Special Issue on ‘Global Trade and FDI: The Road Ahead’

Abstract

The world’s geopolitical landscape has never been more dynamic. Environmental pressures and disruptions to the global economy have driven researchers to reexamine the links between globalisation and emerging threats. The current special issue touches on some issues related to the challenges in front of globalisation, economic connectivity and economic development for human prosperity. We ask the question what does a post-COVID-19 world look like in terms of trade and investment flows? What is the future of economic connectivity and what are policies that would lead to improvements? We inquire about putting in perspective the wide range of challenges economies are facing in the year 2022: disruptions and uncertainty in global trade and investment flows; environmental implications of international economic activity; accelerating automation of production that leads to falling labour shares and increasing income inequality in the context of an interconnected world. The issue contains five articles and one book review by international scholars. The first article by Canh Nguyen and Su Thanh (Canh & Thanh, 2022) investigates the dynamics of export diversification, economic complexity and economic growth cycles. The authors apply several advanced econometric techniques to estimate the relationships among the variables for a global sample of countries. They find a Granger bidirectional causality between economic complexity and export diversification, and a unidirectional Granger causality exists from economic complexity to economic growth cycles. A three-stage least squares method demonstrates that economic complexity and export diversification significantly impact each other, and the dynamics of economic complexity and export diversification reduce economic fluctuations. The authors also find that the negative impact of economic complexity on economic growth cycles is statistically significant only for high-income economies. The second article by Nidhi Bagaria (Bagaria, 2022) pays attention to the increasing trade in intermediate goods dues to the wider spread of global value chains (GVCs). With China emerging as one of the leading countries in the global GVC network, there is a heavier reliance on Chinese intermediate goods for the manufacturing sector. The outbreak of COVID-19 and the subsequent lockdowns in many countries, including China, have disrupted the supply of GVCs and have led to a search for alternative markets for intermediate goods. The study by Nidhi Bagaria explores how India can substitute for China as an alternative avenue for Editorial