On the (nonlinear) relationship between exchange rate uncertainty and trade — An investigation of US trade figures in the group of seven

In this paper bilateral models formalizing monthly growth of US imports and exports are employed to investigate the potential of nonlinear relationships linking exchange rate uncertainty and trade growth. Parametric linear and nonlinear as well as semiparametric time series models are evaluated in terms of fitting and ex ante forecasting. The overall impact of exchange rate variations on trade growth is found to be weak. In periods of large exchange rate variations, trade growth forecasts gain from conditioning on volatility. Empirical results support the view that the relationship of interest might be non-linear and, moreover, lacks homogeneity across countries and imports vs. exports. JEL no. C14, C22, F31, F41     

What has determined the rapid post-war growth of intra-EU trade?

Based on the gravity model by Baier and Bergstrand (2001), we use a static and dynamic panel approach to estimate the determinants of the growth of intra-EU trade from 1960 to 2000. The results suggest that income growth was the major force, accounting for approximately two-thirds of total growth. Trade liberalization still had a sizeable effect, while other factors had only a little impact (income convergence, real effective exchange rate changes) or played no role (trade costs). Our estimation results for intra-EU trade, using a variety of extensions, underline the robustness of the Baier-Bergstrand cross-section findings for world trade. JEL no. C23, F12, F14, F15     

Does the internet generate economic growth,international trade,or both?

Recent cross country panel data studies find a positive impact of internet use on economic growth and a positive impact of internet use on trade. The present study challenges the first finding by showing that internet use does not explain economic growth directly in a fully specified growth model. In particular openness to international trade variables seem to be highly correlated with internet use and the findings in the literature that internet use causes trade is confirmed here suggesting that internet use impacts trade and that trade impacts economic growth. A simultaneous equations model confirms the positive and significant role of internet use to openness and the importance of openness to economic growth. Internet use shows to be more impacting trade in non-high income countries than in high income countries whereas the impact of trade on economic growth is the same for both income groups.     

Trading away what kind of jobs? Globalization,trade and tasks in the US economy

Economists and other social scientists are calling for a reassessment of the impact of international trade on labor markets in developed and developing countries. Classical models of globalization and trade, based upon the international exchange of finished goods, fail to capture the fragmentation of much commodity production and the geographical separation of individual production tasks. This fragmentation, captured in the growing volume of intra-industry trade, prompts investigation of the effects of trade within, rather than between, sectors of the economy. In this paper we examine the relationship between international trade and the task structure of US employment. We link disaggregate US trade data from 1972 to 2006, the NBER manufacturing database, the Decennial Census, and occupational and task data from the Dictionary of Occupational Titles. Within-industry shifts in task characteristics are linked to import competition and technological change. Our results suggest that trade has played a major role in the growth in relative demand for nonroutine tasks, particularly those requiring high levels of interpersonal interaction.     

Analysis on the effect of economic interaction＇s pulse from the Sino-US trade perspective

In an open economy, the economic concussion in sole country will transmit to other countries which make the international economic concussion play an important role in the formation of economic fluctuation. Both America and China, as two prominent economy units, have a great impact not only on the regional economy but also international economy. This paper constructs a shock-response model for China-America bilateral trade relations by using of impulse-response function of the vector auto-regressive model. The fluctuation of mutual economic growth caused by the shock of bilateral trade variances is empirically analyzed. Further more; the paper also uses variance decomposition technology to estimate its contribution-rate. The empirical analysis result shows that American economy has a notable impact on China, and Chinese economy will depend on American economy more and more.     

The structure and nodes’ role of the world coal trade network

This paper employs the network approach to study the structure and nodes’ role of the world coal trade network. Based on the bilateral coal trade data of 212 countries (or regions) over the period from 2001 to 2010, this study analyses the world coal trade network, the network’s directionality and heterogeneity, and the roles of network nodes. It is found that the size of the world coal trade network is relatively stable, while the trade links and volume have been growing overtime. Because of the buyer–seller dual structure between exporters and importers, the network shows strong directionality. It also exhibits heterogeneity because of the uneven distribution of trade among different countries. In general, most countries can be classified as the in-nodes, followed by the middleman-nodes, then the cycle-nodes and out-nodes. Finally, the web shows a remarkably significant core–periphery structure and core–half-an-edge–edge structure and the core layers of each model are quite stable.     

A kalman filter-gravity equation approach to assess the trade impact of economic integration: The case of Spain, 1986–1992

A Kaiman Filter-Gravity Equation Approach to Assess the Trade Impact of Economic Integration: The Case of Spain, 1986-1992. — The main objective of this paper is to propose an alternative method for evaluating the effects that economic integration between countries has on their trade flows. The trade impact model of reference is the gravity equation and the empirical application of the methodology focuses on Spain’s incorporation into the EEC in 1986. The principal contribution consists in the dynamization of the gravity equation by means of the Kaiman filter. By way of the Kalman algorithm, we use all the preintegration information in order to predict the coefficients of the gravity equation for the subsequent years, thereby defining a more credibleantimonde.     

