The dynamic patterns of Korea’s export specialization

The Dynamic Patterns of Korea’s Export Specialization 177

The Dynamic Patterns of Korea’s

Export Specialization

Nguyen Khanh Doanh*

1

Abstract

This paper takes investigation into the dynamics of Korea’s export

specialization. Using various analytical tools, our empirical findings

are established as follows. First, Korea follows the Heckscher-Ohlin

model. In other words, the patterns of Korea’s comparative

advantage have become more in conformity with its factor

endowment. Second, the pattern of Korea’s revealed comparative

advantage has been more or less diverged. The results show that

there is a movement towards specialization. Third, while RCA

indices in class a is persistent, the corresponding figure for classes

b, cand d exhibit moderate variation in their pattern. Fourth, while

unskilled labor intensive products show relatively high degree of

export specialization, other product categories exhibit relatively high

degree of export diversification. Overall, there is a upward trend in

the degree of specialization for all commodity groups. Finally,

Korea’s exports are heavily dominated by technology and human

capital intensive products.

Keywords: Revealed Comparative Advantage, Galtonian Regression,

Transition Probability Matrix, Gini-Hirschman Index, Korea

* Dean, The Faculty of Graduate Studies, Thai Nguyen University of Economics and

Business Administration, Vietnam. Senior Researcher, IIAS, Sogang University, Korea

E-mail: [email protected]

178 Nguyen Khanh Doanh

I. Introduction

This paper seeks to empirically examine the patterns and dynamics

of Korea’s export specialization in the period 1997-2010. The logic of

export specialization was originally developed to explain the underlying

reasons for international trade and predict the trade pattern resulting

from changes in factor endowment and technology. Accordingly, free

trade would allow countries to gain from increasing specialization in

activities where they have comparative advantage under autarky.

Seeking for this aim, we focus on the following research objectives:

∙ To assess the patterns and dynamics of Korea’s export

specialization.

∙ To analyze the mobility of Korea’s revealed comparative advantage

and the degree of export specialization.

∙ To derive policy implications based on the empirical findings.

The rest of this paper is structured as follows. Section 2 provides

the indicators and the background for the analysis of export

specialization. Section 3 describes the data base used. The in-depth

analysis of the patterns and dynamics of Korea’s export specialization

is presented in Section 4. Concluding remarks are included in the final

section.