Anatomy of the Trade Collapse, Recovery, and Slowdown: Evidence from Korea

Abstract

In the last decade, international trade has been marked by an unprecedented collapse, quick recovery, slowdown, another drop, and recovery. Using both aggregate and disaggregated trade statistics of South Korea. This paper shows that while the last drop of trade after 2015 has cyclical aspects, there is evidence that the continued slowdown from 2012 is structural. Also, firm sizes, destination countries, and the mode of transactions affect disaggregated trade flows during the slowdown periods. It is advisable to diversify main export products to lower the influence of oil prices on export prices and to strengthen the cooperation with Vietnam, whose trade barriers have exceptionally diminished throughout the last decade.