Trade Competitiveness Research Articles

Growth and Potential of Intra-Industry Trade of India in Agriculture among the BIMSTEC Nations

The unification and development of crawling Asian countries is the burning issue after the declaration of failure of the SAARC (South Asian Association for Regional Cooperation) region. Besides, a small bubble in the ocean of agreements is ‘BIMSTEC’ (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), which has not been flourishing to date due to the lack of interest of a dominating country like India, whose focus is on other successful regional blocs. However, recent studies have shown that though it starts late but contributing significantly towards the trade among BIMSTEC countries. And, second, almost all the countries have shared similar cultures, languages and levels of per-capita income except Myanmar and Thailand, which will favour the trade among the region. Thus, the main focus of the study is to analyse the revealed comparative advantage of countries in BIMSTEC, their trade competitiveness and contribution made to the country’s growth before and after formation by the region. Under the study, it was observed that the intra-industry trades of India in Agriculture among the BIMSTEC nations have shown very less potential for trade in all 24 agriculture chapters. Thus, economies need to reframe the policies as required and identify the potential products in agricultural-related goods that can significantly improve the trade balance of the countries. JEL Codes: F14, F15, F19, F53

How to Measuring Comparative Advantage in International Trade

Along with the development of relations between countries, both in the social and economic fields, cooperative relations between these countries are also developing. Southeast Asian countries, for example, agreed to form the ASEAN Community (ASEAN Community) in various economic, social and cultural aspects and political security. Indonesia certainly faces very diverse challenges in fighting for market share which is expected to be a place to sell the goods and services it produces. The purpose of this service is to explain and conduct discussion activities related to how to measure the competitiveness of the market share of Indonesian export products. The method used is a presentation in the form of a webinar using zoom. The results of the dedication show that there were active discussions with the participants and increased enthusiasm of the participants to write scientific papers related to trade competitiveness.

A Matter of Taste: Tea, Opium, and Trade Monopolies in Tibet

Abstract This article chronicles the British Indian state’s attempt, and eventual failure, to break the Chinese monopoly on trading tea in Tibet at the very time Britain replaced Qing China as the largest exporter of tea on the global stage. I explore this short history by analysing the trade marts established in Tibet and the eastern Himalayas between the late nineteenth and early twentieth centuries, not simply as centres of imperial trade between two powerful empires, but as occupied territories meant to form key nodes on land networks throughout the Tibetan plateau and highlands. Following its failure to push Indian tea into Tibetan markets, the British government in India experimented with the sale of opium in British-controlled marts in Tibet, thus marking important continuities in commodity trade competition with China across market spheres. The competition between Chinese and Indian tea has been richly documented as a narrative of ascendancy and industrial modernisation that rapidly reshaped global imperial hierarchies as well as local socio-cultural relationships (including those of labour accumulation). By contrast, the British failure in Tibet highlights how militarised frontier-making alone advanced market capitalism throughout the trans-Himalayan theatre. This article demonstrates how the exigencies of war propaganda and imperial frontier-making shaped not only the spatial and cultural frames of tea consumption in Tibet, but the territorial entities of the Himalayan “borderlands”, and indeed, “Tibet” itself.

Impact of imports from China on Indian manufacturing performance: an analysis of trade competitiveness

