nep-int New Economics Papers
on International Trade
Issue of 2007‒03‒24
27 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. The Role of Trade Barriers in SME Internationalisation By Barbara Fliess; Carlos Busquets
  3. The Impact of ISO 9000 Diffusion on Trade and FDI: A New Institutional Analysis By Clougherty, Joseph A; Grajek, Michal
  4. The Free Trade Agreement Between the United States and Morocco. The Importance of a Gradual and Assymetric Agreement By Lahsen Abdelmalki; Mustapha Sadni-Jallab; René Sandretto
  5. What Explains Germany's Rebounding Export Market Share? By Frederick L. Joutz; Stephan Danninger
  6. Does tariff liberalization promote trade? Latin America in the long run (1900-2000) By Carlo Pietrobelli; Silvia Nenci
  7. Are Regional Trade Agreements in Asia Stumbling or Building Blocks? Some Implications for the Mekong-3 Countries By Patrizia Tumbarello
  8. Can the Chinese trade surplus be reduced through exchange rate policy? By Garcia-Herrero, Alicia; Koivu, Tuuli
  9. Indo-U.S. FTA: Prospects for Audiovisual Services By Arpita Mukherjee; Paramita Deb Gupta; Prerna Ahuja
  10. Intra-industry trade and labour market adjustment: A reassessment using data on individual workers. By Joanne Kathryn Lindley; Marius Brullhart; Rob Elliott
  11. Indo-US FTA: Prospects for the Telecommunication Sector By Arpita Mukherjee; Prerna Ahuja
  12. Specialization Patterns and the Factor Bias of Technology By Alejandro Cuñat and Marco Maffezzoli
  13. MARKET OVERLAP AND THE DIRECTION OF EXPORTS - a new approach of assessing the Linder hypothesis By Bohman, Helena; Nilsson, Desirée
  14. Should WTO dispute settlement be subsidized? By Wilckens, Sebastian
  15. Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform By Eric V. Edmonds; Nina Pavcnik; Petia Topalova
  16. Onsite Research in the U.S. and Canada: Govemental Data Availability in Notrh America By Nagendra Shrestha
  17. EU and US safeguards against Chinese textile exports: What consequences for West African cotton-producing countries? By Delpeuch, Claire
  18. Exporing growth linkages and market opportunities for agriculture in Southern Africa: By Nin Pratt, Alejandro; Diao, Xinshen
  19. Business services, trade and costs By Molly Lesher; Hildegunn Kyvik Nordas
  20. Public Ownership and Trade Policy By Ngo Van Long; Frank Staehler
  21. Agricultural trade liberalization under Doha: the risks facing African countries By Badiane, Ousmane
  22. The Prospects for Sustained Growth in Africa: Benchmarking the Constraints By Simon Johnson; Jonathan David Ostry; Arvind Subramanian
  23. Inflation in Poland: How Much Can Globalization Explain? By Celine Allard
  24. Can the Natural Resource Curse Be Turned Into a Blessing? The Role of Trade Policies and Institutions By Rabah Arezki; Frederik van der Ploeg
  25. Subsidies and regulatory reform in West African cotton: What are the development stakes? By Shepherd, Ben; Delpeuch, Claire
  26. CSR and Trade: Informing Consumers about Social and Environmental: Part I By Barbara Fliess; Hyung-Jong Lee; Olivia L. Dubreuil; Osvaldo Agatiello
  27. The Bazaar Economy Hypothesis Revisited By Ansgar Belke; Anselm Mattes; Lars Wang

  1. By: Anna Maria Mayda; Chad Steinberg
    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. This paper focuses on the static effects of South-South preferential trade agreements stemming from changes in trade patterns. Specifically, it estimates the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda's imports between 1994 and 2003. Detailed import and tariff data at the 6-digit harmonized system level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that-in contrast to evidence from aggregate statistics-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, the paper finds no evidence of trade-diversion effects.
