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Impact of Tighter Controls on Japanese Chemical Exports to Korea

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  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies, Tokyo, Japan)

Abstract

The Japanese Ministry of Economy, Trade and Industry announced recently that they will terminate preferential treatment in the licensing of specific chemical products for export to South Korea. This announcement evoked concern that the impact on Korean semiconductor and electronics industries, which rely heavily on imports from Japan, might cause a serious supply shortage in the global semiconductor market. To assess the economic impact of tighter export controls, this study simulates: (a) imposition of an export tax on chemical products; and (b) a productivity decline in the electronics sector in Korea, using a world trade computable general equilibrium model. The results of these simulations indicate that such a productivity decline would cause only slight harm to the Japanese and world economies, aside from the electronics sector in Korea, and that an export tax would significantly distort trade patterns and undermine the welfare of Japan and Korea in a similar magnitude. However, welfare loss normalized for GDP size would be far smaller in Japan than in Korea.

Suggested Citation

  • Nobuhiro Hosoe, 2019. "Impact of Tighter Controls on Japanese Chemical Exports to Korea," GRIPS Discussion Papers 19-17, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:19-17
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    2. He, Yuhan & Lyu, Jinqiu, 2025. "Export controls and innovation transfer within Chinese business groups: Evidence from the U.S. entity list," Research Policy, Elsevier, vol. 54(9).
    3. Li, Haoyang & Wang, Xue & Liu, Chenyang & Han, Lin, 2024. "Do technology export regulations impact corporate trade credit financing? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    4. Huang, Hengxuan & Liu, Suyi & Gong, Yuan & Yan, Zehao & Ge, Zhixiang, 2025. "Export control and earnings management: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 104(PB).
    5. Hayakawa, Kazunobu & Ito, Keiko & Fukao, Kyoji & Deseatnicov, Ivan, 2023. "The impact of the strengthening of export controls on Japanese exports of dual-use goods," International Economics, Elsevier, vol. 174(C), pages 160-179.
    6. Han Hu & Shihui Yang & Lin Zeng & Xuesi Zhang, 2024. "U.S.–China trade conflicts and R&D investment: evidence from the BIS entity lists," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    7. Shin, Sangho & Balistreri, Edward J., 2022. "The other trade war: Quantifying the Korea–Japan trade dispute," Journal of Asian Economics, Elsevier, vol. 79(C).
    8. Liu, Qing & Jia, Deting & Liu, Huiling & Wang, Kai, 2025. "Good for bad: The heterogeneous effects of export controls on firms' ESG," China Economic Review, Elsevier, vol. 90(C).
    9. Jia, Zhijie & Lin, Boqiang & Wen, Shiyan, 2022. "Electricity market Reform: The perspective of price regulation and carbon neutrality," Applied Energy, Elsevier, vol. 328(C).
    10. Yuan Qiu & Di Zhou, 2024. "De‐politicization and corporate social responsibility: Empirical evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3668-3684, July.
    11. Sajid Anwar & Beibei Hu & Qiao Luan & Kai Wang, 2024. "Export controls and innovation performance: Unravelling the complex relationship between blacklisted Chinese firms and U.S. suppliers," The World Economy, Wiley Blackwell, vol. 47(7), pages 2995-3033, July.
    12. Natsuki Kamakura, 2022. "From globalising to regionalising to reshoring value chains? The case of Japan’s semiconductor industry [Reorienting the drivers of development: alternative paradigms]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(2), pages 261-277.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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