scholarly journals The Impact of Systemic Stress in the Euro Area on Bilateral Exports of Goods

2021 ◽  
pp. 1-26
Author(s):  
Dejan Romih ◽  
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Euro Area ◽  
Panel Study ◽  
Composite Indicator ◽  
Volatility Index ◽  
Systemic Stress ◽  
Bilateral Exports ◽  
The Impact

There is a growing interest among policymakers and researchers in estimating the impact of systemic stress on the economy. In this chapter, I present main findings of a panel study designed to estimate the impact of systemic stress in the euro area on bilateral exports of goods. Using the gravity model of international trade in goods, I found that systemic stress in the euro area, measured by the Composite Indicator of Systemic Stress for the euro area, the new Composite Indicator of Systemic Stress for the euro area and the EURO STOXX 50 Volatility Index negatively affects bilateral exports of goods, which is consistent with my expectations.

scholarly journals The Impact of Economic Policy Uncertainty and Financial Stress in the United Kingdom on Bilateral Exports of Goods: Pre-Brexit Evidence

2021 ◽  
pp. 27-49
Author(s):  
Dejan Romih ◽  
Keyword(s):  
Economic Policy ◽  
Panel Study ◽  
Financial Stress ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The United Kingdom ◽  
Systemic Stress ◽  
The Uk ◽  
Bilateral Exports ◽  
The Impact

Brexit was a wake-up call for the UK and the EU. There is a growing body of evidence that the referendum results contributed to an increase in economic policy uncertainty and financial stress (including systemic stress) in the UK. In this chapter, I present the findings of a panel study designed to estimate the impact of economic policy uncertainty and financial stress in the UK on bilateral exports of goods. Using the panel data gravity model of international trade, I found that economic policy uncertainty in the UK negatively affects bilateral exports of goods, which is consistent with my expectations. The results for financial and systemic stress are not statistically significant.

The Role of Competition Reforms in Unlocking International Trade: Evidence from Africa’s Proposed Tripartite Free Trade Area

2021 ◽  
pp. 0003603X2199704
Author(s):  
Cornelius Dube
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Free Trade ◽  
Generalized Method Of Moments ◽  
Free Trade Area ◽  
Trade Area ◽  
Econometric Approach ◽  
Bilateral Exports ◽  
The Impact

This study applies an econometric approach to estimate the impact of competition reform adoption and tightening on international trade, using Africa’s envisaged Tripartite Free Trade Area (TFTA) as a case study. An index measuring the extent to which competition regimes have been tightened and enforced between 2001 and 2016 in the TFTA countries is constructed. A gravity model of international trade, based on generalized method of moments, is then estimated to establish how exports are influenced by this competition index measure after controlling for other traditional gravity model variables. The results show that increasing competition reforms by 1% is associated with an increase in bilateral exports into the TFTA by 0.16%. However, if competition reforms in the importing country increase by 1%, then an approximate decline in bilateral exports of 0.46% would result. This underlines the role of competition enforcement in enhancing national competitiveness.

scholarly journals ICT Augmented Gravity Model Application: Sector Level Analysis of the Asia-Pacific Region

2021 ◽  
Vol 10 (18) ◽  
pp. 43-66
Author(s):  
Bilal Mehmood ◽  
Azka Arif Malik ◽  
Rabia Khalid
Keyword(s):  
International Trade ◽  
Information And Communication Technologies ◽  
Gravity Model ◽  
Information And Communications Technology ◽  
Asia Pacific ◽  
Pacific Region ◽  
Asia Pacific Region ◽  
Information And Communication ◽  
Ict Infrastructure ◽  
The Impact

The use of information and communication technologies (ICT) in commerce improves the commercial structure and economic capacity of a country. This study empirically assesses the impact of ICTs on international trade in 36 countries in Asia and the Pacific, at the sectoral level, between 2007 and 2018. The study evaluates whether ICTs improve international trade by hiring the gravity model of international trade and increasing it with the ICT variable. An ICT development indicator (IDI) is formed by joining seven different ICT variables that show ICT infrastructure, use, and skills. Using the Poisson pseudo-maximum likelihood (PPML) estimation technique, this study shows that ICTs improve trade by reducing transaction costs. The findings reveal that information and communication technology positively and significantly influence international trade in all sectors of the Asia-Pacific region, and that trade intensifies when both trading partners have a high endowment of information and communications technology. The study recommends that governments in developing countries upgrade their ICT infrastructure levels.

