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Trade is considered one of the main drivers of a country's economic growth and development. Therefore, a successful analysis that identifies the bilateral trade flows, their determinants, and the regional integration costs and benefits opens new horizons for international trade perspectives. This study examines the effects of new and existing regional agreements on the international trade patterns of Western Balkan countries based on the Albanian case. In this regard, an extended trade gravity model is applied with a panel data set of trade flows between Albania and 43 of its regional strategic partners during the period of 2008 to 2022. This work considers two different similarity indexes to explain the effect of the economic structures of partner countries on their trade volumes: the relative factor endowment and the absolute factor endowment. The first is used to test the Linder Hypothesis, and the latter is used to test the effect of similarity in economic size between trading partners. Empirical results indicate that the effect of the selected explanatory variables, such as transportation costs, economic size, economic strength, exchange rate, and their relative as well as absolute endowment, is within expectations. Unexpectedly, the domestic economic size and strength are found to be insignificant in explaining the import flows and inversely proportional to the exports of Albania. Finally, it is indicated that trade flows are clearly dependent on traditional ties rather than on new incentives like the Open Balkan, which cannot offer a new regional center of gravity. To the best of our knowledge, this is the first time that the gravity of the Open Balkan initiative has been tested for one of the participating countries. The study concludes that while the Open Balkan initiative shows potential, the Berlin Process remains a more reliable path toward EU integration for Albania. [ABSTRACT FROM AUTHOR]

This study examined the effect of free trade on intra-African bilateral trade balances for Kenya, Rwanda, Uganda, and Tanzania to assess the potential implications of the African Continental Free Trade area. The four countries have experienced persistent trade deficits. Whether free trade within Africa can improve the national trade balances, and the drivers of bilateral trade balances are important questions for policy and strategic programmes for the countries to make the most gains from free trade area. The econometric model estimated for each country is an extension of the standard Keynesian model of trade balance to include determinants of bilateral trade flows from the gravity model. Quantitative analysis using panel regression was augmented with qualitative data from interviews with trade policy experts and trade officials from various African countries and focus group discussions with small-scale cross-border traders at the Busia and Namanga border posts in East Africa. Findings show that complete tariff elimination on intra–African trade may not impact the bilateral trade balances of Kenya, Rwanda, and Tanzania but could improve bilateral trade balances for Uganda by 6 percent. Within the free trade areas, Uganda's bilateral trade balances were higher within the Common Market for Eastern and Southern Africa but lower within the East African Community, than outside these areas. Kenya's trade balances were lower in the Common Market for Eastern and Southern Africa, than otherwise. On the contrary, no significant difference in trade balances is established for the membership of Kenya, Rwanda, and Tanzania in the East African Community; Rwanda in the Common Market for Eastern and Southern Africa; and Tanzania in the Southern African Development Community, when compared to trade balances with non-members. The importance of macroeconomic factors is demonstrated by the increase in bilateral trade balances with higher relative price levels of trade partners; the reduction with increase in relative production and expenditure capacities of trade partners; and improvements following a depreciation of home currency for Tanzania and Uganda, yet a worsening of trade balances in Kenya. A lack of harmony in documents required for cross-border movements within the free trade areas is reported as counterproductive. All African countries should therefore fully implement protocols and cooperate in the harmonization of trade procedures for the free movement of people and goods across borders. Country policies and trade programmes should pursue increased productivity in the leading intra-African export sectors and diversify exports via foreign direct investment in strategic sectors to substitute imports from outside Africa; reduce costs of production; increase the quality of products; and improve transport infrastructure. [ABSTRACT FROM AUTHOR]

In the realm of international trade and economic development, the prediction of trade flows between countries is crucial for identifying export opportunities. Commonly used log-linear regression models are constrained due to difficulties when dealing with extensive, high-cardinality datasets, and the utilization of machine learning techniques in predictions offers new possibilities. We examine the predictive power of Graph Neural Networks (GNNs) in estimating the value of bilateral trade between countries. We work with detailed UN Comtrade data that represent annual bilateral trade in goods between any two countries in the world and more than 5000 product groups. We explore two different types of GNNs, namely Graph Convolutional Networks (GCNs) and Graph Attention Networks (GATs), by applying them to trade flow data. This study evaluates the effectiveness of GNNs relative to traditional machine learning techniques such as random forest and examines the possible effects of data drift on their performance. Our findings reveal the superior predictive capability of GNNs, suggesting their effectiveness in modeling complex trade relationships. The research presented in this work offers a data-driven foundation for decision-making and is relevant for business strategies and policymaking as it helps in identifying markets, products, and sectors with significant development potential. [ABSTRACT FROM AUTHOR]

In this work, we develop a trade model that explains the pattern of trade between countries based on differences in total factor productivity (TFP) while also accounting for differences in relative factor endowments. The novelty stems from the introduction of production functions derived by combining the Ricardian and Heckscher–Ohlin–Samuelson (H-O-S) theories, with TFP differences serving as the basis of comparative advantage. To this end, a testable hypothesis is derived. For the empirical measurement of the TFP in each industry and country, a constant elasticity of substitution (CES)-type production function was employed, and the TFP was calculated as the Solow residual from the production function's fixed term. To offer a better understanding, the model was tested for the bilateral trade between Germany and Russia, and Germany and the Czech Republic. It was found that TFP differences can be used as a basis for explaining comparative advantages and, consequently, the bilateral pattern of trade between two countries. [ABSTRACT FROM AUTHOR]

