International Trade Performance Research Articles

International Trade and Economic Performance in Tanzania: Further Evidence

Abstract The study investigated the role of international trade in economic performance in Tanzania for the post reform period, from 1980 to 2018. International trade is measured by disaggregated imports and exports while economic performance is measured by GDP growth. Exports are disaggregated into manufactured goods and non-manufactured goods while imports are disaggregated into capital goods and intermediate goods. To obtain robust non-spurious regression results, Dickey-Fuller (D-F) and Phillips-Peron (PP) Unit Root tests were performed. Johansen Co-integration tests were employed to investigate long-run relationships between export, imports and economic growth. The Johansen test suggested a long-run relationship between international trade and its components and economic development. In addition, the Error Correction Model (ECM) results further supported a long-run relationship between international trade and economic growth in Tanzania. This calls for further opening of the economy and further liberalisation of trade restrictions.

Theory vs practice: Patterns of the ASEAN-10 agri-food trade

Abstract During the past decades, agricultural trade is enormously expanded. One of its driving factors is the World Trade Organization. However, regional agreements can give further trade opportunities for the participating countries. Association of Southeast Asian Nations (ASEAN) is one of them. This article aims to give a detailed overview of ASEAN members’ agri-food trade by using the world and regional level data. The country level competitiveness is calculated by four different Balassa-type indices and highlights whether the agri-food trade (practice) of these countries is in line with the revealed comparative advantages/competitiveness of the different product groups (theory). According to the results, commodities with the highest comparative advantages overlap with the most important export products. This confirms a tight connection between theory and practice. It should also be noted that world level values are generally higher than that of the regional levels. Moreover, countries with significant agri-food production (Thailand, Indonesia, Vietnam, and Malaysia) can be characterized by higher comparative advantages compared to the other ASEAN member states. These results can help to better understand these countries’ trade specialization and international trade performance.

Trade openness and political distortions

AbstractIn this paper, we explore the relationship between international trade openness and two major political distortions, political uncertainty, and political polarization. We consider two measures of trade openness, the trade expenditures and the number of trade partners, as well as their volatility. As political distortions and trade characteristics of the country are endogenously related, we instrument the political uncertainty by the standard deviation of the effective political leaders’ ages of a country and the minimum age of the political leaders of a country's neighbors. We find that political uncertainty reduces the level of trade openness and increases the volatility of trade openness while political polarization negatively affects both the level and the volatility of trade openness. We propose a simple theoretical model that provides the intuition on the relationship between political distortions and trade openness.

Exploring Barriers to International Trade Faced by Sri Lankan Exporters to the Indian Market

In recent decades, India has emerged as a major economy in the world. Although Sri Lanka is situated in close proximity to India and has entered into trade agreements with India to boost its international trade, it has still not been able to achieve the expected level of growth in exports to India. Based on the 2019 United Nations COMTRAD data, India is the third largest export destination of Sri Lanka, and the export revenue from trade with India amounted to US $ 759 million in 2019. However, the statistics in the past years indicate a drop in Sri Lankan export revenue to India from $ 767 million in 2018 to $ 759 million in 2019. In spite of different bilateral and multilateral trade agreements entered into between the two countries, Sri Lankan export performance still remains unsatisfactory. This indicates that apart from tariff reductions, certain other non-tariff barriers influence international trade performance between the two countries. Therefore, this study aims to explore barriers to Sri Lankan exporters which undermine their international trade performance in the Indian market. The study follows a qualitative research methodology and has collected data using face-to-face unstructured interviews with twenty (20) respondents representing different stakeholders engaged in the process of exporting from Sri Lanka to India. The collected data was coded and analyzed through template analysis. Findings revealed thirty-five (35) important factors which influence successful penetration into and performance in the Indian market. The results reveal that host market and home market characteristics have a greater impact on successful performance in the Indian market than product or firm characteristics.

