External connectivity and its macroeconomic influence of a nation
Shi, W and Li, KX, External connectivity and its macroeconomic influence of a nation, Proceedings of the 2015 International Association of Maritime Economists (IAME) Conference, 24-26 August 2015, Kuala Lumpur, Malaysia, pp. 1-18. (2015) [Refereed Conference Paper]
The proverb of "All roads lead to Rome" implies the importance of connectivity in the international trade, economic development and influence of a nation. This paper aims to develop a method to measure a nationís external connectivity by considering not only potential connection channels but also its economic power and international influence. Meanwhile, in the cases of China and United States, it empirically examines the impact of a nationís external connectivity on its macroeconomic performance during 2000-2012. Our main findings are as follows: First, as for China, significant positive impacts of its external connectivity on inflation and change in gross national income (GNI) per capita are found but no empirical evidence confirm it in the case of United States. Second, a potential threshold effect reflected by a V-shape relationship might exist between Chinaís external connectivity and unemployment while regarding United States, a significant positive relationship is reflected. Last, a strong positive relationship between liner shipping connectivity index (LSCI) and Chinaís external connectivity, to a certain extent, reveals a fundamental significance of logistics connectivity in the improvement of Chinaís external connectivity but a similar finding is not confirmed in the case of United States. Results from this study shed some light on how to measure and compare connectivity and its macroeconomic influence among different nations, and to promote a nationís overall competitiveness by the improvement of its external connectivity.