Department of Economics and Finance
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Item Measurement of Trade Costs, its Determinants and Trade Growth. Accounting for India with its Asian Trading Partners(ICPE, 2016-02) Arora, RahulGravity model of international trade established a fact that international trade of an economy is highly affected by the trade costs incurred locally and across borders. These costs are the difference between production cost of a traded commodity and its price paid by the ultimate buyers. The present study calculates the trade costs of Indian economy with its Asian trading partners. The study is developed in three stages: It measures the trade costs for India with its trading partners from the Asian region; it also estimates the determinants of trade costs by using the data on the available trade cost proxies; and thereafter, it decomposes the growth of Indian trade into the contribution of growth in income, the contribution of the decline in bilateral trade costs, and the contribution of the decline in multilateral resistance. It is found that the trade costs of India with all its Asian partners have declined throughout the whole study period (1995-2013). The decline in Indian trade costs was the highest in West Asia followed by Southeast Asia, East Asia, South Asia, and Central Asia. The variables, used as determinants of trade costs, namely: contiguity, distance, tariffs, non-tariff barriers, exchange rate, and port infrastructure, behaved according to the theoretical expectations. Furthermore, the decomposition of the growth of Indian trade with Asian partners revealed that the decline in the relative bilateral trade costs was the driving force of growth of Indian trade with all the Asian regions.Item Goods Trade Liberalization Under Canada-India FTA and Its Impact: Partial and General Equilibrium Analysis(Springer, 2017-12) Arora, RahulThis chapter uses the partial (SMART) and general equilibrium (GTAP) tools to assess and simulate the impact of complete trade liberalization of ‘All’ and ‘Specialized’ products’ between India and Canada under the proposed Canada-India free trade agreement (FTA).The simulation results obtained from both of the analyses (partial and general equilibrium analyses) indicate that India would invariably gain more (than Canada) in terms of welfare change and consumer surplus when ‘All’ or ‘Specialized’ products of Canada enters India in comparison with the scenario when Indian ‘Specialized’ and ‘All’ products enters Canada. This study recommends the reworking of benefits and costs associated with Canada-India FTA in the presence of WTO plus and extra provisions.Item Calculation of Ad Valorem Equivalents of Non-Tariff Barriers: A Case Study of 16 RCEP Countries(Springer, 2017-12) Arora, RahulThis chapter provides the calculation of ad valorem equivalents (AVEs) of nontariff barriers, particularly those barriers that increase both the time to import and the time to export goods between two trading partners. The calculation considers the example of 16 member countries of the proposed Regional Comprehensive Economic Partnership (RCEP) agreement. This chapter evaluates the impact of trade facilitation in RCEP countries on their bilateral trade flows and other macroeconomic variables. Using an econometric approach, sectorwide AVEs of the time to import and the time to export have been calculated through the estimation of an augmented version of the gravity model.Item Theoretical Exposition of Some Ex Ante Approaches to Assess the Proposed Trade Policy(Springer, 2017-12) Arora, RahulThis chapter explains the partial and general equilibrium approaches of evaluating proposed changes in trade policies. It discusses some of the empirical methods available in trade policy research that have been presented in earlier chapters. Advance references and online links are given for detailed reading. This chapter is very important for those readers who have initiated and planned their research in the field of empirical analysis of international trade policy issues. It will guide them in choosing appropriate methodology and acquiring data for their research work.Item Developments in International Trade Theory and Gravity Modelling(Springer, 2017-12) Arora, RahulThis chapter discusses advances in international trade theory and gravity modeling with an explanation of the reasons behind gains from trade. The changing pattern of trade over time has also changed the explanation of the emergence of gains from trade, which provides room for new trade theories. Initial theories of trade, known as traditional trade theories, explain the pattern of trade in terms of comparative advantage. But with the passage of time, the emergence of trade in intermediates and services has provided new reasons for trade and hence has led to the advent of new trade theories. This chapter will explain the different reasons behind international trade.Item Theorizing International Trade(Springer, 2017) Arora, RahulThis book discusses the developments in trade theories, including new-new trade models that account for firm level trade flows, trade growth accounting using inverse gravity models (including distortions in gravity models), the impact of trade liberalization under the aegis of regional and multilateral liberalization efforts of economies using partial and general equilibrium analysis, methodologies of constructing ad valorem equivalents of non-tariff barriers, volatility spillover