Pub Date : 2022-08-17DOI: 10.1080/08853908.2022.2111381
Augustine Tarkom, Nacasius U. Ujah
ABSTRACT Arguably, R&D remains one of the main drivers for signaling, and its essence in reducing bankruptcy risk (BR) is critical. We revisit the literature and debate and find that since 1982, R&D investment has, on average, been increasing at an annual rate of 0.033%, while BR has been decreasing at an annual rate of 9.02%. Empirically, we find consistent evidence that R&D investment reduces BR. Also, firms with a higher likelihood of bankruptcy have a higher marginal benefit from incremental investment in R&D. Additional results suggest that capital structure and other signaling strategies matter in how R&D affects BR.
{"title":"Do or Die: Analysis of Bankruptcy Risk from a Research and Development Perspective","authors":"Augustine Tarkom, Nacasius U. Ujah","doi":"10.1080/08853908.2022.2111381","DOIUrl":"https://doi.org/10.1080/08853908.2022.2111381","url":null,"abstract":"ABSTRACT Arguably, R&D remains one of the main drivers for signaling, and its essence in reducing bankruptcy risk (BR) is critical. We revisit the literature and debate and find that since 1982, R&D investment has, on average, been increasing at an annual rate of 0.033%, while BR has been decreasing at an annual rate of 9.02%. Empirically, we find consistent evidence that R&D investment reduces BR. Also, firms with a higher likelihood of bankruptcy have a higher marginal benefit from incremental investment in R&D. Additional results suggest that capital structure and other signaling strategies matter in how R&D affects BR.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-08-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47335099","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}
ABSTRACT Trade mispricing is a significant channel for tax base erosion from developing countries; however, evidence based on aggregated annual trade data remains limited. This article combines statistical price filter methods based on legal rules for customs valuation and transfer pricing analysis with extensive commodity sector research to present new evidence of commodity trade mispricing from Laos. Our analysis of transaction-level export data finds significant undervaluation in exports of coffee beans and identifies multiple risks of trade mispricing in copper exports. We identify trade between related firms, regulatory loopholes, and lack of customs valuation capacity as the main drivers of this phenomenon.
{"title":"Commodity Trade Mispricing: Evidence from Lao P.D.R.","authors":"Rahul Mehrotra, Vanthana Nolintha, Vanxay Sayavong","doi":"10.1080/08853908.2022.2108170","DOIUrl":"https://doi.org/10.1080/08853908.2022.2108170","url":null,"abstract":"ABSTRACT Trade mispricing is a significant channel for tax base erosion from developing countries; however, evidence based on aggregated annual trade data remains limited. This article combines statistical price filter methods based on legal rules for customs valuation and transfer pricing analysis with extensive commodity sector research to present new evidence of commodity trade mispricing from Laos. Our analysis of transaction-level export data finds significant undervaluation in exports of coffee beans and identifies multiple risks of trade mispricing in copper exports. We identify trade between related firms, regulatory loopholes, and lack of customs valuation capacity as the main drivers of this phenomenon.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46355481","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 : 2022-07-21DOI: 10.1080/08853908.2022.2096730
Carlos Arnade, W. Liefert
ABSTRACT This article examines the import behavior of major importers of corn over the period of 1996 to 2016. The article uses an upper-stage import demand equation for corn to estimate countries’ elasticities of import demand with respect to income/GNP, the import price, exchange rate, domestic corn production, and animal inventories. The article also examines whether countries’ corn import demand is sensitive to changes in income and the exchange rate during macroeconomic downturns, specifically when both nominal GNP falls and the currency depreciates. The results show greater import demand responsiveness in periods of macroeconomic stability, as opposed to downturns.
{"title":"The Import Demand for Corn in Changing Macroeconomic Circumstances","authors":"Carlos Arnade, W. Liefert","doi":"10.1080/08853908.2022.2096730","DOIUrl":"https://doi.org/10.1080/08853908.2022.2096730","url":null,"abstract":"ABSTRACT This article examines the import behavior of major importers of corn over the period of 1996 to 2016. The article uses an upper-stage import demand equation for corn to estimate countries’ elasticities of import demand with respect to income/GNP, the import price, exchange rate, domestic corn production, and animal inventories. The article also examines whether countries’ corn import demand is sensitive to changes in income and the exchange rate during macroeconomic downturns, specifically when both nominal GNP falls and the currency depreciates. The results show greater import demand responsiveness in periods of macroeconomic stability, as opposed to downturns.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46063061","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 : 2022-07-14DOI: 10.1080/08853908.2022.2078912
Sean K. Byrne
ABSTRACT Bank holding companies exert influence at every step of the legislative and regulatory processes. In our article, we ask if banks frequently comment upon proposed financial rulings with the goal of favorable regulatory change. We explore whether bank lobbying leads to having their opinions worded into the final form of the regulation. By making use of an original collection of political and financial quarterly panel data, we find that banks use multiple mechanisms of influence while lobbying regulatory agencies. This is important since banks lobby to preserve gains in non-traditional revenues.
