Highlights
A snapshot of ARCII results
Regional cooperation and integration is a multifaceted and multidimensional process in which neighboring economies expand linkages and coordinate policies to attain common objectives. As channels of regional cooperation and integration evolve, the framework of the Asia-Pacific Regional Cooperation and Integration Index (ARCII) was reviewed and strengthened. New dimensions and indicators were added to the ARCII framework to better capture underlying dynamics in regional integration.
Excerpt from Asia-Pacific Regional Cooperation and Integration Index: Enhanced Framework, Analysis, and Applications. Access the full report here.
Overall ARCII and Dimensional Indexes—Asia and the Pacific
Distribution of ARCII by income group - World, 2018
Indicator Contribution to the Overall ARCII Estimate—Asia and the Pacific, 2018
Dimensional Contribution to the ARCII in Asia and the Pacific
Spatial Distribution of the ARCII in Asia and the Pacific, 2018
Dimensions and Indicators in the Enhanced ARCII Framework
ARCII = Asia-Pacific Regional Cooperation and Integration Index.
Notes: Worldwide normalization is used for all estimations, where the indicators are normalized using global maximum and minimum values across all regions. Higher values denote greater regional integration.
Source: ADB. Asia-Pacific Regional Cooperation and Integration Index Database. https://aric.adb.org/database/arcii (accessed May 2021).
- The gradual uptrend in the enhanced ARCII results show that regional integration trends in Asia remain positive, with a moderate 7% increase in the index from 2006 to 2018.
- The rise is explained by progress in trade and investment, better infrastructure, and stronger digital connectivity within the region.
- ARCII results increase with income per capita, suggesting a possible link between regional integration and economic development.
- High-income countries report considerably higher ARCII estimates, with an average close to 0.6 against 0.4 for other income groups.
ARCII = Asia-Pacific Regional Cooperation and Integration Index.
Note: Higher values denote greater regional integration. Worldwide normalization is used for all estimations, where the indicators are normalized using global maximum and minimum values across all regions.
Source: Asian Development Bank. Asia-Pacific Regional Cooperation and Integration Index Database. https://aric.adb.org/database/arcii (accessed May 2021).
ARCII = Asia-Pacific Regional Cooperation and Integration Index, BIT = bilateral investment treaty, DTT = double taxation treaty, FDI = foreign direct investment, FTA = free trade agreement, ICT = information and communication technology, IEA = international environmental agreement, LSBCI = Liner Shipping Bilateral Connectivity Index.
Notes: The contribution of indicators to dimensional indexes is calculated for each region as the product of indicator’s weight and indicator normalized value. The contribution of dimensional index to overall ARCII estimate is calculated as the product of dimension’s weight and dimension’s normalized values.
Source: Asian Development Bank.
- An important feature of the ARCII approach is that the relative contribution of the dimensions and indicators that form the framework is determined by a principal component analysis (PCA).
- This approach uses the data structure and extracts maximum common information from individual indicators, shedding light on the driving factors explaining trends in dimensional and overall level of regional integration.
ARCII = Asia-Pacific Regional Cooperation and Integration Index.
Note: Dimensional contribution is computed as the weight of the dimension multiplied by the dimensional index.
Source: Asian Development Bank. Asia-Pacific Regional Cooperation and Integration Index Database. https://aric.adb.org/database/arcii (accessed May 2021).
- Regional value chain, infrastructure and connectivity, and people and social integration dimensions continue to sustain regional integration in Asia, as seen in their high contributions to the overall ARCII estimate.
- Money and finance integration remains the weakest aspect of regional integration in Asia, having the lowest weight and contribution among the dimensions.
