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Journal section "Branch-wise economics"

The Impact of Geographical Factors on Expanding Trade Interactions between Countries (on the Example of the Asia-Pacific Region)

Izotov D.A.

Volume 16, Issue 6, 2023

Izotov D.A. (2023). The impact of geographical factors on expanding trade interactions between countries (on the example of the Asia-Pacific region). Economic and Social Changes: Facts, Trends, Forecast, 16(6), 38–54. DOI: 10.15838/esc.2023.6.90.2

DOI: 10.15838/esc.2023.6.90.2

Abstract   |   Authors   |   References
The aim of the study is to assess the impact of geographical factors on trade in the Asia-Pacific region. We show that physical distance is the key parameter in assessing the influence of geographical factors on trade within the framework of gravity dependence. The estimates obtained confirm the validity of the hypothesis concerning a long-term reduction in the negative impact of physical distance calculated in various ways on trade in the Asia-Pacific region, indicating the invariance in the choice of values of this parameter to determine the general trend of the influence of geographical factors on commodity exchange in the subglobal region. It is determined that the use of an arithmetic mean physical distance is more acceptable for obtaining correct estimates of the influence of geographical factors on trade in the Asia-Pacific region in terms of compliance with formal criteria for gravitational modeling. The negative impact of physical distance on trade in the Asia-Pacific region has decreased by almost 13% by 2021 compared to 1993, indicating a high intensity of commodity exchange in the subglobal region. The estimates obtained confirm the assumption that the land border has a positive impact on trade turnover in the Asia-Pacific region, which increased by 56% in 1993–2021. We find that the presence of a land border contributed to the expansion of trade between border economies in comparison with other countries of the Asia-Pacific region by 208.3% in 2021. The assessment shows the absence of a statistically significant impact of other factors – the colonial past and linguistic community – on trade in the Asia-Pacific region; this indicates the leveling of ties formed in the past due to the dominance of gravitational attraction between economies in terms of reducing barriers in interactions between them. It is shown that against the background of a decrease in comparative transport costs in the Asia-Pacific region, the current sanctions against Russia are able to limit the geographical distribution of Russian exports, reducing it to the neighborhood markets of the subglobal region, where the Russian economy will experience an increasing gravitational pull from China

Keywords

trade, asia-pacific region, Asia-Pacific region, geographical factors, physical distance, transport costs, land border, linguistic community, colonial past, gravity model

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