Chong-Sup Kim

The Impact of Trade Facilitation on the Extensive and Intensive Margins of Trade: An Application for Developing Countries

Previous literature has looked merely into the effect of trade facilitation on aggregate trade, or analyzed trade growth using the extensive and intensive margins. This paper blends these two lines of research for a detailed analysis of the impact of trade facilitation on trade by using highly disaggregated trade data and a more composite index for measuring trade facilitation, also taking into account the export sectors and income levels of countries. As a result, this paper finds that developing countries with higher trade facilitation levels export a wider range of products, especially primary goods. While trade facilitation levels do not have a statistically significant association with trade at the intensive margin in general, further analysis shows that the impact of advanced trade facilitation is the largest for lower middle-income countries in primary goods trade at the intensive margin, and the largest for upper middle-income countries in manufactured goods trade at the intensive margin. More importantly, our policy simulation results suggest that trade facilitation-related policy reforms enable developing countries to benefit from increased trade in manufactured goods at the extensive margin.

China–Latin America Economic Relations in the New Millennium

Relations between China and Latin America have grown rapidly since the beginning of the 21st century. Many countries in the region now enjoy increasing amounts of trade with China. For some, China is a source of foreign investment as well.

Japan’s Internationalization Strategy and Latin America

Japan reinvigorates its engagements in Latin America motivated by the recent good economic conditions. He argues that although Latin America is not the main target of diplomacy and business for Japan, the state of diplomacy and competitiveness in Latin America is the most sensitive indicator of Japanese diplomatic and business strength. He predicts that Japan–Latin America relations will be affected by changing economic diplomacy of the USA and China toward the region and structural transformation of the Japanese economy itself.

Economic Relations Between Korea and Latin America

Geographically, Latin America is the most distant region from Korea. However, economic relations between Korea and Latin America are much closer than what might be expected considering the distance and economic scale of the economies involved.

The effect of export portfolio on export earnings and risks

Purpose – The purpose of this paper is to assess a country’s export returns and return volatility and to demonstrate that such an approach is a relevant method to predict a country’s export earnings and risks. Also to suggest important policy implications for Korea’s trade in terms of diversifying its export structure of products and destinations. Design/methodology/approach – The modern portfolio theory by Markowitz (1959) is applied to predict a country’s export earnings and risks. The import amount of a product, which includes aspects of both price and volume, is used as a measure of returns and return volatility and, as a result, the correlation matrix between 19 product groups covering almost all the export goods is calculated. The empirical analysis to show a strong causal relationship between expected returns and the return volatility of a country’s export portfolio and its real export earnings and risks is also made. Findings – This study demonstrates that the portfolio approach can be a useful method to predict export returns. Also suggests that Korea needs to change its portfolio of both export products and destinations in order to maintain more stable growth of its trade and reduce its vulnerability to an external shock. Research limitations/implications – The empirical tests have many limitations because they are based on simple cross-sectional models. Practical implications – The study shows that the modern portfolio approach to export by using prices and volume as a measure of variation in returns can predict how vulnerable a country’s export earnings is to economic shocks, and thus, provide a useful policy implication in the design of export structure and resource allocation. Originality/value – This study provides a new idea to predict a country’s export earnings and risks by applying the export portfolio.

Intermediate Inputs Industry and Industrial Restructuring: The Case of Mexico

The questions explored in this paper are: Why GDP did not grow as much as exports? Why the structure of GDP did not change as much as that of exports after NAFTA? The reason of these was because a large part of the exports consisted of products assembled in Mexico using imported intermediate inputs. One of the products with the highest export growth rate was electric and electronic products, but because of its poorly developed parts industry, the value added in this industry did not increase so much. On the contrary, the automobile industry was not so dynamic as electronic industry in terms of exports, but its value added increased in a larger scale. This was thanks to a developed auto parts industry in Mexico. Government programs like PROSEC, which allowed a tariff free import of some intermediate inputs, and Chinas strong competitiveness in electronic sector and relatively weak competitiveness in automobile sector, also contributed to the different performance of Mexican electronic sector and automobile sector.