Abstract:

This study aims to investigate if developing Asian economies are able to converge to trade and financial openness levels based on selected regions of Asia; East Asia Pacific and South Asia. The results of the study offer no support to the hypothesis that all countries converge to a single equilibrium state in trade and financial liberalization. Nevertheless, the findings show the existence of club convergence among countries. The results imply that although the integration process is actively geared in Asian, the question of the countries’ suitability for the Free Trade Agreement such as AEC (Asian Economic Community) and South Asian Free Trade Area (SAFTA) is still a debatable issue.