Trade and Response In the Korean Beef Industry

Abstract

This paper empirically tests the trade effect on the Korean beef industry focusing on market price and marketing margin. Unlike the forecast of traditional economic theory, the Korean beef market is still sustaining after market opening to the world market. The domestic cattle farmers have tried to differentiate their products from the imported beef. They have been developing to produce high quality beef called vertical differentiation and spending money to appeal to domestic consumers for its origin called horizontal differentiation. Trade and subsequent market differentiations by domestic producers are empirically supported by the data.