Trading Partner Countries Research Articles

Trade Facilitation and China’s Agricultural Products Exports: Empirical Evidence from Japan and Korea

Purpose – This paper analyzes the relationship between trade facilitation and agricultural products exports and estimates the effects of trade facilitation in importing countries on Chinese agricultural products exports, which is of great significance for promoting agricultural trade between China,Japan and Korea and the governments of the three countries to formulate targeted trade facilitation policies. Design/methodology – Based on Wilson (2003) theoretical framework, this paper sets up its own trade facilitation level measurement system by involving four primary indicators and fifteen secondary indicators to evaluate the trade facilitation levels of Japan and Korea from 2011 to 2018 respectively. The paper selected the data on China s agricultural exports at the HS4 level from 2011-2018 and used a fixed-effects model to estimate the effect of changes in trade facilitation levels in trading partner countries on China s agricultural trade. Findings – Our main findings can be summarized as follows: the level of trade facilitation in importing countries has a significantly positive effect on China’s agricultural exports. The higher the level of trade facilitation in trading partner countries, the more Chinese agricultural exports trade, i.e. for every 1 percentage point increase in the level of trade facilitation, the volume of exports will increase by 2.299%.The sub-sample test shows that China s main agricultural products exported to Japan and Korea, such as aquatic products, vegetables, fruits and other perishable fresh products, are particularly significantly affected by the level of trade facilitation. Originality/value – First, from the innovation of the research perspective, which is different from the analysis of the existing paper on the overall trade facilitation of all traded commodities. This article is based on the close trade relations between China, Japan and Korea, and the particularity of agricultural products, from the perspective of China’s agricultural exports to Japan and Korea, discuss the impact of importing countries—Japan and Korea’s trade facilitation levels on China’s agricultural exports;Secondly, in this paper, the hierarchical data of the HS4 quartile is used to avoid the information loss of the industry, and to analyse the impact of the importing country’s trade facilitation level on the export of different types of agricultural products more scientifically.

Türkiye ve Ana Ticaret Partnerleri için J Eğrisinin Geçerliliğinin Analizi: Panel Veri Yaklaşımı Uygulaması

External trade cannot create the expected result for some countries due to their economic structures or policies. Economies could encounter severe foreign trade deficits and the risk of an economic crisis. Thus, researchers and policymakers analyse the dynamics of countries’ external trade balances. Turkey’s persistent current account deficit is one of the most significant macroeconomic problems. Turkey depreciated the Turkish Lira against foreign currencies to reduce its foreign trade deficit in the past. Using panel data analysis, the current study tests the J-curve for Turkey and its six main foreign trade partner countries - Russia, USA, Germany, UK, Italy, and China. Results do not support the validity of the J-curve hypothesis in the long run. Test results analysing the short-run indicate that the whole panel is statistically insignificant.

Analysing the export potentials of the Portuguese footwear industry by data envelopment analysis

Exports are widely believed to play a central role in economic development and firms' profitability, particularly in countries with small domestic markets. With that aim, governments and firms spend considerable resources on international promotion. Identifying the markets with the greatest potential for export growth is therefore crucial for an efficient allocation of public and private resources. In this paper, we propose a Data Envelopment Analysis framework to identify trading potentials with existing trading partner countries within an industry. To illustrate its applicability, we use data from the Portuguese footwear industry. Specifically, among the countries that currently import Portuguese footwear, we aim to identify those that have the greatest potential for increasing their imports from Portuguese footwear in terms of revenue. We further decompose this potential into price and quantity changes to provide strategic directions to the Portuguese footwear industry. For the analysis, we use panel data of 64 countries analyzed over the years 2011-2018. The results reveal that higher potentials lie among the countries of the European Economic Area. Overall, these potentials may be achieved through different price-quantity strategies.

