Top Research Papers on Trading

Abstract In the context of trade protectionism impacting economic and environmental sustainability, a more comprehensive understanding of the impact of trade on carbon emissions is critical to economic and environmental sustainability. Existing literature mainly explores the impact of trade on carbon emissions from the perspective of trade openness, neglecting the perspectives of trade diversification and trade direction. This study aims to fill this gap by investigating the impact of trade openness (measured by trade volume, import, and export), and trade diversification (measured by import d...

This study aims to investigate the decoupling impact of trade on carbon emissions and under what circumstances trade would contribute to decoupling carbon emissions. A combination of Tapio decoupling model and structural threshold model is developed to study and quantify the impact. The empirical study uses panel data for 124 countries around the world from 2000 to 2018. The results show that the main state of the relationship between trade openness, economic growth and carbon emissions was weak decoupling. Moreover, there are two breakpoints in the impact of trade openness on carbon emissions...

This book discusses the business case for Quantitative Trading, how to identify a Strategy that suits you, and the importance of minimizing Transaction Costs.

We study the financial implications of the 2018–2019 U.S.-China trade war for global supply chains. Around the dates when higher tariffs are announced, U.S. firms that depend more on exports to and imports from China experience larger declines in market value, with the negative effect spilling over to the affected firms' suppliers and customers through production networks. The trade war effect is mainly concentrated among U.S. firms that sell to Chinese customers with low R&D intensity or outsource to Chinese differentiated input suppliers. We also exploit the within-firm variation in tariff e...

Trade policy uncertainty (TPU) has become an important source of economic uncertainty and research. We review the main sources and measures of TPU. We then provide a conceptual framework for modeling TPU and methods for estimating and quantifying its effects. We analyze its role in trade agreements and discuss open questions for future research.

ABSTRACT Modern markets are characterized by speed differentials, with some traders being fractions of a second faster than others. Theoretical models suggest that such differentials may have both positive and negative effects on liquidity and gains from trade. We examine these effects by studying a series of exogenous weather episodes that temporarily remove the speed advantages of the fastest traders by disrupting their microwave networks. The disruptions are associated with lower adverse selection and lower trading costs. In additional analysis, we show that the long‐term removal of speed d...

This paper examines the impact of COVID-19 on trading volume in stock markets around the world. We document a large spike in trading volume in 37 international equity markets. The surge in trading volume is found to be associated with the national culture and institutional environment of individual countries. In particular, investors tend to trade more heavily in societies characterized by a higher level of trust and individualism, as well as a lower level of uncertainty avoidance. Investors are also more willing to trade in wealthier nations, as well as those with stronger protection of legal...

This paper investigates how exports respond to trade protection by studying the US-China trade war in 2018. Using monthly customs data in China from January 2017 to May 2019, we find that the launch of the trade war against Chinese exports by the US on average reduces Chinese total exports to the US by 16.47%. Further decomposition shows that the reduction in exports is mostly explained by a decrease in quantity, with prices relatively unchanged. Meanwhile, negative trade shocks cause export diversion to countries that are closer and have larger economies, and exports in R&D-intensive, skilled...

This paper examines whether the efficient market hypothesis (EMH) holds in the Chinese carbon trading pilots by employing the Sequential Panel Selection Method (SPSM) which is combined with the Panel KSS unit root tests with Fourier function. This approach serves as a highly valid tool in controlling for cross-sectional dependence and heterogeneity as well as structural shifts and nonlinearities. In virtue of the SPSM, the paper could divide the whole panel into two groups and clearly identify which and how many series belong to stationary or non-stationary group. The results show that carbon ...

We review the state of knowledge concerning international CO 2 emission transfers associated particularly with trade in energy-intensive goods and concerns about carbon leakage arising from climate policies. The historical increase in aggregate emission transfers from developing to developed countries peaked around 2006 and declined since. Studies find no evidence that climate policies lead to carbon leakage, but this is partly due to shielding of key industrial sectors, which is incompatible with deep decarbonization. Alternative or complementary consumption-based approaches areneeded. Privat...

