Potential Trade Research Articles

Assessment of grid electricity systems using the life-cycle carbon-emission model

The previous study developed a life-cycle carbon emissions (LCCE) algorithm in MS Excel. Despite improvements, a comprehensive approach is needed to conduct life-cycle carbon emissions inventory (LCCEI) analysis using current methods. This study diverges from existing research by assessing LCCEI data of power generation and transmission systems on studied grids, considering component lifespans, recycling pollutants, and retirement rates. The life-cycle carbon emissions inventory analysis results improve understanding of power system environmental performance, aligning with stakeholders’ objectives. This study aims to enhance the environmental performance of electric power systems in Kenya, Rwanda, and Tanzania by evaluating the LCCE of power generation and transmission within their national grids. The selected grids are the right participants for the study, of non-renewable and renewable grid electricity generation mixes, due to their different environmental features, potential power trade, upcoming grid interconnection, and power transmission practices at various scales. The study applied a life cycle assessment method and simulated the learning patterns using RStudio. The data (emission factors and activity) has been collected from the reports (scientific and technical) and national utility actors. The presented results show that only Kenyan generation and transmission systems have a lifetime decarbonization performance relationship between renewable energy sources dominated power systems and non-renewable energy sources dominated power systems. A major challenge of this study has been the scarcity of primary data, leading to reliance on some secondary and external sources. Therefore, future research should consider the use of more internal and primary data sources, and the use of the most current data, including new technologies adopted from cradle-to-grave of the systems. This study’s findings inform better system designs, policies, and plans for improved environmental performance in electrical power systems.

Сравнительный потенциал торговли стран Северо-Восточной Азии

The purpose of the study is to assess the comparative trade potential of Northeast Asian countries based on the border effect estimation. In general, intraregional trade in North-East Asia (NEA) was less intensive than NEA trade with other countries. This indicates high trade barriers between NEA countries. It was determined that the reduction of trade barriers between China, Japan and the Republic of Korea can increase the total trade turnover of NEA. It was found that access to the Chinese market, as well as the inflow of Chinese direct investment in cooperation projects, can significantly increase the foreign trade of Russia and Mongolia. The estimates of the border effect for the DPRK indicated the close relations of its economy with the Chinese market, as well as North Korea’s foreign trade could significantly increase in the event of reduction high trade barriers with the Republic of Korea. The assessments indicated the existence of economic conditions for expanding trade in NEA, and China is a «connecting link» between the NEA countries. However, political conflicts between some NEA countries, as well as the political and economic influence of other countries, significantly complicate the implementation of the existing trade potential of the sub-global region

ТЕНДЕНЦИИ РАЗВИТИЯ ВНЕШНЕЭКОНОМИЧЕСКИХ СВЯЗЕЙ КИТАЙСКОЙ НАРОДНОЙ РЕСПУБЛИКИ В 2024 – 2030 ГГ.

The article analyzes trends in the development of foreign economic relations of the People’s Republic of China in 2024 – 2030. Analysis of trends in the distribution of Chinese exports and imports by countries and regions of the world suggests that the distribution of Chinese exports and imports by countries and regions of the world until 2030 will tend to increase the share of Asian countries. The share of North American and Western European countries in the distribution of Chinese exports and imports across countries and regions of the world will remain either unchanged or will decline. Russia’s share in the distribution of Chinese exports and imports by country will tend to increase until 2030. An analysis of the capabilities of the People’s Republic of China to realize the trade and investment potential of import substitution of products in the economy of the Russian Federation in the future until 2030 suggests that Russian imports from China may increase by 2025 to 80.82 billion dollars, and by 2030 to 85 08 billion dollars, which will ensure the realization of the trade potential of import substitution in the Russian economy by 84.79% and 89.26%, respectively. At the same time, direct investments by the PRC in the domestic national economy can increase the realization of the import substitution potential in the Russian economy to 89.25% and 98.85%, respectively. However, the share of high-tech products when China realizes its trade and investment potential for import substitution in the economy of the Russian Federation will remain low. At the same time, the level of scientific and technical development of basic production (technologies for execution, provision) of goods (work, services) imported from China and produced (performed, provided) as a result of direct investment from this country into the Russian economy, until 2030, will tend to increasing. China will thus largely be able to realize its trade and investment potential for import substitution of high-tech products in the domestic economy by 2030.

