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- Intra-industry trade in the automobile components industry:an empirical analysisPublication . Leitão, Nuno Carlos; Faustino, Horácio C.This manuscript examines the determinants of intra-industry trade (IIT) in the automobile component sector in Portugal. We have examined the Portuguese trade in this sector between European Union (EU-27), the BRIC (Brazil, Russia, India and China), and United States between 1995 and 2006. Using a panel data approach, the results show a negative correlation between endowments and IIT. These results indicate that IIT occurs more frequently among countries that are similar in terms of factor endowments. We also introduce economic and cultural dimensions; these proxies confirm the positive effects of IIT. Our results also confirm the hypothesis that trade increases if the transportation costs decrease.
- Outsourcing, foreign direct investment and tourism demandPublication . Leitão, Nuno CarlosThis text was developed based on three chapters, namely: fragmentation and outsourcing, in the second chapter we emphasize foreign direct investment and the gravity model and finally the demand for tourism. Throughout the three chapters are used explanatory models that test underlying theoretical hypotheses using econometric models (panel data and time series). The book that is published is a result of the research of the last years.
- The gravity model and United States' tradePublication . Leitão, Nuno CarlosThis study examines the determinants of bilateral trade between United States and NAFTA, European Union, and ASEAN countries in the period 1995-2008, using a panel data. In this paper we revisited the recent contribution as in Egger (2000, 2002, Baltagi et al. (2003)and Serlenga and Shin (2007), Faustino and Leitão (2008,and Kabir and Salim (2010). The findings indicate that United States' trade flows follow the Linder hypothesis, while the bilateral trade is associated with Heckscher-Ohlin-Samuelson theorem. Results show that geographical distance is negative and significant; i.e., trade increases if the transportation costs decrease. We also introduce the economic dimension, productivity and common border; these proxies confirm the positiv effects in bilateral trade. Our results also confirm the hypothesis that foreign direct investment is positively correlated with trade.
- Portuguese intra-industry trade and labor market adjustment costs:the sah againPublication . Faustino, Horácio C.; Leitão, Nuno CarlosThis paper provides an empirical test of the SAH (smooth adjustment hypothesis) using the data on Portugal. According to the SAH, intra-industry trade leads to relatively lower adjustment costs in comparison to inter-industry trade. The paper tests the SAH by using a dynamic panel data analysis that takes into account lagged effects of changes in the MIIT (marginal intra-industry trade) index. The regressions use the absolute change in the total employment in a given industry as a proxy for trade adjustment costs. The main results imply that a higher MIIT leads to lower adjustment costs in the same year. More specifically, the coefficients of the MIIT index are negative and statistically significant in all the regressions. These results provide support for the SAH.
- Tourism and economic growth:a panel data approachPublication . Leitão, Nuno CarlosThis article focuses on the importance of tourism by investigating the relationship between tourist arrivals and the tourism share in economic growth. The findings are consistent with the literature on tourism. Tourist arrivals have positive impact on economic growth. We also find that bilateral trade and investment output are determinants of economic growth. This paper specifies static and dynamic panel models for the period of 1995-2008 between Portugal and 20 partners. We apply the dynamic panel models to observe serial correlation and the endogeneity of some explanatory variables.
- The impact of geopolitical risk on portuguese exportsPublication . Leitão, Nuno CarlosThis investigation evaluates the performance of Portuguese exports by focusing on the 11 main partners for 1990–2021, considering panel data. Country risk analysis has been frequently used to assess the determinants of international trade in recent years. Empirical studies demonstrate that country risk can affect bilateral relationships between economies, especially in economies with greater geopolitical risk. Next, we refer to the methodology used in this research. In this context, we assessed the stationarity of the variables used in this study. Subsequently, models were used to eliminate bias and endogeneity between the variables. The panel quantile regression model allows us to understand the behaviour of variables across different quartiles. The empirical study shows that countries with low country risk promote the performance of Portuguese exports. On the other hand, the size of the economies, both the exporting country (Portugal) and the importing countries (commercial partners), is decisive for increasing Portuguese exports. This finding can be explained as a monopolistic competition with the economy’s scale and industrial concentration serving as theoretical support. As noted with previous studies on the gravity model, the common language of Portuguese-speaking countries reduces communication costs and increases Portuguese exports. Furthermore, the econometric model also validates the issue of geographical distance, where this variable has a negative impact on exports, demonstrating that geographical proximity reduces transport costs.
