This document summarizes an econometric analysis of the impact of the 2002 Japan-Singapore Free Trade Agreement (JSEPA). It finds that while trade between the two nations increased following JSEPA, careful regression analysis shows the impact was not as large as expected, with reductions in trade of about 30% in subsequent years. The analysis uses gravity models to control for various economic and country-specific factors to isolate the effect of JSEPA, but placebo tests complicate attributing changes directly to the trade agreement.
Effecto exchange rate fluctuations on manufacturing sector in nigeriaAlexander Decker
This document summarizes a research paper that examines the effects of exchange rate fluctuations on Nigeria's manufacturing sector from 1985 to 2010. It uses variables like manufacturing GDP, foreign investment, employment, and exchange rates. The study found that exchange rates and foreign investment have a positive impact on manufacturing GDP. It recommends that the government promote export diversification, restrict imports of goods also made in Nigeria, and maintain a stable exchange rate to improve the manufacturing sector performance. The paper provides context on Nigeria's fluctuating exchange rates over time and reviews several other studies that also found exchange rates influence economic growth and agricultural exports.
A survey of foreign exchange rate determinants in nigeriaAlexander Decker
The document presents a study that investigates factors that determine foreign exchange rates in Nigeria over the period 1960-2011. Regression analysis was used to analyze the relationship between the foreign exchange rate and several independent macroeconomic variables including GDP, balance of payments, external reserves, inflation, deposit rates, and lending rates. The results of the regression showed no statistically significant relationship between the foreign exchange rate and any of the independent variables over the time period analyzed.
The paper aims to see the effect of Nominal, Real (External) and Effective Exchange rates (EER) of the U.S dollar on its Terms of Trade with two of its APEC trading partners Australia and New Zealand for the period 1991 to 2010. For analysis, the whole values, percentage changes and relationships between Nominal, Real, EER and Terms of Trade of U.S with the two countries has been taken into consideration. In order to fully access the relationship between the EER and TOT of the U.S with the two trading partners, the Classical Regression analysis is used. It was found that the Real Exchange rate was overvalued as compared to the Nominal Exchange Rate. It was also found that when compared to Nominal exchange rate, Real exchange rate is more effective in explaining the TOT. The Real AUD/USD had both short run and long run impacts on the TOT of U.S.A with Australia but the Real NZD/USD had no impact on the TOT of U.S.A with New Zealand. The EER has been found to be the most effective in determining the TOT balance. The regression analysis showed a regression function of “Terms of Trade= -122.026 + 2.1 Effective Exchange Rate”. The relationship is found by coefficient correlation (r) and there is found to be a positive and strong relationship between the two variables. The 𝑟2 value shows that although some values of the TOT are caused by the EER, there are also other variables that might be influencing the EER as well. The t-values show that the values of β0 and β1 are significant. Also the F-test confirms the overall significance of the model and terms the results as authentic.
The document provides information on Japan's real estate market, including:
1) Foreign corporations are very active in Tokyo's real estate market due to the weak yen.
2) Transaction ROI ranges from 3.8-4.5% in Tokyo and 4.7-7.2% outside Tokyo.
3) When foreigners purchase property in Japan, they cannot get bank loans and must report purchases to authorities.
This document summarizes a study that investigated the short-run and long-run dynamic relationship between stock prices and exchange rates in Malawi from 1999 to 2010. The study used data on the Malawi stock exchange index, exchange rates, interest rates, and the Johannesburg Stock Exchange index. Statistical analyses found no evidence of cointegration, or a long-run relationship, between the variables. Granger causality tests also found that stock prices and exchange rates did not cause each other during the period analyzed. Additionally, the study found that internal and external macroeconomic shocks did not have an immediate influence on the stock or foreign exchange markets in Malawi.
Macroeconomic and Institutional Determinants of Capital Market Performance in...Fakir Tajul Islam
This paper examines the institutional and macroeconomic
determinants of stock market performance using data in the last 20 years starting from 1995 to 2015. In this
paper, Gross Domestic Product (GDP), Consumer Price Index (CPI), inflation rate and Foreign Direct Investment
(FDI) inflows were used as the proxy of macroeconomic determinants, whereas market capitalization, total
issued capital and market turnover of Dhaka Stock Exchange were the proxy of institutional determinants of
capital market performance.
Foreign Direct Investment and economic growth in small island developing stat...Jhary Yadav Nandishwar
Despite the worldwide record of FDI inflows experienced lately, inflows to SIDS were among the lowest, acquiring only 1.2% of the total share of developing countries. The role FDI has in SIDS is an issue hardly discussed in the economics literature given the low absolute amount of capital involved. The smallness and vulnerabilities of SIDS make it difficult for them to attract FDI even though FDI is a major driver of economic growth in these islands. This dissertation is aimed at analysing the effect foreign direct investment (FDI) has on economic growth of small island developing states (SIDS) and Mauritius. Taking a sample of 24 SIDS to econometrically assess the impact of FDI on economic growth, panel data regression is used with the random effect model for the period 1980-2010. The result indicates that FDI, GCF, trade openness, inflation and infrastructure are all statistically significant. Even though many SIDS were not taken into consideration due to data constraints, our results are consistent with the empirical finding available for SIDS such as Armstrong et al., (1998); Armstrong & Read, (1998a); Armstrong & Read, (2002); Read (2002).For Mauritius, the ARDL-ECM approach is used and it has been found that GCF only has short-run significance and not long-run. This dissertation also presents extensive examination of theoretical and empirical evidence on the factors influencing FDI and economic growth. Most studies conclude that FDI is conducive to growth.
