Examining the Bilateral Relationship between Mexico and South Korea through the Trade in Value-Added Perspective, 2000–2021

Rodrigo Morales-López, Luis Quintana-Romero, Nam Kwon Mun () and Inhye Oh
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Rodrigo Morales-López: Department of Economics, Facultad de Estudios Superiores Acatlán UNAM, Naucalpan de Juárez 53150, Mexico
Luis Quintana-Romero: Department of Economics, Facultad de Estudios Superiores Acatlán UNAM, Naucalpan de Juárez 53150, Mexico
Nam Kwon Mun: Department of Latin American Studies, Graduate School of International and Area Studies, Hankuk University of Foreign Studies, Seoul 02450, Republic of Korea
Inhye Oh: Department of Latin American Studies, Graduate School of International and Area Studies, Hankuk University of Foreign Studies, Seoul 02450, Republic of Korea
Authors registered in the RePEc Author Service: Luis Quintana Romero

Mathematics, 2023, vol. 11, issue 15, 1-24

Abstract: This article examines the trade relationship between Mexico and South Korea through the lens of trade in value-added perspective. Using the global input–output model, we dissect gross exports into their value-added components to analyze the sectors benefiting most from value-added generation in both countries. To do this, we use the multiregional input–output matrices developed by the Asian Development Bank (ADB). The results show a growing bilateral relationship between 2000 and 2021, with South Korea having a stronger position by generating a larger share of value-added linked to the bilateral relationship. Nevertheless, the gap has narrowed over time. Notably, South Korean exports to Mexico have substantially contributed to value-added generation in technology-based manufacturing sectors such as machinery, equipment, electronics, electrical, and optical products. Similarly, Mexico’s mining sector increasingly relies on exports to South Korea for value-added generation. The trends observed in this study’s findings persist even amidst the reconfiguration of Global Value Chains, indicating that a free trade agreement between Mexico and South Korea has the potential to further enhance value-added generation.

Keywords: international trade; input–output analysis; trade in value-added; global value chains; South Korea; Mexico (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:11:y:2023:i:15:p:3352-:d:1207298

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