@article{Frankel:233438,
      recid = {233438},
      author = {Frankel, Jeffrey A. and Wei, Shang-Jin},
      title = {ASEAN in a Regional Perspective},
      address = {1996-11},
      number = {1554-2016-132535},
      series = {Working Paper},
      pages = {86},
      year = {1996},
      abstract = {Trade among the ASEAN economies is higher than one would  expect, based on their
income levels and other important  determinants of bilateral trade. The same is true of  trade
within East Asia more broadly (or trade within an  ASEAN-Australia-New Zealand grouping).
To the extent that  this regional concentration of trade is attributed to  formal or informal
regional trading arrangements, they  appear to be trade-creating, not trade-diverting.
The rate  of increase of trade within ASEAN or within East Asia,  however, can be
entirely explained by the rapid growth of  the countries. There is nothing left over to
attribute to  an intensifying bloc. Perhaps the regional concentration,  which shows up from
the beginning of the sample period, is  not due to formal measures, such as the decision to
form an  ASEAN FrA, but rather to a shared trading culture. (Trade  among Southeast
Asian countries will in the future  naturally continue to grow more rapidly than incomes.)
The  openness of the Indochinese countries, suitably adjusted,  was very low in 1992,
but had almost doubled by 1994. If  these formerly autarkic countries restore normal  trade
relations with the rest of the world over the coming  decade, the gravity model predicts that
their trade will  expand another seven-fold, in addition to the expansion  attributable to
growth.
The stock of Foreign Direct  Investment (FDI) is a significant determinant of trade.
We  find that bilateral FDI can be modelled analogously to  bilateral trade. In both cases,
there is no evidence that  Japan has accelerated its economic interactions with  Southeast Asia,
beyond what can be attributed to simple  economic growth rates.
We accept others' arguments that the  ASEAN countries' trade relations with the
industrialized  countries are more important than their relations with each  other. But we do
not accept the argument that the latter  are unimportant. If the ASEAN countries make
serious  progress along the path that they have set for themselves  under the AFTA, the gains
from increased trade and  investment in the area are potentially important.  Furthermore, such
progress would give them more of a voice  at the global level.},
      url = {http://ageconsearch.umn.edu/record/233438},
      doi = {https://doi.org/10.22004/ag.econ.233438},
}