Pandemic Pressures and Trade Resilience: Evidence from High-income Countries

Muhammad Rizal Anggit Putra, Laras Safira, Tina Fepriyanti

Abstract


This study aims to analyze the impact of inflation, military expenditure, industrial sector dynamics, and investment policies on international trade performance in High Income Countries(HICs)duringthepandemicera(2018to2022)using panel data analysis. The Fixed Effects model reveals that inflation and industrial value added have a positive effect on trade openness, while military expenditure and foreign direct investment outflow negatively impact trade openness. In contrast, the share of labor in the industrial sector and foreign direct investment outflow do not show a significant influence. These findings suggest that maintaining inflation stability is essential to safeguarding the prices of essential goods, especially during crises such as the COVID-19 pandemic. Additionally,improvingtheperformanceoftheindustrialsector, both within the country and at the international level, is recommended.Higherindustrialvalueaddedhasbeenshown tosignificantlyenhancetradeopenness.PolicymakersinHICs should consider these factors to support more resilient and open international trade systems.


Keywords


FDI; inflation; industrial; military; high income countries

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DOI: https://doi.org/10.20961/bfde.v5i2.107333

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