Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/335564 
Authors: 
Year of Publication: 
2025
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 47 [Issue:] 4 [Year:] 2025 [Pages:] 73-129
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
This paper analyzes how the U.S.-China trade war affected Korean industries and identifies the industry characteristics that determined which industries gained or lost. I show that heterogeneity in responses is closely linked to capital intensity and export intensity, highlighting the role of economies of scale and export readiness. Using detailed industry-level data from Korean manufacturing, the analysis finds that capital-intensive industries with substantial pre-war investments and industries with high export intensity achieved greater growth and cost reductions following the tariff shocks. These findings indicate that industries positioned to expand their scale captured the gains, while others were left behind, emphasizing the importance of targeted and differentiated policy support for pre-investment, capital deepening, and export infrastructure ultimately to enable more industries to leverage external trade disruptions as opportunities for sustained growth.
Subjects: 
Tariff Elasticity
Trade War
Trade Fragmentation
Third-country Effect
Economies of Scale
JEL: 
F12
F13
F14
C33
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-sa Logo
Document Type: 
Article

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