Pub Date : 2024-09-14DOI: 10.1177/00157325241276252
Md. Monirul Islam, Kazi Sohag
Trade policy plays a pivotal role in shaping import and export volumes within the global economy. However, the escalation of geopolitical tensions has posed significant challenges to the smooth flow of mineral resource trade. This study aims to analyse the consequences of global trade policy uncertainty (TPU) and various measures of geopolitical risk (GPR), including terror threats, war threats and nuclear threats (NCT), on Russian mineral exports (MEX). The analysis covers the period from January 2013 to December 2021. By employing sophisticated quantile regression methodologies, such as the cross-quantilogram (CQ) and cross-spectral quantile coherency (CQC) techniques, this study uncovers a compelling interaction between TPU and Russian MEX across different market conditions. Interestingly, TPU exerts a significantly positive impact on the export volumes of Russian mineral resources. In contrast, the presence of GPRs, particularly warfare and terrorism, proves to be detrimental to MEX during bullish market phases across various memory horizons. Surprisingly, NCT stimulates mineral trade during bearish market conditions, both in monthly and annual timeframes. These findings remain robust and consistent even when the CQC technique is employed. In light of these pressing geopolitical challenges, this study underscores the importance of developing sustainable mineral trade policies that foster enhanced global cohesion. It is crucial to address these challenges effectively to ensure the smooth and efficient flow of mineral resources in the international trade landscape.JEL Codes: C22, F13, F14, P28, Q21, Q27
{"title":"Trading in Turbulent Times: Unravelling the Interplay between Trade Policy Uncertainty and Geopolitics in Russian Mineral Resource Supply","authors":"Md. Monirul Islam, Kazi Sohag","doi":"10.1177/00157325241276252","DOIUrl":"https://doi.org/10.1177/00157325241276252","url":null,"abstract":"Trade policy plays a pivotal role in shaping import and export volumes within the global economy. However, the escalation of geopolitical tensions has posed significant challenges to the smooth flow of mineral resource trade. This study aims to analyse the consequences of global trade policy uncertainty (TPU) and various measures of geopolitical risk (GPR), including terror threats, war threats and nuclear threats (NCT), on Russian mineral exports (MEX). The analysis covers the period from January 2013 to December 2021. By employing sophisticated quantile regression methodologies, such as the cross-quantilogram (CQ) and cross-spectral quantile coherency (CQC) techniques, this study uncovers a compelling interaction between TPU and Russian MEX across different market conditions. Interestingly, TPU exerts a significantly positive impact on the export volumes of Russian mineral resources. In contrast, the presence of GPRs, particularly warfare and terrorism, proves to be detrimental to MEX during bullish market phases across various memory horizons. Surprisingly, NCT stimulates mineral trade during bearish market conditions, both in monthly and annual timeframes. These findings remain robust and consistent even when the CQC technique is employed. In light of these pressing geopolitical challenges, this study underscores the importance of developing sustainable mineral trade policies that foster enhanced global cohesion. It is crucial to address these challenges effectively to ensure the smooth and efficient flow of mineral resources in the international trade landscape.JEL Codes: C22, F13, F14, P28, Q21, Q27","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142258676","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-04DOI: 10.1177/00157325241255749
Nancy H. Chau
In this article, I echo Jones (1965) and sketch a model rooted in search frictions and costly entry to demonstrate by example how central features of simple general equilibrium models can show up as ‘retranslated properties in diverse areas’. By uncovering and imparting popular understanding about these central features of simple general equilibrium models, the legacy of Professor Jones’s contributions transcends diverse disciplines in economics, extending well beyond the theory of international trade.JEL Codes: D5, F1, J6
{"title":"Search Friction and Costly Entry in the Specific Factors Model","authors":"Nancy H. Chau","doi":"10.1177/00157325241255749","DOIUrl":"https://doi.org/10.1177/00157325241255749","url":null,"abstract":"In this article, I echo Jones (1965) and sketch a model rooted in search frictions and costly entry to demonstrate by example how central features of simple general equilibrium models can show up as ‘retranslated properties in diverse areas’. By uncovering and imparting popular understanding about these central features of simple general equilibrium models, the legacy of Professor Jones’s contributions transcends diverse disciplines in economics, extending well beyond the theory of international trade.JEL Codes: D5, F1, J6","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142209530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-30DOI: 10.1177/00157325241274812
