The impacts of trade policy uncertainty on trade flow of emerging economies and low-income developing countries

Bibliographic Data

ID15067487
AuthorsDinkneh Gebre Borojo (0000-0002-4905-1832, Southwest Jiaotong University), Jiang Yushi (Southwest Jiaotong University), Miao (0000-0001-6923-8525), Miao Miao (0000-0002-7383-2858, Chengdu Normal University, corresponding author), Yang Liu (0000-0003-1220-7044, Sichuan University of Science and Engineering)
Year2023
Volume36
Issue1
Pages1055-1075
Publication date2023-03-31
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomic Research-Ekonomska Istraživanja (JOURNAL)
Journal identifiersISSN: 1331-677X • E-ISSN: 1848-9664
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/1331677x.2022.2081235
OpenAlexW4293077868
LanguageEN
Citations received1
References cited40

This study is aimed to investigate the effects of the trade policy uncertainty (T.P.U.) on the trade flow of 113 emerging economies and low-income developing countries to 143 destination countries. It further investigates the effects of T.P.U. based on income heterogeneity. Moreover, it considers the effects of T.P.U. on trade flow between developing countries’ pair and non-manufacture trade. The two-step Heckman sample selection model is applied to run the structural gravity model of trade using three-year intervals for the period 2004–2019. The analysis is repeated using the Poisson pseudo-maximum likelihood (P.P.M.L.) model for the robustness test. The results imply that the extensive and intensive margin of trade flow of emerging economies and low-income developing countries are adversely affected by the T.P.U. of destination countries. However, the T.P.U. of origin has an adverse effect on the extensive margin of trade. It also negatively affects the trade flow between developing-developing pairs. We also conduct a counterfactual simulation analysis to convert the effect of T.P.U. on trade flow to distance equivalent. To sum up, the findings of this study imply that T.P.U. is a more important barrier to trade for emerging economies and low-income developing countries. Policy implications are forwarded based on the findings

Developing country · Economic growth · Economics · Emerging markets · International economics · International trade · Macroeconomics · Trade barrier · Economic and Technological Innovation · Global trade and economics · Market Dynamics and Volatility

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Open DOIOpen Access