The Asymmetric Effect of Trade, Financial, and Political Globalization on Economic Development in ASEAN+3

Abstract

This study investigates the heterogeneous effect of trade globalization, financial globalization and political globalization on economic development in ASEAN+3 countries (Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan and South Korea) over the period 1990–2016 using Panel quantile cointegration regression approach. The results of long run relationship show the asymmetric effect of trade globalization on economic development with a strong positive effect in low economic development countries but a negative effect in high economic development countries. Meanwhile, political globalization has only the positive effect on economic development for both poorer and richer nations, but the coefficient values vary across quantiles. Finally, financial globalization shows the weak contribution to economic development. Furthermore, the short run relationship between economic development and each globalization variable evidently exists with a weak negative speed of adjustment toward equilibrium.