Search results
1 – 8 of 8Rahul Arora, Sarbjit Singh and Somesh K. Mathur
The present study is an attempt to evaluate the impact of the proposed India-China free trade agreement (FTA) in goods trade on both countries under a static general equilibrium…
Abstract
Purpose
The present study is an attempt to evaluate the impact of the proposed India-China free trade agreement (FTA) in goods trade on both countries under a static general equilibrium framework.
Design/Methodology/Approach
The study has utilized the Global Trade Analysis Project (GTAP) model of world trade with the presence of skilled and unskilled unemployment in the world. For analysis purposes, 57 GTAP sectors, representing the whole regional economy, have been aggregated into 43 sectors and 140 GTAP regions, representing the whole world, have been aggregated into 19 regions. The study has also used the updated tariff rates provided by the World Trade Organization for better results.
Findings
The preliminary analysis using trade indicators depicted that by utilizing their own comparative advantage, both of the countries can maximize their gains by exporting more to the world. The simulation results from the GTAP analysis revealed that a tariff reduction in all goods trade would be more beneficial for both the countries than the tariff reduction in each other's specialized products. All other regions lose in terms of shifting the Indian imports towards China in a post-simulation environment. Regions with a significant loss are: the European Union (28 members), Southeast Asia, the Unites States, Japan, Korea, West Asia, and the European Free Trade Association (EFTA).
Originality/Value
The disaggregated sector-wise analysis has been performed using the latest available GTAP database, version 9.
Details
Keywords
In this paper, we evaluated the impact of the US “Chip Act” on the participation of the Chinese electronics industry in the global value chain based on the dynamic CGE model. This…
Abstract
Purpose
In this paper, we evaluated the impact of the US “Chip Act” on the participation of the Chinese electronics industry in the global value chain based on the dynamic CGE model. This is a meaningful attempt to use the GTAP-VA model to analyze the electronics industry in China.
Design/methodology/approach
We employ a Dynamic GTAP-VA Model to quantitatively evaluate the economic repercussions of the “Chip Act” on the Chinese electronic industries' GVC participation from 2023 to 2040.
Findings
The findings depict a discernible contraction in China’s electronic sector by 2040, marked by a −2.95% change in output, a −3.50% alteration in exports and a 0.45% increment in imports. Concurrently, the U.S., EU and certain Asian economies exhibit expansions within the electronic sector, indicating a GVC realignment. The “Chip Act” implementation precipitates a significant divergence in GVC participation across different countries and industries, notably impacting the electronics sector.
Research limitations/implications
Through a meticulous temporal analysis, this manuscript unveils the nuanced economic shifts within the GVC, substantially bridging the empirical void in existing literature. This narrative accentuates the profound implications of policy regulations on global trade dynamics, contributing to the discourse on international economic policy and industry evolution.
Practical implications
We evaluated the impact of the US “Chip Act” on the participation of the Chinese electronics industry in the global value chain based on the dynamic CGE model. This is a meaningful attempt to use the GTAP-VA model to analyze the electronics industry in China.
Social implications
The interaction between policy regulations and global value chain (GVC) dynamics is pivotal in understanding the contemporary global trade framework, especially within technology-driven sectors. The US “Chips Act” represents a significant regulatory milestone with potential ramifications on the Chinese electronic industries' engagement in the GVC.
Originality/value
The significance of this paper is that it quantifies for the first time the impact of the US Chip Act on the GVC participation index of East Asian countries in the context of US-China decoupling. With careful consideration of strategic aspects, this paper substantially fills the empirical gap in the existing literature by presenting subtle economic changes within GVCs, highlighting the profound implications of policy regulation on global trade dynamics.
Details
Keywords
The purpose of this study is to quantify the impact of laws and regulations that govern the cross-border flow of data on the economies of five selected African countries, namely…
Abstract
Purpose
The purpose of this study is to quantify the impact of laws and regulations that govern the cross-border flow of data on the economies of five selected African countries, namely, Egypt, Morocco, South Africa, Kenya and Mauritius. Moreover, this study addresses the state of cloud computing in Africa. Finally, policy recommendations are provided in this respect.
Design/methodology/approach
To reach accurate finding the Global Trade Analysis Project (GTAP) data was used, and then the computable general equilibrium (CGE) was computed to estimate the total cost on the economy. Using the three data regulations linkages indexes (DRLs), the increased administrative cost effect was analyzed on five to six major economic sectors in the target countries. This was followed by estimating the loss in sector-wide total factor productivity (TFP) (for the five to six shortlisted sectors). Using this data, the computable general equilibrium model (CGE) was computed, in order to estimate the economy-wide impact. Based on these findings, a set of recommendations were offered to the policy maker, reflecting the obtained results and conclusions and their implications on drafting data-related policies.
