nep-int New Economics Papers
on International Trade
Issue of 2005‒05‒29
four papers chosen by
Martin Berka
University of British Columbia

  1. Putting new economic geography to the test: Free-ness of trade and agglomeration in the EU regions By Brakman, S.; Garretsen, H.; Schramm, M.
  2. Information Asymmetry and the Problem of Transfers in Trade Negotiations and International Agencies By Koichi Hamada; Shyam Sunder
  3. Trade, Foreign Firms, and Economic Policy in Indonesian and Thai Manufacturing By William E. James; Eric D. Ramstetter
  4. Productivity differentials in the U.S. and EU distributive trade sector: Statistical myth or reality? By Timmer, M.P.; Inklaar, R.

  1. By: Brakman, S.; Garretsen, H.; Schramm, M. (Groningen University)
    Abstract: Based on a new economic geography model by Puga (1999), we use the equilibrium wage equation to estimate two key structural model parameters for the NUTS II EU regions. The estimation of these parameters enables us to come up with an empirically based free-ness of trade parameter. We then confront the empirically grounded free-ness of trade parameter with the theoretical relationship between this parameter and the degree of agglomeration. This is done for two versions of our model: one in which labor is immobile between regions, and one in which labor is mobile between regions. Overall, and in line with related studies, our main finding is that agglomeration forces still have only a limited geographical reach in the EU. Agglomeration forces appear to be rather localized
    Date: 2005
  2. By: Koichi Hamada (Economic Growth Center, Yale University); Shyam Sunder (School of Management, Yale University)
    Abstract: This paper studies the role of transfers among groups within a country as well as among countries in a two level game of nternational trade negotiations. We show that in order to realize the intended transfer in the presence of asymmetric information on the states of recipients (and donors), a transfer process uses up additional resources. The difficulty of making transfers renders it less likely that a nation would find it individually rational to participate as a member of an international institution. Costly transfers render the internal and international adjustment difficult, and serve as a barrier to trade liberalization. Costly international transfers harden the resistance against trade liberalization in the (potentially) recipient country and soften it in the (potentially) donor country.
    Keywords: International trade, tariff negotiation, asymmetric Information, transfer, WTO, common agency, two-level game
    JEL: F13 H21 H71 H77
    Date: 2005–05
  3. By: William E. James (Nathan Associates, Inc.); Eric D. Ramstetter (International Centre for the Study of East Asian Development and Kyushu University)
    Abstract: This paper first examines the rapid growth and changing composition of manufactured exports in Indonesia and Thailand, highlighting the rapid growth of office and computer machinery and electric machinery, somewhat slower growth of non-electric and transportation machinery, as well as the low growth of previously large exports of textiles apparel. Second, the important contributions of foreign multinational enterprises (MNEs) to export growth in the machinery industries, particularly in electric, office, and computing machinery, are documented. Third, the paper describes trade policies in all these industries in some detail, emphasizing how low protection was a key facilitator of rapid export growth in the MNEs that dominated the electric, office, and computing machinery industry, while high protection reduced incentives to export among MNEs in the transportation machinery industry.
    JEL: F13 F14 F23
    Date: 2005–05
  4. By: Timmer, M.P.; Inklaar, R. (Groningen University)
    Abstract: In this paper we asses whether productivity growth differentials between the U.S. and Europe in the distributive trade sector are real or mainly a statistical myth. New estimates of retail trade productivity are constructed, taking into account purchase prices of goods sold. We also adjust U.S. wholesale productivity growth for the upward bias due to the use of constant-quality prices of ICT-goods sales. We find that multifactor productivity growth in the U.S. has been higher than in Europe after 1995, but that this lead is smaller than suggested by national accounts based estimates. This finding is robust for various productivity measurement models.
    Date: 2005

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