2015•Asian Development ReviewOpen access

An Empirical Estimation of Asia's Untapped Regional Integration Potential Using Data Envelopment Analysis

Dominik Naeher

Abstract

This paper uses bilateral flow data on multiple dimensions of economic integration to construct a composite index of regional integration outcomes covering 19 regions in various parts of the world. As a first step, the multidimensional indicator is used to rank regions according to their current degree of regional integration, which allows for a direct comparison of Asia's regional integration performance with those of other regions of the world. As a second step, the constructed indicator of regional integration outcomes is used as the output variable in a data envelopment analysis to estimate Asia's untapped regional integration potential.

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Key concepts: Regional integration, Data envelopment analysis, Economic integration, Econometrics, Regional science, Estimation, Variable (mathematics), Rank (graph theory)