Trade Model Research Articles

Driving economic transition: The impact of cross-border e-commerce policy on the upgrading of service industry structure

Cross-border e-commerce, as an innovative format and model of international trade, plays a crucial role in accelerating the transformation and upgrading of industrial structures, and shaping a modern economic framework. Using panel data from 260 prefecture-level cities in China from 2003 to 2019, this study investigates the impact of the cross-border e-commerce comprehensive pilot area (CBECCPA) policy on the upgrading of service industry structure and its mechanisms using the staggered difference-in-differences (DID) method. The results show that the CBECCPA policy can significantly promote the upgrading of service industry structure. The mechanism analysis reveals that the CBECCPA policy can promote the upgrading of service industry structure by clustering service industry enterprises, bolstering urban innovation, and increasing the scale of trade. Heterogeneity analysis indicates that the impact of the CBECCPA policy on the information transmission, software, and information technology service industry is more pronounced and the policy effect is stronger for those with a lower level of service industry structure and for pilot areas with higher levels of development, developmental foundation, developmental scale, and developmental innovation. Furthermore, the policy effect varies significantly across cities. This study provides empirical evidence and policy insights into the role of the CBECCPA in the upgrading of service industry structure.

Trade risk transmission of global cobalt industrial chain based on multi-layer network

In order to study the potential systemic risk transmission in cobalt trade, this paper combined the infectious disease model with complex networks to build a multi-layer network trade risk transmission model for cobalt trade based on the transmission of export restrictions and bilateral friction in a single country, in order to simulate the degree of impact of risk transmission in cobalt industry chain, identify key countries and risk transmission paths. The results show that multi-layer network risk transmission of global cobalt trade based on two communication forms has the characteristics of “robust and fragile”. In addition, the risk transmission situation based on bilateral frictions is mainly transmitted by core countries and direct contacts. The risk transmission based on the export restriction of a single country is mainly through direct contact, indirect contact and regional transmission. We also find that the multi-layer trade network of global cobalt trade can resist the bilateral frictional transmission mode better than the transmission mode of single country export restriction. The results can support policy makers to optimize the cobalt trade structure and mitigate the negative impact of trade disruptions.

Possible development path for agricultural economic and trade cooperation in FTAAP: A numerical simulation

Exploring the path of developing agricultural economy and trade cooperation in the Free Trade Area of the Asia Pacific (FTAAP) is of great practical significance for deepening economic integration in the Asia Pacific region and strengthening regional agricultural development. This paper proposes three feasible paths based on RCEP, CPTPP, and the integration of RCEP and CPTPP to establish FTAAP. Moreover, a dynamic computable general equilibrium model of global trade is used to simulate the macroeconomic effects and the agricultural effects represented by China in forming FTAAP under these three paths. The research results show that six common policy nodes will promote macroeconomic growth in participating countries, and the effects of the in-depth implementation of RCEP and CPTPP will be greater than those of the initial implementation. Due to the broader base of participating economies and the higher level of openness, establishing FTAAP under Path 3 will yield greater macroeconomic effects and agricultural effects. Therefore, the path based on the integration of RCEP and CPTPP is an optimal selection for economic and trade cooperation of agriculture in FTAAP. All parties should actively overcome the obstacles to forming FTAAP and provide a stable internal and external industrial development environment for regional agricultural economic and trade cooperation.

Stakeholders’ Perceptions of the Peer-to-Peer Energy Trading Model Using Blockchain Technology in Indonesia

Stakeholders’ Perceptions of the Peer-to-Peer Energy Trading Model Using Blockchain Technology in Indonesia

Unveiling the dynamic flows and spatial inequalities arising from agricultural methane and nitrous oxide emissions

Tracing the spatial transfer and heterogeneity of agricultural methane (CH4) and nitrous oxide (N2O) emissions in China is a prerequisite for the sustainable transformation of agricultural systems. In this study, we established a research framework for evaluating agricultural CH4 and N2O flows and convergence. Using this framework, we established an inventory of China's agricultural CH4 and N2O emissions calculated according to the IPCC inventory guidelines, built a food trade model to simulate the spatial transfer, and revealed the regional differences. Finally, we analyzed the influence mechanism by combining extended Kaya identity and the logarithmic mean divisia index (LMDI) model. We found that inter-regional transfer of agricultural CH4 and N2O emissions in China have intensified, increasing from 56.14 % of total transfers in 2000 to 67.28 % in 2019. The spatial inequalities of agricultural CH4 and N2O increased, and emission intensity varied more within regions than between regions, with per capita emissions showing a club convergence with “intragroup convergence and intergroup divergence”. Although the contribution of agricultural CH4 and N2O emissions varies across provinces, controlling emissions intensity and land use intensity while maintaining GDP per capita is the key to emission mitigation. Our study provides theoretical support for prioritizing policies to mitigate agricultural CH4 and N2O emissions.

