• Korea Trade Review
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• v.45 no.4
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• pp.1-24
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• 2020

This study aims to analyze the export effects of Korea-Canada FTA's tariff reduction, which was launched on January 1, 2015. First, as a groundwork, this study reviewed trade creation and trade diversion by investigating all possible cases of both initial FTA and additional FTA. The review was done by using the simple model of three countries assuming FTA means elimination of tariff. The review suggested that additional FTA doesn't have any negative impact on import country's social welfare contrary to initial FTA. In additional FTA, Trade diversion could happen between FTA partner countries, but it always increases import country's social welfare. In this sense, it can be called favorable trade diversion. Second, this study analyzed the export effects of Korea-Canada FTA using Clausing's product level model based on Canadian government import data from Korea which is not open to the public. It turned out that Korea-Canada FTA's tariff reduction boosted Canadian import growth rate from Korea. On the other hand, Canadian import growth rate from rest of the world was not negatively affected by Korea-Canada FTA's tariff reduction. Rather, it increased as Canadian import growth rate from Korea was higher. These findings implied trade creation rather than trade diversion of Korea-Canada FTA when it comes to Korea's export to Canada.

• International Area Studies Review
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• v.13 no.2
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• pp.602-616
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• 2009

EU and NAFTA which are huge regional economic blocs came out the world economy at the end of the twentieth century. It is the first that Europe has been trying to establish regional economic integration which is a revolutionary change to world economy. So that regional economic integration of Europe(European Union) has been improving to make a complete economic political integration. This paper analyzes trade creation effect for joining European Union(EU) of Central Eastern European countries with random effect estimation and fixed effect estimation. 12 Central Eastern European countries have become membership states of EU since 2004 is able to get 27.4% of trade increase effect on average between old and new membership countries one another as well as between new membership countries one another respectively. It is very important for some countries have a plan to affiliate to EU in the future to realize such a big effect if they are in.

• Journal of Distribution Science
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• v.10 no.12
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• pp.13-17
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• 2012

Purpose - The Asia-Pacific Economic Cooperation (APEC) forum has evolved and is actively facilitating free and open trade. It is debated whether APEC has effectively reduced trade barriers in a preferential manner to encourage liberalized trade and whether increased trade between member countries has reduced trade with nonmember countries. Research designs, data, methodology -This paper empirically tests whether APEC creates or diverts trade, using an extended gravity model with tariff rates, exchange rates, and dummy variables to analyze how APEC affects intra-trade between members.The model utilizes the annual panel data between 1990 and 2007 of 16 selected APEC members and nonmembers. Results - Results reveal the changing role of APEC only between 2002 and 2007 has it created trade, fostering increased trade among trading partners and between members and nonmembers. Conclusion - APEC can be expected to demonstrate a stronger trade creating effect once its advanced and developing members complete tariff reductions by 2010 and 2020, respectively.

• East Asian Economic Review
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• v.17 no.1
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• pp.3-25
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• 2013

This paper evaluates whether the proposed FTAAP is a desirable policy option for APEC member economies and the world economy. More specifically, this paper qualitatively investigates whether the FTAAP satisfies conditions for a trade bloc to generate positive and sufficient net trade creation effect. In addition, this paper estimates the likely impact of the FTAAP by using a CGE model analysis. From the qualitative analysis based on statistical data, this paper strongly argues that the FTAAP can be a desirable regional trade bloc able to generate positive gains from freer trade. From the ex-ante scenario analysis using both static and capital accumulation CGE Models, this paper concludes that the FTAAP has great potential for improving welfare of participating APEC economies and will boost economic growth in the region. In particular, the FTAAP would be even better if it can be linked with liberalization of trade in services and enhanced trade facilitation.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.72
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• pp.139-160
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• 2016

