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South-South Trade: An Asian Perspective

  • Prema-chandra Athukorala

The purpose of this paper is to inform the contemporary policy debate on promoting trade among developing countries (South–South trade) by analyzing trade patterns of developing Asian economies from a comparative global perspective. The paper begins with a stage-setting historical overview of the policy debate on South–South trade. It then examines trends and patterns of South–South trade in Asian economies, with emphasis on the implications of the growing importance of global production sharing and the rise of the People’s Republic of China, followed by an econometric analysis of the determinants of South–South trade flows within the standard gravity modeling framework. As far as developing Asian countries are concerned, there is no evidence to suggest that growth of their trade with the Southern trading partners has lagged behind what we would expect in terms of the standard determinants of trade potential. The findings also suggest that South–South trade is largely complementary to, rather than competing with, South–North trade.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2011/wp_econ_2011_09.pdf
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Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2011-09.

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Length: 59 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:pas:papers:2011-09
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  1. Lewis, W Arthur, 1980. "The Slowing Down of the Engine of Growth," American Economic Review, American Economic Association, vol. 70(4), pages 555-64, September.
  2. Przemyslaw Kowalski & Ben Shepherd, 2006. "South-South Trade In Goods," OECD Trade Policy Papers 40, OECD Publishing.
  3. Souleymane Coulibaly & Lionel Fontagné, 2006. "South--South Trade: Geography Matters," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(2), pages 313-341, June.
  4. Kindleberger, C. P., 1976. "A world divided: The less developed countries in the international economy : G.K. Hellemer, ed., (Cambridge University Press, Cambridge, 1976)," Journal of Development Economics, Elsevier, vol. 3(3), pages 299-300, September.
  5. Havrylyshyn, Oli & Civan, Engin, 1985. "Intra-industry trade among developing countries," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 253-271, August.
  6. Prema-chandra Athukorala, 2003. "Product Fragmentation and Trade Patterns in East Asia," Departmental Working Papers 2003-21, The Australian National University, Arndt-Corden Department of Economics.
  7. Riedel, James, 1984. "Trade as the Engine of Growth in Developing Countries, Revisited," Economic Journal, Royal Economic Society, vol. 94(373), pages 56-73, March.
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