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on International Trade |
| By: | Andrew Swiston; Tamim Bayoumi |
| Abstract: | This paper examines linkages across North America by estimating the size of spillovers from the major regions of the world-the United States, euro area, Japan, and the rest of the world-to Canada and Mexico, and decomposing the impact of these spillovers into trade, commodity price, and financial market channels. For Canada, a one percent shock to U.S. real GDP shifts Canadian real GDP by some ¾ of a percentage point in the same direction- with financial spillovers more important than trade in recent decades. Thus, a large proportion of the reduction in Canadian output volatility since the 1980s can be accounted for by the "Great Moderation" in U.S. growth. Before 1996, domestic volatility in Mexico swamped the contribution of external factors to the business cycle. After 1996, the response of Mexican GDP is 1½ times the size of the U.S. shock-"when the U.S. sneezes, Mexico catches a cold". These spillovers are transmitted through both trade and financial channels. |
| Keywords: | Trade , Canada , Mexico , Commodity prices , Capital markets , |
| Date: | 2008–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/3&r=int |
| By: | Michael B. Devereux; Alan Sutherland |
| Abstract: | This paper presents a general approximation method for characterizing time-varying equilibrium portfolios in a two-country dynamic general equilibrium model. the method can be easily adapted to most dynamic general equilibrium models, it applies to environments in which markets are complete or incomplete, and it can be used for models of any dimension. Moreover, the approximation provides simple, easily interpretable closed form solutions for the dynamics of equilibrium portfolios. |
| Keywords: | Payments imbalances , Markets , Trade , Bonds , |
| Date: | 2007–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/284&r=int |
| By: | Flora Bellone; Liza Jabbour; Patrick Musso; Lionel Nesta; Stefano Schiavo |
| Abstract: | We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: Exporters are more productive than non-exporters when observed and unobserved heterogeneity are controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is strong evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find that countries that are more open and have more effective government report higher productivity premia. However, the level of development per se does not appear to be an explanation for the observed cross-country differences. |
| Keywords: | Exports, productivity, micro data, international comparison |
| JEL: | F14 D21 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0736&r=int |
| By: | Irina Tytell; Florence Jaumotte |
| Abstract: | Labor markets around the world have become increasingly integrated over the last two decades, with the entry of China, India and the former Eastern bloc into the world trading system, the removal of restrictions on trade and capital flows, and rapid technological progress. At the same time, the share of labor in national income decreased in most advanced countries. This paper uses a labor share equation derived from a translog revenue function to estimate the contributions of globalization, technological progress, and labor market policies to the decline in the labor share. The results, obtained for 18 advanced countries over 1982- 2002, suggest that globalization was only one of several factors that have affected the labor share. Technological progress, especially in the information and communications sectors, has had a bigger impact, particularly on the labor share in unskilled sectors. |
| Keywords: | Globalization , Labor , Labor markets , International trade , Immigration , Information technology , |
| Date: | 2008–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/298&r=int |
| By: | Sarah Guillou (Observatoire Français des Conjonctures Économiques); Stefano Schiavo (Observatoire Français des Conjonctures Économiques) |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0725&r=int |
| By: | M. Ayhan Kose; Cigdem Akin |
| Abstract: | This paper examines the changing nature of growth spillovers between developed economies, the North, and developing countries, the South, driven by the process of globalization?the phenomenon of rising international trade and financial flows. We use a comprehensive database of macroeconomic and sectoral variables for 106 countries over the period 1960- 2005. We consider the South to be composed of two groups of countries, the Emerging South and the Developing South, based on the extent of their integration into the global economy. Using a panel regression framework, we find that the impact of the Northern economic activity on the Emerging South has declined during the globalization period (1986-2005). In contrast, the growth linkages between the North and Developing South have been rather stable over time. Our findings also suggest that the Northern and Emerging Southern economies have started to exhibit more intensive intra-group growth spillovers. |
| Keywords: | Emerging markets , Globalization , International trade , Capital flows , Economic growth , |
| Date: | 2007–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/280&r=int |
| By: | Sotiris Karkalakos (Economics, Keele University) |
