Benefits Of International Trade Research Articles

A new approach for estimating trade elasticities and measuring the productivity effects associated with trade

Although there is an extensive literature on the measurement of total factor productivity (TFP) and its decomposition, the benefits of international trade for aggregate TFP have been less frequently studied. Combining the theoretical trade models and the so-called proxy-variable approach, this paper provides a new method for estimating trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our proposed model is used to analyse the main determinants of the degrees of openness (embeddedness) of countries and sectors. Using data from the World Input-Output Database, we find that the pecuniary productivity gains attributable to embeddedness tend, on average, to offset its effect on sectors’ underlying productivity. We also use the model to measure the different factors affecting productivity changes due to the Covid-19 pandemic. We find that the trade-related consequences are important in explaining the contraction in countries’ productions.

Impact Of International Trade On Regional Economic Growth

This study aims to analyze the impact of international trade on regional economic growth through literature studies. International trade is one of the main drivers of economic growth in the era of globalization. Despite a significant increase in the volume of global trade, the distribution of benefits is not always evenly distributed across regions. Some regions with adequate infrastructure access and supportive economic policies experience rapid economic growth, while other less developed regions face limitations in taking advantage of international trade opportunities. This study shows that international trade contributes significantly to increasing Gross Regional Domestic Product (GRDP), investment, and job creation, although these impacts depend on the readiness of infrastructure and the competitiveness of each region. Factors such as government policies and access to global markets also play a role in influencing the benefits obtained. This study recommends policies for infrastructure development and strengthening the competitiveness of local products to ensure that all regions can feel the optimal benefits of international trade. The results of this study provide direction for the government in formulating policies that encourage inclusive and sustainable economic growth at the regional level.

Trade openness, governance quality, and economic growth in Latin America and the Caribbean

The existing literature on the relationship between trade openness and economic growth is extensive, but there is a dearth of research that examines whether this relationship is contingent on the quality of governance institutions in a country. In this study, we address this gap by investigating the moderating effects of governance quality on the trade openness-economic growth nexus in Latin America and the Caribbean (LAC) during the 2000–2021 period. We utilize six indicators of governance quality from the World Bank's world governance indicators and employ correlation and the dynamic panel System Generalized Method of Moments technique for robust and efficient analysis, which yields more accurate results when the number of cross-sections exceeds the time dimension of the dataset. Our findings indicate that governance effectiveness, rule of law, control of corruption, and regulatory quality have a significantly positive impact on the positive relationship between trade openness and economic growth. In contrast, the moderating effects of voice and accountability and political stability on the trade openness-economic growth relationship are negative and statistically significant. Based on these results, we conclude that each governance dimension has distinct effects on the trade openness-economic growth nexus. In term of policy recommendation, policymakers need to harness the benefits of international trade for promoting economic growth; therefore, LAC countries should focus on investing in institutional quality and designing policies that would enhance the overall quality and effectiveness of governance.

Agricultural Economic Growth, Renewable Energy Supply and CO2 Emissions Nexus

International trade has created more economic growth opportunities in the agriculture sector. The agricultural sector remains key to the South African economy, with a vibrant international market becoming available as the country’s agriculture exports grow. However, the impacts of human-caused global warming have intensified as a result of increased greenhouse gas emissions, notably carbon dioxide (CO2), which negatively affects agricultural productivity and the economy. Considering the future energy resource demands for agricultural productivity due to the expected population growth and the emphasis on environmental remedial actions, the following question presents itself: what impact will a clean energy supply have on the agricultural economy and the environment, notwithstanding that agriculture, as a sector, also has a huge potential to contribute to renewable energy production? This study examines the effect of the nexus of South Africa’s renewable energy supply, CO2 emissions and trade openness on agricultural economic growth from 1990 to 2021. The nexus provides crucial insights into policies targeted at promoting renewable energy in the agricultural sector by isolating key areas of priority. An autoregressive distributed lag (ARDL) bounds test, fully modified ordinary least square (FMOLS) test, a dynamic ordinary least square (DOLS) test and a canonical cointegrating regression (CCR) econometric analysis were used to estimate the nexus. The results showed that growth in the agricultural sector leads to deterioration in the environment, while international trade benefits the sector. The scale of renewable energy supply slowed down the agricultural economy. The study makes a new contribution in providing empirical evidence for the links between renewable energy supply and agricultural GDP, which can drive policy on renewable energy use in the agricultural sector in South Africa. The paper recommends intentional renewable energy production research and development (R&D) finance focusing on renewable energy human development planning and investments in vocational programmes in higher learning institutes, agricultural renewable energy policy and the creation of green incentive schemes for feedstock producers, especially in rural areas in the agricultural sector.

