Involvement In International Trade Research Articles

Управлінські рішення в умовах невизначеності міжнародного бізнес-середовища

The article is aimed at developing a methodical approach to assessing the favorability of the business environment in the process of making managerial decisions under conditions of uncertainty. The necessity of making sound managerial decisions when an enterprise carries out international activities is proved. It is noted that from the point of view of studying the conditions of international business activity, the concept of uncertainty characterizes a situation in which there is no reliable information about the possible state and trends in the factors of the business environment of the host country. A thorough analysis of the current state and trends in the transformation of business environment factors in foreign markets contributes to minimizing uncertainty. It is underlined that the use of such common global analytical systems for rating economic processes as the Global Competitiveness Index, the Ease of Doing Business Index and the Index of Countries’ Involvement in International Trade to assess the business environment is currently impossible. The author proposes to use the KOF Globalization Index, the Index of Economic Freedom, the Global Innovation Index, and the Human Development Index, which are the result of global studies of the business environment of countries. The general characteristics of each of the indices are provided, development trends are determined, the five leading countries and Ukraine’s positions are presented according to the results of the published ratings for 2022–2023. To assess the country’s favorability in carrying out international activities in terms of uncertainty and instability of its business environment, an approach to calculating the aggregated indicator based on indicators of the KOF Globalisation Index, the Index of Economic Freedom, the Global Innovation Index, the Human Development Index, combined by the PEST analysis methodology, has been developed. The use of the proposed methodological approach will help to increase the thoroughness of managerial decision-making in the implementation of international activities by the enterprise.

Military and Political Influence on the Portfolio of Global Reserve Currencies

This paper analyses a new concept presented in the works of B. Eichengreen, A.J. Mehl, L. Chitu “Mars or Mercury? The Geopolitics of International Currency Choice”, according to which the state’s possession of nuclear weapons is linked to its possession of reserve currency. The paper aims to provide a detailed assessment of how gaining reserve currency status depends on the military and political potential of the state issuer. The research method is an analysis of the historical material and the current state of the issue under discussion. The study shows the relationship between the global military and political leadership and control over the global financial infrastructure, which increases its importance as a space for interstate conflicts. It has been proven that neither the presence of military power nor the ability and willingness to provide partners with security guarantees do not predetermine the acquisition of the reserve status by the national currency. This status is acquired as a result of control over global investment processes, in the implementation of which military power plays a significant, but not exclusive role. This power, as the potential for economic and financial dominance, is a derivative of the scale and level of development of the national economy, with a key factor in its deep involvement in international trade. From the point of view of practical forecasting of economic, military and political development, the authors conclude that in the foreseeable future, despite the strengthening of its military potential, the PRC will not be able and, most likely, will not try to obtain the status of the yuan as a reserve currency. The United States, in turn, will increasingly use its dominance in the capital market and control over the global financial infrastructure as a tool to maintain global leadership. Further study of the considered issues will significantly increase the efficiency of forecasting economic processes in relation to the military and political situation.

Impact of Digitalization on the Efficiency of Supply Chain Management in the Digital Economy

The study considers digital supply management from the perspective of the involvement in international trade. A SWOT analysis of the concept has been carried out; the concept strengths, weaknesses, opportunities, and threats have been highlighted. The hypothesis has been thoroughly considered through the example of the following countries: the Russian Federation (RF), the People's Republic of China, and the Federal Republic of Germany (FRG); in particular, the correlation between the volume of external traffic and the investment in SCM software was built. It has been revealed that in some countries an increase in the volume of external traffic due to an increase in investment in SCM software is associated with the complication and globalization of supply chains, which increases the competitiveness of goods and services of these countries. A composite index that takes into account the efficiency of the supply chain using digital technologies has been developed.

