Market Structure and International Trade: Business Groups in East Asia
AbstractIn this paper we study the effect of market structure on the trade performance of South Korea, Taiwan, and Japan. We center our analysis on Korea and Taiwan, countries which have very different market structures: Korea has many large, vertically-integrated business groups known as chaebol, whereas business groups in Taiwan are smaller and horizontally-integrated in the production of intermediate inputs. The exports of these countries to the United States are compared using indexes of product variety and 'product mix', which are constructed at the 5-digit industry level. It is found that Taiwan tends to export a greater variety of products to the U.S. than Korea, and this holds across nearly all industries. In addition, Taiwan exports relatively more high-priced intermediate inputs, whereas Korea exports relatively more high-priced final goods. We argue that these results confirm the importance of market structure as a determinant of trade patterns.
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Bibliographic InfoPaper provided by California Davis - Institute of Governmental Affairs in its series Papers with number 93-23.
Length: 42 pages
Date of creation: 1993
Date of revision:
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Postal: UNIVERSITY OF CALIFORNIA DAVIS, INSTITUTE OF GOVERNMENTAL AFFAIRS, RESEARCH PROGRAM IN APPLIED MACROECONOMICS AND MACRO POLICY, DAVIS CALIFORNIA 95616 U.S.A.
trade ; market;
Other versions of this item:
- Robert C. Feenstra & Tzu-Han Yang & Gary G. Hamilton, 1993. "Market Structure and International Trade: Business Groups in East Asia," NBER Working Papers 4536, National Bureau of Economic Research, Inc.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- repec:fth:michin:324 is not listed on IDEAS
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- Robert C. Feenstra & Deng-Shing Huang & Gary G. Hamilton, 1997. "Business Groups and Trade in East Asia: Part 1, Networked Equilibria," NBER Working Papers 5886, National Bureau of Economic Research, Inc.
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- Yen, Meng-Feng, 2013. "The Wage Premium and Market Structure: The Case of South Korea and Taiwan," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151292, Agricultural and Applied Economics Association.
- Feenstra, Robert C. & Yang, Tzu-Han & Hamilton, Gary G., 1999. "Business groups and product variety in trade: evidence from South Korea, Taiwan and Japan," Journal of International Economics, Elsevier, vol. 48(1), pages 71-100, June.
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