Determinants of China's bilateral trade balance in global value chains

This paper identifies the determinants of China's bilateral trade balance using a new measure based on international input–output data, the so-called ‘trade in value-added’ (TiVA), which can prevent double counting in the estimation of bilateral trade balance. Our results show that using a measure based on gross exports, rather than TiVA, causes relatively large overestimation of the impact of the RMB exchange rate on China's bilateral trade balance. This overestimation is mainly because that the increasing production of exports may require increasing intermediate imports as a consequence of international fragmentation of production in global value chains. In addition, our results also show that the impact of FDI inflows on China's bilateral trade balances depends on the position and role of China and its trading partners in GVCs.     

Factors driving embodied carbon in international trade: a multiregional input–output gravity model

ABSTRACT

Concerns about the effects and consequences of climate change have notably increased in recent decades. Despite large advances in the understanding of this phenomenon, further research into the determinants of gas emissions is necessary, to shed light on the responsibilities of producers and consumers, and their potential contribution to mitigation strategies. This paper studies the trajectories and determinants of carbon embodied in world trade during a period of 15 years. Our methodology relies on a multiregional input–output model, environmentally extended. Drawing on data from the World Input–Output Database, we estimate embodied emissions in bilateral flows. Then, we assess the determinants of CO₂ emissions embodied in trade, combining input–output modelling with trade gravity panel data analysis. This paper offers a methodological approach that explains and quantifies the underlying factors of carbon trade, integrating the production and consumption perspectives and considering the geographical, structural and institutional context of countries.     

The exchange regime and trade balance in Turkey

Over the last 15 years, high trade deficits have become a source of external vulnerability for the relatively stabilized Turkish economy. This corresponds to the period where authorities have been following a floating exchange rate regime. Thus, this study aims to empirically show whether the adopted exchange rate regime has an impact on the trade balance for the period of 1987 Q1 to 2015 Q2. Estimation results indicate that there is a long-run relationship between the real effective exchange rate and trade balance under both fixed and floating regimes in Turkey, but there is no evidence for the J-curve hypothesis.     

Political Economy of Regional Integration: The Northeast Asian Model Revisited

It is found that the intra-regional trade share or functional integration plays an important role in the institutionalization of regional integration not only in the European Union (EU) but also in Northeast Asia. The crisis factor, which is measured by the regional economic growth rates, is empirically significant in Northeast Asia but not in the EU. This situation confirms the crisis model for Northeast Asia that emphasizes the stimulating role of crisis for the institutionalization of regional integration. However, the political leadership factor is not empirically significant in Northeast Asia and in the EU, and this finding does not support the political leadership model that emphasizes the facilitating role of political leadership for the institutionalization of regional integration.     

Information and Knowledge as Antecedents of Consumer Attitudes and Intentions to Buy and Recommend Fair-Trade Products

The authors propose and empirically test a causal model to understand how the availability of fair-trade information and consumer knowledge about this issue affect consumers’ attitudes and intentions toward fair-trade products. The model is built upon the attitude-behavior paradigm and the premises of agency theory. It is tested through structural equation modeling with a sample of 292 Spanish consumers. The findings are that consumers do not have good knowledge about fair trade and that this is significantly determined by the lack of information about this in the market. It is also observed that consumers’ perceptions about the availability of fair-trade information have negative effects on their concern about this issue and that such information as is available is not effective in reducing consumer skepticism. The research represents an extension of previous fair-trade literature because the role of information and communication in improving consumer attitudes and buying intentions has rarely been explored in the case of ethical products.     

