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The Heterogeneous Effects of Trade Facilitation on Trade in Intermediate Goods: The Case of Korea, China, and Japan

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Abstract

This paper empirically examines the impact of trade facilitation on the trade of intermediate goods in Korea, China, and Japan, along with their trading partner countries, during the period from 2008 to 2017. We particularly focus on the distinct roles of hard and soft environments in trade facilitation. Trade facilitation levels are quantified using principal component analysis, and regression analyses are conducted using the two-way fixed-effects model and the Arellano-Bond estimator. The regression results indicate that overall trade facilitation has the greatest positive impact on Korea’s trade in intermediate goods. The hard environment significantly drives China’s trade growth in intermediate goods, while the soft environment exerts the most substantial influence on Japan’s trade growth in intermediate goods. These findings provide policy implications for regional cooperation and the enhancement of global value chains (GVCs) among Korea, China, and Japan.

Suggested Citation

  • Yan , Tong & Jang, Yong Joon, 2025. "The Heterogeneous Effects of Trade Facilitation on Trade in Intermediate Goods: The Case of Korea, China, and Japan," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 29(1), pages 77-104, March.
    • Handle: RePEc:ris:eaerev:0445
    DOI: 10.11644/KIEP.EAER.2025.29.1.445
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    More about this item

    Keywords

    Trade Facilitation; Intermediate Goods Trade; Global Value Chain;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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