Export Sector Research Articles

Combining the management of natural resources with the management of environmental resources: Modeling the impact of high-tech and ICT service export

The sustainable development of nations highly depends on the management of natural resources and their environment. Based on the above, we can establish that there is a practical solution the incorporation of natural resources and environmental management in the export sector of high-tech and ICT services working for sustainable development. The high-tech and ICT sectors, using technology and new business models, can solve many issues in the natural resources and environmental sectors. This paper examines Combining the management of natural resources with the management of environmental resources in China from 1990 to 2022 in the light of renewable energy consumption and ICT service exports as control variables. This study reveals that renewable energy consumption is positively associated with the management of natural resources and ICT service exports are positively related to the management of environmental resources. The implications of these results are the necessity for the co-management of natural and environmental resources in China and the opportunities for leading technologies to improve environmental management practices. One of the greatest troubles that climate change has brought is the production of natural resources. Policymakers can integrate natural resource management with exports of high-tech and ICT services to develop novel solutions to mitigate the effects of climate change, including creating early warning systems, disaster management technologies, and climate-smart agriculture. Also, policymakers can make more informed decisions and enforce impactful policies to achieve sustainable development goals through modeling and simulation.

Impacts of Regional Integration and Market Liberalization on Bilateral Trade Balances of Selected East African Countries: Potential Implications of the African Continental Free Trade Area

This study examined the effect of free trade on intra-African bilateral trade balances for Kenya, Rwanda, Uganda, and Tanzania to assess the potential implications of the African Continental Free Trade area. The four countries have experienced persistent trade deficits. Whether free trade within Africa can improve the national trade balances, and the drivers of bilateral trade balances are important questions for policy and strategic programmes for the countries to make the most gains from free trade area. The econometric model estimated for each country is an extension of the standard Keynesian model of trade balance to include determinants of bilateral trade flows from the gravity model. Quantitative analysis using panel regression was augmented with qualitative data from interviews with trade policy experts and trade officials from various African countries and focus group discussions with small-scale cross-border traders at the Busia and Namanga border posts in East Africa. Findings show that complete tariff elimination on intra–African trade may not impact the bilateral trade balances of Kenya, Rwanda, and Tanzania but could improve bilateral trade balances for Uganda by 6 percent. Within the free trade areas, Uganda’s bilateral trade balances were higher within the Common Market for Eastern and Southern Africa but lower within the East African Community, than outside these areas. Kenya’s trade balances were lower in the Common Market for Eastern and Southern Africa, than otherwise. On the contrary, no significant difference in trade balances is established for the membership of Kenya, Rwanda, and Tanzania in the East African Community; Rwanda in the Common Market for Eastern and Southern Africa; and Tanzania in the Southern African Development Community, when compared to trade balances with non-members. The importance of macroeconomic factors is demonstrated by the increase in bilateral trade balances with higher relative price levels of trade partners; the reduction with increase in relative production and expenditure capacities of trade partners; and improvements following a depreciation of home currency for Tanzania and Uganda, yet a worsening of trade balances in Kenya. A lack of harmony in documents required for cross-border movements within the free trade areas is reported as counterproductive. All African countries should therefore fully implement protocols and cooperate in the harmonization of trade procedures for the free movement of people and goods across borders. Country policies and trade programmes should pursue increased productivity in the leading intra-African export sectors and diversify exports via foreign direct investment in strategic sectors to substitute imports from outside Africa; reduce costs of production; increase the quality of products; and improve transport infrastructure.