Menavigasi Daya Saing dan Determinan Ekspor Unggulan Indonesia di Kawasan Carribean Community (Caricom)

CARICOM is an area that has trade potential to be explored by Indonesia. However, for Indonesia, this region has various challenges to explore considering that the countries that are members of it are non-traditional countries. For this reason, this study aims to analyze the competitiveness, competitor countries and determinants of exports of Indonesia's superior products to the CARICOM region. The analysis methods used are market share, RCA, EPD, X-Model and panel data regression. The results showed that ten commodities identified as Indonesia's leading products in the CARICOM region faced lost opportunity market positions on average and CARICOM countries were included in the category as potential market developments. The United States, European Union, Brazil, China, South Korea, Japan, Dominica Republic, Colombia and Trinidad and Tobago and Singapore were identified as Indonesia's competitors in CARICOM. In terms of export determinants, real GDP and investment positive and significant effect on the export of Indonesia's superior products to CARICOM. Meanwhile, inflation and the real exchange rate together have a significant and negative effect in contrast to the economic distance which has a negative but insignificant effect on the volume of Indonesia's exports to the CARICOM region.

Nepal and China Trade Relations

Because landlocked countries can only access sea ports through neighbors, their economies are heavily influenced by them. A nation’s economy will grow slowly without strong trade. A country must have solid diplomatic relations with its neighbors in a globalizing globe. Many studies have examined commerce with India, but few with China. The Nepal-China commercial relationship is the topic of this study. From the 5th century to present, Nepal and China have cooperated. This relationship has grown. This report examines Nepal-China trade opportunities and difficulties. Trade connections and import-export trade between these countries are the focus of this study. The analysis covers 2007/08 to 2016/17 trade volumes between these countries. The trade imbalance expanded from 228 million to 1 billion between 2007/08 to 2016/17, highlighting the significant difference between countries. The findings show Nepal has significant trade potential in agriculture, hydroelectricity, and banking sectors, but its economy, infrastructure, and political instability provide hurdles. Nepal is paving the path to prosperity with new trade agreements and existing and proposed activities with China.

Pakistan’s Trade Insight in Terms of Gravity Model: An Empirical Evidence

This study is intended to analyze the determinants of the trade potential of Pakistan. For the said purpose, the study employed an augmented gravity model over the data of 12 trading partner countries of Pakistan for the period of 20 years from 2002 to 2022. The dependent variable is merchandise trade, while the independent variables consist of core variables i.e., GDP & bilateral distance, and explanatory variables like population, common border, and preferential trade agreement. Breusch-Pegan and Hausman's tests were used for model selection, which proposes that the Random effect model is appropriate for estimation. The results confirm that distance among trading states hurts trade between them. Although the GDP of Pakistan shows a positive effect on trade the relation is inconsequential. However, the impact of GDP on trading associates of Pakistan is positive and highly substantial. The population of trading allies of Pakistan is showing a significant positive impact on trade. Common border and preferential trade agreements between the trading partners have a significant negative influence on trade. The study concludes that for Pakistan, the larger the distance with its trading associate country the smaller the trade among them and Pakistan has greater trading potential with larger economies as compared to smaller ones.

Internationalisation of Australian small and medium-sized enterprises: The case of the Australia and EU Free Trade Agreement

Australia is a member of many multilateral trade bodies and engages in trade agreements of a multilateral and bilateral kind across most regions. In June 2018, it launched negotiations for a Free Trade Agreement (FTA) with the European Union (EU) which are still ongoing and since then Australia and the EU have conducted fifteen rounds of negotiations (last one on 28 May 2023 in Brussels). This paper aims to explore the business awareness of the EU amongst Australian small and medium-sized enterprises (SMEs) and to analyse the factors that influence their internationalisation. To ascertain this, we reviewed the results of two surveys[1] that were conducted pre- and post-COVID-19 pandemic (also coinciding with the Brexit transition period). This paper argues that SMEs in Australia are essentially unaware of the EU as a market and that no significant change in the business perception of the EU and potential international trade opportunities occurred between the pre- and post-COVID-19 political contexts.

