Lower Trade Barriers Research Articles

Protectionism or let go? Evidence from IT investment in Chinese manufacturing firms

ABSTRACT From a global perspective, economic and trade disputes between countries are gradually increasing. Under the influence of the COVID-19 epidemic and war, the competition among the countries has become more intense. Lower trade barrier for economic cooperation or trade protection is becoming a concerned topic for governments and researchers around the world. This study uses the IT investment data from Chinese manufacturing enterprises from 2015 to 2022 to test the impact of international competition on technological development under environmental heterogeneity. The research results show that the external environment has an important impact on the technology performance of enterprises. After the COVID-19 epidemic, the IT investment performance of enterprises shows a “productivity paradox” situation. Further research shows that reducing tariffs and introducing international competition will be conducive to the development and utilization of IT by enterprises, which is supported in different market environments. This study verified that lowering trade barriers and introducing international competition to achieve win–win cooperation is still an important method for economic and firm development.

Lowering trade barriers improves income distribution and economic resiliency

The U.S.-China trade war, COVID-19 pandemic and Russian invasion of Ukraine contributed to calls for greater economic self-sufficiency by exposing gaps in international collaboration and the uncertainty of global supply chains. In this study, we apply a comprehensive global modeling framework to enhance understanding of the potential impacts of fragmentation of global value chains. Supporting the general argument toward economic benefits from open markets our analysis contributes to the policy debate in two important dimensions of this phenomenon—distributional impacts and economic resiliency. We find that tariff liberalization and trade facilitation measures implemented by developing countries could not only reduce between-country inequality but also result in progressive within-country income distribution primarily through lowering food prices, as well as increasing unskilled wages. In addition, using a case study of disruption to Thailand’s electronics industry, we find higher resiliency of developing countries to external shocks in the globalized (as opposed to a localized) world.

Indirect channel of trade agreements in deepening global value chains

AbstractPreferential trade agreements (PTAs) between trading partners are known to have positive impact on the expanding and deepening of global value chain integration due to lower trade and investment barriers. Less is known, however, is if other PTAs of PTA partners have any impact on the value‐added trade linkages of the direct PTA partners concerned. Based on compositive indicators measuring the breadth and depth of PTAs from 2007 to 2018 and using Multiregional Input–Output Table database covering 62 countries and 35 sectors and the Content of Deep Trade Agreements database, this paper estimates the multiplicative form of the constant‐elasticity augmented gravity equation model by a Poisson Pseudo Maximum Likelihood (PPML) estimator. This study shows that indirect impact of the deepening of trade agreements of a country's PTA partner exerts positive, significant impact on value‐added exports of a country. Both backward and forward linkages of a country measured by various decomposition of valued added exports indicate this indirect channel of value chain deepening effect even outweighs the direct impact from the deepening of PTAs between direct trading partners with significant policy implications in formulating PTA strategies.

Profitability and cost-effectiveness analysis of brucellosis control in Armenia: A One Health approach

