Structural Reforms and Labor Reallocation: A Cross-Country Analysis

Adjustment costs and gradual trade liberalization

Purpose: After the trade liberation, Bangladesh has faced the crisis of trade imbalance. Therefore, trade liberation is considered as the driving force behind the crisis. To investigate this historical allegation, this study aims at analysing the factors that determined the post trade liberalisation aggregate import demand function of Bangladesh.
 
 Design/Methodology/Approach: Based on quarterly data from trade liberalisation period to reaching the economic stability period, 1992Q1 - 2007Q4, an autoregressive distributed lag (ARDL) approach to cointegration and an error correction model (ECM) have been utilised to estimate the impacts of natural calamity, gross domestic product, foreign exchange reserve, relative price and tariff on aggregate import demand of Bangladesh.
 Findings: Empirical results revealed that the natural calamity is identified to be nonresponsive to the nation's aggregate import demand both in the short and long run. This indicates that Bangladesh can meet the natural crisis related demand by herself without influencing its aggregate import demand. Results also revealed that the import volume of Bangladesh is cointegrated with relative import price, actual GDP and real foreign exchange reserve of the country. The import demand of the country can largely be described by its real GDP, while it is found inversely associated with relative price ratio in the long run. The long run association among import demand and tariff rate indicates that trade liberalisation has a significant positive impact on the country's aggregate import demand, as well as real foreign exchange reserve, as explained by the reduction in tariff rate.
 
 Research Implication: Developing countries like Bangladesh and the relevant business stakeholders would have considerable implications of such empirical findings with their trade policies, particularly how they should respond to unpredictable scenarios caused by the factors such as natural calamity, foreign exchange reserve, tariff, etc.
 
 Originality Value: The originality of the study lies in its uniqueness in using the historical data and factors that no studies have so far used in analysing the import demand function of Bangladesh.
 
 Keywords: Natural calamity, import demand, foreign exchange reserve, gross domestic product, tariff, trade liberalisation, Bangladesh.
 
 Cite as: Shikha, H. A., Alam, M. M., Murad, M. W., Said, J., & Ahmed, Z. U. (2023). A historical perspective of trade liberalisation dynamics in Bangladesh: impacts of natural calamity risk, gross domestic product, foreign exchange reserve, relative price and tariff on import demand. Journal of Nusantara Studies, 8(TI), 177-208. http://dx.doi.org/10.24200/jonus.vol8issTIpp177-208

Trade liberalization in recent years has been part of important world agenda in an attempt to create an unlimited relationship. The endogenous growth literature provides persuasive support that stresses the importance of international trade levels for economic growth. This research uses endogenous growth approach to analyze the effect of international trade on manufacturing industry sector of Indonesia, and importantly to find out the impact in relation to trade liberalization in 1985. The panel data is used and the trade deregulation policy is captured by using dummy variable. A piecewise linear regression model is applied. Observation covers 26 manufacturing sectors between 1979 and 1997. In general, the results show that trade variables used to measure productivity growth rate have small effect on output growth. There is also a positive effect of export growth in one year time lag on productivity but it lesser than that of the imported input growth. We confirm that trade deregulation in 1985 contribute to the increase in productivity of the manufacturing sectors, especially the export oriented firms. Nevertheless, the relatively smaller effect of trade variables than production variables can be a sign of low productivity rate in international trade that is expected to lead the growth of Indonesian manufacturing industry. Keywords: Trade liberalization, productivity, growth, Indonesian manufacturing industry.

In 2004 the United Nations University World Institute for Development Economics Research (UNU-WIDER) embarked on a large-scale research project on the ‘Impact of Globalization on the World’s Poor’ co-directed by Machiko Nissanke and Erik Thorbecke. The first conference was essentially conceptual in nature, meant to understand better the various mechanisms and channels through which globalization affects the poor either directly or indirectly. The other three conferences focused on each of the major regions of the developing world: Asia, Africa and Latin America. Theobjectivesofthisintroductionarethreefold:first,toreviewbrieflyhow the forces of globalization influence poverty in general; second, to describe and discuss the main transmission channels and mechanisms; and third to analyze the impact of globalization on Africa and present an overview of the six Africa case studies included in this issue. 1. The Impact of Globalization on the World’s Poor Globalization provides a strong potential for a major reduction in poverty in the developing world because it creates an environment conducive to fastereconomicgrowthandtransmissionofknowledge. 1 However,structural factors and policies within the world economy and national economies have impeded the full transmission of the benefits of the various channels of globalization for poverty reduction. In particular sub-Saharan Africa (SSA) hasbeenrelativelylessaffectedbytheforcesofglobalizationthanotherparts of the world. World income distribution continues to be very unequal and many poor countries particularly in Africa are stagnating. Moreover, there is much empirical evidence that openness contributes to more within-country

