Dae-Jong Kim1, Jong Bum Kim2, Seon Ho Seo3, Mi Jung Kwak4

(1. Sejong University, Gwangjin-ku Seoul, Korea; 2. Kookmin University, Seongbuk-ku, Seoul, Korea;

3. Korea Association Industrial Counseling Consultant University, Songpa-gu, Seoul, Korea;

4. Kimpo University, Gyeonggi-do, Korea)

 

 

Abstract: This paper focuses on the importance of trade and personnel exchange between North and South Korea, substantiated by studies of Gaeseong Industrial Complex (GIC) and inter-Korean exchange on gross national product, composite stock price index, current account, and FDI (Foreign Direct Investment). In correlation analyses, it was revealed that the aggregate volume of inter-Korea exchange, personnel exchange, and admission of North Korean defectors had highly significant positive relationship with GDP and composite stock price index, current account and GDP per capita, the resulting values ranging from 0.600 to 0.933. In other words, it is evident that the support to North Korea including Gaeseong Industrial Complex brought an extremely positive effect on our GDP. The significance of this paper is in the fact that it analyzed the country risk of South Korea, and for the first time, exploiting a range of data and materials on inter-Korean exchange, empirically analyzed its correlation with various economic variables including GDP.

 

 

Key words: Inter-Korean exchange; GDP; foreign direct investment; North Korea Gaeseong industrial

complex

 

JEL codes: C4, F2