TL;DR: In this article, the impact of aid for trade sectoral flows on the previously detected determinants of export performance was evaluated using a two-step empirical analysis, where the first step is to test whether institutions and infrastructure, two potential channels of transmission, are significant determinants for export performance.
Abstract: There are few empirical studies assessing the effectiveness of aid for trade as regards trade performance. Furthermore, existing work does not test which are the channels through which aid for trade has an impact on trade performance. We address this question using a two-step empirical analysis. Relying on an export performance model, we first test whether institutions and infrastructure, our two potential channels of transmission, are significant determinants of export performance. Second, we test the impact of aid for trade sectoral flows on the previously detected determinants of export performance. We show, as part of the first step, that the infrastructure channel is a highly significant determinant of export performance, whereas the institutional channel turns out to have a limited positive impact on developing countries’ export performance. Furthermore, we show, from the second step, that aid for infrastructure, once instrumented, has a strong and positive impact on the infrastructure level. As a result, we find that a ten per cent increase in aid for infrastructure commitments per capita in developing countries leads to an average 2.34 per cent increase in the exports over GDP ratio. It is also equivalent to a 2.71 per cent reduction in tariff and nontariff barriers. These results highlight the high potential impact of aid for trade on developing countries’ export performance throughout the infrastructure channel.
TL;DR: This article explored the influence of domestic competition on international trade performance, using data from a broad sample of Japanese industries and found robust evidence that domestic rivalry has a positive and significant relationship with trade performance measured by world export share, particularly when R&D intensity reveals opportunities for dynamic improvement and innovation.
Abstract: The study explores the influence of domestic competition on international trade performance, using data from a broad sample of Japanese industries. Domestic rivalry is measured directly using market share instability rather than employing structural variables such as seller concentration. We find robust evidence that domestic rivalry has a positive and significant relationship with trade performance measured by world export share, particularly when R&D intensity reveals opportunities for dynamic improvement and innovation. Conversely, trade protection reduces export performance. These findings support the view that local competition, not monopoly, collusion, or a sheltered home market, pressures dynamic improvement that leads to international competitiveness.
TL;DR: This paper explored the influence of infrastructure, institutional quality, colonial and geographic context, and trade preferences on the pattern of bilateral trade and found that institutional quality and institutional quality are significant determinants not only of export levels, but also of the likelihood exports will take place at all.
Abstract: We work with a panel of bilateral trade flows from 1988 to 2002, exploring the influence of infrastructure, institutional quality, colonial and geographic context, and trade preferences on the pattern of bilateral trade. We are interested in threshold effects, and so emphasize those cases where bilateral country pairs do not actually trade. We depart from the institutions and infrastructure literature in this respect, using selection-based gravity modeling of trade flows. We also depart from this literature by mixing principal components (to condense our institutional and infrastructure measures) with a focus on deviations from expected values for given income cohorts to control for multicollinearity. Infrastructure, and institutional quality, are significant determinants not only of export levels, but also of the likelihood exports will take place at all. Our results support the notion that export performance, and the propensity to take part in the trading system at all, depends on institutional quality and access to well developed transport and communications infrastructure. Indeed, this dependence is far more important, empirically, than variations in tariffs in explaining sample variations in North-South trade. This implies that policy emphasis on developing country market access, instead of support for trade facilitation, may be misplaced.
TL;DR: A study of 82 Cana... as discussed by the authors showed that new products tend to achieve better than average export sales. But all new products are not exportable, so managers face a problem in deciding which new products to emphasize.
Abstract: New products tend to achieve better than average export sales. But all new products are not exportable, so managers face a problem in deciding which new products to emphasize. This study of 82 Cana...
TL;DR: In this paper, the role played by internal technological factors on the exporting behavior of enterprises of different size classes in the Mauritian garment industry was explored by constructing a technology index and conducting econometric analysis on factors affecting enterprise-level technological development and export performance.
Abstract: Mauritius is an outlier in Sub-Saharan Africa for its impressive manufactured export performance based on garments since the adoption of market-oriented policies in the early 1980s. Little, however, is known about the role played by internal technological factors on the exporting behaviour of enterprises of different size classes in the Mauritian garment industry. Using recent methodological developments in the literature on industrial technological capabilities, this paper explores this issue by constructing a technology index and conducting econometric analysis on factors affecting enterprise-level technological development and export performance in a sample of Mauritian garment enterprises. The econometric results show that firm size, technical manpower, training expenditures and external technical assistance are positively related to the technology index. This confirms that investments in human capital and seeking information, both facilitated by size, improve technological performance. This is strengthened by the fact that the technology index and foreign ownership have positive and statistically significant effects on export performance of each firm. The technology index is a robust tool of empirical research and can be used to analyse the technological record of enterprises in adjusting developing countries.