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Bounds Estimation for Trade Openness and Government Expenditure Nexus of ASEAN-4 Countries

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  • Kueh, Jerome Swee-Hui
  • Puah, Chin-Hong
  • Wong, Chiew-Meu

Abstract

Southeast Asia countries are encountering several challenges as they are moving towards the globalization and trade liberalization era. Due to that, government intervention is essential in ensuring that the economy is resilience against the severe implications of trade openness. Therefore, this study aims to examine the relationship between trade openness and government expenditure of ASEAN-4 countries using the Autoregressive Distributed Lag [ARDL] bounds testing approach that covers a sample period of annually data from 1974-2006. Empirical results indicate that there is an existence of a significant positive long-run linkage between trade openness and government expenditure of all the ASEAN-4 countries under study. This means that government intervention in an open economy is crucial as to cushion the risks associated with trade liberalization.

Suggested Citation

  • Kueh, Jerome Swee-Hui & Puah, Chin-Hong & Wong, Chiew-Meu, 2008. "Bounds Estimation for Trade Openness and Government Expenditure Nexus of ASEAN-4 Countries," MPRA Paper 12351, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:12351
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    Cited by:

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    2. Ahmet Tekin & İbrahim Tuğrul Çınar & Ersin Nail Sağdıç & Fazlı Yıldız, 2023. "Trade Openness and Sustainable Government Size: Evidence from Central and Eastern European Countries," Sustainability, MDPI, vol. 15(15), pages 1-17, August.
    3. Liew, Siew-Ling, 2016. "Review on Determinants of Capital Flight," MPRA Paper 70445, University Library of Munich, Germany.
    4. Muhammad Zakaria & Samreen Shakoor, 2011. "Relationship Between Government Size and Trade Openness: Evidence from Pakistan," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(2), pages 328-341, December.
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    7. Ghafar, Nurul & Masih, Mansur, 2016. "Determinants of unemployment rate in an open economy: Malaysian evidence," MPRA Paper 109916, University Library of Munich, Germany.

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    More about this item

    Keywords

    ARDL; ASEAN-4; openness; government expenditure;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • F10 - International Economics - - Trade - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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