Foreign Trade Liberalization Research Articles

The Budget Law As a Mechanism of Government Intervention in the Economy in Light of The Adoption of Market Economy in Algeria

Algerian Adoption of the mechanisms and the principles of the liberaleconomy, as liberalization of foreign trade, open the way to the privatesector, and the abandonment of the direct investment in the public firms.All that did not prevent Algeria for continuing to pursue the interventionpolicy in economic activity, through the budget law which authorizes andimplements the public investment programs

MOBILITY OF POPULATION IN SUPPORT OF COMPETITIVE ADVANTAGES OF HUMAN CAPITAL

The article discusses the role of mobility of population as a bearer of human potential in shaping the competitive advantages and the accumulation of human capital as the main development resource. It focuses on the problem of polarization in the global market of education, which is based on the concentration of scientific potential and intelligence in minor regions of the planet and its degradation in other regions. The article analyzes the importance of attracting skilled workers to countries based on the Global Competitiveness Index. It reveals the essence of the new "win-win" concept of the circulation of skilled workers. The articledeals with the establishing backlog of Ukraine in attracting highly qualified specialists for the accumulation of human capital. It analyzes the migration losses of Ukraine and identifies prospects of attracting employees with the necessary skills abroad. It is found out that the distribution of migrant workers by occupational groups in employment abroad is significantly different from the structure of professions employed by Ukraine. The article proves the source of human capital loss because of non-recognition in Ukraine the specialties acquired by workers without professional education, which hinders their employment in other sectors, that are specialized according to their formal education at home. It considers the new possibilities of migration transformation towards the creation of the challenges for public policy in connection with the liberalization of foreign trade, harmonization of national legislation with European standards; support the necessary population amount and labor; the formation of orientation on temporary migration (mainly circular) among mobile youth; reintegration of return migrants in the society that has changed over the period of their absence; promoting entrepreneurship of migrants and their families. The article determines the measures to enhance the attractiveness of national labor market to attract human capital through mobility.

ASSESSMENT OF MAJOR FACTORS OF FOOD SECURITY

The analysis of the food security index and its correlation with foreign trade liberalization degree, as well as correlation with GDP per capita and the level of agriculture is carried out in this article. The authors came to the conclusions that the foreign trade liberalization level and economic growth play special role for ensuring food security. As well as there is no need to choose the agrarian sector as a strategic priority for ensuring food security if the country has no competitive advantage in this sector in the globalization condition.

Do trade reforms affect changes in patterns of comparative advantage?

Purpose The purpose of this paper is to examine the effects of foreign trade liberalization and trade reforms on the process of structural upgrading, and explore the extent to which they provide impetus for exports. Design/methodology/approach This paper accounts for trade liberalization dates, cumulative years in open regime, and the density of 1,006 products in the patterns of comparative advantage for 132 countries from 1975 to 2000. The effects of trade liberalizations and trade reforms in open regime on future export performance are estimated by using various empirical strategies. Findings This paper finds that the speed of moving from simple poor-country goods to rich-country goods in export depends not only on having a route to nearby goods of increasingly higher value, but also on the increase in the cumulative years in open regime. In particular, a 1 percent change in the relatedness across products with trade reform in open regime increases the probability of exporting a new product by 2.0 percent more. Originality/value A contribution of this paper is that it measures the extent to which trade reform in open regime affects the evolution of comparative advantage, even after taking account of the role of relatedness of exported products as in the Hausmann and Klinger (2006, 2007). In this paper, empirical findings of a comprehensive product level cross-country time-series data analysis may contribute to generalize the role of trade reform on structural upgrading not only for a pro-competitive export country like Korea but also for a typical developing country.

Modelling the Determinants of Import Demand in Sub-Sahara Africa

This study employed panel data from 1995 to 2012 to model the determinants of imports in sub-Sahara Africa. Also, it assesses the long-run and short-run elasticities of aggregate imports and their components and considers the impact of trade liberalization. Fixed effects and Random effect estimation were done for the model. The results indicate that domestic income, foreign exchange reserves and trade liberalization all play significant roles both in the short-run and long-run import demand levels in sub-Sahara Africa. Therefore, trade policy authorities who aim at reducing imports to correct balance-of-payments imbalances in the long run should focus their efforts on policies that will reduce purchasing power at the macroeconomic level and implement policies that will ensure an increased domestic supply.