    Keywords: South-South trade agreements , trade creation , trade diversion , International trade agreements , Uganda , Imports , Commodities , Developing countries , Common Market for Eastern and Southern Africa , Trade models ,
    Date: 2007–02–26
  2. By: Barbara Fliess; Carlos Busquets
    Abstract: This paper discusses trade barriers that SMEs are likely to encounter in export markets and available policy tools aimed at their reduction or elimination. Drawing on recent work in the Trade Directorate and elsewhere, key types of barriers are identified based on a review of business surveys and other studies recently undertaken. The paper also explores how governments deal with trade barriers and how SME participation in the trade policy process...
    Keywords: OECD, trade policy, exports, non-tariff barriers, trade barriers, tariffs
    Date: 2006–12
  3. By: Clougherty, Joseph A; Grajek, Michal
    Abstract: The effects of ISO 9000 diffusion on trade and FDI have gone understudied. We employ panel data reported by OECD nations over the 1995-2002 period to estimate the impact of ISO adoptions on country-pair economic relations. We find ISO diffusion to have no effect in developed nations, but to positively pull FDI (i.e., enhancing inward FDI) and positively push trade (i.e., enhancing exports) in developing nations.
    Keywords: FDI; institutions; trade; transaction costs
    JEL: C51 F23 L31
    Date: 2006–12
  4. By: Lahsen Abdelmalki (GATE CNRS); Mustapha Sadni-Jallab (United Nations Economic Commission for Africa African Trade Policy Center); René Sandretto (GATE CNRS)
    Abstract: The agreement recently signed between Morocco and the United States foresees several modalities in dismantling tariffs. Our simulations show that the various modalities of trade liberalization may have different impacts on the welfare, the rate of growth and the sectoral trade balance of these two countries. More precisely, our findings justify the interest of a gradual and asymmetrical agreement. In addition, the FTA between the US and Morocco will have a significant impact not only on trade between the two countries, but also on their trading relationships with other countries. The most important trade diversion will affect the EU and particularly France, which is Morocco’s largest trading partner. It will also adversely affect the other North African countries. The FTA will thus offer the opportunity to Morocco to diversify its markets and its capabilities, which are currently focused on the EU, particularly on France and Spain.
    Keywords: CGE Model, free trade agreement, Morocco, simulation, trade liberalisation, trade policy, United States
    JEL: C68 F13 F17
    Date: 2007–01
  5. By: Frederick L. Joutz; Stephan Danninger
    Abstract: Germany's export market share increased since 2000, while most industrial countries experienced declines. This study explores four explanations and evaluates their empirical contributions: (i) improved cost competitiveness, (ii) ties to fast growing trading partners, (iii) increased demand for capital goods, and (iv) regionalized production of goods (e.g. offshoring). An export model is estimated covering the period 1993-2005. The dominant factors explaining the increase in market share are trade relationships with fast growing countries and regionalized production in the export sector. Improved cost competitiveness had a comparatively smaller impact. There is no conclusive evidence of increased demand for capital goods.
    Keywords: International trade , export , Export markets , Germany , International trade , Economic models ,
    Date: 2007–02–06
  6. By: Carlo Pietrobelli; Silvia Nenci (Department of Law, Università degli Studi Roma Tre)
    Abstract: This paper estimates the effect of trade liberalisation on import performance of selected Latin American countries. The novelty of this study is that it applies a long-term approach covering the whole XX century using times series and panel data analyses. The empirical exercise shows that the relationship between tariffs and import growth in Latin America cannot be taken for granted - as it often happens – and anyway that it is not always quantitatively substantial. In particular, our analysis shows the existence of a long run relationship between tariffs and imports only from the second half of the XX century. It follows that trade liberalisation appears effective in fostering Latin America’s trade growth only when integrated within a wider process, implying a multilateral and negotiated approach to trade policy. In this sense, multilateral and regional agreements (e.g. Mercosur) appear to have played a key role not only through tariff reduction but remarkably thanks to the creation of a rule-based system governing global trade relations. This result would confirm the thesis of those who endorse the existence of a formalized trading system to guarantee tariff liberalization and foster trade growth.