Making one\u2019s own way: jumping ahead in the capability space and exporting among Indian firms

This paper provides large scale evidence on the determinants of international competitiveness of Indian manufacturing firms, focusing in particular on the role of technology, costs and imported intermediate inputs. Our evidence suggests that innovation, in particular R&D investment, is positively related to both firms’ probability to export and firms’ export volumes. We also find that imported intermediate inputs, incorporating foreign technology is strongly associated with expanding export activities of firms. Finally, and in contrast to much of previous evidence on developed economies, we find that higher productivity or lower unit labour costs are not systematically associated with the probability to enter export markets, but they are positively related to higher export volumes. Overall our results point to the existence of a pattern of involvement in international trade for firms in developing countries that is not relying as a main driver on cost competitiveness.

ДОСЛІДЖЕННЯ ЗАЛЕЖНОСТІ НЕРІВНОСТІ ТА БІДНОСТІ В УКРАЇНІ З ПРЯМИМИ ІНОЗЕМНИМИ ІНВЕСТИЦІЯМИ

The modern world economy, which is formed under the influence of globalization processes, is characterized by the growing role of foreign direct investment, which plays an important role as a means of achieving national development strategies, and host economies become part of their reproductive process. At the same time, a number of significant changes have been observed in the global structure of foreign direct investment in recent decades, the growth rate of which is likely to increase in the short and medium term. The position of developing countries and countries with economies in transition as targets and sources of global foreign direct investment is growing. The article uses data from Ukraine for 2010–2020 to analyze whether foreign direct investment has an impact on inequality and poverty; we also conducted a study of the impact of the average number of full-time employees on the Gini index using seven different models. The results confirm the direction and type of impact that foreign direct investment has or does not have on inequality and poverty in Ukraine. Developing countries and countries with economies in transition are liberalizing investment regimes to attract foreign direct investment. It has long been known that the benefits of attracting foreign direct investment can be quite significant, which is manifested in the acquisition of new technologies, increasing the country’s involvement in international trade, improving the competitive environment, human capital formation and more. Moreover, moving cleaner technologies to the investing country leads not only to an improvement in the environment, but also to the formation of socially responsible business policies. All these benefits contribute to economic growth, which is the main tool for overcoming poverty in these countries. The purpose of the article is to study the relationship between social indicators: the Gini index, the poverty rate of Ukraine and foreign direct investment. During the study period, there is an inverse relationship between the growth of foreign direct investment and poverty. Attracting foreign direct investment helps boost business activity, increase income, and increase consumption and savings.

Trade policy in a “GVC World”: Multinational corporations and trade liberalization

AbstractThe globalization of production is changing the political economy of trade policymaking: Traditional supporters of free trade (exporters seeking market access in foreign countries) are joined by new actors (companies needing intermediates from abroad for their production processes) in their lobbying efforts for trade liberalization. Multinational corporations (MNCs) play a crucial role in this new alliance due to their strong involvement in international trade and endowment with resources that can be used to lobby policymakers. We derive an argument from these premises that leads to the expectation of variation in trade policy outcomes across industries depending on their degree of integration in a global network of multinational corporations. Disaggregated data on the level of tariffs and speed of tariff cuts in preferential trade agreements, international mergers and acquisitions at the firm level, and MNC imports of intermediates by sector allow us to test the argument. The findings support our theoretical expectations. The paper sheds light on the processes and outcomes of trade policymaking in a globalized economy by further developing an existing argument about GVCs and trade policy outcomes as well as expanding on it by adding data on international corporate connections.

Otvorenost privrede kao determinanta privrednog rasta - panel analiza zemalja regiona Zapadnog Balkana

The openness of the economy and its intensive involvement in international trade and economic flows has an important role in stimulating economic growth and development of a national economy. The aim of the research is to determine the degree of impact and effects of exports, imports and foreign direct investment (FDI) on economic growth. The applied research methodology is a panel regression analysis on the example of six countries in the Western Balkans region in the period from 2000 to 2018. Three hypotheses were tested in this paper. H1: Exports have a positive effect on economic growth; H2: Imports contribute to GDP growth; H3: FDI has a positive impact on economic growth. The results show that all three variables have a positive, statistically significant impact on GDP. The greatest effect on economic growth in the analyzed sample has exports, which implies the conclusion of the inevitability of more intensive participation of these economies in international trade flows.

