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Assessing the impact of the main East-Asian free trade agreements using a gravity model. First results

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  • Laëtitia Guilhot

    ()
    (LEPII-CNRS)

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    Abstract

    The purpose of this article is to assess the impact of the three main East-Asian free trade agreements (ASEAN, ASEAN-China and ASEAN-South Korea) on intra-regional and extra- regional trade. To do this, we use a panel-data gravity model with three regional indicator variables. On the basis of the results, we conclude that the ASEAN agreement favours regional and multilateral trade, with the creation of exports to the rest of the world outweighing the diversion of extra-regional imports. The ASEAN-China and ASEAN-South Korea agreements have thus far not been shown to have an impact on East-Asian trade flows.

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I1-P24.pdf
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    Bibliographic Info

    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 30 (2010)
    Issue (Month): 1 ()
    Pages: 282-291

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    Handle: RePEc:ebl:ecbull:eb-09-00555

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    Related research

    Keywords: Free Trade Agreement; East Asia; Gravity model;

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    1. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
    2. Peter Egger & Michael Pfaffermayr, 2003. "The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects," Empirical Economics, Springer, vol. 28(3), pages 571-580, July.
    3. I-Hui Cheng & Howard J. Wall, 2005. "Controlling for heterogeneity in gravity models of trade and integration," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 49-63.
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