A Study on Changes in the Dependency Structure between Korea and Japan

Abstract

Purpose: This paper focuses on empirically analyzing the changes and characteristics of the division of labor between the two countries after measuring the dependency relationship between Korea and Japan for the past 20 years. The reason for this is due to the increasing protectionism barriers such as export restrictions between Korea and Japan and trade frictions between the US and China. Research design, data, and methodology: The analysis The analysis industries in this study are 9 manufacturing industries in Korea and Japan, and the analysis period was set from 2000 to 2020. The analysis method introduces the backward and forward correlation effects of the international industry model, and ADB-MRIO is used for statistics. Results: As a result of the analysis, it was observed that over the past 20 years, the structure of division of labor between Korea and Japan is changing from Korea’s unilateral dependence on Japan in the past to a two-way structure of dependence between Korea and Japan. In particular, both Korea and Japan are highly dependent on each other in the same industries, so-called electric·electronic and precision machinery, metal products, chemical products, general machinery, and transportation machinery, confirming that a close division of labor has been established. Implications: The analysis results of this study indicate that the level of Korea’s production technology for Japan has been improving over the past 20 years, and at the same time suggest that the structure of division of labor between the two countries is deepening due to the increase in Japan’s dependence on Korea’s production technology.