• Asia-Pacific Journal of Business
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• v.13 no.3
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• pp.475-491
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• 2022

Purpose - This study analyzed the correlation and effect of FTA environmental factors (company internal environmental factors, corporate external environmental factors) between FTA utilization and performance of Shandong companies in China. Design/methodology/approach - To test the hypothesis, SPSS 24.0 statistical packages were used based on the collected data. Findings - First, it was confirmed that internal environmental factors (international marketing orientation, corporate competitiveness, and corporate awareness of FTA) of companies had a positive(+) effect on FTA utilization. Second, The government's support for FTA utilization will have a significant positive (+) effect on companies' FTA utilization.Non-tariff barriers will have a negative (-) effect on companies' use of FTA. Third, A company's FTA utilization will have a significant positive effect on FTA performance. Research implications or Originality - If Shandong companies want to increase the utilization of FTAs, they should strengthen international marketing, such as collecting information on competitors and improving product quality and price competitiveness, and increase corporate competitiveness through active export activities to the global market.In order to increase the awareness of FTA among enterprises in Shandong Province, the government should strengthen the relevant education of enterprises about FTA.

• International Area Studies Review
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• v.22 no.2
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• pp.3-18
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• 2018

This paper analyzes both the FTA effects and FTA spillover effects on bilateral trade using 62 countries' panel data during the period of 2003 ~ 2013. To this end, we construct a FTA dummy variable for the effect of FTA in the model and the weighted FTA matrix interacted with export and import for the spillover effect of FTA. Gravity model is applied to the empirical analysis with GMM, fixed and random effects, and PPML estimation. As a result of the analysis, FTA variables have positive relationships with bilateral export and import. The weighted FTA matrix interacted with export and import also have positive signs on the bilateral export and import in all estimations. Thus, we conclude that various FTAs of neighbor or 3rd countries increase the bilateral export and import. We provide some implications that a country to increase the amount of trade has a trade relationship with the countries having various FTAs and for the FTA effect analysis, the three-country model is better than to the two-country model.

• Journal of Korea Port Economic Association
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• v.29 no.3
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• pp.95-111
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• 2013

The purpose of this study is to draw out the trade effect of the Korea ASEAN FTA by carrying out a panel analysis. For achieving such a purpose, Panel Unit Root, Panel Cointegration Test, Pooled OLS, Hausman Test, Fixed Effect, Random effect are performed. The last 15 years's data over the period of 1997 to 2011 concentrated on the ASEAN countries such as Indonesia, Malaysia, Philippine, Singapore, Thai, Vietnam is used in this study. Major implications are summarized as following. First, our government need to maximize the effect derived from conclusion of FTA(Free Trade Agreement) in order to enhance the competitive edge through obtaining a stable foreign market. Second, it necessary for our government to improve a national system by orienting a FTA conclusion complying with WTO's product and service-related regulation.

• Korea Trade Review
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• v.42 no.5
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• pp.93-112
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• 2017

The purpose of this study is to analyze the effects of FTA information learning in export SMEs. Therefore, this study has constructed an integrated model including the moderating effects of FTA information learning on the of export performance in SME. The relationship between SMEs' localization strategy, product innovation capacity, and FTA information learning was linked to export performance, and an empirical analysis was conducted on 195 export SMEs. The path analysis was performed using the structural equation model(SEM), and six hypotheses including the control effect were tested. As a result, the localization strategy of SMEs positively influenced product innovation capacity. On the other hand, FTA information learning did not show significant results. Product innovation capacity and FTA information learning as an antecedents showed significant results in terms of export performance. In the moderated effects analysis, the moderated effect between the localization strategy and FTA information learning did not show significant effect on the product innovation capacity. Whereas the moderated effect between the product innovation capacity and the FTA information learning significant influence on the export performance of SMEs.

• Korea Trade Review
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• v.44 no.3
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• pp.253-269
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• 2019

This study examines the utilization effect of FTA on the sales and profit of the secondary auto-part suppliers in two aspects: 1) firm-level survey on the utilization of FTA and 2) statistical inference on the FTA effects on their sales and profit. We use the GLS statistical technique, panel and survey data of 130 secondary auto-part suppliers in the Daegu and Kyungpook area in 2007-2016. The evidence shows that the secondary auto-part suppliers struggle to prepare documents for the FTA certificates of origin due to their small firm size, although they utilize the FTA at the relatively high rate of 92 percent. Statistical evidence shows that an increase in the export of the first vender significantly affects the sale of the secondary auto-part vendors, but not their profit. The low profit and high managing cost of utilizing the FTA deteriorate the utilization effect of the FTA of the secondary auto-part vendors, which is a key factor in a global supply chain and for the competitiveness of the automobile industry. Government policies are required for the secondary auto-part suppliers to utilize the FTA more effectively and share the benefits of tariff reduction with first auto-part vendors under FTA transaction.