KEYWORDS: Foreign Direct Investment, FDI, SIDS, Panel Data Regression, Random Effect Model, ARDL-ECM, Mauritius
The Agreement on Trade-Related Investment Measures (TRIMs) aims to promote trade liberalization while ensuring competition. It recognizes that certain investment measures can distort trade. The TRIMs Agreement clarifies that GATT Articles III (national treatment) and XI (prohibition of quantitative restrictions) apply to investment measures related to trade in goods. It includes an illustrative list of measures inconsistent with these articles, such as local content requirements and import/export balancing requirements. The agreement establishes notification requirements for members and transition periods for eliminating inconsistent measures. It focuses on limiting investment measures' impact on trade in goods and does not regulate foreign investment or services.
Effecto exchange rate fluctuations on manufacturing sector in nigeriaAlexander Decker
This document summarizes a research paper that examines the effects of exchange rate fluctuations on Nigeria's manufacturing sector from 1985 to 2010. It uses variables like manufacturing GDP, foreign investment, employment, and exchange rates. The study found that exchange rates and foreign investment have a positive impact on manufacturing GDP. It recommends that the government promote export diversification, restrict imports of goods also made in Nigeria, and maintain a stable exchange rate to improve the manufacturing sector performance. The paper provides context on Nigeria's fluctuating exchange rates over time and reviews several other studies that also found exchange rates influence economic growth and agricultural exports.
A survey of foreign exchange rate determinants in nigeriaAlexander Decker
The document presents a study that investigates factors that determine foreign exchange rates in Nigeria over the period 1960-2011. Regression analysis was used to analyze the relationship between the foreign exchange rate and several independent macroeconomic variables including GDP, balance of payments, external reserves, inflation, deposit rates, and lending rates. The results of the regression showed no statistically significant relationship between the foreign exchange rate and any of the independent variables over the time period analyzed.
The paper aims to see the effect of Nominal, Real (External) and Effective Exchange rates (EER) of the U.S dollar on its Terms of Trade with two of its APEC trading partners Australia and New Zealand for the period 1991 to 2010. For analysis, the whole values, percentage changes and relationships between Nominal, Real, EER and Terms of Trade of U.S with the two countries has been taken into consideration. In order to fully access the relationship between the EER and TOT of the U.S with the two trading partners, the Classical Regression analysis is used. It was found that the Real Exchange rate was overvalued as compared to the Nominal Exchange Rate. It was also found that when compared to Nominal exchange rate, Real exchange rate is more effective in explaining the TOT. The Real AUD/USD had both short run and long run impacts on the TOT of U.S.A with Australia but the Real NZD/USD had no impact on the TOT of U.S.A with New Zealand. The EER has been found to be the most effective in determining the TOT balance. The regression analysis showed a regression function of “Terms of Trade= -122.026 + 2.1 Effective Exchange Rate”. The relationship is found by coefficient correlation (r) and there is found to be a positive and strong relationship between the two variables. The 𝑟2 value shows that although some values of the TOT are caused by the EER, there are also other variables that might be influencing the EER as well. The t-values show that the values of β0 and β1 are significant. Also the F-test confirms the overall significance of the model and terms the results as authentic.
The document provides information on Japan's real estate market, including:
1) Foreign corporations are very active in Tokyo's real estate market due to the weak yen.
2) Transaction ROI ranges from 3.8-4.5% in Tokyo and 4.7-7.2% outside Tokyo.
3) When foreigners purchase property in Japan, they cannot get bank loans and must report purchases to authorities.
This document summarizes a study that investigated the short-run and long-run dynamic relationship between stock prices and exchange rates in Malawi from 1999 to 2010. The study used data on the Malawi stock exchange index, exchange rates, interest rates, and the Johannesburg Stock Exchange index. Statistical analyses found no evidence of cointegration, or a long-run relationship, between the variables. Granger causality tests also found that stock prices and exchange rates did not cause each other during the period analyzed. Additionally, the study found that internal and external macroeconomic shocks did not have an immediate influence on the stock or foreign exchange markets in Malawi.
Macroeconomic and Institutional Determinants of Capital Market Performance in...Fakir Tajul Islam
This paper examines the institutional and macroeconomic
determinants of stock market performance using data in the last 20 years starting from 1995 to 2015. In this
paper, Gross Domestic Product (GDP), Consumer Price Index (CPI), inflation rate and Foreign Direct Investment
(FDI) inflows were used as the proxy of macroeconomic determinants, whereas market capitalization, total
issued capital and market turnover of Dhaka Stock Exchange were the proxy of institutional determinants of
capital market performance.
Foreign Direct Investment and economic growth in small island developing stat...Jhary Yadav Nandishwar
Despite the worldwide record of FDI inflows experienced lately, inflows to SIDS were among the lowest, acquiring only 1.2% of the total share of developing countries. The role FDI has in SIDS is an issue hardly discussed in the economics literature given the low absolute amount of capital involved. The smallness and vulnerabilities of SIDS make it difficult for them to attract FDI even though FDI is a major driver of economic growth in these islands. This dissertation is aimed at analysing the effect foreign direct investment (FDI) has on economic growth of small island developing states (SIDS) and Mauritius. Taking a sample of 24 SIDS to econometrically assess the impact of FDI on economic growth, panel data regression is used with the random effect model for the period 1980-2010. The result indicates that FDI, GCF, trade openness, inflation and infrastructure are all statistically significant. Even though many SIDS were not taken into consideration due to data constraints, our results are consistent with the empirical finding available for SIDS such as Armstrong et al., (1998); Armstrong & Read, (1998a); Armstrong & Read, (2002); Read (2002).For Mauritius, the ARDL-ECM approach is used and it has been found that GCF only has short-run significance and not long-run. This dissertation also presents extensive examination of theoretical and empirical evidence on the factors influencing FDI and economic growth. Most studies conclude that FDI is conducive to growth.
