IDEAS home Printed from https://ideas.repec.org/a/agr/journl/v3(612)y2017i3(612)p51-62.html
   My bibliography  Save this article

What impact has free trade area on economies of ASEAN-5 countries?

Author

Listed:
  • Abidin ÖNCEL

    (Sakarya University, Sakarya, Turkey)

  • Raisal Fahrozi LUBİS

    (Sakarya University, Sakarya, Turkey)

Abstract

The main object of this study is to evaluate the impact of free trade liberalization on ASEAN-5 countries, consisting of Indonesia, Malaysia, The Philippines, Singapore and Thailand. Since ASEAN free trade area agreement was declared on 28 January 1992, the cooperation among the members has increased rapidly and has fostered them to achieve higher levels of economy. Therefore, variables such as foreign direct investment and trade should be implied to find out the determinants of the increase of output per capita of these countries. Panel data regression analysis has been employed in order to analyze the data. The variable of foreign direct investment has a positive effect on increasing output per capita of ASEAN-5 economies. We have also found the evidence for which the variable of trade and dummy free trade area don’t have significant effect on output per capita before the policy was totally applied (zero tariffs). However, after the policy of zero tariffs was applied, these variables proved to give significant positive effects on output per capita.

Suggested Citation

  • Abidin ÖNCEL & Raisal Fahrozi LUBİS, 2017. "What impact has free trade area on economies of ASEAN-5 countries?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(612), A), pages 51-62, Autumn.
    • Handle: RePEc:agr:journl:v:3(612):y:2017:i:3(612):p:51-62
    as

