The Impact of Maritime Transportation Instability on International Trade Instability: Combination Spatial Panel data Econometric Approach and Wavelet Smoothing

Authors

Department of Economics, Shahid Chamran University of Ahvaz, Ahvaz, Iran

Abstract

The main objective of this study is to evaluate the impact of maritime transportation instability on international trade instability based on wavelet smoothing and spatial panel data econometric method during the period 1990-2012. The results showed that the spatial effects have an impact on international trade instability. So that a sudden 100 percent increase in international trade in the neighboring countries will reduce 38 percent of trading in own countries. Evaluation of the results of spillovers elasticity of international trade instability showed that maritime transportation did not have a significant impact on international trade fluctuations and geographical concentration is the most important variable of instability in international trade.
 

Keywords

References

Abdol-Rahman, K. (1991). Firms’ Competitive and National Comparative Advantages as Joint Determinants of International Trade Composition. Review of World Economics, 127(1), 83-97.
Anselin, L., Le Gallo, J., & Jayet, H. (2008). Spatial Panel Econometrics. In L. Matyas, P. Sevestre (3rd Eds.), The Econometrics of Panel Data, Fundamentals and Recent Developments in Theory and Practice (901–969). Kluwer: Dordrecht.
Anselin, L. (2001). Spatial Econometrics. In B. Baltagi, A Companion to Theoretical Econometrics (310–330). Oxford: Blackwell.
---------- (1988). Spatial Econometrics: Methods and Models. Dordrecht: Kluwer Academic Publishers.
Assenmacher-Wesche, K., & Gerlach, S. (2008a). Money, Growth, Output Gaps and Inflation at Low and High Frequencies: Spectral Estimates for Switzerland. Journal of Economic Dynamics & Control, 32, 411-435.
---------- (2008b). Interpreting Euro Area Inflation at High and Low Frequencies. European Economic Review, 52(6), 964-986.
 
 
Bahmani-Oskooee, M., & Kandil, M. (2010). Exchange Rate Instability and Output in Oil-Producing countries: The Case of Iran. Emerging Markets Finance & Trade, 46(3), 23-45.
Bahmani-Oskooee, M., & Latifa, N. (1992). Effects of Exchange Rate Risk on Exports: Cross Country Analysis. World Development, 20(8), 1173 –1181.
Baxter, M., & King, R. (1999). Measuring Business Cycles: Approximate Band-Pass Filters for Economic Time Series. Review of Economics and Statistics, 81, 575-593.
Breitung, J. (2000). The Local Power of Some Unit Root Tests for Panel Data. In B. Baltagi (Ed.), Advances in Econometrics, 15: Nonstationary Panels, Panel Cointegration, and Dynamic Panels (161-178). Amsterdam: JAI Press.
Çakir, M. Y., & Kabundi, A. (2011). Trade Shocks from BRIC to South Africa: A Global VAR Analysis. University of Johannesburg, Working Paper, 250, Retrieved from http://www.econrsa.org/node/273.
Coppock, J. D. (1977). International Trade Instability. The Economic Journal, 88, 602-604.
Cushman, D. O. (1983). The Effects of Real Exchange Rate Risk on International Trade. Journal of International Economics, 15(1–2), 45–63.
Devkota, S. C. (2004). Causes of Export Instability in Nepal. International Trade, 141, Retrieved from
http://econwpa.repec.org/eps/it/papers/0410/0410002.pdf.
Dixit, A. K., & Stiglitz, J. E. (1977). Monopolistic Competition and Optimum Product Diversity. American Economic Review, 67(3), 297-308.
Elhorst, J. P. (2014). Spatial Econometrics from Cross-Sectional Data to Spatial Panels. Heidelberg: Springer.
---------- (2003). Specification and Estimation of Spatial Panel Data Models. International Regional Science Review, 26(3), 244–268.
---------- (2001). Dynamic Models in Space and Time. Geographical Analysis, 33, 119–140.
Feenstra, R. C. (2004). Advanced International Trade: Theory and Evidence. California: University of California Press.
Fernandez, V. (2006). The CAPM and Value at Risk at Different Time-Scales. International Review of Financial Analysis, 15, 203-219.
Frankel, J. A. (1998). The Regionalization of the World Economy. Chicago: University of Chicago Press.
Gencay, R., Selcuck, F. & Whitcher, B. (2003). Systematic Risk and Timescales. Quantitative Finance, 3(2), 108-116.
Graham, F. (1923). Some Aspects of Protection Further Considered. Quarterly Journal of Economics, 37, 199-227.
Haberler, G. (1968). Terms of International trade and Economic Development. In J. D. Theberg (Ed), Economics of International Trade and Development. London and New York: John Wiley and Sons.
Halleck, V. S., & Elhorst, J. P. (2012). On Spatial Econometric Models, Spillover Effects. Retrieved from
https://www.econstor.eu/bitstream/10419/123888/1/ERSA2013_00222.pdf.
Heckscher, E., & Ohlin, B. (1991). Heckscher-Ohlin International Trade Theory. Cambridge: MIT Press.
Hirschman, A. O. (1964). The Paternity of Index. American Economic Review, 54, 761-62.
Hodrick, R. J., & Prescott, E. C. (1997). Post-War U. S Business Cycles: A Descriptive Empirical Investigation. Journal of Money Credit and Banking, 29, 1-16.
Hondroyiannis, G., Swamy, P. A. V. B., Tavlas, G., & Ulan, M. (2008). Some Further Evidence on Exchange-Rate Instability and Exports. Review of World Economics, 144(1), 151-180.
 
