DETERMINANTS OF SOUTH KOREA’S INTRA-INDUSTRY TRADE WITH HER MAJOR TRADING COUNTRIES IN THE MANUFACTURING SECTOR

Seung Jin Kim and Byung Tak Cho ()
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Seung Jin Kim: Department of East Asian Studies, University of Malaya, 50603 Kuala Lumpur, Malaya
Byung Tak Cho: Korea Productivity Center, Seoul, South Korea

The Singapore Economic Review (SER), 2018, vol. 63, issue 03, 731-758

Abstract: This paper analyzed how South Korea’s intra-industry trade (IIT) with her major trading countries (i.e., China, the USA, and Japan (CUJ)) in the manufacturing sector changed over time for the period of 1994–2011. It was found that South Korea’s IIT with China mainly increased through economies of scale (ES), the ratio of inward and outward foreign direct investment to total investment (FDI), the ratio of intermediate cost to total cost (II), and R&D intensity (RD). On the other hand, South Korea’s IIT with the USA was found to mainly increase through ES, FDI, and RD. Finally, RD, FDI, and II variables are found to be the most important determinants for South Korea’s IIT with Japan.

Keywords: Intra-industry trade (IIT); horizontal IIT; vertical IIT; product differentiation; economies of scale (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1142/S0217590815500915

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