Mechanisms of Successful EU Business Expansion in East Asia - Evidence from Germany's Performance in Japan and South Korea

Tosi, Stefano

4. semester

International Relations, MSc.

2026

2026-05-28

65

Why has Germany maintained stronger export competitiveness in Japan and South Korea than France and Italy, even though all three are large, advanced Western European economies in the same trade and geopolitical framework? This thesis examines that question. It shows that the difference cannot be explained by market size, trade openness, political alignment, or general development alone. Instead, Germany’s edge results from a sequential process in which several mechanisms work together: Political alignment within the Western bloc created favorable conditions for trade, but did not determine who benefited most. The decisive factor is export structure. Germany specialized more in machinery, transport equipment, chemicals, and other production-related goods. These goods are closely tied to industrial production processes and are therefore harder to substitute than many French and Italian exports. This connects to ideas such as asymmetric interdependence (mutual reliance, but not to the same degree), path dependence (early choices create lasting trajectories), and gradual institutional adaptation (rules and organizations slowly adjust to trade patterns). Methodologically, the study combines a Most Similar Systems Design (comparing very similar countries) with process tracing (tracking how cause and effect unfold over time). Germany, France, and Italy serve as the cases, while Japan and South Korea are the advanced East Asian markets. The analysis draws on long-run trade data from IMF International Merchandise Trade Statistics and sectoral data from UN Comtrade SITC LTS, complemented by contextual indicators from Macrotrends, the World Bank, and the Observatory of Economic Complexity. Key measures include export composition, position in value chains, trade dependence, stability of export shares, upgrading of the export mix, sectoral specialization, and relative export shares. Findings show that Germany’s advantage is strongest in indicators capturing export structure and stability over time: a higher concentration in machinery and transport equipment, a larger share of production-related exports, greater sectoral specialization, and a more stable market position. Evidence on trade dependence and upgrading is more mixed: dependence by itself does not explain the advantage, and upgrading does not follow a simple, linear rise in advanced industrial goods. Overall, the thesis concludes that Germany’s stronger export competitiveness is best understood as a long-term structural and relational process, based on production embeddedness, lower substitutability, and self-reinforcing trade relationships over time.

Hvorfor har Tyskland opretholdt en stærkere eksportkonkurrenceevne i Japan og Sydkorea end Frankrig og Italien, selv om alle tre er store, avancerede vesteuropæiske økonomier i samme handels- og geopolitiske ramme? Denne afhandling undersøger netop det. Den viser, at forskellen ikke kan forklares af markedsstørrelse, handelsåbenhed, politisk tilknytning eller generelt udviklingsniveau alene. I stedet skyldes Tysklands fordel en sekventiel proces, hvor flere mekanismer virker sammen: Politisk tilknytning inden for den vestlige blok skabte gode rammer for handel, men afgjorde ikke, hvem der vandt. Den afgørende forskel er eksportstrukturen. Tyskland var mere specialiseret i maskiner, transportudstyr, kemikalier og andre produktionsrelaterede varer. Sådanne varer er tæt knyttet til industrielle produktionsprocesser og er derfor sværere at erstatte end mange franske og italienske eksportvarer. Dette hænger sammen med begreber som asymmetrisk indbyrdes afhængighed (parterne er afhængige af hinanden, men ikke i samme grad), stiafhængighed (tidlige valg skaber varige spor) og gradvis institutionel tilpasning (regler og organisationer tilpasses langsomt til handelsmønstre). Metodisk kombinerer studiet et Most Similar Systems Design (sammenligning af meget lignende lande) med process tracing (at følge årsagsforløb over tid). Tyskland, Frankrig og Italien er casene, mens Japan og Sydkorea er de avancerede østasiatiske markeder. Analysen bygger på langtids handelsdata fra IMF International Merchandise Trade Statistics og sektordata fra UN Comtrade SITC LTS, suppleret med kontekstindikatorer fra Macrotrends, Verdensbanken og Observatory of Economic Complexity. Centrale mål omfatter eksportsammensætning, position i værdikæden, handelsafhængighed, stabilitet i eksportandele, opgradering af eksportsammensætningen, sektoriel specialisering og relative eksportandele. Resultaterne viser, at Tysklands fordel er tydeligst i indikatorer for eksportstruktur og stabilitet over tid: en højere koncentration i maskiner og transportudstyr, en større andel produktionsrelaterede varer, større sektoriel specialisering og en mere stabil markedsposition. Beviserne for handelsafhængighed og opgradering er mere blandede: afhængighed i sig selv forklarer ikke fordelen, og opgradering følger ikke en enkel, lineær stigning i avancerede industrivarer. Afhandlingen konkluderer, at Tysklands stærkere eksportkonkurrenceevne bedst forstås som en langsigtet strukturel og relationel proces, baseret på produktionsindlejring, lavere substituerbarhed og selvforstærkende handelsrelationer over tid.

[This apstract has been rewritten with the help of AI based on the project's original abstract]

Germany ; Export ; International Trade ; East Asia ; EU

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