Trade Intensity Index Research Articles

Examining current regional intensity of trade in Africa: How strong are the trade linkages and implications for intra-Africa trade in the African Continental Free Trade Area

The African Continental Free Trade Area (AfCFTA) is a continent-wide free trade area which is expected to pave way for a continental customs union. This article assessed the current state and extent of intra-Africa trade in 2001-2018. The results give insights into the foundation which the current regional economic communities in Africa have put in place regarding intra- and inter-trade linkages. This is a foundation which the AfCFTA would utilise to achieve trade integration in a continent-wide economic integration arrangement that seeks to improve intra-Africa trade. Five regional groups were considered, namely Arab Maghreb Union, East African Community, the Economic Community of West African States, Economic Community of Central Africa States, and the Southern African Development Community. Intra-regional trade intensity index results show that trade within individual regional groups, and within Africa, is oriented towards respective member countries, although there is no evidence of increased inward orientation over time. Inter-regional trade intensity index results show that most regional groups trade intensively with each other, albeit at different levels. With increased market access in the AfCFTA through lower trade resistances between regional groups, inter-regional trade is expected to increase as per the volume of trade criteria in the natural trading partners hypothesis.

An Analysis of Bilateral Trade Relation between Turkey and Russia: Challenges and Opportunities of Russia-Ukraine War

Purpose: This study examines Turkey's bilateral trade intercourse with Russia in order to identify potentialities and problems for Turkey caused by the Russia-Ukraine War. Method/Design/Methodology/Approach: In the course of the study, with the help of descriptive statistics and calculations of trade indices such as trade intensity and trade complementarity indices, the current state of Russian-Turkish trade was examined. Afterwards, commodity sectors in which supply is expected to fall due to international companies’ suspension of businesses were identified. Next, the revealed comparative advantage index and its dynamic form were calculated to assess Turkey's potentialities to export commodities of the identified sectors to Russia and to highlight commodities groups where export policy should be improved. Thus, the study considers Russia and Turkey not as competitors, but as partners. Findings: It has been concluded that the countries have tight-connections and, to a certain extent, are dependent on one another. Both Russia and Turkey can benefit from further intensifying bilateral trade and improving partnership in other spheres as well. Originality: There is substantial literature comparing Russia and Turkey with other countries, trade blocks or with each other, mainly these two countries are counterposed from a competition perspective. This article, on the contrary, evaluates how cooperation and bilateral trade can improve the economic situation of both Russia and Turkey.

POST-SAFTA INTRAREGIONAL TRADE BETWEEN INDIA AND SAARC

India plays a vital role in improving bilateral relations within SAARC. Since intra-regional trade is one of the major areas of cooperation, multilateral trade agreements among the regional members have been implemented for trade in merchandise. The paper examines the post-SAFTA extent of trade between India and SAARC members grouped under Less Developed Countries (LDCs) and Non-Less Developed Countries (NLDCs). Data for the period 2007-2021 were collected from IMF, DOTS. Percentages, Trade Intensity Index (TII) and Revealed Comparative Advantage Index (RCA Index) have been employed to study the research objectives. Percentages and TII reveal that India constitutes 80 percent of the intra-SAARC export with its trade concentrated with the LDCs, exhibiting greater trade intensity with Bhutan and Nepal. Further, SAARC being an agrarian region, the analysis of RCA Index on data from Trade Map, (ITC) indicate that India enjoys greater comparative advantage in its export of agricultural products to LDCs, especially Afghanistan and Bangladesh, and with Pakistan among the NLDCs. KEY WORDS: Intra-SAARC trade, Revealed Comparative Advantage (RCA) Index, Trade Intensity Index (TII).

The impact of gross domestic product, exchange rates and ACFTA implementation on Indonesia’s trade intensity index

The impact of gross domestic product, exchange rates and ACFTA implementation on Indonesia’s trade intensity index