Revisiting the carbon-economic inequality within global value chain considering corporate heterogeneity: Evidence from China's trade

The mismatch between trade-embodied economic benefits and CO2 emissions gives rise to inherent inequality within the era of global value chains (GVCs), whereas the existing accounting framework failed to distinguish between multinational corporations and local firms. Taking China as a case study, this study developed a novel Inter-country Input-output (ICIO) model based on the trade in factor income (TiFI) principle, while considering corporate heterogeneity. The findings reveal that when bilateral trades are measured in terms of trade in traditional value added (TiVA) principle, China's trade surplus with five partners was overestimated by 61 % from 2010 to 2015, with the United States being particularly overvalued by nearly 45 %. At the industry level, the Non-metallic manufacturing and Retail sectors accounted for over 10 % of China's exports, surpassing TiVA in terms of market share, indicating that China's contribution to crucial export sectors is underestimated. However, the evaluation based on the TiFI principle revealed a 27 % reduction in the overall carbon deficit, indicating that China's contribution to global carbon emissions continued to decline. The carbon-economic inequality (CEI) index between China and its trading partners indicates a value greater than or equal to 1, implying that China has encountered setbacks in global carbon trading. Notably, the application of the TiVA principle results in an underestimation of CEI between China-United States and China-South Korea, with respective values ranging from −0.13 to 0.27 and − 0.05 to 0.05. Overall, this study offers valuable scientific evidence towards addressing accountability and promoting climate justice.

An Application of the Kaldor-Dixon-Thirlwall Model for Regional Economic Growth in Mexico

This paper analyzes the links between exports and regional economic growth in Mexico. The Kaldor-Dixon-Thirlwall theoretical model and the econometric methodology of Durbin spatial panel models are used, which were estimated for the periods 2008-2019 and 2008-2023. The econometric results show, among other findings, that the relationship between regional growth and state export growth is null and non-significant, while trade openness and its absolute growth are positive and significant. The weak relationship between exports and regional growth implies that industrial policy proposals other than traditional ones should be promoted. A limitation of this study is the absence of data on regional imports, which could have enabled a more comprehensive examination of theoretical frameworks. Nonetheless, the study's significance lies in highlighting the limited role of the export sector in driving regional growth in Mexico, attributed to the weakening of national productive links.

Measuring Structural Power in Global Value Chains: Evidence from Malaysian Manufacturing

The global value chain (GVC), as the most important feature and driving force of globalisation has profoundly shaped state–market relations, as well as the international political economy. This paper uses Malaysia as a case study to demonstrate a country’s embedding structural power in GVC. Deploying the OECD’s Inter-Country Input-Output Table from 1995 to 2018, two indicators were constructed, namely power of value added (PV) and interaction of value added (IV), to measure Malaysia’s structural power in GVC. The results indicate that Malaysia’s PV in GVCs has declined over the years. A combination of high GVC participation but low GVC position indicates that Malaysia’s export sector remains stuck in low value-added activities despite being highly integrated into global production networks. Also examined is the value-added interaction between Malaysia and major economic powers, such as the US, China and Japan. In so doing, we provide an evolutionary explanation of Malaysia’s location in the international political economic system where economic and political power are increasingly intertwined.

China’s public international investment: A strategic-trade-policy perspective

Initiatives such as the Belt and Road initiative reduce trade costs, increase export firms’ profits and stimulate their activities in R&D contests. The resulting strategic-trade policy equilibria tend to be asymmetric. One country earns leadership in the markets for exports to the rest of the world. Factors that are conducive for a country to gain the role of major innovator and exporter nation are: (1) whether a nation follows a ‘national champions’ policy compared to a rigorous national anti-trust policy, (2) whether a nation has a large pre-existing export sector, (3) whether the government places a high welfare weight on the profits of the firms in its country, and (4) whether the government has low opportunity costs of such investment policies. Piecemeal evidence suggests that, compared to the US, China has the advantages in all these four dimensions.

Cloud computing and rural globalization: Evidence for the U.S. nonfarm economy

We use confidential firm-level data to examine the association between export intensity and subscription to cloud computer services – a technology that often requires very high-speed broadband. Our focus on rural nonfarm exports is motivated by the increasing concentration of manufacturing—the dominant export sector—in nonmetropolitan counties and the large public investment in extending high-speed broadband to underserved parts of the U.S. We find that cloud computing is associated with higher export intensity that is consistent with exporting activity placing new demands on IT-enabled functions such as order fulfillment and tracking, marketing, or document control.

