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Economic integration is an extremely important institutional structure for countries in international trade, which is highly competitive, with the level of globalisation, innovation and communication technology.

Previous work in the literature on regional economic integration has proposed the use of machine learning algorithms to evaluate the composition of customs unions, specifically, to estimate the degree to which customs unions match “natural markets” arising from trade flow data or appear to be driven by other factors such as political considerations. This paper expands upon the static approaches used in previous studies to develop a dynamic framework that allows to evaluate not only the composition of customs unions at a given point in time, but also changes in the composition over time resulting from accessions of new member states. We then apply the dynamic algorithm to evaluate the evolution of the global landscape of customs unions using data on bilateral trade flows of 200 countries from 1958 to 2018. A key finding is that there is considerable variation across different accession rounds of the European Union as to the extent to which these are aligned with the structure of “natural markets,” with some accession rounds following more strongly a commercial logic than others. Similar results are also found for other customs unions in the world, complementing the insights obtained from static analyses. [ABSTRACT FROM AUTHOR]

This paper aims to contribute to the understanding of the digital economy in Southeast Asia (SEA). It evaluates SEA’s digital economy industry from various perspectives, analysing the reasons for its rapid development as a non-core innovation area of the digital economy.

This study investigates the influence of exchange rate fluctuations on the informal economy within the BRICS countries from 2010 to 2019. Employing linear and nonlinear analytical methods, this research utilizes linear autoregressive distributed lag (ARDL) models to analyze the relationship between exchange rate variations and the shadow economy in each BRICS nation. The study consistently reveals significant evidence of the impact of exchange rate fluctuations on the informal economy across both short-term and long-term timeframes. Moreover, employing a nonlinear ARDL model uncovers distinct and uneven effects of exchange rate volatility among the BRICS nations, emphasizing the varied characteristics of currency fluctuations in the clandestine economy. The findings underscore the need for BRICS member states to develop and implement tailored fiscal strategies to mitigate the risks associated with exchange rate volatility. Recognizing these dynamics is crucial for policymakers and stakeholders to effectively address the unequal ramifications of the informal sector within each country. Considering these findings, policymakers must devise economic policies that account for the diverse attributes of each nation’s informal economy. Implementing measures to reduce and manage the impacts of exchange rate fluctuations can foster stability and resilience within the informal sector, ultimately contributing to broader economic development objectives. This study contributes to the existing literature by employing linear and nonlinear methodologies to explore the relationship between currency exchange rates and the informal economy within the BRICS context. The identification of varied impacts across nations underscores the importance of tailored policy responses to address the unique challenges of exchange rate volatility on informal economic activities. [ABSTRACT FROM AUTHOR]

This study analyzes the determinants of intra-ECCAS trade, with special attention paid to the role of institutional quality from 1996 to 2021.

In our study from 2000 to 2021, using the CS-ARDL technique, we explored green energy adoption in 15 ASEAN+6 countries. These nations, including Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, China, Japan, South Korea, Australia, India, and New Zealand, revealed the critical role of good governance in accelerating green energy deployment. Effective regulation and reduced corruption fostered a favorable environment for renewable energy adoption. GDP size acted as a long-term driver but sometimes led to short-term reliance on carbon-intensive sources. Financial development catalyzed the long term, while CO2 emissions posed barriers in the short and long term. Population size slowed short-term deployment, emphasizing the need for energy policy reforms. Foreign Direct Investment (FDI) played a key long-term role, with limited short-term impact. A multifaceted policy approach is crucial for promoting green energy, including transparent regulation, anti-corruption measures, incentives, environmental regulations, attractive investment climates, green job creation, and sustainable financial development. [ABSTRACT FROM AUTHOR]

