Time, uncertainty and trade flows

The gains from trade in intermediate goods: A Ricardo-Sraffa-Samuelson model

During the last decade, the volume of international trade has increased significantly as international economic integration has deepened, especially in emerging countries, and national industrial structures have become increasingly aligned with international trade in intermediate goods. The OECD STAN Bilateral Trade Database by Industry and End-use Category (BTDIxE) presents international trade in goods flows broken down both by industry sectors and by end-use categories, allowing insights into the patterns of trade in intermediate goods between countries to track global production networks and supply chains as well as helping to address other trade-related policy issues such as trade in value added and tasks.

This article provides a comprehensive theoretical and methodological analysis of the essence, key elements, and main forms of international trade. Employing a systematic approach, the author defines the form of international trade as an institutionally structured model for organizing cross-border exchange of goods, services, capital, and intellectual property, characterized by a specific combination of economic, organizational, and legal parameters. The dialectical two-dimensionality of the form is revealed: its economic content (function in the system of the international division of labor) and organizational embodiment (implementation mechanisms. The form of international trade is decomposed into three interconnected elements: subject-object composition, organizational mechanism, and legal regime. The article proposes analyzing forms of international at two levels of abstraction—narrow (tactical-operational) and broad (strategic-macroeconomic)—which exist in dialectical unity. A comprehensive, multi-criteria typology of forms of international trade is developed, which takes into account the nature of regulation, the degree of investment involvement, the object of trade, the technology of organization, regional and institutional features, and other criteria.The evolution of forms of international trade is traced in the context of the development of theories of international trade — from classical models of trade in final goods to modern concepts of global value chains, digital trade, and sustainable development. Modern trends in the transformation of forms of international trade are identified, in particular, hybridization, growth The importance of trade in intermediate goods and services within global value chains, the development of digital platforms and environmentally friendly models of international commodity exchange. The practical importance of understanding the forms of international trade for the formation of effective foreign trade policy of the state and corporate strategies for entering global commodity markets is emphasized. For businesses, it enables a conscious choice and combination of forms for market entry, minimizing risks and transaction costs. For the state, it is crucial for creating an adequate institutional environment that facilitates the transition of national economies towards more complex, technological, and value-oriented forms of participation in international trade, which is key to sustainable development in a globally competitive landscape.

According to economic literature, a large part of discussion is related to trade in intermediate goods and services as an indication of international outsourcing. Gamberoni et al. (2010) have stated that trade in intermediate goods create about 60 percent of world exports. These data suggest that understanding the determinants of trade in intermediate goods is crucial to comprehend the patterns of trade. The objective of this paper is to analyze the role of international outsourcing in form of trading intermediate products on bilateral trade relations between Iran and China. As an empirical work, we have studied the trade structure of intermediate and final goods traded between two countries during the period 1992-2011. Intermediate and final goods traded are classified into three groups: 1) electronic product, 2) automobiles and motorcycles, and 3) apparel and footwear. Observations on such products show that the share of Iran’s intermediate trade with China in these three industries to total trade is about 55% on average. We have concluded that trade in intermediate goods between Iran and China has been more volatile than that of final goods. These findings confirm the same story for both developed and developing countries, which found by Chen (2010), and Sturgeon and Memedovic (2010).

Agriculture, food and global value chains: issues, methods and challenges

A gravity-model approach is used to estimate the magnitude of the internal border (home bias) and external border (frontier) effects in Spain using industry-level trade flows. We find that the average border effects are about 30 and 10, respectively. Next we explore the variation in the industry-specific border effects. First, the border effects are larger in highly product differentiated industries. Second, the internal border effect is twice bigger for trade in intermediate goods than for trade in final goods. Third, conditioning on the geographic concentration of firms reduces significantly the internal border effect.

In recent years, trade in intermediate goods has increased manifold with the emergence of global value chains (GVCs). China has emerged as one of the leading countries in the whole GVC network; many countries, including the USA, are heavily dependent on China for the intermediates in the manufacturing sector. The outbreak of COVID-19 and the subsequent lockdowns in many countries, including China, have disrupted the supply in GVCs. This situation has led to the search for alternative markets for intermediates for the sustainable-production process. This study looks at how India can be an alternative avenue for the USA in place of China in the GVC network. It investigates the extent of participation of the countries under study in the GVCs and the gains resulting from it. The main focus of the research is to determine the emerging opportunities for India in GVCs, through correlating the USA industries which are vulnerable to disruption in GVCs as caused by China to those industries of India in which India enjoys a comparative advantage. The analysis reveals that in the ‘textiles, wearing apparel, leather and related products’ and ‘chemicals and non-metallic mineral products’ industries, India could be a replacement of China for the USA. JEL Codes: F10, F13, F15

Global value chains (GVCs), relying on transnational specialized division of labor and resource integration, have become a core force reshaping the logic of macroeconomic operation. Drawing on the structural logic of GVCs, this paper systematically analyzes their transmission pathways, equilibrium effects, policy linkages, and restructuring impacts on the macroeconomy. The study finds that: the resource allocation mechanism of value chains optimizes the allocation of global production factors through trade in intermediate goods, and digital technology is enhancing their transmission efficiency to macroeconomic variables such as inflation and trade fluctuations. While value chain division of labor improves overall global economic efficiency, it also amplifies macroeconomic co-fluctuations and structural imbalances. Policies and regional agreements such as the EU carbon tariff (CBAM) and the RCEP have a significant impact on the layout of value chains, thereby reshaping the trajectory of macroeconomic operation. Currently, the regionalization, shortening of supply chains, and greening of GVCs are reshaping the driving forces of macroeconomic growth and the transmission pathways of risks. This study reveals the inherent linkages between GVCs and macroeconomic operation, providing theoretical support for responding to global economic fluctuations and improving policy regulation.

