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The Empirical Investigation on The Relationship of Foreign Trade, Institutions and Economic Performance of The ASEAN Nations

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  • KHIM Samitt

Abstract

This short empirical paper attempts to study on the empirical investigation on the relationship of foreign trade and institutional stocks on economic growth of the ASEAN nations. The panel data which contains ten countries in ASEAN is employed to use in this paper and the econometric estimations such as Pooled OLS and Fixed-Effect estimations are adopted. In this paper, the conventional factors such as fixed capital formation and economically employed labor and domestic credit sizes are controlled. Finally, the empirical results from this paper suggest a strong positively significant relationship between total stocks of institutions, foreign trade and domestic credit development on economic growth of these nations. Moreover, when controlling conventional factors and domestic credit sizes, foreign trade and individual effect of government effectiveness, accountability, rule of law and political stability plays extremely roles in economic development of these nations. Additionally, foreign trade effect on economic growth of these nations has changed over time; increasing sharply, in particular after the ASEAN Free Trade Area was launched in 1992.

Suggested Citation

  • KHIM Samitt, 2012. "The Empirical Investigation on The Relationship of Foreign Trade, Institutions and Economic Performance of The ASEAN Nations," Business and Economic Research, Macrothink Institute, vol. 2(2), pages 119-135, December.
    • Handle: RePEc:mth:ber888:v:2:y:2012:i:2:p:119-135
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    References listed on IDEAS

    as
    1. Cavalcanti, Tiago V. & Magalhães, André M. & Tavares, José A., 2008. "Institutions and economic development in Brazil," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 412-432, May.
    2. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
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    More about this item

    Keywords

    Economic Cooperation; ASEAN; Institutions; Foreign Trade; Economic Performance; Pooled OLS and Fixed-Effect estimation;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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