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Strategic responses to China's overcapacity: a system dynamics analysis of South Korea's petrochemical industry
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DOI：10.1080/15567249.2025.2603659.png)
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Abstract
En 中文
This study investigates strategic options for South Korea's petrochemical industry in response to China's increasing self-sufficiency in ethylene and polyethylene production. Utilizing a system dynamics model, the research simulates scenarios based on historical data (2010-2021) to evaluate the economic impacts of two strategies: margin defense and volume defense. Key findings reveal that as China's production capacity expands, South Korea faces declining profit margins across both strategies. However, the volume defense strategy, which emphasizes maintaining production levels and targeting alternative export markets, proves more profitable than margin defense under scenarios of both 100% and 200% Chinese self-sufficiency targets. The study highlights the need for South Korea to adopt long-term structural adjustments, including transitioning toward high value-added products and expanding economic partnerships within ASEAN regions. The research advances understanding how fringe producers in globally traded commodity markets can respond to dominant players' overcapacity rather than directly emulating their strategies.
Keywords:
System dynamics modeling
petrochemical industry
oversupply
strategic responses
margin defense
volume defense
involution
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2.2
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1.1K
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