DO ELECTRICITY CONSUMPTION AND INTERNATIONAL TRADE OPENNESS BOOST ECONOMIC GROWTH IN SUDAN? EMPIRICAL ANALYSIS FROM BOUNDS TEST TO COINTEGRATION APPROACH

Electricity power plays a significant role as an engine factor in boosting economic growth, particularly in developing countries. This paper utilized the autoregressive distributed lag (ARDL) model to study the interrelationship among electricity consumption, international trade openness, and economic growth in Sudan data spanning 1975-2014. The cointegration test result confirms the presence of long run cointegration relationship among electricity consumption, international trade openness, and economic growth. The estimated results of the long run point out that electricity consumption and international trade openness showed a significant positive relationship relating to economic growth. The estimated error correction term coefficient is found to be significant at a 1% significance level with an expected sign. The findings of this paper suggest that Sudan's economy takes advantage of promoting electricity production and more open international trade. Therefore, the policies that support and encourage electricity generation for effective uses are highly recommended. The engagement in international trade creates opportunities for Sudan's economy to benefit from the comparative advantage in exporting some goods that have a comparative advantage in Sudan as well as to import modern technologies particularly, the machineries and equipment relating to agriculture and industrial sectors recently to improve economic growth.Keywords: economic growth, trade openness, electricity consumption, ARDL, Sudan.JEL Classifications: F43, F16, L94DOI: https://doi.org/10.32479/ijeep.9374

Panel Data Analysis of International Trade in West African Sub Region

West African countries have suffered so much under poor economic growth rate; this issue is largely caused as a result of the poor performance in international trade, which is one of the most essential tools for economic growth. The study investigated the factors influencing international trade in West African Sub region. A Pooled OLS, Fixed Effect Model, and Random Effect Model were adopted to fit the panel regression model for the panel data sets. The study divided the models into three in other to have proper view of factors influencing international trade across West African Sub-region, each model contain the same independent variables and different dependent variables. The result shows that fixed effect model was accurate for the study. Also from the study it was observed that for the first model which use import as dependent variable, gross domestic production, foreign direct investment, and exchange rate are positively significant to import which implies that all the regressor variable influence import across west African sub region positively, while only GDP and FDI are positively significant to export and only FDI is positively significant to trade balance (TB). We therefore conclude that foreign direct investment is the key macro-economic variable that positively influences the policy of international trade across West African over the period of consideration.

Flattening of the Phillips Curve: Causes and Their Policy Implications

This paper explores potential causes of the flattening of the Phillips curve and why they matter for monetary policy. I use a novel open economy nested-CES model to show that an increase in product market concentration (Herfindahl-Hirschman Index) and a higher degree of openness to international trade both lead to a flatter Phillips curve. Within the model, the central bank’s optimal policy choices depend separately on these two factors, not just on the resulting slope of the Phillips curve. My model predicts a 30% drop in the slope of the Phillips curve since the 1990s, where the major contribution comes from increases in product market concentration rather than increases in international trade openness. Through a series of policy experiments, I quantitatively show the suboptimality of the choices made by policymakers who are misinformed either about the slope of the Phillips curve or about its causes.

Impact of Trade Liberalization on Economic Growth of Nepal

Trade openness has been considered as an important determinant of economic growth. It has been witnessed during the past couple of decades that international trade openness has played a significant role in the growth process of both developed and developing countries. International organizations such as Word Trade Organization, International Monetary Fund and World Bank are constantly advising, especially developing countries, to speed up the process of trade liberalization to achieve high economic growth. In this context, this paper aims to analyze the impact of trade liberalization on economic growth of Nepal. For this purpose, all the data regarding gross domestic product, export, import, total trade, trade balance of Nepal from 1980 A.D. to 2013 A.D. published by World Bank (2014) were used. Both descriptive as well as inferential statistics were used to analyze the data. Correlation analysis was used to find the correlation between the selected variables. Multiple linear regression analysis was carried out to analyze the impact of the trade liberalization in economic growth of Nepal. Trade cost does not explain any influence in gross domestic product, export, import, total trade and trade balance. The impact of trade openness is positive for all variables except trade balance. Trade openness has influenced economy significantly; import increased with purchasing power, export also increased but service only. Therefore, there is gap in export and imports.

