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The Time-Varying Impact of Regional Trade Agreement: Evidence from ASEAN

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  • Pakasa Bary

Abstract

Regional Trade Agreements such as ASEAN Free Trade Area (AFTA) are expected to increase the trade flows among member countries through trade creation and trade diversion. This paper employs the gravity model using manufacturing trade data to analyse this hypothesised effect in a time-varying context. The estimation results suggest that AFTA has expanded the trade substantially. The trade creation effects occurred immediately, but the effects tend to decrease overtime. On the other hand, trade diversion was insignificant in the short-term, but the effects increased gradually over time.

Suggested Citation

  • Pakasa Bary, 2015. "The Time-Varying Impact of Regional Trade Agreement: Evidence from ASEAN," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(9), pages 1061-1075.
    • Handle: RePEc:asi:aeafrj:v:5:y:2015:i:9:p:1061-1075:id:1425
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    File URL: https://archive.aessweb.com/index.php/5002/article/view/1425/2061
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    Cited by:

    1. Kee-hung Lai & Yu Pang & Christina W. Y. Wong & Y. H. Venus Lun & Y. N. Eppie Ng, 2019. "Are trade and transport logistics activities mutually reinforcing? Some empirical evidences from ASEAN countries," Journal of Shipping and Trade, Springer, vol. 4(1), pages 1-17, December.

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