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Article
Publication date: 1 January 2013

Desi Peneva and Rati Ram

The purpose of this research is to study the relation between “restrictiveness” of a country's trade policy and its socio‐economic well‐being as reflected in the indicators of…

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Abstract

Purpose

The purpose of this research is to study the relation between “restrictiveness” of a country's trade policy and its socio‐economic well‐being as reflected in the indicators of human development.

Design/methodology/approach

A recently‐developed traderestrictivenessindex (TRI), which seems superior to almost all existing indexes of trade policy or “outward orientation”, is related with infant‐mortality, child‐mortality, maternal‐mortality, access to safe water, access to basic sanitation, and secondary‐school enrollment, which are well‐known and important measures of a country's human development and are closely related to several Millennium Development Goals. In addition to a consideration of the covariation between TRI and the six human‐development measures, estimates from parsimonious regression models are studied. Sensitivity checks are conducted by considering covariations and regression estimates for another trade‐policy index and different country groups.

Findings

The evidence overwhelmingly shows that, contrary to the position shared and disseminated widely, there is no indication that a more restrictive international trade policy has a significant negative association with human development or socio‐economic well‐being. Every correlation between trade restrictiveness index and human‐development measures is close to zero. Almost every regression coefficient of traderestrictivenessindex lacks statistical significance at any meaningful level, and a consistent pattern is noted across two measures of trade policy and different country groups.

Social implications

The evidence suggests much caution in the articulation and dissemination of the widely‐shared view that a more restrictive trade policy is detrimental to a country's socio‐economic well‐being. In particular, it implies that international organizations and developed‐country governments may not force developing‐country governments to adopt more “outward‐oriented” trade policies, but may let them choose the trade‐policy stance they find appropriate for their country. The estimates also reinforce the view that great care be exercised by scholars in the choice of trade‐openness measures for studying the relation between trade policy and economic well‐being.

Originality/value

In the vast literature on the nexus between trade policy and economic well‐being, this is probably the only study that relates six important measures of human development with what seems to be the best available index of restrictiveness of a country's trade policy. Therefore, the research, which is based on a fairly large cross‐country sample, may be deemed as highly significant on a topic of much scientific and policy relevance.

Details

International Journal of Social Economics, vol. 40 no. 1
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 1 March 2012

Demelash Demessie

Public procurement is characterized as a distorted market which grants limited access to foreign suppliers and contractors. However, the different impediments existing within the…

Abstract

Public procurement is characterized as a distorted market which grants limited access to foreign suppliers and contractors. However, the different impediments existing within the public procurement policies and their relative significance in restricting effective international competition are not very well known. This paper, through the process of developing a model of Trade Restrictiveness Index, identifies weighs and scales 17 impediments existing within the public procurement policies. The paper also reveals that implicit restriction which emanates mainly from lack of transparency imposes a greater level of restriction in the market. In a final application of the model, comparison of the public procurement policies of selected Common Market for Eastern and Southern African (COMESA) countries, has shown that with a rated index of 1, the procurement policies of Kenya and Uganda are rated as most restrictive while Rwandaʼs is found to be least restrictive.

Details

Journal of Public Procurement, vol. 12 no. 2
Type: Research Article
ISSN: 1535-0118

Article
Publication date: 13 August 2018

Deeparghya Mukherjee

The purpose of this paper is to investigate and assess the trends of bilateral services trade in the world segmented by trade for final consumption and intermediate usage across…

Abstract

Purpose

The purpose of this paper is to investigate and assess the trends of bilateral services trade in the world segmented by trade for final consumption and intermediate usage across several service sectors. The differential trends, if any, are studied while examining the role of free trade agreements which have a chapter on services trade as well as the role of services trade restrictions. The study unravels differences across service sectors in this respect.

Design/methodology/approach

The author uses an augmented gravity model to address the above using OECD- World Trade Organization (WTO) TiVA data for bilateral trade in intermediates and final products (October 2015 release) and World Bank Services Trade Restrictions Index (STRI). The poisson pseudo maximum likelihood estimation technique is used in light of the structure of the data. Trade creating and diverting effects are identified controlling for time and country-time specific effects. The following sectors are specifically looked at: total business sector services, computer and related services, financial intermediation, post and telecommunication, transport and storage, R&D and other business services, hotels and restaurants, construction, and wholesale and retail trade.

