The People's Republic of China as an Engine of Growth for Developing Asia?: Evidence from Vector Autoregression Models
Park, Donghyun; Shin, Kwanho | October 2009
Abstract
Developing Asia has traditionally relied on exports to the United States (US) and other industrialized countries for demand and growth. As a result, the collapse of exports to the US and other industrialized countries during the global financial and economic crisis has sharply curtailed gross domestic product (GDP) growth across the region. The emergence of the People’s Republic of China (PRC) as a globally influential economic force is fueling hopes that it can supplement the US as an additional source of demand and growth. The central objective of this paper is to use vector autoregression (VAR) models to empirically investigate whether exports to the PRC have a significant and positive effect on the GDP of nine developing Asian countries. The study’s results from a three-variable VAR model indicate that PRC’s imports have a significant positive effect on the GDP of regional countries. However, the study’s results from a four-variable VAR model indicate that the PRC’s apparently positive impact reflects the US’ demand for Asian goods, rather than independent demand from the PRC. Therefore, overall, the study’s evidence suggests that the PRC is not yet an engine of growth for the rest of the region.
Citation
Park, Donghyun; Shin, Kwanho. 2009. The People's Republic of China as an Engine of Growth for Developing Asia?: Evidence from Vector Autoregression Models. © Asian Development Bank. http://hdl.handle.net/11540/1830. License: CC BY 3.0 IGO.ISSN
1655-5252
Keywords
Asian Development Bank
Development
Trade
Development Goals
Skills Development
Sustainable Development
Trade Flows
Trade And Development
Food Security And Trade
Trade Volume
Trade Potential
Trade Flows
External Trade
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New technology
Innovations
Industry
Export policy
Import policy
Development assistance
ADB
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Development assistance
Development aid
Development indicators
Development potential
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Project appraisal
Performance appraisal
Regional development bank
Trade development
Import volume
Export volume
Capital
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Communication in rural development
Social participation
Occupational training
Partnership
Joint venture
System analysis
Labor and globalization
Labor policy
Regional trading blocs
Foreign trade and employment
Developing countries
Industrial priorities
Technological innovation
Technology transfer
Foreign trade regulation
Industrial relations
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