The necessity of new versions of bilateral trade balances and COVID-19 : the nonlinear ARDL approach for the USA and Japan

Gocer, Ismet and Ongan, Serdar and Karamelikli, Huseyin and Rarick, Charles A. (2023) The necessity of new versions of bilateral trade balances and COVID-19 : the nonlinear ARDL approach for the USA and Japan. Foreign Trade Review. pp. 1-28. ISSN 0971-7625 (https://doi.org/10.1177/00157325231192180)

[thumbnail of Gocer-etal-FTR-2023-The-necessity-of-new-versions-of-bilateral-trade-balances]
Preview
 Text. Filename: Gocer-etal-FTR-2023-The-necessity-of-new-versions-of-bilateral-trade-balances.pdf
Final Published Version
License: Creative Commons Attribution 4.0 logo
Download (3MB)| Preview

Abstract

This study aims to reveal the need to reformulate new forms of Bilateral Trade Balances (BTBs) for a country rather than a traditional BTB. This is because the traditional BTB ratio, based on total exports and defined as the total exports/total imports ratio, cannot classify and quantify a BTB based on its economic impact content. It fails to classify because countries also export goods already imported (denotes re-export) besides exporting their domestic goods produced within the country (denotes domestic export). It also fails to quantify because, while domestic goods undergo a value-added process within a country, re-exported goods do not. In this context, for the first time, this study attempts to reformulate/reinvestigate new forms of BTBs as production-related BTB, based on domestic export and non-production-related BTB, based on re-export for the USA with Japan. Empirical findings confirm the necessity and cruciality of the proposed methodology in this study. JEL Codes: F10, F14.

CORE (COnnecting REpositories)