Trade Balance Research Articles

Magnetic Macro Drivers of Trade Openness: A Study of BRICS Economies

The major goal of this study endeavour is to thoroughly evaluate the impact of macro factors on trade openness (TOP). The study was conducted through the examination of numerous trade conceptions, with a specifically emphasis on examining these patterns within the economies of the BRICS nations (Russia, India, China and South Africa) from 1995 to 2020. Stepwise regression for selecting models, Pedroni, Johnson, Granger causality and advance panel regression are some of the techniques used including FMOLS, Panel OLS and FEM. The study’s outcomes reveal the presence of both long-term and short-term associations between TOP and (a) total investment, (b) human capital, (c) trade reserves, (d) trade balance and (e) exchange rate. The study authors found both one-way and two-way causal association between TOP and these five factors. Additionally, trade balance emerges as the most significant factor impacting TOP. Notably, the exchange rate does not exhibit significant economic importance. JEL Classification: F14, F15, F17

التطور اللوجستي وتحسين الأداء في حجم التجارة والميزان التجاري في المملكة العربية السعودية: دراسة مقارنة بين سنوات (2007-2023)

One of the goals of Vision 2030 is to transform the Kingdom into a leading industrial power and a global logistics hub, and to this end, the Ministry of Transport and Logistics has developed an ambitious strategy aimed at developing the transport and logistics sector in the country, especially in light of the increasing global demand for logistics services. The Vision 2030 plan is leading massive investments and expansions in all sectors of the economy, and logistics infrastructure is being set up to increase private sector participation,. Given that The study aimed to know the extent of development in logistical performance in the Kingdom and its role in improving the trade balance and trade volume during the period (2007-2023) and the most important problems addressed by the research were there an impact on the development of logistical performance and improving the trade balance The volume of trade of the Kingdom of Saudi Arabia, and the most important hypotheses where there is a statistically significant relationship between logistical performance and improving the trade balance of the Kingdom of Saudi Arabia and to reach a solution to the problems that the research was exposed to, the research was addressed in three sections: The nature of logistics services - trade balance - international trade - statistics on the volume of trade and trade exchange (2007-2023)The second topic: the nature of the logistics performance index and the evaluation of the role of the Kingdom's performance in it and the Kingdom's strategy in logistics services. The third topic: statistical analysis of the extent of development of the logistical performance of the Kingdom and its impact on improving the volume of international trade balance and the volume of international trade The results of the statistical analysis showed that there is a positive impact between the development of the Kingdom's logistical performance and the improvement of the trade balance and the volume of trade, which confirms that the trend to rely on the development of logistics services will have a fairly good return on the trade balance and the volume of trade and thus increase the recovery and progress of the economy.

The Influence of Sino-US Trade Friction on the Export Volume of China's High-tech Products

With the rapid development of economy, witnessing the extraordinary progression of the economy, China has ascended as the second largest economy globally, and the gap with developed countries is getting smaller and smaller. For a long time, there has been a huge trade deficit from China to the United States. The United States provoked trade friction on the grounds of trade protectionism, restricting trade with China, high-tech industries being the focus. Employing the difference-in-differences (DID) methodology, this paper scrutinizes the influence of Sino-US trade frictions on the export value of China's high-tech industries, utilizing the export data of China's high-tech industries to the United States spanning from 2012 to 2022. It is found that after the Sino-US trade friction began, China's exports of high-tech products to the United States have declined significantly, which has caused trade destruction effect and trade deflection effect from China to the United States.

Analysis of the Fluctuations of ASEAN Currencies Against the US Dollar

At the beginning of 2024, from January to April, there was a downward trend in the rupiah exchange rate against the United States dollar. This downward trend also occurred in various countries in ASEAN. This trend is of course influenced by several factors, both internal and external. This research aims to analyze the internal and external factors that cause this tendency. The data in this research is secondary data and comes from the International Monetary Fund (IMF) at CEIC. This research uses descriptive analytical-qualitative methods. The results of this research show that interest rates, inflation, and net exports in the short term do not have a significant effect on exchange rate movements. However, this depreciation factor trend is more influenced by global geopolitical problems and the size of a country's economy. Geopolitical issues and the size of the economy affect a country's balance of payments (BOP) and foreign exchange reserves, which in turn influence exchange rate movements. Researchers hope that this research can provide new information for the academic community and become material for consideration, suggestions, and input for government authorities who have internal decision-making authority regarding exchange rates.

