The purpose of this paper is to empirically analyze Korea's trade patterns based on the gravity model and to suggest possible ways to expand trade by identifying important factors determining Korea's bilateral trade flows. The gravity model assumes that trade flows between two countries are positively related to their economic size and negatively related to the distance between them. By taking into account geographical factors, such as distance, population and adjacency, which had long been disregarded by international trade theorists, the gravity model is now recognized as one of the best models for explaining international trade volumes. (The rest is omitted.)

Executive Summary

I. Introduction

II. Theoretical Foundations

III. Methodology and the Data
1.The Data
2. The Model

IV. Empirical
1.OLS Regression Results based on the Basic Gravity Equation
2. Effect of the TCI on Korea's Trade Flows
3. The Effect of a Regional Trading Arrangement on Korea's Bilateral Trade Flows

V. Policy Implications
1. For Korea's FTA Choices
2. For North-South Korean Trade

VI. Conclusions

References

Appendix

國文要約