Real Exports Research Articles

Foreign trade and nineteenth century American growth

The American economy exhibited an impressive growth in the nineteenth century. There certainly are numerous factors at play in this extraordinary growth story. This paper presents a quantitative analysis which investigates the role of foreign trade in the nineteenth century American growth. To this purpose, the relationship between real exports, real imports and real GDP is questioned between the years 1820 and 1910. Since the American Civil War was an extremely important event in the American history we divided the period under examination into two, 1820-1860 and 1867-1910 periods. By examining causal relationship, we aim at investigating the existence of export led growth, growth led exports, import led growth and growth led imports hypotheses during the periods before and after the Civil War. While the results exhibit a strong evidence for growth-led imports in both samples, export led growth, growth led exports and import led growth hypotheses are supported only in the second period.

New Panel Data Evidence on Sub-Saharan Trade Integration: Prospects for the COMESA-EAC-SADC Tripartite

In the year 2008 the member states of the three major trading blocs in southern and eastern Africa agreed on establishing a common free trade area (FTA). This so-called COMESAEAC-SADC Tripartite is supposed to be an important milestone towards Africa’s continental trade integration. This study analyzes the impact of regional integration among the Tripartite countries on their bilateral exports and evaluates the latest integration efforts. We estimate an extended gravity model on a panel data set using yearly observations from 1995 to 2010. Specifically, we apply two approaches to proxy limited market access and effectively applied tariff rates. Therefore, we combine Sub-Saharan- and country-average import and export tariff rates and indicator variables for the membership in regional FTAs to isolate distinct effects on real exports. We find a robust and significantly negative effect of tariff barriers with respect to the rest of the world. Interestingly, an FTA status does not show any export enhancing effect. From a methodological point of view, we detect a bias in our loglinear specifications when we compare the estimates with those we obtain from Poisson pseudo-maximum likelihood estimation.

The Influence of RMB Real Exchange Rate on the Technical Structure of Sino-US Export Trade Products

Based on the classification of HS (Harmonized Commodity Description and Coding System), and according to the method of Lall (2000) [1], Sino-US trade products are divided into five categories, namely primary products, resource-intensive products, low technology products, medium technical products and high-tech products. Based on the data from the first quarter of 2005 to the fourth quarter of 2017, the influence of bilateral real exchange rate on the structure of Sino-US export trade was studied by using VAR model in this paper. The empirical results show that there is a strong granger causality between Sino-US bilateral real exchange rate and Sino-US export trade product structure, the former being the latter’s granger reason; in the short term, the appreciation (devaluation) of the real exchange rate between China and the US is conducive (inconducive) to an improvement in the trade structure, which has long been detrimental (beneficial) to the improvement of the trade structure. In general, the appreciation of RMB is unfavorable to the improvement of the technical structure of Sino-US export trade. Variance decomposition shows that Sino-US bilateral real exchange rate has a great contribution to the technical structure of Sino-US export trade.

Drivers of Spain's Export Performance and the Role of the Labor Market Reforms

Spain's export performance strengthened after the global financial crisis, and exports now represent more than a third of GDP. This paper argues that several factors contributed to that achievement: external demand, supported by greater diversification of destination markets; enhanced export orientation of Spanish firms, partly as a response to lower domestic demand after the crisis; and competitiveness gains, reflecting in part changes in the labor market following structural reforms adopted in 2010 and 2012. Based on cross-country panel regressions linking real export growth to employment protection indicators, those labor market reforms are estimated to account for nearly one-tenth to above one-quarter of Spain's total export growth rate from 2010 to 2013.

Drivers of Spain's Export Performance and the Role of the Labor Market Reforms

Spain’s export performance strengthened after the global financial crisis, and exports now represent more than a third of GDP. This paper argues that several factors contributed to that achievement: external demand, supported by greater diversification of destination markets; enhanced export orientation of Spanish firms, partly as a response to lower domestic demand after the crisis; and competitiveness gains, reflecting in part changes in the labor market following structural reforms adopted in 2010 and 2012. Based on cross-country panel regressions linking real export growth to employment protection indicators, those labor market reforms are estimated to account for nearly one-tenth to above one-quarter of Spain’s total export growth rate from 2010 to 2013.

The effects of exchange rate volatility on exports: evidence from Armenia

ABSTRACTThe article examines how the volatility of exchange rate affected Armenia’s export to its main trading partner, Russia, in the period from January 2007 to February 2016. Along with real foreign income and competitiveness, the exchange rate volatility is considered as a determinant of real export. The estimation results indicate that the exchange rate volatility has negative significant effects on real export both in the long run and in the short run.

