Unlocking Somalia’s food production: the role of trade openness, poverty, and institutional quality

This study examines the relationship between foreign direct investment (FDI) inflow, trade openness, and the influence of FDI on economic growth. The threshold methodology and GMM estimation are employed to analyze panel data from 60 developing countries in the period between 1995 and 2019. This study demonstrates the positive impact of FDI on economic growth in developing countries. However, the study also finds a significant threshold of FDI inflow relative to GDP that changes the impact of inward FDI on GDP growth. Regarding the role of trade openness, a significant threshold is found, which also indicates the absorptive capacity of the host countries. Moving from below to above this threshold, an increase in FDI inflow leads to a lower increase in economic growth. An increase in FDI relative to GDP stimulates growth only when the host country has sufficient absorptive capacity with regard to trade openness above the threshold. We suggest developing countries tighten the coherence of trade liberalization and FDI attraction policies to obtain the benefits of FDI and make changes to attract new investors when they succeed in attracting massive FDI inflows.

PurposeThis paper empirically investigates whether trade openness (TO) in Brazil, Russia, India, China and South Africa (BRICS) countries affects how banks might employ loan loss provisions (LLPs) to smooth out their earnings and how adopting the International Financial Reporting Standards (IFRS) can mitigate it.Design/methodology/approachThe analysis includes 78 commercial banks from five BRICS nations and spans 2014 through 2020. To test these hypotheses, the authors utilized a fixed-effect and two-step system panel generalized methods of moments (GMM) estimator.FindingsTO positively affects income smoothing (earnings management) across BRICS commercial banks. The effect is clearer in banks that make financial reports under the IFRS. Path analysis reveals that the effect of TO is driven by nonperforming loans (NPLs). Additionally, the IFRS restricts earnings management in the BRICS banking sector when a better institutional environment is present. The authors found that accounting rules (IFRS) and enforcement (better institutional settings) interact to enhance earnings’ quality.Practical implicationsThe relationship between TO and bank earnings management practices is important for understanding the complex interplay between trade and finance and ensuring financial stability, investor confidence and regulatory compliance. This study recommends better regulations and governance mechanisms for financial reports in emerging nations like BRICS. Additionally, macro-prudential regulators and banking supervisors should work closely to ensure transparent TO decisions with improved discipline, institutional quality and regulatory support to enhance bank stability.Originality/valueThe study finds evidence of bank income smoothing in the BRICS and introduces TO as a determinant. It also identifies the evolving role of IFRS in the presence of higher institutional quality and TO, thereby expanding the financial reporting literature.

The present study attempts to examine the link between trade openness and sustainable human development (SHD) in 19 emerging economies. The study used the data for the period from 1996 to 2019. The study employed fixed-effect regression with Driscoll-Kraay standard error techniques robust to cross-section dependence. The study found the favorable impact of trade openness on sustainable development through sustainable human development. Trade openness affects sustainable human growth in many ways. It is a critical component that should not be ignored in sustainable development policies. Moreover, foreign direct investment, economic growth, and renewable energy consumption positively impact the sustainable human development. In contrast, innovations and institutional quality have an adverse impact on SHD. The study also provides policy suggestions for the emerging economies that will promote all the dimensions of sustainable development: economic, social, and environmental.

Pricing behavior and the role of trade openness in the transmission of monetary shocks

Within-country inequality is on the rise in many Asian countries despite rapid educational expansion, poverty reduction and export-driven macroeconomic growth.This trend raises questions about the role and effectiveness of governments in redistributing income and wealth.Therefore, our study re-examines the effects of trade openness and educational attainment on income inequality while additionally investigating the role of governance on several dimensions.The study is conducted on nineteen Asian economies for the period 1990-2019.Methodologically, we follow Generalised Methods of Moments using dynamic panel procedures to improve previous efforts to examine the trade-inequality relationship.We hypothesize that good institutions can generate better distributional outcomes in terms of foreign trade and educational attainment.To test this, aggregate measures of institutions on five dimensions of governancegovernment stability, corruption, law and order, democratic accountability, and bureaucratic quality are incorporated into the empirical model.Our empirical results reveal that controlling for the country's income level, increasing trade openness and overall improvements in institutional quality contribute to reducing income inequality in the Asia-Pacific region.However, educational attainment has an inequality-widening effect during our period of study.We conclude by discussing other possible explanations for rising inequality in the region, and in that context, the role of public policy in ensuring equitable distributions.

Food insecurity poses a serious and ongoing threat to many developing countries, where rapid population growth has reshaped the landscape of food production and distribution. This study examines the non-linear analysis of urban and rural populations on food security. Besides these effects, it also explores the key determinants of food security, with a special focus on the role of trade openness, foreign direct investment, education, and institutional quality dynamics. The empirical results are estimated using the Panel Quantile Regression approach of 47 developing countries from 2002 to 2023. This approach reveals an inverted U-shaped relationship between both urban and rural populations on food security. The linearized marginal effect shows that the urban population is more vulnerable to food security compared to the rural population in developing countries. Moreover, education enhances food security, while foreign direct investment and trade openness cause food insecurity in developing countries. This study recommends that developing countries should promote sustainable urban development and strengthen rural agriculture systems.

