YU Zhen,GE Wei：Economic Integration and Industrial Location Effect: A Panel Data Analysis Based on the Industrial Level of CAFTA

Abstract：This paper constructs a multinational FC model based on comparative advantage differences among countries and applies panel data analysis method of GMM to the study of economic integration and industrial location effect. It utilizes manufacturing industrial level data of China and five major ASEAN countries, namely, Singapore, Malaysia, Indonesia, Thailand and the Philippines from 1990 to 2010 and investigates into the impact of CAFTA regional economic integration on the spatial distribution of industries of its members. It finds out that more and more manufacturing industry in the CAFTA concentrate toward China and regional integration reshapes the industrial spatial distribution; the fewer the internal trade barriers in the FTA there are, the larger the impact of the “primary quality” factor on industrial location effect is; the greater the preferential margin is, the larger the impact of manufacturing industrial market potential and input-output relevance on industrial location effect is whereas the smaller the impact of national market potential and industrial scale on it is.

Key words： “South-South” Regional Economic Integration    CAFTA    Industrial Location Effect    GMM

source:Finance & Trade Economics ,No.12,2014