Abstract Brucellosis is endemic in the Republic of Armenia and constitutes a financial and public health burden on the nation. Control of the disease is currently using the test-and-slaughter strategy, reportedly at a coverage level deemed insufficient to interrupt transmission by the authorities responsible for disease control. A key aspect of this control strategy is the shared costs between the agricultural and public health sectors. An earlier study conducted by the Advanced One Health Class at the Swiss Tropical and Public Health Institute developed a mathematical-compartmental transmission model to represent the transmission of Brucella between cattle, sheep, and humans. The study simulated the performance of the existing control strategy and three other upgraded scenarios over a decade, giving the cumulative incidence of human and livestock prevalence (2022–2031). Based on the cumulative incidence of human and livestock prevalence from 10-year simulations, this study evaluates Armenia’s current brucellosis control program’s profitability, cost-effectiveness, and cost distribution for the existing test-and-slaughter level and three proposed upgraded scenarios in cattle and sheep. In these scenarios, the percentages represent the proportion of animals that were culled when they tested positive for brucellosis: Scenario 1 – 86% of cattle and 65% of sheep; Scenario 2 – 88% of cattle and 70% of sheep; Scenario 3 – 90% of cattle and 75% of sheep. Further estimations were made on public and private health costs, and income loss of human brucellosis patients averted through the different livestock-level interventions. The incremental livestock production and the averted human health cost were summed up as societal benefits of brucellosis interventions. From a societal perspective, the most profitable scenario is estimated to have a net present value of US$ 41.82 million, from an overall cost of US$ 48.27 million and a benefit of US$ 6.45 million, resulting in a benefit-cost ratio of 0.133 at 80% compensation for farmers’ losses and discounted at 5%. From a public health perspective, the cost-effectiveness ratio for the same intervention scenario is US$ 1587 per DALY averted (95% CI: US$ 1268–US$ 2009). When private costs, which are the private income loss and out-of-pocket costs of patients, are added to the public health costs, the cost-effectiveness decreases to US$ 6727 per DALY averted at a 5% discount rate (95% CI: US$ 5371–US$ 8504). These cost-effectiveness and benefit-cost ratios highlight the remarkable disparity in the cost of the test-and-slaughter strategy across the agriculture and public health sectors. Our study highlights the need to reassess the cost-effectiveness of the test-and-slaughter strategy for brucellosis control in Armenia and consider an equitable distribution of the cost of the test-and-slaughter strategy among the sectors as this could facilitate better disease control and cost-effectiveness of the strategy. Armenia should view brucellosis elimination as a public good, justifying public spending for compensation. As seen in other countries, its elimination could boost the economy by lowering trade barriers, making brucellosis-free status a societal benefit. One Health impact statement Our study focuses on controlling brucellosis in Armenia using an integrated approach called One Health, which seeks to demonstrate the incremental benefit of closer cooperation between human and animal health and other sectors. We evaluate how profitable and cost-effective test-and-slaughter interventions are in improving the health of both humans and animals while also considering the costs for farmers and the state. Using a One Health approach, we can better understand the cross-sector expenses related to the disease and develop more efficient strategies to interrupt transmission and eventually eliminate the disease. The result is improved animal and human health outcomes, enhanced livelihoods, and a positive contribution to the economy’s overall growth (Narrod et al ., 2012 ). To carry out this study, we collaborated closely with non-academic partners from the Food Safety and Inspectorate Body (FSIB) and the National Centre for Disease Control in Armenia (NCDC). This collaboration resulted in the creation of valuable knowledge and practical solutions, underscoring the importance of working together across different sectors, including indigenous communities, academia, and non-academic organizations.

Does Trade Reform Promote Economic Growth? A Review of Recent Evidence

Abstract Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the twenty-five years since Rodríguez and Rodrik's (2000) critical survey of empirical work on this question, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. I examine three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms have had a positive impact on economic growth, on average, although the effect is heterogeneous across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.

Does trade openness promote economic growth in developing countries?

This study examines the influence of trade openness on economic growth in the Association of Southeast Asian Nations. Trade openness is associated with low levels of trade barriers and high levels of trade volumes. Lower trade barriers may negatively affect GDP in developing economies, implying that excessive trade openness could impede economic growth. Conversely, increased trade volumes positively affect GDP, highlighting the potential advantages of trade openness for economic growth. We identify the moderating role of trade barriers, noting that in countries with high trade barriers, increased trade volumes are associated with stronger economic growth.

The influence of trade war on the international economic system and its adjustment measures

This paper discusses the influence of trade war on the international economic system and the corresponding adjustment measures. First of all, the trade war has had a negative impact on global economic growth, investment flows, international trade patterns and financial market fluctuations. Secondly, the trade war has caused international investment problems, which has led to the adjustment of the supply chain of multinational companies and the increase of investment uncertainty. Then, the financial market fluctuated and the currency, stock and bond markets were disturbed. Finally, by strengthening international cooperation, promoting trade multilateralism, lowering trade barriers and paying attention to sustainable development, we can meet the challenges brought by trade wars and look forward to establishing a more stable and sustainable international economic system in the future.

LOGISTICS CLUSTERS AND THEIR POTENTIAL FOR ECONOMIC DEVELOPMENT

Supply chain resilience in the face of shocks has arisen as a policy issue due to the multilateral trading system lowering trade barriers. Innovations in transportation technology created intelligent transport systems and production fragmentation of global supply chains. However, climate shocks and the COVID-19 pandemic restructured supplies in the global markets. At the same time, geopolitical conflict and tensions emerged with Russia’s invasion of Ukraine, increased China’s military activity, introduced additional tension, and created difficulties for the supply chains. On the other hand, the current industrial policy, aiming at national economic growth, is motivated by objectives different from increasing company-level productivity or spillovers between sectors. The concern primarily revolves around supply chain resilience, the fear of weaponizing exports, supporting technological advancement, and the need for policymakers to introduce greater control over economic activity in anticipation of potential shocks. In cross-border supply chains, some governments seek to coordinate their industrial policies with the most significant partners without implementing measures at the national level (Bown, 2023). Overlaying other considerations is the existential threat of climate change, a significant driver behind many modern industrial policy initiatives. That is leading to the rebirth of the idea of logistic clusters uniting different partners in size with foreign trade-oriented activities, aiming at efficiency as well as resiliency of the logistics chains. Based mainly on deep secondary research, this paper addresses the rebirth of cluster ideas in international transport and logistic activities.