The Current Conjuncture: In Summary Form A brief overview of some of important features of current conjuncture which demonstrates interconnectedness between global and hemispheric trade regimes, evolving CARICOM Single Market and Economy and gendered realities of women and men, is a useful way to begin this discussion. During 1980s, overall economic policy environment Caribbean was characterized by economic reforms which moved through stabilization to structural adjustment The IDB (1998:1) notes that in countries such as Jamaica and Guyana, acute economic situation required comprehensive adjustment strategies which involved harsh austerity measures, supported by loans from IMF and World Bank. Other countries such as Grenada and Suriname, designed their own home grown adjustment early 199Os, Barbados, Dominican Republic, Haiti and Trinidad and Tobago were pursuing various types of structural adjustment programmes. The Structural Adjustment Programmes (SAPs) undertaken region included trade liberalization, tax reform, privatization, reduced government involvement economic activities, as well as reduced budgetary support for critical social services and infrastructure. As globalization process intensified, and global trade policy was increasingly determined by a complex of multilateral trade agreements, room for Caribbean countries to manoeuvre policy options was increasingly restricted. By 1992, countries of Caribbean Basin had already taken first step towards free trade by signing Framework Agreements on Trade and Investment, with United States. The groundwork for this step had already been prepared, as many countries had begun a process of trade liberalization mid to late 1980s largely as part of policy conditionalities linked to structural adjustment agreements with multilateral agencies such as World Bank and International Monetary Fund. (Wedderburn 1998: 24). The economic reform process with trade liberalization as a major focus, proceeded more rapidly, more comprehensively under WTO after 1995. With limited policy options, limited resource base and productive capacity, small size and, some cases, a debt burden, among other problems, Caribbean nations saw a trade and investment agreement with United States as an attractive option. Any other option, as attempted even tentatively by Jamaica, Grenada and Guyana, was viewed with much disquiet and suspicion by United States, major trading and donor partner of several CARICOM countries. In 1995, against this background, CARICOM governments like most others of world, signed on to Beijing Platform of Action. With this act, they committed to improving conditions of life and opportunities for women several specific areas. Some are relevant to multilateral and regional trading agreements. Specifically, paragraph 165 (k) reads: the governments: seek to ensure that national policies related to international and regional trade agreements do not have an adverse impact on women's new and traditional activities. Ten years later, there is a growing recognition that little progress has been made most countries towards fulfilling these commitments. Instead, extremes of poverty and wealth are now more evident. In CARICOM countries, fiscal policy as part of economic reforms impacted social policy, and resulting redistribution of budgetary resources associated with these reforms seriously affected resources available for health, education and critical subsidies for various social Given socially defined roles of women, they ended up being 'de facto' providers of those social services no longer supplied by public sector. More recently, 2000, governments of world adopted Millennium Development Goals (MDGs). These goals are being used as an important instrument for guiding policy Caribbean towards achievement of a number of specific goals and targets. …

This paper is the first of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of Chile from 1973 onward. The report consists of 5 main parts; Part 1 provides the introduction, part 2 looks at the trade liberalisation in Chile which was implemented in three phases, (1) initial trade reforms (1973-84), (2) trade reform after a temporary policy reversal(1985-89) and (3) after 1990. Part 3 looks at the evolution and structure of exports and imports, and Part 4 looks at sectoral developments in the copper industry, agrofood industry, wood and wooden products industry and the textiles and clothing industry. Part 5 concludes with lessons learnt. The experience of Chile shows that trade reform has been essential for realigning the incentive structures in Chile. A stable macroeconomic environment, trade reform starting with the elimination of quantitative restrictions, introduction of flat tariffs, coherent exchange rate policy, sound institutional framework, rule of law, mild promotion of exports, use of foreign capital, and relatively flexible labour market policies have been important factors in Chili's successful trade liberalisation experience.

This paper seeks to provide a systematic literature review on the speed of adjustment (SOA) of capital structure between 1984 and 2025, providing the major themes and recommending the potential areas that can be used in future investigation. Unlike the general reviews of capital structure, the study is concerned with the sub-area of speed of adjustments and its changing dynamics. The review uses systematic method to select and analyze the related studies and apply bibliometric tools and systems thinking approach to reviewing, identifying current trends of research and new research directions. The results indicate that there has been a drastic evolution in the concept of SOA, especially in terms of dynamic models that analyze how the adjustment costs, economic environments, corporate governance, and other factors affect the financial policies of firms. This study provides novel insights to understand the intellectual structure of the field by utilizing the co-citation analysis, keyword network, and clusters of themes, and highlights the gaps in the research and introduces the future research directions The study is done through published works present in the SCOPUS database, while studies that were not considered during the study may or may not affect the conclusions. The review is also using an innovative "systems engineering thinking approach" to establishing literature gaps, which makes a multidisciplinary contribution to the research work on the topic of capital structure adjustment.