China trade with belt and road countries: the role and impact of institutions

ABSTRACT This article investigates the impact of institutional quality on China’s trade with belt and road economies by testing the augmented gravity model framework. Our empirical analysis is based on 16 years of balanced panel data of 65 belt and road economies. We use the instrumental variable estimator developed for a panel data model to address the potential endogeneity issue. We distinguish the vital role of institutions in trading partner countries in shaping this result. Our outcomes outline an interesting story about the association between institutional quality and China’s export to and import from belt and road countries. We find that the weaker voice and accountability and political stability in B&R countries negatively affect China exports, while China import from B&R economies shows a statistically positive effect of institutions. Our findings are robust to employs a panel pseudo-maximum likelihood (PPML) estimation method. As part of wider trade integration, we conclude that the B&R countries should strengthen their institutions. The results of this study have several implications for policymakers.

DETERMINANTS OF INDONESIA NON-OIL AND GAS EXPORTS TO NON-TRADITIONAL MARKET

Indonesia has considerable opportunities to export non-oil/gas to various countries. Non-traditional market is considered to have great potential for increasing non- oil exports. This study aims to estimate the effect of GDP of export destination countries, inflation of export destination countries, economic openness of export countries and the Indonesian exchange rate against the US dollar to Indonesia non-oil exports to non-traditional trading partner countries. The analytical method in this study uses descriptive statistical analysis and panel data regression, the results show that REM is the selected model. The GDP has a significant and positive affect to Indonesia’s exports, while exchange rate has no effect on Indonesia’a exports, inflation having a significant and negative effect to Indonesia’a exports, and economic openness having an significant and positive effect to Indonesia’a exports. Indonesia needs to diversify exports to non-traditional countries and cannot rely solely on exports to major trading partner countries. Keywords: exports, non-traditional markets, GDP, inflation, exchange rates, economic openness

Does the import diversity of inputs mitigate the negative impact of COVID-19 on global value chains?

This study sheds light on the role of the import diversity of inputs and explores the effects of COVID-19 on global value chains (GVCs). Using monthly export data of final machinery products for 35 countries and indicators of diversity with 252 trade partner countries, we investigate the supply-side effects of COVID-19 on GVCs during the period from January to August 2020 and examine how the import diversity of inputs influences such effects. As a result, we find the negative supply-side effects in all three machinery industries, with the greatest ones in the transport equipment industry. In addition, such negative impacts on machinery industries are larger during the trade–fall period from February to May 2020. Furthermore, we demonstrate that the import diversity of inputs had a significant influence in partially mitigating the harmful supply-side effects of COVID-19, particularly during the early period of February–March 2020.

The Impact of Trade Deficit in Nepalese Economy

This study aims to explore more information about the economic performance of Nepal and the impact on the economy caused by foreign trade. The trade deficit impacted directly on the financial performance of the country. It affected the GDP of the nation, supply side, interest rate, price of commodities and FDI. The article has discussed the relationship with the major trading partner of Nepal and other countries. Besides this, a quantitative research method was used in this research paper. Information in this article was collected from a secondary source of data. The reliability of this study depended on the reliability of secondary data. The analysis was based on a simple statistical tool. Concerning the methodology, it is based on exploratory data analysis. The comparison has been made in this paper with primary trading partner countries India, China and other countries. This study has found the deficient export performance of Nepal, which has created the problem of rapidly increasing trade deficit. Trade deficit became one of the major causes that lead the national economy to downturn side.