| Dimension | Indicator | Source of Raw Data | Raw Data Availability | Numerator | Denominator | Imputation method | |
| I. Trade and Investment Integration (5) | I-a | Proportion of intraregional goods exports to total goods exports | Direction of Trade, International Monetary Fund (IMF) | 2000-2019 | intraregional goods exports | Total goods exports | N/A |
| I-b | Proportion of intraregional goods imports to total goods imports | Direction of Trade, IMF | 2000-2019 | intraregional goods imports | Total goods imports | N/A | |
| I-c | intraregional trade intensity index | Direction of Trade, IMF | 2000-2019 | Share of the country's intraregional trade to its total trade | Share of the region's total trade to world trade | N/A | |
| I-d | Proportion of intraregional foreign direct investment (FDI) inflows to total FDI inflows | Greenfield FDI: FDI Markets, Mergers and acquisitions (M&A) FDI: Zephyr | 2003-2018 | intraregional FDI inflows | Total FDI inflows | N/A | |
| I-e | Proportion of intraregional FDI inflows plus outflows to total FDI inflows plus outflows | Greenfield FDI: FDI Markets, Mergers and acquisitions (M&A) FDI: Zephyr | 2003-2018 | intraregional FDI inflows plus outflows | Total FDI inflows and outflows | N/A | |
| II. Money and Finance Integration (5) | II-a | Proportion of intraregional cross-border equity liabilities to total cross-border equity liabilities | Coordinated Portfolio Investment Survey, IMF | 2001-2018 | intraregional cross-border equity liabilities | Total cross-border equity liabilities | N/A |
| II-b | Proportion of intraregional cross-border bond liabilities to total cross-border bond liabilities | Coordinated Portfolio Investment Survey, IMF | 2006-2018 | intraregional cross-border bond liabilities | Total cross-border bond liabilities | N/A | |
| II-c | Pair-wise dispersion of deposit rates averaged regionally relative to that averaged globally | ADB using various sources | 2006-2019 | Average intraregional pair-wise dispersion of deposit rates | Average pair-wise dispersion of deposit rates | N/A | |
| II-d* | Capital account openness: Chinn-Ito Index (de jure) | http://web.pdx.edu/~ito/chinn-ito_website.htm | 1970-2018 | Chinn-Ito Index | N/A (Denominator = 1) | N/A | |
| II-e | Correlations of exchange rates vis-Ã -vis US dollar averaged regionally minus those averaged globally | ADB using various sources | 2006 - 2019 | Pairwise correlations for monthly exchange rate with respect to the US dollar exchange rate of all other Asia-Pacific countries | Pairwise correlations for monthly exchange rate with respect to the US dollar exchange rate of all other countries | N/A | |
| III. Regional Value Chain (5) | III-a | Ratio between the averaged trade complementarity index over regional trading partners and the averaged trade complementarity index over all trading partners | United Nations Conference on Trade and Development (UNCTAD); UNComtrade | 2006 - 2019 | Average trade complementarity index over regional trading partners | Average trade complementarity index over all trading partners | N/A |
| III-b | Ratio between the averaged trade concentration index over regional trading partners and the averaged trade concentration index over all trading partners | United Nations Conference on Trade and Development (UNCTAD); UNComtrade | 2006 - 2019 | Average trade concentration index over regional trading partners | Average trade concentration index over all trading partners | N/A | |
| III-c | Proportion of intraregional intermediate goods exports to total intraregional goods exports | UNComtrade | 2000-2018 | Total intraregional intermediate goods exports | Total intraregional goods exports | N/A | |
| III-d | Proportion of intraregional intermediate goods imports to total intraregional goods imports | UNComtrade | 2000-2018 | Total intraregional intermediate goods imports | Total intraregional goods imports | N/A | |
| III-e | Ratio between the sum of the value-added contributed by regional trading partners and that contributed by all trading partners | UNCTAD-EORA or ADB-MRIO | 2006-2018 | Sum of the value-added contributed by regional trading partners | Sum of the value-added contributed by all trading partners | N/A | |
| IV. Infrastructure and Connectivity (5) | IV-a | Ratio between the averaged trade cost over regional trading partners and the averaged trade cost over all trading partners | World Bank/UNESCAP | 2000-2018 | Average trade cost over regional trading partners | Average trade cost over all trading partners | N/A |
| IV-b | Ratio between the averaged liner shipping connectivity index over regional trading partners and the averaged liner shipping connectivity index over all trading partners | UNCTAD | 2006, 2008-2018 | Average liner shipping connectivity index over regional trading partners | Average liner shipping connectivity index over all trading partners | Set values for 2007 to equal to the average of 2006 and 2008. | |
| IV-c | Proportion of passenger seats sold on regional flights relative to those sold on all international flights | ICAO | 1995-2018 | Number of passenger seats sold on regional flights | Number of passenger seats sold on all international flights | N/A | |
| IV-d* | Logistics Performance index (overall) | World Bank | 2007, 2010, 2012, 2014, 2016, 2018 | Logistics performance index (overall) | N/A (Denominator = 1) | Set values for 2006 to equal to 2007. For other missing years, set values equal to average of previous year and following year. | |
| IV-e* | Doing Business Index (overall) | World Bank | 2009-2018 | Doing Business Index (overall) | N/A (Denominator = 1) | Set values for 2006-2008 equal to 2009. | |
