International Journal of Scientific and Research Publications

IJSRP, Volume 6, Issue 7, July 2016 Edition [ISSN 2250-3153]

Does AFTA really lead to Economic Growth? Evidence from ASEAN-5
      James Paul
Abstract: This paper seeks to revisit the contentious causality relationship between Asean Free Trade Area (AFTA) and economic growth in the pioneering Association of Southeast Asian Nations (ASEAN-5) using data from 1970 till 2013. The purpose of this report is to investigate the impact of trade openness and their combined interaction on economic growth in selected countries before and after AFTA implemented. Foreign Direct Investment (FDI) is the key element for economic growth, hence this analysis divided into two major section (i) FDI and (ii) other parameter that contribute to economic growth such as import, export and deregulation of tariff rate. Base on the time series analysis the Granger Causality test show mixed result among ASEAN-5. The result show AFTA has restructured the AESN-5 into export oriented due to liberalization their economies and bring down their tariffs and commit to various types of liberalization programs. The finding show the main advantage of AFTA is increased intra-regional trade and investment and improved resource allocation within the region. These benefits can be captured as tariffs and other trade barriers are reduced and markets are integrated.

Reference this Research Paper (copy & paste below code):

James Paul (2018); Does AFTA really lead to Economic Growth? Evidence from ASEAN-5; Int J Sci Res Publ 6(7) (ISSN: 2250-3153).
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