Review Article] Impact of Cryptocurrency on Global Economy in the Twenty-First Century: A Comprehensive Review

Cryptocurrency has become a disruptive force in the twenty-first century's quickly changing world, completely changing how we view and interact with conventional financial institutions. This in-depth analysis intends to give insight on the underlying technology, economic ramifications, and legal difficulties that have formed this digital phenomena in order to examine the origins, development, and effect of cryptocurrencies over the past two decades. This article begins by exploring the history of cryptocurrencies, tracing its origins back to the mysterious Satoshi Nakamoto and the invention of Bitcoin in 2009. It analyses the underlying blockchain technology that underpins cryptocurrencies, giving readers a thorough understanding of its decentralised nature and the potential it has to revolutionise a number of industries outside of banking. The study also looks at the wide variety of cryptocurrencies that have appeared since the popularity of Bitcoin, including Litecoin, Ethereum, and Ripple, among countless others. It explores their distinctive characteristics, use cases, and market dynamics, stressing their potential for financial inclusion, international trade, and smart contract applications. The economic effects of cryptocurrencies are also examined in this paper, along with how they affect decentralised finance (DeFi), traditional banking systems, and financial innovation. It also looks at the difficulties presented by cryptocurrencies, including their volatility, scalability, and security issues, as well as the ongoing discussions surrounding their regulation and widespread use

Cryptocurrency price forecasting – A comparative analysis of ensemble learning and deep learning methods

Cryptocurrency price forecasting is attracting considerable interest due to its crucial decision support role in investment strategies. Large fluctuations in non-stationary cryptocurrency prices motivate the urgent need for accurate forecasting models. The lack of seasonal effects and the need to meet a number of unrealistic requirements make it difficult to make accurate forecasts using traditional statistical methods, leaving machine learning, particularly ensemble and deep learning, as the best technology in the area of cryptocurrency price forecasting. This is the first work to provide a comprehensive comparative analysis of ensemble learning and deep learning forecasting models, examining their relative performance on various cryptocurrencies (Bitcoin, Ethereum, Ripple, and Litecoin) and exploring their potential trading applications. The results of this study reveal that gated recurrent unit, simple recurrent neural network, and LightGBM methods outperform other machine learning methods, as well as the naive buy-and-hold and random walk strategies. This can effectively guide investors in the cryptocurrency markets.

ANALYSIS OF THE INFLUENCE OF INFLATION, EXPORT VALUE, IMPORT AND INVESTMENT ON INDONESIA'S ECONOMIC GROWTH AND PERCAPITA INCOME IN 2023: PANEL DATA REGRESSION APPROACH

This study analyzes the impact of inflation, trade, and investment on Indonesia's economic growth and purchasing power (1990-2022). Using panel data regression, we find: that inflation and exports have a positive impact on both GDP and purchasing power. Inflation boosts aggregate demand while exports increase income. Imports have a positive impact on purchasing power due to the increased availability of goods, but a negative on GDP due to potential trade imbalances. Domestic and foreign investment hurt both GDP and purchasing power. While investment boosts production, it can also intensify competition, leading to price reductions and dampened purchasing power.
 The findings of this study have implications for policymakers in Indonesia. Policymakers should focus on policies that can promote inflation, exports, and foreign direct investment. These policies can help to increase purchasing power and improve the standard of living of Indonesians

Internalizing match-dependent externalities

External effects can be triggered through trade and depend on the locations of buyers and sellers who are matched. Inspired by electricity markets, we experimentally investigate markets in which net trades between two locations induce social costs. Based on a modified double auction setting, we compare the performance of market platforms that are location-blind with those where information on the location of (potential) trading partners or the level of the externality is given. We demonstrate that locational information is sufficient to reduce the externality. Imposing the full external costs on individual trades leads to maximal price differentiation between locations and further reduces net trades, while welfare improvements are limited. Reasons for not achieving the typically high efficiency of double auctions are discussed.

Intra-Regional Trade Potential: An Analysis of the Ecowas Zone

The main objective of this paper is to evaluate and analyse the potential of intra-regional trade in the ECOWAS zone. Given the unavailability of data for some countries, only data from 10 countries could be collected over the period 2001-2019. The methodology we used is based essentially on the gravity model, a model whose use in international trade is widely justified with solid theoretical foundations. The method for calculating countries' trade potential is inspired by the work of Ghazi, T. and Msadfa, Y. (2016). The results obtained show that Nigeria and Côte d'Ivoire top the ranking, respectively 1st and 2nd, of countries whose trade potential is best exploited. In 2001, Ghana ranked 4th and Senegal 3rd, but in the years since, Ghana has improved its position and Senegal has regressed. Countries such as Mali, Burkina Faso and Niger saw their trade potential increase between 2001 and 2019. In contrast, countries such as Guinea and Benin regressed over this period. These results call on the authorities to encourage the relevant economic policies taken for countries that have seen an improvement in their trade potential. On the other hand, countries with slow or low levels of progress need to be supported by effective development programs to improve their position.

