The Role of Economic Diplomacy in the System of Modern International Economic Relations

Thomas Nübling,Viktoriia V Kukharyk

doi:10.52566/msu-econ.8(2).2021.35-44

Abstract

The modern globalised world is characterised by economic independence, which is a component that measures the level of relations between countries, the content, direction and intensity of which has begun to be influenced by economic dependence. In other words, economic relations have become central to diplomatic activity, which determines the relevance of the subject matter. The purpose of this study is to determine the role of economic diplomacy in the system of modern international economic relations, to compare the theoretical model of economic diplomacy and the practice of its implementation. This paper uses the following methods: scientific abstraction; monographic, dialectical, historicallogical; structural-logical; abstract-logical; methods of regression analysis; synthesis; problem-oriented method; statistical and graphic methods. The author used a Scatter plot model and performed a regression analysis to determine which free trade area (Ukraine-EU, Ukraine-Canada, or Ukraine-Israel) affects Ukraine's GDP growth. The study model confirms the positive relationship between Ukraine's GDP growth and the growth of foreign trade turnover (FTT) between Ukraine and the EU. The linear model explains that a 1% increase in FTT affects an average 5% increase in Ukraine's GDP. At the same time, the regression model shows the opposite trend in terms of FTT between Ukraine and Canada, Ukraine and Israel. Thus, the dynamics of Ukraine's FTT with these countries does not have a significant impact on GDP. Only the growth of FTT between Ukraine and the EU indicates the effectiveness of bilateral cooperation. The practical significance of the results obtained lies in the fact that the theoretical foundations, conclusions, and recommendations obtained and formulated by the author can serve as a basis for further study of issues of economic diplomacy and for the development of such a concept of economic diplomacy, which should take into account the positions of stakeholders to balance the interests of ensuring the national economic security of the state

Highlights

The international environment is constantly changing, it is not static, but has a dynamic character, so it offers significant opportunities and creates problems for conducting economic diplomacy
The practical significance of the results obtained lies in the fact that the theoretical foundations, conclusions, and recommendations obtained and formulated by the author can serve as a basis for further study of issues of economic diplomacy and for the development of such a concept of economic diplomacy, which should take into account the positions of stakeholders to balance the interests of ensuring the national economic security of the state
Economic diplomacy occupies a proper place in the system of international economic relations, since it performs specific functions that are unique to it

Summary

Introduction

The international environment is constantly changing, it is not static, but has a dynamic character, so it offers significant opportunities and creates problems for conducting economic diplomacy. There is a growing number of international organisations and forums to meet growing economic needs Another trend is that contradictions between economic superpowers are growing more and more, and the international economic order requires reforms, so there is an obvious need for a new global order. The role of the economy will continue to strengthen due to the dynamics and trends of international relations, and at the same time difficulties in using economic instruments would increase. With this in mind, states should develop appropriate strategies for implementing economic diplomacy to maintain their relevance in the dynamic international arena

Objectives

Methods

Results

Conclusion