Factors Affecting Trade Volume - Free Essay Example

Sample details Pages: 28 Words: 8291 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Introduction The area of research for this thesis focuses on empirical study determinants of trade volume of Asian developing economies; which constitute the success of global trade. The relationship among determinants of trade studied in the context of developing economies which includes: Pakistan, India, China, Bangladesh and Sri Lanka. Factors those affects on trade includes: Tariff, Import duty, Inflation, Foreign Direct Investment (F.D.I), Exchange Rate, Transportation Cost and Gross domestic Product (G.D.P) affect on trade volume, based on gravity equation framework in which foreign trade depend in between countries. Don’t waste time! Our writers will create an original "Factors Affecting Trade Volume" essay for you Create order To accomplish this purpose by using standard gravity model, study comprises multivariate regression on trade of Asian economies. Study found that trade depend on distance in between countries, wealth, tariff and non tariff barriers (N.T.Bs) like exchange and capital control. Export volume of an economy measures trade volume of a particular country to indicate economic growth of a particular country (Tamirisa, 1999). An Economy that have positive balance of trade, improve economic growth of a particular country due to effective economic and financial performance. Besides this basic affects exchange and capital controls influence trade through other channels, for example, transaction cost, exchange rate, foreign exchange risk and trade financing. Capital control in particular country affect on trade in goods by reducing inter temporal trade and portfolio diversification, which may substitute or complement intra temporal trade (Tamirisa, 1999). Therefore, this thesis aims to study determinants of trade volume based on developing economies. A restricted trade policies imposed by a government is harm for a trade. Study found that world trade organization (W.T.O) rules regulations foster trade volume based on strategic planning of global trade at this competitive era. Despite the net economic and social benefits; most governments reduce subsidies and open economic trade. It has been realized in this study manufacturing tariffs remained high in developing countries. However; subsidies and trade policies affects on agricultural, textile and service industries of both rich and poor countries which continued hamper efficient resource allocation, economic growth and poverty alleviation (Anderson, 2004). Fundamentally, capital controls affects on trade by decreasing inter temporal trade and portfolio diversification. The impact of trade in goods depends, if trade in goods and trade in factors are substitute (for example, as found in the basic Heckscher-Ohlin m odel) the volume of trade in goods likely to fall. If trade in goods and trade in factors are complement (as, for example, in some models with increasing returns to scale), the volume of trade in goods increases (Tamirisa, 1999). The empirical evidence indicates that foreign direct investment tend to increase host countries export and import due to liquidity in a financial market. Foreign direct investment and exports are alternative strategies in this case. Since multinational companies (M.N.Cs) avoid to pay tariff. They initiate subsidiary companies at the host country to cross subsidize in other countries based on strategic management. Capital controls often limit business opportunities for hedging foreign exchange risk and trade financing, thus inhibit trade (Tamirisa, 1999). The gravity equation is one of the most empirically successful studies. It relates trade flow to GDP, distance and other factors that affects on the volume of trade (Anderson and Wincoop, 2003). For t his purpose, the overall effects of trade barriers on Asian developing economies empirically studied, analyzed, tested and resulted. Justification For The Research This study is timely significant for theoretical, methodological and practical reasons. With regards to theoretical significance; this study contributes to the literature based on their specification. Determinants of trade volume of Asian developing economies comprises, Pakistan, India, China, Bangladesh and Sri Lanka to identify their trade issues with respect to other regions based on gravity equation framework. As mentioned in empirical literature, determinants of trade volume contribute their significance at this competitive era, where lot of resistance exists at global market. While competition indicate threat for any type of business either manufacturing or service industry. On other hand trade barriers like Tariff, Import duty, Capital Control through Foreign direct investment (F.D.I), Transportation cost and Inflation raise more critical issues to survive in this competitive era. This study also practically signifies from management prospective for those entrepreneurs intending to cross subsidize their business at global market to retain their leading market share. Results of this study provide guidelines for entrepreneurs to identify their, Economic and Socio-Cultural issues that lead to trade barriers for their investment. This study support them based on empirical understanding about trade barriers of developing economies and how it affects on trade. Finally, this study will benefit on strategic decision making to implement trade policies in global market. This chapter comprises the foundation of this study. It introduces research objective and focus on trade and its determinants based on theoretical practical justification of this research. Then major terms used in this study are discussed comprehensively. Literature Review This chapter based on comprehensive literature review, those are useful for this study. The objective is to evaluate determinants of trade volume in the context of literature review. To this end, this chapter divided into three sections. First section deal broadly with trade and its determinants for which this thesis first explains determinants of trade and then model based empirical finding those are relevant to this research. The second section will investigate theoretical perspective and determinants of trade. The third section interlinks determinants of trade with empirical findings based on Asian developing economies. In short, this thesis first discuss trade theories as mentioned in the literature and then pertinent model present; which will not only explain trade theories but also highlight the link determinants of trade and developing economies. Overview Of International Trade It is a well accepted idea that free trade benefits all countries around the world; it is also a well known fact that hardly any country has always been practice free trade policies. Traditionally trade theories contend that government intervenes on foreign trade because of political pressure from interest groups. Since import can pose a threat to domestic industries, these industries lobby intensely for trade protection (Krueger, 1974, Pincus 1975, Mayer 1984). Other studies suggest that governments are tempted to use trade bargaining to gain larger share from global trade (Morishima, 1989); [Cheng, Liu, and Yang, 1999]. International trade is more or less substitute of foreign investment. On the contrary factor proportion hypothesis [Helpman, 1984; Markusen, 1984; Helpman and Krugman, 1985; Ethier and Horn, 1990] seems to predict that international trade and investments are complement as firms take advantage of factor price differences through cross border vertical integration . According to Aizenman, Joshua and Ilan Noy (2005), it is common to expect bidirectional linkage between FDI and trade. However, it is difficult to indicate whether inflows and outflows of FDI affect directly on trade in different types of goods and services. Study found there is strong feedback relationship between FDI and trade; especially in manufacturing industries. There is some evidence indicate trade enhancement lead to extensive competition in domestic and global market at this era (S. and W. Chaisrisawatsuk, 2007). Economic integration promises to raise trade volume through trade creation by engaging trade agreements. At micro level, interdependence between international trade and investment is magnified through intra firm trade (trade among foreign affiliates), outsourcing of raw material, intermediate goods, output and firms vertical integration behavior (S. and W. Chaisrisawatsuk, 2007). Since trade liberalization implies a liberated (less costly) movement of good s and services while investment liberalization implies better environment for movement of resources. Increasing international trade based on sustainable comparative advantage is a key condition for countries to realize gain from global trade. If trade and investment are complementary, FDI inflow supposed to enhance gain from trade. In addition, FDI inflow to the host country expected to improve efficiency and productivity of factors production, therefore it enhances the countrys competitiveness (S. and W. Chaisrisawatsuk, 2007). This study applies gravity model approach to investigate the relationship between international trade and foreign investment. Generally, countries with similar resources produce similar products. However, existence of two way trade (Bilateral Trade) in similar products and two way investments among developed as well as developing economies indicates that there is a room for trade and investment. Thus, simultaneous equation estimate is more appropriate app roach used in order to capture feedback effects between trade and investment in order to examine relationships between trade and investment (S. and W. Chaisrisawatsuk, 2007). Factors Influence International Trade Study found that tariff, inflation, transportation costs are critical factors affect on trade of developing economies. The empirical evidence indicates foreign direct investment tends to increase host countries exports, although the impact on imports is relatively weak. In the presence of tariff barriers, however restrictions on foreign direct investment distort trade. According to the static general equilibrium model, trade is determined by the wealth and size of countries. While distance has a negative effect on trade, in a part because