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Journal of Economic Integration 2014 June;29(2) :329-342.
Military Alliances and Reality of Regional Integration: Japan, South Korea, the US vs. China, North Korea

Young-Wan Goo Seong-Hoon Lee 

Chungbuk National University, Cheongju, South Korea
Cheongju University, Cheongju, South Korea
Corresponding Author: Young-Wan Goo ,Tel: +82 432612217, Email:
Copyright ©2014 Journal of Economic Integration
East Asian military security is of overarching importance in the economic integration and prosperity in this region. This study analyzes how South Korea and Japan consider the U.S. as a military ally in the context of the China–North Korea alliance by using the iterative Seemingly Unrelated Regression(SUR) method in estimating defense goods demand functions. The findings are that Japan considered the U.S. to be a closer ally than the U.S. did during 2000~2005 and South Korea may regard the U.S. as a closer ally than vice versa. The U.S. regards Japan as a closer ally than Korea. South Korea’s demand for defense goods has not been increased by the threat from the China–North Korea alliance but American and Japanese demand has recently been increased by the threat, implying that South Korea has not regarded the China–North Korea alliance as a significant threat whereas that Japan and the U.S. have recognized the military alliance as a serious one.

JEL Classification
Keywords: Military Alliance | Defense Goods | Threat Elasticity | Spill-In Elasticity (SIE) | Public Good
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