nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2020‒06‒15
five papers chosen by
Marek Giebel
Universität Dortmund

  1. Global trade in final goods and intermediate inputs: impact of FTAs and reduced “Border Effects” By Franco-Bedoya, Sebastian; Frohm, Erik
  2. Towards digital globalization and the covid-19 challenge By Schilirò, Daniele
  3. Big Tech Mergers By Massimo Motta; Martin Peitz
  5. COVID-19 prevention measures in Ethiopia: Current realities and prospects By Baye, Kaleab

  1. By: Franco-Bedoya, Sebastian; Frohm, Erik
    Abstract: International trade in manufacturing goods has risen strongly over the past decades, contributing to the expansion of global value chains (GVCs). This paper studies how two factors contributed to this rise since 1970: (i) declining “border effects” that are arguably related to the ICT revolution that started around 1985, and (ii) the implementation of Free Trade Agreements that have gotten deeper over time. We take advantage of the identification of the time dimension in a panel setting to capture the emergence of GVCs by disentangling domestic and international trade in final goods and intermediate inputs. According to our results, diminished border effects account for the bulk of the increase in international trade in manufactured goods. The cost of a national border is estimated to have fallen by around 10% per year for total manufacturing trade since the 1970s. The decline has been 13% per year for exports of final goods and 8% for intermediate inputs, highlighting the importance of reduced border effects for enabling international trade in the age of GVCs. Moreover, we show that it is important to control for different border effects for final goods and intermediate inputs when estimating the trade impact of FTAs in gravity equations. With this enhancement, our results suggest that FTAs increase trade by 54% after ten years. We also find evidence that FTAs that are more recent have a greater trade effect than those signed in earlier periods. JEL Classification: F13, F14, F15, F23
    Keywords: border effect, free trade agreements, global value chains, international trade
    Date: 2020–05
  2. By: Schilirò, Daniele
    Abstract: Digital globalization is a new form of globalization. It brings about relevant changes regarding how business is conducted across borders, the flow of economic benefits, and broadening participation. The growth of data and information related to digital globalization determines that global economic, financial, and social connections increase through digital platforms. Covid-19 is causing a shock to the global economy that is proving to be both faster and more severe than the 2008 global financial crisis. If the current crisis is pushing towards deglobalization, at the same time, Covid-19 represents a challenge for digital globalization and the digital transformation of economies. This research contribution examines the process towards digital globalization that is characterizing the world economy, its impact on businesses, consumers, and governments. It also discusses the challenge that the crisis caused by the coronavirus pandemic is posing to the globalization and digital transformation of economies.
    Keywords: digital globalization; fourth industrial revolution; artificial intelligence; Covid-19; deglobalization; digital innovation policy
    JEL: D20 D78 F60 L86 O31
    Date: 2020–04
  3. By: Massimo Motta; Martin Peitz
    Abstract: Big tech mergers are frequently occurring events. What are the competitive effects of these mergers? With the help of a simple model we identify the acquisition of potential competitors as a pressing issue for merger control in digital industries. We also sketch a few novel theories of harm of horizontal and conglomerate mergers that are potentially relevant in digital industries. Finally, we draw some policy recommendations on how to deal with mergers in such industries.
    Keywords: merger policy, digital markets, potential competition, conglomerate mergers
    JEL: L41 L13 K21
    Date: 2020–01
  4. By: Obi, Chinedu
    Abstract: International migration is undergoing unprecedented changes. The traditional determinants of migration such as poverty, food insecurity and climate change are giving way to new motivations. These new issues, that include but are not limited to ambitions to live a foreign lifestyle, incomplete and asymmetric information are capable of underestimating the risk in irregular migration. As the information about foreign lifestyle flow freely and new opportunities open, it becomes very difficult to manage irregular migration through border control. Within the transitional mode of international migration, the use of awareness campaigns, especially in rural areas of home countries that target the most vulnerable groups, – school-age youths, could become a veritable means of deterring irregular migration. In 2018, Ricosmigration – Rural Information Campaign on Safe Migration - received funding from the German Foreign Office to investigate why young people from Nigeria migrate irregularly and implement a safe migration awareness campaign for youth in rural secondary schools. This report is from the result of the project which cut across interviews of Nigerian migrants living in Italy, potential migrants in Nigeria, and the result of the awareness campaigns conducted in 10 secondary schools in Edo, Nigeria. In the report, we explain the profile of a potential migrant from Nigeria. We also explore how reduced capabilities to lead the desired life and how the increasing use of social media internet has greatly raised the likelihood of migration in Nigeria. We equally show in the detail how we implemented a randomized experiment to test the efficiency of the migration awareness campaign. The project provides a new dimension to the discourse of the root cause of migration by introducing the role of limited opportunities and freedom (capabilities), low life satisfaction, and incomplete information through social media. Additionally, it shows the power of light interventions such as awareness campaigns in reducing irregular migration. In particular, the result showed that about 77.2 per cent of Nigerian youths that responded to the interview have the intention to migrate abroad, and 37.2 per cent would migrate if they win a cash lottery that is enough to cover the migration cost. Our randomized experiment showed that migration awareness campaign could reduce the risk of being a victim of human trafficking by more than 50 per cent. It could also reduce the desire to engage in irregular migration by more than 30 per cent and increased the decision to take necessary steps to avoid human traffickers and follow proper procedures for safe migration by more than 50 per cent. The awareness campaign had a wide coverage reaching about 7000 students in rural communities in Edo State, Nigeria. The success factors of our awareness campaign include the utilization of appropriate channels, delivery of an accurate message that was tailored to the group we spoke to, and the use of respected external facilitators.
    Date: 2020–05–26
  5. By: Baye, Kaleab
    Abstract: Immediately after the first confirmed case of COVID-19 in Ethiopia in March 2020, the Government of Ethiopia took several public health measures to prevent increased levels of infection These included closing all schools and restricting large gatherings and movements of people. Hand-washing and social distancing were the main prevention measures that government has communicated to the general public through various media platforms. Using the latest round of the Ethiopian Demographic and Health Survey, COVID-19 relevant indicators related to household access to communication platforms; access to water, sanitation, and hygiene (WASH); and characteristics of the home environment were assessed. The analysis shows that a sizeable proportion of the rural population does not have access to the media platforms used to publicize COVID-19 prevention measures. Moreover, without aggressive interventions, current levels of access to water and soap are suboptimal to adopt the hand-washing recommendations, particularly in rural areas. The low proportion of households with electricity, refrigeration, or internet connection and the relatively high prevalence of partner violence suggest that implementing the stay and work from home measures will be challenging. Public health measures that slow down the transmission of the virus should be continued and efforts to prevent transmission to rural areas should be prioritized. Communication platforms and messaging will need to be adapted to different local realities to make any COVID-19 containment recommendations operational. WASH-related support should be ramped-up, and addressing barriers to staying at home, such as the risk of partner violence, should be considered. The efforts needed to end the current pandemic in Ethiopia, as well as similar pandemics in the future, illuminates the serious challenges related to WASH and to the inequalities between rural and urban areas that need urgent attention.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; Coronavirus; coronavirus disease; Coronavirinae; hygiene; water; public health; health; physical distancing; disease prevention; Covid-19; inequalities; access to water, sanitation, and hygiene (WASH); partner violence; social distancing
    Date: 2020

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