of trade costs (e.g., transportation and communication) are likely increase with respect to distance. Tariff barrier in the importing countries also tend to have a negative, albeit insignificant effect on exports into these countries. While Per capita, G.D.P and Population, on other hand, have significant positive effects on exports (Tamirisa, 1999). Factors those affect on trade justify in detail below. Tariff A tariff is a tax on import which is collected by the federal government to build infrastructure of a particular country. Tariff usually aims first to limit import and second to raise government revenue, thats reason multinational corporations (M.N.Cs) avoid to pay tariff. And initiate subsidiary companies at host country through cross subsidization to retain their leading market share at global market. Empirical studies found tariff lead to trade distortion due to it have a negative effect on trade which raises the cost of trade. Due to tariff rates significantly reduce export of developing and transition economies (Tamirisa, 1999). Model predicts the presence of trade barriers, such as tariffs and non-tariff barriers (N.T.Bs) diminish trade volume. The empirical study found tariff rate interact with the estimated share of free trade. Since trade distortions caused by tariffs; which indicate low growth rate in a country that needs to import more under free trade regime. Governm ent intervenes in foreign transactions by imposing tariff on import of foreign goods. Therefore, tariff has two effects on economy, namely distortion of resource allocation and the transfer of revenue. Thus, distortion effects of tariffs on the growth rate evidently hinge free trade (Lee, 1993). Empirical study found large variation in trade, caused by tariffs and transportation cost. Tariff liberalization shift trade from rich to poor and domestic to global countries, this estimates imply that elimination of tariff create more trade for poor countries. It is also implies that tariff elimination would divert trade away from continental to preferential trading areas. It has been studied in empirical literature tariffs, distance and production costs are important factors affect on trade; study found tariffs reduce trade significantly. Where low tariff rate is exists among organization of economic cooperation and development (O.E.C.D) countries. While high tariff is exist among Non- O.E.C.D countries. Therefore elimination of tariff rate would raise global trade significantly (Lai and Zhu, 2004). Inflation It has been realized in comprehensive literature review inflation tends to hamper the volume of trade and slow down economic growth. The initial effects arise from decreased in domestic demand. Thus, result rises in price fluctuation relative to those competing or importing countries (Lovasy, 1962). The initial affects of inflation is an increase the price of goods and services in domestic market, which makes selling on that market more profitable than export. Since market price influence a volume of trade. However inflationary affects tend to encourage such change with a view to raise the price of commodity and maintain it high level. The creation of substitute adversely affects on the volume of trade. If inflation prolong over a period of years, trade will adversely affect through structural changes in an economy (Lovasy, 1962). The affects of inflation on exports may be counteracted by government actions in various forms like: adjustment of exchange rates, retention quota, subsidies on exports (either straight or through multiple rate practices). In other hand devaluation or gradual depreciation of exchange rate will raise the prices of trade (Lovasy, 1962). Since many other factors influence export, inflation can be a visible affects if it lead the price out of line with price in competing countries or importing areas (Lovasy, 1962). On the other hand, extensive empirical research such as Levine and Renelt (1992), Levine and Zervos (1993), Stanners (1993), Bruno and Easterly (1998) and Easterly (2003) indicate negative relationship between inflation and economic growth (Chowdhury and Siregar, 2004). Transportation Cost Transportation cost is one of the significant factor affects on trade. The importance of geography has been recognized by Moneta (1959) as well as by Hummels (1998). It was found that distance is a critical factor in-between country, whether they share common border or they are landlocked. The infrastructure depends on transport and communications network. Study found that infrastructure is quantitatively important factor to determine transport cost (LimÃÆ'ƒÂ £o and Venables, 2001). Generally these types of cost associated in foreign trade. 1. Physical Shipping cost. 2. Time related cost (Lead Time). 3. Cost of cultural unfamiliarity. Among these costs physical and shipping cost obvious with respect to distance in a trade (Frankel, 1997 quoted from Linnemann, 1996). Generally neighbor countries have more integrated logistics network that reduce number of trans-shipments. Second, neighboring countries are more likely to have transit and custom agreements th at reduce transit time and translate into lower shipping and insurance cost. This suggests that distance affects trade volumes through transportation costs and through other channels such as information, which is often associated with distance. It has been realized that poor communication network leads to higher transportation cost, which significantly affect on the volume of trade (LimÃÆ'ƒÂ £o and Venables, 2001). Transportation cost negatively affect on trade volumes due to complex geographical location, infrastructure, administrative barriers and the structure of shipping industry. Based on comprehensive literature review, land locked countries face transportation cost fifteen percent higher and lower trade volumes than representative coastal countries (LimÃÆ'ƒÂ £o and Venables, 2001). Exchange And Capital Control Study found that most countries have liberalize policy on transfers payments; since economic policy is increasingly shifting toward liberalize transaction. Exchange control acts as a tax on foreign currency required for purchasing goods and services. Besides this basic effect, exchange and capital controls influence trade through other channels as well, for example, transaction cost; exchange rates, foreign exchange risk and trade financing. Study found that exchange and capital control often raise transaction cost (Tamirisa, 1999). Furthermore, exchange and capital controls can reduce trade by limiting the transfer of technology, managerial expertise and skills through foreign direct investment. Capital controls often limit business opportunities for hedging foreign exchange risk and trade financing. Thus inhibit trade volume in the presence of capital control. Exchange and capital control on other hand, often associated with an overvalued exchange rate, which inhibit trade. Mo reover capital controls help to retain domestic savings and higher saving leads to higher investment in export sectors; thus trade may increase (Tamirisa, 1999). Study found that capital controls are critical barrier to export into developing and transition economies; but not to industrialized countries. These findings attribute to capital controls, which noticeably reduce export into developing and transition economies and have only a minor negative impact on export for developed economies. Reason is that industrial economies have relatively liberal regimes for global capital movement. While many developing and transition economies continue maintain various capital controls (Tamirisa, 1999). Exchange and capital controls affect trade through interrelated channels, including transaction cost, and volatility of exchange rate, inter temporal trade, and portfolio diversification. Study realized exchange and capital control have a negative impact on export. However, this result va ries depending on the level of development in the country and type of exchange and capital control. These results may reflect the extent, to which restrictions on current payment and transfers have been liberalized (Tamirisa, 1999). Gross Domestic Product Trade cost operates primarily via price. In the context of monopolistic competition model, difficulty is created by the complexity of constant elasticity substitution (C.E.S) price index in the presence of asymmetric trade costs. To resolve this difficulty, three approaches have been taken: 1. G.D.P price indexes are used to capture the price effects in the gravity equation as Bergstrand (1985, 1989) and Baier and Bergstrand (2001). 2. Estimated border effects are used to measure the price effects, as in Anderson and Wincoop (2003) and Balistreri and Hillberry (2001). 3. Fixed effects are used to account for the price effects, as in Harrigan (1996), Hummels (1999), Redding and Venables (2002), and others (Lai and Zhu, 2004). Turn to an empirical investigation export from one country to other trading partners depends on gross domestic product (G.D.P). By using [Rauchs, 1999] classification sample consist in groups: homogeneous goods, differentiated goods in between categ ories. On the basis of gravity equation framework trade in each of these groups move from homogeneous to differentiated goods; studies found elasticity of export with respect to G.D.P rise significantly. These findings are empirically significant both economically and statistically. The G.D.P of exporting country is found to be a powerful explanatory variable to explain trade relations. There are demographic variables such as G.D.P and population which relate to the size and stage of economic development based on export and import in between countries. These factors are included in the study despite controlling the effect of dependent variable to determine whether size of an economy has an independent influence on trade relations (Feenstra, Markusen, and Rose, 2001). The ratio of trade volume to real G.D.P is often used as an indicator of an economys openness to international trade (Prasad and Gable, 1998). Import Duty Import duties refer to a tax in which importer pay to the government in order to bring foreign products in a particular country. Most of the import duties are figured in a percentage on declared value of the commodity. An import duty differs from product to product and depends on