 Propagation of economic shocks through vertical and trade linkages in Korea: An empirical analysisJapan and the World Economy, 2021, vol. 60, issue C Abstract: In the last two decades, manufacturing industries in Korea have become more concentrated, and interconnectedness across industries and across country borders has risen via vertical relationships and trade linkages. Using the industry-level international input–output data, this paper investigates the propagation of economic shocks in such a highly concentrated and interconnected structure, focusing on the role of vertical and trade linkages. The results establish that, first, the role of vertical and trade linkages in propagating economic shocks originated from both domestic sources and external sources is important. Second, the productivity impacts of a few key sources of economic shocks are relatively sizable. These findings highlight that economic shocks in a few key industries and/or major trading partners that are transmitted through vertical and trade linkages can lead to large swings in the overall economy. This paper contributes to the understanding of the potential interactions between the industrial structure and economic growth/stability. Keywords: Propagation of shocks; Vertical linkage; Trade linkage; Aggregate fluctuations (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:60:y:2021:i:c:s0922142521000475 DOI: 10.1016/j.japwor.2021.101103 Access Statistics for this article Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao More articles in Japan and the World Economy from Elsevier |
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