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Is the ASEAN Ready for Economic Integration? The Evidence from Panel Data Regressions


Complementary to the commitment to building the ASEAN economic Community (AeC) is the necessity to assess productivity and economic growth across the region. The prior experience of similar economic communities posits the importance of a strong production base in order to achieve a unified growth trend. in recent years, the general growth behavior of several ASEAN member states, taken individually, have been optimistic. in this paper, the paradigm for evaluating readiness towards economic integration used a Cobb-Douglas production function to identify key factors that may affect the sustainability of integration. The results of the panel data regression analysis reveal that both labor and capital are significant contributing factors to economic growth, taken individually among countries and collectively as a region. The evidence further indicates that the region is not yet ready for economic integration and that country-specific characteristics are apparent. This implies that in order to achieve a sustainable economic integration that benefits all ASEAN member states, further assessment and unification of economic policies within and among nations has to be made, especially those relating to the development of home-grown technologies and the establishment of a truly strong market and production base.


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