Trade openness, export, import and economic growth in asean-5 and Japan

• Main Author: Khairunisah Kamsin
• Format: Thesis
• Language: English; English
• Published: 2021
• Subjects: HC94-1085 By region or country
• Online Access: https://eprints.ums.edu.my/id/eprint/41433/1/24%20PAGES.pdf; https://eprints.ums.edu.my/id/eprint/41433/2/FULLTEXT.pdf; https://eprints.ums.edu.my/id/eprint/41433/

This study examined the relationship between trade openness, exports, and imports, on economic growth of ASEAN-5 countries and Japan between 1980-2018. The dependent variable used was Gross Domestic Product whereas independent variables were trade openness, export and import. In order to reduce bias result, explanatory variables such as Foreign Direct Investment, Capital Formation and Real Effective Exchange Rate were included. To examine the stationarity of the data, two tests for Unit Root test were performed which were the Augmented Dickey–Fuller (ADF) test and Phillips Perron (PP). Then, ARDL were employed to identify the co-integrating vectors for determining a long-run relationship between the variables. The last step was to use Wald test for identifying the short-run and causality relationship between the variables. The results were that all variables had a long-run relationship with each other, and there were co-integrating vectors among the variables. Based on the ARDL Bound test, Thailand was the only country where there was a positive and significant relationship between trade openness and economic growth. In addition, the economic growth in Malaysia and Singapore were highly influenced by Foreign Direct Investment while economic growth in Indonesia was very much affected by Real Effective Exchange Rate. The finding was that in short run, that there exists a causality between trade openness and economic growth for Singapore. Also, exports have strong influence on economic growth in short-run, for Malaysia, Thailand, and Singapore. Imports have a positive and significant relationship with economic growth in only in one country, which was Malaysia. For the Philippines and Japan, the results show that there was no long-run effect between the independent variables and dependent variable. Almost all relationships are negative and not significant. The foreign direct investment, however, was found to be not significant but are positive for both countries. This result implies that the economic growth in the Philippines and Japan was not influenced by trade openness.