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Trade verticality and structural change in industries : The case of Taiwan and South Korea

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  • Trade verticality and structural change in industries
  • Chen, Hung-Yi; Chang, Yang-Ming
  • Springer Science + Business Media, LLC


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Title Trade verticality and structural change in industries
Similar Titles
Sub Title

The case of Taiwan and South Korea

Material Type Articles
Author(English)

Chen, Hung-Yi; Chang, Yang-Ming

Publisher

[New York, United States]:Springer Science + Business Media, LLC

Date 2006
Journal Title; Vol./Issue Open Economies Review:vol. 17
Pages 21
Subject Country South Korea(Asia and Pacific)
Taiwan(Asia and Pacific)
Language English
File Type Link
Subject Economy < Trade
Holding Research Gate

Abstract

This paper documents that a significant portion of trade for Taiwan and Korea follows the trend of world trade in moving toward a pattern of vertical specialization (VS). Noteworthy is the manufacturing sector, whose VS shares of exports has been steadily increasing and has accounted for more than 90% of the total VS shares of manufactured exports. For Taiwan, nearly 57% of the growth in exports is contributed by the growth in VS-based trade; for Korea, it is as high as 64%. In the analysis, we compare VS shares of exports with or without inputoutput circulation among domestic industries in an open economy. Using Taiwan as a case study, we further discuss the implications of trade liberalization through tariff reductions for trade verticality.