중력모형을 이용한 인도네시아와 한국의 교역 성과 분석

Abstract

There is a notable increase in Korea’s and Indonesia’s exports and imports which indicates that bilateral trade flows are improving and should be evaluated to convince people that foreign trade is vital to economic development. From that evidence, this study attempts to evaluate Korea’s and Indonesia’s bilateral trade performance with the gravity model using annual data from 1995 to 2009. The evaluation emphasizes FDI as the notable variable to determine bilateral trade flows. Moreover, FTA and population, as the explanatory variables, function as the complementary variables. The analysis takes several steps to find feasible variables to explain bilateral trade flows. The findings reveal that 30 of 136 countries are better at explaining bilateral trade flows rather than 136 countries. Therefore, the results find that FDI in Korea and its trading partners significantly and positively affect Korea’s bilateral trade flows. On the other hand, FDI in Indonesia and its trading partners significantly, but negatively, affect Indonesia’s bilateral trade flows. The disparity of the results compared to the real condition implies some suitable policies for society, government, and the business sector, particularly in the case of trade and investment.