International Trade Performance Research Articles

Similarity index for estimating tax reform program and its impact on tax revenue

Tax reform in Indonesia begins with implementing self-assessment approach for elevating voluntary tax compliance. We use 16 developed countries' tax structures as a benchmark for measuring Indonesia's tax reform with the Similarity Index. The result of the Similarity Index shows Indonesia Tax Reform fluctuating trend in 40 years, which started at 72,56% in 1980 and ended at 55,84% in 2019. Furthermore, with the VAR model and international trade openness as variable outside the model in our study, we found that GDP per capita, and inflation, altogether with tax reform had created a 20% positive causality impact on tax revenue in the first three years and 5% in the year tenth. Negative causalities impact which shown in the fourth to ninth year is relevant to the declining trend of Indonesian tax reform that we previously measured. Therefore, it is important for the government to critically focus on developing the structure of the direct tax, indirect tax, and international tax after the first three years of period to maintain the positive impact of tax reform for growing tax revenue in the long term.

ANALISIS EKSPOR, IMPOR TERHADAP NERACA PERDAGANGAN DI EMPAT NEGARA EMERGING MARKET (RITI)

The goal of international trade between nations is to promote economic expansion. Based on the trade balance's findings, indicators of a nation's performance in international trade can be examined. The rate of economic growth, which can be evaluated from a number of angles, including the value of imports and exports, which affect a nation's trade balance, can be used to characterize a country's degree of success. The purpose of this study is to ascertain the short- and long-term effects of GDP, exports, imports, exchange rates, and GDP on the trade balance in four emerging market nations. The ARDL Panel Method was used to collect data from the World Bank between 2012 and 2022 for this study. There are therefore both long-term and short-term relationships. Over an extended period, the trade balance is largely influenced by exports, GDP, and exchange rates. Exports, meanwhile, have an immediate impact on the trade balance.

Territorial resilience on the aftermaths of COVID‐19 crisis—An exploratory analysis on the role of innovation

This study examines the impact of different regional determinants on heterogeneous territorial resilience to the COVID‐19 crisis, highlighting the role of innovation, particularly the engagement of research and innovation (R&I) entities in networks with businesses. Two ordinary least squares (OLS) models were separately estimated for the resistance and the recovery phases, complemented by a multinomial logistic model, applied to test for a nonlinear relationship between R&I networks and territorial resilience. The results are robust concerning the positive influence on municipalities' resistance and recovery of having R&I entities collaborating in innovation consortia. Education, stability, and sectoral diversification of the local labor market are also essential for regions to be able to resist to the crisis but seem not important for recovery. Finally, international trade openness and pre‐crisis labor performance penalizes both resistance and recovery from downturns.

Foreign Ownership and International Trade Performance in China

AbstractWe investigate the causal relationship between foreign ownership and international trade performance by comparing foreign‐acquired firms with similar domestic‐acquired firms in China with regard to changes in their post‐acquisition international trade performance. Our findings indicate that foreign ownership significantly enhanced the probability of both exporting and importing, and strongly increased trade value. Foreign ownership took effect from the year of the acquisition and persisted for at least 2 years. It stimulated both processing trade and ordinary trade, and expanded products and trading partners. Post‐acquisition trade performance also exhibited heterogeneity based on the different pre‐acquisition and post‐acquisition ownership. As for the underlying mechanisms, we show that firms experienced significant output expansion, increased export dependence, and eased financial constraints after foreign acquisition.

Do international tourism arrivals, infrastructural development, and trade openness promote economic complexity in Africa?

Recent scholarly articles consistently show that economic complexity promotes economic development. However, upon further examination of the literature, it becomes evident that macroeconomic determinants of economic complexity are not fully investigated, particularly in Africa. This study addressed this gap in the literature by investigating the impact of international tourism arrivals, infrastructural development, and trade openness on economic complexity in Africa. The study utilized the dynamic system GMM and panel Fixed Effects estimators for 34 African economies from 2010 to 2021. The results indicated that international tourism arrival and trade openness have beneficial effects on economic complexity in Africa, while the effects of infrastructural development remained mainly negative. Additionally, we established that human capital development and foreign direct investment inflow are potent channels for promoting economic complexity on the continent. We highlighted the policy implications of these findings.

