International Trade Performance Research Articles

Research and Development Intensity and its Impact on the International Trade Performance of Automobile Firms

Research and Development Intensity and its Impact on the International Trade Performance of Automobile Firms

Benchmarking International Trade Performance of OECD Countries: TOPSIS and AHP Approaches

Ekonomilerin ekonomik performanslari “Cok Kriterli Karar Verme” yontemleri gibi cesitli kantitatif teknikler kullanilarak hem makroekonomik hem de mikroekonomik acidan cok sayida ampirik calismada degerlendirilmistir. Buna karsin, bu arastirma ulkelerin uluslararasi ticaret performanslarini ampirik olarak karsilastiran ilk arastirma ozelligini tasimaktadir. Gunumuzde firmalar gibi hukumetler de dis ticaret vasitasiyla kit kaynak yonetimi, dis ticaret anlasmalari ve duzenlemeleri, inovasyon, verimlilik artirimi vb. stratejiler izleyerek kuresel piyasadan daha buyuk bir pay alabilmek icin yeni firsatlar kollamaktadirlar. Bu arastirma, OECD ulkelerinin 1999-2014 yillari arasindaki uluslararasi ticaret performanslarini Kisi Basi Ihracat Hacmi, Normallestirilmis Ticaret Dengesi ve Ticaret Hadleri degiskenlerini kullanarak TOPSIS ve AHP yaklasimlari yardimiyla incelemeyi amaclamaktadir. Arastirmada elde edilen bulgular gostermektedir ki; Norvec, Irlanda ve Almanya uluslararasi ticaret performansi degerlendirmesinde ilk uc sirayi alirken Turkiye, ABD ve Yunanistan son uc sirada yer almislardir.

Trade Openness Effect on Income Inequality: Empirical Evidence from Indonesia

This research analyzed the effect of international trade openness to income inequality in Indonesia using Vector Error Correction Model (VECM). The data used is the secondary data, which are the export-import value, gross domestic product (GDP), GDP per capita, open unemployment rate, and Gini index. The results of this study indicate that in the short term the trade openness has negative impact significantly on the income inequality. However, in the long-run, it does not show any significant effect in decreasing the income inequality rate. The impulse response function (IRF) concluded that income inequality gives a positive response, except on the third year. Based on the forecast error variance decomposition (FEDV), the trade openness does not provide any significant contribution in effecting the income inequality in Indonesia, but economic growth does. Nevertheless, in long-term, the economic growth makes the income inequality getting worse than in the short-term.DOI: 10.15408/sjie.v7i1.5527

Exchange-rate volatility and international trade performance: Evidence from 12 African countries

In this paper, we study a sample of twelve African countries to examine the impact of the real exchange-rate volatility on their trade flows. In order to distinguish the distinct impact of the real exchange-rate volatility on their exports and imports, both in the short-run and long-run, we use the bounds-testing approach. We find that while exchange rate volatility affects trade flows of many of the countries in our sample in the short run, the long-run effects were restricted only on the exports of five countries and on the imports of only one country. The level of economic activity in the world and at home were identified to be major determinants of exports and imports, respectively.

Globalization Effects on Sub-Saharan Africa: The Impact of International Trade on Poverty and Inequality

In a context of growing cooperation marked by increasing international transactions, the international trade which is a key component of globalization occupied a non-negligible position. Considering the divergence of ideas about the impact of international trade on countries, this paper focuses on the effect of globalization, through international trade, on poverty and inequality in selected developing countries. To do so, three types of (simple and multiple) linear regression models were set namely a naive model which includes only one dependent variable, a standard model and an improved standard model including respectively one and two control variables. The ratio of external trade (sum of exports and imports related to GDP) captured openness in international trade, our main explanatory variable. Poverty was caught using three indicators from the FGT family and inequality by the GINI index. With these variables, we tried to see if there is any relationship between international trade and poverty on the one hand, and between international trade and inequality on the other hand. The findings showed that of the three predefined models only the last two ones were significant to conduct our analysis. Thus, it appeared that international trade, hence globalization, contributes to reducing poverty and inequalities in developing countries. In other words, in these developing countries, increasing openness to international trade goes with a sharp decrease in poverty and inequalities, all other things being equal.

Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis

This paper studies the impact of labor mobility on comparative advantage of China’s manufacturing industries. Labor mobility refers to labor movement across regions and industries. Comparative advantage refers to better product performance in international trade in aspect of quality and price, and it can be reflected directly in export values. Industries with comparative advantage have more benefits in international trade. Firstly, this paper reviews literatures that focus on impact of labor market on comparative advantage. Secondly, this paper illustrates the mechanism of how labor mobility has impact on comparative advantage. Thirdly, the empirical analysis tests this mechanism through mixed OLS (Ordinary Least Square) regression and one-way FEM (Fixed Effects Model), using panel data of China subdivision export. The results of empirical analysis support the mechanism. Lastly, this paper reaches a conclusion that higher labor mobility has positive impact on comparative advantage in highly volatile industries, due to the fact those industries in higher labor mobility regions have stronger ability and lower cost to adjust production scale when confronted with economic shocks.

Modeling the incidence of international trade on Italian regional productive efficiency using a meta-frontier DEA approach

Although there continues to be considerable debate about the impact of European integration on the EU regions, studies in this field have mainly investigated the convergence-divergence issue, while the effect of trade on regional performance has attracted few empirical studies. A bootstrapped DEA metafrontier framework used in this study, as a first stage of analysis, is exploited to account for the heterogeneity between the Italian regions in the whole period and in two distinct time frames before and after EMU implementation. In a second stage, using a partial least squares model, the technology gaps estimated for each period are regressed, investigating factors related mainly to R&D efforts and trade behavior that may have affected regional performance. Our findings reveal a significant improvement for the Italian regions since 1993, a paradoxically unchanged behavior for efficiency performance in the Center-North regions, and clear identification of which regions performed better in terms of the technology gap. Inclusion of variables related to international trade performance in the model indicates that trade is of major importance for better regional performance. In addition, the technology gap is negatively influenced by R&D expenditures, denoting the catching-up phenomenon for the technology level of Italian regions.

The Logistics Performance Effect in International Trade

ABSTRACT The continuous growth in world trade depends on the efficiency of trade support structures such as the logistics services. Despite logistics integral role in supporting commercial activities, there has generally been a low level of analysis and trade policy research focus from trade practitioners. This paper explores the effect of logistics performance in international trade. The analysis draws on overall logistics performance as well as disaggregated measures of logistics specificities data for a large sample of countries. The empirical analysis involved the estimation of standard export and import equations incorporating measures of logistics performance. The findings show that the overall logistics performance is positively and statistically significantly correlated with exports and imports. The analysis is also extended by investigating if logistics specificities mattered for international trade. The findings reveal that several dimensions capturing logistics performance have statistically significant and positive effect, mostly on exports. The main policy implication is that continuous investment in logistics infrastructure and services can positively impact international trade.

The importance of export logistics and trade costs in emerging economies

The aim of this article is to analyse the importance of logistical performance in international trade and its influence on costs, focusing on the study of emerging economies with a maritime border. For this purpose, gravity models are used to determine the importance of logistics in these countries’ exports, taking as a representative variable the Logistics Performance Index and each of its components. Moreover, the equation of trade costs proposed by Novy (2013) is used to determine the importance of logistical performance. The results show that the analysed countries should continue to strive for improvement in their logistical infrastructure, not only in order to boost their trade, but also to improve their export competitiveness. They have already undertaken both by the private and public sector in an attempt to progress internationally as a way of boosting country growth.

International air passenger traffic, trade openness and exchange rate in Brazil: A Granger causality test

Brazil has invested substantially in encouraging international air passenger traffic. The results, however, have fallen far short of expectations, raising the question of what factors should be considered in policy-making to encourage the development of international passenger air traffic in Brazil. Based on indications in the literature, this study explores relations between international trade-related factors and international air passenger movement in Brazil, using the Granger causality methodology. The study results show evidence that changes in international trade indicators hold a long-term relationship with, and precede, variations in international air passenger movement. These indicators also show significant impact on the evolution of international air passenger movement in Brazil. The study indicates a need to rethink policy and may serve as a point of reference for other developing countries.

Trade Openness and Political Distortions

In this paper we explore the relationship between international trade openness and two major political distortions, political polarization and political instability. We consider both the extensive and intensive margins of trade as measured by the number of trade partners and trade volume, respectively. As political distortions and trade characteristics of the country are endogenously related, we instrument political instability by the age difference between the youngest and the oldest effective political leaders of a country and the average neighbors’ neighbors political instability. We find that political instability reduces trade openness both at the extensive and intensive margin while political polarization negatively affects the extensive margin of trade. We propose a simple model that provides intuition on our findings.