IMPACTS OF MANDATORY STANDARDS POLICY AND SIGNING OF INTERNATIONAL MUTUAL RECOGNITION AGREEMENTS ON INDONESIAN IMPORTS

<p>The abatement of tariff obstacles led to an increase in the implementation of non-tariff barriers inglobal trade. Standardization policy plays a dual role in international trade as non-tariff barriers which can drive or inhibit trade. On the other hand, international organizations, such as ILAC and IAF, encourage their members to sign mutual recognition agreements to reduce technical barriers to trade. This study aims to investigate the extent to which mandatory standards policy and signing the international mutual recognition agreements influence Indonesian imports.This is a quantitative study by using secondary data, including: Indonesian import’s value, Indonesian tariff, Indonesian GDP, partner countries’ GDP, geographic distance, a dummy variable of mandatory SNI, and a dummy variable of MLA/MRA. This study observes the import value of 300 commodities that are required to comply with SNI from 103 trading-partner countries between 2007 and 2019. The gravity model is employed as an analytical tool, which is then regressed by utilizing linear regression with a product's fixed effect. A key finding of this empirical research is that mandatory standards policy has a negative link to Indonesian imports. Another crucial outcome is that though the mutual recognition agreement of the conformity assessment results has a positive correlation to Indonesian imports, it is not statistically significant. It can be recommended that the enforcement of compulsory SNI needs to be upward in the future in order to carry out the mandate of the law for consumers protection from an abundance of low-quality imported goods. Another recommendation is that the government could make optimal use of the MRA to be able to promote exports of Indonesia's main commodities to the global market.</p>

Pertumbuhan Ekonomi dan Kemiskinan Indonesia: Analisis Dampak Liberalisasi Perdagangan pada Mitra Dagang Utama

Abstract Purpose: This study aimed to analyze the effect of trade liberalization on Indonesia's exports by involving the three (South Korea, Japan, and China) major trading partner countries. Research Methodology: This study used the concept of a gravity model, with panel data samples from 1996 - 2019. This study used independent variables such as tariffs, level of openness, exchange rates, poverty, economic growth (GDP), inflation, and distance. Results: The study results found that tariffs and the level of openness have a significant effect on exports. It can be said that trade liberalization has an effect on exports. In addition, the variables GDP, poverty, and the exchange rate also have a significant effect on exports. Meanwhile, the two variables of inflation and distance have no effect on Indonesian exports. This condition shows the same thing among the three trading partner countries. Limitations: Other elements were not included in this study, such as digitalization and international trade technology. Contribution: The theoretical contribution of this research provides scientific contributions in the field of economic liberalization and poverty, and the empirical contribution shows that Indonesia's macroeconomic conditions are still dependent on trade with neighboring countries.

The Effects Pandemic Covid-19 on Indonesia Foreign Trade

Indonesia is a developing country whose needs are exported from abroad. Therefore Indonesia needs foreign trade to fulfill goods that cannot be produced domestically or to distribute goods in which Indonesia has an absolute advantage in producing these goods. However, the policies are taken by the domestic government and Indonesia's foreign trading partner countries to limit the spread of the Covid-19 virus have an impact on the inflow of goods to and from abroad. Thus, this study intends to see how the Covid-19 pandemic has affected Indonesia's foreign trade by using the Paired Sample T-test, which observes conditions before and during/after a pandemic occurs. This study found that the Covid-19 pandemic had an impact on Indonesia's foreign trade from the aspect of oil and gas exports, imports of raw materials, and imports of Indonesian capital goods.

The impact of infrastructure on trade in Central Asia

This paper aims to investigate the impact of infrastructure on trade in Central Asia based on the data of three countries: Kazakhstan, Kyrgyzstan, and Tajikistan. Empirical estimations are based on panel data for the period 2010–2018. Infrastructure is measured by quality and quantity indicators. Trade flows are measured by the export and import volumes of each of these countries with their main trade partner countries. The results show that both the quality and quantity of infrastructure in Central Asia have a positive impact on trade flows. However, the positive impact of infrastructure over trade demonstrates a diminishing trend. Given the general remote geographical location of Central Asian countries, the findings of this study indicate that a regional approach to the development of infrastructure is important and that policy towards infrastructure development should be associated with a government policy that facilitates international trade.

