Asia-Pacific regional integration index: Construction, interpretation, and comparison

We develop a composite index to measure the degree of regional integration in Asia. The index comprises 26 indicators in six dimensions of regional integration, namely, trade and investment, money and finance, regional value chains, infrastructure and connectivity, free movement of people, and insti...

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Bibliographic Details
Published inJournal of Asian economics Vol. 54; pp. 22 - 38
Main Authors Huh, Hyeon-Seung, Park, Cyn-Young
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.02.2018
Subjects
Asia
Composite index
Regional integration
O1
Asia
O5
Regional integration
F1
F3
Composite index
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Summary:We develop a composite index to measure the degree of regional integration in Asia. The index comprises 26 indicators in six dimensions of regional integration, namely, trade and investment, money and finance, regional value chains, infrastructure and connectivity, free movement of people, and institutional and social integration. We use principal component analysis to apportion a weight to each indicator to construct dimensional sub-indexes, then follow the same procedure to weight the sub-indexes to construct the overall index. Asia is shown to be relatively well integrated along dimensions of trade and investment and the free movement of people, not so well integrated along the institutional and social dimension. Overall, Asia is somewhat more integrated than South America and Africa, but much less integrated than the European Union.
ISSN:1049-0078
1873-7927
DOI:10.1016/j.asieco.2017.12.001