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Has South Korea Really Benefited from FTAs?: A Gravity Model Estimation
(Inst Korean Studies, 2022) Simdi, Halil; Unal, Tugce Danaci
This study aims to reveal the actual effect of FTAs on South Korea's foreign trade volumes of main export and import products separately. The econometric approach of our study follows the gravity model with a panel dataset of 47 countries that have FTA with South Korea for the years between 2001-2018 by using 2-digit HS (Harmonized System) classification for main export and import goods. The study reveals that even though signing the FTA affects positively the trade volume of South Korea and partner countries, the export of South Korea is affected positively only for the base metals & articles products while the import of South Korea increases for mineral products, chemical or allied industries products and machinery & mechanical appliances after the FTAs entered into force. Our findings contribute to the literature by ascertaining a new estimation model and original empirical results for South Korean trade policy makers.