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Enhancing Trade Flows in ASEAN Plus Six

  • Sithanonxay SUVANNAPHAKDY
  • Toshihisa TOYODA

Using an unbalanced panel dataset of bilateral trade flows, we study the determinants of bilateral trade of ASEAN 10 countries, Australia, China, India, Japan, New Zealand, and South Korea, from 1989 to 2009. We find that bilateral trade flow is positively related to the overall bilateral country size and similarity in country size and inversely related to the relative factor endowment differences, transportation costs, and import tariffs. Our simulation results show that establishing the free trade area in ASEAN+6 is important for promoting intraregional trade by about 39.3% ($66.6 billion), and that a new economic community of the “6” countries together with ASEAN promotes mutual trade.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 11 (2011)
Issue (Month): 2 ()

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Handle: RePEc:eaa:aeinde:v:11:y:2011:i:2_14
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  9. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-29, December.
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