Reduction In Trade Costs Research Articles

Impact of Artificial Intelligence on Manufacturing Industry Global Value Chain Position

Using transnational panel data from 61 nations and regions from 2000 to 2019, this article empirically examines both the influence of artificial intelligence on the Global Value Chain as it pertains to the manufacturing industry and its mechanism of action. According to the report, AI significantly improves the industrial sector’s GVC position; this finding still holds after multiple robustness and endogeneity tests of the model. The findings of the heterogeneity test at the national level demonstrate that, in developing nations as opposed to developed countries, AI has a stronger impact on advancing the GVC position of the manufacturing industry. Heterogeneity tests at the industry level show that AI has a significant role in promoting the GVC of high, medium and low technology manufacturing industries. The mechanism test demonstrates three primary ways by which AI contributes to improving the GVC position of the manufacturing industry: by improving both production efficiency and technological innovation capacity, and by reducing trade costs. This study provides policy implications for the promotion of AI with respect to China’s manufacturing industry GVC position.

Challenges and countermeasures of international economy and trade under the background of big data

In the era of big data, international economy and trade are facing unprecedented challenges and opportunities. This paper analyzes the influence of big data on international economy and trade, discusses the related challenges, and puts forward the countermeasures. In terms of challenges, big data brings privacy and security risks, data standardization issues and the widening digital divide. In order to meet these challenges, the international community needs to strengthen data security regulations, formulate international data standards, promote digital inclusion, and improve the transparency of data governance. In addition, this paper also emphasizes the great potential of big data in international trade, including improving market access, reducing trade costs and optimizing supply chain.

The role of shipping and logistics MNCs in economic development: a case study of how Maersk contributed to Vietnam’s ascendence to an export oriented economy

This paper assesses the role shipping and logistics foreign direct investment (FDI) plays in developing country export performance, exemplified by the case of the large multinational corporation (MNC) Maersk’s investments in Vietnam. The paper aims to generate a deeper understanding of how the introduction of advanced shipping and logistics services by a foreign investor contributed to export growth. The paper is based on a longitudinal case study of Maersk in Vietnam employing more than 100 interviews from Maersk, Maersk’s clients, subcontractors, and industry experts conducted between 2003 and 2016, complemented and validated by primary commercial data from Maersk, and secondary industry- and market data. The paper finds that during that period, Maersk impacted Vietnam’s export performance through five mechanisms: 1. Building infrastructure; 2. Creating connectivity and market access; 3. Reducing transaction and logistics costs; 4. Bringing buyers and sellers together; and 5. Upgrading export capabilities. While transport and logistics MNCs’ role in building infrastructure and reducing trade costs is described in the literature, the paper provides novel insights into their role as intermediaries in trade that provide value chain access and transparency, reduce transaction costs for buyers and producers, and upgrade export capabilities. The paper suggests that Maersk’s contributions to Vietnam’s export growth from 2003 to 2016 in part can be attributed to its unique competitive advantages originating from its superior organization, technology, and capital intensity. The paper contributes to the literature by deepening it’s understanding of the mechanisms through which large shipping and logistics MNCs influence developing countries’ export-led industrialization; by proving novel insights into the role of Maersk in Vietnam’s development path; and by providing and validating an analytical framework for analyzing shipping and logistics MNCs’ role in export led development that may inspire future research,

Blockchain Technology and Corporate Governance: An Analysis of Board Structure, Shareholder Rights and Compensation Policies

The blockchain technology (BT)_offers a new means to trade and monitor the ownership of financial assets which is similar to the advent of double-entry bookkeeping centuries ago. This represents a significant development in financial record-keeping. Stock exchanges are investigating BT worldwide to enable businesses to list, to trade and to vote on shares. This adoption has the potential to benefit stockholders through reduced trading costs, faster ownership transfers, improved record accuracy and increased process transparency. This study examines the effect of BT on corporate governance. Using feasible generalised least squares analysis, our study analyses data from 297 European businesses included in the STOXX Europe 600 index between 2016 and 2021. The results show that the adoption of BT improves the quality of board decision-making and streamlines board activities. In addition, the study indicates that BT facilitates greater direct shareholder rights and encourages effective worldwide administration of director and board member compensation. The research contributes to the current body of literature by confirming the positive impact of implementing (BT) on enhancing corporate governance measures. This, in turn, assists managers in formulating appropriate strategies.