PurposeThe focus of this paper is to provide an assessment of the impact of imports from China on Indian manufacturing and capture the multifarious dimensions of India–China bilateral trade flows. By examining the comparative disadvantage imports (RCA<1), the paper critically examines their significance on India's industry output and performance and underlines factors beyond trade competitiveness.Design/methodology/approachFor examining the impact of India's manufacturing imports from China on industry performance, four stages of analysis is adopted. First, the imports with RCA <1 have been identified. For these, BRCA was also computed. Second, trends in industry performance associated with high imports from China. Third, for estimating the impact of imports on industry output, augmented production function was specified and estimated with imports from China as a potential determinant. And fourth, comparison of industry performance between India and China.FindingsThe impact of imports from China on industry output is positive and significant. A 1% increase/decrease in the share of China in world imports will result in output increasing by 0.31%. The rise in imports from China seems to be on account of non-availability of necessary intermediate and capital goods domestically, thereby making these imports critical and complementary for production. This negates the threat perception of imports from China.Research limitations/implicationsThe paper recognizes the need for understanding the firm heterogeneity in import decisions and R&D intensity of imports. Across industries, the drivers for firms' decisions to import are “learning by importing’ and “self-selection” (Camino-Magro et al., 2020). Also, another important dimension at the firm-level analysis is the elasticity of substitution between foreign and domestic inputs. If the elasticity of substitution is low then high import barriers will lead to reduction of domestic output. These firm-level issues are important for effective policy interventions.Practical implicationsOne, the inward looking focus of the industry which is exhibited in low export intensity will not provide the necessary impetus to propel the manufacturing sector to a higher technology frontier and translate the productivity gains to export competitiveness. Two, unless the domestic manufacturing is propelled from the current low/medium technology to high technology products, the current policy thrust on “self-reliance” cannot be realized.Originality/valueAnalysis is based on manufacturing imports with RCA<1 from China thereby underlining factors beyond trade competitiveness not covered by RCA methodology. Complementing the quantitative analysis with economic policy developments in China and India and contrasting the same has provided insights into the real factors determining India–China bilateral trade.

Causal Relationship among Exports, Imports and Economic Growth in Nepal: Evidence from VAR Model

This study's goal is to evaluate the causal relation among Nepal's exports, imports, and real gross domestic product. One of the most significant sources of foreign currency income that reduces the strain on the balance of payments is considered to be exports. The relationship between real GDP, exports and imports is investigated on Nepalese economy over the period 1975-2020, using yearly data. For that purpose, Vector Autoregressive model is used as there is no cointegration among variables as per Johansen's approach. Similarly variance decomposition test is also conducted. Findings confirm the presence of relationship among Real GDP, exports and imports. The results of VAR granger causality test shows that surprisingly export doesn't cause real GDP and import whereas import causes real GDP. Similarly, real GDP causes export, and import also causes export. But there is no bi-directional causality between the variables. Nepal will gain from raising its international trade competitiveness to reduce current account deficits. Prioritizing research and development and producing export goods with high value added by focusing on science and technology are the simplest ways to do this. Similarly, in order to raise worker productivity, which will immediately spur economic growth and raise living standards in Nepal, there is a need to increase technology imports.

Import competition and pressure in the international crude oil trade: A network analysis

As crude oil demand grows, the international crude oil trade grows as well, thus import trade competition between crude oil importers intensifies. It further leads to the increasing import pressure faced by importers. We defined and calculated the import competition pressure. Taking crude oil importers as nodes, the import competition relationships between importers as edges, the direction of import competition pressure as the edges’ direction, and the crude oil importing competitive pressures forced on importers are weights, the paper builds a crude oil import trade competition pressure network. Using a complex network theory analysis method, according to complex network characteristics, the paper analyzes crude oil import trade competition pressure network evolution law from 2000 to 2020. The results showed that: (1) The import competition intensity difference is larger, concentrated between Asian and European countries; (2) The most import competitive markets for crude oil are Russia and Saudi Arabia, and the crude oil dependence of China on Saudi Arabia is higher than USA; (3) The crude oil trade relationships are roughly divided into four categories, namely import-dependence, importer-oriented, close cooperation, and loose trade relationships; (4) China has gotten increasing competitive pressure from Germany and Netherlands in Russia in recent years, but decreasing in Angola and Saudi Arabia. Based on the above results, we recommend diversifying the supply, expanding the global circle of trusted trading partners and establishing a risk response mechanism. The above analysis can help countries identify competition pressure and provide suggestions for improving competitive advantages about crude oil.

Competitiveness of international merchandise trade: The case of Poland

The aim of the article is to present the possibilities that qualitative classifications of industries and goods introduce to the analysis of structural changes in the economy, as well as to assess changes in the international competitiveness of Polish merchandise trade in the long term. The article presents a review of the literature and the results of authors’ own research on the structure of Polish merchandise trade. The study uses Lall’s classification of goods which is relatively innovative and rarely used in the existing literature. By using this classification and the analysis of revealed comparative advantages (RCA) we also managed to assess the competitiveness of Polish exports. The research shows that since Poland’s accession to the European Union, the international competitiveness of Polish trade in terms of its technological level has changed only slightly. After the growth in the first years of Poland’s EU membership, the share of high technology products in the export structure stagnated in the 2010s and was still lower than that of medium or low technology products. Throughout the researched period, the RCA for high-tech products remained on the “foreign” side.

