nep-int New Economics Papers
on International Trade
Issue of 2006‒05‒20
seven papers chosen by
Martin Berka
Massey University

  1. Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA By Anna Maria Mayda; Chad Steinberg
  2. Institutional quality and trade: which institutions? which trade? By Pierre-Guillaume Méon; Khalid Sekkat
  3. Technology and Trade - an analysis of technology specialization and export flows By Andersson, Martin; Ejermo, Olof
  4. Economic Integration and Similarity in Trade Structures By Lucia Tajoli; Lucia De Benedictis
  5. Friendly Fire? The Impact of US Antidumping Enforcement on US Exporters By Robert M. Feinberg; Kara M. Reynolds
  6. Multinationals, Technology, and the Introduction of Varieties of Goods By Irene Brambilla
  7. Pursuing Manufacturing-BasedExport-Led Growth: Are Developing Countries Increasingly Crowding Each Other Out? By Arslan Razmi

  1. By: Anna Maria Mayda; Chad Steinberg (Department of Economics, Georgetown University)
    Abstract: South-South trade agreements are proliferating: developing countries signed 70 new agreements between 1990 and 2003. Yet the impact of these agreements is largely unknown. In this paper, we focus on the static effects of South-South preferential trade agreements that take place through changes in trade patterns. We estimate the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda's imports between 1994 and 2003. We use detailed import and tariff data at the 6-digit Harmonized System level for over 1,000 commodities. Based on a difference-indifference estimation strategy, we find evidence—in contrast to aggregate statistics—that COMESA’s preferential tariff liberalization has not considerably increased Uganda’s trade with member countries, on average across sectors. The effect, however, is heterogeneous across sectors. Finally, we find no evidence of trade-diversion effects. Classification-JEL Codes: F13, F14, F15, O24
    Keywords: South-South Trade Agreements, Trade Creation, Trade Diversion
  2. By: Pierre-Guillaume Méon (DULBEA, Université libre de Bruxelles, Brussels); Khalid Sekkat (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: Using a panel of countries over 1920-2000, this paper examines the extent to which different dimensions of the institutional framework affect exports of total, manufactured, and non-manufactured goods. It is observed that exports of manufactured goods are positively affected by the control of corruption, the rule of law, government effectiveness, and the lack of political violence. This result does not hold for non-manufactured and total exports. Instrumental variable regressions finally confirm that the control of corruption, but not the other dimensions of governance, robustly cause manufactured exports.
    Keywords: Institutions, governance, trade, manufactured exports, non-manufactured exports.
    JEL: F15 O17
    Date: 2006–04
  3. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Ejermo, Olof (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper examines how technology specialization, measured by citations-weighted patents, affects trade flows. The paper analyzes (i) the relationship between technology specialization and export specialization across regions and (ii) how the technology specialization of origin and destination affect the size and structure of link-specific export flows. We find that the export specialization of a region typically corresponds to the region’s technology specialization, which supports the view that comparative advantages can be created by investments in technology and knowledge. Export flows from regions to destination countries with similar technology specialization as the origin regions consist of commodities of higher quality in the specific technology, as indicated by higher prices. Highly specialized regions export more and charge higher prices. The results of the paper suggest that an understanding of trade ultimately requires an understanding of the spatial pattern of investments in (and creation of) technology and knowledge, as such investments shape export specialization patterns and the corresponding composition of export flows between locations across space.
    Keywords: exports; technology; knowledge; specialization; quality; patents
    JEL: F14 O33 O52 R12
    Date: 2006–05–11
  4. By: Lucia Tajoli (Politecnico di Milano); Lucia De Benedictis (Università di Macerata)
    Abstract: In this paper we look at the similarity of trade structures in an integrating area. In particular, we analyse the export flows toward the EU market of four of the so-called “accession countries" of Central and Eastern Europe by comparing them to those of the pre-2004 members of the European Union (EU15). From a methodological point of view, we evaluate the appropriateness of different classes of similarity indices - correlation indices and distance metrics - opting for the use of the Bray-Curtis semi-metric to assess changes in the trade similarity. We examine its evolution over time - from 1989 to 2001 - considering both self-similarity (how the export composition of a CEEC has changed with respect to the beginning of the transition process) and EU-similarity (if and how the export composition of a CEEC has changed with respect to the EU15 export composition). Finally, we use EU-similarity matrices to test if the dynamics of sectoral distribution of total exports of Poland, Hungary, Romania, and Bulgaria to the EU is related to the role acquired by processed trade in the 1990s. Using a nonparametric Mantel test we give evidence that: (1) processed trade is crucial in explaining changes in the overall structure of exports of transition countries, and (2) that greater economic integration in terms of trade flows and processing trade does not always lead to greater export similarity between the CEECs and the EU15 member States.
    Keywords: EU, CEECs, Transition, Similarity, Nonparametrics
    JEL: F3 F42
    Date: 2006–04
  5. By: Robert M. Feinberg (Department of Economics, American University); Kara M. Reynolds (Department of Economics, American University)
    Abstract: While there has been considerable interest in recent years in the role of macroeconomic determinants of antidumping actions by the US and other traditional users, on the one hand, and the determinants of the growing global usage of this trade policy instrument, on the other, there has to date been no systematic exploration of the motivations for the significant number of foreign antidumping cases filed against US exporters. Several observers have remarked that the growing number of foreign users of antidumping might threaten US exporters, but the determinants of these actions have not been examined. That is the purpose of the following study. We find that these actions are in part explained by macroeconomic forces and as a response to US export superiority in particular sectors, however a significant role (and larger than found for global antidumping more generally) is played by retaliation for US trade policy actions.
    Keywords: antidumping, US exports, retaliation
    JEL: F13
    Date: 2006–04
  6. By: Irene Brambilla
    Abstract: Firms that engage in international transactions have been shown to outperform domestic firms in several dimensions. This paper studies the advantages of affiliates of multinationals to grow through an expansion in their range of products. I first develop a monopolistic competition model with multiproduct firms in which firms are heterogeneous in two dimensions: the fixed cost of developing new varieties and the variable cost of production. Multinationals have cost advantages because of economies of scale and learning by doing across countries. Using firm-level data for the Chinese manufacturing sector during 1998-2000, I compare the performance of foreign and domestic firms in terms of the new varieties that they introduce, and, as described in the model, I estimate whether the number of new varieties can be explained by differences in the cost of development and variable productivity. Controlling for size, I find that firms with more than 50 percent of foreign ownership introduce on average more than twice as many more new varieties of goods as private domestic firms. Advantages in productivity account for 33 to 45 percent of the difference in the number and sales of new varieties, while advantages in the cost of development account for 5 to 17 percent of these differences.
    JEL: F23 F12 F14
    Date: 2006–05
  7. By: Arslan Razmi (University of Massachusetts Amherst)
    Abstract: This study empirically investigates the presence of crowding out effects emerging from intra-developing country competition in export markets for manufactured goods. Export equations are estimated for a panel consisting of twenty major developing country exporters of manufac- tures, after developing weighted price and quantity indexes based on their exports to thirteen major industrialized countries. The results indicate that in spite of an increase in the elasticity of industrialized country expenditures on imported products, crowding out effects became much more significant in the 1990s. The estimated crowding out effects vary across time periods, SITC categories, and levels of technological sophistication of exports. JEL Categories: F10, O01, F42
    Keywords: Crowding out, export displacement, real exchange rates, intra-developing country competition, dynamic panel data techniques, generalized method of moments.
    Date: 2006–05

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