- Log In/Sign Up
- E-ISSN2288-2766
- KCI
E-ISSN : 2288-2766
A Study on the Determinants of Bilateral Trade: Evidence from China and United States of America
Abstract
Purpose – Recently, the trade war between China and United States of America has been escalating, which has also attracted worldwide attention. Based on this background, this paper sets China and United States of America as an example to exploit the determinants of biliteral trade between China and United States of America. Research design, data and methodology – A quarterly data from the first quarter of 2000 to the fourth quarter of 2017 will be employed to conduct an empirical analysis under some econometric approaches such as fully modified least squares and vector error correction estimates. Results – The results of this paper show that the two economic entities of China and Unites States of America have the greatest positive effect on biliteral trade between China and United States of America. The real exchange rate has a positive effect on biliteral trade between China and United States of America. The nominal exchange rate has a negative effect on biliteral trade between China and United States of America in the short run. United States of America’s average price has a positive effect on biliteral trade between China and United States of America in the short run. China’s average price has a negative effect on biliteral trade between China and United States of America in the short run. Meanwhile, the biliteral trade between China and United States of America also suffers from the economic crisis happened in 2008. Even through the biliteral trade between China and United States of America in the short run is deviate from the long-run equilibrium, there exist an error correction mechanism back to the long-run equilibrium. Conclusions – This paper provides some empirical evidences for both governments. Based on the results of this paper, both governments should take corresponding measures to promote the development of bilateral trade between China and United States of America.
- keywords
- Bilateral Trade, Determinants, Econometric Approaches.
Reference
Baek, J. (2014). Exchange rate effects on Korea–US bilateral trade: A new look. Research in Economics, 68(3), 214-221.
Bahmani-Oskooee, M., & Ratha, A. (2008). Exchange rate sensitivity of US bilateral trade flows. Economic Systems, 32(2), 129-141.
Chen, D. (2016). A study on the impact of currency swap agreement on bilateral trade between China and South Korea based on the trade gravity model. Finance & Economy, 24(7), 42-44.
Clark, X., Dollar, D., & Micco, A. (2004). Port efficiency, maritime transport costs, and bilateral trade. Journal of development economics, 75(2), 417-450.
Dong, Y., & Whalley, J. (2012). Gains and losses from potential bilateral US–China trade retaliation. Economic Modelling, 29(6), 2226-2236.
Egger, P., & Larch, M. (2011). An assessment of the Europe agreements’ effects on bilateral trade, GDP, and welfare. European Economic Review, 55(2), 263-279.
Feng, M., Liu, Q., & Liu, C. (2012). How important id Renminbi Rate?. Review of Investment Studies, 12(6), 3-15.
Guo, P., & Wu, Y. X. (2016). Decomposition of the domestic production in Sino-Japanese bilateral trade: Empirical research based on the World Input-Outout Database. Contemporary Economy of Japan, 6(5), 38-50.
He, Y. (2018). A study on the dynamic relationship between cultural industry and economic growth. Journal of Asian Finance, Economics and Business, 5(4), 85-94.
He, Y., & Feng, W. (2019). A study on the determinants of social welfare: Evidence from macroeconomics. International Journal of Industrial Distribution & Business, 9(9), 7-14.
Huang, X. F. (2011). Empirical analysis on FDI and provincial bilateral trade flow based on gravity model. Journal of International Trade, 24(2), 12-20.
Li, Y. B. (2013). Research on potential of bilateral trade between Chile and China: An analysis based on gravity model. Journal of International Trade, 12(7), 62-69.
Meng, Y. (2010). The demonstration analysis of inflation on China’s bilateral trade by free trade area. Foreign Investment in China, 24(4), 18-19.
Pham, C. S., Lovely, M. E., & Mitra, D. (2017). The home-market effect and bilateral trade patterns: A reexamination of the evidence. International Review of Economics & Finance, 30(March), 120-137
Shang, Y. H., & Cui, H. F. (2014). The impact of cultural distance on bilateral trade between China and Central and Eastern European Countries: An empirical analysis based on revised trade gravity model. Jianghan Tribune, 12(7), 58-62.
Song, Y. N., & Guo, G. L. (2008). The impact of the movement of natural persons on China’s bilateral trade: An empirical analysis based on gravity model. International Economics and Trade Research, 24(2). 19-22.
Wang, X. D., & Deng, D. X. (2014). A study on the impact of logistics infrastructure on bilateral trade based on analysis of trade data of 31 countries and regions. Commercial Times, 24(10), 22-24.
Wang, Y. D., Wang, L. L., & Wang, Y. Y. (2015). The impact of investment environment on bilateral trade between China and Central and Eastern European Countries: An empirical analysis based on revised trade gravity model. Market Modernization, 24(5), 6-7.
Wu, D. (2008). Institutional factor and bilateral trade of East Asia: An empirical analysis with trade gravity model. Economic Survey, 6(3), 47-49.
Yeyati, E. L. (2003). On the impact of a common currency on bilateral trade. Economics Letters, 79(1), 125-129.
Ye, S. (2009). Country comparison of the shock of financial crisis to China's bilateral trade based on gravity model. Manager Journal, 24(17), 242-243.
Zheng, X. D. (2014). On factors of trade growth between China and India—An empirical analysis based on CMS model. Southeast Asia & South Asian Studies, 4(2), 41-47.
Zhou, J. Y. (2015). A study on the impact of currency swap on bilateral trade between China and South Korea based on the trade gravity model. Times Finance, 24(4), 22-25.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations
