India–European Union Trade Integration: An Analysis of Current and Future Trajectories

In a dynamic global environment of increased economic interdependence, nations are more than ever seeking to remove barriers to trade, despite growing trends of protectionism. In this context, India and the EU-27 have initiated talks for the establishment of a Bilateral Trade and Investment Agreement (BTIA) in an attempt to bring their economies together. However, after 16 rounds of negotiations, the failure to conclude this agreement has raised questions regarding the benefits of the agreement to India. This study attempts to examine the current trade scenario and the effects of the proposed regional trade agreement by estimating a structural gravity model. This study employs the Poisson Pseudo Maximum Likelihood (PPML) estimator for analysing the trade-creation and trade-diversion effects of the BTIA to overcome the shortcomings of ordinary least square (OLS) estimators. For the empirical analysis, the merchandise export data from the Gravity database has been taken for a period of 19 years from 2001 to 2019. The results indicate that the BTIA could lead to trade creation and trade diversion, highlighting the need for a re-evaluation of India’s trade policy. JEL Classification: F10, F13, F14, F15, O24

An Empirical Investigation of the Relationship between Financial Development and Merchandise Trade in Nigeria

This study examines the empirical relationship between financial development and merchandise trade in Nigeria using annual data from 1981 to 2014. The empirical analysis is also carried out on the disaggregated components of the trade, that is, merchandise export and import, for robust analysis. Estimation results based on error correction model show that there exists significant long run positive relationship between financial development and export in Nigeria over the period under study. There is need for government to therefore provide enabling environment for financial sector to thrive through sound macroeconomic policies for effective economic diversification through export.

Supply Size in Exports: Expansion Input-Output Analysis Approach

In recent years, Vietnam has joined international intergration by strong export agreements of bilateral and multilateral; Vietnam’s merchandise export in 1995 was only US $5.4 billion, in 2018 Vietnam’s merchandise export increased by 45 times compared to 1995 with US $244 billion. Vietnam’s imports increased by 29 times in 2018 compared to 1995. This study is an attempt to test a method of estimating the influence of exports on several Supply-sidefactors such as production value, value added and imports through the expansion of the standard system W. Leontief I.O and Miyazawa-style economic-demographic relations. This study also tries to make an experiment in the “Leontief Paradox”.The result is that Vietnam’s export value spread to production and imports but spread low to added value, especially in the processing industry group’s fabrication. The study is based on the non-competitive I.O table in 2012 and 2018 with 16 sectors.

INDIA’S EXPORT POTENTIAL WITH NON-ASEAN RCEP NATIONS-AN EMPIRICAL ESTIMATION

In November 2019, India decided to pull out from the Regional Comprehensive Economic Partnership (RCEP), initiated in 2012 to create a common trade block comprising 10 ASEAN nations along with Australia, China, India, Japan, Korea P R, and New Zealand. India already has free trade agreement (FTA) with ASEAN nations. In this backdrop, it becomes quite interesting to know about India’s export potential with Non-ASEAN RCEP nations. Since India has significant scope in export of services, this paper aims to assess India’s merchandise export potential with Non-ASEAN RCEP countries, viz. Australia, China, Japan, Korea P R, and New Zealand. The gravity model of international trade is employed to estimate India’s merchandise export potential with these nations. Panel data on India’s merchandise exports, spanning from 2005 to 2018, have been employed and results are based on pooled effects, random effects and fixed effect methods of OLS estimation. The study shows that India seems to have merchandise export potential with China only, while no merchandise export potential seems to exist with Australia, Japan, Korea and New Zealand. The finding of this research would be useful for academics, industry experts and government policy makers. KEYWORDS: Gravity Model, Export Potential, ASEAN, RCEP, India JEL Classification: F1, F12, O24

Trade Flow of India with BRICS Countries: A Gravity Model Approach

In this article, we tried to investigate the trade flow of India with the rest of the Brazil, Russia, India, China and South African (BRICS) countries. To do this, we augmented the gravity model of trade by incorporating time-invariant variables such as per capita gross domestic product (PCGDP), distance, language, etc. We used a panel data econometric model (i.e., pooled ordinary least squares—OLS, fixed effect model) and Poisson–Pseudo Maximum Likelihood (PPML) methods. The sample size consists of BRICS countries and top merchandise export partner countries of India over the period of 2001–2016. The empirical results revealed that the traditional arguments of the gravity model in the context of India are valid. However, as distance increases, export of goods is adversely affected due to a higher trade cost. Moreover, common official language and common border positively influence trade. In addition, evidence on marginal trade creation (21% above the normal level) has been observed. The study suggests that the Indian government should negotiate trade dialogues to resolve trade barriers and market access hurdles among the BRICS countries. This will increase exports among nations. Thus, trade relationship among the BRICS members needs to be addressed on a priority basis.

The Impact of International Trade on Environmental Quality: Implications for Law

Our study illuminates the impact of international trade on environmental quality in lower-middle-income countries by using CO2 emission as the proxy for environmental degradation. Using the Pooled Mean Group estimation along with validity tests, the results show that in the long run, CO2 emission is affected by merchandise export, merchandise import, FDI, GDP per capita, and renewable energy consumption. The impact of trade on CO2 emission is mixed because our findings show that merchandise export and import have opposite effects. In addition, our results reveal that Environmental Kuznets Curve exists in the long run with N-sharped. The increase in GDP per capita leads to the raise of CO2 emission at first, but later comes the decrease and then increase. The paper has relevant implications for law makers.