This study employs OECD panel data from 2005 to 2021 and utilizes the CS-ARDL (Cross-sectionally Augmented Autoregressive Distributed Lag) method to reveal a notable positive correlation between the Human Development Index (HDI) and pension income levels. A 1% increase in HDI corresponds to approximately 0.6% and 0.7% increases in short- and long-term pension income. Additionally, green energy deployment positively influences pensions, with a 1% increase leading to about 0.09% and 0.17% increases in the short and long term, respectively. Economic size (GDP) demonstrates a robust positive relationship, and ICT development significantly impacts pension income levels. Policymakers are advised to prioritize local green power generation, sustainable pension funds, and green loans to enhance the welfare of aging populations in OECD countries. [ABSTRACT FROM AUTHOR]

This research examines economic integration within the RCEP subset of 13 countries from 2000 to 2020, focusing on the impact of green energy and digital currency adoption. A 1% increase in sustainable energy deployment yields significant short-term (0.01%) and long-term (0.05%) improvements; while, a 1% rise in electronic banking transactions results in substantial short-term (0.19%) and long-term (0.26%) enhancements. A 1% GDP increase leads to notable short-term (0.32%) and long-term (0.59%) improvements, emphasizing economic strength’s importance. Improved internet access (1% increase) contributes to short-term (0.09%) and long-term (0.10%) economic integration. Conversely, a 1% increase in economic risk corresponds to a significant long-term reduction (0.33%) in economic integration. The research suggests crucial policy implications, emphasizing prioritizing green power generation, strengthening digital infrastructure, and promoting eco-friendly blockchain technologies for sustainable economic integration. [ABSTRACT FROM AUTHOR]

This study employs the CS-ARDL estimator to model the adoption of renewable energy within BRICS nations spanning the period from 1995 to 2021. The key findings reveal that a 1% increase in foreign direct investment (FDI) has a negative impact on green consumption, with approximately a 0.21% decline in the short-term and a 0.48% decrease in the long-term. Furthermore, a 1% increase in GDP leads to a reduction of 0.04% in short-term and 0.12% in long-term green consumption. On a positive note, an augmentation in environmental tax revenues exerts a favorable influence on green consumption, with an increase of about 0.17% in the short-term and 0.20% in the long-term. The presence of a larger green financial market significantly accelerates green consumption. Policy implications encompass strategies such as attracting green FDI, financing environmentally friendly projects, developing digital green financial markets, and expanding trade networks for green utilities with other nations. [ABSTRACT FROM AUTHOR]

The majority of previous studies have asserted that the high quality of local institutions can improve the productivity effects of trade policies; yet, only a few studies have acknowledged the heterogeneous impact of these institutions. Using data from Chinese manufacturing plants, we examine the moderating effects of regional-level regulations on the effectiveness of national services trade policy. The key findings are threefold: First, as the initial degree of service liberalization advances, the productivity effect of trade liberalization diminishes. Second, opening access to foreign enterprises can substitute for pro-competitive regulatory reform. Regardless of whether the regulatory institutions related to administrative processes, law enforcement, and commercial service have improved, services trade liberalization can have significant productivity effects. Third, in contrast, when regulations to protect for local incumbents impose prohibitive costs for new entrants, the impact of services trade liberalization is highly contingent on local regulatory improvement. The confirmation that trade liberalization can potentially serve as an alternative measure for local regulation reform in Chinese context distinguishes this study from others.

This study applies Keynesian macroeconomic theory in the ARDL model to compare the growth effects of the US's AGOA and China's FOCAC multilateral trading systems in South Africa from the first quarter of 2001 to the fourth quarter of 2022. The study uses South Africa's net exports with the corresponding partner as a proxy for each multilateral trading system. This quantification stems from the fact that South Africa's trade with the US and China has significantly improved since the establishment of AGOA and FOCAC in 2000. Our findings show that none of the multilateral trading systems contribute significantly to South Africa's economic growth. Rather, they appear to be used as strategic initiatives to gain access to mineral resources and facilitate the movement of mining machinery and other inputs into South Africa. To some extent, they are used as market-seeking initiatives, particularly FOCAC. It is worth noting, however, that the mineral resource preferences of these systems vary: while China prioritizes mineral products, the US prioritizes precious metals. This suggests that China and the US scramble for natural resources in South Africa, and possibly Africa in general, is complementary rather than competitive.