International Friends and Enemies

We examine whether, as countries become more economically dependent on a trade partner, they realign politically toward that trade partner. We use network measures of economic exposure to foreign productivity growth derived from the class of trade models with a constant trade elasticity. We establish causality using two different sources of quasi-experimental variation: China’s emergence into the global economy and the reduction in the cost of air travel over time. In both cases, we find that increased economic friendship causes increased political friendship and that our theory-based network measures dominate simpler measures of trading relationships between countries. (JEL D72, E23, F14, F15, F53, O19, P33)

Dynamic Market Making with Asymmetric Information and Market Power

Abstract We study the dynamics of trading volume and bid-ask spread using a multiperiod trading model with oligopolistic market makers. Traders smooth out their trading even though they are not strategic, and thus trading persists after the arrival of information or liquidity shocks. Traders act quickly on their private information while postponing hedging trades until later periods. The market power of market makers enables them to widen bid-ask spreads when trading incentives are heightened. Consequently, both trading volume and bid-ask spread may exhibit U-shaped patterns. Our model calibration aligns with the empirical intraday patterns observed in bid-ask spreads and trading volumes. (JEL D53, D61, D82, G12, G14, G18)

A new approach for estimating trade elasticities and measuring the productivity effects associated with trade

Although there is an extensive literature on the measurement of total factor productivity (TFP) and its decomposition, the benefits of international trade for aggregate TFP have been less frequently studied. Combining the theoretical trade models and the so-called proxy-variable approach, this paper provides a new method for estimating trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our proposed model is used to analyse the main determinants of the degrees of openness (embeddedness) of countries and sectors. Using data from the World Input-Output Database, we find that the pecuniary productivity gains attributable to embeddedness tend, on average, to offset its effect on sectors’ underlying productivity. We also use the model to measure the different factors affecting productivity changes due to the Covid-19 pandemic. We find that the trade-related consequences are important in explaining the contraction in countries’ productions.

Quality and trade with many countries and industries

This paper investigates a trade model with horizontal and vertical product differentations, many goods and many countries. It studies the impact of productivity, population changes and trade costs on the quality composition of exports. The analysis embeds within the same tractable model a series of empirical results, including Linder hypothesis and high-income countries’ specialization in high quality good production. It also shows that high-quality goods exhibiting a high degree of differentiation are traded only by high-income countries.

The price evolution in financial markets under influence of published opinions

Opinions by media experts and pundits in both traditional media outlets and online venues influence investors. While a published opinion could be more accurate than that of a typical investor, its influence displaces many independent views and has the potential to introduce a shared error. My probabilistic trading model characterizes such influence and demonstrates how the “wisdom of the crowds” effect leads convergence of prices to the fundamental value. I use two corporate events to test the model, and find evidence consistent with the theoretical predictions.

Research on Chinas Economic and Trade Pattern under the Internet Technology Era

In the era of the Internet, Chinas economic and trade models have undergone profound and transformative changes, reshaping the landscape of global commerce. This paper aims to explore the critical role that internet technology has played in driving Chinas economic development while also delving into the future directions and possibilities for further growth. By focusing on Alibaba and JD.com as primary case studies, the paper examines how these industry leaders have leveraged advanced technologies such as cloud computing, cross-border e-commerce, and electronic logistics to revolutionize their operations and expand their global reach. The study not only highlights their innovative approaches and development experiences but also addresses the societal challenges that have emerged or been exacerbated by the rapid expansion of internet technology. Understanding these challenges is essential for formulating strategies to mitigate their impact and ensure long-term, sustainable growth. The significance of this research lies in its potential to provide valuable insights and practical references for small and medium-sized enterprises (SMEs) in China. By learning from the successes and challenges of leading enterprises, SMEs can navigate the complexities of the Internet era more effectively, contributing to the sustainable and healthy development of Chinas economy in an increasingly digital world.

A multi-commodity partial equilibrium model of imperfect competition in future global hydrogen markets

Techno-economic studies are investigating procurement costs of hydrogen and related derivatives across various international trade routes. However, the strategic behavior of exporters is rarely considered in this context, despite similar behavior frequently observed in the fossil fuel world and market characteristics indicating some potential. This work introduces a novel techno-economic model of oligopolistic trade tailored around the value chain of potential future global hydrogen markets. It is formulated as a mixed complementarity problem with a convex reformulation, allowing to solve both competitive and oligopolistic equilibria much beyond the capabilities of traditional complementarity models. Illustrative results show that assuming perfectly competitive price formation in early phases of future global hydrogen markets may lead to overly optimistic hydrogen price projections. This is especially the case within Europe, Japan, and South Korea. In contrast, strategically withholding quantities in export may decrease prices for some domestic markets.

The Impact of the Digital Economy on International Trade Models: Opportunities and Challenges

With the rapid development of the digital economy, international trade models are undergoing profound changes. Digital technology has reshaped traditional trade structures, driving the reorganization of global value chains and the rise of intangible assets. This paper explores the new characteristics of international trade in the context of the digital economy, including the transformation of trade structures driven by digitalization, the increasing importance of intangible assets in trade, and the influence of digital ecosystems. The digital economy has made trade processes more convenient and efficient, offering new globalization opportunities for emerging markets and small and medium-sized enterprises (SMEs), and promoting the growth of cross-border services and digital products. However, challenges remain, such as disparities in digital infrastructure, conflicts between digital governance and cross-border data flows, and the diversity of digital trade rules. This paper summarizes these opportunities and challenges and suggests future research directions to help policymakers, businesses, and technology providers navigate the complex landscape brought about by the digital economy.

