Technical Notes

Trade Indicators

Note: Total trade data (1990-2008) are sourced from the International Monetary Fund Direction of Trade Statistics (DOTS), except data for Taipei,China which are sourced from the CEIC Data. Total trade data are available for ADB regional member countries except Bhutan, Cook Islands, Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Timor-Leste, and Tuvalu. The commodity trade data (1997-2007) are from the United Nations Commodity Trade Statistics (UN Comtrade) Online Database downloaded in May 2009. They are based on the Harmonized System (HS) 1996 classification. Data availability varies across countries. Download data availability matrix.

Export growth is the percentage change in the value of exports relative to the previous year.

Export intensity index is the ratio of export share of a country/region to the share of world exports going to a partner. It is calculated as:



where x_ij is the dollar value of exports of country/region i to country/region j, X_iw is the dollar value of the exports of country/region i to the world, x_wj is the dollar value of world exports to country/region j, and X_ww is the dollar value of world exports. An index of more than one indicates that trade flow between countries/regions is larger than expected given their importance in world trade.

Export share is the percentage of exports going to a partner to total exports of a country/region. It is computed as the dollar value of exports of country/region i to country/region j expressed as a percentage share of the dollar value of exports of country/region i to the world. A higher share indicates a higher degree of integration between partner countries/regions.

Import growth is the percentage change in the value of imports relative to the previous year.

Import share is the percentage of imports from a partner to total imports of a country/region. It is computed as dollar value of imports of country/region i from country/region j expressed as a percentage share of the dollar value of imports of country/region i from the world. A higher share indicates a higher degree of integration between partner countries/regions.

Intra-regional trade intensity index is the ratio of intra-regional trade share to the share of world trade with the region, calculated using exports data. It is computed as:



where X_ii is exports of region i to region i; X_iw is exports of region i to the world, X_wi is exports of world to region i, and X_ww is total world exports. It determines whether trade within the region is greater or smaller than should be expected on the basis of the region's importance in world trade. An index of more than one indicates that trade flow within the region is larger than expected given the importance of the region in world trade.

Intra-regional trade share is the percentage of intra-regional trade to total trade of the region, calculated using exports data. It is calculated as:



where X_ii is exports of region i to region i; X_iw is exports of region i to the world, and X_wi is exports of world to region i. A higher share indicates a higher degree of dependency on regional trade.

Total trade is the sum of the value of exports and imports.

Trade growth is the percentage change in the value of total trade relative to the previous year.

Trade intensity index is the ratio of trade share of a country/region to the share of world trade with a partner. It is calculated as:



where t_ij is the dollar value of total trade of country/region i with country/region j, T_iw is the dollar value of the total trade of country/region i with the world, t_wj is the dollar value of world trade with country/region j, and T_ww is the dollar value of world trade. An index of more than one indicates that trade flow between countries/regions is larger than expected given their importance in world trade.

Trade share is the percentage of trade with a partner to total trade of a country/region. It is computed as the dollar value of total trade of country/region i with country/region j expressed as a percentage share of the dollar value of total trade of country/region i with the world. A higher share indicates a higher degree of integration between partner countries/regions.

Trade openness is measured by total trade of a country expressed as a percentage of nominal Gross Domestic Product (GDP) in dollars. A higher value indicates a more open economy.

Foreign Direct Investment Indicators

Note: FDI flows in the host economy by geographic origin are sourced from United Nations Conference on Trade and Development (UNCTAD). FDI outflows by destination are derived from the reported inflows. FDI inward stocks expressed as a percentage of GDP, as well as cross-border mergers and acquisition (M&A) sales and purchases are sourced from UNCTAD’s FDI Online database.

Foreign direct investment (FDI) refers to the category of international investment that reflects the objective of a resident entity in one economy obtaining a lasting interest in an enterprise resident in another economy. A 10 percent ownership of control qualifies as direct investment. Some countries may allow for subjective qualifications, but most foreign direct investment enterprises are branches or subsidiaries that are wholly or majority owned by the nonresident, and borderline cases are likely to be few. Components of direct investment capital transactions are recorded primarily on a directional basis (i.e., resident investment abroad, nonresident investment in the recording economy). Subcomponents of direct investment are equity capital, reinvested earnings, and other capital related to intercompany debt. FDI flows with a negative sign indicate that at least one of the three subcomponents is negative and not offset by positive amounts of the remaining components. These are instances of reverse investment or disinvestment. Inward FDI stock in the reporting economy is the value of capital and reserves (including retained profits) attributable to a parent enterprise resident in a different economy, plus the net indebtedness of affiliates to the parent enterprise. In concept, market price is the basis for the valuation of flows and stocks, but in practice, book value or historical cost is used, reflecting prices at the time when the investment was made. The standard for reporting FDI is the Balance of Payments (BOP) Manual 5th edition. Please refer also to the UNCTAD website for FDI definitions, sources, methods, and practices.

