Navigating China's Expanding Influence in the Mekong Sub-region: Opportunities and Challenges for Republic of Korea and Thailand

Abstract

This paper examines the impact of regional economic cooperation between Thailand, the Republic of Korea, and partner countries, focusing on the efficiency of the Greater Mekong Sub-region (GMS) cooperation. Overall, we find that the GMS takes a noteworthy part in Thailand and the Republic of Korea’s economic portfolios. We apply the gravity model of international trade associated with random-effect method to predict multilateral trade investment and finance cooperation. We found significant interaction terms between trade openness and financial development in GMS cooperation. In other words, while trade openness can facilitate the Republic of Korea’s and Thailand’s exports of goods and services, financial coordination becomes more improved. These results indicate key relationship factors that can facilitate efficiency of GMS cooperation. However, Thailand and the Republic of Korea need to move forward to facilitate some vital policy implications in the context of greater benefits from GMS economic cooperation, especially on trade liberalization associated with economic reform programs and financial development.