scholarly journals An Empirical Sector-Specific Gravity Model for Hungarian International Trade

2015 ◽  
Vol 63 (6) ◽  
pp. 2145-2150
Author(s):  
Jana Šimáková ◽  
Daniel Stavárek
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Foreign Trade ◽  
Gravity Model ◽  
Exchange Rate Volatility ◽  
Extended Model ◽  
Panel Data Regression ◽  
Trading Partners ◽  
Trade And Exchange ◽  
The Impact

This paper contributes to the economic literature on the impact of exchange rate volatility on Hungary’s foreign trade. Basic gravity model shows that trade volume between a pair of countries is an increasing function of their sizes (GDP) and a decreasing function of the distance between them. Additional factors included in extended model are population, dummy for common border and proxy for exchange rate volatility. The measure of exchange rate volatility is estimated by GARCH model. This paper explores relationship between trade and exchange rate uncertainty using quarterly data over the period 1999:1 – 2014:3. In order to obtain the objective result, we use the panel data regression for 10 sectors of Hungarian international trade based on SITC classification and six major trading partners (Austria, Germany, France, United Kingdom, Italy and Poland). The significant parameters obtained from panel regression demonstrate that bilateral exchange rate volatility leads to a decrease in Hungary’s foreign trade.

scholarly journals NON-TARIFF MEASURES (NTMS) AND INDONESIAN NATURAL RUBBER EXPORT TO THE MAIN EXPORT DESTINATION COUNTRIES

2020 ◽  
Vol 5 (1) ◽  
pp. 57
Author(s):  
Andina Virginia ◽  
Tanti Novianti
Keyword(s):  
International Trade ◽  
Natural Rubber ◽  
Gravity Model ◽  
Positive Coefficient ◽  
Estimation Result ◽  
Negative Coefficient ◽  
Coverage Ratio ◽  
Technical Barrier To Trade ◽  
Export Destination ◽  
The Impact

The value of natural rubber exports is declining continuously every year. One of the reasons for the decline in the value of natural rubber exports is due to the implementation of Non-Tariff Measures (NTMs) by the main export destination countries in international trade. The most widely applied NTMs policies in trading countries are Sanitary and Phytosanitary (SPS) and Technical Barrier to Trade (TBT). This study aims to analyze the impact of NTMs on Indonesia's natural rubber exports from 2012 to 2016. The estimation result shows the GDP coverage ratio of SPS and coverage ratio of TBT significantly affect the export value of the natural rubber of Indonesia. SPS variable shows a negative coefficient value while the TBT variable shows a positive coefficient value. Keywords: Natural Rubber, Gravity Model, Inventory Approach, NTMsJEL Classification: F13, F14, Q17

scholarly journals The further the distance, the closer the ties.

2015 ◽  
Vol 4 (1) ◽  
pp. 35-46
Author(s):  
André Jordaan
Keyword(s):  
International Trade ◽  
Empirical Evidence ◽  
Gravity Model ◽  
Negative Impact ◽  
European Countries ◽  
Negative Sign ◽  
African Countries ◽  
Trade Analysis ◽  
The Impact

In his article ‘death of distance’, Caincross (1997) challenged the orthodoxy with regard to the role and direction of proximity in international trade. The mainstream model for trade analysis, the gravity model has only two prominent determinants – one of which is distance. But while this theory predicts a negative impact of distance on trade, empirical evidence seems to be evenly split between those finding a positive and those finding a negative impact of distance on trade. South Africa’s total exports to three groups of countries at different distances are measured to determine the impact of distance. The results indicate that distance shows a negative sign when African countries are concerned but turns positive when European countries, even more distant, enter the equation.

scholarly journals International trade, non-tariff measures and climate change: insights from Port wine exports

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anthony Macedo ◽  
Sofia Gouveia ◽  
João Rebelo ◽  
João Santos ◽  
Helder Fraga
Keyword(s):  
Climate Change ◽  
International Trade ◽  
Exchange Rate ◽  
Gravity Model ◽  
Temperature Anomaly ◽  
Port Wine ◽  
Content Type ◽  
Explanatory Variables ◽  
Mean Temperature ◽  
The Impact

