Title: Determinants of aggregate and sectoral trade between Japan and ASEAN countries: a Poisson pseudo-maximum-likelihood estimator approach

Authors: Hoan Quang Truong; Chung Van Dong; Huong Thu Thi Nguyen; Hung Xuan Nguyen

Addresses: Institute for Southeast Asian Studies (ISEAS), Vietnam Academy of Social Sciences (VASS), No. 176 Thai Ha Street, Dong Da District, Hanoi City, Vietnam ' Institute of World Economies and Politics (IWEP), Vietnam Academy of Social Sciences (VASS), No. 176 Thai Ha Street, Dong Da District, Hanoi City, Vietnam; VNU International School, No. 144 Xuan Thuy Street, Cau Giay District, Hanoi City, Vietnam ' Faculty of Economics, Hanoi Open University, B101 Nguyen Hien, Bach Khoa, Hanoi, Vietnam ' School of Trade and International Economics, National Economics University, 207 Giai Phong Street, Hai Ba Trung District, Hanoi City, Vietnam

Abstract: Our study investigates the determinants of aggregate and sectoral trade between Japan and the Association of Southeast Asian Nations (ASEAN). The estimation results from the gravity model show that the scale of the economy and market development are the main determinants of aggregate trade between the two regions, in which the effect of Japan's economic size is stronger. Meanwhile, the improvement in logistic performance possibly reduces the disadvantageous impacts of geographical distance on Japan-ASEAN trade flows. By contrast, the formation of trade agreements does not play an important role in Japan-ASEAN trade activities. We find that most determinants of aggregate trade are also factors affecting the trade flows of subsectors between the two sides; however, there are significant differences in the impact magnitudes and the predicted signs. The effects of the considered factors on Japan-ASEAN trade are relatively heterogeneous among the sub-industries. The study also provides implications for enhancing Japan-ASEAN trade in the future.

Keywords: Japan; ASEAN; aggregate trade; sectoral trade; PPML.

DOI: 10.1504/GBER.2025.146496

Global Business and Economics Review, 2025 Vol.32 No.4, pp.418 - 440

Received: 04 Sep 2023
Accepted: 21 Nov 2023
Published online: 02 Jun 2025 *

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