IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-137-59613-0_2.html
   My bibliography  Save this book chapter

The Impact of ASEAN FTA: Regional Level Analysis

In: The Future of the ASEAN Economic Integration

Author

Listed:
  • Kiki Verico

    (University of Indonesia)

Abstract

Originally, AFTA was expected to create intra-regional trade intra-regional trade (trade creation trade creation ) rather than to attract long-run investment of FDI inflows (investment creation investment creation ). This is expected to be achieved through an increase in intra-regional trade among its member states. Intra-regional trade affects FDI inflows in two ways: (1) an increase in horizontal FDI inflows from non-members in order to avoid trade impediments from discrimination by regional trade policies and (2) an increase in vertical FDI inflows from members due to the increasing benefits from intra-regional trade following the implementation of regional discriminative trade policies. Previous studies suggest that intra-regional trade increases FDI inflows, therefore, it is important to see one, indirect impact which is the impact of AFTA to intra-regional trade compared to the impact of intra-regional trade to investment (FDI Inflows) and two, direct impact which is the impact of AFTA to FDI inflows. Trade discrimination such as AFTA is also expected to enhance investment creation (FDI inflows) from non-members even though its main purpose is for intra-regional trade enhancement. This chapter takes a time-series framework from 1988 to 2008. 1988 was selected as it was the start of the first of AFTA’s five year preparation before it was officially signed in 1992. It limits time-series analysis to year 2008 for three reasons: First, after 2008, ASEAN started to prepare the ASEAN Economic Community, ASEAN Economic Community which came into force at the end of 2015. Two, the occurrence of a global financial crises, which changed ASEAN’s economic relations with other trading partners especially major economies which have been most affected by this crises. Three, ASEAN established several significant regional-plus cooperation to enhance its investment flows such as the ASEAN Japan Free Trade Area (AJFTA), ASEAN South Korea FTA, ASEAN China FTA ASEAN China FTA , ASEAN India FTA and ASEAN Australia New Zealand FTA. These three considerations have significantly changed the major factors that affect FDI inflows in ASEAN region other than ASEAN FTA as such. Given its time-series framework, this chapter takes the founding members of ASEAN and in particular Indonesia, Malaysia, Thailand, and Philippines as the observation countries.

Suggested Citation

  • Kiki Verico, 2017. "The Impact of ASEAN FTA: Regional Level Analysis," Palgrave Macmillan Books, in: The Future of the ASEAN Economic Integration, chapter 2, pages 25-111, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-59613-0_2
    DOI: 10.1057/978-1-137-59613-0_2
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    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:pal:palchp:978-1-137-59613-0_2. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    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.