Institutional quality and trade in intermediate goods

2018 ◽  
Vol 22 (2) ◽  
pp. 162-186 ◽  
Author(s):  
Hea-Jung Hyun
Keyword(s):  
Comparative Advantage ◽  
Empirical Finding ◽  
Institutional Quality ◽  
Trade Costs ◽  
Trade Flows ◽  
Production Costs ◽  
Intermediate Goods ◽  
Omitted Variables ◽  
Data Set ◽  
Content Type

Purpose Recently published studies stress the importance of trade in intermediate goods. The literature on determinants of trade, however, have largely focused on the sources of comparative advantage in determining aggregate trade flows rather than trade in intermediate goods. The purpose of this paper is to examine the role of institutional quality and trade costs to explain the determinants of trade in intermediates. Design/methodology/approach The simple model is based on the model of comparative advantage in the gravity framework used by Eaton and Kortum (2002) and Chor (2010) to relate trade flows of intermediate goods to institutional parameters, factor endowments and geography. The empirical tests use a data set containing 172 countries and 17 industries spanning ten years. Findings The results confirm the theoretical prediction that a country with higher institutional quality has a comparative advantage in institution-intensive goods and trade costs have a negative effect on trade. The author further finds that these effects are stronger in share of trade in intermediate goods vis-à-vis final goods. Originality/value To highlight the distinct nature of trade in intermediate goods, the author separates industry trade flows as intermediate input trade and final goods (consumption goods) trade to compare the importance of different sources of comparative advantage among different types of trade flows. Unlike Eaton and Kortum (2002) and Chor (2010) who used cross-sectional data for final goods trade, the ten-year industry-level panel data are used to compare the relative importance of institutions and geography as determinants in trade in intermediate goods compared to final goods trade and capture the macroeconomic time variant factors as well as industry–country pair characteristics. A significant caveat in gravity regression is that an empirical finding may often be driven by omitted variables. Inclusion of a set of country variables such as GDP, production costs and institutional level may still allow omitted variables to bias the estimation. To avoid this problem, the author includes a fixed effect of exporter and importer as well as industry and year, instead of a set of country characteristics.

scholarly journals Credit composition and income inequality in Vietnam: an empirical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Quoc Hoi ◽  
Hương Lan Trần
Keyword(s):  
Income Inequality ◽  
Educational Level ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Primary Data ◽  
Data Set ◽  
Content Type ◽  
Private Credit ◽  
The Impact

PurposeThis paper aims to examine the credit composition and income inequality reduction in Vietnam. In particular, the authors focus on the distinction between policy and commercial credits and investigate whether these two types of credit had adverse effects on income inequality. The authors also examine whether the impact of policy credit on income inequality is conditioned by the educational level and institutional quality.Design/methodology/approachThe authors use the primary data set, which contains a panel of 60 provinces collected from the General Statistics Office of Vietnam from 2002 to 2016. The authors employ the generalized method of moments to solve the endogenous problem.FindingsThe authors show that while commercial credit increases income inequality, policy credit contributes to reducing income inequality in Vietnam. In addition, we provide evidence that the institutional quality and educational level condition the impact of policy credit on income inequality. Based on the findings, the paper implies that it was not the size of the private credit but its composition that mattered in reducing income inequality, due to the asymmetric effects of different types of credit.Originality/valueThis is the first study that examines the links between the two components of credit and income inequality as well as constraints of the links. The authors argue that analyzing the separate effects of commercial and policy credits is more important for explaining the role of credit in income inequality than the size of total credit.

Is HOA capitalized in housing price? Evidence from Chongqing, China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Feng Deng
Keyword(s):  
Telephone Survey ◽  
Empirical Finding ◽  
Housing Price ◽  
Data Set ◽  
Chinese Cities ◽  
Content Type ◽  
Dummy Variable ◽  
Homeowners Association ◽  
Private Communities ◽  
Different Sources

Purpose International research has found that Homeowners Association (HOA) is capitalized in housing price in the West. Is that result applicable in Chinese cities? In China there is also widespread applause for HOA. Will that leave trail in the housing market? This paper aims to answers these questions by presenting empirical evidence from 113 private gated communities in Chongqing, China. Design/methodology/approach The data set comes from three different sources including a telephone survey. The research methodology includes hedonic models with an endogenous dummy variable of the presence of HOA in a community. Findings HOA is not capitalized in housing price. Research limitations/implications The empirical finding helps to explain why about 80% of private communities in big Chinese cities have not formed an HOA. Originality/value This is the first empirical study on HOA capitalization in housing price in China.

