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Determinants of the Korean agricultural trade with the LDCs and the OECD countries

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  • So Yeon LEE

    (Department of Food and Resource Economics, Korea University, Seoul, Korea)

  • Song Soo LIM

    (Department of Food and Resource Economics, Korea University, Seoul, Korea)

Abstract

The study aims to analyze Korea's import trade in agricultural products with (i) the least developed countries (LDCs) and (ii) the Organization for Economic Co-operation and Development (OECD) countries. Extended versions of a gravity model are adopted and the balanced panel data for the unilateral trade over the period of 2003 to 2008 are constructed using the Harmonized System Codes. The Heckman two-stage analysis is incorporated to detect the potential selection bias arising from many zero trades. We find that only preferential tariffs on the LDCs have significantly contributed to the trade flows. However, in contrast, gross domestic products (GDPs), free trade agreements (FTAs), the applied tariff rates, and the exchange rates turn out to be statistically significant in the trade with the OECD countries, thus highlighting the possibility of the potential trade benefits associated with the trade policy reforms. The study is unique in that it empirically estimates the determinants of agricultural trade between the LDCs and developed countries and reveals the potential effectiveness of the preferential treatment and the implementation of the trade policy reforms.

Suggested Citation

  • So Yeon LEE & Song Soo LIM, 2014. "Determinants of the Korean agricultural trade with the LDCs and the OECD countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(3), pages 110-122.
    • Handle: RePEc:caa:jnlage:v:60:y:2014:i:3:id:118-2013-agricecon
    DOI: 10.17221/118/2013-AGRICECON
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    References listed on IDEAS

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    Cited by:

    1. Raul SERRANO & Isabel ACERO & Marta FERNANDEZ-OLMOS, 2016. "Networks and export performance of agri-food firms: New evidence linking micro and macro determinants," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(10), pages 459-470.

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