Trade Balance Research Articles

Building bridges: impact of regional cooperation and the belt and road initiative integration on Afghanistan’s trade balance

The main purpose of the study is to shed light on how the Belt and Road Initiative, Foreign Direct Investment, and Regional Cooperation affect Afghanistan's Trade Balance. In research, we used a mixed-methods approach to thoroughly investigate the relationships among distinct variables. The exploratory factor analysis (EFA) and reliability analysis were carried out using SPSS and AMOS was utilized in the research to validate the data and establish a measurement model, for confirmatory factor analysis (CFA). The study found that integration with BRI has a significant impact on Afghanistan’s trade balance (M = 3.925, SD = 1.048), with effective regional cooperation Afghanistan can enhance trade, ease barriers, and promote cooperation with neighboring countries (M = 4.017, SD = 1.095). Trade Balance (M = 3.938, SD = 1.112), Also, the importance of attracting FDI is to boost exports and reduce dependence on imports and it is necessary to implement policies for sustainable development (M = 3.983, SD = 1.096). To promote trade, and cooperation and ensure prosperity in the region, the governments can utilize strategic cooperation and create investment opportunities. In conclusion, the study found the importance of cooperation, strategies, and attracting FDI to address both trade facilitation and promote investment for a positive impact on trade balance and influence development.

An Analysis of the Patterns of Economic Growth in the US

ABSTRACT This article seeks to investigate which demand component led and shaped the growth patterns of the US economy between 1954 and 2020 and comprehensive sub-periods relying on a proper allocation of imports. In doing so, it aims to establish whether the external sector can make a positive contribution to growth even in a context of negative net exports. Finally, it seeks to shed light on the reasons for higher or lower output growth, drawing particular attention to the engines of growth in each historical period. This article takes a novel approach in two ways: (1) it calculates and analyzes the decomposition of the contributions to growth for the US; (2) it divides the analysis into sub-periods and engines of growth, separately analyzing movements in the components of the multiplier, the dynamics of each component’s share with respect to GDP, and their respective growth rates. The empirical results show that the very low growth rates experienced between 2008 and 2020 are mainly explained by a minimal contribution of the government sector accompanied by weak demand from the private sector, highlighting the importance of growth-oriented public policies. These negative results have been only partially compensated by improvements in the external sector.

The decomposition of carbon productivity under the context of international trade

Noting the rising importance of international trade in global warming, this study proposes a new decomposition of carbon productivity by dividing it into the part of true carbon productivity (consumption-based labor productivity and population-sustaining power of CO2) and the part with zero-sum nature (labor exploitation, carbon emission exploitation and trade surplus). By analyzing 66 countries/regions and the rest of the world in 2018, we find that by excluding the exploitation part, the differences in carbon productivity among countries – particularly between developed and developing countries – narrow. Analysis for selected economies (EU15, EU13, the United States, Japan, China and India) from 1995 to 2018 reveals that international exploitation of labor and carbon emissions has deepened from 1995 to 2006, and weakened from 2006 to 2018, but the structure of exploitation has been maintained through the entire period; the consumption-based labor productivity and population-sustaining power of CO2 effects are the principal driving factors of change in carbon productivity. The growth in true carbon productivity increased in the last half of the period, but the improvement is still quite modest.

Demand for electric cars and oil prices: A wavelet approach

ABSTRACT The paper explores the worldwide co-movement between the demand for electric cars and oil prices from January 3rd, 2020, to March 6th, 2023, utilizing wavelet methodology. The main finding shows a strong link between electric car demand and oil prices when oil prices are highly volatile in the short term. When oil prices suddenly drop, people’s preference for electric cars decreases in the very short term. However, in the short term, the demand for electric cars is influenced by how much oil prices change and the anticipation of future trends, causing a shift between traditional and electric cars. These results hold true even when considering factors like geopolitical risks, pandemics, the health of the car industry, and the cost of metals used in car batteries. The findings have crucial implications in the socio-economic environment, being very useful to both policy-makers and car market actors. In this light, on the one hand, the outputs can offer support in shaping policies able to reduce fossil fuel dependency and address climate change. On the other hand, this insight aids in correcting the market dynamics across automotive and energy sectors under oil price volatility. Furthermore, these dynamics can affect economic indicators like inflation, trade balances, unemployment, and GDP growth. Not least, transitioning to electric cars can mitigate emissions reduction, improve air quality, diversify energy sources, and enhance energy security.

