Seminars

◈ 주   제: How Persistent Are the Effects of Unilateral Economic Sanctions?: Evidence from Japan’s Exclusion of Korea from Its “White Countries”

◈ 발표자: 손세호 (석사과정 3 학기)

◈ 일   시: 2024년 5월 28일 화요일 11:30~12:30

◈ 장   소: 우석경제관(223동) 504호

◈ 주   관: 경제학부, 경제연구소 한국경제혁신센터, SSK, BK21 

◈ 초   록

In August 2019, Japan imposed economic sanctions on the Republic of Korea, revoking its preferential export status and requiring stricter import procedures for "strategic materials." This study utilizes this supply shock as a natural experiment to assess the impact on Korean firms. The paper constructed a firm-level import sanctions exposure measure and analyzed data from the Survey of Business Activities conducted by Statistics Korea using a two-way fixed effect event study specification. The results indicated that in 2019, the year sanctions were initially implemented, firms subject to sanctions experienced a decrease of approximately 10 million KRW in profit per employee compared to non-exposed firms, with a more pronounced decline in firms with greater sanction exposure; however, the negative impact diminished, becoming insignificant over time, thereby exhibiting the U-shaped profit recovery trajectory. In contrast, no such results were found regarding revenue. This evidence suggests that Japan's sanctions program was sufficient to exacerbate the performance of Korean firms by elevating costs in the short term, but it was not persistent, making it difficult to achieve its intended political purpose. This could imply the porous nature of unilateral economic sanctions.