What is it about?
Using Chinese customs data on HS 8-digit products over the period of 2000–2013, this paper first investigates the impact of both foreign economic policy uncertainty (EPU) and domestic intra-industry trade on China’s mechanical and electrical product exports to 23 trading partners and applies pooled OLS regressions to conduct an empirical study. This paper finds that EPU has a significant inhibition effect on mechanical and electrical product exports; conversely, intra-industry trade can both significantly promote exports and alleviate the inhibition effect of EPU. In addition, the export impact of EPU varied with different trade patterns. It can significantly inhibit processing exports, while it has no effect on ordinary exports. The results of this paper indicate that in the context of increasing uncertainty, our findings could have far-reaching policy implications for China to build a new development pattern of domestic and international dual circulation.
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Why is it important?
The marginal contribution of this paper is mainly reflected in three aspects. First, the nexus between uncertainty and exports is analyzed from the perspective of a specific industry. The extant related literature mainly analyzes the nexus between uncertainty and trade across different industries and focuses less on a specific industry. Second, we empirically test the moderation effect of intra-industry trade and trade patterns on the relationship between uncertainty and exports based on highly disaggregated trade data. Third, the conclusions have some crucial policy implications. Further involvement in intra-industry trade and diversification of trade patterns can help firms alleviate the impact of external shocks due to policy uncertainty.
Perspectives
I hope this article can make people feel that international trade is still very interesting and even exciting in the context of increasing uncertainty, and the way to deal with uncertainty can be from different perspectives, such as inter-industry trade. Because international trade is a global issue that involves various countries and is related to the economic development of each country.
Xiugang Zhu
Hefei University of Technology
Read the Original
This page is a summary of: Economic policy uncertainty, intra-industry trade, and China’s mechanical and electrical product exports, PLoS ONE, January 2024, PLOS,
DOI: 10.1371/journal.pone.0290866.
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