scholarly journals The duration of global agri-food export competitiveness

2017 ◽  
Vol 119 (6) ◽  
pp. 1378-1393 ◽  
Author(s):  
Štefan Bojnec ◽  
Imre Fertő
Keyword(s):  
Comparative Advantage ◽  
Agricultural Land ◽  
Survival Rates ◽  
Revealed Comparative Advantage ◽  
Data Set ◽  
Term Survival ◽  
Content Type ◽  
Country Level ◽  
Export Competitiveness

Purpose The purpose of this paper is to examine the pattern, duration and country-level determinants of global agri-food export competitiveness of 23 major global agri-food trading countries. Design/methodology/approach A large panel data set is compiled to facilitate assessment of the pattern, duration and country-level determinants of global agri-food export competitiveness using a revealed comparative advantage index. Findings The results suggest that the duration of revealed comparative advantage is heterogeneous at the agri-food product level. Long-term survival rates as revealed by the comparative advantage indices are among the highest for the Netherlands, France, Belgium, the USA, Argentina and New Zealand. The level of economic development, the share of agricultural employment, subsidies to agriculture and differentiated consumer agri-food products increase the likelihood of failure in the duration of comparative advantage, while the abundance of agricultural land and export diversification reduce that likelihood. Originality/value The framework is conceptually innovative in how it models the likelihood of failure in the duration of comparative advantage and assesses implications. Export competitiveness is a crucial factor in long-term global farm business survival as it fosters opportunities for business prosperity on global markets.

Impact of the institutional quality on NAFTA's international trade: a system GMM approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yoon Heo ◽  
Nguyen Thi Thanh Huyen ◽  
Nguyen Khanh Doanh
Keyword(s):  
Economic Development ◽  
Low Income ◽  
Institutional Quality ◽  
Trade Flows ◽  
Low Income Countries ◽  
Content Type ◽  
Long Run ◽  
Trading Partners ◽  
Level Of Economic Development ◽  
Trade Elasticity

PurposeThis paper aims to analyze the impacts of institutional quality on trade flows of NAFTA with a panel data set of 105 countries spanning the period 2006–2017.Design/methodology/approachWe applied the system generalized method of moment (GMM) estimator to investigate the impacts.FindingsThe results show that institutional quality is a positive and significant determinant of international trade flows of the NAFTA bloc and its trading partners. Our results also indicate that the impact of institutional quality depends on the level of economic development of NAFTA's trading partners. Specifically, the trade elasticity of institutional quality is the highest for NAFTA’s trade with middle-income countries and the lowest for NAFTA's trade with low-income countries. In the long run, the trade elasticity of institutional quality increased significantly, with the highest increase in the case of NAFTA's trade with medium-income countries and the lowest increase in the case of NAFTA's trade with low-income countries.Originality/valueThis study contributes to the existing literature in three different ways. First, we examine the differential impact of institutions on NAFTA's trade according to the level of economic development of NAFTA's trading partners. Second, we compare the differential trade elasticity of institutional quality in the long run. Finally, we support our findings through an improved research methodology by using the system GMM estimation. This method allows us to overcome the potential sample bias, omitted variable problems and endogeneity of explanatory variables.

Female board members: the effect of director affiliation

2020 ◽  
Vol 35 (2) ◽  
pp. 225-254 ◽  
Author(s):  
Emrah Arioglu
Keyword(s):  
Financial Performance ◽  
Generalized Method Of Moments ◽  
Omitted Variables ◽  
Reverse Causality ◽  
Data Set ◽  
Content Type ◽  
Cultural Setting ◽  
Management Culture ◽  
Female Directors ◽  
Positive Effect