| Abstract: | It is shown in the context of a new economic geography that, when capital is heterogeneous (a degree of environmental sensitivity), then trade liberalization may lead to industrial agglomeration and inter-regional trade. Capital heterogeneity gives local monopsony power to firms but also introduces variations in the quality of the match. Matches occur, under environmental consciousness assumption, giving rise to an agglomeration force, which can offset the forces against, trade costs and the erosion of monopsony power. A robust agglomeration equilibrium is derived analytically and shows that pollution can provide a motive for trade by spatially concentrated industries with environmental sensitivities. |
| Keywords: | Agglomeration; Pollution; Matching. |
| JEL: | F10 Q20 R12 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:kee:kerpuk:2007/15&r=int |
| By: | Colantone, Italo; Sleuwaegen, Leo (Vlerick Leuven Gent Management School) |
| Abstract: | This paper examines the impact of international trade on firm entry and exit in Europe. The results point to strong displacement exit and less creative replacement entry in industries characterized by increasing import competition Moreover, the evidence suggests strong selection and higher entry barriers in industries characterized by higher openness through the export channel. The negative effects of trade openness lose importance if the increasing trade exposure concerns intra-industry trade, mainly coupled with international sourcing within the industry. |
| Keywords: | Globalization, Exit, Entry |
| Date: | 2008–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2007-36&r=int |
| By: | Azim M. Sadikov |
| Abstract: | How do signatures required for exporting and business registration procedures affect the volume and composition of country's exports? To answer this question, I develop a model where a country can export two types of products: differentiated and homogeneous. I show that export signatures and registration procedures reduce overall exports by increasing transaction costs. The impact, however, varies across goods according to the product's degree of differentiation- the lack of price data on differentiated products due to their heterogeneity makes them more sensitive to export signatures. Regressions show that each extra signature exporters have to collect before a shipment can take place reduces aggregate exports by 4.2 percent. The impact is large, equivalent to raising importer's tariff by 5 percentage points. Furthermore, each signature lowers exports of differentiated products by 4-5 percent more than exports of homogeneous goods. I find evidence that business registration procedures affect exports of differentiated products only. |
| Keywords: | Trade policy , Exports , Tariffs , |
| Date: | 2007–12–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/292&r=int |
| By: | Horácio Faustino |
| Abstract: | This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT. |
| Keywords: | intra-industry trade; horizontal intra-industry trade; vertical intra-industry trade; comparative advantage. |
| JEL: | F1 C0 C2 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp32008&r=int |
| By: | Francis Bloch (GREQAM and Ecole Superieure de Mecanique de Marseille); Ben Zissimos (Department of Economics, Vanderbilt University) |
| Abstract: | This paper presents a North-South model of international trade in which (i) there is a relatively small number of countries in the North and (ii) the North is relatively abundant in capital while the South is relatively abundant in labor. Using new methods in monotone comparative statics, the effect of changes in country numbers on the outcome of a "tariff war" is studied. It is shown that terms-of-trade and welfare in the North are greater the larger the number of countries in the South and vice versa. The paper also studies the relationship between the number of countries in the world market and its performance in terms of efficiency. It is shown that, as the world economy is replicated, the equilibrium in a tariff war converges monotonically towards the competitive equilibrium of free trade. |
| Keywords: | Comparative statics, efficiency, North-South, tariff war, terms of trade |
| JEL: | E2 E6 H2 O4 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:0802&r=int |
| By: | Guillaume Daudin |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0735&r=int |
| By: | de Nardis, Sergio; De Santis, Roberta; Vicarelli, Claudio |
| Abstract: | In this paper we study the effect of the single currency across industries for euro area members. This analysis may help to shed light on the main factors influencing the euro effect on trade flows. We intend to verify whether these factors are specific to individual sectors and/or countries or common to the entire euro area. We use a dynamic specification of an augmented gravity equation. Following the most recent econometric literature, we apply a “System GMM” dynamic panel data estimator (Blundell and Bond, 1998) to avoid inconsistency and biases in the estimates, and introduce controls for heterogeneity. Our preliminary results indicate some heterogeneity at country level. Despite statistically pro-trade effects in the majority of the EMU members, at sectoral level there are some countries in which the impact of the euro has been negative. The pro-trade effects are mainly concentrated in scale intensive industries. Industrial specialization and location of these industries, together with other factors (i.e. differences in factor endowments, product regulations across countries), may have determined “the winners and the losers” in the monetary integration process. These preliminary findings are in line with those of the few other studies on this issue. In particular, this recent literature seems consistent with Baldwin’s (2006) “new good” hypothesis. However, in our estimates the magnitude of these effects are lower, probably because of our empirical strategy. Moreover, the sector/country analysis points out that other specific factors have been in place in shaping differently the euro effect on trade. |