The Pattern of Rural Employment in India

The experience of countries that succeeded in reducing poverty significantly indicates the importance of high rates of economic growth in achieving this. Every section of the Indian economy is now linked with the world outside, either through its direct involvement in international trade or through its indirect linkages with the export or import transactions of other sectors of the economy. The new policy regime is as much important, and relevant, to farmers, industrialists, traders and sundry service providers as to scientists, writers and singers. The present study is to attempts into some of the crucial dimensions of the changing employment scenario in rural India at the national as well as the state level. The present paper mainly focus on the agricultural sector is also heavily dependent on migrant, temporary and seasonal workers; the precarious conditions in which these workers labour often rob them and their families of food security. Low pay, however, is not the only problem facing agricultural workers. Agriculture is one of the most dangerous industries to work in, alongside construction and mining. Indeed, it is the sector with the most fatal accidents. Agricultural workers face many hazards: dangerous machinery, livestock, extremes of temperature and inclement weather, dehydration due to lack of access to potable water, and exposure to biological hazards arising from pesticides and other agro-chemicals.. In doing so, the paper attempts to figure out the challenges and threats, as well as the potential for employment expansion that lies ahead.

World Trade and Endogenous Rule of Law: Size and Pattern Effects

Recent literature has analyzed three channels through which size and patterns of a country's involvement in international trade may affect the quality of its institutions: openness, the institutional intensity of exports and the natural resources exports. Our contribution is threefold. First, we analyze these channels jointly. Second, we propose a novel way to measure institutional intensity of exports at goods level based on nearly one hundred million disaggregated bilateral trade flows that represent world trade. Third, we analyze the effects of separate export goods categories, that is, primary, fragmented, and other goods, on the rule of law. Using data for 144 countries in an instrumental variables framework, we find that geographically predetermined openness improves the rule of law. The impact of the rule of law intensity of a country’s exports on its rule of law differs for different goods categories. In particular, in our preferred specification it is only the rule of law intensity of exports of fragmented goods that matters. Finally, we do not find evidence for an institutional resource curse.

Free Trade in Theory and Policy: Contemporary Challenges

Abstract Free trade denotes a state of international commercial relations premised on governments’ restraint from using policy instruments meant to favor indigenous industries against foreign competitors. According to the conventional trade theory advocated by classical and neo-classical thinkers, free trade makes little economic sense failing nations’ tendency to specialize based on comparative advantage, a concept with high persuasive influence despite the elapsing of time. Even though the comparative advantage rule has seldom been questioned per se, the free trade concept has been fiercely disputed and not infrequently, bashed. Nations’ involvement in international trade often follows patterns that do not fit theoretical models but attempt to respond to circumstantial interests, most often the need to protect poorly competitive industries. In common parlance, free trade has had both proponents and enemies.

Pasture intensification is insufficient to relieve pressure on conservation priority areas in open agricultural markets