Kpeyol Kamo, Jerome Andohol, Gbatsoron Anjande, Victor Ushahemba Ijirshar
This study assessed the effect of the trade gap on public debt sustainability and the transmission from the trade gap to public debt sustainability through the revenue channel using annual data for Nigeria from 1970 to 2022. The novelty of this study lies in its investigation of factors affecting trade gap shocks and its departure from conventional debt sustainability metrics, offering a deeper understanding of the connection between trade gap and public debt sustainability. The study has been anchored on the theory of trade misinvoicing. The researchers applied the structural vector autoregressive (SVAR) method, which has been estimated using the impulse response function tool. The findings established a negative effect of the trade gap on public debt sustainability. The results further show that the revenue variable is, on average, related to a larger (negative) effect of the trade gap. However, the effect of the trade gap on debt sustainability is shown to be communicated through budget deficits and not the revenue channel. The study recommends that policymakers should prioritise measures to counteract the negative impact of the trade gap on the economy. This may include boosting exports, decreasing import reliance and enhancing competitiveness in global markets.JEL Codes: F14, H62, H63
{"title":"Trade Gap and Public Debt Sustainability in Nigeria","authors":"Kpeyol Kamo, Jerome Andohol, Gbatsoron Anjande, Victor Ushahemba Ijirshar","doi":"10.1177/00157325241274812","DOIUrl":"https://doi.org/10.1177/00157325241274812","url":null,"abstract":"This study assessed the effect of the trade gap on public debt sustainability and the transmission from the trade gap to public debt sustainability through the revenue channel using annual data for Nigeria from 1970 to 2022. The novelty of this study lies in its investigation of factors affecting trade gap shocks and its departure from conventional debt sustainability metrics, offering a deeper understanding of the connection between trade gap and public debt sustainability. The study has been anchored on the theory of trade misinvoicing. The researchers applied the structural vector autoregressive (SVAR) method, which has been estimated using the impulse response function tool. The findings established a negative effect of the trade gap on public debt sustainability. The results further show that the revenue variable is, on average, related to a larger (negative) effect of the trade gap. However, the effect of the trade gap on debt sustainability is shown to be communicated through budget deficits and not the revenue channel. The study recommends that policymakers should prioritise measures to counteract the negative impact of the trade gap on the economy. This may include boosting exports, decreasing import reliance and enhancing competitiveness in global markets.JEL Codes: F14, H62, H63","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142209531","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-24DOI: 10.1177/00157325241255743
Erick Kitenge, Sajal Lahiri
Based on input/output tables that contain disaggregated data from 45 industries grouped into 16 sectors from 1995 to 2020 across 66 countries, we carry out a gravity analysis to examine how imported inputs affect bilateral exports. In terms of econometric methodology, we use pseudo Poisson maximum likelihood (PPML) as well as Instrumental-Variable Tobit methods. Our results consistently show a positive and significant effect of imported inputs on bilateral exports.JEL Codes: F10, F40
{"title":"Imported Inputs and Export Performance: A Gravity Analysis","authors":"Erick Kitenge, Sajal Lahiri","doi":"10.1177/00157325241255743","DOIUrl":"https://doi.org/10.1177/00157325241255743","url":null,"abstract":"Based on input/output tables that contain disaggregated data from 45 industries grouped into 16 sectors from 1995 to 2020 across 66 countries, we carry out a gravity analysis to examine how imported inputs affect bilateral exports. In terms of econometric methodology, we use pseudo Poisson maximum likelihood (PPML) as well as Instrumental-Variable Tobit methods. Our results consistently show a positive and significant effect of imported inputs on bilateral exports.JEL Codes: F10, F40","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142209532","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-22DOI: 10.1177/00157325241258790
Debashis Chakraborty
Rajib Bhattacharyya, Ramesh Chandra Das, and Achintya Ray (Eds.), COVID-19 Pandemic and Global Inequality: Reflections in Labour Market, Business and Social Sectors (Singapore: Springer Nature, 2023), 333 pp. €128.39 (Hardcover), ISBN 978-981-99-4404-0.
