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

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...

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.

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...

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...

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...

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 ...

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...

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...

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 ...

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...

We develop a monopolistically competitive model of trade with firm heterogeneity—in terms of productivity differences—and endogenous differences in the "toughness" of competition across markets—in terms of the number and average productivity of competing firms. We analyse how these features vary across markets of different size that are not perfectly integrated through trade; we then study the effects of different trade liberalization policies. In our model, market size and trade affect the toughness of competition, which then feeds back into the selection of heterogeneous producers and export...

Originally published in 1994, The Economics of the Tropical Timber Trade provides a detailed analysis of the economic linkages between the trade and forest degradation. Based on a report prepared for the ITTO, it looks current and future market conditions at the time of publication, and assesses the impacts on current and future market conditions, and assesses the impacts on tropical forests of both the international timber trade and domestic demand. The authors examine the causes of deforestation and compare the environmental impacts of the timber trade with other factors, such as the convers...

Deep trade agreements (DTAs) cover not just trade but additional policy areas, such as the international flows of investment and labor, and the protection of intellectual property rights and the environment. Their goal is integration beyond trade, or deep integration. 
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\nDTA rules influence how countries transact, invest, work, and, ultimately, develop. The rules and commitments in DTAs should be informed by evidence and shaped by development priorities rather than international power or domestic politics. An impediment to this goal is that data and analysis on trade agreements have...

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...

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).