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The Economic Benefits From Asian Trade to the Australian Economy

Kulatunga, Ananda (2015). The Economic Benefits From Asian Trade to the Australian Economy. In: JEPA 2015 - 14th International Conference of the Japan Economic Policy Association, Toyo University, Tokyo, Japan, 7-8 November 2015.

Document type: Conference Paper
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Author Kulatunga, Ananda
Title The Economic Benefits From Asian Trade to the Australian Economy
Conference Name JEPA 2015 - 14th International Conference of the Japan Economic Policy Association
Conference Location Toyo University, Tokyo, Japan
Conference Dates 7-8 November 2015
Publication Year 2015
Total Pages 35
HERDC Category 340100 Economic Theory
Abstract The majority opinion in policy circles in Australia is that the Australian economy has substantial benefits from trade with the Asia. However, there are very limited research and analytical studies available in order to substantiate such a claim.

Therefore, this paper is an attempt of carrying out a research and statistical analysis of exports data in relation to Australian exports during the period of 1992 to 2011 in order to ascertain the validity of above claim. The research focused on examining the significance of the influence of Australia’s merchandise exports to Asia in relation to Australian Gross Domestic Product.

The research propositions were elicited from an analysis of the economic benefits from Asian trade to the Australian economy. The economic benefits from Asian trade were investigated while bearing in mind a hypothesis. The null hypothesis (H0) ‘Trade with Asian countries does not improve Australian GDP’. This hypothesis was also tested comparing the Australian GDP and Australian merchandise exports to Asia.

A regression model was constructed in order to test time series data collated for the data analysis. If the corresponding p-value of R-Squared statistical value is less than 5 per cent, it is considered as significant. The R-squared value shows the significance of the influence of an independent variable in relation to its dependent variable. However, the regression model was further tested to make sure that the model is free of stationary, that the Dublin- Watson Statistical value is greater than the value of R-squared. Breusch-Godfrey Serial Correlation LM Test and Breusch-Pagan-Godfrey heteroskedasticity test is carried out to check whether
the regression model has no serial correlation in its residuals. If the residuals are subject to serial correlation, then the first difference method was applied in order to remove serial correlation from the residual. The Histogram Normality test was carried out to check whether the residual is normally distributed. If the Jarque-Bera value and the correspondent probability are high, then the regression model is considered as it has a normally distributed residual.

The statistical test results revealed that the Australian merchandise exports to Asia had a significant impact on the Australian GDP during this period 1992 to 2011.
Keyword Merchandise Exports
Gross Domestic Product and Regression Model
Additional Notes Conference Presentation Session 11 - Main Theme of the Conference: "Future of Young Generations and Welfare of Aging Society: Roles of Public Sector and Private Institutions"
Description for Link Link to conference hompage
URL http://www.soc.shukutoku.ac.jp/shumpei/jepaic2015index.html


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