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The Nexus Between Regional Trade Integration and ASEAN Macroeconomic Indicators: Evidence from Bayesian Panel Regression Approach

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Credible Asset Allocation, Optimal Transport Methods, and Related Topics (TES 2022)

Part of the book series: Studies in Systems, Decision and Control ((SSDC,volume 429))

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Abstract

As regionalization gains momentum globally, this paper aims to investigate the impact of regional trade integration on three macroeconomic indicators for ASEAN member countries: economic growth, inflation, and labor force participation. The regional trade integration is represented by three regional variables: trade intensity, export diversification, and value chain. This paper has deployed the Bayesian panel regression approach using a panel data set of 10 ASEAN countries with their major trading partners in Asia from 1995 to 2019. The empirical findings suggest that the regional export diversification and trade intensity promote economic growth for the overall ASEAN, whereas the regional value chain stimulates employment. Furthermore, the regional trade integration significantly reduces inflation. The key finding indicate that since 2015, ASEAN’s deeper integration has enabled member countries with a greater regional trade intensity and regional value chain to enhance their economic growth and development. The ASEAN could also achieve the goal of the ASEAN economic community to uplift their people’s standard living.

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Notes

  1. 1.

    ASEAN (Association of South East Asia Nations) countries include Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. In addition, the major trading partners include ASEAN, Australia, China, India, Japan, South Korea, and New Zealand.

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Author information

Authors and Affiliations

  1. Department of Economics and Office of Border Economy and Logistics Study (OBELS), School of Management, Mae Fah Luang University, Chiang Rai, Thailand

    Nathapornpan Piyaareekul Uttama & Popkarn Arwatchanakarn

Authors
  1. Nathapornpan Piyaareekul Uttama
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  2. Popkarn Arwatchanakarn
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Corresponding author

Correspondence to Nathapornpan Piyaareekul Uttama .

Editor information

Editors and Affiliations

  1. Faculty of Economics, Chiang Mai University, Chiang Mai, Thailand

    Songsak Sriboonchitta

  2. Department of Computer Science, University of Texas, El Paso, TX, USA

    Vladik Kreinovich

  3. Faculty of Economics, Center of Excellence in Econometrics, Chiang Mai University, Chiang Mai, Thailand

    Woraphon Yamaka

Appendices

Appendix

This appendix contains diagnostics for the convergence of MCMC parameter estimates in GDP, inflation, and employment models. Figure 1 depicts the GDP growth (GDPGR) convergence diagnostics on regional export diversification (RED), regional value chain (RVC), and regional trade intensity (RTI). It found the well-mixing MCMC chains, high autocorrelation, and a unimodal histogram in the GDP model. Additionally, convergence diagnostics for the inflation (INF) and employment (LFP) models are depicted in Figs. 2 and 3, respectively, in accordance with the GDP model.

Fig. 1
figure 1

Convergence diagnostics of GDP model

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Fig. 2
figure 2

Convergence diagnostics of inflation model

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Fig. 3
figure 3

Convergence diagnostics of employment model

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Declaration of Competing Interest

The authors have no competing interest to declare.

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Uttama, N.P., Arwatchanakarn, P. (2022). The Nexus Between Regional Trade Integration and ASEAN Macroeconomic Indicators: Evidence from Bayesian Panel Regression Approach. In: Sriboonchitta, S., Kreinovich, V., Yamaka, W. (eds) Credible Asset Allocation, Optimal Transport Methods, and Related Topics. TES 2022. Studies in Systems, Decision and Control, vol 429. Springer, Cham. https://doi.org/10.1007/978-3-030-97273-8_33

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