Foreign Direct Investment, Trade Liberalization and Economic Growth: Evidence from the ASEAN-5

Foreign Direct Investment, Trade Liberalization and Economic Growth: Evidence from the ASEAN-5

An OLS Approach to Modelling the Determinants of Private Investment in Ghana

After independence, most developing countries embraced the development paradigm of import substitution. Nevertheless, in the 1980s, there was a shift in development paradigm from import substitution to the private sector-led development strategy to boost growth in developing countries. The study analyses the determinants of private investment in Ghana using a time series data from 1980 to 2010 with the aid of multiple linear regression model. It was revealed that factors that have a significant impact on private investment in Ghana were public investment, credit supply to the private sector, external debt, openness of the economy, corporate tax and democracy. Nevertheless, variables like: GDP growth, real interest rate, inflation and real exchange rate were not statistically significant. The study therefore recommends a tighter fiscal policy to reduce the crowding out effect on private investment. Foreign trade and trade liberalization must be encouraged to ameliorate private investment in Ghana.

Nonoil Export – Growth Nexus in Nigeria: Macroeconomic Base for Nonoil Export- LED Growth Policy

Public hue and cry about Nigeria’s overdependence on oil has now faded into an inaudible whisper and a mere rhetoric as diversification of the Nigerian economy still remains an unsettled issue. However, the dwindling international oil price has rendered the country insolvent thereby creating a need to exploit non-oil sources. Therefore, the study was aimed at devising a viable non-oil export-led growth policy. Study covered the period 1980 to 2014. Data were sourced from Central Bank of Nigeria, National Bureau of Statistics and World Development Indicators. This study revealed a preferred choice for a more robust factor analytic model to isolate potent factors influencing non-oil export–growth nexus in Nigeria. Results indicate that there was positive significant relationship between non-oil export and growth in Nigeria which was solely attributable to the influence of foreign direct investment and trade liberalization. Moreover, the study revealed that the active variables in the constellation of foreign direct investment and trade liberalization provided the theoretical constructs for a new non-oil export-led growth policy. It was concluded that a viable non-oil export-led growth policy should comprise of such policy instruments as budgetary policy, exchange rate policy, human resource development policy, credit policy, and import substitution/export promotion policy. It was recommended, inter alia, that petroleum exporting countries should channel foreign direct investment to non-oil sectors in order to render the sectors viable and so augment their productive bases.

(Analysis of the Consequences of the RF Foreign Trade Liberalization within Russia's Accession to the WTO and Regional Economic Integration)

(Analysis of the Consequences of the RF Foreign Trade Liberalization within Russia's Accession to the WTO and Regional Economic Integration)

Trade, foreign investment, and wage inequality in developing countries

Liberalization of foreign trade and investment raises the domestic ratio of skilled to unskilled wages (skill premium) if the country has a sufficiently well-educated workforce, but lowers it otherwise. Wide wage inequality is undesirable on equity grounds, especially in poor countries where the bottom wage is close to the breadline; but it gives parents an incentive to invest in their children’s education. The incentive will be ineffective, however, if parents cannot borrow for their child’s education because of underdeveloped credit markets or because they are too poor to finance the investment from their own income and savings.

Intermediate Goods Trade, Technology Choice and Productivity

We develop a dynamic model of intermediate goods trade in which the pattern and the extent of intermediate goods trade are endogenous. We consider a small open economy whose …nal good production employs an endogenous array of intermediate goods, from low technology (high cost) to high technology (low cost). The underlying intermediate goods technology evolves over time. We allow for endogenous markups and consider the eect of trade policy on both the intensive and extensive margins. The existence of trade barriers means that there is a nondegenerate range of intermediate goods that are nontraded. The ranges of imports, exports and nontraded intermediate goods, as well as the entire range of intermediate products used are all endogenously determined. The responses of these ranges, markups and productivity to domestic and foreign trade liberalization are then analyzed.