This study re-evaluates the determinants of international trade in the global south, focusing on intra- and extra-SSA trade while considering financial development and institutional quality as additional predictors. It also examines whether these factors differ for south-south and north–south trade ties. We used a 22-years (ranging from 2000 to 2021) panel of 98 countries (41 from the SSA and the remaining from the ROW). A panel gravity model with Poisson pseudo-maximum likelihood (PPML) estimation is used for the analysis. The results show that financial development in origin and destination countries boosts intra-trade in SSA countries, and the developed financial sector of the destination countries contributes to both intra-bloc and international trade. Financial development of exporting countries also spurs intra-bloc trade in SSA countries and the global south. In addition, apart from common expectations, the institutional quality of exporting countries plays a deterrent role, while the institutional quality of destination countries plays a positive and significant role in trade in the global south. We identified the interaction term for financial development and institutional quality of the exporting countries with a significant and positive coefficient for the global south and the global north, and null for intra-SSA trade. For destination countries, it becomes significantly positive with SSA and the global south but negative with the global north. The findings suggest that as part of the policy measures to boost intra-bloc trade in SSA and the global south, ensuring financial development needs better emphasis.

Over time, the trade agreements are witnessing a substantial change in their provisions by encompassing provisions beyond their conventional trade domain, such as labour market regulations, environmental regulations and competition policies. Theoretically, studies argued the role of signing an agreement with deep provisions to promote trade in value‐added, but empirical verification in favour of a few is rarely available. The present study attempts to identify this set of provisions included in deep trade agreements (DTAs) that positively impact the bilateral trade in value added. Using the traditional gravity model framework and its estimation through modern econometric and machine learning tools, the study shows that incorporating provisions relating to establishing and preserving economic rights in trade agreements promotes trade in value‐added among member countries. Notably, the study found the combination of three main policy areas: technical barriers to trade, competition policy and labour market regulations. Both econometric and machine learning methods confirm the significant impact of these three provisions. Understanding the significance of specific provisions holds relevance in the current scenario where major trading economies are calibrating trade agreements. From the policy perspective, disentangling a set of provisions might be relevant for designing and negotiating trade agreements. [ABSTRACT FROM AUTHOR]

China-ASEAN relations have experienced remarkable growth and transformation over the past few decades, driven by China's emergence as a global economic powerhouse and ASEAN's dynamic regional integration efforts. However, the South China Sea issue has cast a persistent shadow over their economic partnership. This paper examines the economic relations between China and ASEAN and the impact of the issue on these relations. Employing a multi-faceted approach, the paper finds that the South China issue had a negative impact on China-ASEAN economic relations, leading to tensions and disputes, a potential economic loss, a hindered economic integration, and a more cautious approach from ASEAN countries in their economic relations with China.

In this paper, we investigate the extent to which precious metals can be used as a hedge from the perspective of global supply chain uncertainty (GSCU), which is significant for obtaining higher investment returns. This exploration uses the wavelet-based quantile-on-quantile regression (QQR) technique to identify the complex connection between GSCU and the price of precious metals (PMP). We find that GSCU has both positive and negative effects on PMP, which indicates that precious metals do not always hedge against global supply chain uncertainty, in contrast to the predictions of the theoretical model. This analysis considers multiple time scales, showing that severe GSCU can lead to a bull market in precious metals, but moderate GSCU may cause PMP to decline in the short term. However, extremely low GSCU might result in a bear market in precious metals, whereas moderate GSCU could also decrease PMP in the medium run. PMP could also be positively affected by moderate GSCU and it turns negative in the long term due to severe GSCU. A test of these results using the wavelet-based QQR technique reveals that they are robust. Because the global supply chain is strained and faces a potential crisis, our results have important implications for investment by individual investors, firms, countries, and regions.

This study explores the specifics of strengthening Central Asian regional cooperation and its potential opportunities according to Hungary’s Eastern Opening Policy.