commodity is being imported. Its declared value of origin country. While product group used to assess import duties in between two countries (Sampson and Yeats, 1976). The competitiveness of domestic manufacturers adversely affected vis-ÃÆ'ƒÂ  -vis import because importer liable to pay additional charges due to execution of projects financed by a trading partners (Mukhopadhyay, 2002). Like India fetched excessive price because of banning imports on some goods, they charged very high duty running around the price of goods. These non traditional goods (mainly consumer durables) provided great stimulus to the contraband trade. However, when there is a massive scale of contraband trade, country f ace substantial loss in term of revenue (Sarvananthan, 1994). Foreign Direct Investment Study found foreign direct investment change industrial structure and trade flow across a country. Since FDI help in cost reduction and export promotion at host countries through up date technology. Foreign direct Investment (FDI) also provides financial resource for investment at a host country. In other hand it provides foreign exchange thats positively affect on the balance of trade. Indeed, in the wake of debt crisis, FDI has come to be viewed as an increasingly important source of revenue for developing countries (Goldar and Ishigami, 1999). Advantage of FDI is that it assists the host country to improve its export performance. By raising the level of efficiency and the standards of product quality, FDI makes a positive impact on the host countrys export. Furthermore, it provides better access to export in foreign markets. According to the Hymer-Kindleberger theory (Kindleberger, 1969) foreign owned firms investment at the host country; if it possesses competitive advantage which allows them sustainable growth. Foreign direct investment plays significant role to promote export and to change industrial structure of Asian countries through transfer of technology. Dunnings eclectic theory of international trade (Dunning, 1988) explain overseas market served by enterprises in different geographical location around the world. According to this theory, firms invest in a country if following conditions are satisfied: Firm possesses some ownership advantages vis-ÃÆ'ƒÂ  -vis firms with other nationalities serving particular markets. It is more beneficial for the firm to produce in foreign country due to update technology and Infrastructure of a particular country (Goldar and Ishigami, 1999). FDI contribute on economic growth of the region through cost reduction and export promotion. On other hand, rapid growth is being attained by the region due to update technology and infrastructure for a particular country. As growth leads to expansion o f both domestic and global market (Goldar and Ishigami, 1999). FDI flow in Asia has shifted over a time from Asian Newly Industrialize Economies (N.I.Es) to A.S.E.A.N. While china and Japan have became persistent source of FDI in developing countries (Goldar and Ishigami, 1999). During the past two decades, Taiwan, South Korea, Singapore, and Hong Kong witnessed most rapid economic growth in all developing countries. Their export oriented strategy emphasis on foreign investment and trade is considered the main cause for their success (Amirahmadi and Weiping Wu, 1994). Many countries established Export Processing Zones and Special Economic Zone to promote foreign investment and export to other countries. These zones have preferential treatment in manufacturing process. Their products are targeted for export market. Taiwan and China are the chief example; where these zones have become major attractions of FDI (Amirahmadi and Weiping Wu, 1994). Exports and FDI is complementary instrument in economic growth [Veugelers and Yamawaki, 1991]. Increasing import and inward FDI increase competition on domestic market and reduce domestic firms profitability. FDI allow transfer of technology to produce and sell goods on foreign market. Empirical study found import have positive effects on competitive behavior of domestic firms and have negative effects on their profitability; it has been analyzed theoretically (e.g. by Caves [1985], Jacquemin [1982]) and empirically in the literature (e.g. by Levinsohn [1991], Pugel [1978, 1980], Turner [1980]); (Bertschek, 1995). Based on export oriented group of countries, foreign investment is a more powerful driving force in economic growth process rather than domestic investment. According to this supplementary hypothesis the elasticity of output with respect to foreign capital is predicted as exceeding with respect to domestic capital (Balasubramanyam, Salisu and Sapsford, 1996). Model For Study. Study comprises factors affecting trade volume of developing economies based on gravity equation framework. Foreign trade relation play vital role for economic development. Foreign trade is influenced by multinational corporation (M.N.Cs). These underlying relationships explain the effects, trade barriers of developing economies based on foreign trade relation. This section present trade model and its key concepts used in this study. Determinants of trade and its relationship with trade theory have been identified, tested and resulted. On the basis of comprehensive literature review; it observed that ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€¹Ã…“tariff, inflation and transportation cost are significant factors affects on trade volume of Asian countries. The trade model tested based on developed hypotheses in the next section of this research. Trade Theory Based on comprehensive literature following are the facets of trade theories focus on various concepts associated with global trade in terms of theories expanded by the scholars. Gravity Model Of Trade Theory Study found that international trade flow well described by a ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€¦Ã¢â‚¬Å"gravity equation frameworkÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚  indeed, gravity equation is one of the empirical accomplishment stories in economics and trade theories (Feenstra, Markusen and Rose, 1999). The gravity equation framework is one of the most popular empirical evidence for the whole range of spatial relations in economics and international trade over a period of time. Generally it apply to study determinants of trade volume and to assess various regional economic integration with respect to developing economies (Cieslik, 2007). In the context of international trade, gravity equation in its basic form nominate the amount of trade in-between two countries increases in their size and proportion to their national income, and inversely decreases by the cost of transport between them, (As measured by distance between their economic centers). This relationship closely look like Ne wtons (1687) law of gravitation which states that every atom in the universe attracts other atom with a force that is comparative to the product of their masses and inversely comparative to the distance among particles (Cieslik, 2007). Although gravity equation in its basic form performs a good job to justify foreign trade based on size of trading countries and distance between them. Therefore, in order to improve performance of the gravity equation in empirical studies of trade; one should take into account the impact of other factors that affects on volume of trade (Cieslik, 2007). Theoretical Foundation Of Gravity Model The concept of the gravity model based on Newtons Law of Universal gravitation which relate the force of attraction between two objects with their combined masses and distance between them. The application of gravity model in social sciences empirically proposed by James Stewart in the 1940s (Fitzsimons et al., 1999). And then originally applied to international trade by Tinbergen (1962), the gravity model predicts trade flow between any two countries as a function of their size and distance between them (Walsh, 2006). Economic size is measured by gross domestic product, population and per capita income. Distance typically calculated through transportation cost between countries capital cities. In some studies this is replaced by the measures of remoteness through G.D.P or measure distances relative to the countrys average distance with all trading partners. Extension of this approach is to calculate trade cost with respect to barriers. And other restrictions on trade flow by co mparing predicted and actual levels of trade volume (Walsh, 2006). As the empirical applications of the gravity model has grown theoretically over a period of time; foundation of this model have also developed. Beginning with Anderson (1979); who illustrates gravity equation framework is consistent with a model of trade in which products are differentiated by the country of origin (Walsh, 2006). The gravity model is being established in a literature and measure potential trade between countries. The gravity model; defined by the Newtons Law of Gravitation, explain trade flow between two countries. It is one of the most popular empirical associations in economics and international trade. Earlier studies have estimated difference between observed values and predicted values those are calculated through O.L.S estimate of gravity model (Baldwin, 1994; and Nilsson, 2000); (Kalirajan and Singh, 2007). Justification Of The Gravity Model The Newtons physician primarily justify gravity model based on theoretical justification with their combined masses. Second justification for the gravity model was analyzed by Linneman (1966); (Rahman, 2003). Anderson (1979), Bergstrand (1985, 1989), Thursby (1987), Helpman Krugman (1985) share this view. Their studies identify number of variables. However, price and exchange variables can be omitted when products are perfect substitutes for one another in consumer preference. This structure of course, obtains the standard Heckscher-Ohlin (H-O) setting (Jakab 2001); (Rahman, 2003). Empirical Study Study found the gravity model in the context of international trade applied, first time independently by Tinbergen (1962) and PÃÆ'ƒÂ ¶yhÃÆ'ƒÂ ¶nen (1963) but they didnt have any theoretical justification at the beginning. The earliest but not completely successful attempts provide a theoretical justification for the gravity equation by Linneman (1966), Leamer and Stern (1970) and Leamer (1970). However, origin