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Article
Publication date: 3 November 2020

Gour Gobinda Goswami and Nisit Panthamit

Political risk factors play a pivotal role in determining the bilateral trade flow of Asian countries in general and the Association for Southeast Asian Nations (ASEAN…

Abstract

Purpose

Political risk factors play a pivotal role in determining the bilateral trade flow of Asian countries in general and the Association for Southeast Asian Nations (ASEAN) countries in particular. The main purpose of this research paper is to examine the impact of disaggregated political risk in lowering the bilateral trade flow of Thailand, a prominent member of ASEAN, vis-à-vis her 132 trading partners.

Design/methodology/approach

Using panel data of Thailand with her partner countries for the period 1984–2015, this paper uses four different panel specifications named pooled ordinary least squares and random effects estimations (estimated generalized least squares estimation) of three types by controlling for cross-sectional heteroscedasticity, time-wise heteroscedasticity and contemporaneous correlation.

Findings

Holding other gravity-based determinants constant, for one unit increase in the ranking of indicator of military in politics at home and abroad, trade flow decreases by 5–9% of the total trade flow of Thailand per year. For other types of political risks like government instability at home and abroad, difficulties in investment profile at home and abroad and internal and external conflict at home and abroad, the decrease is also substantial and most statistically significant. The magnitude of loss due to the military channel at home and abroad can amount to US$9.38–US$16.88 bn per year for Thailand, after controlling for other gravity variables.

Research limitations/implications

The reasons for risk originating from different political channels could be explored at the regional or global level to understand their global and local dimensions.

Practical implications

Policymakers should attempt to resolve the political risks at home and abroad in an amicable manner, through dialogue, so that bilateral trade flow is not inhibited.

Social implications

By taking economic reforms only, the trading problem cannot be resolved until and unless Thailand involves her society, politics and administrative mechanisms in a conducive manner to facilitate her trade. A dialogue among bureaucracy, political authority and military is beneficial in mitigating political risks.

Originality/value

The paper is unique in the sense that it makes a solid attempt to identify the potential channels of disaggregated political risk in affecting trade flow negatively, in a gravity framework, by controlling for different kinds of error structure.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 15 December 2020

Gour Gobinda Goswami, ARM Mehrab Ali and Sharose Islam

The main purpose of this study is to examine the role of the coronavirus disease 2019 (COVID-19) test on transmission data globally to reveal the fact that the actual…

Abstract

Purpose

The main purpose of this study is to examine the role of the coronavirus disease 2019 (COVID-19) test on transmission data globally to reveal the fact that the actual picture of transmission history cannot be exposed if the countries do not perform the test adequately.

Design/methodology/approach

Using Our World in Data for 212 countries and areas and 162 time periods daily from December 31, 2019, to June 09, 2020, on an unbalanced panel framework, we have developed a panel-based path analysis model to explore the interdependence of various actors of COVID-19 cases of transmission across the globe. After controlling for per capita gross domestic product (GDP), age structure and government stringency, we explore the proposition that COVID-19 tests affect transmission positively. As an anecdote, we also explore the direct, indirect and total effects of different potential determinants of transmission cases worldwide and gather an idea about each factor's relative role in a structural equation framework.

Findings

Using the panel path model, we find that a 1 standard deviation change in the number of tests results in a 0.70 standard deviation change in total cases per million after controlling for several variables like per capita GDP, government stringency and age population (above 65).

Research limitations/implications

It is not possible to get balanced data of COVID-19 for all the countries for all the periods. Similarly, the socioeconomic, political and demographic variables used in the model are not observed daily, and they are only available on an annual basis.

Practical implications

Countries which cannot afford to carry out more tests are also the countries where transmission rates are suppressed downward and negatively manipulated.

Social implications

Cross country collaboration in terms of COVID-19 test instruments, vaccination and technology transfer are urgently required. This collaboration may be sought as an alternative to foreign development assistance.

Originality/value

This article provides an alternative approach to modeling COVID-19 transmission through the panel path model where the test is considered as an endogenous determinant of transmission, and the endogeneity has been channeled through per capita GDP, government stringency and age structure without using any regression-based modeling like pooled ordinary least squares (OLS), fixed-effects, two-stage least squares or generalized method of moments (GMM). Endogeneity has been handled without using any instruments.

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Article
Publication date: 1 December 2005

Mohsen Bahmani‐Oskooee, Claire Economidou and Gour Gobinda Goswami

To avoid aggregation bias by using trade data at bilateral level so that we can determine how sensitive are Britain's inpayments and outpayments to the value of the British pound.

Abstract

Purpose

To avoid aggregation bias by using trade data at bilateral level so that we can determine how sensitive are Britain's inpayments and outpayments to the value of the British pound.

Design/methodology/approach

The method is based on the bounds testing approach to cointegration and error‐correction modeling.

Findings

The main finding is that while UK inpayments are not sensitive to the exchange rate, her outpayments are.

Research limitations/implications

Future research must concentrate on disaggregating data further, perhaps at commodity level.

Practical implications

The results could be used to identify Britain's trading partners against which Britain can devalue the pound and improve her trade balance.

Originality/value

No study has attempted to test the impact of real depreciation of the pound on Britain's payments and receipts with her major trading partners.

Details

Journal of Economic Studies, vol. 32 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 4 March 2014

Gour Gobinda Goswami and Samai Haider

In today's increasingly globalized world, foreign direct investment (FDI) is a hotbed for discussion. Numerous studies have been undertaken regarding FDI, its determinants…

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Abstract

Purpose

In today's increasingly globalized world, foreign direct investment (FDI) is a hotbed for discussion. Numerous studies have been undertaken regarding FDI, its determinants and benefits, but very few works provide importance to the effect of political risk on the inflow of FDI. Some papers introduce institutional or governance issues in determining FDI inflow, but a comprehensive framework in this respect is non-existent. With this end in view, the authors take 146 countries worldwide over a period of 1984-2009 and then classify countries as OECD or non-OECD members to see whether there is any difference in the nature of the effect. The study keeps other possible determinants of FDI – market size, growth rate of real GDP, trade openness, infrastructural facilities as control variables while considering the effect of underlying political risk factors in deterring the FDI.

Design/methodology/approach

This paper looks at the effect of political risk on FDI by using a systematic approach of factor analysis, in reducing the number of variables into their underlying factors and then generating factor scores. Then it uses a panel regression approach combined with factor analysis to examine which particular aspect of political risk contributes more towards deterring FDI inflow.

Findings

The empirical results of this study refute the conventional notion that government failure is the primary contributing factor for poor FDI inflow. Rather, cultural conflict and the attitude of the partner country towards the host country are found to be mostly responsible for deterring FDI inflow. The result holds significantly even after controlling for traditional determinants regardless of whether it is an OECD member country or not.

Practical implications

It is not just governance failure but the cultural factors and development partners' attitude about the country which mostly determines FDI inflow.

Originality/value

This is the first paper which combines the factor analysis in a panel regression framework to examine the impact of political risk on FDI inflow.

Details

Journal of Economic Studies, vol. 41 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

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