Assessing the Effectiveness of India's Free Trade Agreements (Ftas): A Comparative Analysis

This study, titled "Assessing the Effectiveness of India’s Free Trade Agreements (FTAs): A Comparative Analysis," explores the economic impact, sectoral outcomes, and implementation challenges of India’s FTAs. With an increasing number of trade agreements aimed at enhancing market access, boosting exports, and promoting economic growth, India has pursued FTAs with various countries and regional blocs, including ASEAN, Japan, and South Korea. However, these agreements have produced mixed results, with significant trade imbalances, limited export growth, and sectorial disparities, raising questions about their overall effectiveness. The study employs a comparative analysis framework, combining quantitative and qualitative methods. By analysing trade data, the study assesses changes in trade volumes, trade balances, and GDP growth post-FTA implementation. Additionally, sector-specific analyses examine the differential impact on agriculture, manufacturing, and services, revealing both gains in certain industries and challenges faced by others. Findings indicate that while FTAs have increased India's trade volume, they often disproportionately favour imports over exports, leading to trade deficits with key partners. Sectors such as IT and services have benefited from liberalized trade, while traditional industries like agriculture face competitive pressures from imports, limiting broader economic gains. Moreover, implementation challenges such as regulatory and non-tariff barriers in partner countries, low FTA utilization by Indian businesses, and limited awareness have hindered the agreements' potential benefits. Interviews with stakeholders, including policymakers and industry representatives, further highlight the need for enhanced support and strategic adjustments to maximize FTA advantages. India’s FTAs have contributed to economic integration, their effectiveness in achieving balanced trade and sustainable growth requires improvement. Recommendations include negotiating favourable terms, addressing non-tariff barriers, and increasing awareness among Indian businesses. This study’s findings provide valuable insights for policymakers to refine India’s FTA strategy, fostering more equitable and beneficial trade relationships in the future.

Era of uncertain events: Swedish foreign trade in 2010–2023

International trade has experienced since Global Financial Crisis (GFC) numerous uncertainties and risks. There are some countries that have successfully navigated in this challenging environment, like Sweden. In this research, we analyze the changes in trade between 2010–2023. For imports, the role of Russia, United Kingdom (UK) and Denmark has declined, while the importance of the Netherlands, Norway, and Poland show increase. For exports, a diminishing role of UK and Russia could be detected, while the role of the USA, Poland, Germany and China has increased. Our interpretation is that these trade changes are due to global geopolitical, i.e. macro-level shifts. Both Brexit (2016 onwards) and Russian invasion of Ukraine (2014 onwards) show long-term trade effects. Prior both UK and Russia held high importance; however, in the recent years, especially exports to USA have played more important role, and it is providing growth and surplus. Despite the export growth to Poland, Germany, and China, the trade to these countries remains to show trade deficit. We also analyze the impact of trade changes on maritime trade. Although, the overall handling at sea ports has declined, but container based trade demonstrates clear growth. Direct container connections to UK and Russia have declined substantially in the observation period as Chinese show significant increase.

Business Intelligence for Agricultural Foreign Trade: Design and Application of Power BI Dashboard

In today’s rapidly evolving business landscape, data analytics has become a critical tool for organizations striving to remain competitive and make informed decisions. Although technology facilitates data analysis, many decision-makers need more technical knowledge to use these tools. This project focuses on developing a business intelligence system in Power BI to analyze agricultural exports from Mexico as part of the Agro-logistics Observatory, aiming to bridge this gap and make data more accessible for non-technical users. The objective is to create an interactive panel that would allow users to visualize and compare export and import data, thereby supporting decision-making for both business and academic purposes. The methodology involved collecting and cleaning data from various sources, such as public institutions, and a modeling process that integrates geospatial data and economic classifications. Key performance indicators (KPIs), such as trade balance and the export share by-product, were designed and calculated to identify critical products and trade patterns. Although similar approaches have been presented in the literature, the novelty of this research lies in the detailed presentation of its methodology, which provides a step-by-step guide for its replication that is often lacking in other studies. In addition, it offers a dashboard that integrates data from various sources, presenting them through easy-to-interpret visualizations so that stakeholders can quickly and efficiently access valuable information beyond traditional data visualization. Furthermore, the project highlights opportunities for improvements in data visualization, including integrating more specific product data and enhancing the dashboard’s capabilities through predictive analysis.