of the gravity equation from a model was not possible till the product homogeneity assumption; since early neoclassical trade literature was relaxed at that time (Cieslik, 2007). The first formal attempt to derive the gravity equation directly from theoretical point of view made by Anderson (1979) based on Armington hypothesis which argues that products differentiated by the country of origin. Anderson (1979) demonstrated to derive gravity equation by using properties of Cobb Douglas expenditure system when goods produced by a country. Andersons (1979 ) approach subsequently applied and extended by Bergstrand (1985) who derived and summarize equation in terms of trade flow (Cieslik, 2007). An alternative method proposed by Helpman (1987) who completely departed from neoclassical assumptions of traditional Heckscher-Ohlin-Samuelson model. Which assume monopolistic competition and product differentiation among various firm in all industries rather than countries. The monopolistic competition approach viewed as an elegant way to indigenize product differentiation and explain formally on the basis of Armington assumption. The main role of monopolistic competition in Helpmans (1987) model is to assure that different countries specialize in different varieties of products due to existence economies of scale, at the firm level. Insight has been formalized by Deardorff (1998) who derived gravity equation in its basic structure from traditional Hechscher-Ohlin-Samuelson model with complete specialize in production at a country level (C ieslik, 2007). Empirical Model Of Trade International trade is a vast study which comprises several model of trade one of them is gravity model. It is being used extensively in empirical studies of international trade and economics since 1960s. According to the static general equilibrium model, trade is determined by the wealth and size of the countries and distance between them. Theoretical foundation of the gravity model based on trade theories; under imperfect competition this has been integrated with the factor proportion and demand based theories of international trade (Tamirisa, 1999). The basic gravity equation is given by Where, Xkj = Exports from country k to country j. (Qk/Nk) and (Qj/Nj) = Per capita income of country k and j. Nk and Nj = Population of country k and j. Dkj = Geographical distance between country k and j. Akj = Denote factors distorting trade. ekj = Distributed error term. Based on above equation which can be modify by taking natural logs and defined tariff, capital cont rol and geographical distance as a trade distortions as follows: Where, Tjk = Import duty imposed by country j on import from country k, Ej = Aggregate measure of exchange and capital control in country j. The intercept accounts measured trade distortions on export volume. The model estimated by the ordinary least squares method (Tamirisa, 1999). Empirical Evidence Study found that tariff, inflation, transportation cost and capital control through foreign direct investment are critical barriers for developing and transition economies but not to developed economies. Controls on current payments and transfer reduce trade flow significantly (Tamirisa, 1999). Study found that distance has a significant affects on export in a part because of trade costs (e.g., transportation and communication) cost likely increase with respect to distance. Tariff barrier in importing countries also tend to have a negative affects. While per capita, G.D.P and population on the other hand have positive affects on export volume (Tamirisa, 1999). It has been realized in this study exchange and capital controls are significant barriers for developing and transition economies. These findings attribute to capital control, which noticeably reduce export in developing and transition economies and have minor negative affects for industrialized economies. The reason is that industrialized economies have relatively liberal regimes for global capital movements; while many developing and transition economies preserve various capital controls. While controls on transfer payment represent barrier for a trade (Tamirisa, 1999). Empirical Result An overall positive relationship found between trade and investment, greater the international trade among the countries, the higher level of F.D.I generates vice versa. In order to enjoy sustainable competitive advantage from trade liberalization, investments have a significant role for trade development (S. and W. Chaisrisawatsuk, 2007). In this research model, study based on theories influenced trade of developing countries. The empirical evidence indicates relationship between international trade and investment which suggest important role for policy coordination to gain potential benefit, in terms of social welfare improvement. The positive association found in-between trade and investment thats suggests these are complements. Since trade liberalization leads to welfare improvements, F.D.I induced trade expansion. The on going process of trade and agreement seems to focus on trade liberalization by reducing trade barriers of both tariff and non tariff which obstacle for inv estment liberalization (S. and W. Chaisrisawatsuk, 2007). Based on all discussions it has been realized in this study foreign trade have paramount significance more or less at all dimensions. The fact behind this; trade liberalization is foremost step for economic growth and development. Summary Based on comprehensive literature review it noticeably seems that trade barriers are critical factor to form trade liberalization in the context of developing economies. For practicing managers it realized that foreign trade is a vast study which has grown over the period of time at this competitive era, which bringing new concepts of foreign trade relations at this competitive era. The area of research focused to understand major constructs determinants of trade volume, which are seen to revolve around global marketplace. Study reveals that Product, Price, Place and Promotion are significant factors which affects on trade volume. To have a right product, right place at right time in front of target market at this competitive era. Extensive literature illustrate various theories and model of global trade thats highlight three critical factors affects on trade in which includes; tariff, inflation and transportation cost at this competitive era. This section based on theories infl uenced trade and economic growth of developing countries. The research model has been tested based on developed hypotheses in the next section of this research to investigate determinants of trade volume in the context of Asian developing economies. Research Hypotheses Based on empirical findings, this chapter comprises research hypotheses on the basis of trade theories and empirical evidence; factors affecting trade volume. Those theories empirically identified, tested and resulted to develop research hypotheses. The aim of this study is to understand the basic concepts of trade volume and its key dimensions, this study focused to investigate the role of foreign trade and its interactions with competitive era, which affects on global trade. Based on comprehensive studies in foreign trade and management literatures, dimensions of trade and management understand at this stage. Research Problem. The Problem area or issues regarding factors affecting trade volume based on Asian developing economies observed in this study. Some of the critical factors address in international business like tariff, inflation and transportation cost which negatively affects on trade; to limit the volume of trade at this competitive era. It is realized that inflation rate is critical factor affects on international market. Study also found transportation cost increase with respect to distance in between trading countries. Determinants of trade and their impact on international market evaluated on the basis of multiple criteria in this study. On the basis of empirical evidence research problem is being developed ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€¦Ã¢â‚¬Å"Factors affecting trade volume of Asian developing economiesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ . As economy growth depends on foreign trade due to modern technology and specialized expertise. Since foreign reserves have positive balance of trade with re st of the world. Research Hypotheses This study focused to identify factors affecting trade volume based on developing economies formulated by different scholars. It is recognized in literature review; management actions have potential affects on foreign trade, since foreign trade affects positively on economic growth for a particular country. Therefore after studying the model of trade, to measure trade with flourish economic growth for a sustainable period of time by its customer which can be achieved through effective management efforts. Finally study comprise the following hypotheses: H1: There is a relationship between Gross domestic product (G.D.P) and Trade volume. H2: There is a relationship between Foreign direct investment (F.D.I) and Trade volume. H3: There is a relationship between Exchange rate and Trade volume. H4: There is a relationship between Tariff and Trade volume. H5: There is a relationship between Inflation and Trade volume. H6: There is a relationship between Transportation cost and Trade volume. H7: There is a relationship between Import duty and Trade volume. H8: There is a relationship between Population and Trade volume. To answer the above propositions this thesis proceed in the following manner to determine real facts figure based on assessment of qualitative quantitative data. Summary In this chapter theoretical framework represents the relationship among determinants of trade in the context of Asian developing economies. Study found that critical factors affects on foreign trade includes: Tariff, Inflation and Transportation cost respectively by evaluating research hypotheses. Methodology This study empirically examine those factors affecting trade volume in the context of Asian developing economies. As chapter three comprises hypothetical structure with regards to Asian developing economies. This section justifies research objective to evaluate and proper methods that are followed. Research Objective Objective of this study is to empirically identify factors affecting trade volume and assess the impacts of trade barriers on Asian developing economies. It further attempts to investigate those factors affects on trade volume significantly. Research Design Research design based on research problem. The research problem therefore employed; to find factors affecting trade volume based on Asian developing economies. Since research design is the basic plan that guides about target population of the research to arrange sample size for data collection to analyze data in meaning full methods. The methods that were applied for this research was analytical research design. Nature Of Study Basically nature of this research is descriptive to justify those factors empirically identify, evaluated and tested based on develop hypotheses. Independent factors those have been identified in this research comprise (Tariff, Inflation, Transportation cost, Exchange rate, Import duty and F.D.I) on the other hand dependent variable (Trade volume). This research will help to analyze trade barriers and its affects on Asian developing economies. This information described with regards to empirical evidence. Data Source Basically this research comprises secondary data; collected from authentic source which includes: 1. World trade organizations (W.T.O) trade and tariff profiles. 