nep-int New Economics Papers
on International Trade
Issue of 2008‒05‒24
seven papers chosen by
Martin Berka
Massey University

  1. Are Imports in Africa Responsive to Tariff Reductions? By Chris Jones; Oliver Morrissey
  2. Exploiting the Modularity of Value Chains: Inter-firm Dynamics of the Taiwanese Notebook PC Industry By Kawakami, Momoko
  3. Adapting to Import Competition: Effects of Low-wage Trade on Commodity Mix in Canadian Manufacturing Plants By Baldwin, John R.; Lileeva, Alla
  4. African Trade Policy in the 1990s: Political Economy or Technocratic Reforms? By Chris Jones; Oliver Morrissey; Doug Nelson
  5. Aggregate and Sector Import Price Elasticities for a Sample of African Countries By Chris Jones
  6. Does Globalization Benefit the Poor? Evidence from Pakistan By Shahbaz, Muhammad
  7. A short analysis on the stricter European regulations on tropical hardwood imports and their side effects By Jean-Marc Roda; Eric J.M.M. Aretz; Hin Fui Lim

  1. By: Chris Jones; Oliver Morrissey
    Abstract: In the 1980’s and 1990’s many African countries liberalised their trade policy, although since the mid 1990s there are countries that did not alter tariffs. This allows us to analyse the effects of trade liberalisation on the change in imports using Difference-in-Differences techniques that allow us to evaluate the impact on imports of trade liberalisation at the general and sector-specific level. During the period of study (1996-2004), Algeria (in 1997), Ethiopia (2001), Egypt (1998), Tanzania (2000) and Uganda (2000) all liberalised their tariffs. These countries act as a ‘treatment’ group. In comparison, Cameroon, Gabon and Madagascar all left their tariffs unchanged. These countries act as our ‘control’ group or counterfactual. We compare the effects on imports for liberalising countries relative to non-liberalising countries, controlling for the timing of liberalisation, trends in import capacity (country effects) and in sector imports across countries (product market effects). Overall, using three methods of measuring imports, there is little evidence that suggests imports increased for the treatment group countries relative to the control group countries. This is true at the general and sector-specific levels.
    Keywords: Tariffs, Difference-in-Difference, liberalisation, Africa
  2. By: Kawakami, Momoko
    Abstract: This paper explores the inter-firm dynamics that govern the rise of capabilities of latecomer firms operating in global value chains. By extending and modifying the model proposed by Gereffi, Humphrey and Sturgeon [2005], I present a framework in which the rise of supplier capabilities is determined by interactions among the strategies of the firms. Based on a case study of the Taiwanese notebook PC industry, the paper will explore how the interactions among outsourcing strategies by lead firms from the developed countries, the learning strategies of Taiwanese suppliers, and the product strategy of powerful component vendors have driven the explosive growth of the industry after the 1990s. By so doing, the paper attempts to highlight the active roles firms play in determining the speed and direction of the rise in supplier capabilities.
    Keywords: Global value chains, Notebook PC industry, ODM(original design manufacturing), Taiwan, Computer, Electronic industries
    JEL: F14 L23 L63
    Date: 2008–04
  3. By: Baldwin, John R.; Lileeva, Alla
    Abstract: The paper investigates how Canadian manufacturing plants adjust to an increase in low-wage import competition by changing their commodity portfolios. At the commodity level, we distinguish between 'core' versus 'peripheral' and differentiated versus homogeneous commodities. We also account for cost and technological complementarities using input-output linkages between commodities produced by a plant. We document large commodity turnover within plants over the period from 1988 to 1996. The largest changes happened in multi-commodity plants and involved peripheral commodities. The commodities that were affected the most were those commodities that are potentially used as inputs in production of the 'core' commodity; homogeneous (rather than differentiated) commodities; and, commodities with relatively weak input complementarities with the core product. Plants experiencing large import competition shifted their output toward production of their core commodity and away from production of unrelated peripheral commodities.
    Keywords: Manufacturing, Business performance and ownership, Business adaptation and adjustment
    Date: 2008–05–16
  4. By: Chris Jones; Oliver Morrissey; Doug Nelson