KEYWORDS: Foreign Direct Investment, FDI, SIDS, Panel Data Regression, Random Effect Model, ARDL-ECM, Mauritius
The Agreement on Trade-Related Investment Measures (TRIMs) aims to promote trade liberalization while ensuring competition. It recognizes that certain investment measures can distort trade. The TRIMs Agreement clarifies that GATT Articles III (national treatment) and XI (prohibition of quantitative restrictions) apply to investment measures related to trade in goods. It includes an illustrative list of measures inconsistent with these articles, such as local content requirements and import/export balancing requirements. The agreement establishes notification requirements for members and transition periods for eliminating inconsistent measures. It focuses on limiting investment measures' impact on trade in goods and does not regulate foreign investment or services.
- The document examines whether China benefited from the ASEAN-China Free Trade Area (ACFTA) by analyzing China's export values to ASEAN countries before and after ACFTA using a gravity model.
- Regression results showed ACFTA had a small, positive but insignificant effect on China's total exports to ASEAN. This insignificant effect may be due to the small sample size or it being too early to see ACFTA's full effects as many provisions don't take effect until 2020.
- When using exports by product categories, regressions unexpectedly showed ACFTA significantly reduced China's exports to ASEAN, which is inconsistent with other studies. Overall, the analysis found ACFTA has not significantly benefited
Impact of general agreements on trade in services on the balance of payment o...Alexander Decker
This document analyzes the impact of the General Agreement on Trade in Services (GATS) on Nigeria's balance of payments. It begins with an abstract and introduction on GATS and its objectives. It then provides conceptual clarifications on services and trade in services. Theoretical frameworks on GATS and its four modes of supply are discussed. Research methods including data collection and analysis are described. Results found the variables like GDP, exports, and imports were not significantly impacted by GATS agreements, thus the null hypothesis that GATS did not influence Nigeria's balance of payments was accepted. Survey responses also indicated that GATS had varying levels of impact on sectors like communication, tourism, finance, and transportation.
Discussing unilateral trade liberalization experience of HK, Singapore, ASEAN, gravity model of trade, intellectual property rights (IPR), plain packaging issues.
Read the complete article, see videos and more studies:
http://ged-project.de/2014/02/07/benefits-transatlantic-free-trade-deal/
Who are the winners and losers in a Transatlantic Trade and Investment Partnership (TTIP). What does TTIP mean for employment? How would TTIP affect economic disparities in the EU? Are the effects on the EU single market a threat to European cohesion?
Empirical test of the relationship between import substitution and trade perf...Alexander Decker
This document summarizes a study that empirically tested the relationship between import substitution policies and trade performance in Zimbabwe from 1980 to 2009. The study used a vector error correction model to analyze the long-run and short-run relationships between net exports (the measure of trade performance), import tariffs, and exchange rates. The results showed cointegration, indicating a long-run equilibrium relationship between the variables. Specifically, it found that real exchange rate depreciation was negatively associated with net exports and negatively related to import tariffs in the long-run. It also found that import tariffs had a negative relationship with net exports in the long-run.
Does the Gravity Model Explain Bangladesh’s Direction of Trade? A Panel Data ...iosrjce
The goal of this article is to investigate the determinants of bilateral trade flows of Bangladesh with
her fifty two major trading partners with the use of trade gravity model approach. The gravity model has been
estimated using pooled OLS, fixed effects, random effects estimation technique with the help of panel data for
the period 1975-2005. Our estimation results show that trade volume of Bangladesh responds more than
proportionally to per capita GDP and distance for OECD and NON –OECD trading partner countries
separately. Bangladesh’s direction of trade pattern is also strongly governed by geographical characteristics,
such as Area implying Bangladesh has a tendency to trade with larger countries. Membership in OECD and
GSP dummy has significant impact on trade. The results of gravity models have also been applied to calculate
the trade potentials indicating that Bangladesh has unexploited trade potentials with countries like UK,
Singapore, Netherlands, Germany, UAE, Canada, India, China, Italy, Australia, Germany, Switzerland &
Pakistan. We have found that the actual trade is converging towards equilibrium level of trade using average
speed of convergence measure. Therefore, identifying & utilizing unexploited trade potentials among some of
Bangladesh’s trading partners should stimulate growth to alleviate unemployment & poverty.
Munich Personal RePEc Archive...international economicsAmbreen Zulfiqar
This document analyzes intra-industry trade (IIT) in Pakistan. It defines IIT as simultaneous exports and imports of the same product. The document discusses theories of IIT, including horizontal and vertical models. It also reviews literature on measuring IIT using indexes. The document then analyzes factors that influence IIT for Pakistan, such as differences in GDP, distance, and foreign direct investment. It finds that IIT occurs more between countries with similar economic and market sizes. The document concludes that while IIT benefits some industries, it can also hurt others, and that IIT for Pakistan is still incipient despite trade agreements.
This paper investigates the evolution and determinants of manufactured exports and FDI in MED-11 countries over the period 1985-2009 as well as the prospects of their evolution under different scenarios pertaining to the evolution of the determinants. The econometric analysis confirmed the role of exchange rate depreciation, the openness of the economy and the quality of institution and infrastructure in fostering manufactured exports and FDI inflows in the Region. The prospects' assessment suggested that a scenario of deeper integration with the EU entails superior performance regarding manufactured exports and FDI than status quo or less integration with the EU but greater regional integration.
Authored by: Khalid Sekkat
Published in 2012
After the fall of Bretton Woods System, exchange rates become the focus of researchers and politicians. When a floating exchange rate system was started researchers investigated the impact of exchange rate volatility on international trade but the development of derivative instruments changed the researchers focus from currency volatility towards the impact of currency appreciation or depreciation on international trade. The main objective of this research was to investigate the short run and long run relationship between Turkey’s merchandise trade deficit and real effective exchange rate. The monthly data was collected from Central Bank of Republic of Turkey from March 2005 to September 2017. Autoregressive distributed lag (ARDL) approach and Error correction model (ECM) was used for the analysis. The finding shows that the variables have long run relationship but it is not significant at 5% significance level. The short run model also shows the insignificant results. These findings have the following policy implication: Turkey cannot improve the merchandise trade deficit by devaluating its currency.
