Field Of International Economy Research Articles

A Gravity Model Analysis of China’s Bilateral Trade Flows: The Role of Free Trade Agreements and Exchange Rates

In the field of International Economics, the gravity model of trade has been one of the most successful empirical models guiding trade-policy decisions by nations. This paper aims to incorporate the theoretical foundations into the real world of trade flows between China and rest of the countries. An augmented gravity model is applied to study the impact of two variables, free trade agreements and nominal effective exchange rate on bilateral trade flows. Multiple regression analysis is carried out on a panel data consisting of trade flows with 224 countries from 1992-2015. The estimated results reveal a positive and significant influence of FTA on exports and imports. NEER displays a positive, though not significant, relationship with China’s imports and negative with exports.

New challenges in international economics and finance

AbstractThis Special Issue brings together 13 papers that examine a variety of central topics in the field of international economics and finance. These papers were presented at the 23rd Conference on International Economics held in Málaga (Spain) on 16th–17th June 2022. The conference was organised by the Spanish Association of International Economics and Finance (AEEFI) and the University of Málaga. The selected papers make up an interesting and revealing set of information to study the new challenges of the international economics and finance in a context especially marked by the aftermath of the 2008 financial crisis, the climate change, the challenge posed by the COVID‐19 crisis and the instability unleashed after the invasion of Ukraine in 2022. From different perspectives, the papers analyse how events that have particularly affected the evolution of the world economy have substantially altered the rules of international trade, foreign direct investment, as well as monetary, fiscal or sectoral policy. The conference included two keynote lectures by Per Krusell (Institute for International Economic Studies, Stockholm University) and Fabio Canova (Norwegian Business School and Budapest School for Central Banking Studies), as well as 97 selected contributions.

Investment cooperation between Russia and Turkey under current economic conditions: New formats

Subject. This article explores the advantages of the Russian-Turkish strategic partnership based on mutual interest in building up economic and geopolitical potentials. Objectives. The article aims to describe the stages of implementation of investment cooperation between Russia and Turkey in various sectors of the economy and predict the prospects for investment cooperation between these countries. Methods. For the study, based on the review of materials of foreign and Russian experts in the field of international economics, finance, investment deposits, and reporting documents of statistical institutions, I used the historical method, observation, and generalization. Results. The article structures the factors affecting the changes in the bilateral investment cooperation between Russia and Turkey, and identifies investment risks that impede efficient cooperation in the long term. Conclusions. It is necessary to enhance efforts in the field of bilateral partnership, as well as diversification of the Russian economy key sectors.

Theoretical Aspects of Teaching Students Economic Terminology

Teaching students professional terminology in the course of English for Specific Purposes (ESP) has always been a subject of interest for researchers. This interest has been enhanced with the necessity to arm future specialists, namely in the field of International Economics, with a powerful means of communication in order to sign contracts, hold negotiations and develop cooperation with their business partners. To perform these and numerous other functions specialists will obviously need the knowledge of special vocabulary and will require skills how to use it in practice. Gaining such knowledge and acquiring proper skills can be feasible if teachers of ESP develop effective ways of teaching terminology and apply their theoretical findings in practice. Hence, the demand of society to foster qualified specialists in the conditions of integrating into the world economy and the requirements of labor market evoke the need to find new approaches to provide students majoring in...

Новые форматы инвестиционного сотрудничества между Россией и Турцией в современных экономических условиях

The deterioration of Russia’s trade and economic relations with international partners due to the aggravation of the geopolitical situation in Ukraine increases the importance of diversification of key sectors of the Russian economy. Russia’s search for new strategic partners increases the pace of cooperation with the Republic of Turkey. The subject of the study is the study of the advantages of the Russian-Turkish strategic partnership, the basis of which is mutual interest in building up economic and geopolitical potential. The key objectives of the study will be to study the current investment climate, the stages of implementation of investment cooperation between Russia and Turkey in various sectors of the economy, analysis of the dynamics of foreign direct investment, mutual investment, trade turnover, exports and imports between the countries. Such research methods as observation, comparative analysis, generalization, historical method will be used in the work. The author will refer to the materials of Russian and foreign experts in the field of international economics, finance, investment deposits, statistical data on export, import, mutual turnover, foreign direct investment (FDI) between Russia and Turkey, obtained from the reporting documents of the Turkish Statistical Institute (TurkStat), the World Bank (The World Bank), the United Nations (UN), the Turkish Construction Union (Turkish Construction Union). The main result of the study will be the structuring of factors affecting the dynamics of bilateral investment cooperation. The results of the study can be useful to representatives of business organizations, business owners and managers, specialists in the field of economics and finance. Formulating the main conclusions of the study, the author notes the priority of mutually beneficial Russian-Turkish partnership on key economic issues

