Export Relationships Research Articles

Private equity buyouts & firm exporting in crisis periods: Exploring a new channel

This paper examines whether private equity (PE)-backed companies are better able to remain active on export markets compared to similar non-PE firms, when hit by a negative shock. We look at two such recent shocks, namely the global financial crisis (GFC) and COVID-19 pandemic. We construct two matched samples, one for each crisis period, to assess the resilience of exporting under PE ownership in recessionary periods. We then explore how improvements in working capital management allow PE-backed firms to engage in international activities and maintain their export relationships relative to similar, non-PE-backed firms. Our results show that the export activities of PE-backed firms are significantly more resilient to the effects of the GFC but less pronounced following COVID-19. PE investment enhances working capital management, which in turn improves the persistence in export markets at the onset of the crises.

Waves or ripples: African countries risk shocks and the survival of Chinese exports to Africa

This paper examines the impact of risk shocks in Africa on the stability of Chinese firms' export relationships by analyzing risk fluctuations and using survival analysis to measure their effect. The findings reveal that risk shocks significantly increase the survival risk of Chinese firms' export relationships, leading to a notable reduction in stability. Private and non-foreign firms are more vulnerable to these risks, but certain market strategies such as learning-by-doing, learning from neighboring firms, and waiting strategies can effectively mitigate their adverse effects on export stability. Our findings indicate that certain market strategies, such as learning-by-doing, learning from neighboring firms, and waiting strategies, can effectively mitigate the adverse effects of risk shocks on export stability. Interestingly, a nonlinear marginal effect is observed in the case of the waiting-timing strategy. However, adopting a multi-destination strategy tends to worsen the negative impact of risk shocks on export stability, especially for private firms. Furthermore, non-market strategies employed by firms that promote government diplomatic behavior help reduce this negative impact.

The Impact of Exchange Rates on Macroeconomic Factors in Lao PDR from 2012-2021

The purpose of the analysis of the impact of exchange rates on macroeconomic factors of Lao PDR from 2012-2022 aims to (1) analyze the fluctuation of macroeconomic factors and exchange rate of Kip/Dollar and Kip/Baht in the Lao PDR from 2012-2021 and (2) the impact of the exchange rate on the macroeconomic factors of the Lao PDR from 2012-2021. By bringing the collected data to summarize, interpret, consider, select and analyze by using descriptive statistical model and inferential statistics to find a value in percentage, parameter value of regression equation with OLS through E-view 12. The analysis results found that: the exchange rate of Kip/Dollar has effect on the Gross National Income (GNI) of the Lao PDR in the same direction relationship, if the exchange rate changes and increases, it means that the kip of Lao PDR is weak. The country will have the ability to compete in terms of price or make the income from exports that change the value of the kip increase and have a continuous effect on the wages of labor in businesses related to exports, investment and the purchasing power of consumers through income and the economic growth increases, lead to export and investment increase. That will result in the increase of the Gross National Income (GNI) of the Lao PDR. The Consumer Price Index of Lao PDR is continuously increasing, if the Dollar /Kip exchange rate increase by 1 US dollar (USD), it will cause the consumer price index (CPI) of Lao PDR to increase by 1.67% in US dollar (USD). For the exchange rate and export relationship of Lao PDR, it shows that if the exchange rate of Dollar/Kip increase by 1 US dollar (USD), it will result in the export value (EX) of Lao PDR increase by 11.15% US dollar (USD). In other side, the Thai/Kip Baht exchange rate is unable to explain the Gross National Income (GNI), Consumer Price Index (CPI) and Lao PDR's exports clearly, which means that there is no relationship among them, or in other words, the Thai Baht exchange rate does not affect the macroeconomic factors in the model of this research.

Uncertainty of the Export VAT Rebate Policy: Measurement and Its Effects

Abstract Based on the export VAT rebate rate data from 2004 to 2015, this paper measures the uncertainty of Chinese export VAT rebate policy by using unexpected fluctuation of export VAT rebate rate, and finds that the index varies across products, years and industries. Then, the paper studies the influence of the uncertainty of export VAT rebate policy on China’s export growth from both theoretical and empirical perspectives. The research results show that this uncertainty reduces the expected profit of export enterprises and their optimal output, and significantly reduces the growth rate of the ordinary export that applies the export VAT rebate method, but it has no impact on the processing export. By decomposing total value of exports, it is found that the growth in the number of ordinary export relationship and average sales decrease with the increase of uncertainty, while the average price growth rate increases slightly, and these effects are only reflected in the newly entered export relations. The findings suggest that when the uncertainty of export VAT rebate policy is high, enterprises are more cautious about entering the ordinary export market and more likely to adopt a low-quantity-high-price strategy.

