Trade Links Research Articles

Factors of Foreign Trade Resilience of European Countries in the Context of Global Competition: the Role of Intra-industry Trade

The article dwells onto the identification and quantitative assessment of the factors of the European countries’ bilateral trade resilience. The factors were studied separately for two groups, namely those responsible for maintaining of trade linkages and those characterising their ability to recover after external shocks. The paper covers only the first group of factors that were furtherly split onto inherent (endogenous) and acquired (exogenous). The inherent factors include geographical proximity and historical linkages, whereas acquired factors consist of bilateral trade intensity and degree of intra-industry trade between a pair of countries. Identifying factors that ensure resistance to foreign trade shocks using the example of relations within Europe is useful because from a historical and geographical point of view, this region is an example of the deep development of trade relations. Therefore, the identified factors will be significant for conducting research in the case of other countries. The indicators allowing for the factors’ assessment are calculated for the European states, except Turkey, Russia and several microstates. The conclusion is drawn that it is only degree of intra-industry trade that is responsible for preserving bilateral trade flows during crises. The results obtained suggest that upgrading intra-industry trade through participation in global value chains is necessary for trade resilience. This takeaway is critical for the foreign trade and industrial policies’ recalibration both in Europe and other regions, such as Africa and the Middle East.

The economic cost of locking down like China: Evidence from city-to-city truck flows

Containing the COVID-19 pandemic by non-pharmacological interventions is costly. Using high-frequency, city-to-city truck flow data, this paper estimates the economic cost of lockdown in China, a stringent yet effective policy prior to the Omicron surge. By comparing the truck flow change in the cities with and without lockdown, we find that a one-month full-scale lockdown causally reduces the truck flows connected to the locked down city in the month by 54%, implying a decline of the city’s real income with the same proportion in a gravity model of city-to-city trade. We also structurally estimate the cost of lockdown in the gravity model, where the effects of lockdown can spill over to other cities through trade linkages. Imposing full-scale lockdown on the four largest cities in China (Beijing, Shanghai, Guangzhou, and Shenzhen) for one month would reduce the real national GDP by 8.7%, of which 8.5% is contributed by the spillover effects.

Synchronization of endogenous business cycles

Business cycles tend to comove across countries. However, standard models that attribute comovement to propagation of exogenous shocks struggle to generate a level of comovement that is as high as in the data. In this paper, we consider models that produce business cycles endogenously, through some form of non-linear dynamics—limit cycles or chaos. These models generate stronger comovement, because they combine shock propagation with synchronization of endogenous dynamics. In particular, we study a demand-driven reduced-form model in which business cycles emerge from strategic complementarities within countries, synchronizing their oscillations through international trade linkages. We develop an eigendecomposition that explores the interplay between non-linear dynamics, shock propagation and network structure, and use this theory to understand the mechanisms of synchronization. Next, we calibrate the model to data on 24 countries and show that the empirical level of comovement can only be matched by combining endogenous business cycles with exogenous shocks. Despite the limitations of using a stylized model, our results support the hypothesis that business cycles are at least in part caused by underlying non-linear dynamics.

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.

Genomic diversity of Campylobacter jejuni and Campylobacter coli isolates recovered from human and poultry in Australia and New Zealand, 2017 to 2019.

We used genomic and epidemiological data to assess and compare the population structure and origins of Campylobacter, a major foodborne pathogen, in two neighbouring countries with strong trade and cultural links, similar poultry production systems and frequent movement of people and food products. The most common sequence types (STs) differed between Australia and New Zealand, with many unique to each country. Over half of all STs were represented by a single isolate. Multidrug-resistant (MDR) genotypes were detected in 0.8% of all samples, with no MDR isolates detected in poultry. Quinolone and tetracycline resistant ST6964 was prevalent in New Zealand (10.6% of C. jejuni). Closely related isolates suggested some similar food sources or contacts. We have shown that there is little genetic overlap in human and poultry STs of Campylobacter between the countries, which highlights that this common foodborne pathogen has domestic origins in Australia and New Zealand.

Proximity to War: The Stock Market Response to the Russian Invasion of Ukraine

AbstractWe identify a “proximity penalty” in the stock market response to the Russian invasion of Ukraine: the closer countries are to Ukraine, the lower their equity returns in a four‐week window around the start of the war. This result holds even at the firm level within Ukraine's neighbors. Trade linkages explain two‐thirds of the proximity penalty. We attribute the remainder—1.1 percentage points in equity returns per 1,000 km of extra distance—to military disaster risk. Evidence from other financial data, geopolitical risk indicators, and aid flow statistics supports the relevance of military tail risk as a spillover channel.

