The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry
Although the port industry is very important in the Korean economy, there are few literature studies that shed light on the macroeconomic implications of the business cycles in this industry. This paper examines the roles played by foreign economic factors in the business cycle in the Korean port in...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Wiley
2023-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2023/8696858 |
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| author | Sung-A. Kim Kapje Park Chan-Ho Kim |
| author_facet | Sung-A. Kim Kapje Park Chan-Ho Kim |
| author_sort | Sung-A. Kim |
| collection | DOAJ |
| description | Although the port industry is very important in the Korean economy, there are few literature studies that shed light on the macroeconomic implications of the business cycles in this industry. This paper examines the roles played by foreign economic factors in the business cycle in the Korean port industry. Specifically, it aims to estimate the impulse response of the seaborne freight volume in the port industry due to the shocks of the foreign economy and analyze the contributions of each shock considered on the variation in the freight volume. The structural FAVAR (SFAVAR) model was employed to extract the unobserved foreign economic factors. This paper estimates the four foreign economic factors and the parameters of the model using the one-step Bayesian Gibbs sampling method. The findings of this study show that foreign economic activity statistically affects the freight volume of the Korean ports. Specifically, the shocks to the foreign real economic activity increased freight transportation for nearly one year. Following the world inflation shocks, the freight transportation was enhanced. However, this impact disappeared after a year. Similarly, the rise in global liquidity was shown to encourage transportation activity; nevertheless, this activity declined after five quarters. Moreover, the increase in the world interest rates exerted a negative effect on the volume of transportation. Furthermore, the variance decomposition analysis shows that 49.2% of the variation in the transportation volume could be attributed to foreign economic activity. This analysis can contribute to drawing useful implications in establishing the port industry policy in response to the change in the economic environment such as the foreign economy. |
| format | Article |
| id | doaj-art-1f84d006be0647659455a1f8820bc588 |
| institution | Kabale University |
| issn | 1607-887X |
| language | English |
| publishDate | 2023-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-1f84d006be0647659455a1f8820bc5882025-02-03T01:30:26ZengWileyDiscrete Dynamics in Nature and Society1607-887X2023-01-01202310.1155/2023/8696858The Dynamic Effects of the Foreign Economic Shocks on the Korean Port IndustrySung-A. Kim0Kapje Park1Chan-Ho Kim2Korea Maritime InstituteDepartment of Economics and FinanceKorea Maritime InstituteAlthough the port industry is very important in the Korean economy, there are few literature studies that shed light on the macroeconomic implications of the business cycles in this industry. This paper examines the roles played by foreign economic factors in the business cycle in the Korean port industry. Specifically, it aims to estimate the impulse response of the seaborne freight volume in the port industry due to the shocks of the foreign economy and analyze the contributions of each shock considered on the variation in the freight volume. The structural FAVAR (SFAVAR) model was employed to extract the unobserved foreign economic factors. This paper estimates the four foreign economic factors and the parameters of the model using the one-step Bayesian Gibbs sampling method. The findings of this study show that foreign economic activity statistically affects the freight volume of the Korean ports. Specifically, the shocks to the foreign real economic activity increased freight transportation for nearly one year. Following the world inflation shocks, the freight transportation was enhanced. However, this impact disappeared after a year. Similarly, the rise in global liquidity was shown to encourage transportation activity; nevertheless, this activity declined after five quarters. Moreover, the increase in the world interest rates exerted a negative effect on the volume of transportation. Furthermore, the variance decomposition analysis shows that 49.2% of the variation in the transportation volume could be attributed to foreign economic activity. This analysis can contribute to drawing useful implications in establishing the port industry policy in response to the change in the economic environment such as the foreign economy.http://dx.doi.org/10.1155/2023/8696858 |
| spellingShingle | Sung-A. Kim Kapje Park Chan-Ho Kim The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry Discrete Dynamics in Nature and Society |
| title | The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry |
| title_full | The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry |
| title_fullStr | The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry |
| title_full_unstemmed | The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry |
| title_short | The Dynamic Effects of the Foreign Economic Shocks on the Korean Port Industry |
| title_sort | dynamic effects of the foreign economic shocks on the korean port industry |
| url | http://dx.doi.org/10.1155/2023/8696858 |
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