    Abstract: The majority of African countries implemented import liberalisation in the 1990s. This paper explores factors that may explain the pattern of protection and of tariff reform. We consider political economy explanations, motivated specifically by the Grossman and Helpman (1994) model of protection in response to industry lobbies, and the possibility that reforms are technocratic. Using industry-level data for a sample of six African countries, we find limited evidence that political economy factors have influenced the pattern of tariffs or tariff reductions since the early 1990s. One result does appear frequently: relative sector size (measured by the number of employees or establishments) appears to be associated with the relative level of protection. We then explore various descriptive statistics for tariff changes in seven African countries. The analysis suggests that the pattern of tariff reductions was essentially technocratic in structure - across the board reduction in average tariffs and in the dispersion of rates, with larger proportional reductions for higher tariffs – consistent with policy reforms being guided by the World Bank. While political economy factors may have influenced the initial pattern of protection, the technocratic reforms since the early 1990s have diluted political economy influences on average and relative protection.
    Keywords: Pattern of Protection, Tariff Reform, Political Economy, Africa
  5. By: Chris Jones
    Abstract: This paper applies panel data methods to a simple imperfect substitutes model to estimate import demand elasticities for ten African countries. The elasticities are estimated at three levels of aggregation. Firstly, we generate aggregate elasticities for each country. Secondly, we use interactive dummy variables to create estimates for 16 sectors defined by the World Customs Organisation (WCO). Finally, we estimate elasticities for each of the 94 2-digit product lines defined by the Harmonised System (HS). In total there are 10 aggregate estimates, 158 estimates for the 16 WCO sectors; and 911 estimates at the 2-digit level. Using Fixed-Effects, the aggregate estimates do not differ significantly from unity. However, as we move to different levels of aggregation the estimates have much more variability. In general, import demand appears more elastic in sectors that have relatively high levels of domestic production or where there are exports.
    Keywords: Imports, Import Demand Elasticities, Africa
  6. By: Shahbaz, Muhammad
    Abstract: In present endeavor we have addressed a key and very sizzling issue in the current contest in the area of economic development: the effect of trade liberalization on poverty levels in the case for Pakistan. We received empirical evidence on the relationship between trade liberalization and poverty through the application of FMOLS (Fully Modified Ordinary Least Square) for long run parameters and ECM for short run dynamics. To measure globalization or pace of openness, we used standard indices of trade openness, financial openness and public intervention in the country while head-count ratio for poverty measurement and, remittances and urbanisation are considered control variables. Respectively our findings suggested that, trade liberalization has a cumulative effect on poverty reduction in long-run but not in short run in the case of Pakistan. Economic shocks deteriorate the situation of poverty in the economy. Remittances decline poverty trends in long run but not in short span of time.
    Keywords: Trade; Liberalization; Poverty
    JEL: A10
    Date: 2007–08–14
  7. By: Jean-Marc Roda (CIRAD); Eric J.M.M. Aretz (Alterra); Hin Fui Lim (FRIM)
    Abstract: This paper analyses the side effects of the stricter regulation on tropical hardwood or timber imports. It considers the place of Europe within the global timber market, where Europe accounts only for a very limited share. It also explains the high selectivity of European markets, with its consequences. While tropical wooden furniture and other secondary processed products are not considered as timber here, their question is also discussed. The number of empirical studies specifically dealing with the side effects of EU regulations is limited, but the results are converging, showing that these regulations have a general adverse effect, contrary to the initial aim of promoting the sustainability of tropical timbers. These side effects are essentially to divert the trade towards countries with lower standards, and to add a burden on most of the producing countries which have already a set of comparative disadvantages for the production of legal or sustainable timber. The effects are positive on a limited number of companies which markets are very dependent of Europe. The question is then analysed from a broader perspective, replacing the effects of the EU regulations as an incidental factor compared to the increasing consumption of tropical timber by the three developing giants: Brazil, India and China.
    Keywords: timber trade, trade regulation, environmental regulation, Europe, tropical timber, tropical hardwwod, side effect, adverse effect
    JEL: L73 O13
    Date: 2007–03

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