Abstract:
The prime focus of this study is to investigate the bilateral trade gap between
Bangladesh and South Korea. To find the bilateral trade gap at the outset this paper will
investigate total exports and imports between South Korea and Bangladesh and then this
study focuses on examining the determinants of total bilateral trade during the period
from 1991 to 2020. The study also investigates the strategies through which two
countries can improve their bilateral trade relation and can find amicable ways to
minimize trade gap. Firstly, the findings reveal that bilateral trade gap increased during
the study period of last 30 years. Secondly, the study identifies some determinants
namely asymmetry of output, currency risk, comparative advantage and inconsistency of
trade friendly environment which led to high bilateral trade gap between the two
countries. Finally, this paper suggests some policy recommendations such as hedging of
currency risk, increasing Foreign Direct Investment and Research & Development
allocations, as well as to create scope for maintaining Gross Domestic Product growth
and to increase bilateral cooperation through deliberation amongst high governmental
officials and political leaders of the two countries. A model is also developed to forecast
the bilateral trade between these two countries in the foreseeable future.