Structural gravity and the gains from trade under imperfect competition: Quantifying the effects of the European Single Market

The structural gravity model is the workhorse model in international trade to estimate the drivers of trade costs. We propose a new gravity estimation procedure that allows us to disentangle exogenous trade costs and endogenous aggregate markups under oligopoly. Our method can be easily implemented in standard gravity data sets, and we illustrate it by analyzing the competition and welfare effects of the European Single Market. We find that abolishing the European Single Market would increase domestic aggregate markups in EU member countries by 2 to 6 percent. Welfare effects of trade liberalization are larger due to changes in competition among domestic and foreign firms. Our findings highlight that evaluations of trade policy changes and trade cost reductions should also consider their effects on competition.

Effect of the Duration of Membership in the World Trade Organization on Trademark Applications

This article has examined the effect of the duration of membership in the World Trade Organization (WTO) on the submission of trademarks by countries’ residents. The analysis used an unbalanced sample of 124 countries (including developed and developing countries) and, primarily, the binominal regression approach supplemented by the generalized method of moments estimator, which was utilized for the robustness check. Results have shown that the effect of the duration of WTO membership on trademarks works through the channel of trade costs. This effect is positive for less developed economies and negative for relatively advanced economies. These findings reflect the fact that as countries spend more time as WTO members, they experience a higher submission of patents in relation to trademarks, especially if they enjoy an improvement in their real per capita income (and export complex products). Furthermore, countries that receive higher Aid for Trade flows (which help to reduce trade costs) experience yet a higher number of trademark applications, but to a lesser extent than patent filings.

How climate change and international trade will shape the future global soybean security pattern

Soybean planting is highly concentrated and sensitive to climate change, which makes global soybean security vulnerable to production fluctuations in the main producing countries. As an important trade commodity, the impacts of climate change on soybean production in the main producing countries can ripple globally through international trade. However, little is known about the spatial distribution of soybean security under future climate at the global scale. This study couples an ensemble of multi-crop models and a global economic model (GTAP, Global Trade Analysis Project) to evaluate variations in soybean yield of the top ten soybean-producing countries in the 2050s (2046–2055) and the consequent impacts on global soybean supply and price under a range of future climate scenarios. Our results show that (1) The top ten soybean-producing countries, accounting for nearly 97% of global soybean production, suffer an average soybean yield reduction of 0.82% (specific to each country: −5.81%∼7.05%), 0.43% (−23.5%∼11.72%) and 5.22% (−17.88%∼18.73%) under Representative Concentration Pathway (RCP) 2.6, RCP4.5 and RCP 8.5, respectively, when considering the fertilization effect of CO2. A substantial soybean yield loss of 19.51% (−28.86%∼2.97%) is projected under RCP8.5 without accounting for the CO2 fertilization effect. (2) Climate-induced yield reduction leads to insufficient soybean supply and higher price worldwide through the transmission of international trade, with the largest supply decline of 14.20% in Bolivia and the largest price increase of 91.19% in India. Regionally, soybean net-importing countries are more vulnerable because of the ripple effect of the soybean supply chain. For example, despite a simulated increase in soybean yield of 2.97%–18.73%, China's soybean supply will decline by 0.61%–2.27% due to import shortages from the United States and Brazil where severe soybean yield losses are witnessed. (3) Liberal trade does dampen the negative impact of climate change on global soybean supply and price by reducing trade costs and facilitating trade flows, but in soybean export-oriented regions, trade liberalization can result in increased exports at the expense of domestic soybean supply (e.g., Canada and Russia). Our findings highlight the necessity of developing a liberal trade policy that benefits all regions of the world and improving domestic soybean productivity to adapt to climate change.

Study on Trade Effects of Green Maritime Transport Efficiency: An Empirical Test for China Based on Trade Decision Model

As the natural environment continues to deteriorate, countries have begun to shift their emphasis to sustainable development, and the study of green shipping—as the main realization of international trade—is an important prerequisite for global sustainable trade. This paper measures the green maritime transport efficiency considering greenhouse gas emissions using the Super-slacks-based measurement (Super-SBM) method, then extrapolates the theoretical model of trade decision covering maritime transport efficiency and maritime transport distance based on the transcendental logarithmic utility function. A panel econometric model based on this theoretical model was constructed, and then the trade effects of green maritime transport efficiency and its transmission mechanism were studied empirically based on the data of 60 sample countries (regions) in five continents from the years 2010 to 2020. The study shows that green maritime transport efficiency significantly promotes China’s foreign trade through three channels: promoting technological progress, reducing trade costs and curbing environmental deterioration. Additionally, this effect tends to be stronger for countries that are IMO members and have higher incomes. This article’s research helps to provide new empirical evidence to explain the growth of international trade.

