IDEAS home Printed from https://ideas.repec.org/a/kap/jincot/v16y2016i2d10.1007_s10842-015-0205-9.html
   My bibliography  Save this article

Bilateral Trade under Environmental Pressure: Balanced Growth

Author

Listed:
  • Feng Dai

    (Zhengzhou Information Engineering University)

  • Songtao Wu

    (Zhengzhou Information Engineering University)

  • Ling Liang

    (Zhengzhou Information Engineering University)

  • Zifu Qin

    (Zhengzhou Information Engineering University)

Abstract

Based on the advance-retreat course (ARC) model - a growth model under environmental pressure, this paper builds a bilateral import and export trade growth model under environmental pressure. By using the model, the paper analyzes the impacts of innovation on import and export growth, presents a method for computing the optimal levels of imports and exports, derives the limit values of imports and exports, and obtains the limit equilibrium between exports and imports. Finally, a strategy for promoting import and export growth and achieving a bilateral trade balance according to the limit equilibrium is designed. The findings are the following: (i) innovation growth will gradually reduce goods import and export, and services import and export will increase, (ii) the U.S. import–export structure is more reasonable than that of China, and (iii) there is big room for services import and export growth for China.

Suggested Citation

  • Feng Dai & Songtao Wu & Ling Liang & Zifu Qin, 2016. "Bilateral Trade under Environmental Pressure: Balanced Growth," Journal of Industry, Competition and Trade, Springer, vol. 16(2), pages 209-231, June.
    • Handle: RePEc:kap:jincot:v:16:y:2016:i:2:d:10.1007_s10842-015-0205-9
    DOI: 10.1007/s10842-015-0205-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10842-015-0205-9
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10842-015-0205-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
    2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Feng Dai & Songtao Wu & Ling Liang, 2014. "Capital and innovation aggregation with environmental pressure: An optimal evolution," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-16, December.
    5. Joseph Francois & Ian Wooton, 2010. "Market Structure and Market Access," The World Economy, Wiley Blackwell, vol. 33(7), pages 873-893, July.
    6. Kiminori Matsuyama, 2000. "A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North-South Trade," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1093-1120, December.
    7. Kraay, Aart & Ventura, Jaume, 2002. "Trade integration and risk sharing," European Economic Review, Elsevier, vol. 46(6), pages 1023-1048, June.
    8. Maria Cipollina & Luca Salvatici, 2010. "The trade impact of European Union agricultural preferences," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 87-106.
    9. J. R. Sanchez & J. Gonzalez-Estevez & R. Lopez-Ruiz & M. G. Cosenza, 2007. "A model of coupled maps with Pareto behavior," Papers nlin/0701016, arXiv.org.
    10. Constantinos Syropoulos, 2002. "On Tariff Preferences And Delegation Decisions In Customs Unions: A Heckscher--Ohlin Approach," Economic Journal, Royal Economic Society, vol. 112(481), pages 625-648, July.
    11. James E. Anderson & Douglas Marcouiller, 2005. "Anarchy And Autarky: Endogenous Predation As A Barrier To Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 189-213, February.
    12. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    13. Alan V. Deardorff, 2011. "The possibility of factor price equalization, revisited," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 15, pages 155-163, World Scientific Publishing Co. Pte. Ltd..
    14. Maria Cipollina & Luca Salvatici, 2010. "The trade impact of European Union agricultural preferences," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 13(1), pages 87-106.
    15. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    16. Harrigan, James, 2010. "Airplanes and comparative advantage," Journal of International Economics, Elsevier, vol. 82(2), pages 181-194, November.
    17. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    18. Roldos, Jorge E, 1991. "Tariffs, Investment and the Current Account," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(1), pages 175-194, February.
    19. Beladi, Hamid & Oladi, Reza, 2011. "An elementary proposition on technical progress and non-traded goods," Journal of Mathematical Economics, Elsevier, vol. 47(1), pages 68-71, January.
    20. Hing-Man Leung, 1998. "On wage-inequalities in the North and in the South," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(3), pages 299-315.
    21. Dutt, Pushan & Mitra, Devashish & Ranjan, Priya, 2009. "International trade and unemployment: Theory and cross-national evidence," Journal of International Economics, Elsevier, vol. 78(1), pages 32-44, June.
    22. James Melvin & Robert Waschik, 2001. "The neoclassical ambiguity in the specific factor model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(3), pages 321-337.
    23. Danilo Pelletiere & Kenneth A. Reinert, 2004. "Used automobile protection and trade: Gravity and ordered probit analysis," Empirical Economics, Springer, vol. 29(4), pages 737-751, December.
    24. Opp, Marcus M., 2010. "Tariff wars in the Ricardian Model with a continuum of goods," Journal of International Economics, Elsevier, vol. 80(2), pages 212-225, March.
