Impact of Trade Costs on Trade: Empirical Evidence from Asian Countries

Findings of this paper have important policy implications for Asian countries seeking to expand trade. Addressing rising auxiliary shipping charges as well as the overall rise in shipping costs may require serious consideration by regulators and policymakers that wish to further promote trade in Asia. In addition, if improvements in the quality of infrastructure in LDCs continue to lag behind those in more developed countries, their share in world trade is likely to decline.Trade Facilitation, Trade Cost, Trade Liberalisation

Trade in Northeast Asia: Why do Trade Costs Matter?

Trade costs are often cited as an important determinant of the volume of trade. This paper provides enough evidences to ascertain that today’s trade issues in Northeast Asia go beyond the traditional mechanisms of tariffs, and include “behind-the-border” issues. By estimating a modified gravity equation, controlling for endogeneity and remoteness, we find that variations in transaction costs along with trade infrastructure facilities have significant influence on regional trade flows in Northeast Asia. On average, 10 percent saving in transaction costs increases imports by about 5 percent in Northeast Asia. This paper concludes that when tariffs tend to become low in Northeast Asia, the economies in this region could potentially benefit substantially from higher trade provided trade costs are well controlled.trade costs, transaction costs, infrastructure, regional trade, tariff

Global economic and financial crisis: India’s trade potential and future prospects

This paper estimates the trade potential for India using the augmented gravity model and then attempts to determine the importance of trade remedies. Based on panel data, this gravity model is the first-ever attempt to estimate India’s trade potential in the pre- and post- global economic and financial crisis period. The estimates of India’s global trade potential reveal that the magnitude of India’s trade potential is at its maximum in the Asia-Pacific region, followed by Africa and Latin America. Potential for expansion of trade in the post-crisis period is highest for countries such as China. However, in a large part of the world, India’s trade has remained unrealized, which provides further opportunities to expand despite the slowdown in global demand. There is a strong complementary role, as the findings of this paper indicate; i.e., tariff liberalization and trade facilitation, which taken together can help build export momentum in the crisis period.Financial crisis, India, gravity model

Global Financial and Economic Crisis: Implications for Trade and Industrial Restructuring in South Asia

This study investigates the impact of global crisis shocks on India's trade and industry. The authors use panel data modeling and vector autoregression techniques to understand the dynamic effects of global crisis shocks on Indian industry and trade. Changes in trade composition are positively associated with changes in manufacturing composition in India, controlling for other variables. However, there is no strong indication that Indian industry has been severely harmed by the fall in demand in crisis-affected advanced economies such as the United States, the European Union, and Japan, holding other things constant.india trade industry; indian industry; india manufacturing sector; india external trade; global economic crisis

Trade, infrastruture and income inequality in selected Asian countries: An empirical analysis

This paper attempts to unravel the interlinkages and interconnections among infrastructure, trade openness and income inequality, using panel data of 14 Asia-Pacific countries at different levels of development.Trade, infrastructure, imcome inequality

Assessing Barriers to Trade in Education Services in Developing Asia - Pacific Countries:An Empirical Exercise

The study, thus, touches only tip of an iceberg in terms of its analytical power to explain movement of students across nations. It points out to the definite existence of country specific barriers and from a pilot case study in India, highlights some of these possible barriers. However, future studies should be attempted to understand the extent of barriers to trade in education services through more intensive primary survey and bilateral country studies.Trade in Education Services, Asia-Pacific

Promotion of Trade and Investments between China and India: The Case of Southwest China and East and Northeast India

Open regionalism and integration between the world’s two largest developing countries - the People’s Republic of China (China) and India - in trade, investments and infrastructure development can foster outward-oriented development and economic and social benefits that could result in poverty reduction. In view of the increasing trend toward regional integration, particularly the expanded European Union and North American integration, the opportunity costs of not moving toward greater economic integration between China and India involving common neighbouring countries could be increasing. This paper discusses the above subject in the context of possible areas of China - India economic cooperation and integration in the Eastern and Northeastern region of India and Southwestern provinces of China, including neighbouring countries like Bangladesh, Bhutan, Myanmar, and Nepal.India, China, economic cooperation and integration, trade, investment and infrastructure development

Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia

This study examines a range of cross-border infrastructure development issues related to the Asian countries. Despite active pursuit of private investment in infrastructure by most developing countries in Asia and a growing number of success stories, the pace of such investment remains slow. Participation by the private sector in infrastructure development has been mixed. While there has been moderate progress in national infrastructure development by the private sector, progress is rather limited in the case of development of cross-border infrastructure in Asia. This study documents that Asian countries have attracted higher private sector investment for the development of national infrastructure projects such as seaports and airports as compared to cross-border infrastructure projects. The rising trend among private investors in infrastructure projects indicates a decline of investments by developed country investors. One of the findings of this study is that cross-border energy projects have received greater private sector investment globally as compared to transport, telecommunication, and water projects. In the context of Asia, too, energy sector projects still dominate the investment scenario. By considering all modes of financing, this study finds that cross-border infrastructure financing in Asia has witnessed an upward trend in the last decade and a half. Aside from hydropower projects in Bhutan, cross-border infrastructure in Asia is pursued through public-private partnerships. Interestingly, these few cross-border projects in Asia have limited private sector investors, compared to other regions, despite a wide base of local investors in Asia. This paper also shows that public sector investment drives cross-border energy and transportation projects in Asia, whereas private sector investments have picked up the pace only recently, specifically after the 1997 Asian financial crisis. This study recommends that given the huge infrastructure investment needs of the region and insufficient government resources, the role of the private sector and public-private partnerships in enhancing infrastructure facilities in Asia is very crucial. A review of select case studies of cross-border infrastructure projects clearly indicates that the major reasons for slow progress of regional infrastructure development by private sector stem from both economic to non-economic issues that need to be addressed in order to promote seamless Asia.asia regional infrastructure; crossborder infrastructure

Transit and Trade Barriers in Eastern South Asia: A Review of the Transit Regime and Performance of Strategic Border-Crossings

The analysis of this paper shows that a regional transit arrangement would perhaps enhance the regional trade, controlling for other variables. At the same time, implementation of e-governance at border is found to be significant determinant of trade flows thus indicating e-filling of Custom formalities has been helping the trade to grow in eastern South Asia.Transit, Trade Barriers, Eastern South Asia, Transit Regime

Trade Facilitation in India: An Analysis of Trade Processes and Procedures

This study undertakes Business Process Analysis (BPA) to help assess the trade processes and procedures. One of the research objectives in BPA is to identify administrative and procedural barriers that unnecessarily impede the participation of more firms and more countries in regional and global trade, and propose solutions.Trade Cost, Trade Facilitation, India