Real Exchange Rate Changes and the Trade Balance: The Evidence from Pakistan

This study uses quarterly data from July 1980 to June 2006 to explore the relationship between changes in real exchange rate and the trade balance of Pakistan. Applying the Auto Regressive Distributed Lag (ARDL) approach to cointegration, we examine the existence of a possible long-run relationship. We find the following: (1) a long-run relationship between the series exists, and (2) the coefficient of elasticity is negative and statistically significant, which does not support for the J-relation.

Given this, the policymakers should take a conservative approach in using currency devaluation to cure the fundamental disequilibrium in the balance of payments. It is likely that such policy may not produce the desired outcome—i.e., the trade balance may not improve.     

The Impact of Trade Openness on Regional Inequality: The Cases of India and Brazil

Regional inequalities are large in India and Brazil and represent a development challenge. This article aims to determine whether regional inequalities are linked to a country's trade openness. An annual indicator of regional inequalities is constructed for India for the period 1980–2004 and for Brazil from 1985–2004. Results from time series regressions show that Brazil's trade openness contributes to a reduction in regional inequalities. The opposite result is found for India. India's trade openness is an important factor aggravating income inequality among Indian states. In both countries, inflows of foreign direct investment are found to increase regional inequalities.     

Impact of Trade Facilitation on Parts and Components Trade

This article utilizes data from seventy-seven countries over the period 2004–07 in a gravity trade model to examine the impact of four dimensions of trade facilitation—physical infrastructure, information and communication technology, business environment, and border efficiency—on parts and components and final goods trade for the machinery and transport equipment sector. The results show that the effect of importers’ overall trade facilitation measures is stronger for promoting parts and components than for final goods trade. Among the four dimensions, border efficiency has the largest impact on trade flows for this sector, and the effect of exporter and particularly importers’ border efficiency is important for parts and components, as compared to final goods trade.     

Province-Level Impacts of Canada’s Trade Agreements

Given Canada’s extended geography and regional economic diversity, individual provinces have differing exposures to particular international trade agreements. We demonstrate this by estimating the impacts of the Canada-Korea free trade agreement on the province of Ontario, using a dynamic general equilibrium model to generate Canada-level impacts, which are then decomposed on the basis of partial equilibrium model simulations on a trade dataset in which Ontario is represented as a separate international trading entity. We show that geography and sectoral specialization matter and that general equilibrium effects must be taken into account in partial equilibrium assessments of sectoral impacts of major trade agreements.     

The High-Value Commodity Export Effects of Standards in Africa

ABSTRACT

The stringency in standards usage, especially in developed markets, has trade effects, particularly for Africa. Thus, this study investigated the export effects of the EU standards for Africa in a two-step, Helpman et al. (2008) model for two high-value commodities. In all, 52 African countries were considered from 1995 to 2012. This study finds that fish standards are trade enhancing at the extensive margins, but not at the intensive margins. However, vegetable standards are trade inhibiting at both the extensive and intensive margins. Thus, these findings suggest that the impacts of standards on exports are commodity-specific.     

International Competitiveness: A Case Study of American,Swedish, and Ukrainian Forest Industries

ABSTRACT

The objectives of this article are to assess changes in the international competitiveness of the forest products industries in three countries (Sweden, the US, and Ukraine) during the years preceding, during, and after the recent economic crisis. To deepen the exploration of the three countries’ competitiveness, we propose a Cross-Country Relative Competitiveness Index. The results show that comprehensive measurement of comparative and competitive advantages is essential for determining why a given industry in a given country is doing well or badly. They also provide broad background information for subsequent, more detailed explorations of important changes and trends.     

Consciousness for fair consumption: conceptualization,scale development and empirical validation

Sustainable consumption means that consumers act in an environmentally and socially responsible manner. Compared with the vast amount of studies concerning environmentally conscious consumer behaviour, relatively little is known about socially conscious consumption. The present paper focuses on fair consumption as an important aspect of social consumption. In our study, consciousness for fair consumption (CFC) is defined as a latent disposition of consumers to prefer products that are produced and traded in compliance with fair labour and business practices. A scale to measure CFC was conceptualized and tested in three independent empirical studies. Two studies were conducted at European universities (2010 and 2012) and used 352 and 362 undergraduate business students respectively. The third study, conducted in 2011, used 141 employees at a European university. The results confirmed the reliability and validity of the new CFC scale across samples. While being moderately related to other aspects of sustainable consumption such as ecological concern and moral reasoning, CFC was significantly distinct from those concepts. Most importantly, it was established that the CFC, as measured by the new CFC scale, is a strong determinant of consumption of fair trade products that has been neglected in existing research.     

The Effect of Corruption on Exports and Imports in Latin America and the Caribbean

International trade, in particular exports and imports, are regarded as important factors that can increase the economic development of the Latin American and Caribbean (LAC) countries. However, little is known whether the ability of these countries to strengthen their global positions in trade can be affected by the pervasiveness of local corruption. The objective of this study is to analyze the impact of corruption on exports and imports in LAC countries. Our empirical results from the gravity model indicate that local corruption strongly reduces exports in the region. Thus, we conclude that LAC would be able to achieve more export growth if corruption in the region was effectively reduced.     

Comparing trade areas of technology centres using ‘Geographical Information Systems’

Advances in geographical information systems have contributed to location and marketing design strategies on the part of retailers. The techniques used in this field are based on delimiting trade areas and spatial analysis. The same approach is applied in this study to technology centres, which are considered as suppliers of knowledge-intensive services to their associated firms. The research objective focuses on analysing the spatial distribution of firms associated with two technology centres from different sectors. The results indicate that firms associated with a technology centre present spatial patterns that are similar to those observed in retailing, while significant differences were also found between the two technology centres used for the study.     

EXCHANGE RATE PASS-THROUGH IN THE AUTOMOBILE INDUSTRY

This article examines empirically the exchange rate pass-through of car manufacturers on the Swedish market. It first analyzes the changes in prices by supplying countries during the period 1976 - 1996. In a second stage, the relationship between price-level adjusted exchange rates and quality-adjusted prices is investigated. Although there exist significant differences across countries, the evidence shows that actual price adjustments are associated with stabilization of local currency prices. The policy implication of the results is that the use of an exchange rate policy in the case of external imbalances should therefore be reconsidered within the broader context of how market structure and conduct influence the optimal pricing of traded goods.