Структурные сдвиги во внешней торговле стран Балтии

Professor Gennady Fedorov, Doctor of Geography and a distinguished Soviet and Russian researcher, made a significant contribution to the study of economic development in the Baltic states, particularly in their economic relations with Russia. His work consistently underscored the importance of trade with Russia for the Baltic economies and its impact on regional production of goods and services. Recent geopolitical shifts have triggered profound structural changes in international trade. This article examines the trade in goods within the Baltic states, as well as between these states and third countries, including Russia. It evaluates the long- and short-term structural shifts in commodity flows, utilizing a comparative analysis of export and import trends based on the latest international statistics. The study covers the period from 2004 to 2024, drawing on annual statistics from 2004—2023 and more granular quarterly and monthly data for 2021—2024, sourced from UN/UNCTAD, Eurostat, WTO, and the World Bank. Employing methods of statistical and structural analysis and Trade Intensity Index (TII) calculations, the article investigates two hypotheses. The first hypothesis, proposing a general increase in the TII between the Baltic states from 2004 to 2023, is partially supported; Lithuania’s exports deviate from the overall trend due to the country’s strong trade links with Poland and Germany. The second hypothesis, asserting the adaptability of Baltic business to geo-economic and geopolitical stresses — including sustained trade with Russia—has been fully confirmed. The article identifies commodity groups where export and import flows between the Baltic states and Russia increased between 2021 and 2023, highlighting potential niches for Russia to maintain or expand its presence.

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.

Measuring India’s trade potential with south Asian countries using trade intensity index

Measuring India’s trade potential with south Asian countries using trade intensity index

An Analysis of India's Revealed Comparative Advantage in Merchandise Trade with Australia

India's export sector has considerably improved since 1991 economic and trade reforms. It has gained momentum after the signing of various trade agreements with several countries. India and Australia started free trade agreement (FTA) negotiations over a decade ago in 2011 and finally concluded a landmark Economic Cooperation and Trade Agreement (ECTA) on 2nd April 2022. This study examines India's trade relations with Australia using the revealed comparative advantage (RCA) index and trade intensity index (TII) for exports and imports, to determine the patterns of exports and areas of specialisation of the two countries. The findings suggest that the bilateral trade between India and Australia has not strengthened. However, India enjoys a comparative advantage in several product groups, which fall into the category of primary goods, low-technology manufacturers, and manufactured goods as well. Overall, the RCA is much higher for India's exports than that for Australia's exports to India. The study finds that India has trade potential in several product groups with Australia and efforts should be made to bring greater benefits from the trade agreement for both countries in the years to come.

Bilateral Trade Between India and Bangladesh: A Pre- and Post-SAFTA Period Analysis

India and Bangladesh, the two neighbouring economies of South Asia, are at the centre of attraction in the foreign trade literature. The present article analyses the pattern of trade between India and Bangladesh before and after joining the South Asian Free Trade Area (SAFTA). The study covers twenty-five years, from 1996 to 2020 and used indices, namely, the Index of Revealed Comparative Advantage (RCA)Index, Trade Intensity Index (TII) and Trade Complementarity Index (TCI), to analyses the bilateral trade. Although Bangladesh has a relative comparative advantage in some of the products, India has a maximum comparative advantage in relatively more product groups. The index value of the TII is more than one for both countries during the study period, which means that the bilateral trade flows are highly intensive compared to their trading partner of the rest of the world. Furthermore, at the bilateral level, the index value of trade complementarity reflects a partial match between each country’s export supply and import demand because the value of indices stays between 0 and 100 during the entire study period. It also reflects that India’s export complementarity with Bangladesh is reciprocating, indicating growing trade demand for Indian product in Bangladesh’s market and India’s export supply becomes more compatible to meet imports demand of Bangladesh. India and Bangladesh have huge potential for bilateral trade, because they belong to Indian subcontinent, have geographical proximity, abundant natural resources and pursed similar policies towards achieving economic development. Neighbouring Countries, Bilateral Trade, Trade Intensity, Index of Revealed Comparative Advantage, Trade Complementarity, Trade Pattern, Exports, Imports JEL Classification: F10, F13, F14, F47

Trade damper effect of regional trade agreements

The authors explore the impact of crises on the dynamics of trade between partners within regional trade agreements (RTAs) with the aim to determine whether RTAs have a stabilizing effect on foreign trade. RTAs have become one of the main instruments of trade policy in recent decades. It is generally recognized that RTAs do stimulate trade at the time of stability and growth. It is logical to assume that meeting commitments between RTA partners should lead to the preservation of trade flows between them in the event of a crisis. However, this statement requires empirical confirmation. The study examines the effects of RTA networks for the three most active RTAs’ participants located on different continents — the EU, Chile and the Republic of Korea. The analysis of dynamics of these countries trade flows indicates a clear trend of strengthening trade interaction between RTA partners during crisis periods. The focus of the methodology of the study lies in computations of three trade indices: export significance index, trade intensity index and symmetric trade introversion index. They were calculated for the totality of trade partners for the EU, Chile and the Republic of Korea from 2005 to 2020 in order to identify the dominant tendencies of trade flows during periods of economic shocks of recent decades (the financial crisis of 2008—2009 and the crisis caused by the pandemic of 2019—2021). The authors come to the conclusion that for the studied countries and the EU RTAs act as a damper that reduces the negative impact of crises on foreign trade. Trade between RTA countries at the time of a crisis either decreased to a lesser extent compared to trade between countries that do not have RTA, or recovered faster. This empirically confirms yet another significant importance of RTAs. The authors suggest to make similar calculations for other countries and RTAs to support the revealed pattern.