Changes in the EU and Global Milk and Dairy Products Market in View of Multilateral Trade Liberalisation

The aim of this article is to present the situation of the milk and dairy products market in the EU countries and in the countries which are the world’s major milk producers in view of changes caused by the potential liberalisation of the global milk trade. The volume of trade in milk and dairy products, as well as production, demand and prices paid by consumers were analysed. The study uses the general equilibrium model of the Global Trade Analysis Project (GTAP). Projections were made according to the propositions included in the modalities negotiated at the World Trade Organisation forum in December 2008. It was proved that the progressing liberalisation of foreign trade may increase the competitive pressure both on regional markets and on the global market. In consequence, the dairy producers and processors from the EU countries may lose part of the market to the suppliers from the countries with lower costs of production. Such countries as New Zealand, the USA, Brazil and China may benefit from the liberalization.

Determinants of Economic Growth in Laos

This paper identifies the key determinants of economic growth in Laos, using annual timeseries data from 1980 to 2010. To avoid the problems of non-stationary associated with time series analysis, the Dickey-Fuller unit roots statistic is checked in order to ascertain whether the variables are stationary. This prevents problems of spurious results in the regressions by transforming the dependent and independent variables in the first different operator form. This paper contributes on the on-going research issue whether foreign aid and trade liberalization help developing countries to foster their growth. The findings show that trade openness and foreign aid contribute to economic growth in Laos. Furthermore, foreign direct investment, domestic investment, government expenditure, labour force and being a member of ASEAN also found to have positive effects on the performance of the economy, whereas the population growth has a negative impact. This is in line with the argument that a large population is related to the capacity of government expenditure to provide the people with social services efficiently, thereby negatively impact development. To sustain a high rate of growth, this paper suggests improving the trade policy orientation, based on value-added products for exporting, together with investment policy adoption and tourism promotion based on the potential resources of the country. The foreign aid allocation should be focused on specific areas, such as (1) promoting economic growth and (2) direct intervention for the poor, and ensured the positive effectiveness with accountability and transparency methods for aid allocation.

The effect of foreign trade and investment liberalization on spatial concentration of economic activity

I examine the varying responses of countries to foreign trade and direct investment liberalization on spatial concentration of their economic activity by taking into consideration moderating factors such as their market size and level of economic development. I argue that liberalization increases the concentration under normal conditions but large market size, and underdevelopment can disperse economic activity. Using data from 168 countries for the period of time starting in 1980s, I found support for all hypotheses.

Changes in BH Foreign Trade after the Process of Liberalization with Neighboring FTA Countries

Macroeconomic performances of Bosnia and Herzegovina after the war and process of reconstruction and transition of economy are pretty bad. One of very critical issues regarding the state of BH economy is external sector, or more precisely, foreign trade deficit that has increasing trend from year to year. This paper will present some basic characteristics of BH foreign trade overall. But, main task is to analyze changes in BH foreign trade after the process of liberalization through foreign trade agreements. It is evident today that after liberalization of foreign trade with FTA countries value of import and export increased. But, BH trade deficit was larger from year to year even the fact that growth rate of export had been faster than growth of import. In 2004, foreign trade deficit with FTA countries was more than 50 % of total deficit or 1,718 billions of
1. Also, additional increase of trade deficit in 2004 compare to 2003 has been made basically with FTA country – 83 % of total additional deficit. Therefore, we may conclude that main generators of additional foreign deficit are FTA countries. And finally, beside the fact that BH has almost full liberalization of foreign trade with neighboring countries it is possible to find some non-tariff barriers to trade. We are going to identify them.

