A Study on the Effect of Investment Types on Major Export Sectors in Korean Industry
Ho-Young Son, Jae-Hwa Lee · 2022
This study examines the effect of investment types on 10 major export sectors in Korean Industry during the recent ten years. In particular, it attempts to estimate the role of the three channels of investment types such as equipment investment, R&D investment and foreign direct investment in the effect. Three panel data models were established and estimated with using a data set of 10 major export sectors in Korean Industry during the current decade from 2010 to 2019. The empirical estimation reports the results that equipment investment had a positive effect on the amounts of export in major export sectors in Korean industry, while R&D investment and foreign direct investment had an inconsistent effect on them. In addition, the labor productivity had significant impact on the exports. These stylized findings are consistent across the two different models of the basic model and the revised model. More importantly, it is likely to reflect indirectly the trade structure in major export sectors, in which high-tech-intensive intermediate products account for a large proportion of major exports. This trend is expected to continue as long as Korea maintains a competitive advantage in major export sectors of technology-intensive industries. The study proposes a future study on short-run and long-run effects in the role of R&D on exports. It also emphasizes the implication of policy support and strategical consideration for the role of investment, particularly R&D and equipment investment in major export sectors in Korean industry.