Can export services assistance make a difference? : the Korean experience

To this end, the GOK created several joint public-private commodity-specific task forces to assist export businesses with production and marketing, as well as the Korean Trade Promotion Agency, a public sector agency to market exports, and the Korean Institute of Science and Technology, which was responsible for developing new industrial technologies. A.I.D. directly assisted these agencies and supplemented this support with highly targeted production assistance to firms and industries. This case study assesses the impact of these publicly provided export services on Korea"s export performance. Individual sections of the report: outline the program"s political and economic context; examine the market for export services; and review the use and impact of GOK export services. The study shows that the GOK"s export services institutions had minimal impact on export expansion. It appears that foreign sources provided most of the production and marketing assistance to exporters, with lucrative export incentives facilitating cooperation between Korean exporters and aggressive foreign buyers. Four major lessons were learned from this experience. (1) Donors must carefully identify the rationale for intervening in export service markets. In the Korean case, no sound rationale existed. (2) The effectiveness of public sector provision of export services is open to question. (3) The importance of the export services provided by the international sector suggests that the proper role of the public sector may lie in facilitating long-term contacts between exporters and developed country importers and suppliers. (4) Even if there is a rationale for subsidizing export services, public sector institutions should not be created to provide export services. Each of Korea"s institutions experienced significant problems.