This study investigates whether diversification of agricultural products and export partners contributes to the growth of agricultural trade in developing countries. Despite historically facing restrictive trade policies, such as quota-based preferences under the Generalized System of Preferences, many developing economies have experienced substantial growth in agricultural exports over the past five decades. Using a panel dataset of 64 low- and lower-middle-income countries from 1990 to 2018, the study employs two-way fixed-effects models to estimate the relationship between export diversification and agricultural trade. The analysis leverages data from the UN Comtrade and World Integrated Trade Solution databases, using both product-level and partner-level diversification metrics. The findings indicate that a 1
Economic diversification remains a major challenge for hydrocarbon-dependent economies, where identifying sectors with systemic influence is essential for achieving sustainable structural transformation. In Oman, existing input–output studies have primarily relied on Leontief multipliers and traditional backward and forward linkage measures, which may overlook sectors that play critical roles within the broader production network. This study advances input–output network analysis by integrating conventional linkage indicators with network centrality approaches to identify structurally influential sectors relevant to Oman Vision 2040 diversification objectives. Using the latest available Oman input–output table, the study applies backward and forward linkage analysis, along with PageRank and random walk centrality algorithms, to evaluate sectoral importance from both multiplier-based and network-based perspectives. The results demonstrate that Oman’s economic structure remains strongly hydrocarbon-centered, with oil and gas-related activities consistently ranking among the most influential sectors. However, network centrality analysis reveals that public administration, defense, and construction possess substantial systemic importance despite relatively limited traditional linkage effects, indicating that their strategic roles are underestimated by conventional multiplier approaches. Conversely, several non-oil sectors, including fisheries and social services, exhibit weak network integration, highlighting structural vulnerabilities in the diversification process. Robustness tests confirm the stability of the identified key sectors under alternative model specifications. The findings suggest that effective diversification strategies should consider production network positions and sectoral centrality, rather than relying exclusively on direct and indirect output multipliers, to strengthen economic resilience and support Oman Vision 2040 goals.
Evaluating the economic impact of trade policy in computable general equilibrium (CGE) models relies on the trade elasticities. This study builds a new, internally consistent database of trade elasticities that can be directly integrated into the CGE framework.We estimate a structural gravity model by Poisson pseudo maximum likelihood (PPML), using bilateral HS6 trade flows and applied tariff rates. The estimation yields elasticities for approximately 5,000 HS6 products, covering nearly the entire classification. The median elasticity is 5.28, and the 10th to 90th percentile span is 1.49 to 15.33, underscoring pronounced heterogeneity in price sensitivity.Each product is mapped to one of the 47 GTAP goods sectors, and the resulting elasticities are compared with the region-generic default values. The simulation experiments on U.S. tariff shocks are conducted using the estimated elasticities as well as the GTAP default parameters. The results reveal that the difference in elasticity affects bilateral imports of goods the most, leading to sign reversals of macroeconomic variables, including GDP, economic welfare, and real income for some countries.
Abstract Recently, an international environment revealed the risk of import dependency and required improvement in the domestic production of agricultural products for a stable food supply in Japan. On the other hand, at ordinary times, domestic agricultural products are increasingly exposed to competition in international markets. Since 1993, when the Act on Promotion of Improvement of Agricultural Management Foundation was enforced, fostering efficient and stable agricultural management that can withstand international competition has been a policy objective. The Japanese government has supported certified farmers, acknowledged as leading farmers in the region by municipalities, by various measures. However, why does such policy support for certified farmers contribute to strengthening the competitiveness of agriculture and making it a growth industry? In this paper, we theoretically show that the concentration of resources by policy on certified farmers improves agricultural productivity when certified farmers are regarded as the learning sector and has a productivity-spillover effect in the agricultural industry, and demonstrate the extent of the spillover effect through TFP growth rate decomposition using a cost function analysis. The analysis shows that such spillover effects increased the productivity growth rate of rice farming by about 0.27% on average nationwide.