ECONOMETRIC ANALYSIS OF THE GOLD MINING SECTOR IN THE KYRGYZ REPUBLIC: IMPACT ON THE ECONOMY AND RECOMMENDATIONS FOR ENHANCING EFFICIENCY

The article is devoted to the analysis of gold mining sector in the Kyrgyz Republic. Effective management of this sector is extremely important, as gold is one of the key minerals in the country, which makes a significant contribution to the country's economy. Econometric models were used to assess the performance of the gold mining sector. As a result of the analysis, quantitative indicators of the relationship of gold exports on the economy were obtained, and the impact of activities in the Kumtor deposit on the country's economy was studied. Based on the obtained indicators, the analysis and forecast of revenues to the budget of the Kyrgyz Republic were made. Based on the results, recommendations were made to improve the efficiency of the gold mining sector.

The nexus between product sophistication and export survival: Evidence from China

This study investigates the survival of China's bilateral export flows at the six-digit HS level over the period 2002–2020. The results reveal that export relationships defined as product-destination pairs are highly dynamic and short-lived. Most export spells last no longer than five years, with a median duration of only two years. Product sophistication is a crucial determinant in establishing and stabilizing export relationships. This conclusion remains robust even after accounting for various measures for product sophistication, alternative definitions of export spells, and potential biases arising from simultaneity, sample selection, and data aggregation. Further analyses demonstrate that comparative advantage plays a positive role in moderating the nexus between product sophistication and export survival. In contrast, destination income poses a reverse U-shaped moderating effect on the relationship. The per capita income corresponding to the maximum moderating effect is US$ 6996.94, or the 56th percentile of the variable. Income distance accounts for the nonlinear effect of per capita destination income on export survival. These findings provide insights into China's rapid export growth and have significant implications for policymakers in China and other emerging economies striving for global trade success.

Streamflow duration curve to explain nutrient export in Midwestern USA watersheds: Implication for water quality achievements

As part of federal programs to reduce nutrient pollution, states across the Midwest have developed nutrient reduction strategies, which focus on implementation of agricultural conservation practices (ACPs) or best management practices (BMPs). Despite several decades of federal investment in implementing ACPs/BMPs for reducing nutrient pollution, nutrient pollution is a continuing and growing challenge with profound implications for water quality and public health as well as ecological functions. Pollutant transport depends on water and sediment fluxes, which are governed by local hydrology. Therefore, knowing how flow conditions affect nutrients export is critical to develop effective nutrient reduction strategies. The objective of this study was to investigate the role of streamflow duration curve in controlling nutrient export in the western Lake Erie Basin and the Mississippi River Basin. To achieve this goal, we used long-term monitoring data collected by the National Center for Water Quality Research. We focused on the percentage of the annual pollutant load (nitrate-NO3-N, dissolved reactive phosphorus-DRP, total phosphorus-TP, and total suspended solids-TSS) exported during five flow intervals that spanned the flow duration curve: High Flows (0–10th percentile), Moist Conditions (10–40th percentile), Mid-Range Flows (40–60th percentile), Dry Conditions (60–90th percentile), and Low Flows (90–100th percentile). The results show that the top 10% of flows (i.e., high flows) transported more than 50% of the annual nutrient loads in most of the studying watersheds. Meanwhile, the top 40% of flows transported 54–98% of the annual NO3–N loads, 55–99% of the annual DRP loads, 79–99% of the annual TP loads, and 86–100% of the annual TSS loads across the studying watersheds. The percentage of the annual loads released during high flows increased as the percentage of the agricultural land use in the watershed increased, but it decreased as the watershed area increased across different watersheds. Finally, flow condition/nutrient export relationships were consistent over studying period. Therefore, reducing nutrient loads during high flow condition is the key for effective nutrient reduction.

Survive and Thrive: The Duration of Cultural Goods Exports from China

ABSTRACT This paper employs survival analysis to examine the duration of cultural goods exports from China. We use disaggregated product-level data from 1995 to 2020 to explore the export dynamics of Chinese cultural goods and investigate the determinants. We find that most of the export relationships are short-lived, with a median duration of one year. However, if Chinese cultural goods can survive in the foreign market during the early stage, they will face a lower probability of failure and tend to survive for a longer period. In addition, we show that cultural distance is more of an obstacle to the exports of cultural goods under the framework of the gravity model. These findings survive a variety of robustness checks and have important policy implications.

