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Assessment of the Effect of Free Trade Agreements on Exports of Lao PDR - Article Example

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This article "Assessment of the Effect of Free Trade Agreements on Exports of Lao PDR" discusses the research paper that assessed the effects of free trade agreements (FTA) between Lao PDR and its 32 trading partners for its exports. The abstract was also well constructed. …
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Assessment of the Effect of Free Trade Agreements on Exports of Lao PDR
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CRITIQUE Assessment of the Effect of Free Trade Agreements on Exports of Lao PDR (VANHNALAT et al. 2015) Topic title and abstract The researcher used a clear statement of the research question that summarized the research purpose. The abstract was also well constructed with a summary of the key points entailed in the whole research report. However, the researcher scantly summarized the research problem and the methodology as he/she majored on the findings of the study in this section. Introduction This research paper assessed the effects of free trade agreements (FTA) between Lao PDR and its 32 trading partners for its exports. The researcher began by mentioning that economic integration among nations offers a broad range of benefits including economies of scale in production, greater specialization for local producers, efficiency in production and an increase in direct foreign investment inflows. However, basing on Irungu (2009), economic integrations are not enough ingredients for a country to realize these benefits without the political will of the participating partners. Several economic alliances have failed to reach these objectives due to lack of political goodwill as seen in the case of East African Community among others. The rationale and purpose of the research were not clearly exposed, perhaps because the variables of the study were not clear. The researcher should have presented the material facts from previous studies why there is a need for further study of this relationship. The researcher presented the statement of the research problem, but it is not clearly showing the variables being considered for research. Perhaps the researcher would have cited more information that directly relates the changes in exports of Laos PDR as a consequence of the trade from the FTA partners. Further, the free trade agreements have more elements of exchanges whose values supersede the export as an item. For instance, the researcher should have considered foreign direct investment as a significant dependent variable to capture the diverse impacts of Free Trade Agreements. Literature review The researcher utilized the literature review to discuss the previous studies on the effects of free trade agreements on the economic performance of member states. This helped me to get a clue as to how this area of study has been thoroughly researched. The researcher also discussed the variables of the study based on previous research works. This facilitated an easier flow of the researchers ideas from the introduction of the topic of study. The review of the previous studies was helpful since the researcher had not mentioned the variables of study in the presentation and particularly the statement of the research problem. The researcher also presented a balanced review of the previous studies discussing the studies that suggested the existence of an effect and those that implied there was little relationship between the variables. In a bid to develop the conceptual framework, the author analyzed free trade agreements and economic integrations by studying the reduction of import tariffs, input and output tariffs, trade facilitation factors as the primary variables of bilateral and multilateral FTAs. In this case, the author did not precisely define the variables of the study. Thus, the researcher used a limited approach to the factors constituting the free trade agreements. Such a clear framework of independent variables should have included specific international integrations such as the agreements between members to allow concessional entry into the markets, the removal of trade barriers or introduction of common tariffs. All these forms of free trade agreements have their unique impacts on the trade flows or economies of member states. As such bundling, all these forms under one dependent variable of exports is ambiguous and insufficient. The author did not clarify whether the variables chosen were the main topical aspects of free trade agreements that impressed him/her or were just the commonly discussed variables in previous researches on economic integration and exports. Thus, the forms of agreements the researcher based the study and the expected results of the research were not clarified or defined. The author should have explained the parameters to be considered in the literature review to aid in developing a clear conceptual framework. The framework developed in the form of research questions is appropriate. However, it is not adequate in covering the topic of study as it seems confined to fewer variables. Methodology After the literature reviews the author generated research questions that are as follows (Vanhnalat & Kyophilavong, 2015): i. Will a reduction of the CEPT and the MFN import tariff support trade creation or trade diversion? ii. How does the country gain from trade liberalization through various types of FTAs? iii. What are the major issues faced by exporters in applying preferences? And what are the urgent trade policies needed to improve their export performance? Thus, from the research questions above, the author highlighted the dependent and independent variable. The independent variable is trade integration, and the dependent variable is the export performance of Lao PDR. The researcher did not define the semi- variables under each of these variables. Similarly, the author should have generated intervening and moderating variables. The author employed the gravitational model to analyze the variables of trade flows between the nations in free trade agreement. However, according to Mele (2012), the gravitational model is insufficient since it considers a limited choice of variables that surround international trade between two countries. International trade is affected by many more factors, including political influences and cultural factors besides the traditional gross domestic output and physical distance considered by the gravitational model. The author should have utilized the radiation model that is based on population density and Linders representative of demand. This information model can give a relatively accurate estimate of trade flows around the world than the gravitational model (Mele, 2012). The research involved eight FTAs, and secondary data were collected and reviewed based on the variables included in the study. In fact, one wonders whether the variables were used since they are widely utilized in these previous studies. For instance, the use of many samples gave wide information sufficient to be analyzed using inferential statistics. The researcher analyzed the development of free trade agreements using a descriptive approach. Further, the researcher