Purpose This study aims to investigate whether female directors have an effect on company financial performance in a patriarchal emerging country that has a collectivistic culture with a substantial gender equality gap and is characterized with a paternalistic management culture. In addition, it aims to investigate whether the affiliations of female directors matter performance-wise in a setting where the majority of the companies are ultimately controlled by large business groups including families. Design/methodology/approach The current study uses a unique hand-collected data set that covers all non-financial public companies quoted at the Borsa Istanbul between the years 2009 and 2017. To investigate the relationships between the presence and ratio of female directors and company financial performance, the current study uses the pooled ordinary least squares method, as well as the firm-fixed effects method to overcome potential omitted variables problems and various generalized method of moments methods to overcome potential reverse causality problems. Findings The findings of the current study demonstrate that the presence and percentage of female directors both have a positive effect on company financial performance in a cultural setting where the opposite might be expected. They also present evidence suggesting that the effect becomes larger as the level of the independence of female directors becomes greater. Originality/value The current study demonstrates that the presence of female directors on boards has a positive effect on company financial performance, even in a cultural setting that is very different from those of countries where the majority of previous studies on female directors are conducted on. In addition, it demonstrates how company financial performance varies with the level of the affiliation of female directors.

scholarly journals Trade intensity and revealed comparative advantage: an analysis of Intra-BRICS trade

2018 ◽  
Vol 13 (5) ◽  
pp. 1182-1195 ◽  
Author(s):  
Javeria Maryam ◽  
Umer Jeelanie Banday ◽  
Ashok Mittal
Keyword(s):  
Comparative Advantage ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Trade Intensity ◽  
Revealed Comparative Advantage ◽  
Holistic View ◽  
Content Type ◽  
Brics Countries ◽  
Comparative Advantages ◽  
India And China

Purpose In the recent international scenario, the rise of emerging economies, in particular, Brazil, Russia, India, China and South Africa (BRICS) has gained ample of attention. The global trade flows of the BRICS countries have significantly increased during the last one-and-a-half decade. The purpose of this paper is to examine the intra-BRICS and BRICS–EU trade flows. Design/methodology/approach To study the intensity of trade among BRICS countries and with EU, the Trade Intensity Index is employed for the period 2001–2015. Balassa’s revealed comparative advantage (RCA) index is computed for the assessment of comparative advantages of exports by BRICS countries in the year 2015 in the global markets. A comparative analysis of export similarity is done for India and other BRICS countries in EU. Findings The findings of trade intensity showed large bilateral trade flows among BRICS member. Russia has emerged as the main trading partner with EU in BRICS. For the year 2015, the comparative study of RCA at HS-two digits and HS-four digits classification highlights marginal structural changes in the export composition of these countries. The analysis revealed that Brazil and Russia have comparative advantages in natural resource-based products, while India and China possessed comparative advantages in manufactured and processed products. The export similarity index shows the presence of competition between India and China in EU. Practical implications This paper highlights the need for closer cooperation to promote intra-BRICS trade and to make structural transformations in the basket of trading products by them to have trade benefits at large. Originality/value Numerous studies are available on bilateral trade of BRICS members. However, limited studies are available to get a holistic view of intra-BRICS trade. This paper is an attempt to examine the BRICS countries trade profile both at global levels and within the group.

The effect of comparative advantage of host country’s industry on multinationals’ M&A vs greenfield FDI decisions

2016 ◽  
Vol 20 (3) ◽  
pp. 229-258 ◽  
Author(s):  
Jaeho Lee ◽  
Yong Joon Jang
Keyword(s):  
Comparative Advantage ◽  
Investment Decision ◽  
Heterogeneous Firms ◽  
Entry Mode ◽  
Foreign Market ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Trade Model ◽  
Comparative Advantages

Purpose The purpose of this paper is to argue that comparative advantage of host country’s industry can be one of the significant determinants of the decision on mergers and acquisitions (M&A) or greenfield in foreign direct investment (FDI). Design/methodology/approach The authors extract five-related properties of an industry with comparative advantage in a host nation from Bernard et al.’s (2007) international trade model with heterogeneous firms and attempt to empirically test their roles in a multinational enterprise’s (MNE) M&A or greenfield investment decision, using the inward FDI data set in Korea from 1999 to 2006. Findings The theoretical framework finds that the five properties derived from an industry with comparative advantage in a host country have mixed motives for M&A or greenfield. The empirical results show that selected conventional independent variables generally affect the M&A or greenfield entry mode decision with significance individually and that their impacts become more or less prominent when the authors employ interaction terms combining them with comparative advantages in the industries. Research limitations/implications This implies that MNEs not only consider their own firm-specific advantages or other country-level factors for foreign market entries as the previous research generally found, but also seriously take into account industry-specific factors, especially industry-wide comparative advantages based on heterogeneous productivities of firms. Originality/value This paper reconciles multinationals’ strategic motives under an oligopolistic market with their efficiency gains under a monopolistic competitive market, which are considered as two main factors for cross-border M&A. Furthermore, this paper adds a new firm-level data set into entry mode research.

