A new assessment of economic integration in East Asia: Application of an industry-specific G-PPP model
Document Type
Journal Article
Publication Title
Japan and the World Economy
Volume
60
Publisher
Elsevier
School
School of Business and Law
RAS ID
42631
Funders
Japan Society for the Promotion of Science (JSPS) KAKENHI
Abstract
It is well known that intra-industry trade and cross-border production networks have promoted economic growth and regional integration in East Asia. However, regional supply and production chains may have been formed differently across industries, reflecting different degrees and a different scope of regional economic linkages at an industry level. This paper makes a threefold contribution. First, to assess industry-level differences, this study adopts the generalized purchasing power parity (G-PPP) model using industry-specific producer prices. Second, the momentum threshold autoregressive (M-TAR) model is employed to allow for possible nonlinearity arising from the dynamic nature of regional economic growth and development. Third, the Granger causality test is also conducted to assess whether regional economies have autonomously integrated. The empirical results reveal that economic integration has progressed more autonomously in the electrical industry, as well as in the transportation equipment industry, as China and the ASEAN countries have become the final destination markets for finished products in these two industries.
DOI
10.1016/j.japwor.2021.101105
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Comments
Kawasaki, K., & Kiyotaka, S. A. T. O. (2021). A new assessment of economic integration in East Asia: Application of an industry-specific G-PPP model. Japan and the World Economy, 60, article 101105. https://doi.org/10.1016/j.japwor.2021.101105