In the context of global value chains (GVCs), the impact of the Belt and Road Initiative (BRI) on China's bilateral trade with Belt and Road countries (BRCs) is controversial. This study constructed a GVC accounting framework based on a multiregional input–output model, aiming to clarify the trends and transfer characteristics of the value added (VA) and the embodied carbon emissions (ECEs) in China–BRCs bilateral trade from 2000 to 2018 at the overall country, Belt and Road region (BRR), and typical country levels. The relevant results are threefold. (1) At the overall country level, the BRCs VA and ECEs imports and exports have shown overall increasing trends. (2) Most BRRs are net ECE exporters to China. Southeast Asia and Northeast Asia are the main ECEs destinations and sources. (3) In China–typical BRCs bilateral trade, China is a net ECEs exporter to most typical BRCs, and the net ECE transfers through route 1 (onefold value chain) are all positive, implying that route 1 can reduce ECEs in BRCs. These findings can help formulate policies and measures to reduce carbon emissions and provide a scientific basis for realizing the coordinated development of carbon emission reduction and economy in China and BRCs. [ABSTRACT FROM AUTHOR]

The integration of renewable rnergy sources (RESs) into the power grid involves operational challenges due to the inherent RES energy-production variability. Imbalances between actual power generation and scheduled production can lead to grid instability and revenue loss for RES operators and aggregators. To address this risk, in this paper, we introduce a mutually beneficial bilateral trading scheme between a RES and a DR aggregator to internally offset real-time energy imbalances before resorting to the flexibility market. We consider that the DR aggregator manages the energy demand of users, characterized by uncertainty in their participation in DR events and thus the actual provision of flexibility, subject to their offered monetary incentives. Given that the RES aggregator faces penalties according to dual pricing for positive or negative imbalances, we develop an optimization framework to achieve the required flexibility while addressing the trade-off between maximizing the profit of the RES and DR aggregators and appropriately incentivizing the users. By using appropriate parameterization of the solution, the achievable revenue for the imbalance offsetting can be shared between the RES and the DR aggregators while keeping users satisfied. Our analysis highlights the interdependencies of the demand–production energy imbalance on user characteristics and the RES and DR aggregator profits. Based on our results, we show that a win–win outcome (for the RES and DR aggregators and the users) is possible for a wide range of cases, and we provide guidelines so that such bilateral agreements between RES and DR aggregators could emerge in practical settings. [ABSTRACT FROM AUTHOR]

Since 2014, economic sanctions between Russia and Western nations have significantly altered the global seafood trade. The consequent decline in bilateral trade also had spillover effects on the rest of the world (ROW). According to earlier studies, economic sanctions appear to negatively impact bilateral trade and income. However, few studies examine how Russian sanctions affect the world as a whole and estimate their effects on the fisheries industry. This study seeks to close this gap by quantifying the extent to which Russian sanctions have impacted trade in terms of trade deflection, trade destruction, trade depression, and trade creation. To this end, panel data from 185 countries were created for the years from 2005 to 2020. With trade policy variables that account for changes in trade channels, a structural gravity trade model was specified. Based on calculations using the Poisson pseudo-maximum likelihood (PPML) fixed effect model, economic sanctions led to a 119.28% surge in Russia's seafood imports from the rest of the world (ROW), alongside a 39% decline in imports from Western countries. The extent of trade deflection, which includes the exports of Western nations diverted from Russia to the ROW markets, increased by 5.49%. The results demonstrate that trade between sanctioned states, as well as global trade, is significantly impacted by economic sanctions. [ABSTRACT FROM AUTHOR]

The rapid growth of digital trade has had a profound impact on global economies, revolutionizing trading practices and facilitating trade expansion. The purpose of this paper is to explore the digital partnership between Korea and the European Union (EU) and its implications for their shared agenda in digital trade to theorize the dynamics of digital trade. A case study method is used to explore trade between Korea and the EU with in-depth descriptive analysis. Digital trade-flow statistics were analyzed to develop the case for Korea and EU digital trade and derive implications for both countries. The findings were generalized by discussing the relevant literature and data from other countries to identify the wider implications. The analysis was focused on the areas of information and communication technology and e-commerce. The findings suggest uncovered trade imbalances, such as Korea's surplus of ICT goods exports and the EU's dominant position in online trade. There is an influence of supply chain dynamics, specifically the presence of Korean manufacturers' production units in countries like Vietnam, and the same dynamics have shaped Korea's actual place in the supply of ICT goods to the European market. While the digital partnership was established to align regulatory frameworks and foster trust, transparency, and harmonization in the digital domain, it has failed to adequately reflect the importance of digital trade. Although both sides are motivated to collaborate on the harmonization of digital trade rules, there have been instances where the partners' interests diverge. It is concluded that some political and economic factors may hinder the effectiveness of the digital partnership, unless concrete measures that go beyond traditional bilateral policymaking approaches are implemented. It is therefore recommended to emphasize the need to enhance the efficacy of the digital partnership by taking bolder actions to develop digital trade. [ABSTRACT FROM AUTHOR]