Institutional quality and export-led growth: an empirical study

2018 ◽  
Vol 45 (1) ◽  
pp. 193-208
Author(s):  
Vidhya Sathyamoorthy ◽  
Tuck Cheong Tang
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Institutional Quality ◽  
Quality Data ◽  
Growth Strategies ◽  
Omitted Variables ◽  
Oriented Growth ◽  
Individual Country ◽  
Relevant Variable ◽  
Content Type

Purpose The purpose of this paper is to examine the influence of institutional quality on the export-led growth (ELG) with global evidence of a panel of 119 countries. Design/methodology/approach The research framework looks at the role of exports in promoting growth via. good institutional quality. The methods of testing are panel data approach of causality, and fixed and random effects models. Findings Empirical results show that good Institutional quality mediates the ELG relationship in general, and middle income group in specific. The legal institutional quality has significant positive impact, whereas political and economic institutional quality have significant negative impact on ELG for all sampled countries. Research limitations/implications The Kuncic’s (2014) institutional quality data are annually available between 1990 and 2010. Therefore, time series analysis for individual country is bias with 21 observations. And, this study ignores other potential variables such as capital, labor, real exchange rate, and so on, may possibly contribute to omitted-variables bias. Practical implications Policymakers may well utilize institutional quality reforms either in terms of improving existing institutional quality or enhancing “second-best” institutions as a policy instrument to reap success from export-oriented growth strategies. Originality/value Existing studies on ELG have ignored institutional quality as a relevant variable. It looks at the three institutional quality indicators, namely political, economic, and legal in ELG framework.

Detection of solder paste defects with an optimization‐based deep learning model using image processing techniques

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Sezer ◽  
Aytaç Altan
Keyword(s):  
Image Processing ◽  
Deep Learning ◽  
Learning Model ◽  
Production Costs ◽  
Solder Paste ◽  
Data Set ◽  
Content Type ◽  
Image Processing Techniques ◽  
Processing Techniques ◽  
Deep Learning Model

Purpose In the production processes of electronic devices, production activities are interrupted due to the problems caused by soldering defects during the assembly of surface-mounted elements on printed circuit boards (PCBs), and this leads to an increase in production costs. In solder paste applications, defects that may occur in electronic cards are usually noticed at the last stage of the production process. This situation reduces the efficiency of production and causes delays in the delivery schedule of critical systems. This study aims to overcome these problems, optimization based deep learning model has been proposed by using 2D signal processing methods. Design/methodology/approach An optimization-based deep learning model is proposed by using image-processing techniques to detect solder paste defects on PCBs with high performance at an early stage. Convolutional neural network, one of the deep learning methods, is trained using the data set obtained for this study, and pad regions on PCB are classified. Findings A total of six types of classes used in the study consist of uncorrectable soldering, missing soldering, excess soldering, short circuit, undefined object and correct soldering, which are frequently used in the literature. The validity of the model has been tested on the data set consisting of 648 test data. Originality/value The effect of image processing and optimization methods on model performance is examined. With the help of the proposed model, defective solder paste areas on PCBs are detected, and these regions are visualized by taking them into a frame.

Comparative Advantage in Land-Use Allocation under Regionalism

2005 ◽  
Vol 32 (2) ◽  
pp. 281-292 ◽  
Author(s):  
Dean M Hanink ◽  
Robert G Cromley
Keyword(s):  
Land Use ◽  
Comparative Advantage ◽  
Land Use Planning ◽  
Trade Flows ◽  
Production Costs ◽  
Geographical Information ◽  
Land Uses ◽  
Generalized Assignment Problem ◽  
Land Use Allocation ◽  
Effective Integration

The Ricardian principle of comparative advantage is used frequently as a foundation for illustrating potential improvements in the allocation of production and trade flows among countries. Such improvements typically consist of increased economic efficiency in the form of lower aggregate production costs and greater welfare in the form of higher levels of aggregate output. The improvements are made possible by the effective integration of otherwise individual economies. This paper employs the principle of comparative advantage as the foundation for illustrating potential improvements in the allocation of land uses under a regional approach to land-use planning. It uses a generalized assignment problem within a geographical information system (GIS) to describe the efficiency benefits of integrating land-use plans among several districts.

Sign in / Sign up

Export Citation Format

Share Document