An analysis of intra-SAARC trade relations

The world is composed of geographical regions comprising clusters of countries having physical contiguity. This premise motivated South Asian countries to form SAARC in 1985. SAARC envisioned enhancing trade and commerce among the member states. In 1993, they initiated SAPTA to liberalise tariff barriers and created SAFTA in 2004 to make South Asia a trading zone. Despite these initiatives, many pitfalls and hiccups did not allow SAPTA and SAFTA to bloom. This paper attempts to empirically examine intra-regional trade among SAARC countries through their bilateral trade intensity index, intra-regional trade intensity index and intra-regional trade share. The study found that most SAARC countries have their trade priorities outside the region. Their intra-regional trade stands at just 5.8%. To reduce this economic disconnect, SAARC countries need to come forward to enhance cross border trade, for which an open and more inclusive trading system and political will is required.

ՀՀ արտաքին առևտրի առկա վիճակը․ արտահանման և ներմուծման ինտենսիվություն

The purpose of this article is to conduct a comprehensive analysis of Armenian foreign trade on the main trends of exports, imports, trade turnover, exported and imported partner countries, and major commodity groups. In addition, the article calculated the Armenian export and import intensity index with several partner countries. The task of the work is to identify the main trends in Armenian foreign trade and assess the opportunities and potential for trade development. In this context, through a comparative analysis of comparable historical series, the author presented the trade processes recorded in Armenia during the years under review, identifying the main trends and directions. The research results show that the Armenian foreign trade processes have limited diversification both by the exported and imported group of partner countries and by commodity groups. On the other hand, due to the foreign trade intensity index, a number of unrealized opportunities have been identified among the EAEU member states (with the exception of Russia) and with China and European countries. In this context, the unrealized trade opportunities and their realization will directly affect both the Republic of Armenia's foreign trade and the economy's development as a whole. Thus, a comprehensive analysis of the Armenian foreign trade and an assessment of the intensity of exports and imports give reason to believe that we continue to fix diversification problems in individual commodity groups and foreign trade countries. In addition, the intensity of Armenia's foreign trade, due to various objective reasons, continues to be concentrated around several countries. All above-mentioned create problems in developing local production and increasing international competitiveness.

Key Features and Challenges of the China-Western Balkan Countries Merchandise Trade Development

The economic growth and development of the Western Balkan largely depend on the integration of national economies into international trade flows. Bearing in mind the expanding presence of China in the Western Balkan countries and the considerable increase in bilateral trade over the previous decade, it is of great importance to focus on the strategies for overcoming main challenges and fostering more balanced trade in the forthcoming period. Regarding that, the main aim of the research was to analyze trade flows and patterns and investigate the trade intensity between the Western Balkan countries and China. Furthermore, the research attempted to determine the main challenges and to consider the strategic approach to their overwhelming, including better exploiting the opportunities provided by trade cooperation with China in the rapidly changing global environment.
 The paper used desk research - a descriptive analysis of data on merchandise trade between six Western Balkans countries (Albania, Bosnia and Herzegovina, Montenegro, Croatia, North Macedonia, and Serbia) and China. The analysis was based on the data available in the UN Comtrade and Trade Map statistical databases for the period 2016-2021. In addition, the Trade intensity index (TTI) was also used in the paper in order to discover how intensively the Western Balkan countries were trading with China.
 However, despite the rapid trade growth with China, its share in the WB countries' total trade remains at a relatively low level of about 7%. The trade deficit also increased significantly, indicating a deepening of the asymmetry in the economic relations of the observed countries. Although the trade intensity index (TII) confirms the deepening of trade relations, the TII value of 0.24 in 2021 indicates that trade between the Western Balkans and China is still under-represented and there is considerable room for improvement.