Foreign direct investment (FDI) inflows are foreign capital reported as balance-of-payments net inflows. Data is available from 1990 for 23 regional member countries, namely Armenia, Australia, Azerbaijan, Bangladesh, Cambodia, People’s Republic of China, Fiji Islands, Georgia, Hong Kong, India, Japan, Kazakhstan, Republic of Korea, Kyrgyz Republic, Lao PDR, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Thailand, Vanuatu. A higher volume of FDI indicates higher capital mobility and integration in the region.

Foreign direct investment (FDI) share is the percentage of regional FDI inflows to total FDI from the investing region. Data is available from 1990 at the earliest for 23 regional member countries, namely Armenia, Australia, Azerbaijan, Bangladesh, Cambodia, People’s Republic of China, Fiji Islands, Georgia, Hong Kong, India, Japan, Kazakhstan, Republic of Korea, Kyrgyz Republic, Lao PDR, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Thailand, Vanuatu. It is calculated as the dollar value of FDI of country/region i to country/region j expressed as a percentage share of the dollar value of FDI of country/region i to the world. A higher share indicates a stronger preference for the region and a higher degree of integration.

Cumulative foreign direct investment (FDI) inflows are the inclusive sum of foreign capital reported as balance-of-payments net inflows beginning 1990. Data is available for 23 regional member countries. A higher volume of FDI indicates higher capital mobility and integration in the region.

Cumulative foreign direct investment (FDI) share is the percentage of regional FDI inflows to total FDI from the investing region beginning 1990. Data is available for 23 regional member countries. It is calculated as the dollar value of cumulative FDI of country/region i to country/region j expressed as a percentage share of the dollar value of cumulative FDI of country/region i to the world. A higher share indicates a stronger preference for the region and a higher degree of integration.

Cross-border mergers and acquisitions (M&A) purchases are the value of deals involving the acquisition of a foreign company by a local company. A higher value indicates a higher degree of openness.

Cross-border mergers and acquisitions (M&A) sales are the value of deals involving the acquisition of a local company by a foreign company. A higher value indicates a higher degree of openness.

FDI openness is measured by the dollar value of inward FDI stock of a country expressed as a percentage of its nominal GDP in dollars. A higher value indicates a more open economy.

Money and Finance Indicators

Note: Annual rates are computed as the average of daily rates. Data for bond, lending and money market rates; and stock market returns are sourced from Bloomberg.

Bond Market Rates
Bond market rates are yields for domestic 10-year sovereign bonds. Data are available for Australia, Hong Kong, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Taipei,China, and Thailand.

Bond market rate correlation is a pair-wise measure of co-movement in the bond markets from 2000 to 2008. Rates are available for 13 countries and the correlations are given as single data points for each year. A higher correlation indicates a higher degree of integration in the markets.

Bond market rate differential is the difference in the bond market rates between two countries. The smaller the difference, the more integrated the financial markets are in the two countries.

Lending Market Rates
Lending market rates are prime rates or equivalent short-term corporate lending rates. Data are available for People’s Republic of China, Hong Kong, India, Indonesia, Japan, Republic of Korea, Malaysia, Philippines, Singapore, Taipei,China, and Thailand.

Lending market rate correlation is a pair-wise measure of co-movement in the lending markets from 2000 to 2008. Rates are available for 11 countries and the correlations are given as single data points each year. A higher correlation indicates a higher degree of integration in the markets.

Lending market rate differential is a pair-wise measure of convergence. It is the difference between the rates in two lending markets. Rates are available for 11 countries from 2000 to 2008. A lower differential indicates a higher degree of convergence.

Money Market Rates
Money market rates are three-month interbank offer rates or equivalent money market rates. Data are available for Australia, People’s Republic of China, Hong Kong, India, Indonesia, Japan, Kazakhstan, Republic of Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taipei,China, and Thailand.

Money market rate correlation is a pair-wise measure of co-movement in the money markets from 2000 to 2008. Rates are available for 16 countries and the correlations are given as single data points for each year. A higher correlation indicates a higher degree of integration in the markets.

