A Study on Export Trade Efficiency and Potential of Korean Semiconductor Industry: Empirical Evidence from 72 Trade Export Countries

Abstract

Purpose - The semiconductor industry is an integral part of the Korean economy. Trade competition in semiconductors, the core component of the fourth industrial revolution, has become increasingly fierce. In this context, this study aims to empirically analyze the current situation, international competitiveness, and challenges faced by Korea’s semiconductor export trade from the perspective of trade efficiency by using Korea’s semiconductor export trade data. Design/Methodology/Approach - Using a stochastic frontier gravity model, this study analyzes the data of 72 countries and regions that have been the main targets of Korea’s semiconductor exports for the past 22 years using an empirical approach to investigate the main factors affecting Korea’s semiconductor export trade, trade efficiency, and trade potential. Findings - From the division of semiconductor export market type, there are 13 saturated countries, and the trade volume accounts for 77.86% of the total trade volume of Korea’s semiconductor exports. There were 31, 16, and 12 expansion, development, and iceberg-type countries, respectively. In addition, the regression results show that Korea’s population size and the R&D expenditures of the countries with which it trades have a significantly positive effect on semiconductor exports. Research Implications - To date, no more systematic empirical research literature on the efficiency of Korean semiconductor export trade has been found, and this study fills the gap in the literature in this area through an empirical analysis approach. This study aims to provide a reference value in Korea’s semiconductor export trade.