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Trade Creation And Trade Diversion Effects: The Case Of The Asean Plus Six Free Trade Area

Author

Listed:
  • Rossanto Dwi Handoyo

    (Universitas Airlangga)

  • Lilik Sugiharti

    (Universitas Airlangga)

  • Miguel Angel Esquivias

    (Universitas Airlangga)

Abstract

This study examines whether trade agreements promoted under the ASEAN+6 over the period 2007-2017 supported trade creation and/or trade diversion effects within three export product groups, namely, manufactured goods, primary products, and natural resources-based goods. Using a gravity model, we note that primary products offer pure trade creation (greater intra-bloc and extra-bloc trade). Manufactured products experienced trade creation in intra-bloc and extra-bloc exports, while natural resources-based goods show trade creation in intraregional exports and trade creation in imports from extra-bloc.

Suggested Citation

  • Rossanto Dwi Handoyo & Lilik Sugiharti & Miguel Angel Esquivias, 2021. "Trade Creation And Trade Diversion Effects: The Case Of The Asean Plus Six Free Trade Area," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 24(1), pages 93-118, March.
    • Handle: RePEc:idn:journl:v:24:y:2021:i:1e:p:93-118
    DOI: https://doi.org/10.21098/bemp.v24i1.1163
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    Citations

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    Cited by:

    1. Narayan, Paresh Kumar & Rath, Badri Narayan & Syarifuddin, Ferry, 2022. "Understanding the role of trade agreements in Indonesia’s FDI," Journal of Asian Economics, Elsevier, vol. 82(C).
    2. Abdul Rahim Ridzuan & Bayu Arie Fianto & Miguel Angel Esquivias & Vikniswari Vija Kumaran & Mohd Shahidan Shaari & Aliashim Albani, 2022. "Do Financial Development and Trade Liberalization Influence Environmental Quality in Indonesia? Evidence-based on ARDL Model," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 342-351, September.
    3. Rudi Purwono & Lilik Sugiharti & Rossanto Dwi Handoyo & Miguel Angel Esquivias, 2022. "Trade Liberalization and Comparative Advantage: Evidence from Indonesia and Asian Trade Partners," Economies, MDPI, vol. 10(4), pages 1-21, March.

    More about this item

    Keywords

    Gravity model; Panel data; Trade creation and trade diversion effects; PMML; Technology intensity; Food; Manufacturing;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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