nep-int New Economics Papers
on International Trade
Issue of 2005‒10‒08
eight papers chosen by
Martin Berka
Massey University

  1. What is the effect of trade openness on wages? By Nomaan Majid
  2. Trade Invoicing in the Accession Countries: Are They Suited to the Euro? By Linda Goldberg
  4. Geographical deviations in foreign trade statistics: a study into European trade with Latin American Countries, 1925 By Anna Carreras-Marín; Marc Badia-Miró
  5. Does Financial Liberalization Improve the Allocation of Investment? Micro Evidence from Developing Countries By Arturo Galindo; Fabio Schiantarelli; Andrew Weiss
  6. Aggregate Scale Economies, Market Integration, and Optimal Welfare State Policy By Hassan Molana; Catia Montagna
  7. Fear of Relocation? Assessing the Impact of Italy’s FDI on Local Employment By Stefano Federico; Gaetano Alfredo Minerva
  8. China Business in the 'Asian Age' - Notes on Strategic Directions for Japanese Electronics Firms - By Kiyoshi Urakami

  1. By: Nomaan Majid (International Labour Office, Employment Strategy Department)
    Keywords: wage inequality, trade, GDI, national income
    JEL: J31 F15 F16
    Date: 2004–01–05
  2. By: Linda Goldberg
    Abstract: The accession countries to the euro area are increasingly binding their economic activity, external and internal, to the euro area countries. One aspect of this phenomenon concerns the currency invoicing of international trade transactions, where accession countries have reduced their use of the US dollar in invoicing international trade transactions. Theory predicts that the optimal invoicing choices for accession countries depend on the composition of goods in exports and imports and on the macroeconomic fluctuations of trade partners, both bearing on the role of herding and hedging considerations within exporter profitability. These considerations yield country-specific estimates about the degree of euro-denominated invoicing of exports. I find that the exporters of some accession countries, even in their trade transactions with the euro zone and other European Union countries, might be pricing too much of their trade in euros rather than in dollars, thus taking on excessive risk in international markets.
    JEL: F3 F4
    Date: 2005–10
  3. By: Luis C. Corchon
    Abstract: We present a simple dynamic model of international trade and growth. Our equations linking exogenous and endogenous variables do not resemble those estimated by the empirical literature: Ours are not linear, despite the fact that our model is linear, they do not include variables used in this literature and include variables that have never been used in this literature.
    Date: 2005–09
  4. By: Anna Carreras-Marín; Marc Badia-Miró
    Abstract: We have analyzed the spatial accuracy of European foreign trade statistics compared to Latin American. We have also included USA’s data because of the importance of this country in Latin American trade. We have developed a method for mapping discrepancies between exporters and importers, trying to isolate systematic spatial deviations. Although our results don’t allow a unique explanation, they present some interesting clues to the distribution channels in the Latin American Continent as well as some spatial deviations for statistics in individual countries. Connecting our results with the literature specialized in the accuracy of foreign trade statistics; we can revisit Morgernstern (1963) as well as Federico and Tena (1991). Morgernstern had had a really pessimistic view on the reliability of this statistic source, but his main alert was focused on the trade balances, not in gross export or import values. Federico and Tena (1991) have demonstrated how accuracy increases by aggregation, geographical and of product at the same time. But they still have a pessimistic view with relation to distribution questions, remarking that perhaps it will be more accurate to use import sources in this latest case. We have stated that the data set coming from foreign trade statistics for a sample in 1925, being it exporters or importers, it’s a valuable tool for geography of trade patterns, although in some specific cases it needs some spatial adjustments.
    Keywords: Economic geography, statistical accuracy, foreign trade statistics
    JEL: N01 N70 N76
    Date: 2005–07
  5. By: Arturo Galindo; Fabio Schiantarelli (Boston College); Andrew Weiss (Boston University)
    Abstract: Using firm level panel data from twelve developing countries we explore if financial liberalization improves the efficiency with which investment funds are allocated. A summary index of the efficiency of investment allocation that measures whether investment funds are going to firms with a higher marginal return to capital is developed. We examine the relationship between this and various measures of financial liberalization and find that liberalization increases the efficiency with which investment funds are allocated. This holds after various robustness checks and is consistent with firm level evidence that a stronger association between investment and fundamentals after financial liberalization.
    Keywords: financial liberalization, investment, efficiency, reform, development
    JEL: E22 E44 G28 O16
    Date: 2005–10–04
  6. By: Hassan Molana (University of Dundee); Catia Montagna (University of Dundee)
    Abstract: Using a two-sector-two-country model with aggregate scale economies and unionisation, we show that optimal welfare state policy entails positive levels of unemployment benefits under free-trade and capital mobility. In this setting, economic integration does not reduce the revenue raising capacity of governments and thus does not lead to a race-to-the- bottom in social standards. Instead, trade and capital flows interact with welfare state policies in increasing welfare even when each government acts independently (non-cooperatively) in determining its optimal welfare payment. Cooperation is shown to improve upon noncooperative outcomes by raising both the generosity of the welfare state and aggregate welfare.
    Keywords: circular causation; international trade; capital mobility; optimal policy; welfare state
    JEL: E6 F1 F4 H3 J5
    Date: 2005–10–05
  7. By: Stefano Federico; Gaetano Alfredo Minerva (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont)
    Abstract: Using data from U±cio Italiano dei Cambi and Istituto Nazionale di Statistica, we empirically assess the impact of Italy's outward foreign direct investment (FDI) on local employment growth between 1996 and 2001 for 12 manufacturing industries. We find that FDI towards advanced countries is associated with faster local employment growth, relatively to the national industry average. Local areas whose ¯rms invest more towards developing countries show instead an employment performance in line with the national industry average; only for two industries the relationship turns out to be negative.
    Keywords: Foreign direct investment; agglomeration; employment growth
    JEL: C21 F21 F23
    Date: 2005–06
  8. By: Kiyoshi Urakami (Urakami Asia Management Research)
    Abstract: Electronics products originating either from the U.S.A. or Europe have experienced tremendous shifts to the Asian countries such as Japan, Korea, Taiwan and China. This paper examines the recent development of Chinafs electronics industry where a significant degree of foreign direct investment has enhanced the industrial accumulation. Based on the survey on the IT industry (personal computer, mobile phone and semiconductor) in China, business status in both Chinese and Japanese companies will be analyzed and future strategic directions for Japanese firms in the gAsian Ageh will be discussed.
    Keywords: the gAsian Ageh, originated from the U.S.A., business models, gMao, Gong, Jih method, the Asian talents, multilateral collaboration
    JEL: F1 F2
    Date: 2005–09–30

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