The sustainability of trade accounts of the ASEAN-5 countries

Olayeni Olaolu Richard (Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria)
Aviral Kumar Tiwari (Institute of Chartered Financial Analysis of India, University Tripura, Tripura, India)

Journal of Chinese Economic and Foreign Trade Studies

ISSN: 1754-4408

Publication date: 28 January 2014

Abstract

Purpose

The present study aims to analyse the sustainability of the trade deficits in the Association of Southeast Asian Nations (ASEAN)-5 countries using panel framework during the period from 1965 to 2011.

Design/methodology/approach

The paper applied a battery of first- and second-generation panel unit root tests and Pedroni's, Kao and Chiang's, Westerlund, and Di Iorio and Fachin cointegration tests to achieve the objective.

Findings

The paper found the evidence of sustainable trade deficit in ASEAN-5 countries while utilizing panel unit root tests as well as panel cointegration tests.

Research limitations/implications

The findings have important macroeconomic policies implication for ASEAN-5 countries that these policies had been effective in leading exports and imports to long-run steady-state equilibrium relationship among the ASEAN-5 countries.

Originality/value

The main contribution of the paper is to show that the macroeconomic policies of ASEAN-5 countries had been effective in leading exports and imports to long-run steady-state equilibrium relationship. To the authors' best knowledge, in this area, this is the first study in the panel framework for ASEAN countries.

Keywords

Citation

Olaolu Richard, O. and Kumar Tiwari, A. (2014), "The sustainability of trade accounts of the ASEAN-5 countries", Journal of Chinese Economic and Foreign Trade Studies, Vol. 7 No. 1, pp. 51-65. https://doi.org/10.1108/JCEFTS-06-2013-0023

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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