A Study on the Characteristics of Intra-Industry Trade for Korea’s E-Commerce Trade

Abstract

Comprehensive studies examining how Korean e-commerce trade works are currently limited. This study seeks to explore whether Korea’s e-commerce trade is more applicable to traditional trade theory or to modern theories. According to our analysis, the share of intra-industry trade (IIT) in modern trade theory is less than that of general trade for Korean e-commerce. Therefore, trade based on comparative advantage can be more valid in explaining e-commerce trade. From results in analyzing the gravity model, it was found that Korea’s e-commerce exports are higher as IIT with its FTA partners. In contrast, it is found that the lower the proportion of e-commerce trade, the higher chance for the import growth. Lastly, this study looked at what kind of comparative advantage is realized through imports. While Korea has been mostly exporting goods of high quality, its major trading partners import products based on price and selection of goods. In order for Korea’s e-commerce to grow, a more strategic approach is necessary. A strategy of high price based on superior quality is not effective, and as e-commerce has radically reduced sales and marketing costs, so a price reduction needs to be reflected in the price of goods for consumers.

Traversing the Macroeconomic Terrain: An Exploration of South Korea’s Economic Responsiveness to Cross-Border E-Commerce Production Technology Alterations in the Global Arena

“…The analysis of the time-oriented impacts of cross-border e-commerce on South Korea's macroeconomic factors is an enlightening endeavor. Commencing with a temporal scope, Cheong and Yoo's [23] longitudinal study over a span of ten years offered insights into the dynamics of employment and wage augmentation within non-traditional sectors, predominantly those encompassed by the burgeoning e-commerce industry. Their study signposted a shift in the labor market paradigm towards digitally driven professions, which unraveled complex considerations about the future work landscape.…”