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Assessing the impact of China shocks on intra-ASEAN trade

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  • Hayakawa, Kazunobu

Abstract

The member countries of the Association of Southeast Asian Nations (ASEAN) have made significant efforts to increase intra-ASEAN trade by reducing or eliminating tariffs in the region. However, intra-ASEAN trade as a percentage of total trade in the region has not increased significantly; instead, ASEAN countries' imports from China have grown dramatically. In this study, we examine the causal impacts of imports from China on intra-ASEAN trade by estimating gravity-type equations for intra-ASEAN trade at a highly disaggregated product level for the period 2000–2019. In particular, we address the issues of including observations with zero-valued trade and endogeneity in a gravity equation with multiple high-dimensional fixed effects. As a result, we found that imports from China significantly increase, rather than decrease, intra-ASEAN trade.

Suggested Citation

  • Hayakawa, Kazunobu, 2022. "Assessing the impact of China shocks on intra-ASEAN trade," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:jjieco:v:65:y:2022:i:c:s0889158322000168
    DOI: 10.1016/j.jjie.2022.101206
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    Cited by:

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    More about this item

    Keywords

    China shocks; ASEAN; Trade creation effect;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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