Combining Export- and Domestic Demand-Led Growth Hypotheses: Key Sustainable Development Amidst Global Dynamics

Export-led growth has conventionally been regarded as a pivotal determinant of economic growth in developing countries. The article aims to affirm the vulnerability of Vietnam’s export sector due to its dependence on foreign direct investment flows and external market demand and evaluate the validity of the export-led growth strategy being applied in Vietnam among evolving global dynamics. The review of relevant literature explored the theoretical foundations, theories, and concepts of export-led and domestic demand-led growth with regard to the causal link between exports and economic growth. Qualitative and secondary research methods were used to analyze statistical data sets on imports and exports and domestic demand components to highlight their impact on the country’s GDP growth. The results showed that it is necessary to embrace both export-led growth and domestic demand-led growth as concurrent development paradigms, thereby ensuring the sustainability of Vietnam’s economic growth. Doi: 10.28991/HIJ-2024-05-02-05 Full Text: PDF

Elimination of Discrimination Against Women and the African Continental Free Trade Area

Abstract Article 4 of the Protocol on the Free Movement of Persons, provides against the discrimination of nationals of state parties to the treaty based on their sex. The discrimination against women extends to stereotypes that often put them at risk in other countries where they might be domiciled. And this is further worsened by the fact that many of these women are not informed about their rights. The study would focus on the issues that result from the discrimination against women in Africa and how this would impact women’s economic capacity to trade within the African Continental Free Trade Area (AfCFTA). This research engaged the doctrinal approach and the Realistic Conflict Theory. Content analysis was done on the Agreement Establishing the African Continental Free Trade Area Protocol on Trade and Services, the Protocol on the Free Movement of Persons, institutional reports, and journal articles. This study concluded on the opportunities that the inclusive approach of the AfCFTA could bring, if states could leverage on the AfCFTA through states mechanisms to provide equitable means for women to thrive in an export sector, culturally inclined to constrain gender inclusion.

Asymmetric effects of exchange rate volatility on Turkish-German commodity trade

This study investigates the asymmetric effects of exchange rate volatility on Turkish-German commodity trade using annual time-series data from 1980 to 2022. We analyze 90 industries exporting from Turkey to Germany and 114 industries importing from Germany to Turkey. The empirical results of the nonlinear ARDL model show that the volatility of the real lira-euro exchange rate had short-run asymmetric effects on trade flows for 60 (86) Turkish export (import) industries, which persisted for 46 (52) Turkish export (import) industries in the long-run. The industry-specific results show that an increase (a decrease) in lira-euro volatility increases Turkish exports (imports) to (from) Germany mostly for both small and large industries. The study suggests that export and import sectors that benefit from lira-euro volatility may consider expanding their production and trade activities, while sectors adversely affected by volatility may need to explore alternative strategies. This study highlights the importance of considering exchange rate volatility's asymmetric effects on trade between Turkey and Germany, emphasizing the varying implications across specific industries. The findings contribute valuable insights for policymakers and industry stakeholders in understanding how exchange rate fluctuations impact bilateral trade dynamics.