{"title":"Bank Holding Company Lobbying Activity upon Regulation and Its Impact upon Non-Traditional Revenue","authors":"Sean K. Byrne","doi":"10.1080/08853908.2022.2078912","DOIUrl":"https://doi.org/10.1080/08853908.2022.2078912","url":null,"abstract":"ABSTRACT Bank holding companies exert influence at every step of the legislative and regulatory processes. In our article, we ask if banks frequently comment upon proposed financial rulings with the goal of favorable regulatory change. We explore whether bank lobbying leads to having their opinions worded into the final form of the regulation. By making use of an original collection of political and financial quarterly panel data, we find that banks use multiple mechanisms of influence while lobbying regulatory agencies. This is important since banks lobby to preserve gains in non-traditional revenues.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44019682","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 : 2022-06-27DOI: 10.1080/08853908.2022.2081412
G. Clarke
Dear Readers, Welcome to the fourth issue of The International Trade Journal (ITJ)’s thirty-sixth volume. The articles in this issue focus on exchange rates. The first article examines how aid allocated to increasing trade affects exchange rates. The second article studies how exchange rate volatility affects trade between the United Kingdom and Germany. The third article looks at the asymmetric effect of the exchange rate on Korea’s trade balance with Japan, while the final article looks at how exchange rates affect output in seven countries in Asia. The first article in this issue, by Sena Kimm Gnangnon, asks whether aid that is aimed at expanding trade contributes to Dutch disease in recipient countries. The author finds that in contrast to other types of aid, which result in the exchange rate appreciating, aid intended to expand trade leads to the real exchange rate depreciating. The author argues that this is due to its effect on trade openness, export product diversification, and inward foreign direct investment. The second article, by Mohsen Bahmani-Oskooee and Huseyin Karamelikli, looks at how exchange rate volatility affects trade between the United Kingdom and Germany at the sectoral level. Before allowing for increases and decreases in volatility to affect trade differently, the authors find that increased volatility affects British exports to Germany in 36 of 95 industries in the short run and 23 industries in the long run. Volatility affects German exports to Britain in 42 industries in the short run and 17 in the long run. The effects were stronger when they allowed for increases and decreases in volatility to affect trade asymmetrically. They found short-run effects in 54 British and 64 German exporting industries and long-run effects in 38 British and 42 German exporting industries. The affected industries, however, were mostly small. As a result, exchange rate volatility affected only a small share of UKGermany trade. The third article, by Huseyin Karamelikli and Serdar Ongan, looks at how appreciations and depreciations of the Korean won affect Korea’s trade balance with Japan. Using data on 43 commodities, the authors test whether the long-run and short-run effects are symmetric or asymmetric. Although in
{"title":"From the Editor","authors":"G. Clarke","doi":"10.1080/08853908.2022.2081412","DOIUrl":"https://doi.org/10.1080/08853908.2022.2081412","url":null,"abstract":"Dear Readers, Welcome to the fourth issue of The International Trade Journal (ITJ)’s thirty-sixth volume. The articles in this issue focus on exchange rates. The first article examines how aid allocated to increasing trade affects exchange rates. The second article studies how exchange rate volatility affects trade between the United Kingdom and Germany. The third article looks at the asymmetric effect of the exchange rate on Korea’s trade balance with Japan, while the final article looks at how exchange rates affect output in seven countries in Asia. The first article in this issue, by Sena Kimm Gnangnon, asks whether aid that is aimed at expanding trade contributes to Dutch disease in recipient countries. The author finds that in contrast to other types of aid, which result in the exchange rate appreciating, aid intended to expand trade leads to the real exchange rate depreciating. The author argues that this is due to its effect on trade openness, export product diversification, and inward foreign direct investment. The second article, by Mohsen Bahmani-Oskooee and Huseyin Karamelikli, looks at how exchange rate volatility affects trade between the United Kingdom and Germany at the sectoral level. Before allowing for increases and decreases in volatility to affect trade differently, the authors find that increased volatility affects British exports to Germany in 36 of 95 industries in the short run and 23 industries in the long run. Volatility affects German exports to Britain in 42 industries in the short run and 17 in the long run. The effects were stronger when they allowed for increases and decreases in volatility to affect trade asymmetrically. They found short-run effects in 54 British and 64 German exporting industries and long-run effects in 38 British and 42 German exporting industries. The affected industries, however, were mostly small. As a result, exchange rate volatility affected only a small share of UKGermany trade. The third article, by Huseyin Karamelikli and Serdar Ongan, looks at how appreciations and depreciations of the Korean won affect Korea’s trade balance with Japan. Using data on 43 commodities, the authors test whether the long-run and short-run effects are symmetric or asymmetric. Although in","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48989538","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 : 2022-06-27DOI: 10.1080/08853908.2022.2093803
N. Garcia
{"title":"A Beginners Guide to America: For the Immigrant and the Curious","authors":"N. Garcia","doi":"10.1080/08853908.2022.2093803","DOIUrl":"https://doi.org/10.1080/08853908.2022.2093803","url":null,"abstract":"","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49025394","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 : 2022-06-24DOI: 10.1080/08853908.2022.2092566
Rexford Abaidoo, Elvis Kwame Agyapong
ABSTRACT This study examines the effect of trade openness on environmental sustainability risk, with emphasis on the role of governance and regulatory factors. Data for the study were compiled from 39 countries in Sub-Saharan Africa (SSA) from 2001 to 2018. Results from a two-step system generalized method of moments estimation suggest that for the sub-region, governance and regulatory variables significantly moderate the trade openness–CO2 emission nexus, suggesting that improved governance and regulatory structures help in reducing CO2 emissions associated with trade openness. For the trade openness–ecological footprint relationship, the empirical estimates further suggest that government effectiveness significantly moderates the nexus.
