Institute of International Affairs, Graduate School of International Studies, Seoul National University
Abstract
Recent economic calamities such as the 1997 Asian financial crisis have amply demonstrated the
need for increased economic integration in the East Asian economic region. While various forms of
economic cooperation are possible, it is important to identify groups, or clusters, of countries that are
similar to each other economically. Such similarity not only has been shown to be associated with the
increased bilateral trade flows, but also with the increased net welfare gains to the participating
countries. I employ a variety of clustering techniques and come up with a clustering solution
containing four groups of economically similar countries. The clusters are robust across the estimation
procedures. Hierarchical clustering also conducted in this study suggests a sequential agglomerating
path for the countries to follow. The results of this study are intended as one of the (many) decision
tools used by the parties considering multilateral economic cooperation and trade agreements in the
region