    Keywords: Tariffs liberalization, trade growth, trade integration process, time series, Latin America
    JEL: C22 F13 F15 N7
    Date: 2005
  7. By: Patrizia Tumbarello
    Abstract: Is the recent proliferation of Regional Trade Agreements (RTAs) in Asia a healthy development, or runs the risk of turning into an unmanageable "noodle bowl" in the future? The goal of this paper is to shed some light on this question. The results show that membership in the Asian RTAs considered in this study have not, to date, occurred at the expense of trade with nonmembers, as most Asian countries' integration with the global economy preceded regional integration. However, looking forward, given their discriminatory nature, a proliferation of RTAs, which is not accompanied by continuing unilateral and multilateral liberalization, could run the risk of leading to costly trade diversion.
    Keywords: Regional trade agreements , gravity model , trade diversion , Asia , Mekong countries , panel data , Trade , Asia , Cambodia , Lao People's Democratic Republic , Vietnam ,
    Date: 2007–03–08
  8. By: Garcia-Herrero, Alicia (BOFIT); Koivu, Tuuli (
    Abstract: This paper shows empirically that China’s trade balance is sensitive to fluctuations in the real effective exchange rate of the renminbi, although the size of the surplus is such that exchange rate policy alone will be unable to address the imbalance. One of the main reasons why the reduction in the trade surplus is limited is that Chinese imports are reduced with a real appreciation of the renminbi. By estimating bilateral import equations, we find that it is imports from other Southeast Asian countries which fall. This result reflects the vertical integration of Southeast Asia with China through the 'Asian production network'. We find, in turn, that imports from Germany – which serve China’s domestic demand – behave as one would expect, ie they increase with renminbi real appreciation. All in all, our results raise concerns on the impact of renminbi appreciation on Southeast Asia even if regional currencies do not follow the renminbi’s upward trajectory.
    Keywords: China; trade; exports; real exchange rate
    JEL: F10 F14
    Date: 2007–03–19
  9. By: Arpita Mukherjee (Indian Council for Research on International Economic Relations); Paramita Deb Gupta (Indian Council for Research on International Economic Relations); Prerna Ahuja (Indian Council for Research on International Economic Relations)
    Abstract: Many WTO (World Trade Organization) member countries, including India, are defensive about opening up of the audiovisual sector in the Doha Round due to reasons of cultural sensitivity. On the other hand, the United States is pushing for liberalizing trade in this sector - both in the WTO and in its bilateral FTAs (Free Trade Agreements). With the slow progress of the Doha Round, India and the United States are exploring the possibilities of entering into FTAs with like-minded trading partners. In this context, the present paper discusses the prospects of liberalizing audiovisual services under a possible Indo-U.S. FTA. The study found that India and the United States have significant trade complementarities in this sector which can be further enhanced under an FTA. It identifies areas such as co-production of films, digital content creation and broadband infrastructure in which companies from India and the United States can enter into mutually beneficial collaborations. It argues that India should enter into a media cooperation agreement with the U.S. to facilitate the inflow of technical know, finance and best management practices. It discusses regulatory and other reforms which would not only improve the productivity and global competitiveness of the Indian audiovisual sector but also enable it to gain from the FTA.
    Keywords: Indo-U.S. FTA, GATS, bilateral agreements, audiovisual, services
    JEL: F13 F14 L82
    Date: 2007–02
  10. By: Joanne Kathryn Lindley; Marius Brullhart; Rob Elliott (Department of Economics, The University of Sheffield)
    Abstract: We re-examine the relationship between intra-industry trade and labour reallocation, using individual-level data on manufacturing worker moves in the United Kingdom. The contribution of this analysis is twofold. First, we estimate the impact of intra-industry trade on worker moves between occupations as well as between industries. Second, we run individual-level regressions that allow us to control for worker heterogeneity. Our results suggest that intra-industry trade does have the stipulated attenuating effect on worker moves, both between occupations and between industries, but that this effect is relatively small compared to other determinants of labour reallocation.
    Keywords: Intra-industry trade, worker mobility, labour-market adjustment.