Internal Communication and Change Management at Cotton Web Private Limited

Cotton Web Private Limited (CW), an apparel company based in Lahore, was established in the late 1990s by entrepreneurs who faced limitations in resources and experience within the textile manufacturing and export sector. Despite these constraints, the directors successfully capitalized on a narrow window of opportunity, leveraging their entrepreneurial skills with the dedicated support of experienced employees and fostering a positive ‘can-do’ culture. By 2013, they had transformed the company from its inception in 1998 into a substantial enterprise with over 2,000 employees. At this juncture, the directors, particularly Daniyal and Waseem, decided to initiate a strategic change aimed at transitioning the flat, entrepreneurial structure of the company into a systematically managed organization. To facilitate this transformation, the directors enlisted the services of an external HR consultant to assess, design, and implement the strategic change process. Despite the positive intent behind the change process to foster organizational growth and enhance management systems, it encountered significant challenges. Communication breakdowns emerged at various levels and junctures, including between the directors and the HR consultant, between the consultant and the employees, and between the management and the workforce. The change process, unfortunately, resulted in thirteen resignations within a short timeframe, indicating its disruptive impact. This challenging situation left the directors in an uncomfortable position, compelling them to contemplate difficult decisions to address the issues at hand.

Unintended environmental gains: The impact of China–Europe Railway Express on carbon dioxide emissions in China

Climate change is a major environmental issue, while reducing carbon dioxide emissions is viewed as a vital measure against global warming. The CHINA RAILWAY Express (CRE) could attract or foster new export-oriented industries by generating new profitable export opportunities and enhancing access to European markets. This study focused on the unintended effect of the CRE policy on carbon dioxide emissions reduction, which stems from its promotion of industry development. We used the synthetic difference-in-differences approach to derive reliable estimation of the CRE’s unintended low-carbon effect. After controlling for the influence of other emission sectors and other low-carbon policies, the estimated results indicate that the CRE only reduced carbon dioxide emissions in the 12 cities with regular CRE services. The unintended policy effect decreased carbon dioxide emissions, on average, by 9.18%. Further heterogeneous analysis shows that the CRE’s effect is positively correlated with the numbers of CRE trains. Moreover, the CRE has a heterogeneous impact on high-carbon and low-carbon sectors. Because the CRE can promote the exports of low-carbon sectors to Europe rather than those of high-carbon sectors, the CRE has a prominent impact on reducing average carbon dioxide emissions and improving the industrial structure. Formal mechanism analysis confirms that the impact of the CRE on carbon dioxide emissions actually occurs through the mechanism of industrial structure upgrading. Our results reveal the CRE’s unintended environmental gains and offer insight for governments that hope to simultaneously reduce carbon dioxide emissions and promote economic growth.

The Real-Time Impact of the War on Russian Imports: A Synthetic Control Method Approach

Abstract In response to the invasion of Ukraine, the EU and most other advanced economies imposed extensive sanctions on Russia, intending to harm its production capabilities and hinder its economic activities by restricting its access to international trade and financial markets. This paper develops an empirical framework based on the synthetic control method to assess the impact of the war and the following sanctions on bilateral and sectoral exports to Russia almost in real time. The war and the following sanctions reduced aggregate exports to Russia by a third between March and December 2022, with the effects being stronger for sanctioning countries than for non-sanctioning ones, albeit with substantial country-level heterogeneity within each group. Exports to Russia in high-tech sectors – relatively more targeted by trade sanctions – have been disproportionately affected.

Factors affecting the attractiveness of African financial markets: The case of the WAEMU stock market assessed using quantile regression

Our study contributes to the literature on the dynamics of African financial markets by examining the dependence structure between the BRVM, the economic fundamentals of the WAEMU and global factors. Using the quantile regression approach, our empirical findings show that investors have to overcome several difficulties to correctly understand the dynamics of the BRVM market. These difficulties reduce the attractiveness of the BRVM. Tax incentives to attract more companies to the stock market, in particular companies in the exporting sectors (mining and agricultural sectors), could help to increase the liquidity and attractiveness of the BRMV. This can concretely materialize by creating a new index: BRVM Export sectors.

