Widening income inequality in recent years has triggered an outpouring analysis and reflection on the causes of inequality. Economic cooperation demonstrated robust economic growth, reducing poverty but also accompanied by rising inequality. The income gap persists between ASEAN-5 (Indonesia, Malaysia, the Philippines, Singapore, Thailand) and the ASEAN-3 (Cambodia, Laos, Vietnam) has become a prominent issue and policy debate. Hence, this study aims to investigate the relationship of regional economic integration and income inequality by adopting a balanced panel analysis for selected ASEAN countries from 2005 to 2018. Trade and financial integration was evaluated to investigate the influence on inequality. Empirical findings showed that trade integration is more effective than financial integration in improving income distribution. Export activities from the manufacturing and service sectors help ASEAN-5, while the agricultural and manufacturing sectors help ASEAN-3 in narrowing income distribution. Therefore, integration policies to improve inequality should not be universally implied on countries with diverse economics structures and varied development activities.
Ametoglo, M., & Guo, P. (2016). Regional economic integration and income inequality in Latin America: The case of Andean Community of Nations. Journal of Economics and Sustainable Development, 7(14), 176-185.
Ando, M., & Kimura, F. (2014). Evolution of machinery production networks: Linkage of North America with East Asia. Asian Economic Papers, 13(3), 121-160.
Asian Development Bank (ADB). (2018, April 11). Continued reforms key to Myanmar’s economic growth. Retrieved from https://www.adb.org/news/continued-reforms-key-myanmars-economic-growth
Asteriou, D., Dimelis, S., & Moudatsou, A. (2014). Globalization and income inequality: A panel data econometric approach for the EU27 countries. Economic Modelling, 36, 592-599.
Auguste, D. (2012). European integration and income inequality convergence. Retrieved from https://paa2013.princeton.edu/papers/132193
Baek, I., & Shi, Q. (2016). Impact of economic globalization on income inequality: Developed economies vs emerging economies. Global Economy Journal, 16(1), 49-61.
Barro, R. J. (2000). Inequality and growth in a panel of countries. Journal of Economic Growth, 5(1), 5-32.
Calderón, C., & Chong, A. (2001). External sector and income inequality in interdependent economies using a dynamic panel data approach. Economics Letters, 71(2), 225-231.
Chen, C. (2016). The impact of foreign direct investment in urban-rural inequality: Evidence from China. China Agriculture Economic Review, 8(3), 480-497.
Chen, C., Zhao, H., & Zhou, Y. (2017). Foreign direct investment and wage inequality, Evidence from the People’s Republic of China. Asian Development Bank Institute. Retrieved from https://pdfs.semanticscholar.org/3671/0ed680861341ebc391e33028269e0c3ba03d.pdf
Chintrakarn, P., Herzer, D., & Nunnenkamp, P. (2011). FDI and income inequality: Evidence from a panel of U.S. States. Economic Inquiry, 50(3), 788-801.
Cornia, G. A. (2011). Economic integration, inequality and growth: Latin America vs the European economies in transition. United Nations. Retrieved from https://www.un.org/esa/desa/papers/2011/wp101_2011.pdf
Delios, A. (2017). Commentary: Is ASEAN’s economic integration still a work in progress? Channel News Asia. Retrieved from https://www.channelnewsasia.com/news/asia/commentary-is-asean-s-economic-integration-still-a-work-in-8814696
Figini, P., & Görg, H. (2011). Does foreign direct investment affect wage inequality? An empirical investigation. The World Economy, 34(9), 1455-1475.
Furuoka, F., Rasiah, R., Idris, R., Ziegenhain, P., Jacob, R. I., & Munir, Q. (2018). Income convergence in the ASEAN-5 countries. International Journal of Business and Society, 19(3), 554-569.
Gnanasagaran, A. (2018). Driving growth in ASEAN economies. The ASEAN Post. Retrieved from https://theaseanpost.com/article/driving-growth-asean-economies
Gourdon, J., Maystre, N., & De Melo, J. (2007). Openness, inequality, and poverty: Endowments matter. World Bank.
Hartley, K. (2017). Inequality looms beneath the shiny façade of Southeast Asia’s growth. Channel News Asia. Retrieved from https://www.channelnewsasia.com/
news/asia/commentary-inequality-looms-beneath-the-shiny-facade-of-8743726
Herzer, D., Hühne, P., & Nunnenkamp, P. (2014). FDI and income inequality- Evidence from Latin American economies. Review of Development Economics, 18(4), 778-793.
Hew, D. (2006). Economic integration in East Asia: An ASEAN perspective. UNISCI Discussion Papers. Retrieved from https://www.ucm.es/data/cont/media/www/pag-72530/UNISCI11Hew.pdf
Ibrahim, M. (2015). ASEAN financial integration- Outlook and implications. Bank Negara Malaysia. Retrieved from http://www.bnm.gov.my/
index.php?ch=en_speech&pg=en_speech&ac=556&lang=en
Krumm, K., & Kharas, H. (2004). East Asia integrates: A trade policy agenda for shared growth. World Bank. Retrieved from http://documents.worldbank.org/curated/en/
759971468748770496/East-Asia-integrates-a-trade-policy-agenda-for-shared-growth
Kuo, K. H., & Lee, C. T. (2017). Econ
In-Text Citation: (Ean et al., 2020)
To Cite this Article: Ean, T. G., Mansor, S. B. A., & Ling, S. W. S. (2020). Regional Economic Integration and Income Inequality in Selected Asean Countries. International Journal of Academic Research in Business and Social Sciences, 10(2), 648–664.
Copyright: © 2020 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
