Openness, Regional Trade Agreements and Growth: Evidence from Asia

摘要

This paper assesses the relationship between regional trade agreements, trade integration and economic growth in 21 South and South-East Asian countries over the period from 1980 to 2004. We aim to answer the following questions. First, how does the trade policy of a given country (and countries within the same region) affect a nation's domestic growth? Second, should developing economies in South and South-East Asia engage in regional trade agreements (RTA) or move towards broad liberalization? Our results show that openness of either a single country or of its neighbors does not affect a nation's growth and that the impacts of RTA are unclear (if not detrimental to growth in some cases, once endogeneity is accounted for). Panel Granger-causality tests running from openness to growth yield mixed results and some conclusions depend on the particular subsample under scrutiny.