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Export Geographical Diversification and Economic Growth Among ASEAN Countries

Hinlo, Jennifer E. and Arranguez, Grace Ivy S. (2017): Export Geographical Diversification and Economic Growth Among ASEAN Countries.

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Abstract

The study investigated the relationship of export geographical diversification and economic growth among ASEAN countries for the period 1980-2014. With a sample of 5 countries- Indonesia, Malaysia, Philippines, Singapore and Thailand- the study computed for the geographical diversification of countries using the Herfindahl index. Using time series analysis, with Vector Autoregressive (VAR) analysis and Granger causality tests, the relationship of the two variables among ASEAN countries were tested. The results showed a generally decreasing trend of HHI values of all 5 countries. Results of the analysis of the relationship showed a bidirectional relationship for Malaysia and a unidirectional relationship from export geographical diversification to economic growth in the case of Philippines. For countries Indonesia, Singapore and Thailand, results showed no causality which indicates that the variables are independent for these countries. Based on the results, the study recommendeds the followng: (1) formulation and implementation of appropriate strategies to improve export structure and improve economies for Malaysia and Philppines; and (2) diversification of export structure in terms of market destinations for Philippines to improve its economy.

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