Review of Literature

2020 ◽  
pp. 13-35
Author(s):  
Murali Patibandla
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Developing Economies ◽  
Import Substitution ◽  
Trade Policies ◽  
Trade Theory ◽  
Reform Era ◽  
Strategic Trade ◽  
New Trade Theory ◽  
Trade And Investment

The chapter reviews fundamental theoretical contributions explaining determinants of international trade starting from comparative advantage, neo-technology theories, intra-industry trade, strategic trade policies and ‘New’ New Trade Theory. For developing economies, the Heckscher-Ohlin (H&O) Theory of Comparative Advantage in labour abundance is relevant. However, as countries start growing economically, neo-technology and intra-industry factors become relevant. The book traces the transition of international trade behaviour starting the Pre-reform era of import substitution to the Post-reform era of opening to international trade and investment. The conceptual discussion provides basic underlying theories in understanding international trade and investment behaviour of firms. It shows under what conditions international trade and investment are beneficial to a country. The discussion of the theories helps in formulating hypotheses for empirical testing in the following chapters.

International Trade and Investment Behaviour of Firms

2020 ◽  
Author(s):  
Murali Patibandla
Keyword(s):  
International Trade ◽  
Global Economy ◽  
Initial Conditions ◽  
Import Substitution ◽  
Global Market ◽  
Large Firms ◽  
Firm Level ◽  
Reform Era ◽  
Trade And Investment ◽  
Investment Behaviour

During last four decades the world has been significantly impacted by globalization and rapid technological changes. This in turn had major effects on the global economy. Several developing and socialist economies that earlier followed closed door and import substitution policies started to open their economies to world trade and investments. Some such countries, as India, managed to achieve a degree of economic prosperity over the last few years after opening their economy. The analyses in this book show that there are significant benefits from international trade and investment to emerging economies that possess critical-level initial conditions in technology, infrastructure, and ease of doing business, and have friendly policies. Focusing on Indian firms, the book spans the period from the pre-reform era to the post-reform era, when the market was responding to policy reforms and global market dynamics. It analyses firm-level behaviour with systematic theory and corresponding rigorous econometrics and qualitative information from field study across the country. In the Pre-reforms era, it was mostly small and medium scale firms that contributed to exports while most large firms were inward oriented in search of monopoly profits. This changed significant in the Post-reform era owing increased competitive conditions especially multinational firms. Large firms started to play important role in international trade and investment behaviour by acquiring world class technology and organizational practices.

Introduction to Part 1

2020 ◽  
pp. 3-12
Author(s):  
Murali Patibandla
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Developing Economies ◽  
Allocative Efficiency ◽  
Initial Endowment ◽  
Reform Era ◽  
Advanced Technologies ◽  
Rapid Flow ◽  
Trade And Investment ◽  
Investment Behaviour

International trade and investment across countries, both developed and developing economies, are a major source of economic growth by improving allocative efficiency of resources and rapid flow of advanced technologies. Several developing and socialist economies that pursued inward orientation since the last forty years started to open up their economies for international trade and investment. Countries that had initial endowment of industrial, technological endowments, and basic institutions have able to take advantage of this phenomenon. India fits this bill. It acquired basic industrial, technological, and capitalist institutions. The reforms operate on the basis of these endowments. The objective of the book is to trace out the underlying theoretical and empirical factors that demonstrate the effect of the reforms It explains the reason for dividing the book into two part: (1) International Trade Behaviour: the Pre-reform Era and (2) International Trade and Investment Behaviour: The Post-reform era.

scholarly journals Trade Theory in International Economics

2019 ◽  
pp. 33-42
Author(s):  
Krzysztof Król
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
International Economics ◽  
Trade Theory ◽  
New Trade Theory ◽  
Absolute Advantage ◽  
Compare And Contrast

You will get an overview about the nature of trade theory. Many terms related international trade here will be discussed. Overview of Mercantilism we will discuss here. Theory of absolute advantage will be deeply discussed here. Comparative Advantage related the advantage term here I will describe. In this article the ideas of Heckscher-Olin Theory, new Trade Theory and the theory of Porter’s Diamond will be discussed. By this article, we will be able to clearly understand international trade. WE will be able to compare and contrast different trade theories.

Trade and Spatial Growth

2017 ◽  
Vol 18 (1) ◽  
pp. 94-111
Author(s):  
Sirimal Abeyratne ◽  
N. S. Cooray
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Global Economy ◽  
Spatial Concentration ◽  
Trade Theory ◽  
Missing Link ◽  
Spatial Growth

Comparative advantage is based on ‘locational factors’ so that trade leads to growth and its spatial concentration. Until recently, the nexus between trade and spatial growth received little space within trade analyses though it did not appear to be a missing link in initial contributions to trade theory. The reshaping of the global economy with greater integration has called for analyses of trade and spatial growth. This article examines theoretical premises of the link between international trade and spatial growth, and the implications of reshaping of the global economy for the study of spatial growth within trade theory.

scholarly journals The Basic for Trade According to International Trade Theories and Their Relation with Trade Policies

Ekonomika ◽  
1999 ◽  
Vol 47 ◽  
Author(s):  
Gražina Jatuliavičienė
Keyword(s):  
International Trade ◽  
Competitive Advantage ◽  
Comparative Advantage ◽  
Imperfect Competition ◽  
Economies Of Scale ◽  
Export Performance ◽  
Trade Policies ◽  
Theoretical Evaluation

In the article is presented an overview over some of the competing theories aimed at explaining the basis and gains of international trade. Key classical concepts such as absolute and comparative advantage are explained and extended to include modern-day realities. The article also deals with important new trade theories, which base trade on economies of scale and imperfect competition, as well as on competitive advantage. This leads to the theoretical evaluation of a country’s trade policies and their impact on export performance.