Harberger-Laursen-Metzler Hypothesis: An Analysis with ARDL Bounds Test Approach

The Harberger, Laursen, and Metzler (HLM) hypothesis posits that a positive (negative) change in terms of trade, ceteris paribus, will lead to positive (negative) movements in the trade balance. When tested on developing countries, the hypothesis yields varying results. Some studies validate the hypothesis, while others suggest it is not applicable. Additionally, causality tests examining long-term relationships also produce different outcomes. Türkiye ranks among the countries with significant trade deficit issues. Therefore, testing the validity of the HLM hypothesis in the context of Türkiye is of great importance. The motivation of this study is to examine the impact of changes in terms of trade on the long-term trade balance in Türkiye from 2013 to 2023. In this context, both the volume and unit value of the terms of trade are considered. According to the findings, there is a positive relationship from terms of trade to the trade balance. Short-term deviations are found to be corrected within approximately three months. The causality test indicates that terms of trade are a Granger cause of the trade balance, and this causality is unidirectional. In this study, Türkiye's terms of trade and trade balance data for the specified periods were meticulously analyzed, and the validity of the HLM hypothesis was carefully tested. The analysis results provide strong evidence supporting the HLM hypothesis. These findings offer significant insights for Türkiye's economy and trade policies.

The Impact of Saudi Arabia’s Accession to the Brics Bloc on the Performance of Saudi Exports

Abstract This study aims to analyze the expected impacts of Saudi Arabia’s accession to the BRICS bloc, which is intergovernmental organization comprising Brazil, Russia, India, China, and South Africa. By analyzing the intra-trade flows of Saudi Arabia with the BRICS countries from the implementation of the bloc until 2023 and measuring the impact of Saudi exports and imports with BRICS on the balance of merchandise trade, and to discuss the extent of the impact of the net intra-trade situation of Saudi Arabia with BRICS on the balance of merchandise trade. The most prominent Saudi export sectors were diagnosed, and their corresponding customs tariff averages in the BRICS countries were analyzed to determine the expected effects of implementing a regional trade agreement (RTA) between the BRICS bloc. The study is based on the ARDL model and Saudi data from (2003-2022), using three models by applying on exports, imports, and trade balance of Saudi Arabia, the findings suggests that there is no significant relationship between Saudi Arabia’s trade balance on the one hand, and exports, imports and the trade balance with BRICS on the other hand, which reduces the impact of Saudi Arabia’s accession to BRICS on Saudi exports. which requires further negotiation of mutual obligations and potential gains between the member states of BRICS.

Archetypes of aquaculture development across 150 countries

In this study we compile and integrate data on 42 indicators to examine the social, economic, governance and environmental conditions shaping aquaculture development across 150 countries, including the top 100 aquaculture producing countries. We apply cluster analysis to identify social-ecological archetypes of aquaculture development across these indicators. We also calculate the percentage of global aquaculture production within the quartile ranges of 15 indicators of singular relevance for development. This shows how much aquaculture production is taking place in countries performing low or high on key indices. For example, we show that 85% of global aquaculture production is taking place in countries with the highest or high climate risk, 74% in countries with the lowest or low environmental performance scores, and 90% in countries with the highest or high food supply variability. Our cluster analysis identifies four distinct archetypes driven by the 42 country-level indicators, which includes: climate risk, inland water area, coastal population, seafood consumption, trade balance, governance indices and environmental performance. We characterize the four archetypes as: Archetype 1 - Emerging aquaculture producers, Archetype 2 - Limited aquatic food engagement, Archetype 3 - Developing economy aquaculture producers, Archetype 4 - Wealthy economy aquaculture producers. We discuss this complexity of factors driving each archetype with country specific examples, as well as the utility of integrated social-ecological analysis for both continued aquaculture research and development practice.

THE DYNAMICS OF EXCHANGE RATES, INFLATION, AND TRADE BALANCE IN A SMALL OPEN ECONOMY (CASE STUDY OF SIERRA LEONE)

