This report seeks to examine the deciding factors and transitions of Korea’s market shares by calculating the regression equation for Korean exports to the United States.
The report aims to observe the significant factors that influence market shares and the dimensions of transition over time. For this, it assumes the increased export of industrial products towards the American, Japanese and other OECD markets as the leading factor to increases in trade volume and market share. Observation is to be conducted by calculating the regression equation based on trade records to the American market.
According to an analysis of increase in export, Korea’s average annual increase in export to OECD countries from 1974 to 1978 was 28% by current prices. However, the growth drastically fell to 11% between 1978 and 1983, and rose back to a level of 21% between 1983 and 1989. Although stagnation among the world economies between the late 70s and early 80s was an important factor for the decrease during the second phase, a more important factor was the sudden decrease in the average annual growth of market shares, which fell from 12% to 3%. In order to gain a deeper understanding on this phenomenon, the report provides a multifaceted analysis, including analyses from industry and country perspectives.
A calculation of market shares by applying it in the regression equation points physical and human-capital intensity as a leading factor. Industries with higher physical or human capital intensity turned out to have smaller market shares, but the degree of intensity as a handicap decreased with the progress of time. This outcome is a reflection of the Korean economy’s abundance, and the rapid accumulation of physical and human capital compared to the increase in labor. In addition, human-capital intensity turned out to hold a higher degree of handicap over physical-capital intensity, reflecting the economy’s lack of human capital compared to physical capital. In addition, the Japanese Yen’s influence on Korean shares turned out to be varying across time. The Yen’s devaluation leading to the decrease in Korean shares turned out to have played a greater impact during the 80s. Furthermore, the Heavy and Chemical Industry (HCI) policies of the 70s turned out to have played a severely negative role on light industry exports.
Based on the analysis provided above, the report concludes massive government intervention to promoting a ‘sophistication’ in the export structure as inappropriate. More importantly, the ongoing sophistication is not to be considered as the outcome of government intervention, but a result of physical and human capital accumulation. In this regard, support policies to facilitate these accumulations are an urgent necessity.
한국수출의 시장점유율 분석(An analysis of Korean shares in the export markets)
대미·일·여타 OECD 수출실적을 중심으로(Based on records in the United States, Japan and other OECD countries)
|Journal Title; Vol./Issue||한국개발연구:vol. 13(issue 4)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Trade|
|Holding||KDI; KDI School|