Inter-industry Trade Research Articles

Identification and Evaluation of Synergy Between Carbon Emissions and Air Pollutants in Inter-Industrial Trade Among Provinces in China

With the vigorous promotion in China of efforts to reduce pollution and carbon emissions, examining their synergies becomes increasingly crucial. This study used the multi-regional input–output (MRIO) table to build the consumption-based industrial emissions inventories of CO2 and three major air pollutants (PM2.5, NOx, and SO2) and constructed synergistic emission indices of the intensity and magnitude to identify and evaluate the synergy between carbon emissions and air pollutants in inter-industrial trade among 30 provinces in mainland China. The results show that more than 85% and 40% of inter-provincial and inter-industrial trades have synergistic emissions between CO2 and air pollutants, respectively. We identified 77 inter-provincial trades and 84 inter-industrial trades among provinces with strong synergistic emissions. They are mainly reflected in the demand of the construction industry in Zhejiang and Guangdong for the nonmetal mineral products manufacturing industry in Henan, and the metal smelting and processing industry in Hebei, along with the demand of the service industry in Beijing for the electric power, steam, and hot water production and supply industry in Inner Mongolia. Our study provides new insights into the synergistic reduction of CO2 and air pollutants within the supply chain, thereby enriching the discourse on regional and industrial synergies in achieving sustainable development goals.

Inter-industry trade and business cycle dynamics

AbstractMotivated by the increased importance of trade between industrialized and less-developed countries, we build a two-sector dynamic stochastic general equilibrium model featuring inter-industry trade as well as intra-industry trade to analyze the business cycle dynamics of industrialized countries. We find that import-competing sectors are more sensitive to domestic productivity shocks than exporting sectors, due to their stronger reliance on domestic demand. This generates pressure to adjust relative prices and to reallocate factors of production. It also propagates the international spillover effects of productivity shocks leading to stronger business cycle comovement across countries, relative to a traditional business cycle model that does not feature inter-industry trade.

Status of Sino–Russian Trade in Agricultural Products: Dual Consideration Based on Characteristics and Growth

The security of agricultural product supply is crucial for social development. For populous and resource-rich countries like China and Russia, strengthening their bilateral trade in agricultural products is essential to ensure stability and security in the global food market. However, current research on their agricultural product trade lacks sufficient detail. This article aims to analyze the overall trend of agricultural product trading between China and Russia based on trade data from 2007 to 2021. Different trade indexes will be used to examine the four aspects of the agricultural product trade characteristics of both countries. The constant market share model will be employed to analyze the growth factors of agricultural product trade between the two nations, providing insights into the driving force behind changes in agricultural exports. The findings of this study demonstrate that bilateral agricultural trade between China and Russia shows complementarity and high trade intensity. Intra-industry trade represents the primary form of agricultural product exchange, while inter-industry trade serves as a supplemental form of trade. In terms of trade growth impact, the bilateral agricultural trade between China and Russia is primarily influenced by the effect of product structure, followed by competitiveness. Therefore, in the face of uncertain situations, such as counter-globalization and localized trade frictions, specific recommendations will be provided to optimize the trade structure of agricultural products between the two nations.

Regional Comprehensive Economic Partnership (RCEP) on agricultural products

Intra-industry trade plays an important role in the current international economics literature. In 2019, Indonesia's total exports to RCEP member countries reached 61.65% of Indonesia's total exports, and 44% of total exports to RCEP came from the agricultural sector. The purpose of this research is to examine the interdependence of Indonesia and its 14 trading partners in RCEP. This research uses secondary time series data from the trademap, namely the flow of Indonesian agricultural trade with RCEP countries from 2010-2019. The data analysis method in this study is the intra-industry trade index. The results of the study of trade patterns identified through the Indonesia-RCEP Trade Relations (IIT) show that the raw material with the highest average IIT value is processed flour (HS 19). This shows that Indonesia's RCEP trade in flour products (HS 19) is bilateral. In terms of country, Malaysia is a country with the strongest trade relations with Indonesia. The average score of 19.74 between IIT Indonesia and RCEP reflects that the relationship between Indonesian agricultural products and RCEP is still low and classified as inter-industry trade. The low IIT value may be due to the large one-way trade in RCEP, where Indonesia is still the dominant importer. Therefore, it is important for the government to further increase potential commodity exports by encouraging agricultural product processing industries with tax breaks within a certain period.