Exchange rate regimes and fiscal discipline: The role of trade openness

External demand is considered to be one of the channels of transmission of monetary policy to aggregate demand. If external demand matters in the monetary transmission, then the response of output to monetary shocks must be more pronounced in the sectors that are more open to trade and exposed to foreign competition. However, the empirical evidence is not conclusive. Using a New Keynesian open economy model, I show that the role of trade openness in the transmission of monetary shocks can be reversed completely by the degree of exchange-rate pass-through into import prices. If the pass-through is complete, traded output increases more than nontraded output after a positive monetary shock, if the pass-through is zero, traded output increases less. The lack of conclusive evidence on the role of external demand in the transmission of monetary shocks may also be explained by sectoral heterogeneity in price rigidity: if prices are more rigid in the nontraded sector, then it is not possible to find a positive correlation between the response of output to monetary shocks and the degree of openness, regardless of the degree of exchange rate pass-through.

BackgroundEnvironmental pollution seriously endangers people’s physical and mental health, especially the health of middle-aged and elderly people. Environmental pollution, trade openness, and population health are interconnected. Environmental pollution may have a nonlinear impact on health, and the impact of trade openness on the health effects of environmental pollution may not be a simple strengthening or weakening effect. However, few studies have used threshold effects model to explore the nonlinear mechanisms of environmental pollution’s impact on health in China. As a result, this study incorporates trade openness into the research framework on the health effects of environmental pollution, aiming to study the mechanism of environmental pollution on health.MethodsUsing the China Health and Retirement Longitudinal Study (CHARLS) data from 2013 to 2020 and the data of 111 prefecture-level cities in China, we combine two-way fixed-effects models and threshold models to explore the effects of environmental pollution on the health of middle-aged and elderly people and the role of trade openness in the path of environmental pollution affecting health.ResultsEnvironmental pollution impairs the health of middle-aged and elderly people, and there is a single threshold effect and regional heterogeneity in this negative impact. Trade openness has the effect of first weakening and then strengthening in the inhibitory effect of environmental pollution on health.ConclusionThe negative impact of environmental pollution on health has regional heterogeneity, and there is a nonlinear relationship between environmental pollution and the health of middle-aged and elderly people. The health effect of environmental pollution is mainly long-term effect, and trade openness has a threshold effect on the impact of environmental pollution on health. Therefore, instead of adopting a one-size-fits-all policy, environmental and economic policies should be customized according to the degree of environmental pollution, trade openness, and regional variations, so as to safeguard the health of middle-aged and elderly individuals through effective environmental governance.

Amidst on the debate of the trade openness (TO) importance in influencing an economic growth (EG) and the central bank policy rate (CBPR), it is necessary to analyze the long-term relationship by using ARDL. This paper aims to analyze the CBPR and TO influence on EG in ASEAN -3. This study examines the EG model which focuses on the effect of CBPR and the ratio of exports in which plus imports divided by GDP as a measure of TO in ASEAN-3. The Data was collected from IFS for Indonesia, Philippines and Thailand for the period 2007q1-2022q2. The ARDL test method is used to determine the long-term relationship among the EG, TO and CBPR variables with different degrees of the integration. The FMOLS, DOLS, and CCR testing is for check robustness. The study show that CBPR has a positive effect on the EG in ASEAN-3, although it is only in Indonesia, and in Philippines which is statistically significant. The TO positive effect on the EG in Indonesia and in Thailand, but it is not significant and it has a TO statistically significant negative effect on EG in Philippines. The importance of this research given the recent interest in globalization activities, so the role of TO has become very important. A better TO understanding whether import dominance or vice versa helps in understanding the impact of globalization on the country economy. This finding emphasizes on the export importance over the imports in the economy. However, there is not an academic research looks at the long-term relationship between monetary policy and trade openness on the economic growth with the various econometric models.

Does artificial intelligence promote energy transition and curb carbon emissions? The role of trade openness

PurposeThe aim of this research is to investigate the causal relationship between trade openness (TO) and life expectancy (LE) at birth in Latin American countries over the period of 1980–2014.Design/methodology/approachThe bootstrap panel Granger causality test proposed by Emirmahmutoglu and Kose (2011) was used to determine the direction of causality in the presence of cross-sectional dependency and heterogeneity among Latin American countries. Also, four different tests were employed in order to determine the cross-sectional dependency and slope homogeneity. The stationarity properties of variables were inspected by employing a unit root test.FindingsThe findings indicated that Granger causality existed between TO and LE, at birth which was running from the former to the latter for panel. On a country basis, TO Granger caused LE at birth for countries with low level of economic development and higher taxes on income and profits.Practical implicationsThis study provides new insights for policymaking regarding the role of TO in achieving comprehensive economic reforms to increase LE at birth during a period of intense trade rivalry across nations.Originality/valueAlthough research in the literature has mainly focused on the impact of TO on LE at birth with panel data, most studies ignored the regional effects. It is the authors’ concern that the direction of causality can be country-specific and have regional characteristics. In this regard, instead of dividing countries for a specific region into two parts such as developing and developed, the authors investigated the pattern of trade–health link for a specific region, Latin America.

Could trade protectionism reshape the nexus of energy-economy-environment? Insight from different income groups

The aim of this study is to examine the possible effects that the UK’s decision to leave the European Union will have on its economy due to a change in the country’s attractiveness to foreign direct investment (FDI). The study focuses on openness to trade as a channel through which Brexit will impact inward FDI activity in the UK. After establishing the benefits of being an FDI host and the role of trade openness as one of the key determinants of inward FDI, the study finds that the relative attractiveness of the UK as a host of FDI has decreased as less of the world’s inward FDI is being directed at the UK. With a set of econometric tests, the study shows that the relationship between trade openness and inward FDI for the UK is positive and strong, and that the causality runs from trade openness to inward FDI, with no feedback. Therefore, the UK leaving the EU, through a fall in trade openness and therefore a fall in inward FDI, would have a significant negative impact on the UK’s economy.

Could information and communication technology (ICT) reduce carbon emissions? The role of trade openness and financial development