EXCHANGE RATE VOLATILITY AND EXPORTS OF MALAYSIAN MANUFACTURED GOODS TO CHINA: AN EMPIRICAL ANALYSIS

The impact of exchange rate volatility on international trade is an important issue in international economics. This study investigates the impact of exchange rate volatility on disaggregated bilateral exports of Malaysian manufactured goods to China. Exchange rate volatility is estimated by the threshold generalized autoregressive conditional heteroscedasticity (TGARCH) model, more specifically the TGARCH(1,1) model. The Johansen cointegration method and the dynamic ordinary least squares (DOLS) estimator are used in the estimation. There is some evidence of exchange rate volatility to have significant impact on real exports. Moreover, the impact of exchange rate volatility on real export can be negative or positive. The exports competitiveness of Malaysia should be improved. Exports shall be further diversified with more focused on intra-regional trade in Association of Southeast Asian Nations Economic Community (AEC).Keywords: Exchange Rate Volatility; Exports; Manufactured Goods; Malaysia; China.

The Change and Its Causes of China's Export Competitiveness within Global Production Networks: Analyses Based on Market Penetration Rate of Trade in Value Added

Under the background of China's deepening integration into global production networks, how to evaluate China's real export competitiveness and observe its evolution direction and routes needs to take the quality and quantity of trade into account comprehensively. This paper combines TiVA method with MPI measuring industry trade competitiveness to construct market penetration rate index of trade in value added (MPIVA) based on import market of final products, and then measures changes in China's export competitiveness and the causes within global production networks. It arrives at the results as follows:firstly, China's value-added export competitiveness within GPN has been increasing, but its speed has slowed down; China's value-added export competitiveness is rising in most industrial markets, among which manufacturing industry appears faster, while value-added export competitiveness in the service industry is also rising; secondly, both the increase in intra-industry value-added export and the transfer to industries with high-level value-added account for China's increase in value-added export competitiveness, however, the main cause lies in export intra-industry effect rather than inter-industry effect; thirdly, China's industrial export competitiveness in value added is not derived from the direct value-added effect of export industries themselves, but from indirect value-added effect of upstream industries, and China's manufacturing export is at the low end of the global value chain and there is much more space for growth. It provides useful implications and reference for the improvement of trade position of China's export industries in the global value chain and the optimization of trade structure of export industries.

Determinants of Government Debt Sustainability in Uganda for the Period 1960-2015

Unquestionably the impact of government debt sustainability, especially the external debt on economic growth in developing countries in particular can never ever over emphasized enough. The status of external debt in many of the developing countries has been an issue of concern among both bilateral and multilateral lending agencies like the IDA for the World Bank, ADF for the African Development bank and other emerging infrastructure financers like China and also among scholars and policy makers since the start of the early 1980’s debt crisis. The ability of the government to sustainably service its debt obligations will depend on how much it borrows in the first place, but most importantly the purpose of the loan, because it argued if funds are well invested then returns are high which ae then utilized in paying back debts. In this paper we examine this notion of debt sustainability considering real values on economies output such as real GDP, real exports and imports, total government revenue and how much government spends and finally the inflation rate. This is done by using data from world development indicators about Uganda’s economic performance since 1990 to 2015, linear imputation is adopted in years with missing observations for certain variables like inflation, total revenue and government expenditure. The results from the estimation show a one unit improvement in real GDP and total revenue and real export will significantly improve government debt sustainability status by 87.3, 46.8, and 2% respectively, while an increase in real imports, government expenditure and inflation will reduce government sustainability by 84.9, 66.0 and 06.0% respectively. A review of debt statistical figures showed that most highly indebted countries are not paying more 95% of debt obligations, this was clearly highlighted in BOU’s 2017 report of the economy. The policy message is that government should cut down on its wasteful spending and direct borrowed funds in infrastructure spending like hydropower projects, roads and investing in human capital which can enhance revenue collection to service debts. Government should also improve export status of the country concentrate in production of agricultural products in which it seems to have a comparative advantage.

THE EXCHANGE RATE VOLATILITY AND EXPORT PERFORMANCE: THE CASE OF INDONESIA'S EXPORTS TO JAPAN AND THE US

This paper investigates the long-run and short-run impacts of the exchange rate volatility onIndonesia’s real exports to its major trading partners; Japan and US. The study uses monthly data from January 1998 to October 2015 in order to capture the structural break period of the Global Financial Crisis 2008. In addition, commodity price is included as an explanatory variable. The index of exchange rate volatility is generated using moving sample standard deviation of the growth of the real exchange rate. This paper estimates the long-run cointegration using Autoregressive Distributed Lag (ARDL) bounds testing, while for the short-run dynamic this paper use error-correction-model (ECM). The findings suggest rupiah volatility against the Japanese yen reduces Indonesia’s export to Japan, both in the short and the long-run. Fluctuation of rupiah against the US dollar helps Indonesia’s export to the US in the short run, but the impact is not carried out to the long-run. On the other hand, the impact of commodity price shock is negligible, except for the long-run export to Japan.

