This paper analyses the effects of enhanced trade between Austria and its four neighbouring Central and Eastern European countries (Czech Republic, Slovak Republic, Hungary, Slovenia) on sectoral production and regional welfare in Austria. The analysis is based on two distinct modelling traditions at the centre of regional science. The first model (a Fischer-Johansson Model of bilateral trade flows) is used to predict the volume and commodity composition of future trade flows based on a long term income scenario. The predicted long-term increases of the trade flows are huge. Exports rise by 190 % and imports by 160 % (compared to 1995). The effects of these trade flows on sectoral production and regional welfare in Austria are simulated by means of a multiregional computable general equilibrium model for the Austrian economy. The model contains the 9 Federal Provinces (NUTS-II). The likely implications of the projected trade flows are measured in terms of real income, which can be expected to rise by 1.2 %. The welfare gains will not necesarily be shared equally by all Federal Provinces. The results indicate a clear East-West pattern with the eastern regions of Austria gaining most. (authors' abstract) / Series: Discussion Papers of the Institute for Economic Geography and GIScience

The dissertation is mainly made up of three empirical theses on the Optimum Currency Area theory, business cycle synchronization, and intra-industry trade. The second chapter conducts an empirical test into the theory of Optimum Currency Area. I investigate the feasibility of creating a currency union in East Asia by examining the dominance and symmetry of macroeconomic shocks. Relying on a series of structural Vector Autoregressive models with long-run and block exogeneity restrictions, I identify a variety of macroeconomic disturbances in eleven East Asian economies. To examine the nature of the disturbances, I look into the forecast error variance decomposition, correlation of disturbances, size of shocks, and speed of adjustments. Based on both statistical analysis and economic comparison, it is found that two groups of economies are subject to dominant and symmetrical domestic supply shocks, and that the two groups respond quickly to moderate-sized shocks. Therefore, it is economically feasible for the two groups of economies to foster common currency zones. The third chapter investigates the different effects of intra- and inter-industry trade on business cycle synchronization, controlling for financial market linkage and monetary policy making. The chapter is the first attempt to use intra- and inter-industry trade simultaneously in Instrument Variable estimations. The evidence in my paper is supportive that intra-industry trade increases business cycle synchronization, while inter-industry trade brings about divergence of cycles. The findings imply that country pairs with higher intra-industry trade intensity are more likely to experience synchronized business cycles and are more feasible to join a monetary union. My results also show that financial integration and monetary policy coordination provide no explanation for synchronization when industry-level trade are accounted for. The fourth chapter extends the third chapter and explores how the characteristics of global trade network influence intra-industry trade. Borrowing the concept of structural equivalence, the similarity of two countries’ aggregate trade relations with other countries, from the social network analysis, this study incorporates this measure of trade network to the augmented gravity model of intra-industry trade. I build up two fixed effects models to analyze intra-industry trade in the raw material and final product sectors among 182 countries from 1962 through 2000. Structural equivalence promotes intra-industry trade flows in the final product sector, but it does not influence intra-industry trade in the crude material sector. Moreover, structural equivalence has been increasingly important in boosting intra-industry trade over time. / Graduate / 0508

In recent years, the use of the mode of regional trade liberalisation has proliferated, while the multilateral talks through the WTO have proceeded slowly, resulting in a debate on the role of bilateral and multilateral trade liberalisation. This thesis aims to provide new insights to this debate by studying the welfare effects of different types of trade agreements and the equilibrium outcome(s) of trade negotiation. We apply the three-country and three-good “competing-exporters model" developed by Bagwell and Staiger (1999) as our basic trade framework. By comparing the equilibrium welfare of each country under different structures of trading blocs, we clarify the welfare impacts of each trade agreement. Then we model the process of trade negotiation as a trade negotiation game, in which each country endogenously decides whether to negotiate through multilateral or bilateral trade liberalisation. By solving the equilibrium of the game, the stable structure of trading blocs and the path(s) to reach it can be found. We start with a framework in which all countries are welfare maximising. We find that at the early stage of trade negotiation, a free trade agreement (FTA) is Pareto welfare improving, despite the fact that member countries benefit more than any non-member. Although being the hub is the best position, a spoke is in a worse position than being outside a single FTA. Thus, a “hub-and-spoke" structure cannot be achieved and the unique equilibrium outcome of trade negotiation is given by multilateral free trade (MFT) through a multilateral trade agreement (MTA). The welfare-maximising analysis is followed by the examination of cases in which each government is politically motivated. The political structure we use is similar to Ornelas (2005), which follows the basic framework developed by Grossman and Helpman (1995), emphasising the interaction between lobby groups representing the special interest of one industry and the government in their home country. We first consider a circumstance where the political pressures are only from the import- competing sector. It is then generalised to a case in which all sectors are allowed to lobby the local government. Furthermore, the analysis is extended into an asymmetric world that includes two big countries and one small country. Our results show that political economy forces usually reduce the likelihood of forming trade agreements and that when the political concerns are sufficiently large, all trade agreements can be prevented by political pressures. Also, our findings suggest that the option of bilateral FTAs does not cause an initially infeasible MFT to become feasible, while a previously feasible MFT is likely to be blocked by the option of FTAs. Thus, our thesis provides some evidence to support the argument that the formation of FTAs can be a “stumbling block" for global trade liberalisation. / Thesis (Ph.D.) - University of Adelaide, School of Economics, 2009