International trade and the risk in bilateral exchange rates

Exchange rate volatility falls after a trade deal, driven by a decline in the systematic component of risk. The average trade deal increases trade by 50 percent over five years, reducing systematic risk by a third of a standard deviation across countries. We examine this connection in an Armington model where the structure of trade networks determines the risk in exchange rates. We estimate our model to current data and find i) that countries at the periphery of the world trade network benefit the most from lower trade barriers and ii) that a counterfactual experiment of a trade war between the US and China shows a global increase in currency risk, with effects concentrated among peripheral countries.

Demand Volatility and Firm Export Margins: Evidence from Egypt

The study explains the export behavior of Egyptian firms under demand volatility in destination countries using detailed customs data and high-dimensional fixed effects. It finds that demand volatility negatively affects both the intensive and extensive export margins. The effects are particularly evident for large firms which reduce their export sales — especially over time — to more volatile destinations/products, are more likely to exit from exporting more volatile products and are less (more) likely to enter (exit) more volatile destinations. These findings confirm recent literature that emphasizes the greater elasticity of large firms to foreign demand shocks. They are also in line with risk aversion models in which the average risk premium increases with firm size. Given the disproportionate adverse impacts on large exporters, we find that higher demand volatility leads to lower aggregate exports, especially to geographically close and low trade costs countries. Accordingly, uncertainty in demand lessens the positive effect of lower trade barriers on exports.

ANALYSIS OF THE STATE OF THE METALLURGICAL INDUSTRY OF UKRAINE IN THE CONDITIONS OF WAR

The article considered main trends of Ukrainian metallurgical industry development in wartime conditions. It was established that the world leaders in the metallurgical industry are China, India, Japan, the USA, North Korea, Ukraine lost its global position from 14th to 25th place. Crude steel production volumes in Ukraine decreased by 70.7%. Despite the fact that the EU steel industry remains a highly energy-intensive industry, in Europe this sector is characterized by modern energy-saving equipment that is able to produce products with high added value for the global market based on innovative metadata. The influence of the metallurgical industry of Ukraine on the inflow of foreign investments into the state’s balance of payments was studied. Today, the metallurgical industry in Ukraine is inferior to the agricultural industry. The main problems faced by the metallurgical industry of Ukraine in the conditions of Russia’s armed aggression are the complicated sales of products due to the blockade of sea ports. The main threats faced by enterprises of the metallurgical industry are: destruction of their assets, which led to a complete stoppage or partial operation of enterprises; lack of working capital; logistical restrictions due to the blockade of ports (about 65% of the exports of the enterprises’ products were carried out by sea); shortage of energy resources (attacks on critical infrastructure facilities brought Ukraine’s energy system to the point of total frugality). The Ukrainian mining and metallurgical complex managed to remain at the level of 15-30% of capacity in 2022, primarily due to the support of Western partners, who provided their ports and lowered trade barriers. The main realistic scenario of support for metallurgical enterprises today remains the prolongation of reduced tariff rates for Ukrainian products and the inclusion of enterprises in the national post-war reconstruction program in the following years.

Common External Tariff and Household Welfare in Nigeria

Economic integration into the global markets offers the opportunity for rapid growth and poverty reduction, particularly in developing countries. It is believed that lowering trade barriers on imported goods provides the consumers with welfare gains, access to better-quality products and lower prices. Therefore, this paper investigated the impact of common external tariff on household welfare in Nigeria within the period of 2005 to 2021. This study is a quantitative research and the data were sourced from World Bank Integrated Trade Solution database, World Bank Commodity Price data and National Bureau of Statistic. The data collected were analyzed using Auto Regressive Distributive Lag (ARDL). The results of the study show that common external tariff are significant and positively impacted on household welfare while tariff changes has significant but negative impact on household welfare. The study, therefore, strongly recommends that all closed borders should be opened in order to discourage smuggling and illegal routes of importing goods while advocating the adoption of Africa’s free trade agreement for better opportunities for export of domestic manufactures

UNDERSTANDING THE RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH; AND ITS DETERMINANTS: A REVIEW OF LITERATURE AND EVIDENCE

In the last few decades, there has been a lot of discussion in the economic literature about the link between FDI and economic growth; and its determinants. This paper reviews the literature dealing with the same. The findings presented on the particular topic show that the links between them are somehow conflicting and it is a bit difficult to draw a clear conclusion. Some of the scholars argue that FDI promotes technology transfer and spillovers; uplifts institutions, human capital, and infrastructures, and boosts market conditions. While other pessimists believe that FDI may lead to dependency on foreign capital, external vulnerabilities, and destructive competition of foreign affiliates with domestic firms. This paper also investigated on some empirical findings on the determinants of FDI and presented that tax rates, physical infrastructures, legal framework, low wage rate, trade barriers and government policies were major determinants of FDI inflow.

