The Export Structure of Six Counties in Jeonnam

Abstract

Many economic time-series display regular and seasonal fluctuations. These seasonal fluctuations can raise problems when adjacent data points are compared. Thus this paper adjusts the export demand seasonally in order to remove predictable seasonal variation and isolate trend changes from seasonal patterns. Seasonal adjustment factors are then applied to the underlying export demand to smooth seasonal fluctuations. We use export data collected from the Korea International Trade Association. The date is used to construct seasonal factors by comparing non-seasonally adjusted export with seasonally adjusted ones. A very strong seasonal pattern in both fishery and agricultural products implies that seasonal adjustment factors will reduce the export of these products during above-average seasons, and increase them during below-average seasons. The Herfindahl-Hirschman Index (HHI) has also received considerable attention from researchers from diverse fields, including economists and law scholars, for several years. The U.S. Justice Department's 2010 horizontal merger guideline suggests that markets with an HHI below 1500 is said to be dispersed. A moderately concentrated market exists when the HHI lies between 1500 and 2500, while a highly concentrated market has a HHI above 2500. The HHI of 6 regions range from 3486 up to 8868, meaning that they are in highly concentrated markets. The HHI reveals that the exports of 6 regions are very highly concentrated in only one or fishery and agricultural products at a 2-digit level of disaggregation. The nth concentration ratio also shows that those of 6 regions have a very high concentration degree at the MTI 4- or 6-digit products. We regressed the export of the MTI 4- or 6-digit in fishery and agricultural products on exchange rate, dummy, seasonal dummies, and foreign industrial production. The literature on export demand is voluminous, but few studies have previously estimated the export demand of some regions in Jeonnam. The results show that both exchange rate and economic activity are not significant at reasonable level, but the coefficients of determination are very high. This means that the six counties' exports are determined solely by seasonal dummies.