This research delves into the impact of World Trade Organization (WTO) membership on trade dynamics in the Commonwealth of Independent States (CIS) region, focusing on the potential augmentation or diversion of trade resulting from CIS countries' WTO accession. The study context is grounded in the interplay between regionalism, represented by regional trade agreements and historical connections, and global integration facilitated by WTO membership. The study also scrutinizes the potentially complicating role of the Eurasian Economic Union (EAEU) regional bloc, referencing the 'Spaghetti Bowl' phenomenon of overlapping trade agreements. The gravity model of trade serves as a conceptual foundation to understand the effects of WTO membership and regional trade agreements on trade costs. Empirical results suggest that WTO membership has not enhanced trade for the CIS. Instances of trade within the CIS region where there is only one WTO member have resulted in a positive trend, even though there is no robust evidence that it is due to WTO membership. The EAEU enhances trade and serves as a trading bloc within the region. This study highlights that while the WTO strives to foster trade liberalization and growth, its effects can be region-specific and complex, as demonstrated by the CIS region's experience. The research also hints at the importance of intra-regional trade and unique regional factors as critical determinants of trade patterns, which can enhance broader trade expansion and economic development. [ABSTRACT FROM AUTHOR]

China and Brazil established the "Comprehensive Strategic Partnership" in 2012. Since the establishment of the partnership, China and Brazil have continued to deepen economic and trade cooperation, and cooperation in various fields has achieved remarkable results. China has long been consistent in maintaining its status as Brazil's largest export destination and source of imports. The total volume of bilateral trade between China and Brazil has significantly increased, and the trade structure in goods is becoming increasingly diversified. The total volume of bilateral trade between China and Brazil has grown considerably, and the trade structure in goods has become increasingly diversified. On 20 April 2023, when Brazilian President Lula visited China, China and Brazil issued a joint statement on deepening the "Comprehensive Strategic Partnership", further deepening the cooperation in trade in goods has become a consensus. From the perspective of goods trade under the comprehensive strategic partnership, the article analyses the complementarities and competitiveness of goods trade between China and Brazil with the help of relevant formulas to form a complete and transparent study of the goods trade between the two countries. [ABSTRACT FROM AUTHOR]

Russia and the EU represent two economic blocs with high-value bilateral trade, especially in several specific sectors. The Russia–Ukraine war has facilitated the escalation of protectionism against Russia, and the EU and Western partners have introduced a set of sanctions on the import of goods from Russia, but also on EU exports to Russia. This analysis aims to research in detail the characteristics of the global value chains (GVCs) of the EU and Russia, focusing on their interconnections. Russia is a resource-rich country whose exports are mainly based on resources and resource-related products. Therefore, forward participation in global value chains dominates, being 4.5 times higher than backward participation. In the EU and its member states, backward participation dominates, implying a high level of dependence of the production process in the EU on import of intermediates (i.e., production inputs) from abroad. The analysis indicates a high share of value added from Russia in the sector "mining and quarrying, energy producing products" in the EU final demand where almost one-fifth of foreign value added pertains to products from Russia. On the other hand, the sectors of electrical equipment, pharmaceuticals, chemical products and construction in Russia rely on value added imported from the EU. [ABSTRACT FROM AUTHOR]

As two influential countries in the global grain production and marketing system, China and Russia have increasingly strengthened their agricultural, economic, and trade cooperation. There are few papers that have considered trade relations from the perspective of the growth effect of grain exports, and it is necessary to fill this gap by systematically sorting the grain trade between the two countries and clarifying the growth effect and influencing factors in this paper. By comparing and analyzing the quantitative and structural characteristics of grain trade between China and Russia between 1996 and 2020, this study used the H–K marginal analysis method to explore the growth path and influencing factors of the export trade of grain products between China and Russia. The results show that the main driving force of the export growth of Russian and Chinese grain products is the price margin, which presents a growth pattern dominated by price and complemented by type and quantity. The empirical analysis of the gravity model shows that the size of the agricultural economy, grain productivity, trade cost, and economic shocks have significant impacts on bilateral trade. In view of this, the status of international agricultural cooperation between China and Russia will be further optimized if they can optimize trade policies to improve the quality of trade development, build cross-border cooperation parks to construct the layout of the whole industrial chain, strengthen infrastructure construction, and deepen and expand interconnectivity. [ABSTRACT FROM AUTHOR]

We point out an equivalence between a class of games in which players negotiate while fighting and a class of games in which a buyer and seller negotiate over terms. Importantly and perhaps ironically, bargaining before fighting is strategically distinct from bargaining before a change of ownership but bargaining while fighting is equivalent to bargaining before a change of ownership. These connections and intuition from models of bilateral trade help shed light on two mechanisms for learning while frighting: inference based on observing strategic choices and information leakage on the battlefield. Debates on the relative importance of these to mechanism are addressed; some subtle clarifications to extant arguments are provided. Moreover, the importance of learning hard information from the battlefield is connected to work on Coasian Dynamics with information leakage and avenuse for future work relying on advances in behavioral theory are sketched out. [ABSTRACT FROM AUTHOR]