In recent years, the use of the mode of regional trade liberalisation has proliferated, while the multilateral talks through the WTO have proceeded slowly, resulting in a debate on the role of bilateral and multilateral trade liberalisation. This thesis aims to provide new insights to this debate by studying the welfare effects of different types of trade agreements and the equilibrium outcome(s) of trade negotiation. We apply the three-country and three-good “competing-exporters model" developed by Bagwell and Staiger (1999) as our basic trade framework. By comparing the equilibrium welfare of each country under different structures of trading blocs, we clarify the welfare impacts of each trade agreement. Then we model the process of trade negotiation as a trade negotiation game, in which each country endogenously decides whether to negotiate through multilateral or bilateral trade liberalisation. By solving the equilibrium of the game, the stable structure of trading blocs and the path(s) to reach it can be found. We start with a framework in which all countries are welfare maximising. We find that at the early stage of trade negotiation, a free trade agreement (FTA) is Pareto welfare improving, despite the fact that member countries benefit more than any non-member. Although being the hub is the best position, a spoke is in a worse position than being outside a single FTA. Thus, a “hub-and-spoke" structure cannot be achieved and the unique equilibrium outcome of trade negotiation is given by multilateral free trade (MFT) through a multilateral trade agreement (MTA). The welfare-maximising analysis is followed by the examination of cases in which each government is politically motivated. The political structure we use is similar to Ornelas (2005), which follows the basic framework developed by Grossman and Helpman (1995), emphasising the interaction between lobby groups representing the special interest of one industry and the government in their home country. We first consider a circumstance where the political pressures are only from the import- competing sector. It is then generalised to a case in which all sectors are allowed to lobby the local government. Furthermore, the analysis is extended into an asymmetric world that includes two big countries and one small country. Our results show that political economy forces usually reduce the likelihood of forming trade agreements and that when the political concerns are sufficiently large, all trade agreements can be prevented by political pressures. Also, our findings suggest that the option of bilateral FTAs does not cause an initially infeasible MFT to become feasible, while a previously feasible MFT is likely to be blocked by the option of FTAs. Thus, our thesis provides some evidence to support the argument that the formation of FTAs can be a “stumbling block" for global trade liberalisation. / Thesis (Ph.D.) - University of Adelaide, School of Economics, 2009

