THE COMPETITION BETWEEN CHINA AND SOUTH KOREA FOR EXPORT MARKETS IN LATIN AMERICA: AN ANALYSIS BY TECHNOLOGICAL CATEGORIES
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Abstract
The trade competition between China and South Korea for Latin America’s market over the period 2001-2019 is researched in this paper. We build an export quality index based on the classification of exports by technological intensity to show China’s and Korea’s export profiles have become more similar over time. Additionally, we calculate an index of competition between the said countries in Latin American markets. We then compute an exports function of South Korean exports to Latin America using a dynamic panel data analysis where the competition index, the Chinese exchange rate, and Latin America’s GDP are explanatory variables. The estimation results show the Chinese exchange rate and the competition between China and South Korea impart a negative impact on South Korean exports to the region, while Latin America’s GDP does a positive one.
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