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Assessing the displacement effect of exports with gravity trade model: China’s textile and clothing case and OBOR implications

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Lau, Y-Y, Chan, M-H and Nguyen, H-O ORCID: 0000-0002-9167-0143 2017 , 'Assessing the displacement effect of exports with gravity trade model: China’s textile and clothing case and OBOR implications' , Journal of International Logistics and Trade, vol. 15, no. 1 , pp. 19-32 .

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Abstract

This paper employs the gravity model to investigate how the growth of China’s textile and clothing (T&C) exports is displacing the exports of other Asian developing countries over the 1990-2015 period. Aggregate analyses were undertaken, and the endogeneity of Chinese exports were accounted by applying instrumental variables with country fixed effects. It was found that there was a negative impact of China’s emergence on T&C exports on other Asian developing countries. We further explored whether such displacement effect varies across Asian countries and the results showed that a more pronounced effect was found in low-income countries than high-income ones. Our findings suggest that the export competitiveness of China’s neighbors, i.e. both more and less developed Asian countries, are affected by the emergence of China in T&C Trade. The implications of China’s One Belt, One Road initiative are also discussed.

Item Type: Article
Authors/Creators:Lau, Y-Y and Chan, M-H and Nguyen, H-O
Keywords: China, Asia, gravity model, textile and clothing exports, One Bell-One Road, Silk Road
Journal or Publication Title: Journal of International Logistics and Trade
Publisher: Jungseok Research Institute of International Logistics and Trade, Inha University
ISSN: 1738-2122
Copyright Information:

Copyright 2017 Journal of International Logistics and Trade

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