Potential for Cooperation between Russia and MERCOSUR under Sanctions

Under the pressure of the unprecedented economic sanctions, the Russian Federation faces the tasks of reformatting its foreign economic strategy, transforming its trade policy, changing supply chains, and expanding cooperation with the partners that maintain economic neutrality, particularly with the countries in Latin America, the Asia-Pacific region, and the Middle East. The purpose of this research is to determine to what extent economic sanctions can serve as a factor for activating trade and economic relations between Russia and the countries of MERCOSUR as the most significant potential partners from the Latin American region. The research question of the article is to what extent it is possible to sooth the impact of sanctions on the Russian economy by stimulating trade links with MERCOSUR countries. The article attempts to compare the relative significance of Brazil, Argentina, Uruguay, and Paraguay as trade and economic partners for Russia at the time of sanctions. The article identifies factors contributing to the growth of potential of mutual trade and economic cooperation and those constraining it; provides an assessment of the current development of trade and investment relations between the parties; calculates indicators to determine the possibility of substituting the lost markets for export-import operations by the new ones.

Central banks, economic statecraft and offshore banking: Comparing financial internationalization strategies in Latvia and Estonia

Small states play a critical role in the operation of the Global Wealth Chains, storing capital assets and funnelling financial flows. However, the knowledge of how such practices of financial transit emerge remains scant. Focussing on the 1990s as the formative decade of post-Soviet capitalism, the article focuses on the variegated financial internationalization in the Baltics, as Latvia developed a vibrant offshore banking sector, whereas Estonia pursued complete Westernization in bank ownership. Challenging the literature that relates the emergence of Baltic offshore finance with right-wing politics, and existing trade and cultural links with Russia, the article argues that the varieties of financial internationalization in the Baltics were due to ‘economic statecraft’ by the Central Banks (CBs). Drawing upon a survey of CB reports, parliamentary speeches, press archives, memoirs, and elite interviews, the article argues that the Baltic CBs’ path-setting decisions shaped the two distinct financial internationalization paths through three interventions: currency reforms, agenda setting, and banking regulation. Drawing on the literature on social embeddedness of CBs, the article attributes the differences in the two CB approaches to their informal alliances with broader society – domestic financiers in Latvia and the government in Estonia.

Comparative Dynamics of the Belt and Road Initiative: Unveiling the Unique Position and Implications of the China-Pakistan Economic Corridor

The Belt and Road Initiative introduced by China is one of the biggest infrastructure and development projects striving to facilitate commercial exchanges and stimulate growth through construction, trade, and investment links across countries and continents. Under this grand framework, the China-Pakistan Economic Corridor (CPEC) arose as a significant and novel dimension of the deepening bilateral relationship between Beijing and Islamabad Meanwhile CPEC plays a strategic role as a critical artery that aims to redefine the regional dynamics. This article undertakes analytical research to disclose the position as well as consequences of CPEC among other projects comprising the BRI on a global scale. Through fine-grained analysis of the political, economic, and social dimensions of CPEC somehow positioned next to other BRI projects, this study can identify the uniqueness of CPEC at the level of its ambitions, challenges, and implications on both regional geopolitics and economic frameworks. The paper draws upon a combination of qualitative and quantitative data, comprising CPEC project results, bilateral agreements, and economic indicators, among others, to demonstrate how CPEC functions as a driving force towards economic transformation in Pakistan with associated implications for international trade corridors. Moreover, the research sheds light on the geopolitical strategies behind China’s investments and brings to the surface how CPEC is not only employed in economic affairs but rather military and geopolitical interests for China in South Asia as well. Such a comparative study assists in the process of knowing the multilayered nature of the BRI, and bringing forth those emerging insights on how projects like CPEC can form the structure of global economic and governance engagement of the 21st century.

Supply chain adjustments to tariff shocks: Evidence from firm trade linkages in the 2018-2019 U.S. trade war

We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports. Using confidential trade data, we show that the decline in U.S. imports of tariffed goods during the trade war was driven primarily by the exit of firms from import markets, discontinued buyer–supplier relationships, and reduced entry into importing. However, tariffed products where imports were concentrated in fewer suppliers exhibited smaller declines in import growth.

Re-examining international spillovers: An Asian perspective

This study investigates the transmission and the business cycle implications of Chinese export shocks to other Asian economies. Based on a panel vector autoregression (PVAR) model, we provide evidence that a positive export shock originating from China simultaneously stimulates aggregate demands for both China and other Asian economies. The PVAR model takes into account three main sources of potential interactions among ten Asian economies. Simulations from a two-country DSGE model featuring endogenous trade links suggest that positive trade spillover is essential to explain the macroeconomic comovement pattern. Our findings further indicate the importance of the Chinese economy to business cycle synchronization.

