Systematic Review of Tariff-Induced Trade Shocks and Capital Flow Responses in Emerging Markets

• Author(s): Melvin J. Oshomegie; Blessing Olajumoke Farounbi; Ayomide Kashim Ibrahim
• Paper ID: 1711042
• Page: 504-521
• Published Date: 31-05-2020
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 3 Issue 11 May-2020

Abstract

The resurgence of protectionist policies in the global economy has generated renewed interest in understanding the economic consequences of tariff-induced trade shocks in emerging markets. Over the past two decades, shifts in global trade regimes, coupled with capital mobility and financial integration, have amplified the exposure of emerging economies to external shocks arising from tariff escalation. This systematic review examines the intersection between trade policy changes and capital flow dynamics in emerging markets, synthesizing evidence from a broad range of empirical and theoretical studies. By employing a structured approach, the review consolidates findings across disciplines such as international trade, finance, and political economy to provide a comprehensive understanding of how tariff shocks alter capital inflows and outflows. The analysis highlights critical channels through which trade disruptions affect foreign direct investment, portfolio flows, and exchange rate movements, as well as the mediating role of institutional quality and macroeconomic fundamentals. The paper further discusses heterogeneity in country responses, emphasizing the significance of structural vulnerabilities and global financial cycles. The systematic review not only identifies consistent patterns across the literature but also uncovers gaps that warrant further research, particularly in the context of post-2018 trade tensions and the COVID-19 pandemic. The findings underscore the need for policymakers in emerging markets to adopt adaptive strategies that mitigate volatility in capital flows while promoting sustainable economic integration in an era of heightened uncertainty.

Keywords

Tariff Shocks, Trade Policy, Emerging Markets, Capital Flows, Systematic Review, Financial Integration

Citations

IRE Journals:
Melvin J. Oshomegie, Blessing Olajumoke Farounbi, Ayomide Kashim Ibrahim "Systematic Review of Tariff-Induced Trade Shocks and Capital Flow Responses in Emerging Markets" Iconic Research And Engineering Journals Volume 3 Issue 11 2020 Page 504-521

IEEE:
Melvin J. Oshomegie, Blessing Olajumoke Farounbi, Ayomide Kashim Ibrahim "Systematic Review of Tariff-Induced Trade Shocks and Capital Flow Responses in Emerging Markets" Iconic Research And Engineering Journals, 3(11)