The Impact of Access to Intermediate Inputs on Export Margins: Firm-Level Evidence from the Regression Decomposition Approach

This paper analyzes how export margins responded to an intermediate input supply shock caused by the 2020 lockdown in China. We use regression decomposition with triple and quadruple difference-in-differences models to identify causal impacts and mitigate potential heterogeneity in transaction-level customs data from the Bangladesh apparel manufacturing industry. The triple difference estimate shows that the average export value per firm–product–destination combination declined by approximately 65%, leading to a decrease in overall exports of woven apparel from Bangladesh. The input supply shock also adversely affected the subgroups of firms across various firm-level characteristics along the intensive margin. Moreover, the export market share decomposition reveals that the shock significantly affected intensive margins by decreasing incumbents’ market allocation by 9%. An equivalent increase in extensive margins led to a readjustment in the market allocation, leading to fewer market leavers and slightly more new market entrants. Our results indicate that Bangladesh’s exports mostly decreased due to the smaller quantities of products exported rather than there being fewer firms, destinations, or products involved in export trade. There were significant market share reallocations that occurred after the Chinese input supply shock. An appropriate policy stance is required for sustainable export sector growth strategies, which will enhance the country’s defense against potential future shocks and foster the achievement of sustainable development goals (SDGs) in Bangladesh.

Decoupling with(out) outsourcing? Quantifying emissions embodied in BRI trade with implications for climate policy

We empirically examine the trade-related environmental impacts of the Belt and Road Initiative (BRI) using a novel technology-adjusted consumption-based accounting in addition to traditional accounting schemes and data from the Eora Global database from 1995 to 2015. We find that BRI trade accounted for 3-quarters (5.01 Gt) of global traded emissions in 2015. BRI countries account for 60%–75% of (non-BRI) developed-world consumption-based emissions. While developing (BRI) countries import 8%–42% of their consumption needs from China, they account for half of the China’s imported emissions. Our analysis reveals that technological adjustments in export sectors significantly alter the magnitude of outsourcing and emission responsibility assigned to both BRI and non-BRI countries. This leads to a notable shift in net trade balance emissions. We find that developed (BRI and non-BRI) countries have reduced emissions primarily through decoupling and outsourcing. Our findings demonstrate that BRI trade has diverse environmental effects; exports from more carbon-efficient (BRI and non-BRI) developed countries are likely to reduce (or avoid) emissions in developing (BRI) countries and vice versa. An important implication of these findings is that China’s BRI-led outsourcing and investments have the potential to yield significant environmental benefits by accelerating the transition to renewable energy in developing countries participating in the initiative.

Impact of the EU’s Carbon Border Adjustment Tax on India and other trading partners of EU

The European Union (EU) recently introduced the Carbon Border Adjustment Mechanism (CBAM) with the intention to impose a pricing mechanism on carbon emissions, originating during the production process of emission-intensive products, imported by EU from its non-EU trading partners. However, CBAM is facing a lot of criticism ̶ as an unfair, protectionist measure that threatens the principles of multilateral trading system and has a disproportionately biased impact on the overall welfare of the low-income developing countries. In this context, the paper empirically examines the impact of the European Union’s Carbon Border Adjustment Mechanism on its trading partners by using the CGE GTAP-E model. The impact has been assessed across three pathways – export sales of the trading partners, the emission intensity of the products, and the overall impact on the welfare of the European Union’s (EU’s) trading partners using the GTAP 11 database. The impact varies across countries and sectors. The model estimates indicate that due to the imposition of CBAM, countries with existing domestic carbon pricing mechanism experience marginal increase in welfare with the UK being an exception. Contrastingly, countries with no carbon pricing mechanism will experience a decrease in overall welfare. Countries with a higher share of the EU in their total export basket are affected in terms of their export sales. India’s cement sector export is affected the most due to the imposition of CBAM. However, India’s total amount of exports of cement to the EU’s market is negligible. India’s export of iron and steel to the EU constitutes a larger share but the impact of CBAM is found to be negligible on the same.