    25. Marie Stack & Eric Pentecost, 2011. "Regional integration and trade: A panel cointegration approach to estimating the gravity model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(1), pages 53-65.
    26. Alan V. Deardorff, 2007. "The Ricardian Model," Working Papers 564, Research Seminar in International Economics, University of Michigan.
    27. Feng Dai & Ling Liang & Songtao Wu, 2013. "Money supply and economic growth under environmental pressure: the strategy for re-growth," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 6(1), pages 55-80.
    28. Debaere, Peter, 2005. "Monopolistic competition and trade, revisited: testing the model without testing for gravity," Journal of International Economics, Elsevier, vol. 66(1), pages 249-266, May.
    29. Henry Thompson & John Francis, 2009. "Tariff Elimination and the Wage Gap in an Industrial Specific Factors Model," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 447-460, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dai, Feng & Li, Pengpeng & Liang, Ling, 2016. "Long-term economic growth under environmental pressure: An optimal path," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 15-24.
    2. Becker, Daniel Thomas & Gundlach, Erich, 2006. "Notes on factor price equality and biased technical change in a two-cone trade model," Thuenen-Series of Applied Economic Theory 68, University of Rostock, Institute of Economics.
    3. Robert S. Chirinko & Debdulal Mallick, 2014. "The Substitution Elasticity, Factor Shares, Long-Run Growth, and the Low-Frequency Panel Model," CESifo Working Paper Series 4895, CESifo.
    4. Peter Gripaios & Paul Bishop, 2005. "Spatial inequalities in UK GDP per head: The role of private and public services," The Service Industries Journal, Taylor & Francis Journals, vol. 25(8), pages 945-958, December.
    5. Jaewon Lim & Changkeun Lee & Euijune Kim, 2015. "Contributions of human capital investment policy to regional economic growth: an interregional CGE model approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 269-287, December.
    6. Smaoui, Houcem & Nechi, Salem, 2017. "Does sukuk market development spur economic growth?," Research in International Business and Finance, Elsevier, vol. 41(C), pages 136-147.
    7. Asongu, Simplice & Andrés, Antonio R., 2015. "Trajectories in Knowledge Economy: Empirics from SSA and MENA countries," MPRA Paper 71786, University Library of Munich, Germany.
    8. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Revolution empirics: predicting the Arab Spring," Empirical Economics, Springer, vol. 51(2), pages 439-482, September.
    9. Asongu Simplice & Andrés Antonio, 2014. "Global trajectories, dynamics, and tendencies of business software piracy: benchmarking IPRs harmonization," Working Papers of the African Governance and Development Institute. 14/011, African Governance and Development Institute..
    10. Manuel R. Agosin & Gustavo Crespi & Leonardo Letelier, 1997. "Análisis sobre el aumento del ahorro en Chile," Research Department Publications 3008, Inter-American Development Bank, Research Department.
    11. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters, in: Emilio Albi & Jorge Martinez-Vazquez (ed.), The Elgar Guide to Tax Systems, chapter 2, Edward Elgar Publishing.
    12. Philippe Casin, 2003. "Une analyse structurelle de la σ-convergence. Application aux pays de la zone euro," Économie et Prévision, Programme National Persée, vol. 159(3), pages 39-52.
    13. Wei-Bin Zhang, 2017. "Growth with Endogenous Capital, Knowledge, and Renewable Resources," Romanian Statistical Review, Romanian Statistical Review, vol. 65(1), pages 19-37, March.
    14. World Bank, 2001. "Mexico Energy Environment Review," World Bank Publications - Reports 20297, The World Bank Group.
    15. Simplice A. Asongu, 2017. "Knowledge Economy Gaps, Policy Syndromes, and Catch-Up Strategies: Fresh South Korean Lessons to Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 211-253, March.
    16. Taylor, Alan M., 1999. "Sources of convergence in the late nineteenth century," European Economic Review, Elsevier, vol. 43(9), pages 1621-1645, October.
    17. Wei-Bin Zhang, 2017. "Fashion and Business Cycles with Snobs and Bandwagoners in a Multi-Sector Growth Model," Journal of Business, LAR Center Press, vol. 2(3), pages 1-13, May.
    18. Victor Court & Pierre-André Jouvet & Frédéric Lantz, 2015. "Endogenous economic growth, EROI, and transition towards renewable energy," Working Papers 1507, Chaire Economie du climat.
    19. Michael Landesmann & Robert Stehrer, 2012. "Skills and the Competitiveness of EU Manufacturing Industries," Chapters, in: Matilde Mas & Robert Stehrer (ed.), Industrial Productivity in Europe, chapter 12, Edward Elgar Publishing.
    20. Ledyaeva, Svetlana & Linden, Mikael, 2006. "Foreign direct investment and economic growth : empirical evidence from Russian regions," BOFIT Discussion Papers 17/2006, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    Import–export model; Trade environmental pressure; Policy index; Bilateral trade balance; Balanced growth;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jincot:v:16:y:2016:i:2:d:10.1007_s10842-015-0205-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.