International financial reporting standards (IFRS) have become a worldwide common accounting language which most countries have adopted. However, there are no studies obtained based on transition economies in a particular geographic zone. Thus, this study is carried out to observe the influence of IFRS adoptation on the economic growth of 11 CIS countries from 2005 to 2018. To examine the actual effect of the variables, the regression model was divided into two sub-models based on the category of variables. There is a difference between the economic growth in adopted and non-adopted states. The adoption of IFRS showed negative and insignificant relation to GDP per capita. The number of observations after fully adopting IFRS was low, the data on IFRS adoption was challenging, and an advanced econometric model should be selected. The study compared CIS results with Eastern European countries to see a clear pattern and generate an efficient suggestion for policy implementation. The policy implementations related to Uzbeki-stan were also provided.

Central and Eastern European (CEE) countries are struggling with internal and external macroeconomic and social factors in their catching-up strategies to be closer, as economic wealth, to the Western developed European countries. In these ex-communist countries, institutional factors could be seen as critical for success in narrowing the income gap. The paper proposes an analysis of the impact of economic and financial development and globalization on the income gap in 11 Central and Eastern European (CEE) countries (Bulgaria, Croatia, Czechia, Estonia, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia) for the period of 1996 to 2019, taking into consideration institutional factors. The study analyses the variables: transition coefficient as a proxy for income gap, GDP per capita, KOF Financial Globalisation Index, Financial Development Index and World Bank Institutional Indicators in a panel approach methodology and estimation of FMOLS and DOLS equations. The paper’s findings show that all considered factors have a significant contribution to the income gap in the examined period of time. Economic and financial development, as well as institutional quality, is positively associated with the closing income gap, while globalization has a negative influence. It is also revealed the direction of the causality relationship between the considered variables: from economic and financial development, globalization and institutional quality to the income gap. These findings suggest some policy recommendations in support of the continuation of the European integration process.

Aim/purpose – This paper surveys three decades of empirical literature on foreign direct investment (FDI) and international trade across the former Soviet economic space. In this survey, we outline the current state of research, discuss data limitations, and identify topics for further studies.

From the perspective of the diversity of capitalism and that of economic sociology, the article deals with the issue of center-peripheral relations as one of the key dimensions of economic diversification that determines the development opportunities of the European Union. The collapse of the convergence processes during the 2008–2010 financial crisis revealed the separateness of development trajectories of various countries and geographical regions of the EU. Without reversing this phenomenon and working out new mechanisms of development convergence and institutions supporting them, the process of European integration will enter further structural crises that may lead to the disintegration of the EU. Various classifications of the core and of the peripheries of the euro area are characterized, within which several types of countries are identified with different economic characteristics (countries of the Northern core and of the Southern peripheries of the euro area, different types of peripheries in Southern Europe and in Central and Eastern Europe, the internal core and the external core or the outer core, and the internal peripheries and the external peripheries, as well as the super-peripheries including candidates or potential candidates to join the EU). The COVID-19 crisis has an asymmetric impact on the economic situation of the Member States. As with other crises, this impact will be the result of the interconnection of the prior state of economies, structural differences in growth patterns, and responses to new challenges brought about by the pandemic. Also, the consequences of the pandemic for the reconfiguration of center-peripheral relations in the EU are discussed, with a particular focus on the CEE.

Mexico and South Korea have progressed in their commercial affairs since they began diplomatic relations in 1962. Currently, the possibility of negotiating a free trade agreement between both economies is being raised. The objective of this research is to evaluate the potential effects of such a trade agreement for both countries. For this, indexes of commercial intensity, revealed comparative advantages, complementarity, and commercial similarity are used. The results show that these two countries have intensified their trade relations, turning Mexico into South Korea's main trading partner in Latin America and giving rise to a complementary trade structure with advantages for Mexico in the trade of mineral fuels, lubricants, machinery, and transport equipment. Also, an asymmetry was found in the tariff rates that could generate commercial advantages, especially for Mexico in the primary sector in case of the signing of a free trade agreement. [ABSTRACT FROM AUTHOR]

These data were obtained from the World Development Indicators (World Bank, 2021). HT ht represents the country fixed effect, HT ht represents the year fixed effect, and HT ht is the error term. OSA Table 2 presents the estimation results of DRI using the new DRI for the 60 countries between 2005 and 2018 and a two stage least squares panel analysis. [Extracted from the article]