Trade Integration and Export Aspiration: Evidence from India’s Trade in Goods with BRICS Countries

The purpose of this study was to examine the dynamics of trade between India and the BRICS countries as well as to gauge the relative strength of Indian exports to those nations. The trade integration patterns among BRICS countries were also analyzed. To quantify the extent to which India’s exports correspond to the needs of its BRICS counterparts, a novel export aspiration index was constructed. The index of trade integration patterns has also been employed to quantify India’s trade integration pattern with other BRICS members. Further, the gravity model of trade has been employed to analyze the fundamentals of India–BRICS trade. The export aspiration in individual BRICS countries shows a diverse pattern. However, India’s export aspiration in these countries has improved, although marginally in the long run. Such empirical evidence substantiates that the relative strength of India’s exports within its BRICS counterparts has marginally improved over time. Moreover, the trade integration index indicates a similar trade integration pattern among the BRICS countries and corroborates the presence of inter-industry trade. Added to the conventional variables of the gravity model, India’s outward multilateral trade resistance and BRICS inward multilateral trade resistance significantly promote India–BRICS trade. Hence, the relative strength of Indian exports will increase substantially if India’s commodity composition is diversified by including more commodities in its export baskets that correspond to the needs and changing conditions of the BRICS economies.

Competitiveness and complementarity of agricultural products between Thailand and China on a short-term basis

China and Thailand belong to Regional Comprehensive Economic Partnership countries, and agricultural trade is vital to Thailand’s economy. Competition in agricultural trade between countries is fierce. Therefore, it is crucial to understand the advantages and disadvantages of agricultural trade between Thailand and China. Complementarity and competitiveness of international business show the benefits and drawbacks of cross-border exports and the trend of future exports. This study uses quantitative techniques to analyze the agricultural trade between Thailand and China. It employed four methods, including the calculations of the Grubel-Lloyd index, revealed comparative advantage index (RCA), trade intensity index (TII), and trade complementarity index (TCI). The result of method 1 indicates that Thailand’s agricultural trade has a more substantial competitive advantage (three years average RCA = 1.69 > 1.25) than China (three years average RCA = 0.37 < 0.8) from 2017 to 2019; they are complementary in specific categories of agricultural products. The result of method 2 indicates that items 03, 07, 13, and 14 of China’s exports and Thailand’s imports have strong complementarity. Items 10, 11, 17, and 19 of Thailand’s exports and China’s imports have strong complementarity. The result of method 3 indicates that the positive factor on bilateral trade flow is significant. The result of method 4 indicates that items 06, 07, 12, 19, 20, and 21 have advantages in intra-industry trade, and items 09, 10, 13, and 18 have advantages in inter-industry trade. The paper has important implications for Thailand’s government to formulate relevant trade policies to enhance its agricultural export competitiveness, which is also conducive to developing bilateral agricultural trade.

Immigration - Trade Relationship in ASEAN: What Does the Evidence Show?

The Association of Southeast Asian Nations (ASEAN) region has become more integrated through trade and migration. Yet, public policies in ASEAN do not consider the interrelations between trade and immigration policies. Therefore, the paper employs a static panel gravity model for the 10 ASEAN countries over five-year intervals between 1990 and 2020 to identify the direct connections between migration and trade (exports, imports and intra-industry trade). The empirical results support a pro-import immigrant effect but not a pro-export immigrant effect. The negative effect of the stock of immigrants on the share of bilateral intra-industry trade implies that immigration better explains one-way trade or inter-industry trade. The limited presence of the immigrant-link effects reflects the large stock of unskilled ASEAN immigrants that reduces the possibilities of creating networks between the home and host countries. The significant immigration-import links, however, is sufficient to justify the importance for ASEAN to work towards connecting migration and trade policies.