This document discusses the relationship between export and economic growth in Nigeria. It begins with an abstract noting that while some economists argue export competition improves productivity, others argue it can negatively impact local industries. The document aims to empirically test the relationship between export and GDP in Nigeria. It provides background on Nigeria's economic history, including a reliance on oil exports. It reviews theories on how export can impact growth, including Ricardo's comparative advantage model. Tables show Nigeria's weak manufacturing exports as a percentage of total exports. The document aims to analyze problems with Nigeria's exports and propose solutions to strengthen manufacturing exports and economic growth.
Decomposition of Trade Agreements of the Philippines: Do Free Trade Agreement...Mark Edison Bautista
The document analyzes the impact of free trade agreements (FTAs) on the Philippines' trade margins. It conducts a decomposition of trade growth with FTA partner countries and a control group to examine the extensive (new goods) and intensive (existing goods) margins. Preliminary results show the ASEAN FTAs had a higher extensive margin growth compared to intensive for exports, indicating FTAs widened Philippine products traded. For imports under ASEAN+partners, the extensive margin was also significant, suggesting FTAs increased variety of imported goods.
This document analyzes the effects of international trade on the trade balance in the Republic of Congo between 2012-2019. It finds that exports of crude oil and raw wood positively affect the trade balance, while imports of most goods negatively affect it, except for imports of electrical machinery which have a positive effect. The study uses a multiple linear regression model and monthly trade data between China and Congo to analyze the relationships between export/import volumes and the trade balance.
The document discusses examining the existence of the J-curve effect of devaluation on trade balance in Ethiopia from 1974-2011 using time series econometrics. It outlines the background, objectives, hypotheses, methodology including variables and model specification to investigate the short-run and long-run relationship between real exchange rate and trade balance.
International Journal of Mathematics and Statistics Invention (IJMSI) is an international journal intended for professionals and researchers in all fields of computer science and electronics. IJMSI publishes research articles and reviews within the whole field Mathematics and Statistics, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The impact of some economic factors on imports in jordanAlexander Decker
The document analyzes factors that impact imports in Jordan using a multiple linear regression model. It finds that imports are most strongly influenced by consumer price index (CPI), remittances, relative prices, and exchange rates. While GDP and remittances were not statistically significant predictors in the initial model, further analysis found issues with multicollinearity between some variables. Addressing this by using standardized variables and stepwise selection resulted in a better fitting model with CPI as the most important predictor of imports in Jordan.
This research was aimed to analyze the effect of ASEAN economic integration on
Indonesian fishery export. This research employed gravity model which was used to analyze
Indonesian fishery export with ASEAN countries and other non-ASEAN main trading partners. The
result of this research indicated that Indonesian fishery export in 2000 - 2015 fluctuated with an
upward trend
TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP - THE ECONOMIC ANALYSIS EXPLAINEDCláudio Carneiro
The CEPR study predicts that an ambitious TTIP agreement would increase the EU economy by around €120 billion (0.5% of GDP) and the US economy by €95 billion (0.4% of GDP). Specific sectors that would benefit the most include metal products, processed foods, chemicals, other manufactured goods, other transport equipment, and motor vehicles. The study also estimates that average European household income would increase by around €500 per year due to wage increases and lower prices from the agreement. However, the figures provided are estimates from economic models and not precise predictions.
The document discusses the potential impacts of de-globalization trends on East Asian economies. It finds that world trade, foreign direct investment, and intra-East Asian trade have significantly contributed to East Asian income per capita and GDP growth based on regression analyses. It concludes that East Asian countries should boost intra-regional trade through agreements like RCEP to compensate for possible stagnation in world trade and maintain economic integration and welfare as de-globalization progresses.
- The document examines whether China benefited from the ASEAN-China Free Trade Area (ACFTA) by analyzing China's export values to ASEAN countries before and after ACFTA using a gravity model.
- Regression results showed ACFTA had a small, positive but insignificant effect on China's total exports to ASEAN. This insignificant effect may be due to the small sample size or it being too early to see ACFTA's full effects as many provisions don't take effect until 2020.
- When using exports by product categories, regressions unexpectedly showed ACFTA significantly reduced China's exports to ASEAN, which is inconsistent with other studies. Overall, the analysis found ACFTA has not significantly benefited
Impact of general agreements on trade in services on the balance of payment o...Alexander Decker
This document analyzes the impact of the General Agreement on Trade in Services (GATS) on Nigeria's balance of payments. It begins with an abstract and introduction on GATS and its objectives. It then provides conceptual clarifications on services and trade in services. Theoretical frameworks on GATS and its four modes of supply are discussed. Research methods including data collection and analysis are described. Results found the variables like GDP, exports, and imports were not significantly impacted by GATS agreements, thus the null hypothesis that GATS did not influence Nigeria's balance of payments was accepted. Survey responses also indicated that GATS had varying levels of impact on sectors like communication, tourism, finance, and transportation.
Discussing unilateral trade liberalization experience of HK, Singapore, ASEAN, gravity model of trade, intellectual property rights (IPR), plain packaging issues.
Read the complete article, see videos and more studies:
http://ged-project.de/2014/02/07/benefits-transatlantic-free-trade-deal/
Who are the winners and losers in a Transatlantic Trade and Investment Partnership (TTIP). What does TTIP mean for employment? How would TTIP affect economic disparities in the EU? Are the effects on the EU single market a threat to European cohesion?
Empirical test of the relationship between import substitution and trade perf...Alexander Decker
This document summarizes a study that empirically tested the relationship between import substitution policies and trade performance in Zimbabwe from 1980 to 2009. The study used a vector error correction model to analyze the long-run and short-run relationships between net exports (the measure of trade performance), import tariffs, and exchange rates. The results showed cointegration, indicating a long-run equilibrium relationship between the variables. Specifically, it found that real exchange rate depreciation was negatively associated with net exports and negatively related to import tariffs in the long-run. It also found that import tariffs had a negative relationship with net exports in the long-run.
