earticle

영어

For developing and least-developed countries (LDCs) like Nepal, foreign trade is crucial for number of reasons. Firstly, foreign trade is principal mechanism for achieving the benefits of globalization. Secondly, the continuing reallocation of manufacturing activities from industrial countries to LDCs provides many opportunities for expanding trade both in goods and in services. And finally, the growth of trade is firmly reinforced by international institutions. However, trade or flow of goods and services, both internal and external, may be disturbed due to many exogenous shocks. Those shocks can either be macro; policy or natural disaster shocks. This paper aims to examine the effect of earthquake and closing the Tatopani customs thereafter on Nepal-China trade. The estimation of earthquake effect on trade is performed in three steps. Using total trade, exports and imports between Nepal and China as dependent variables and other four variables as explanatory variables estimation is done via multiple regression analysis. Log GDP of Nepal, Log GDP of China, Dummy variable and one period lagged value of total trade; export and import are taken as explanatory variables. The overall analysis suggests that the closure of Nepal -China land border is of less significant impact upon Nepal-China trade however GDP of China and one period lagged variables has seem dominant role among others in Nepal- China trade. Tatopani closure shifted the trade routed among different ports in the short term while no effect in trade is observed.