Impact of India’s Free Trade Agreement with ASEAN on Its Goods Exports: A Gravity Model Analysis

The relationship between India and ASEAN has emerged as a crucial basis of their foreign policy. Both the regions signed a Free Trade Agreement in 2009, which came into effect in 2010. They are now reviewing the FTA to further enhance their economic cooperation. At this critical juncture, this study aimed to analyze the trade and export relationship between India and ASEAN and examine the extent to which the AIFTA effectively influenced it. Additionally, the study intended to determine what other factors influenced the trade and export relationship between the two regions and what future changes are needed in order to make this partnership mutually beneficial. To fulfill this objective, a gravity model was applied to a panel data from 2000–2019. A random effect model was utilized for the estimation. The empirical analysis concludes that the adoption of the AIFTA increased trade significantly; however, had no significant impact on raising exports. The study has identified rising NTMs as one of the important variables impeding realization of India’s export potential to ASEAN. This study suggests that in order to increase India’s exports and for the future of the FTA, India needs to emphasize on building stronger and extensive relationships with those countries in the ASEAN that are witnessing a higher GDP growth rate, such as Cambodia, Malaysia, the Philippines and Vietnam.

Clustering coefficients as measures of the complex interactions in a directed weighted multilayer network

In this paper, we provide novel definitions of clustering coefficient for weighted and directed multilayer networks. We extend in the multilayer theoretical context the clustering coefficients proposed in the literature for weighted directed monoplex networks. We quantify how deeply a node is involved in a cohesive structure focusing on a single node, a single layer or the entire system, respectively. The coefficients convey several characteristics inherent to the complex topology of the multilayer network. We test their effectiveness applying them to a particularly complex structure such as the international trade network. The trade data integrate different aspects and they can be described by a directed and weighted multilayer network, where each layer represents import and export relationships between countries for a given sector. The proposed coefficients find successful application in describing the interrelations of the trade network, allowing to disentangle the effects of countries and sectors and jointly consider the interactions between them.

Innovation and export performance of emerging market enterprises: The roles of state and foreign ownership in China

This article examines the role of ownership for the relationship between innovation and exports. Analyzing a large firm-level data set on Chinese manufacturing firms during 2000–2007, we find that state ownership has a positive moderating effect on the innovation–export relationship. We ascribe this effect to state-owned firms’ privileged access to complementary resources and networks that strengthen their ability to use innovation to generate exports. In contrast to many earlier studies, we also find that foreign ownership has a negative moderating effect. One likely reason is that indicators of local innovation do not reflect the flows of knowledge between foreign-owned firms and their parent companies. This finding highlights the fact that innovation and production may be geographically separated within multinational enterprises. A policy implication of the analysis is that public support to innovation is likely to have stronger effects on exports when it targets firms that carry out most of their activities in domestic market.

Duration of Trade Relationships of Polish Enterprises on the Intra-Community Market: The Case of Vehicles and Automotive Parts Trade

International trade allows for wider access to goods and services in domestic markets. It contributes to socio-economic development, and it is an important factor in raising living standards. The aim of the study is to provide a duration analysis of trade relationships of Polish enterprises on the intra-community market and determine the influence of selected factors on the length of time the relationships last. We employ survival analysis methods to study the duration of Polish enterprises on the intra-community market (the case of 87 CN chapter—vehicles and parts and accessories thereof), separately for intra-community supplies (ICS) and intra-community acquisitions (ICA). Our research covers trade relationships at a level close to individual transactions—the data unit relates to a specific domestic company, a specific product group (combined nomenclature heading), a specific direction of the transaction (ICS/ICA) and exchange with a specific country. Differences in duration curves for ICS and ICA are statistically significant, and export (ICS) relationships are more durable over time than import relationships (ICA). The most durable relationships of Polish enterprises are with business partners from countries such as the United Kingdom, France, Sweden, Spain, Portugal and the Czech Republic.

Saudi Non-Oil Exports before and after COVID-19: Historical Impacts of Determinants and Scenario Analysis

