Analyzing the Impact of Shrimp Imports on Domestic Prices in Korea

As shrimp demand continues to rise due to increasing income and growing preference among the young generation, import volumes have expanded owing to the limitations of domestic production. Although previous studies have analyzed the effects of imports on market prices, few have explored their post-effects on the industry. Hence, This study examines the impact of shrimp imports on domestic market prices and the resulting damage to domestic shrimp farms. The variables were seasonally adjusted using ARIMA-12 method and estimated whether they are stationary or non-stationary using the ADF and PP unit-root test. The ARDL bound test identifies long-term relationships. On the basis of the cointegration, OLS, FMOLS, DOLS and CCR methods were employed. Empirical results show that GDP positively influences domestic shrimp prices, while increased domestic production and imports have a negative impact. Sensitivity analysis indicates that if imports increase by more than 20.02%, the net present value (NPV) of domestic shrimp farms turns negative, highlighting the need for policies to protect local producers.