Measurement and Analysis of the Relationship between General Revenues and Imbalance in Iraq's Export Structure For duration (2004-2021)

The Iraqi economy relies primarily on oil exports to achieve necessary financial surpluses in order to finance economic and social development plans. Capital imports also contribute to improving the productive capacity of all sectors that directly or indirectly contribute to the country's economic growth if they actually exist. These imports, represented by the equipment and machinery necessary for building and developing infrastructure in Iraq, which cannot be provided except through foreign trade, make Iraq closely connected to broad economic relationships with most of the developed world economies. Oil revenues have had a positive impact on the general budget situation. However, on the other hand, the lack of a productive base has led to the leakage of revenues towards imports to meet domestic demand, resulting in an imbalance in the overall export structure. Moreover the research objective was to identify the relative importance of total exports in Iraq and how they are affected by oil revenues during the period 2004-2021. The hypothesis is fiscal policy has led to a disruption in the structure of Iraq's exports. And one of the most important result that appeared general revenues depend to a large extent on oil revenues compared to other revenues (non-oil), which means that the Iraqi economy is considered one-sided. With the weakness of revenues achieved from productive sectors (industry and agriculture) as well as weak tax revenues, this leads to an imbalance in the structure of the trade balance, evident through the dominance of oil exports over total exports in the country. Paper type: Research paper.

Analisis Pengaruh Ekspor dan Impor Terhadap Pertumbuhan Ekonomi Pendekatan Akuntansi Arus Dana yang Dimediasi Foreign Direct Investment di Indonesia Tahun 2019-2021

The purpose of this study was to determine and examine the effect of exports and imports before, during, and after the covid-19 outbreak on economic growth with an accounting approach to foreign direct investment mediated fund flows in indonesia. Quantitative approach with PLS analysis technique is used in this study. Secondary Data obtained from various official websites were used in this study. This study provides the results that exports and imports have a positive and significant influence on economic growth with the approach of accounting for the flow of funds mediated by foreign direct investment in Indonesia. This implies that exports and imports have an important role in economic growth approach to accounting for the flow of funds. Foreign direct investment plays an active role in mediating the relationship between exports and imports to economic growth. The declining value of exports, imports, and foreign direct investment during the pandemic also affected the decline in economic growth in Indonesia. Export activity needs to be increased so that economic growth also increases. Likewise with import activities, although imports are excessive trade balance deficit, imports also have some positive influence on economic growth such as by importing can meet domestic needs and open opportunities to attract investors to invest. For this reason, imports need to be controlled so that economic growth continues to increase.

Analysing Real Exchange Rate Effects on the Trade Balance in South Africa

For years, policymakers and economists have been researching the significance of the native currency value versus other currencies in favouring the country’s trade balance and total. Therefore, this study investigates the impact of the real exchange rate change on the trade balance in South Africa. The study used annual time series data from 1980 through 2022. This study used the ARDL technique to analyse data. Variables used in this study include the trade balance, real exchange rate, terms of trade, money supply, South Africa’s gross domestic product, and the Chinese gross domestic product. Bounds tests showed that the variables are cointegrated. According to the empirical findings, the real exchange rates have significantly influenced the trade balance positively in the short run but in the long run, have a negative significant influence on the trade balance. The terms of trade have a positive significant influence on the trade balance in the short run, but it appears to be positively significant in the long run. The money supply in the short run has an insignificant negative relationship with the trade balance but in the long run, has a significant positive relationship with the trade balance. The SA gross domestic product has a significant negative impact on the trade balance both in the short and long run. Lastly, the Chinese gross domestic product has a negative insignificant relationship with the trade balance in the short. However, in the long run, it has a positive significant relationship with the trade balance. This proves that a rise in Chinese GDP, as a proxy for foreign economic activity, boosts South African exports to the rest of the world in the long term. As a result, the trade balance improves as China imports minerals from South Africa for production purposes. The dependence on currency depreciation to enhance trade in South Africa can improve its trade balance, but it may also damage the economy due to the country’s reliance on imports. However, the advice to weaken the South African currency should not be so harsh as to have a negative impact on the importation of key capital goods critical to the growth and development of the South African economy. It is recommended that the government reduce demand for imported products and boost domestic manufacturing, which might lead to domestic products being exported. The central bank must also stabilize the currency to increase competitiveness by decreasing the overseas price of exports and increasing the cost of imports.

