On the Determinant of Trading Hub in East and Southeast Asia: Theory and Empirical Evidence1

Deng-Shing Huang (), Yo-Yi Huang () and Ching-lung Tsay ()
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Deng-Shing Huang: Institute of Economics, Academia Sinica, Taipei, Taiwan, https://www.econ.sinica.edu.tw/
Yo-Yi Huang: Institute of Economics, Academia Sinica, Taipei, Taiwan
Ching-lung Tsay: Institute of Applied Economics, National Taiwan Ocean University, http://www.tidx.tku.edu.tw/main.php

No 18-A007, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: Based on the existing hubness measure in the trade literature, we developed two modified trading-hub index in two directions, export-destination and import-source. Then we demonstrate the stylized fact of China-and-Japan’s double trading-hub, especially in export-destination sense, in East Asia since the early 1990s. After showing the dynamics of the twin-hub, more specifically the rising China-hub and shrinking Japan-hub, theoretical explanations, such as the home-market effect (HME), FDI and technology advantage etc. are provided. Finally, a panel data ranged from 1993 to 2014 of thirteen economies, including eleven economies in East Asia, USA and EU as a whole, are established to conduct empirical tests. In general, the empirical results support the role of HME, FDI and technology advantage for making a trading-hub, in terms of export-destination and/or import-sources.

Keywords: : Double Trading-Hub; Export Destination Hub; Import-Source Hub; Homemarket effect; Technology Advantage (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2018-08
New Economics Papers: this item is included in nep-int and nep-sea
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