Exploring the relevance of investing in technological innovation programs for tackling natural resource consumption-related environmental challenges in developing countries

Promoting green growth, especially across underdeveloped countries, is a well-acknowledged agenda that has prime relevance for making the global economic growth processes more ecologically sustainable over time. Hence, taking this critically important issue into cognizance, this current study considers a sample of 80 underdeveloped nations from different regional locations for retrospecting how technological financial provisions, natural resource dependency, urbanization, international trade, foreign direct investment, and corruption control have affected their annual carbon emission growth figures during the 2000-2021 time frame. In a nutshell, the analytical findings for the concerned underdeveloped countries as a whole show that scaling financial grant provisions for investing in technological innovation programs helps to reduce environmental challenges by independently plunging the yearly emission growth rates, while jointly mitigating the emission growth figures further alongside more consumption of natural resources. Besides, the results also confirm the emission growth rate-surging impacts exerted by rising levels of natural resource dependency and international trade openness. By contrast, controlling the spread of corruption is identified as an effective emission growth rate-inhibiting mechanism while urbanization and influx of foreign direct investment are found to not bother the annual carbon emission growth figures of the concerned underdeveloped nations. More importantly, these abovementioned findings are observed to be heterogeneous for underdeveloped countries having different national income levels, regional locations, pollution intensities, natural resource dependency levels, and technological innovation-related financial provisions. Therefore, in light of the analytical findings, it is recommended that the underdeveloped nations boost the output productivity and carbon-intensity levels of their respective natural resource industries, scale funding levels for technological innovation programs, promote clean energy consumption while raising energy efficiency levels across urban areas, make trade baskets less embodied with carbon, attract clean foreign direct investment, and enforce stringent corruption controlling laws.

Retracted: Research on the International Trade Performance Evaluation of Cross-Border e-Commerce Based on the Deep Neural Network Model

Retracted: Research on the International Trade Performance Evaluation of Cross-Border e-Commerce Based on the Deep Neural Network Model

Does Economic Growth Attract FDI Inflows? A Dynamic Panel Analysis

Economic growth is deemed to be a conducive factor in attracting foreign direct investment (FDI) as it often confers location advantage to host countries and fosters business confidence. This paper examines the short-run and the long-run effects of economic growth on FDI inflows. The empirical analysis is conducted through the Generalized Method of Moments (GMM) System estimator for dynamic panel models. The main results show significant positive effects of economic growth on FDI inflows, and they indicate that the magnitudes of these effects are statistically comparable over time and do not diminish with higher economic growth levels. They also reveal important variations in the magnitude of these effects across geo-economic regions and over pertinent economic variables such as economic development level, international trade and foreign investment openness, and endowment in natural resources. These findings underscore the significance of developing growth-enhancing policies that are designed on the basis of the economic and geo-economic characteristics of host countries. Such policies could be coupled with international trade and foreign investment openness directions to stimulate stronger responses of FDI inflows to economic growth and mitigate the implications of unfavorable global and regional political conditions.

The role of international tourism, trade openness and renewable energy in the financial development of selected African countries

It is well established that financial development is pivotal to the proper functioning of the real economy and there is a vast body of literature investigating into its determinants. In this study, we shift attention to tourism and renewable energy consumption that are rarely discussed in the financial development debate along with trade openness. Even though, tourism and renewable energy consumption may be less conventional to issues of financial intermediation, they could, along with trade openness, nonetheless contribute to some aspects of financial development in ways consistent with the finance-growth hypothesis. Consequently, this study, while controlling for economic growth, development assistance and government expenditure examines the effects of renewable energy consumption, tourism development and trade openness on financial development in selected African countries. The study relies on data from the World Bank (2023) World Development Indicators for seven African countries (Egypt, Tunisia, Kenya, South Africa, Zimbabwe, Ivory Coast and Morocco) over the periods 1995–2021. Fully Modified Ordinary Least Square (FMOLS) regression estimations reveal that, in the long run, trade openness, international tourism, and renewable energy stimulate financial development. The quantile regression which rendered additional support to this evidence further reveals that, the financial sector gains associated with trade openness, international tourism and renewable energy are greater for countries with lower financial sector development. Thus, a country can still optimize the gains associated with increased trade openness, international tourism, and renewable energy consumption with a relatively less developed financial market. Hence, polices that improve tourism development, promote renewable energy consumption and intensify economic openness may be important catalysts for stimulating further financial development in Africa.

