Enhancing Trade Flows in ASEAN Plus Six

Sithanonxay Suvannaphakdy (), Toshihisa Toyoda and Chris Czerkawski

Applied Econometrics and International Development, 2011, vol. 11, issue 2

Abstract: Using an unbalanced panel dataset of bilateral trade flows, we study the determinants of bilateral trade of ASEAN 10 countries, Australia, China, India, Japan, New Zealand, and South Korea, from 1989 to 2009. We find that bilateral trade flow is positively related to the overall bilateral country size and similarity in country size and inversely related to the relative factor endowment differences, transportation costs, and import tariffs. Our simulation results show that establishing the free trade area in ASEAN+6 is important for promoting intraregional trade by about 39.3% ($66.6 billion), and that a new economic community of the “6” countries together with ASEAN promotes mutual trade.

Keywords: East Asia; trade flows; gravity model (search for similar items in EconPapers)
JEL-codes: C33 F14 F15 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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