This study examines the structural dependence of Bangladesh’s textile and clothing industry (TCI) within the national production system and benchmarks it against Vietnam and Pakistan. Using an input–output framework, the analysis quantifies economy-wide losses in total output and gross value added (GVA) when the sector’s inter-industry linkages are hypothetically removed and simulates partial disruptions to assess short-run vulnerability. Under complete extraction, Bangladesh experiences the largest systemic losses—output declines by 18
Abstract This study visualizes long-term shifts in interregional trade between Ishikawa Prefecture in the Hokuriku region and Aichi Prefecture in the Tokai region, focusing on their trade relationships with other prefectures in the Chubu region. Using the hypothetical regional extraction method and multiregional input–output tables for five time points (1995, 2000, 2005, 2011, and 2015), the economic effects of hypothetically removing these prefectures from the regional production network were analyzed. The analysis revealed that interregional trade within the Chubu region expanded in both prefectures after 2011 despite a substantial decline in production owing to the Great East Japan Earthquake. By 2015, production levels had recovered to approximately the same level as in 2005, and the trend of increasing interregional trade continued. Thus, the expansion in interregional trade observed after 2011 was not temporary; both Ishikawa and Aichi prefectures have since strengthened their trade relationships with other prefectures in the Chubu region. Positioning the Great East Japan Earthquake within the international literature on disaster propagation through production networks, this paper provides a comparable, multi-period indicator of interregional embeddedness and its persistence after large shocks. It also highlights the importance of resilient interregional trade networks in mitigating future disruptions, offering policy-relevant insights.
Since Japan’s recent financial liberalization, online securities transactions have proliferated, and changes have been promoted in the securities industry’s structure. This study investigated the differences in efficiency and scale economies between online securities firms and traditional securities firms using the stochastic metafrontier approach based on input and output distance functions. Our findings indicate that online securities firms demonstrate higher metafrontier efficiency in both input and output distance functions. In contrast, traditional securities firms exhibit relatively low efficiency. Moreover, online securities firms enjoy exceedingly large economies of scale and scope derived from the input distance function, indicating clear differences in the business characteristics of the two types of securities firms.
Abstract This study examines changes in the UK’s global value chain (GVC) participation following the EU referendum, using the Asian Development Bank’s multiregional input–output (ADB MRIO) tables for 2000–2023 to trace direct and indirect value-added flows at national and industry levels. Three key findings emerge. First, the UK’s dependence on domestic value added in exports remained consistently high. Second, while value-added trade with non-EU countries—particularly Switzerland, China, India, and the US—increased after the referendum, the EU’s share in UK value-added exports stabilized or rose slightly, and reliance on EU value-added imports remained high. Third, indirect value-added trade through third countries has gradually increased since formal EU withdrawal. Despite post-Brexit adjustments and growing diversification, the EU remains a central partner in the UK’s value-added trading activities.
Comprehensive assessments of emerging technologies are increasingly vital for understanding their impacts on industry and society. Various electric vehicles (xEVs) reduce fuel consumption but alter cost and supply structures due to changes in components and materials. Hydrogen technologies, including Hydrogen Direct Reduction Method of Iron Ore (HDRI), may significantly shift material flows and production costs. The spread of Information and Communication Technologies (ICT) is expected to transform business processes, boosting productivity and electricity demand. This study uses Input–Output analysis to model future scenarios incorporating xEVs, HDRI, and various ICT-based services. A complementary power expansion and operation planning model forecasts long-term electricity generation investments to meet rising demand. These models are integrated to simulate Japan’s industrial transformation from 2015 to 2050 in five-year intervals. Simulation results show average annual GDP growth between 0.19
This study examines the impact of environmental regulations on intra- and extra-BRICS export flows and tests the validity of the Porter hypothesis for the bloc. Within the framework of the gravity model, this study utilizes a comprehensive panel dataset on the five BRICS countries for intra-BRICS trade and bilateral trade with 15 trading partners. Aggregate and dirty exports were analyzed from 2010 to 2021. It employs system GMM (SGMM) to address the potential issues of heterogeneity and endogeneity. Results indicate that environmental policy standards in the exporting countries have a promoting effect, while those in the importing countries have an inhibiting effect on intra-BRICS exports. This implies that the Porter hypothesis is invalid for intra-BRICS export flow when considering the diverse effects of environmental regulations in both exporting and importing countries. The results also demonstrate that the Porter hypothesis is invalid when extra-BRICS export flows are analyzed using disaggregated BRICS data (separating China and India from Brazil, Russia, and South Africa). However, when analyzing extra-BRICS trade using the full BRICS data, the findings show that both exporters’ and importers’ environmental standards promote trade, validating the hypothesis. Results highlight that the Porter Hypothesis’s validity relies on the chosen environmental regulation measures.
Economic expansion in recent years has been associated with a significant increase in budget deficits. It is, therefore, imperative to examine their relationship given the contradiction of the effect of budget deficits on economic growth. The study demonstrates that the Keynesian hypothesis holds for the case of African countries, utilising dynamic models such as system GMM, quasi-maximum likelihood estimator, and bias-corrected with data from 1996 to 2022. The findings display that budget deficits and economic growth have a significant positive association in the short run. Moreover, control variables, such as the real interest rate, terms of trade, and general government debt, have been shown to exhibit a negative relationship with economic growth, except for foreign direct investment. The results indicate a single threshold level of 14.3%, which confirms the prevalence of a nonlinear relationship and demonstrates a mean-reverting behaviour over the threshold amount. It is concluded that budget deficits affect economic growth positively and beyond the threshold value negatively. Governments should expand their tax base for government revenue by prioritising strengthening revenue authorities and reducing government spending or recurrent budgets. African governments should continue to develop a political and economic environment that attracts more foreign direct investment.