The diversification of the economy including its exports is at the core of Saudi Vision 2030. The vision targets to raise non-oil export from 16% to 50% of non-oil GDP by 2030. Achieving this, in addition to other goals, necessitates a better understanding of the non-oil export relationship with its determinants. However, we are not aware of a study that estimates the impacts of the determinants on Saudi non-oil exports covering the recent years of reforms and low oil prices and that conducts simulations for future. The purpose of this study is to develop an econometric modeling framework for Saudi non-oil export that can enhance informing the policymaking process through empirical estimations and simulations. For estimations, we applied cointegration and equilibrium correction methodology to the annual data for the period 1983–2018. Results show that Middle Eastern and North African countries’ GDP, as a measure of foreign income, and Saudi Arabia’s non-oil GDP, as a measure of production capacity, have statistically significant positive effects on Saudi non-oil exports in the long run. The real effective exchange rate (REER), as a measure of competitiveness, also exerts a positive effect in the long run if it depreciates and vice versa. Furthermore, our findings support the Export-led growth concept, which articulates that export can be an engine of economic growth and does not support the Dutch disease concept, which highlights the consequences of the resource sector for the non-resource tradable sector for Saudi Arabia. Macroeconometric model-based simulations conducted up to 2030 reveal out that the Saudi non-oil export is more responsive to the changes in REER than any other determinants. The simulation results also show that non-oil manufacturing makes a three times larger contribution to the future expansion of non-oil exports than agriculture. Moreover, the simulations discover that finance, insurance, and other business services, as well as transport and communication play an important role in improving the Saudi non-oil export performance in the coming decade. The key policy recommendation is that measures should be implemented in a coordinated and balanced way to achieve non-oil exports and other targets of the Vision.

Evolution of Regional Export Growth in China: A Multidimensional Decomposition of Export Dynamics

Over the past few decades, China’s exports have grown at a phenomenal pace. Using a firm–product–destination-level database from 2000 to 2016, this article analyzes the microlevel mechanisms underlying changes in the growth of China’s local export from the perspective of export relationship dynamics. To identify the impact of each kind of export dynamics, we decompose export growth into three distinct aspects: entry, incumbent, and exit. We break down China’s export growth along various dimensions and find that entry of new export relationships is the biggest force driving rapid export growth, but the quality of these entry relationships is far lower than the market average. We further analyze industrial restructuring and spatial restructuring of entry relationships. By estimating the correlation coefficient between the quality of the export relationship and the entry relationship, we demonstrate the need to increase the quality of entry relationships. The findings suggest that the entry relationship is pivotal to understanding the changing export geography, and it is imperative to change from traditional competition on quantity to nonquantity competition on quality upgrading.

Aid Effectiveness of Aid for Trade: An Empirical Analysis on the Extensive and Intensive Margins of Aid Recipients

Paris Declaration on Aid Effectiveness held in 2005 emphasized the role of Aid for Trade (AFT) on capacity building of developing nations. Past literature showed mixed results regarding the aid effectiveness of foreign aid both theoretically and empirically. To test the impact of foreign aid thoroughly, we first focus on the AFT which purposes are not only stimulating the volume of trade flow but also facilitating the construction of robust infrastructure and environment for developing nations to participate in the global economy independently. Second, we disaggregate bilateral trade into the extensive and intensive margin of international trade to examine whether AFT affects more on the new products traded or incumbent good. Lastly, we conduct Poisson pseudo maximum likelihood (PPML) estimation to control for zero-value observations and possible heteroskedasticity stemming from the sample. With different sample groups, the results indicate that AFT overall benefits the exports of aid recipients. Particularly, AFT from European Union (EU) shows the most considerable and consistent effect on both the new export and incumbent relationships. Furthermore, AFT from the EU facilitates the new export relationship between developing nations with other developing nations, specifically with those without a Free Trade Agreement (FTA) relationship, indicating that the aid from the EU is relatively effective in establishing new trade partners.

Internalization of externalities in international trade

Using disaggregated customs data about exporters from nine countries, I demonstrate that informational externalities are determinants of entry, survival, and growth of exporters at the product–destination market level. I show that exporters who optimize entry decisions and internalize informational externalities survive longer and grow faster. Then, I conceptualize why exporters enter certain international markets and why not all exporters from the same origin survive and grow in these markets. I incorporate the interaction between the performance and number of peers in a given market to identify a potential learning externality that exporters may be exposed to. Also, I highlight that, even without the formation of formal networks, the observation of the actions of peers in export markets can deliver implications for export flows: exporters may not need to start small in new markets if the actions of peers in those markets reveal enough information. By helping to explain how export relationships survive and grow, I complement the literature on the determinants of export diversification and signal to export promotion agencies the importance of internalization of informational externalities by exporters.

Decomposing the immigration-trade link using price and quantity margins: the role of education

ABSTRACT This paper examines the immigration-trade links for OECD countries for the 2000–2015 period. By decomposing the overall effect of the presence of immigrants on the export of the hosting countries according to the methodology proposed by Hummels and Klenow (2005), we investigate if there is a migration-driven increase in the number of export relationships (extensive margin) and/or simply a growth of pre-existing export relationships (intensive margin) decomposed by an increase in quantity and price. We consider the country of origin of immigrants and their level(s) of education. Our results confirm the existence of a pro-export effect of immigrants attributable to the contribution of international networks regarding the reduction in information costs, which is especially strong for developed countries as sources of migration. However, when we look at the heterogeneous impact of different levels of immigrants’ education, we find that the pro-trade effect is due to the contribution of less- and more educated immigrants to the reduction of trade costs, while the medium educated do not spur bilateral trade significantly. We address the potential endogeneity problems by adopting an instrumental variable (IV) approach based on shift-share IV and pull-and-push factors that could induce international migration.

