Exploring the Intention of FTA Utilization by Exporting SMEs: Evidence from South Korea

Abstract

Considering the proliferation of free trade agreements (FTAs) worldwide, this study develops and empirically tests a conceptual model to explain the impact of CEO attitudes on the intention of exporting firms to utilize FTA preferential tariffs. Based on a survey of 221 exporting small and medium-sized enterprises in South Korea, this study employed partial least squares structural equation modelling to test the hypotheses. Results show that perceived usefulness and organizational learning partially mediate the relationship between CEO attitudes and intention to use FTA schemes. This study deepens our understanding on the firm's internal process for utilizing FTA preferential tariffs.

The effect of agricultural trade openness on fruit prices in Korea

“…Specifically, among the various agricultural prices, this study focuses on fruit prices because the fruit sector has the highest openness growth. Between 1995 and 2018, the total agricultural openness increased from 5.2% to 17.4%, while openness in the fruit sector rose from 2.7% to 26.4% (Song et al, 2019). Figure 1 shows that total agricultural trade in Korea has increased mainly due to agricultural imports rather than agricultural exports.…”

“…South Korea (hereafter, Korea) is one of the countries that satisfy the two abovementioned conditions: comparative disadvantage in the agricultural sector and experience of a high level of trade openness for the past few decades. According to Song et al (2019), from 2004 to 2018, Korea's agricultural imports and exports increased from $14.6 billion to $353 billion and from $29 billion to $69 billion, respectively. In other words, Korea's growth in agricultural imports was much greater than that of its agricultural exports, which reflects its relative agricultural disadvantage.…”