Determinants of Trade Patterns and Comparative Advantage of Tanzania Trade 1981-2009

This study analyses the determinants of Tanzania’s trade and comparative advantage. The results show that most of the commodities with comparative advantage (CA), expressed in terms of symmetric Revealed Comparative Advantage (SRCA), are the agricultural products. In addition, the empirical trade analysis (ETA) reveals that the commodities with CA are primary intensive, resource intensive, and unskilled labor intensive commodities. The gravity model demonstrates that, the economic size of the partners’ country (GDPj), and per capita income together with the Tanzania’s per capita income, regional integration dummy, and exchange rates determines Tanzania’s trade flows in all levels, when total trade, export, export of agricultural products and export of manufactured products volume of trade are considered. However, Tanzania’s economic size as well as the cost of trading growth, expressed as distance, impedes the trade flows. Keywords: Gravity model, Comparative Advantage; factor intensity; export oriented economy; Regional Trade Agreements; production’s specialization and competitivenes

Korea's Bilateral Trade with Japan and the United States : A Comparative Study

This paper examines the development of Korea's trade structure with Japan and the United States over the past 30 years. Three aspects of the trade structure are investigated: changes in trade patterns, changes in the decomposition of total trade growth, and import and export elasticities. We find that there are major differences between Korea's trade with Japan and Korea's trade with the United States: Korea's intra-industry trade with Japan is higher than that with the United States. The contribution of intra-industry trade to Korea's total trade growth has increased over time. The trade pattern of Korea with Japan has become more similar to that with the U.S. in terms of intra-industry trade while it has diverged from it in terms of inter-industry trade. Also, Korea's import and export price elasticities are larger for trade with the United States than for trade with Japan

Tobins q of a Multi-Product Firm and an Endogenous Growth of a Firm

This study considers the Tobins q of a multi-product firm with fixed capital goods. This modified version of Tobins q includes a share of the fixed capital goods in a firms investment. A firm in a developing economy, such as a South Korean chaebol, catches up the world frontier technology with its diverse products. The fixed capital investments of chaebols are conducive in pursuing diversifications, thereby exhibiting high Tobins q. Moreover, achieving an Ak technology enables chaebols to reap their growth on the endogenous path. We observe a high disparity between the chaebol-incumbent and non-incumbent firms in their growth performances in the previous half-century experience of the South Korean economy. We attribute this disparity to the endogenous growth of chaebols

Industrial Structure, Regional Trade Bias, and China's FTA with Korea and Japan

This paper investigates the potential for China's FTA with Korea and Japan. We examine the similarities of industrial structures and regional trade biases among the three countries as indictors for establishing a China-Korea-Japan FTA. Even though the three countries are at very different developmental stages, their industrial structures will converge over time and their regional trade bias is high. Regression results of the gravity equation show that the trade volume among the three countries will increase. Based on our analysis of industrial similarities, we suggest a step-by-step procedure for the economic integration of Northeast Asia. A successful China-Korea-Japan FTA can be realized through the initial establishment of Korea- Japan and China-Korea FTAs, followed by subsequent negotiations between these two FTAs