Peer Effects Of ASEANs’ Trade With China

The Regional Comprehensive Economic Partnership agreement,which came into force on Jan 1st 2022,has already delivered considerable dividends to member economies especially for China and Association of Southeast Asian Nation(ASEAN).At the same time,the decisions of the members’ governments in ASEAN on the trade policy of China are influenced by its “peer countries”.The“peer countries” of ASEANs include not only geographically adjacent countries,but also countries with similar economic development level,similar governance indicator or similar cultural distance.In other words,there is a significant “peer effect” existed in ASEANs’ trade with China.On the basis of reviewing the core literature in related fields,this paper uses panel data of ASEAN counties in 2011-2020 to study the “peer effects” of trade between ASEANs and China by using spatial Dubin model.Moran Index and the Giri Index are used to examine the spatial auto-correlation in ASEANs’ trade with China.Four spatial weight matrices were established to verify the “peer effects” of ASEANs’ trade with China on geographical,economic,political and cultural characteristics.Based on the robustness test of changing the explained variables,time division test and changing the foregoing weight matrix into asymmetric one,the influences of each factor on the ASEANs’ trade with China are further decomposed into direct effects and indirect effects.In the end,a dynamic space Dubin model is built,and the short or long-term performance of the Dubin model is analyzed.The conclusions of this study are as follows:(i)The ASEANs’ trade with China has a significant positive “peer effect” to carry out trade practice on China in terms of geographical characteristics,but a significant negative “peer effect” in terms of trade openness,national governance level,freedom of speech and social responsibility;When the “peer effects” of ASEANs’ trade with China exist significantly,the growth of GDP,population size,unemployment ratio and mobile phone rental will promote the growth of ASEANs’ trade with China through direct effects to varying degrees,but due to the existence of indirect effects or feedback effects,the promotion effects will be hindered to some extent.(ii)There are certain differences in the “peer effects” of ASEANs’ trade practices with China in terms of trade volume,export volume and import volume.When ASEANs export products to China,they are less affected by neighboring countries and more affected by countries with similar levels of national governance;the “peer effects” before and after the signing of the agreement to upgrade the China-ASEAN Free Trade Area in 2015 were analyzed.On the whole,the significance of peer effects among ASEANs was weakened after the signing of the Agreement.Considering that the setting of spatial weight matrix may ignore the radiating effects of countries with a high level of economic development on less developed countries;after setting asymmetric influence weight regression in this paper,the results are basically consistent with the benchmark regression results,indicating that the main conclusions of this paper have a certain robustness.(iii)The regression results of dynamic spatial Dubin model show that ASEANs have significant “peer effects”on China’s trade in terms of geographical,economic,political and cultural,which again verifies the robustness of the conclusions of this paper;From the perspective of time,the trade tendency of ASEANs in the last period will continue to affect their trade tendency to China in the next period,which reflects a certain snowball effect.From the perspective of time and space,the influence of the previous period of the peer countries’ trade with China on their own trade with China is less than that of the previous period of their trade with China.On the basis of the above empirical analysis,this paper puts forward the following policy suggestions:(i)Scientifically guide trade tendency by considering the influence of “peer effects”;(ii)Reasonably estimate the effect of trade policy with the influence of peer effect;(iii)Creating a sound external environment and strengthen China-ASEAN economic and trade cooperation;(iv)Strengthen infrastructure construction and explore the ASEAN market.