    Download full text from publisher

    File URL: http://store.ectap.ro/articole/1293.pdf
    Download Restriction: no
    File URL: http://www.ectap.ro/articol.php?id=1293&rid=128
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Subhash Sharma & Soo Chua, 2000. "ASEAN: economic integration and intra-regional trade," Applied Economics Letters, Taylor & Francis Journals, vol. 7(3), pages 165-169.
    2. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
    3. Shams, Rasul, 2003. "Regional Integration in Developing Countries: Some Lessons Based on Case Studies," Discussion Paper Series 26272, Hamburg Institute of International Economics.
    4. Henrekson, Magnus & Torstensson, Johan & Torstensson, Rasha, 1997. "Growth effects of European integration," European Economic Review, Elsevier, vol. 41(8), pages 1537-1557, August.
    5. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    6. Jeffrey A. Frankel, 1993. "Is Japan Creating a Yen Bloc in East Asia and the Pacific?," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 53-88, National Bureau of Economic Research, Inc.
    7. Jesus Crespo Cuaresma & Doris Ritzberger-Grunwald & Maria Antoinette Silgoner, 2008. "Growth, convergence and EU membership," Applied Economics, Taylor & Francis Journals, vol. 40(5), pages 643-656.
    8. World Bank, 2017. "World Development Indicators 2017," World Bank Publications - Books, The World Bank Group, number 26447, December.
    9. Baldwin, Richard & Seghezza, Elena, 1996. "Growth and European Integration: Towards an Empirical Assessment," CEPR Discussion Papers 1393, C.E.P.R. Discussion Papers.
    10. Tien Dung Nguyen & Misuo Ezaki, 2005. "Regional Economic Integration And Its Impacts On Growth, Poverty And Income Distribution: The Case Of Vietnam," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 17(3), pages 197-215, November.
    11. Capannelli, Giovanni & Lee, Jong-Wha & Petri, Peter, 2009. "Developing Indicators for Regional Economic Integration and Cooperation," Working Papers on Regional Economic Integration 33, Asian Development Bank.
    12. repec:ilo:ilowps:486351 is not listed on IDEAS
    13. Peter A. Petri, 1993. "The East Asian Trading Bloc: An Analytical History," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 21-52, National Bureau of Economic Research, Inc.
    14. Patrick Vanhoudt, 1999. "Did the European unification induce economic growth? In search of scale effects and persistent changes," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(2), pages 193-220, June.
    15. Jeffrey Frankel & Miles Kahler, 1993. "Regionalism and Rivalry: Japan and the United States in Pacific Asia," NBER Books, National Bureau of Economic Research, Inc, number fran93-1, October.
    16. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    17. Shams, Rasul, 2003. "Regional integration in developing countries: Some lessons based on case studies," HWWA Discussion Papers 251, Hamburg Institute of International Economics (HWWA).
    18. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    19. Plummer, Michael G. & Petri, Peter A. & Zhai, Fan,, 2014. "Assessing the impact of ASEAN economic integration on labour markets," ILO Working Papers 994863513402676, International Labour Organization.
    20. Wana Ismail, Normaz & Smith, Peter, 2009. "The Effect of ASEAN Economic Integration on Foreign Direct Investment," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 24, pages 385-407.
    21. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    22. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clemente, Jesús & Pueyo, Fernando & Sanz, Fernando, 2009. "Market potential, European Union and growth," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 719-730, September.
    2. Claire Economidou & Vivian Lei & Janet Netz, 2006. "International Integration and Growth: A Further Investigation on Developing Countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(4), pages 435-448, November.
    3. Rosa Capolupo & Giuseppe Celi, 2008. "Openness And Economic Growth: A Comparative Study Of Alternative Trading Regimes," Economie Internationale, CEPII research center, issue 116, pages 5-36.
    4. Stryszowski, P.K., 2006. "Intellectual Property Rights, Globalization and Growth," Discussion Paper 2006-76, Tilburg University, Center for Economic Research.
    5. G rkemli Kazar & Altu Kazar, 2015. "Is Harmonious Development Valid for European Union Regions?," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 954-967.
    6. Roberto Ezcurra & Andr�s Rodr�guez-Pose, 2014. "Trade Openness and Spatial Inequality in Emerging Countries," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(2), pages 162-182, June.
    7. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    8. Alan V. Deardorff & Robert M. Stern, 2004. "EU Expansion and EU Growth," International Economic Association Series, in: Alan V. Deardorff (ed.), The Past, Present and Future of the European Union, chapter 5, pages 74-102, Palgrave Macmillan.
    9. Potvorszki Gabor, "undated". "Contributions To Regional Disparities And Convergence In The Eu," Description: Managerial Challenges of the Contemporary Society 32, Faculty of Economics and Business Administration, Babes-Bolyai University.
    10. Arjan Lejour & Vladimir Solanic & Paul Tang, 2009. "EU Accession and Income Growth: An Empirical Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 127-144, May.
    11. Ezcurra, Roberto & Rodríguez-Pose, Andrés, 2013. "Does Economic Globalization affect Regional Inequality? A Cross-country Analysis," World Development, Elsevier, vol. 52(C), pages 92-103.
    12. Jesus Crespo Cuaresma & Doris Ritzberger-Grunwald & Maria Antoinette Silgoner, 2008. "Growth, convergence and EU membership," Applied Economics, Taylor & Francis Journals, vol. 40(5), pages 643-656.
    13. Xiaokai Yang, 2006. "The Division Of Labor, Investment And Capital," World Scientific Book Chapters, in: Christis Tombazos & Xiaokai Yang (ed.), Inframarginal Contributions To Development Economics, chapter 16, pages 409-436, World Scientific Publishing Co. Pte. Ltd..
    14. Indunil De Silva & Sudarno Sumarto, 2015. "Dynamics Of Growth, Poverty And Human Capital: Evidence From Indonesian Sub-National Data," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(2), pages 1-33, June.
    15. Olivier Parent & Abdallah Zouache, 2009. "Geographical Features vs. Institutional Factors: New Perspectives on The Growth of Africa and Middle-East," Working Papers 490, Economic Research Forum, revised Jun 2009.
    16. Mitra, Arup & Sharma, Chandan & Véganzonès-Varoudakis, Marie-Ange, 2016. "Infrastructure, information & communication technology and firms’ productive performance of the Indian manufacturing," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 353-371.
    17. repec:use:tkiwps:2929 is not listed on IDEAS
    18. Peter Henry, 2007. "Capital Account Liberalization: Theory, Evidence, and Speculation," Discussion Papers 07-004, Stanford Institute for Economic Policy Research.
    19. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters, in: Emilio Albi & Jorge Martinez-Vazquez (ed.), The Elgar Guide to Tax Systems, chapter 2, Edward Elgar Publishing.
    20. Miguel-Ángel Galindo Martín & Agustín Álvarez Herranz, 2006. "Regional Exports and Economic Growth: The Case of Spanish Regions," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(1), pages 81-89, February.
    21. Vassilis Monastiriotis & Dimitris Kallioras & George Petrakos, 2014. "The regional impact of EU association agreements: lessons for the ENP from the CEE experience," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 0, London School of Economics / European Institute.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:3(612):y:2017:i:3(612):p:51-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mircea Dinu (email available below). General contact details of provider: https://edirc.repec.org/data/agerrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.