THE IMPACT OF THE GLOBAL ECONOMIC CRISIS ON TRADE FLOWS: AN ANALYSIS OF EMERGING MARKET ECONOMIES

Abstract

The global economic crisis that began in 2008 had a significant impact on international trade, resulting in a sharp decline in world trade and shrinking markets for developing country exports. This study focuses on the impact of the crisis on trade flows in emerging market economies (EMEs), which have experienced rapid growth in trade and capital flows during globalization. Using data from 2003 to 2012, including the pre-crisis period of 2003-2007 and the crisis and post-crisis period of 2008-2012, this paper analyzes the extent to which the crisis affected trade at the extensive and intensive margins. The results indicate that the crisis had a more severe impact on bilateral trade flows that did not exist before 2006, highlighting the importance of the extensive margin. This study contributes to the literature on the effects of economic crises on international trade and provides insights into the implications for emerging market economies.