nep-int New Economics Papers
on International Trade
Issue of 2007‒03‒03
twelve papers chosen by
Martin Berka
Massey University

  1. Are Improving Terms of Trade Helping Reduce Poverty in Africa? By Andrew Mold
  2. Institutions, infrastructure, and trade By Joseph F. Francois; Miriam Manchin
  3. Market structure and market access By Joseph F. Francois; Ian Wooton
  4. International trade, migration and investment with horizontal product differentiation and free entry and exit of firms By Hernán Vallejo
  5. Agricultural Trade and the Doha Round: Lessons from Commodity Studies By Beghin, John C.; Aksoy, Ataman
  7. Productivity and Size of the Export Market - Evidence for West and East Geman Plants. 2004 By Joachim Wagner
  8. Trade and human capital accumulation: evidence from U.S. immigrants By Domeland, Dorte
  9. CAP Reform, Enlargement, Trade Liberalization, and Structural Change in European Agriculture By Fuller, Frank H.; Beghin, John C.
  10. Exports and Productivity in Germany By Joachim Wagner
  11. Why more West than East German fimrs export By Joachim Wagner
  12. Enty, Exit and Productivitry - Empirical Results for German Manufacturing Industries By Joachim Wagner

  1. By: Andrew Mold (African Centre for Gender and Social Development, United Nations Economic Commission for Africa - ECA)
    Keywords: Africa, Poverty, Trade, Terms of Trade
    Date: 2006–11
  2. By: Joseph F. Francois (Department of Economics, Johannes Kepler University Linz, Austria); Miriam Manchin (University College London)
    Abstract: We work with a panel of bilateral trade flows from 1988 to 2002, exploring the influence of infrastructure, institutional quality, colonial and geographic context, and trade preferences on the pattern of bilateral trade. We are interested in threshold effects, and so emphasize those cases where bilateral country pairs do not actually trade. We depart from the institutions and infrastructure literature in this respect, using selection-based gravity modeling of trade flows. We also depart from this literature by mixing principal components (to condense our institutional and infrastructure measures) with a focus on deviations from expected values for given income cohorts to control for multicollinearity. Infrastructure, and institutional quality, are significant determinants not only of export levels, but also of the likelihood exports will take place at all. Our results support the notion that export performance, and the propensity to take part in the trading system at all, depends on institutional quality and access to well developed transport and communications infrastructure. Indeed, this dependence is far more important, empirically, than variations in tariffs in explaining sample variations in North-South trade. This implies that policy emphasis on developing country market access, instead of support for trade facilitation, may be misplaced.
    Keywords: exports; trade; institutions; infrastructure; zero-trade; gravity model
    JEL: O19 F10 F15
    Date: 2007–02
  3. By: Joseph F. Francois (Department of Economics, Johannes Kepler University Linz, Austria); Ian Wooton (University of Strathclyde, Glasgow)
    Abstract: We examine an issue at the nexus of domestic competition policy and international trade, the interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a set of linkages between service-sector competition and goods trade supported by econometrics involving imports of 22 OECD countries vis-´a-vis 69 exporters. Competition in services affects the volume of goods trade. Additionally, because of interaction between tariffs and competition, the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Empirically service competition apparently matters most for exporters in smaller, poorer countries. Our results also suggest that while negotiated agreements leading to crossborder services liberalization may boost goods trade as well, they may also lead to a fall in goods trade when such liberalization involves FDI leading to increased service sector concentration.
    Keywords: distribution sector competition; market access; services; trade liberalization; GATS
    JEL: L16 L8 F12 F13
    Date: 2007–02
  4. By: Hernán Vallejo
    Abstract: This paper builds a circular road model of the world with horizontal product differentiation and free entry and exit of firms, to show that freer international trade increases welfare –with ideal variety preferences– through the exploitation of economies of scale and better allocative efficiency, that all participating countries gain from trade, and that smaller countries have more to win from free trade than larger countries. Political resistance to trade liberalization, international migration and foreign direct investment are also analyzed with the model. Finally, the model provides a microfoundation for the use of demand curves with constant and negative slopes.
    Date: 2006–01–01
  5. By: Beghin, John C.; Aksoy, Ataman
    Abstract: While global analytical approaches to agricultural trade liberalization yield large gains for most economies, there are substantial variations in the policy regimes across commodities. To clarify the multiplicity of distortions and impacts, the World Bank’s Trade Department undertook a series of commodity studies. The studies highlight the important challenges faced by negotiating countries in the Doha Round of the World Trade Organization (WTO) trade negotiations. The studies provide a sharper look at the North-South dimensions of the agricultural trade debate, with the North’s trade barriers, domestic support, and tariff escalation. They also underscore the South-South challenges on border protection and the reduced rural income opportunities for the lowest-income countries due to policies in higher-income countries that depress world prices. Agricultural trade liberalization would induce significant price increases for most commodities. The studies identify the detrimental effects of multilateral trade liberalization for some countries because of lost preferential trade agreements and higher prices on net consumers of commodities. Given the complexity of specific issues in agriculture, as well as the North-South and South-South dimensions of distortions, a global solution would be required to liberalize these markets. Rather than being self-contained, agricultural trade negotiations should involve concessions on other sectors and issues (services and intellectual property rights for example) to identify overall reform packages palatable to all parties.