Peculiarities of the economic assessment of the development of the export potential of agricultural enterprises

The analysis of existing theoretical approaches shows that the problem of clarifying the essence and features of the formation of the export potential of agricultural enterprises remains insufficiently resolved, which significantly inhibits the development of methodological principles for their comprehensive assessment and management mechanisms for increasing international competitiveness on foreign markets. We consider the category "export potential" as a business process, which is divided into main stages (formation, development, management) and includes a sequence of certain stages (planning, regulation, organization, motivation, control). The novelty of the proposal lies in the assessment of the export potential of agricultural enterprises by calculating the system of indicators both at the level of individual economic entities of the agro-industrial complex (direct method) and with the help of national specialized and state bodies (indirect method) in compliance with important methodological principles. We suggest using the trade intensity index, which allows you to determine whether the value of trade between two countries is greater or less than one would expect. The trade complementarity index can provide useful information on the prospects for intra-regional trade. It indicates to what extent the counterparty's export profile matches or complements the partner's import profile. The economic evaluation of the export potential of agricultural enterprises allows to ensure the stable and effective functioning of economic entities in the structure of global economic relations and to determine the priorities of their development. The practical application of this methodology will allow to obtain a reliable assessment of the current situation in a specific sales market, to identify trends, problems and priorities of its development, as well as potential and competitive opportunities of the organization from the exit of agricultural enterprises to this agro-food segment. Taking into account the specificity of the subject of research, we suggest to evaluate the export potential of agricultural enterprises to use an integral methodology that allows to more accurately reflect the capabilities of the enterprise on the foreign market, with the help of indicators that are weighted in a certain way. In addition to the integral methodology for the purpose of assessing the export potential, we have proposed a method of export diagnostics of agricultural enterprises, which consists in evaluating the main functions of the enterprise, which determine its readiness for export activity. The advantage of the developed methodology is the availability of the information necessary for analysis, the simplicity of calculations, it more clearly and accurately reflects the level of export potential of a company that has been present on the foreign market for a long time, as it takes into account the opinion of third-party experts and the influence of internal and external factors. The main advantage of the developed technique is visual optimization. Data obtained as a result of the analysis of the complex methodology, which is much easier to perceive by the user.

Impact of Regional integration on Trade and Economic Cooperation – a key study of Georgia and Azerbaijan

The South Caucasus is a unique small and densely populated region in the southern part of the Caucasus. It consists of three independent states - Georgia, Azerbaijan and Armenia. Georgia is actively engaged in the Peaceful Neighborhood Initiative in the South Caucasus and strives to deepen political and economic relations with the countries in the region based on sovereign interests. In these processes, strengthening mutually beneficial, trust-based cooperation with the Republic of Azerbaijan is of special interest to Georgia. After the collapse of the Union of Soviet Socialist Republics (USSR) and the regaining of independence by Georgia and Azerbaijan, a completely new phase of diplomatic relations began between the two countries which grew into a strategic partnership. Territorial proximity and the establishment of diplomatic relations have prompted the dynamic development of trade and economic relations between the two countries, which increases the degree of urgency of the study. The presented paper focuses on the priority areas of trade and economic cooperation between Georgia and Azerbaijan. However, at the present stage economics and politics are so closely interrelated that it is impossible to draw a line between them. Therefore, in order to achieve the purpose of the paper, the first chapter focuses on the development of diplomatic relations between the two countries, while the following chapters study trade and economic cooperation between Georgia and Azerbaijan and analyze the development of bilateral cooperation in trade in services; in addition, the trade intensity index is calculated; the importance of investments from Azerbaijan in the Georgian economy is assessed; the transnational energy and transport projects proposed by the Georgian and Azerbaijani governments are discussed; and the growing role of Georgia as trade and transport hub in the Caucasus in both the offshore and onshore components of these projects is assessed. It is noted that trade and economic relations have growing dynamics and show readiness to further develop cooperation. In addition, some suggestions that will be helpful for Georgia to increase the scale of cooperation with Azerbaijan and assist deepening the involvement of the two countries in the world integration processes are proposed. We believe that the paper will enhance further research and discussion on trade and economic cooperation between Georgia and Azerbaijan and, most importantly, ensure support for this kind of cooperation.

AN ANALYSIS OF INDIAS TRADE INTENSITY INDEX WITH UAE

Today no country on the earth (planet) is completely independent on its own resources. Every one of the countries of the world are some way or another associated on others, in light of the fact that each country has its own normal assets, environment, geological circumstances and wellsprings of energy. Worldwide relationship is the principal element of the present worldwide economy. Exchanging commodities among India and UAE have existed since antiquated times. Indo-UAE exchange has filled massively as of late. Numerous factual exchange lists are accessible to gauge exchange between two nations. One of them is the International Trade. The International Tradeshows up in two structures, namely exports and imports list. A couple of studies have done to investigate complexities of the International trade connection between the two nations. Under such situation this paper examines the significant patterns of International Trade Relations.. An endeavor is made here to look at the Indias Trade Intensity with UAE for the period from 2012 to 2021. The paper likewise proposes measures to enhance International trade relations among India and UAE. Time series information has been utilized to quantify Trade Intensity Index (TII). The discoveries of the review uncover that Indias exchange with UAE is more extraordinary in examination with its other exchanging accomplices.

