The Journal of Fisheries Business Administration (수산경영론집)

The Korean Society of Fisheries Business Administration (한국수산경영학회)
권호 표지
DOI QR코드

DOI QR Code

The Change in Exchange Rate Pass-Through into Import Price of the Post-FTA Import Market for Fishery Products in South Korea

FTA 이후, 국내 수입수산물 가격의 환율전가도 변화

  • Lim, Eun-Son (Division of International Commerce, Pukyong National University)
  • Received : 2022.05.04
  • Accepted : 2022.06.22
  • Published : 2022.06.30
Download PDF
⟨ Previous Next ⟩

Abstract

The effect of change in exchange rates on an economy is very important, especially, to a small open economy like South Korea. I explore whether Free Trade Agreements (FTAs) have positive influences on exchange rate-pass through import price of import market for fishery products in South Korea. Competition among FTA partners is enhanced after FTAs are effective. I expect that the extent to which are exchange rate pass-through (hereafter, ERPT) into import price of fishery products (in terms of Korea currency) would be reduced since the import market for fishery products in South Korea is an oligopolistic market. Specifically, I investigate two research questions with six South Korea's FTA partners-Norway, Thailand, Peru, U.S., China and Vietnam. First, whether the extent to which are exchange rate pass-through into import price of fishery products from six FTA partners would decrase in the post-FTA era; seconds, the size of reduction has a negative relation with the size of their market share in the import market for fishery products in South Korea if it decreases. The empirical results indicate that the degree of ERPT into import price from other FTA partners than Norway has been reduced after FTA, statistically and significantly; however, I do not find the evidence that the size of reduction is related to their market share. The findings in this study imply that FTAs have negative effects on producers' economic welfare in South Korea's fishery industry by reducing the extent to which are exchange rate pass-through as well as reducing tariff barriers.

Keywords

References

  1. 김기수.김우경(2006), "환율과 환율변동성의 변화가 수산물 수입에 미치는 영향 분석", 수산경영론집, 37(2), 1-18.
  2. 김기수.임은선(2009), "우리나라 수산물 수입시장에서 수출국간의 가격경쟁구조 및 환율변화가 수출가격에 미치는 영향", 수산경영론집, 40(1), 27-50.
  3. 김기수.이상숙(2012), "한.중 FTA 체결 시 관세 철폐가 우리나라 수산물 교역에 미치는 영향", 수산경영론집, 43(2), 1-14. https://doi.org/10.12939/fba.2012.43.2.001
  4. 김찬복.조성택(2015), "한.ASEAN FTA 협정이 수산부문에 미친 영향: 한국-베트남을 중심으로", 국제지역연구, 19(3), 81-97.
  5. 김규민.김도훈(2018), "대미 수산물 수출에 관한 한-미 FTA 효과 및 수출결정요인 분석", 무역학회지, 43(6), 71-92.
  6. 임은선.김기수(2017), "자유무역협정(Free Trade Agreements : FTA)이 국내 수산물 수입시장통합에 미친 효과", 수산경영론집, 48(4), 45-66. https://doi.org/10.12939/fba.2017.48.4.045
  7. 조택희(2010), "환율의 산업별 수출가격 전가도 추정", 한국경제연구, 28(3), 117-147.
  8. 차혜경(2008), "수입물가의 환율전가 상승요인분석", 경제연구, 25(4), 205-230.
  9. Bacchetta, P. and Van Wincoop, E. (2005), "A Theory of the Currency Denomination of International Trade", Journal of International Economics, 67(2), 295-319. https://doi.org/10.1016/j.jinteco.2004.01.006
  10. Campa, J. M. and Goldberg, L. S. (2002). "Exchange rate Pass-through Into Import Prices: a Macro or Micro Phenomenon?" (No. 149), Federal Reserve Bank of New York.
  11. Dornbusch, R. (1987), "Exchange Rates and Prices", American Economic Review, 77(1), 93-106.
  12. Devereux, M. B. and Engel, C. (2003), "Monetary Policy in the Open Economy Revisited: Price Setting and Exchange-Rate Flexibility", The Review of Economic Studies, 70(4), 765-783. https://doi.org/10.1111/1467-937X.00266
  13. Feenstra, R. C. (1989), "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test", Journal of international Economics, 27(1-2), 25-45. https://doi.org/10.1016/0022-1996(89)90076-7
  14. Feenstra, R., Gagnon, J. and Knetter, M. (1993), "Market Share and Exchange Rate Pass-Through in the World Automobile Industry,". NBER Working Paper, 4399.
  15. Froot, K. A. and Klemperer, P. (1989), "Exchange Rate Pass-Through When Market Share Matters", The American Economic Review, 79, 637-654.
  16. Goldberg, P. K. and Knetter, M. M. (1997), "Goods Prices and Exchange Rates: What Have We Learned?", Journal of Economic Literature, 35(3), 1243-1272.
  17. Kreinin, M. E. (1977), "The Effect of Exchange Rate Changes on the Prices and Volume of Foreign Trade", Staff Papers, 24(2), 297-329. https://doi.org/10.2307/3866575
  18. Knetter, M. M. (1989), "Price discrimination by US and German exporters". The American Economic Review, 79(1), 198-210.
  19. Lim, E. S. and Breuer, J. B. (2019), "Free Trade Agreements and Market Integration: Evidence from South Korea." Journal of International Money and Finance 90, 241-256. https://doi.org/10.1016/j.jimonfin.2018.09.010
  20. Marston, R. C. (1990), "Pricing to Market in Japanese Manufacturing", Journal of International Economics, 29(3-4),
  21. McCarthy, J. (2007), "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies", Eastern Economic Journal, 33(4), 511-537, 217-236. https://doi.org/10.1057/eej.2007.38
  22. Marmolejo, A. L. (2011), "Effects of a Free Trade Agreement on the Exchange Rate Pass-through to Import Prices", Review of International Economics, 19(3), 475-493. https://doi.org/10.1111/j.1467-9396.2011.00960.x
  23. Permani, R. (2021), "FTA, Exchange Rate Pass-Through and Export Price Behavior-Lessons from the Australian Dairy Sector", Australian Journal of Agricultural and Resource Economics, 65(1), 192-221. https://doi.org/10.1111/1467-8489.12402