Comprehensive assessment of the environmental and employment impacts of international trade from the perspective of global value chains

A comprehensive assessment of the environmental and employment impacts of international trade is essential for coordinating sustainable development between the economy, environment, and society. International trade is an important driving force for global economic growth. However, the environmental and social impacts of trade under global value chains (GVCs) have not yet been comprehensively characterized. This study aims to estimate the impacts of international trade from 2000–2014 on carbon emissions and employment using the gross export decomposition method, incorporating a counterfactual method based on the multi-region input–output model. We found that (1) at the global level, international trade has been conducive to carbon emission reductions since 2003 and played a role in increasing employment throughout the study period; however, the impacts of GVC-related trade have been mixed, generating global emissions savings, but leading to job losses. This implies that there is a trade-off between carbon emission reduction through GVC embedding and employment creation. (2) At the national level, a country’s participation in international trade benefits the environment, employment, or both. In this sense, international trade is no longer a zero-sum game; rather, it is likely to be a positive-sum game for all participants regarding environmental benefits and job creation. (3) In bilateral trade, developed and developing economies have positive and negative impacts, meaning that they should take joint actions to balance environment–employment–trade growth. These findings are useful for determining the responsibilities of different countries toward climate change and achieving sustainable development of the economy, society, and environment.

Resilience of Polish Exports to Non-Economic External Shocks

Goal – the paper aims to assess the resilience of Polish exports to disruptions caused by external factors of a non-economic nature, using the example of the shocks caused by the COVID-19 pandemic and the war in Ukraine. Research methodology – the author of the study uses a literature review and analysis based on official statistics. The three dimensions of export resilience were operationalized and assessed, i.e. resistance, responsiveness and adaptation. Short- and medium-term results were evaluated. Score/results – Polish exports are not completely resilient to non-economic external shocks, as there has been a short-term deterioration in performance due to the pandemic and the war in Ukraine, but taking all dimensions of resilience together and the medium-term time horizon, the resilience of Polish exports to this type of disruptions has been strongly confirmed. Originality/value – the study responds to the need to assess the economic security of economies participating in the international division of labor in connection with the emergence of non-economic external shocks negatively affecting international cooperation. The study makes an important contribution to the recognition of the resilience of Polish exports, its various dimensions and over a longer time horizon. To date, such research has not been conducted, and the issue of trade resilience, although very important for continuing to reap the benefits of international trade, is not sufficiently explained.

Rise of Cross-Border E-Commerce: A Systematic Literature Review

E-Commerce is trending almost everywhere globally. However, the new trends in E-Commerce further transformed it into Cross-Border trade, leading to extensive benefits at every level of social and commercial life. Considering the rise of Cross-Border online shopping, this study has extensively highlighted how the Cross-Border E-Commerce phenomenon is reflected in the literature. The researcher applied a systematic review approach and selected n= 45 research papers published between 2010 to 2022. Analysis indicated that Cross-Border E-Commerce had taken the globe by storm due to its rapid growth and unprecedented COVID-19 emergence. With the introduction of the ICT and Internet, it has become increasingly prevalent and simple to become a global seller and reap the benefits of international trade by the means of E-Commerce. Besides, the rise of E-Commerce drives new economic growth and triggers innovation among retailers by encouraging them to differentiate their products and provide an engaging user experience. On the other hand, digital payment patterns such as cryptocurrencies further add to the adoption, adding improved payment trends in Cross-Border E-Commerce. Thus, it is concluded that advanced technology, strategic policies, increased demand, and all others played a potential role in the success of Cross-Border E-Commerce today. However, traders face many challenges that need to be resolved to attain greater opportunities. Finally, the researcher emphasized the study's limitations and recommended future studies.

