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Interdependence of income between China and ASEAN-5 countries

Author

Listed:
  • Evan Lau
  • Koon Po Lee

Abstract

Purpose - The purpose of the paper is to empirically examine the interdependence of income between China and ASEAN-5 countries by using the real gross domestic product (GDP). Besides answering this important policy question, the paper is also concerned with ascertaining the causal direction between China and the ASEAN-5 income. Design/methodology/approach - The paper resorts to the standard time series econometrics analysis. These includes the unit root, cointegration and the Granger causality tests in order to test the causal interplay and interdependence of income between ASEAN-5 and China for the estimation period from 1960 to 2003 obtained from the Penn World Table (PWT) 6.2. Findings - Empirical results are found to support the strong interdependence of income between China and ASEAN-5 countries. Further, the causality experiment suggests that China is the key factor in connecting (equilibrium point) the ASEAN-5 region, where China in one-way or another marks the resemblance of the income amongst these economies. Originality/value - The paper is of value in that it highlights the issue of interdependence of income especially in developing countries. With the increasing interest of economic integration around the globe especially the China-ASEAN Free Trade Area (CAFTA), the interdependence and synchronization movements of income between member countries is an important characteristic for suitability towards the regional common currency goal.

Suggested Citation

  • Evan Lau & Koon Po Lee, 2008. "Interdependence of income between China and ASEAN-5 countries," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 1(2), pages 148-161, June.
  • Handle: RePEc:eme:ceftpp:v:1:y:2008:i:2:p:148-161
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    Citations

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    Cited by:

    1. Kueh, Jerome Swee-Hui & Puah, Chin-Hong & Mattias, Murphy Lai, 2010. "Economic Integration between ASEAN+5 Countries: Comparison of GDP," MPRA Paper 31764, University Library of Munich, Germany.
    2. Wu, Po-Chin & Liu, Shiao-Yen & Hsiao, Juei-Ming & Huang, Tsai-Yuan, 2016. "Nonlinear and time-varying growth-tourism causality," Annals of Tourism Research, Elsevier, vol. 59(C), pages 45-59.

    More about this item

    Keywords

    China; South East Asia; Free trade; Income; International cooperation;

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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