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Regional Exporting Activity. Assessment of Determinants in Light of Contemporary Foreign Trade Theory for Poland and Spain

Goal: Regional Exporting Activity. Assessment of Determinants in Light of Contemporary Foreign Trade Theory for Poland and Spain

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Jarosław Nazarczuk
added a research item
The book provides a comprehensive approach to the assessment of the nature of exporting activity, combining well-established theoretical reasoning with empirical evidence, and also signalling important economic policy recommendations. It is suitable for a wide range of recipients, ranging from scholars and students, to policy-makers or local/regional authorities engaged in the process of designing/implementing regional policies. Regional authorities show more interest in export potential because globalisation makes the regional economies more open and vulnerable to external economic shocks. The international trade channel has become an important factor influencing the region’s economic performance, including dynamics and volatility of economic growth as well as labour market performance. Due to economic transition and the accession to the EU, Poland’s regions have become more open than ever. For regions of both Poland and Spain (an EU country similar to Poland in terms of size and the number of administrative units), being part of the EU’s internal market with a free circulation of goods and capital – exerts competitive pressure, which can be regarded a stress test showing the regional adaptive capacity and competitiveness. Apart from the in-depth review of the regional export activity of Poland and Spain, the book also provides similar insights for Canada and Australia, in terms of their regional export performance and trade policy.
Laura Márquez-Ramos
added 2 research items
Our contribution to the literature is threefold. First, we identify “hot issues” in the Australian context regarding foreign trade in regions. To do so, we review the existent related literature for Australia at both country and regional level. Second, we provide a comprehensive collection of stylised facts about foreign trade (exports) in Australian regions. Finally, we interact trade policy and economic inequality with trade patterns and trends in Australian regions. More specifically, we focus on the co- movements of Australian foreign trade (exports/openness) with trade liberalisation and unemployment. Crucially, in our analysis, we focus on both trade in goods and trade in services.
We go beyond standard determinants of trade intensity and aim at the identification of the impact of several new variables to explain regional trade, which we refer to as non-orthodox factors. To do so, we focus on regional trade statistics from regions in Poland and Spain and we analyse their determinants of bilateral trade flows.
Jarosław Nazarczuk
added 16 research items
Regions differ in terms of their economic openness. The aim of this part of the project is to analyze the situation of Polish regions (NUTS2 level) and identify these differences. The paper presents indicators characterizing exports, such as: exports per capita, share of regions in national exports, geographical structure of exports, 5 most important exports product groups, value of 1 kg of exports mass, the share of the EU-countries in regional exports, and indices: HHI, Krugman’s Specialization Index. The analysis covers the years 2005 – 2015. The statistics used refer to the place of registration of the exporters.
Regions differ in terms of their economic openness. The aim of this part of the project is to analyze the situation of Polish regions (NUTS2 level) and identify these differences. The paper presents indicators characterizing exports, such as: exports per capita, share of regions in national exports, geographical structure of exports, 5 most important exports product groups, value of 1 kg of exports mass, the share of the EU-countries in regional exports, and indices: HHI, Krugman’s Specialization Index. The analysis covers the years 2005 – 2015. The statistics used refer to the place of registration of the exporters.
Regions differ in terms of their economic openness. The aim of this part of the project is to analyze the situation of Polish regions (NUTS2 level) and identify these differences. The paper presents indicators characterizing exports, such as: exports per capita, share of regions in national exports, geographical structure of exports, 5 most important exports product groups, value of 1 kg of exports mass, the share of the EU-countries in regional exports, and indices: HHI, Krugman’s Specialization Index. The analysis covers the years 2005 – 2015. The statistics used refer to the place of registration of the exporters.