Міжнародна економіка: поглиблення і розширення дослідницького потенціалу України

The topical issues of the development of the research potential of Ukraine in the field of international economics , capable of creating scientific support for the foreign economic activity of entrepreneurial structures and government organizations in the context of world and European integration, have been investigated. The creation of the infrastructure of research organizations specializing in the international economics has been substantiated, in particular, the feasibility of creating research institutes in the USA and Canada, Europe, and the Center for International Agricultural Business. The article considers the expediency of conducting research on the issues of cooperation with interstate integration associations of countries, including the EU, ASEAN, TPP, APEC, BRICS, for the implementation of the country's foreign economic policy. A special place in the system of international economics research should be occupied by the problems of Industry 4.0 and the leadership of Ukrainian IT companies in the system of global economic competition. The state of the staffing of research activities in international economics is analyzed and proposals for training of highly qualified specialists in international economics in large industrial centers: Kharkov, L’viv. Dnieper, Odessa and Zaporizhia are formulated.

Construction and Validation of Indian Consumer Ethnocentrism Scale: The Ice-Scale

Globalization has unlocked and exposed domestic and overseas marketers to superior market opportunities. Additionally, it presents consumers worldwide with a vast number of local and foreign brand choices. Indian consumers, also now, have a broader choice of merchandise at their disposal as economic liberalization and privatization along with globalization have reduced the barriers to trade. In such a setting, the concept of consumer ethnocentrism can deliver deep insights about the preference of consumers toward domestic merchandise. The study aims to develop the Indian Consumer Ethnocentrism Scale (ICE-Scale) and validate the same. Data are collected using a structured questionnaire from urban and rural regions. The study constructed the Indian Consumer Ethnocentrism Scale (ICE-Scale), explored its dimensionality on a sample of 450 respondents, and validated the scale with another sample of 450 using exploratory factor analysis. It was established that the ICE-Scale encompasses two dimensions, namely, protective ethnocentrism and patriotic ethnocentrism. Additionally, the validity testing for the proposed scale and both the constructs were conducted through confirmatory factor analysis. The study advances the existing pool of information in the field of international economics, consumer psychology and global marketing. It also assists domestic producers to get an improved understanding of consumers’ ethnocentric tendencies which in turn would assist them in choosing superior marketing strategies and boosting their sales. The study will not only deliver certain social and policymaking insights to the domestic firms and government but also to the foreign firms functioning or planning to operate in India.

The Qualitative Comparative Analysis: An Overview of a Causal Complexity Approach

Research background: Alongside with the development of configurative comparative analysis aiming at identification of necessary and sufficient conditions, various formal methods used for this purpose have been formulated during the last decades. One of them is qualitative comparative analysis (QCA), one of approaches used for causal explanation of phenomena of cases performed in the field of international economics and global affairs. Purpose of the article: The main purpose of the article is to provide a detailed overview of the QCA method in global context, to define its methodologic foundations and consequently introduce the key concepts of the method. The article also provides a comparison of QCA to typical tools of qualitative and quantitative approaches. On the basis of this part, both pros and cons of QCA are derived. Methods: Basically, the methods of analysis, deduction and comparison are used to fulfil the purpose of the article. The existing and available papers and books coping with the topic of QCA and its position among other research methods are reviewed to provide an overview on the selected method. Findings & Value added: The QCA is a method based on analysing stated relations. It bridges the quantitative and qualitative research and reveals certain patterns based on causal complexity principles, however, it is done regarding heterogeneity and diversity of individual researched cases. It is a method applicable to the middle number of cases, it means too few cases for statistical methods on the other hand too many cases for typical qualitative approaches.