Findings

First, services free trade agreements (FTAs) have had a trade creating impact with no trade diverting impact for services trade in aggregate with stronger effects on services traded for intermediate usage. Second, financial intermediation and post and telecommunication have been left unaffected by services FTAs. While no trade diversion is concluded for any sector, R&D and other business services, transport and storage and wholesale retail trade show maximum trade creation effects in response to FTAs. Third, trade restrictions of mainly OECD countries are responsible for lowering exports for most sectors. Finally, in terms of policy implications, at a general level, the author does not find a significant difference in the author’s results for services traded for intermediate usage or final consumption except for a stronger effect of FTAs on intermediate services trade. Hence, the policies to foster services trade on both counts are concluded to be the same and deal with behind-the-border policies of domestic industrial policy reforms like national treatment of foreign firms, licensing requirements, FDI policies, etc.

Research limitations/implications

Statistics for services trade are limited. The data are only available for the years 1995, 2000, 2005, 2008, 2009, 2010 and 2011. Additionally, the conclusions on services trade restrictions are based on statistics for 2011 alone, since this is the only year for which the statistics are available. A complete time series for the entire sample period would increase robustness of the study with a better time variant version of the trade restrictiveness variable. Finally, in the construction of the OECD-WTO-TiVA database of a world IO table, there may have been approximations in constructing statistics for services traded for intermediate usage and final consumption. The results remain sensitive to the same but this is the best possible statistics available for the purposes.

Originality/value

This is the first study which looks at services trade segmented by trade for final consumption and intermediate usage taking advantage of the available data for a number of service sectors. The role of restrictions is also studied for the first time segmented by trade in intermediates and final consumption. The stronger effects of FTAs on intermediate services trade as well as financial intermediation and post and telecommunication services being insulated from effects of FTAs are important findings, especially since services are mainly thought to be traded for final consumption. Similar trends of results for services traded for intermediate usage and final consumption and restrictions affecting exports from exporter countries and imports by importer countries highlight the importance of behind-the-border domestic policies in facilitating or inhibiting services trade on both counts and more importantly for intermediate usage which, in turn, would improve goods tradability.

Details

Journal of Economic Studies, vol. 45 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 11 March 2022

Christina Ruth Elisabeth and Kiki Verico

The purpose of this study is to investigate the effects of Indonesia’s technical barriers to trade (TBT) on manufacturing exports.

Abstract

Purpose

The purpose of this study is to investigate the effects of Indonesia’s technical barriers to trade (TBT) on manufacturing exports.

Design/methodology/approach

This study uses the UNCTAD database to calculate the coverage ratio and frequency index of TBTs, which represent the restrictiveness of TBTs on imports. The effects of TBTs are estimated using the gravity model (Tinbergen, 1962) and the pseudo-Poisson maximum likelihood methodology (Santos Silva and Tenreyro, 2006, 2011).

Findings

An estimation on the manufacturing sector shows that TBT reduces Indonesia’s manufacturing exports. However, the effect of TBT is different in disaggregated manufacturing sector. TBT is found to reduce exports of chemicals and transportation but increase exports of metal and textiles. This finding supports the empirical evidence that TBT can create trade-impeding and demand-enhancing effects on trade flows. The negative effect of TBT on chemical and transportation exports implies that the cost of compliance is higher than the increasing demand rate. This finding suggests the need for policy evaluation and improvements for restrictive TBT. As Indonesia is still highly dependent on imported inputs, restrictive TBT can potentially reduce the productivity of the Indonesian manufacturing sector.

Originality/value

This study aims to investigate the effects of TBT in Indonesia, as a manufacturing-based economy that relies heavily on imported intermediate inputs. Furthermore, this study contributes to the literature by using country-specific techniques and aggregated and disaggregated manufacturing sectors as subjects for study. Meanwhile, previous studies use multi-country and multi-product approaches and focus on the aggregate sector. This study estimates the effects of TBT on the disaggregated sector, given its high share of imported inputs and reliance on export-oriented industries. TBT is constructed in a more detailed product level (HS-4 digit level) to provide more accurate results.