Prospects for further development of logistics and trade in Central Asian Countries

This paper examines the conditions of foreign trade of the Central Asian countries and their impact on economic growth. Currently, the transport corridors of Central Asia are at the peak of their demand. The current positive changes and achievements of the region are considered. Attention is drawn to the geopolitical trends that create conditions for the development of alternative transport corridors and infrastructure projects. Special attention is paid to improving transport connectivity. It is proposed to develop transit and transport potential and increase the production of finished products. The comprehensive analysis carried out in this work allows us to take a broader look at the potential of the region and propose measures for its full development. Due to the growing role of Central Asia in the international arena, this paper also examines the impact of foreign policy on the development of the region’s economy. The strategic location of Central Asia between China, Russia, Iran and other countries makes the region an important partner in international trade and transport links. The paper analyses the current positive developments in the region, such as the creation of new transport corridors, the development of logistics infrastructure and the strengthening of trade relations with other countries. Special attention is paid to projects for the development of regional integration and economic unions, which contribute to improving competitiveness and economic stability in Central Asia.

The macro driving factors of co-movement of RMB with other currencies in FX markets

The co-movement of the RMB exchange rate with other currencies highlights the global standing of the RMB and its significance in FX markets. This paper employs the rational expectations present-value model of exchange rates to identify the macroeconomic factors influencing this co-movement. Our finding reveals a general increase in the RMB's co-movement with other currencies, especially after the 2015 reform of the RMB exchange rate regime, known as the “811 Reform”. Factors such as the synchronizations of output and monetary policy, as well as global market sentiment significantly, can affect this co-movement significantly. However, this explanatory power is relatively weaker compared to trade linkage. The market-oriented reforms in the RMB exchange rate regime and the liberalization of capital account in China have indeed strengthened this co-movement. Additionally, various international cooperation policies taken by the Chinese government have demonstrated promotional effects. This study echoes the traditional exchange rate determination theory and offers some policy implications for the internationalization of the RMB.

Archaeoparasitology and pathoecology of Buchta Nakhodka, a medieval settlement in the far north of Western Siberia, dating from the 13th century

Buchta Nakhodka, which was inhabited by the Northern Samoyeds, is one of the few sites in the far north of Western Siberia that has been explored archaeologically and archaeoparasitologically. Many factors complicate research work in this region; therefore, any additional study of known sites can provide valuable data. Here, we report the results of soil samples from the cultural layer taken during the excavation of structures of the medieval settlement of Buchta Nakhodka. Six types of human and animal parasite eggs were found in the studied samples. The extent of contamination and number of parasite species varied, depending on the sampling location. The analysis of research results in the historical and archaeological context enabled the reconstruction of certain nutritional habits of the population of Buchta Nakhodka in the 13th century and such activities as hunting, fishing, and dog breeding, as well as an evaluation of the level of hygiene and possible population movements and trade links with neighbouring settlements.

Evolution of Food Trade Networks from a Comparative Perspective: An Examination of China, the United States, Russia, the European Union, and African Countries.

In the intricate landscape of the global food system, a nuanced understanding of dynamic evolution patterns and driving mechanisms of food trade network is essential for advancing insights into the African food trade and maintaining the food security of Africa. This paper constructs a framework for analyzing the food trade network from a comparative perspective by comparing and analyzing the evolution of food trade networks in China, the United States, Russia, the European Union, and African countries. The development trend of food trade between China, Russia, the United States, the European Union, and African countries is relatively good. China, the United States, Russia, and the European Union export far more food to African countries than they import, and bilateral food trade plays an important role in alleviating food supply shortages in Africa. The food trade networks between China, the United States, Russia, the European Union, and African countries exhibit a butterfly-shaped structure centered in Africa, and the overall intensity of bilateral trade linkages is gradually increasing. France has the greatest control over the food trade network between China, the United States, Russia, the European Union, and African countries, and the influence of the United States on the food trade network between China, the United States, Russia, the European Union, and African countries is increasing. China's independence in the food trade network between China, the United States, Russia, the European Union, and African countries is enhanced, but its control ability is limited. The impact of differences in total population, differences in food production, and geographical borders on the trade network between China, the United States, the European Union, and African countries tends to decrease, while the influence of differences in the proportion of agricultural employment, differences in the arable land available for food production, and institutional distance tends to increase.

What determines global sentiment towards China’s Belt and Road Initiative?