Globalisation: Recent traits and challenges

AbstractThis special issue gathers together twelve papers that revisit a range of core topics in the field of international economics. These papers were presented at the XIX Conference on International Economics (CIE) held in Vila‐Real (Spain) on 28th–29th June 2018. The Conference was co‐organized by researchers from the Spanish Association of International Economics and Finance (AEEFI) and the Institute of International Economics (IEI). The selected papers are stimulating pieces that shed new light on recent trends in globalization as well as some of the main challenges that need to be faced in the presence of the multiple yield curves that emerged after the credit crunch. The CIE also included two keynote lectures by Laura Alfaro (Harvard Business School) and Gabriel Quirós (IMF) as well as 64 selected contributions.

Икономическото развитие на България и Румъния като държави-членки на ЕС и мястото им в глобалното стопанство

The international scientific workshop “Bulgaria and Romania: Member Countries of the EU, Part of the Global Economy” was held on the 10th of December 2018 at the Economic Research Institute at the Bulgarian Academy of Sciences (ERI-BAS) in Sofia, Bulgaria. The worshop was organized by the International Economics Department at the ERI-BAS and the Institute for World Economy at the Romanian Academy (IWE-RA) as a closing event of the joint interacademy project “Bulgaria and Romania: Member Countries of the EU, Part of the Global Economy” carried out by the two institutions. It was also a sequel to the Inernational Conference with the same title, which was held in 2017. The worshop aimed and managed to bring together esteemed researchers, young scholars, post-doctoral researchers and PhD students working in the field of International Economics and International Finance to share their views on some contemporary aspects of Bulgarian and Romanian economic development – either in comparison with each other, or as part of the global economy. There were participants from various Bulgarian and foreign academic institutions – the Economic Research Institute at the BAS, the University for national and world economy, New Bulgarian University, Sofia University, Tracian University, the Institute for World Economy and the Institute for National Economy at the Romanian Academy, Nicolaus Copernicus University in Torun, etc.

Divisa-chave, elasticidade, liquidez internacional e autonomia de política econômica no Sistema Monetário Internacional

Resumo A autonomia de política econômica dos países no sistema monetário internacional (SMI) foi uma preocupação fundamental de Keynes nos acordos que deram origem ao regime de Bretton Woods e ainda é objeto de grande interesse na economia internacional. Neste artigo é feita uma análise entre a autonomia de política econômica e um dos componentes do SMI, a divisa-chave. Mais especificamente, buscou-se analisar dois elementos relacionados à divisa-chave, quais sejam, a elasticidade do sistema e a liquidez internacional. É defendido aqui que em um sistema mais elástico, em que a liquidez internacional não seja restringida, seria possível reduzir a assimetria entre os países de moeda conversível e inconversível. Para isso é fundamental que tais variáveis (elasticidade e liquidez) sejam passíveis de serem administradas por instituições internacionais ou por mecanismos de cooperação. Ademais, tratou-se das implicações políticas advindas de sistemas em que os países tenham maior ou menor autonomia.

Co-Movements Between Key Components Of Aggregate Productivity And Real Exchange Dynamics In Developing Countries

The relationship between productivity growth and the real exchange rate has dominated the field of international economics for a long time. However, previous empirical studies do not focus on the nexus between real exchange rate and unraveling sources of productivity growth, i.e., technical change and several exhaustive measures of efficiency. In this paper, we investigate the relationship between the real exchange rate and key components of aggregate productivity for a sample of countries in four developing country regions. Our methodology proceeds in two stages. First, a non-parametric method is used to estimate the Hicks-Moorsteen total factor productivity (HMTFP) change, which is decomposed into technical change and different exhaustive measures of efficiency change. This methodology allows one to extract different exhaustive measures of efficiency change. Second, system-GMM models are used to explore the dynamics of the real exchange rate and different components of productivity while controlling for other exchange rate fundamentals and civil conflicts. The results for total factor productivity (TFP) and TFP efficiency indicates that the TFP has not changed much in the sample period. In addition, the average TFP efficiency has remained relatively low because only a few countries defined the best practice frontier while a majority of the countries operated below this frontier. In particular, Africa has lagged behind other regions in terms of TFP improvement. Our results also indicate that the main differences in TFP change are explained by differences in efficiency, an indication of disparities in the use of available technology across countries and regions. We also find that a positive change in technological innovation and its diffusion tend to appreciate the real exchange rate. These results are robust across different model specifications. Two key policy implications can be extrapolated from our results. First, our results show significant differences in the evolution of different components of TFP across regions; indications that policy targets to improve productivity growth across regions are unlikely to be uniform. Second, our results also show that policies that target specific drivers of productivity change have the potential to also influence the international competitiveness of a country through the real exchange rate-technological-efficiency change linkages.

