Analysis on the Trade Patterns of Domestic Strategic Materials: Focusing on the Moderating Effects of Non-Market Factors

This study analyzed the trade patterns of strategic materials based on trade data for about 20 years from early 2000's when defense exports began to provide policy support at the government level as a new growth engine for the Korean economy to early 2020's, when tangible results started to be derived, recording $3 billion in exports.In particular, this study aims to select market and non-market factor variables that affect trade volume between countries based on existing literature reviews and empirically analyze correlations based on gravity theory.For the analysis, it was intended to focus on non-market factors such as military alliances and defense and military agreements reflecting various interests with trading partners, democracy indices, similarities in foreign policy, and the level of defense science and technology, and how the interaction between the target country's economic scale affected the trade volume of strategic materials between countries.As a result of the analysis, first, it was found that the GDP variable, which refers to the size of the economy of the trading partner country, has a significant positive (+) relationship with trade volume.On the other hand, the interaction with variables related to the similarity between GDP and foreign policy and whether or not an agreement was signed had a positive (+) relationship with import volume, and there was no significant relationship with exports and total trade volume.In the case of democratic variables and GDP, it was found that there was a negative (-) effect on total trade volume and export volume, and technology level and GDP variables had a negative (-) effect on total trade volume and exports and a positive (+) effect on imports.In addition, it was confirmed that the existing theories of M. Posner and G. C. Hufbauer are significantly applied to domestic strategic material trade patterns.