Impact of Digital Economy on Inter-Regional Trade: An Empirical Analysis in China

Unimpeded domestic inter-regional trade is an inevitable choice for a country to improve its economic development autonomy and internal stability. The booming development of the digital economy profoundly affects inter-regional trade exchanges and the construction of domestic trade patterns. Based on China’s inter-provincial panel data, this study analyzes the mechanism channels and regional heterogeneity of the digital economy’s impact on inter-regional trade. We found that firstly, the digital economy significantly promotes inter-regional trade outflows and inflows with positive spatial spillover effects. Secondly, the digital economy promotes inter-regional trade by reducing trade costs and stimulating market demand, while the role of the resource allocation effect and technological innovation effect needs to be enhanced. Thirdly, the promotion of inter-regional trade by the digital economy is more prominent and has the potential for less developed regions or non-border regions. In addition, the digital economy significantly boosts inter-regional trade in labor-intensive regions, while it has a limited effect on inter-regional trade in technology-intensive regions. Therefore, this study suggests increasing the construction of digital infrastructure in less developed regions, tapping the role of the digital economy in resource allocation, and promoting the in-depth integration of the digital economy with the region’s advantageous industries, so as to promote inter-regional trade and economic development.

Food trade and regional trade agreements – A network perspective

Since the establishment of the World Trade Organization (WTO) also the number of Regional Trade Agreements (RTAs) has risen strongly, from less than 50 in 1995 to more than 350 in 2022. Increasingly overlapping RTAs imply challenges and can raise trade costs associated with the management of multiple trade rules and regulatory standards. At the same time, countries that are connected through several RTAs could be strongly integrated and their regulatory approaches well-aligned, thus reducing trade costs among them. This paper looks at the parallels in the evolution of agricultural trade and RTAs and asks how the layering of RTAs is associated with agricultural trade among their signatories and with countries outside the RTAs. Based on network measures and correlations we identify common patterns in the evolution of RTAs globally and agricultural trade of a balanced panel of 190 countries in the years 1995, 2007, 2013 and 2019. We also provide first indication on the interaction of overlapping RTAs and agricultural trade. On global average, our findings hint at a positive association between RTA and agricultural trade connectivity and suggest that this relationship could be more pronounced at the extensive margin of trade and for countries that share several RTAs, possibly indicating a stronger political integration among these countries.

The market quality implications of speed in cross-platform trading: Evidence from Frankfurt-London microwave

Exploiting information transmission latency between stock exchanges in Frankfurt and London, and speed-inducing technological upgrades, we show that when cross-market latency arbitrage opportunities are linked to the arrival of information, high-frequency traders' (HFTs’) activities impair liquidity and enhance price discovery by facilitating the incorporation of public information into prices. Conversely, when cross-market latency arbitrage opportunities are driven by liquidity shocks, HFTs improve liquidity and reduce trading costs, thus incentivizing information acquisition and trading with private information. These findings underscore the complex nature of the association between trading speed and market quality and reconcile mixed evidence in the extant literature.

Estimating the economic impacts of the regional comprehensive economic partnership

This paper links the ENVISAGE computable general equilibrium model with a microsimulation to assess the economic effects of implementing the Regional Comprehensive Economic Partnership (RCEP). Reductions of tariffs and non-tariff measures, implementation of a rule of origin, together with productivity gains stemming from trade cost reductions strengthens regional trade among RCEP members. The analysis indicate that tariff liberalization alone brings little benefit, with real income gains of 0.21 percent relative to the baseline (without the RCEP) in 2035. With liberal rules of origin, the gains in real income could double to 0.49 percent. The biggest benefits accrue when the productivity gains are considered, increasing real income by 2.5 percent and trade among RCEP members by 12.3 percent in 2035 relative to the baseline. RCEP has the potential to lift 27 million additional people to middle-class status by 2035. These aggregate effects mask large variety of outcomes across countries.

The Influence of Trade Facilitation on Export Diversification in Tanzania

This paper examines the relationship between trade facilitation and export diversification in Tanzania. Specifically, it attempts to ascertain the role of infrastructure in facilitating export diversification. The study uses trade data for Tanzania’s export with its trading partners for the period from 2008 to 2017. The gravity model is used for data analysis. Findings reveal that the quality of airport infrastructures positively influences export diversification in Tanzania while other infrastructures had no influence on export diversification. The paper concludes that reliable infrastructure specifically airport infrastructures reduces trade costs, improves competitiveness, and increases export diversification in Tanzania and; thus recommends continual investment towards airport infrastructure development and maintenance.

