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Regional Integration and Trade Cost in South Asia

Author

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  • Banik, Nilankan
  • Gilbert, John

Abstract

Until now, amount of inter-country trade within South Asian nations have been low. While similarities in exports profile can be seen as a reason for this low value of trade it might not be a valid one, especially in presence of growing South Asian income. Intra-industry trade theory suggests that complementarity might actually increase trade in presence of a rising income. There can be other important factors, such as, trade costs. Using an augmented gravity model in a panel framework the authors try to identify the components of trade costs that might have resulted in lower inter-country South Asian trade. This paper was prepared for the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 4th Annual Meeting held in Lima, Peru, on June 17, 2008.

Suggested Citation

  • Banik, Nilankan & Gilbert, John, 2008. "Regional Integration and Trade Cost in South Asia," IDB Publications (Working Papers) 3681, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3681
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    Cited by:

    1. Jean-Francois Gautrin, 2014. "Connecting South Asia to Southeast Asia: Cross-Border Infrastructure Investments," ADBI Working Papers 483, Asian Development Bank Institute.
    2. Mr Hasanuzzaman & Zeeshaan Rahman, 2010. "Bangladesh and Regional Connectivity : Best Practices from Global Experiences," Trade Working Papers 23061, East Asian Bureau of Economic Research.
    3. De, Prabir & Raihan, Selim & Kathuria, Sanjay, 2012. "Unlocking Bangladesh-India trade : emerging potential and the way forward," Policy Research Working Paper Series 6155, The World Bank.
    4. Sushil Kumar & Shahid Ahmed, 2015. "Gravity Model by Panel Data Approach," Foreign Trade Review, , vol. 50(4), pages 233-249, November.
    5. Vaqar, Ahmed & Ghulam, Samad, 2011. "Trade facilitation for economic corridors in South Asia: the perspective of Pakistan," MPRA Paper 31368, University Library of Munich, Germany.
    6. Md. Abdur Rahman Forhad, 2014. "How many currencies in Saarc countries? a multivariate structural var approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(4), pages 265-286, October-D.
    7. Anura Ekanayake & Ratnakar Adhikari & Puspa Sharma & Paras Kharel, 2012. "Private sector in South Asia : Stumbling blocks or building blocks to regional integration?," Regional Economic Integration: Challenges for South Asia during turbulent times (Edited volume), in: Saman Kelegama (ed.), Regional Economic Integration : Challenges for South Asia during turbulent times (Edited volume), edition 1, volume 1, chapter 12, pages 213-224, South Asia Watch on Trade, Economics and Environment.

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    Keywords

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    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
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration

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