    JEL: F1 J62 C25
    Date: 2005–05
  11. By: Arpita Mukherjee (Indian Council for Research on International Economic Relations); Prerna Ahuja (Indian Council for Research on International Economic Relations)
    Abstract: Since telecommunication is one of the main drivers of economic growth and globalization, WTO (World Trade Organization) negotiations and New Age FTAs (Free Trade Agreements) have focused on liberalizing trade in this sector. The present paper analyses the possibilities of liberalizing trade in telecommunication services if India and its largest trading partner-the US-enter into a bilateral agreement. The study found that India and the US have trade complementarities in telecommunication services and that it should be a priority sector in the FTA negotiations. The study identified certain areas such as R&D related to telecommunication and broadband infrastructure where collaboration between companies of both countries would be mutually beneficial. The study found that telecommunication services have been significantly liberalized in the US FTAs-much beyond the scope of the GATS and the Reference Paper on Basic Telecommunications. While the current policy regime in India is consistent with some of the requests made by the US in its bilateral negotiations, for meeting others, the policy regime needs to be examined and, if required, reformed. The present paper suggests certain reforms which would enhance the productivity, efficiency and global competitiveness of the sector and enable the country to benefit from the bilateral liberalization.
    Keywords: Indo-US FTA, GATS, bilateral agreements, telecommunication, services
    JEL: F13 F14 L96
    Date: 2006–12
  12. By: Alejandro Cuñat and Marco Maffezzoli
    Abstract: Development accounting exercises based on an aggregate production function find technology is biased in favor of a country's abundant production factors. We provide an explanation to this finding based on the Heckscher-Ohlin model. Countries trade and specialize in the industries that use intensively the production factors they are abundantly endowed with. For given factor endowment ratios, this implies smaller international differences in factor price ratios than under autarky. Thus, when measuring the factor bias of technology with the same aggregate production function for all countries, they appear to have an abundant-factor bias in their technologies.
  13. By: Bohman, Helena (Jönköping International Business School (JIBS)); Nilsson, Desirée (Jönköping International Business School (JIBS))
    Abstract: The Linder hypothesis states that countries will trade more intensively with countries that have similar structures of demand. We suggest an alternative method of assessing the hypothesis, incorporating the distribution of income within a country. The variables that we develop capture the similarity in demand structures between two trading partners and the size of the market for which the market overlap is identified. These variables are included in a one-sided gravity model. Results show that similarity in structure of demand act as a catalyst of trade flows between countries and that similarities are more important for the differentiated goods than homogenous goods.
    Keywords: Linder hypothesis; income distribution; overlapping demand
    JEL: B41 D31 F10
    Date: 2007–03–20
  14. By: Wilckens, Sebastian
    Abstract: This paper develops a model of the WTO dispute settlement process (DSP) to study the recent proposal by legal scholars to subsidize litigation costs. The high cost of litigation, so the argument, is a major obstacle for developing countries to using the DSP to enforce developed countries’ compliance with WTO rules. The paper shows that this proposal may be misguided. In particular, a reduction of litigation costs may lead large countries to impose larger trade impediments where before they may have raised barriers only a little. Thus, a cost reduction may even weaken the smaller countries’ position in the DSP. Moreover, the model sheds light on the structure of the dark figure of un-accused offenses, suggesting that the observed record of disputes notified to the WTO is systematically biased.
    Keywords: Developing Countries, Dispute Settlement, GATT/WTO, Tariff Retaliation, Trade Disputes
    JEL: F13
    Date: 2007
  15. By: Eric V. Edmonds (Dartmouth College NBER and IZA); Nina Pavcnik (Dartmouth College NBER and CEPR); Petia Topalova (International Monetary Fund)
    Abstract: Do the short and medium term adjustment costs associated with trade liberalization influence schooling and child labor decisions? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. However, communities that relied heavily on employment in protected industries before liberalization do not experience as large an increase in schooling or decline in child labor. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling.