The trade partnership between Bangladesh and India has strengthened significantly over the past decade, with growing integration into global value chains (GVCs). This study explores the value-added components of Bangladesh’s exports to India from 2012 to 2022, categorizing them into five groups: domestic value added (DVA) directly absorbed, re-exported DVA, DVA returning home, foreign value added (FVA), and double-counted trade. Using the global value chain framework and input–output analysis, the research employs multiregional input–output (MRIO) tables from the Asian Development Bank, covering 62 economies and 35 sectors. This methodological approach provides a detailed examination of sectoral and bilateral trade dynamics, highlighting the shifts in value-added contributions over the decade. The results reveal an increasing trend of backward participation in GVCs for Bangladesh, particularly in the textile sector, where the contribution to India’s GVC participation rose by 182%. Other sectors, including agriculture, food and beverages, leather, and telecommunications, also exhibited notable trends. The agriculture sector saw a modest rise in value-added exports of final (4%) and intermediate (3%) goods, while the food and beverage sector experienced a 56% increase in intermediate exports despite a decline in final goods. The textile sector achieved a 15% growth in intermediate exports and a 13% increase in FVA. These findings underscore the need for sectoral diversification and an enhanced focus on intermediate goods to strengthen Bangladesh’s trade position. By providing a decade-long, sector-specific analysis, this study offers valuable insights for policymakers and stakeholders aiming to optimize GVC integration.
This study investigates the economy-wide effect of land rent in Thailand, addressing a gap in the literature by focusing on the distribution of land rent income across different household groups. Using a Social Accounting Matrix that disaggregates land rent from capital return, the study applies Structural Path Analysis to trace the effects of sectoral growth in the five sectors with the highest land rent on household incomes. Results reveal considerable disparities in income distribution, with land rent income heavily concentrated among the richest households. The study further evaluates the potential of redistributive policies to mitigate these inequalities through a multiplier model. Two counterfactual scenarios are explored, reallocating 10% and 25% of land rent income from the richest households to poorer households. Findings suggest that redistributing land rent income can significantly reduce income inequality. These results offer valuable policy insights, emphasizing the need for targeted land rent redistributive measures to promote equitable economic growth in Thailand.
Karl Popper, Austrian–British philosopher, proposed “three worlds” in 1970’s; world 1 being the world of physical objects and physical states, world 2 being the world of mental states, and world 3 being the world of products of human minds. This paper proposes that capital formation as well as production should be able to be described in terms of Popper’s world 1 only. We call this “world 1 criterion” concerning the production boundary (and the capital boundary). Unfortunately, the present SNA rules involve some failure about the treatment of world 3. Irish anomaly is a typical consequence. Patents and copy rights are not capital, residents of world 1, but rights, residents of world 3. For example, when a novel, resident of world 3, first appears in the world as an original manuscript, it is a resident of world 1 as well. The 1993 version of SNA called this type of world 3 assets “entertainment, literary and artistic originals.” It is this world 1 product (the original of the novel) that national accounts statistics should record as production and capital formation. The present paper seeks to make clear where the SNA failed and consider how you can fix it. Among them, the tangible-intangible distinction will be examined. Software, database, as well as data in a digital form should be regarded as world 1 products which exist physically. The category “intellectual property products” which newly appeared in the SNA 2008 is so motley that re-examination is definitely needed.
In achieving the African Union Agenda 2063—The Africa We Want—and financing SDGs, African economies will require an unprecedented mobilization of resources. This study examines the role of financial development on the nexus between domestic resource mobilization (DRM) and inclusive growth using an unbalanced panel of 31 African countries from 1990 to 2022. The study finds that: (1) in the presence of a sound financial sector, DRM contributes positively to inclusive growth; (2) African countries with higher inclusive growth benefit more from the positive impact of tax revenue than those with lower growth; (3) regional characteristics differ in terms of the impact of DRM on inclusive growth; and (4) countries must maintain an annual threshold of DRM and financial development to harness the benefits of DRM. The empirical results are robust to different measures of DRM and estimators (two-step system GMM, Machado and Silva quantile regression, and the dynamic panel threshold model). In leveraging the benefits of DRM, the study recommends that African governments should improve their financial sector, and they can learn from the success story of the South African Financial Sector Development and Reform Program.