Assessment of the role of the state in the management of mineral resources

Mineral resources as natural capital can be transformed into human, social and physical capital, that guarantees the sustainable development of a country, exclusively through professional public management. Public management of a country's mineral resource potential is seen as an element of transnational governance. Regulation involves the use of laws, rules and regulations within the jurisdictional and sectoral capabilities of the state, minimizing its involvement as a producer. The features of the ideology of economic liberalism, which polarizes the societies of raw material producing countries by imposing austerity, as well as lowering trade barriers have been studied. The analysis of the influence of the radical new order of neoliberal world ideology on the development of the extractive sector and the strengthening of state regulation has been presented.

Income inequality, productivity, and international trade

This paper studies the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences and product quality. The model matches the empirical fact that an increase in income shifts one’s consumption towards goods that have higher quality both at the intensive and extensive margins. It also implies a negative relationship between the number and quantity of goods consumed by an income group and the earnings of other income groups. The central result is that a mean-preserving spread of the income distribution negatively affects aggregate productivity through the softening of firms’ selection. In the presence of international trade, this effect is amplified with lower trade barriers or a larger number of trade partners. Furthermore, the model implies that the domestic expenditure shares and welfare gains from trade are constant across income groups. A simple quantitative exercise suggests that an income redistribution like the one induced by the US Federal taxes and transfers raises average productivity by about 3%.

Can raising trade barriers curb industrial pollution emissions?

The development of foreign trade and industrial pollution control is an important theme of government governance today. Based on the institutional background of rising international trade protectionism, this study examines the impact of trade barriers on industrial pollution emissions by using different measurement methods and data from 16 industrial sectors in 10 major countries. The results show that lowering trade barriers can significantly reduce industrial pollution emissions, considering the impact of potential endogenous problems. Heterogeneity analysis shows that reducing trade barriers in developed countries can reduce industrial SO2-emission intensity, while the opposite is true in developing countries. Trade barriers have the greatest effect on the pollution-emission intensity of technology-intensive industries, followed by labor-intensive and capital-intensive industries. Mechanism analysis shows that trade barriers affect industrial pollution-emission intensity through both pollution emission and industrial output and that energy-use intensity and biased technological progress are important mechanisms. This study provides a useful reference for governments to promote foreign trade development and ecological and environmental protection.

Cultural diversity and cultural trade: theory and an application to the motion picture industry

ABSTRACT The relationship between trade liberalisation and cultural diversity is a long-standing and controversial issue in many countries that strive to promote free flow of cultural trade as well as to sustain local cultural production. The controversy is partly attributable to multiple meanings attached to the notion of cultural diversity. In this paper we propose three operational definitions of cultural diversity relevant in the context of international cultural trade: national, inter-national and global cultural diversity. We suggest measures of these three types of cultural diversity and apply them to data for the global motion picture industry covering 37 countries/regions for years 2009–2019. We argue that the three types of cultural diversity may operate in opposite directions as a result of lower trade barriers. The paper concludes by considering the implications for cultural policy arising from our analysis.

Moderating influence of emotional intelligence in the relationship between domain-based self-efficacy and task performance: A study of employee in Nigerian banking industry

Given the lowering of trade barriers among nations, the internet revolution, and a resultant increase in the bargaining power of consumers, coupled with the economic impact of COVID-19 pandemic, firms are increasingly forced to make use of a high performing workforce. It is to raise the quality of their products and/or services as global competition for the consumer’s money severely punishes inefficiencies. As a result of this, it has become imperative for organizational researchers to determine the important antecedents of employee task performance. Hence, the purpose of this study is to examine the relationship between the domain-based self-efficacy and employee task performance. Drawing on the Social Cognitive Theory, we propose that there is a relationship between these two variables, and that the relationship is moderated by emotional intelligence, with the view of shedding light on the inconsistent nature of the results from previous studies. Through the descriptive survey research design, the multi-stage sampling technique was applied in eliciting data from a total of 342 employees of the Nigerian banking industry who are employed in the customer services sector. From the simple moderation analysis conducted after utilizing the Process macro, results indicate that there is a positive and significant relationship between domain-based self-efficacy and task performance. However, emotional intelligence moderates this relationship in such a way that the positive relationship between self-efficacy and task performance was weaker among subjects who reported a higher level of emotional intelligence. In the light of these findings, it was recommended for managers particularly in the banking industry to set up intervention strategies that have the potentials of promoting a desirable level of domain-based self-efficacy among their employees while also ensuring that an optimal mix of emotional intelligence both within and across components is promoted with the view of achieving a desirable moderating impact of this relationship.