Digital Economy, China International Trade Potential, Industries of BRI countries: Evidence from Stochastic Frontier Gravity Model

The article investigates the impact of digital trade on China’s trade efficiency, trade potential, and the possible influence factors of China to BRI nations under stochastic frontier gravity methodology framework. In this article, it follows previous studies and employ stochastic frontier gravity model to explore possible influence of digital trade and trade barriers on China’s foreign trade potential at country-level. It evaluates the influence factor of China export potential to BRI countries via the aspect of digital commerce. Moreover, this article enriches the BRI literatures by employing stochastics frontier gravity model to examine the impact of digital trade on China trade potential and trade efficiency to BRI countries. The results of the study support the important role of BRI in facilitating digital trade among BRI countries and China. In addition to revealing the factors affecting digital trade (e.g., GDP and distance, bordering issue), the results highlight the importance of considering non-efficiency factors, in our case, the negative impact of digital trade restrictions on trade efficiency. The findings may provide some insight for policy makers (in China and BRI countries) into loosening the digital trade restrictions and improve trade efficacy along the BRI.

India’s Export Potential to Southern African Customs Union

The Southern African Customs Union (SACU) is a prominent economic association of the African continent. SACU comprises five southern African countries: South Africa, Botswana, Namibia, Lesotho, and Eswatini. The overall value of India’s trade with SACU increased from $1,477.52 million in 2001 to $1,0941.24 million in 2020, an almost sixfold increase. The export increased almost tenfold between 2001 and 2020, from US$ 343.49 million to US$ 3,760.94 million. In order to increase India’s trade with SACU, the Indian-SACU PTA negotiations are now ongoing. This article examines India’s export potential to SACU nations using the revealed comparative advantage index, the revealed import dependency index, and the Potential bilateral trade equation. The study shows India has trade potential with all SACU member states. Still, it has only utilised this potential with South Africa. India has not taken advantage of the vast potential of exporting its goods to SACU countries except South Africa. The trade intensity index indicates that India’s export and import intensities with SACU have increased over time.

Georgia’s foreign trade potential with the United States: A Gravity Model approach

Shortly after the restoration of Georgia's independence, the United States became an important strategic partner. On June 20, 2007, a trade and investment framework agreement was signed between the U.S. and Georgia. This agreement is to expand trade in goods and services between countries, as well as to improve the investment environment in Georgia. Although Georgia does not yet have a Free Trade Agreement with the United States, this research aimed to assess the trade potential between Georgia and the U.S. through a gravity model using panel data for the period 2000-2021. The bilateral trade gravity model was evaluated by EGLS, two-stage EGLS, and GMM techniques, which included the following variables: GDP, population, distance, and trade openness between Georgia and partner countries. In addition, dummy variables such as religion, common border, and trade agreement also play a role. The results of the study also revealed that Georgia's foreign trade potential with the United States is fragile.

Post COVID-19 International Economy Recovery: Forecasting Bilateral Trade Between U.S. and China

This paper aims to use an empirical analysis to study and forecast the bilateral trade between the United States of America and the Peoples Republic of China in the post-pandemic era. This study was conducted from three perspectives: aggregate demand (import), supply (export), and trading potentials. In sections of import and export analysis, the paper focuses on analyzing the aggregate behavior by households with Schmitt-Grohe, Uribe, Woodfords risk-averse demand model in an open economy and the firm production optimization model by Giovanni, Kalemli-zcan, Silva, and Yildirim. In the analysis of the bilateral trade potentials, a gravity model of trade with one least square regression was applied and subsidized with the test method from Liu. From the study, it was found that the bilateral import and export between the U.S. and China are facing challenges from stringent policies, fragmentation of global value chains, and the residual effects of the pandemic on consumption. Thereby, the trading potential between the U.S. and China is restrained to an intermediate level, which is not beneficial for the robust growth of bilateral trade in the future.

