Vertical intra-industry trade and product quality: the case of South Korea, 1996–2003

Authors

  • Minsung Kang Korea Institute for Industrial Economics and Trade (KIET)
  • Jeong-Dong Lee Seoul National University

DOI:

https://doi.org/10.17811/ebl.1.3.2012.37-47

Abstract

This paper contributes to empirical research of intra-industry trade, especially vertical intra-industry trade (VIIT), by two aspects. Firstly, we separate VIIT into higher-export-price VIIT and lower-export-price VIIT. Secondly, we give attention to R&D and FDI stock in explaining VIIT determinants. Applied to panel data representing South Korea’s bilateral trade with 15 OECD countries and Taiwan from 1996 through 2003, this alternative makes an intricate understanding of the VIIT determinants possible. Main empirical findings are that South Korea’s R&D investments focus on price competitiveness while its inward FDI seeks efficiency and its outward FDI seeks a market in this period.

Author Biographies

Minsung Kang, Korea Institute for Industrial Economics and Trade (KIET)

-Ph.D. in Seoul National University (Economics)

-Associate Research Fellow at KIET

Jeong-Dong Lee, Seoul National University

-Professor at Seoul National University (tenured)

References

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Published

05-11-2012

How to Cite

Kang, M., & Lee, J.-D. (2012). Vertical intra-industry trade and product quality: the case of South Korea, 1996–2003. Economics and Business Letters, 1(3), 37–47. https://doi.org/10.17811/ebl.1.3.2012.37-47

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Section

Articles