ЕКОНОМІЧНА РЕТРОСПЕКТИВА РОЗВИТКУ ТЕОРІЇ ВЕРТИКАЛЬНОЇ СПЕЦІАЛІЗАЦІЇ

We explore the development of vertical specialization theory which is trade in goods across multiple stages of production on the relationship between trade and business cycle synchronization across countries. We study various papers about international trade model in which explores the degree of vertical specialization varying with trade barriers. We examine how and why these vertical specialization models created by economists and compare differences of those models. Since VS one of the most important changes involves the increasing interconnectedness of production processes in a vertical trading chain that stretches across many countries, with each country specializing in particular stages of a good’s production sequence. The purpose of the article is to form a theoretical and methodological basis for an economic retrospective of the development of the theory of vertical specialization. The subject of the research is theoretical and methodological aspects of the economic retrospective of the development of the theory of vertical specialization. Methods used in the study: historical method, methods of verification of theoretical positions (morphological analysis of the content and relationship of categories, principles and laws, assessment of the correspondence of historical facts to theoretical hypotheses), methods of analysis and synthesis, induction and deduction, logical method (hypothetical and axiomatic approaches), comparison method. Research hypothesis. In the context of global challenges, it is necessary to change the nature of interaction, for which it is necessary to form a theoretical and methodological basis for an economic retrospective of the development of the theory of vertical specialization. Presentation of the main material. Vertical specialization occurs when a country uses imported intermediate parts to produce goods that it later exports. This definition reflects the idea that countries are consistently linked to each other to produce the final good. The fulfillment of the conditions is justified: the product must be produced in several successive stages, two or more countries must specialize in the production of some, but not all, stages, and at least one stage must cross the international border more than once. It is emphasized that vertical specialization occurs when a country uses imported intermediate parts to produce goods that it later exports. Originality and practical significance of the research. The study of the economic retrospective of the development of the theory of vertical specialization includes four interrelated blocks – the theoretical and exploratory basis of interaction, the substantive (paradigmatic and methodological), applied and managerial basis of the interaction of business entities, which will allow comprehensively cover possible aspects of interaction. Conclusions of the study. The article examines the theoretical and methodological basis of vertical trade also connects the growth of international trade with an increase in international production. The forces that have driven increased vertical trade – lowering trade barriers and improving transport and communication technologies – are likely to persist. Thus, we can conclude that the value of VS and vertical trade in world trade will grow from year to year.

Comprehensive Analysis of Tariff Barriers Worldwide: A Composite Assessment Approach

International trade has fundamental importance for all the countries and the analysis concerning international trade particularly concerning tariff barriers is high on the agenda of researchers in the field of economics, business and politics. Aim of the study is to assess the world tariff barriers of 158 countries. Overall design of the study comprises of a crisp literature review, data extraction and analysis. It is a study of one hundred fifty-eight countries that uses secondary data taken from World Development Indicators (WDI) 2020. It uses Grey Relational Analysis (GRA) as research methodology. Results of GRA show that Macao SAR, China, Hong Kong, Singapore, Montenegro, Mauritius, Brunei Darussalam, Myanmar, Chile, Peru and Australia have relatively highest grey relational grades meaning thereby, low tariff trade barriers whereas Grenada, Antigua and Barbuda, Belize, Central African Republic, Nepal, Guinea-Bissau, Fiji, Gabon, Barbados, Djibouti, St. Kitts and Nevis have lowest grey relational grade meaning thereby, these countries have high level of tariff based barriers of international trade. Interestingly, all the member countries of European Union occupy the rank of 27 (i.e. all countries have the same rank) which can be explained in the perspective of their union of tariff. Since, they have uniformed tariff policy as against rest of the world, therefore, have same rank. It is a study based on reliable real time data set. The study has value for all stakeholders i.e. international community, local governments, society at large, policy makers, researchers and international institutions.