Asia's Export Research Articles

Estimating the impact of COVID-19 on South Asia's exports: does trade facilitation matter now more than ever?

The COVID-19 has posed a real threat to global trade as the forecast shows an unprecedented decline of trade in 2020. In such a situation, trade facilitation (TF) has been considered as an effective strategy to revive trade. However, primary questions emerge - what extent pandemic would affect exports and how much improvement in TF is needed for recovery. The present study endeavours to answer these questions, especially for South Asia. Using augmented gravity model, study finds negative impact of COVID-19 on exports. Based on coefficient estimates, study predicts decline in South Asian economies' export and finds Nepal the most and India the least affected by pandemic. The study also predicts improvement in TF required for all South Asian countries for resilient recovery of their exports. The study extends further by predicting the reduction in other TF measures like costs and time to export to deal with emerging trade challenges.

The Slowdown in Global Air-Pollutant Emission Growth and Driving Factors

<h2>Summary</h2> Fine-particulate-matter pollution (PM_2.5) is linked to millions of deaths annually. Consumption in one region can cause production and PM_2.5 emissions in another, but the socioeconomic drivers of transboundary PM_2.5 emissions are not fully understood. Here, we quantify the driving factors of primary-particle and oxidized-precursor emissions from 2004 to 2011 at global and regional scales. The results indicate that the growth rate of global PM_2.5 emissions slowed from 2004 to 2011, mainly due to improvements in energy intensities and production efficiency. Improvements in the emission intensity of coal represent the main factor offsetting SO₂ and NO_x emissions, whereas emission controls implemented for industrial processes have largely contributed to reducing primary PM_2.5 emissions. The net emissions embodied in East Asia's exports to developed countries declined, while that to developing countries increased rapidly. The analysis creates opportunities to involve both producers and consumers in co-mitigation of various pollutants.

The sophistication of East Asian exports

Hausmann et al. found that countries that export more sophisticated products tend to subsequently grow more rapidly. We examine the sophistication of Asia's exports using Hausmann et al.'s and Kwan's measures. Japan remains the technology leader in Asia, but not in the world. In 2012, Japan's exports competed with those of South Korea and Taiwan and were complementary with those of China and ASEAN. Korea and Taiwan competed intensely with each other and less so with China and ASEAN. ASEAN countries competed extensively with each other. Given the high levels of competition and cooperation among East Asian countries, greater exchange rate stability in the region would reduce export volatility among competitors and facilitate trade among comrades.

Understanding Japan's Capital Goods Exports

Japan is the leading supplier of sophisticated capital goods to East Asian countries. These goods embody advanced technologies and facilitate learning and productivity growth. Capital goods also represent 30–40% of Japan's exports. This paper investigates the determinants of these exports. Results from dynamic ordinary least squares estimation indicate that exports depend on exchange rates, income in the importing countries and downstream countries' exports to the rest of the world. Results from out-of-sample forecasts indicate that Japanese exports crashed in 2009 because of the perfect storm of a yen appreciation, a global slowdown and a collapse in Asia's exports.

Sense and Nonsense on Asia's Export Dependency and the Decoupling Thesis

It has often been argued that East Asia needs to switch from an export-led growth model to a domestic-demand led growth model so as to reduce its vulnerability to a sharp slowdown in the US economy. This paper argues that, indeed, in the foreseeable future, East Asia's business cycle is unlikely to decouple with that of the US, but the switch-of-growth-model argument is problematic because it mixes up the effects of external trade on an economy's cyclical developments and its long-term growth potential. The paper argues that the desirable way to reduce external vulnerabilities is to diversify export markets and to further strengthen domestic institutions and policies in order to reduce the impact of temporary shocks, not by reducing the degree of openness or the share of exports in GDP. The paper further agues that the rising size of domestic demand in Mainland China will overtime help the rest of the region to diversify its export markets away from the major industrialized countries.

