Trade Flow among Association of South-East Asian Nations (ASEAN) Countries: A Trade Intensity Approach

Abstract

This paper features the integration of trade among five founding member countries of ASEAN during the period 2001-2019. To measure the trade relations between two countries, a variety of statistical indicators are available, but in this paper trade intensity index is applied. As a general rule, when a country’s trade intensity index of imports and exports is observed to be more than one with the trading partner, then it indicates a high degree of trade association between them. The empirical results signify that the pair-wise export and import intensity index of these countries is greater than one, suggesting significant trade among the member countries. The study has many policy implications. Although the trade intensity index is greater than one for all counties, the value varies, signifying the under-developed bilateral trade areas among the region which need to be focused. Further, the regional and cultural differences should be coped up to accelerate the trade in the region.