ABSTRACT
In recent decades, southeast asian countries are moving toward a more integrated regional economy. The wide development gap and asymmetric impacts among countries highlight the importance of studying integration effects for individual member states. However, the reality of limited data among these countries and multilevel data structure cause severe problems for conventional estimation methods. In this research, we demonstrate three types of hierarchical bayesian models to analyze the impacts of economic integration and the intermediate effects of domestic infrastructures. The best results from the non-centered parameterization model verify previous research showing “the rich get richer and the poor get poorer” during the integration process. More advanced economies in the region benefit from more connected trade relationships and the inflow of migrant workers. In contrast, less developed countries suffer from the outflow of capitals and brain drain. However, we also find promising evidence that governments can improve living standards through developing information communication technology infrastructures, which can facilitate additional positive contribution toward living standards during the process of integration.
