An Analysis of the Effects of Agricultural Export Determinants on Export Expansion

Abstract

Purpose - Globalization has made it possible to divide and specialize across borders, and efficiency-oriented production and consumption have become mainstream. In particular, following COVID-19, the global supply chain has faced a crisis, promoting the localization of supply chains that expand domestic production, and focusing on daily necessities, national strategic products, and food. This study recognizes the structural changes in the agricultural product market in the process of promoting globalization and attempts to estimate the effect of the determinants of the export of agricultural products in Korea on exports. Design/Methodology/Approach - This study aims to analyze the effect on the export of agricultural products by deriving export demand factors for Korean agricultural products from 1996 to 2019 targeting 28 countries that have signed FTAs with Korea. As for the analysis method, the most generalized panel analysis is used to analyze time series data and cross-sectional analysis data. Findings - As a result of estimating the export demand function of agricultural products, it was estimated that the other nation s income (GDP), per capita income (PGDP), exchange rate (EXR), and free trade agreement (FTA), which are determinants of agricultural exports, affected Korea s agricultural products. In particular, it was found that a Free Trade Agreement (FTA) greatly contributed to the expansion of agricultural exports. However, contrary to the analysis expectations, it was analyzed that the relative price index (REPRI) did not directly affect exports. Research Implications - This study derives the most representative variable among the export determinants on the export of Korean agricultural products covered in previous studies whether it actually affects export expansion. Based on the estimated results, it is meaningful in that it presented the necessity of exporting agricultural products to improve income and competitiveness in the domestic agricultural sector.