China’s Belt and Road Initiative (BRI) is one of the most important geopolitical phenomena of this century. It signals China’s increasing clout overseas while focussing on trade links and infrastructure in general. An important question which has not yet been fully answered is how different countries perceive this initiative, whether they are part of it or not. To answer this question, a large media repository, GDELT, is used to assess each country’s perceptions of the BRI and how they evolve over time. The main finding is that global sentiment on the BRI deteriorated significantly in most geographies from 2017 to 2022, although generally still in positive territory. Further, an empirical analysis is conducted to test the relationship between individual countries’ sentiment towards the BRI and three possible determinants, i.e. economic linkages with China, geopolitical closeness with China, and a country’s perceptions and attitudes about some China-related issues. The results suggest that import dependence on China seems to worsen the image of the BRI. Instead, a country’s geopolitical alignment with China, whether by being a member of the BRI or by voting at the United Nations (UN) like China, is positively correlated with its perceptions of the BRI.

Analysis of lithium trade patterns and influencing factors in the regions along the "Belt and Road".

Lithium has broad applications in several emerging industries and fields, including high energy batteries, energy storage, aerospace, and controlled nuclear reactions. Currently, the discrepancy between the supply and demand for lithium resources increases, and its distribution is uneven. Within the framework of the "Belt and Road" Initiative, the lithium trade pattern evolves constantly. However, the trade pattern of lithium in the nations along the "Belt and Road" is likely to face substantial repercussions in modern world of unilateral protectionism and geopolitical conflicts. Taking the social network analysis approach as a tool, this study first examines the characteristics of the lithium trade network structure as it has evolved over the years in the Belt and Road countries, from 2000 to 2022. Additionally, this study uses the quadratic assignment problem approach to analyze the factors influencing the evolution of the lithium trade network. The study shows that: (1) The spatial patterns of import and export trade network of lithium in countries along the route has a certain path dependence. And the market is mainly concentrated in East Asia, Central and Eastern Europe, South America and Southeast Asia. (2) The network density of the countries along the route has increased year after year, but it remains low. And the fluctuation of the network's reciprocity has increased, with a huge magnitude of variation. The number of core countries in the network has decreased over time, but the core-periphery structure has stayed largely steady. China, Chile, and South Korea are the network's main node countries. (3) Regarding the influencing factors, the differences in economic and technological development between these countries have a beneficial impact on the formation of lithium trade; whether or not regional trade agreements have been signed, the differences about average tax rates for mineral products, bordering countries, and similar languages and cultures are all conducive to the establishment of close trade links. The contribution of this essay is of paramount importance for understanding different countries' role along the Belt and Road in the lithium trade network pattern, and promoting regional trade cooperation.

Trade Complementarity and Substitutivity between China and Nigeria in Exports: Evidence from the Data in 1996-2022

This study examined the China and Nigeria’s export relations with a view to determining the mutuality of the trade benefits to both countries. Using data for the period 1996 to 2022 from World Integrated Trade Solution (WITS) database, the paper estimated four distinct measures of trade relations (the revealed comparative advantage index, the trade integration index, the complementarity index and the export similarity index) and then analyzed the effect of trade complementarity and substitutivity on exports of Nigeria and China respectively. Based on the findings, China’s top export destination in sub-Saharan Africa is Nigeria, and one of Nigeria’s top export destinations globally is China. Furthermore, the comparative advantage index showed that China has a comparative advantage in manufactured goods, capital goods, consumer goods, intermediate goods, and mechanical and electrical goods, whereas Nigeria has a comparative advantage in fuels and basic materials. Meanwhile, Nigeria’s trade integration index showed that Nigeria’s trade connections to China are weak, while China’s trade integration index showed that its ties to Nigeria are strong. This implies that China depends less on Nigeria’s exports and that Nigeria is more dependent on China’s exports. In addition, Nigeria’s and China’s export structures differed significantly, but it was determined that these trade links are advantageous to both parties and increased their respective export trade. However, the two countries’ trade rivalry will jeopardize their mutual benefits from trade in addition to sharply lowering the volume of their respective exports.

Information Communication Technology's Influence on Exchange Rate

Investigated in this study is the influence of information communication technology (ICT) on the exchange rate in Zambia from 2010 to 2021. The research methods employed involve using descriptive, exploratory, and experimental designs. The results are reported focusing on ICT acquisition, usage, and production in relation to the performance of the exchange rate: imports of ICTs from the Zambia Revenue Authority (ZRA) represented the uptake while the performance of the exchange rate from the Bank of Zambia represented actual volatilities. It was further discovered that the ICTs influence movements in financial transactions by increasing the quantum of transactions. The impact on the movements of currencies advertently affects the exchange rate causing volatility. The role of ICTs in the amalgamation of markets, trade linkages, and openness, is key. Conclusively, ICTs influence the exchange rate: inherent in productive means and permeate consumptive aspects of ICTs and financial transactions. The main limitation arose from data collection on ICT software and services due to lack of a consolidated data capturing information system.

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

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