FREE TRADE AREAS AND INTRA-REGIONAL TRADE: THE CASE OF ASEAN

Maurice J. G. Bun (), Franc Klaassen and G. K. Randolph Tan ()
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Maurice J. G. Bun: Tinbergen Institute & Amsterdam School of Economics, Universiteit van Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands
G. K. Randolph Tan: Division of Economics, School of Humanities & Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore

The Singapore Economic Review (SER), 2009, vol. 54, issue 03, 319-334

Abstract: We study the effects of free trade areas on bilateral trade flows. We review and extend the previous empirical literature by embarking on the modelling of unobserved heterogeneity. We apply our preferred model to the case of the Asean Free Trade Area (AFTA). The estimation results suggest that there has been a positive effect of AFTA. This empirical finding is contrary to earlier estimation results, which are typically not so positive about AFTA. It is our impression that these earlier estimates on AFTA are confounded with the effects of unobserved determinants of trade.

Keywords: AFTA; ASEAN; free trade area; gravity model; panel data; C23; F15 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S0217590809003367

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