IDEAS home Printed from https://ideas.repec.org/a/spr/elcore/v21y2021i3d10.1007_s10660-019-09358-3.html
   My bibliography  Save this article

An analysis of the effects of electronic commerce on the Korean economy using the CGE model

Author

Listed:
  • Yoonkyo Cho

    (Duksung Women’s University)

  • Taehwan Kim

    (Anyang University)

  • Jaewhak Roh

    (Hansung University)

Abstract

The purpose of this paper is to analyze the economic effects of foreign direct online purchasing on the Korean economy using computable general equilibrium and to analyze the future growth of electronic commerce. We assumed that foreign online direct purchasing has reduced transaction costs in two ways: reduction of tariff equivalents and a decline in direct import prices. Simulation results showed that the reduction of both tariff equivalents and import prices due to an increase in foreign direct online purchasing increased the public welfare of the Korean economy. We also found that the reduction of import prices had a greater impact on the welfare increase than did the tariff reduction. Therefore, electronic commerce has a positive impact on the Korean economy, and we expect that businesses in the field will be diversified and prosper in the future.

Suggested Citation

  • Yoonkyo Cho & Taehwan Kim & Jaewhak Roh, 2021. "An analysis of the effects of electronic commerce on the Korean economy using the CGE model," Electronic Commerce Research, Springer, vol. 21(3), pages 831-854, September.
    • Handle: RePEc:spr:elcore:v:21:y:2021:i:3:d:10.1007_s10660-019-09358-3
    DOI: 10.1007/s10660-019-09358-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10660-019-09358-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10660-019-09358-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 141-162, April.
    2. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    3. Shelanski, Howard A & Klein, Peter G, 1995. "Empirical Research in Transaction Cost Economics: A Review and Assessment," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 335-361, October.
    4. Rutherford, Thomas F, 1999. "Applied General Equilibrium Modeling with MPSGE as a GAMS Subsystem: An Overview of the Modeling Framework and Syntax," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 1-46, October.
    5. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    6. Brandt, Loren & Morrow, Peter M., 2017. "Tariffs and the organization of trade in China," Journal of International Economics, Elsevier, vol. 104(C), pages 85-103.
    7. Yu Wang (Avery. W) & Yi Wang & Soo Hee Lee, 2017. "The Effect of Cross-Border E-Commerce on China’s International Trade: An Empirical Study Based on Transaction Cost Analysis," Sustainability, MDPI, vol. 9(11), pages 1-13, November.
    8. Luis Garicano & Steven N. Kaplan, 2001. "The Effects of Business-to-Business E-Commerce on Transaction Costs," NBER Chapters, in: E-commerce, pages 463-485, National Bureau of Economic Research, Inc.
    9. Stéphane Hallegatte, 2008. "An adaptive regional input-output model and its application to the assessment of the economic cost of Katrina," Post-Print hal-00716550, HAL.
    10. Wen Li Cheng & Jeffrey Sachs & Xiaokai Yang, 2005. "A General-Equilibrium Re-Appraisal Of The Stolper-Samuelson Theorem," World Scientific Book Chapters, in: An Inframarginal Approach To Trade Theory, chapter 8, pages 131-149, World Scientific Publishing Co. Pte. Ltd..
    11. de Muro, Pasquale & Salvatici, Luca, 2001. "The Common Agricultural Policy In Multisectoral Models," Working Papers 14804, National Institute of Agricultural Economics, Italy - INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    12. Tuan Anh Luong, 2011. "The Impact of Input and Output Tariffs on Firms' Productivity: Theory and Evidence," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 821-835, November.
    13. Saridakis, George & Lai, Yanqing & Mohammed, Anne-Marie & Hansen, Jared M., 2018. "Industry characteristics, stages of E-commerce communications, and entrepreneurs and SMEs revenue growth," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 56-66.
    14. Bin Guo & Shasha Zhou, 2017. "What makes population perception of review helpfulness: an information processing perspective," Electronic Commerce Research, Springer, vol. 17(4), pages 585-608, December.
    15. Auerbach, Alan J & Kotlikoff, Laurence J, 1987. "Evaluating Fiscal Policy with a Dynamic Simulation Model," American Economic Review, American Economic Association, vol. 77(2), pages 49-55, May.
    16. Peter B. Dixon & Maureen T. Rimmer, 1998. "Forecasting and Policy Analysis with a Dynamic CGE Model of Australia," Centre of Policy Studies/IMPACT Centre Working Papers op-90, Victoria University, Centre of Policy Studies/IMPACT Centre.
    17. Murray C. Kemp & Koji Shimomura, 2003. "A Dynamic Heckscher–Ohlin Model: The Case of Costly Factor Reallocation," The Japanese Economic Review, Japanese Economic Association, vol. 54(3), pages 237-252, September.
    18. Berthon, Pierre & Pitt, Leyland F. & Watson, Richard T., 1996. "The World Wide Web As An Advertising Medium:," Journal of Advertising Research, Cambridge University Press, vol. 36(1), pages 43-54, January.
    19. McCole, Patrick & Ramsey, Elaine & Williams, John, 2010. "Trust considerations on attitudes towards online purchasing: The moderating effect of privacy and security concerns," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1018-1024, September.
    20. Robinson, Sherman & Roland-Holst, David W., 1988. "Macroeconomic structure and computable general equilibrium models," Journal of Policy Modeling, Elsevier, vol. 10(3), pages 353-375.