Sierra Leone experiences a persistent trade deficit problem. Currently, there is a vacuum in the literature employing recent data and suitable approaches to address the issue of non-stationarity and dynamic interaction between macroeconomic variables in influencing the trade deficit in Sierra Leone. This study examines the relationship between Sierra Leone's trade balance, inflation, and exchange rate using quarterly data from 2005 Q1 to 2023 Q3. The focus is on understanding how the exchange rate and inflation impact Sierra Leone's trade balance in both the short and long term. To achieve this, the study utilizes the VAR/VECM model to depict the dynamic interaction between the trade balance, exchange rate, and inflation. It also employs Granger Causality analysis to determine the most appropriate ordering among the macroeconomic variables in the model and Impulse Response Function (IRF) analysis to test the hypotheses regarding the trade balance response to exchange rate shocks and inflation. The empirical results confirm the existence of cointegration, indicating a long-term balance between the trade balance, exchange rate, inflation, and other macroeconomic variables such as GDP growth and interest rate differentials. Moreover, the dynamic prediction analysis using the IRF method supports the J-curve hypothesis in Sierra Leone and suggests that inflation can reduce the performance of the trade balance. These findings highlight the need for Sierra Leone to implement a comprehensive strategy to adjust the exchange rate and curb inflation to improve the trade balance and enhance external economic stability.

Does the S-curve demonstrate an asymmetrical response to fluctuations in exchange rates?

PurposeThis study aims to examine the asymmetric S-curve between the trade balances of Pakistan and China at the commodity level using disaggregated data.Design/methodology/approachThis study focuses on Pakistan and China bilateral trade based on commodity-level data. This study delves into the S-curve phenomena by examining time series data from 1980 to 2023 across 32 three-digit industries/commodities.FindingsThe findings show significant evidence in favor of the “asymmetric S-curve” in 27 out of the 32 industries studied. This study confirms that the devaluation of home currency is not a viable solution always to improve trade balance.Research limitations/implicationsThis study considers 32 three-digit industries limiting the generalizability of findings. Due to data unavailability, the authors fail to consider other industries. In the absence of quarterly data on industry-level trade between Pakistan and China, annual data from 1980 to 2023 were used in generating the cross-correlation functions. Previous literature frequently resorted to the general consumer price index with its inherent aggregation issues, whereas this study has opted for commodity price indices to overcome the shortcomings in the estimation of S-curves at the commodity level.Practical implicationsThe findings have practical relevance in guiding policy decisions regarding commodity trade, whereas the industry-wise analysis enriches the understanding of the short-term effects of currency depreciation on trade balance dynamics.Originality/valueThe S-curve hypothesis predicts a negative cross-correlation between a country's current exchange rate and its past trade balance and a positive cross-correlation between the current exchange rate and its future trade balance. Previous empirical S-curve studies had the limitation of assuming symmetry in cross-correlation with both current and future trade balance values.

PRODUCTS MAPPING: THE CASE OF ARMENIA

From the point of view of the export promotion strategy, it is crucial to choose industries in which a given country has comparative advantages and the development of which can lead to export-led economic growth. In this article, the indices of Revealed Symmetrical Comparative Advantage (RSCA), Normalized Revealed Symmetric Comparative Advantage (NRCA), and the Trade Balance (TBI) were calculated based on the export data of about 100 commodity groups (chapters at 2-digit level) of Harmonized System (HS) to carry out the Products Mapping for the period 2018-2022. The market concentration index of exports and the product concentration index of exports were also calculated as well. The results show that Armenia had comparative advantages in producing some product groups, and in some, government support is required to increase the competitiveness thereof. We conclude that the majority of products that Armenia has a comparative advantage in producing thereof were mostly exported to Russia. We believe that it is necessary to diversify merchandise exports since the concentration index of export markets in 2022 was 0.427 (normalized Herfindahl-Hirschman index), and exports of products should be channeled more to middle- and upper-middle-income countries. This, in turn, would contribute to the transformation of the structure of the Armenian economy.

THE EFFECTS ON U.S. IMPORTATION: RISE OF CRYPTOCURRENCY AND TRADITIONAL CURRENCIES

Objective: This paper aims to investigate both short and long run interactions between the U.S. Imports, Bitcoin, Gold, and U.S. Dollar by applying monthly data from January of 2011 to December of 2023. Theoretical Framework: The United States has been experiencing trade deficit for the past several years. Hence, prices of cryptocurrency and traditional currencies are also increasing that may serve a connection with the increasing trade deficit. Method: This study utilized Unit Root, Auto-Regressive Distributed Lag (ARDL), and Granger Causality to examine the relationship between all the variables. Results and Discussion: The results of this study revealed that the U.S. Dollar has a positive relationship with the increasing U.S. Imports in the short run while the rest of the variables are insignificant. Notably, Bitcoin revealed a positive significant relationship with U.S. Imports in the long run while the rest of the variables remained insignificant. Research Implications: This study has implied that the rise cryptocurrency mainly Bitcoin and traditional currencies specifically the U.S. Dollar and Gold has an implication with the current trade deficit being faced in the United States. Originality/Value: This study unraveled the implications of cryptocurrency and traditional currencies to a macroeconomic variable, specifically imports. Furthermore, this study wishes to contribute within the field of cryptocurrency as it can change the system of financial technology and its relationship with traditional currencies implying a greater impact for the global economy, as it is showing great potential for the future of finance with its global adoption.

