Theinternational trade journal defines exports as the process of sellinggoods and services produced from the home country to other markets inanother country. In this case, the seller of the goods and servicesis based in the country of origin whereas the buyer is the importer.Export as a function of international trade that entails the movementof goods from the country of production to another country for trade.Exports form part of the producing nation’s gross output (Mottaleb& Kalirajan, 2014).
Exportshave been identified as one of the most important contributor todeveloped world economies. They influence the balance of payments,level of economic growth and employment. In recent past,globalization, lower transport costs and reduced bilateral tariffbarriers have helped exports to take an increasing share of nationalincome. For instance the United States economy, exports accounted for14% of gross GDP in 1990. In 2010, the value of exports had hadincreased to27% of the same GDP (Mottaleb & Kalirajan, 2014).
Accordingto the International Trade Administration (ITA) the United Statesexported goods worth $2.34 trillion in the 2014 fiscal year. In itsanalysis, the International Trade Administration this value exceedscommercial output in countries like Mexico, India and Italy. In fact,it equaled to the entire gross domestic product of countries such asBrazil (Commerce.Gov,2016).
Determinantsof growth in exports
Demandfrom other Countries. Firstly,the demandfrom other countries influences export growth. The demand for goodsdepends onthe rate of economic growth in other countries. The United States’main export targets countries areMexico, India, and Canada.Therefore, economic growth in this countries meansexpectedincreased demand for United States exports. Otherwise recessioncauses a falling demand for United States exports (Vedia-Jerez &Chasco 2016).Competitivenessand productivity
Increasedimportance of export trade to the United States economy means thatits international competitiveness is of crucial importance. TheUnited States exports aremore competitive if the nation boostcompetitivenessand productivity.Competitivenessand productivity is a measure of the relative cost of the nation’sexports. By improving international Competitiveness, exports becomerelatively cheaper leading to higher demand for exports and increasedjobs in the export sector. It also helps to reduce inflation in theeconomy. Lastly, higher exports increase aggregate demand andeconomic growth.
TheexchangeRate is a third factor that determines growth of exports.If the value of exchange rates depreciates the level of exportingeconomic activities will also depreciate. Higher exchange rate makesUnited States exports increase demand and more competitive. The elasticity of demand for exports is directly correlated with itsdepreciation effect (Mottaleb & Kalirajan, 2014).
Religiouscultures are legitimate subjects for economic study. However, thereis relatively little research on the role of religion in economicactivities such as international trade. Religious philosophies arecomponents of national cultures that shape economic activities. While examining empirical correlation of religious cultures andinternational trade the Journal of African news found out that onlyBuddhism and Judaism, have positive effects on trade-enhancingnetwork. Buddhism was identified to have positively contributed tointernational trade. Sharing religious cultures enhances trust andeffectively creates networks that facilitate international economictransactions. Strict provisions of the scripture in religious sectsprovide a behavioral guarantee that substitutes the legal governmentenforce contracts. In addition, religious cultures have positiveeffects on trade as they enhance bilateral trade.
Commerce.gov2016, “New Top Markets Series Provides Data and Analysis to HelpU.S. Exporters Compare Opportunities across Border” retrieved from<https://www.commerce.gov/news/blog/2015/07/new-top-markets-series-provides-data-and-analysis-help-us-exporters-compare>
Mottaleb,K. A., & Kalirajan, K. P. (2014). Determinants of labor-intensiveexports by the developing countries: a cross country analysis.Singapore economic review, 59(5), -1.Doi:10.1142/S021759081450043X
Vedia-Jerez,D. H., & Chasco, C. (2016). Long-run determinants of economicgrowth in south america. Journal of applied economics, 19(1),169-192.