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Impact Analysis of Normalized Revealed Comparative Advantage on ASEAN’s Non-Oil and Gas Export Pattern Using a Gravity Model Approach

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Globalization, Productivity and Production Networks in ASEAN

Abstract

The development of global economic challenges has forced ASEAN countries to further deepen its economic integration within the ASEAN Economic Cooperation (AEC) and to incorporate several ASEAN Plus agreements into Regional Comprehensive Economic Partnership (RCEP). Under this circumstance, the ASEAN members need to distinguish how the difference in comparative advantage of each export commodity affects and influences the pattern of ASEAN’s non-oil exports. This study attempts to identify the impact of comparative advantage, represented by normalized revealed comparative advantage (NRCA) index, on the non-oil export pattern of the ASEAN countries using the augmented gravity model as its research method. The results indicate that comparative advantage has a positive influence on ASEAN’s non-oil exports and that the comparative advantages in agricultural commodities have the biggest influence.

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Notes

  1. 1.

    The intra-trade assumption here only reflects trade among ASEAN member states without including trade with members of ASEAN Plus and non-ASEAN (China, Japan, Korea, India, Australia and New Zealand).

  2. 2.

    ASEAN Plus is ASEAN-People’s Republic of China Comprehensive Economic Cooperation Agreement (ACFTA ), implemented in mid-2005; ASEAN-Korea Comprehensive Economic Cooperation Agreement (AKFTA ), implemented in mid-2007; ASEAN-Japan Comprehensive Economic Partnership (AJCEP), implemented in late 2008; ASEAN-India Comprehensive Economic Cooperation Agreement (ASEAN-India CECA) and ASEAN-Australia and New Zealand Free Trade Agreement (ASEAN-ANZ FTA) which was implemented in early 2010.

  3. 3.

    Trade pattern is anything that is traded by a country (be it goods or services), with whom, and to which direction (export or import) the trade is conducted. Trade pattern itself is one of the main goals of trade theory, particularly in terms of which goods or services that will be exported or imported by a country (Deardorff 2010).

  4. 4.

    The trade cost data are available from ESCAP only for the period 1992–2011. Therefore, this study requires data period 1989–2012 and the available data are processed with extrapolation so that the appropriate data are obtained.

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Authors and Affiliations

  1. Trade Analysis and Development Agency, Ministry of Trade, Jakarta, Indonesia

    Umar Fakhrudin

  2. Universitas Indonesia, Depok, Indonesia

    Fithra Faisal Hastiadi & Banu Muhammad Haidir

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  1. Umar Fakhrudin
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    Fithra Faisal Hastiadi

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Fakhrudin, U., Hastiadi, F.F., Haidir, B.M. (2019). Impact Analysis of Normalized Revealed Comparative Advantage on ASEAN’s Non-Oil and Gas Export Pattern Using a Gravity Model Approach. In: Hastiadi, F. (eds) Globalization, Productivity and Production Networks in ASEAN. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-16510-9_5

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  • DOI: https://doi.org/10.1007/978-3-030-16510-9_5

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