Liberalization of trade in services and productivity growth in Korea

Description:

This paper investigates the effect of regional borders on trade in Asia. The regional borders define the three regions of Asia: South, Southeast, and East Asia. Regional trade indicates the flows of trade within a region, whereas regional border trade means trade across regions. A gravity model is augmented with the region dummies to estimate the regional border effects that capture any and all time-invariant factors promoting or impeding regional trade. The main finding is that regional border effects are asymmetric on the three regions in Asia: There is a large and significant regional border effect on South Asia, small on Southeast Asia, and negligibly negative on East Asia. The significant and positive regional border effect in South Asia suggests that countries share intrinsic factors facilitating trade between countries in this region. Although the regional border effect of Southeast Asia is positive, its magnitude shows little difference between its regional trade and regional border trade. Finally, the estimate on East Asia presents a completely different picture from the actual data. It implies that there exist some factors leading to active regional border trade between East Asia and other Asian regions.

subjects: Free trade,  Service industries,  Industrial Research,  Economic aspects,  Technological innovations,  Government policy,  Exports,  Econometric models,  Electronic commerce,  Capital movements,  Comparative advantage (International trade),  Commerce,  Industrial productivity,  Foreign Investments,  Economic policy,  International cooperation,  Economic conditions,  Foreign relations,  Monetary policy,  Financial crises,  Global Financial Crisis, 2008-2009,  Economic sanctions,  Foreign exchange rates,  Physical distribution of goods,  Costs,  Stock exchanges,  Political aspects,  Elections,  Inflation targeting,  Business cycles,  Economic integration,  International trade,  Ciblage d'inflation,  Modèles économétriques,  Cycles économiques,  Commercial policy,  Politics and government,  Regionalism,  Economic history,  Political science,  Foreign economic relations,  Happiness,  Monetary unions,  Foreign exchange,  International business enterprises,  Korean Investments,  Stock ownership,  Manufacturing industries,  Management,  Distances,  Measurement,  Industries,  Input-output analysis,  Mathematical models,  Transmission mechanism (Monetary policy),  Interest rates,  International economic relations,  Natural resources,  Political corruption

Places: Korea (South)