In recent years, the use of the mode of regional trade liberalisation has proliferated, while the multilateral talks through the WTO have proceeded slowly, resulting in a debate on the role of bilateral and multilateral trade liberalisation. This thesis aims to provide new insights to this debate by studying the welfare effects of different types of trade agreements and the equilibrium outcome(s) of trade negotiation. We apply the three-country and three-good “competing-exporters model" developed by Bagwell and Staiger (1999) as our basic trade framework. By comparing the equilibrium welfare of each country under different structures of trading blocs, we clarify the welfare impacts of each trade agreement. Then we model the process of trade negotiation as a trade negotiation game, in which each country endogenously decides whether to negotiate through multilateral or bilateral trade liberalisation. By solving the equilibrium of the game, the stable structure of trading blocs and the path(s) to reach it can be found. We start with a framework in which all countries are welfare maximising. We find that at the early stage of trade negotiation, a free trade agreement (FTA) is Pareto welfare improving, despite the fact that member countries benefit more than any non-member. Although being the hub is the best position, a spoke is in a worse position than being outside a single FTA. Thus, a “hub-and-spoke" structure cannot be achieved and the unique equilibrium outcome of trade negotiation is given by multilateral free trade (MFT) through a multilateral trade agreement (MTA). The welfare-maximising analysis is followed by the examination of cases in which each government is politically motivated. The political structure we use is similar to Ornelas (2005), which follows the basic framework developed by Grossman and Helpman (1995), emphasising the interaction between lobby groups representing the special interest of one industry and the government in their home country. We first consider a circumstance where the political pressures are only from the import- competing sector. It is then generalised to a case in which all sectors are allowed to lobby the local government. Furthermore, the analysis is extended into an asymmetric world that includes two big countries and one small country. Our results show that political economy forces usually reduce the likelihood of forming trade agreements and that when the political concerns are sufficiently large, all trade agreements can be prevented by political pressures. Also, our findings suggest that the option of bilateral FTAs does not cause an initially infeasible MFT to become feasible, while a previously feasible MFT is likely to be blocked by the option of FTAs. Thus, our thesis provides some evidence to support the argument that the formation of FTAs can be a “stumbling block" for global trade liberalisation. / Thesis (Ph.D.) - University of Adelaide, School of Economics, 2009

The different ways countries trade with each other have developed during the years but the purpose, free exchange in goods and services, remains intact. The main idea of trade between countries is that both parties gain from the exchange. The European Union is the world’s biggest trading block, and in the form of a customs union there are mainly two different ways in which it theoretically can affect bilateral trade flows, namely by trade diversion or by trade creation. The purpose of this thesis is to analyze how the European Union affects the bilateral trade flows both within the union, as well as with countries outside of it. In order to examine these effects a quantitative method will be used where a regression analysis is applied based on a gravity model, observing the years 2000–2019. The results indicate a significant positive effect of EU-membership on both trade flows with different member countries, as well as with countries without a membership. The estimations from the different regressions indicate that the bilateral trade flows between member countries increases with around 33%–40%, while bilateral trade flows with countries outside of the union increases with around 3%. / Länders sätt att handla med varandra har utvecklats genom åren men syftet, fritt utbyte av varor och tjänster, är intakt. Grundidén till handel mellan länder är att båda tjänar på utbytet. Europeiska unionen är världens största handelsblock, och som en tullunion så finns det framförallt två effekter detta kan ge på länders bilaterala handel, antingen handelsfrämjande eller handelsomfördelande. Syftet med denna uppsats är att analysera hur den europeiska handelsunionen påverkar den bilaterala handeln dels med andra medlemsländer, dels med länder utanför handelsunionen. För att undersöka dessa effekter används en kvantitativ metod där en regressionsanalys genomförs med hjälp av en gravitationsmodell, där de observerade åren är år 2000–2019. Resultatet av denna studie visar ett positivt signifikant samband mellan bilateral handel med både andra medlemsländer såväl som länder utanför unionen. Estimeringarna från de olika regressionerna indikerar att den bilaterala handeln ökat mellan EU-medlemmar med cirka 33%–40% och med cirka 3% med länder utanför unionen.

This paper examines the effects of the exchange rate on bilateral industry trade in Sweden's trade with the Euro area. This is done by examining whether the J-curve effect exists using quarterly data from 1995 until 2022. Since becoming floating in the 1990s, the Swedish Krona has weakened significantly and recently, the discussion about the weakness of the Swedish Krona has gained renewed attention. Since Sweden is a small and open economy highly dependent on international trade, changes in the exchange rate may have large effects on the Swedish economy. The J-curve effect implies that the trade balance following a depreciation may initially worsen before later improving. The ARDL-approach is employed to obtain both short- and long-run effects of a depreciation on Swedish trade balance. In the 66 industries studied, little support can be found for a J-curve effect in Sweden's trade with the Euro area. Although 27 industries present short-run effects of a depreciation only five lasts until the long-run. Similarly, the results indicate that industries with a lower share of foreign inputs in their exports are affected more favourable than those with a higher share in the short run. No such results are found in the long run.