In liberalized markets, consumers can choose their electricity suppliers or be part of an energy community. The problem with communities is that they may not have enough weight to trade in markets, which can be overcome by forming coalitions. Electricity is traded in spot markets or through bilateral contracts involving consumers and suppliers. This paper is devoted to bilateral contracting, modeled as a negotiation process involving an iterative exchange of offers and counter-offers. It focuses on coalitions of energy communities. Specifically, it presents team and single-agent negotiation models, where each consumer has strategies, tactics, and decision models. Coalition agents are equipped with intra-team strategies and decision protocols. It also describes a study of bilateral contracts involving a seller agent and a coalition of energy communities. By allying into a coalition, members of energy communities reduced their average costs for electricity by between 2% (large consumers) and 64% (small consumers) according to their consumption. Their levelized cost reduction was 19%. The results demonstrate the power of coalitions when negotiating bilateral contracts and the benefit of a low-consumption members alliance with larger players. [ABSTRACT FROM AUTHOR]

From the formal dialogue between China and ASEAN in 1991 to the establishment of the China–ASEAN FTA in 2010, the economic and trade relations between China and ASEAN countries have developed rapidly. With the continuous development of economic and trade relations, the infrastructural level between China and ASEAN has far lagged behind the needs of exchanges and trade. How to promote the development of bilateral trade through infrastructure construction and interconnection has become a concern of governments of all countries. In the context of China's "Belt and Road" Initiative and the "Master Plan for ASEAN Connectivity", new ideas and opportunities are provided for ASEAN infrastructure construction and its interconnection with China. Based on panel data from 2004 to 2020, this paper analyzes the impact of ASEAN infrastructure on the China–ASEAN trade volume. The analysis finds that road, port, shipping and communication infrastructure positively impact the bilateral trade volume, among which ports exert the greatest impact on the bilateral trade volume and roads have the least impact. For a more in-depth study, the transportation infrastructures of land and island countries are compared and analyzed separately. The impact of road infrastructure on trade is significant for land countries, while the impact of port infrastructure on trade is more remarkable for island countries. Finally, measures and suggestions on how to promote the development of bilateral trade are proposed on the basis of the above analysis. [ABSTRACT FROM AUTHOR]

This paper revisited the link between intra-industry trade (IIT) between Portugal and Spain and Portuguese carbon dioxide (CO2) emissions. The research also considers the effects of foreign direct investment (FDI) on CO2 emissions, pondering the arguments of the pollution haven hypothesis and the halo hypothesis. As an econometric strategy, this investigation has applied panel data, namely a Pooled Mean Group of an Autoregressive Distributed Lag (ARDL) model and Panel Quantile Regression (PQR). The preliminary unit root tests indicated that IIT, Portuguese and Spanish renewable energy, and Portuguese FDI are integrated into the first differences and stationary with the second generation test (Pesaran methodology). In the next step, this study applied the multicollinearity test and cross-dependence between the variables. The variance inflation factor test demonstrated that FDI and IIT have no multicollinear problems. However, as expected, collinearity exists between Portuguese and Spanish renewable energy. Regarding the cross-sectional dependence test, this investigation concluded that the variables have a dependence between them. The cointegration test revealed that the variables are overall cointegrated. In the econometric results with the ARDL estimator, this investigation has found that IIT between Portugal and Spain is negatively correlated with Portuguese CO2 emissions, showing that this type of trade encourages environmental improvements. However, the PQR demonstrates that there is an opposite relationship. According to this, Portuguese and Spanish renewable energy is negatively impacted by CO2 emissions, revealing that renewable energy aims to decrease pollution. Finally, Portuguese FDI reduces CO2 emissions, which is explained by product differentiation, innovation, and monopolistic competition. [ABSTRACT FROM AUTHOR]

Turkey's government seeks to apply both "religious soft power" and "economic soft power" to increase its influence in Ghana. Turkey's religious soft power relationship with Ghana is exemplified by Turkey's paying for construction of a new national mosque in the African country, at a cost of USD 10 million. Turkey's economic soft power relationship with Ghana is exemplified by both considerable recent investments and in fast-growing bilateral trade. The overall aim of the government of Turkey is to increase the country's influence in Ghana, part of a wider initiative to expand its regional influence in Africa. Ghana is important to Turkey as it is regarded as a strategically important African country, one of the region's few democracies and an economic success. The paper assesses Turkey's various forms of influence in Ghana and considers what Turkey hopes to achieve in foreign policy terms. The paper is in four sections. The first examines religious soft power and Turkey–Ghana relations, noting that recently they have become closer and more cordial, involving both religious and non-religious aspects. The second section examines Muslims' traditionally marginal political position in Ghana and explains that over time Muslims have become more politically assertive, open to external religious influences, including from Turkey, a country well known to use religious soft power to try to expand its foreign policy influence. The third section assesses recent Ghana-Turkey relations, including the expansion of Turkey's economic soft power, with three examples: the national mosque, encouraging Islamic education, and mutual desire to quell the activities of what the government of Turkey refers to as the "Fethullah Terrorist Organisation". The section also considers the role of Turkey's economic soft power in increasing the country's presence in Ghana. The concluding section argues that the government of Turkey uses several techniques to increase its influence in Ghana, including both religious soft power and economic soft power. The government of Ghana broadly welcomes Turkey's influence from both religious and economic perspectives: from a religious point of view, Turkey's Sunni orthodoxy is seen as very unlikely to stimulate radicalization among Ghana's Muslims, while Turkey's economic presence is welcomed as an important means to help further build Ghana's economy. [ABSTRACT FROM AUTHOR]