2. The world fact book, from central intelligence authority (C.I.A). 3. Federal bureau of statistics. 4. International Monitory Fund (I.M.F). 5. United Nation Conference on trade and development (U.N.C.T.A.D) and their Annual reports respectively. An explanation based on collected data and the information used to justify this study. Reliability of this study based on filtered data comprised from authentic source which includes: W.T.O, I.M.F, C.I.A (Fact Book) and U.N.C.T.D. To collect filtered data based on specification of this research. Sampling Method Sample size based on target population which comprises developing economies. Therefore this thesis comprised fifteen observations based on five developing economies of Asian countries. Imply ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€¹Ã…“Judgment sampling method due to certain characteristics of developing economies which includes (Pakistan, India, China, Bangladesh and Sri Lanka). These are true representatives of entire population of Asian developing economies. For validity purpose, filtered data comprised based on trade theories to find the answers of this research hypotheses. It was important to understand trade barriers of Asian developing economies at this competitive era, where lot of competition exists due to economic socio cultural differences. Summary Of Hypotheses Factors Affecting Trade Volume. H1: There is a relationship between Gross domestic product (G.D.P) and Trade volume. H2: There is a relationship between Foreign direct investment (F.D.I) and Trade volume. H3: There is a relationship between Population and Trade volume. H4: There is a relationship between Exchange rate and Trade volume. H5: There is a relationship between Tariff and Trade volume. H6: There is a relationship between Inflation and Trade volume. H7: There is a relationship between Transportation cost and Trade volume. H8: There is a relationship between Import duty and Trade volume. Statistical Technique The statistical tool used to evaluate and interpret data into meaningful information by using S.P.S.S version 13. Filter data from excel sheet was entered in S.P.S.S. Basically regression analysis; Multiple Regression used to test the degree, in which independent variables of foreign trade able to predict dependent variable of trade volume in the context of Asian developing economies. Main Effects (H1 through H8) Hypotheses testing concern factors affecting trade volume based on Asian developing economies by using ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€¦Ã¢â‚¬Å"Multiple Regression Analysis.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚  To assess the impact of independent variables: Tariff, Inflation, G.D.P, Transportation cost, Import duty, Exchange rate and F.D.I. on dependent variable of trade; Asian developing economies. Trade Volume = X1 + X2 + X3 Trade DeterminantsÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ + Error term. Result concern the main effects presented in Table 4.1 (H1 through H8) of Asian de veloping economies. Regression Interprtations Of Hypotheses H1: States there is a relationship between Transportation cost and Trade volume. The level of association between transportation cost and trade volume indicates R is .944 and R2 .883 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .883 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is .944 at p0.05, it explains the 94% positive variation in Transportation comes from 94% positive variation in Trade volume significantly. Hence, H1 Accepted. H2: States there is a relationship between Gross domestic product (G.D.P) and Trade volume. The level of association between gross domestic product and trade volume indicates R is .973 and R2 .939 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .939 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…  ¸) is .491 at p0.05, it explains the 49% positive variation in G.D.P comes from 49% positive variation in Trade volume significantly. Hence, H2 Accepted. H3: States there is a relationship between Tariff and Trade volume. The level of association between tariff and trade volume indicates R is .984 and R2 .960 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .960 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is -.179 at p0.05, it explains the 18% negative variation in Tariff comes from 18% negative variation in Trade volume significantly. Hence, H3 Accepted. H4: States there is a relationship between Exchange rate and Trade volume. The level of association between exchange rate and trade volume indicates R is .990 and R2 .972 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .972 shows significant description. The coeffi cient of regression (ÃÆ'Æ’Ã…Â ¸) is -.219 at p0.05, it explains the 22% negative variation in exchange rate comes from 22% negative variation in Trade volume significantly. Hence, H4 Accepted. H5: States there is a relationship between Population and Trade volume. The level of association between population and trade volume indicates R is .998 and R2 .994 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .994 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is -.467 at p0.05, it explains the 47% negative variation in Population comes from 47% Population variation in Trade volume significantly. Hence, H5 Accepted. H6: States there is a relationship between foreign direct investment (F.D.I) and Trade volume. The level of association between foreign direct investment and trade volume indicates R is .965 and R2 .926 at p0.05, which represent substantial correlation between depen dent and independent variables. The R2 = .926 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is .965 at p0.05, it explains the 96% positive variation in foreign direct investment (F.D.I) comes from 96% positive variation in Trade volume significantly. Hence, H6 Accepted. H7: States there is a relationship between Import duty and Trade volume. The level of association between import duty and trade volume indicates R is .989 and R2 .974 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .974 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is .263 at p0.05, it explains the 26% positive variation in Import duty comes from 26% positive variation in Trade volume significantly. Hence, H7 Accepted. H8: States there is a relationship between Inflation and Trade volume. The level of association between inflation and trade volume indicates R is .993 and R2 .982 at p0.05, which represent substantial correlation between dependent and independent variables. The R2 = .982 shows significant description. The coefficient of regression (ÃÆ'Æ’Ã…Â ¸) is .148 at p0.05, it explains the 15% positive variation in Inflation comes from 15% positive variation in Trade volume significantly. Hence, H8 Accepted. Limitations Following are the limitations faced during the structure of this research. This research generalized specifically on Asian developing economies which can not be generalized on other economies. Specific data comprised only authentic sources due to limited time and information availability. Further in research, critical factors have been observed, the most affects include (Tariff, Inflation and Transportation Cost) are significant barriers on trade of Asian developing economies. Summary In this chapter research methodology describe in the light of factors affecting trade volume. This was a descriptive study; which incorporates data from authentic sources based on comprehensive literature review. Regarding analytical technique, the model was tested by using; Multiple Regression Analysis to assess determinants of trade volume in the context of Asian developing economies on the basis of extensive literature review. Conclusion And Recomendation The final chapter discus empirical evidence and research findings presented in preceding chapters. Based on develop hypotheses to identify trade issues and implication for the practicing manager in the context of Asian developing economies. In this study key dimensions of foreign trade includes tariff, inflation, transportation cost and exchange rate are significant factors which affects on trade. This Study further incorporates other key elements to elaborate determinants of trade such as Import duty, F.D.I and G.D.P respectively. Study found that G.D.P of exporting country is a powerful explanatory variable in the relative intensity of trade relation (Feenstra, Markusen and Rose, 2001). Result Discussion On the basis of Table 4.1 where result of hypotheses shown accordingly. Result on that table represents factors affecting trade volume based on Asian developing economies and their significance level. The aim was to identify determinants of trade and their affects in the context of Asian developing economies. Result of the analysis identify significant association among these variables (Tariff, Inflation, Transportation cost, Exchange rate, F.D.I and G.D.P) are statistically significant in relation to trade volume of these economies like (Pakistan, India, China, Bangladesh