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1 Identifying ESG Trends of International Container Shipping Companies Using Semantic Network Analysis and Multiple Case Theory  / 2023 /  Sustainability  / vol.15, no.12, pp.9441 / 

10.3390/su15129441
2 On the Determinants of Intra-industry Trade: Specialization and Relative Factor Endowments  / 2007 /  East Asian Economic Review  / vol.11, no.2, pp.189 / 

10.11644/KIEP.JEAI.2007.11.2.174

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East Asian Economic Review Vol. 11, No. 1, 2007. pp. 27-56.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2007.11.1.163

Number of citation : 2

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Korea’s Horizontal and Vertical Intra-Industry Trade and FDI in Trade with East Asian Countries

Author

Taegi Kim

Chonnam National University

tgkim@chonnam.ac.kr

Kyungwon Ju

Chonnam National University

kewjoo@hanmail.net
Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This paper examines Korea's intra-industry trade (IIT) by disentangling vertical from horizontal IIT, and analyzes the determinants of both IIT types in trade with East Asian countries during the period of 1991-2005. Korea's IIT with East Asian countries has increased rapidly, especially its high quality IIT, which has increased faster than horizontal IIT and low quality IIT, implying that Korea's product quality has improved over time. Korea's high quality IIT is larger in trade with developing countries, but its low quality IIT is larger in trade with Japan. The regression results show that the income differences between countries have a negative effect on horizontal IIT, and that Korea's high quality IIT becomes larger when Korea's income is higher than the income of partner countries. This supports the theory of IIT. Foreign direct investment (FDI) inflow has had a positive effect on increases in IIT, but the effects of FDI outflow are not certain. This suggests a policy implication that FDI inflow has a more positive effect on IIT than FDI outflow.

JEL classification: F14, F23, O53

Keywords

East Asian Trade, Horizontal and Vertical Intra-Industry Trade, Quality, FDI

Language

Korean

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