Money market rate differential is a pair-wise measure of convergence. It is the difference between the rates in two money markets. Rates are available for 16 countries from 2000 to 2008. A lower differential indicates a higher degree of convergence.

Stock Market Returns
Stock market returns are computed as year-on-year percent change of daily stock price indices. Data are available for Australia, Bangladesh, People’s Republic of China, Hong Kong, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taipei,China, and Thailand.

Stock market returns correlation is a pair-wise measure of co-movement in the stock markets from 2001 to 2008. Stock price indices are available for 16 countries and the correlations are given as single data points each year. Please see sources for stock market returns. A higher correlation indicates a higher degree of integration in the markets.

Coefficient of Variation
Coefficient of variation is a measure of dispersion calculated as the standard deviation normalized by the mean. The formula for standard deviation is:



where x is the observation, x is the mean or average, and n is the number of observations.

Coefficient of variation of bond market rates measures the dispersion of bond market rates as the standard deviation divided by the mean. A lower coefficient indicates a higher degree of convergence of rates in the markets. It is calculated for NIEs-4 and East Asia for 2000 to 2008, and for Asia, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, SAARC, and Southeast Asia from 2003 to 2008, but only Indonesia, Malaysia, Singapore, Philippines and Thailand have available data. Values exist only where reporting and partner country groupings are the same.

Coefficient of variation of lending market rates measures the dispersion of lending market rates calculated as the standard deviation divided by the mean. A lower coefficient indicates a higher degree of convergence of rates in the regions’ markets. It is calculated for NIEs-4, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, East Asia, Southeast Asia and Asia from 2000 to 2008, but of the ASEAN/Southeast Asian countries only Indonesia, Malaysia, Singapore, Philippines and Thailand have available data. Values exist only where reporting and partner country groupings are the same.

Coefficient of variation of money market rates measures the dispersion of money market rates calculated as the standard deviation divided by the mean. A lower coefficient indicates a higher degree of convergence of rates in the regions’ markets. It is calculated for NIEs-4 and East Asia for 2000 to 2008, and for Asia, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, East Asia, SAARC and Southeast Asia from 2002 to 2008, but of the ASEAN/Southeast Asian countries only Indonesia, Malaysia, Singapore, Philippines and Thailand have available data. Asia for this indicator is represented by 16 countries for which data are available. Values exist only where reporting and partner country groupings are the same.

Portfolio Investment Assets
Portfolio investment assets data (2001 to 2006) are sourced from the International Monetary Fund Coordinated Portfolio Investment Survey (CPIS). The survey covers 71 participants including 13 ADB regional member countries, namely Australia, Hong Kong, Indonesia, Japan, Kazakhstan, Republic of Korea, Malaysia, New Zealand, Pakistan, Singapore, Thailand, and Vanuatu.

Total portfolio investment assets are the holdings of portfolio securities issued by non-residents reported by countries participating in the IMF Coordinated Portfolio Investment Survey. A higher volume of regional portfolio investment indicates greater financial accessibility and integration in the region.

Portfolio share is the percentage of intra-regional portfolio assets to total portfolio assets held by countries in the region. A higher share indicates a higher degree of integration.

Portfolio investment assets: equity securities cover instruments that give the holder ownership claim on the residual value of enterprises. A higher volume of regional portfolio investment indicates greater financial accessibility and integration in the region.

Portfolio investment assets: debt securities cover instruments that give the holder the right to a fixed money income. A higher volume of regional portfolio investment indicates greater financial accessibility and integration in the region.

Portfolio investment assets: long-term debt securities cover instruments such as bonds, debentures, and notes that give the holder the right to a fixed money income and have an original term to maturity of more than one year. A higher volume of regional portfolio investment indicates greater financial accessibility and integration in the region.

Portfolio investment assets: short-term debt securities cover instruments that give the holder the right to a fixed sum of money on a specified date and have an original term to maturity of one year or less. A higher volume of regional portfolio investment indicates greater financial accessibility and integration in the region.

International Debt Securities
International debt securities outstanding by residence of issuer are sourced from the Bank for International Settlements (BIS) Securities Statistics. Data obtained are for December of each year.

International debt securities by residence of issuer are the amounts of outstanding debt securities in dollars issued internationally by residents of a country, as reported in the Bank for International Settlements Statistics. It is a measure of the degree of financial openness of a country. A higher amount of financing tapped from the international markets is indicative of greater financial openness.