A Comparative Analysis of Determinants of Export Demand by Major Industrial Groups in Korea

Abstract

After COVID-19, supply chain management problems were exposed in the global economy. As a way to prevent this, each country has established a strategy to pursue supply chain localization that expands domestic production from food to strategic products for efficient supply chain management. In this study, the export demand function was used to analyze the export determinants by industry by dividing 10 industries of Korea's total exports from 1995 to 2021 for 10 major export destinations. In particular, it was intended to propose a plan to expand agricultural exports in the mid- to long-term by comparing general manufacturing products with agricultural products through empirical analysis. As a result of the analysis, it was found that there were differences in factors affecting exports by industry. In particular, in the case of exports of agricultural, forestry and fisheries products, the total production of trading partners, the price of Korean export goods, and whether or not an FTA was signed had a significant impact at the 1% significance level. Although Korea's agriculture accounts for a low proportion of gross domestic product, it is evaluated as a field with various functions at various levels, such as food security and sustainable environmental conservation. In the recent growth process of the global agri-food market in the global economy, Korea's agri-food sector is emerging as a blue ocean field. In order to expand the export sector of Korean agricultural products, a national strategy should be established to efficiently combine the roles of agricultural producers, exporters, and the government.