Analysis of Exchange Rate Stability on the Economic Growth Process of a Developing Country: The Case of South Africa from 2000 to 2023

This study examines the impact of exchange rate stability on the economic growth of South Africa from 2000 to 2023, a period characterised by significant political and economic changes. Exchange rate stability is critical for developing countries, affecting key macroeconomic variables such as trade balances, foreign direct investment (FDI), and inflation. For emerging economies like South Africa, maintaining a stable exchange rate can reduce uncertainty in international transactions, foster investor confidence, and support sustainable economic development. This research explores whether consistent exchange rate management has positively influenced South Africa’s economic trajectory, particularly by mitigating the adverse effects of global shocks and domestic volatility. Using the EasyData online database, which contains yearly time series data, the method of analysis adopted by the research is the ordinary least squares (OLS) regression method. The findings show that while exchange rate stability positively impacts GDP, the influence of FDI and political risk is more substantial. These results underscore the importance of fostering a stable economic environment through sound exchange rate policies, political stability, and efforts to attract foreign investments to ensure long-term economic growth.

Modelling the Relationship Between Merchandise Trade Flows and Some Macroeconomic Variables in Ghana

Macroeconomic variables serve as economic indicators that offer valuable insights into the overall health and stability of an economy. Changes in these variables can have significant impacts on a country's trade balance and overall economic performance. This study employed multivariate time series analysis to study the relationship between Merchandise Trade Flows (MTF), Monetary Policy Rate (MPR), Commercial Lending Rate (CLR), Nominal Growth Rate (NGR) and Consumer Price Index (CPI) with Money Supply (MoS) as exogenous variable. The nature of trend in each series was investigated. The results revealed that quadratic trend model best models MTF, MPR, CLR and NGR whiles an exponential trend best models CPI. Johansen’s co-integration test with unrestricted trend performed revealed the existence of long-run equilibrium relationships between the variables and three (3) co-integrating equations described this long-run relationship. In terms of short-run relationships, the VEC (2) model revealed that, CLR, NGR, MoS have positive and significant impact on MTF. CLR, NGR and MoS have positive and significant impact on MPR, NGR have positive and significant impact on CLR, CPI and MoS have significant impact on NGR whiles NGR and MoS have significant impact on CPI. Model diagnostics performed on the VEC (2) model showed that, all the model parameters are structurally stable over time and the residuals of the individual models are free from serial correlation and conditional heteroscedasticity. Forecast error variance decomposition (FEVD) analysis showed that each variable primarily explained its own variance and the influence of other variables increase over time. Hence, adopting a broad perspective on macroeconomic variables can help policymakers anticipate and mitigate ripple effects across various economic sectors.

A Study on the Evolution of Oil Trade Relations Between Japan and Russia from Geopolitical Perspective

The research on the relationship between international trade and geopolitics has garnered extensive attention. However, there are still numerous aspects worth discussing in the study of the impact of East Asian geopolitics on its economic and trade exchanges. This paper analyzes the changes in the oil trade policy of Japan and Russia under the influence of international relations between ecology and geopolitics. This article also examines the distinct dilemmas of Japan and Russia and the trend of international relations. That is, Russia is facing the blockade of its energy economy and trade by Western countries, and Japan is facing the problem of oil trade simplification, as well as the impact and influence of the international environment and the policies of the two countries. Based on this, this paper puts forward the following suggestions. Japan should seek a trade balance among big countries flexibly and pragmatically. As a big country, Russia should assume a leadership role in global trade while pursuing mutually beneficial and win-win results with other countries.

