Global Economy Journal

In this paper we explore the BACI-CEPII database using Network Analysis. From the visualization of the World Trade Network, we define and describe its topology, both in its binary version and in its weighted version, by calculating and discussing a number of the commonly used network statistics. We finally discuss various specific topics that can be studied with Network Analysis and International Trade data, both at the aggregated and at the sectorial level. The analysis is carried out with multiple software (Stata, R and Pajek). The scripts to replicate part of the analysis are included in the appendix and can be used as a hands-on tutorial. Moreover, local and global centrality measures, based on the unweighted and the weighted version of the aggregated World Trade Network, have been calculated for each country (178 in total) and each year (from 1995 to 2010) and can be downloaded from the CEPII webpage.

Both experienced and novice international business practitioners may need to examine many country ranking reports on a frequent basis. Most of these reports focus on certain socio-economic variables and compute country rankings with a weighted average method, which does not distinguish between likely causes (i.e. inputs) and consequences (i.e. outputs). Through data envelopment window analysis (DEWA), the publicly accessible globalEDGE™ data were employed to compute the relative efficiency index for 22 countries from 2002 to 2009. Subsequently, the trend (averages) and the consistency (correlations) of relative country efficiency along the passage of years were examined to segment those countries into three groups: the “consistent performers,” the “sliding performers,” and the “improving performers” groups. This segmentation scheme may facilitate business practitioners when they develop their global expansion strategy. This paper introduces a complementary yet different longitudinal efficiency which could help multinational corporations’ top management teams and government decision makers evaluate the continuous performance of output/input efficiency.

This paper classifies 175 countries over a period of just 30 years according to the balance of payments stages that are frequently used in proposing a hypothesis that the stage depends on the progression in a nation’s development. Using a nonparametric estimation, this investigation demonstrates that a nation’s stage in the balance of payments has a non-monotonic relationship with its economic development and that a country at the stage of immature creditor–lender enjoys a higher GDP per capita than at any other stage in its development. Another notable finding is that a lending country produces about twice the GDP per capita that a borrowing one does and that about 25% of countries in the world lend money to the rest of the world in nearly every year.

This research found that recent efforts aimed at stimulating both domestic and foreign investment have attached great importance to the improvement of the regulatory framework and institutions of economic freedom. From the empirical perspective, benchmarking panel data of two samples of countries of Sub-Saharan Africa and Western Europe was used to assess the disaggregated effect of the regulatory variables of economic freedom on FDI. The results indicate that institutional variables of economic freedom are important in attracting FDI for both Europe and Africa. However, the specific variables that are statistically significant depend on the current state of development of the countries in the samples. These results are useful for comparing and identifying the priorities of the regulatory framework reforms for improving economic performance.

The paper starts with a discussion of potential sources of regionalism in trade; and what, on this basis, might have been expected to be the performance of regionalism. In its main part, this is an empirical analysis of the actual change in the degree of regionalism over the last half-century, distinguishing four major groups of countries as “regions”. Judging by two complementary indices, it appears that the share of regional trading in world trade has increased substantially, so that much of the remarkable expansion of global trade has taken place via the channel of trade within specific regions.

Offshore financial centers are inextricably linked with the global flow of capital. Offshore financial centers encourage short-term investment by reducing market frictions. Lowered tax rates diminish the required expected gains from trading. This study employs data from the IMF’s Coordinated Portfolio Investment Survey to create a network that is weighted, directed and dynamic based on the portfolio investment positions of 240 countries. The aim of this article is to examine the topology of the global capital network to identify the importance of the roles played by 17 offshore financial centers over the period 2001–2011–particularly in diffusing portfolio investment throughout the network. This article employs two generalized measures of node centrality: random walk centrality and counting betweenness. These algorithms uncover the findings that some of these offshore financial centers are only well connected to a narrow range of countries, but they all perform well in their roles as capital transmitters and are thus very important to the efficient flow of capital to productive end users. While this study reveals reduced influence of offshore finance over time, it suggests that offshore financial centers may be beneficial to global welfare.

Foreign direct investment specially targeted to export sector is relatively new phenomenon in the global economy. Such inflow of foreign capital changes the sectoral composition of the economy, and it has some influence on the exchange rate of the destination country. In this study, we attempt to provide underlying theoretical and empirical explanations for exchange rate appreciation due to foreign capital inflow. We first use an extended three-sector specific factor model to explain analytically why and how an inflow of foreign capital boosts the price of a nontradable good that helps tilting the exchange rate in favor of the host country and then conduct an empirical analysis based on a panel dataset of 12 prominent developing countries over the time period 1980–2011 to substantiate our theoretical findings. We also strive to look at the possible consequences on factor prices and on sectoral de-composition of a representative economy.

This paper contributes to the ongoing debate about the effects of trade liberalization on productivity performance of the Australian passenger motor vehicle industry, which has experienced significant liberalization over the years. Our analysis indicates that trade liberalization had a negative impact on productivity growth, at least in the immediate post-liberalization period. Empirical results suggest that economies of scale and tariff protection improve productivity, while industry assistance (such as the local content and duty drawback schemes and production subsidies) retards productivity. Policy implications of these findings are that there are dividends in terms of improved productivity by encouraging economies of scale, providing tariff protection and lowering industry assistance.