Market Structure and International Trade: Business Groups in East Asia / Robert C. Feenstra, Tzu-Han Yang, Gary G. Hamilton.

Format:

Book

Author/Creator:

Feenstra, Robert C.

Contributor:

National Bureau of Economic Research.

Yang, Tzu-Han.

Hamilton, Gary G.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4536.

NBER working paper series no. w4536

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Market Structure and International Trade

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1993.

Summary:

In this paper we study the effect of market structure on the trade performance of South Korea, Taiwan, and Japan. We center our analysis on Korea and Taiwan, countries which have very different market structures: Korea has many large, vertically-integrated business groups known as chaebol, whereas business groups in Taiwan are smaller and horizontally-integrated in the production of intermediate inputs. The exports of these countries to the United States are compared using indexes of product variety and 'product mix', which are constructed at the 5-digit industry level. It is found that Taiwan tends to export a greater variety of products to the U.S. than Korea, and this holds across nearly all industries. In addition, Taiwan exports relatively more high-priced intermediate inputs, whereas Korea exports relatively more high-priced final goods. We argue that these results confirm the importance of market structure as a determinant of trade patterns.

Notes:

Print version record

November 1993.