The article tackles the political and legal environment within the borders of the European Union (EU) member states. Determinants of the political and legal environment of the European market were identified on two levels: (1) the framework, i.e. supranational European political and legal conditions; (2) the classical political and legal environment of the EU member states. Afterwards, an analysis of individual factors of the political and legal environment in the aforementioned levels was performed. Four legal areas in the EU states were demonstrated: Roman, Anglo-Saxon, Germanic and mixed; three jurisdictional systems were identified: case law, continental and Scandinavian law; and the legal framework of the Union was found to consist of primary legislation, secondary legislation and adjudications of the Court of Justice of the EU. The problem of excessive duration of the administrative procedures, untimeliness and incomplete transposition of directives into the national law of the member states was discussed. It was also brought to attention that the diversity of laws and taxes is still a significant barrier to foreign operations of businesses in the EU internal market. It was also indicated that the integration of European law enables economic entities to perform marketing activities in the European market in the form of a representative office or a foreign branch without legal entity. Finally, it was stated that the factors of the political and legal environment are significantly unified in the supranational environment, while in the classical environment, there are some differences among the EU countries, but they allow for the use of unified marketing concepts, e.g. the concept of euromarketing.

This study investigated the influence of regional economic integration (REI) on poverty reduction and the revenue distribution in the West African Economic and Monetary Union (WAEMU) over the period 1994–2018. The second generation panel unit root tests and the Westerlund panel cointegration test were employed for preliminary analysis. The elasticities of the variables were investigated using the Pooled Mean Group (PMG) approach. The results showed that REI reduced income inequality and increased the poverty rate. Moreover, the causal relationship revealed the presence of a bidirectional relationship between REI and poverty. The feedback causal effect operated between REI and remittances, while unidirectional causality runs from REI to income inequality, from economic growth per capita to income inequality, from remittances to poverty, from the control of corruption to income inequality, and from remittances to economic growth. Consequently, the study recommends an easing of governmental regional integration restrictions and provision of subsidies that help to increase the volume of trade and financial development while reducing poverty in the union.

This paper examines the role of global and regional uncertainties on output and price dynamics connectedness between members of the Economic Community of West African States (ECOWAS) over the period of 1990 to 2020. The paper employs the Time-Varying Parameter Vector Autoregression connectedness framework to compute the spillover indexes and the non-parametric causality-in-quantile approach to analyze the causal effect of Global and Africa uncertainties on the output and price connectedness between the countries. Our findings indicate a high degree of interdependence between ECOWAS members in terms of output and prices with the exception of Togo and Mali which show the weakest vulnerability to idiosyncratic shocks from other West African countries. Also, the causal analysis provides evidence supporting a non-linear causal relationship between economic and trade uncertainties and the connectedness between ECOWAS economies, mostly at lower and median quantiles. Policymakers are advised to ensure stability in economic policies and rapid policy intervention to tackle economic crises to reduce economies' exposure to risks and speculative shocks.

Recently, studies with different methods (computable general equilibrium models, dynamic stochastic general equilibrium models, structural gravity equations) evaluated the European Union's Single Market. The problem with all these studies is that they use complex models with datasets that are not always replicable. This paper demonstrates that even a simple model of the European Union can capture the most important effects of European economic integration: the European Union's Single Market, the introduction of the Euro, and the following European Union enlargements. A simple European Union model, built with the publicly available program, EViews, serves this purpose. The dataset is also freely available from the European Commission. This makes the model results replicable. Evaluation of Austrian membership in the European Union is in the foreground of the analysis with the simple European Union model, followed by the next steps of integration, such as the introduction of the Euro and the big European Union enlargements. However, this prototype model is also able to estimate the integration effects of other European Union member states. [ABSTRACT FROM AUTHOR]

