Expanding International Trade Beyond the RTA Border: The Case of ASEAN's Economic Diplomacy

Oh, Chang Hoon; Selmier, W. Travis

doi:10.2139/ssrn.962516

Cited by 8 publications

(10 citation statements)

References 13 publications

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“…Anderson (), Boisso and Ferrantino (), Fratianni () and Oh and Selmier () have argued that the influence of language and cultural familiarity on international trade and FDI can be analysed in a gravity model . Therefore, a modified version of the gravity model is used in this study to assess the economic impact of having a cultural institute programme for three countries (i.e., the Goethe Institut from Germany, the Cervantes Institute from Spain and Confucius Institute from China).…”

Section: Methodsmentioning

confidence: 99%

Asymmetric effects of cultural institutes on trade and foreign direct investment

Lien

Bojanic

2019

World Economy

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The purpose of a cultural institute is to improve international relations with other countries by promoting language familiarity and cultural awareness. In addition, cultural institutes can provide additional business opportunities that lead to positive economic side effects such as increases in trade and foreign direct investment (FDI). In this study, gravity models were used to analyse the data for the Goethe Institut (Germany), the Cervantes Institute (Spain) and the Confucius Institute (China) to identify any stylised international patterns of the documented economic effects. The study finds significant positive effects on bilateral trade and FDI outflows for all three programmes, along with two important (i) the effects are stronger for non‐advanced economies and (ii) the effects are substantially larger on FDI than on trade. These results suggest that cultural institutes can be an effective policy tool in promoting FDI outflows, with the strongest effect realised when a home country locates its cultural institutes in host countries with developing economies. Importantly, results also suggest that the Chinese government's approach to extend its soft power through rapid expansion of Confucius Institutes worldwide has not been as successful as the efforts by the German Goethe Institut in increasing trade and FDI.

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Section: Methodsmentioning

confidence: 99%

Asymmetric effects of cultural institutes on trade and foreign direct investment

Lien

Bojanic

2019

World Economy

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“…Some studies adopt the framework and data set from Rose and Spiegel () and Rose (), who examined the association between exports and diplomatic representations abroad (Yakop & van Bergeijk, ). While Oh and Selmier Ii () take a different approach by employing highly disaggregated diplomatic events data to examine the roles of regional trade agreements in the globalisation of trade for ASEAN countries. They constructed diplomatic relationship indicators by dividing diplomatic meetings into several levels: summits, ministerial, forums and committee meetings based on the diplomatic rank of the key participants at each meeting.…”

Section: Literature Reviewmentioning

confidence: 99%

Malaysia's Exports to China: Does Diplomatic Relationship Matter?

Hong

Sun

Beg

et al. 2019

J of App Econs and Policy

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Institutional arrangements can play an important role in fostering trade between countries. It can help to boost export from one country to another and ease the penetration of new products to the market of the importing country. The institutional aspects, however, have been largely overlooked in trade studies for developing economies, especially for Malaysia. This study focuses on examining the importance of diplomatic relationships in fostering Malaysia–China's trade. Through consumer utility maximisation, diplomatic relationships as well as other institutional aspects such as halal‐related variables are incorporated into an augmented gravity model. The findings suggest that building and improving diplomatic ties tend to boost trade between countries.

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“…The differences in these growth rates and the impact of different factors on their respective increases indicate both the efficacy of ASEAN’s trade diplomats and their ability to value‐claim over this period. We consider four levels of diplomatic meetings (as explained in the next section), between ASEAN and non‐ASEAN nations, to determine the efficacy of these levels of diplomatic meetings on imports (Oh and Selmier, 2008).…”

Section: Theory and Research Questionsmentioning

confidence: 99%

“…The chronological data set of the external diplomatic relations of ASEAN was gathered from ASEAN Annual Reports (1980–2001) and extensively augmented with other sources, including the ASEAN Economic Research Unit (1991), Sueo and Makito (1999) and Low (2004). We enhanced the granularity of diplomatic relations by dividing the meetings into four different diplomatic levels: summit, ministerial, forum and committee meetings, as based on the diplomatic rank of the chief participants at each meeting (Oh and Selmier, 2008). Further, we differentiated between forum and committee meetings by considering the agenda coverage of the meeting in question.…”

Section: Statistical Analysis: Does Asean Membership Privilege Valmentioning

confidence: 99%

“…T. SELMIER II AND C. H. OH increases indicate both the efficacy of ASEAN's trade diplomats and their ability to valueclaim over this period. We consider four levels of diplomatic meetings (as explained in the next section), between ASEAN and non-ASEAN nations, to determine the efficacy of these levels of diplomatic meetings on imports (Oh and Selmier, 2008). We also subdivide this period by the structural break that occurred in 1992, when ASEAN converted into an RTA from a regional political association.…”

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confidence: 99%

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Economic Diplomacy and International Trade: ASEAN’s Quest to Value‐Claim

Selmier

2012

World Economy

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Utilising economic diplomacy theory, this study specifies a statistical model to reveal ASEAN members’ capacity to negotiate better international trade outcomes. Examining imports into ASEAN members from 134 nations between 1980 and 2001, we find that ASEAN’s diplomats were able to pursue more ‘value‐claiming’ in economic diplomacy than expected. While our results support the commonly accepted view in economic diplomacy that smaller nations are pressured to accept trade outcomes desired by larger nations, we also find support for a new perspective: smaller nations obtain more favourable trade outcomes, as members of a regional trade bloc, which cannot be achieved as individual nations. We find that ASEAN’s conversion to a fully fledged regional trade agreement in 1992 significantly enhanced this capacity. This study adds a different perspective to the substantial literature examining cases in trade and economic diplomacy.

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Expanding International Trade Beyond the RTA Border: The Case of ASEAN's Economic Diplomacy

Cited by 8 publications

References 13 publications

Asymmetric effects of cultural institutes on trade and foreign direct investment

Asymmetric effects of cultural institutes on trade and foreign direct investment

Malaysia's Exports to China: Does Diplomatic Relationship Matter?

Economic Diplomacy and International Trade: ASEAN’s Quest to Value‐Claim

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