Using the gravity model, this paper analyzes empirically how the world trade in goods is affected by regional trade agreements(RTAs) which have been spreading rapidly since the mid-1990s. This paper attempt to do the panel data analysis about 174 countries during the period of 1994-2008. These panel data include 157 RTAs. It is meaningful that this paper uses comprehensive data to analyze the net effect of regional trade agreements on the global trade volume. This provides a clue as to the answer to the stumbling block debate raised early in the regional trade agreement. Also, confirming how the participation of the WTO affected the trade volume among the member countries, the WTO-related dummy variables are additionally introduced to this gravity model. And as far as we know, the state system-related variables is first considered in this model. This variable reflects the social and cultural environments of countries as the proxy variable representing the sociocultural homogeneity. In all regressions, joining to the WTO and consistency of the state system have a positive effect on increasing the trade volumes between countries. According to the analysis of RTA trade effects, RTAs, on average, increase the volume of trade within the RTA region by 27%~37%, and decrease the volume of trade between the regional and the non-regional nation by 1.2%~3.4%.Therefore, the net effect of regional trade agreements on the promotion of global welfare is positive. For robustness check, we also introduce the interaction term of the dummy variable which reflects the RTA tightening and the continuous variable which reflects the distance effect. As a result, the RTAs alleviate the trade-decreasing effect which is caused by the distance between the countries.

• Korea Trade Review
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• v.42 no.2
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• pp.345-367
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• 2017

A bank payment obligation(BPO) has been introduced as a new alternative instrument for trade payments based on a technology and data-driven mechanisms aimed at facilitating an electronic trading in international trade transactions. The BPO is governed by URBPO which was in effect as of July 1, 2013. The URBPO only applies to inter-bank relationships because the BPO is bank-to-bank payment obligation, not a bank-to-customer obligation. The URBPO does not cover the interaction between a bank and their customer. For this reason, the standard bank-customer guidelines on BPO agreements were required to prepare the agreements between the banks and their customers. Accordingly, the International Chamber of Commerce established "ICC Guidelines for the creation of BPO Customer Agreements" for the settlement and development of the BPO by supporting banks in creating contracts or agreements with their customers. So, This study is to review its establishment purpose and to present the implications by analyzing the ICC guidelines. This study was based on documentary research focusing mainly on the ICC Guidelines and the appendix.

• Journal of Korea Trade
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• v.24 no.8
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• pp.189-206
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• 2020

Purpose - This paper attempted to verify the process by which a multinational corporation (MNC)'s subsidiary practices entrepreneurship to create effective knowledge (KC) in the local market. We have looked at whether subsidiary entrepreneurship (SENT) has a moderation effect in creating knowledge for the local market when a subsidiary has been given autonomy (AUT) from the headquarters (HQ). We also argue that when a subsidiary creates meaningful knowledge, the effect of the increased status by the HQ within the MNC network position (NP) has an indirect effect on whether knowledge is transferred to other overseas subsidiaries (KTO). Design/methodology - This paper used a structural equation model (SEM) of 282 effective foreign companies invested in Korea. To test the hypothesis about the process of SENT on KTO, descriptive statistics, confirmatory factor analysis, reliability, convergent and discriminant validities, and common method bias were analyzed using STATA. In addition, the moderation effect was verified along with SEM. The moderation effect of AUT on SENT and KC was presented graphically by confirming \mathrm{\pm1} standard deviation of AUT for the main effect. Findings - Our findings are as follows. First, while the hypothesis about the direct effect of SENT and KC on KTO was not supported, all other hypotheses were supported. Second, both the AUT and moderating effect and the indirect effect of NP were significant. In the conclusion, these findings are discussed in relation to its various theoretical and practical implications. Originality/value - This study attempted to contribute to the knowledge creation theory of MNC by contemplating how subsidiaries can move away from HQ and grow in the local market. Although there is still a shortage of foreign investment in the Korean market, our practical implications offer guidance for how current subsidiaries can develop more than other overseas subsidiaries.

