An Analysis of Determinants of Agricultural Product Export Using Export Functions

Abstract

Under the economic environment centering on the WTO and FTA, global markets are opening at an accelerated pace under a dynamic economic environment, and the agricultural sector is no exception. Due to changes in the market environment, Korea’s exports of agricultural products are also increasing. Exports of agricultural products were only US$300 million in 1971, but this figure soared to US$3.5 billion in 1995, and as a result of aggressive expansion strategies, exports of agricultural products rose to US$9.2 billion in 2017. In this study, we analyzed the factors that determine the exports of agricultural products in Korea. Under an environment in which the structure of the agricultural markets are changing due to globalization, localization, emergence of emerging export countries, changes in income structure, and increased interest in health food. This study extracted import and export data from KATI and estimated export function of agricultural products in Korea by using panel analysis method using STATA 15 version. The countries which 15 countries with high export performance subject to analysis were limited to those exporting more than US$100 million of farm products and those exporting more than US$300 million of farm products, and the total export function was estimated at the same time. According to the analysis results, the factors affecting the nation’s agricultural exports are GDP and the signing of FTAs, each of which is statistically significant at a significance level of 1%. An analysis of countries exporting more than US$300 million showed significant results in terms of per capita national income (PGDP) and relative prices over a significant range. As a result, the analysis of the countries where the nation’s agricultural exports are high showed that the economic scale of other countries, per capita income, relative price index, and FTA agreements in force are the main factors of the expansion of Korea’s agricultural product export.