IDEAS home Printed from https://ideas.repec.org/p/uow/depec1/wp03-02.html
   My bibliography  Save this paper

Growth of Asian Regional Trade and Income Convergence: Evidence from ASEAN+3 Based on Extended Helpman-Krugman Hypothesis and Flexible Modelling Approach

Author

Abstract

In earlier cross-sectional gravity-theory reports (see for example Frankel and Romer, 1999), empirical modelling evidence lends support to the hypothesis of ‘trade causes growth’. In our time-series study on trade-growth causation for a new Asian regionalism (namely ASEAN+3), the hypothesis was also confirmed (Tran Van Hoa, 2002c). A number of benchmark models have also been proposed to find out what causes trade (for a brief survey, see Baier and Bergstrand, 2001), but specific research on income convergence and Asian or more specifically ASEAN+3 trade is still scarce or even non-existent. The paper focuses on studying the growth of ASEAN+3 bilateral trade in the volatile period 1968-2000 and, using an extended Helpman-Krugman (1985) function-free model and World Bank national account and CHELEM trade data, tests the impact of convergence on this trade. Surprisingly, this convergence is found plausible but statistically insignificant and ASEAN output growth and crises are principal determinants of the trade flows between the East Asia 3 and ASEAN.

Suggested Citation

  • Tran Van Hoa, 2003. "Growth of Asian Regional Trade and Income Convergence: Evidence from ASEAN+3 Based on Extended Helpman-Krugman Hypothesis and Flexible Modelling Approach," Economics Working Papers wp03-02, School of Economics, University of Wollongong, NSW, Australia.
    • Handle: RePEc:uow:depec1:wp03-02
    as

