Analysis of Export Quality Competitiveness and Factors Affecting Market Share Changes in the Korean New Renewable Energy industry by Items in the EU, US, and China Markets

This study applied product and market segment analysis (PMSA) and intra-industry trade (IIT) indices to capture the quality and price competitiveness and high- and low-quality IIT of new renewable energy (NRE) items in Korea’s trade with major economic powers (i.e., European Union EU, United States, and China) for the period 2012-2022. Additionally, this study used the constant market share (CMS) technique to divide the causes of fluctuations in Korea's market share in large economies’ import markets into demand side, supply side, and adaptation side. The empirical results can be summarized in the following three points. First, PMSA of quality and price competitiveness confirmed Korea’s weakness in securing price and quality competitiveness in trade with the EU and the United States and Korea’s inability to secure price competitiveness in trade with China. Additionally, analysis of high- and low quality IIT showed that in trade with the EU, low-quality vertical IIT and horizontal IIT were mixed, whereas in trade with the United States and China, the majority of items showed low-quality vertical IIT and high-quality vertical IIT patterns, respectively. More importantly, the CMS results by item in the NRE industry based on the 2017/2022 period showed that in the EU and US import markets, supply factors caused most of the market share changes for the majority of items, and in the Chinese import market, the main causes were a mixture of supply and demand factors. In conclusion, policy and institutional support for research and development of independent and convergence technologies are needed to strengthen the NRE industry’s quality competitiveness, and market expansion of the NRE industry can be accomplished by expanding direct investment in the United States and the EU, as well as through government financial support.