Details

Journal of International Trade Law and Policy, vol. 21 no. 2
Type: Research Article
ISSN: 1477-0024

Keywords

Article
Publication date: 29 November 2018

Evelyn S. Devadason, V.G.R. Chandran Govindaraju and Shujaat Mubarik

The purpose of this paper is to investigate the potentials and barriers to trade in the Malaysia–Chile partnership.

Abstract

Purpose

The purpose of this paper is to investigate the potentials and barriers to trade in the Malaysia–Chile partnership.

Design/methodology/approach

This paper estimates two-way export potentials from an augmented three-dimensional panel gravity model of bilateral trade between Malaysia and the Latin America and the Caribbean (LAC) region, spanning the 1990–2014 period. Utilizing interviews with government officials and industry experts in Malaysia and Chile, this paper also provides insights into market access issues.

Findings

The empirical findings of this study suggest that Malaysia has trade potential in Chile, but Chile is “overtrading” with Malaysia. By major products traded, both countries are found to be “overtrading,” as the export basket remains concentrated in this partnership. Through the interviews, fewer restrictions are reported by the various stakeholders, as the extent of trade engagement remains somewhat low. The main challenge identified within specific sectors in both the countries relates mainly to procedures established to secure compliance with labeling regulations for food products.

Research limitations/implications

The sectoral findings reveal that there is indeed scope for expanding exports beyond the current major products traded, particularly in base metal and scientific and measuring equipment from the Malaysia and Chile perspectives, respectively. Thus, product diversification matters to intensify trade cooperation between the two countries. Non-tariff measures need to be streamlined by both parties to ensure further product diversification to food trade, particularly for Chile.

Originality/value

The limited literature on cross-regional trade within the broader framework of Southeast Asia and LAC only support the fact that potentials do exist but do not appear to provide much research evidence. Empirically, this paper will add to the existing literature on the potentials that hold in the Malaysia–Chile partnership. Further, a lack of adequate information remains on market access and other barriers in both the nations to facilitate decisions on trade opportunities. The findings of the study fill that vacuum of information pertaining to market access and trade facilitation through interviews with various stakeholders in Malaysia and Chile.

Details

International Journal of Emerging Markets, vol. 13 no. 5
Type: Research Article
ISSN: 1746-8809

Keywords

Content available
Book part
Publication date: 14 March 2022

Abstract

Details

International Business in Times of Crisis: Tribute Volume to Geoffrey Jones
Type: Book
ISBN: 978-1-80262-164-8

Book part
Publication date: 17 June 2024

Nassir Ul Haq Wani

The benefits of global trade are primarily attributed to reducing trade distortions between trading partners. The anticipated promise of a progressive diminution in tariffs…

Abstract

The benefits of global trade are primarily attributed to reducing trade distortions between trading partners. The anticipated promise of a progressive diminution in tariffs throughout the globe was, regrettably, steadily superseded by non-tariff measures (NTMs). However, the impact of these NTMs is only sometimes evident since it occurs in various disguises. NTMs significantly influence trade in the SAARC, mandating prompt attention. The question is how much internal trade will expand if NTMs are repealed. Based on statistics from 2015 to 2020, the study endeavours to quantify the impact of NTMs on Afghanistan's trade volume within the SAARC region, primarily targeting four export destinations (Bangladesh, India, Pakistan and Sri Lanka). Using trade freedom scores as a proxy for trade distortions, it has been determined that Afghanistan's magnitude of export earnings is significantly lower due to NTMs imposed by its importing trading partners. According to the findings, a 1% rise in tariffs and NTMs applied by importing countries diminishes Afghanistan's exports by 1.23%.

