Changes in Trade Intensity between Korea and Russia in the Manufacturing Sector

Abstract

This paper analyzes how trade intensity between Korea and Russia changed from 2000 to 2005. For this purpose, we measured the trade intensity index, the trade complementarity index, and the special country bias index between Korea and Russia by using trade intensity index model developed by Yamazawa (1970). The OECD trade matrix was used as data. It was found that Korea's trade intensity with Russia increased from 1.64 in 2000 to 2.31 in 2005 due to a considerable increase in Korea's special country bias with Russia from 1.93 in 2000 to 2.18 in 2005. Therefore Korea's special country bias with Russia should be enhanced further by increasing capital movements and reducing discriminatory tariffs and other import restrictions between Korea and Russia. It was also found that trade intensity between Korea and five other East European countries (i.e., Poland, Slovakia, Hungary, Czech Republic, and Bulgaria) shows a similar pattern of the above trade intensity between Korea and Russia. On the other hand, trade intensity between Korea and two other East European countries (i.e., Romania and Slovenia) showed the opposite results.