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Widening and Deepening Economic Integration Impact on Bilateral Trade in the Eurozone and ASEAN

  • Zaenal Mutaqin

    (Graduate School for International Development and Cooperation, Hiroshima University)

  • Masaru Ichihashi

    (Graduate School for International Development and Cooperation, Hiroshima University)

The main aim of this study is to comparatively investigate the impact of different level of economic integration on bilateral trade between the Eurozone and ASEAN. Applying augmented gravity equation, the results showed that deepening impact on bilateral trade was positive in all Eurozone members but insignificant for original member. In ASEAN, deepening impact which is creating AFTA generates positive result only between ASEAN-6, but not when CLMV joined the membership. The policy related with Maastricht criteria variables has small influence on reciprocal trade in both the Eurozone and ASEAN. Horizontal integration was improving in both the Eurozone and ASEAN for positive result of size and similarity coefficient. Intra-trade industry was a phenomenon in all Eurozone, but it was insignificant if only between original members in both the Eurozone and ASEAN due to relatively similar level of development in original members. For ASEAN, different factor endowment was determinant for higher bilateral trade when CLMV countries were included in 1990-2009.

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File URL: http://ir.lib.hiroshima-u.ac.jp/files/public/34633/20141016202915906287/IDEC-DP2_03-3.pdf
File Function: First version, 2013
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Paper provided by Hiroshima University, Graduate School for International Development and Cooperation (IDEC) in its series IDEC DP2 Series with number 3-3.

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Length: 28 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:hir:idecdp:3-3
Contact details of provider: Web page: http://www.hiroshima-u.ac.jp/en/idec/

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  1. Sergio Nardis, 2004. "Currency unions and trade: The special case of EMU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 140(3), pages 625-649, September.
  2. Robert J. R. Elliott & Kengo Ikemoto, 2004. "AFTA and the Asian Crisis: Help or Hindrance to ASEAN Intra-Regional Trade?," Asian Economic Journal, East Asian Economic Association, vol. 18(1), pages 1-23, 03.
  3. Zsolt Darvas, 2010. "The Case for Reforming Euro Area Entry Criteria," IEHAS Discussion Papers 1022, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  4. Angresano, James, 2004. "European Union integration lessons for ASEAN + 3: the importance of contextual specificity," Journal of Asian Economics, Elsevier, vol. 14(6), pages 909-926, January.
  5. Hill, Hal & Menon, Jayant, 2010. "ASEAN Economic Integration: Features, Fulfillments, Failures and the Future," Working Papers on Regional Economic Integration 69, Asian Development Bank.
  6. Markusen, James R. & Venables, Anthony J., 2000. "The theory of endowment, intra-industry and multi-national trade," Journal of International Economics, Elsevier, vol. 52(2), pages 209-234, December.
  7. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
  8. Thierry Warin & Phanindra V. Wunnava & Hubert P. Janicki, 2009. "Testing Mundell's Intuition of Endogenous OCA Theory," Review of International Economics, Wiley Blackwell, vol. 17(1), pages 74-86, 02.
  9. Belke, Ansgar & Spies, Julia, 2008. "Enlarging the EMU to the East: What Effects on Trade?," IZA Discussion Papers 3647, Institute for the Study of Labor (IZA).
  10. Stefano Schiavo, 2008. "Financial Integration, GDP Correlation and the Endogeneity of Optimum Currency Areas," Sciences Po publications info:hdl:2441/9857, Sciences Po.
  11. repec:spo:wpecon:info:hdl:2441/9857 is not listed on IDEAS
  12. ZaenalMutaqin & Masaru Ichihashi, 2012. "Assessing Determinants of Macroeconomic Policy on Real Convergence and Growth: A Comparative Study of the Eurozone and ASEAN," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(2), pages 301-324, June.
  13. Sergio Nardis & Claudio Vicarelli, 2003. "Currency unions and trade: The special case of EMU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 139(4), pages 625-649, December.
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