DOI QR코드

DOI QR Code

Determinants of Trade Flows and Trade Structure between Korea and ASEAN

  • Received : 2018.10.08
  • Accepted : 2018.12.10
  • Published : 2019.03.30

Abstract

Our paper contributes to existing literature by empirically investigate the trade structure and trade performance between Korea and ASEAN. Overall, trade activities between Korea and almost major ASEAN economies have significantly focused on capital goods, medium and high technology goods, while the remaining ASEAN countries' exports over Korea have been mainly primary and low technology goods. There has been a higher complementarity in between Korea's exports and ASEAN's imports compared with between ASEAN's exports and Korea's imports. Estimation results show that ASEAN's GDP and income have larger impacts than those of Korea on aggregate trade flows as well as sectoral level between two sides. Additionally, geographical conditions are critical factors impeding Korea-ASEAN trade. Meanwhile, other factors in the estimation model have mixed impacts on components of Korea-ASEAN trade structure. Finally, there is a significant room for Korea's trade expansion with ASEAN, particularly new and less developed members in future.

References

  1. Adam, C. and D. Cobham. 2007. Modelling Mutilateral Trade Resistance in a Gravity Model with Exchange Rate Regimes. The CDMA Conference Series, no. 0702, Centre for Dynamic Macroeconomic Analysis.
  2. Anderson, J. E. and E. van Wincoop. 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, vol. 93, no.1, pp. 170-192. https://doi.org/10.1257/000282803321455214
  3. Anderson, J. E., Vesselovsky, M. and Y. V. Yotov. 2013. Gravity, Scale and Exchange Rates. NBER Working Paper, no. 18807.
  4. Athukorala, P. C. 2011. "Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?," Asian Economic Papers, vol. 10, no. 1, pp. 65-95. https://doi.org/10.1162/ASEP_a_00045
  5. Bacchetta, M., Beverelli, C., Cadot, O., Fugazza, M., Grether, J. M., Helble, M., Nicita, A. and R. Piermartini. 2012. A Practical Guide to Trade Policy Analysis. Geneva: WTO Publications.
  6. Baltagi, B. H. 2013. Econometric Analysis of Panel Data, 5th Edition. Chichester, West Sussex: John Wiley & Sons, Inc.
  7. Chandra, V., Boccardo, J. and I. Osorio. 2007. "Export Diversification and Competitiveness in Developing Countries." Unpublished. Washington, D.C: World Bank.
  8. Chen, P. 2016. "Lessons from Taiwan's Economic Development," Orbis: A Journal of World Affairs, vol. 60, no. 4, pp. 515-530. https://doi.org/10.1016/j.orbis.2016.08.009
  9. Cheong, J. 2010. Korea's Economic Cooperation with CLMV Countries: Vietnam Case. In Kagami, M. (ed.) Japan and Korea with the Mekong River Basin Countries. Bangkok: IDEJETRO. pp. 121-163.
  10. Cheong, J. 2011. Korea's Intermediate Goods Trade with ASEAN. In Kagami, M. (ed.) Intermediate Goods Trade in East Asia: Economic Deepening through FTAs/EPAs. Bangkok: IDEJETRO. pp. 119-162.
  11. De Benedictis, L. and C. Vicarelli. 2005. "Trade Potentials in Gravity Panel Data Models," B. E. Journal of Economic Analysis & Policy, vol. 5, no.1, pp. 1-33.
  12. Egger, P. 2002. "An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials," World Economy, vol. 25, no. 2, pp. 297-312. https://doi.org/10.1111/1467-9701.00432
  13. Gaulier, G., Lemoine, F. and D. Unal-Kesenci. 2007. "China's Integration in East Asia: Production Sharing, FDI & High-tech Trade," Economic Change and Restructuring, vol. 40, no. 1-2, pp. 27-63. https://doi.org/10.1007/s10644-007-9013-5
  14. Gomez-Herrera, E. 2013. "Comparing Alternative Methods to Estimate Gravity Models of Bilateral Trade," Empirical Economics, vol. 44, no. 3, pp. 1087-1111. https://doi.org/10.1007/s00181-012-0576-2
  15. Hinloopen, J. and C. van Marrewijk. 2008. "Empirical Relevance of the Hillman Condition for Revealed Comparative Advantage: 10 Stylized Facts," Applied Economics, vol. 40, no. 18, pp. 2313-2328. https://doi.org/10.1080/00036840600949488
  16. Hirschman, A. O. 1964. "The Paternity of an Index," American Economic Review, vol. 54, no. 5, pp. 761-762.
  17. Kwon, Y. 2004. "Toward a Comprehensive Partnership: ASEAN-Korea Economic Cooperation," East Asian Review, vol. 16, no. 4, pp. 81-98.