Research on the Influence of Investment and Trade System on Wuhan Manufacturing Innovation Mode in the Post Epidemic Era

In today's fierce competition in international trade, whether a country's foreign trade system is sound and perfect has an important and far-reaching impact on the regional manufacturing innovation mode and the development of manufacturing industry. This paper combs the domestic and foreign literatures, analyzes the academic significance and practical value of the research, and puts forward the possible social benefits, which provides a reference for the development of Wuhan manufacturing innovation mode.

Research on the International Competitiveness of China’s Financial Services Trade

With the continuous development of benefits, China is slowly moving towards the era of service economy, and the service industry occupies an increasingly large position in our country's national economy, which also promotes the existence of weak industries in our country's international service trade competitiveness. As a kind of our country's service industry, financial service trade still has a big gap with other countries in terms of international competitiveness. Financial service trade is one of our country's comparative advantages, but with economic globalization, the connection between countries getting closer.In such an open era, factors such as the accelerated international capital flow, large capital flow, and fierce market competition have caused serious impacts to most countries in the world, and problems have arisen in the development of the domestic financial industry and the real economy industry. As a result, it will affect the overall competitiveness of the domestic financial industry, etc. These situations lead us to pay attention to some bad results brought about by financial services trade. It is necessary to analyze and study the reasons for these bad performances and give corresponding measures. This paper mainly conducts a relevant analysis from the research on the international competitiveness of China's financial services trade.

Comercio de la carne bovina paraguaya y su competitividade a nível global

The objective of this research was to evaluate Paraguay's competitiveness in the international trade of fresh beef in the period from 2010-2021, using the Constant Market Share international trade model. Data was collected from the UNCOMTRADE database of the United Nations, initially identifying the commodity under study with the following NCM code: 201-chilled beef. The most representative destinations for the country were taken into account, such as Chile, Brazil, and Lebanon, as well as the rest of the world for fresh beef, and Russia, Israel, and Angola for frozen beef. The main results showed that the country is competitive in the export of chilled fresh beef, however, it needs to improve its export destinations for the first period. However, for the second and third periods, it had negative results. The country is competitive in frozen beef and has taken advantage of global growth, however, it still maintains negative export destinations.

Research on the Barriers and Legal Countermeasures of Exporting Traditional Chinese Medicine to ASEAN Countries under the Background of the Belt and Road Initiative

The total amount of China's exports of Chinese medicinal materials to the world and the trade competitiveness index gradually declined, but the exports of Chinese medicinal materials along the "the Belt and Road" increased significantly. The main problems faced by China's export trade of traditional Chinese medicine include the lack of quality standard system, the establishment of technical barriers to trade in importing countries, and the insufficient development of the export market of traditional Chinese medicine. The "the Belt and Road" initiative has brought opportunities to the international development of Chinese medicine, and has provided a broad market space for the development of Chinese medicine industry. The "the Belt and Road" strategy and the expansion of demand for traditional Chinese medicine in the international market have brought good development opportunities for the export trade of traditional Chinese medicine. However, cultural differences at home and abroad, international trade barriers and competition in the same industry have also brought threats and challenges to the export trade of traditional Chinese medicine in Gansu.

