MAKING EAST ASIAN REGIONALISM WORKS
Keywords:
Regionalism, Engle-Granger Cointegration, Error Correction Mechanism, Fixed Effect, Two Stage Least Squares
Abstract
For the past few years, regionalism has been progressing in East Asia with the likes of Cina, Japan, and Korea (CJK) as the most prominent actors. Unfortunately, with the absence of trade arrangement amongst the CJK, the present regional trade scheme is not sufficient to reach sustainability. This paper uncovers the inefficient scheme through Engle-Granger Cointegration and Error Correction Mechanism. Moreover, the paper underlines the importance of triangular trade agreement for accelerating the phase of growth in CJK which eventually create a spillover effect to East Asia as a whole. Employing Two Stage Least Squares in a static panel fixed effect model, the paper argues that the spillover effect will function as an impetus for creating region-wide FTA. Furthermore, the paper also identifies a number of economic and political factors that can support the formation of East Asian Regionalism.
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References
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Angrist, J. D, & Imbens, G. W. (1995) “Two-stage least squares estimation of average causal effects in models with variable treatment intensity”, Journal of the American Statistical Association, Vol. 90, hal. 431-442.
Arellano, M. (1995) “On the testing of correlated effects with panel data”, Journal of Econometrics, Vol. 59, hal. 87--97.
Bernard, A. 2., & Durlauf, S. N. (1995) “Convergence in international output”. Journal of Applied Econometrics, Vol. 10, hal. 97-108.
Chan, Sarah and Chun-Chien Kuo. (2005) “Trilateral Trade Relations among China, Japan and South Korea:Challenges and Prospects of Regional Economic Integration”, Journal of East Asia, Vol. 22, hal. 33-50.
Chia, Siow Yue. (2006) “ASEAN-China Economic Competition and Free Trade Area”, Asian Economic Papers, Vol. 4, hal. 109-147
______________. (2007), “Challenges and Configurations of a Region-wide FTA in East Asia”, FONDAD Conference.
Cohen, Benjamin J (1997) “The Political Economy of Currency Regions”, in Helen Milner and Edward Mansfield (eds) The Political Economy of Regionalism, New York: Columbia University Press.
Dollar, Davi4. (1992) “Outward Oriented Developing Economies Really Do Grow More Rapidly: Evidence From 95 LDCs, 1976-85”, Journal of Economic Development and Cultural Change, Vol. 4, hal. 523-544.
Doraisami, Anita. (1996) “Export Growth and Economic Growth: A Reexamination of Some Time-Series Evidence of the Malaysian Experience”, Journal of Developing Areas, Vol. 30, hal. 223-230.
Ekanayake, E.M. (1999) “Export and Economic Growth in Asian Developing Countries: Cointegration and Error-Correction Models”, Journal of Economic Development, Vol. 24, hal. 43-56.
Engle, R.F. and 3.W.J. Granger. (1987) “Cointegration and Error Correction: Representation, Estimation and Testing”, Econometrica, Vol. 55, pp. 251-76.
Feng, Yi and Gaspare M. Genna. (2003) “Regional integration and domestic institutional homogeneity: a comparative analysis of regional integration in the Americas, Pacific Asia and Western Europe”, Review of International Political Economy, Vol. 10, hal. 223-230.
Frankel, Jeffrey A. and David Romer. (1999) “Does Trade Cause Growth?”, The American Economic Review, Vol. 89, hal. 379-399.
Harrison, Ann. (1996) “Openness and Growth: A Time Series, Cross Country Analysis for Developing Countries”, Journal of Development Economics, Vol.48, hal. 419-447.
Harvie, Charles and Hyun Hoon Lee. (2002) “New Regionalism in East Asia: How Does It Relate to the East Asian Economic Development Model”, University of Wollongong Department of Economics, Working Paper Series.
Holst, David Roland and John Weiss. (2004) “ASEAN and China: Export Rival or Partners in Regional Growth?”, Blackwell Publishing Lt4.
Kaufmann, Daniel, Aart Kraay and Massimo Mastruzzi. (2003) “Governance Matters III: Governance Indicators for 1996-2002”, World Bank Policy Research Department Working Paper.
Kawai, Masahiro, (2005) East Asian Economic Regionalism: Progress and Challenges, Asian Economics, Vol. 16, hal. 29-55.
Kawai, Masahiro and Ganeshan Wignaraja. (2007) “Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA”, ADB Working Paper series on Regional Economic Integration no.14.
Love, Jim and Ramesh Chandra. (2004) “An Index of Openness and its Relationship with Growth in India”, The Journal of Developing Areas, Vol. 38, hal. 37-54
Milner Helen V and Keiko Kubota. (2005) “Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries,” International Organization, Vol. 59, hal. 107-143.
Nachrowi, Djalal. (2007) “Ekonometrika Untuk Analisa Ekonomi dan Keuangan [Econometrics for Economic and financial analysis]”, Faculty of Economics University of Indonesia.
Oxley, L., & Greasley, 4. (1995) “A time-series perspective on convergence: Australia, UK and USA since 1870”. The Economic Record, Vol. 71, hal. 259-270.
Summers, R. and A. Heston. (1988) “A New Set of International Comparisons of Real Product and Price Levels: Estimates for 130 Countries, 1950-1985”, Review of Income and Wealth, Vol. 34, hal. 1-25.
Stubbs, Richar4. (2002) “ASEAN PlusThree: emerging East Asian Regionalism?”, Asian Survey, Vol. 42, hal. 440-455.
Tamura, Robert. (1995) “Regional economies and market integration”, Journal of Economic Dynamics and Control, Vol. 20, hal. 825-845
Urata, Shujiro and Kozo Kiyota. (2003) “The Impacts of an East Asia Free Trade Agreement on Foreign Trade in East Asia”, NBER Working Paper Series 10173, National Bureau of Economic Research, Cambridge.
Yoshida, Tadahiro. (2004) “East Asian Regionalism and Japan”, IDE APEC STUDY CENTER Working Paper Series.
Watanabe, Yorizumi. (2008) “Economic Partnership Agreement (EPA) of Japan and Economic Integration in Northeast Asia”, Academic presentation, Graduate School of Media and Governance, Keio University.
Xing, LI. (2007) “East Asian Regional Integration: From Japan-led ‘Flying-geese’ to Chinacentred ‘Bamboo Capitalism’”, CCIS Research SeriesWorking Paper No.3.
Published
2010-11-22
How to Cite
Hastiadi, F. (2010). MAKING EAST ASIAN REGIONALISM WORKS. Buletin Ekonomi Moneter Dan Perbankan, 13(1), 103-124. https://doi.org/10.21098/bemp.v13i1.386
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