Internationalization and Economic Growth: The Comparison of European Economies

The paper analyses the internationalization of European economies focusing on ten new member states (NMS-10: Cyprus, the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovakia, and Slovenia). The degree of internationalization is measured by macroeconomic aggregates, particularly by foreign direct investment (FDI) and international trade. The focus is on the association between FDI and economic growth.The research literature argues on an existing linkage between internationalization of economies through international trade and FDI flows, and economic growth. The integration and accession of the NMS-10 into European Union (EU) is expected to contribute essentially to the increasing of trade and FDI flows.The paper focuses on NMS-10 and compares the impact of FDI and exports on the economic growth before and after their accession to EU, as well as compares the economic internationalization of the NMS-10 with EU-15 countries. We aim to establish the influence of the economic integration on trade and FDI flows. While several studies focus on the influence of inward FDI on host country’s economy, we aim to assess the impact of both inward and outward FDI on the economic growth. The research uses panel data for the period 2000-2008 in a regression framework analysis.Our main hypothesis is that foreign trade and investment liberalization have provided crucial incentive for the ascension of foreign trade and FDI flows in NMS-10 countries, which in a turn have had a positive impact on their economic growth.The findings and implications are useful for predicting the changes in foreign trade and FDI flows for the future members of EU, induced by their accession into EU, as several studies emphasize the high foreign trade and FDI performance as a success determining factor of the European integration process with important managerial and policy implications.

Modeling Long-Run Determinants of Economic Growth for the Mauritian Economy

This study develops a macroeconometric model for the Mauritian economy to explain long-run determinants of the country’s economic performance. The Engle-Granger (1987) two-step cointegration methodology is adopted to capture both short-run and long-run dynamic properties of the macroeconomy. The empirical findings indicate that labor, domestic investment, prices and financial development play a pivotal role in the economic growth process of the Mauritian economy. More notably, the contribution of financial development to the economic performance of the domestic economy is positively influenced by output, foreign direct investment, human capital, trade liberalization and price stability. Policy should emphasize the role of FDI-financing for education and training and capital investment projects. Furthermore, the promotion of trade and financial liberalization as well as the maintenance of macroeconomic stability is crucial to enhance financial deepening and in turn sustained economic performance.

The growth of inequality in Russia: is globalisation to blamec

The paper explores income based and non-monetary dimensions of inequality in Russia. It is argued that globalisation exacerbated inequality at least in three ways. Firstly, the adoption of global neo-liberal economic concepts resulted in an excessive reliance on market forces and a curtailment of social guarantees which produced a rise of wealth and income differentiation and undermined equality of opportunity. Secondly, the liberalisation of foreign trade and global competition gave impetus to a rapid development of the fuel sector exacerbating the structural bias in economy and wage differentiation. Thirdly, globalisation diversified employment opportunities for certain categories of workers with access to the international labour market which offered much better terms of employment as compared to Russian standards. Globalisation provided new opportunities for development and individual success but in the absence of a strong state commitment to equitable provision of social goods it is bound to exacerbate inequality problem.

Privatization in a Small Open Economy with Imperfect Competition

AbstractWe look at privatization in a general equilibrium model of a small, tariff‐distorted, open economy. There is a differentiated good produced by both private and public sector enterprises. A reduction in government production in order to cut losses from such production raises the returns to capital and increases the tariff revenue, which are welfare‐improving. However, privatization also leads to lower wages and possibly fewer private brands. This lowers workers’ welfare, which may make privatization politically infeasible. Privatization can improve workers’ welfare with complementary reforms, e.g., attracting foreign investment or trade liberalization.

Customs tariffs and the policy of custom tariffs in the function of the realization of regional economic integrations: The example of the European Union

Custom tariffs and the policy of custom tariffs have always been important instruments in the protection of domestic production from foreign competition, though the more in the past, the less in today's global economic environment. The idea of protectionism in international trade hasn't evaded the European Union either. The European Union has a common protectionist policy against countries that are not member to it. The agricultural production and the policy of administrative levies on the import of agricultural products pertain to the area that enjoys the highest degree of protection. The realization of such protectionist policy makes the international trade less free, while the free movement of goods is quintessential to the economic growth of the European Union, other regional economic integrations, individual countries and the society as such. The World Trade Organization, which imposes its own rules on the international trade, the creation of regional economic organizations in today's environment of international trade and free-trade agreements between individual states shrank to minimal the diapason of various protectionist measures and instruments. The decline of the idea of protectionism in international trade is evidenced by data on the share of the customs tariffs in the total fiscal revenues of the European Union and of the GDP of the member states. Namely, the fiscal impact of custom tariffs for some years shows a descending tendency, above all due to the process of globalization in foreign trade and liberalization at the scale of global economy. The European Union will be able to facilitate the development of the regional economic integrations only through the liberalization of foreign trade, because the idea of protectionism in international trade doesn't have perspectives on the long run.