ENVIRON-ECONOMIC BALANCE ANALYSIS IN BILATERAL INDUSTRIAL TRADE: A COMPARISON BETWEEN AUSTRALIA AND CHINA

Exchanges of products and services in bilateral industries may be accompanied by environmental and economic inequalities which lead to imbalanced situations in relation to environmental protection and economic development. In a close trade relationship between two countries such as Australia and China, their industries inevitably affect each other. This study maps the embodied CO2 emissions and value added in bilateral trade under the input–output model and measures the unequal exchanges in such trade using an originally established industrial environ-economic balance index. The bilateral trade between Australia and China is taken as an example to validate the outcomes of the research method. The results indicate that in 2014, Australia transferred 580.90 billion tons of CO2 and 105.85 billion USD of value added to China, while approximately 375.65 billion tons of CO2 and 25.15 billion USD of value added flowed from China to Australia. China’s manufacturing, construction, and services and other industries, and China’s and Australia’s real estate activities industries had net inflows of embodied CO2 emissions and value added, indicating these industries paid economic costs in return for reducing environmental pressure. In inter-industrial trade between Australia and China, 49 pairs of bilateral industrial trades were relatively fairly balanced, while the remaining 15 pairs of inter-industrial trades were imbalanced. The established environ-economic balance analysis method and quantitative findings are valuable for better understanding the environment impacts of the economic development of national economies and developing national policies in corresponding to the rising environmental issues.

Intra-industry Trade in Latvian Agricultural Commodities and Food Products

The share of simultaneous exports and imports of the same types of products by a country or intra-industry trade has gown continuously over the last century. At the same time, share of inter-industry trade when countries specialize in production and trade occurs only between industries has declined. Trade in differentiated products of the same sector and the same stage of processing is referred to as a horizontal intraindustry trade. Such products are close substitutes for each other in terms of factor inputs and consumption. Trade in products of the same sector at different stages of processing is referred to as a vertical intra-industry trade. According to economic theory, a rise in the share of intra-industry trade is occurring within the trade growth in general due to an economic development and broader integration. Since early nineties, Latvia has remained a net importer of agri-food products. At the same time, both exports and imports of agricultural commodities and processed food products has consistently grown, with total trade turnover increasing. The objective of the study is to determine the share of the intra-industry trade and structural changes in the sectors of Latvian agricultural production and food processing over the last decade. To reach the research objectives, Grubel-Lloyd intraindustry trade indexes, Brülhart marginal intra industry trade indexes and Thom-McDowell indexes of total marginal intraindustry trade were compiled for Latvian agri-food trade data over ten years period from 2002 to 2011. The research results show consistently high share of intra-industry trade in total Latvian trade in agricultural commodities and food products over the whole period. A shift from predominantly vertical marginal intra-industry trade towards horizontal marginal intraindustry trade is observed.

Industry centrality: Weak ties, industry attributes, and managerial contracting

AbstractCentrality in the network of interindustry trade relationships provides novel insights into an industry's economic attributes and managerial incentive contracts prevalent in the industry. More “central” industries trade with a large number of industries, implying numerous but relatively weaker interindustry ties. Weakness of interindustry ties suggests that relationship‐specific investment (RSI) will be less important and output will be relatively more commoditized in central industries. As predicted, central industry firms are less innovative, face greater competition, and have lower idiosyncratic risk. Further, CEOs in central industries receive lower pay and weaker incentives. Tournament incentives are also weaker in more central industries.

ECONOMIC AND SOCIAL UPGRADING OF DEVELOPING COUNTRIES IN GLOBAL VALUE CHAINS

The issue of overexploitation in developing countries in the era of Global value chains (GVC ) is directly related to the question of the relationship between the economic and social upgrading of countries in GVC. The relevance of this topic is due to its narrow representation in the scientific field, as well as the persistence of a low standard of labor force’s living in developing countries, despite the growth in labor productivity and the transition to the production of goods with higher added value. This article examines the problems faced by low-and medium-skilled workers in developing countries, including extremely low wages, social insecurity, and gender inequality. Often the reason for the preservation of this situation is the low price of goods, which is set by the purchasing companies that govern the GVC. International organizations and the media systematically attract public attention to this problem, which has led to the establishment of control over working conditions by the parent companies of the GVC. However, in many industries, the workers’ situation is still unsatisfactory, which indicates that the measures taken in this direction are insufficient. According to the author, significant improvement of working conditions is difficult without the participation of industry and inter-industry trade unions of employees.

Industry-level determinants of India's vertical and horizontal IIT.