Does the Gravity Model Explain Bangladesh’s Direction of Trade? A Panel Data ...iosrjce
The goal of this article is to investigate the determinants of bilateral trade flows of Bangladesh with
her fifty two major trading partners with the use of trade gravity model approach. The gravity model has been
estimated using pooled OLS, fixed effects, random effects estimation technique with the help of panel data for
the period 1975-2005. Our estimation results show that trade volume of Bangladesh responds more than
proportionally to per capita GDP and distance for OECD and NON –OECD trading partner countries
separately. Bangladesh’s direction of trade pattern is also strongly governed by geographical characteristics,
such as Area implying Bangladesh has a tendency to trade with larger countries. Membership in OECD and
GSP dummy has significant impact on trade. The results of gravity models have also been applied to calculate
the trade potentials indicating that Bangladesh has unexploited trade potentials with countries like UK,
Singapore, Netherlands, Germany, UAE, Canada, India, China, Italy, Australia, Germany, Switzerland &
Pakistan. We have found that the actual trade is converging towards equilibrium level of trade using average
speed of convergence measure. Therefore, identifying & utilizing unexploited trade potentials among some of
Bangladesh’s trading partners should stimulate growth to alleviate unemployment & poverty.
Munich Personal RePEc Archive...international economicsAmbreen Zulfiqar
This document analyzes intra-industry trade (IIT) in Pakistan. It defines IIT as simultaneous exports and imports of the same product. The document discusses theories of IIT, including horizontal and vertical models. It also reviews literature on measuring IIT using indexes. The document then analyzes factors that influence IIT for Pakistan, such as differences in GDP, distance, and foreign direct investment. It finds that IIT occurs more between countries with similar economic and market sizes. The document concludes that while IIT benefits some industries, it can also hurt others, and that IIT for Pakistan is still incipient despite trade agreements.
This paper investigates the evolution and determinants of manufactured exports and FDI in MED-11 countries over the period 1985-2009 as well as the prospects of their evolution under different scenarios pertaining to the evolution of the determinants. The econometric analysis confirmed the role of exchange rate depreciation, the openness of the economy and the quality of institution and infrastructure in fostering manufactured exports and FDI inflows in the Region. The prospects' assessment suggested that a scenario of deeper integration with the EU entails superior performance regarding manufactured exports and FDI than status quo or less integration with the EU but greater regional integration.
Authored by: Khalid Sekkat
Published in 2012
After the fall of Bretton Woods System, exchange rates become the focus of researchers and politicians. When a floating exchange rate system was started researchers investigated the impact of exchange rate volatility on international trade but the development of derivative instruments changed the researchers focus from currency volatility towards the impact of currency appreciation or depreciation on international trade. The main objective of this research was to investigate the short run and long run relationship between Turkey’s merchandise trade deficit and real effective exchange rate. The monthly data was collected from Central Bank of Republic of Turkey from March 2005 to September 2017. Autoregressive distributed lag (ARDL) approach and Error correction model (ECM) was used for the analysis. The finding shows that the variables have long run relationship but it is not significant at 5% significance level. The short run model also shows the insignificant results. These findings have the following policy implication: Turkey cannot improve the merchandise trade deficit by devaluating its currency.
This document discusses the relationship between export and economic growth in Nigeria. It begins with an abstract noting that while some economists argue export competition improves productivity, others argue it can negatively impact local industries. The document aims to empirically test the relationship between export and GDP in Nigeria. It provides background on Nigeria's economic history, including a reliance on oil exports. It reviews theories on how export can impact growth, including Ricardo's comparative advantage model. Tables show Nigeria's weak manufacturing exports as a percentage of total exports. The document aims to analyze problems with Nigeria's exports and propose solutions to strengthen manufacturing exports and economic growth.
Decomposition of Trade Agreements of the Philippines: Do Free Trade Agreement...Mark Edison Bautista
The document analyzes the impact of free trade agreements (FTAs) on the Philippines' trade margins. It conducts a decomposition of trade growth with FTA partner countries and a control group to examine the extensive (new goods) and intensive (existing goods) margins. Preliminary results show the ASEAN FTAs had a higher extensive margin growth compared to intensive for exports, indicating FTAs widened Philippine products traded. For imports under ASEAN+partners, the extensive margin was also significant, suggesting FTAs increased variety of imported goods.
This document analyzes the effects of international trade on the trade balance in the Republic of Congo between 2012-2019. It finds that exports of crude oil and raw wood positively affect the trade balance, while imports of most goods negatively affect it, except for imports of electrical machinery which have a positive effect. The study uses a multiple linear regression model and monthly trade data between China and Congo to analyze the relationships between export/import volumes and the trade balance.
The document discusses examining the existence of the J-curve effect of devaluation on trade balance in Ethiopia from 1974-2011 using time series econometrics. It outlines the background, objectives, hypotheses, methodology including variables and model specification to investigate the short-run and long-run relationship between real exchange rate and trade balance.
International Journal of Mathematics and Statistics Invention (IJMSI) is an international journal intended for professionals and researchers in all fields of computer science and electronics. IJMSI publishes research articles and reviews within the whole field Mathematics and Statistics, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The impact of some economic factors on imports in jordanAlexander Decker
The document analyzes factors that impact imports in Jordan using a multiple linear regression model. It finds that imports are most strongly influenced by consumer price index (CPI), remittances, relative prices, and exchange rates. While GDP and remittances were not statistically significant predictors in the initial model, further analysis found issues with multicollinearity between some variables. Addressing this by using standardized variables and stepwise selection resulted in a better fitting model with CPI as the most important predictor of imports in Jordan.
