Effects of FTA Provisions on the Market Structure of the Korean Automobile Industry

Minsoo Park () and Hongjai Rhee ()

Review of Industrial Organization, 2014, vol. 45, issue 1, 39-58

Abstract: The Korean passenger car market is dominated by a few domestic producers. In this paper, we investigate whether this market structure is the result of import tariffs and taxes that penalize foreign manufacturers. Our counterfactual simulation under two FTA scenarios shows that the market shares of imported and domestic cars show minimal adjustments, suggesting that import tariffs and taxes may not explain the lack of penetration of import cars in Korea. We predict changes in consumer surplus and discuss the policy implications of our findings. Copyright Springer Science+Business Media New York 2014

Keywords: FTA; Tariff elimination; Automobile industry; Nested logit; F14; F17; L62 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11151-014-9417-0

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