ASEAN centrality amidst economic integration in the Asia Pacific region

ABSTRACT

This paper uses network analysis to evaluate the extent to which the Association of Southeast Asian Nations (ASEAN) is able to maintain its centrality in the context of the emerging economic integration in the Asia Pacific region. Employing methodology derived from network analysis, this paper maps Asia Pacific-related trade flows, and also determines the corresponding strength of these trade flows using appropriate centrality measures as defined and applied in network analysis. This paper finds that on average, ASEAN as a group is not upholding centrality within the Asia Pacific region, except when considering trade intensity, where ASEAN's average eigenvector centrality from 2007 to 2013 is higher than that of the network.

KEYWORDS:

• ASEAN
• ASEAN centrality
• Asia Pacific economic integration
• network analysis

JEL CLASSIFICATION:

• F15
• F13
• F14

Acknowledgements

The author is grateful to the referee for the very helpful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Includes all EU member economies except Croatia.

2. Includes all EU member economies except Bulgaria, Romania, and Croatia.

3. Kemp and Wan (1976) showed that for every customs union, ‘there exists a common tariff vector and a system of lump-sum compensatory payments, involving only members of the union, such that there is an associated tariff-ridden competitive equilibrium in which each individual, whether a member of the union or not, is not worse off than before the formation of the union’, implying that by adjusting third-party tariffs, the members of a union can ensure that outsiders are not harmed by a discriminatory agreement.

4. Betweenness centrality indicates how crucial a node is in joining various other nodes in a network, signifying the node's importance in the nature of linkages within the network. This centrality measure is not used in this paper, as it does not have a clear economic interpretation when applied in the analysis using aggregate trade data.

5. A network is defined to be a mathematical description of the state of a system at a given point in time in terms of nodes and links (Schiavo, Reyes, and Fagiolo 2010)

6. The adjacency matrix is a matrix in which entry is unity if nodes and are connected by a single edge, or adjacent, and zero otherwise (Weisstein 2007).

7. To maximise the graphical quality of the network, only the relatively essential characteristics are shown, and accordingly, only include the major relevant trade flows. Edges with weights below 0.02 are left out, and thus a total of 213 edges to visualise the network are retained.

8. The extension of centrality measures to groups was proposed by Everett and Borgatti (1999).

9. The author is very grateful to the referee for this recommendation.

Additional information

Funding

This work was supported by the University of the Philippines Los Baños under the Office of the Vice Chancellor for Research and Extension UPLB Basic [Research Code 9116004].

Notes on contributors

Emmanuel Genesis T. Andal

Emmanuel Genesis T. Andal is an assistant professor at the Department of Economics, College of Economics and Management, University of the Philippines Los Baños. His research interests include economic integration, international political economy, and international outsourcing. He has published an article on the economic incentives of war, and also on firm organisation under moral hazard.