Bilateral Trade

This paper aims to identify key challenges facing Iran and South Korea in their bilateral trade and investment relations. In particular, it is concerned with the policy implications which can be useful for policy makers and business people of both countries. For this purpose, we review and analyze the recent developments of the Iranian economy and bilateral trade and investment relations between Iran and Korea as well. Then, we discuss how the impact of the recent economic sanction imposed on Iran has affected the economy and the economic relations between Iran and Korea. Finally, this paper identifies the pattern of revealed comparative advantage (RCA) at the 2 digit sector level of the Harmonized System of classification. The analysis shows no similarities in the structure of comparative advantage for Iran and Korea. After identifying some key challenges, we discuss how both sides can overcome the obstacles to boost the mutually beneficial trade and investment.      JEL Classification: F11, F14    

Although initially originated as a totally empirical relationship to explain the volume of trade between two partners, gravity equation has been the focus of several theoretic models that try to explain it. Specialization models are of great importance in providing a solid theoretic ground for gravity equation in bilateral trade. Some research papers try to improve specialization models by adding imperfect specialization to model, but we believe it is unnecessary complication. We provide a perfect specialization model based on the phenomenon we call tradability, which overcomes the problems with simpler initial. We provide empirical evidence using estimates on panel data of bilateral trade of 40 countries over 10 years that support the theoretical model. The empirical results have implied that tradability is the only reason for deviations of data from basic perfect specialization models. JEL Classification: F11, F14, C23, E23.

Developing economic relations with the countries of the world is necessary for any country, and the nations of the world are always looking to build their business. The expansion of the phenomenon of economic globalization has led states to engage in countries' engagement in pursuing their interests in the form of regional cooperation and the formation of monetary :union:s. Therefore, according to the importance of this issue, the effect of the monetary :union: on bilateral trade is studied using a gravity pattern based on the panel data approach. Also, the factors affecting bilateral trade between selected countries of the world during the period of 1993-2015 are studied. The results of the research show that the effect of a common currency on bilateral trade is positive, which increases trade between countries. Also, the study of variables shows that GDP variables of states and business partners, common currency, race, and standard language have a positive and significant effect on bilateral trade between nations. Real exchange rate variables and trade openness do not affect, and the distance and GDP per capita variables have a negative and significant impact on the flow of trade between the drains. Hence, it is concluded that countries that are adjacent to each other or have common currency would strengthen the trade between themselves, by creating monetary :union:s.

The relationship between international disputes and international trade is a complex and crucial field of research. Conflicts at the international platform can cause geopolitical instability, thus it affects global trade. Comprehending the impact of political dynamics on trade contacts is essential for maintaining global economic stability. This study investigates the impact of political ties on the volume of bilateral trade, suggesting that positive political relationships increase trade, while negative ones decrease it. Using utility theory, we examine the common ideas held by customers and trade corporations. This theory examines the factors that influence the decision making of individuals which later can provide understanding and insights into the potential consequences of political conflicts on global trade. As a result, it has a big effect on how importers and exporters interact with each other. Our study utilises empirical analysis of monthly trade data to investigate the influence of oscillations in commerce on political ties between nations. Our research suggests that when political relationships deteriorate, it results in enduring alterations in trade patterns, but fluctuations in commerce have little long-term impacts on political relations. This research offers valuable insights into the correlation between political conflict resolution and the stabilisation and promotion of international trade.