Somaliland: a self-declared country’s fight against COVID-19

Somaliland despite having a weak health system, managed COVID-19 better than some well-resourced countries in the continent by establishing a National Task Force to direct efforts in early detection, surveillance, risk communication and infection control of the virus. The Ministry of Health has been able to garner personnel with medical skills to increase the response workforce and also supervise the activities of medical facilities across the country. However, these measures have shown unfavorable effect on the economy. Somaliland is in active trade with other African countries and neglecting the impact of the virus can greatly affect the trade partner countries. Appropriate relief funds should be offered by capable countries to lessen the economic impact of the pandemic in the country. In the meantime, it is time to reframe the health system of Somaliland and improve sectors that have been underfunded like emergency, intensive care units and the surgical departments.

Implications of COVID-19 Pandemic on China’s Exports

ABSTRACT This study empirically analyzes various implications of the COVID-19 pandemic in China and trading partner countries on China’s exports by constructing an econometric model using COVID-19 pandemic data from China and its 21 trading partner countries (regions) from January 2019 to August 2020. The results show that (1) the COVID-19 pandemic in China has a significant negative effect on its export trade, (2) the COVID-19 pandemic situations in trading partner countries and regions generate significant positive effects on China’s total exports, and (3) the COVID-19 pandemic situation has a heterogeneous impact on China’s exports to different trading partners.

Technology intensive trade and business cycle synchronisation: Evidence from a panel threshold regression model for India

In recent years, the export baskets of developing economies have undergone a structural shift away from traditional exports towards more technology-intensive exports. The case of India, in particular, is important as the performance of Indian exports in terms of their productivity is now at par with that of developed countries. Since trade integration has significant implications for output comovements, we analyse whether this phenomenon of a structural shift in India’s intra-industry trade composition has had any impact on its business cycle synchronisation with its developing and developed trade partners. Using a panel threshold regression model, our estimates reveal that intra-industry trade in technology leads to a convergence in business cycle of India with only its developing country trade partners. Further, when the GDP per capita of the partner country is greater than the threshold estimate, we find a negative relationship between technology-intensive trade and output comovements.

The impact of the economic crisis on Indonesian palm oil exports: a long term simulation analysis

This study aims to analyze the impact of the economic crisis on Indonesia’s palm oil exports. The relationship between factors in palm oil trade was analyzed using the simultaneous equation system model and estimated using the Two-Stage Least Square (2SLS) method. This research uses time-series data (years 2000 - 2018). The results showed that Indonesia’s economic growth contracted up to 5.32% leading to an economic recession due to the Covid-19 pandemic and the United States-China trade war which caused Indonesia’s palm oil exports to decline significantly. However, the increase in domestic palm oil consumption is thought to be due to lower palm oil prices and the implementation of domestic industrial policies. In this condition, the depreciation of the rupiah (11%) and the reduction in import tariffs for palm oil from trading partner countries are predicted to be able to improve the performance of Indonesia’s palm oil exports, but still low in net compared to conditions of average economic growth. This proves that the reduction in export tariffs (Indonesia) and import tariffs (trading partners) during the depreciation of the Rupiah due to contraction in economic growth can improve the performance of Indonesia’s palm oil exports.

Impacts of Environmental Policies on Global Green Trade

The objective of this study was to investigate the impact of environmental policies on bilateral green exports among developed and developing countries. The empirical analysis was based on the fixed-effects gravity model estimation with the PPML (Poisson pseudo-maximum likelihood) for bilateral green trade of world countries for 1990–2019. This study focused on two proxy environmental policy indicators: environment-related tax and energy intensity. The major findings were that, first, promotion of environment-related tax increases green exports among HIC (high-income countries) and, second, an increase in the green trade of a country depends on the energy intensity level of its trading partner countries in order to stabilize domestic demand and production. This result is shown to be significant and consistent within the trade between the same income groups. Thus, supporting the green growth strategy, empirical results suggest that LMY (low- and middle-income) countries have to promote environmental policies and green production processes to be competitive in the global market.

