BOK Working Paper No.2024-3, Analyzing the Impact of Technical Barriers to Trade (TBT) in Exporting Countries on South Korean Exports: A Comparative Study Based on the Intensive and Extensive margins of Exports and Industry-Specific Characteristics

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2024.03.12
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International Economic Studies Team(02-759-5478)

Title : Analyzing the Impact of Technical Barriers to Trade (TBT) in Exporting Countries on South Korean Exports: A Comparative Study Based on the Intensive and Extensive margins of Exports and Industry-Specific Characteristics

Author : Yong Joon Jang(KyungHee University), Sangho Shin(Bank of Korea)



This study analyzes how the intensive and extensive margins of exports, as well as industry-specific characteristics, influence the export effects mechanism of foreign Technical Barriers to Trade (TBT) measures. Using industry-specific export data and diverse characteristics for 26 countries from 2015 to 2019, we applied a two-way fixed-effects model to the gravity equation. The results indicate that foreign TBT generally had a negative impact on Korean exports. Particularly, this effect was prominently observed at the extensive margin where the number of exporting firms decreased. Additionally, by incorporating various industry-specific characteristic variables such as capital accumulation, value-added, and labor productivity into the analysis, it was generally observed that the export barrier effect of foreign TBT on the extensive margin of exports is less pronounced in industries with high levels of these variables. These findings suggest that, in addressing TBT issues, diplomatic efforts such as trade negotiations should be complemented by government strategies focused on enhancing productivity and market competitiveness of industries and businesses, especially small and medium-sized enterprises (SMEs).

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