AEIR 2018

Integration Indicators technical notes



Trade Indicators

Note: Total trade data 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 economies except Bhutan, Cook Islands, Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Timor-Leste, and Tuvalu. The commodity trade data are from the United Nations Commodity Trade Statistics (UN Comtrade) Online Database. They are based on the Harmonized System (HS) 1996 classification. Data availability varies across economies. Download data availability matrix.

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

    Export intensity indexis the ratio of a trading partnerís share to a country/regionís total exports and the share of world exports going to the sametrading partner. It is calculated as:

    where xij is the dollar value of exports of country/region i to country/region j, Xiw is the dollar value of the exports of country/region i to the world, xwj is the dollar value of world exports to country/region j, and Xww 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 trade data. It is computed as:

    where Tii is exports of region i to region i plus imports of region i from region i; Ti is total exports of region i to the world plus total imports of region i from the world; and Tw is total world exports plus imports. 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.
    ( Last update : 31 Oct 2013 )

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

    where Tii is exports of region i to region i plus imports of region i from region i and Ti is total exports of region i to the world plus total imports of region i from the world. A higher share indicates a higher degree of dependency on regional trade. ( Last update : 31 Oct 2013 )

    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 a trading partnerís share to a country/regionís total trade and the share of world trade with the same trading partner. It is calculated as:

    where tij is the dollar value of total trade of country/region i with country/region j, Tiw is the dollar value of the total trade of country/region i with the world, twj is the dollar value of world trade with country/region j, and Tww 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 an economy expressed as a percentage of nominal Gross Domestic Product (GDP) in dollars. A higher value indicates a more open economy.



Foreign Direct Investment Indicators

Notes: FDI flows in the host economy by geographic origin are sourced from United Nations Conference on Trade and Development (UNCTAD) Bilateral FDI Statistics. However, UNCTADís Bilateral FDI Statistics is only available up to 2014. FDI inflows data from national sources, ASEANstats Database from Association of Southeast Asian Nations Secretariat, Eurostat Balance of Payments Database were also used. Total FDI inflows data from world for each country are from UNCTAD World Investment Report Statistical Annex. Inward Direct Investment Position data are from the International Monetary Fund Coordinated Direct Investment Survey (CDIS). Reporter country pertains to the host economy (recipient or destination) of FDI while partner country pertains to the home economy (investor or source) of FDI.

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 economies 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 and 6th edition starting 2014. Please refer also to the UNCTAD website for FDI definitions, sources, methods, and practices.

  • Inward FDI flows are foreign capital reported as balance-of-payments net inflows. Data is available from 2001 for 47 regional members of ADB except for Nauru.

Inward Direct Investment Position refers to the value of outstanding positions by immediate direct investor, broken down by counterpart economy, and between equity and debt instruments. It is a stock data. Direct investment arises when a unit resident in one economy makes an investment that gives control or a significant degree of influence on the management of an enterprise that is resident in another economy. Data in the CDIS are recorded by economy based on the location of the immediate counterpart economy relative to a direct investment position. Please see CDIS Guide for more information. Data is available from 2009.



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. Download data availability matrix.

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

    • Bond market rate correlation is a pair-wise measure of co-movement in the bond markets. Rates are available for 13 economies 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 economies. The smaller the difference, the more integrated the financial markets are in the two economies.

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

    • Lending market rate correlation is a pair-wise measure of co-movement in the lending markets. Rates are available for 11 economies 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 economies. 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; the Peopleís Republic of China; Hong Kong, China; India; Indonesia; Japan; Kazakhstan; the Republic of Korea; Malaysia; New Zealand; Pakistan; the Philippines; Singapore; Sri Lanka; Taipei,China; and Thailand.

    • Money market rate correlation is a pair-wise measure of co-movement in the money markets. Rates are available for 16 economies 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 economies. 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; the Peopleís Republic of China; Hong Kong, China; India; Indonesia; Japan; the Republic of Korea; Malaysia; New Zealand; Pakistan; the Philippines; Singapore; Sri Lanka; Taipei,China; and Thailand.

    • Stock market returns correlation is a pair-wise measure of co-movement in the stock markets. Stock price indices are available for 16 economies 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, East Asia,Asia, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, SAARC, and Southeast Asia. See list for Integration Indicators groupings

      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, East Asia,Asia, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, SAARC, and Southeast Asia. See list for Integration Indicators groupings

      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, East Asia,Asia, ASEAN, ASEAN+3, Emerging East Asia-14, East Asia-15, SAARC, and Southeast Asia. See list for Integration Indicators groupings

    Portfolio Investment Assets
    Portfolio investment assets data are sourced from the International Monetary Fund Coordinated Portfolio Investment Survey (CPIS). The survey covers 71 participants including 14 ADB regional member economies, namely Australia, Hong Kong, India, Indonesia, Japan, Kazakhstan, Republic of Korea, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Thailand, and Vanuatu.

    • Total portfolio investment assets are the holdings of portfolio securities issued by non-residents reported by economies 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 economies 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 an economy, as reported in the Bank for International Settlements Statistics. It is a measure of the degree of financial openness of an economy. A higher amount of financing tapped from the international markets is indicative of greater financial openness.