The Influence of Macroeconomic Factors on the Export of Cereal Crops in Foreign Trade Activities Individual Countries

Aims: The aim is to analyze the impact of macroeconomic factors on the dynamics of realizing the foreign trade potential of companies based on vector autoregression and the formation of strategic priorities for the companies’ economic activities. Methods: The research methodology is based on the application of methods of time series analysis and impulse response functions. The Granger causality test was used for the linear causal relationship between the analyzed indicators. The study used statistical data for the period 2001–2020 in the annual section of the World Bank Trade Map portal. Results: It is shown that the innovative development of the country contributes to an increase in non-raw material trade with countries geographically close to its borders. It was revealed that the level of agricultural development of the importing country influences the import of cereals with a lag effect of 3–4 years. Justified: The intensification of export-import operations contributes to the development of the production potential of countries as a whole, creating great potential for enhancing the economic activity of agricultural companies and creating incentives for the development of the economies of the country's regions. It has been determined that the foreign trade system is an equilibrium system that returns to a stable state 2-3 years after the shock impact of exogenous and endogenous factors. Novelty: The novelty of the study lies in the assessment of the dynamic impact of the shock impact of exogenous and endogenous factors on macroeconomic indicators, taking into account the specifics of the foreign trade turnover of countries. Conclusion: The results of the study can be used to develop a strategy for the development of foreign trade activities, including grain crops for both countries, to realize more reliable forecasting of foreign economic transactions with a lag of 3-5 years. Doi: 10.28991/HEF-2023-04-04-08 Full Text: PDF

Trade potential in European Union manufacturing

PurposeThis study deals with changes in European Union's (EU's) trade potential in Machinery (HS 84–85) and Transportation (HS86-89) products.Design/methodology/approachThe study uses a Structural Gravity model, Poisson Pseudo Maximum Likelihood (PPML) estimation together with panel data for the years 2002–2018 and a two-step procedure that employs predicted values of bilateral trade to compare potential to actual trade.FindingsResults for Machinery products suggest a potential to expand trade with existing Regional Trade Agreements (RTAs) in the American continent, and countries of the IGAD region in Africa. In Transportation, a high trade potential with RTAs is found in the Americas, Africa and the Middle East. Policy suggestions concentrate on opportunities for enhancing trade relations through trade liberalization and agreement proliferation.Originality/valueThere are no studies to date, that examine “collective” measure of EU trade potential, that treats the EU as a single country. Changes in existing opportunities to expand trade, common for EU members, are of special interest for policy formulation, especially after the recent turmoil presented by the Global Financial Crisis (GFC) and the Greek Economic Crisis (GEC). Treating the EU as a single entity, is necessary for the formulation of an effective, common, EU trade policy. This study concentrates on the manufacturing sector to examine existing opportunities for the EU to expand trade, after the GFC and the GEC. This article deals with Machinery (HS 84 and 85) and Transportation (HS 86 through 89) products as they comprise a significant part of total EU exports, reaching 41% of total exports in 2016. Finally, this study offers a unique illustration of results through trade potential heat maps.

Socioeconomic impacts of Russian invasion of Ukraine: A multiregional assessment for Europe

AbstractHistory shows that wars can be enormously disruptive of economic activity, especially international trade, national income, and global economic welfare. This article analyzes the impact on the European regions the Russian invasion of Ukraine using the largest and most updated multiregional input‐output model for Europe. Two shocks, trade and inflation, and four alternative scenarios are simulated. The scenarios are considered regarding the number of countries applying a trade embargo, the exemption of oil and gas, and the potential trade diversions with third countries such as China. We obtained a significant fall in GDP (−1.7%), 3.7 m lost jobs and 3% raise over the prewar inflation rate. For trade shock, large indirect effects are obtained, indicating the high relevance of the sectors and countries exposed to the war and the sanctions. The republics of the former Soviet Union, as well as the satellite countries of the former communism, face the harshest adverse impacts. This work shows the importance of breaking Russia's colonial economic ties to the countries in Eastern Europe.

Is the EUs Carbon Border Adjustment Mechanism Proposal in Accordance with WTO Regulations?

The European Unions proposed Carbon Border Adjustment Mechanism (CBAM) is a cornerstone initiative of the European Green Deal, designed to address both environmental and economic challenges. At its core, the CBAM seeks to tackle carbon leakage, which occurs when businesses transfer production to countries with laxer carbon regulations. This not only undermines domestic climate policies but also threatens fair competition in global markets. This paper breaks down the dual purposes of CBAM: levelling the economic playing field by adjusting the price of imports based on their carbon content and encouraging nations to adopt stronger climate policies. It critically examines CBAMs alignment with World Trade Organisation (WTO) standards to avoid potential trade conflicts, emphasising the balance between environmental aims and trade norms. Moreover, the paper assesses CBAMs compatibility with global climate goals. Conclusively, while highlighting the mechanisms legislative intricacies, the study proposes refinements ensuring its effectiveness and compliance with international trade rules. This analysis offers policymakers a clear framework for advancing environmentally conscious strategies without violating trade agreements.