Findings
The obtained data indexes reveal that Mauritius is the country with the most laws and regulations governing the cross border flow of data, followed by South Africa Egypt to a lesser extent and finally Morocco and Kenya both showing an obvious lack of data regulations. The small value of the estimated elasticity of the selected countries compared to the value of the estimated elasticity in the EU-0.347 shows that the impact of data localization is less in the selected African countries than in the other set of EU countries examined in the research paper. This is because the former has smaller economies with fewer linkages to the global economy and are less reliant on sectors that are heavy users of data. Thus, the overall impact of data localization was not as profound on TFP as is the case in advanced economies. This research paper arrives at the conclusion that fighting the trend of data localization is crucial. In fact, data localization hinders the necessary and essential role of global trade in realizing economic development. Specifically, this is evident in the increase in production costs as reflected in the increase of the prices of goods, which would lead to a decline in incomes.
Originality/value
Global studies looked at the impact of data localization on the EU, as well as China, India, Korea and Vietnam, providing some data on Asia Pacific. However, no study has ever been conducted on the Middle East and Africa. This study aims to fill this gap. The approach of this study is to capture the extent of data localization mandates encoded in the laws of each of the selected five African countries showing how these mandates govern their cross-border data flow and, in turn, affect their economies. Furthermore, the policy recommendations section of this research paper makes a contribution to the existing literature.
Details
Keywords
Gabriela Ortiz Valverde and Maria C. Latorre
The purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an in-depth…
Abstract
Purpose
The purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an in-depth analysis of the TPP’s quantitative impact on an upper-middle economy such as Mexico, as well as on the USA.
Design/methodology/approach
The analysis is performed using a computable general equilibrium (CGE) model.
Findings
The results suggest that in the short run, both Mexico and the USA would slightly benefit from the TPP. Tariff reductions would lead to less bilateral trade between Mexico and the USA and the stronger integration of both countries with the rest of the TPP members. The opposite is true after a decrease in non-tariff barriers (NTBs). Overall, in terms of the impact on Mexico, trade integration with the rest of the TPP members prevails. This suggests that a TPP without the USA could still be beneficial.
Originality/value
Previous studies on the TPP have mainly focused on its impact for the USA, which is also analysed in the present study. The effects of the TPP are estimated for a broad set of micro and macroeconomic variables, paying particular attention to the reductions of NTBs.
Details
Keywords
Ryuichi Shibasaki, Masahiro Abe, Wataru Sato, Naoki Otani, Atsushi Nakagawa and Hitoshi Onodera
This study predicts the growth of Africa's international trade from 2011 to 2040 by accounting for the uncertainties in the continent.
Abstract
Purpose
This study predicts the growth of Africa's international trade from 2011 to 2040 by accounting for the uncertainties in the continent.
Design/methodology/approach
This study applies a scenario planning method (SPM) to develop multiple future scenarios considering uncertainties inherent in African socio-economies related to the success or failure of economic and industrial policies (EIPs) and economic corridor development policies (ECDPs). Subsequently, based on these future scenarios, the growth of African international trade from 2011 to 2040 is predicted using the Global Trade Analysis Project (GTAP) model.
Findings
The predictions reveal that if the EIPs and the ECDPs are successfully implemented, Africa, as a whole, will experience a significant increase in trade, estimated at US$ 1,905 billion and US$ 1,599 billion for exports and imports, respectively, compared to the scenario in which they fail. However, the effects vary greatly by country or region and industrial sector. The results also show that African intra-regional trade is rapidly expanding and is the second-largest after trade with Europe followed by other continents.
Originality/value
SPM, which allows us to reflect the uncertainties affecting African international trade prediction, is applied to build the future scenarios. The study comprehensively predicts African future international trade by setting a wide range of exogenous variables and parameters (input conditions for the GTAP model) related to EIPs and ECDPs.
Details
Keywords
Gour Gobinda Goswami, Farhan Khan, Kazi Labiba, Farhanaj Achol, Tapas Kumar Saha and Aunanna Zulfikar
The scope of this work is to explore whether Regional Comprehensive Economic Partnership (RCEP) would be beneficial to Bangladesh, given Bangladesh's strong ties with India and…
Abstract
Purpose
The scope of this work is to explore whether Regional Comprehensive Economic Partnership (RCEP) would be beneficial to Bangladesh, given Bangladesh's strong ties with India and the west.
Design/methodology/approach
Using extended gravity equation and data from Head and Mayer (2021) and the Direction of Trade Statistic (IMF, 2021) for Bangladesh with its applicable partner countries from 1972 till 2019, the authors attempted to examine the potential impact of joining RCEP while keeping its relationship with South Asian Association for Regional Cooperation (SAARC), and other existing economic integration schemes intact.
Findings
Using traditional pooled ordinary least squares, two-stage least square and generalized method of moment techniques, it has been revealed that conventional partners in the South led by India are still beneficial to Bangladeshs trading line. Joining RCEP provides ample avenues for trade expansion without replacing the positive effects of SAARC.
Practical implications
Traditional partners from European, American and South Asian trading opportunities are still paying enough dividends to Bangladesh. RCEP is providing a trade-enhancing chance for Bangladesh in the eastern direction. This paper provides a policy suggestion to look east policy of government. A total overhaul of her tax structure through minimizing excessive reliance on import tariff revenue is desired to facilitate her to join RCEP in the future because most of its prospective RCEP partners are import partners.