Research on the Impact and Path of Digital Trade Driving the Enhancement of Export Competitiveness of Chinese Enterprises

With the rapid development of the global digital economy, digital trade, as a new trade model, has a profound impact on the export competitiveness of Chinese enterprises. Starting from the connotation and characteristics of digital trade, this article analyzes the impact mechanism of digital trade on the export competitiveness of enterprises, explores the path of digital trade promoting the improvement of Chinese enterprises' export competitiveness, and provides theoretical basis for the transformation and upgrading of Chinese enterprises and the development of foreign trade.

How does digital technology affect export in services?

Based on the comprehensive measures of digital technology and cross-country services trade database, our study empirically examines the impacts of digital technology on export in services. We find that digital technology significantly promotes services export. However, the impact varies in different modes of supply. Digital technology significantly promotes service export in the mode of cross border delivery, consumption abroad, and commercial presence rather than the mode of the natural person movement. Heterogeneous analysis shows that the trade impact of digital technology is more pronounced in developed countries and the countries with higher levels of digital openness. Based on both the empirical analysis and the case studies, three main channels of the enhancement of tradability, the function of digital platforms, and innovation of new trade models are discussed for the influencing mechanisms of digital technology.

A Simple Theory of Deep Trade Integration

Abstract Which countries should aim for regulatory cooperation, and to what extent should they pursue it? We develop an imperfectly competitive trade model that accounts for differences in technology and regulatory preferences regarding local consumption externalities across countries. Each country sets unique product standards, and firms incur costs when tailoring products to different markets. Trade occurs when the benefits of comparative advantages outweigh the desire for asymmetric regulations. Our findings indicate that regulatory cooperation, defined as the cooperative setting of standards, is most advantageous for countries with moderate differences in regulatory preferences. Shallow integration, however, falls short of achieving the optimal planner’s solution. Countries with strong comparative advantages in distinct externality-generating goods can pursue deeper regulatory cooperation through mutual regulatory concessions. Additionally, when regulatory preferences are highly dispersed, international cooperation tends to form regulatory blocs.

Optimal peer-to-peer energy trading model with short-term load forecasting for energy market

Optimal peer-to-peer energy trading model with short-term load forecasting for energy market

Strategic Ambiguity in the Time of a Second Cold War

Abstract In the competition for hegemony of major powers, it seems logical for a small or middle power state to be ambiguous on its preference. Aligning with one protagonist for protection and preferential treatment can only be at the expense of antagonizing the other. Conventional wisdom holds that hedging is practical as it allows a country to leverage on its amicable relations with both powers. The ASEAN states are caught in the middle of the U.S.–China economic rivalry as well as directly engaged in maritime disputes with China. This paper evaluates strategic ambiguity versus alignment against the backdrop of trade decoupling of rival superpowers. Using a multi-sector, multi-country Ricardian trade model, our simulation results reveal that it is in the interest of some economies to align with one of two camps, contrary to conventional wisdom. The diverse welfare effects of decoupling on member states prevent the attainment of a unified ASEAN position and undermine ASEAN centrality in curbing the risk of a second cold war.

Review of peer-to-peer energy trading: Advances and challenges

The power system is confronting progress due to the high integration of distributed energy resources (DERs). These DERs are expected to cause challenges for power system operations. Therefore, innovative management approaches were proposed for integrating DERs in future power systems and maximizing DER owners’ benefits, such as peer-to-peer (P2P) energy trading. Direct energy trading between users is made possible by P2P energy trading, which supports bulk power infrastructure operations while supporting local power and energy balance. P2P energy trading is a promising approach to expanding the installation of renewable energy sources and achieving the system flexibility required for the shift to low-carbon energy. The grid is anticipated to gain from P2P energy trading by having lower reserve requirements, peak demand, and network losses. Many studies and pilot projects have shown how P2P energy trading benefits prosumers as well as the grid. However, the widespread use of such trading models remains limited in today's electrical markets. This paper reviews recent advances in the P2P energy system and a perceptive discussion of the challenges that are keeping P2P from becoming a viable energy management solution in the present electrical market. First, the energy network is covered in this paper's description of these new P2P markets; next, the types of P2P energy trading, moving on to the market structure. Then, the technologies and technical approaches behind P2P energy trading are covered. After that, P2P energy trading advances in different systems are discussed. Finally, we identify challenges before making some concluding remarks.

Multifaceted impacts of R&D activities on exporting behavior

ABSTRACT This study uses data from China to investigate the multidimensional impacts of R&D activities on a firm’s exporting behaviour. The findings confirm the well-documented positive effects of innovations on export participation and export volumes while also uncovering additional aspects of innovation’s influence on exporting. Specifically, firms that engage in research activities charge lower prices, offer a wider variety of exported products, enter more international markets, and demonstrate a tendency to expand into smaller and less affluent export markets. These findings offer cohesive and unified support for the effects of innovation on export that align with the implications of heterogeneous-firm trade models.