The role of national trade logistics in the export trade of African countries

Background: This article critically examines the role of trade logistics in the exports of African countries. The performance of the trade logistics of African countries was analysed using the World Bank logistics performance index (LPI) and its components. The study was conducted based on the performance statistics of countries around the world in 2016. Objectives: The aim of this study was to identify African countries’ inefficient trade logistics areas based on LPI components for future improvement; and to investigate the relevance of trade logistics performance of African countries on export values in order to boost the region’s merchandise export share in the global market. Method: The methodological approach employed in this study is a combination of both descriptive and inferential data analysis. The African countries’ logistics performance in international trade was summarised using LPI median values. The effect of the performance of trade logistics on exports was explored based on a gravity model of international trade. For the estimation, the Heckman selection approach was applied to incorporate zero bilateral trades. Results: On average, African countries experience the lowest LPI score, particularly in terms of quality of trade and transport-related infrastructure, and customs and border clearance. A successful improvement in these areas would enhance African countries’ supply chain deliveries including on-time delivery, tracking and tracing and international shipments in cross-border transactions. Conclusion: The evidence from the gravity model estimates of this study suggests that an improvement in any of the LPI components can lead to significant growth in the export of African countries. This could then increase the African merchandise export share in global trade. The gravity model results also show that landlocked countries have lower trade flows than their coastal neighbours.

Analysis of the Relationship between International Service Trade and Economic Growth Based on VAR Model

The rapid development of international trade in services and the focus of international trade competition from goods trade to service trade, international trade in services has become a new engine of economic growth, and gradually become an important aspect of international trade competition. The VAR model analysis of international service trade and economic growth correlation, between the two have a long and stable relationship, improve international service trade openness and international competitiveness of trade in services on economic growth plays a promoting role.

Impact of FDI on the Development of an Economy and the Growth in the Value of Exports of a Country

The flow of FDI into the country is anticipated to be in a position to expand productivity which will ultimately have an influence on the growth in national income in the form of the Gross Domestic Product (GDP) as well as in the form of increased exports. In other words, in order to enhance the country’s overall performance in international trade, investment is genuinely necessary. There is a one-way relationship between FDI and export in which the value changes in FDl have an effect on changes in the value of exports. In the short term, the extend in the expense of FDl reasons a decline in the value of exports. While in the long term, the extend in the expense of FDl will reason an upward jab in the value of exports the increase in price will cause a upward jab in the fee of exports. . It is activated by the idea of FDI is a subsidizing in long term oriented so that the advantages to the economy, which incorporate export in general execution can be obtained in the long term. Hence, foreign countries can be instrumental in advancing exports from the host nations. As an ever increasing number of exports help lead a nation to expand its foreign exchange reserves and fabricate a strong financial position, in this manner, it tends to be appropriately said that FDI can not just build the export base of the domestic country but additionally adds to the overall growth of the host country.

Pengaruh ekspor, impor, dan inflasi terhadap nilai tukar rupiah di Indonesia

Indonesia as a country rich in natural resources should have better international trade performance in improving exchange rates. This study aims to investigate the effect of exports, imports, and inflation on the rupiah exchange rate in Indonesia during 2006-2017. The data used is secondary data sourced from Bank Indonesia and the Ministry of Commerce of the Republic of Indonesia. The method used is a quantitative approach by applying multiple linear regression models. The findings of this study indicate that exports, imports have a significant negative effect on the rupiah exchange rate. While inflation has no effect on the rupiah exchange rate in Indonesia.

Service Trade Liberalization in Oman: International Commitments and Trade Performance

Abstract The service sector constitutes an important and a growing sector of the global economy as well as in the Arab region. In Oman, the service sector accounts for the highest share in the sectoral composition of the GDP and constitutes a crucial component of the overall policy of economic diversification. The objective of this paper is to investigate the extent of service trade liberalization in Oman as reflected in its international trade commitments, and analyze its trade performance using an adapted version of the gravity model within the context of the wider Arab region. The analysis shows that Oman has the third most extensive GATS commitments in the Arab region, which have been consolidated and improved upon under USA–Oman FTA. Results from the gravity analysis indicate that WTO membership has a significant effect in enhancing service exports, while the variable US-FTA has a correct sign but a non-significant effect. Trade potential calculation shows that comparatively Oman has a quite significant export potential among the Arab countries indicating that it could potentially increase its exports more than what is actually traded. A trade liberalization scenario, in which countries reduce their trade restrictiveness index to the most liberal country in the region indicates that the GCC countries like Kuwait, Qatar and Oman would benefit the most from service liberalization with an increase in export values of, respectively, 89 %, 87 % and 75 % compared d to the base year.