effects of financial and exchange rate markets. The main purpose of the book is to guide researchers working in the area of international trade, especially focused on empirical analysis of trade policy issues by updating their knowledge on issues related to trade theory, empirical methods, and their applications. The book would prove useful for policy makers, academicians, and researchers.Item Ajitava Raychauduri, Prabir De and Suranjan Gupta (Eds.), World Trade and India: Multilateralism, Progress and Policy Response(Sage, 2021-09) Arora, RahulToday, the entire world is witnessing a tough time because of the deadly coronavirus spread. It has adversely impacted almost all aspects of human lives and hit the world economy since last year. The pandemic has also hit the international trading system which is already facing many challenges. As per the latest report on trade trends by UNCTAD (2021), the last decade has witnessed declining dependence, calculated by the ratio of the value of world trade flows to the world output including goods and services, on international trade since the year 2009. This ratio was 30% in the year 2008, and it is expected that this ratio will settle at 25% by the end of the year 2020. The last decade has witnessed changes in many economic phenomena such as rising share of trade in intermediate goods and services, the emergence of technology as a major factor of production, and asymmetry in its intensity, which pose severe challenges to the countries involved in international trade indirectly or directly. Losing faith in the WTO by its member countries, the rising level of protection, unilateralism, and emerging regionalism are few such challenges. These challenges gave birth to many complexities that compelled trade economists to think from a different perspective and formulate trade policy in such a way that it satisfies the demand of all the stakeholders. Before devising any solution, understanding all these complexities and channels of their potential impact is very much necessary. This is where World Trade and India: Multilateralism, Progress and Policy Response, a book edited by Ajitava Raychaudhuri, Prabir De, and Suranjan Gupta, comes into play and provides the required knowledge. The book offers fussy insights on various international trade issues of the present-day world, challenges associated with those issues, and the steps taken at the country level. Focusing particularly on the Indian economy, the book covers almost all the aspects related to India’s progress in new trade issues and its policy responses and provides few potential solutions.Item Linking entrepreneurial ability with profitability: A study of registered women entrepreneurs from Punjab, Haryana, and Chandigarh(The Society of Economics and Development, 2022-04) Arora, RahulOver time, with growing attention to women's entrepreneurship, their entrepreneurial ability is improving. The term entrepreneurial ability is used to highlight various abilities that a woman entrepreneur must have that is further linked to their success in business. The present study attempted to highlight various entrepreneurial abilities related to entrepreneurial psychology and behaviour of women entrepreneurs and assess their impact on the level of profit using structural equation modelling. For the empirical analysis, primary data were collected from Punjab, Haryana, and Chandigarh's registered women entrepreneurs. The study identified one psychological and three behavioural factors that significantly influence the level of profits through the impact on investment. Overall, the study found that levels of initial investment were positively and significantly impacting the profits. The level of investment is determined by factors such as achievers’ attitude and willingness to take the risk. The risk-free attitude of women entrepreneurs was negatively affecting their profit levels.Item Energy poverty and human development: Empirical evidence from rural Rajasthan, India(Sage, 2023-02) Giri, Arun Kumar; Arora, RahulThis study attempts to establish the linkage between human development and energy poverty for rural households and evaluate the impact of government schemes such as Pradhan Mantri Ujjwala Yojana, free electricity and unemployment allowance on human development. For the analysis purpose, primary data have been collected from rural areas of two main districts of the Shekhawati region of the state of Rajasthan in India. To pursue the objectives, two measures of energy poverty – energy deprivation and the multidimensional energy poverty index – and one measure of human development – the human development index – have been constructed. The primary survey of 1,000 households is conducted from January to March 2020. For establishing the empirical relationship, the study has used Tobit regression analysis. The findings confirm the hypothesis that the existence of energy poverty adversely affects the level of human development in the region. It also confirms the other side of the relationship, which states that increasing human development reduces energy poverty through various linkages. The study results reveal that the government scheme which directly contributes to the per capita income is also impacting positively human development through an increase in income. Hence, to improve the level of human development and to decline energy poverty, the study recommends policies to improve the overall level of income of households.