Journal Press India®

Does Institutional Integration Lead to Economic Integration? A Lesson from India-China Regional Trade Agreements

Vol 7 , Issue 1 , January - June 2020 | Pages: 102-116 | Research Paper  

Article has been added to the cart.View Cart (0)

Author Details ( * ) denotes Corresponding author

1. * Mayengbam Lalit Singh, Assistant Professor, Department of Economics, Khamanipur College, Manipur University, Kakching, Manipur, India (

Regionalism has become one of the most debated institutional integration. Under the umbrella of GATT article XXIV, many countries across the globe are rushing themselves into the formation of regional economic integration. It is expected that such integration yields greater trade openness and deepening between the countries in agreement. The present paper deals with successive India-China regional trade agreements; formation of BRICS bank and Asian Infrastructure Investment Bank (AIIB) and their impact on bilateral trade openness and deepening. This paper employs sophisticated econometric tools such as Unit root test and Granger causality test in order to check whether institutional integration causes trade integration for these two countries. In order to set up institutional scores, manual generation of institutional scores have been worked out from the gravity of bilateral agreements on trade and other related institutions.


GATT; World Trade Organisation; BRICS; MFN; RTA; Hausman Taylor estimation; Unit root test; Granger causality

  1. Balassa, B. (1961). The theory of economic integration. Homewood, Illinois.
  2. Bhasin, N. & Manocha, R. (2014). Impact of globalisation on India’s exports with special reference to regional trade agreements. FOCUS: Journal of International Business, 1(2), 42-54.
  3. Bhasin, N. & Manocha, R. (2015). Impact of regional trade agreements on India’s agricultural exports. FOCUS: Journal of International Business, 2(2), 83-98.
  4. Dorrucii, E., Firpo, S., Fratzscher, M. & Mongelli, F. P. (2002). European integration: What lessons for other regions? The case of Latin America. ECB Working Paper No. 185.
  5. Dorrucii, E., Firpo, S., Fratzscher, M., & Mongelli, F. P (2004). The link between institutional and economic integration: Insights for Latin America from the European Experience. Open Economies Review, 15(3), 239-260.
  6. Frankel, J. A. & Rose A. K. (1997). Is EMU more justifiable ex-post than ex-ante. European Economic Review, 41, 753-600.
  7. Frankel, J. A. & Rose, A. K (1998). The endogeneity of the optimum currency area criteria. Economic Journal, 108, 1009-1025.
  8. Manocha, R. (2018). Impact of regional trade agreements on India’s trade potential: The case of SAARC and APTA. FOCUS: Journal of International Business, 5(1), 14-36.
  9. Mongelli, F. P. (2002). New views on the optimum currency area theory: What is EMU telling us? ECB Working Paper, 138.
  10. Mongelli, F. P. (2005). What is European economic and monetary union (EMU) telling us about the optimum currency area properties? Journal of Common Market Studies, 43, 607-35.
  11. Mundell, R. A. (1961). A theory of optimal currency areas. American Economic Review, 51, 105-146.
  12. Mundell, R. A. (1973). Uncommon arguments for common currencies. In H. G. Johnson and A. K. Swoboda (Ed.), The Economics of Common Currencies, (pp. 114-312).
  13. Singh, M. L. (2016). Does institutional integration lead to economic integration? A case study on India - ASEAN free trade agreements. FOCUS: Journal of International Business, 2(1), 71-84. 
Abstract Views: 169
PDF Views: 27

By continuing to use this website, you consent to the use of cookies in accordance with our Cookie Policy.