Agricultural expansion is a leading driver of biodiversity loss across the world, but little is known on how future land-use change may encroach on remaining natural vegetation. This uncertainty is, in part, due to unknown levels of future agricultural intensification and international trade. Using an economic land-use model, we assessed potential future losses of natural vegetation with a focus on how these may threaten biodiversity hotspots and intact forest landscapes. We analysed agricultural expansion under proactive and reactive biodiversity protection scenarios, and for different rates of pasture intensification. We found growing food demand to lead to a significant expansion of cropland at the expense of pastures and natural vegetation. In our reference scenario, global cropland area increased by more than 400Mha between 2015 and 2050, mostly in Africa and Latin America. Grazing intensification was a main determinant of future land-use change. In Africa, higher rates of pasture intensification resulted in smaller losses of natural vegetation, and reduced pressure on biodiversity hotspots and intact forest landscapes. Investments into raising pasture productivity in conjunction with proactive land-use planning appear essential in Africa to reduce further losses of areas with high conservation value. In Latin America, in contrast, higher pasture productivity resulted in increased livestock exports, highlighting that unchecked trade can reduce the land savings of pasture intensification. Reactive protection of sensitive areas significantly reduced the conversion of natural ecosystems in Latin America. We conclude that protection strategies need to adapt to region-specific trade positions. In regions with a high involvement in international trade, area-based conservation measures should be preferred over strategies aimed at increasing pasture productivity, which by themselves might not be sufficient to protect biodiversity effectively.

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.

Imports, Exports, Dollar Exposures, and Stock Returns

Economic theory suggests that the magnitude and direction of a firm’s currency risk exposure depends crucially on its fundamental involvement in international trade. For U.S. industries, we find that the stock performance of import-oriented companies moves positively with the performance of the dollar, but the stock performance of export-oriented companies tends to move against the dollar. Based on this finding, we use the imports and exports information to enhance the identification of the dollar risk exposure for different industries, and analyze how each industry’s expected stock return varies with its dollar risk exposure. We identify a strongly negative risk premium for bearing positive exposures to the dollar. On average, import-oriented companies generate lower expected stock returns.

Foreign Ownership And Local Firms Capital Labor Ratio: Case Of Abu Dhabi

This paper examines the impact of foreign ownership on local firms capital deepness in the resource-rich economy of Abu Dhabi. The authors use a novel dataset of more than 15,000 local firms registered in the Emirate of Abu Dhabi.Empirical evidence shows a positive effect of foreign ownership on the capital labor ratio for the local firms, which is typically channeled through technology and knowledge transfer to the local firms. The results also show that the capital labor ratio of a firm is positively associated to the firm involvement in international trade. Overall, the evidence supports the fact that the economy of Abu Dhabi may benefit from foreign ownership and the openness to trade.

The Structure and Scope of the Foreign Trade of the Polish–Lithuanian Commonwealth in the 16th to 18th Centuries: The Case of the Grand Duchy of Lithuania

This article is a continuation of the analysis of the structure and extent of the foreign trade of the Polish-Lithuanian Commonwealth in the 16th to 18th centuries, the starting point of which is the problematic place of the concept of the capitalist world system (CWS) which has exaggerated too much the influence of international trade on the socioeconomic development of the Commonwealth. Having analysed Poland’s foreign trade structure in the 16th to 18th centuries, as well as the scale of its economic involvement in international trade, the article seeks to determine the foreign trade structure of the Grand Duchy of Lithuania (GDL) in the 16th to 18th centuries, and the scale of its involvement in international trade. The article consists of two sections (The Integration of the GDL’s Foreign Trade in the 16th to 18th Centuries into European Market Relations: The Role of Sea Trade and its Growth; and The Foreign Trade of the GDL with the West in the 16th to 18th Centuries: Structure and Scale), and a Summary. The latter contains a comparative analysis of the structure and scale of the foreign trade of Poland and the GDL with the west, and the scale of the Commonwealth’s involvement in international trade is determined.

