A Study on the Trade Competitiveness of Korea to ASEAN in IT Industry

Abstract

Purpose: The purpose of this paper is to analyze the trade structure and competitiveness of Korea’s information technology (IT) industry in comparison to that of ASEAN, particularly in terms of quality. Research design, data, and methodology: Indices such as trade specialization index (TSI), Revealed Comparative Advantage (RCA), and Market Comparative Advantage (MCA) are used. Further, an Intra-industry Trade (IIT) index is used to analyze qualitative changes in horizontal intra-industry trade and Intra-industry trade of high- and low-quality goods. Results: An analysis of export competitiveness through RSCA analysis showed that the Korean IT industry’s competitiveness against ASEAN is strong, and its competitiveness is gradually improving. By classification, broadcasting devices, parts, communication devices, and information devices were found to be highly competitive. In addition, the competitiveness of broadcasting, parts and communication devices in 2018 compared to 2010 has been shown to be more competitive and improved, but information devices have weakened further. According to the IIT analysis, more than 60% of Korea and ASEAN were made up of trade in the industry, and as of 2018, the ASEAN Korean IT industry had improved qualitative competitiveness compared to 2010. As a result of IIT analysis based on trade volume, HIIT has decreased and VIIT has increased, indicating that trade within horizontal industries is shifting from vertical to vertical industries. The analysis of IIT based on the number of items showed that HIIT is increasing and VIIT is decreasing, unlike the analysis of trade volume. However, as VIITL is decreasing and VIITH is increasing, the qualitative competitiveness of ASEAN Korea IT has improved. Implications: This study has academic and political implications, as it analyzes changes in Korea’s IT trade competitiveness. However, it is somewhat limited as factors determining qualitative aspects has not been considered.