Global trade of South Korea in competitive products and their impact on regional dependence

Abstract

The economic growth of a nation under the competition among countries can result from the interaction of the diversity and complexity of product export and import relations on the globe. This research aims to evaluate the competitiveness of South Korea's trading products and its partner countries' dependency by implementing a product and partner-based analysis. This research raises questions about the transactional positions of products and trading partners based on the diversification of import-export relations of South Korea. This study utilizes the matrix of products and trading partners from the Korean product export and import data from 1995 to 2015. The research analyzes Korea's product competitiveness and dependency of trading countries on Korea using the Revealed Comparative Advantage (RCA) and a nonlinear iterative method (NIM). The study finds that the products of several manufacturing industries showed a large production scale. From the global perspective, the trade dependency on Korea was high in Asia and in Africa and South America where the portion of underdeveloped or developing countries is relatively large. This research suggests that Korea may face difficulties of continuing growth if it maintains or intensifies its trade relation pattern under the environment of rapidly changing technology and economy. Therefore, diversification and mutual complementarity could be important for the export of promising products and industrial development policy.