Carbon emissions,trade liberalization,and the Japan–ASEAN interaction: A group-wise examination

As in any modern economy, trade is central to the progress of the economy in the Association of Southeast Asian Countries (ASEAN) region, but environmental degradation occurs with globalization. Using panel data from the period 1970–2006, this study examines the interaction between trade and the environment in terms of carbon emissions for the group of ASEAN countries. The results demonstrate that CO₂ emissions display an inverted-S shape in the region. In general, exports as a percentage of the gross domestic product (GDP) are main contributors to carbon emissions in the developed, developing and late-developing ASEAN countries. The study found no evidence for the Foreign Direct Investment’s (FDI) deteriorating impact on environmental quality. Moreover, Japan’s imports from the region do not cause pollution while China’s imports stimulate the pollution per capita.     

Lingering effects of central planning on trade? Evidence from current CIS trade patterns

Conclusions Both the gravity model and indexes of trade dependence show a bias in the geographical distribution of trade towards other members of CIS, in both exports and imports of most of the CIS countries, except Russia. The gravity model and the comparison made with the EU shows that this cannot be solely explained by geographical proximity or free trade agreements within the CIS. However, central planning cannot be the only reason, either. These CIS members shared a country, a common experience, a culture for more than half a century. This can also explain part of the bias in CIS trade. In sum by these two measures, some evidence is found for a bias in geographical distribution towards CIS, suggesting that complete reorientation towards Western markets did not take place.     

Pass-on trade: why do firms simultaneously engage in two-way trade in the same varieties?

This paper documents that a large fraction of trade flows at the firm level consists of simultaneous imports and exports in identical products, narrowly defined at the 8-digit product classification, which we call pass-on trade (POT). We use data on imports and exports at the firm and product level for Slovenian manufacturing firms in the period 1994–2008, to show that, on average, 70 % of all exporting firms engage in POT. This corresponds to more than 50 % of all exported products. Thus, imported products that are exported again by the same firm is a statistical regularity of trade of Slovenian manufacturing firms. We document that the use of POT is increasing in firm size, product diversification, multinational status as well as firm productivity and profitability. We offer and explore empirically a number of explanations for POT. Among possible explanations, we find evidence on the importance of firms’ multinational networks and demand complementarities between firms’ own and POT products. The latter confirms the theoretical explanations for carry-along trade (CAT) as developed by the recent work of Bernard et al. (2012).     

Where has the rum gone? The impact of maritime piracy on trade and transport

Review of World Economics - Despite a general agreement that piracy poses a significant threat to maritime shipping, empirical evidence regarding its economic consequences remains scarce. This...     

The impact of regional trade agreements on the quality of export products in China’s manufacturing industry

In recent years, under the risks of anti-globalization trend and uncertainty of trade war, countries have been entering into bilateral and multilateral regional trade agreements (RTAs). This study constructs both theoretical and empirical models to examine whether these RTAs can improve the quality of exported products among Chinese manufacturing enterprises, thereby expanding on a new policy research area that focuses on improving Chinese export quality or import quality of RTAs trade partners from China. The study finds that RTAs’ clause quantity (measured by clause coverage rate) and clause quality (measured by law commitment rate) play different roles. The former can generate “spaghetti bowl” effect but the latter can significantly promote export quality for Chinese manufacturers. The study also finds that RTAs can promote balanced development among the various regions in China and that a new generation of binding clauses in the “WTO-X field” with more new clauses strongly affects efforts to improve the quality of products exported to high and upper-middle income markets. We also find that for most industries, signing high-quality RTAs helps to improve export product quality, but there are no effect for some industries with laggard or special advanced technology.     

Who captures the price rent? The impact of European Union trade preferences on export prices

Preferential trade agreements (PTAs) aim at increasing trade flows via the incentives created by preference margins; this is the difference between the preferential tariff and the tariff of the main competitors. However, an additional impact that is often omitted in PTAs evaluations is the possibility that the wedge between preferential and most favoured nation (MFN) tariffs may induce a preference rent that translates into larger prices for preferential exporters. This paper analyses empirically whether preferential exporters capture this preference rent using a unique dataset of imports in the European Union at a highly disaggregated level linked to information on the preferential regime used and the tariff applied. Our main findings suggest that on average an exporter obtains a larger price margin under a preferential regime than under MFN. However, this preference rent is only partially appropriated by exporters with a pass-through coefficient from preference to price margins that oscillates between 0.17 and 0.8, depending on the size of the margin and the type of product.     

