Emerging Asian Economies and MNCs Strategies

Emerging Asian Economies and MNCs Strategies

New Horizons in International Business series

Edited by Robert Taylor and Bernadette Andreosso-O’Callaghan

Analysing the role of multinational investors in emerging Asian economies and the implications for regional economic integration, this astute study examines the increasing role being played by Asian countries in the global economy. Encompassing a large number of diverse manufacturing and service sectors, this book highlights the cultural and strategic challenges faced by multinational investors in the region in which they invest. It shows that despite high rates of economic growth in Asian countries presenting multinational traders and investors with unparalleled market opportunities, there have been only tentative moves towards regional economic integration. Areas such as trade facilitation, uniform customs clearance, removal of non-tariff barriers and labour deployment issues are yet to be adequately addressed.

Chapter 9: The Transatlantic Free Trade Area: ASEAN’s perspective

Utai Uprasen

Subjects: asian studies, asian business, business and management, asia business, international business

Abstract

This study examines the displacement effect emanating from export competition between ASEAN and the U.S. into the EU market. This research adds to previous studies in that it takes into account the interaction between ASEAN and the U.S. in their export competition by endogenizing export variables in the model used. Additionally, the determining factor of the displacement effect is derived. Therefore, the cause of the displacement effect can be specified. The experiment is conducted at SITC 2-digit level of machinery and transport equipment (SITC 7) for five major industries under simultaneous equations. The empirical findings using panel data from 2003 Q1 to 2013 Q4 affirm that, from the point of view of ASEAN, the displacement effect is detected in two industries of three ASEAN countries. The empirical analysis has significant policy implications, given that the EU-U.S. FTA may come into force in the near future and ASEAN may encounter increased competition on exports from the U.S. to the EU market in these two affected industries. ASEAN needs to increase the level of competitiveness in the aforementioned industries to ensure accessibility to the EU market. Key words: the Transatlantic Free Trade Area, machinery and transport equipment, displacement effect, export competition, simultaneous equations, ASEAN.

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