Kueh, Jerome Swee-Hui and Puah, Chin-Hong and Wong, Chiew-Meu (2008): Bounds Estimation for Trade Openness and Government Expenditure Nexus of ASEAN-4 Countries.
Download (34kB) | Preview
Southeast Asia countries are encountering several challenges as they are moving towards the globalization and trade liberalization era. Due to that, government intervention is essential in ensuring that the economy is resilience against the severe implications of trade openness. Therefore, this study aims to examine the relationship between trade openness and government expenditure of ASEAN-4 countries using the Autoregressive Distributed Lag [ARDL] bounds testing approach that covers a sample period of annually data from 1974-2006. Empirical results indicate that there is an existence of a significant positive long-run linkage between trade openness and government expenditure of all the ASEAN-4 countries under study. This means that government intervention in an open economy is crucial as to cushion the risks associated with trade liberalization.
|Item Type:||MPRA Paper|
|Original Title:||Bounds Estimation for Trade Openness and Government Expenditure Nexus of ASEAN-4 Countries|
|Keywords:||ARDL, ASEAN-4, openness, government expenditure|
|Subjects:||H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General
F - International Economics > F1 - Trade > F10 - General
O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes
|Depositing User:||Chin-Hong Puah|
|Date Deposited:||24. Dec 2008 06:49|
|Last Modified:||09. May 2015 21:44|
Adserà, A. and Boix. C. (2002). Trade, Democracy, and the Size of the Public Sector: The Political Underpinnings of Openness. International Organization, 56(2), 229-262.
Albertos, J.F. (2002). Explaining Economic Openness. The Political Sustainability of Internationalization in Latin America and Europe. Advance Research Workshop, 16-22.
Alesina, A. and Spolaore, E. (1997). On the Number and Sizes of Nations. Quarterly Journal of Economics, 112, 1027-1056.
Alesina, A., Spolaore, E. and Wacziarg, R. (1997). Economic Integration and Political Disintegration. NBER Working Paper No. 6163.
Balle, F. and Vaidya, A., (2002). A Regional Analysis of Openness and Government Size. Applied Economic Letters, 9(5), 289-292.
Bates, R.H., Brock, P. and Tiefenthaler, J. (1991). Risk and Trade Regimes: Another Exploration. International Organization, 45(1), 1-18.
Bejan, M. (2006). Trade Openness and Output Volatility. Munich Personal RePEc Archive (MPRA) Paper No. 2759.
Bretschger, L. and Hettich, F. (2002). Globalisation, Capital Mobility and Tax Competition: Theory and Evidence for OECD Countries. European Journal of Political Economy, 18, 695-716.
Cameron, D. R. (1978). The Expansion of the Public Economy: A Comparative Analysis. The American Political Science Review, 72(4), 1243-1261.
Engel, R.F. and Granger, C.W.J. (1987). Cointegration and Error Correction Representation, Estimation and Testing. Econometrica, 55, 251-276.
Frankel, J.A. and Romer, D. (1999). Does Trade Cause Growth? American Economic Review, 89(3), 379-399.
Hendry, D. F. and Ericsson, N. (1991). An Economic Analysis of U.K. Money Demand in ‘Monetary Trends in the United States and the United Kingdom by Milton Friedman and Anna J. Schwartz.’ American Economic Review, 81, 8-38.
International Monetary Fund, International Financial Statistics, various issues. Washington, D.C.: IMF.
Islam, M.Q. (2004). The Long Run Relationship between Openness and Government Size: Evidence from Bounds Test. Applied Economics, 36(9), 995-1000.
Narayan, P.K. (2005). The Saving and Investment Nexus for China: Evidence from Cointegration Test. Applied Economics, 37, 1979-1990.
Narayan, P.K. and Narayan, S. (2005). Estimating Income and Price Elasticities of Imports for Fiji in a Cointegration Framework. Economic Modelling, 22, 423-438.
Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16, 289-326.
Rodrik, D. (1998). Why Do More Open Economies Have Bigger Governments? Journal of Political Economy, 106(5), 997-1032.
The Heritage Foundation & the Wall Street Journal. 2008 Index of Economic Freedom. [On-line]. Available: http//:www.heritage.org/index/