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영어

This paper investigates the effect of import penetration as a cause of the acceleration of technological development. The trade intensity and engagement level have been a long-debated bilateral trade issue, especially when there is a regional supply chain. China is the base of a relatively big regional supply chain formed in East Asia. Korea is one of the key contributors to this unique trade structure. This paper aims to illustrate Korea’s import penetration as one of the key contributors to China’s industry-level technological development. This paper adapts Autor’s baseline investigation on the import penetration and follows the latest research of a Key Paper using different country and industry group. As a robustness check, we analyzed a periodic gap effect of the independent variable to reflect the time between the period when a relatively high competition in each industry has occurred and the time firms in each industry became more competitive. Regardless of the large size of Chinese economy, Korea’s import penetration over Chinese industry showed a significant influence. Although the influence vary differently over each industry, industries where Korea has relatively high competitiveness showed significant effect over technological development. Through the research of periodic gap effect, this paper proved the intuitive idea of the time gap existence. Apparently, the import penetration of t-1 showed stronger coefficient than t and diminishes after t-2. Existing studies in trade somewhat ignored such analysis between countries where relatively big difference in the scale of economy exist. This paper tried to describe that even there is a big difference in scale between sample countries, if there is a significant level of engagement and a global level competitiveness, small countries could affect the large ones. This paper used a time lag variable to analyze the different period of observation over variables.