Did mega-regional trade agreements reshuffle the financial influence of the US, China, and Japan in ASEAN? Evidence from the volatility-spillover effects

The Trans-Pacific Partnership (TPP) and the succeeding Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) were widely viewed as trade agreements aiming at containing the influence of China and raising that of the US and Japan in Asia. This study utilizes the outward volatility-spillover effect of the equity market as a proxy for a country's financial influence and analyzes whether the signing of the TPP and CPTPP reshuffled the financial influence of the US, China, and Japan in the Association of Southeast Asian Nations (ASEAN). The study finds that the TPP and CPTPP did boost the financial influence of the US and Japan in some ASEAN countries; however, there is no evidence that they have reduced the financial influence of China in ASEAN.

Automated summary

This study examines whether the signing of TPP and CPTPP reshuffled the financial influence of the US, China, and Japan in ASEAN by using the outward volatility-spillover effect of the equity market as a proxy. The study finds that TPP and CPTPP did enhance the financial influence of the US and Japan in some ASEAN countries, but there is no evidence of them reducing China's financial influence in ASEAN.