State international income position, trade openness, and mass antigovernment protests

This research provides a state-level systemic explanation for antigovernment insurgencies. We posit that state international income position influences antigovernment movements, which effect, however, hinges on the level of trade openness. By analyzing 157 states from 1990 through 2018, it is found that for a state having an unclosed market, its internationally relative income level is negatively associated with mass antigovernment protests. This study implies that trade liberalization may exert a context-specific impact on domestic political insurgency, which helps understand why trade liberalization seems to be a reason for mass anti-government movements in some contexts while enhancing a regime in other cases.

An empirical analysis of economic growth in countries exposed to coastal risks: Implications for their ecosystems

Using a novel database on countries exposed to coastal risks (CR), this paper estimates an augmented neoclassical growth model that encompasses eight other new growth models. To account for uncertainty related to the number of models and choice of growth determinant proxies, we use a Bayesian averaging of classical estimates (BACE) approach. A preliminary examination of the data reveals that a country that faces coastal risks is likely to be a former British colony characterized by a common law legal framework, a parliamentary political system, a high degree of international trade openness, little language and ethnic fractionalization, a low level of public sector corruption, and a high rate of fertility. The BACE-based model selection procedure shows that, in CR countries, the growth determinant proxies typically used in the neoclassical, macroeconomic policy, natural resources, and institutions theories are significantly correlated with growth. These results suggest two implications related to these countries’ coastal ecosystems. First, because they are heavily dependent on natural resources and have high fertility rates, these countries might seek short-term economic gains at the expense of deterioration in their ecosystems. Second, these countries’ good institutions and low levels of ethnic division might be conducive to sustainable management of these ecosystems.

Enhancing forecast accuracy using combination methods for the hierarchical time series approach.

This study aims to investigate whether combining forecasts generated from different models can improve forecast accuracy rather than individual models using the hierarchical time series. Various approaches of hierarchical forecasting have been considered; a bottom-up, top-down, and an optimal combination approach. Autoregressive moving averages (ARIMA) and exponential smoothing (ETS) were used as forecasting models in creating forecasting for all levels in the hierarchy to show the effect of different forecasting methods for each hierarchical model. The results indicated that the Minimum Trace Sample estimator (MinT-Sample) and the bottom-up approaches with the ARIMA model have good predictive performance than other approaches. Moreover, the forecasts from the MinT-Sample and bottom-up approaches were combined using five different combining methods. The experimental results showed that the (AC) method is superior to all other combining methods and more accurate than other individual models at level zero (international total trade in Egypt) and level one (total exports, and total imports). So, combining forecasts generated from different models by hierarchical time series leads to more accurate forecasting of the value of imports and exports which will improve the overall international trade performance, and that is through using the forecasting values of imports and exports to plan for improving the trade balance and drawing up a more efficient production policy. Finally, the study recommends using hierarchical forecasting methods in the areas of international trade, and the Ministry of Commerce and Industry could adopt the results of this study to produce precise forecasts for international trade. Moreover, the results of this study are to be a guide for the researchers to apply these approaches in other fields to improve the performance of forecasting.

Latin America and the Caribbean’s Productivity: The Role of Pro-Market Policies, Institutions, Infrastructure, and Natural Resource Endowments

This paper examines the role played by pro-market policies, institutions, natural resources, and infrastructure on the total factor productivity (TFP) of twenty Latin American and Caribbean countries over the period 2000–2018. In estimating the TFP, we use the Färe-Primont index based on DEA. We have verified cointegration and estimated the long-run parameters by the grouped-mean FMOLS estimator. For measuring the impact of institutions, natural resources, and infrastructure, we have used the Productive Capacity Indexes of UNCTAD. We found a positive effect of all these variables on the TFP. Natural resources and energy play the most important role. Followed by information and communication technology and institutions quality. Transport infrastructure has played a minor role. The pro-market policies have been measured by the Fraser Institute indexes. We verified the positive impact of pro-market policies in the area of international trade and financial openness through six different variables. Finally, we considered three areas to measure the impact of domestic regulations and policies; credit, labor and business. We could verify a positive impact of credit and business pro-market policies, but we did not get statistically significant results from the labor regulations index.