analyzed the determinants of Lao PDRs exports using pooled ordinary least square model, the fixed and random effect model. Findings and conclusions The researcher analyzed the results through calculations of statistical inferences to determine the determinants of Lao PDRs export performance due to trade integrations with its 32 trading partners in six trading blocks. By use of the gravitational model in which the author adopted the random effect model and fixed effect models, the researcher found out that Lao PDRs export performance had improved as a result of economic integration into free trade agreements. Though there was no much new about this research, it was full of information and inferential analysis that can be used in training exporters and importers to make optimum decisions. Thus, the research was resourceful and informative. However, based on the above criticism of the gravitational model, this conclusion is made based on the inadequacies evident in the gravity model; hence its accuracy needs further examination. For instance, the researcher recommends the necessity of government efforts in encouraging utilization of the preferential treatment by the nations exporters. However, the researcher did not recommend for further study that I propose is necessary to conduct a complete analysis using clear variables and samples that can yield accurate results of the nature of the relationship. Analysis of Factors Affecting Growth of Pension Mutual Funds in Turkey (Acikgoz et al., 2015) Abstract The author briefly highlighted the central issues in the abstract. From the abstract, the researcher highlights the main purpose of the study being to analyze the relationship between the real growth of the stock pension mutual funds involved in the individual pension system and the number of fund participants, real fund returns, fund operating expenses and proportion of capital assets in relation to the total assets of the fund. In this case, the author presents the variables of study that is helpful as it enables the reader to have a clear picture of what the whole research is about. The title is clear and unambiguous as the author brought out clearly the two variables. The study also highlights the method of data analysis employed in the research, though the sample and research design are not highlighted. Finally, the researcher highlighted in the conclusion, though there is no recommendation for further research or concerning the findings highlighted in the research. Introduction The article analyzed the factors affecting the growth of mutual pension funds in Turkey. The researcher began by emphasizing the role of social security in enhancing the better post- retirement life of scheme participants. However, there is no sufficient data to determine the accuracy of the statement. The author presented an argument for the significance of the private pension contributions by comparing the percentage ratios of total pension funds to the Gross Domestic product of the countries in the OECD. However, there is no data that backs the claims since little research has been conducted in the area of pension funds in Turkey. The author carefully presented the justification for and the purpose of the study. However, the reason justifying a research on this topic is not sufficiently shown. The purpose of the study is highlighted in the statement of the research problem is not stated. The rationale of this study is not sufficiently justified. This would be due to limited research having been done in this field yet the researcher ought to have cited more sources to define the statement of the research problem. Thus, the researcher should have cited information that sheds light on determinant factors of pension funds growth. Literature review Following the introduction, the researcher examined secondary information on the topic of study. Through the literature review, the researcher further analyzed the variables and the past, researchers that involved these variables. For instance, the researcher emphasized on the variables that influence pension or mutual fund growth as the administrative expense ratio, the type and size of the executive management corporations. However, the literature review was not logically presented as the researcher considered few resources. Similarly, the researcher gave a less balanced consideration of sources as most of the sources reviewed alluded to the existence of a positive relationship between the rate of growth of pension funds and the three determining factors. The researcher should have considered more sources, perhaps this was because there is limited research on this topic. However, the researcher could have defined the variables clearly to aid in developing a conceptual framework. The author did not develop a theoretical framework neither were there objectives and questions of research. The hypothesis was developed, but it is not directly related to the information presented in the literature review. The author developed it for the purpose of calculation of panel data analysis. Methodology For the purpose of this study, the population of interest was eight pension funds that the researcher sampled due to their relevance to the study variables. The selected equity funds were based on due to their rapidly changing rates of return, mobility of participants and shares of participants. The sample size seems subtle to hold any inferential analysis accurate. The data were obtained using logarithmic and proportional transformations of data sets to arrive at series of monthly data utilized in the analysis. The researcher developed statistical and econometric models that analyzed the cross-sectional and time series information that was created. The researcher used the panel root test technique to analyze the data. The author did not test the validity and reliability of these statistical models neither was pilot studies conducted and results used by the author. Findings and conclusions Using panel unit route analysis that integrated inferential statistical analysis, the researchers findings show that there is a relationship between the asset size and individual or institutional participants choice of a pension fund to participate in. Also, the rate of growth of the pension fund is directly related to the increase in the number of participants. Thus, the researcher concluded that the changes in the pension mutual assets are affected by the participants contribution and level of fund returns that drives the participants decision to subscribe or to quit the capital (Acikgoz et al., 2015). The author analyzed the variables as presented I the introduction and literature review. However, the analysis was not sufficient, and there is the need for further research on the topic to aid in decision making by investors and the government planners of social security. References Ersin Acikgoz1, H.U.T.K., 2015. Analysis of Factors Affecting Growth of Pension Mutual Funds in Turkey. International Journal of Economics and Financial Issues, 5, pp. 427-433. VANHNALAT, B., PHONVISAY, P.-K.A. & SENGSOURIVONG, B., 2015. Assessment of the Effect of Free Trade Agreements on Exports of Lao PDR. International Journal of Economics and Financial Issues, 5, pp. 365-376. Read More

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