Paving the Road to Export: Assessing the Trade Impact of Road Quality

Assessing the trade impacts of domestic transport costs is data demanding and analyses that examine the effects of road quality, a critical aspect in regional and public policy, practically do not exist in the international trade literature. The few studies available rely mostly on distance-based measures as proxies of transport costs which impede analyzing the trade effects of transport-infrastructure improvements. In this paper, we combine highly disaggregated records of export flows with detailed geo-referenced information of the Colombian transport network, including its road quality, as well as real measures of transport costs of shipping goods within the country to measure the trade impacts of improving road quality. We find that the trade effects of improvements in road quality are relatively small on average; however, there is considerable heterogeneity in the magnitude of the effects. We show that longer routes have larger shares of their roads in poor conditions; accordingly, the trade impacts of shipments originated in remote regions are found to be quite substantial.     

Development of Sunflower Oil Exports in Russia and the EEU: Main Trends,Prospects, and Evaluations by the Gravity Model

ABSTRACT

The purpose of this paper is to assess the major trends, factors, and prospects of development of Russian and EEU sunflower oil exports. The sanctions resulted in an increase of sunflower oil exports in 2014 to a peak value, which allowed the producers to accumulate revenues in hard currency. The gravity models findings for Russia and for the EEU show that the sanctions stimulated the growth of sunflower oil exports. As distinct from a common language, a common border also encourages the development of Eurasian exports to third countries. The tariff size in the importer country is strongly and negatively connected with exports both from Russia and from the EEU. The effect of regional integration within the EEU is insignificant for the development of sunflower oil exports, while regional integration processes in the CIS have a positive impact on exports.     

WTO challenges and efficiency of Chinese banks

After joining the World Trade Organisation (WTO) in December 2001, China was given 5 years to completely open up its banking market for international competition. Chinese banks have been renowned for their mounting nonperforming loans and low efficiency. Despite gradual reforms, the banking system is still dominated by state ownership and encapsulated monopolistic control. How to raise efficiency is a key to the survival and success of domestic banks, especially the state-owned commercial banks. Two important factors may be responsible for raising efficiency: ownership reform and hard budget constraints. This article uses a panel data of 22 banks over the period 1995 to 2001, and employs a stochastic frontier production function to investigate the effects of ownership structure and hard budget constraint on efficiency. Empirical results suggest that nonstate banks were 8–18% more efficient than state banks, and that banks facing a harder budget tend to perform better than those heavily capitalized by the state or regional governments. The results shed important light on banking sector reform in China to face the tough challenges after WTO accession.     

Impact of regional interactions on China’s trade performance: evidence from a spatial econometric approach

ABSTRACT

In this paper, we examine the impact of regional interactions on China’s trade performance as supported by infrastructure development, using exports and imports of Chinese-owned and foreign-owned firms disaggregated for 28 provinces. Taking into account the disparities in the regional economic activities, we use five spatial weight matrices in a spatial panel lag and spatial panel error frameworks in the period 1996–2016. The spherical distance and the gasoline usage weight matrices measure the impact of ground connections on China’s trade flows. The nautical miles and the river distance weight matrices measure the impact of maritime and river connections on trade flows for provinces along the sea coast, in the Yangtze valley, and along Zhu river, respectively. We find significant cross border effects on provincial trade flows. The effects vary between areas and firms. Overall, our findings show positive influence of regional interactions on China’s international trade performance.     

Explaining the Uneven Economic Performance of the EU Cohesion Countries: An Export-Led Growth Approach

This article explains the differences in growth rates between the cohesion countries of the EU: Ireland, Spain, Portugal and Greece. Employing a decomposition growth approach, it is found that the main driver of growth differences lies in productivity. The remarkably higher Irish growth rates in the 1990s are sourced to greater productivity growth resulting from higher investment in human capital and technology. The export-led growth approach reasonably predicts the growth rates and the prediction is more precise when differences in productivity growth are controlled for. Higher economic growth is explained by the higher income elasticity of exports relative to imports.     

International Channels of Distribution and the Role of Comparative Marketing Analysis

To enter international markets successfully, firms need to secure adequate distribution channels for their products in the targeted markets. But gaining access to, as well as developing and maintaining marketing channels in foreign markets requires substantial knowledge of the distribution structures and patterns in thos markets. This follows because the so-called standardized (globalized) approach to international marketing strategy does not apply to distribution strategy in foreign markets. Comparative marketing analysis can provide international marketers with the means for obtaining the knowledge needed by providing (1) a substantial literature on distribution in different countries, (2) a variety of methodologies that can provide insights into foreign distribution structures, and (3) by sensitizing international marketers to changing patterns of distribution around the world.     

A Note on Firm Age and the Margins of Exports: First Evidence from Germany

This article uses a new tailor-made data set to empirically investigate the link between firm age and the extensive and intensive margins of exports for the first time for Germany. Results turn out to be fully in line with theoretical considerations. Older firms are more often exporters, export more and more different goods to more different destination countries, and export to more distant destination markets.     

Aid,Aid for Trade,and bilateral trade: An empirical study

In a gravity model for 184 countries between 1990 and 2005, we show that bilateral aid is not only positively correlated with donor exports, as suggested in earlier studies, but also positively associated with recipient exports to donors. Our interpretation is that an intensified aid relation reduces the effective cost of distance. We find a particularly strong effect of aid in the form of technical assistance. The effect of trade-related assistance (Aid for Trade) is small and fully accounted for by aid to investments in trade-related infrastructure. The aid-trade link is particularly strong for donor exports to Sub-Saharan African countries and for recipient exports of strategic materials.     

Export diversification,composition, and economic growth: Evidence from cross-country analysis

We investigate the export-growth relationship at disaggregate levels – disaggregation both at the country level and at the level of exports – focusing on the diversification and the composition of exports of countries. In a sample of 65 countries for the period 1965–2005 the dynamic panel estimation reveals that both diversification and composition of exports are important determinants of economic growth after controlling for the impacts of other variables like lagged income, investment, and infrastructure. There is a critical level of export concentration beyond which increasing export specialization leads to higher growth. Below this critical level, diversification of exports matters for gross domestic product (GDP) growth. Growth of high technology exports also contributes tothe output growth; the relationship becomes stronger for countries that have share of manufacturing exports in their total exports greater than the world average. These results are robust even when the dataset isclassified in four sub-panels based on the export-economic growth relationship.     

The role of exports in India's economic growth

We analyze the role of exports in India's economic growth and examine whether the export-led growth hypothesis (ELGH) applies to India. Our causality analysis provides support for the validity of the ELGH for India in the trade liberalization phase. Error variance decomposition and other analyses are also undertaken; these corroborate the results of the causality analysis and suggest that the rapid growth of exports has played a substantial role in increasing the growth rate in India following the economic reforms of 1991.