This study examines how the volume of Korea’s imports has increased over time with the country’s economic development with the goal of identifying and analyzing the main factors of such increases.
The rapid growth of domestic demand as well as the expansion of exports accounted for much of the increases of imports in all categories, whether directly or indirectly, between 1955 and 1975. The export substitution effect after 1963, with respect to the increasing exports in all categories, was marginal at best, but contributed substantially to the increase in the amount of primary goods imported between 1955 and 1963. Whereas the overall contribution of export substitution to the increases in imports began to decline rapidly after 1963, Korea’s exports overseas increased dramatically. However, it was technological change, or the change in the I-O coefficient, that contributed most to the increased imports throughout the entire period, from 1955 to 1975.
The analysis of the factors involved in the increase of exports in all categories overlapped to a large extent with the analysis of the factors of increasing imports in all categories. However, the relative contributions of various factors to the increase in the import and export of intermediate goods showed contrasting patterns. For instance, import substitution made an overall contribution of 10 percent or more to the increase in the import of individual goods in the early years, but has since declined drastically, having a negative impact in the last five years, 1970 through 1975. On the other hand, the import substitution effect, which made negative contributions to the increase in the import of goods by sector, rose to seven percent in the middle period, and began to fall below zero again in recent years. This may reflect the fact that, while the imports of goods by sector have been declining somewhat due to the increasing import substitution of certain goods, the amount of intermediate goods imported and involved directly or indirectly in the production of domestic goods of various sectors has increased.
Compared to the goods Korea imported after its economic development entered a period of stability, from 1970 to 1975, the goods imported in the early years of its economic development, from 1955 to 1963, were almost entirely goods required for the development of manufacturing and other industries in Korea. That is why Korea’s trade balance was skewed heavily in favor of imports during those years. Once Korea’s economic development truly got underway, in and around 1963, the gap between its exports and imports began to shrink noticeably. Nevertheless, in Korea’s case, imports will always outweigh exports due to the export-oriented structure of its economy and the increasing demand from Korea’s industries for raw materials and other such resources. However, Korean industries should not become complacent, and instead should begin to diversify their range of products for greater export around the world.
장기적인 수입증가요인의 분석(An analysis of factors involved in the long-term increases in imports)
|Journal Title; Vol./Issue||한국개발연구:vol. 1(no. 4)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|