Intra-Industry Trade in ASEAN-5: An Overall and Country-Specific Study

Jha, Ajit Kumar; Saha, Sanjoy
July 2011
Journal of International Economics (0976-0792);Jul2011, Vol. 2 Issue 2, p17
Academic Journal
The formation of ASEAN Free Trade Area (AFTA) in 1992 was a significant step towards the regional economic integration in the South-East Asian region. The paper mainly shed lights on the most recent trading scenario among ASEAN-5 from 1993 to 2007. The main objective of the study is to see the trade patterns of ASEAN-5 estimating the overall as well as the country-specific intra-industry trade using Grubel-Lloyed index since the implementation of AFTA. It also analyses the impact of the Asian crisis on the overall trade pattern of the same. The study reveals that there has not been any major change in the trading pattern within ASEAN-5 since the implementation of AFTA. Total intra as well as extra-ASEAN trade remains more or less stable from 1995 to 2001; after that it has been increasing gradually. However, the overall trend in intraindustry trade among the ASEAN-5 reveals a marginal improvement. The countryspecific intra-industry trade figures throw a little different and inclusive picture. Trade between Indonesia-Malaysia, Indonesia-Philippines, Malaysia-Philippines, Malaysia-Singapore, Malaysia-Thailand, Philippines-Thailand and Singapore- Thailand has decreased. However, trade between Indonesia-Singapore, Indonesia- Thailand and Singapore-Philippines has increased. The study also indicates that the Asian crisis has not had any significant impact on the intra-industry trading pattern among ASEAN-5.


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