On the Suitability of Alternative Competitiveness Indicators for Explaining Real Exports of Advanced Economies

We discuss the relative merits of various indicators of international price competitiveness from a conceptual point of view, and empirically check which indicator serves best to predict real exports in the long run. To this end, a panel cointegration analysis is conducted, augmented by a forecast exercise. In the latter, repeated sampling techniques are used in order to avoid arbitrary sample splits. In line with the theoretical reasoning, we find that broad price- and cost-based indicators are to be preferred to narrow price-based measures such as CPI- or PPI-deflated real exchange rates. Furthermore, the evidence points towards using world trade as external activity variable instead of GDP- or real imports-based measures.

Determinants of India’s Exports

The objective of this paper is to examine the key determinants of India’s exports. The estimated equations show that the two variables influencing India’s export demand are the real effective exchange rate and world exports. The time trend variable which was introduced to take care of the stationarity problem and India’s GDP which is a proxy for availability also are statistically significant. Equations were also estimated at a disaggregated level of commodity groups. The article also focuses on measuring the relative contribution of the variables. For this, a new methodology is proposed. World exports which emerges as the dominant variable is however exogenous to Indian policy makers. This leaves nominal exchange rate as the tool available to policy makers. In the market determination of exchange rate, besides current account deficit, capital flows also play an important part. There is need to moderate the impact of large capital inflows on exchange rate through appropriate intervention so long as we continue to have current account deficit. An appreciating currency will erode the competitiveness of exports. Truly speaking, the critical factor is not so much exchange rate as competitiveness. In this context, maintaining domestic price stability and improving the productivity, particularly of the traded goods sector are equally important.

Brexit and the Impact of Gradual Economic Integration on Export

I develop an index for economic integration accounting for its gradual and bilateral nature: the Gradual And Bilateral Integration (GABI) index. The graduality captures differences in the depth and path of five stages in economic integration and is an improvement over the use of binary dummy variables. Its bilateral nature allows for country-pair differences, which is not possible with the multilateral indexes in existing literature. I apply the GABI index to a gravity model for 18 OECD countries and estimate the impact of the five stages on export. The estimates for these five stages allow me to investigate four different Brexit scenarios in a general equilibrium analysis, ranging from soft to very hard Brexit. I find that in the latter scenario real export of the UK decreases by a significant 32% in the long run. Other EU countries also experience a decrease in real export, while non-EU countries experience an increase due to trade diversion effects. Similarly, I also investigate potential future free trade agreements like TTIP.

Impact of Regional Comprehensive Economic Partnership (RCEP) on Households’ Income and Factors’ Returns in Pakistan: A Global CGE Approach

As regional integration has proliferated in most parts of the world, so developing economies across the globe have made it a leading policy instrument to integrate their economies with the global markets and rest of the world through the instrument of trade liberalization. This has led to the establishment of various mega global integrations. Regional Comprehensive Economic Partnership (RCEP) is an example of these global integrations. Currently Pakistan is not part of RCEP, which is likely to be adversely affected due to the expected trade diversion. This paper investigates the possible adverse impact of RCEP on households’ income and real factors’ returns in Pakistan using the MyGTAP model in the global Computable General Equilibrium (CGE) model framework. The results of simulation intimate that the overall impact of RCEP on the economy of Pakistan (as outsider) is negative. There is an overall decrease in real income of all types of households and factors’ returns. Khyber Pakhtunkhwa and Baluchistan may reveal the largest decrease in households’ income. The possible decrease in income may be higher for urban households and non-farm rural households as compared to farmers and farm workers. Additionally, Pakistan is adversely impacted in terms decrease in real GDP, real exports, and imports and also decrease in most of the sectorial exports, sectorial imports and sectoral output. Keeping in view the research findings, this study suggests to the government to undertake remedial measures in advance to avoid the possible adverse impact of RCEP on the economy of Pakistan.

Real Exchange Rate Volatility and Sectoral Export Flows Under Intermediate and Flexible Exchange Rate Regimes: Empirical Evidence From Turkey

Real Exchange Rate Volatility and Sectoral Export Flows Under Intermediate and Flexible Exchange Rate Regimes: Empirical Evidence From Turkey

HUTANG LUAR NEGERI, PENANAMAN MODAL ASING (PMA), EKSPOR, DAN PERANANNYA TERHADAP PERTUMBUHAN EKONOMI INDONESIA TAHUN 1975 - 2000

The debate about the role of exports in the development of economic theory has emerged since the 1950s. In the macroeconomic theory, the relationships between export and economic growth and / or national income is an identity because export is a part of national income, but in development economics, heavily concern over matters wether export make prosperity (wealth) or suffering to a nation.Jung and Marshall (1985) examine four viewpoints characterize equally plausible hypothesis of relationships between export and economic growth: (1) export-led growth hypothesis, (2) internally generated export hypothesis, (3) export-reducing growth hypothesis and (4) growth-reducing export hypothesis. The empirical result using real national income and real export data over 1969-1997 suggests that error correction causality tests show bidirectional pattern, but according to the value of error correction term, adjustment coefficient reaction. Granger-causality test (1969) and final prediction error (FPE) show unidirectional causality from real national income to real export. Thus, over the period 1969-1997, Indonesia supported internally generated export hypothesis.