Jarosław Nazarczuk
added a research item
After the announcement in June 2016 that the UK would leave the EU, studies analysing the consequences of this reversal in economic integration have proliferated, mostly presenting prospective consequences for the UK economy. But Brexit will necessarily also have consequences for non-UK European countries and their regions. Given the different character and intensity of regions’ interconnections with the British economy, we assess Polish and Spanish regions’ vulnerability to Brexit in the sphere of foreign trade. We rely on the conceptual framework originally presented by Turner et al. (2003) comprising: exposure, sensitivity and resilience, which together describe the overall vulnerability to a specific phenomenon. We fill the gap in the Brexit-related literature by applying the perspective of the regions of other EU countries, engaged in trade relations with the UK. We show that geography “still matters” and due to gravity, path dependency and FDI, some regions have developed relatively stronger commercial links with the British economy. We expected to obtain the taxonomy or Polish and Spanish regions ‘mixed’ within the identified clusters of vulnerability. However, it is not the case, because clusters are mainly composed by Spanish or Polish regions, with a few exceptions, in which several Polish regions are accompanied by one or two Spanish regions. The results show greater vulnerability of Spanish (more exposed but better prepared) than Polish regions (more sensitive). While Brexit is rather perceived as a national problem, its asymmetrical impact on regions’ economy through the trade channel is a serious challenge for regional policy. It is therefore the role for regional institutions to monitor the vulnerability to the Brexit consequences and to facilitate adjustments to the exporting (and importing) companies that will be severely affected. They can be assisted in searching for the alternative export (import) markets.
Jarosław Nazarczuk
added a research item
Spatial distribution of exporters only recently has attracted the attention of researchers, while the location of economic activity as such has been subject of profound analysis for a long time. Regions have become more open and thus vulnerable to external shocks. Nevertheless, the increase in the number of exporters in the population of firms is one of the top priorities of regions’ economic policy agenda, as it improves competitiveness and overall productivity. Literature overview shows an important gap, which is insufficient consideration of the role of ownership, as regards the determinants of the spatial distribution of exporters. The study identifies the differences between the determinants of spatial location of foreign-owned exporters (FOEs) and domestic-owned exporters (DOEs), in particular the role of metropolis, the proximity to infrastructure and the consequences of historical factors and thus the path dependency. The FOEs and DOEs differ in their location preferences. In particular, our results indicate that FOEs pay more attention to proximity to infrastructure and are more susceptible to the presence of agglomeration externalities in the vicinity of metropolitan areas. In addition, historical factors affect the spatial distribution of exporters, especially if the interaction of path dependency and infrastructure endowment is introduced.
Jarosław Nazarczuk
added a research item
Spatial distribution of exporters only recently has attracted the attention of researchers, while the location of economic activity as such has been subject of profound analysis for a long time. Regions have become more open and thus vulnerable to external shocks. Nevertheless, the increase in the number of exporters in the population of frms is one of the top priorities of regions’ economic policy agenda, as it improves competitiveness and overall productivity. Literature overview shows an important gap, which is insufcient consideration of the role of ownership, as regards the determinants of the spatial distribution of exporters. The study identifes the diferences between the determinants of spatial location of foreign-owned exporters (FOEs) and domestic-owned exporters (DOEs), in particular the role of metropolis, the proximity to infrastructure and the consequences of historical factors and thus the path dependency. The FOEs and DOEs difer in their location preferences. In particular, our results indicate that FOEs pay more attention to proximity to infrastructure and are more susceptible to the presence of agglomeration externalities in the vicinity of metropolitan areas. In addition, historical factors afect the spatial distribution of exporters, especially if the interaction of path dependency and infrastructure endowment is introduced.
Tomasz Brodzicki
added a research item
Most of the empirical studies in the literature on intra-industry trade are conducted at the country level. Countries, however, differ in terms of granularity and internal heterogeneity. In the present study we empirically identify the determinants of the overall IIT as well as its horizontal and vertical components in the trade of Spanish and Polish NUTS-2 regions with all existing trade partners over the period 2005–2014. In order to obtain unbiased results, we utilize a semi-mixed effect model, estimated with the PPML method. We estimate the models jointly for all Spanish and Polish regions and then disjointly in a comparative manner – in order to identify incongruities of reaction to the various factors investigated. These include both traditional factors and a number of unorthodox factors such as regional path dependence, quality of regional institutions, the core or peripheral status of the reporting region.