South America's biophysical involvement in international trade: the physical trade balances of Argentina, Bolivia, and Brazil in the light of ecologically unequal exchange

International trade is becoming increasingly important in the strategies of industrialized economies ('core' countries) to meet their physical needs and maintain their social metabolism. Less industrialized ('non-core') countries, in particular those with low population densities such as countries in South America, provide a large share of the natural resources currently being used by the 'core' countries. This article analyzes the relations of biophysical exchange of Argentina, Bolivia, and Brazil with global 'core' and 'non-core' countries in order to add to a discussion of possible relations of different national economic policies, such as import substituting industrialization or neoliberal adjustment, on the countries' physical trade balances (PTBs). By that we will provide a biophysical reading of ecologically unequal exchange; by investigating whether there is a physical net trade flow from 'non-core' to 'core' countries, whether primary products dominate exports of 'non-core' countries in exchange for processed products from 'core' countries, and whether the notion of unfavorable mass-to-price relation for the trading 'non-core' countries applies (Hornborg 2012; Martinez-Alier 2007). The magnitudes, type of material, stage of processing and monetary value of the traded goods are analyzed for the time period from 1962 to 2011. The evaluations have been carried out for trade relations with the 'core' and the 'non-core' countries separately. Additionally, in order to trace the so-called China Effect, which led to the period of new extractivism, the quantities exported to China are shown separately. The results indicate that the three countries examined are net exporters of physical quantities. The physical involvement in 'core'- and 'non-core'-related international trade differs greatly, but at the same time the relative importance of the 'core' as trading partner has decreased steadily over the five decades. Still, 'core'-related trade involves the most unfavorable mass-to-price relation. These conditions, i.e. high importance of unprocessed export commodities, low average unit prices, and an unfavorable monetary trade balance (MTB), reveal many characteristics of an ecologically unequal exchange. This is especially true for Argentina and Brazil. Due to its lower economic performance and limited involvement in international trade, Bolivia to some extent represents an exception.Keywords: Ecologically unequal exchange, physical trade balance, South America, Argentina, Bolivia, Brazil.

Trade Facilitation: An Assessment of South African Experiences vis-à-vis WTO Disciplines

AbstractDespite an array of trade reforms undertaken to integrate the country into the international community, South Africa's performance in international trade has remained dismal, primarily due to its customs procedures and documentation, coupled with resulting high transaction costs. The facilitation of trade and integration into the international community has therefore been a challenging issue for South Africa. Recently, the republic has embarked upon reforming its existing customs regimes, by enacting new legislation that will replace the prevailing Customs and Excise Act 91 of 1964. This article attempts to analyse how far these reforms will adhere to the World Trade Organization's disciplines on trade facilitation that call for harmonization and simplification of customs related rules. The author evaluates the provisions of this new legislation in order to assess whether South Africa is ready to undertake the obligations imposed by the Agreement on Trade Facilitation.

Empirical Verification of Dynamic Dependences Between Productivity and Economy Openness. The Case of Visegrad Countries

This study analyses one of the main postulates of the Endogenous Growth Theory, that suggests that international trade openness is capable to speed up growth-impacting productivity. ADF stationary tests, Johansen co-integration test and Vector Error Correction Model (VECM) procedures are applied on a yearly data set covering the period 1995–2014. Data for individual V4 countries were also compared with EU-15 benchmark. The main finding of the paper is that for all V4 countries there exists a long term relationship between economy openness and labour productivity and in case of Hungarian economy in the Granger sense – causality is one-directional and runs only from productivity to openness. It suggest, that the Endogenous Growth Theory in this case is no longer supported nevertheless further and deeper investigation is needed. Although huge differences in case of openness between V4 countries exist, strong positive linear correlation with productivity is observed. Also disturbing secondary result of conducted research is that however convergence in case of productivity between V4 and EU-15 is observed, assuming the current rate of catching-up (apart from existence of saturation level of productivity), EU-15 and V4 average productivity would equal in 6 decades.

Growth in International Commodity Prices, the Terms of Trade, and GDP Per Capita: A Case Study of Vietnam

The Vietnamese economy is characterized by a high degree of international trade openness and a relatively low GDP share of net-exports. This paper examines the effect of growth in the terms of trade, and more specifically, in international commodity prices, on Vietnam's GDP per capita growth. The paper finds that, during 2000-2014, growth in the terms of trade contributed positively to Vietnam’s GDP per capita growth but the effect is not large: less than one-tenth of Vietnam’s GDP per capita growth was due to growth in its terms of trade. The paper argues that the relatively small effect of growth in the terms of trade on GDP per capita growth is due to a low GDP share of net-exports. Econometric model estimates show that transitional convergence accounted for about half of Vietnam's GDP per capita growth during 2000-2014.