ASEAN FDI (Factors Influencing ASEAN FDI and the Policy Implications)

Korean Abstract: 본 연구는 아세안 FDI 특징과 비즈니스 여건을 살펴본 후 그 결정요인을 실증적으로 분석함으로써 한아세안 경제협력을 보다 심화시키기 위한 정책적 시사점을 도출하는 데 그 목적이 있다. 본 연구에서는 실증분석을 통해 아세안 FDI 유입 결정요인을 분석하여 그 결과를 제시하였으며, 한국의 대아세안 FDI 활성화를 통한 상호 호혜적 경제성장동력 창출의 측면에서 우리 기업과 한국정부에 시사점을 제시하였다. 본 보고서는 향후 우리 정부의 통상정책과 아세안 지역의 경제협력 정책수립에 큰 기여를 할 수 있을 것으로 판단되며, 아울러 우리 기업의 투자 및 진출전략 수립에도 큰 키여를 할 수 있을 것으로 기대된다. English Abstract: Since the global economic crisis triggered in the United States in 2008, the East Asian economic region has received particular attention as it achieved relatively solid economic growth compared to developed countries, which struggled with recession. The discussion on economic cooperation and economic liberalization within East Asia has mainly focused on the RCEP, with this discussion being led by ASEAN as it calls for ASEAN centrality. ASEAN is currently the second-largest overseas investment destination and second-largest trading partner for South Korea, making it an important partner in economic cooperation for South Korea. Particularly, as China is openly implementing economic retaliatory measures against South Korea for the deployment of THAAD missiles in the nation, South Korea has become more interested in the ASEAN market as it strives to diversify its trade and investment portfolio. Under this background, this research examines the characteristics of ASEAN FDI by income level and doing business conditions, then conducts an empirical analysis of determination factors to draw policy implications for stronger economic cooperation with ASEAN. This report consists of five chapters in total. In Chapter 2 we examine FDI determination factors which have been discussed from a theoretical and empirical viewpoint in the field of international economics. In Chapter 3 we look into the current situation of ASEAN FDI and the characteristics of ASEAN FDI by income level, along with conditions for doing business in the region. In Chapter 4, we conduct an empirical analysis of the determination factors for ASEAN FDI inflow, utilizing a covariance structure analysis. Lastly, in Chapter 5, we suggest implications for the Korean government and enterprises to generate mutually beneficial economic growth momentum by promoting Korea’s FDI to ASEAN.

‘Grounding’ Global Value Chains? A Geographer’s Perspective on Outsourcing Economics

William Milberg has made important contributions to scholarship on the economics of globalisation, especially in relation to matters such as income distribution and economic growth. With Outsourcing Economics, he continues to advance work in this area, teaming up with fellow economist Deborah Winkler to produce an exceedingly dense yet fundamentally important book that tackles the role of offshoring in the internationalisation of production and its impact on labour and economic development. In the field of international economics that is largely dominated by neoclassical trade theories based on the specialisation and exchange of final goods, the book thus stands out as a novel and powerful take on globalisation by placing global value chains (GVCs)—sets of inter-firm networks involved in the production of commodities—at the centre of the analysis. Empirically, the core concern is the increasing proportion of world trade occurring within GVCs. Theoretically, the assertion is that the Ricardian logic of comparative advantage can no longer comprehend this ‘new wave’ of globalisation. Growing trade in intermediate goods and the vertical disintegration of production along GVCs have undermined the validity of such economic models. Rather than a set of natural ‘market forces’ determining the volume and direction of trade between national economies, the decisions by lead firms and the power asymmetries among GVC actors are now the major elements shaping the (uneven) distribution of the gains from globalisation.

