Climate change, geography and trade agreements: A perspective of Asian bilateral trade

PLOS One | https://doi.org/10.1371/journal.pone.0320363 April 25, 2025 1 / 23 OPEN ACCESS Citation: Liang Q, Shao L, Hussain Z, Chao Y, Liu H, Wang C (2025) Climate change, geography and trade agreements: A perspective of Asian bilateral trade. PLoS One 20(4): e0320363. https://doi.org/10.1371/journal. pone.0320363 Editor: Asif Khan, Hainan University, CHINA Received: July 31, 2024 Accepted: February 18, 2025 Published: April 25, 2025 Peer Review History: PLOS recognizes the benefits of transparency in the peer review process; therefore, we enable the publication of all of the content of peer review and author responses alongside final, published articles. The editorial history of this article is available here: https://doi.org/10.1371/journal. pone.0320363 Copyright: © 2025 Liang et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Data availability statement: This data is not collected from third party. Therefore, other RESEARCH ARTICLE Climate change, geography and trade agreements: A perspective of Asian bilateral trade Qianxu Liang1, Lin Shao1*, Zahid Hussain 2*, Yufang Chao1, Haiying Liu1, Chaonan Wang1 1 Department of Economics and Management, Qilu University of Technology (Shandong Academy of Sciences), Jinan, PR China, 2 Business School, Faculty of Economics, Liaoning University, Shenyang, P.R. China * linshao@qlu.edu.cn (LS); zahiduibe@yahoo.com (ZH) Abstract

This study investigates the simultaneous effects of geographic factors, trade agreements, and climate change on bilateral exports in Asian countries. We estimate the correlation with bilateral exports by utilizing a panel data set from 2000 to 2020, employing various econometric techniques, particularly the structural gravity model. Therefore, this study aims to examine the simultaneous or complementary impact of influencing factors on exports and link them with the gross domestic product. Findings demonstrate that geo- graphic factors are crucial for determining bilateral exports in terms of increasing trends. Furthermore, geography plays a crucial role in enhancing the magnitude and probability of bilateral exports between trading partner countries. Moreover, bilateral exports have declined because of the simultaneous impact of geographic factors, climate change, and economic size. Thus, geographic factors and economic size affect marginal exports to varying degrees. This study suggests that the simultaneous increase in economic size, trade agreements, and geographic factors can enhance the bilateral export level and its probability at an above-average rate between trading partner countries. Introduction Exports always play a vital role in economic growth and development for each economy; how- ever, they are affected by several factors, especially natural and man-made geographic factors [1, 2]. Therefore, geography is categorised into two aspects: first, natural geography, which comprises the physical fundamentals of nature, such as mountains, seashores, and natural

resources. Second, man-made geography comprises the fundamental’s spot of diverse eco- nomic actions [3]. However, while challenges and facilities are created by geographic factors, they remarkably impact firms’ decisions regarding exports, infrastructure, and market access [4–6]. Distance is a crucial factor for trade, which significantly increases international trade costs via the transportation system. More analytically, the distance is detected via geographic coordinates, e.g., latitude and longitude. Thus, the differentiation in coordinate points stimu- lates the transport infrastructure level (which is a determinant of trade costs) [7,8].