Trade credit provision and national culture

In this paper we investigate the relation between trade credit provision and national culture as captured by Hofstede's four cultural dimensions (collectivism/individualism, power distance, uncertainty avoidance, and masculinity/femininity). Consistent with our predictions based on several theories of trade credit, we find that after controlling for firm- and country-level factors as well as industry effects, trade credit provision is higher in countries with higher collectivism, power distance, uncertainty avoidance, and masculinity scores. These results are robust to using alternative measures of culture and trade credit, alternative sample compositions, and alternative estimation methods, as well as to addressing potential endogeneity concerns. International trade openness, however, mitigates the relation between trade credit provision and our proxies for national culture.

Trade–Terrorist Evaluation Index (TTEi)

This paper introduces a new index which measures the responsiveness of terrorist attacks to the international trade. The main idea of this study is to analyse the international trade performance from terrorist attacks point of view. There are two main parts of this research paper, first part relates to theoretical and conceptual framework of trade–terrorist evaluation index (TTEi). This TTEi has four stages (i) total trade volume, (ii) trade growth rate, (iii) terrorism (TR) vulnerability growth rate and (iv) TTEi. The second part is associated with the application of TTEi to the economies of Iraq and Afghanistan. This study provides a new approach to analyze the international trade and TR from a novel perspective.

Trade Credit Provision and National Culture

In this paper we investigate the relation between trade credit provision and national culture as captured by Hofstede’s four cultural dimensions (collectivism/ individualism, power distance, uncertainty avoidance, and masculinity/femininity). Consistent with our predictions based on several theories of trade credit, we find that after controlling for firm- and country-level factors as well as industry effects, trade credit provision is higher in countries with higher collectivism, power distance, uncertainty avoidance, and masculinity scores. These results are robust to using alternative measures of culture and trade credit, alternative sample compositions, and alternative estimation methods, as well as to addressing potential endogeneity concerns. International trade openness, however, mitigates the relation between trade credit provision and our proxies for national culture.

The spillover effect of international trade and investment flows: spotlight on Arab unrest

The economic and political grievances of Arab youth is fueling social and political upheaval across the Arab world and is reviving the call for equitable and inclusive economic development. The Arab world, where young people constitute a significant proportion of the population, is lagging behind other developing regions over human development. Indeed, addressing the human development challenge has become a necessity and strategic path to achieve peace and security in the Arab world. The purpose of this article is to investigate the spillover effects of economic globalization, economic flows, and restriction on trade and capital on Arab human development. This article attempts, both theoretically and empirically, to answer four questions. First, could economic globalization fulfil the promises of human development in the Arab world? Second, whether actual economic flows (trade, FDI and portfolio investment) to the Arab world have been enough to make meaningful contributions in terms of human welfare. Third, do Arab countries’ restrictions on trade and capital diminish human development? Fourth, whether Arab countries’ governance impede actual economic flows’ development potential. We opted for the Generalized Method of Moments “System GMM” to analyze the effects of international trade and capital flows and openness to trade and foreign capital on Arab human development. The statistical approach, designed for dynamic panel model, helps account for unobserved country specific effects and endogenous determinants. Our panel consists of 18 Arab countries for which data is available on all variables and covers the period between 1990 and 2011. The system GMM models reveal that economic globalization increases the rate of human development both in aggregate and via two channels: international trade and capital flows and trade and investment regimes. These findings highlights the positive effects on human development of a more globalized economy where international trade and capital flows plays a significant role. We also find considerable backing of our hypothesis that openness to trade and capital will likely accelerate human development in the Arab world. The results are consistent with the conjecture of trade and free-market theories of that nation may benefit from engaging in international trade. We conclude by stressing the need for Arab economies to globalize further and they must implement outward-oriented policies that maximize the benefits and minimize the costs of economic globalization more effectively. The Arab world stands at a crossroads and the continuous unrest is a stern wake-up call to tackle the human development challenge.

The bell-shaped curve of international trade openness: a panel data test for OECD countries

<p>By partially following Head and Mayer’s (2003) suggestions, in this paper we test Puga’s (1999) fundamental bell-shaped relationship between trade openness and agglomeration in the industrial sector. The main result is that concentration of both employment and production may arise if a pair of countries is involved in a process of trade liberalization. </p>