Economic Impacts of the Possible China–US Trade War

This article uses a multi-country global general equilibrium (GE) model to numerically simulate the effects of possible China–US trade wars. We introduce an endogenous trade imbalance structure with trade cost into the model which helps to explore both tariff and non-tariff trade war effects. Our simulation results show that China will be significantly hurt by the China–US trade war, but negative impacts are affordable. The US can gain under unilateral sanction measures to China, but will lose if China takes retaliation measures. Comparing the effects under mutual trade war, China will lose more than the US. Introducing non-tariff barrier trade wars will intensify the negative effects, and comparatively negative effects to China are larger than to the US. Mexico’s involvement in trade war with the US will strengthen the negative effects and comparatively hurt the US more. Under non-cooperative and cooperative Nash bargaining equilibrium, the US can gain more than China in trade war negotiation, which means the US has stronger bargaining power than China. Additionally, trade wars between China and the US will hurt most countries and the world especially in GDP and manufacturing employment, but benefit their welfare and trade.     

Size and information revelation in securities trading

We examine differences in information content between order submission sizes and trade sizes by U.S. equity traders. Increasing (decreasing) order submission (trade) size is reflective of information. The result suggests that better-informed traders want to trade in a large size, but that they engage in stealth trading practices or break larger orders into smaller sizes in order to conceal information. While prior studies tend to narrowly focus on trade executions at the market-centre level, our findings indicate that order submission size varies significantly from trade size and that both sizes are informative about future prices, albeit in an inverse manner.     

“Retail is detail! Give consumers a gift rather than a bundle”: Promotion framing and consumer product returns

Retailers often use the promotion strategy of offering supplementary products (e.g., free gift, bundle) to attract consumers and increase sales. Despite the growing literature on the promotions that are differently framed but offer economically identical values, little research has examined the link between promotion framing and consumer product returns. The current article sheds light on this relationship, hypothesizing that a free gift promotion would be superior to a bundle promotion in reducing consumer product returns. The findings suggest that a gift‐framed promotion leads to a lower product return intention than an economically equivalent bundle promotion, because consumers tend to perceive more loss from giving up the gift‐framed (vs. bundle‐framed) deal. Further, this study examines a moderating role of brand familiarity (familiar vs. unfamiliar) and shows that the merits of free gift framing on product return intention via perceived loss are amplified (attenuated) when the promoted brand is familiar (unfamiliar). Overall, the investigations of this study imply that it is better to frame a promotion as a “free gift” than a “bundle” to increase perceived loss in returning the purchase and thus to decrease consumer product returns. This strategic intervention works especially when the gift is offered by familiar brands.     

Trade-threshold Effect on Inflation in Tunisia: New Evidence Resulting from a Nonlinear Approach

Trade openness is an important determinant of the inflation process. The effect of trade openness on inflation, however, is still an issue of debate at both theoretical and empirical levels. This study tried to provide a contribution to the literature by examining the relationship between inflation and trade openness in Tunisia over the period 1975Q1-2015Q4 using a nonlinear model. The originality of this study stems from the fact that it is the first investigation considering both the Residual-Based Tests for Cointegration in Models with the Regime Shifts and Threshold Regression model. The linear model confirms the existence of a positive relationship between inflation and trade in Tunisia. Yet, considering the nonlinear model, trade openness growth and Consumer Price Index (CPI) inflation growth show a statistically significant negative link as long as the trade openness evolution does not exceed the threshold. Nevertheless, if the trade openness growth is higher than the threshold, integrating the trade positively affects CPI inflation. Furthermore, a positive influence of Money supply growth on this type of inflation was noticed in Tunisia in all the considered regimes proving the effect of monetary factors on inflation level. Consequently, trade openness could be used to control inflation in Tunisia.     

中国木质家具出口贸易与汇率波动关系研究

木质家具是我国最重要的出口林产品之一。人民币汇率改革后,人民币总体呈升值趋势,这一趋势提高了国产木质家具的出口价格,会产生阻碍出口的作用;与此同时其也会使进口原材料价格相对降低、促进原材料的进口,二者相互作用会共同影响木质家具出口额。通过建立回归模型,研究人民币汇率波动对中国木质家具出口贸易额的影响,结果表明人民币汇率与中国木质家具出口额呈负相关,但是通过人民币贬值来促进出口的策略并不明智。