This research was aimed to analyze the effect of ASEAN economic integration on
Indonesian fishery export. This research employed gravity model which was used to analyze
Indonesian fishery export with ASEAN countries and other non-ASEAN main trading partners. The
result of this research indicated that Indonesian fishery export in 2000 - 2015 fluctuated with an
upward trend
TRANSATLANTIC TRADE AND INVESTMENT PARTNERSHIP - THE ECONOMIC ANALYSIS EXPLAINEDCláudio Carneiro
The CEPR study predicts that an ambitious TTIP agreement would increase the EU economy by around €120 billion (0.5% of GDP) and the US economy by €95 billion (0.4% of GDP). Specific sectors that would benefit the most include metal products, processed foods, chemicals, other manufactured goods, other transport equipment, and motor vehicles. The study also estimates that average European household income would increase by around €500 per year due to wage increases and lower prices from the agreement. However, the figures provided are estimates from economic models and not precise predictions.
The document discusses the potential impacts of de-globalization trends on East Asian economies. It finds that world trade, foreign direct investment, and intra-East Asian trade have significantly contributed to East Asian income per capita and GDP growth based on regression analyses. It concludes that East Asian countries should boost intra-regional trade through agreements like RCEP to compensate for possible stagnation in world trade and maintain economic integration and welfare as de-globalization progresses.
1. JSEPA: AN ECONOMETRIC EVALUATION
Assessing the Impact of the 2002 Japan-Singapore
Free Trade Agreement
Mark Chesney
Dr. Gordon Hanson
Special Topics in International Trade: IRGN 435
School of International Relations and Pacific Studies
University of California, San Diego
June 8, 2015
International Relations and Pacific Studies
University of California, San Diego
June 8, 2015
Abstract
Thirteen years after the signing of JSEPA—the Japan Singapore Economic
Partnership Agreement, the ensuing boost in trade witnessed between the two
nations has commonly been attributed to this policy act. Beneath the surface,
careful econometric measurement reveals that the impact of this free trade
agreement is not nearly as optimistic as politicians and business leaders would
hope. Regression coefficients show reductions of about 30% in the years
following JSEPA. With placebo tests turning up positive in the year 2000, it is
difficult to explain exactly from where the source of these trade losses come.
2. Mark Chesney
1
1. Introduction
JSEPA, the Japan Singapore Economic Partnership Agreement, is Japan's first free trade
agreement. It was signed by prime ministers Goh and Koizumi on January 13, 2002 in
Singapore, coming into effect on November 30, 2002. Beneath the surface of the signing and
enactment, talks over free trade between the two nations have begun as early as 1999.1
News of
the talks in the media prompted an important anticipation of free trade among the business
communities of both nations (see section 4: Econometric Challenges).
The greatest observed outcomes that chronologically followed this agreement were the
boosts in merchandise trade, private investments, and gross domestic product. In an overview of
Japanese exports to Singapore, the bulk of these industries are concentrated in machinery and
equipment. Meanwhile Singapore's exports to Japan are mostly in the services. Because so
much of this trade is intra-industry, the benefits of free trade come not just from tariff reduction
but from concessions in non-tariff costs.2
A snapshot of a breakdown of the bilateral trade
subsectors appears in Appendix A.
Trade agreements and their true impact have been a common subject for econometricians.
Treating the JSEPA as a treatment that began in late 2002 is the basis of this analysis. Of course
selection into JSEPA was not done randomly, as an ideal experiment would have it be. Rather,
JSEPA came out of a climate of easing economic relations between Japan and Singapore.
Further complicating the matter are agreements that followed JSEPA and fall into this time
frame. For example, the agreement between Singapore and New Zealand in 2000 was sure to
1
Terada, Takashi. The Making Of Asia’s First Bilateral FTA: Origins And Regional Implications Of The Japan–
Singapore Economic Partnership Agreement. Australia–Japan Research Centre: 2006.
2
Regional Trade Agreements. The Chinese University of Hong Kong. 2000. http://intl.econ.cuhk.edu.hk/rta/index.php?did=17
3. Mark Chesney
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have potential impact on Singapore’s trade flows—and arguably on Japan’s too. By teasing
apart the data available on economic trade, this study intends to investigate any true impact that
can be attributed to this particular treaty.
2. Data
The data used in these gravity modeling is sourced from the World Trade Organization
(with pre-processing performed by Dr. Gordon Hanson). The raw data contain foremost dyadic
values of nominal trade flows in USD, which makes up the dependent variable selected for this
analysis. Also of primary importance are nominal GDPs and distances between pairs of 116
countries. The time range runs from 1984 to 2008.
Generated from these primary variables were input variables for the gravity models: log-
transformations of trade value, GDP product (of each importer and exporter), and distance.
Other major dummy variables were contiguity (sharing a land border), common official
language, historical colonial relationship, membership in the GATT or WTO, nation exporter,
nation importer, and exporter-importer pair.
Data Time Trends
Of critical importance is the underlying time trend of economic trade. To illustrate this
comparison of Japan and Singapore’s exports, two baseline comparisons are made. In addition
to the entire world export volume, a select comparison group was constructed. (The
methodology of the gravity-score matched set is described under the Model Specification section
of this report.)
4. Mark Chesney
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Figure 1—Export Value Time Trends
The time trend of exports shows how our target countries are increasing in export values. This is
true not just of the world as a whole, but as well as the two target countries here, and the gravity
score matched set.
Figure 2—GDP Time Trends
The GDP time trend makes it apparent that while the world as a whole is climbing at a gradual
pace, Singapore has gone through leaps and bounds in this study time period. This can explain
the increases in trade that is seen, particularly those after JSEPA is signed.