Trade is an important means to achieve the Sustainable Development Goals (SDGs) Target 2.1 "Zero Hunger", and comparative advantage can be used to explain the causes and performance of trade. This study measures the static distribution of agricultural trade comparative advantage in countries along the Belt and Road (B&R) and China by utilizing the Balassa revealed comparative advantage (RCA) index, and further calculates its dynamic change by utilizing the revealed symmetric comparative advantage (RSCA) index and the ordinary least squares correlation analysis. The results show that: (1) in the face of multiple unfavorable factors, the initial comparative advantage of most agricultural products at Harmonized System (HS) 2-digit level in countries along the B&R and China deteriorated, simultaneously, but the initial comparative disadvantage of most and some agricultural products at HS 2-digit level in countries along the B&R and China improved, respectively; (2) the present agricultural trade comparative advantage in most countries along the B&R was higher than China and had a larger extent of change, but the current product structure of their bilateral agricultural trade was in line with each other's comparative advantage, indirectly proving the validity of the Heckscher–Ohlin theorem. Our research findings suggest that the agricultural trade comparative advantage in countries along the B&R and China need to be further utilized to improve agricultural trade performance and better play its important role in ensuring global, regional, and national food security. [ABSTRACT FROM AUTHOR]

Agricultural products are essential for human survival, and strengthening agricultural trade cooperation between China and countries along the "Belt and Road" (B&R) can promote food security, but there are few studies on bilateral trade fluctuation factors in the literature. This paper uses the modified multi-country multi-product CMS (constant market share) model and the two-country multi-product CMS model to decompose the fluctuation of agricultural trade between China and B&R countries by stage, region, and agricultural product type. The results show that in recent years, in the fluctuation of China's exports to B&R countries, in overall agricultural products, the demand effect plays a major hindering role, accounting for −9.2%; in the region, Southeast Asia has the largest share of trade, which is mainly pulled by the joint demand effect, structural effect and competitiveness effect; in specific agricultural products, animal, fruit and vegetable, and food processing products are mainly pulled by competitiveness. In the fluctuation of B&R countries' export to China, in overall agricultural products, the demand effect pulls the largest share, accounting for 72.55%; in the region, Southeast Asia is mainly driven by the joint pull of demand effect, structural effect. and competitiveness effect; in specific agricultural products, animal, fruit and vegetable, and food processing products are mainly driven by the pull of demand effect. The findings of this paper can provide a basis for making decisions on food security cooperation between China and B&R countries. [ABSTRACT FROM AUTHOR]

Introducing carbon trading is an essential way to decarbonize the power system. Many existing studies mainly consider source-side unilateral carbon trading (UCT). However, there are still rare studies considering source-load bilateral carbon trading (BCT). The effect of source-load BCT on system-wide carbon mitigation is worth studying. To fill this research gap, a hierarchical low-carbon economic-dispatch model with source-load BCT based on the Aumann–Shapley method was proposed. In the first layer, economic-dispatch was conducted to minimize the power-generation costs and source-side carbon-trading costs. Then, based on the carbon-emission flow (CEF) theory, the actual load carbon emissions can be obtained and passed to the second layer. At the second layer, the demand-response optimization was performed to minimize the load-side carbon-trading costs. Finally, the proposed model was tested on the modified New England 39-bus and IEEE 118-bus systems using the MATLAB/YALMIP platform with the Gurobi solver. The results indicate that the proposed model can effectively facilitate peak-load shifting, wind-power consumption, and carbon mitigation. Furthermore, compared with the models only considering source-side or load-side UCT, the proposed source-load BCT model has obvious advantages in carbon mitigation. [ABSTRACT FROM AUTHOR]

This paper aims to examine the symmetric and asymmetric effects of third country exchange rate volatility on the trade flow between the US and EU from January 2003 through March 2021. The monthly disaggregated data of the top twelve export and import industries are the sample frame. We find that separating increased volatility from declines and introducing a nonlinear adjustment to the volatility shows a more significant outcome than symmetric analysis. Different industries carry distinctive behaviors regarding exchange rate risk, and the third country effect plays a vital role in trade. Moreover, increased CNY/USD real exchange rate volatility increases bilateral trade between the US and EU. [ABSTRACT FROM AUTHOR]

In the context of the high incidence of flooding disputes among neighboring subjects in the basin, exploring the drainage rights trading mechanism and clarifying the pricing method of drainage rights are new ideas to manage flooding disasters. In this study, the trading mechanism of drainage rights is constructed using a bilateral call auction model, in which the price constraint, the control total quantity constraint, the clearing rule, and the matching rule are explained. In addition, we adopt the wealth utility concept to construct a function, apply the social welfare function to associate the wealth utility functions of both sides of the transaction, and draw on the environmental Gini coefficient concept to construct a pricing model for drainage rights transactions based on fairness and efficiency. Finally, we conduct an arithmetic simulation of the drainage rights trading mechanism and transaction pricing for China's Jiangsu section of the Huaihe River Basin. The study's results show that the trading mechanism model can give the optimal trading scheme when multiple subjects are trading drainage rights. This fills the gap in existing studies and can lead to efficient trading of drainage rights. At the same time, the pricing model can give the optimal transaction price that considers efficiency and fairness, providing a more practical pricing theory for drainage rights trading. [ABSTRACT FROM AUTHOR]

