Assessing the impact of China shocks on intra-ASEAN trade

Kazunobu Hayakawa

Journal of the Japanese and International Economies, 2022, vol. 65, issue C

Abstract: The member countries of the Association of Southeast Asian Nations (ASEAN) have made significant efforts to increase intra-ASEAN trade by reducing or eliminating tariffs in the region. However, intra-ASEAN trade as a percentage of total trade in the region has not increased significantly; instead, ASEAN countries' imports from China have grown dramatically. In this study, we examine the causal impacts of imports from China on intra-ASEAN trade by estimating gravity-type equations for intra-ASEAN trade at a highly disaggregated product level for the period 2000–2019. In particular, we address the issues of including observations with zero-valued trade and endogeneity in a gravity equation with multiple high-dimensional fixed effects. As a result, we found that imports from China significantly increase, rather than decrease, intra-ASEAN trade.

Keywords: China shocks; ASEAN; Trade creation effect (search for similar items in EconPapers)
JEL-codes: F15 F53 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:65:y:2022:i:c:s0889158322000168

DOI: 10.1016/j.jjie.2022.101206

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