| Since the end of the last century and the beginning of the 21 st century,the world has experienced a great transformation where cultural values,the performance of the institutions as well as the acceleration of technological progress have played a crucial role in global economic development.In modern economies it is important to have a proper understanding of different cultural values such as preferences,beliefs,trust level between trade partners,the efficiency of institutions and the use of technology such as internet.These could reduce uncertainty as well as create business opportunities and improve the efficiency of the transaction cost,resulting in a change the structure of trade thus boosting international trade.The upswing of some countries has an important role in this puzzle,especially emerging economies which have moved into a new dynamic and who had already shown differences in economic performance and improved living standards.China is a fast emerging economy and one of the major actors in these global trends.Furthermore,China is having a significant impact on Latin American economies via international trade This especially impacts South American countries,since the region does not only includes its major trade partners,but also represents 70% of the total trade between China and the Latin American region.China also represents a strategic partner to the region as well as a major consumer of resources and producer of manufactured products.It will also become a major consumer of food produced from this region.Besides the enormous potential to contribute to the global food production and food security,some countries from this region have emerged as a destination for offshore services.Some of the main reasons are the fastest growing outsourcing market,the rise in tech programming talent and the favorable business environment.At the same time,other traditional farming countries already have an agricultural innovation process system that is improving the productivity of the sector and the quality of food products.China already has ventured into amplifying its strategy with South American countries.In this context,increasing the development of bilateral trade between China and South American countries is crucial.However,even if the trade development between China and the region is at the core of the economic analysis,researchers have so far neglected the analysis of the role of cultural values,institutions and technological factors.Therefore,research on promoting a sustainable trade development,should take into account the technological changes,the different cultural patterns and the difference in the efficiency of the institutions into the analysis.This research analysis focuses on the trade development of China and South American countries from cultural,institutional and technological factors.This research approaches the analysis from three untraditional determinants of trade.Firstly,since different cultural values affect trade,different levels of trust then become important factors for promoting a sustainable development of trade.The higher trust level reduces the transaction cost through the incentive of cooperation,and improves the efficiency of the allocation of resources.China and South American countries have different cultural values and history.In qualitative terms,there is a different comprehensive understanding of what trust means.Here the difference of culture is referred as the trust distance.Secondly,a good development of trade requires also the efficiency of institutions.The good performance of the institutions,the quality of the rules,the efficiency of the law and a low level of corruption,can make enforceable contract and an adequate property rights system.Cooperation on trade becomes a necessary measure for each trade partner.Here,the difference of quality of the institutions is measured by the Institutions distance'.Thirdly,as a result of technological progress,the internet has changed the social and cultural life and has had a direct impact on trade.The internet has accelerated the flow of information,changed the methods used to trade,created virtual trade platforms,improved the efficiency of transaction cost and definitely changed the structure of international trades.China is the first country in terms of number of Internet users and South American countries has shown an increase of Internet users over the last period.Even when it can have an impact on trade,it can be a different impact in relationships within the trade sector.In order to study how the above trade factors affect China and South American trade,this paper:firstly,analyses the structure of bilateral trade and the comparative advantage of this structure as well as the trade structure complementary to this industry.The analysis was conducted based on the Revealed Comparative Advantage,Complementarity Trade Index and the technological structure of exports approach of Lall(2000).Secondly,the study theoretically describes the impact of different cultural values,different institutions and Internet on bilateral trade.Thirdly,the paper estimates cultural distance based on trust distance and the institution distance.Using data from the World Values Survey on cultural values and believes,and the method of difference values,trust distance was estimated.Subsequently data from the Worldwide Governance Indicators and the Kogut and Singh equation allowed the institutions distance to be estimated.Finally,this paper empirically analyses the impact of trust distance,institutions distance and Internet on China and South American trade flow over the period 1995-2015.The empirically method was based on the gravity model framework.The results of this research show 1)meanwhile,there is evidence of a negative impact of trust distance on Chinese exportations to South American countries as there is no evidence on Chinese imported products from South American countries.When the difference of level of trust increased by 1%,Chinese export to the region decrease by 0.187%;2)furthermore,there is also evidence that institutions distance have a negative effect on the bilateral trade between China and the region.When the institutions distance increases by 1%,Chinese export to the region decreases by 0.149% and Chinese import from the region decreases by 0.39%.3)Estimating model result shows there is a significant positive impact of Internet on Chinese exports to South American countries but not positive but not significant on China imports from the region.If the number of Chinese Internet users rise by 1%,Chinese,export to the region increases 0.00749%.4)Estimating model result shows there is a significant and positive impact on China export to South American countries at category of products such as medium technology manufactures,process and engineering,and high technology manufactures,electronic and electrical and other product,and there is not impact on primary products and resources-based manufactures.If the internet interaction term rise by 1%,Chinese export to the region increases 0.0154%,0.0089%,0.0186%,0.088% respectively.These results is robust to Poisson Pseudo-Maximum Likelihood Estimator and IV Poisson.Thus,this research concludes that 1)China have increased the share of median and high technology product export over the period,China became highly comparative competitive in this sector.China's exports to South American are comparative competitive at low,median and high technology product but not in primary product and agroindustry.South American countries has comparative competitive advantage in primary product and manufacture based on agriculture product,it is not competitive in manufacture product.The Complementary index show that China and the region are complementary in medium and high technology manufacture(automotive and process product)and high technology manufacture(other products)however medium technology manufacture,engineering product show its complementary decrease over the period.2)Result are consistent to the main finding on the literature,different in differences at trust level have a significant and negative effect on export,but it is weak.3)However,comparatively the level of efficiency of the institutions show a remarkable effect on bilateral trade.The result suggest that when the bilateral trade is not associated with a high level of cooperation as well as with an appropriate changes in the laws,cannot bring confidence to trader and impact negatively on China and South American trade flows.4)while there is positive and significant effect on china manufacture export to the region,there is a positive but not significant effect on Chinese imports from South American countries.5)While there is positive and significant effect on china manufacture export to the region,there is a positive but not significant effect on Chinese export of primary product to the region. |
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