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An export strategy and technology networks in the Republic of Korea

Discussion Papers

No.397

by MIZUNO Junko
March 2013

ABSTRACT

In Korea, trade with Japan has had a deficit since the normalization of Japan-Korea diplomatic relations in 1965. Korea’s trade balance with Japan has remained in deficit since then, although Korean companies have become bigger compared to Japanese companies. My hypothesis is that the problem has been caused because Korea introduced technologies from Japan. However, in recent years Korean companies could not introduce technologies through technical cooperation with Japan like in the 1990s. In addition, the Korean government seemed to encourage domestic production for import substitution. Nevertheless, the deficit has continued. I thought it necessary to check my hypothesis in order to discover whether or not it was persuasive.



Keywords: Korea’s trade balance with Japan, Technology networks
JEL classification: F1, O1, O5

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