- Intra-industry trade:a static and dynamic panelPublication . Faustino, Horácio C.; Leitão, Nuno CarlosThis study examines the features and determinants of intra-industry trade (IIT), horizontal IIT (HIIT) and vertical IIT (VIIT) between Portugal and the European Union in the period 1996–2002, using a static and a dynamic panel data analysis. The findings indicate that Portuguese VIIT increased significantly during the period in accordance with the values expected for a developed country. The regression results show that there is evidence supporting the explanation of VIIT by Heckscher–Ohlin’s (HO) theory and that Portugal has comparative advantages in low-quality differentiated products. The findings support the theory that, in general, there is no positive statistical association between HIIT and HO variables. The central theme of this paper is to show that it may be preferable to use the GMM approach in empirical studies of IIT rather than pooled OLS, fixed effects or random effects estimators. The results also suggest that the GMM system estimator obtains more reasonable parameter estimates than the first-differenced GMM estimator.
- A gravity approach of agricultural trade:the nexus of the EU and African, Caribbean and Pacific countriesPublication . Balogh, Jeremiás Máté; Leitão, Nuno CarlosThe European Union (EU) is one of the biggest traders of agricultural products. In 2017, extra-EU agricultural trade accounted for 7.4% of the total EU international trade. Furthermore, Europe is the main destination for agricultural goods arriving from African, Caribbean and Pacific (ACP) trading partners. The paper analyses the effect of geographical proximity, cultural similarity, free trade agreements on bilateral agricultural trade as well as intra-industry trade between EU member states and its trading partners (intra and extra EU trade), employing gravity model for a period of 1996–2017. Regression results suggest that EU countries export more agricultural products to their common markets. In addition, the export costs of agricultural products are lower if the EU and its external trading partners are culturally similar; have the same religion or both have regional trade agreements. We found a moderate intra-industry trade between the EU and ACP countries at 18%. The results indicate rather inter-industry trade between EU and non-EU members, with a lower index level for ACP countries. A higher positive impact is revealed on the agricultural import between ACP-EU countries than export.
- Intra-industry trade in the agriculture sector:the experience of United StatesPublication . Leitão, Nuno CarlosThis study analyses the determinants of United State’s intra-industry trade (IIT) applied to the agriculture sector. The results indicate that IIT in this sector is a negative role of the difference in GDP per capita between U S. and its trade partners. This is according to the literature; that is, countries with similar demands will trade similar products. Statistically strong evidence is also found that this trade is influenced by the economic dimension between trading partners. The foreign direct investment inflows have a positive influence on U.S. bilateral IIT.
- Fragmentation, Vertical Intra-Industry Trade, and Automobile componentsPublication . Leitão, Nuno Carlos; Faustino, Horácio C.; Yoshida, YushiBy analyzing vertical intra-industry trade (VIIT) within Portugal's automobile parts and components industry, this study adds new empirical evidence for the international fragmentation of the production process. For trade partner countries, we choose the EU countries, the BRICs, and the US during the period 1995 to 2005. From panel data analysis, the empirical evidence supports the notion that shorter geographical distance, dissimilar income levels, and dissimilar endowments between two economies lead to a higher VIIT of automobile components. In addition, our results also confirm the hypothesis that automobile (assembly) production in each country promotes higher VIIT of auto parts, while economic integration in the style of the European Union and similarity in culture do not magnify the VIIT of the parts and components industry. We conclude that income differences between trade partner countries are an important driver via the international fragmentation of production of a higher VIIT. However, a call for a geographically closer vertical linkage by the agglomeration effect for large domestic automobile production leads a firm to keep the entire production process within a country and may deter this income-difference effect.