Assessing Market Integration in ASEAN with Retail Price Data
Dang,Vinh Q.T.1; Yang,Yu Alan2
Source PublicationPacific Economic Review

We assess the extent of market integration the Association of Southeast Asian Nations (ASEAN) using a comprehensive data set that contains actual local retail prices for 131 goods and services in ASEAN countries (except Laos and Myanmar) over the period of 1990–2013. We conduct two different, but complementary, approaches: analyzing price dispersion and testing for convergence to the law of one price via panel unit root tests. The 1997 Asian crisis and, to a lesser extent, the 2008 global crisis appear to have caused a considerable disruption in the process of market integration. Despite significant tariff reduction under the ASEAN Free Trade Area commitments in the past two decades, the level of price dispersion across ASEAN is higher in 2013 than in 1990. Panel unit root tests accounting for cross-section dependence show that convergence to the law of one price holds for only a minority of retail prices, including those of traded goods, in the ASEAN markets. We also consider a nonlinear exponential smooth transition autoregressive approach and a structural break as alternative adjustment dynamics in the panel unit root tests. Overall, our results suggest that there is much to be done in ASEAN to achieve a meaningful ASEAN economic community.

URLView the original
Indexed BySCI
WOS Research AreaBusiness & Economics
WOS SubjectEconomics
WOS IDWOS:000413763300002
PublisherWILEY, 111 RIVER ST, HOBOKEN 07030-5774, NJ USA
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Cited Times [WOS]:3   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionUniversity of Macau
Corresponding AuthorDang,Vinh Q.T.
Affiliation1.University of Macau,China
2.Peking University,China
First Author AffilicationUniversity of Macau
Corresponding Author AffilicationUniversity of Macau
Recommended Citation
GB/T 7714
Dang,Vinh Q.T.,Yang,Yu Alan. Assessing Market Integration in ASEAN with Retail Price Data[J]. Pacific Economic Review,2017,22(4):510-532.
APA Dang,Vinh Q.T.,&Yang,Yu Alan.(2017).Assessing Market Integration in ASEAN with Retail Price Data.Pacific Economic Review,22(4),510-532.
MLA Dang,Vinh Q.T.,et al."Assessing Market Integration in ASEAN with Retail Price Data".Pacific Economic Review 22.4(2017):510-532.
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