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Assessing the impact of the main East-Asian free trade agreements using a gravity model. First results

Author

Listed:
  • Laëtitia Guilhot

    () (LEPII-CNRS)

Abstract

The purpose of this article is to assess the impact of the three main East-Asian free trade agreements (ASEAN, ASEAN-China and ASEAN-South Korea) on intra-regional and extra- regional trade. To do this, we use a panel-data gravity model with three regional indicator variables. On the basis of the results, we conclude that the ASEAN agreement favours regional and multilateral trade, with the creation of exports to the rest of the world outweighing the diversion of extra-regional imports. The ASEAN-China and ASEAN-South Korea agreements have thus far not been shown to have an impact on East-Asian trade flows.

Suggested Citation

  • Laëtitia Guilhot, 2010. "Assessing the impact of the main East-Asian free trade agreements using a gravity model. First results," Economics Bulletin, AccessEcon, vol. 30(1), pages 282-291.
    • Handle: RePEc:ebl:ecbull:eb-09-00555
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I1-P24.pdf
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    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. I-Hui Cheng & Howard J. Wall, 2005. "Controlling for heterogeneity in gravity models of trade and integration," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 49-63.
    3. Peter Egger & Michael Pfaffermayr, 2003. "The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects," Empirical Economics, Springer, vol. 28(3), pages 571-580, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Free Trade Agreement; East Asia; Gravity model;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F1 - International Economics - - Trade

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