 
Hooper, P. & Kohlhagen, S. W. (1978). The effect of Exchange Rate Uncertainty on the Prices and Volume of International Trade. Journal of International Economics, 8, 483- 511.
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panel. Journal of Econometrics, 115, 53-74.
Kelejian, H. H., & Prucha, I. R. (1999). A Generalized Moment’s Estimator for the Autoregressive Parameter in a Spatial Model. International Economic Review, 40(2), 509–533.
---------- (1998). A Generalized Spatial Two Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances. J Real Estate Finance Econ, 17(1), 99–121.
Kim, S., In, F., Marisetty, V., & Faff, R. (2008). Analyzing the Performance of Managed Funds Using the Wavelet Multi-scaling Method. Review of Quantitative Finance and Accounting, 31, 55-70.
Krugman, P. (1980). Scale Economies, Product Differentiation, and the Pattern of International Trade. American Economic Review, 70, 950-959.
Lancaster, K. (1980). Intra-Industry International Trade under Perfect Monopolistic Competition. Journal of International Economics, 10, 151-175.
---------- (1979). Variety, Equity and Efficiency. New York: Columbia University Press.
---------- (1975). Socially Optimal Product Differentiation. American Economic Review, 65, 567-585.
Lee, L. F. (2004). Asymptotic Distribution of Quasi-Maximum Likelihood Estimators for Spatial Autoregressive Models. Econometrica, 72(6),1899–1925.
LeSage, J. P., & Pace, R. K. (2009). Introduction to Spatial Econometrics. Boca Raton: CRC Press Taylor & Francis Group.
 
Levin, A., Lin, C. F., & James Chu, C. S. (2002). Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties. Journal of Econometrics, 108(1), 1-24.
Love, J. (1992). Export Instability and Domestic Economy: Question of Causality. The Journal of Development Studies, 28(4), 735-740.
---------- (1987). Export Instability in Less Develop Countries: Consequences and Causes. The Journal of Economic Studies, 14(2), 3-80.
Macbean, A. I. (1966). Export Instability and Economic Development. Cambridge: Harvard University Press.
Massell, B. F. (1970). Export Instability and Economic Structure. American Economic Review, 60, 618-630.
Naya, S. (1973). Fluctuation in Export Earning and Economic pattern of Asian Countries. Economic Development and Cultural Change, 21, 629-641.
Peree, E., & Steinherr, A. (1989). Exchange Rate Uncertainty and Foreign International Trade. European Economic Review, 33(6),1241-1264.
Phillips, P. C. B., & Perron, P. (1988). Testing for a Unit Root in Time Series Regression. Biometrika, 75, 335-346.
Ricardo, D. (1951). On Foreign International Trade. In P. Sraffa, M. H. Dobb (Eds.), The Works and Correspondence of David Ricardo. Cambridge: Cambridge University Press.
---------- (1817). On the Principles of Political Economy and Taxation. In P. Sraffa (1951), Works and Correspondence of David Ricardo. Cambridge: Cambridge University Press.
Ramsey, J. B. (2002). Wavelets in Economics and Finance: Past and Future. NYU Working Paper, S-MF-02-02, Retrieved from https://ssrn.com/abstract=1300227.
---------- (1999). The Contribution of Wavelets to the Analysis of Economic and Financial Data. Retrieved from http://rsta.royalsocietypublishing.org/content/357/1760/2593.full.pdf.
Samuelson, Paul A. (1949). International Factor Price Equalization Once Again. Economic Journal, 59(234), 181-197.
Smith, A. (1986). The Wealth of Nations. London: Penguin Books.
Souter, G. N. (1977). Export Instability in the Less Development Countries. Journal of Development Economies, 4, 279-297.
Spence, M. (1976). Product Selection, Fixed Costs, and Monopolistic Competition. Review of Economic Studies, 43(2), 217-235.
Tariq, A., & Najeeb, Q. (1995). Export Earning Instability in Pakistan. The Pakistan Development Review, 34, 1181-1189.
Tegen, A. (2000). Commodity Concentration and Export Earning Instability: Evidence from African Countries. The American Economist, 34, 61-73.
Ullman, E. L. (1957). American Commodity Flow. Seattle: University of Washington Press.
Vergil, H. (2002). Exchange Rate Instability in Turkey and Its Effect on International Trade Flows. Journal of Economic and Social Research, 4(1), 83-99.
Xin, X., & Liu, J. (2008). Geographic Concentration and China’s Agricultural Export Instability. The World Economy, 31, 275-285.
Yousefi, A. (2000). Merchandise International Trade Balances of Less Developed Countries and Exchange Rate of the U. S. Dollar: Cases of Iran, Venezuela & Saudi Arabia. University of Waterloo, Working Papers, 00002, Retrieved from
https://ideas.repec.org/p/wat/wpaper/00002.html.
Iranian Economic Review
Volume 22, Issue 3 - Serial Number 3
September 2018
Pages 643-666

Files

Share

How to cite

Statistics