Tomasz Brodzicki
added a research item
Most of the empirical studies in the literature on intra-industry trade and on the factors affecting trade are performed on the country level. Countries, however, differ in terms of granularity and internal heterogeneity at the regional level. This internal differentiation in terms of intra industry (IIT) patterns, which could affect countries’ overall trade pattern, is thus not typically taken into account. In contrast, in the present study – using a unique dataset – we conduct an analysis at the level of NUTS2 regions of two large EU Member States (Poland and Spain) of similar size, level of development, a number of regions and the extent of international regional diversity. This allows drawing more thorough and robust conclusions, as regards the nature of IIT and its determinants. IIT is measured at the 4-digit level of products CN classification. We first describe the overall pattern of IIT for regions, and then empirically identify the determinants of overall IIT as well as its horizontal and vertical components in trade the Spanish and Polish NUTS-2 regions with all existing trade partners on bilateral basis over the period 2005-2014. In order to obtain unbiased results, we utilise a novel empirical approach - a semi-mixed effect model, estimated with the Poisson Pseudo Maximum Likelihood estimator. We estimate the models jointly for all Spanish and Polish regions and then disjointly in a comparative manner – in order to identify incongruities of reaction to various factors investigated. These include both traditional factors, postulated by the standard theoretical models, as well as a number of factors related to the regional dimension of our analysis such as regional path dependence, quality of regional institutions or the core or peripheral nature of reporting region. The study contributes significantly to the analysis of determinants of IIT. We go beyond the traditional approach to IIT analysis (focused on countries). By treating regions as small open economies, participating in international trade, we are able to show new, interesting aspects of IIT and its determinants.
Tomasz Brodzicki
added a research item
Most of the empirical studies in the literature on intra-industry trade and on the factors affecting trade are performed on the country level. Countries, however, differ in terms of granularity and internal heterogeneity at the regional level. This internal differentiation in terms of intra industry (IIT) patterns, which could affect countries’ overall trade pattern, is thus not typically taken into account. In contrast, in the present study – using a unique dataset – we conduct an analysis at the level of NUTS2 regions of two large EU Member States (Poland and Spain) of similar size, level of development, a number of regions and the extent of international regional diversity. This allows drawing more thorough and robust conclusions, as regards the nature of IIT and its determinants. IIT is measured at the 4-digit level of products CN classification. We first describe the overall pattern of IIT for regions, and then empirically identify the determinants of overall IIT as well as its horizontal and vertical components in trade the Spanish and Polish NUTS-2 regions with all existing trade partners on bilateral basis over the period 2005-2014. In order to obtain unbiased results, we utilise a novel empirical approach - a semi-mixed effect model, estimated with the Poisson Pseudo Maximum Likelihood estimator. We estimate the models jointly for all Spanish and Polish regions and then disjointly in a comparative manner – in order to identify incongruities of reaction to various factors investigated. These include both traditional factors, postulated by the standard theoretical models, as well as a number of factors related to the regional dimension of our analysis such as regional path dependence, quality of regional institutions or the core or peripheral nature of reporting region. The study contributes significantly to the analysis of determinants of IIT. We go beyond the traditional approach to IIT analysis (focused on countries). By treating regions as small open economies, participating in international trade, we are able to show new, interesting aspects of IIT and its determinants.
Jarosław Nazarczuk
added a research item
Objective: The objective of this article is to evaluate the role of specialisation in the export success of counties (powiats) (LAU 1) in Poland between 2004 and 2015. Research Design & Methods: Using panel fixed-effects regressions with Driscoll and Kraay standard errors, the authors investigate the role of export specialisation and product concentration, as well as comparative advantages on the value of log exports per capita, controlling for other important export determinants. Findings: Estimations of the panel model bring the conclusion that specialisation in a positive way contributes to the value of exports per capita, assessed at county level. The robustness of the obtained results has been verified by the use of several concentration and specialisation measures, incl. HHI, Krugman specialisation index, weighted RCA and concentration ratio. Implications & Recommendations: Further research is recommended to capture the consequences of differentiation in the patterns of exports among counties in terms of agricultural vs. industrial goods as well as the low-tech vs. high-tech products. Similar research is recommended to be done at NUTS-2 level in order to inquire into the rationale of smart specialisation(s). Contribution & Value Added: The main contribution of the research is showing the lumpiness of Poland’s exports at county level in terms of product specialisation and concentration. The value added is depicting the positive role of specialisation for the exports success, understood as exports per capita.
