Rebalancing Through Expansions in Intra-ASEAN Exports? Insights from Gravity Panel Estimates

This paper examines the impact of common economic factors on intra-ASEAN bilateral exports through estimations of panel data using a gravity model. In particular, the paper compares the determinants of two-way bilateral exports within the pioneer ASEAN member economies from that of the pioneer-newer ASEAN economies, to provide insights on the specific channels and trading relationships relevant for boosting intra-regional exports. The gravity estimates imply the importance of the overall size effects and similarities in size between the pioneer-newer ASEAN partnerships for export expansions, and also for trade in agriculture and manufactures. These channels however do not bolster exports amongst the pioneer ASEAN economies. The empirical findings therefore add weight to the observation that strategic partnerships are necessary within the region to bolster intra-regional exports through the level and relative size effects. We therefore posit that any rebalancing strategy to increase intra-regional exports should move beyond the focus on the pioneer ASEAN members per se, to foment greater trade cooperation between the pioneer and newer ASEAN economies