A Review of Literature on Factors Affecting Trade: India, China And USA

Abstract

Purpose: Foreign trade is an integral part of a country. To be a part of a global world a country needs to trade with other countries. This review systematically examines the factors that affect trade which comprises of Export-Import, inflation, exchange rate, GDP, Anti-dumping, Tariffs, Investment. We studied the various tools used by researchers in their research: Regression, Gravity model, GARCH, Unit Root test Constant Market share Analysis.

Design/ methodology: We do this by carrying out a literature review on the various factors affecting trade. As there are many factors affecting trade, we took 7 factors in our review. They are; import-export, inflation, exchange rate, tariffs, anti-dumping, GDP and FDI.  Foreign trade is a very wide concept and include may countries. Therefore, to make our research simpler we have considered 3 major countries i.e., India, USA and China. We have studied the various policy implementations and their impact on foreign trade.

 Findings: there are various factors affecting trade. Each factor has positive or negative impact according to the various studies done by different authors. We conclude that foreign trade in India has evolved as the most significant area of international business. The researchers have used various tools to determine the change that can occur due to change in factors.