    Keywords: agricultural trade liberalization, Doha, World Bank, commodities
    Date: 2007–02–23
  6. By: Francis Cripps (Alphametrics Ltd); Alex Izurieta (Cambridge Endowment for Research in Finance); Terry McKinley (International Poverty Centre)
    JEL: B41
    Date: 2007–02
  7. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: Using unique recently released nationally representative high-quality data at the plant level, this paper presents the first comprehensive evidence on the relationship between productivity and size of the export market for Germany, a leading actor on the world market for manufactured goods. It documents that firms that export to countries inside the euro-zone are more productive than firms that sell their products in Germany only, but less productive than firms that export to countries outside the euro-zone, too. This is in line with the hypothesis that export markets outside the euro-zone have higher entry costs that can only by paid by more productive firms.
    Keywords: Exports, productivity, micro data, Germany
    JEL: F14 D21
    Date: 2007–03
  8. By: Domeland, Dorte
    Abstract: This study provides empirical evidence that trade increases on-the-job human capital accumulation by estimating the effect of home country openness on estimated returns to home country experience of U.S. immigrants. The positive effect of trade on on-the-job human capital accumulation remains significant when controlling for GDP, educational attainment, and institutional quality. It is not the result of self-selection, heterogeneity in returns to experience, English-speaking origin, or cultural background. The effect persists when restricting the sample to non-OECD countries, thereby resolving the theoretical ambiguity of whether trade increases or decreases learning-by-doing. The role of trade in generating economic growth is therefore likely to be more important than generally considered.
    Keywords: Economic Theory & Research,Country Strategy & Performance,Labor Markets,Population Policies,Inequality
    Date: 2007–03–01
  9. By: Fuller, Frank H.; Beghin, John C.
    Abstract: "Enlargement, Structural Change, CAP Reform, and Trade Liberalization in European Agriculture." A special issue of the Journal of International Agricultural Trade and Development. Frank H. Fuller and John C. Beghin, guest editors, Vol 3, 2007 Table of Contents Enlargement, Structural Change, CAP Reform, and Trade Liberalization in European Agriculture: Highlights of the Special Issue Frank H. Fuller and John C. Beghin Agricultural Productivity Growth in the European Union and Transition Countries Supawat Rungsuriyawiboon and Alexej Lissitsa European Integration, Reforms, and Governance of Food Supply Chains in Eastern Europe Johan F.M. Swinnen Differentiated Food Quality Standards and Industry Structure in the Enlarged EU: The Polish Meat Sector Marie-Luise Rau and Frank van Tongeren The Impact of the European Enlargement and CAP Reforms on Agricultural Markets. Much Ado about Nothing? Jacinto F. Fabiosa, John C. Beghin, Fengxia Dong, Amani Elobeid, Frank H. Fuller, Holger Matthey, Simla Tokgöz, and Eric Wailes The 2003 Mid-Term Review of the Common Agricultural Policy: A Computable General Equilibrium Analysis for Ireland Janine Dixon and Alan Matthews Policy Implications of the Decoupling of the EU Cotton Subsidies Manuel Arriaza and José A. Gomez-Limon Preferences Erosion and Trade Costs in the Sugar Market: the Impact of the Everything But Arms Initiative and the Reform of the EU Policy Piero Conforti and George Rapsomanikis The EU Import Regime for Oranges - Much Ado about Nothing? Linde Götz and Harald Grethe
    Date: 2007–02–23
  10. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: Using unique recently released nationally representative high-quality longitudinal data at the plant level, this paper presents the first comprehensive evidence on the relationship between exports and productivity for Germany, a leading actor on the world market for manufactured goods. It applies and extends the now standard approach from the international literature to document that the positive productivity differential of exporters compared to non-exporters is statistically significant, and substantial, even when observed firm characteristics and unobserved firm specific effects are controlled for. For West German plants (but not for East German plants) some empirical evidence for self-selection of more productive firms into export markets is found. There is no evidence for the hypothesis that plants which start to export perform better in the three years after the start than their counterparts which do not start to sell their products on the world market. Results for West Germany support the hypothesis that the productivity differential between exporters and non-exporters is at least in part the result of a market driven selection process in which those export starters that have low productivity at starting time fail as a successful exporter in the years after the start, and only those that were more productive at starting time continue to export.
    Keywords: Exports, productivity, micro data, Germany
    JEL: F14 D21
    Date: 2007–03
  11. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: Using unique new data and a recently introduced non-linear decomposition technique this paper shows that the huge difference in the propensity to export between West and East German plants is to a large part due to differences in firm size and human capital intensity.
    Keywords: Exports, micro data, West Germany, East Germany
    JEL: F14
    Date: 2007–03
  12. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: Using panel data from Spain Farinas and Ruano (IJIO 2005) test three hypotheses from a model by Hopenhayn (Econometrica 1992): (H1) Firms that exit in year t were in t-1 less productive than firms that continue to produce in t. (H2) Firms that enter in year t are less productive than incumbent firms in year t. (H3) Surviving firms from an entry cohort were more productive than non-surviving firms from this cohort in the start year. Results for Spain support all three hypotheses. This paper replicates the study using a unique newly available panel data sets for all manufacturing plants from Germany (1995 – 2002). Again, all three hypotheses are supported empirically.
    Keywords: Exports, Entry, exit, productivity
    JEL: L11 L60
    Date: 2007–03

This nep-int issue is ©2007 by Martin Berka. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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