China-Japan-Korea (CJK)'s FTA Strategy towards ASEAN Countries: A Game Theoretical Approach
AbstractThis paper analyzes the FTA strategies of China, Japan and Korea (CJK) toward ASEAN countries using a three-player game. It explores the implications of China, Japan, and/or Korea participating in an FTA with ASEAN and the corresponding rewards in a payoff matrix. The Nash equilibrium occurs when China, Korea and Japan all choose to participate in an FTA with ASEAN. Dominant strategies and response functions for each country are analyzed using Error Correction Mechanism (ECM) and Vector Auto Regression (VAR) models. The paper also finds that Japanâ€™s action to create FTA will be the most effective for regional settings. Although the game analysis is backward looking, it is a useful benchmark for understanding future FTA policies in East Asia.
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 Faculty of Economics, University of Indonesia in its series Working Papers in Economics and Business with number 201210.
Length: 12 pages
Date of creation: Oct 2012
Date of revision: Oct 2012
FTA; Game Theory; Error Correction Mechanism; Vector Auto Regressive;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-22 (All new papers)
- NEP-GTH-2012-12-22 (Game Theory)
- NEP-SEA-2012-12-22 (South East Asia)
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.:
- Hansen, Henrik & Rand, John, 2005.
"On the Causal Links between FDI and Growth in Developing Countries,"
Working Paper Series
RP2005/31, World Institute for Development Economic Research (UNU-WIDER).
- Henrik Hansen & John Rand, 2006. "On the Causal Links Between FDI and Growth in Developing Countries," The World Economy, Wiley Blackwell, vol. 29(1), pages 21-41, 01.
- Henrik Hansen & John Rand, 2004. "On the Causal Links between FDI and Growth in Developing Countries," Discussion Papers 04-30, University of Copenhagen. Department of Economics.
- Harrison, Ann, 1996.
"Openness and growth: A time-series, cross-country analysis for developing countries,"
Journal of Development Economics,
Elsevier, vol. 48(2), pages 419-447, March.
- Harrison, Ann, 1991. "Openness and growth : a time series, cross-country analysis for developing countries," Policy Research Working Paper Series 809, The World Bank.
- Ann Harrison, 1995. "Openness and Growth: A Time-Series, Cross-Country Analysis for Developing Countries," NBER Working Papers 5221, National Bureau of Economic Research, Inc.
- Robert C. Feenstra, 1995.
"Estimating the Effects of Trade Policy,"
NBER Working Papers
5051, National Bureau of Economic Research, Inc.
- Feenstra, R.C., 1995. "Estimating the Effects of Trade Policy," Department of Economics 95-10, California Davis - Department of Economics.
- Feenstra, R.C., 1995. "Estimating the Effects of Trade Policy," Papers 95-10, California Davis - Institute of Governmental Affairs.
- Robert Feenstra, 2004. "Estimating The Effects Of Trade Policy," Working Papers 9510, University of California, Davis, Department of Economics.
- Kawai, Masahiro, 2005. "East Asian economic regionalism: progress and challenges," Journal of Asian Economics, Elsevier, vol. 16(1), pages 29-55, February.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Shujiro Urata & Kozo Kiyota, 2005. "The Impacts of an East Asia Free Trade Agreement on Foreign Trade in East Asia," NBER Chapters, in: International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14, pages 217-252 National Bureau of Economic Research, Inc.
- Kawai, Masahiro & Wignaraja, Ganeshan, 2008. "Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA," Working Papers on Regional Economic Integration 14, Asian Development Bank.
- James P. Gander, 2008. "Dynamic Economic Game Theory and Asian Free Trade Agreements," Working Paper Series, Department of Economics, University of Utah 2008_18, University of Utah, Department of Economics.
- David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
- Giovanni Capannelli & Jong-Wha Lee & Peter A. Petri, 2010. "Economic Interdependence In Asia: Developing Indicators For Regional Integration And Cooperation," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(01), pages 125-161.
- Harvie, Charles & Lee, Hyun-Hoon, 2002. "New Regionalism in East Asia: How Does It Relate to the East Asian Economic Development Model?," Economics Working Papers wp02-10, School of Economics, University of Wollongong, NSW, Australia.
- Baldwin, Robert E. & Clarke, Richard N., 1987. "Game-modeling multilateral trade negotiations," Journal of Policy Modeling, Elsevier, vol. 9(2), pages 257-284.
- Hadi SOESASTRO, 2006. "Regional Integration in East Asia: Achievements and Future Prospects," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 215-234.
- Baharumshah, Ahmad Zubaidi & Onwuka, Kevin Odulukwe & Habibullah, Muzafar Shah, 2007. "Is a regional trade bloc a prelude to multilateral trade liberalization?: Empirical evidence from the ASEAN-5 economies," Journal of Asian Economics, Elsevier, vol. 18(2), pages 384-402, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rus'an Nasrudin).
If references are entirely missing, you can add them using this form.