Direct intervention or indirect support? The effects of cooperative control measures on farmers’ implementation of quality and safety standards

In recent years, labor-intensive agricultural products from developing countries have exhibited inferior performance in international trade due to quality and safety incidents, among which pesticide residue is a major issue. Aiming to improve food quality and safety in the context of cooperatives, we introduced three categories of control measures: outcome control, process control and social control. Based on the Pre-Harvest Interval Standard (PHIS), we selected three indices, farmers’ implementation rate of PHIS, absolute distance to PHIS and relative distance to PHIS, to evaluate appropriateness of pesticides use, reduction of pesticide residue and safety improvements of agricultural products. By using random sampling survey data, we empirically analyzed the marginal effects of control measures and their combinations on food quality and safety standards. The empirical results show that implementing process control, namely, unified production standards or supply of unified agricultural inputs, can comprehensively improve farmers’ implementation rate of PHIS, absolute distance and relative distance to PHIS respectively by 34.9%, 3.2 days and 46.0% on average. While the effects of outcome control (safety inspection) and social control (bonus-penalty incentive or training) are restricted to other measures. Therefore, we suggest cooperatives should take farmers’ features, implementation conditions and the effects of control measures into consideration in order to make a sustainable management plan for improving food quality and safety and enhancing competitiveness in international markets.

Effect of Trade Diversification on Economic Growth of ECOWAS Countries

This study investigated the effect of trade diversification on economic growth of ECOWAS countries. The study has looked at the determinants of exports and imports in some selected ECOWAS countries. The selected ECOWAS countries are Benin, Ghana, and Nigeria. The employed a model form of the GMM estimator was adopted but the empirical validation shall be based on ordinary panel regression. The study revealed that the activities of the main sector when rated as a percentage of the gross domestic product is a significant factor that influences the exports and imports in these selected countries. This means that the activities done in the main sector of these economies have significant effect on the value of exports and imports. The activity of the main sector is huge and voluminous enough to accommodate some level of significant imports in order to assist production which will also be exported. The study has also revealed that the service sector is also a significant factor that influences the exports and imports of these selected ECOWAS countries. Many experts are imported into the service sector of these countries and thus these served as a significant factor that possess influence on the performance of exports and imports in the countries. There is a negative and weak correlation between primary exports and service as a percentage of GDP. Invariably, it can be said that the level of primary exports may not be related with the service sector, thus, the association is expected. The main sector performance is found to be positively correlated with the primary exports in the selected ECOWAS countries. The author then suggested that there is urgent need for ECOWAS states to place more emphasis on the exports of manufacturers’ products and make efforts to reduce concentration on exports of primary (agriculture and fuel) products. This will help improve their international trade performance especially with respect to reducing term of trade losses and unfavorable shocks in foreign earnings. Also, the region should focus on production of products for domestic need; in doing this, the ECOWAS states will escape the trap of homogenous export and foster more intra-trade links. The region should see production as major objective rather than exports; this enhances industrial activities and innovations in the region. This attempt retains economic gains of resource within the region and foster economic well-being, the critical mass of ECOWAS challenge is weak productive capacity, this has accentuated the progress of the member states and the sole cause of social and economic evils within the region. ECOWAS should see exports as originating from domestic sufficiency. 

The relevance of coordinated regional trade logistics for the implementation of regional free trade area of Africa

Background: Logistics will play a vital role in the process of boosting intra-regional trade among member states. Despite logistics integrating role in trade between countries, generally, African countries had faced with formidable challenges in logistics infrastructures development, and customs and border clearance. Objectives: The main objective of this article was to analyse the effect of trade logistics performance on the intra-regional trade of Africa. African countries’ logistics performance in international trade was measured using the World Bank Logistics Performance Index (LPI) and its components. The article emphasized examining the relevance of trade logistics for the implementation of the Continental Free Trade Area of Africa. Method: Descriptive analysis was undertaken to analyse African countries’ trade logistics performance, based on 2010–2018 LPI measures. The gravity model of international trade with Heckman maximum likelihood regression was used to explore the effect of trade logistics performance on the intra-regional trade of Africa. Results: African countries experience lowest average LPI score relative to its trading partner regions, particularly in terms of quality of trade- and transport-related infrastructures, customs, and border clearance, and competency and quality of logistics services. The study on gravity model estimates shows that improvement in any of LPI components, that is, infrastructures development, customs clearance, competence and logistics service quality, international shipments, tracking and tracing, and timeliness, can lead to significant growth on the trade between African countries. However, being geographically landlocked has a statistically significant negative effect on bilateral trade flow. Conclusion: Successful improvement in African countries’ trade logistics performance including logistics infrastructure, customs clearance, and logistics service quality will enhance trade between African countries. This, in turn, will have a paramount contribution to the effective implementation of the Continental Free Trade Area of Africa.