The Dynamism of Trade Balance in Ghana

Developing economies have frequently employed macroeconomic factors such as the currency rate, inflation, investment, and so on to manage trade flow; yet, there are often chronic deficits in the balance of trade and payments due to a structural imbalance between the amounts of exports and imports. As most rich countries intentionally used the benefits of international trade to improve their trade balance position, many developing countries signed up for numerous unilateral and multilateral trade policy reforms that provided little to no economic benefit. As a result, this study employs cointegration and an error correction model based on the Autoregressive Distributed Lag (ARDL) framework to analyse and estimate the effect of macroeconomic factors on Ghana's trade balance and how Ghana's trade balance has changed from 2000 to 2018. Quarterly time series data covering a period of 19 years, from 2000 to 2019 was collected on all dependent and independent variables such as exchange rate, inflation rate, interest rate and GDP per capita. The results indicate that exchange rate and interest rate significantly affect trade balance while GDP per capita and inflation insignificantly affect trade balance. The study recommended that the government should put in more measures to stabilise the currency and local manufacturers should be motivated by giving subsidies and tax exceptions.

The causal nexus between trade openness and environmental pollution in selected emerging economies

To avert the disruption of the Earth’s ecosphere, global carbon stock reduction must be embarked upon with all solemnity. Emissions-induced climate pattern would reduce the comparative advantage of critical sectors in emerging economies like agronomy sector, adventure industry, forest sector and fishery’s sector, thus altering the structure of trade openness. The influence of trade on global carbon stock is at a precarious stage. In this way, our study spread out the frontiers of current empirical study on the link between pollution and trade by further disaggregating international trade into trade import and export of merchandise in some emerging economies between 1971 and 2013, using Driscoll-Kraay error’s regression in pooled OLS to determine long run coefficients. Empirical results suggest that 1% rise in imports, energy usage and industrialization cause’s upsurge emissions by 0.471%, 1.176% and 0.596% respectively while 1% increase of economic progress causes a huge drop of emissions by as much as 1.153%. However, it was found that exports and urbanization increase improve emerging economy’s environment but it is statistically not significant. The path of causation between variables was examined using Dumitrescu-Hurlin causality test. Potentially, emerging economies should minimize or control imports to reduce impact on environment. This will ensure that international trade benefits the environment, boosts economic growth, protects environment and generates additional income to mitigate ecological pollution. Emerging economies should increase awareness on how to protect environment and offer a reduction of the carbon tax to green industries.

Can Geopolitics Help Restore Missing Tools to the U.S. Trade Toolbox?

When U.S. trade negotiators and trade litigators seek to increase market access for U.S. goods and services abroad, they look in their toolbox to see what might be the best tool. The more well-stocked the toolbox, the more possibilities for increasing foreign market access. Today, when U.S. trade negotiators look in their toolbox, they see several traditional tools missing, specifically legally-binding, comprehensive (including tariff-cutting) regional and bilateral free trade agreements (FTAs) and large package deals within the World Trade Organization (WTO). Their trade litigator colleagues face a similar circumstance of missing traditional tools, specifically the loss of binding two-level dispute settlement within the WTO. Domestic politics and geopolitical developments have pulled some tools from the toolbox. Domestically, more and more members of Congress and presidential candidates voice skepticism over the benefits of international trade – and this in spite of much more alignment on how to address labor and environmental concerns within trade agreements. Internationally, increased tensions between the U.S. and the West, on the one hand, and China and Russia on the other, as well as nationalistic turns in other countries, have left U.S. trade negotiators and litigators with fewer traditional tools to pursue market access. Ironically, the geopolitical developments, and in particular the trending U.S. response to those geopolitical developments, may hold the key to overcoming domestic political limitations and ultimately place traditional tools back in the toolbox.