Towards Export-Led Growth in The West Africa Sub Region Economies

2020 ◽  
Vol 3 (2) ◽  
pp. 1-16
Author(s):  
Raphael Kolade Ayeni
Keyword(s):  
West Africa ◽  
Comparative Advantage ◽  
Developing Economies ◽  
Import Substitution ◽  
Strong Support ◽  
Growth Strategy ◽  
African Countries ◽  
The West ◽  
Long Run ◽  
Short Run

The policy of import substitution dominated developing economies especially Sub-Sharan African countries up till 1970. The focus later shifted to pursuing growth through increased export. Recently, countries of the West Africa Sub-region are clamoring for a revisit of growth through import substitution policies. This study therefore delved into the question of whether ECOWAS countries should go for import substitution growth strategy, or to develop strategy that promotes export-led growth, following the law of comparative advantage or a considerable mix of the two strategies. Using an export-augmented neoclassical production function, the study tested how relevant is the Export-led Growth Hypothesis for the ECOWAS sub-region over the period 1980-2014. Evidence does not offer a strong support for the Hypothesis in the short run but a strong evidence for improved capital stock and labor causing growth. However, long-run results suggest a significant relationship between export and growth but currently negative. A likely explanation of this negativity is that although exports, in the West African sub-regions has the tendency of increasing growth in the long run along with other factors of production, the present conditions of export, especially manufactured and agricultural exports, is experiencing a kind of “Import surge”. That is the import content of exports is high and the local content is low, thus reducing the spillover or multiplier effects. This was confirmed by the strong bilateral causality between export and import discovered in this study. A policy mix of import substitution and export promotion strategies was recommended for countries in this sub-region. Policies that will promote technological innovation in manufacturing and linkages with local suppliers alongside incentives to produce towards export are imperative. Production towards export should be focused on manufactured and agricultural products where each country has the highest comparative advantage so as to reduce the import content of the export.

scholarly journals Towards Export-Led Growth in the West Africa Sub Region Economies

2021 ◽  
Vol 9 (10) ◽  
pp. 1-18
Author(s):  
R. K. Ayeni ◽  
Momodou Mustapha FANNEH
Keyword(s):  
West Africa ◽  
Comparative Advantage ◽  
Developing Economies ◽  
Import Substitution ◽  
Strong Support ◽  
Growth Strategy ◽  
African Countries ◽  
The West ◽  
Long Run ◽  
Short Run

The policy of import substitution dominated developing economies especially Sub-Sharan African countries up till 1970. The focus later shifted to pursuing growth through increased export. Recently, countries of the West Africa Sub-region are clamoring for a revisit of growth through import substitution policies. This study therefore delved into the question of whether ECOWAS countries should go for import substitution growth strategy, or to develop strategy that promotes export-led growth, following the law of comparative advantage or a considerable mix of the two strategies. Using an export-augmented neoclassical production function, the study tested how relevant is the Export-led Growth Hypothesis for the ECOWAS sub-region over the period 1980-2014.  Evidence does not offer a strong support for the Hypothesis in the short run but a strong evidence for improved capital stock and labor causing growth. However, long-run results suggest a significant relationship between export and growth but currently negative.  A likely explanation of this negativity is that although exports, in the West African sub-regions has the tendency of increasing growth in the long run along with other factors of production, the present conditions of export, especially manufactured and agricultural exports, is experiencing a kind of “Import surge”. That is the import content of exports is high and the local content is low, thus reducing the spillover or multiplier effects. This was confirmed by the strong bilateral causality between export and import discovered in this study. A policy mix of import substitution and export promotion strategies was recommended for countries in this sub-region.  Policies that will promote technological innovation in manufacturing and linkages with local suppliers alongside incentives to produce towards export are imperative. Production towards export should be focused on manufactured and agricultural products where each country has the highest comparative advantage so as to reduce the import content of the export.

scholarly journals RIVIEW SKEMA ACFTA TERHADAP EKSPOR INDONESIA KE TIONGKOK, HONGKONG DAN ASEAN

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Made Adnyana
Keyword(s):  
Regression Analysis ◽  
Free Trade ◽  
Comparative Advantage ◽  
Theory Model ◽  
Trade Theory ◽  
New Trade Theory ◽  
Highly Sensitive ◽  
Export Volume ◽  
Early Harvest ◽  
Normal Track

<p>          In addition to the free trade accord of Bali II, Indonesia has also agreed to implement ACFTA with RRChina and Hongkong. Four schemes agreed up on are Early Harvest Program (EHP), Normal Track (NT) Sensitive Track (ST) and Highly Sensitive Track (HST). The  method used in the study is applying  New Trade Theory model, i.e. involving Comparative Advantage determinants, along with regression analysis. The study  focuses on  data on export volume of  1996 up to  2013 on three-monhly basis. The finding of the study is that certain commodities have gained promising export in 2010; steady export growth has been experienced by two commodities numbered as 87 and 27 at the schemes.   The number 26 commodity at the scheme experienced the decline.</p><p><strong> </strong></p><p><strong>Keywords: </strong>ACFTA schemes, exsport from Indonesia, RR China, Hongkong</p>

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