5. Mark Chesney
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3. Empirical Model Specification
A gravity model captures the effects due to trade liberalization under JSEPA on trade
volume. This model can take various forms; here it is as follows:
ln 𝑋 𝑑𝑜𝑡 = 0
+ 1
𝐽𝑆𝐸𝑃𝐴 𝑑𝑜𝑡 + 2
ln 𝑌𝑑 𝑌𝑜 + 3
𝐶𝑂𝑁𝑇𝐼𝐺 𝑑𝑜 + 4
𝐿𝐴𝑁𝐺 𝑑𝑜 + 5
𝐶𝑂𝐿 𝑑𝑜 + 6
𝐺𝐴𝑇𝑇
+ 7
ln 𝐷 𝑑𝑜 + 𝑜 𝐸𝑋𝑃𝑜 + 𝑑 𝐼𝑀𝑃𝑑 + 𝑃𝐴𝐼𝑅 𝑑𝑜 + 𝑡 + 𝑑𝑜𝑡
Variable List
X: bilateral trade volume
JSEPA: treatment of interest. JSEPA = 0 before 2002; JSEPA = 1 from 2002 onward.
YdYs: multiplicative product of nation-pair’s gross domestic product.
CONTIG = 1 if two countries share a land border (contiguity)
LANG: common language
COL: common colonial history
GATT: whether origin and destination country both belong to the GATT or the WTO
D: distance. Captures costs associated with transport (shipping duration, shipping risks,
communication, etc.)
EXPo: exporting country in a pair (dummy variable)
IMPd: importing country in a pair (dummy variable)
PAIR are the country pair dummies. They capture the average trade between the source
and destination countries
t: time trend, annual
Lastly, subscripts refer to: d (destination), o (origin), and t (time, year).
My gravity model specification consists of logarithm-transformed variables and binary
variables. The three log-transformed variables are annual total value of trade between a nation-
pair (in nominal US dollars), the multiplicative product of exporter and importer GDPs, and the
6. Mark Chesney
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distance between the two nations. (As with Baier and Bergstrand3
, the distance is between two
countries’ economic centers, traced along great circles which are concentric with the earth’s
core.)
Binary variables are used to indicate whether the two nations share:
a border
a common official language
a colonial power
simultaneous membership in the GATT
the treatment, i.e. the Japan-Singapore FTA. Simply put, this variable jpn_sgp2002 = 1
for panel observations on or after 2002 in which Japan and Singapore are trading.
Specifications of Model Variations and Explanation of Counterfactuals
I perform four variations of my gravity model. These variations are:
1. Controlling for time trends, by including dummy variables for each year
2. In addition to (1), controlling for cross-sectional variation, by including dummy variables
for each exporter nation, and each importer nation.
3. Controlling for the interactions of importer time trends and exporter time trends.
4. Controlling for fixed effects among nation pairs by creating dummies for each pair.
Regression (1) Treatment Effect: Time Trends
This specification contains time trends (year dummy variables). This estimates the
average impact that JSEPA has on trade in years following its ratification in 2002. This
treatment effect is compared to all other observations beyond the treatment: bilateral trade with
other countries (where trade is not between Japan and Singapore), in addition to Japanese-
Singaporean trade in years prior to 2002.
3
S.L. Baier, J.H. Bergstrang / Journal of International Economics 71 (2007) 72-95
7. Mark Chesney
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One notable concern is that while this regression controls for the size of its nominal
economic activity (i.e. GDP), it does not control for specific, and quite possibly unobservable
traits of each nation. Traits specific to Japan as an exporter (or importer) could be unidentified
and yet crucial to the impact of trade with Singapore. I correct for this in the second regression.
Regression (2) Treatment Effect: Time Trends, Importer-Dummies, and Exporter-Dummies
This regression contains both time trends and dummy variables to control for each
importing country and each exporter. It controls for an exporter's trade on average, as well as
average imports per country. By this specification this regression estimates the impact that
JSEPA has on trade between Singapore and Japan, when compared to a) trade between the two
prior to JSEPA, b) trade between Japan and any other nations except Singapore, and c) trade
between Singapore and any other nations except Japan.
This regression is useful in controlling for the trade of each nation, whether as exporter or
importer, averaged over the 25-year time frame. To extend the explanatory power of the panel
data one step further, the next regression uses each year rather than averaging them.
Regression (3) Treatment Effect: Interaction between Time Trends and Importer/Exporter-
Dummies
This regression contains the interaction of time trends with dummy variables of each
importing and exporting country. In doing so, time trends that are specific to any nation are
capturing in this interaction term. However, the counterfactual for this regression still remains
very similar to that of the previous, and because of its complexity, it remains still too bulky in
discerning the effects of JSEPA on trade. The next regression helps to resolve this challenge.
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Regression (4) Treatment Effect: Country-Pair Fixed Effects
This regression contains dummies for each pair of countries. In doing so, this regression
measures the effect of JSEPA on Japan-Singapore trade after JSEPA (i.e. 2002 to 2008)
compared to Japan-Singapore trade before JSEPA (1984 to 2001). Though the establishment of
causality from JSEPA on trade between Japan and Singapore is not certain, it is more plausible
in this variation than in previous regressions that rest upon more complex counterfactuals.
Comparison Group Construction: Gravity Score Matching
The country-pair fixed effects regression is conditional on the gravity model variables. In
the process of constructing this comparison group, the gravity score between Japanese-
Singaporean trade was 14.5. Holding Singapore constant as the importer, only the USA scores
within 0.25 of Japan’s gravity score as exporter to Singapore. Performing the same gravity score
matching with Japan as importer returns an array of nations: Austria, Belgium, Denmark,
Finland, Norway, Philippines, Poland, and Turkey. These are all included into the matched
comparison group.
4. Econometric Challenges
Even in the most sophisticated model variation, in which I compare country pairs on the
various gravity characteristics, there are always the danger of potentially confounding global
events that influence both trade between Japan and Singapore and their gravity characteristics.
Exporter capability and importer demand conditions are fundamental to the gravity
model. As much as exporter and importer fixed effects can aid in capturing these conditions,
they will never be accurate enough for us to be certain that causality is identifiable from the
JSEPA onto trade flows. Though the fixed effects by their nature do not change over time, these
9. Mark Chesney
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true import and export conditions may change drastically, often in unobservable ways. This
caution is advised while interpreting econometric results.