Tomasz Brodzicki
added a research item
Objective: We use the small open economy concept to identify the determinants of region's exports at a NUTS-2 level for Poland and Spain over the period 2005-2015. Research Design & Methods: We apply the Prais-Winsten method for Panel Corrected Standard Errors (PCSE) on a data panel allowing for heteroskedasticity and autocorrelation estimating a model of regional exports for a joint sample of Polish and Spanish NUTS-2 regions. Findings: We identify a number of factors which statistically significantly determine exports arising from Polish and Spanish regions. These factors are classified into the following main groups: factor conditions, FDI, infrastructure, market conditions , remoteness and geography, spatial agglomeration and technological knowledge base. Implications & Recommendations: By going beyond national trade statistics, we provide evidence which can be used at the regional level to increase participation of regions in the world economy. Political decisions which are taken at the regional level seem to matter. Contribution & Value Added: This paper combines scientific knowledge from several perspectives: international economics and international business, as well as regional science. We believe that an interdisciplinary approach is necessary to increase the knowledge which goes beyond nations, while not focusing on firms, as units of analysis. Article type: research paper
Tomasz Brodzicki
added a research item
The bond between economic growth and openness of regions is a complex and to some extent ambiguous both from theoretical and empirical perspectives. The relationship becomes even more blurred if we take into account spatial nonlinearity into account. In the present paper we critically review the theoretical and empirical literature in the two strands-economic growth and new economic geography. It seems that thee analysis of the impact of openness on economic growth of regions should take into account the various potential channels, try to prove the direction of causality and acknowledge the presence of spatial interlinkages between regions. This is in particular important for mid-size and large-size economies with a significant number of regions and large regional heterogeneity frequently due to more deep-rooted factors. It implies the use of spatial econometric techniques. JEL Classification: F21, F43, O47, R11, R12
Tomasz Brodzicki
added a research item
With the use panel data techniques, we estimate an empirical growth model for Polish and Spanish NUTS-2 regions – two similar-in-size European economies with the inferior initial level of development and at the same time major recipients of EU structural funds. The analysis is carried out for 16 Polish voivodeships and 19 NUTS2 level municipalities, provinces and autonomous communities observed over the period 2000-2014. Within the joined group of regions, we observe a clear beta-absolute and sigma-convergence. Within countries, the evidence points to divergence. The level of regional sigma convergence is similar. Of particular interest to us is the assessment of the role of broadly defined economic openness in the process of regional economic growth. The initial analysis points to the bidirectional relationship. We then estimate a dynamic panel data model with the use of two-step GMM due to non-stationary nature of the key variables. We control for potential interactions of openness with regional human capital endowments as well as other major determinants postulated by theoretical models. The obtained results are in line with theoretical predictions.
Tomasz Brodzicki
added a research item
Identification of the determinants of exports of the Spanish and Polish NUTS-2 Going beyond the usage of gravity model Bringing the analysis of trade in the regional context beyond a single country Verification of the hypotheses related to determinants of exports for Spain and Poland in order to check their universal nature We use the statistical data that are not simulated/estimated (as is often the case in similar research), which allows our research to better reflect the nature of regions’ exports We contribute to previous knowledge on the determinants of the regional export base, including a number of factors that have been typically neglected By identifying export-affecting factors, we provide important information for decision makers responsible for exports promotion at the regional level
Tomasz Brodzicki
added a research item
Most of the empirical studies in the gravity strand of empirical trade literature are conducted at the level of national economies. In contrast, in the present paper we show the results of the analysis at the level of regions of two large EU Member States of similar size, a number of regions and level of development (cohesion states), namely Poland and Spain. The paper identifies the determinants of the intensity of foreign trade of the Spanish and Polish NUTS-2 regions with all existing trade partners on bilateral basis over the period 2005-2014, within the framework of an augmented panel gravity model. In order to obtain unbiased results and escape some of the standard problems such as the heteroscedasticity and zero trade flows adjustment, we utilise novel empirical approaches, such as the estimation of a semi-mixed effect model with the Poisson Pseudo Maximum Likelihood method. We estimate the model jointly for all Spanish and Polish regions and then disjointly, in a comparative manner, in order to identify discrepancies of reaction to various factors investigated. They represent standard determinants, such as the role of distance and size, differences in the level of development and technological sophistication, as measured by the total factor productivity, exchange rate variability – as well as more structural factors: metropolitan nature of some regions, cultural and institutional variation or trade-persistence (long-term nature, historical factors such as former colonies or partitions).