This paper develops two models to study the impact of trade in intermediate goods on wage inequality between skilled and unskilled labor in a developed country and a developing country. The first model assumes symmetric production technologies in the intermediate good. It predicts that trade in the intermediate good will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the intermediate good. It predicts that trade in the intermediate good can lead to an increase in wage inequality in both the developed country and the developing country.

Contents: Introduction, James Wang, Daniel Olivier, Theo Notteboom and Brian Slack. Part 1 Conceptualization of Port-Cities and Global Supply Chains: Supply chain and supply chain management: appropriate concepts for maritime studies, Valentina Carbone and Elisabeth Gouvernal Global supply chain integration and competitiveness of port terminals, Photis M. Panayides The terminalisation of seaports, Brian Slack Re-assessing port-hinterland relationships in the context of global supply chains, Theo Notteboom and Jean-Paul Rodrigue. Part 2 Shipping Networks and Port Development: The development of global container transhipment terminals, Alfred J. Baird Mediterranean ports in the global network: how to make the hub and spoke paradigm sustainable?, Enrico Musso and Francesco Parola Northern European range: shipping line concentration and port hierarchy, Antoine Fremont and Martin Soppe Factors influencing the landward movement of containers: the cases of Halifax and Vancouver, Robert J. McCalla. Part 3 Inserting Port-Cities into Global Supply Chains: Globalization and the port-urban interface: conflicts and opportunities, Yehuda Hayuth A metageography of port-city relationships, Cesar Ducruet Chinese port-cities in the global supply chains, James Wang and Daniel Olivier The economic performance of seaport regions, Peter W. De Langen. Part 4 Corporate Perspectives on the Insertion of Ports in Global Supply Chains: The success of Asian container port operators: the role of information technology, Daniel Olivier and Francesco Parola Which link in which chain? Inserting Durban into global automotive supply chains, Peter V. Hall and Glen Robbins Sustainable development and corporate strategies of the maritime industry, Claude Comtois and Brian Slack References Index.

Chapter 6 introduces concepts of global business process, business process design, business process reengineering, and business process management, to present a process-based view of global operation strategy and to introduce the primary processes of global operation strategy. First, we discuss global supply chain strategy, including its concepts, global sourcing strategy, global internal supply chain strategy, global distribution strategy, global supply chain coordination, global supply chain strategic alliances, and global sustainable supply chain strategy. Second, we introduce concepts of global revenue management strategy, present its globally evolving process, and discuss strategies for global revenue management. Third, we discuss global technology strategy, including its concepts, global product development strategy, R&D internationalization modes, global R&D coordination and communication, global R&D sourcing strategy, and technology strategies for global sustainable operations. Finally, we discuss global risk management strategy, including its concepts, basic operational strategies, basic approaches and the operational risk management framework. In this chapter, we use case examples including Etam Distribution Center, Global Supply Chain of H&M, SkyTeam Alliance, Microsoft Research Worldwide, Mattel’s Global Risks and Supply Chains, and a case Tiffany to illustrate process-based fundamentals.KeywordsSupply ChainBusiness Process ManagementGlobal Supply ChainRevenue ManagementBullwhip EffectThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This paper examines the regional and global growth effects of current account imbalances in Japan, Germany, and the People’s Republic of China (PRC)—the three largest persistent surplus countries—and the United States and United Kingdom, the two largest persistent deficit countries. Controlling for a set of macroeconomic determinants, we use a structural vector autoregression (SVAR) framework to show that positive shocks to current account balances in the PRC, Germany, and Japan transmit positive regional and global growth effects, particularly in the case of spillovers to regional growth from Japan. As expected, the global growth response is lower in magnitude than the regional growth response. In addition, the extent of the effect is amplified by global value chains, pointing to the significant role played by trade in intermediate goods. For current account deficit countries, the magnitudes of the responses of growth to shocks are much lower on average than in the case of current account surplus countries. We find some marginal positive effects on regional and global growth emanating from a positive shock on the UK current account—i.e., a reduction in the deficit. For the US, a positive shock to its persistent current account deficit marginally drags on global growth, possibly reflecting declining import demand and wealth effects linked to the US dollar’s status as the global reserve currency. Our findings have important policy implications, particularly in light of discussions in recent years on whether current account surplus countries are hindering growth abroad.

Persistent Current Account Imbalances: Are they Good or Bad for Regional and Global Growth?

Basis of Inter-industry Trade

This study examines the impact of trade policies on global supply chains and their implications for economic inequality. In the first part of the paper, we analyze existing literature on globalization, trade agreements, tariffs, and non-tariff measures. Theoretical insights build a strong foundation for further quantitative research. The second part of the paper draws data from two major economies – the United States, and the European Union. By analyzing major trade policies between these two partners, we assess their impact on supply chain and bilateral trade in goods. And by analyzing the correlation between trade growth rates and GDP per capita growth rates, we identify significant linkage between trade performance and distribution of economic outcomes. In this study we combine theoretical knowledge with empirical approach to assess the role of different trade policies on supply chain and nations wealth. The findings indicate that while trade liberalization improves supply chain efficiency, achieving equitable economic outcomes requires policy interventions that expand access to opportunities, strengthen infrastructure, and promote fairer distribution of benefits. The paper concludes with predictions of trade for upcoming years, and policy recommendations for balancing efficiency and equitable growth.