This paper mitigates the gap in the Indian context about the non-consideration of vertical and horizontal intra-industry trade (IIT) distinctly in testing empirical hypotheses about industry-level determinants of IIT. Our study indicates that failure to segregate vertical and horizontal IIT from the total IIT possibly leads to potential bias in econometric results. Drawing on annual multilateral trade data encompassing two and half decades of the liberalization period, we find India’s IIT outpaced the growth of inter-industry trade over the years and its contribution mainly came from six manufacturing industry groups whose export baskets had been loaded with low vertically differentiated goods. However, horizontal and high vertical IIT have gained some momentum since the end of the last decade. Given the fractional nature of our dependent variable, we initially estimate a (random effects) Tobit model followed by the Exponential Regression of Fractional Response model. The robust econometric findings show that product differentiation has a positive impact only on total IIT. Whereas vertical and horizontal IIT are promoted in industries with concentrated and competitive market structures, respectively. The prevalence of concentrated market structure indicates that (large) Indian firms sustain import competition by specializing in low vertically differentiated goods, as they efficiently adjust to resource reallocation.

The Labour Market Effects of International Trade in the Presence of Vertical Product Differentiation: Some Methodological Remarks in Retrospect

The paper retrospectively analyses the issue of the impact of international trade on developed countries’ labour markets in the 1990s, when the majority of academic opinion denied the role of trade in the misfortunes of unskilled workers. An analytical framework is proposed in which intra-industry trade is explained in terms of countries’ factor endowments and factor intensities of goods. Unlike the traditional Heckscher–Ohlin model of inter-industry trade, the model suggested here is more consistent with stylised facts about North–South trade. The paper also proposes a method for empirically assessing factor substitution effects at the product level. Inferring the factor content of intra-industry trade from the inter-sectoral relationship between factor intensity and average unit values of exports, the paper found that the labour market effects of intra-industry trade add significantly to the estimated factor market impact of trade.

International trade and cyber conflict: Decomposing the effect of trade on state-sponsored cyber attacks

A state’s decision to engage in cyber operations has important implications for its trade. Successful cyber espionage could yield valuable trade secrets that could boost domestic production and spur economic growth. On the other hand, uncovered cyber operations could invite devastating sanctions that retard economic development. In spite of this, the nexus between trade and cyber attacks has received little attention in the literature. In this article, I explore how a state’s trade relations affect its propensity to engage in cyber attacks. I develop a theoretical framework that links the composition of a state’s trade to its deficit in proprietary information relative to other states. I decompose trade into its inter- and intra-industry components and show that while inter-industry trade is associated with higher incidence of state-sponsored cyber attacks, intra-industry trade has the opposite effect. I also show that these effects are non-monotonic, varying by the share of inter- or intra-industry trade in total trade. The results also show that states that have a heavy concentration of high-tech industries such as aerospace, computers, and pharmaceuticals have a higher propensity to engage in cyber espionage operations. These results are robust to a variety of controls and specifications.

Measurement and Analysis of Agricultural Products Trade Level between China and Ukraine

The analysis of intra-industry trade and inter-industry trade in international trade in different regions can fully explain the status of export trade and the advantages and disadvantages of products in different regions. The purpose of this research is to analyze the overall agricultural trade situation between China and Ukraine and the nature of the specific trade. To analyze agricultural import and export trade data between China and Ukraine, the author uses the Grubel-Lloyd index (intra-industry trade index) and the Brulhart index (the marginal inter-industry trade index in a specific period). The Grubel-Lloyd index measures the intra-industry trade of a particular product. The Brulhart index is closely related to that of intra-industry trade, that being the export and import of the same items, but concerns changes in exports and imports between two points in time as opposed to their values at a given point in time. The research is based on data for 2011-2020, which are contained in the UN Comtrade database. The research results show that agricultural trade between China and Ukraine is mutually beneficial. The difference in agricultural resource endowment and agricultural structure directly affects the trade of agricultural products between the two countries. The agricultural products exported from China to Ukraine are mainly unprocessed or primary processed agricultural products. Seafood, meat products, fruits, and vegetables account for a large proportion. The main imports are also primary processed agricultural products such as grains and vegetable oils. The agricultural product trade between the two countries is mainly based on intra-industry trade, and the difference in agricultural technology level is an important factor in determining bilateral agricultural exports.