    Download full text from publisher

    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow012142.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ullah, Aman & Ullah, Shobha, 1978. "Double k-Class Estimators of Coefficients in Linear Regression," Econometrica, Econometric Society, vol. 46(3), pages 705-722, May.
    2. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    3. Tran Van Hoa (ed.), 2002. "Economic Crisis Management," Books, Edward Elgar Publishing, number 2412.
    4. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    5. Tran Van Hoa, 2002. "Korea, China and Japan: Their Trade with the World and Its Impact on New Asian Regionalism ASEAN+3," Economics Working Papers wp02-13, School of Economics, University of Wollongong, NSW, Australia.
    6. David Romer, 1993. "Openness and Inflation: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(4), pages 869-903.
    7. Van Hoa, Tran, 1985. "The inadmissibility of the Stein estimator in normal multiple regression equations," Economics Letters, Elsevier, vol. 19(1), pages 39-42.
    8. Van Hoa, Tran, 1993. "The mixture properties of the 2SHI estimators in linear regression models," Statistics & Probability Letters, Elsevier, vol. 16(2), pages 111-115, January.
    9. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
    10. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
    11. Glenn Otto & Graham Voss & Luke Willard, 2001. "Understanding OECD Output Correlations," RBA Research Discussion Papers rdp2001-05, Reserve Bank of Australia.
    12. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    13. Mr. Elhanan Helpman & Mr. David T. Coe, 1993. "International RandD Spillovers," IMF Working Papers 1993/084, International Monetary Fund.
    14. Van Hoa, Tran & Chaturvedi, A., 1988. "The necessary and sufficient conditions for the uniform dominance of the two-stage stein estimators," Economics Letters, Elsevier, vol. 28(4), pages 351-355.
    15. Tran Van Hoa, 2003. "New Asian Regionalism: Evidence of ASEAN+3 Free Trade Agreement From Extended Gravity Theory and New Modelling Approach," Economics Working Papers wp03-03, School of Economics, University of Wollongong, NSW, Australia.
    16. Van Hoa, Tran, 1986. "Improved estimators in some linear errors-in-variables models in finite samples," Economics Letters, Elsevier, vol. 20(4), pages 355-358.
    17. Van Hoa, Tran, 1986. "The inadmissibility of the 2SLS estimator in linear structural equations," Economics Letters, Elsevier, vol. 21(4), pages 337-341.
    18. Van Hoa, Tran, 1992. "Modelling output growth : A new approach," Economics Letters, Elsevier, vol. 38(3), pages 279-284, March.
    19. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    20. Tran Van Hoa & Chaturvedi, A., 1999. "Performance of the 2SHI Estimator under the Generalised Pitman Nearness Criterion," Economics Working Papers wp99-4, School of Economics, University of Wollongong, NSW, Australia.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tran Van Hoa, 2003. "New Asian Regionalism: Evidence of ASEAN+3 Free Trade Agreement From Extended Gravity Theory and New Modelling Approach," Economics Working Papers wp03-03, School of Economics, University of Wollongong, NSW, Australia.
    2. Tran Van Hoa, 2004. "Economic and Financial Crisis Management in Asia: A Critical Analysis," Economics Working Papers wp04-13, School of Economics, University of Wollongong, NSW, Australia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tran Van Hoa, 2003. "New Asian Regionalism: Evidence of ASEAN+3 Free Trade Agreement From Extended Gravity Theory and New Modelling Approach," Economics Working Papers wp03-03, School of Economics, University of Wollongong, NSW, Australia.
    2. Tran Van Hoa, 2004. "Australia-Thailand Free Trade Agreement: Challenges and Opportunities for Bilateral Trade Policy and Closer Economic Relations," Economics Working Papers wp04-12, School of Economics, University of Wollongong, NSW, Australia.
    3. Tran Van Hoa, 2010. "Impact of the WTO Membership, Regional Economic Integration, and Structural Change on China's Trade and Growth," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 577-591, August.
    4. Tran Van Hoa, 2007. "ASEAN3+India Trade Relations," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 1(4), pages 341-357, December.
    5. Tran Van Hoa, 2002. "WTO Membership for China and Its Impact on Growth, Investment and Consumption: A New Flexible Keynesian Approach," Economics Working Papers wp02-04, School of Economics, University of Wollongong, NSW, Australia.
    6. Tran Van Hoa, 2000. "Recent Significant Advances in Estimating and Forecasting Theories and Economic Modelling: With Applications to Asian Investment Studies," Economics Working Papers wp00-01, School of Economics, University of Wollongong, NSW, Australia.
    7. Van Hoa, Tran & Limskul, Kitti, 2013. "Economic impact of CO2 emissions on Thailand's growth and climate change mitigation policy: A modelling analysis," Economic Modelling, Elsevier, vol. 33(C), pages 651-658.
    8. Frankel, Jeffrey A. & Romer, David & Cyrus, Teresa, 1995. "Trade and Growth in East Asian Countries: Cause and Effect?," Center for International and Development Economics Research (CIDER) Working Papers 233408, University of California-Berkeley, Department of Economics.
    9. Akio Namba, 2001. "MSE performance of the 2SHI estimator in a regression model with multivariate t error terms," Statistical Papers, Springer, vol. 42(1), pages 81-96, January.
    10. Tran Van Hoa & Lindsay Turner & Jo Vu, 2018. "Economic impact of Chinese tourism on Australia," Tourism Economics, , vol. 24(6), pages 677-689, September.
    11. Tran Van Hoa, 2012. "ASEAN-India Economic, Trade and Integration Relations: Modelling the Challenges and Opportunities," Journal of Quantitative Economics, The Indian Econometric Society, vol. 10(1), pages 121-135, January.
    12. Tran Van Hoa, 2004. "Economic and Financial Crisis Management in Asia: A Critical Analysis," Economics Working Papers wp04-13, School of Economics, University of Wollongong, NSW, Australia.
    13. Lumenga-Neso, Olivier & Olarreaga, Marcelo & Schiff, Maurice, 2005. "On `indirect' trade-related R&D spillovers," European Economic Review, Elsevier, vol. 49(7), pages 1785-1798, October.
    14. Francisco J. Buera & Ezra Oberfield, 2020. "The Global Diffusion of Ideas," Econometrica, Econometric Society, vol. 88(1), pages 83-114, January.
    15. Kim, Dong-Hyeon & Lin, Shu-Chin & Suen, Yu-Bo, 2016. "Trade, growth and growth volatility: New panel evidence," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 384-399.
    16. Mirajul Haq & Muhammad Luqman, 2014. "The contribution of international trade to economic growth through human capital accumulation: Evidence from nine Asian countries," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-13, December.
    17. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    18. Khalid, Usman, 2015. "Why Trading with Dictators May Nevertheless Help the People: On the Interplay between Trade, Political Regimes and Economic Institutions," Working Papers 2015:15, Lund University, Department of Economics, revised 23 Jul 2015.
    19. Gourdon, Julien, 2006. "Openness and Inequality in Developing Countries: A New Look at the Evidence," MPRA Paper 4176, University Library of Munich, Germany.
    20. Jeffrey A. Frankel & Andrew K. Rose, 2000. "Estimating the Effect of Currency Unions on Trade and Output," NBER Working Papers 7857, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    New Asian Regionalism; Free Trade Agreement; ASEAN; ASEAN+3; Trade and Growth; Crises; Convergence Theory; Gravity Theory; Causality; Economic Modelling; Estimation Methods; Economic and Trade Policy;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uow:depec1:wp03-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Siminski (email available below). General contact details of provider: https://edirc.repec.org/data/deuowau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.