The indirect strategies of internationalization of companies

The subject of this work are, as mentioned in the title, the indirect strategies of internationalization of companies. The first part talks about the new business environment, the factors that lead to changes and their implications. It is at the same time the business context, which must be taken into consideration that determines the success of companies in the new business environment. In this paper, the emphasis is on company business in international markets, and the selection of appropriate strategies of internationalization, which will be responsible for this new business environment. There are many reasons that are discussed in this paper, and would rather indicate that partners from different countries to accept different strategies, rather than opting for a strategy of export, or a strategy of direct investments abroad. The dynamic technical and technological development, and its universal impact, among other relevant factors, put in the first place the importance of different strategies which is achieved through technology transfer, knowledge and experience whereby the exports, as a classic strategy of involvement in international trade, becomes significantly more difficult. Also, the internationalization of enterprises through direct investment abroad, involves many difficulties related to fitting in a foreign enterprise environment, and a high risk strategy. In addition, there is still a large number of countries do not allow wholly owned foreign enterprises. The paper discusses the value of various indirect internationalization strategy, which may be useful for those domestic companies that are in front of problem the choice of acceptable strategies of internationalization.

Do Autocratic States Trade Less?

Does the political regime of a country influence its involvement in international trade? A theoretical model that predicts that autocracies trade less than democracies is developed, and the predictions of the model are tested empirically using a panel of more than 130 countries for 1962-2000. In contrast to the existing literature, data on the regime type of individual countries are used rather than information about the congruence of the regime type of pairs of trading countries. In line with the model, autocracies are found to import substantially less than democracies, even after controlling for official trade policies. This finding is very stable and does not depend on a particular setup or estimation technique.

Trade Liberalisation in Education Services: Opportunities and Risks for SADC Countries.

Education has become a ‘commodity’ widely tradable on the international market. This has resulted in the sector being subjected to multinational as well as global priorities and agreements. This paper looks at the opportunities and risks of international trade liberalisation moves in the high education sector on member countries of the Southern Africa Development Community (SADC). An analysis of tertiary education supply and demand conditions in the member countries as well as levels of involvement in international trade in education services was done. The world’s major players in this trade were also identified and their higher education supply and demand conditions analysed. The findings shows that promotion of international trade in the sector through trade liberalisation measures in general would help provide more access opportunities for such services to students from the SADC region bearing in mind current capacity problems. However, this potential advantage can be eroded if member countries open up markets without ensuring that mechanisms are in place for international players to help in contributing to the achievement of domestic educational goals and not just their own profit motives.

Imports, Exports, Dollar Exposures, and Stock Returns

Economic theory suggests that the magnitude and direction of a company’s currency risk exposure depends crucially on its fundamental involvement in international trade. For U.S. industries, we find that the stock performance of import-oriented companies moves positively with the performance of the dollar, but the stock performance of export-oriented companies tends to move against the dollar. Based on this finding, we use the imports and exports information to enhance the identification of the dollar risk exposure for different industries, and analyze how each industry’s expected stock return varies with its dollar risk exposure. We identify a strongly negative risk premium for bearing positive exposures to the dollar. On average, import-oriented companies generate lower expected stock returns. We also find that the risk premium becomes more negative during recessions than during expansions.Our strong findings rely on three major insights. First, it is not the aggregate trade activity but rather the unhedged trade imbalance between imports and exports that generates the currency exposure. Second, cross-sectional variations in business characteristics and hence risk exposures are much larger than intertemporal variations within a fixed industry. Third, the lack of significance in risk premium estimates is often due to measurement errors in the risk exposure estimates. The first insight leads us to include imports and exports as separate explanatory variables; the second insight motivates us to use cross-sectional regressions instead of time-series regressions to identify the linkage between currency risk exposures and trade fundamentals; and the third insight motivates us to sharpen the risk exposure identification by incorporating economic fundamentals, with which we obtain a significant risk premium estimate on the dollar exposure.

Do Autocratic States Trade Less?

Does the political regime of a country influence its involvement in international trade? A theoretical model that predicts that autocracies trade less than democracies is developed, and the predictions of the model are tested empirically using a panel of more than 130 countries for 1962-2000. In contrast to the existing literature, data on the regime type of individual countries are used rather than information about the congruence of the regime type of pairs of trading countries. In line with the model, autocracies are found to import substantially less than democracies, even after controlling for official trade policies. This finding is very stable and does not depend on a particular setup or estimation technique.