Journal of International Commerce, Economics and Policy

To shed light on the question of whether or not institutional similarity always increases bilateral trade, we divide institutional quality into the low level (one standard deviation below the mean), medium level (in between minus one and one standard deviation from the mean), and high level (one standard deviation above the mean). By applying the system-GMM estimator, we found that the institutional similarity between the two countries has a trade-boosting effect, except in cases where one or both countries have low-institutional quality. These imply that measures to enhance institutional similarity must be accompanied by policies to promote institutional adaptability.

In recent years, there were many researches on China Free Trade Pilot Zone (FTZ), however, there was still a lack of research on the effect of the FTZ on trade efficiency. To make up for gaps in research, this paper calculated the trade efficiency of 30 provinces in China with stochastic frontier gravity model, and then empirically tested the policy effect of the FTZ by using the propensity score matching and difference in difference (PSM-DID) method, and further analyzed the inherent mechanism. The results showed that China’s general level of trade efficiency was relatively low, while the average trade efficiency in FTZs was significantly higher. The establishment of the FTZ had a significant positive impact on trade efficiency advances. Before and after the establishment of the pilot free trade zone, the difference between the changes in the trade efficiency measurement results of the treated group provinces and the trade efficiency measurement results of the control group provinces showed the characteristics of first increasing and then decreasing, and the policy effect has a certain lag. The establishment of the FTZ significantly reduced the trade cost. The model estimated that the trade efficiency increased by 3.576% for every 1% growth of trade cost, and the policy effect of the FTZ was significantly positive, which verified the existence of the intermediary effect of trade cost.

We study the heterogeneity of interest rate effects on private saving across the age dimension. Taking income and substitution effects as given, we illustrate how in a simple life cycle model, older individuals respond less to interest rate changes than younger ones. This result is driven by the fact that older individuals have a shorter planning horizon, and consequently a lower and less interest sensitive present discounted value of future earnings. However, estimating a dynamic error components model on a global panel of countries spanning the period 1995–2014, we find that there is no evidence for there being a different interest rate effect for countries with higher old age dependency ratios. Our results stand in contrast to recent studies that find effects which are consistent with the theory.

This paper studies the empirical impact of Foreign Assets Management (FAM) on companies’ capital expenditure in emerging market economies with International Financial Shocks (IFS). The empirical analysis uses annual data of 2,931 publicly listed companies in 45 emerging market economies from 2000 to 2019. We analyzed a multiplicative regression of a canonical capital expenditure Q model. The findings show that FAM positively affects companies’ capital expenditure. Moreover, financially restricted companies are more sensitive to the favorable impact of FAM compared to restricted companies. Our results highlight the relevance of considering companies’ heterogeneity when examining the effect of macro-management policies. In addition, FAM has a more favorable impact on companies’ capital expenditure in economies that concurrently use capital controls and macroprudential policy. Finally, our findings suggest that successful macro-management policies insulate capital expenditure from adverse IFS. This result highlights the role of more coordinated approaches to repel adverse international shocks.

This paper analyzes the dependence pattern of net debts inflows on the sovereign debts rating and the fiscal balance, on accounting for the productivity growth rate. The cross-section evidence on a sample of 149 economies for the period from 1990 to 2019 uncovers that a higher sovereign debts rating, a lower fiscal balance or a higher productivity growth is associated with more net debts inflows. Thus, the debts flows are underlined by the store of wealth accumulation across economies. Moreover, there exists a nonlinearity on the pattern of debts flows, for which the fiscal balance determines the impact of sovereign debts rating on the net debts inflows. The results are robust for panel data regression as well as case study of three economies including Japan, Thailand and Vietnam.

Various empirical methodologies have examined the relationship between exchange rate and household consumption expenditures. However, traditional methods fail to analyze the exchange rate effect on consumption across minor and major currency depreciation and appreciations. We attempt to extend the existing literature by examining the impact of minor and major currency appreciation and depreciation on household consumption expenditures in BRICST countries, including Brazil, Russia, India, China, South Africa and Turkey. We use an extended version of the nonlinear ARDL (NARDL) and multiple threshold nonlinear ARDL model called the multiple asymmetric ARDL (MATNARDL) model. Our estimates, based on the traditional NARDL model, indicate that the asymmetric effect is found in the context of India and China only. However, the MATNARDL estimates suggest that, in the long run, the asymmetric effect is found for all the sample countries except India whereas, in the short run, the asymmetric effect is found for all the sample countries except Turkey. Finally, this study recommends the policy implications based on the results obtained in this study.

Environmental degradation has been one of the major global concerns in the last few decades. Efforts are made to improve our environment including how to alter consumers’ preferences toward the use of environmental-friendly products. We conduct an online laboratory experiment to investigate the effectiveness of information and nudges regarding green products using social (cultural) identity-specific campaigns. Our study shows that information and green nudges are unable to alter subjects’ risk aversion and time preference. However, green nudges are effective to motivate subjects to allocate more to green product and that differs the effectiveness between information and green nudges in our context. Lastly, we find that some green perceptions are associated with subjects’ willingness to pay for green products and characteristics. We conclude with a discussion of how to effectively deliver nudges in promoting green consumption.

In this paper, we derive a generalized version of New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to study how real imperfections of labor market affect the steady state and dynamics of model given different non-zero annual target inflation rates. The main finding is that, given the same target inflation rate, wage stickiness is more distortionary than the price stickiness. The existence of positive target inflation rate can also change the first-order dynamics of model, amplifying or reducing the dynamic response of model according to the type of exogenous shocks. A relatively high target inflation rate, 2% or 3%, may be preferable to a zero target inflation rate.