Explaining regionalization of trade in Asia Pacific: A transaction cost approach
AbstractRecent investigations on the regional distribution of trade flows in the Asia Pacific area suggest that some countries have developed strong bilateral trade links, while others obviously tend to be more closely linked towards trading partners outside the Asia Pacific area (Amelung (1990)). Moreover, empirical findings indicate that there are groups (clusters) of countries in the Asia Pacific area which - in relative terms - trade more intensively with the members of their group than with other countries of this area or the world. For instance, in the eighties there was a clear separation between a South East Asian group of trading partners comprising Singapore, Indonesia, Malaysia and Thailand and a group of North East Asian countries encompassing Korea, Taiwan, Japan, China, Hong Kong and the USA as a non-Asian nation. However, the cluster analysis does not explain why this pattern of regionalization emerges. In economic theory the regionalization of trade flows has been attributed to the. discrimination of countries through legal (El-Agraa (1988), Nienhaus (1987), p. 84) and natural trade barriers (Langhammer (1983), Deardorff (1987)). Following Viner's custom unions theory (Viner (1950)) a group of countries can negotiate preferential ?tariff treatment for their members, thus discriminating against non-member countries. Given such an institutional arrangement regional trade is expected to rise as a consequence of trade creation and trade diversion. Moreover, regionalization of trade flows can be enhanced by differences in transport costs resulting from the spatial remoteness of trading partners. As Deardorff shows, these differentials may affect both the direction and the composition of trade, since they constitute natural trade barriers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 423.
Date of creation: 1990
Date of revision:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lall, Sanjaya & Khanna, Ashok & Alikhani, Iradj, 1987. "Determinants of manufactured export performance in low-income Africa: Kenya and Tanzania," World Development, Elsevier, vol. 15(9), pages 1219-1224, September.
- Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-61, October.
- Amelung, Torsten, 1990. "Economic regions in Asia Pacific: An exercise in regional delimitation," Kiel Working Papers 409, Kiel Institute for the World Economy.
- Warren J Bilkey, 1978. "An Attempted Integration of the Literature on the Export Behavior of Firms," Journal of International Business Studies, Palgrave Macmillan, vol. 9(1), pages 33-46, March.
- Warren J Bilkey & George Tesar, 1977. "The Export Behavior of Smaller-Sized Wisconsin Manufacturing Firms," Journal of International Business Studies, Palgrave Macmillan, vol. 8(1), pages 93-98, March.
- Busse, Matthias, 2001. "Transaktionskosten und Wettbewerbspolitik," HWWA Discussion Papers 116, Hamburg Institute of International Economics (HWWA).
- Lücke, Matthias, 1992. "Technischer Fortschritt und die Arbeitsteilung zwischen Industrie- und Entwicklungsländern : eine empirische Analyse," Open Access Publications from Kiel Institute for the World Economy 758, Kiel Institute for the World Economy (IfW).
- Inotai, Andras, 1991. "Regional integration among developing countries, revisited," Policy Research Working Paper Series 643, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).
If references are entirely missing, you can add them using this form.