• KDI Journal of Economic Policy
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• v.32 no.2
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• pp.93-143
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• 2010

This paper estimates the impact of Japan's economic sanction on DPRK trade in the 2000s. It conceptualizes the effects of sanction on DPRK trade, econometrically tests whether such effects exist in case of Japan's sanction using currently available DPRK trade statistics, and measures the size of the effects by correcting and reconfiguring the deficiencies of the currently available DPRK trade statistics. The main findings of the paper are as follows. First, Japan's sanction can have two different effects on DPRK trade: 'Sanction Country Effect' and "Third Country Effect.' The former means that the sanction diminishes DPRK trade with Japan while the latter refers to the effects on DPRK trade with other countries as well. The third country effect can arise not simply because the DPRK changes its trade routes to circumvent the sanction, but because the sanction forces the DPRK to readjust its major trade items and patterns. Second, currently no official DPRK trade statistics are available. Thus, the so-called mirror data referring to DPRK trading partners' statistics should be employed for the analysis of the sanction effects. However, all currently available mirror data suffer from three fundamental problems: 1) they may omit the real trade partners of the DPRK; 2) they may confuse ROK trade with DPRK trade; 3) they cannot distinguish non-commercial trade from commercial trade, whereas only the latter concerns Japan's sanction. Considering those problems, we have to adopt the following method in order to reach a reasonable conclusion about the sanction effect. That is, we should repeat the same analysis using all different mirror data currently available, which include KOTRA, IMF and UN Commodity Trade Statistics, and then discuss only the common results from them. Third, currently available mirror data make the following points. 1) DPRK trade is well explained by the gravity model. 2) Japan's sanction has not only the sanction country effect but also the third country effect on DPRK trade. 3) The third country effect occurs differently on DPRK export and import. In case of export, the mirror statistics reveal positive (+) third country effects on all of the major trade partners of the DPRK, including South Korea, China and Thailand. However, on DPRK import, such third country effects are not statistically significant even for South Korea and China. 4) This suggests that Japan's sanction has greater effects on DPRK import rather than its export. Fourth, as far as DPRK export is concerned, it is possible to resolve the abovementioned fundamental problems of mirror data and thus reconstruct more accurate statistics on DPRK trade. Those reconstructed statistics lead us to following conclusions. 1) Japan's economic sanction diminished DPRK's export to Japan from 2004 to 2006 by 103 million dollars on annual average (Sanction Country Effect). It comprises around 60 percent of DPRK's export to Japan in 2003. 2) However, for the same period, the DPRK diverted its exports to other countries to cope up with Japan's sanction, and as a result its export to other countries increased by 85 million dollars on annual average (Third Country Effect). 3) This means that more than 80 per cent of the sanction country effect was made up for by the third country effect. And the actual size of impact that Japan's sanction made on DPRK export in total was merely 30 million dollars on annual average. 4) The third country effect occurred mostly in inter-Korean trade. In fact, Japan's sanction increased DPRK export to the ROK by 72 million dollars on annual average. In contrast, there was no statistically significant increase in DPRK export to China caused by Japan's sanction. 5) It means that the DPRK confronted Japan's sanction and mitigated its impact primarily by using inter-Korean trade and thus the ROK. Fifth, two things should be noted concerning the fourth results above. 1) The results capture the third country effect caused only by trade transfer. Facing Japan's sanction, the DPRK could transfer its existing trade with Japan to other countries. Also it could change its main export items and increase the export of those new items to other countries as mentioned in the first result. However, the fourth results above reflect only the former, not the latter. 2) Although Japan's sanction did not make a huge impact on DPRK export, it might not be necessarily true for DPRK import. Indeed the currently available mirror statistics suggest that Japan's sanction has greater effects on DPRK import. Hence it would not be wise to argue that Japan's sanction did not have much impact on DPRK trade in general, simply using the fourth result above.

• Journal of Distribution Science
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• v.19 no.4
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• pp.37-51
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• 2021

Purpose: The purpose of this study is to provide a basis for establishing a policy to promote the export of Korean goods through the economic ripple effect of the Korean Wave. From 2001 to 2017, cultural goods exports and consumer goods exports data to 102 countries were used to estimate the effect of cultural goods exports on domestic consumer goods exports. Research design, data and methodology: Based on the Gravity Model, we analyzed the effects of domestic film, publishing, music, broadcasting, clothing, cosmetics, processed food, IT products, and automobiles on the export of consumer goods. Results: The empirical analysis estimated the trade creation effect of exports of cultural products driving exports of consumer goods and found that a 1% increase in exports of cultural products increased 0.136% in exports of consumer goods. Conclusions: The average rate of change in consumer goods exports due to changes in cultural product exports was 22.44, which could be interpreted as an increase of $2,244 in exports of consumer goods such as IT products, cosmetics, clothing, and processed foods. According to the analysis of export-driven effects of each consumer item by dividing cultural products by sector, the effects of export of processed foods, clothing, cosmetics, IT products, and film, music, publishing exports were statistically significant.