Originality/value
This is the first and the only study which explores the feasibility of Bangladesh to join the RCEP by using the most recently updated gravity data in a panel framework.
Highlights
Since its inception on November 15, 2020, Regional Comprehensive Economic Partnership (RCEP) has emerged as one of the largest economic integration areas in the world.
As a borderline country between South Asia and RCEP, Bangladesh is in a fix to take a decision either to join or not to join RCEP if they are invited.
This paper used the gravity equation in an extended form by taking Bangladesh with its 197 trading partners’ trade data for 1972–2019.
The findings postulate that the existing relationship with SAARC countries is still beneficial to its welfare, and RCEP is also economically helpful in enhancing its trade.
Since its inception on November 15, 2020, Regional Comprehensive Economic Partnership (RCEP) has emerged as one of the largest economic integration areas in the world.
As a borderline country between South Asia and RCEP, Bangladesh is in a fix to take a decision either to join or not to join RCEP if they are invited.
This paper used the gravity equation in an extended form by taking Bangladesh with its 197 trading partners’ trade data for 1972–2019.
The findings postulate that the existing relationship with SAARC countries is still beneficial to its welfare, and RCEP is also economically helpful in enhancing its trade.
Details
Keywords
Fan Yang, Kirsten Urban, Martina Brockmeier, Eddy Bekkers and Joseph Francois
The purpose of this paper is to develop a modelling approach that enables the analysis of long-term food security policies. Specifically, the authors explore the effect of China’s…
Abstract
Purpose
The purpose of this paper is to develop a modelling approach that enables the analysis of long-term food security policies. Specifically, the authors explore the effect of China’s agricultural domestic support on its agricultural and food market by also considering the impact of incomplete price transmission.
Design/methodology/approach
The authors extend the standard Global Trade Analysis Project (GTAP) modelling framework. First, the authors incorporate incomplete price transmission into the GTAP model by generating tariff-equivalent price transmission elasticities. Second, the authors improve the current representation of China’s agricultural domestic support in the GTAP model and the underlying database by considering the production requirements and the trade-distorting effect of different policy instruments. Running a set of simulations, the authors examine first how the incorporation of incomplete price transmission affects the model’s results and second how increased agricultural domestic support affects China’s agricultural and food market accounting for incomplete price transmission.
Findings
Considering incomplete price transmission mitigates the domestic price increases as responses to high international agricultural prices, which also lead to an increase in China’s trade deficit and prohibits net food sellers from receiving high prices. In the long term, an increase in China’s agricultural domestic support to its World Trade Organisation de minimis commitment level would increase domestic agricultural production and reduce its demand pressure on the international market.
Originality/value
This paper contributes to the literature by examining the impact of increased agricultural domestic support on the domestic market while innovatively accounting for incomplete food price transmission. The authors combine econometric estimated price transmission elasticities and an extended GTAP framework to underscore the importance of enhancing the model’s ability in accounting for incomplete price transmission when analysing the impact of agricultural policies.
Details
Keywords
During the Paris Convention, Korean Government made commitment to curb carbon emission by 37 percent by the year of 2030. Since then there has been constant debate, both in media…
Abstract
Purpose
During the Paris Convention, Korean Government made commitment to curb carbon emission by 37 percent by the year of 2030. Since then there has been constant debate, both in media and academia, as to whether attempts to reduce carbon emission would spell the concomitant economic slowdown. The purpose of this paper is to build a Computable General Equilibrium (CGE) model to see the effects of emission decrease on Korea economy.
Design/methodology/approach
To answer the above question, we build a comprehensive framework to gauge the economic impact of Paris Convention through the lens of Computable General Equilibrium (CGE) model using Armington and Melitz model.
Findings
Contrary to conventional wisdom, Korea’s economic performance in terms of welfare remains robust when the carbon emission is reduced. Broadly speaking, Korea’s welfare does not contract significantly in part due to expansion at the export market. For instance, the energy intensive industry (EIT) is affected most directly from the Paris Convention commitment and yet it experiences growth in export. On the contrary, the authors find that the general economic impact on Korea’s output is negative. The additional experiment using Melitz model shows that as the carbon reduction is enforced, both the number and the average productivity of the exporting firms increase in the EIT sector, which the authors refer in the paper as the “Melitz Effect.”
Practical implications
This paper shows that what can be occurred in Korean industries by emission decrease commitment.
Social implications
One byproduct from restricting carbon emission is the surge in the electricity price. This is due to the fact that industries have to shift away from traditional fuels such as oil to electricity for energy. Therefore the authors propose that industrial policies aimed at balancing electricity price should accompany the plan to reduce carbon emission.
Originality/value
For Korean economy, the effects of emission reduction is researched using Armington and Melitz model at the same time. Especially, this is the first research case using the Melitz model in this Korean topic.
Details