and Sri Lanka). For this one determinant of trade represents significant relationship among these variables. Based on comprehensive literature and theoretical framework of this research, result indicates that (Tariff, Inflation and Transportation Cost) are statistically significant factors which critically affects on trade of Asian developing economies. Implications The major implications of this research are two fold. Academically it advance theory of International trade: Factors affecting trade volume based on Asian developing economies. Practically it focuses the attention of regional managers to continuously grow their business in other countries to lead in a global market and retain their market share based on sustainable competitive advantage. Another implication for managers and entrepreneurs is to implement supply chain management effectively to manage their backward and forward integration based on sustainable competitive advantage to build their strength in distribution network to minimize logistic and transportation cost. Scope Of Future Research On the basis of limitation there are numerous opportunities for future research. Since generalize propositions can not explain the phenomena alone; due to integrated approach need to implement to gain sustainable competitive advantage. These are the few potential opportunities for future research. First an integrated method need to adopt; to understand the essence of trade barriers caused by (Tariff, Inflation and Transportation cost) in relevance to multilateral trade construct. Using this approach provide better understanding of how trade barriers reveal with other factors of trade volume and affects on transitional, developing and developed economies. Second, the extent literature includes other dimensions relevant to both trade barriers and additional economies to identify relationship among determinants of trade with regards to developed and transitional economies. Conclusion Aim of this study was to investigate the factors affecting trade volume based on Asian developing economies. A theoretical framework was developed to represent the link between trade barriers of developing economies; Based on gravity equation frame work to examine trade flow of developing economies. Given the lack of research based on trade strategies, in the context of Asian developing economies. Dimensions of trade barriers were first theoretically delineated then empirically validated. The dimension includes: Tariff, Inflation, Gross domestic product and foreign direct investment were top of the mind. Filtered data were collected from authentic sources. The key information was used to collect data from W.T.O, I.M.F, U.N.C.T.D, C.I.A (World fact Book). The main statistical technique used in descriptive research based on Multiple Regression Analysis. In the area of trade, this study attempt to explain determinants of trade in the context of developing economies. It also repr esents empirical and theoretical steps toward an explanation of trade barriers based on gravity equation framework. Such effort not only directed towards assimilating trade barriers of developing economies. But also toward generalizing the relevant studies mainly conducted from management perspective. Therefore such type of research necessary due to lack of study with this regards in the context of Asian developing economies. Due to such type of efforts acknowledge academically and practically in the future. Refernce Andrzej Cieslik, 2007. Bilateral trade volumes, the gravity equation and factor proportions Macroeconomics and International Trade Theory Division, Department of Economics, Warsaw University, Ul. Dluga 44-50. Anis Chowdhury and Hermanto Siregar, 2004. Indonesias Monetary Policy Dilemma: Constraints of Inflation Targeting. The Journal of Developing Areas, Vol. 37, No. 2, pp. 137-153. Published by: College of Business, Tennessee State University. Chaisrisawatsuk, S. and W. Chaisrisawatsuk, 2007. Imports, exports and foreign direct investment interactions and their effects, pp.97-115. A study by the Asia Pacific Research on Trade, (United Nations, New York). Gertrud Lovasy, Mar, 1962. Inflation and Exports in Primary Producing Countries International Monetary Fund, Vol. 9, No. 1. pp. 37-69. Published by: Palgrave Macmillan Journals. Huiwen Lai and Susan Chun Zhu, May, 2004. The Determinants of Bilateral Trade. The Canadian Journal of Economics Revue. Vol. 37, No. 2. pp. 459-483. James E. Anderson and Eric van Wincoop, Mar, 2003. Gravity with Gravitas: A Solution to the Border Puzzle The American Economic Review, Vol. 93, pp. 170-192. Published by: American Economic Association. Mohammad Mafizur Rahman, September, 2003. The Gravity Model Approach. Discipline of Economics. University of Sydney, Australia. Natalia T. Tamirisa, Mar, 1999. Exchange and Capital Controls as Barriers to Trade International Monetary Fund (I.M.F) Papers, Vol. 46, No.1 pp. 69-88. Published by: Palgrave Macmillan Journal. Nuno LimÃÆ'ƒÂ £o and Anthony J. Venables, 2001. Infrastructure, Geographical Disadvantage, Transport Costs, and Trade. The World Bank Economic Review, Vol. 15, No. 3 (2001), pp. 451-479. Published by: Oxford University Press. Robert C. Feenstra, James A. Markusen and Andrew K. Rose*August 3, 1999. The Gravity Equation Framework of Trade. Andrew K. Rose Haas School of Business University of California. Wen Li Cheng, Meng-chun L iu, and Xiaokai Yang, 1999, A Ricardian Model with Endogenous Comparative Advantage and Endogenous Trade Policy Regimes. Center for International Development at Harvard University.

Using The Method Ipa Is It Favors Open Ended Questions...

Qualitative In the examination of a topic as personal as changes in meaningful occupation, using the method IPA is going to enhance the researchers ability to complete an in-depth analysis in order to understand the individual’s experiences. An advantage of IPA is it favors open-ended questions with the view of gaining detailed descriptions about individuals lived experiences. It is frequently used in research concerned with identity and the individual’s sense of self as it favors in-depth analysis into important life experiences (Scotland, 2012; Smith Eatough, 2012). Under this approach the researcher needs to be aware of there own pre-understanding of the topic and how this personal understanding may influences the issues being researched (Borell, Nygard, Asaba, Gustavsson Hemmingsson, 2012). IPA studies use a small sample size, to ensure each individual’s experiences are analyzed in detail. The researcher needs to decide if they are going to give detailed analysis on one or two individual’s experiences or take a view of a larger group. Taking on a larger sample size runs the risk of becoming a superficial qualitative analysis due to the overwhelming amount of data (Smith Eatough, 2012). IPA is best suited to a flexible method of data collection such as semi-structured interviews. These interviews are participate led with guidance from the researcher using open-ended questions, which will produce meaningful and in-depth accounts of the topics being explored.Show MoreRelatedBranding in Clothing Industry22425 Words   |  90 PagesSummary 20 23 Chapter 3: Methodology 3.1 Introduction 3.2 Theoretical backgrounds 3.2.1 Review of different research traditions 3.2.2 Quantitative versus qualitative analysis 3.2.3 Reliability and validity of data 3.3 Justification of research method 3.4 Sampling 3.5 Interview schedule 3.5.1 Stage one 3.5.2 Stage two 3.5.3 Stage three 3.6 Administration 3.7 Analysis strategy 3.7.1 Grounded theory and its relationship to qualitative data analysis 3.7.2 Within-case and cross-case analysis 3.7.2Read MoreInternational Management67196 Words   |  269 Pagesinternational management reflect this dynamism and the increasing unpredictability of global economic and political events. Continued growth of the emerging markets is reshaping the global balance of economic power. Many emerging markets continued to experience growth during a period in which developed countries saw their economies stagnate or decline. The global political environment remains volatile and uncertain, with ongoing conflicts in the Mi ddle East and Africa and continuing tensions in Iran, North

A Analysis of Essay Volar free essay sample

Yuliya Slipets A Analysis of Essay â€Å"Volar† In â€Å"Volar† Judith Cofer, she portrays the problems faced by many immigrant families, such as problems with fitting in, homesickness and starting life from the beginning in America. The author shows the daughter’s, the mother’s, and the father’s secret desire through their dream. The daughter’s obsession with superheroes is her desire to fit in to the culture where she lives. The author shows that the twelve years old girl with tight curls and skinny arm and legs is not happy with way she looks. She feels different from people surrounding her. She dreams that as she turns into super girl her† legs would grow long† (69) her â€Å"arms harden into steel†(69) and her† hair would magically go straight and turn a golden hair† (69). Escaping into her dreams, the little girl is trying to avoid a reality of not fitting in her new world. We will write a custom essay sample on A Analysis of Essay Volar or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page She feels â€Å"incongruous†( 69) waking up in her body. The mother is homesick for her country. She wants to go back to her country and see her â€Å"familia on the Island† (70). She understands that it is financially impossible for her to go back and it hurts her. She looks out from her kitchen window and has a view of the sky. She wishes to fly to her family and says â€Å"Ay,si yo pudeiera volar†- all she could do is wish she could fly. Although, the author has not clearly defined of the Father’s dream in this essay. It seems that father wants a new, better and financially stable life for his family. He is the person in the family who lives realistically and practically. He seems more worried about their new life than his wife. He is more interested in the discussion about their current life â€Å"†¦they would be discussing events in the barrio. Actually, he would be carrying that part of the conversation†. In this story, the family is like many immigrant families is dealing with their problems , escaping to their dreams to find a relief from the pain.