The Role of Distance in the Gravity Model: From the View of Newton, International Economics and Quantum Mechanics

The gravity model widely used in international economics in order to explain bilateral trade flows between countries has its roots in physics and the common variable suggested in both of the equations used in physics and economics is “distance”. Although several variables expected to have significant effect on trade are added to the analysis in the field of international economics lately; distance is always considered as the first issue because of its correlation with transportation costs. Similarly, from it was first suggested by Newton in the equation of the universal gravity law to Einstein and to the recent finding in the field of quantum mechanics much attention has been paid to distance in physics research too. The aim of this paper is to examine the role of distance in the gravity models considering economic and physics perspectives with an eye to Newton’s equation, Einstein’s relativity and quantum mechanics.

Artificial islands as a manifestation of glocalisation

The article is devoted to economic reasons for creation of artificial lands, including artificial islands, and problems related to their functioning. The scientific achievements of economic geography constitute a theoretical basis of the analysis. Economic reasons for constructing artificial islands in particular may, to a large extent, be explained by reference to a new economic geography of Paul Krugman. Therefore, the Authors associate the dynamically developing phenomenon of building artificial islands with the process of glocalisation. On the other hand, functioning of artificial islands – in their opinion – may basically be reduced to a concept of the balance of a company, as an artificial island may be treated as its counterpart.

Leveraging <i>Torihiki-Jisseki</i> through Japanese Small- and Medium-Sized Enterprises' Overseas Businesses

IntroductionThis study discusses corporate domestic growth after an expansion in overseas production. In response to discussions about the hollowing out of industries, that is, domestic production decreases because of an expansion in overseas production (Nakamura & Shibuya, 1995), some recent studies, primarily in the field of international economics, have noted that domestic production increases with an expansion in overseas production (Hijzen, Inui, & Todo, 2007; Matsuura, Motohashi, & Hayakawa, 2008; Yamashita & Fukao, 2010). At the same time, focusing on international management, Amano (2000, 2005) identified a mechanism wherein an expansion in overseas production leads to an increase in domestic production. In this phenomenon, domestic production increases through an expansion in overseas production, thereby promoting two conversion behaviors: spontaneous and induced (Amano, 2000).However, Amano studied large firms with abundant management resources, making the study a poor fit for small- and medium-sized enterprises (SMEs) with few management resources. If one posits that SMEs experience expanded domestic production after an overseas expansion, then what are the success factors causing such a phenomenon? This study aims to identify these mechanisms by investigating an SME that witnessed growth in domestic production because of an expansion in overseas production.This paper studies an SME that manufactures production goods. Customers often determine the functionality and specifications of the products in this industry. This, in turn, helps determine what management resources and capabilities will be held by the company (Takashima, 1998). Entering into a business relationship with a new customer promotes the accumulation of company resources and capabilities and enables the company to grow (von Hippel, 1986). In Japan, where long-term, fixed relationships are a standard business practice 1 and keiretsu relationships usually dominate the automotive parts industry,2 it is difficult for new companies to enter the market (Asanuma, 1997).However, Japanese companies bound by fixed business practices domestically do not hold the same position overseas. In recent years, large firms expanding production overseas have demonstrated a tendency to procure parts locally (Kato, 2011). Unlike the situation in Japan, given a chronic shortage of suppliers in overseas markets, Japanese SMEs entering such markets find it possible to become suppliers with other firms even without precedents of such relationships in Japan.This paper concludes that as the global supply chains of Japanese firms expand, even SMEs can develop new customers among Japanese companies overseas. Japanese SMEs can even enter new relationships domestically if they can create a torihiki-jisseki (track record of transactions in Japanese) overseas, thereby expanding domestic production.Case Study of Japanese SMEs in ChinaThe case provided herein is of Company A, which expanded domestic production by first expanding overseas. Company A is a manufacturer of mainsprings, which are small springs used in car seats. The company has 130 employees in Japan and has a capital of 50 million yen. The company's primary customer is a 1st-tier Toyota supplier, Company I. Company A's Chinese subsidiary, Company a, has two business lines, wire ropes (created in 1998) and mainsprings (created in 2002). Company a started the mainspring business after ensuring the wire rope business was on track.Although Company I did not have a production site in China, Company a was set up in the country as a mainspring business in 2002. At the time, there were almost no local companies that could manufacture automotive springs; thus, Company a's main competitors were other Japanese firms. The number of automobiles sold in China in 2002, when Company a started its mainspring business there, was 3.2 million. This number rose to 8.8 million in 2007 and 19. …

China Trade Strategy: FTAs, Mega-Regionals, and the WTO

In light of the stalemate in the Doha Round of trade negotiations of the WTO, various regional and mega-regional free trade agreements are becoming the norm. Free trade areas advocated by major economies such as the U.S., China, and the EU have become the focus of attention in the field of international economics and trade. Compared to the free trade agreements of the U.S. and the EU, China’s free trade agreement strategies are unique in their approach and philosophy. This essay analyzes and envisions China’s FTA strategies, mega-regionals, and the WTO.

