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Military Alliances and Reality of Regional Integration: Japan, South Korea, the US vs. China, North Korea


  • Goo, Young-Wan

    () (Department of Economics, Chungbuk National University)

  • Lee, Seong-Hoon

    () (Department of Economics, Cheongju University)


East Asian military security is of overarching importance in the economic integration and prosperity in this region. This study analyzes how South Korea and Japan consider the U.S. as a military ally in the context of the China–North Korea alliance by using the iterative Seemingly Unrelated Regression(SUR) method in estimating defense goods demand functions. The findings are that Japan considered the U.S. to be a closer ally than the U.S. did during 2000~2005 and South Korea may regard the U.S. as a closer ally than vice versa. The U.S. regards Japan as a closer ally than Korea. South Korea’s demand for defense goods has not been increased by the threat from the China–North Korea alliance but American and Japanese demand has recently been increased by the threat, implying that South Korea has not regarded the China–North Korea alliance as a significant threat whereas that Japan and the U.S. have recognized the military alliance as a serious one.

Suggested Citation

  • Goo, Young-Wan & Lee, Seong-Hoon, 2014. "Military Alliances and Reality of Regional Integration: Japan, South Korea, the US vs. China, North Korea," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 329-342.
  • Handle: RePEc:ris:integr:0631

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    References listed on IDEAS

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    More about this item


    Military Alliance; Defense Goods; Threat Elasticity; Spill-In Elasticity (SIE); Public Good;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East


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