Bilateralni trgovinski trendovi i obrasci Bosne i Hercegovine - slučaj trgovine sa Turskom

A country's trade pattern reflects its supply (export) and demand (import) specialization indicating national performance and competitiveness in the foreign as well as in the domestic market. By applying two different concepts of trade specialization (one based on traditional trade theories of comparative advantages and the other based on modern trade theories), complemented with the analysis of export-import flows and relations, the paper aims to identify characteristics of the position of Bosnia and Herzegovina (B&H) in its bilateral trade. The paper investigates trends, patterns and variations in the trade of B&H with Turkey during the eleven-year time frame (2009-2019), with special regard to identifying industries with revealed comparative advantages and industries with dominancy of IIT. The analysis employs different indicators such as indices of export composition, sectoral diversification/concentration, IIT intensity and structure, quality of exports and imports based on relative unit values and classification of industries by technological intensity. The research results indicated an unfavourable position of B&H in trade with Turkey, with no prominent changes in the observed period. The trade deficit is constantly present, with low export-import coverage and a declining export trend. The analysis revealed a higher level of export product concentration primarily on low value added products, and comparative advantages of B&H in fewer industries, mainly resource-based or medium-technologically intensive. Trade with Turkey is extremely inter-industry trade, viewed both at an aggregate and industrial level, also pointing to B&H's low competitiveness in analyzed trade relations.

Analisis Faktor-Faktor yang Mempengaruhi Perdagangan Indonesia dengan Negara-Negara Anggota APEC

This study aims to analyze the factors that influence Indonesia's trade with APEC member countries. Research period between 2011-2017. The method used in conducting the analysis is the Gravity Model. To support the conclusion of the gravity model, the Trade Conformity Index and the Grubel Lloyd Index are also calculated. Based on the results of the study showed that Indonesia's trade with APEC member countries was positively influenced by GDP, exchange rates, and Trade Conformity Index, while economic distance and population had a negative effect. It shows that Indonesia's trade with APEC member countries has an inter-industry trade pattern which is indicated by a positive sign of the coefficient of TCI and relatively low GLI values. But it should be noted that quite a lot of Indonesian commodities have Grubel Lloyd Index above 0.50 which means they are already in the category of intra-industry trade.

Inter-industry trade and heterogeneous firms: country size matters

This study investigates how industries with different patterns of firm heterogeneity are distributed across countries by developing a three-sector general-equilibrium model. There are two manufacturing industries in our setting: one in which firm productivity is homogeneous and the other in which it is heterogeneous. The higher degree of firm heterogeneity in the latter reflects the larger difference in firm heterogeneity between industries. We show that the larger country is more specialized in the industry with heterogeneous (homogeneous) firms when trade costs are low (high) and that an increase in the inter-industry difference in firm heterogeneity fosters the larger country's degree of specialization in the industry with heterogeneous firms. We also disclose the trade patterns across countries and show how they respond to trade liberalization. Moreover, wages are found to be higher in the larger country, with an increase in the inter-industry difference in firm heterogeneity enlarging the wage inequality across countries.

Income Distribution and Trade Pattern

Abstract Motivated by recent insights from behavioral economics and social psychology, we present a theory of trade that seeks to explain inter-industry trade between countries that are similar in their production sides, but differ in their income distribution. By assuming status-dependent preferences that are non-homothetic, we show that income inequality differential can be a basis for inter-industry trade between otherwise similar economies.

The cost of congestion and the benefits of congestion pricing: A general equilibrium analysis

The benefits of congestion pricing are examined with a spatially detailed computable general equilibrium model of the Greater LA region. The model treats choices of roads on a network, of driving or public transit, of residence and job location, of non-work trip patterns, of housing type and size; vacancies and new construction, production, interindustry trade and exports. The aggregate benefit of pricing LA County road congestion increases 2.7 fold when the toll revenue is recycled to cut the income tax of the poorer LA County workers while maintaining region-wide tax revenue neutrality. Consumers get 66% of the aggregate benefit and landlords 41%, while importers suffer losses equal to 7% of the aggregate benefit. Gross regional product increases by 1.34%. The aggregate benefit changes negligibly when the toll revenue is recycled to cut sales taxes instead of the income tax, but gross product still rises by 0.6%. Under the sales tax cut, consumers, importers and landlords benefit more evenly than under the income tax cut, but with the property tax cut nearly all of the cut is capitalized into property values.