Investigating the Effects of Trade Facilities on Exports: A Case Study of Mongolian Economy
Investigating the Effects of Trade Facilities on Exports: A Case Study of Mongolian Economy

Summary/Abstract: This study examines relationship between trade facilitations and exports in Mongolian economy with its 45 trading partner’s countries from Asian regions. To evaluate relationship, we construct trade facilitation indicators from different primary variables by employing the econometrics techniques principal component (PCA) and factor analysis (FA) namely cost, custom efficiency, shipment and time as well as period from 2001 to 2017. Findings show most trade facilitations have higher impact on Mongolian’s exports such as cost, custom efficiency, shipment and time. Cost and time indicators have negative relation with exports level and the probability of the exports. Similarly, custom efficiency and shipment have also impact on exports level and probability. According to findings, cost and time indicators in US$ and days should be reduced by implementing the state policies respectively. Furthermore, custom efficiency and shipment should have higher values to improve the custom clearance and other border agencies at border of Mongolia. Domestic trade facilitations may enhance the exports level and probability to enter the other firms into markets with other trading partners that including in this model. Traditional gravity variable distance has negative impact on export level and probability. Results show that higher distance in kilometer cause higher cost and reduce the exports volume, while geographical factor common border with Russia and China has larger impact on Mongolian’s exports level and probability.

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