PurposeThe purpose of this study is to investigate international trade determinants, paying special attention to variables related to climate change and non-tariff measures (NTMs), as they shape more and more world trade flows, with particular incidence on globalised goods, such as wine.Design/methodology/approachBased on panel data of Port wine exports to 60 countries, between 2006 and 2018, a gravity model has been estimated through Poisson pseudo-maximum likelihood. Explanatory variables include NTMs, mean temperature, temperature anomaly, gross domestic product (GDP), exchange rate, ad valorem equivalent tariffs and home bias.FindingsThe findings show that exports are inversely related to both mean temperature and temperature anomaly in importing countries. Regarding NTMs, it is found that only part of them are trade deterrent. Additionally, purchasing power in importing countries is one of the main determinants of Port wine exports.Research limitations/implicationsThe results show that, besides traditional economic variables, policymakers and wineries should include in their exports' decisions the impact of variables related to climate change and NTMs.Originality/valueThe novelty of this paper is to incorporate the impact of climatic variability of importing countries as a determinant of international trade of wine. Most former studies inspired of the gravity model consider explanatory variables such as GDP and exchange rate, and more recent ones started to consider NTMs too, however, this study may be the first paper to include the impact of climate change (quantified by mean temperature and temperature anomaly in importing countries) on exports.

scholarly journals Evaluating the effects of language on international trade in MENA countries: A gravity-model approach

2021 ◽  
Vol 3 (4) ◽  
pp. 48-62
Author(s):  
Fatemeh Rehimzadeh ◽  
Bahman P. Ebrahimi
Keyword(s):  
International Trade ◽  
Gravity Model ◽  
Positive Impact ◽  
Estimation Method ◽  
Arabic Language ◽  
Mena Region ◽  
Mena Countries ◽  
Pseudo Maximum Likelihood ◽  
Bilateral Exports

Prior studies have investigated the role of economic and noneconomic variables on international trade. A major factor, which has been studied less, is the language used in transactions and negotiations. We explore the effects of language connectedness and the Arabic language on international trade in thirteen countries in the Middle East and North Africa (MENA) region. We used a panel of bilateral data and gravity model for the countries of the region over the 2000 to 2018 period. Our analytic technique was the Poisson pseudo-maximum-likelihood (PPML) estimation method. The empirical outcomes indicate that speaking Arabic leads to an increase in export, that is, Arab nations prefer to export to the countries whose people speak their language. In addition, the language connectedness index, which depends on the extent to which the country's languages are spoken outside the country, is positively associated with the levels of exports and imports. Results further show that the GDP, population of the destination country, and political co-stability have significant positive impacts on the bilateral exports. Additionally, GDP, the population of the source country, political co-stability, and a common border have had significant positive influences on bilateral imports. The major contribution of this research is that the Arabic language has a significant and positive impact on trade among MENA countries.

Gravity models in international trade analysis: testing the country similarity theory 50 years

2020 ◽  
pp. 52-62
Author(s):  
I.S. Smirnov
Keyword(s):  
Developing Countries ◽  
International Trade ◽  
Gravity Model ◽  
Similarity Theory ◽  
Market Competition ◽  
Gravity Models ◽  
Trade Data ◽  
Trade Relations ◽  
Similarity Factor ◽  
The Impact

The article assessed the potential use of gravity models to test the impact of various socio-geographical factors on international and inter-regional trade. The potential of gravitational modeling was estimated based on testing the theory of Linder’s Country similarity theory on recent trade data. This theory was one of the key theories of international trade in the post-war period. The classical gravity model of international trade can be used to test the change in the importance of the country similarity factor over a certain time period. The gravity model will demonstrate more significant results compared to its classical version (excluding the country similarity factor) in the case of a positive effect of the similarity factor on the volume of bilateral trade between countries. The analysis of recent trade data allowed us to assess the extent of change in the country similarity factor over the past 70 years. This period was accompanied by high growth in international trade, as well as the involvement of developing countries in the international division of labor. Vigorous market competition for the production of industrial goods led to the fact that manufacturers were forced to cut costs by moving their main production capacities to developing countries, which significantly differ from them in their level of economic development. The country similarity factor has lost its significance in this new system of international trade relations. As a result, at present the country similarity factor is not a key factor explaining the volume of trade relations between different countries.

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