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

This thesis asks why Germany has kept stronger and more stable export competitiveness than France and Italy in Japan and South Korea. Export competitiveness here means the ability to win and hold market share abroad. The study argues that Germany’s edge cannot be explained by market size, trade openness, political alignment, or overall development alone. Instead, it results from a sequence in which political alignment within the Western bloc created room for trade, while the decisive driver was Germany’s export structure, reinforced over time by asymmetric interdependence (partners rely on each other to different degrees), path dependence (past choices shape current outcomes), and gradual institutional adaptation (slow changes in rules and organizations that support trade). Germany specialized more in machinery, transport equipment, chemicals, and other production-related goods—inputs closely tied to customers’ industrial processes and harder to replace—whereas many French and Italian exports were easier to substitute. Methodologically, the thesis uses a Most Similar Systems Design (comparing similar countries to isolate key differences) combined with process tracing (following how causes unfold over time). Germany, France, and Italy are the cases; Japan and South Korea are the destination markets. The analysis draws on long-run trade data from IMF International Merchandise Trade Statistics and UN Comtrade SITC LTS, plus contextual indicators from Macrotrends, the World Bank, and the Observatory of Economic Complexity. It examines export composition, value-chain position (components vs final goods), trade dependence, stability of export shares, upgrading of export composition (moving toward more advanced goods), sectoral specialisation, and relative export shares. The findings show Germany’s advantage most clearly in export structure and stability over time: greater concentration in machinery and transport equipment, a higher share of production-related exports, stronger sectoral specialisation, and more stable export shares. Evidence on trade dependence and upgrading is mixed: dependence alone does not account for Germany’s edge, and upgrading does not follow a simple linear rise in advanced industrial goods. Overall, the thesis concludes that Germany’s stronger export competitiveness is a long-term structural and relational outcome built on production embeddedness, lower substitutability, and self-reinforcing trade relationships.

Dette speciale undersøger, hvorfor Tyskland har opretholdt en stærkere og mere stabil eksportkonkurrenceevne end Frankrig og Italien i Japan og Sydkorea. Eksportkonkurrenceevne forstås her som evnen til at vinde og fastholde markedsandele i udlandet. Specialet argumenterer for, at Tysklands fordel ikke kan forklares alene med markedets størrelse, handelsåbenhed, politisk tilknytning eller generelt udviklingsniveau. I stedet skyldes den en sekvens, hvor politisk tilknytning til den vestlige blok skabte rum for handel, mens den afgørende drivkraft var Tysklands eksportstruktur, som over tid blev forstærket af asymmetrisk indbyrdes afhængighed (parter er afhængige af hinanden i forskellig grad), sti-afhængighed (tidligere valg former nutidige resultater) og gradvis institutionel tilpasning (langsomme ændringer i regler og organisationer, der understøtter handel). Tyskland specialiserede sig mere i maskiner, transportudstyr, kemikalier og andre produktionsrelaterede varer—input tæt knyttet til kundernes industrielle processer og sværere at erstatte—mens mange franske og italienske eksportvarer var lettere at substituere. Metodisk anvender specialet et Most Similar Systems Design (sammenligning af meget ens lande for at isolere forskelle) kombineret med proces-tracing (at følge, hvordan årsager udfolder sig over tid). Tyskland, Frankrig og Italien er cases; Japan og Sydkorea er destinationsmarkeder. Analysen bygger på langsigtede handelsdata fra IMF International Merchandise Trade Statistics og UN Comtrade SITC LTS samt kontekstindikatorer fra Macrotrends, Verdensbanken og Observatory of Economic Complexity. Den undersøger eksportens sammensætning, værdikædeposition (komponenter vs. slutvarer), handelsafhængighed, stabilitet i eksportandele, opgradering af eksportens sammensætning (bevægelse mod mere avancerede varer), sektorspecialisering og relative eksportandele. Resultaterne viser Tysklands fordel klarest i eksportstruktur og tidsmæssig stabilitet: større koncentration i maskiner og transportudstyr, højere andel af produktionsrelaterede varer, stærkere sektorspecialisering og mere stabile eksportandele. Evidensen for handelsafhængighed og opgradering er mere tvetydig: afhængighed i sig selv forklarer ikke fordelen, og opgradering følger ikke en simpel lineær stigning i avancerede industrivarer. Samlet konkluderer specialet, at Tysklands stærkere eksportkonkurrenceevne er et langsigtet strukturelt og relationelt resultat baseret på produktionsindlejring, lav substituerbarhed og selvforstærkende handelsrelationer.

[This abstract 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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