Current Issue

Seoul Journal of Economics - Vol. 33 , No. 4

[ Article ]
Seoul Journal of Economics - Vol. 33, No. 3, pp.333-354
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 2020
Received 20 May 2020 Accepted 26 Jun 2020

Korea’s Patterns of Trade
Jean Imbs ; Laurent L. Pauwels
Jean Imbs, Professor, NYU Abu Dhabi, Saadiyat Island Campus, Abu Dhabi, UAE, Tel: +971-2-628-7653 (
Laurent L. Pauwels, Business School, University of Sydney, Australia (

JEL Classification: E32, F44


Imbs and Pauwels (2020) introduce a measure of openness based on indirect trade. This paper illustrates the differences in the Korean patterns of trade when openness is measured using conventional measures based on direct trade, and when it is measured using this measure of indirect trade, labeled Export Intensity (EI). According to EI, the Republic of Korea (Korea) has been following an upward trend in openness since 2000 and even after 2010. This stands in contrast with most other large trading countries, including China and Germany. We show this is a reflection of Korea’s integration with a few partner economies, most notably China. Vertical integration is considerable between Korea and China, in manufacturing and in services alike. The extent of this integration would be invisible on the basis of conventional measures of openness.

Keywords: High Order Trade, Republic of Korea, Trade partners, Sectors


All errors are our own.

1. Alcalá, Francisco, and Antonio Ciccone. “Trade and Productivity.” The Quarterly Journal of Economics 119 (No. 2 2004): 613–46.
2. Antràs, P., and D. Chor. “On the Measurement of Upstreamness and Downstreamness in Global Value Chains.” In World Trade Evolution: Growth, Productivity and Employment, edited by Lili Yan Ing and Miaojie Yu. Routledge (2018).
3. Antràs, Pol, and Davin Chor. “Organizing the Global Value Chain.” Econometrica 81 (No. 6 2013): 2127–2204.
4. Bems, Rudolfs, and Robert C. Johnson. “Demand for Value Added and Value-Added Exchange Rates.” American Economic Journal:Macroeconomics 9 (No. 4 2017): 45–90.
5. Bems, Rudolfs, and Ayumu Ken Kikkawa. “Measuring trade in value added with Firm-Level Data.” Working Paper Research 378. National Bank of Belgium (2019).
6. Dietzenbacher, E., B. Los, R. Stehrer, M. P. Timmer, and G. J. de Vries. “The Construction of World Input-Output Tables in the WIOD Project.” Economic Systems Research 25 (2013): 71–98.
7. Head, K., and T. Mayer. “The Empirics of Agglomeration and Trade.” In Handbook of Regional and Urban Economics. North-Holland (2004).
8. Imbs, Jean, and Laurent Pauwels. “High Order Openness.” (2020).
9. Johnson, Robert C. “Trade in Intermediate Inputs and Business Cycle Comovement.” American Economic Journal: Macroeconomics 6 (No. 4 2014).
10. Johnson, Robert C., and Guillermo Noguera. “Accounting for Intermediates: Production Sharing and Trade in Value Added.” Journal of International Economics 86 (No. 2 2012): 224–36.
11. Koopman, Robert, Zhi Wang, and Shang-Jin Wei. “Tracing Value-Added and Double Counting in Gross Exports.” American Economic Review 104 (No. 2 2014): 459–94.