INTERNATIONAL TRADE, WAGES, AND SKILL PREMIUMS IN BRAZILIAN MUNICIPALITIES FROM 2000 TO 2010

ABSTRACT This study aims to assess wage and skill premium responses to international trade in Brazil, determining different local specialization patterns with municipal data. We followed the theoretical model developed by Venables and Limão, who state that distance is a non-neutral variable in determining trade patterns. We used Chiquiar’s empirical model, which includes pooled regression with microdata and feasible generalized least squares in three steps. Selection bias and omitted variable biases were evaluated based on Redding and Schott and Oster. Results show that wage and skill premium responses to international trade are heterogeneous and depend on the geographic location. International trade seems to help reducing interregional inequalities in Brazil. However, it seems to intensify inter-skill wage inequalities in more distant zones, like Midwest and North Brazil. Thus, the reduction in income inequality due to a greater trade liberalization is not homogeneous in all regions of this developing country. Therefore, policies that geographically spread the benefits of international trade within Brazil would have to consider the occurrence of these regionally heterogeneous responses.

The Costs of Bureaucracy and Corruption at Customs: Evidence from the Computerization of Imports in Colombia

Customs face a difficult tradeoff between, on one side, collecting tariff revenues and preventing smuggling, and on the other side, avoiding creating additional barriers to trade. They also tend to concentrate discretionary power in the hands of officials whose decisions can bear high costs for the firms, creating room for rent extraction. In this context, information technologies can limit direct interactions, reduce transaction costs and allow local businesses to better take of the benefits of international trade. We assess the effects of the computerization of import transactions on plants’ growth in Colombia. The reform occurred sequentially in the different customs between 2000 and 2005, allowing us to use a triple-difference strategy, comparing the change in outcome variables of plants that were importing before the beginning of the reform, to the one of firms that were not importing (less likely to be affected by changes at customs). We find that the computerization of imports led to an increase of 6 log points in the firms’ value added along with consequent increases in employment, productivity and tax collection. However, it generated winners (importing firms) and losers (non-importing firms). Our investigation of the channels reveals a reduction in corruption judiciary cases at treated customs, as well as a reduction of time to clear customs and its unpredictability. Our results support growing evidence of the high potential of proper use of information technologies to improve efficiency and tackle corruption in public administration with important consequences for the economy.

The impacts of international trade on global greenhouse gas emissions: A thought experiment based on a novel no-trade analysis

Trade has been substantially influencing regional economic development, environmental sustainability, and human well-being. Enabled by the decomposition analysis, pollution haven hypothesis or “no-trade” scenarios (NTSs), the effects of trade on global/national social-economic-environmental development have been revealed. However, major limitations (e.g., using with-trade economic structures or neglecting price differences) existed in previous studies, and thus made the previous assessments of trade's effects unsatisfactorily. This study develops a novel NTS that addresses the existing limitations, and further applies it to estimate the effect of trade on global economic development and greenhouse gas (GHG) emissions. We show that current international trade benefits the global economic growth but with a consequence of more GHG emissions compared with the NTS. The hypothetical production in small countries (e.g., Luxembourg or Japan) would be more constrained by the production factors (e.g., land) under the NTS, compared with those factor-endowment countries (e.g., the United States or India). For country-specific analysis, we find that today's developed countries would have a substantial increase in their GHG emissions of clothing- and service-related products under the NTS, whereas countries with net-export (e.g., China or Brazil) would have less GHG emissions under the NTS. Enhancing future global collaborations is vital, especially for small or resource-deficient economies, if they are to achieve the Sustainable Development Goals.

