The Korean Textile Industry: Still Competitive, After All These Years?

Lila Truett
Additional contact information
Lila Truett: The University of Texas at San Antonio

No 4, Working Papers from College of Business, University of Texas at San Antonio

Abstract: Although a vital part of the economy, the Korean textile industry has been challenged by the recent reduction of international trade barriers, particularly as this industry was fully integrated into GATT in 2005. The textile industries in Japan and many other countries have also faced difficulties. This study examines future prospects for the Korean industry by investigating the presence of economies of scale and relationships among the inputs of domestic capital, labor, and intermediate goods, as well as foreign intermediate goods. The findings are consistent with constant returns to scale and a substitutes relationship among all input pairs except for domestic capital and foreign intermediate goods. Thus, there appear to be no further cost reductions available through increased output and economies of scale. However, some reduction in industry output may not result in increased unit costs either. A reduction in the price of foreign intermediate goods will increase the demand for domestic capital, but also, at least in the short run, add stress to the industry as it decreases the demand for domestic labor and domestic intermediate goods.

Keywords: Korea; Textile Industry (search for similar items in EconPapers)
JEL-codes: D2 F14 L (search for similar items in EconPapers)
Pages: 24 pages
Date: 2010-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://interim.business.utsa.edu/wps/eco/0004ECO-102-2010.pdf Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tsa:wpaper:0131eco

Access Statistics for this paper

More papers in Working Papers from College of Business, University of Texas at San Antonio Contact information at EDIRC.
Bibliographic data for series maintained by Wendy Frost ().