Is the Yen/Dollar Exchange Rate Really Responsible for East Asia's Export and Business Cycles? A Commentary on McKinnon and Schnabl (2003)

In a paper published in The World Economy, Ronald McKinnon and Gunther Schnabl claim that fluctuations in the nominal yen/dollar exchange rate are the principal causal factor behind the export and business cycles in East Asian countries (McKinnon and Schnabl, 2003). Their econometric work, however, suffers from at least two important difficulties. First, while McKinnon and Schnabl preclude industry shocks as an explanation for the East Asian countries’ macroeconomic fluctuations, cyclical fluctuations in the global electronics industry have a significant impact on their short-run export and output dynamics. Second, although McKinnon and Schnabl assume that the relative industrial competitiveness of Japan and other East Asian countries moves in tandem with fluctuations in the nominal yen/dollar exchange rate, the empirical validity of this assumption is not indisputable. Once these two issues are taken into account properly, it becomes very difficult to make a convincing case for the yen/dollar exchange rate being the main driver of East Asia's macroeconomic instability. A brief critique will also be made of another paper that has appeared recently in The World Economy (Doraisami, 2004), which models Malaysia's pre-crisis export dynamics using the nominal yen/dollar exchange rate as a proxy for the country's export competitiveness.

Impact of the Enlargement of APEC on South Asia: An Analysis of Trade Potential †

APEC-South Asian trade has attracted very little attention among researchers although the APEC region has become South Asia's most important trading part ner. This article provides an analysis of the determinants of trade flows between South Asian and APEC countries, using a gravity trade model (GTM) with some extensions. The model incorporates the conventional variables (income, distance, relative prices, etc.) as well as policy related variables (tariff and non-tariff barriers). This model was also used to conduct trade policy experiments on trade liberaliza tion in the two regions. The results show that the potential for expansion of South Asia's exports to the APEC region is very limited and indicate the need for policy reforms if the region is to achieve its goal of higher exports as a vehicle for growth.

South Asia's Export Structure in a Comparative Perspective

World-wide cross-country regressions are used to examine South Asia's export structure through the lens of Heckscher‐Ohlin trade theory. By comparison with other regions, South Asia's exports are unusually concentrated on labour-intensive manufactures. This distinctive export structure is shown to be the result mainly of South Asia's distinctive combination of resources: by comparison with other regions, it has a low level of education and few natural resources, relative to its supply of labour. This basic economic fact must be recognized in the design of trade and development strategy for South Asia over the next few decades.

South Asia's Export Structure in a Comparative Perspective

World-wide cross-country regressions are used to examine South Asia?s export structure through the lens of Heckscher-Ohlin trade theory. By comparison with other regions, South Asia?s exports are unusually concentrated on labour-intensive manufactures. This distinctive export structure is shown to be the result mainly of South Asia?s distinctive combination of resources: by comparison with other regions, it has a low level of education and few natural resources, relative to its supply of labour. This basic economic fact must be recognised in the design of trade and development strategy for South Asia over the next few decades.

Analysis of Trade in Man-made Fibers with Emphasis on Asia

The objective of this paper is to examine changes in Asia's export share for man-made fibers in the 1979–90 time period and the factors contributing to such changes. The paper has two parts. In the first part, Constant Market Share (CMS) analysis is used to compare Asia's competitive position in world export markets for non-cellulosic and cellulosic fibers. In the second part, multiple regression analysis is used to determine the impact of static and dynamic economics of scale on trade in man-made fibers in 1977, 1982, and 1987.

Trade is a Two‐way Exchange: Rising Import Penetration in East Asia's Export Economies

Trade is a Two‐way Exchange: Rising Import Penetration in East Asia's Export Economies

Multinational corporations and multinational buying groups: Their impact on the growth of asia's exports of manufactures-myths and realities

Multinational corporations and multinational buying groups: Their impact on the growth of asia's exports of manufactures-myths and realities