World trade report, international business

1. World Trade Report 2014
Class: International Business
Professor: oh, Joon Seok
Presenter: Kuy, Daranita

2. Content
• Developed vs. developing economies
I. Worldwide Convergence in GDP
II. What Factors Determine Growth?
III. Rising Share of Developing Countries in the World
Economy
IV. Heterogeneity of Developing Experience
V. Trade Opening in Developing Countries
VI. Conclusion

3. “developed” vs. “developing”
• Countries categorized as either “developed” vs. “developing”
countries
• Developed economies: 27 members states of EU, non-EU
Western European countries and territories.
• Developing economies:
• Least-developed countries (LCDs)
• G-20 countries
• Other developing countries

4. I. World Convergence in GDP
• Faster growth in developing world and slower growth in developed
world
(a) Strong growth in developing economies since 2000
• Exporters of natural resources benefits from large increases in
commodity price
(b) Diverging rates of income convergence among developing countries
• Per capita real GDP has increased dramatically which boost up the
whole economies, 1990-2011
• Average per capita income in developing economies as a whole
increase by 54%
• G-20 developing economies = 61%
• LCDs = 43%
• Other developing economies = 43%

6. II. What Factors Determine Growth?
(a) Resources, technology, institution
• Resources:
• Accumulate resources and investment in HR
• Utilize these resources
• Technology:
• Create new investment opportunities
• Increase productivity
• Institution
• Incentive for firm to invest in human and physical capital or R&D
(b) Trade and growth
• Improve efficiency of its resource allocation
• Extend the size of markets
• Allows us to select the most productive firms in market; variety of choices

7. The graph shoes that a rising share of world trade in GDP has
been accompanied by raising per capita GDP since 1980

9. III. Rising share of developing countries in the world

10. IV. Heterogeneity of Development Experience
• Rising of output and higher incomes not only increase growth development
but also better standard of living and higher income
(a) Increase human development indicators and income growth
• Well-being, nutrition and opportunity/social equity
(b) Growth and inequality within countries
• Kuznets Curve:
1. Migration of rural people to cities increase,
therefore GDP growth also increasing inequality.
1. At certain point, GDP has reach certain level,
inequality falls then welfare states allows for
better redistribution policies

11. (c) Environment impact of economic development
Environment Kuznets Curve ((EKC)
1st: Production changes
2nd: Growing preference for environmentally friendly goods
3th: institutions improves, better capacity to enforce
regulations to address environment problems
4th: Higher GDP enhances, exploits economies of scale
associated with pollution through technologies

12. V. Trade Opening in Developing Countries
• Increasing of trade opening in developing countries has dramatically
changed the pattern of international trade
• G-20 countries have reduced their MFN by over 5%, committed to a
“bound” rate over 80% of their tariff lines and reduced bound rates by
approximately 10% in the last decade
Ex: China’s average tariff was 40% in 1985 but under only 10% today
• Trade opening in G-20 developing economies has expanded export
opportunities for the economies in general and for LDCs in particular.

13. VI. Conclusion
• Show the rapid rise of large developing countries over the past 15 years
and their increased important in international trade
• Trade opening has been an integral part of this process, which enable us
to access to today market and enormous opportunity for other developing
countries
• The share of developing economies in world output increased from 23%
to 40% between 2000-2012, and the share of these countries in world
trade also rose from 33% to 48%

14. THANK YOU!!!