Free trade is always under attack, more than ever in recent years. The imposition of numerous U.S. tariffs in 2018, and the retaliation those tariffs have drawn, has thrust trade issues to the top of the policy agenda. Critics contend that free trade brings economic pain, including plant closings and worker layoffs, and that trade agreements serve corporate interests, undercut domestic environmental regulations, and erode national sovereignty. Why are global trade and agreements such as the Trans-Pacific Partnership so controversial? Does free trade deserve its bad reputation? This book aside ...

African countries are negotiating the African Continental Free Trade Area with the aim to spearhead global value chain (GVC) trade among African countries as a driver for robust economic growth. This paper evaluates the participation of Sub-Saharan African Regional Economic Communities (RECs) in GVC-related trade over the period 1990-2015 using measures of backward, forward, regional, and non-regional GVC participation. We find that participation of African RECs in GVC trade (regional and non-regional) has increased but still lags behind comparator groups. Overall, African RECs have participat...

We use de-identified data from Facebook to construct a new and publicly available measure of the pairwise social connectedness between 170 countries and 332 European regions. We find that two countries trade more when they are more socially connected, especially for goods where information frictions may be large. The social connections that predict trade in specific products are those between the regions where the product is produced in the exporting country and the regions where it is used in the importing country. Once we control for social connectedness, the estimated effects of geographic ...

[Download latest version] ABSTRACT ————————————————————————————————————-This paper studies the extent to which frictions in financial markets affect aggregate trade flows. I study a model of firm dynamics with financial frictions and international trade, calibrated to match key features of firm-level data. I find that, while financial frictions have a large effect on the pattern and extent of international trade at the industry-level, as documented in the literature, they have a small effect on trade at the aggregate-level. Relaxing the financial constraints allows more firms to finance the up...

Did the rapid expansion of Chinese exports between 1990 and 2010 contribute to the country's worsening environmental quality? We exploit variation in local industrial composition to gauge the effect on pollution and health outcomes of export expansion due to the decline in tariffs faced by Chinese exporters. In theory, rising exports can increase pollution and mortality due to increased output, but they may also raise local incomes, which can in turn promote better health and environmental quality. The paper teases out these competing effects by constructing two export shocks at the prefecture...

Over the past 30 years, the world has witnessed a period of unprecedented income convergence, as the wide gap in income levels between economies has narrowed. Economic growth has improved living conditions and prospects for many people around the world. However, not all individuals, regions and economies have benefited equally from the changes brought about by more open trade. The World Trade Report 2024 explores the complex interlinkages between trade and inclusiveness across and within economies. Openness to international trade can drive economic growth, but many low- and middle-income econo...

This paper provides a comprehensive survey of cryptocurrency Trading research, by covering 146 research papers on various aspects of cryptocurrency trading (e.g., cryptocurrency trading systems, bubble and extreme condition, prediction of volatility and return, crypto-assets portfolio construction and crypto- assets, technical trading and others).

Abstract We investigate economic causes of the rising support of populist parties in industrialised countries. Looking at Germany, we find that exposure to imports from low-wage countries increases the support for nationalist parties between 1987–2009, while increasing exports have the opposite effect. The net effect translates into increasing support of the right-populist Alternative for Germany party after its emergence in 2013. Individual data from the German Socio-Economic Panel reveal that low-skilled manufacturing workers’ political preferences are most responsive to trade exposure. Usin...

In the digital age, a growing number of governments have adopted policies aimed at boosting growth through innovation and technological upgrading. The World Trade Report 2020 looks at these trends and at how trade and the WTO fit with them. A defining feature of government policies adopted in recent years has been their support of the transition towards a digital economy. Trade and trade policies have historically been important engines for innovation. In particular, the multilateral trading system has contributed significantly to the global diffusion of innovation and technology by fostering ...

The COVID-19 pandemic and the prospect of increasingly frequent and more intense natural and man-made disasters raise important questions about the resilience of the global economy to such shocks. The World Trade Report 2021 explores the basic, binary assumption driving much of the current debate about economic resilience, namely the inherent trade-off between global trade interdependence and national economic security, and suggests that this can be a false dilemma. Due to its interconnected nature, international trade can increase an economy’s exposure to risks and contribute to the transmiss...