Effect of Foreign Direct Investment and Trade Openness on the Poverty Alleviation in Burundi – Sub African Country: ARDL (Co-integration) Approach

International Trade and Foreign Direct Investment openness are crucial for economic growth and development. These are equally significant for developed and under-developed countries. The study’s major goal was to look at how foreign direct investment, inflation, GDP and trade openness affected the poverty alleviation in Sub-Saharan African Countries. A country where half of the population lives below the poverty. Annual data for the period 1990 to 2021 gathered from World Development Indicators database to investigate the long run & short run effects of the independent variables for the Sub-Saharan African countries by using Auto-regressive and Lag distributive (Co-integration) model. The findings revealed negative long run influence of foreign direct investment and GDP to poverty head count ratio. The shreds of Evidence also showed that FDI has not shown any distinctive effect on poverty in a shorter period. Moreover, GDP, trade openness and inflation are also effective in reducing poverty in short run. While inflation urges the investors to do more investment in production sector that reduces unemployment and poverty in the end. The study suggested the government officials, policymakers, and investors, to invest more in the poor countries. As FDI is crucial in creating jobs for the unemployed population that lead to the rise in income and living standard of the people. Moreover, the study suggested questioning some other factors causing poverty.

Revisiting the Environmental Kuznets Curve Hypothesis in the MENA Region: The Roles of International Tourist Arrivals, Energy Consumption and Trade Openness

This paper employed advanced panel methods to examine the effects of international tourist arrivals on CO2 emissions in the Middle East and North Africa (MENA) region over the period of 1995–2018. To analyze the predictive power of tourist arrivals for CO2 emissions, the panel Granger non-causality test was employed. Employing the common correlated effects mean group estimator showed that tourist arrival reduces CO2 emissions, while energy consumption and trade openness are the main contributors of CO2 emissions. Results also showed that although first-generation estimators confirmed the Environmental Kuznets Curve (EKC) hypothesis, according to the CCE-MG estimator, an inverted U-shaped association between economic progress and CO2 emissions does not exist. Furthermore, the null hypothesis of non-Granger causality from tourist arrivals to CO2 emissions was rejected. The findings suggest taking a more sustainable approach to tourism development and energy conservation in the long run.

COVID-19 KNOWLEDGE MANAGEMENT ON SMES SURVIVAL

The novel coronavirus (COVID-19) has adversely affected the global community and like most countries, Kenya has not been spared, Kenya’s international trade performance, its financial and commodity markets, and the entire macroeconomic environment have all been affected (Gui2de EA., 2019).SMEs have been vulnerable to the effects of the covid-19 pandemic as seen in the report by the International Trade Centre, (2020) it was uncovered that two-thirds of these SMEs have had their operations strongly impacted by the pandemic with two-thirds of all businesses claiming that same in Africa. Moreover, informal businesses are at a higher risk of closing down and are more susceptible to the effects of the pandemic due to their reduced ability to access financing. SMEs in Kenya have been facing unprecedented income losses and uncertainties about their future because of business disruptions due to the outbreak of COVID19. Most SMEs do not have financial reserves to meet expenses during emergencies. SMEs need Knowledge management support to access and adopt digital technologies as well as respond to the current pandemic situation and for long-term transformation (Diana, S. et al., 2020). To increase their understanding of consumer needs, the business environment, and the actions of their rivals, SMEs must engage in knowledge acquisition, which is the process of gathering information from a variety of sources (Koohang, et al., 2017). Knowledge management, a process of acquiring, converting, applying, and protecting knowledge assets, is crucial for value creation. The purpose of this paper is to integrate these Knowledge management processes (knowledge acquisition, knowledge conversion, knowledge application, and knowledge protection), into the SMEs to help them adapt and respond to the current pandemic. This paper seeks to discuss some knowledge management initiatives to help SMEs handle these critical issues of the COVID-19 pandemic that will help them to sustain livelihood in the pandemic and eventually encourage knowledge management initiatives such as avoiding misinformation, psych educational, and, developing competencies such as resilience, agility, and ambiguity tolerance in the SMEs that can work to tackle the pandemic crisis.