Fiscal Policy, International Spillovers, and Endogenous Productivity

AbstractThe paper presents empirical evidence on the international effects of U.S. fiscal policy from structural vector autoregressions identified through external instruments in a panel setting for the G7 countries. An exogenous increase in U.S. government spending is estimated to produce sizable positive responses of output and consumption in the rest of the G7 countries, both about half as large as their domestic U.S. counterparts, while strongly depreciating the U.S. terms of trade and lowering the U.S. trade balance and short‐run real interest rates. Moreover, fiscal shocks are estimated to have a strongly positive impact on hourly labor productivity in the private sector. We solve a two‐country New Keynesian model in closed form and show that a low cost elasticity of varying technology utilization can simultaneously explain the positive productivity, consumption, and international spillover effects as well as the real depreciation resulting from expansionary U.S. government spending shocks.

Overlapping community detection in weighted networks via hierarchical clustering.

In real-world networks, community structures often appear as tightly connected clusters of nodes, with recent studies suggesting a hierarchical organization where larger groups subdivide into smaller ones across different levels. This hierarchical structure is particularly complex in trade networks, where actors typically belong to multiple communities due to diverse business relationships and contracts. To address this complexity, we present a novel algorithm for detecting hierarchical structures of overlapping communities in weighted networks, focusing on the interdependency between internal and external quality metrics for evaluating the detected communities. The proposed Graph Hierarchical Agglomerative Clustering (GHAC) approach utilizes maximal cliques as the basis units for hierarchical clustering. The algorithm measures dissimilarities between clusters using the minimal closed trail distance (CT-distance) and the size of maximal cliques within overlaps, capturing the density and connectivity of nodes. Through extensive experiments on synthetic networks with known ground truth, we demonstrate that the adjusted Silhouette index is the most reliable internal metric for determining the optimal cut in the dendrogram. Experimental results indicate that the GHAC method is competitive with widely used community detection techniques, particularly in networks with highly overlapping communities. The method effectively reveals the hierarchical structure of communities in weighted networks, as demonstrated by its application to the OECD weighted trade network, which describes the balanced trade value of bilateral trade relations.

Interaction of Climate Change and Green Stocks on Economic Growth in ASEAN-5

Research Originality: This study presents a new interaction of climate change in moderating the effect of green stocks, exchange rates, and net exports on economic growth in ASEAN-5 countries. Research Objectives: This study aims to analyze the interaction of climate change on green stocks, exchange rates, and net exports on economic growth in ASEAN-5 countries. Research Methods: This study used quarterly panel data from ASEAN-5 countries, 2016-2022, and selected a fixed effects model as the best model. The moderated regression analysis (MRA) approach supports this research.Empirical Results: The results showed that green stocks, exchange rates, and net exports positively affect economic growth in ASEAN-5 countries. The interaction of climate change on green stocks and exchange rates has a negative effect on economic growth. However, the interaction of climate change on net exports positively affects economic growth in ASEAN-5 countries. It represents that climate change can weaken the effect of green stocks and exchange rates on economic growth. Meanwhile, climate change can strengthen the effect of net exports on economic growth in ASEAN-5 countries. Implications: This study implies that the government needs to increase investment in green stocks to support financing that can mitigate climate change and develop net exports to increase economic growth toward a green economy. Similarly, the ASEAN-5 central banks, as monetary authorities, can maintain exchange rate fluctuations to achieve stable economic growth.JEL Classification: F31, F43, G11, Q54, Q56

Depreciation and Trade Balance: An Exploration of the J-Curve Phenomenon in Indonesia

