Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three

ASEAN -5 plus 3 ( Malaysia, Thailand, Philippines, Singapore, Indonesia, Japan, Korea and China) have undergone a substantial trade liberalization in the mid 1980s. As a result, the share of exports in GDP has also risen as the region became more industrialized. A greater reliance on exports has hel...

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Main Author: Yong, Chen Chen
Format: Thesis
Language:English
English
Published: 2007
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Online Access:http://psasir.upm.edu.my/id/eprint/5044/1/FEP_2007_15.pdf
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spelling my-upm-ir.50442013-05-27T07:19:59Z Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three 2007 Yong, Chen Chen ASEAN -5 plus 3 ( Malaysia, Thailand, Philippines, Singapore, Indonesia, Japan, Korea and China) have undergone a substantial trade liberalization in the mid 1980s. As a result, the share of exports in GDP has also risen as the region became more industrialized. A greater reliance on exports has helped the region to sustain rapid growth rate but at the same time it has made the region more dependent upon import demand from the rest of the world particularly the industrial countries. These countries were running huge surpluses in 2000 and 2001, compared with large deficits just a few years earlier. Indeed, it is assumed that the initial export growth and trade surplus generates such favourable responses in the economy that the balance of payments surplus actually grows. There is no consideration given to the possibility that the rate of growth of income determined by the rate of growth of imports and thereby imposing a constraint on the export-led growth rate. In addition, there is a fairly well defined and trade-off showing that the faster the rate of growth of output, the worse the trade balance in the balance of payments; and conversely, as growth slowed the deficit improved and a surplus developed. Thus we should analyze whether the economic growth is constrained by the trade balance in the balance of payments. Panel analysis is employed to estimate the effect of trade liberalization on export growth, import growth and the balance of payments for ASEAN-5 plus 3 based on Thrilwall’s Law for a sample period of 1970-2003. This study finds that liberalization stimulated export growth but raised import growth by more for Japan, Malaysia and Korea. Among all, Indonesia is found to be constrained by the external market. In conclusion, the findings have important implications for the sequencing and degree of liberalization. Free trade - Asia, Southeastern Balance of payments - Asia, Southeastern Economic development - Asia, Southeastern 2007 Thesis http://psasir.upm.edu.my/id/eprint/5044/ http://psasir.upm.edu.my/id/eprint/5044/1/FEP_2007_15.pdf application/pdf en public phd doctoral Universiti Putra Malaysia Free trade - Asia, Southeastern Balance of payments - Asia, Southeastern Economic development - Asia, Southeastern Faculty Economics and Management English
institution Universiti Putra Malaysia
collection PSAS Institutional Repository
language English
English
topic Free trade - Asia
Southeastern
Free trade - Asia
Southeastern
Free trade - Asia
Southeastern
spellingShingle Free trade - Asia
Southeastern
Free trade - Asia
Southeastern
Free trade - Asia
Southeastern
Yong, Chen Chen
Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
description ASEAN -5 plus 3 ( Malaysia, Thailand, Philippines, Singapore, Indonesia, Japan, Korea and China) have undergone a substantial trade liberalization in the mid 1980s. As a result, the share of exports in GDP has also risen as the region became more industrialized. A greater reliance on exports has helped the region to sustain rapid growth rate but at the same time it has made the region more dependent upon import demand from the rest of the world particularly the industrial countries. These countries were running huge surpluses in 2000 and 2001, compared with large deficits just a few years earlier. Indeed, it is assumed that the initial export growth and trade surplus generates such favourable responses in the economy that the balance of payments surplus actually grows. There is no consideration given to the possibility that the rate of growth of income determined by the rate of growth of imports and thereby imposing a constraint on the export-led growth rate. In addition, there is a fairly well defined and trade-off showing that the faster the rate of growth of output, the worse the trade balance in the balance of payments; and conversely, as growth slowed the deficit improved and a surplus developed. Thus we should analyze whether the economic growth is constrained by the trade balance in the balance of payments. Panel analysis is employed to estimate the effect of trade liberalization on export growth, import growth and the balance of payments for ASEAN-5 plus 3 based on Thrilwall’s Law for a sample period of 1970-2003. This study finds that liberalization stimulated export growth but raised import growth by more for Japan, Malaysia and Korea. Among all, Indonesia is found to be constrained by the external market. In conclusion, the findings have important implications for the sequencing and degree of liberalization.
format Thesis
qualification_name Doctor of Philosophy (PhD.)
qualification_level Doctorate
author Yong, Chen Chen
author_facet Yong, Chen Chen
author_sort Yong, Chen Chen
title Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
title_short Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
title_full Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
title_fullStr Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
title_full_unstemmed Effects Of Trade Liberalization On Economic Growth And Balance Of Payment Of ASEAN Five Plus Three
title_sort effects of trade liberalization on economic growth and balance of payment of asean five plus three
granting_institution Universiti Putra Malaysia
granting_department Faculty Economics and Management
publishDate 2007
url http://psasir.upm.edu.my/id/eprint/5044/1/FEP_2007_15.pdf
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