Title: The impact of globalisation on business cycle synchronisation: the case of ASEAN5

Authors: Jia Xin Ng; Zhi Nie Seet; Siok Kun Sek

Addresses: School of Mathematical Sciences, Universiti Sains Malaysia, 11800, Minden, Penang, Malaysia ' School of Mathematical Sciences, Universiti Sains Malaysia, 11800, Minden, Penang, Malaysia ' School of Mathematical Sciences, Universiti Sains Malaysia, 11800, Minden, Penang, Malaysia

Abstract: The study examines the impact of globalisation on business cycle synchronisation between ASEAN5 and partner countries: China (CHN), Japan (JPN) and United States (USA) from 1982 to 2021 using static and dynamic Common Correlated Effect estimators. It aims to: 1) investigate the synchronisation levels of ASEAN5 with each partner country; 2) identify the best estimator; and 3) reveal the main determinants of synchronisation. The findings indicate that synchronisation varies across period and countries. ASEAN5 aligns most with the USA from 1998 to 2009, but with an increase synchronisation with CHN starting 2010. The CS-DL estimator emerges as the most effective estimator. Key determinants that affect synchronisation differ between short term and long-term scenarios: financial openness and urbanisation negatively impact ASEAN5-CHN and ASEAN5-USA respectively, while FDI inflow negatively impacts ASEAN5-JPN in the short term but positively in the long term. The insights are crucial for regional policy decision and planning.

Keywords: globalisation; business cycle synchronisation; ASEAN5; financial openness; urbanisation; FDI inflows.

DOI: 10.1504/IJTGM.2025.148620

International Journal of Trade and Global Markets, 2025 Vol.21 No.4, pp.388 - 416

Received: 23 Sep 2024
Accepted: 12 May 2025
Published online: 15 Sep 2025 *

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