Competitiveness and complementarity of agricultural products between Thailand and China on a short-term basis

China and Thailand belong to Regional Comprehensive Economic Partnership countries, and agricultural trade is vital to Thailand’s economy. Competition in agricultural trade between countries is fierce. Therefore, it is crucial to understand the advantages and disadvantages of agricultural trade between Thailand and China. Complementarity and competitiveness of international business show the benefits and drawbacks of cross-border exports and the trend of future exports. This study uses quantitative techniques to analyze the agricultural trade between Thailand and China. It employed four methods, including the calculations of the Grubel-Lloyd index, revealed comparative advantage index (RCA), trade intensity index (TII), and trade complementarity index (TCI). The result of method 1 indicates that Thailand’s agricultural trade has a more substantial competitive advantage (three years average RCA = 1.69 > 1.25) than China (three years average RCA = 0.37 < 0.8) from 2017 to 2019; they are complementary in specific categories of agricultural products. The result of method 2 indicates that items 03, 07, 13, and 14 of China’s exports and Thailand’s imports have strong complementarity. Items 10, 11, 17, and 19 of Thailand’s exports and China’s imports have strong complementarity. The result of method 3 indicates that the positive factor on bilateral trade flow is significant. The result of method 4 indicates that items 06, 07, 12, 19, 20, and 21 have advantages in intra-industry trade, and items 09, 10, 13, and 18 have advantages in inter-industry trade. The paper has important implications for Thailand’s government to formulate relevant trade policies to enhance its agricultural export competitiveness, which is also conducive to developing bilateral agricultural trade.

Trade Flow among Association of South-East Asian Nations (ASEAN) Countries: A Trade Intensity Approach

This paper features the integration of trade among five founding member countries of ASEAN during the period 2001-2019. To measure the trade relations between two countries, a variety of statistical indicators are available, but in this paper trade intensity index is applied. As a general rule, when a country’s trade intensity index of imports and exports is observed to be more than one with the trading partner, then it indicates a high degree of trade association between them. The empirical results signify that the pair-wise export and import intensity index of these countries is greater than one, suggesting significant trade among the member countries. The study has many policy implications. Although the trade intensity index is greater than one for all counties, the value varies, signifying the under-developed bilateral trade areas among the region which need to be focused. Further, the regional and cultural differences should be coped up to accelerate the trade in the region.

Assessment of Intra-trade Intensity within Common Market for Eastern and Southern Africa.

Utilizing panel data, this study looked at the intra-trade intensity within the Common Market for Eastern and Southern Africa (COMESA) region from 2000 to 2016, with a particular focus on export trade. To quantify the intensification of trade among member states, the study employed the trade intensity index. The results of the Trade Intensity Index (TII) show that, while intra-COMESA trade remains low for the majority of members, the intensity result appears to be increasing at a modest rate at the regional level. According to the study, the regional trade strength of intra-COMESA exports climbed from 11% in 2000 to 13.6 percent in 2016. Egypt and Kenya, in particular, have increased their export trade among COMESA members, whereas Libya has the smallest export trade share, followed by Eretria. To expand bilateral trade among member states, it is recommended that COMESA members invest in complementary products (export diversification) where they have a comparative advantage by identifying priority products in the region, improving economic size, implementing the AU's 2012 declaration of Continental Free Trade Area (CFTA), developing regional transport infrastructure, and strengthening institutional democracy.

Konkurentnost izvoza vina iz zemalja CEFTA regiona na tržištu EU

The objective of this paper is to examine the competitiveness of wine export of CEFTA parties (excluding Kosovo), in the period from 2011 to 2020. The CEFTA group exported wine worth a total of 2.3 billion USD during the analyzed period, with significant differences in export value among certain parties. Moldova and North Macedonia generated over 80% of the wine export value. Competitiveness of wine export was analyzed by calculating two sets of indicators. The first set includes three competitiveness indices: revealed comparative advantage index, export specialization index and trade intensity index. The second set of factors relates to the analysis of market share and changes in the market share. With the purpose of identifying causes of changes in the market share, one of them being the competitiveness effect, the authors employed the method of constant market share analysis. The leading exporter, Moldova, although not predominantly focused on the European Union as the main export market, is competitive in the EU market and achieves specialization in exporting wine to the EU market, as well as an increase in trade intensity and market share. Other analyzed CEFTA countries have recorded a decrease in market shares and variable performance regarding export specialization, revealed comparative advantage and trade intensity.