• International Area Studies Review
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• v.20 no.4
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• pp.23-36
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• 2016

This studies the relationship between ODA and export performance of donor countries in Myanmar. This study analyzes 19 donor countries from 2002 to 2014 by using gravity model. The results show that ODA improves the export performance of donor countries in Myanmar in the period. The larger the amount of ODA, the larger the exports in Myanmar. And the rate of increase of ODA is also important in determining the export performance. These imply that ODA increases donor's export directly as well as indirectly by improving the relationship between donors and receivers. These results are important for Korea that is increasing ODA into Myanmar. Korea should search for a mode of ODA supporting as well as the amount of ODA.

• International Commerce and Information Review
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• v.14 no.4
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• pp.297-315
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• 2012

In this paper, we explore the effects of export insurance on the Korea's export by using the gravity model with the data of 112 countries that Korea exports on years of 2005 and 2009. For this model, we used the Korea export as a dependent variables and real GDP, distance between the two nations, export insurance, country credit rating of the Korea's counterpart countries and FTA were used as an independent variables. The results show that the underwriting performance of the export insurance and the sovereign credit rating of the export counterpart countries have the positive impact on Korea's export. Also, the impact of the export insurance is more increasing to the Korea exportation but the importance of the economy size of the export counterpart countries decreased after 2008 global financial crisis. Particularly, the influence to the export by the sovereign credit rating has diminished in that period and this seems to be due to the export insurance has increased. These results imply that the export insurance plays an important role to promote the Korea's exportation since 2008 global recession. Especially, if the recession continues, then there will be more crippling impact to the small-mid size companies rather than large size companies. Therefore, Korea government should do their best to continuously expand the export insurance for the purpose of increasing Korea exportation, expecially to the small-mid size companies.

• Journal of Technology Innovation
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• v.27 no.2
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• pp.99-122
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• 2019

ODA (Official Development Assistance) aims for practicing international humanitarianism in developing countries. However, ODA donors also seek to find convincing evidence meeting the national economic & political interests in the international community. In this regards, precise & unbiased estimation of the policy effects of ODA aid on the donors' exports to the recipient countries has recently become one of the primary concerns of the ODA donors, especially developing countries including Korea of which economy structure heavily relies on exports for economic growth. Based on the basic gravity model, this study empirically analyzes the effects of technical cooperation ODA delivering skills, knowledge and technical know-how on Korea's exports to the ODA recipient countries using 10-year panel data from 2007 to 2016. Specifically, by incorporating major variables affecting trade such as GDP, distance, FDI etc, the effect of technical cooperation ODA on Korea's exports to the ODA recipient countries is estimated with various kinds of panel models. As a result, technical cooperation ODA has a statistically significant impact on Korea's exports to ODA recipient countries, especially in the exports of intermediate goods. And the detail process of this black-boxed mechanism is scrutinized through case studies on Uzbekistan, The Philippines, and Morocco.

• International Commerce and Information Review
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• v.14 no.3
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• pp.159-183
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• 2012

Promoted in places like Korea, the central government and the local governments that can provide information on which to base investment policy to attract foreign direct mutation-specific gravity model (Shift-Share Model) In this study, the decrease of foreign direct investment performance using factors looked up in the industry. The sample period of 2009, 2010, 2011 nationwide (metropolitan and non-metropolitan separated) of foreign direct investment performance for Industry Standard Industrial Classification (Division) was conducted. Factors to look at the results of the National Growth Effect(NS), the industrial structure effect (IM), local allocation effect(RS) to decrease foreign direct investment in 2010 and 2011 non-metropolitan, metropolitan national growth effect(RS) is negative(-) has a value. Because it appears to be the aftermath of the global recession, the impact on the domestic economy Metropolitan area and the Industrial Mix Effect(IM) to the development of education, culture, business, and transportation, etc. in the development of service industries than in non-metropolitan valid environment. In the sector of services (food accommodation, business services, entertainment), We did it, was able to find the function. However, the Regional Share Effect(RS) be competitive in the manufacturing sector in metropolitan areas in the metal and chemical sectors have been identified. These results seems to enhance the competitiveness of the region, such as the metropolitan area's excellent workforce. Shift-Share analysis technique based on competitive factors of the region, to find the failure has limitations.