In contrast, the impact of tariffs alone lowers Afghanistan's exports by 1.13%. The incidence of NTMs also devoid actual Afghanistan exports by US$ 5.70 million, equal to a 0.029% loss of Afghanistan's GDP. The calculations also reveal that lowering or eliminating non-tariff barriers has diverse trade growth effects in different trade groupings. The study recommends a serious NTM-oriented trade policy dialogue that is liberal and guarantees regional integration, thereby promoting and ensuring the future of Afghanistan's economic laurels and stability.

Details

Policy Solutions for Economic Growth in a Developing Country
Type: Book
ISBN: 978-1-83753-431-9

Keywords

Book part
Publication date: 24 September 2010

Joseph F. Francois and Will Martin

Most current modeling approaches identify very small gains from trade reform. In this chapter, we examine recent developments in the literature to assess whether standard modeling…

Abstract

Most current modeling approaches identify very small gains from trade reform. In this chapter, we examine recent developments in the literature to assess whether standard modeling approaches are mis-specifying, understating, or overstating the gains from trade reform. Key areas where the impacts of trade barrier reduction appear to be understated include the measurement of barriers; the aggregation of these barriers; process productivity gains, particularly those resulting from reallocation of resources between firms; product quality improvements and expansion of product variety; factor supply; and investment of gains from trade.

Details

New Developments in Computable General Equilibrium Analysis for Trade Policy
Type: Book
ISBN: 978-0-85724-142-9

Keywords

Book part
Publication date: 14 March 2022

Matthew Stephenson, Lorraine Eden, Michael Kende, Fukunari Kimura, Karl P. Sauvant, Niraja Srinivasan, Lucia Tajoli and James Zhan

Rapid digital transformation underway represents both a risk and an opportunity for both policymakers and firms. This can address the risk and seize the opportunity by leveraging

Abstract

Rapid digital transformation underway represents both a risk and an opportunity for both policymakers and firms. This can address the risk and seize the opportunity by leveraging FDI to grow digital capabilities and competitiveness through a three-part strategy. First, launching Digital FDI enabling projects (DEPs) to create “digital friendly” investment climates through enabling policies, regulations, and measures. Second, using a “SMART” test as a heuristic before a full-fledged DEP is launched, which benchmarks their economy’s digital Skills, Market functioning, Access through connectivity, Restrictions, and Trust, and provides tools to tackle limiting factors. Third, reviewing FDI trends in six sectors that are important to grow the digital economy (two of which are proposed as essential, namely Communications and Software & IT services), with graphical evidence that can guide policymakers to prioritize policy reforms and investment promotion where they are relatively weak. Throughout, particular attention should be paid to growing the digital capacity of small and medium-sized enterprises (SMEs). A Sustainable Technology Board – modeled after the Financial Stability Board but oriented to cooperation over new technologies – could further help address techno-competition and other concerns over Digital FDI.

Details

International Business in Times of Crisis: Tribute Volume to Geoffrey Jones
Type: Book
ISBN: 978-1-80262-164-8

Keywords

Open Access
Article
Publication date: 30 September 2020

Jungran Cho, Byunghee Ahn, Kyoungseo Hong and Inkyo Cheong

As a countermeasure to the COVID-19 pandemic, countries are implementing social distancing and mask-wearing. In this situation, the use of digital devices and untact activities…

Abstract

As a countermeasure to the COVID-19 pandemic, countries are implementing social distancing and mask-wearing. In this situation, the use of digital devices and untact activities are increasing. As a result, domestic and international e-commerce is increasing, and data is growing rapidly. Developed countries with advanced artificial intelligence and big data technologies have been striving to establish international regulations for digital trade in order to create a business environment that is advantageous for their own companies. This paper examines the e-commerce trend since the outbreak of COVID-19 and analyzes major issues related to digital trade rules under discussion. In particular, this paper pointed out that although Korea is recognized to be an advanced country considering its stage of industrial development and income level, the nation maintains the position of developing countries regarding digital trade. Based on this, this paper attempted to draw implications for the development of Korea's digital trade in the post COVID-19 world.

Details

Journal of International Logistics and Trade, vol. 18 no. 3
Type: Research Article
ISSN: 1738-2122

Keywords

1 – 10 of 161