Brexit and trade policy: an analysis of the governance of UK trade policy and what it means for health and social justice

BackgroundThere is an extensive body of research demonstrating that trade and globalisation can have wide-ranging implications for health. Robust governance is key to ensuring that health, social justice and sustainability are key considerations within trade policy, and that health risks from trade are effectively mitigated and benefits are maximised. The UK’s departure from the EU provides a rare opportunity to examine a context where trade governance arrangements are being created anew, and to explore the consequences of governance choices and structures for health and social justice. Despite its importance to public health, there has been no systematic analysis of the implications of UK trade policy governance. We therefore conducted an analysis of the governance of the UK’s trade policy from a public health and social justice perspective.ResultsSeveral arrangements required for good governance appear to have been implemented – information provision, public consultation, accountability to Parliament, and strengthening of civil service capacity. However, our detailed analyses of these pillars of governance identified significant weaknesses in each of these areas.ConclusionThe establishment of a new trade policy agenda calls for robust systems of governance. However, our analysis demonstrates that, despite decades of mounting evidence on the health and equity impacts of trade and the importance of strong systems of governance, the UK government has largely ignored this evidence and failed to galvanise the opportunity to include public health and equity considerations and strengthen democratic involvement in trade policy. This underscores the point that the evidence alone will not guarantee that health and justice are prioritised. Rather, we need strong systems of governance everywhere that can help seize the health benefits of international trade and minimise its detrimental impacts. A failure to strengthen governance risks poor policy design and implementation, with unintended and inequitable distribution of harms, and ‘on-paper’ commitments to health, social justice, and democracy unfulfilled in practice. Although the detailed findings relate to the situation in the UK, the issues raised are, we believe, of wider relevance for those with an interest of governing for health in the area of international trade.

PENGARUH GDP DAN NILAI TUKAR NEGARA MITRA DAGANG TERHADAP EKSPOR KARET INDONESIA

International trade is one of the economic activities that plays an important role for a country. The benefits of international trade are related to economic growth, national development and national welfare. The condition of limited resources is no longer a barrier to meeting the needs of a country with exchange and trade. Rubber is one of the leading export commodities for the Indonesian plantation sector. Indonesia is one of the main producers of natural rubber number two in the world after Thailand. The purpose of this study was to determine the effect of Gross Domestic Product and the exchange rate of trading partner countries on Indonesian Rubber exports. The type of data used is panel data of Indonesia Rubber export partner countries in 2009-2018. The method used is panel data regression. The results showed that the export of Indonesian Rubber with Gross Domestic Product was positive and significant. And the exchange rate also has a positive and significant effect

Spatiotemporal Evolution of Global Greenhouse Gas Emissions Transferring via Trade: Influencing Factors and Policy Implications.

Global climate change caused by greenhouse gas emissions (GHGs) from anthropogenic activities have already become the focus of the world. A more systematic and comprehensive analysis on the factors influencing the changes of global GHGs transferring via trade have not been fully discussed. To this end, employing spatial econometric regression models and multi-regional input-output models, this paper reveals factors influencing the GHGs transferring via trade changes in 39 major economies, so as to develop the relevant GHGs reduction policies. The results indicate that regions with the highest net outflow of GHGs transferring via trade are primarily Russia and Canada, and the adverse effects of promoting GHGs reduction on the national economy could be avoided by these regions owing to trade relations. Additionally, factors influencing the changes in GHGs transferring via trade have significant spatial autocorrelation, and population size and energy structure exert significant spatial spillover effects on the changes in the GHGs transferring via trade. On this basis, this paper suggests that one more effective way to prevent trade from the rigorous demands of environmental governance measures while preserving the economic benefits of international trade may be to facilitate cooperation between countries on GHGs mitigation. Further, we articulate more balanced environment governance policies, including conducting the sharing of advanced energy technologies and developing clearer production technologies.

