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The choice of export destinations and its determinants : Evidence from Korean exports

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  • The choice of export destinations and its determinants
  • Kang, Kichun
  • The Korean Economic Association


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Title The choice of export destinations and its determinants
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Sub Title

Evidence from Korean exports

Material Type Reports
Author(English)

Kang, Kichun

Publisher

[Seoul]:The Korean Economic Association

Date 2013
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Trade
Holding The Korean Economic Association

Abstract

Empirical evidence shows that zeros in a bilateral export matrix are very common and non-zeros are extremely concentrated across destinations. According to the simple version of Melitz (2003) model, variations in market size, as well as variable and fixed trade costs across destinations are potential candidates for explaining the stylized facts on the incidence of zeros and non-zeros in a trade matrix. Using Korean disaggregate export data (HS 10- digit level), this paper finds that export participation depends on destination-specific factors such as destination income, distance, local distribution cost, and fixed entry costs associated with the destination language, institution, and information. In line with this theory, the empirical findings suggest that destination-specific factors are important for shaping the country’s export entries.