ABSTRACT
Past studies indicate that trade and economic growth do not show a parallel co-movement, or in other words, high level of trade does not necessarily lead to high economic growth. By using five selected East Asian economies as case studies, we attempt to investigate the source of this inconsistency. The indirect impact procedure is applied to help us to determine through which channel trade positively affects economic growth and vice versa. We found that in order for ASEAN (Association of South East Asian Nations) to emulate the success of South Korea in developing its economy, ASEAN has to ensure that it is moving towards greater competitiveness by enhancing the level of efficiency as well as technological development.