한국 ICT산업의 대 아세안 질적 무역 경쟁력 연구: 일본과의 비교를 중심으로

Purpose: The purpose of this paper is to analyze changes in the trade competitiveness of the information and communication technology (ICT) industries in Korea and Japan in the ASEAN market through export competitiveness and intra-industry trade analysis.
 Research design, data, and methodology: The Revealed Symmetric Comparative Advantage Index(RSCA) analysis method is used to measure changes in export competitiveness. In addition, intra-industry trade(IIT) is analyzed by dividing it into vertical intra-industry trade(VIIT) and horizontal intra-industry trade(HIIT), and vertical intra-industry trade(VIIT) is analyzed by dividing it into High Quality Vertical Intra-Industry Trade and Low Quality Vertical Intra-Industry.
 Results: As a result of RSCA analysis, it was found that the Korean ICT industry was comparatively inferior in the ASEAN market between 2010 and 2019, and its competitiveness weakened. By item, the competitiveness of communication apparatus was the lowest, followed by information apparatus, broadcasting apparatus, and parts.
 Meanwhile, unlike Korea, Japan’s ICT industry was found to be competitive in comparative advantage. Among them, broadcasting apparatus were found to be the most competitive, followed by parts, information apparatus, and communication apparatus. According to the IIT analysis, Korea and Japan in the ASEAN market between 2010 and 2019. Both countries were found to be actively engaged in intra-industry trade with ASEAN. In the case of Korea, VIIT was found to be more active than HIIT in trade with ASEAN. Among them, VIITL was found to be the most active. In the case of Japan, VIIT was found to be more active than HIIT, and among them, VIITH was found to be the most active. In other words, overall, it was found that the qualitative competitiveness of Korea and Japan in the ASEAN market improved.
 Implications: This study has academic and political implications in that it analyzed the changes in ICT trade competitiveness between Korea and Japan in the ASEAN market. However, there is a limit to the research in that the change in trade competitiveness in terms of imports was not considered.

Trade Shocks, Population Growth, and Migration

Abstract This paper examines the effect of trade-induced changes in Mexican labor demand on population growth and migration responses at the local level. It exploits cross-municipality variation in exposure to a change in trade policy between the United States and China that eliminated potential tariff increases on Chinese imports, negatively affecting Mexican manufacturing exports to the United States. Municipalities more exposed to the policy change, via their industry structure, experienced greater employment loss. In the five years following the change in trade policy, more exposed municipalities experience increased population growth, driven by declines in out-migration. Conversely, 6 to 10 years after the change in trade policy, exposure to increased trade competition is associated with decreased population growth, driven by declines in in-migration and return migration rates, and increased out-migration. The sluggish regional adjustment is consistent with high moving costs and transitions across sectors in the short term.

Carbon border adjustment mechanism in the transition to net-zero emissions: collective implementation and distributional impacts

As an instrument to minimize carbon leakage, the effects and feasibility of Carbon Border Adjustments Mechanism (CBAM) will depend on multiple design options. While the EU has committed to introducing CBAM as part of its green climate deal, pursuing climate efforts to successfully limit global warming requires a collective implementation involving major emitters China and the US. This paper quantifies the distributional impacts of a joint CBAM implementation of in a climate alliance or a club of the EU, the US, and China. Differing from a myriad of studies that focus on unilateral CBAM, this analysis emphasizes collective implications on leakage, sectoral competitiveness, and welfare by projecting climate neutrality relative to current policies and climate targets. Our findings confirm that coalition reduces leakage, improves production on energy-intensive industries, and increases club’s welfare relative to a non-CBAM and a unilateral implementation. These are in contrast with some unilateral analytical studies, especially for the US. It is further proof of the potential of CBAM as collective instruments to facilitate mitigation and trade competitiveness.

Trade competitiveness and the aggregate returns in global stock markets

Using the change in the real effective exchange rate (REER) to reflect trade competitiveness, we examine its role in the cross-section of global equity returns. The changes in REER negatively affect stock market returns. The REER effect is robust after controlling for known risk factors and market characteristics. Furthermore, it remains pervasive across different periods and subsamples. Our findings support the conventional wisdom that appreciating currency harms trade values, consequently dampening a firm's stock market performance.

Neutralizing Concerns and Mapping the Trade Competitiveness and Potential of Indian Export with RCEP Countries

Much debate has surrounded India’s lack of interest in plurilateral regional trade agreements (RTAs) and its decision to opt out of the regional comprehensive economic partnership (RCEP). Against this backdrop, the article attempt to analyse the competitiveness and potential of Indian export items in the RCEP region. The revealed comparative advantage (RCA) index has been employed to study India’s trade competitiveness among RCEP nations between 2010 and 2019 using the WITS (World Integrated Trade Solutions) 2021 database. The study found that India has a comparative advantage in more than 9 product categories out of 16 studied in the article. The article also revealed India’s competitiveness in intermediate goods with the majority of RCEP countries. The analysis found a trade complementarity between India and the RCEP countries and the possibility of increased economic cooperation. The problem lies in the utilization rate and weak export competitiveness of Indian industries. Before signing a new FTA, it is imperative to improve the export competitiveness of Indian enterprises. Given India’s current trade balance, tariff structure and export competitiveness of Indian commodities, we believe India had little option but to withdraw from the RCEP.