The Innovative Model of Blockchain Technology and Its Application in Promoting International Fair Trade: Design and Analysis of the IFTBOM Blockchain Framework Model

In this Research, researchers proposed a new framework model for applying blockchain technology, aiming to solve multiple challenges in international fair trade. Through a detailed analysis of the existing trade imbalance and market access restrictions, the paper expounds how blockchain technology can improve the transparency and fairness of trade through its core functions.Globalization and technological progress have promoted the rapid development of international trade, but also brought many challenges. The fair-trade movement tried to provide more fair-trading conditions for small-scale producers in developing countries, but the market acceptance was not high, and consumers' cognition was limited. The purpose of this study is to explore how blockchain technology can promote fair trade practices, especially through real-time monitoring and verification of the fairness of trade activities, and how to deal with uncertainties and data changes in fair trade. The design and implementation of IFTBOM model is expected to significantly improve the global fair-trade environment, especially for small-scale producers in developing countries, and help significantly improve their economic and social conditions. By implementing these policies and practices, we can expect to achieve a fairer and more transparent trade environment in the global context.

ANALYSIS OF SIMILARITIES AND DIFFERENCES IN BEEKEEPING BETWEEN TÜRKİYE AND EUROPEAN UNION COUNTRIES

This study aims to determine the similarities and differences between Türkiye and European Union countries in terms of beekeeping and classify similar countries. The main materials of the study consist of the number of beekeepers, the amount of honey produced, and the trade balance values of European Union countries and Türkiye. In this study, multidimensional scaling analysis and cluster analysis were conducted to reveal the similarities and differences between Türkiye and European Union countries regarding beekeeping. The analysis results indicate that Spain and Romania are the most similar countries and Türkiye and Germany significantly differ from other European Union countries regarding beekeeping. Specifically, Türkiye was differentiated from other countries by its high honey production amount. The key characteristics that differentiated Germany from other countries were the number of beekeepers and a high trade deficit. In order to compete effectively with European Union countries in beekeeping, Türkiye should prioritize policies that encourage the export of honey in small, branded packaging.

India's growing trade in high-value crops with South Asian countries: Prospects of crop diversification

Despite having no comparative advantage in fruits and vegetables export in the world market, India exhibits a comparative advantage over most South-Asian countries, with the exceptions of Afghanistan and Bhutan. Trade balance index (TBI) showed that vegetables like tomatoes (HS Code 0702), cucumbers and gherkins (HS Code 0707), leguminous vegetables (HS Code 0708) and fruits like bananas (HS Code 0803), citrus (HS Code 0805) and fruits and nuts, provisionally preserved (HS Code 0812), emerged as India's major export vegetables and fruits for the study period. As trade liberalisation and market access for agricultural products expands between countries, there will be a greater need for the country to focus on diversifying its agriculture, particularly by emphasizing the cultivation of fruits and vegetables. Keywords: Comparative advantage, export competitiveness, fruits, vegetables. JEL Codes: F13, F18, Q02, Q17.

Implementation of anti-dumping duties on iron and steel products: Effects on the Indonesian economy

This research aims to empirically study the impact of Indonesia's anti-dumping measures on the performance of related imported products in 2011. Using the GTAP-E model, the region is divided into 9 regions and the industrial sector is grouped into 2 industries. Empirical results indicate that the imposition of a 20% Anti-Dumping Duty (BMAD) is ineffective in restricting trade from targeted countries. The GDP of non-targeted countries increased, but international trade balances correlated negatively with each BMAD imposition. Additionally, domestic prices in Indonesia appear to be high due to the implementation of BMAD, which has resulted in increased prices of iron and steel in the domestic market.

Research on the Dynamic Interrelationship between Economic Policy Uncertainty and Stock Market Returns

This paper employs the Panel Vector Autoregression (PVAR) method to examine the dynamic interrelationship between Economic Policy Uncertainty (EPU) and stock market returns. The existing literature has not reached a consensus on the relationship between EPU and stock market returns, and there is a lack of comparative analysis of domestic and foreign EPU. Therefore, this paper is the first to incorporate domestic and foreign EPU, stock market returns, and output into a unified framework, considering the dual impact of domestic and foreign EPU shocks. Additionally, the generalizability of the results is ensured by including a large sample of nine emerging and eleven advanced economies. The main findings are as follows: First, a positive shock to foreign EPU leads to a decline in stock market returns and is stronger than the impact of domestic EPU. Second, a positive shock to stock market returns reduces both domestic and foreign EPU. Third, a rise in stock market returns promotes domestic output growth, while increases in domestic and foreign EPU suppress domestic output growth. Finally, the United States is a net exporter of EPU rather than a net importer.

