A Study on the Impact of Deglobalization on the Economic Growth of Asia-Pacific Countries: Nonlinear Relationship Analysis using Spatial Panel Regression Model

Abstract

Purpose - The WTO and World Bank have pointed out the phenomenon of deglobalization. Despite this, Asian countries are pursuing closer cooperation with other countries in the region and around the world. Accordingly, this study analyzes the impact of deglobalization on the economic growth of Asia-Pacific countries through non-linear relationships. We use 33 Asia-Pacific nation’s panel data from 1990, when globalization rapidly increased, to 2020, when deglobalization saw progress. Design/Methodology/Approach - We analyze the spatial panel regression model using the AMG (Augmented Mean-Group) estimation method, which controls for cross-sectional dependence between countries in panel data and country-specific slope coefficient heterogeneity in the panel model. Findings - As a result of the estimation, there is an inverted U-shaped relationship between deglobalization and Asia-Pacific economic growth. As deglobalization occurs up to 50.11%, economic growth increases, but as deglobalization continues past 50.11%, economic growth decreases. Research Implications - Countries with less deglobalization must increase economic growth through policies that protect their own industries, and countries whose level of deglobalization exceeds the threshold must open international relations and pursue economic growth through mutual cooperation and economic integration. In the long term, deglobalization threatens Asia's integrated development and sustainable growth, so globalization, free trade, and multilateralism must be maintained.