Title: An analysis of ASEANs logistics performance and its impact on regional trade: An extended gravity model approach
Authors: Barton Sy - TAT SING International Logistics Corporation (Philippines) [presenting]
Stephen Jun Villejo - University of the Philippines (Philippines)
Abstract: The aim is to investigate the impact of logistics, using the Logistics Performance Index, on bilateral trade among ASEAN nations using the gravity model on a panel data on certain years from 2007 to 2016. The overall LPI index, and its components, are strong contributors to a healthy trading among countries in the ASEAN region. The ranking of the importance of the components of the logistics index differ between the importing and exporting countries in general. It can also be observed that a dynamic model rather than a static model is more appropriate since the parameter estimates are observed to be changing through time. Instrument Variable Generalized Method of Moments is used based on the result of the Hausman test and in order for time-invariant variables to be retained in the model. Since of particular interest of the researcher is the Philippines, the result of the model is used to investigate which countries in the region the Philippines has the highest trade potential with. Due to an established relationship among ASEAN countries, there is an insignificant trade potential for all countries, using the method of speed of convergence.