This article aims to examine and present trade relations in global value chains (GVCs) and their impact on Polish trade, emphasizing Poland's ability to react to rapid changes in the global economy, as in the case of the COVID-19 pandemic. For this purpose, the author proposed a two-stage study. The first stage focuses on analyzing selected indexes describing the Polish share and position in GVCs against the background of the European Union (EU) and OECD countries. The second stage is related to the analysis of the latest economic trade data and the reaction of Poland, the EU, and OECD to changes in international trade in 2020 and 2021 in the context of GVC. The study uses data from the OECD and WTO Trade in Value Added Database and the Eurostat Database. The relatively quick adaptation of Poland to the world's standards indicates great possibilities for adaptation of the Polish economy. The share of foreign value added in Polish exports was consistent with global trends. The export orientation of Polish production increased during the analyzed period, proving Poland's deep commitment to global production chains. Despite a similar decline in import and export in the first months of 2020, as in the OECD and the EU26, the growth dynamics in the following months were higher in Poland. Many industries in Poland are highly dependent on the smooth operation of GVCs. At the same time, the service sector is gaining importance, and its share in exports is systematically growing. The highly flexible nature of Poland's international trade allowed it to reduce the negative impact of the COVID-19 pandemic on its economy.

El artículo revisa el rápido ascenso de China en la economía mundial durante las últimas dos décadas y las implicaciones de ello sobre la gobernabilidad económica mundial y, en particular, en las crecientes tensiones de China con los Estados Unidos. Se examinan hitos relevantes como el ingreso de China a la Organización Mundial del Comercio (OMC), la crisis subprime y la pandemia de covid-19. Se documenta el tránsito de la guerra comercial entre ambas potencias a un conflicto por el dominio de las principales tecnologías del siglo XXI. El artículo culmina con una reflexión sobre eventuales impactos de este conflicto en el escenario económico global.

The recent COVID-19 pandemic or Global Health Crisis (GFH) has distorted the normal functioning of the global economies and financial markets. Previous research has shown that Islamic equities were relatively more stable than conventional ones during the 2008 Global Financial Crisis (GFC). So, this study aims to assess the effect of the COVID-19 pandemic on the performance and co-movement of the leading Islamic finance markets by employing MGARCH-DCC on daily frequency data spanning from January 01, 2017 to October 22, 2021. The findings suggest that, as expected, the pandemic outbreak has increased the volatility across the sample markets, but it faded relatively soon, indicating that Islamic equities carry hedging features and offer portfolio diversification benefits to investors. Moreover, the sample countries are less correlated during the sample period than expected. The findings have important implications for policymakers and diverse investors deciding on portfolio diversification. Global ethical and Islamic investors, including fund managers, could benefit by focusing on more stable markets and building optimal portfolios of Shari’ah-complaint equities during turbulent market conditions, such as the COVID-19 pandemic.

Convergence and economic and social cohesion remain priorities for the EU, beyond failures to achieve the objectives of the ‘Europe 2020’ strategy. Convergence and territorial cohesion, as a prerequisite for sustainable and durable development, have been the fundamental objectives that generated and developed the strategic planning in the EU, including through the two global strategies, ‘Lisbon’ and ‘Europe 2020’. The sustainability of these processes, even in periods of high economic growth, is questionable since real national convergence is based in many countries, including Romania, on large and widening divergences between regions and counties. In recent years, Romania has seen one of the most enhanced improvements in convergence compared to the EU average, from 60% in 2016 to 69% of the European average in 2019 respectively. During the same period, disparities between regions and counties have deepened. More than 10 years after EU accession and participation in the Community cohesion policy, there is still a third of the counties with less than 70% of the national average of gross domestic product per capita. The health crisis has deeply affected economic activity, but in a differentiated way, depending on the specific territorial economic structures. As a result, the objective of improved and sustainable real convergence, by bringing regions and counties closer together in terms of their level of development, is receding. The economic situation in the counties in 2020 indirectly provides support for assessing the impact of the pandemic on the territorial cohesion process. The implicit conclusion revealed by the latest statistical data is that the level of development has been the support for better resilience to the health crisis. Although the restrictions on international movement and the closure of tourist and industrial capacities have had general validity, the counties with a higher degree of disparity have been more affected.