Real exchange rate and export performance in Argentina, 2002–2008

ABSTRACTBetween 2002 and 2008, Argentina experienced a phase of very high and sustained economic growth. During this period, macroeconomic policy aimed to preserve a stable and competitive real exchange rate (SCRER). There is controversy on whether the SCRER policy was a key factor fostering growth and, even more, on whether it helped promote the expansion of tradable activities and exports. We use a methodology to detect episodes of export surges among Argentina’s export industries and find that labor-intensive industries—especially low- and medium-technology manufactures—experienced the highest proportion of export surges within this period. We also find that between 1980 and 2015, the highest proportion of surges in total exports occurred during the 2003–8 period. The performance of export of services was also particularly dynamic during this period. This evidence suggests that the SCRER policy was instrumental for export surges in Argentina during 2002–8.

Monetary Transmission Channels In Bangladesh: Evidence From A Floating Exchange Rate Regime

The intention of this study is to examine the effectiveness of the monetary transmission channels in Bangladesh.A five-variable unrestricted Vector Auto Regression (VAR) technique is used to examine the relative effectiveness of monetary transmission channel using quarterly data for the sample period from 2004.M7 to 2016.M1. Bangladesh has initiated several policy reforms in monetary policy and exchange rates since 2002 to increase the transparency and efficacy of the monetary transmission channels. For example, there was a significant change in the policy level in Bangladesh at the end of May 2003, when Bangladesh entered into the flexible exchange rate regime.Repurchase Agreement (Repo) and Reverse Repo were introduced in July 2002 & April 2003, respectively for banks and financial institutions as an indirect monetary policy tool for day-to-day liquidity management in response to temporary and unexpected disturbances in the supply of and demand for money. Various government treasury bills have been used to conduct an open market operation to alter money to its desired level. In this backdrop, to assess the policy effectiveness on goal variables, several monetary transmission channels have been analyzed e.g., the interest rate or money channel, bank lending or credit, and the exchange rate channel.The Impulse Response Functions (IRFs) and Variance Decompositions (VDCs) derived from VAR show that money supply and the policy rates both have significant impact on output and the price level in Bangladesh implying that monetary transmission channels are effective in influencing macroeconomic variables particularly output and inflation. The VDCs and IRFs derived from from VAR show that an increase in money supply tends to increase GDP growth, decreasesthe lending rate and increases private sector credit. On the other hand, an increase in the policy rate decreases inflation and also decreases GDP growth. Transmission channel through the real exchange rate increase exports, which in turn increase output. Therefore, the polciy implications of this study is monetary authority can use money suppy and the policy rate to increase output and control inflation in Bangladesh.

International Trade Finance and Exports: Evidence from Korean Bank-Intermediated Trade Finance Instruments

This paper investigates the effects of trade finance shocks on real exports by using novel data on two bank-intermediated instruments of trade finance in Korea: foreign trade loans extended by commercial banks and documentary bills purchased by them. Using a vector autoregression (VAR) model, the results show that a negative shock to both instruments adversely affects exports, particularly the exports of small and medium-sized enterprises (SMEs). The trade financing condition explains as much as 10–14 % of the variation in exports, which is comparable to the estimates in previous studies. Noteworthy is that the effects of trade finance on SME exports vary upon whether it is pre- or post-shipment financing.

Economy-wide Impact of Investment in Road Infrastructure in Ethiopia: A Recursive Dynamic CGE Approach

In this study an attempt has been made to examine economy wide impact of investment in road infrastructure using a recursive dynamic CGE model. The study used an updated version of the 2005/06 EDRI Social Accounting Matrix. Simulations with the CGE model confirm that with the increasing availability of road infrastructure, there is a positive growth on the macroeconomic and sectorial indicators (Real GDP, absorption, investment, private consumption, real export, and real import) though the magnitude of the effects is relatively small compared with the high investment costs and the changes vary among the different indicators. Similarly, the demand for labor, capital, land and livestock increases with increasing availability of road infrastructure. Income from livestock and land responds better compared to labor and capital as road investment increases. Welfare, measured as equivalent variation, increases on average and at the disaggregate level for all households. The rural poor benefited more from road investment in terms of earning better income and consumption. Road infrastructure affects the production sectors differently. Industrial sectors benefit, while agricultural sectors are relatively less favored. Keywords : Road, infrastructure, CGE, Ethiopia