After the annexation of Crimea in 2014, many EU–Russia projects such as the concept of Strategic Partnerships, negotiations on the New Basic Agreement, and the abolishment of visa regime, among other important issues, were suspended. On top of that, the parties involved imposed mutual sanctions which seriously damaged bilateral trade relationships. The present article aims to analyse EU–Russia bilateral trade under the sanctions and low oil prices together with such factors as the growth of Russian and the EU's GDPs per capita, geographical distance between parties and devaluation of Russian currency by applying a gravity model. Moreover, the model allows us to carry out simulations of circumstances as they would likely have unfolded had the sanctions not been imposed and if oil prices had remained at a reasonable level. [ABSTRACT FROM AUTHOR]

We construct a dynamic bilateral monopoly game to analyze the bargaining between a foreign manufacturer and a domestic retailer regarding the wholesale price and explain the foreign upstream firm's corporate social responsibility (CSR) initiative and its economic impacts on the domestic market. Under free trade, the foreign upstream firm's CSR initiative realizes improvements in consumer surplus and social welfare in the home country. A "win–win–win" strategy exists, as the foreign manufacturer has more of an incentive to implement CSR when the government implements a strategic trade policy. The consumer-friendly action implemented by the foreign upstream firm leads to adequate consumer welfare and social welfare, which mitigates the government's political hostility. With the high bargaining power of the foreign upstream firm and the low weight of the consumer-friendly upstream firm, the government should set a higher tariff rate for the foreign upstream firm to extract rent and enhance social welfare. [ABSTRACT FROM AUTHOR]

Interprovincial trade has expanded China's virtual water consumption and economic development. This study uses an environmental–economic inequality index to calculate the virtual water and economic benefit transfer imbalances in interprovincial trade and applies a structural path analysis (SPA) model to find the imbalances on the key virtual water supply chain paths between provinces. The findings are fourfold. (1) The developed provinces, such as Guangdong, Jiangsu, and Shandong, had more virtual water on the consumption side from 2002 to 2017 and had the most value added on the consumption and production sides. (2) The developing provinces in northwest and central China suffered from net virtual water outflows and negative value-added gains in bilateral trade with developed provinces. (3) The developed provinces, such as Beijing, acquired more virtual water from other provinces in 0–5 production tiers, but only a small part of the value added was transferred out. (4) All of the four top ranking virtual water supply chain paths of Beijing came from other provinces, accounting for 28.22% of the total virtual water flowing to Beijing, but their value added only accounted for 1.44%. It is suggested that provinces adopt differentiated water-use systems to reduce virtual water transfer imbalances and provide subsidies to the nodes to compensate the economic benefits on key virtual water supply chain paths. [ABSTRACT FROM AUTHOR]

Because electricity retailers must ensure that energy supply matches end-user demand, electricity that is not traded through bilateral contracts is typically traded in power exchanges which are subject to great price volatility. In Colombia, the spot price is a reflection of climate variability because approximately 70% of the country's electricity is generated by large hydropower stations. In this study, we forecast 2018′s prices and calculated its corresponding purchase margins using the 2015 to 2017 bilateral contract prices for electricity plus power exchange price information and climate information. Our forecasts included climate uncertainty and evaluated two multi-period portfolio methods for deciding among three purchasing strategies: bilateral contracts in the regulated market, bilateral contracts in the non-regulated markets, and purchases in the power exchange. The results indicate that retailers should follow a middle course that is neither conservative nor risky. Creation of portfolios independent of the multi-period method can balance purchases through bilateral contracts and in the power exchange in a way that considers climatic uncertainty. This type of balanced portfolio could control medium-term risks of price volatility and result in good levels of purchase margins. [ABSTRACT FROM AUTHOR]

This paper studies the location choice of foreign multinational firms in the Baltic economies of Estonia, Latvia, and Lithuania using a knowledge-and-physical capital model across 2004-2017. We used the Bayesian model averaging estimation method to investigate a set of possible factors that drive inward FDI. Our analysis demonstrates that factor endowments play a dominant role in driving vertical foreign direct investment, while external market barriers generate "tariff-jumping" FDI. Our analysis quantifies the effects of round-trip FDI, European integration, and external bilateral free trade agreements vis-à-vis inward FDI in the Baltics. [ABSTRACT FROM AUTHOR]

Nonlinear estimation of the gravity model with Poisson-type regression methods has become popular for modelling international trade flows, because it permits a better accounting for zero flows and extreme values in the distribution tail. Nevertheless, as trade flows are not independent from each other due to spatial and network autocorrelation, these methods may lead to biased parameter estimates. To overcome this problem, eigenvector spatial filtering (ESF) variants of the Poisson/negative binomial specifications have been proposed in the literature on gravity modelling of trade. However, no specific treatment has been developed for cases in which many zero flows are present. This paper contributes to the literature in two ways. First, by employing a stepwise selection criterion for spatial filters that is based on robust (sandwich) p-values and does not require likelihood-based indicators. In this respect, we develop an ad hoc backward stepwise function in R. Second, using this function, we select a reduced set of spatial filters that properly accounts for importer-side and exporter-side specific spatial effects, as well as network effects, both at the count and the logit processes of zero-inflated methods. Applying this estimation strategy to a cross-section of bilateral trade flows between a set of 64 countries for the year 2000, we find that our specification outperforms the benchmark models in terms of model fitting, both considering the AIC and in predicting zero (and small) flows. [ABSTRACT FROM AUTHOR]