A Study on the Relationship between Exchange Rate and Consumer Prices Based on ECM

One important issue of exchange rate pass-through is the extent to which exchange rate changes affect the prices. This paper studied the pass-through effect of movements in the RMB nominal exchange rate on consumer prices. In particular, we examined whether the exchange rate pass-through to consumer prices was complete or not, and the im- pact of exchange rate system reform had on the pass-through effect. To this end, the paper used the error correction model (ECM) to conduct an empirical analysis from the first season of 1994 to the last season of 2013 period. The results showed that the pass-through of exchange rate changes to consumer prices was incomplete. In the sample period, the ex- change rate pass-through effect was on the overall downward trend. The exchange rate system reform caused structural changes in the pass-through effect. The overall pass-through effect was higher after the reform than before, and the pass- through was lagging. Finally, our results made suggestions to improve Chinese monetary policies. Price stability has become an important objective of the government's macroeconomic policy. Since 2007, China's inflation was high, showing higher inflationary pressures. After the global financial crisis, the inflation rate fell, how- ever, the major developed countries implemented quantita- tive easing monetary policy, inflation rose sharply. Signifi- cant fluctuations in the price level are the results of a variety of internal and external factors, with the increase of opening degree, the exchange rate has become an important channel for external shocks affecting the domestic economy. With the implementation of the exchange rate system reform, ex- change rate volatility increased, after sustained appreciation of the longer period of time, the RMB exchange rate in the recent period appeared sharp depreciation. Exchange rate changes may cause fluctuations in the domestic price level, i.e. the exchange rate pass-through. Exchange rate pass- through is a hot issue in the field of international economics, in which, an important issue is the extent to which exchange rate changes affect the prices (1, 2). In this paper, we investigated the pass-through effect of movements in the RMB exchange rate on consumer prices. In particular, we examined whether RMB exchange rate pass-through to consumer prices was complete or not, and the impact of the exchange rate system reform had on the pass-through effect. To the end, we applied the error correc- tion model (ECM) to conduct an empirical analysis from the first season of 1994 to the last season of 2013 period. This method can efficiently capture both the long-term and short- term dynamic changes in variables. It also maintains the long-term dynamic information of the relationship between variables, and ensures the effectiveness of the regression analysis. In the application, this paper introduced dummy variables into the model. Furthermore, it introduced mone- tary policy variable into the model, and selected foreign price index constructed to measure the cost of foreign ex- porters. This model took a lag respectively considering ex- change rate and monetary policy variables have lagged ef- fects on the price index. The results showed that the pass- through of exchange rate changes to consumer prices was incomplete. Long-term effect of exchange rate pass-through to consumer prices was -0.19. The degree of exchange rate pass-through was quite slow. In the sample period, the ex- change rate pass-through effect was on the overall downward trend. The exchange rate system reform caused structural changes in the pass-through effect. The overall pass-through effect was higher after the reform than before, and the pass- through was lagging. The remaining parts of the article are organized as fol- lows: Section 2 reviews and summarizes the existing litera- ture; Section 3 presents a theoretical model that has been constructed for studying exchange rate pass-through to con- sumer prices; Section 4 presents the empirical results; Sec- tion 5 provides the main conclusions. 2. LITERATURE REVIEW

On the value of small‐scale GE models

AbstractThe field of international economics has made frequent use of general equilibrium models in order to investigate the nature of those possible comparative static equilibrium solutions that seem somewhat paradoxical. Frequently the analysis is done for settings in which the number of commodities, countries, and/or factors of production is assumed to be rather small. For example, the classic Ricardian model making use of the concept of comparative advantage based on comparisons of efficient ratios of country productivities has solutions that hold for any number of countries or commodities. A number of different issues, such as stability conditions and the transfer problem, are discussed in which surprising equilibrium outcomes possible in a general situation can be understood more easily in a small‐scale setting.