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(Hankuk University of Foreign Studies) (Hankuk University of Foreign Studies)
Journal
Center for International Area Studies International Area Studies Review Vol.28 No.1
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    Abstract·Keywords

    Political stability, often cracked by geopolitical tensions, plays a critical role in shaping the economic landscape, particularly through its impact on trade and investment flows. Media, as the primary conduit of information, significantly influences public perception and, consequently, market behavior. However, there is a lack of empirical studies to explain such a media role in trade. This study attempts to create a media sensitive-trade index, with a focus on the geopolitical dynamics between the Unities States, China, and Korea. Using advanced Natural Language Processing (NLP) techniques and Large Language Models (LLMs), the research quantifies media sentiment and links it to economic outcomes, such as Korea’s Trade Business Diffusion Index (TBDI) and Balance of Payments (BOP). The analysis shows that Korea’s trade trends are more influenced by the broader U.S.-China relationship than by its direct relations with either nation. Notably, the study finds that media sentiment, particularly in the service sectors, plays a predictive role in economic trends, with positive sentiment correlating with improved performance in areas such as transportation and intellectual property services. The developed index in this study supplements ex-post indicators, with the characteristics of ex-ante indicators, regarding to the short-term detection strategy for media sensitive economic system.

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