  18. Lall, S. 2000. "The Technological Structure and Performance of Developing Country Manufactured Exports, 1985-98," Oxford Development Studies, vol. 28, no. 3, pp. 337-369. https://doi.org/10.1080/713688318
  19. Lee, C. L., Hong, S. J. and D. Y. Youn. 2015. ASEAN-Korea Relations: Twenty-five Years of Partnership and Friendship. Seoul: Nulmin Books Publishers.
  20. Michaely, M. 1996. Trade Preferential Agreements in Latin America: An Ex-ante Assessment. World Bank Policy Research Working Paper, no. 1583.
  21. Nam, S. Y. 2000. Competition and Complementarity in Northeast Asian Trade: Korea's Perspective. Korea Institute for International Economic Policy Working Paper, no. 200-02.
  22. Nam, S. Y. 2003. Trade Structure and Complementarity among APEC Member Economies. Korea Institute for International Economic Policy APEC Study Series, no. 03-01.
  23. Nicita, A. 2013. Exchange Rates, International Trade and Trade Policies. UNCTD-PIITC Study Series, no. 56.
  24. Pavitt, K. 1984. "Sectoral Patterns of Technical Change: Towards a Taxonomy and a Theory," Research Policy, vol. 13, no. 6, pp. 343-373. https://doi.org/10.1016/0048-7333(84)90018-0
  25. Phan, T. H. and J. Y. Jeong. 2012. An Analysis of Korea-Vietnam Bilateral Trade Relation. MPRA Paper, no. 48312.
  26. Phan, T. H. and J. Y. Jeong. 2014. "An Empirical Analysis of Intra Industry Trade in Manufactures between Korea and ASEAN," Journal of Economic Studies, vol. 41, no. 6, pp. 833-848. https://doi.org/10.1108/JES-01-2013-0006
  27. Phan, T. H. and J. Y. Jeong. 2016. "Potential Economic Impacts of the Vietnam-Korea Free Trade Agreement on Vietnam," East Asian Economic Review, vol. 20, no. 1, pp. 67-90. https://doi.org/10.11644/KIEP.JEAI.2016.20.1.305
  28. Raballand, G. 2003. "Determinants of the Negative Impact of Being Landlocked on Trade: An Empirical Investigation Through the Central Asian Case," Comparative Economic Studies, vol. 45, no. 4, pp. 520-536. https://doi.org/10.1057/palgrave.ces.8100031
  29. Reis, J. G. and T. Farole. 2012. Trade Competitiveness Diagnostic Toolkit. Washington DC: World Bank.
  30. Santos Silva, J. M. C. and S. Tenreyro. 2006. "The Log of Gravity," Review of Economics and Statistics, vol. 88, no. 4, pp. 641-658. https://doi.org/10.1162/rest.88.4.641
  31. Santos Silva, J. M. C. and S. Tenreyro. 2011. "Further Simulation Evidence on the Performance of the Poisson Pseudomaximum Likelihood Estimator," Economics Letters, vol. 112, no. 2, pp. 220-222. https://doi.org/10.1016/j.econlet.2011.05.008
  32. Tinbergen, J. 1962. Shaping the World Economy: Suggestions for an International Economic Policy. New York: The Twentieth Century Fund.
  33. Tinh, L. D. 2007. ASEAN-Korea Co-operation in the Development of New ASEAN Members. In Leong, H. K. (ed.) ASEAN-Korea Relations: Security, Trade and Community Building. Singapore: ISEAS Publishing. pp. 103-110.
  34. Tran, N. K., Lee, H. R. and Y. Heo. 2010. "Dynamic Patterns of Korea-Vietnam Trade Relations," International Area Studies Review, vol. 13, no. 2, pp. 257-279. https://doi.org/10.1177/223386591001300213
  35. Truong, Q. H. 2013. "The Formation of Regional Comprehensive Economic Partnership Agreement and Some Issues for ASEAN," Southeast Asian Studies, vol. 156, no. 3, pp. 14-21. (in Vietnamese)
  36. Truong, Q. H. 2016. "Technological Structure in Vietnam-Thailand Bilateral Trade Relations," Vietnam's Socio- Economic Development, vol. 85, no. 1, pp. 42-50.
  37. Truong, Q. H. 2017. "The Structure of Commodity Trade between Thailand and Vietnam (2004-2013)," Rian Thai: International Journal of Thai Studies, vol. 10, no. 1, pp. 73-97.
  38. United Nations Conference on Trade and Development (UNCTAD). 2015. Key Statistics and Trends in International Trade. Geneva: UNCTAD.
  39. Yoon, Y. M. and T. D. Yeo. 2007. "Trade Structures and Relations among China, Japan, and Korea," Journal of the Korean Economy, vol. 8, no.1, pp. 121-145.
  40. Yoshida, Y. 2008. Intra-industry Trade between Japan and Korea: Vertical Intra-industry Trade, Fragmentation and Export Margins. Kyushu Sangyo University Discussion Paper, no. 32.