Challenges of Informal Cross-Border Trade Facilitation in Tanzania: Lessons from Kigoma Border

ABSTRACT This study investigates the challenges of an informal cross-border trade (ICBT) facilitation initiative in Tanzania. Specifically, it identifies the regulatory framework governing cross-border trade (CBT), and investigates the challenges of facilitating ICBT. It is based on in-depth interviews with 51 officials from 10 trade-regulating agencies and 47 cross-border traders in Kigoma, Tanzania. The findings reveal that ICBT is largely attributed to the stringent regulatory requirements and high costs of trading via formal routes. Although different trade facilitation measures have been taken, several challenges of CBT facilitation were identified, namely: limited awareness of the existing initiatives; inadequate border facilities; lack of a mechanism to escalate traders’ challenges to the relevant agencies; limited resources; ineffective coordination; hesitation of traders to utilise trade facilitation initiatives; and informality of traders in the neighbouring countries. While we support the rational exit and dual economy views that traders operate informally to avoid the cost of formalisation, we show that trade facilitation measures adopted in the context of the World Trade Organisation (WTO) do not offer traders sufficient incentives to formalise. Accordingly, we suggest a trade regime consisting of simplified documentation and reduced trade costs to effectively accommodate ICBT in the international trading system.

The effects of trade liberalization on tax avoidance

AbstractDoes trade liberalization aggravate tax avoidance? We build a three‐country model of tax competition consisting of two nonhaven countries and one tax haven in which goods are traded between the nonhavens and firms may shift profits to the tax haven. When the nonhavens cooperate, the reduction in trade costs does not change the degree of tax avoidance. In contrast, when the nonhavens do not cooperate, the equilibrium tax rates become higher, resulting in more tax avoidance. Furthermore, trade liberalization strengthens the tax competition between nonhavens, which further increases the tax‐avoidance activities.

Do Digital Trade Rules Matter? Empirical Evidence from TAPED

This study aims to examine (1) the impact of digital trade rules on digital services exports, (2) the heterogeneity of this impact in different trade categories, (3) the impact of digital trade rules on the growth of services exports through reducing trade costs, and (4) whether this impact is different in national income levels. In order to test the hypotheses, this study uses panel data from the TAPED database encompassing 143 economies between 2005 and 2019, employing a differences-in-differences model as the analytical framework. Our empirical results yield several key findings. Firstly, digital trade rules have a significant role in promoting the export of digital services. Secondly, the impact of trade rules on different types of trade and national income levels is significantly different. Thirdly, the mechanism analysis results show that trade costs have an intermediary role, and digital trade rules can promote the export of digital services by reducing trade costs. Finally, compared to “high-income countries”, the establishment of digital trade rules brings greater benefits to the digital services trade of low- and middle-income countries. Digital trade has brought significant changes to globalization development. Few studies address the role of digital trade rules in regulating the development of digital trade, and some researchers suggest reconstructing the global trade rules to meet the growth of digital trade. Nevertheless, research on how digital trade rules affect digital services exports is still sparse. This study contributes to the literature by revealing the importance of digital trade rules and provides a reference to promote institutional openness in the field of digital trade.

Correlation Analysis of Stock Markets in the Belt and Road Regions

As a regional cooperation framework, the Belt and Road Initiative (BRI) aims to spur economic development by investing in infrastructure and improving connectivity between the countries in Asia, Europe, and Africa located along the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Many studies have documented that BRI-related investment projects reduce trade costs, increase trade and investment flows, bring benefits to trading parties, and improve connectivity between countries along the Belt and Road. Financial integration is a critical aspect of intangible connectivity that is fundamental to and benefits from increased trade and investment flows between countries. This study examines the pairwise correlations between 39 stock markets in the Belt and Road regions from 2008 to 2018, focusing on the correlations between China and the other markets. We find that the correlation between two markets in the same region is greater than those in different regions. China has a higher correlation with markets in Southeast Asia and North and Central Asia than in other regions. The correlations fluctuate over time, but their relative rankings among market pairs remain stable. In the first half of 2015, there was an unusually low correlation between China and all other markets, most likely due to China’s stock market bubble. Our systematic examination of stock market correlations in the Belt and Road regions sheds new light on the temporal and cross-sectional dynamics in these understudied financial markets. The findings suggest significant potential for financial integration in the Belt and Road regions.