Simultaneity bias and other similar forms of endogeneity may very well be present in this
analysis. As mentioned earlier, trade agreements are not exogenous because they are often
preceded by increases in trade flows. That is to say that two nations that initially trade very little
would have little incentive to form a trade agreement. No two nations randomly select
themselves into a trade agreement. Also mentioned is the great potential of anticipation for free
trade among business leaders. This could be expected to produce a reverse Ashenfelter’s Dip, or
an explanation of a placebo effect in years. Because improvements in bilateral relation can
influence trade, it is important not to credit the agreement disproportionately with advancing
trade.
5. Results
Table 1 shows the results of the four regressions discussed above. In column 1, the
regression barely takes advantage of the panel structure of the trade data. As a result, this naïve
model shows an impressive 2.066 log-point increase in trade. This amounts to exp(2.066) – 1 =
6.89 or a 689% increase in trade. Because this amount can appear questionable, we proceed to
column 2.4
4
The regressions with the entire world (N=251851) are not shown here, but they demonstrate the same effects as
seen in the gravity score matched comparison group.
10. Mark Chesney
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Table 1—Panel Data Regression Analysis
(1) (2) (3) (4)
JSEPA
2.066*** -0.418*** -0.116 -0.373***
(0.0671) (0.0844) (0.0939) (0.0723)
Observations 2746 (all four regressions)
R-squared 0.74 0.90 0.92 0.95
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Notes: controls mentioned in model specification are included in regression but omitted from
table, as well as regression constant.
Column 2, controlling for importer and exporter dummies, shows a significantly reduced
correlation of trade in the years following JSEPA. This indicates a exp(-0.418) – 1 = 34%
reduction in trade. This is statistically significant to a high degree. Already the analysis shows
that trade outcomes may not be positive at all in the JSEPA years. Column 3, with time trend-
interacted importer and exporter dummies, is not statistically significant. This regression shows
a correlation that is not different from zero. Column 4 gives a very similar result to column 2—a
31% reduction in trade, to a high degree of statistical significance.
In light of the talks of free trade that preceded the actual signing, placebo tests are run to
check if the years leading up to JSEPA have a statistically significant change in trade volume.
We turn to those Falsification Tests now.
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6. Falsification Tests
Placebo Test: 2000
In this falsification test, we conduct a regression while imagining that a free trade
agreement was established in the year 2000. Of course, talks were well under way in this year.
With this placebo, we test whether the “effects of JSEPA” are significant in 2000, two years
prior to JSEPA. Each regression (1 through 4) corresponds to the preceding set of four
regressions. The results are in Table 2.
Table 2—Test for Placebo Effects
(1) (2) (3) (4)
Placebo in 2000 2.131*** -0.309*** -0.0812 -0.287***
(0.189) (0.0955) (0.0853) (0.0778)
JSEPA -0.0631 -0.118 -0.0384 -0.118
(0.200) (0.110) (0.0979) (0.0895)
Observations 2746 (all four regressions)
R-squared 0.74 0.90 0.92 0.95
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Notes: controls mentioned in model specification are included in regression but omitted from
table, as well as regression constant.
What is most notable in this test is that the placebo effects are larger than those of
JSEPA. They are quite similar to the JSEPA coefficients of Table 1, and they are equally as
significant statistically as those of Table 1. As previously discussed, regression 1 has great
limitations in accuracy. However, regressions 2 and 4 show an interesting outcome: a reduction
of 27% and 25%, respectively, is correlated with the years from 2000 onward.
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This is a rather puzzling observation. By the definition of the counterfactual assumption
in regression 4, column 4 shows that the years following 2000 have significantly lower levels of
trade between Japan and Singapore than in the 20th
century.
7. Conclusion
Without question, deeper analysis of the trade data is necessary to produce a more
conclusive answer to the question of impact on trade due to JSEPA. This gravity model raises
questions as to what the true impact can be. Having constructing a gravity score matched set of
countries, and controlling for the average trade between pairs of nations, this analysis suggests
that trade was on the decline in the years leading up to JSEPA.
Though this falsification test is a solution to some of the econometric problems
anticipated in this analysis, the econometric problems do not stop there. The placebo effects can
be reiterated in further analysis to see if any particular year preceding 2002 holds the greatest
correlation with a decrease—or increase—in Singaporean-Japanese trade. And as mentioned
before, this correlation does not imply causality, due to the endogenous nature of all trade
agreements.
Nonetheless, at face value this analysis shows that trade goes down in the years before
JSEPA, and when JSEPA is signed, there is no coinciding change in trade—2002 trade onward is
no different from zero. It is important for policymakers and business leaders to recognize that
the important factors that influence trade go deep beyond the mere signing of a trade agreement.
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Appendix A
Japan's exports to Singapore: total of $20.1 billion, or 5.5% of its overall imports.
1. Electronic equipment: $4.8 billion
2. Machines, engines, pumps: $4.3 billion
3. Oil: $2.9 billion
4. Vehicles: $1 billion
5. Medical, technical equipment: $937.4 million
6. Gems, precious metals, coins: $837.7 million
7. Iron or steel products: $631.4 million
8. Plastics: $543.3 million
9. Iron and steel: $499.7 million
10. Other chemical goods: $366.9 million
Singapore's exports to Japan: total of $7.9 billion, or 1.0% of its overall imports.
1. Electronic equipment: $1.3 billion
2. Machines, engines, pumps: $1.2 billion
3. Pharmaceuticals: $1.1 billion
4. Medical, technical equipment: $707.7 million
5. Books, newspapers, pictures: $496.6 million
6. Plastics: $307.1 million
7. Other chemical goods: $269.5 million
8. Cocoa: $233.6 million
9. Cereal, milk preparations: $204.3 million
10. Oil: $188.1 million
Source: World’s Richest Countries.5
5
http://www.worldsrichestcountries.com/top_japan_exports.html