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Reverse Globalization: Does High Oil Price Volatility Discourage International Trade?

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  • Chen, Shiu-Sheng
  • Hsu, Kai-Wei

Abstract

This paper examines whether higher oil price volatility causes a reversal in globalization. Using a large annual panel data set covering 84 countries all over the world from 1984 to 2008, we investigate the impacts of oil price fluctuations on international trade, namely exports and imports. We present strong and robust evidence that international trade flows will be lower when oil prices fluctuate significantly. We therefore conclude that oil price volatility hurts globalization.

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File URL: http://mpra.ub.uni-muenchen.de/36182/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36182.

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Date of creation: 25 Jan 2012
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Handle: RePEc:pra:mprapa:36182

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Keywords: oil price shocks; oil price volatility; international trade; reverse globalization;

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Cited by:
  1. Mads V. Markussen & Hanne Østergård, 2013. "Energy Analysis of the Danish Food Production System: Food-EROI and Fossil Fuel Dependency," Energies, MDPI, Open Access Journal, vol. 6(8), pages 4170-4186, August.
  2. Zhang, Hai-Ying & Ji, Qiang & Fan, Ying, 2013. "An evaluation framework for oil import security based on the supply chain with a case study focused on China," Energy Economics, Elsevier, vol. 38(C), pages 87-95.
  3. Wang, Yudong & Wu, Chongfeng & Yang, Li, 2013. "Oil price shocks and stock market activities: Evidence from oil-importing and oil-exporting countries," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1220-1239.
  4. Ji, Qiang & Geng, Jiang-Bo & Fan, Ying, 2014. "Separated influence of crude oil prices on regional natural gas import prices," Energy Policy, Elsevier, vol. 70(C), pages 96-105.

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