    21. Robson, Edward N. & Wijayaratna, Kasun P. & Dixit, Vinayak V., 2018. "A review of computable general equilibrium models for transport and their applications in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 31-53.
    22. Enkhbayar Shagdar & Otgonsaikhan Nyamdaa, 2017. "Impacts of Import Tariff Reforms on Mongolia's Economy: CGE Analysis with the GTAP 8.1 Data Base," The Northeast Asian Economic Review, ERINA - Economic Research Institute for Northeast Asia, vol. 5(1), pages 1-25, March.
    23. Joseph Francois & Bertin Martens & Fan Yang, 2014. "The Macro-economic Impact of Cross-border eCommerce in the EU," JRC Working Papers on Digital Economy 2014-10, Joint Research Centre.
    24. Herbert E. Scarf, 1967. "On the Computation of Equilibrium Prices," Cowles Foundation Discussion Papers 232, Cowles Foundation for Research in Economics, Yale University.
    25. Ballard, Charles L & Shoven, John B & Whalley, John, 1985. "General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States," American Economic Review, American Economic Association, vol. 75(1), pages 128-138, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yao Li & Yugang He & Renhong Wu, 2023. "Traversing the Macroeconomic Terrain: An Exploration of South Korea’s Economic Responsiveness to Cross-Border E-Commerce Production Technology Alterations in the Global Arena," Sustainability, MDPI, vol. 15(15), pages 1-20, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tran, Chung & Wende, Sebastian, 2021. "On the marginal excess burden of taxation in an overlapping generations model," Journal of Macroeconomics, Elsevier, vol. 70(C).
    2. Stefania Lovo & Gonzalo Varela, 2022. "Internationally Linked Firms and Productivity in Pakistan: A Look at the Top End of the Distribution," Journal of Development Studies, Taylor & Francis Journals, vol. 58(10), pages 2110-2131, October.
    3. Daphne Chen & Shi Qi & Don Schlagenhauf, 2018. "Corporate Income Tax, Legal Form of Organization, and Employment," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(4), pages 270-304, October.
    4. Chevassus-Lozza, Emmanuelle & Gaigné, Carl & Le Mener, Léo, 2013. "Does input trade liberalization boost downstream firms' exports? Theory and firm-level evidence," Journal of International Economics, Elsevier, vol. 90(2), pages 391-402.
    5. Siwage Dharma Negara & Dionisius A. Narjoko & Kazunobu Hayakawa, 2024. "Impacts of Tariff Rates on Input Source Choice: Evidence from Indonesia," The Developing Economies, Institute of Developing Economies, vol. 62(1), pages 28-44, March.
    6. Scemama, Pierre & Levrel, Harold, 2019. "Influence of the Organization of Actors in the Ecological Outcomes of Investment in Restoration of Biodiversity," Ecological Economics, Elsevier, vol. 157(C), pages 71-79.
    7. Zemskov Peter & Zemskov Sergey, 2000. "Nizhny Novgorod: Computable General Equilibrium in One Region with Barter and Arrears," EERC Working Paper Series 99-14e, EERC Research Network, Russia and CIS.
    8. Xavier Labandeira & Miguel Rodriguez, 2004. "The Effects of a Sudden CO2 reduction in Spain," Others 0412001, University Library of Munich, Germany.
    9. Chahreddine ABBES, 2009. "When Free Trade is Good for the Environment?," EcoMod2009 21500000, EcoMod.
    10. Casey Mulligan & Tomas Philipson, "undated". "Merit Motives and Government Intervention: Public Finance in Reverse," University of Chicago - Population Research Center 2000-03, Chicago - Population Research Center.
    11. L.J. Kimbell & G.W. Harrison, 1982. "General Equilibrium Analysis of Regional Fiscal Incidence," Economics Discussion / Working Papers 82-06, The University of Western Australia, Department of Economics.
    12. Homburg, Stefan, 2010. "Allgemeine Steuerlehre: Kapitel 1. Grundbegriffe der Steuerlehre," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 92547.
    13. José M. Labeaga & Miguel Rodríguez & Xavier Labandeira, 2006. "A Macro and Microeconomic Integrated Approach to Assessing the Effects of Public Policies," Working Papers 2006-02, FEDEA.
    14. Bai, Xue & Hong, Shengjie & Wang, Yaqi, 2021. "Learning from processing trade: Firm evidence from China," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 579-602.
    15. Ian Parry, 2001. "The Costs of Restrictive Trade Policies in the Presence of Factor Tax Distortions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(2), pages 147-170, March.
    16. Bas, Maria & Strauss-Kahn, Vanessa, 2015. "Input-trade liberalization, export prices and quality upgrading," Journal of International Economics, Elsevier, vol. 95(2), pages 250-262.
    17. Javier Ferri & Antonio G. Gómez-Plana & Joan A. Martín-Montaner, 2006. "Illegal immigration booms and welfare in the host country," European Journal of Population, Springer;European Association for Population Studies, vol. 22(4), pages 353-370, December.
    18. Fabrice Defever & Alejandro Riaño, 2017. "Twin peaks," CEP Discussion Papers dp1505, Centre for Economic Performance, LSE.
    19. Thissen, Mark, 1998. "A classification of empirical CGE modelling," Research Report 99C01, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    20. Lu, Jiankun & Zhang, Hongsheng & Meng, Bo, 2021. "Corruption, firm productivity, and gains from import liberalization in China," Economic Modelling, Elsevier, vol. 101(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elcore:v:21:y:2021:i:3:d:10.1007_s10660-019-09358-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.