The Monetary and Fiscal Policies on International Trade in Indonesia

This study is to analyze how monetary and fiscal policies contribute to trade performance in Indonesia. The specific target of this study is to analyze the contribution and influence of variables such as exchange rate, inflation, trade balance, government expenditure, Tax, and investment in the short, medium and long term in Indonesia. So that it can show how much the contribution and influence of monetary and fiscal variables on trade performance in Indonesia. The results of this study explain that the largest contribution to the trade balance is the government expenditure and investment in the previous period, the largest contribution to inflation is the government expenditure and investment in the previous period, the largest contribution to government expenditure is the exchange rate and government expenditure itself in the previous period, the largest contribution to investment is government expenditure and investment itself in the previous period, the largest contribution to the exchange rate is the exchange rate itself and investment in the previous period, the largest contribution to Tax is government expenditure and exchange rate in the previous period.

Pegged exchange rate regime and its impact on inflation in BRICS nations: Country-wise evidence

During the 1990s and 2000s, many developing nations accepted fixed exchange rate regimes to sustain price stability. By pegging their currencies to an anchor currency (i.e. US dollar), developing countries could bring credibility and confidence into their economies. The study tries to analyse the impact of the pegged exchange rate regime on inflation in BRICS countries for the period spanning from 2003 to 2022. The result points to the loss of monetary policy autonomy due to the ‘impossible trinity’ coming into play with a steady increase in capital inflows. The country’s large trade surpluses and extensive trade relationships may buffer the impact of exchange rate fluctuations on domestic prices, as changes in the exchange rate may be absorbed by changes in trade volumes or pricing strategies. Other factors like demographic trends or government interventions in markets could overshadow the influence of the exchange rate regime on inflation. The impact of changes in the exchange rate regimes on inflation may operate with lags, meaning that any effects may not be immediately observable in the data. The analysis in this study proposes that exchange rate regimes choice and money supply influence the inflation dynamics in the BRICS countries. It merely reflects the success of the central bank in neutralizing its very effort of maintaining the pegged rate, which gives rise to inflationary growth of the money supply.

Network structure, dynamic evolution and block characteristics of sovereign debt risk: The global evidence

Global sovereign debt risks are escalating with the tightening of global liquidity. We apply the LASSO-VAR spillover model, network approach and block model to analyze the overall situation and time-varying characteristics of sovereign risk volatility spillover effects among 50 countries. The results show that there is a discernible cyclical pattern in the spillover effect of global sovereign risk volatility, with the spillover intensity progressively rising in each cycle, and more countries have emerged as "net risk exporters" recently. Countries and regions exhibit diverse risk spillover traits, and assume varying roles in the transmission of sovereign debt risks. The originator of a sovereign risk shock isn't necessarily its primary disseminator, underscoring the need to account for systemic significance and risk infectivity. The interlinkages among sovereign debt risk spillover blocks vary over time, given that the composition and attributes of these blocks change. Our findings provide implications for related regulators and investors.

Achieving carbon neutrality in an emerging oil-producing country: Renewable energy transition and international trade flows in Ghana

Over the past decade, climate variabilities have emerged as shaping the dynamics of international trade. The adverse externalities posed by climate change require a corresponding improvement in the production of food, trade and the adoption of abundant renewable energy resources. Our study focused on evaluating the impact of renewable energy transition on international trade flows in Ghana. We employed the dynamics ARDL simulation model to analyse our results using data from various institutions. We found that energy transition using both low carbon energy and renewable energy in electricity generation by 1% and 5% significantly increases the balance of trade to the 4th year after which energy transition decreases the balance of trade to the 9th year. After the 9th year, energy transition by both percentages increases the trade balance of Ghana. We observe that the energy transition by 5% has a higher impact than the energy transition by 1%. Additionally, it is observed that using the share of renewable energy in electricity generation has a decreasing rate relative to the first four years. Drafting renewable energy plans such as allocation of funds, supportive policy frameworks and incentives such as green financing, subsidies, and tax incentives can enhance and develop renewable energy infrastructure to increase renewable energy efficiency and reliability for international trade.