    Keywords: schooling, child labor, literacy, trade liberalization, India
    JEL: J24 O15 J22 J13
    Date: 2007–02
  16. By: Nagendra Shrestha
    Abstract: This paper attempts to reveal the vertical specialization dependence relationship in East Asian countries using the multi country vertical specialization dependence modeling based on the Asian International Input-Output data. Use of multi country model allows us to study the country-wise vertical specialization association that is not possible with the single country model. More over, the multi country vertical specialization dependence modeling, a new approach to study the vertical specialization (imported intermediate goods to produce the export goods), enables us to explain the dependence on domestic intermediate goods and the dependence on other countries as well. The results show that the vertical specialization dependence on total import and group of USA, EU and ROW is high in general among the East Asian countries. However, it is also important to note that the vertical specialization dependence on 9 Asian countries and Hong Kong is relatively high as compared to non-regional countries. Such a situation of vertical specialization dependence in East Asia indicates the strong relationship (in terms of vertical specialization) among the Asian countries.
    Keywords: International trade, Input-Output analysis, Vertical specialization, East Asia
    Date: 2007–03
  17. By: Delpeuch, Claire
    Abstract: In 2005, following the phase-out of the Agreement on Textile and Clothing, the EU and the US have implemented new restrictions on textile and clothing imports from China. Available data suggests that the shortfall thus imposed on China, in terms of textile exports to the EU and to the US, is significant. West African cotton-producing countries are very dependant on cotton earnings for their GDP and over the last years, most of the growth of their cotton exports’ revenues has resulted from increasing exports to China. The results of a model of Chinese and West African cotton exchanges suggests that Chinese imports of West African cotton are strongly dependant on its textile exports to the EU and the US. EU and US safeguards against Chinese textile might have seriously hampered West African cotton exports opportunities over the past two years.
    Keywords: West-Africa; cotton; ATC; EU and US safeguards; China; textile
    JEL: Q17 F13
    Date: 2007–03
  18. By: Nin Pratt, Alejandro; Diao, Xinshen
    Abstract: "Considering the heterogeneity of the countries of southern Africa and the presence of South Africa and other middle-income countries in the region, southern Africa has a unique opportunity to exploit agricultural potential and regional trade opportunities through regional dynamics and integration. We analyze the implications of such opportunities for the growth of the low-income countries, using a regional general equilibrium model that captures growth linkages. We find that growth in the middle-income southern African countries, such as South Africa, benefits the region's low-income countries through increased demand for their agricultural exports. Agricultural productivity growth, however, is necessary for low-income countries to take advantage of South Africa's growth. Productivity growth in the low-income countries' grain and livestock sectors generates more growth in GDP and food consumption than growth in nontraditional export crops. Unlike other regions where growth in grain production is likely to be constrained by domestic demand, expanding middle-income economies in southern Africa provide additional demand for grains and livestock, slowing the decline in grain prices in the region." Authors' Abstract
    Keywords: Regional trade, General equilibrium model, Regional integration, Agricultural productivity, Grain production,
    Date: 2006
  19. By: Molly Lesher; Hildegunn Kyvik Nordas
    Abstract: This technical paper analyses the role of business services in selected OECD and non-OECD economies using recently published input-output tables for 32 countries in or close to the year 2000. Business services have long been recognised as important drivers in the global economy, and this study reinforces that view with a comprehensive, quantitative cross-country analysis of how the manufacturing and business services sectors interact in the production process. Our analysis suggests that...
