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Making East Asian Regionalism Works

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  • Fithra Faisal Hastiadi

    (Waseda Universit)

Abstract

For the past few years, regionalism has been progressing in East Asia with the likes of Cina, Japan, and Korea (CJK) as the most prominent actors. Unfortunately, with the absence of trade arrangement amongst the CJK, the present regional trade scheme is not sufficient to reach sustainability. This paper uncovers the inefficient scheme through Engle-Granger Cointegration and Error Correction Mechanism. Moreover, the paper underlines the importance of triangular trade agreement for accelerating the phase of growth in CJK which eventually create a spillover effect to East Asia as a whole. Employing Two Stage Least Squares in a static panel fixed effect model, the paper argues that the spillover effect will function as an impetus for creating region-wide FTA. Furthermore, the paper also identifies a number of economic and political factors that can support the formation of East Asian Regionalism.

Suggested Citation

  • Fithra Faisal Hastiadi, 2010. "Making East Asian Regionalism Works," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 13(1), pages 103-124, July.
    • Handle: RePEc:idn:journl:v:13:y:2010:i:1d:p:103-124
    DOI: https://doi.org/10.21098/bemp.v13i1.253
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    References listed on IDEAS

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    1. Charles Harvie & Hyun-Hoon Lee, 2003. "New Regionalism in East Asia: How Does It Relate to the East Asian Economic Development Model?," Palgrave Macmillan Books, in: Tran Hoa & Charles Harvie (ed.), New Asian Regionalism, chapter 4, pages 40-71, Palgrave Macmillan.
    2. Kawai, Masahiro, 2005. "East Asian economic regionalism: progress and challenges," Journal of Asian Economics, Elsevier, vol. 16(1), pages 29-55, February.
    3. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    4. Shujiro Urata & Kozo Kiyota, 2003. "The Impacts of an East Asia FTA on Foreign Trade in East Asia," NBER Working Papers 10173, National Bureau of Economic Research, Inc.
    5. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    6. David Roland Holst & John Weiss, 2004. "ASEAN and China: Export Rivals or Partners in Regional Growth?," The World Economy, Wiley Blackwell, vol. 27(8), pages 1255-1274, August.
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    Cited by:

    1. Fithra Faisal Hastiadi Author_Email:, 2011. "East Asian Regionalism: The Way Forward," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-153, Conference Master Resources.

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    More about this item

    Keywords

    Regionalism; Engle-Granger Cointegration; Error Correction Mechanism; Fixed Effect; Two Stage Least Squares;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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