Purpose - This paper provides empirical evidence that explains how and what determinants of the expansion of the destination markets and spillover effects of Korean exports over the past decades with the application of spatial econometric models. Design/methodology/approach - We started by testing if the panel data used in this study has significant spatial effects. Moran’s I (Moran 1950) was employed to observe and assess the changing geospatial distribution of Korean exports during the period of this study. Furthermore, the SDM was verified to be the best fit model of all after a series of tests: the log-likelihood test, the LR test, the robust LR test, and the Wald test. Findings - We found that the rapid growth of Korean exports is highly correlated to GDP per capita and its outward foreign direct investment. Thus, Korean exports concentrated in countries with higher income. Also, foreign direct investments are used to support and strengthen Korean exports to its export-partner countries and the neighboring countries with significant spillover effects over the years studied. Originality/Value - There exists no similar study for Korea exports so far by taking spatial effects into account. We identified the spillover effects and pointed out that it quickly spread to neighboring countries. This originally applies to countries such as China, Hong Kong, Japan, Singapore, Germany, and Switzerland from 1995 or the late 1990s onwards. Eventually, towards to the end of this study, its exports reached and covered most countries in three regions: East Asia, the EU, and the American continent.
