Trade openness and horizontal agricultural income inequality in Korea: focusing on sectoral income differences

Abstract

In this study, we investigate the impact of agricultural trade openness on horizontal agricultural income inequality in South Korea during the period 1993–2018 using the Kuznets curve hypothesis of the openness-income inequality nexus and autoregressive distributed lag model. We find an inverted-U relationship between agricultural openness and horizontal agricultural income inequality. Further, our results indicate that financial development reduces income inequality within the sub-sectors of agriculture in the country. From these results, the inverted-U relationship between agricultural openness and income inequality should be monitored, and the agricultural sector should be provided with financial support to sustain domestic agricultural production to buffer price volatilities attributed to world agricultural supply shocks.

Keywords:

• Agricultural trade openness
• horizontal income inequality
• Kuznets curve hypothesis

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 https://www.index.go.kr/potal/stts/idxMain/selectPoSttsIdxSearch.do?idx_cd=2745&stts_cd=274503&freq=Y

2 Our sample size is small. Thus, we used the maximum lag length up to two lags to achieve the sufficient degree of freedom for the estimation.

Additional information

Notes on contributors

Soo-Eun Kim

Soo-Eun Kim is a research fellow in Jeonbuk Institute. Her research interest is international trade and development. She published research articles such as “The impact of avian influenza on the Korean egg market: Who benefited?” in Journal of Policy Modeling (2018)” and “Causal Relationship among Bioethanol Production, Corn Price, and Beef Price in U.S.” in Environmental and Resource Economics Review (2018).

Jun Ho Seok

Jun Ho Seok is an assistant professor in Jeonbuk National University. His research interest is international trade, consumer economics, and environmental economics. He published research articles such as “Price relationship among domestic and imported beef products in South Korea” in Empirical Economics (2021), “Impact of the positive list system (PLS) on the banana market in Korea” in Journal of the Asia Pacific Economy (2020), and “Does biomass energy consumption reduce total energy CO₂ emissions in the US?” in Journal of Policy Modeling (2020).