The Impact of the COVID-19 Pandemic on the Revealed Comparative Advantage of Industries in the Baltic States

The active spread of COVID-19 and the resulting containment measures have made it clear that both supply and demand and global production networks are facing unprecedented shocks and disruptions. Accordingly, this has resulted in an urgent need to investigate countries’ competitive situation (and its changes) during a prolonged period of uncertainty. This study aims to assess the impact of the COVID-19 pandemic on the revealed comparative advantage (RCA/ Balassa index) of the Baltic states’ industries. The Balassa index was calculated for nine industries in three Baltic States (Lithuania, Latvia, and Estonia). The RCA index calculations were linked to COVID-19 cases in the countries under consideration by forming a regression equation. RCA index values and their changes were evaluated by analysing data before and after the pandemic, covering the period between 2017 and 2021. This study revealed that the COVID-19 pandemic’s impact on each Baltic country’s competitiveness in trade with EU countries is significantly higher than in trade with third countries. The results show that Baltic states did not have a comparative advantage in trade with third countries during this time. However, Lithuania and Latvia proved to be more resilient to the consequences of the pandemic, even though industries with a low RCA were more affected. Meanwhile, in trade with EU countries, many of the Baltic states’ industries appeared to have a comparative advantage, which began to decline a few years before the pandemic’s start. Nevertheless, highly competitive Baltics industries showed remarkable resilience to the impact of the pandemic. However, a short-term decrease in the RCA was observed in individual cases.

Defense Economic Strategy in Creating the Independence of the Indonesian Defense Industry (Case Study of the Independence of the Chinese Defense Industry)

Efforts to build an independent defense industry is a strategic goal in strengthening national identity. The aim of this research is to find out the Defense Economic Strategy in Realizing the Independence of the Indonesian Defense Industry. The results of the study show that one indicator of the independence of the defense industry is to produce its own defense and security equipment without any intervention from other countries. The Indonesian government must be able to make the independence of China's defense industry a spirit model for the development and independence of the Indonesian defense industry by consolidating and strengthening capital for the domestic defense industry, increasing competitiveness in producing defense products in global trade competition, and conducting collaborative technology transfer cooperation. to increase the ability of the national defense industry to realize the independence of the defense industry.

Human Capital, Trade Competitiveness and Environmental Efficiency Convergence Across Asia Pacific Countries.

This study mainly investigates 14 Asia Pacific economies' environmental efficiency. Departing from previous studies ignoring environmental technology heterogeneity, we evaluate environmental efficiency through metafrontier super epsilon based model (EBM). We compare environmental efficiency convergence across different regions via unit root test and truncated regressions. We analyze how trade competitiveness impact environmental efficiency. We also explore effect of green technology and human capital on environmental efficiency from the perspective of endogenous growth. Our findings indicate that stochastic and absolute β-convergence tendencies were confirmed. Human capital can enhance environmental efficiency convergence. Trade competitiveness showed a mixed impact on environmental efficiency convergence, confirming scale, composition and technical effects. It is better to enhance human capital, strengthening environmental regulations under international competition as well as relentlessly pursuing green industrialization across Asia Pacific countries.

Trader Competition in Fragmented Markets: Liquidity Supply Versus Picking-Off Risk

AbstractBy employing a dynamic model with two limit order books, we show that fragmentation is associated with reduced competition among liquidity suppliers and lower picking-off risk of limit orders. Due to these countervailing channels, the impact of fragmentation on liquidity and welfare differs with asset volatility: When volatility is high (low), liquidity and aggregate welfare in a fragmented market are higher (lower) than in a single market. However, fragmentation always shifts welfare away from agents with exogenous trading motives and toward intermediaries. We empirically corroborate our model’s predictions about liquidity. Our model reconciles the mixed results in the empirical literature.