Constructing The Asia Pacific Regional Cooperation And Integration Index

Constructing the Asia-Pacific Regional Cooperation and Integration Index

In this paper, we propose a panel approach in the construction of the Asia-Pacific Regional Cooperation and Integration Index (ARCII) to strengthen the index's ability to track the progress of economic integration in the region over time. Panel-based procedures are employed in imputing missing values, normalizing raw data, and deriving dimensional and subdimensional weights via principal components analysis. Findings suggest the pace of integration in Asia was broadly steady over the 11-year sample period (2006-2016). However, modest gains have been made as a majority of economies in the sample have moved up in their levels of regional integration from 2006 to 2016. Of the six dimensions featured in the ARCII, trade and investment and movement of people are the main drivers of regional integration, while the money and finance dimension was the weakest link. Based on global normalization, Asia comes second to the European Union (EU) in progress on regional integration, but in recent years a few Asian economies have broken through to the top tier dominated by the EU economies.

Regional Integration in the Asia Pacific

This report, published by the OECD's International Futures Programme in co-operation with the Bob Hawke Prime Ministerial Centre in Australia, aims to stimulate informed debate about integration issues facing the Asia-Pacific region, the world's most economically dynamic region as well as a one of great diversity. It contains a number of papers written by international experts, which consider the key challenges facing the region, set in a global context, as well as sector-specific issues.

Asia-Pacific Regional Cooperation and Integration Index