Exchange rate sensitivity of Japan’s bilateral trade flows

The traditional way of assessing the impact of currency depreciation on the trade balance has been to estimate the elasticity of trade volume to relative prices. To this end, most previous studies used aggregate trade data. To shy away from problems associated with using aggregate data, recent studies have relied on bilateral trade data. Since import and export price data is not available on bilateral level, this study proposes an alternative way of assessing the impact of currency depreciation on bilateral trade flows. The models are applied between Japan and her nine largest trading partners using recent advances in time-series modeling.     

Do we really know that trade agreements increase trade?

This study surveys the empirical literature in which the gravity equation has been used to study the effect of economic integration agreements (EIAs) on international trade flows. We show that most studies either focus on improving the methodology to assess regionalism’s overall impact, or on a small set of well-known agreements without necessarily adopting new methodological improvements. We bridge this gap by providing individual estimates for EIAs on world trade, while employing first-differencing techniques to correct for endogeneity bias and account for phase-in effects. Overall, EIAs promote trade by at most 50 %. Surprisingly, more than half of the EIAs investigated have had no discernible impact on trade at all, while only about one quarter of the agreements are trade promoting. Characteristics of these agreements, such as their institutional quality, design, and their members’ involvement in the World Trade Organisation, shed more light on how this variation can be understood.     

Driving forces of vertical intra-industry trade in Europe 1996–2005

A common feature in the empirical literature of intra-industry trade is the analysis of trade between a given reference country and a set of partners. This article differs from previous studies by examining the bilateral trade among all trading partners within a set of partners. Using a panel data approach, we find that differences in factor endowments seem not to be important as a driving force behind vertical intra-industry trade for European countries over the chosen period. More important driving forces are production size, geographical proximity, average income per capita and income distribution overlap.     

The impact of foreign direct investment and trade on economic growth Taking China, Korea, Malaysia, Philippines ＆ Thailand for example

In this study the authors make efforts to survey the impact of foreign direct investment and trade on the economic growth of five East Asian countries, China, Korea, Malaysia, Philippines and Thailand. Using an augmented production function （APF） growth model, the authors apply panel data Method and data span is from1980 to 2006. The required data are extracted from World Development Indicator 2008. The result shows that a co-integration relationship between growth and its determinants in the APF model is supported. Firstly, the study shows that with the increasing the inflow of foreign direct investment, positive impact on growth in Thailand, Korea and China is proved. However, this impact is negative in Philippine and Malaysia. Also the impact of trade on economic growth has the same result with FDI impact in sign. Further, the impact of labor force on growth is not significant in these countries and the effect of gross fixed capital on growth is positive and has a very high impact on selected countries.     

How does trade affect the labor market? Evidence from Japanese manufacturing

This paper investigates how increased trade has affected labor demand at different levels of skills in Japanese manufacturing since the 1980s. First, the estimated loss of employment in aggregate manufacturing attributable to increased imports between 1980 and 1990 is 4.7 percent of the 1980 level of employment. Second, the rate of change in the relative wage of non-production to production workers attributable to the change in trade between 1980 and 1990 is 2.4 percent or less. These findings suggest that the effect of increased trade on the Japanese manufacturing labor market in the 1980s is not yet very large.     

On trade creation and regional trade agreements: does depth matter?

Regional trade agreements (RTAs) are usually classified according to their form into four broad categories: preferential arrangements, free trade agreements, customs unions and common markets. This paper investigates whether the form/depth of RTAs matters concerning their effect on trade. I use a proper specification of the gravity model with panel data on the 1960–2000 period, which specifically control for self-selection into agreements. Results show that creating any kind of RTAs providing trade preferences to their member countries significantly increases bilateral trade. Nevertheless, their average treatment effect on bilateral trade does not significantly differ according to the depth of agreements.

Do regional trade agreements really boost trade? Evidence from agricultural products

We evaluate the impact on trade of regional trade agreements (RTAs) using a panel data approach at the detailed product level which exploits exports to third destinations and imports from third origins as benchmarks. This method is robust to both endogeneity and heterogeneity across agreements and across products, and allows differentiation between the impacts of tariff provisions and non-tariff provisions. The analysis covers agricultural and food products for 74 country pairs linked by an agreement entered into force during the period 1998–2009. Our estimate of the mean elasticity of substitution across imports at product level is slightly below four. Counterfactual simulations suggest that RTAs have increased partners’ bilateral agricultural and food exports by 30–40 % on average, with marked heterogeneity across agreements. Also, RTAs are found to increase the probability of exporting a given product to a partner country although this impact is small. Finally, we found non-tariff provisions have no measurable trade impact.