This paper attempts to examine determinants of export performance of old ASEAN members’ economies during 2000-2015. The ASEAN 6 includes Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei, Ordinary Least Square (OLS) approach has been used to estimate the impact of various factors on exports performance of these ASEAN 6 economies.
Along with conventional demand and supply factors like variables of Inflation, interest rate, GDP and foreign direct investment appeared to be most significant in determining exports performance in ASEAN6. Hence, inflation and gross domestic product were identified as a major common determinant of export performance in ASEAN6 economies.Keywords: Gross Domestic Product, Interest Rate, Inflation, Exchange Rate, FDI, Export Performance,IntroductionExports play an important role by contributing to economic stability, growth and long term development of an economy (Singh, 2014). The export performance of an economy is determined by several factors. Determinants of exports comprise of external and internal factors. External factors are related to demand-side conditions whereas internal factors are associated with supply-side conditions (Fugazza, 2004).
Numerous external and internal factors have been studied in the literature depending upon the nature of economies being studied. The important factors included in this study are based on existing literature and economic conditions of selected ASEAN 6 economies.Asian region includes diverse set of countries – in terms of level of development, size, structure and openness to trade. The region is featured by larger population as it comprises of two most populous countries in the ASEAN. At the economic level the past three decades of selected Asian economies has been marked by the pursuit of the implementation of economic reforms to enhance the country’s economic performance.Trade and industrial policies have played a direct role in the growth process of these economies.A dramatic change was noticed in the trade policies of Asian economies after 1980s.
Earlier these economies were closed and had focus on import substitution but later on these economies shifted towards export oriented growth strategy and started opening up in early 1980s. A considerable change in trade policies was noticed since 1980s in Indonesia, Malaysia, Philippines and Thailand brought major trade reforms in early 1990s (Athukorala, 2012). The export-led growth strategy was followed in these economies with major policy incentives for export promotion which resulted in good performance in terms of export growth relative to other countries and regions in the world. Further, membership of international institutions, increasing popularity of bilateral, multilateral, regional and free trade agreements transformed Asian economies in terms of trade pattern and integration (Singh 2014).The selected Asian economies namely Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei have shown impressive export performance.
To ensure sustainable exports growth, there is a need to identify factors determining the export performance of these economies .Therefore, the present study has examined the demand and supply side export determinants of ASEAN 6 economies.