The Impacts of Bilateral Value Chains Between Japan and Korea on Value-Added Creation of Manufacturing Firms

초록

This paper investigates bilateral value-chain participation between Japan and Korea and its association with firm-level value-added. Using firm-level data for both Japanese and Korean manufacturing firms over the period 2006-2014, we find that firms in both countries operating in industries with stronger backward bilateral value-chain linkages of Korea with Japan-or equivalently, forward linkages of Japan with Korea-tend to exhibit higher real value-added, while the opposite direction of participation is associated with lower value-added. These patterns are broadly observed across major manufacturing industries, with the automobile industry exhibiting distinct behavior.

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