Does trade openness improve the quality of domestic institutions? Evidence from Africa

Research background: The research article deals with impacts of international trade openness on institutions in less developed economies, namely in Africa. Purpose of the article: It investigates the impacts of international trade openness on institutional quality in Africa measured by twelve various variables. Methods: It applies generalized methods of moments to a dynamic panel data of 34 African countries in the period of 1988?2012. Institutional quality data come from International Country Risk Guide, the rest from World Development Indicators and UNESCO databases. Findings & value added: Our results indicate that in the case of Africa, trade openness seems to be a positive and significant determinant of institutional quality, however, it differs across various institutional variables. Trade openness brings a positive impact on government stability, bureaucracy and law and order, we also identify its conflict-mitigating effects. This happens, unfortunately, with an exemption for natural resources exports. Trade openness also positively influences security and socioeconomic conditions, although we find the link much weaker. Regarding our control variables, we find two interesting results. First, GDP per capita has a strong and positive association with institutional quality when measured by one bundled indicator, however, individual variables show different intensities. Second, we find a strong and positive association of net foreign direct investment inflows and government stability. The added value of this research lies not only in focus on the less researched relationship, i.e., how trade impacts the institutional quality, but dominantly in focus on many institutional variables at once and comparison of their effects. Other empirical studies usually focus on selected variables only, or on selected trade items (natural resources).

International Success: A Qualitative Study on the Determinants of Moroccan SMEs’ Export Performance

International trade and global openness have been Morocco’s main objectives during the past decades. However, the abrupt changes of the world economy and the increasing competition are hindering firms’ internationalization and export success. The purpose of this research study is to explore the determinants of export performance in small and medium-sized Moroccan enterprises (SMEs).

Trade openness, global competitiveness, and catching up between the European Union countries

PurposeThis study aims to establish the position of the European Union (EU-28) countries in the dynamics of international trade openness linkages and the Global Competitiveness Index (GCI) in correlation with the gross domestic product (GDP) per capita, research and development (R&D) expenditures, innovation capability and information and communication technology (ICT) adoption.Design/methodology/approachIn the panel data set, comparative analyses were applied to scatter diagrams, correlation and regression analyses and structural equation models using Eurostat and World Economic Forum (WEF) data for the EU-28 countries in the period 2008–2019.FindingsThe empirical results did not confirm the hypotheses that a positive correlation exists between GCI and trade openness indicators and between GDP per capita and GCI. The ICT adoption and innovation capability increase GCI, which affects GDP per capita.Practical implicationsThe empirical results provide a better understanding of the importance of trade policies, particularly in terms of trade openness and trade shares of the EU-28 countries, as it could contribute to increasing the GCI of the EU-28 countries. Furthermore, the results of this study underline the importance of ICT adoption and innovation capability and the need for appropriate government policies that improve global competitiveness.Originality/valueThis study, through empirical analysis, demonstrates the existence of correlations between trade openness (exports as % of GDP, imports as % of GDP and export market shares as % of world trade), R&D expenditures, innovation capability, ICT adoption, GDP per capita and the GCI in the EU-28 countries. In addition, this study contributes managerial and policy-based implications on driving forces of global competitiveness.

CAUSALITY AMONG ENERGY PRICE, TRADE OPENNESS AND ECONOMIC GROWTH IN EMERGING COUNTRIES: A PANEL COINTEGRATION ANALYSIS

This paper investigates the possible existence of dynamic causality between energy price, trade openness and economic growth using data of thirty-six emerging economies over the period 1980 to 2014. Panel unit root tests, panel cointegration, fully modified least squares (FMOLS) methods and panel causality tests are used to investigate this relationship. The FMOLS estimation reveals that higher international reserve, trade openness and energy consumption increase economic growth, whereas higher energy price leads to lower GDP growth. The results also indicate that there is a short-run unidirectional panel causality running from energy price and economic growth. Moreover, there is a bidirectional panel causality operated from trade openness and the total energy consumption. The major policy implication based on the general result of the study is that emerging economy should take necessary steps in making energy management and trade openness policies on the basis of the causal relationship of the variables.