Quality Education in the Philippines Essay Example

Quality Education in the Philippines Essay CHAPTER 1 INTRODUCTION A. Overview What is good quality education? What is the use of this to our daily lives? What will the effects be on our future? These are but just a few questions that run through our mind when we think of what education is. Education, for many, is the forefront in building our future; it gives us the power of knowledge that helps us cope up with the different steps in our lives. Some think of it as a mere process to gain access to monetary security and better life, but this is not mere education should be. It is one of the most powerful instruments for reducing poverty and inequality and lays a foundation for sustained economic growth. † (2008) In my own words, education is merely a step to make us grow in all aspects of life, but useless without the proper guidance provided by the teachers and administrators and the given teaching aids used today. Good Quality education is a given name to those that have the complete or necessary requirements in having a good atmosphere for learning and proper growth. Schools should have the goal to achieve this good quality education and garner more merits and more students. They should teach them by teaching them sing the new and effective methods rather than what we see in the old days. Education is not necessarily good at first, it takes years of service and practice to achieve this kind of excellence just as UST surpassed other institutions in this field. The effects of this kind of education can be seen through their fine work on students and the respect and love that they give on each one. It is through this kind of education that spawns great men of the past. We will write a custom essay sample on Quality Education in the Philippines specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Quality Education in the Philippines specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Quality Education in the Philippines specifically for you FOR ONLY $16.38 $13.9/page Hire Writer This will lead us to more lucrative jobs and better lives. This will determine our fate in this cruel world. â€Å"Education makes man a right thinker. It tells man how to think and how to make decision† Khan (2008). Teachers are the drivers of this future that we want. We can see their fruits of labor on the people that they have produced. One such example is Jose Rizal; he did not like the quality of education in the Philippines that is why he went abroad. He garnered intellectual fame through his wit and possession of good quality education. So now I ask you, is education really only for those who want the finer things in life or is it also about the knowledge that we receive? This will now depend on the basis of our foundation as human people. I believe that to attain good quality education: we must push through the very thought of money and consider the power of knowledge, for if there is n power, then there will certainly be no knowledge. †The modern world in which we live is often termed a knowledge society; education and information have become production factors potentially more valuable than labor and capital† (2008). B. Research Aims This paper aims to: 1. discuss the reasons why we are lacking in teachers 2. discuss the similarity and difference of public from private schools 3. discuss the difference of a normal college program from a ladderized program 4. discuss ways on how to promote values, peace, and order inside the classroom 5. discuss how to make the class active through proper motivation C. Research Questions The proponent intends to provide answers to the following questions: 1. Why are we lacking in teachers? 2. What are the similarities of public and private schools? 3. What are the differences of public and private schools? 4. How to promote effectively values, peace, and order inside a classroom? 5. How is motivation a key to having an active class? 6. What is a Ladderized program? 7. What is its difference with the normal college educational program? CHAPTER 2 METHODS A. Principle/s of Organization Cause and effect Is a form of analysis that examines the causes and consequences of events and ideas. An organizational structure of text in which there is a description of events and their causes or consequences. Explanation: The author used the principle of cause and effect to give out reasons on why promoting values and motivating students will increase their perception in studying. The author also wants to express the possible effects if the teachers and parents will help in enhancing the skill of the child in his/ her aspect. Comparison and Contrast An organizational structure of text in which a description of similarities and differences among two or more things occurs. Explanation: The author used the principle of comparison and contrast to differentiate the two Philippine college educational programs which are the normal and the ladderized program. By giving their differences and similarities the author achieved part of his paper which is to differentiate the two educational systems. B. Conceptual Framework Explanation: The author shows in this simple diagram what he points out on this paper. These topics will be discussed in this paper. The origination and development of the Philippine education system since many do not know where it began. The differences between the two modern programs, the normal and the ladderized because some students are confused on the two programs since the ladderized program was just adapted by the Philippines on the year 2006. Motivating students can lead to many effects according to (Calderon, 1998) there are several definitions of motivation but they all amount to the arousal of interests that directs the learning towards a goal. † The transformation of students takes place in school since it is where a student mainly spends his time. This paper will discuss these topics to answer the questions given and to achieve the aim to discuss the quality education in the Philippines. CHAPTER 3 RELATED READINGS Start of Education in the Philippines When did it start? When was it developed? These are but a few of the question that run into one’s mind. It all started in ancient Philippines. The start of education was the use of Alibata, or otherwise known as the Tagalog script. The Pre-Spanish Philippine era already started with Education in writing in which resulted to the development of the Alibata. This writing system was used by the ancient Filipinos in order to communicate with each other. When the Spaniards first set foot on the Philippine Island they saw that the use of the Tagalog script was their main form of communication and that the use of bamboo as papers and knives or styli as a pen or pencil. When the Spaniards conquered Philippines the writing system of Alibata was replaced by formal education system in Universities run by Spanish priests. Though until now in some parts of our country that the writing system of Alibata is still being used. Modern Philippine Education Today our education has two programs offered a normal school program which is a straight education from elementary to college and another one is the ladderized program in which in college you will two years in technical and vocational schools and another one to three years(depending on your choice of course) as your college program. Ladderized program helps to ease the students in getting a college diploma that according to (Syjuco)† You start with tech-voc modules and thereafter will require much less college courses to earn a college diploma. In a normal educational program you will start from elementary to high school covering about twelve years and then taking up a course of your choice which will take about four-five years straight. The difference between them is that in a ladderized program you will need to have a two year technical vocational educational course before you can go to college to finish your chosen course while in a normal educati onal program you will just have to finish a four or five year course straight. Importance of Teachers Today many of our schools are lacking of highly capable teachers, since most prefer to go abroad and continue their profession in other countries as a result we lack in instructors that can guide students to the right path. Many of today’s students choose education as a last choice of course for some say that it only has a low pay, but we only look at education in the technical or in the monetary side why not look at a different side? Our teachers are the ones responsible to help the parents of their students guide them to be a well educated and highly respectable citizen. However, if a student becomes successful but does not have any values at all then his success means nothing if he or she cannot promote values. Our teachers play this important role in a child’s life so if a school lacks its teachers then a student cannot be properly taught then he or she cannot gain any success. These are but a few effects that are happening due to our lack of teachers. So we can see that teachers have the most important job of all which is to prepare them for the challenges of life. According to Manapat (2008), â€Å"Whenever they hear one of their students achieve something, they always feel that they are part of it. † Schools as Centers for Transformation Our education is slowly decreasing in its quality why? It is because of one simple reason, corruption. Our government has already planned a large amount for education but since some officials are corrupt that a big part of the money needed is inside their pockets. Now our schools are responsible to help the country to prevent these situations. Students are taught with values that will help them in future life. According to (Clemente, 1996), â€Å"Schools can be the vehicle for the peaceful revolution to bring about a better Philippines. † Our schools should be promoting peace and order to their campuses and help in stopping the hindrances for the students to learn and be active. Hindrances like unrecognized organizations, vices, and the likes are disadvantageous to a child’s learning for it may help in promoting the wrong values. A result of these may occur in the future wherein the child becomes a worker or an adult and due to his wrong values that he may not at all succeed in life. Every teacher always say that no matter how much you have forgotten the lessons taught it is fine but forgetting the values learned is not acceptable. Values learned at school are what make a person who he or she is. Everyday our teachers are preparing lesson plans so when they discuss they can also relate it to real life situations and explain the values that can be learned through it. According to Manapat (2008), â€Å"Knowledge or intelligence is second than spirituality, one cannot be very intelligent and yet have lost track of his/ her spirit. Promoting discipline into a child can help change its behavior in class, at school and even anywhere else. According to Manapat (2008), â€Å"A disciplined student can face the challenges of life and succeed. † Student Motivation A student whenever achieves anything a teacher will always be a part of it. Teachers should never discourage their students in having an interest in extraordinary things, for this may be an opportunity for the child to excel in this aspect. A parent should also not discourage their child in having a crush or entering a relationship since this is where their child gets their inspiration. A teacher also needs an inspiration for teaching is not a very easy job. A teacher can help the parent of their student to develop the child into a responsible adult through proper motivation. According to Manapat (2008), â€Å"The students need to inspire their teachers because teachers also need to know whether or not they are able to give them quality education through their teaching. † Motivating a student can help him/ her to develop in a certain aspect and also motivating the teacher can help to give more meaningful discussions. A possible example of this would