Rajib Bhattacharyya, Ramesh Chandra Das, and Achintya Ray (Eds.), COVID-19 Pandemic and Global Inequality：Reflections in Labour Market, Business and Social Sectors》（新加坡：施普林格自然出版社，2023 年），333 页，128.39 欧元（精装），ISBN 978-981-99-4404-0。
{"title":"Book review: Rajib Bhattacharyya, Ramesh Chandra Das, and Achintya Ray (Eds.), COVID-19 Pandemic and Global Inequality: Reflections in Labour Market, Business and Social Sectors","authors":"Debashis Chakraborty","doi":"10.1177/00157325241258790","DOIUrl":"https://doi.org/10.1177/00157325241258790","url":null,"abstract":"Rajib Bhattacharyya, Ramesh Chandra Das, and Achintya Ray (Eds.), COVID-19 Pandemic and Global Inequality: Reflections in Labour Market, Business and Social Sectors (Singapore: Springer Nature, 2023), 333 pp. €128.39 (Hardcover), ISBN 978-981-99-4404-0.","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142209533","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-16DOI: 10.1177/00157325241266040
Arijit Mukherjee, Uday Bhanu Sinha
We provide a simple reason for export tax in a third-country model of strategic trade policy. We show that the optimal policy under Cournot competition could be export tax in the presence of convex production costs. This happens whether or not the import competing country imposes import tariff.JEL Codes: F12, F13
{"title":"Strategic Trade Policy in a Cournot Oligopoly with Convex Cost","authors":"Arijit Mukherjee, Uday Bhanu Sinha","doi":"10.1177/00157325241266040","DOIUrl":"https://doi.org/10.1177/00157325241266040","url":null,"abstract":"We provide a simple reason for export tax in a third-country model of strategic trade policy. We show that the optimal policy under Cournot competition could be export tax in the presence of convex production costs. This happens whether or not the import competing country imposes import tariff.JEL Codes: F12, F13","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142209541","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-06-09DOI: 10.1177/00157325241255746
R. Acharyya
This article pays tribute to Professor Ronald W. Jones by reflecting upon how two significant, yet simple and elegant, analytical structures developed by him have been used by researchers to address a wide set of issues relevant for developed and developing countries alike and hold the potential to analyse some unexplored issues of relevance in the future. One is the specific-factor model, and the other is the composite-traded and non-traded model that came out of his Frank Graham Lecture in 1976. These two important competitive general equilibrium structures provide significant and relevant departures from the Ricardian and Heckscher–Ohlin–Samuelson models, highlighting the role of both factor scarcity and local demand. JEL Codes: F11, F13, F21
{"title":"Some Reflections on Two Significant Contributions of Ron Jones: Specificity of Factors and Non-traded Goods","authors":"R. Acharyya","doi":"10.1177/00157325241255746","DOIUrl":"https://doi.org/10.1177/00157325241255746","url":null,"abstract":"This article pays tribute to Professor Ronald W. Jones by reflecting upon how two significant, yet simple and elegant, analytical structures developed by him have been used by researchers to address a wide set of issues relevant for developed and developing countries alike and hold the potential to analyse some unexplored issues of relevance in the future. One is the specific-factor model, and the other is the composite-traded and non-traded model that came out of his Frank Graham Lecture in 1976. These two important competitive general equilibrium structures provide significant and relevant departures from the Ricardian and Heckscher–Ohlin–Samuelson models, highlighting the role of both factor scarcity and local demand. JEL Codes: F11, F13, F21","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141366867","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-19DOI: 10.1177/00157325241239722
Subhadip Mukherjee, Rupa Chanda