    Keywords: productivity, trade policy, manufacturing, outsourcing, off-shoring
    Date: 2006–12–13
  20. By: Ngo Van Long; Frank Staehler
    Abstract: This paper discusses the influence of public ownership on trade policy instruments. We demonstrate three important invariance results. First, the degree of public ownership affects neither the level of socially optimal activities nor welfare if the government chooses optimal trade policy instruments. Second, in the case of rivalry between domestic export firms, the optimal export tax is independent of the degree of public ownership. Third, in the case of rivalry in the home market, the optimal import tariff is independent of the degree of public ownership. In this case, the optimal production subsidy decreases with public ownership if the optimal tariff is positive. For the case of Cournot rivalry in a third market, the optimal export subsidy is an increasing function of the public ownership share, while in the case of Bertrand rivalry with differentiated products, the optimal export tax is an increasing function of that parameter. <P>Cet article considère l’influence de la propriété publique sur les choix des politiques commerciales. Nous démontrons trois théorèmes sur l’invariance. Premièrement, le degré de la propriété publique n’a aucun impact sur le niveau des activités optimales si le gouvernement utilise les politiques commerciales optimales. Deuxièmement, dans le cas de concurrence entre les firmes qui exportent, le taux de taxe optimale est indépendant du degré de la propriété publique. Troisièmement, dans le cas de concurrence sur le marché domestique, le taux de tarif douanier optimal est indépendant du degré de la propriété publique. Dans le cas de concurrence à la Cournot sur un troisième marché, le taux d’aide optimale est une fonction croissante du pourcentage de la possession publique, tandis que dans le cas de concurrence à la Bertrand, le taux de taxe optimale en est une fonction décroissante.
    Keywords: Semi-public firms, trade policy, Entreprises semi-publiques, politiques commerciales
    JEL: F12 F13
    Date: 2007–03–01
  21. By: Badiane, Ousmane
    Abstract: "African countries tend to be affected by global agricultural policies in the same way as other economies but with much more severe economy-wide repercussions... The present discussion paper 1) examines the vulnerability of Africa economies with respect to global agricultural trading policies and their induced changes in world agricultural markets, based on the above characteristics; 2) analyzes the efficiency effects within Africa's agricultural sector of world market distortions resulting from agricultural trading policies; 3) illustrates the impact of global protectionism on poverty levels and distribution among rural households in Africa and the implication for the objective of poverty reduction; 4) reviews the options and risks facing African countries in their pursuit of opportunities for greater participation in the global trading system, in particular in connection with the Doha trade agenda; and 5) discusses options for global trade liberalization that would best benefit African economies. The paper argues that the insistence on the part of African countries on Special and Differential Treatment entails much more risks than benefits for their economies. It also indicates that trade preferences have been less beneficial to African economies than usually assumed and at any rate have not been significant enough to compensate African countries for the negative impact of global protectionism. Finally, the paper also disagrees with the widely accepted conclusion that African countries would suffer from liberalization of global agricultural policies because they tend to be net food importers. That conclusion does not sufficiently take into consideration the dynamic long term effects of global policy changes on production and trading patterns among African countries and the potential efficiency effects that would emanate there from." Authors' Abstract
    Keywords: Agricultural policies, International trade, agricultural sector, Protectionism, Doha agreement, trade liberalization, Poverty reduction, Rural households,
    Date: 2006
  22. By: Simon Johnson; Jonathan David Ostry; Arvind Subramanian
    Abstract: A dozen countries had weak institutions in 1960 and yet sustained high rates of growth subsequently. We use data on their characteristics early in the growth process to create benchmarks with which to evaluate potential constraints on sustained growth for sub-Saharan Africa. This analysis suggests that what are usually regarded as first-order problems-broad institutions, macroeconomic stability, trade openness, education, and inequality-may not now be binding constraints in Africa, although the extent of ill-health, internal conflict, and societal fractionalization do stand out as problems in contemporary Africa. A key question is to what extent Africa can rely on manufactured exports as a mode of "escape from underdevelopment," a strategy successfully deployed by almost all the benchmark countries. The benchmarking comparison specifically raises two key concerns as far as a development strategy based on expanding exports of manufactures is concerned: micro-level institutions that affect the costs of exporting, and the level of the real exchange rate-especially the need to avoid overvaluation.
    Keywords: Sustained growth , Africa , constraints , benchmark , Economic growth , Africa , Trade liberalization , Imports , Exports ,
    Date: 2007–03–08
  23. By: Celine Allard
    Abstract: This paper analyses how globalization has affected inflation in the New EU Members States (NMS), and Poland in particular, since 1995. It finds prices have become less sensitive to domestic economic conditions as trade integration rose, possibly because monetary policy incentives increasingly shifted toward meeting price stability objectives. Quantitatively, globalization appears to have lowered Polish prices by ½ to 1 percentage point annually since 1995, substantially more than in advanced economies. However, future inflation-dampening effects in the NMS are likely to be smaller as the pace of increases in trade openness moderates.
