Does infrastructure increase exports and reduce trade deficit? Evidence from selected South Asian countries using a new Global Infrastructure Index

Abstract

Structuralists consider that availability of infrastructure plays important role in markets connectivity and trade promotion while the lack of infrastructure disrupts markets and retards trade. Infrastructure makes a huge difference in the process of development and the comparative edge of an economy, particularly in trade (Ahmad et al. 2015; Anderson and Wincoop 2003). Researchers estimated that poor infrastructure penalize international trade (Donaubauer et al. 2018; Yeaple and Golub 2002). Countries with better infrastructure (such as Singapore and Hong Kong) perform well in international trade and punch above their weight while countries with weak infrastructure (such as Bhutan and Pakistan) perform poor on external sector

Infrastructure development, institutions, and intra-regional trade: The case of East Africa

“…Using data for the period 2003 to 2013 and estimating a random effects model, they established that improved transport infrastructure increases the volume of trade. Rehman et al (2020) obtained similar results for 6 South Asian countries by employing a pooled mean group estimator between 1990 and 2017. Shepherd (2016) employed network analysis methods to examine the link between infrastructure development, global value chains, and trade facilitation performance for 44 countries in Sub-Saharan Africa (SSA).…”

“…The role of infrastructure on regional trade flows has been investigated in a number of previous studies (Ismail and Mahyideen, 2015;Shepherd, 2016;Raychaudhuri and De, 2016;Rehman et al, 2020). However, there is little understanding of how different forms of infrastructure and institutions affect intra-regional trade flows, particularly in East Africa.…”

The Nonlinear Relationship between Trade Balance and Income for Selected Asian Economies

“…Among the most recent studies Rehman et al (2020) have explored the determinants of the trade balance for South Asian countries from the period 1990 to 2017. According to the estimated results infrastructure is playing a valuable role in boosting the exports in the selected countries.…”

“…Financial development has a direct relationship with economic growth (Rahman et al, 2020), as the economic growth increase, all the economic aspects also boost up. Same is the case with trade balance, as the financial development increases trade balance also increases (Ahad, 2017;Yakubu et al, 2018;Rehman et al, 2020). In response to financial development, the finances are available for the production process, and consequently, it increases exports (He, 2014).…”

Estimation Of Institutional Factor’s Influence On Regional Foreign Economic Activity

“…More will be considered a national, but not a region's scale, and federal regulating measures (Brambilla et al, 2018;Ünal, 2018). Studied more will be influence of enterprises' export on their well-being [for example: (Bao, 2016)], while effect of export stimulation -less; § some investigations consider influence of aggregated institutional environment on export (Asongu et al, 2018;Rehman et al, 2020), while it seems expedient to concentrate in this research only on institutional assistance; § like in Russian literature, the effect will be studied of institutional support for foreign direct investments' inflow. There's concluded on example of a number of not large economies about positive effect (Irandoust, 2016), on example of large quickly growing economies -about not big role of institutional quality (in comparison with trade openness) (Asongu et al, 2018).…”