Implications of exchange rate volatility for trade: Volatility measurement matters

AbstractThe relationship between exchange rate volatility and trade is inconclusive in the current literature. I find evidence this is due to variation in definitions of exchange rate volatility. My results suggest common volatility measures weigh variation differently over time and economic conditions. Using an autoregressive distributed lag model, I demonstrate the importance of volatility measurement to the estimated relationship of volatility and exports. I find substantial variation across volatility measures, trading partners, and pre‐/post‐2008. When significant, the relationship is almost always negative, albeit unsubstantial. In order to overcome the literature's mixed results, the definition of volatility needs to be standardized.

The two sides of cooperation in export relationships: When more is not better

Studies have questioned the beneficial effects of exporter–importer cooperation by showing, without explaining, that it may not have a positive effect on performance. We contend that cooperation carries the genes of its own demise. We develop a model drawing insights from exchange theory and the dark-side perspective of social relationships, which we then test using two consecutive data collection efforts with exporters. Results suggest the influence of cooperation on exporter market performance has an inverted U shape; at high levels, the effect of cooperation on performance fades and becomes negative. Further, this effect is indirect. Cooperation must first influence the importer’s behavior, via its specific investments, to improve the exporter’s market performance. Moreover, we find that lower levels of interdependence increase the effect of low to moderate levels of cooperation on importer’s specific investments, and that the effect of cooperation on investments is impervious to psychic distance. Our results caution that more cooperation with foreign distributors is not always better and can hurt export performance. Indeed, export managers should not expect a simple, systematically positive, and direct relationship between cooperation and exporter market performance.

Financial Capital Inflows, Manufacturing Exports and Economic Growth in Palestine: A Threshold Regression Analysis

Aims: The study examined the Optimal Level of the Financial Capital Inflows and Manufacturing Exports, Economic Growth in Palestine. Annual data from the (2000-2018) to Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), cross-border borrowing from the World Bank (Components Of Financial Capital Inflows) Financial Sector Development (FSD) real GDP (RGDP) and Manufacturing Exports (MEX) were no different from other Production Sources, Palestinian Monetary Authority (PMA) and Ministry of National Economy (MONE), Ministry of Finance and Planning (MOFP), Palestinian Central Bureau of Statistics (PCBS), Statistical Bulletin while data on Gross Capital Formation (GCF) and Human Capital (HC) was the source of the World Bank also curvature.
 Study Design: Cross-Sectional Survey Research (Qualitative & Quantitative).
 Place and Duration of the Study: Various Governmental Organizations in Palestine, between the periods (2000-2018).
 Methodology: Quantitative and Qualitative specification model, the equations used to examine the Optimal Level, impact and the relationship of Financial Capital Inflows and Manufacturing Exports on Palestinian Economic Growth, Threshold Regression Analysis was used to detect and verify the Optimal Level of Financial Capital Inflows by analyzing the data that have been collected from the Electronic Sources which available on the official websites of Governmental Organizations for the period (2000-2018). The methodology of the study revealed the relationship of the Optimal Level of Financial Capital Inflows with Manufacturing Exports on Economic Growth in Palestine. Data collection process and data analysis techniques employed to achieve the current study objective.
 Results: The study found that the optimization results showed that the Financial Capital Inflows of (CINF) Threshold value (21.77%) with a coefficient of (7.74) per year is the Optimal Level of Financial Capital Inflows in Palestine the Threshold Point Manufacturing Exports to any Financial Capital Inflows (CINF) of the Threshold value of Manufacturing Exports in Palestine. The study concludes that the Optimal Level for Financial Capital Inflows to Economic Growth is (21.77%); any Threshold Level above the sustainable level of Economic Growth will be adversely affected in Palestine.
 Conclusion: Findings of the study found that the Flow of Financial Capital Threshold exists for the Manufacture of Exports, and therefore recommends that excessive Financial Capital Inflows should be avoided in the country so that it does not make the conduct of Monetary Policy difficult, while the need of Financial Capital Inflows must be monitored well and directed to sectors (such as Industry, Agriculture, Mining and Quarrying) that have the absorptive capacity for them.