Research on ethnicity and conflict treats the concept of ethnicity as defining the actors in these conflicts, whereas research on the construction and maintenance of ethnic identity explores why ethnicity unifies individuals into a single social group. What happens when this unifying concept is divided between two enemy countries? How does this situation influence peace settlements over territorial issues, armed conflict, and economic relations between these countries? To answer these questions, I create a continuous measure of ethnic similarity between rivals. I find that ethnic similarity can facilitate cooperation and exacerbate conflictual interactions between rivals, but governments will seek to limit interactions with their rival when the cross border ethnic groups are minorities. In addition, I create categorical predictors of ethnic similarity, which reveal nuances in these relationships. Specifically, rivalries sharing a pan-ethnic identity are more likely to engage in conflict regardless of actual ethnic similarity, and dyads with a majority in one country sharing ethnicity with a minority in another country are less likely to fight once in a state of rivalry. This is because a quid pro quo exists between these rivals where one rival can reduce oppression of the minority in exchange for the other rival not supporting secessions by their co-ethnics. These pairs of rivals also are more likely to attempt peace settlements. Contested nations, which are rivalry-dyads with similar ethnic majorities, are both the most likely of the ethnically similar rival categories to engage in militarized interstate disputes, but also engage in larger amounts of interstate trade.

The gravity model for international trade is one of the most successful empirical models in trade literature. There is a long tradition to log-linearise the multiplicative model and to estimate the parameters of interest by least squares. But this practice is inappropriate for several reasons. First of all, bilateral trade flows are frequently zero and disregarding countries that do not trade with each other produces biased results. Second, log-linearisation in the presence of heteroscedasticity leads to inconsistent estimates in general. In recent years, the Poisson gravity model along with pseudo maximum likelihood estimation methods have become popular as a way of dealing with such econometric issues as arise when dealing with origin-destination flows. But the standard Poisson model specification is vulnerable to problems of overdispersion and excess zero flows. To overcome these problems, this paper presents zero-inflated extensions of the Poisson and negative binomial specifications as viable alternatives to both the log-linear and the standard Poisson specifications of the gravity model. The performance of the alternative model specifications is assessed on a real world example, where more than half of country-level trade flows are zero. (authors' abstract) / Series: Working Papers in Regional Science

A identidade compartilhada de países em desenvolvimento confere ao Brasil e à República Popular da China interesses similares no cenário internacional e fortalece os elementos que compõem a relação bilateral, consolidando o caráter estratégico dessa parceria. A complementaridade econômica impulsiona os fluxos comerciais e os investimentos entre esses Países. O anseio pelo estabelecimento de uma nova ordem política e econômica, favorável à realização dos projetos nacionais de desenvolvimento econômico e social, estimula a aproximação e a cooperação em fóruns multilaterais, como na Organização das Nações Unidas (ONU) e na Organização Mundial do Comércio (OMC). A extensão dos campos de cooperação para outras áreas estratégicas, como a ciência e tecnologia, remete ganhos substanciais à indústria, à economia e à comunidade científica dos Países. A parceria estratégica entre o Brasil e a China está centrada nesses aspectos, que podem ser sintetizados em três vertentes: econômica e comercial; política; e científico-tecnológica. Essas vertentes não esgotam a realidade e a capacidade de cooperação entre os Países, mas constituem as áreas que apresentam os resultados mais significativos. Essa dissertação propõe uma leitura sobre as contribuições da política externa brasileira à parceria estratégica, durante o governo Fernando Henrique Cardoso (1995-2002) e durante os três primeiros anos de governo Luiz Inácio Lula da Silva (2003-2005), com base na evolução das três vertentes. / The shared identity of developing countries remits to Brazil and the People`s Republic of China similar interests on the international scene and strengthens the elements that compose the bilateral relation, consolidating the strategic character of this partnership. The economic complementarity drives on the commercial flow and the investments between these Countries. The craving for the establishment of a new political and economic order, favorable to the accomplishment of the national projects of social and economic development, stimulates the approximation and the cooperation on multilateral forums, such as United Nations (UN) and World Trade Organization (WTO). The extension of the cooperation fields to other strategic areas, such as science and technology, remits substantial gains for the Countries industry, economy, and scientific community. The strategic partnership between Brazil and China relies on these aspects, which can be summarized into three tracks: trade and economics; political; and scientific-technological. These tracks do not exhaust the reality and the capability of cooperation between the Countries, although they present the most significant results. This dissertation proposes a reading about the Brazilian foreign policy contributions for the strategic partnership, during Fernando Henrique Cardoso`s government (1995-2002) and the first three years of Luiz Inácio Lula da Silva`s government (2003-2005), based on the evolutions of these tracks.