Impact of regional interactions on China’s trade performance: evidence from a spatial econometric approach

ABSTRACTIn this paper, we examine the impact of regional interactions on China’s trade performance as supported by infrastructure development, using exports and imports of Chinese-owned and foreign-owned firms disaggregated for 28 provinces. Taking into account the disparities in the regional economic activities, we use five spatial weight matrices in a spatial panel lag and spatial panel error frameworks in the period 1996–2016. The spherical distance and the gasoline usage weight matrices measure the impact of ground connections on China’s trade flows. The nautical miles and the river distance weight matrices measure the impact of maritime and river connections on trade flows for provinces along the sea coast, in the Yangtze valley, and along Zhu river, respectively. We find significant cross border effects on provincial trade flows. The effects vary between areas and firms. Overall, our findings show positive influence of regional interactions on China’s international trade performance.

Understanding 2016: China, Brexit and Trump in the history of uneven and combined development

AbstractThis article uses the theory of uneven and combined development (U&CD) to produce a novel explanation of ‘Brexit and Trump’ – the two shock political events of 2016. The argument proceeds in three steps. First, we identify the global conjuncture of historicalunevennessin which the votes occurred: how the neoliberal transformation of the advanced capitalist countries was synchronized with the radically different process of primitive accumulation in China. Second, we apply the theory of U&CD to this peculiar ‘simultaneity of the non‐simultaneous’: the ‘big country’ effects of China's industrialization, we find, were thrice multiplied by itscombinationwith the advanced sectors of the world economy, which accelerated China's take‐off, brought forward its export phase, and widened its export profile at a moment of maximum openness in international trade. Finally, this produced the pattern ofdevelopmentthat led to the events of 2016: the resultant trade shocks intensified the internal inequalities of British and American societies in ways that match the geography of the Leave and Trump votes. The analysis has a wider intellectual implication too, for the phenomena of historical unevenness and combination are intrinsic to the history of the global political economy; and the theory of U&CD therefore has a unique contribution to make to the field of International Political Economy.

International Trade Openness and Monetary Policy: Evidence from Cross-Country Data

This article studies the extent to which open economies conduct monetary policy differently from economies that are relatively closed to international trade. I first estimate country-specific Taylor rules for 26 economies, following the approach of Clarida, Gal, and Gertler (1998 and 2000). Then, I examine the extent to which open economies assign systematically different weights to changes in economic outcomes, such as inflation and the output gap, than their closed economy counterparts do. I find that open economies respond less strongly to changes in expected inflation than relatively closed economies do and that the response to changes in the output gap is independent of the degree of trade openness. Moreover, I find that this difference between closed and open economies may be accounted for by the higher weight open economies give to changes in the real exchange rate, whereby these economies are more likely to decrease the nominal interest rate when the real exchange rate is relatively appreciated.

Daya saing produk unggulan sektor pertanian Indonesia dalam hubungannya dengan pertumbuhan Ekonomi

This study aims to identify and analyze the competitiveness of Indonesian products in the agricultural sector, especially rice, oil palm, vegetables, fruits and livestock products, also the relation between economic growth and some commonly used competitiveness indicators. The approach used is RCA (Revealed Comparative Advantage), RSCA (Revealed Symetrics Comparative Advantage), Self Sufficiency Ratio (SSR), Import Dependency Ratio (IDR). The results of the study are as follows: The export performance of Indonesian agricultural products in general relatively weak. Almost all agricultural commodities have low competitiveness, except for plantation sub-sector products, especially rubber and palm oil which have high competitiveness, the remaining products such as horticulture, food crops, livestock products, and competitiveness of horticulture relatively low in the international commodity market. In this study, also found in general, the relation between the rate of economic growth and some magnitudes of international trade performance does not show a significant relationship for food crops, horticulture, plantations, and livestock products. Indonesia is approaching the stage of self-sufficiency, especially for food crops, but for other agricultural sector commodities, it is still very dependent on imports to meet domestic consumption needs.