This article examines the effects of tariff and non-tariff reductions on firm-level productivity of large as well as Micro, Small and Medium Enterprises (MSMEs) in India’s manufacturing sector for the 1999–2009 period. We calculate input and final goods tariffs, effective rates of protection and non-tariff barriers (NTBs) for broad product groups using information from India’s Exim Policy of 1997–2003 and 2004–2009 to examine this impact. We use a balanced as well as unbalanced firm-level panel data set, while accounting for firm, industry, state and time-specific factors. By using fixed effect models and Heckman’s two-step estimation procedure, we find that trade liberalisation is associated with improved firm-level productivity for large firms but not in the case of MSMEs. We posit that this might be due to the relative disadvantages that Indian MSMEs face which prevent them from benefiting from trade liberalisation. We also find that productivity gains arising from the sourcing of imported inputs have been greater than those arising from increased product competition and that NTB liberalisation has had a greater impact compared to tariff liberalisation on firm-level productivity. Changes in MSME legislation and the classification of firms are also found to have a bearing on firm performance. Our study contributes to the literature by confirming the need to focus specifically on constraints faced by MSMEs if they are to benefit from trade liberalisation. It highlights the importance of liberalising trade in intermediates as well as the role of MSME classification in enabling productivity gains.JEL Codes: L6, D24, L1, F13
{"title":"Impact of Trade Liberalisation and MSME Classification on Productivity of Indian Manufacturing Firms","authors":"Subhadip Mukherjee, Rupa Chanda","doi":"10.1177/00157325241239722","DOIUrl":"https://doi.org/10.1177/00157325241239722","url":null,"abstract":"This article examines the effects of tariff and non-tariff reductions on firm-level productivity of large as well as Micro, Small and Medium Enterprises (MSMEs) in India’s manufacturing sector for the 1999–2009 period. We calculate input and final goods tariffs, effective rates of protection and non-tariff barriers (NTBs) for broad product groups using information from India’s Exim Policy of 1997–2003 and 2004–2009 to examine this impact. We use a balanced as well as unbalanced firm-level panel data set, while accounting for firm, industry, state and time-specific factors. By using fixed effect models and Heckman’s two-step estimation procedure, we find that trade liberalisation is associated with improved firm-level productivity for large firms but not in the case of MSMEs. We posit that this might be due to the relative disadvantages that Indian MSMEs face which prevent them from benefiting from trade liberalisation. We also find that productivity gains arising from the sourcing of imported inputs have been greater than those arising from increased product competition and that NTB liberalisation has had a greater impact compared to tariff liberalisation on firm-level productivity. Changes in MSME legislation and the classification of firms are also found to have a bearing on firm performance. Our study contributes to the literature by confirming the need to focus specifically on constraints faced by MSMEs if they are to benefit from trade liberalisation. It highlights the importance of liberalising trade in intermediates as well as the role of MSME classification in enabling productivity gains.JEL Codes: L6, D24, L1, F13","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141148612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-04-29DOI: 10.1177/00157325241239724
Abdul Hadi Sultani, U. Faisal
This article empirically investigates the extent, excessiveness and sustainability of Afghanistan’s current account (CA) deficits using quarterly data from 2004-Q2 to 2019-Q4. The framework of this article is the intertemporal approach to the CA using the present value model. First, a descriptive analysis of Afghanistan’s CA is conducted. Next, a bivariate vector auto-regressive (VAR) model is applied to estimate the optimal CA of the economy, which can be compared to the actual one to determine how excessiveness the actual CA is relative to the optimal one. The Augmented Dickey-Fuller and Johnson co-integration tests are applied to examine the necessary and sufficient conditions for the sustainability of the CA. Findings indicate that Afghanistan’s actual CA deficits are excessive and too variant relative to the optimal one; therefore, the deficit is considered problematic. The empirical results further disclose that Afghanistan’s CA is unsustainable. The lack of co-integration between real net output and real private consumption and between exports and imports suggests that the unsustainability is mainly due to the weakness of domestic production in satisfying internal demand and the failure of real export volume to equilibrate the trade balance. Hence, this study recommends increasing the level of domestic output, and reduction in imports supported by improvements in saving rate, infrastructure and export to improve the CA.JEL Codes: F14, F32, F39, C22