Assessing the Efficiency and Potential of China’s Apple Exports

This study elucidates the factors impacting China’s apple trade, its efficiency, and opportunities for increased revenue. This study adopts a stochastic frontier gravity model on China’s apple exports data, covering the period from 1997 to 2022 across 38 significant trading partners. The finding demonstrates that the economic growth of China and its trading partners substantially boosts apple export volumes, with a positive correlation between GDP growth and export flows. The research also highlights the deterrent effect of geographical distance on exports and reveals a complex negative relationship between the per capita GDP of importing nations and export efficiency, shedding light on the nuanced nature of trade dynamics. Furthermore, the study finds that the appreciation of China’s currency plays a crucial role in enhancing export efficiency by lowering transaction costs. Meanwhile, increased agricultural land in importing countries presents competitive challenges, impacting export performance negatively. Geographical proximity and infrastructural features, such as shared borders and lack of access to seaport, are identified as significant factors in export efficiency. The analysis unveils considerable untapped export potential in various countries, suggesting a strategic avenue for market expansion. To optimize China’s apple export strategy, policymakers are advised to consider currency management, negotiate trade agreements that mitigate distance and per capita GDP effects, and target markets with high untapped potential, thereby facilitating sustainable growth in China’s apple export sector.

Assessing the impact of non-tariff measures on Sri Lankan mango exports: insights, challenges, and recommendations

IntroductionWith the increase in non-tariff measures (NTMs) in recent years, understanding their impact on trade policies and agricultural exports is of utmost importance for countries like Sri Lanka, where the proliferation of NTMs has posed substantial impediments to its mango export industry. However, studying NTMs can be challenging due to their complex nature, diverse range, and limited information availability.MethodsThis research aims to investigate the significant effect of NTMs on Sri Lankan mango exports, identify the pivotal drivers influencing mango exports, and analyze the performance of mango exports in Sri Lanka. This study utilized a panel dataset of 16 importing countries spanning the period from 2000 to 2021. The primary focus was on examining NTM-related challenges and obstacles faced by the mango export industry in Sri Lanka. The identification and quantification of these obstacles were achieved through a multifaceted approach in which assessment of NTM-related rejections, both domestic and overseas, evaluation of NTM incidences using frequency and coverage ratio measures, and the deployment of various gravity model equations to quantify the effect of NTMs were taken into consideration. Probit, Ordinary Least Square, Random Effects, and Poisson Pseudo Maximum Likelihood estimation techniques were utilized for data analysis.ResultsThe findings indicate a significant inverse correlation between the increase in the total count of NTMs and Sri Lankan mango exports if the country aims to export more mangoes to relevant markets, while Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), and Pre-shipment Inspection (PSI) contributed to increased mango exports. Among other explanatory variables, the GDP of both importing and exporting countries had a positive influence on Sri Lankan mango exports. Surprisingly, the distance to the importing country had no significant effect, though it shows a negative sign.DiscussionThis study provides valuable insights into the impact of NTMs on Sri Lankan mango exports. It highlights the considerable influence of NTMs on the overall fresh fruit export sector. We recommend proactively aligning internal quality testing regulations with the standards required by destination countries to promote future expansion.

Botswana Coal: Navigating Economic Diversification and Climate Commitments

This paper considers the ethical dilemma posed by the Paris Climate Agreement considering the abundant coal exploitation opportunities in Botswana. The estimated 200 billion tons of coal was initially viewed as an opportunity to diversify the Botswana economy away from diamonds. Coal is currently used locally for electricity production and other small scale domestic uses. This paper mainly discusses thermal coal as opposed to coking coal commonly referred to as Met-coal. Lucrative prices on world markets coupled with demand in India and China for coal, Botswana with its massive coal deposits, one of the largest in world, can develop a new export sector which would diversify the diamond dependent economy. In 2012 the Government of Botswana released a Coal Road Map as it then envisaged coal as one of the more propitious areas for economic diversification. However, the potential to develop this export sector has been seriously challenged by the Paris Climate Agreement decision to move away from coal. In the wake of this treaty countries like China and Japan have refocused their efforts in developing renewable energy and this has negatively hampered Botswana’s economic ambitions.