Linkages between trade and financial integration and output growth in East Asia

Abstract

The effects of trade, financial and other variables generally seen as indicative of the degree of economic integration on movements in industrial production growth among countries in East Asia are assessed using the common component of movements in industrial production growth in the ASEAN 5 + 3 countries as a business cycle benchmark for the region. The results show the dominance of trade-related variables, as well as the world price of oil, in driving regional industrial production growth. Financial variables, while important, are not as robust. © 2010 The Authors. Journal compilation © 2010 East Asian Economic Association and Blackwell Publishing Ltd.