| V. People and Social Integration (6) | V-a | Proportion of intraregional outbound migration to total outbound migration | United Nations Population Division | 2000, 2005, 2010, 2015, 2019 | intraregional outbound migration | Total outbound migration | Linear interpolation |
| V-b | Ratio of intraregional tourists to total tourists (inbound plus outbound) | World Trade Organization (WTO) | 2000-2018 | intraregional tourists (inbound plus outbound) | Total tourists (inbound plus outbound) | N/A | |
| V-c | Ratio of intraregional remittances to total remittances | World Bank | 2006-2018 | intraregional outward remittances | Total outward remittances | N/A | |
| V-d | Cultural proximity with other countries in the region relative to that with all other countries | Centre d’Etudes Prospectives et d’Informations Internationales (CEPII) | 2000-2018 | Average sum of cultural indicators (dummies) across all partner countries in the region | Average sum of cultural indicators (dummies) across all partner countries | Variable is time invariant. Same values across all years for each country. | |
| V-e | Ratio of intraregional cultural goods trade (exports plus imports) to total cultural goods trade | UNCTAD, UNComtrade | 2006-2018 | intraregional cultural goods trade | Total cultural goods trade | N/A | |
| V-f | Ratio of trademark applications made with intraregional residents to trademark applications made with all foreign residents | World Intellectual Property Organization, WDI | 1980-2018 | intraregional trademark applications | Total trademark applications | N/A | |
| VI. Institutional Arrangements (5) | VI-a | Proportion of intraregional countries that have signed free trade agreements with | Design of Trade Agreements (DESTA) | 2000-2018 | Number of partner countries in the region that have signed free trade agreements | Number of countries in the region | N/A |
| VI-b | Proportion of intraregional countries that have signed bilateral investment treaties with | UNCTAD, DESTA | 2000-2018 | Number of partner countries in the region that have signed business investment treaties | Number of countries in the region | N/A | |
| VI-c | Proportion of intraregional countries that have signed double taxation treaties with | UNCTAD | 2000-2018 | Number of partner countries in the region that have signed double taxation treaties | Number of countries in the region | N/A | |
| VI-d | Number of international inter-government organizations in which a country is a member | CIA World Factbook | 2000-2018 | Number of international inter-government organizations in which a country is a member | N/A (Denominator = 1) | N/A | |
| VI-e | Proportion of intraregional countries that have an embassy | Europa World Yearbook | 2006, 2010, 2016 | Number of partner countries in the region that have an embassy | Number of countries in the region | Set values for 2007 - 2005 to equal to 2010. For 2017 to 2018, set values equal to 2016. | |
| VII. Technology and Digital Connectivity (6) | VII-a | Proportion of intraregional ICT goods trade (exports plus imports) to total ICT goods trade | UNCTAD, UNComtrade | 2006-2018 | intraregional ICT goods trade | Total ICT goods trade | N/A |
| VII-b | Proportion of research outputs with intraregional collaborators relative to research outputs with all international collaborators | Web of Science (https://clarivate.com) | 2006-2018 | Number of research outputs with intraregional collaborators | Number of research outputs with all international collaborators | N/A | |
| VII-c | Proportion of patent applications made with intraregional residents to patent applications made with all foreign residents | World Intellectual Property Organization, WDI | 1980-2018 | intraregional patent applications | Total patent applications | N/A | |
| VII-d* | Proportion of persons using the internet | International Telecommunication Union | 2000-2018 | Internet penetration rate | N/A (Denominator = 1) | N/A | |
| VII-e* | Proportion of mobile subscriptions per 100 persons | International Telecommunication Union | 2000-2018 | Mobile subscriptions per 100 persons | N/A (Denominator = 1) | N/A | |
| VII-f* | International Internet Band | ITU/TeleGeography(https://www.telegeography.com) | 2005-2019 | intraregional internet bandwidth traffic | Total international internet bandwidth traffic | N/A | |
| VIII. Environmental Cooperation (4) | VIII-a | Proportion of intraregional environmental goods trade (exports plus imports) to total intraregional goods trade | UNCTAD, UNComtrade | 2006-2018 | intraregional environmental goods trade | Total environmental goods trade | N/A |
| VIII-b* | Number of international environmental agreements ratified | CIA World Factbook | 2006-2018 | Number of international environmental agreements ratified | N/A (Denominator = 1) | N/A | |
| VIII-c* | Environmental health score | Environmental Performance Index at http://epi.yale.edu | 2006-2018 | Environmental health score | N/A (Denominator = 1) | N/A | |
| VIII-d* | Ecological footprint of production as a share of biocapacity | Global Footprint Network | 1961-2016 | Ecological footprint of production | Biocapacity | Autoregressive process AR(1) |
ARCII = Asia-Pacific Regional Cooperation and Integration Index, ICAO = International Civil Aviation Organization, UNCTAD = United Nations Conference on Trade and Development, UNESCAP = United Nations Economic and Social Commission for Asia and the Pacific, UN Comtrade = United Nations Commodity Trade Statistics Database, US = United States, WDI = World Development Indicators.
Notes: Highlighted rows in green indicate new indicators and dimensions included in the enhanced ARCII framework. Indicators marked with an asterisk are national-level indicators.
Source: Asian Development Bank.