{"title":"Trade Liberalization and Environmental Sustainability Risk: Do Governance and Regulatory Structures Influence the Dynamics?","authors":"Rexford Abaidoo, Elvis Kwame Agyapong","doi":"10.1080/08853908.2022.2092566","DOIUrl":"https://doi.org/10.1080/08853908.2022.2092566","url":null,"abstract":"ABSTRACT This study examines the effect of trade openness on environmental sustainability risk, with emphasis on the role of governance and regulatory factors. Data for the study were compiled from 39 countries in Sub-Saharan Africa (SSA) from 2001 to 2018. Results from a two-step system generalized method of moments estimation suggest that for the sub-region, governance and regulatory variables significantly moderate the trade openness–CO2 emission nexus, suggesting that improved governance and regulatory structures help in reducing CO2 emissions associated with trade openness. For the trade openness–ecological footprint relationship, the empirical estimates further suggest that government effectiveness significantly moderates the nexus.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45891292","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 : 2022-06-22DOI: 10.1080/08853908.2022.2090463
P. Chow, Ozcan Ozturk, H. Thompson
ABSTRACT While Taiwan developed due to progress toward free trade, slowing growth since the 1990s has revived protectionism as trade agreements falter worldwide. The present study contributes to the ongoing debate examining the short-run income redistribution due to unilateral free trade in an applied specific factors model with 77 industries. The simulations reveal considerable declines in the returns to capital in the import competing industries relative to other industries, a moderate wage increase, and a negligible impact on the price of natural resource inputs. The short-run adjustments to immigration and foreign direct investment are also examined.
{"title":"Short-Run Adjustments in Taiwan to Free Trade in a Multisector Specific Factors Model","authors":"P. Chow, Ozcan Ozturk, H. Thompson","doi":"10.1080/08853908.2022.2090463","DOIUrl":"https://doi.org/10.1080/08853908.2022.2090463","url":null,"abstract":"ABSTRACT While Taiwan developed due to progress toward free trade, slowing growth since the 1990s has revived protectionism as trade agreements falter worldwide. The present study contributes to the ongoing debate examining the short-run income redistribution due to unilateral free trade in an applied specific factors model with 77 industries. The simulations reveal considerable declines in the returns to capital in the import competing industries relative to other industries, a moderate wage increase, and a negligible impact on the price of natural resource inputs. The short-run adjustments to immigration and foreign direct investment are also examined.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49312412","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 : 2022-05-16DOI: 10.1080/08853908.2022.2072416
Sanjeev Vasudevan, Suresh Babu Manalaya
ABSTRACT This article examines the effect of trade continuity, measured by the lagged imports of intermediate goods, on global production sharing in emerging economies. We estimate an augmented gravity model using the Poisson pseudo maximum likelihood method with a panel dataset of bilateral exports of 29 emerging economies from 2004 to 2017. Our results show that trade continuity positively affects global production sharing. We provide new empirical evidence that trade continuity is process-specific and may vary between parts and components and final assembly stages. Our findings have policy implications on the process-specific nature of global production sharing.
{"title":"Trade Continuity and Global Production Sharing in Emerging Economies: Evidence from Panel Gravity Analysis","authors":"Sanjeev Vasudevan, Suresh Babu Manalaya","doi":"10.1080/08853908.2022.2072416","DOIUrl":"https://doi.org/10.1080/08853908.2022.2072416","url":null,"abstract":"ABSTRACT This article examines the effect of trade continuity, measured by the lagged imports of intermediate goods, on global production sharing in emerging economies. We estimate an augmented gravity model using the Poisson pseudo maximum likelihood method with a panel dataset of bilateral exports of 29 emerging economies from 2004 to 2017. Our results show that trade continuity positively affects global production sharing. We provide new empirical evidence that trade continuity is process-specific and may vary between parts and components and final assembly stages. Our findings have policy implications on the process-specific nature of global production sharing.","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43507196","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 : 2022-05-15DOI: 10.1080/08853908.2022.2072982
Cindy Maldonado, C. Moreno-Hurtado, N. González, Silvia Cumbicus
{"title":"The International Economy Effects on Inequality: Revisiting International Trade, Economic Complexity, and Foreign Direct Investment","authors":"Cindy Maldonado, C. Moreno-Hurtado, N. González, Silvia Cumbicus","doi":"10.1080/08853908.2022.2072982","DOIUrl":"https://doi.org/10.1080/08853908.2022.2072982","url":null,"abstract":"","PeriodicalId":35638,"journal":{"name":"International Trade Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2022-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48164767","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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