External Trade Environment Research Articles

Study on Whether International Trade Has Increased the Inequality in China's Domestic Income Distribution

Inequality in income distribution is a major problem faced in China's and even global development, and has traditionally attracted much academic attention. How to reduce the income distribution gap and achieve common prosperity has also been an important concern of the government for a long time. Meanwhile, foreign trade plays a pivotal role in China's economic development, and along with the changes in the external trade environment and internal economic policies, the country is witnessing a new situation of full openness in all regions. Based on the above background, this paper investigates whether there is an impact of foreign trade on China's income distribution. The empirical results show that foreign trade has increased the income distribution inequality in China, and the impact of export trade on intra-regional income inequality is greater than that of import trade on intra-regional income inequality; the impact of export trade on income inequality in coastal cities is greater than that in inland cities, when viewed by coastal and inland. Finally, based on the empirical results, this paper puts forward three suggestions on narrowing the inequality of domestic income distribution: reasonable guidance of foreign investment, optimization of industrial structure, and increasing the cultivation of talents.

A Study on Foreign Trade Strategies from the Perspective of China’s Economic Transformation and Upgrading

Under the perspective of China’s economic transformation and upgrading, foreign trade is facing pressure from the transformation of internal economic capacity and external trade environment. It is urgent to explore new paths and directions, in order to realize the common evolution of the society, economy, system, and environment in China. From the rapid expansion of foreign trade in China towards high quality development, it is necessary to emphasize on the system, motivation, ability, and pattern; explore new development modes, change the development philosophy, delve into the connotation and characteristics of development, system supply, and organizational and technological innovation; as well as focus on cultivating a constant innovation drive, while capturing value and optimizing the foreign trade environment.

Empirical Analysis on the Influence Factors among RCEP Members in a Gravity Model

Purpose - The purpose of this article is exploring the effect of the RCEP to jointly act against trade protectionism as the international public goods for trade cooperation among countries in the Pacific Rim. Design/Methodology/Approach - Based on the trade gravity model, this article studies the enhancement effect of RCEP on members’ trade potential. It also analyzes on current development needs of RCEP members with indices such as national competitiveness index and international business environment index and analyzes the influence of external environment for trade on the construction of RCEP based on the trade outlook indictor. Findings - This article illustrates the internal necessity of cooperation between RCEP members and analyzes the urgent influence of the deterioration of external trade environment on the construction of RCEP. The results of empirical analysis confirm that trade potential, among member economies increased notably after RCEP was proposed, exhibiting a trend to high trade potential from trade potential exploiting. Research Implications - This study has significance in developing deeper, practical and formal trade cooperation among RCEP members. It also provides some suggestions for China to actively participate in the construction of the RCEP.

In Relation to Entrepreneurial Orientation, Dynamic Capability and Export Performance of International New Ventures, the Moderating Effect of External Trade Environment

In Relation to Entrepreneurial Orientation, Dynamic Capability and Export Performance of International New Ventures, the Moderating Effect of External Trade Environment

The Pacific Speed of Growth: How Fast Can it Be and What Determines it?

This study aims to test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers. We find that PICs are disadvantaged by distance and hampered by lower investment and exports compared with other small island states, but greater political stability, catch-up effects from lower initial incomes, and slower population growth have helped offset some of these disadvantages. On balance, policy-related factors, together with geography-related disadvantages, have led to growth rates in PICs that are much lower than in other small states. We also examine how real exchange rate appreciation, unfavorable developments in the external trade environment, and rising international transport costs may have contributed to PICs’ slower growth over the past decade.

The Pacific Speed of Growth: How Fast Can It Be and What Determines It?

This study aims to test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers. We find that PICs are disadvantaged by distance and hampered by lower investment and exports compared with other small island states, but greater political stability, catch-up effects from lower initial incomes, and slower population growth have helped offset some of these disadvantages. On balance, policy-related factors, together with geography-related disadvantages, have led to growth rates in PICs that are much lower than in other small states. We also examine how real exchange rate appreciation, unfavorable developments in the external trade environment, and rising international transport costs may have contributed to PICs’ slower growth over the past decade.

Maquiladoras in the 21st century: Six strategies for success

The maquiladora industry was conceived as a win-win strategic economic platform for foreign companies and Mexican workers. The primary benefactor has been U.S. companies, which became more cost efficient by employing highly productive, lower-cost Mexican workers. However, the direct link between the U.S. economy and the corresponding employment of Mexican workers has resulted in unpredictable growth-retrenchment cycles. While the globalization of trade has grown dramatically, the maquiladoras have been slow to adapt to new trade realities, including the rise of China as a global manufacturing power. The more intense global competition and the recent financial crisis have challenged Mexico's structural deficiencies and the maquiladora model with its focus on low-cost labor. Can the maquiladoras remain viable in this seemingly unpredictable economic environment? In this article, we provide a brief history of the maquiladoras, discuss the new external trade environment realities, and offer six strategies that can transform the maquiladoras into a sustainable economic model well into the future.

Export competitiveness of commercial services: the ASEAN-5 experience

This paper evaluates the challenges and opportunities confronted by five major members of Association of Southeast Asian Nations (ASEAN-5). The structural transformation of ASEAN-5 is being assessed by examining the role of services in value added, trade and employment. The issue of ASEAN-5 export competitiveness in services is tackled by analysing the revealed comparative advantage (RCA) indices for transport, travel, insurance and financial services. Also, this paper evaluates the members' service trade liberalisation scorecard. This paper contends that, apart from the external trading environment, industry, firm and delivery mode-specific factors play an important role in shaping firms' decisions to export.