Research Originality: Global economic uncertainty has increased in recent years, leading to an appreciation of the US dollar relative to most global currencies, including the Indonesian rupiah. The novelty of this study is the inclusion of natural resource commodity price index variables, given the importance of these commodities in Indonesia's balance of trade.Research Objectives: This study aims to examine the effect of rupiah exchange rate depreciation on Indonesia's trade balance.Research Methods: This study uses a Vector Error Correction Model (VECM) to analyze Indonesia's balance of trade from January 2015 to December 2023, examining the potential J-Curve phenomenon resulting from the depreciation of the Indonesian rupiah.Empirical Result: Findings from the impulse response analysis suggest that the J-Curve phenomenon is present in Indonesia's balance of trade as a result of the rupiah's depreciation. The results of this study also confirm the positive effect of increasing natural resource commodity prices on Indonesia's trade balance.Implications: The implication of these findings is that exchange rate depreciation can improve Indonesia's trade balance only when natural resource commodity prices are rising. Conversely, if commodity prices decline, maintaining the stability of the rupiah exchange rate becomes crucial.JEL Classification: F11, F14, F31, Q02

Macroeconomics Factors Affecting Net Exports of Oil Palm Industry in Malaysia

This quantitative study investigates the impact of oil palm production, oil palm pricing, inflation, and GDP growth rate on the net exports of Malaysia's oil palm industry. This research is aimed at analyzing how the net export of oil palm relates to certain macroeconomic variables. This study has employed multiple regression analysis through Ordinary Least Squares for 26 years of time series data from 1996 to 2020 in Malaysia. The findings from this study improve our understanding of the major factors contributing to net exports in the oil palm industry. Palm oil production, price, as well as GDP growth, drive net export of palm oil in Malaysia found during this research. An increase in production leads to the reduced amount of palm oil exported, all other things remaining constant. Conversely, inflation and GDP growth are major drivers behind the increased net export of palm oil.

Brexit and the Services Trade—A Longitudinal Analysis

This study investigates the impact of Brexit uncertainty on the UK's services sector trade from 2016 to 2019 revealing a statistically significant negative impact that varied across sectors and destinations. Using the OECD-WTO Balanced Trade in Services dataset and synthetic difference in differences methodology, the findings indicate an annual shortfall of US$23.7/£18.5 billion in UK services exports compared to a scenario where the UK remained in the EU, translating to a 5.65 percent reduction. The bilateral data suggests an 8.5 percent average decline, with larger exports to countries like Germany and the US being less affected than smaller bilateral exports. The UK bilateral exports to the EU declined by 6.21 percent, while Ireland’s exports expanded by 21.4 percent. The study highlights that small firms were disproportionately impacted, leading to a decline in trade openness and export activities. Methodological sensitivity is underscored, with various approaches estimating Brexit’s impact differently. Sectoral analysis shows significant declines in Travel, Insurance, Finance, Telecom, Business and Cultural Services. Ireland notably benefited post-Brexit, experiencing a 14.75 percent annual increase in services exports due to business relocations. The study emphasizes the critical yet underexplored consequences of economic disintegration on international trade in services, providing essential evidence for future UK-EU trade relations post-Brexit.

Real Exchange Rate Depreciation and Domestic Tax Revenue Performance in Kenya

Purpose: Taxation plays a critical role in raising the resources needed for financing government activities in developing countries. On the other hand, the volatility of real exchange rates (RERs) has generated significant concern among academics and policymakers in view of its effects on macroeconomic variables such as tax revenue generation. This study therefore focused on real exchange rate depreciation on domestic tax revenue performance in Kenya. The study was guided Theory of Constraints. Methodology: The study employed an explanatory research design. Secondary data was collected from the CBK, KRA, and the World Bank. In this study time series data ranging from 2003 – 2023 was used to analyze the determinants of domestic tax revenue performance in Kenya. The hypotheses were tested at a significance level of .05 using the multiple regression analysis. A multivariate time series ARDL regression analysis model was used to analyze the data. Results: The study ARDL model concluded that Real exchange rate depreciation led to a notable decrease in domestic tax revenue performance, with β = -0.223945 and p = 0.000 < 0.05. This effect is intensified when considering the lagged impact, where a one-period lagged depreciation results in an even greater reduction in tax revenue performance, β = -1.927412 and p = 0.0004 < 0.05. Conclusion: The study recommended that government of Kenya should stabilize the exchange rate and prevent excessive depreciation by fostering a favorable trade balance and maintaining investor confidence. Additionally, future research could focus on the effects of fiscal Policy Changes on domestic tax revenue performance. Also, future studies could examine Impact of Global Economic Shocks on Domestic Tax Revenue.