Impact of foreign trade and foreign direct investment on economic growth: Empirical insights from Nepal

The study reveals the peculiarities of modern global production development due to global value chains (GVCs) formation that allow both developing and developed countries to integrate successfully into international production networks. This research is aimed at identifing key factors responsible for the upstream movement of Ukraine through GVCs and determining locations for production capacities, as well as at developing an institutional mechanism for facilitating the successful integration of domestic producers into GVSs. To achieve this, a multiple linear regression reflecting the interrelation between manufacturing industry share in exports value added and the institutional and economic indicators is analyzed. Three scientific hypotheses are tested and two of them are verified. The multiple linear regression results disclose a significant impact of institutional factors on the country’s ability to participate in GVCs and justify the first hypothesis, namely the higher the government effectiveness and regulatory quality are, the higher the manufacturing value added in exports is. Better governance and administrative functions performance enhance companies’ export potential. The model also verifies the second hypothesis that emphasizes better ability to join GVCs with low and medium technology product than with a high technology one. The model outputs contradict the third hypothesis on the protectionism: high tariffs for imports significantly matter in exports promotion. However, this result should be considered while accounting for the global trend of trade liberalization and Ukraine’s international agreements. The article proposes policy recommendations for improving the positions of Ukraine in GVCs.

The relevance of the research topic is determined by the need to overcome the crisis of the Ukrainian labor market based on balancing state employment policy with other areas of social and economic policy, coordinated use of its tools aimed at forming a system of modern science-intensive jobs that meet the EU latest achievements and standards, especially in information and communication as well as digital economy. The purpose is to analyze the causes of the crisis in the domestic labor market, identify its climate dependence on the main macroeconomic and other factors and develop new approaches to the content and toolset of modern state employment policy. The processes in the labor market, their trends and driving forces are the study object. The research used methodological provisions of Keynesian and other theories and concepts of employment, graphical and correlation analysis, content analysis, classification-analytical and statistical-analytical methods. It has been proved that it is necessary to develop the internal market (by raising the incomes of the population) and raise the innovation-investment framework of employment based on increasing the reliability of the banking system, participation of the population in the stock market operations, develop non-governmental pension funds, credit unions, create real barriers against the money outflow, stimulate export activity of Ukrainian producers at the expense of competitive products with high added value. The use of the directions and instruments proposed in the article to modernize the state employment policy will help to overcome the labor market crisis, increase the population well-being, economic growth, and the country’s entry into the trajectory of sustainable socioeconomic development.

Economic integration facilitated international trade within the EU with overall benefits for its economy. However, the importance of intra-EU trade varies by country and industry. This paper aims to estimate the efficiency of the intra-EU trade for particular Member States and economic sectors. The trade efficiency of the Member States is measured with the net export index and the difference in export and import growth. Correlation and regression analysis is used to assess sector-specific effects. The results show that South European Member States perform better in the efficiency of intra-EU services trade and worse in merchandise trade, but the difference is decreasing. Western European countries tend to have medium efficiency of services trade and stability in the efficiency of merchandise trade. North European countries are likely to have less than average trade efficiency and no major changes in it. Central European countries perform better than average and have an upward trend in merchandise trade efficiency. Ireland, Poland, Czechia, Slovenia, and Bulgaria have the best performance in the total intra-EU trade. The EU has a well-diversified intra-bloc trade with the domination of manufactured goods. The elasticity of value added to exports is the highest for apparel, automotive industries, agriculture, and travel services (0.8-1.2). Other sectors have lower elasticities: 0.3-0.7 (goods) or 0.4-0.6 (services). Export demand has little effect on the food industry, fuel industry, construction, and insurance sectors. The negative correlation in financial services was a prominent exception among industries.