International trade and blockchain technologies: implications for practice and policy

International trade is an important aspect of business. Exchanging goods on a global scale allows states to produce and export goods that they are more efficient in and import the ones that they are not. As a result, countries reduce the cost of production, price of commodities, and expand their markets. Even so, international trade is a complex process that is facilitated by different financial, socio-political, and technological factors. The blockchain technology has revolutionized international trade and has the potential to continue doing so as this smart technology is still at its infancy. This paper analyzes the role and impacts of the blockchain in international trade, including the technology’s benefits, problems and challenges, and recommendations for improving its usefulness. The work finds that blockchain plays a significant role in international trade with numerous benefits. However, a few challenges should be addressed to ensure organizations in international trade benefits fully from blockchain technology.

Trade openness, tax reform and tax revenue in developing countries

AbstractThis article investigates empirically whether the effect of tax reform (involving the progressive replacement of trade tax revenue with domestic tax revenue) in developing countries' tax revenue performance (measured by tax revenue‐to‐GDP ratio) depends on the degree of trade openness of these countries. The analysis has used an unbalanced panel data set of 95 developing countries over the period 1981–2015 and the two‐system GMM approach. Results suggest that tax reform is positively and significantly associated with tax revenue performance in developing countries, with the magnitude of this positive effect increasing as countries experience a higher development level. Additionally, and more importantly, countries that further open up their economies to international trade enjoy a higher positive effect of tax reform on tax revenue than countries that experience a lower degree of trade openness. Therefore, these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international trade would further erode their tax revenue, including by lowering their international trade tax revenue. In fact, the implementation of an appropriate tax reform in the context of greater trade openness would generate higher tax revenue, while concurrently allowing countries to reap the well‐known benefits of international trade.

A Comparative Analysis of Adjustment of Nigerian Selected Macro Economic Variables to Deregulated Exchange Rate System

This study is a comparative analysis of how Nigerian macro economic variables of Balance of Payment and Real Sector performance (surrogated by Real Gross Domestic Product) reacted to exchange rate deregulation in Nigeria. One of the reasons why countries deregulate their exchange rate is to avail themselves the benefits of international trade, and the international trade transaction of every nation is depicted in its balance of payment position. In order to ascertain the significance of Naira deregulated exchange rate on the selected variables, a pre and post deregulation analyses were carried out using Paired Sample T Test staring from 1960 to 1985 as pre deregulation period and 1986 to 2011 as post deregulation period. The result revealed that both Balance of Payment and Real Sector Performance reacted significantly to exchange rate deregulation. While the influence of deregulation of exchange rate on Balance of Payment was negative, it showed a positive influence on Real Sector performance. The researchers concluded that deregulation of exchange rate did not increase the Nigerian general export, but oil export only, which is also an indication that Nigerian domestic industries did not contribute significantly to the country’s export level. We recommend that the monetary authority can consider placing a crawling peg on Naira exchange rate level in order to regulate the level of currency depreciation; this will reduce the cost of production for the domestic industries as most of their raw materials are imported. Again the export ability of the Nigerian domestic industries can be enhanced by granting them export incentives such as free international packaging and external credit guarantee.

Why Indonesia Should Keep Joining in Trade and Investment Agreements?

There have been some concerns over the existence of trade and investment agreements. They have been doubted because of the poverty and inequality issues in some regions across the globe. The rise of the spirit of national interest of their members has also exacerbated the situation. Hence, these two miserable facts may end up with a question whether Indonesia should keep joining trade and investment agreements. This article is aimed to examine if Indonesia should continue its participation in trade and investment agreements. Employing a normative legal research, this article put three parameters, analysing the continuity of Indonesia’s participation, namely the benefits of international trade and foreign direct investment, the rationale of trade and investment agreements, and how trade and investment agreements (that involve Indonesia) have positively affected Indonesia’s development. This article then claims that Indonesia should keep joining trade and investment agreements for realising its targets on economic growth and development.