The Necessity of New Versions of Bilateral Trade Balances and COVID-19: The Nonlinear ARDL Approach for the USA and Japan

Ismet Gocer, Serdar Ongan, Huseyin Karamelikl and Charles A. Rarick

Foreign Trade Review, 2025, vol. 60, issue 1, 109-136

Abstract: This study aims to reveal the need to reformulate new forms of Bilateral Trade Balances (BTBs) for a country rather than a traditional BTB. This is because the traditional BTB ratio, based on total exports and defined as the total exports/total imports ratio, cannot classify and quantify a BTB based on its economic impact content. It fails to classify because countries also export goods already imported (denotes re-export) besides exporting their domestic goods produced within the country (denotes domestic export). It also fails to quantify because, while domestic goods undergo a value-added process within a country, re-exported goods do not. In this context, for the first time, this study attempts to reformulate/reinvestigate new forms of BTBs as production-related BTB , based on domestic export and non-production-related BTB , based on re-export for the USA with Japan. Empirical findings confirm the necessity and cruciality of the proposed methodology in this study. JEL Codes: F10, F14

Keywords: Production-related bilateral trade balance; non-production-related bilateral trade balance; Nonlinear ARDL Approach; the USA; Japan (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/00157325231192180 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:60:y:2025:i:1:p:109-136

DOI: 10.1177/00157325231192180

Access Statistics for this article

More articles in Foreign Trade Review
Bibliographic data for series maintained by SAGE Publications ().