| Keywords: | International trade, currency unions, gravity models, dynamic panel data, Blundell-Bond estimates |
| JEL: | C33 F14 F15 F33 F4 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:6866&r=int |
| By: | Daniel Kanda |
| Abstract: | This paper discusses Ireland's trade and financial linkages with key partner countries, and uses a vector autoregression to examine the impact of shocks to partner country GDP and shocks to Irish competitiveness on Irish GDP. Two main findings are that shocks to U.S. GDP have a larger impact on Irish GDP than shocks to the euro area or the U.K. Also, the share of the variance of Irish GDP explained by shocks to competitiveness rises with the forecast horizon, suggesting that past erosion of competitiveness may yet have a more substantial impact on economic activity. |
| Keywords: | Trade , Ireland , External shocks , |
| Date: | 2008–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/2&r=int |
| By: | Emilio Antonio; Osamu Onodera |
| Abstract: | This paper is the second of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of the Philippines from the 1980s. The report consists of 7 main parts; Part 1 provides the introduction, part 2 looks at the economic policies in the Philippines from the 1970s, and part 3 takes a general look at the general structure of the economy. Part 4 takes a closer look at the trade liberalisation in the Philippines which was implemented in three phases, (1) initial trade reforms (1981-88), (2) second phase (1991-93) and (3) third phase (1994-96). Part 5 takes an overview of the structural adjustments which took place in manufacturing and agriculture, with Part 6 taking a closer look at four sectors, electronics, food processing, cement, and business process outsourcing sectors. Part 7 concludes with lessons learnt and opportunities and challenges for further liberalisation. Despite considerable liberalisation including in trade policy since the 1980s, the Philippines economy posted only lacklustre performance initially. After a growth period in the 1990s and the Asian crisis, it is only in the recent past that some of the reforms are starting to pay off. The importance of a stable political and macroecnomic environment, need for appropriate exchange rates, need for early elimination of quantitative restrictions in trade reform, early deregulation on FDI are some of the lessons learnt. While challenges remain, better results are expected in the future if complemented with further reforms. |
| Keywords: | trade, liberalisation, exchange rate policy, tariffs, structural adjustment, Philippines, Macroeconomic instability, import-substitution, electronics, export processing zones, Food processing, cement, business process outsourcing and IT services, liberalization |
| Date: | 2007–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:59-en&r=int |
| By: | Thorsten Schank (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg); Claus Schnabel (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg); Joachim Wagner (Institute of Economics, Leuphana University of Lüneburg) |
| Abstract: | ABSTRACT: While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer-employee panel data we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities. |
| Keywords: | exports; wages; exporter wage premium; Germany |
| JEL: | F10 D21 J31 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:74&r=int |
| By: | André van Stel; Jolanda Hessels; Dirk De Clerq |
| Abstract: | In this paper we draw on knowledge spillover literature to suggest that a country’s proportion of exportoriented new ventures, compared to its total number of new ventures, represents an outcome of knowledge spillovers (export spillovers) that stem from foreign direct investment (FDI) and international trade, as well as a source of knowledge spillovers (entrepreneurship spillovers) that positively influence the country’s total level of entrepreneurial activity. We distinguish between higher-income and lower-income countries, because the latter are less integrated into the world economy. To test the hypotheses, we use macro-level data from 34 countries during the period 2002–2005. After controlling for relevant factors such as size of the domestic market and industry structure, we find that the relationship between FDI and international trade on the one hand and a country’s proportion of export-oriented new ventures on the other differs for higherand lower-income countries. In addition, a country’s proportion of export-oriented new ventures affects the subsequent emergence of new businesses. These findings have important implications for research and practice. This is an update of paper H200619. |
