Case Study Analysis: International Trade and Logistics, ECO 803

This report presents an analysis of two case studies related to international trade and logistics. The first case study examines the impact of airfreight integrators and new international airports on city mobility in East and Southeast Asia. The second case study investigates the relationship between sovereign bond prices and exchange rates in emerging markets. Both studies employ different research methodologies, including exploratory approaches and models like the double square root model. Key findings include the strengthening of Asian cities as international air traffic hubs and the significant explanatory power of exchange rates on sovereign bond prices. The report offers recommendations for future research, such as incorporating market liquidity, macroeconomic variables, and LCC activity, and suggests expanding the scope of research to include domestic market scale and sensitive cost variables. The analysis emphasizes the need for improved research approaches to refine facts and results within the realm of international trade.

INTERNATIONAL TRADE
AND LOGISTICS

INTRODUCTION:
Assessment of a critical analysis of the case studies
relating to the topic of international trade and logistics.
In the first case study, the effect of integrator of airfreight
and new international airports on city mobility is
examined.
 The second case examines the relationship between
sovereign bond price and exchange rate of currencies in
emerging markets.

Both case studies have adopted different
research approach and models to determine
the impact of one variable on another.
The focus of first case study is one East and
Southeast Asian countries while other
research paper focus on country such as
Colombia, Brazil, Russia, Mexico, Turkey and
Philippines (Shepherd & Hamanaka, 2015).

SIGNIFICANCE OF RESEARCH QUESTIONS:
The first case study ascertains that the significance of
international transportation of airfreight in reversing
intermediate and import goods export among nations
(Hui et al., 2018).
This research question intends to determine the
demand for international air cargo, which in turn
evaluates the impact on city mobility.
The question of examining the temporal changes in the
parameters value that helped in explaining the flow of
international air traffic.

RELATING RESEARCH WITH THE
CURRENT KNOWLEDGE
The research paper ascertains that the airfreight
transportation plays a significant role in export
and import among nations.
The international flow of passenger across Asian
countries is determined by the reduction in the
differences of economic power (Turnes & Ernst, 2015).
The relative ranking of Asian cities have changed
because of location of integrator hubs and
construction of new international airport.

DETERMINING THE RESULTS OF RESEARCH
METHODOLOGY
In the first research paper, it has been found that the
estimated value of parameters such as population and
GDP is larger in cargo specification compared to
passenger specification (Matsumoto & Domae, 2018).
The demand for international air traffic becomes larger
according to the economic growth.
An extreme upward path in the mobility of cities is
experienced by three cities of Mainland China.

A model of double square root for identifying the linkage
between bond prices and exchange rate of currencies is
employed in the second research paper (Matsumoto &
Domae, 2018).
One of the useful sources for gauging information is the
currency options market having feature of forward
looking.

Decision associated with the construction of
international airport is explained by the city
dummy variables such as population and GDP.
The fundamental of country is adequately
reflected by the exchange rate and the
adjustment in foreign currency is absorbed by
the function of domestic debt.
The second research paper also conducted an
empirical test to study the relationship
between US treasury yield and exchange rate
of countries under countries.

ADDRESSING RESEARCH QUESTIONS
USING RESEARCH METHODOLOGY
Researcher in both the case study has adopted an
exploratory approach to research.
Instead of city proper, data in the first case study was
taken from the UN, which was a better representative of
population.
The linkage between bond prices and exchange rate of
currencies has been identified by using a model of double
square root.

KEY FINDINGS OF RESEARCH
PAPER
It was ascertained that the position of Asian companies such as
Shanghai, Hong Kong, Kuala Lumpur, Bangkok and Guangzhou are
able to strengthen their position as hubs of international air traffic all
of which have opened a new international airport.
Tokyo has been downgraded from a top ranked global city. This is
because compared with other hubs; one of the international airports
in the country is small.

Analysis of second research paper ascertains that, there exists a
strong relationship between the stability of exchange rate and
sovereign risk exchange market

The exchange rate of currencies of emerging market has
adequate explanatory power in explaining the sovereign
bond price.
Investors and government are better served by issuing
local currencies debt and investors in the currency market
hedge risks.

RECOMMENDATIONS:
Development of multi factor model that is augmented to
incorporate liquidity of market.
Future research should consider some other variables
affecting sovereign risk such as macro economic variables
and country specific variables.
The extension of research in the second case study could
be the scale of domestic market that is served from a city.

Some of the sensitive cost variables such as airfares
charged, fuel price and physical distance could be used as a
measure of actual interactions between cities.
The LCC activity should be incorporated into the
research with respect to airfares.
Inclusion of LCC activity would help in influencing the role
of home based cities of ASEAN countries.
The extension of second research paper is to investigate the
effect of LCC on cities mobility in the urban hierarchy.

CONCLUSION:
The research papers analyzed deals with the concept of
international trade and international topic.
Researcher and numerous graphs have adopted different
research methodology and data has been presented.
There is a need to improve the research approach for
refining the facts and results that have deduced.

REFERENCE LIST:
Hui, C. H., Lo, C. F., & Chau, P. H. (2018). Exchange rate dynamics and
US dollar-denominated sovereign bond prices in emerging markets. The
North American Journal of Economics and Finance, 44, 109-128.
Matsumoto, H., & Domae, K. (2018). The effects of new international
airports and air-freight integrator's hubs on the mobility of cities in urban
hierarchies: A case study in East and Southeast Asia. Journal of Air
Transport Management, 71, 160-166.
Shepherd, B., & Hamanaka, S. (2015). Overcoming trade logistics
challenges: Asia-Pacific experiences. Asia Pacific Journal of Marketing
and Logistics, 27(3), 444-466.
Turnes, P. B., & Ernst, R. (2015). A framework for transparency in
international trade. Investigaciones Europeas de Dirección y Economía de
la Empresa, 21(1), 1-8.