Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics on 02/11/2017, available online: http://www.tandfonline.com/10.1080/00036846.2017.1392005
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Does the Role of Observer Countries in the Regional Trade Agreement matter for Intra-Regional Trade?
AU - De Silva, Dakshina Garfield
AU - Lee, Soon-Cheul
N1 - This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics on 02/11/2017, available online: http://www.tandfonline.com/10.1080/00036846.2017.1392005
PY - 2018/2
Y1 - 2018/2
N2 - This paper investigates the effects of trade by observed economies on the intra-regional trade by SAARC members using PPML gravity models with panel data over the period 2008-2014. Eight SAARC members and eight observed countries, including the EU, are analyzed in capturing the trade effect of observed economies on intra-regional trade in SAARC. This paper provides an empirical measure of observers’ trade, FDI and ODA with SAARC if the exports and imports of observers to/from SAARC have positive or negative signs for intra-regional exports and imports. The results show that the exports and imports of observers to SAARC members have positive effects on bilateral exports among the members. The FDI of observers reduces the bilateral intra imports in SAARC and ODA also has a negative effect on bilateral exports among the members. These results imply that the imports by SAARC members from observer countries increase intra-regional trade in the region. The FDI and ODA increase and decrease intra-regional trade in SAARC, respectively, implying that the policies for both FDI inflow from observers and efficient aid management are needed to increase regional welfare. The study also recommends that trade between SAARC members and its observers help to increase intra-regional trade in SAARC.
AB - This paper investigates the effects of trade by observed economies on the intra-regional trade by SAARC members using PPML gravity models with panel data over the period 2008-2014. Eight SAARC members and eight observed countries, including the EU, are analyzed in capturing the trade effect of observed economies on intra-regional trade in SAARC. This paper provides an empirical measure of observers’ trade, FDI and ODA with SAARC if the exports and imports of observers to/from SAARC have positive or negative signs for intra-regional exports and imports. The results show that the exports and imports of observers to SAARC members have positive effects on bilateral exports among the members. The FDI of observers reduces the bilateral intra imports in SAARC and ODA also has a negative effect on bilateral exports among the members. These results imply that the imports by SAARC members from observer countries increase intra-regional trade in the region. The FDI and ODA increase and decrease intra-regional trade in SAARC, respectively, implying that the policies for both FDI inflow from observers and efficient aid management are needed to increase regional welfare. The study also recommends that trade between SAARC members and its observers help to increase intra-regional trade in SAARC.
KW - Intra-regional trade
KW - the role of observers
KW - regional trade agreement
KW - SAARC
KW - trade
U2 - 10.1080/00036846.2017.1392005
DO - 10.1080/00036846.2017.1392005
M3 - Journal article
VL - 50
SP - 2219
EP - 2228
JO - Applied Economics
JF - Applied Economics
SN - 0003-6846
IS - 20
ER -