be if the student achieves success in sports a teacher should credit their student’s success since it can help the student to excel more on sports and possibly become a professional athlete in the future. So if both the teachers and the parents would cooperate the child can develop its potential and may become successful in life. Public and Private Schools Public Schools differ in size of school, teaching, uniform, facilities and others. During the old times they say that public schools are better than private schools that according to Cruz (2007) â€Å"All the bright students went o public schools. Why a private school when the public school was free and had a better reputation? Those in private schools went there by force of circumstance. † Today, private schools are better than public schools since they are more advanced in curriculum than in public schools. Both public and private schools are doing their own way to give their student s the quality education they deserve. This is through the PAASCU accreditation. If a school passes the accreditation they will be given levels of which level 1 being the first and level four being the highest. According to PAASCU (2008) â€Å"PAASCU judges an institution not by comparison with other institutions but primarily by the degree to which each institution’s own avowed purposes are matched by actual practice in the various areas being evaluated. † Public and private schools only differ in their physical appearances but in same in their goals and objectives both for the school and the student. CHAPTER 4 PROPOSITIONS These are the statements that the author has learned throughout his research work. These came from the author and not elsewhere. These are the facts based from his interview, materials, readings and sources: Proposition 1: Discipline is key to success. Discipline is key to a man’s success because no man can face challenges if he is not disciplined. If he will be disciplined then he can make his own way into his success. He can choose what will be best for him. According to Manapat (2008), â€Å"Disciplined students can face the challenges of life. † Proposition 2: We always need to connect God and knowledge. According to Manapat (2008), â€Å"We can never be knowledgeable and yet we lost track of our spiritual life†. God created everything and we owe Him our knowledge. God is the one who guides us in our life and helps us in gaining new knowledge. Proposition 3: Teachers are always part of our success. We must always remember that if not for the teachings of our dear mentors then we would not have achieved success in life. Teachers have become a part of our lives since they patiently taught us the values that we learn. We make a special connection with them not only as our teachers but also as our friend in life. Proposition 4: Teachers also need the inspiration of their students. If teachers see their students having high marks then they are motivated to work. Teachers improve their style of teaching based on their students’ capabilities. They can give their students their best performance if they know that they are motivated to gain new knowledge. Proposition 5: A teacher won’t give up their job no matter how hard it may be. A teacher will never give up their love for teaching. Our teachers will patiently guide us even if we are a slow learner until we got our momentum at studying. They are with us from the beginning up to the end. Proposition 6: There are no challenges that are hard if we are guided by God and we are disciplined. Challenges are part of life but if we are disciplined, we can always face them. Discipline helps us to be prepared in facing life’s challenges. If God guides us then we can make the right decisions that can help us develop our life. Proposition 7: Years of experience can help a teacher in giving a quality education. Every year as we progress in life, our knowledge also increases. Teachers who have years of experience can help their students in developing techniques in solving problems. They can use their experiences in their approach to the students in tackling the lesson. Proposition 8: Motivated students can perform differently than others. Students who are motivated can perform better in class. A student can achieve more in life through motivation. Through this that they can excel and be disciplined in their studies therefore helping them prepare for their future life. Proposition 9: Philippines lack highly capable teachers. Our country is having a hard time in adapting and coping up with the educational system of the other countries why? It is simply because we lack the teachers who are capable of giving quality education. Many students who are scholars after finishing college, they will go to other countries and practice their profession there and not serve the Philippines. According to Salamat (2006), â€Å"With their low wages unable to keep up with the rising cost of living, more and more teachers leave the country to get a higher pay teaching in the U. S. † Proposition 10: Teachers and parents cooperate to help the child develop its potential. They both help us in developing our otentials through their support. It is their duty to help us grow but it is also our duty to help them help us to reach our potentials. Reaching our full potentials can help us in having our future secured. Teachers alongside with parents help each other in knowing the child’s performance. â€Å"A good parent-teacher relationship can be the difference between knowing how your childs doing in school and knowing how he tells you hes doing. †(2009) Proposition 11: A peaceful and orderly environment can help a child develop his values. A school’s environment is a very important factor in developing values. These values can help them in life, since by knowing and promoting it that one can earn respect. An environment with peace and order will be able to stop the hindrances for the students to receive their educational right. Proposition 12: Ladderized program can help a student get to college easier. A ladderized program is just having a two year technical vocational course then a two-four year course, again depending on your chosen course, as a continuation for your college. This program has just been adapted by our country last 2006. This program also helps a student to take up college at a low tuition fee. Proposition 13: Parents guiding their children can help them get better performance. A student can perform better if they will be guided by their parents more. It is like a parent looking up for their children while they are growing. A parent should not be too confident that their child is getting enough guidance from their schools. A parent should also guide their child to help them decide on important matters and to help deepen their relationship. According to Sanders (2008) â€Å"Increase the 1-to-1 support your child receives with personal career and education guidance to help your child sort through his/her best-fit choices. † CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS A. Summary of Main Points The author learned through his research that major factors contribute in determining the quality of education that the Philippines give. One is the low salary of teachers that they tend to migrate to other countries to get better payment. Teachers should be given higher wages since they have the most important job of all which is to guide and help the students in their life. Another is the school environment if the environment of the school is inappropriate then it will greatly affect the performance of the student. Students will never grow in their studies or will never be molded into their true potential. This is due to their school’s environment; if it is not suitable in learning then the students will not be able to learn what they will need to use in their lives. Students are having difficulties choosing the right school since they will have to choose the standards, the environment, and other criteria. The country’s educational system is giving students two choices in college; one is to continue in their normal college program or to be in a ladderized program. Being in a ladderized program makes a student enter into a two year technical vocational course then one to three years, which will depend on your course, will be your final college degree. The students need to be guided to know their preferences because knowing their preference can help them grow in their chosen career. The students need to be motivated not only by their teachers but also their parents since they can be able to perform better. Students are not the only one who needs to be inspired and motivated, teachers also need to be inspired and motivated so that they can also perform their best in their class. Students will be receiving more quality lessons if teachers are at their best. Private schools are not the only ones who should give their students quality education. Even in a public school, teachers should be giving their students high standards in teaching. Students can always perform better if they are motivated, guided, and given their lessons accurately. B. Recommendation After series of research the proponent recommends, . Higher salary of teachers. Teachers should also be given importance for they have the hardest job of all. They leave our country because they believe that they can get more money so the students in other countries can receive the quality education that should have been given to students in our country. Teachers are working not only because it is their job but it is their life. 2. Motiva te students to perform better. Students’ performances are judged by their grades, activities, and other co-curricular activities. They perform their best when they are inspired and reaching a goal. They need to be guided by their teachers and parents so they will know how to transfer their motivation positively and in a way that it can help them to perform better in class. 3. Have a clear connection with the teacher of your child. Parents having a clear connection or relating with their child’s teachers and guidance counselors can help them know on how their child’s saying they are performing than what their teachers are saying. Co-relating with your child’s teachers and guidance counselors can help inform you of what your child’s behavior is while at school. . Giving discipline to students can help them in life. Discipline is one major key to success. It is through this that they can concentrate more and focus more on their goals and therefore achieving it. A disciplined student is different from a student who does nothing. A disciplined student performs better in class and other activities because he can focus but a student who does nothing can rea ch nothing. 5. Schools should fix their facilities and environment. A student can focus more on his studies if his environment is suitable for learning. The school’s environment and facilities plays a major role in the quality of education that they can give. Since it can help the students to do better in class and to use the different facilities to gather knowledge and learn. BIBLIOGRAPHY http://www. gov. ph/news/default. asp? i=15637 (January 27, 2009) www. alibata. ph (January 27, 2009) http://web. worldbank. org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION/0,,menuPK:282391~pagePK:149018~piPK:149093~theSitePK:282386,00. html (February 15, 2009) Clemente, A. (1996). Philippines Into the 21st Century: Quezon City: Valeria Publishing House www. alrisala. rg/Articles/mailing_list/importance_of_education. html (February 10, 2009) Cruz, Neal. â€Å"Public schools used to be better than private schools† Philippine Daily Inquirer. February 4, 2007 Meinardus, Ronald. â€Å"The Crisis of Philippine Education in the Philippines† Business World Internet Edition. June 30, 2003 Calderon, Jose. Foundations of Education: Manila, Phili ppines: Rex Printing Company Student Transformation Development Origination Student Motivation Inspiration Moral Support Values Peace and order Ladderized Normal Educational Programs Philippine Education Skill Enhancement