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The Choice of Export Destinations and Its Determinants: Evidence from Korean Exports

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  • Kichun Kang

    (Yeungnam University)

Abstract

Empirical evidence shows that zeros in a bilateral export matrix are very common and non-zeros are extremely concentrated across destinations. According to the simple version of Melitz (2003) model, variations in market size, as well as variable and fixed trade costs across destinations are potential candidates for explaining the stylized facts on the incidence of zeros and non-zeros in a trade matrix. Using Korean disaggregate export data (HS 10- digit level), this paper finds that export participation depends on destination-specific factors such as destination income, distance, local distribution cost, and fixed entry costs associated with the destination language, institution, and information. In line with this theory, the empirical findings suggest that destination-specific factors are important for shaping the country’s export entries.

Suggested Citation

  • Kichun Kang, 2013. "The Choice of Export Destinations and Its Determinants: Evidence from Korean Exports," Korean Economic Review, Korean Economic Association, vol. 29, pages 139-160.
    • Handle: RePEc:kea:keappr:ker-20130630-29-1-07
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    More about this item

    Keywords

    Zeros and Non-zeros; Destination Heterogeneity; Export Participation;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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