本文利用 2004 年第二季度至 2019 年第四季度的季度数据，对阿富汗经常账户赤字的程度、过度性和可持续性进行了实证研究。本文的框架是使用现值模型对经常账户赤字进行跨期分析。首先，对阿富汗的赤字进行了描述性分析。然后，运用双变量向量自回归（VAR）模型估算出阿富汗经济的最优现值，并将其与实际现值进行比较，以确定实际现值相对于最优现值的过剩程度。应用增强型 Dickey-Fuller 和 Johnson 协整检验来研究 CA 可持续性的必要和充分条件。研究结果表明，阿富汗的实际赤字相对于最优赤字而言过高且变化过大；因此，赤字被认为是有问题的。实证结果进一步表明，阿富汗的赤字是不可持续的。实际净产出和实际私人消费之间以及出口和进口之间缺乏协整关系，这表明不可持续的主要原因是国内生产无法满足内部需求，以及实际出口量无法平衡贸易平衡。因此，本研究建议提高国内产出水平，并通过提高储蓄率、改善基础设施和出口来减少进口，以改善长春市的状况：F14, F32, F39, C22
{"title":"The Extent, Excessiveness and Sustainability of Afghanistan’s Current Account","authors":"Abdul Hadi Sultani, U. Faisal","doi":"10.1177/00157325241239724","DOIUrl":"https://doi.org/10.1177/00157325241239724","url":null,"abstract":"This article empirically investigates the extent, excessiveness and sustainability of Afghanistan’s current account (CA) deficits using quarterly data from 2004-Q2 to 2019-Q4. The framework of this article is the intertemporal approach to the CA using the present value model. First, a descriptive analysis of Afghanistan’s CA is conducted. Next, a bivariate vector auto-regressive (VAR) model is applied to estimate the optimal CA of the economy, which can be compared to the actual one to determine how excessiveness the actual CA is relative to the optimal one. The Augmented Dickey-Fuller and Johnson co-integration tests are applied to examine the necessary and sufficient conditions for the sustainability of the CA. Findings indicate that Afghanistan’s actual CA deficits are excessive and too variant relative to the optimal one; therefore, the deficit is considered problematic. The empirical results further disclose that Afghanistan’s CA is unsustainable. The lack of co-integration between real net output and real private consumption and between exports and imports suggests that the unsustainability is mainly due to the weakness of domestic production in satisfying internal demand and the failure of real export volume to equilibrate the trade balance. Hence, this study recommends increasing the level of domestic output, and reduction in imports supported by improvements in saving rate, infrastructure and export to improve the CA.JEL Codes: F14, F32, F39, C22","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140830823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-04-16DOI: 10.1177/00157325241239720
Ketan Reddy, Subash Sasidharan
In this article, we examine the role of trade facilitation in fostering firm participation in global value chains (GVCs). We use cross-sectional data for 115 economies spanning 2006–2018 sourced from World Bank Enterprise Surveys. We employ four trade indicators which are as follows: customs, regulation quality, loans and digitalization proxying for trade facilitation measures and we correct for reverse causality using the instrumental variable approach. Our empirical findings highlight that customs requirements deter GVC participation of the firm. Further, adhering to government regulations, having access to loans and digital communication adoption fosters supply chain integration of the firm. The present study also finds favourable heterogenous effects of trade facilitation on GVC participation of less productive firms and larger firms. Our findings are robust to alternative methods of endogeneity correction and GVC definitions.JEL Codes: F1, F19, F14
{"title":"Trade Facilitation and Global Value Chain Participation: Cross-country Analysis","authors":"Ketan Reddy, Subash Sasidharan","doi":"10.1177/00157325241239720","DOIUrl":"https://doi.org/10.1177/00157325241239720","url":null,"abstract":"In this article, we examine the role of trade facilitation in fostering firm participation in global value chains (GVCs). We use cross-sectional data for 115 economies spanning 2006–2018 sourced from World Bank Enterprise Surveys. We employ four trade indicators which are as follows: customs, regulation quality, loans and digitalization proxying for trade facilitation measures and we correct for reverse causality using the instrumental variable approach. Our empirical findings highlight that customs requirements deter GVC participation of the firm. Further, adhering to government regulations, having access to loans and digital communication adoption fosters supply chain integration of the firm. The present study also finds favourable heterogenous effects of trade facilitation on GVC participation of less productive firms and larger firms. Our findings are robust to alternative methods of endogeneity correction and GVC definitions.JEL Codes: F1, F19, F14","PeriodicalId":29933,"journal":{"name":"Foreign Trade Review","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2024-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140612210","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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