Vertical specialization in the Korean manufacturing sector

Purpose – The purpose of this paper is to answer for questions regarding vertical specialization in the Korea’s key exporting industries, such as the changing pattern toward VS or VS1 and the changing trend in the location of slicing up the value chain in these industries. Design/methodology/approach – The framework of Koopman et al. (2014) is adopted to calculate the industry-level vertical specialization indices, VS and VS1. Findings – VS1 is a dominant type of vertical specialization in the key exporting industries of Korea. The increasing net vertical trades (VS1−VS) verifies the upward trends in the locations of slicing up the value chain in the industries empirically. Research limitations/implications – The net vertical trade (VS1−VS) of each industry is an important indicator of the location of slicing up the value chain in the environment of the international production network. Originality/value – The industry-level calculations of VS and VS1 are necessary in order to remedy the aggregation bias from the country-level calculation of VS and VS1 functioning in the opposite direction.