    Keywords: Globalization , inflation , transition , Inflation , Poland , Globalization , Trade policy ,
    Date: 2007–02–26
  24. By: Rabah Arezki; Frederik van der Ploeg
    Abstract: We criticize existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness, and initial income. These results do not survive once we use instrumental variables techniques to correct for the endogenous nature of the explanatory variables. Furthermore, they suffer from omitted variables bias as they overestimate the effect of initial income per capita and thus underestimate the speed of conditional convergence. Instead, we provide new evidence for the impact of natural resource dependence on income per capita in a systematic empirical cross-country framework. In addition to a significant negative direct impact of natural resources on income per capita, we find a significant indirect effect of natural resources on institutions. We allow for interaction effects and provide evidence that the natural resource curse is particularly severe for economic performance in countries with a low degree of trade openness. Adopting policies directed toward more trade openness may thus soften the impact of a resource curse. We also check the robustness of our results by using a variety of instruments and also employing the ratio of natural capital rather than natural resource exports to national income as an explanatory variable. We find evidence that resource abundance, measured by the stock of natural capital, also induces a resource curse, but less severely for countries that are relatively open.
    Keywords: Resource curse , institutions , trade policies , growth performance , income per capita , Trade policy ,
    Date: 2007–03–09
  25. By: Shepherd, Ben; Delpeuch, Claire
    Abstract: • Available evidence strongly suggests that cotton producers in West Africa are relatively unresponsive to changes in world prices. This means they are poorly placed to take advantage of improved market conditions that might result from the reduction or abolition of cotton subsidies in rich countries. • To increase price responsiveness and ensure that the results of multilateral reform match producers’ expectations it is now more urgent than ever to undertake comprehensive regulatory reform of cotton marketing structures. • While most West African countries have already taken important steps in that direction, much work still remains to be done, in particular in Mali. The necessary path of reform is highly complex and country-specific, but we can suggest some overarching goals: Assuring closer alignment between world and domestic (producer) prices; Improving cotton sector productivity by reinforcing market infrastructure at crucial points in the supply chain, and ensuring openness to technological advances including biotechnology; Investing in physical and informational infrastructure so as to bring farmers closer to markets.
    Keywords: International trade; agriculture; cotton; commodity marketing; regulatory reform; West Africa.
    JEL: F13 Q17
    Date: 2007–03
  26. By: Barbara Fliess; Hyung-Jong Lee; Olivia L. Dubreuil; Osvaldo Agatiello
    Abstract: Focusing on consumer demands in OECD markets and voluntary initiatives taken in the private sector, this study investigates how consumers are informed about the social and environmental conditions under which products have been produced. Consumers of OECD increasingly attach importance to how companies they buy from conduct their business, and the voluntary adoption of CSR policies is spreading in the private sector. But how do consumers know...
    Keywords: OECD, retail trade, multinationals, value chain
    Date: 2007–01–10
  27. By: Ansgar Belke; Anselm Mattes; Lars Wang
    Abstract: In this paper we argue that traditional measures of openness of an economy usually overstate the actual degree. This is due to the fact that traditional export or import shares are measured as a share of the gross domestic product. The former are expressed in gross terms, the latter in value added terms. In this way the actual interdependences between economies are overstated. We develop a new value based openness indicator that includes interregional and interindustrial dependencies. Based on a Leontief production system and input-output-tables we argue that export-induced imports of intermediate parts must be subtracted of the value of exports in order to obtain the real value added in the export sector. The same reasoning applies to the import side. We use these measures of actual openness to calculate openness indicators for Germany using GTAP data. We show that traditional measures of openness exaggerate the actual openness and argue that these new indicators are an important contribution to the debate about the German “bazaar economy”.
    JEL: C67 E20 F15 F41
    Date: 2007

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