• Journal of Korea Trade
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• v.26 no.6
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• pp.1-19
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• 2022

Purpose - This study empirically investigates the effects of Official Development Assistance (ODA) on the economic activities of private actors in recipient countries. As a proxy for the economic activities of private actors, we utilize the job creation activities of foreign subsidiaries in recipient countries. The foreign subsidiaries provide a foundation for economic development by creating paying jobs. That is, if ODA has been successfully transferred to foreign subsidiaries, then these foreign subsidiaries should help economic growth and help create a boom in the local market by providing jobs. These jobs eventually lead to the achievement of the primary aims of foreign aid, including poverty reduction. Thus, this study empirically examines the relationship between ODA and the number of jobs created by foreign subsidiaries in recipient countries. Design/methodology - This is the first study to examine the effects of the ODA on the job creation of foreign subsidiaries because it has been hard to obtain internal information related to the employment status of foreign subsidiaries. Fortunately, we have a unique panel dataset provided by the Export-Import Bank of Korea (KEXIM) for 2006 to 2013. In terms of the empirical specification, we use the generalized least squares (GLS) method. The panel GLS estimator allows us to have an efficient estimation that overcomes the limitations of the panel data. It employs assumptions about the heteroscedasticity between the panels and makes an autocorrelation of the error term within each panel. Findings - We find that ODA influences job creation in foreign subsidiaries. In particular, we found that ODA creates more jobs in sales than in managerial or production positions. This study also shows that the effect of the ODA on the foreign subsidiaries' job creation activities depend on the purpose of the ODA. By examining ODA effects on the foreign subsidiaries' economic activities (e.g., job creation), this study fills a gap in the current literature. Originality/value - Existing studies that focus on the ODA effect have either a macroeconomic point or a microeconomic point of view. However, both approaches do not explain how well foreign aid has influenced private economic actors of recipient countries. In essence, previous researchers found it difficult to obtain the necessary data for internal employment status from foreign subsidiaries. However, thanks to the Korea Export-Import Bank, this study shows that ODA indeed influences the job creation activities of foreign subsidiaries even after controlling for other factors such as FDI, GDP growth rate, employment rate, household expenditure, mother firms' share, etc. By doing so, we can examine how ODA influences the job creation of foreign subsidiaries, which might help economic development and reduce the amount of poverty in recipient countries.

• Korea Trade Review
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• v.47 no.5
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• pp.253-272
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• 2022

As the digital era accelerates, traditional perspectives have limitations in explaining the success or failure of export performance. The purpose of this study is to analyze new factors affecting export performance from the perspective of customer experience, which has emerged as an important factor in securing a competitive advantage and generating organizational performance. After deriving hypotheses based on literature review and discussion, a research model is designed in which three factors of customer experience such as understanding customer's objectives, customer value creation capability, and customer journey management are the antecedents, and export performance is the dependent variable. This model also includes organizational agility and personal contact as the moderating variables. To verify the hypotheses, multiple regression analysis was conducted on the collected data drawn from 198 SME exporters. According to the analysis results, it was found that all three antecedents positively affected export performance. In particular, the organizational agility and personal contact were confirmed to have a moderating effect that creates better export performance by interacting with customer value creation capability. The theoretical significance of this study is to find that effective customer experience management can be a key factor in creating export performance. The results suggest that checking the overall customer journey, exporters should select and intervene to intensively manage key touch points that can have a decisive impact on the quality of customer experience. At the end of the paper, practical implications to be considered in creating export performance through effective customer experience management are presented.

• International Commerce and Information Review
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• v.6 no.1
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• pp.267-284
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• 2004

The expansion of regionalism has resulted in the creation of blocs of the world economy, so that those countries not belonging to one or more blocs can discriminated. Though recently singed on the bill of FTA with Chile, Korea is actually alienated from major stream of the blocs. Therefore, Korea government makes efforts to contract more FTAs with countries such as Singapore and Japan. FTA is believed to be an important method to secure export and national competitiveness in the long term. Therefore, we need to exactly understand critical issues and the long-run effect of FTA. The paper tries to find out important issues and potential strategies relating to electronic commerce in Korea-Singapore and Korea-Japan FTA. According to the historical facts, economic effect of FTA depends a lot on the contents of the agreement. Therefore, additional intensive studies are required before contracting FTA in the future.