Tomasz Brodzicki
added a research item
In the light of the hereto insufficient empirical evidence on the determinants of location of exporters and given the access to a unique GIS-based database for counties in Poland (LAU 1) on the distances to diverse points of interest (POIs) and infrastructure endowment, and data on regional heterogeneity, we investigate the deep determinants of exporters’ location in Poland. Our analysis is mostly driven by the concepts of NEG theory and the firms’ heterogeneity concept. With the use of econometric modelling, in the first step, we identify the determinants of regional location of exporting firms. In the second step, we try to identify the differences in the locational decisions of firms distinguished by ownership form, namely domestic and foreign-owned exporters. Our findings indicate the more predictable behaviour of foreign-owned exporters, for which the quality of transport endowment and inputs plays a more significant role in the decision in comparison to indigenous exporters, affected to a larger extent by deep-rooted factors and path-dependency. The locational preferences of FOEs are more influenced by the proximity to the airport and the motorways as well as subject to agglomeration externalities. The results point furthermore to the significance of accessibility to markets as evidenced by the role of infrastructure endowment and the role of the greater regional human capital endowment. JEL Codes: R12, F14, R15. Keywords: locational determinants, the spatial distribution of exporters, regional trade, foreign investors, Poland. Acknowledgments: The paper is a part of the project entitled “Regional exporting activity. Assessment of determinants in light of contemporary foreign trade theory for Poland and Spain” supported by the National Science Centre of Poland under the grant no. 2015/19/B/HS4/01704.
Tomasz Brodzicki
added a research item
Zipped .txt file. Data tabulated. Open in excel after importing from a txt file. Variables City City ASCII Latitude Longitude Country ISO2 ISO3 Province Approx. distance in km Matrix 7321*7321 Source of geographical data World Cities Database - Basic 2015 http://simplemaps.com/data/world-cities Utilized formula for approximate distance between cities DISTANCE: =6371*2*ATAN2((SQRT(1-(SIN(ABS(LATITUDE_2-LATITUDE_1)*PI()/180/2)^2+COS(LATITUDE_1*PI()/180)*COS(LATITUDE_2*PI()/180)*SIN(ABS(LONGITUDE_2-LONGITUDE_1)*PI()/180/2)^2)));SQRT((SIN(ABS(LATITUDE_2-LATITUDE_1)*PI()/180/2)^2+COS(LATITUDE_1*PI()/180)*COS(LATITUDE_2*PI()/180)*SIN(ABS(LONGITUDE_2-LONGITUDE_1)*PI()/180/2)^2)))
Tomasz Brodzicki
added a research item
Summary: With the use panel data techniques, we estimate an empirical growth model for Polish and Spanish NUTS-2 regions – two similar-in-size European economies with the inferior initial level of development and at the same time major recipients of EU structural funds. The analysis is carried out for 16 Polish voivodeships and 19 NUTS2 level municipalities, provinces and autonomous communities observed over the period 2000-2014. Within the joined group of regions, we observe a clear beta-absolute and sigma-convergence. Within countries, the evidence points to divergence. The level of regional sigma convergence is similar. Of particular interest to us is the assessment of the role of broadly defined economic openness in the process of regional economic growth. The initial analysis points to the bidirectional relationship. We then estimate a dynamic panel data model with the use of GMM due to non-stationary nature of the key variables. We control for potential interactions of openness with regional human capital endowments as well as other major determinants postulated by theoretical models. The obtained results are more or less in line with theoretical predictions. Keywords: regional development, economic growth, panel data, Poland, Spain
Tomasz Brodzicki
added a research item
A gravity panel data analysis of foreign trade by regions: the role of metropolises and history. Regional Studies. The paper investigates the determinants of the intensity of foreign trade of the Polish NUTS-2 regions over 1999–2011 with an augmented panel gravity model. In an attempt to obtain unbiased results, it estimates a semi-mixed effect model with the Poisson pseudo-maximum likelihood (PPML) method. The results clearly demonstrate the robustness of the gravity model. Furthermore, path dependence within the context of regional development, due to the historical partitions of Poland, still plays a significant and robust role. Trade persistence has been confirmed. Metropolitan regions, ceteris paribus, trade more intensely, which proves their role as nodes in global trade flows.
Tomasz Brodzicki
added a project goal
Regional Exporting Activity. Assessment of Determinants in Light of Contemporary Foreign Trade Theory for Poland and Spain