The study of the linkages between regions to identify key economic regions generally uses the hypothetical extraction method proposed by Dietzenbacher et al. (Econ Syst Res 5(2):185–206, 1993). This approach assumes a partial hypothetical extraction (PHEM), as it excludes only intermediate input flows. We use an extension of the hypothetical extraction method (Tormo et al. in Econ Syst Res 36(2):292–318, 2024. 10.1080/09535314.2022.2157249), referred to as full extraction (FHEM), as the extraction of a region also affects final demand and value-added flows. In this study, the FHEM is compared with the PHEM, both from a theoretical point of view, based on the decomposition proposed by Rose and Casler (Econ Syst Res 8(1):33–62, 1996), and from an empirical point of view, applying it to Spanish regions. The results show that, in equilibrium, full backward and full forward dependencies are similar and the PHEM does not adequately quantify the relevance of regions since it varies depending on whether they are analysed from the demand or supply side.
This study examined the impact of institutional quality on trade competitiveness in African Continental Free Trade Area using panel data generated from 53 African Continental Free Trade Area ratified member countries from 2005 to 2018. Pooled mean group, anchored on the revealed symmetric comparative advantage theory, against mean group based ARDL model was adopted as suggested by Hausman test. It was found among others by the study that in the long run, control of corruption, government effectiveness, political stability, absence of violence and terrorism, improved regulatory quality and, strong and impartial rule of law significantly encourages trade competitiveness in AfCFTA countries by about 19.43705%, 7.29468%, 2.19780%, 35.19884%, and 23.84002% respectively. In the short run, inadequate fight against corruption, political instability, violence and terrorism, low index of voice and accountability and, infrastructural factors/quality decadence have negative significant impact on trade competitiveness in AfCFTA countries by about 20.7835%, 15.26566%, 58.94717%, and 27.99211% respectively. It was therefore recommended among others by the study that AfCFTA governments and citizens should strive more to effectively control corruption not only in the public sector but also, in all institutions of human endeavours and, as well as the private sector through campaign against every acts of corruption.
This study aims to explore a method for compiling input–output (I–O) table by firm size: specifically for small and medium enterprises (SMEs) and large enterprises (LEs), using a non-survey method. As a pioneering approach, this study constructs I–O tables by firm size of Vietnam for the years 2015 and 2021 using Vietnamese firm-survey data. The RAS method is employed in allocating intermediate inputs and inter-trade between SMEs and LEs. Non-surveyed method takes less time and cost for constructing I–O table by firm size. This study then investigates the role of SMEs in the Vietnamese economy. The results highlight the significant contributions of SMEs to Vietnam's economy, particularly in key manufacturing sectors, such as food, beverage, and tobacco; wood and wood products; pulp, paper, and printing; and manufacturing, nec, and recycling, from the demand side. In addition, the analysis presents a strong inter-connection between SMEs and LEs in the agriculture sector, chemical and chemical product sectors, and basic metals and fabricated metal sectors. SMEs in these sectors contribute to LEs’ production and Vietnam’s economy. Supporting SMEs in these sectors can be beneficial to the economic growth and industrialization of Vietnam.
In this paper, we introduce a stochastic frontier model that incorporates efficiency effects and a heteroskedastic error structure. The mean efficiency is specified by a logistic function of the effects variables and the distribution for the one-sided random variable representing inefficiency is left unspecified. In contrast to conventional efficiency effects models, our approach does not necessitate the use of the JLMS (Jondrow in J Econom 19:233–238, 1982) transformation for computing efficiency scores. Efficiency scores are derived directly from the estimated model parameters using feasible generalized non-linear least squares. In order to illustrate the practical applicability of our proposed model, we present an empirical example using OECD electricity generation data.
This paper investigates market structure, conduct, and performance in the context of the banking industry of India, and, in particular, the effects of consolidation. Using an unbalanced panel dataset comprising 30 banks from 2010 to 2020, the effects of changes in the degree of market concentration, interest rate spreads, and profitability are explored through panel Vector Auto-regression (PVAR) method. By employing Concentration Ratio (CR4) as a measure for consolidation, we analyse how the changes in structure of the sector affect the conduct and performance. Our findings indicate that banks operating in more concentrated markets tend to enjoy sustained profitability in the short term, as reflected by the positive relationship between market concentration (CR4) and interest rate spreads (IRS). However, competition continues to moderate this relationship, and the effects of concentration are not fully captured by market-based performance measures like Tobin’s Q. This suggests that market participants anticipate future competition or regulatory intervention, which could mitigate the benefits of concentration over time. The findings provide important implications for the regulatory policy and managerial strategies of the banking system in view of the ongoing banking consolidation processes.