Regional variation in the capital structure adjustment speed of listed firms: Evidence from China

This study evaluates the contribution of the export sector to real gross domestic product (GDP) growth rate in the past eight years in Ghana. First, it reviews the main economic policy adopted by the government from 1983 to 2007 to reverse the postindependence economic decline of the Ghanaian economy. Second, it assesses the extent to which the continued reform agenda has facilitated the growth of the export sector during 2000–2007. Third, it presents an evaluation of the contribution of the performance of the export sector as a major stimulus to economic growth. Documentary analysis of available evidence reveals that the implementation of the Structural Adjustment Programme (SAP) has led to a positive export sector performance and subsequent real GDP growth rates during the period under review. However, this study argues that there is little aggregate evidence that the trade policy reforms and liberalization since the late 1980s have produced a very significant export response. Exports have not increased consistently and imports have tended to grow faster than exports following liberalization widening the trade deficit and thus constraining growth. © 2012 Wiley Periodicals, Inc.

This article presents evidence on the positive effect of international trade on productivity growth using industrial level data preceding and following Brazil's trade liberalization in 1988–90. Our data reveal large and widespread productivity improvement across industries after barriers to trade were drastically reduced. Econometric results confirm the association between trade liberalization and productivity growth and show that the impact was indeed substantial: The observed tariff reduction in the period brought a 6% estimated increase in total factor productivity growth rate and a similar impact on labor productivity.

This paper empirically assesses the role of structural and institutional reforms in driving productivity growth across countries at different stages of development, using a distance-to-frontier framework. It gauges whether particular policies and reforms matter more for increasing productivity growth at the aggregate and sectoral levels for some emerging market and developing economies (EMDEs) than others. Recognizing the possibility of time lags between reform implementation and reform payoffs, the paper also examines how productivity gains from various reforms evolve over the the short- and medium-term.

We perform a growth‐accounting exercise for Chinese economic growth from 1978 to 2003, by decomposing Chinese growth in GDP per labor into the contributions arising from the agricultural, public, and private sectors; and the contribution arising from the reallocations of labor among these three sectors. The greatest contributor to overall labor productivity growth (contributing 30% of the overall) is the growth in total factor productivity in the private nonagricultural sector. The next largest contributor (26% of the overall) is the reallocation of labor from the agricultural sector to the nonagricultural sector.

Structural transformation and productivity growth in India during 1960–2010

List of Tables List of Figures List of Abbreviations and Acronyms List of Contributors Preface PART I: INTRODUCTION AND OVERVIEW Macroeconomic and Adjustment Policies since Independence: An Introduction and Overview C.Mumbengegwi & R.Magubu PART II: MACROECONOMIC POLICY AND PERFORMANCE Macroeconomic Performance under Structural Adjustment: An Essay on Latrogenic Effects P.Robinson Distributive Policies and Economic Growth M.T.Nziramasanga & L.M.Soo Inflation During Structural Adjustment D.Durevall & P.Kadenge Labour Market Policies and Outcomes J.Knight PART III: FINANCIAL LIBERALIZATION, MONETARY POLICY AND CURRENCY CRISIS Financial Liberalization and Monetary Policy O.Nyawata & C.Mumbengegwi From Liberalization to Financial Crisis C.Mendis The Crisis in Asia: Are there Lessons for Zimbabwe? J.Gordon PART IV: TRADE LIBERALIZATION Macroeconomic Imbalances, Adjustment Reforms and Sustainability: A CGE Model Simulation R.Mabugu Trade Liberalization and Investment Response in Zimbabwe J.Rattso, R.Torvik & H.Mehlum Income Distribution Effects of Trade Liberalization: A CGE Analysis M.Chitiga-Mabugu PART V: SECTORAL PERSPECTIVES Macroeconomic Policy Impacts on Aggregate Agricultural Performance C.Mumbengegwi Macroeconomic Policies and the Manufacturing Sector H.Bjurek, D.Durevall & D.B.Ndlela Macroeconomic Policies and the Health Sector G.Mutangadura Subject Index Author Index

The study was carried out to analyse the effect of trade liberalization policies on agricultural output growth in Nigeria, using time series data from 1960-2014.The objectives were to; estimate the differences in agricultural output before and after trade liberalization period and estimate the long and short-run effect of agricultural trade policies on agricultural output in Nigeria. Data for the empirical study were sourced from various issues of the Central Bank of Nigeria (CBN) statistical bulletin and publications of the National Bureau of Statistics (NBS). Both descriptive and inferential statistics were used to analyze the data. The estimation procedure was the co-integration and error correction model. The analysis reveals that the mean agricultural output after trade liberalization (AGR GD2) was different from that of the pre-trade period (AGR GD1) and also the t-test result confirms that there exist a significant difference between agricultural output during the pre-trade and post-trade liberalization period given that the t cal (4.5146) was greater than the t crit (2.0484) at 5% level of significance. The long–run and short-run regression results shows that trade openness and exchange rate had a negative effect on agricultural output in the three models meaning that trade openness will lead to reduction in agricultural output both in the long and short-run. The study therefore recommended that monetary authorities should adopt policies that will reduce the volatility of the exchange rate. Also the institution of import quota could curb the negative effect of trade openness on agricultural output growth in Nigeria. Keywords: Agricultural output, Trade liberalization, Trade openness, long-run, Short-run