The bilateral trade data provided by the United Nations International Trade Statistics Database are some of the most authoritative trade statistics and have been widely used in many research fields. Here, we propose a new form of inconsistency in its records, namely statistical imbalance, which refers to the phenomenon of inequality between the import or export trade value of a commodity category and the total value of all its subcategories. We investigated the frequency and spatial-temporal patterns of the statistical imbalances of 15 reporters (i.e., Australia, Brazil, Canada, China, France, Germany, India, the Netherlands, the Rep. of Korea, the Russian Federation, Switzerland, the United Arab Emirates, the United States of America, and Vietnam) from 1996–2016 and explored their distributional differences in commodity categories with a co-clustering algorithm. The results show that statistical imbalance is widespread with obvious clustering patterns. Trade records related to specific categories such as fossil fuels, pharmaceuticals, machinery, and unspecified commodity categories presented severe statistical imbalances, which may lead to erroneous trade research results. Since statistical imbalance is difficult to detect in studies focusing only on specific commodity categories, we suggested that researchers should prescreen the data for statistical imbalance to ensure the validity of their results. [ABSTRACT FROM AUTHOR]

In the post-epidemic era, cross-border e-commerce has become a new growth point for global foreign trade. Unlike traditional trade, which is dominated by marine transport, cross-border e-commerce transactions have high requirements for both marine and land transport, and the scale of their trade is accordingly limited by the level of trade facilitation i.e., the convenience of cross-border logistics in bilateral trading countries. Based on transaction cost theory, this article takes cross-border e-commerce transactions between China and countries along "The Belt and Road" as the core of the study. From the perspective of marine and land transport timeliness, the theoretical framework is constructed using the marine and land logistics infrastructure, customs clearance environment, government–governance environment, and cross-border logistics services as the main influencing paths; the GMM method is then applied in order to conduct a study on the impact of trade facilitation on the scale effect of cross-border e-commerce. The study finds that marine and land transport infrastructure has the strongest impact, with customs clearance environment and government–governance environment having the second strongest and comparable impact. The findings of the study further clarify the differences in the application of different cross-border logistics facilitation measures, and provide a theoretical basis for improving the timeliness of cross-border e-commerce transactions and reducing trade costs as well as a reference for the realization of land–sea integration and land–sea interconnection under "The Belt and Road" initiative. [ABSTRACT FROM AUTHOR]

We investigated the effect of agreements related to climate change on bilateral trade, using the Poisson pseudo-maximum likelihood (PPML) estimator on a large dataset that requires computing high-dimensional fixed effects. This study develops the concordance between commodities based on harmonized systems (HS) and technologies defined by both international and cooperative patent classifications (IPC/CPC). Using the OECD ENV-TECH classification, covering 169 exporting countries and 179 importing countries worldwide from 1991 to 2019, we determined the relationship between HS commodities and IPC/CPC climate change technologies. The main findings show that, first, the Kyoto Protocol has increased international bilateral trade in the climate change industry, while the Montreal Protocol has led to the opposite effect. In addition, the impact of environmental stringency on international bilateral trade in climate-related industries was negative and significant, refuting the Porter Hypothesis. This result was consistent within the trade between the convention countries. Therefore, national and industrial perspectives are relative, and voluntary climate mitigation methods should be applied, considering the areas where carbon reduction is relatively difficult. In other words, the conventions and policies must shift to a global paradigm in environmental protection and a more inclusive approach, with recognition of diversity in governance types. [ABSTRACT FROM AUTHOR]

The aim of this research is to determine the influence of electrical energy market regulation reform in Ukraine on the competitive environment, the reproduction processes of financial and innovative support, and the energy efficiency of the national economy. The authors have put forward and verified the hypothesis that, under conditions of institutional maturity of the Ukrainian electrical energy market, its liberalization and separation of the kinds of activity related to generation, transmission, and distribution leads to a decrease in prices, and the level of economic concentration stimulates implementation of innovations and the formation of reports on sustainable development. Over the thirteen-year time interval, a steady trend of decreasing energy intensity of the Ukrainian economy was established, and the appropriateness of energy efficiency management based on strategic targets was substantiated. The electricity market model in Ukraine is defined as a hybrid one, with an emphasis on trade under bilateral agreements. It was statistically found that liberalization of the electrical energy market in Ukraine contributed to a decrease in prices, with the exception of the areas of largest household and non-household consumers. The high level of asset concentration in the accounts of large enterprises was revealed, and the conclusion concerning the improvement of the competitive environment in the electricity production sector and the existence of the features of natural monopolies in the areas of transmission and distribution of electricity was made. The assessment of the financial competitive ability and profitability of electrical energy market entities was made, the main entities of the investment activity and the sources of their financing were characterized, and innovations were emphasized. The role of the standards of the audit of integrated reporting of the Ukrainian energy holdings and their role in ensuring sustainable development was determined. [ABSTRACT FROM AUTHOR]