Duration of the Membership in the GATT/WTO, Structural Economic Vulnerability and Trade Costs

This paper assesses the effects of the duration of membership in the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO) and structural economic vulnerability on trade costs in developing countries. The analysis is performed on an unbalanced panel dataset of 121 countries over the period 1996–2018 and primarily utilizes the two-step system generalized method of moments estimator. It has established several findings. We obtain that longstanding GATT/WTO members enjoy a larger reduction in trade costs than relatively new GATT/WTO members. Concomitantly, a higher degree of structural economic vulnerability leads to higher trade costs. Moreover, the membership duration exerts a higher trade costs reduction effect in countries that are highly “structurally” vulnerable, including those that face high levels of exposure to shocks and high magnitudes of shocks. Finally, longstanding GATT/WTO members that receive higher amounts of development aid (including total development aid flows, Aid for Trade flows, and NonAfT flows) enjoy a larger trade costs reduction than relatively new GATT/WTO members.

FROM INDUSTRIAL ECOSYSTEMS TO DIGITAL ECONOMY ECOSYSTEMS: NEW BUSINESS MODELS AND MODELS OF COMPETITION IN THE CONDITIONS OF DIGITALIZATION OF INTERNATIONAL TRADE IN GOODS AND SERVICES

Digitalization has become a new stage in the development of the world economy in terms of the development, implementation and dissemination of new technologies, and its impact on the development of international trade is decisive, if only because there is already an explosive growth in digital transactions and digital trade on a global scale. The key result of digital transformations for international trade is the creation of new markets, products and business models based on new digital technologies. In the context of digitalization, however, there is a certain difficulty in defining the increasingly blurred boundaries between goods and services. The main manifestations of the digital transformation of international trade are the large-scale development of e-commerce, the intensive development of foreign trade in information and communication services, and the development of digital e-commerce platforms. Digital technologies have transformed economic activity in domestic and international markets. Their widespread use affects all sectors of international trade, however, they have most affected trade in services, which has become at the center of the latest technological revolution. By creating new products, changing the characteristics of traditional products, and reducing trade costs, digital technologies have a serious impact on the determinants of competitive advantage, and these, in turn, on the structure of international trade. This raises the important question of which determinants of competitive advantage will be stronger in the digital age and whether new determinants are likely to emerge. Digitalization has become a new stage in the development of the world economy in terms of the development, implementation and dissemination of new technologies, and its impact on the development of international trade is decisive, if only because there is already an explosive growth in digital transactions and digital trade on a global scale. The key result of digital transformations for international trade is the creation of new markets, products and business models based on new digital technologies. In the context of digitalization, however, there is a certain difficulty in defining the increasingly blurred boundaries between goods and services. The main manifestations of the digital transformation of international trade are the large-scale development of e-commerce, the intensive development of foreign trade in information and communication services, and the development of digital e-commerce platforms. The purpose of the article is to study the characteristic features of digital business models and digital ecosystems, covering existing (realized) and potential (implicit, hidden) relationships that are formed and established through digital innovations, and to conceptualize the relationship between the business environment and the technological environment of organizations. involved in digital transformation Digital technologies have transformed economic activity in domestic and international markets. Their widespread use affects all sectors of international trade, however, they have most affected trade in services, which has become at the center of the latest technological revolution. By creating new products, changing the characteristics of traditional products, and reducing trade costs, digital technologies have a serious impact on the determinants of competitive advantage, and these, in turn, on the structure of international trade. This raises the important question of which determinants of competitive advantage will be stronger in the digital age and whether new determinants are likely to emerge. Although the ecosystem of platforms is usually identified with digital business ecosystems or software ecosystems, in the process of highlighting the specific characteristics of each of the considered ecosystems – the entrepreneurial ecosystem, the innovation ecosystem, the service ecosystem, the product ecosystem, we found out their common and distinctive features. It has been established that with the rapid development of digital technologies, the forms of economic activity are evolving, the volume of information being used is increasing, and new methods of its processing are emerging. The presence of the qualifying word “digital” in “digital ecosystems” opens the possibility to interpret “ecosystem” as an orientation model for the development of self-organizing software systems, software services, and applications that arise spontaneously from an artificial environment. Self-organization of digital ecosystems is expressed in the ability to independently change in the face of changes in internal elements and the external environment. However, a fundamental change in the external environment, expressed, for example, in a deep economic crisis, may adversely affect the ability of the digital ecosystem to self-organize. The scalability of digital ecosystems lies in the ability to function effectively with a growing amount of data in use and digital divisions. An increase in the number of ecosystem elements leads to an increase in the scale of the ecosystem.

EXİSTİNG PROBLEMS İN THE SPHERE OF DEVELOPMENT OF İNTERNATİONAL TRADE İN THE REPUBLİC OF AZERBAİJAN

EXİSTİNG PROBLEMS İN THE SPHERE OF DEVELOPMENT OF İNTERNATİONAL TRADE İN THE REPUBLİC OF AZERBAİJAN