We Are All in the Same Boat

Are assets in a landlocked country subject to sea-level rise risk? In this paper, we study the cross-border spillovers of physical climate risks through international trade and supply chain linkages. As we base our findings on historical data between 1970 and 2018, we observe that globalization increased the similarity of countries’ global climate risk exposures. Exposures to foreign climatic disasters in major trade partner countries (both upstream and downstream) lower the home-country stock market valuation for the aggregate market and for the tradable sectors. We also find that exposures to foreign long-term climate change risks reduce the asset price valuations of the tradable sectors at home. Findings in this paper suggest that climate adaptation efforts in a country can have positive externalities on other countries’ macrofinancial performance and stability through international trade.

Factors Shaping Exports of Cultural Goods from Pakistan

In the era of economic globalization, cultural goods trade has assumed a vital role in overall bilateral trade. It has become an emerging and transformative force behind socio-cultural-economic development and an important source of inclusive growth. Once virtually unlocked, trade in cultural goods is now fast growing with world-wide market openings. Trade liberalisation in cultural goods thus needs to be treated as a priority policy issue in multilateral and regional trade negotiations. Despite large potential of exports in cultural goods, Pakistan has been unsuccessful in realizing it. This is mainly because of lack of due attention given to it by the policymakers. In this regard, this paper makes a beginning to investigate the determinants of cultural goods exports from Pakistan for the period 2003-2012 with its 157 trading partner countries. The Gravity model is used to identify factors that determine exports of cultural goods. Six major categories of cultural goods are used for the purpose of estimation. Results indicate that size of Pakistan and its trading partner countries’ markets as well as distance among them are important determinants of exports in cultural goods. Specifically, cultural goods exports are strongly and positively influenced by the growth of the GDP in Pakistan, while the trading partner countries’ GDP growth negatively influence cultural goods’ exports. Distance, representing transaction costs and trade barriers, negatively affect exports of cultural goods; while colonial ties, common language, common border and land area of the trading partners positively influence the export of cultural goods. Exports of cultural goods to landlocked countries are lower than other trading partner countries.

Determinants of Ethiopian Coffee Exports to Its Major Trade Partners: A Dynamic Gravity Model Approach

The aim of this article is to examine export determinants of Ethiopian coffee to 31 trade partner countries using a dynamic gravity model and system generalised moment method of estimation (GMM) for the period 1998–2016. Descriptive results showed that Ethiopia was exporting only 39% of its total coffee production, and 53.5% and 34.13% of Ethiopian coffee exports were directed to European and Asian countries, respectively, over the period 1998–2016. Regression results revealed that trade openness, population size of Ethiopia, foreign direct investment and institutional quality index of Ethiopia are positively and significantly affecting volume of Ethiopian coffee export. But population of partner countries, weighted distance, lagged export volume and real exchange rate are negatively and significantly influencing export volume of Ethiopian coffee. Hence, Ethiopia needs to diversify its export destinations and export items a way from primary agricultural exports to secondary industrial exports in order to secure dependable source of foreign currency. Also, controlling corruption, increasing government effectiveness, ensuring political stability promotion of foreign direct investment and encouraging trade liberalisation would help to boost the volume of Ethiopian coffee export. JEL Codes: F12, F13, F14

The effects of external shocks on the business cycle in China: A structural change perspective

AbstractWe study the effects of external shocks on the business cycle in China and its sectors (agriculture, industry, and services) in terms of real GDP growth using several small‐dimensional VAR models with Cholesky identification for the period 1996–2014. We show that China—in particular its industrial sector—is susceptible to shocks, which can be related to a trade channel, a financial channel, and a confidence channel of business cycle transmission from major trading partner countries to the Chinese economy. We build on the previous literature by explicitly focusing on the response of the Chinese economy at the sectoral level and investigating the presence of confidence channels by analyzing the reaction in Chinese business and consumer confidence. If interpreted from the perspective of ongoing structural change and rebalancing in China, our findings can be interpreted as the result of a still very dominant industrial sector, and a previously export‐ and investment‐driven growth model. Tertiarization in China could be one way of increasing the economy's future resilience to external shocks. However, the future structure of both the industrial and service sectors may be very decisive.