Three essays on international Economics: Global value chains of Singapore and the CPTPP; The effects of oil price shocks on trade

• Main Author: NGUYEN, Tran Bao Phuong
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: international trade; global value chains; CPTPP; Singapore; international economics; GVC; gross export decomposition; upstream/downstream trade partners; oil price shocks; International Economics
• Online Access: https://ink.library.smu.edu.sg/etd_coll/303; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1303&context=etd_coll
• Institution: Singapore Management University

This dissertation discusses two questions in international economics. The first two chapters focus on the matter of global value chains. We first explore the participation of Singapore in the global value chains by characterizing the position of Singapore in the global network and identifying Singapore’s key upstream and downstream trade partners. This is done at both the country aggregate and at the sector level. We trace how the country’s position in global value chains has changed in the past two decades: whether it has moved upstream or downstream, how involved it is in global value chains, how its trend compares with other major Asian exporters (including Japan, Korea, China, Taiwan, and Hong Kong). In addition, the paper identifies the key sectors of Singapore which play a major role in the global trade networks. The second chapter expands the analysis to a larger trading block – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This is an example of a “mega-regional” free trade agreement, whose provisions on the rules of origin and trade facilitation can have potentially large impacts on the CPTPP-wide supply chains. We investigate whether the CPTPP members are key upstream and downstream trade partners to one another in the global value chains. In doing this, we hope to evaluate how closely connected the CPTPP members were with one another in the global value chains before the formation of CPTPP. Would alternative groupings with the addition of some third country enhance the tightness of the network? We develop formula of bilateral upstreamness and downstreamness, based on the gross-export decomposition framework of Koopman, Wang, and Wei (2014) and Borin and Mancini (2014). The chapter demonstrates how the decomposition of gross exports can be used to construct informative measures of the position of countries in the global value chains. The final chapter explores a question on the effects of fluctuations in the crude oil market on various external accounts. We employ a structural Vector Autoregression model to investigate the impact of oil price changes on the external balances of oil-exporting and oil-importing countries. We look deeper into the non-oil trade balance of each country to determine the dynamics of the durable and non-durable trades in response to both demand and supply oil price shocks. We find that the source of crude oil price fluctuations lead to diverse effects on both the macroeconomic aggregates as well as the exports and the imports of goods. The paper reaffirms the importance of distinguishing shocks in the energy market when studying their effects and formulating appropriate policies.