• Journal of Korea Trade
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• v.23 no.4
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• pp.131-148
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• 2019

Purpose - Based on the Korea-China FTA as the starting point, this paper makes an empirical analysis of the main influencing factors of the FTA utilization and performance of SMEs. Design/methodology - Taking into account the relationship between the internal and external environmental factors on FTA activities and performance of Korea's SMEs, with PLS-SEM and data obtained by the questionnaire, Smart PLS was applied for the analysis. Findings - The recognition of FTA in SMEs has a significant positive effect on FTA utilization and performance, the international marketing orientation factor only has a significant positive effect on the performance, while the inadequate improvement of non-tariff barriers has a significant negative impact on FTA utilization. In addition, FTA activity has a significant mediation effect on two paths. Originality/value - This paper is of great practical relevance as a tool to enable SMEs to make effective utilization of Korea-China FTA and improve their imports and exports. The paper helps grasp the main factors affecting the utilization and performance of FTA for SMEs, also to establish FTA Business Model and FTA utilization plans for specific industries in the future regarding tariff and non-tariffs compatibility.

• Journal of Korea Trade
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• v.26 no.6
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• pp.41-60
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• 2022

Purpose - The policy implications of free trade agreements have traditionally been a matter of debate among economists. The official signing of the Korea-China Free Trade Agreement provides economists with a quasi-natural experiment to analyze the FTA's policy effects. This article aims to more accurately understand the impact of Korea's FTA accession on the macro economy. Design/methodology - This study adopts the counterfactual method based on panel data to find common factors in the generation process of macro data to fit the counterfactual path, to accurately evaluate the effect of the macro policy. Findings - Our research results show that the signing of the Korea-China FTA has a relatively significant short-term positive effect on Korea's economic growth. On average, Korea's real GDP growth rate has increased by 2.1%. This study finds evidence in support of FTA signing not having a significant impact on Korea's GDP growth in the long run. Additionally, we evaluated the impact of the FTA on Korea's imports and exports and found that it had a significant positive impact in the short term, but the trade effect of the FTA is significantly affected by the external macro-environment. Originality/value - First, this study uses macro panel data at the national level to examine the impact of the Korea-China FTA on Korea, and more accurately describes the policy effect of the FTA. Second, our empirical results show that the Korea-China FTA policy impact is subject to occasional changes in the external environment, such as the geopolitical conflict (crisis) between Korea and China, and the US-China trade war. Finally, the analysis shows that the short-term effect of FTA is significant but the long-term is uncertain, which provides empirical evidence for the debate on whether joining FTA can promote national economic growth.

• Korea Trade Review
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• v.45 no.4
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• pp.1-24
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• 2020

This study aims to analyze the export effects of Korea-Canada FTA's tariff reduction, which was launched on January 1, 2015. First, as a groundwork, this study reviewed trade creation and trade diversion by investigating all possible cases of both initial FTA and additional FTA. The review was done by using the simple model of three countries assuming FTA means elimination of tariff. The review suggested that additional FTA doesn't have any negative impact on import country's social welfare contrary to initial FTA. In additional FTA, Trade diversion could happen between FTA partner countries, but it always increases import country's social welfare. In this sense, it can be called favorable trade diversion. Second, this study analyzed the export effects of Korea-Canada FTA using Clausing's product level model based on Canadian government import data from Korea which is not open to the public. It turned out that Korea-Canada FTA's tariff reduction boosted Canadian import growth rate from Korea. On the other hand, Canadian import growth rate from rest of the world was not negatively affected by Korea-Canada FTA's tariff reduction. Rather, it increased as Canadian import growth rate from Korea was higher. These findings implied trade creation rather than trade diversion of Korea-Canada FTA when it comes to Korea's export to Canada.

• International Commerce and Information Review
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• v.8 no.2
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• pp.249-274
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• 2006

This study extensively investigated Japan's FTA strategy and plan of FTA policy and analyzed the economic effect caused by it. In the analysis of economic effect using world economical model shows not only positive economic effect in home country but also to the foreign country. Recently, Japan's bilateral relation with Korea and China is getting worse, not in a friendly way. Consequently Japan's future FTA negotiation will be expected to be focused on the East-Asia region. In other words, Japan expressed assistance for the purpose of communication, stability and prosperity in the East-Asia and will seek individual economic cooperation with each East-Asia country trying to reinforce the stand of Japan. This means that Japan is trying to improve the relation with Korea and China in the other way because it cannot change the relation with Korea and China on its own. That is to say, It can be interpreted as Japan is trying to reinforce the economic cooperation with other East-Asia countries for the realization of East Asia community rather than directly negotiating with Korea or China.

• International Commerce and Information Review
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• v.12 no.4
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• pp.509-535
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• 2010

This paper examines the Spaghetti bowl effect that different tariffs and rules of origin in multiple FTAs have resulted in increasing the significantly additional burden for business when it comes to apply for the use of FTA preference. The wide spread of FTAs in the several years, from 2003 to 2010, has been the most important trade policy development in economically important Korea. Korea presently has 5 FTAs in effect, and made 3 additional agreements which will be expected to take effect in next year. With the study result and expecting a growing number of FTAs in Korea in a next decade, the international trading firms will face rise of transaction costs for enterprises, particularly small- and medium-sized enterprises(SMEs) to cope with multiple tariffs and rule of origins in FTAs. To help mitigate negative effects and facilitate a more SEMs to use the FTA preference, providing new computer programs system, increasing the awareness of FTA provisions, improving business participation in FTA consultations, and SME support in light of education, and financial support are needed.