The EU marketing environment: Pharmaceuticals and Japanese strategy

The marketing environment - those external forces that directly or indirectly influence an organisation's trading, acquisitions of inputs and generation of outputs, but over which the organisation has little or no control - is in marketing strategy acknowledged to be an important determinant of strategy selection. Recent changes within the European Union have illustrated the workings of these forces. In the emotive, highly competitive, multi-million dollar pharmaceuticals industry, the effect of the elements of the marketing environment are extensive, particularly for a Japanese player attempting to break into the European ‘Single Market’. This article by Sally Dibb, Yvonne Russell and Lyndon Simkin describes the implications in pharmaceuticals of the broader, external trading environment and the marketing environment, using Japan's Sankyo as an illustrative case.

Implications of the Uruguay Round for Kenya

This paper studies the implications of the Uruguay Round for Kenya`s own trade regime and its external trading environment. The analysis indicates that Kenya did not undertake significant liberalization commitments under the Uruguay Round. There are however, several effects on Kenya`s external trading environment due to most-favored nation tariff cuts, erosion of preference margins, and changes in food prices. These effects are determined using simple computational techniques in a partial equilibrium framework. Overall, the results indicate that the effect on Kenya`s balance of payments in the medium-term may be negative but modest, and can be offset by pursuit of appropriate structural adjustment policies.

Implications of the Uruguay Round for Kenya

This paper studies the implications of the Uruguay Round for Kenya’s own trade regime and its external trading environment. The analysis indicates that Kenya did not undertake significant liberalization commitments under the Uruguay Round. There are however, several effects on Kenya’s external trading environment due to most-favored nation tariff cuts, erosion of preference margins, and changes in food prices. These effects are determined using simple computational techniques in a partial equilibrium framework. Overall, the results indicate that the effect on Kenya’s balance of payments in the medium-term may be negative but modest, and can be offset by pursuit of appropriate structural adjustment policies.

Evaluation of external market effects and government intervention in Malaysia's agricultural sector: a computable general equilibrium framework

The purpose of this study is to evaluate the effects of changes in the external trade environment and domestic economic policies on the agricultural development of Malaysia. The scope of this research also includes providing further insights into the strengths and weaknesses of the computable general equilibrium (CGE) methodology for agricultural policy analysis. The first analysis focuses on the export agriculture sector which encompasses Malaysia's two primary agricultural commodities, rubber and palm oil. Heavily dependent on exports of rubber in the 1950s and 1960s, Malaysia has since built a more diversified economy with strong emphasis on manufacturing. Export agriculture, however, is still an important component of the national economy. The second objective examines the influence of domestic policy on agricultural development. The simulation results demonstrate the growing resiliency of the Malaysian economy to external shocks. Also, they point to the domestic economy's ability to buffer internal policy-induced distortions.

Evaluation of external market effects and government intervention in Malaysia's agricultural sector: A computable general equilibrium framework

AbstractThe purpose of this study is to evaluate the effects of changes in the external trade environment and domestic economic policies on the agricultural development of Malaysia. The scope of this research also includes providing further insights into the strengths and weaknesses of the computable general equilibrium (CGE) methodology for agricultural policy analysis. The first analysis focuses on the export agriculture sector which encompasses Malaysia's two primary agricultural commodities, rubber and palm oil. Heavily dependent on exports of rubber in the 1950s and 1960s, Malaysia has since built a more diversified economy with strong emphasis on manufacturing. Export agriculture, however, is still an important component of the national economy. The second objective examines the influence of domestic policy on agricultural development. The simulation results demonstrate the growing resiliency of the Malaysian economy to external shocks. Also, they point to the domestic economy's ability to buffer internal Policy‐induced distortions.

The Changing Geography of Japanese Foreign Direct Investment in Manufacturing Industry: A Global Perspective

The aim in this paper is to set Japanese foreign direct investment (FDI) in Europe (including the United Kingdom) into its broader global perspective. The geographical form of Japanese FDI is the outcome of a complex interaction between economic and political forces, both internal to Japan itself and also in its external trading environment. The dominant foci of Japanese FDI are North America, and East and South East Asia. Initially, Japanese manufacturing investment was heavily concentrated in neighbouring countries of Asia but the emphasis has shifted more recently to North America. However, the organisational structure of Japanese investment tends to be substantially different in these two world regions. In East and South East Asia, in particular, a complex intrafirm division of labour has developed, whereas in North America (and in Europe) the Japanese plants tend to be directly market-oriented and established primarily in response to trading frictions. The recent massive revaluation of the yen promises to generate further substantial changes in the global geography of Japanese FDI.

Price Scissors and the Structure of The Economy

This paper undertakes three sets of tasks: (i) it analyzes positive and normative aspects of price scissors (the domestic terms of trade between agriculture and industry) within nonsocialist as well as socialist LDCs. The critical role of the economy's institutional features (e.g., external trade environment, wage and income determination, and wage-productivity effects) is emphasized. Certain aspects of the Soviet Industrialization Debate and subsequent collectivization are interpreted, (ii) It develops simple rules to delineate who gains and who loses (within agriculture) from changes in terms of trade, (iii) It presents powerful (and informationally parsimonious) rules for Pareto-improving price reforms for cash crops and agricultural inputs.