Zeitschrift für Aktien- und Devisenhandel

Zeitschrift für Aktien- und Devisenhandel
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ISSN: 2168-9458


Influence of Bilateral Trade on Bilateral Economic Growth between China and South Asia

Umer Shahzad*, He Xiaoyin

This study is concerned with the comparative advantage of bilateral trade which plays a crucial role in the economic development of the developed and developing world. The study aims to investigate the Revealed Comparative Advantage (RCA) index used for determining the bilateral trade relationship between China and South Asia during the period of 2000 to 2019. This study has adopted a multiple regression model by analyzing time series data. The results of the multiple regression model showed that there has a positive significant impact of the chemicals, textiles and clothing, minerals, vegetables, metals, and footwear industries' RCA values on bilateral economic growth. While hides and skin products have a negative and significant impact on bilateral economic growth between China and South Asia region. The results further showed that among 20 products, 16 products have RCA values lower than 1, representing a weak bilateral trade relationship while the chemicals, intermediate goods, fuels, and minerals have most RCA values higher than 1 showing a strong relationship between bilateral trade and economic growth. Based on our findings, this study suggests easing trade among nations to get higher economic growth