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The impact of export controls on international trade: Evidence from the Japan–Korea trade dispute in semiconductor industry

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  • Makioka, Ryo
  • Zhang, Hongyong

Abstract

In July 2019, the Japanese government announced export controls to South Korea of three chemical inputs essential in semiconductor production. This paper investigates the short- to middle-run effect of the Japan–Korea export controls on the trade patterns of the restricted and other related products of the semiconductor industry. The results show that the export controls caused a large decline in Japanese exports to South Korea of one of the three restricted inputs, hydrogen fluoride, but not in the other two restricted inputs, photoresist and fluorinated polyimide. Second, South Korea reallocated the sourcing of the restricted chemical inputs from Japan to other economies such as Belgium, the U.S., and Taiwan. Third, there was negative spillover effect on the South Korean imports of semiconductor manufacturing equipments, which is used complementarily with the restricted inputs in the semiconductor production. These results suggest a potential role of export controls in sourcing patterns and production relocation in the semiconductor industry.

Suggested Citation

  • Makioka, Ryo & Zhang, Hongyong, 2024. "The impact of export controls on international trade: Evidence from the Japan–Korea trade dispute in semiconductor industry," Journal of the Japanese and International Economies, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:jjieco:v:74:y:2024:i:c:s0889158324000327
    DOI: 10.1016/j.jjie.2024.101336
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    More about this item

    Keywords

    Trade; Export controls; Semiconductors; Japan–Korea trade disputes;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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