The conceptual research aims to identify antecedents conducive to bilateral trade during the COVID-19 pandemic. Considering the relevance of bilateral trade for foreign policy and economy studies, there is a need for a renewed framework in times of extreme economic instability. As international commerce is essential for improving the country's economy, we have examined how economic distance, population, trade percentage of GDP, exchange rate, and political changes interconnect and relate to COVID-19, influencing trade flows. This conceptual paper illustrates the likely impact of COVID-19 on international trade by exploring pandemics' effects on standard trading parameters such as GDP, distance, policy stability, and population. We model the resulting shock as a multifaceted variable reflected in capital underutilization, manufacturing output decline, international trade costs inflation, production costs inflation, decrease in demand for certain services and shift from everyday needs towards activities that exclude the proximity between people, e.g., proclivity towards virtual market products. The sudden decrease in GDP and bilateral trade, as well as FDI, is amplified by further development of pandemics' long-term consequences. We take COVID-19 to be a technological, financial, and policy shock significantly influencing international trade and economic development and argue that it will have a varying impact on diverse sectors and economies. The paper offers preliminary insight into the pandemic-related economics that are unfolding and deduce recommendations on positive changes in trading policy to fully leverage on arising trading opportunities and point to potential research directions. [ABSTRACT FROM AUTHOR]

This study investigated the driving factors of embodied carbon emission changes in manufacturing trades through structural decomposition analysis. For empirical analysis, we developed an environmental multiregional input–output model for Korea, Japan, and China for 1995–2009. The three countries, which are economically and environmentally significant in Asia, are not only tightly linked economically through global value chains, but also close geographically, sharing various environmental issues. The results show that China is a net exporter of embodied carbon emissions to Japan and Korea, despite a substantial trade deficit. Its exports are more carbon-intensive than its imports from Japan and Korea. China's embodied emissions were mainly affected by a change in carbon-intensive production and trade structure, and Japan's and Korea's were affected by China's final demand. At the sectoral level, "Electrical and Optical Equipment", "Basic Metals and Fabricated Metal", and "Textiles and Textile Products" mainly affected the embodied carbon emission changes in these three countries. As a result, a considerable share of carbon-intensive production has shifted to China and increased consumption of China's final products and services in the manufacturing industries, resulting in a significant increase in embodied carbon emissions. Additionally, our findings at the sectoral level could provide important evidence regarding the effective environmental policies that enable sustainable industries. With the increasing interest in the embodied carbon emissions, future research would pay more attention to the bilateral trades of major carbon-emitting countries and multilateral trades. [ABSTRACT FROM AUTHOR]

Is the willingness to make trades influenced by how the total gains from trade are split between the trading partners? We present results from a bilateral trade game (n = 128) where all participants were price-takers and trading pairs faced one of three exogenously imposed trading prices. The fixed prices divided the gains either symmetrically in the reference treatment or asymmetrically in treatments favoring either the buyer or seller. Price treatments generating asymmetric gains from trade reduced desired transaction levels on both sides of the market, but more strongly by the disfavored party. The data weakly indicated a larger reduction when the disfavored party was a seller. [ABSTRACT FROM AUTHOR]

The gravity model of trade is one of the most common approaches in modern econometrics. In its basic form, the model assumes that income and distance between two partners most likely play a major role in the occurrence of trade. Despite the long history of the gravity model and its high, universal explanatory potential, its application for the forest sector is not broad and refers only to the traditional definition of the gravity approach. However, this traditional approach is not able to explain all aspects of trade at a disaggregated sector level. Consequently, the present study aims to close this research gap and reveal influencing factors for the appearance and the intensity of forest product trade by applying the structural gravity approach. This is done via linear and non-linear estimation methods for the forest sector on the whole and for thirteen forest products in detail. Three major results were found: first, the traditional gravity approach overestimates the impact of the overall income on forest sector trade. Second, the appearance of wood market trade is not always influenced by the same factors as the quantity traded. Third, with increasing processing level, determinants of forest product trade seem to be influenced by different factors. [ABSTRACT FROM AUTHOR]

This article attempts to investigate the impacts of bilateral trade on the environment by estimating the embodied carbon emissions between China and Germany over the period 1999-2018. The above impacts are broadly explored in the literature both under the framework of theoretical and empirical analysis. However, there exist fewer empirical studies exploring the nonlinear relationship between trade volumes and carbon emissions between a well-developed and emerging economies. By applying the multiregional input-output (MRIO) model, this article aims to reveal the impacts of trade on the environment in the case of China-Germany. Specifically, trade amounts between China and Germany rank high with a similarly increasing trend and both of them are large net exporting countries. However, China experienced much larger carbon emissions embodied in its exports to Germany. Despite potential concerns on the carbon leakage issue of China from Germany, we find that the bilateral trades fit an inverse U-shape in the embodied carbon emissions, which suggests that the trade between the two countries can finally reduce carbon intensity without obstructing economic development particularly in the long-term. This paper guides policy-makers to quantify the issue of CO 2 transfer among bilateral trades in order to achieve the target of trading sustainability.