| Date: | 2007–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200713&r=int |
| By: | Panagiotis Liargovas; Konstantinos Skandalis |
| Abstract: | The purpose of this study is twofold. First, to conceptualize various internal, external and strategic factors explaining the motivation and the marketing strategy of Greek exporting firms based on a strategic management model. Second, to empirically test this model in the case of Greek exporting firms to South-East European markets. The analysis is accomplished through the observed behaviour of 41 listed firms in the Athens stock exchange involved in making exports to South-East Europe. It is based on a questionnaire which has provided several insights to export motivations and export marketing strategy elements. It uses principal component factor analysis technique in order to investigate common factors that might explain underlying beliefs about the perceived variables. |
| Keywords: | Export marketing, export motives, Greece, South-East European markets, factor analysis |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uop:wpaper:0013&r=int |
| By: | Batista, Catia (University of Oxford); Potin, Jacques (ESSEC Business School) |
| Abstract: | Using panel data, we provide an integrated treatment of factor endowments, factor prices, and international specialization. In the various cross sections, we confirm the Heckscher-Ohlin prediction that, with sufficient differences in country endowments, there is no factor Price equalization and countries specialize in different subsets of goods. We also explain why, despite higher returns to capital, poor countries do not attract more capital from rich countries. Moreover, along their development path, countries experience the structural change predicted by theory. We find that these changes in specialization mainly occur within industries. Despite capital accumulation by most countries, we find no decrease in the return to capital at any given capital-labour ratio. This must have facilitated growth through capital accumulation |
| Keywords: | Economic Growth and International Trade; Heckscher-Ohlin; Multiple Cones; Marginal Product of Capital; Specialization |
| JEL: | F11 F14 O40 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-08001&r=int |
| By: | Rubiana Chamarbagwala (Indiana University Bloomington); Gunjan Sharma (University of Missouri) |
| Abstract: | We investigate the relationship between economic deregulation (delicensing), skill upgrading, and wage inequality during the 1980s and 1990s in India. We use a unique dataset on India's industrial licensing regime to test whether industrial deregulation during the 1980s and 1990s played a role in generating demand for skilled workers, as measured by the employment and wagebill shares of white-collar workers, and in raising the returns to skilled labor, as measured by the skill premium. Our analysis focuses not only on the difference between licensed and delicensed industries but also on the comparison of these differences during the 1980s, when India's external sector remained relatively closed to the world economy, and the 1990s, when India underwent massive liberalization reforms and became increasingly integrated with the global economy. We identify two main channels through which industrial delicensing affects the demand for skills and wage inequality: capital- and output-skill complementarities. Our analysis finds two important results. First, capital- and output-skill complementarities existed for firms in both licensed and delicensed industries but were stronger in delicensed industries both before and after 1991. The exception is output-skill complementarities with respect to the skill premium, where delicensed industries experienced lower output-skill complementarities compared to licensed ones both before and after 1991. Second, the contribution of industrial delicensing to both types of complementarities was considerably higher during the 1980s and much smaller after 1991. These results suggest that industrial delicensing benefited skilled labor via capital- and output-skill complementarities during the 1980s, the decade before India liberalized it's trade and investment regime. Thus, much of the increase in the demand for and returns to skill as a result of capital- and output-skill complementarities can be attributed to domestic reforms during the pre-1991 period in India. |
| Keywords: | Capital-skill complementarities, industrial delicensing, trade liberalization, India |
| JEL: | F16 J23 J24 O14 O38 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2008-002&r=int |
| By: | Mehar, Ayub |
| Abstract: | Different versions of the South Asian Economic Zone has been discussing in the literature. The basic and important justification behind the formation of South Asian Free Economic Zone is not directly concerned with the economic benefits; it is justified on the basis of cultural and historical relations. . Three different propositions for the socio-economic collaboration between India and Muslim World were discussed in this article. It was concluded that India would has to opt one of the two options: a merger with the Muslim World or playing a role as an agent of the Western bloc against China and Muslim World. |
| Keywords: | Regionalization; Trade Blocs; Free Trade Regime |
| JEL: | Z1 F5 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6822&r=int |