nep-int New Economics Papers
on International Trade
Issue of 2008‒10‒21
thirteen papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. A disaggregated analysis of the export performance of some industrial and emerging countries By Finicelli, Andrea; Sbracia, Massimo; Zaghini, Andrea
  2. Learning-by-Exporting Revisited - the role of intensity and persistence By Andersson, Martin; Lööf, Hans
  3. WTO negotiations on agriculture and developing countries: By Hoda, Anwarul; Gulati, Ashok
  4. Can trade really hurt? An empirical follow-up on Samuelson's controversial paper By Jürgen Bitzer; Holger Görg; Philipp Schröder
  5. Does Comparative Advantage Make Countries Competitive? A Comparison of China and Mexico By Felicitas Nowak-Lehmann D.; Sebastian Vollmer; Inmaculada Martinez-Zarzoso
  6. Vertical specialization and international business cycle synchronization By Costas Arkolakis; Ananth Ramanarayanan
  7. Recent exports matter: export discoveries, FDI and Growth, an empirical assessment for MENA countries By Dalila NICET- CHENAF (GREThA UMR CNRS 5113); Eric ROUGIER (GREThA UMR CNRS 5113)
  8. Trade Liberalization and Antidumping: Is There a Substitution Effect? By Michael Moore; Maurizio Zanardi
  9. Technical Barriers to Trade: Evaluating the Trade Effects of Supplier's Declaration of Conformity By Barbara Fliess; Frédéric Gonzales; Raymond Schonfeld
  10. Imports, Productivity and the Origin Markets -the role of knowledge-intensive economies By Lööf, Hans; Andersson, Martin
  11. FDI Spillovers and their Interrelationships with Trade By Molly Lesher; Sébastien Miroudot
  12. Trade and Sectoral Productivity By Harald Fadinger; Pablo Fleiss
  13. Trade Facilitation and the Extensive and Intensive Margins of Trade By Persson, Maria

  1. By: Finicelli, Andrea; Sbracia, Massimo; Zaghini, Andrea
    Abstract: The paper describes the evolution of export shares and quantifies the contribution of the geographical and sectoral specialization for some industrial and emerging market economies between 1985 and 2003. While the strong growth of emerging countries as world competitors has lowered the market shares of all industrial countries, the results of a constant-market-share analysis indicate that the latter have benefited from positive structural effects. Specifically, industrial countries gained from being specialized in either fast-growing sectors (high-tech) or destinations (Asia). The magnitude of these effects, however, has been quite diversified across countries.
    Keywords: Trade shares; Competitiveness; Constant-market-share analysis
    JEL: F10 F14
    Date: 2008
  2. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Two not mutually exclusive hypotheses can explain the empirically established export premium: self-selection of more productive firms into export markets and learning-by-exporting. We reassess the learning-by-exporting hypothesis and maintain that the scope for learning is related to the persistence and the intensity of a firm’s exporting activity. Using a rich panel of Swedish manufacturing firms, we show that there is a causality going from exports to productivity only for persistent exporters with high export-intensity. No such relationship is found for either temporary exporters or persistent exporters with low export-intensity. Learning-by-exporting in the form of a causality going from exports to productivity only pertains to firms that persistently export a large fraction of their sales on a global scale. Results are robust to the inclusion of several firm characteristics such as imports, physical capital, firm size, skilled labour, capital structure, corporate ownership structure, and industry classification.
    Keywords: export productivity premium; learning-by-exporting; productivity dynamics; panel data; dynamic models; temporary and persistent exporters
    JEL: C16 F14 L25 O33
    Date: 2008–10–13
  3. By: Hoda, Anwarul; Gulati, Ashok
    Abstract: "For more than six years the trade talks of the World Trade Organization (WTO) have been stalled, mainly on account of differences in countries' levels of ambition for reducing support to and protection of agriculture. The expiration of the U.S. president's trade negotiating authority on June 30, 2007, raised the prospect of longer delay. More recently, however, the unprecedented food crisis may have created an environment for reducing the divergences in countries' negotiating positions, and efforts for agreement have intensified at Geneva. To aid developing-country negotiators, the book WTO Negotiations on Agriculture and Developing Countries (published for IFPRI by the Johns Hopkins University Press and Oxford University Press—India) offers the first authoritative analysis of the rules and modalities on which governments of developing countries can rely and suggests a negotiating strategy for developing countries." from Text
    Keywords: International trade, Developing countries, Policies, Markets, World Trade Organization, High-value agriculture,
    Date: 2008
  4. By: Jürgen Bitzer; Holger Görg; Philipp Schröder
    Abstract: This paper investigates Samuelson's (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for sitations with outward knowledge spillovers. Within this framework Samuelson's "Act II" effects may occur. Based on industry level panel data for seventeen OECD countries for the period 1973 to 2000 we show econometrically that the outflow of domestic knowledge via exports or FDI may have a negative impact on industry output in the home country. This is particularly so when exporting to technological less advanced oountries and, more specifically, China
    Keywords: international R&D spillovers, outward foreign direct investment, export driven spillovers
    JEL: F10 F11 F14 O30
    Date: 2008–09
  5. By: Felicitas Nowak-Lehmann D.; Sebastian Vollmer; Inmaculada Martinez-Zarzoso
    Abstract: Latin American countries have lost competitiveness in world markets in comparison to China over the last two decades. The main purpose of this study is to examine the causes of this development. To this end an augmented Dornbusch-type “Ricardian” model is estimated using panel data. The explanatory variables considered are productivity, unit labor costs, unit values, trade costs, price levels, and real exchange rates; all variables are evaluated in relative terms. Due to data restrictions, China’s relative exports (to the US, Argentina, Japan, Korea, the UK, Germany, and Spain) will be compared to Mexico’s exports for a number of sectors over a limited period of eleven years. Panel and pooled estimation techniques (SUR estimation, panel Feasible Generalized Least Squares (panel/pooled FGLS)) will be utilized to better control for country-specific effects and correlation over time. A simulation underlines the positive impact of relative real exchange rate advantages on relative exports for the textile sector. Standardized ß-coefficients identify relative real exchange rates, relative cost levels, and relative unit values as the drivers of competitive advantage in the textile sector.
    Keywords: “Ricardian” model of trade; panel data models; panel Feasible Generalized Least Squares; Seemingly Unrelated (SUR) estimation.
    JEL: C23 F11 F14
    Date: 2008–07–01
  6. By: Costas Arkolakis; Ananth Ramanarayanan
    Abstract: We explore the impact of vertical specialization--trade in goods across multiple stages of production--on the relationship between trade and international business cycle synchronization. We develop a model in which the degree of vertical specialization is endogenously determined by comparative advantage across heterogeneous goods and varies with trade barriers between countries. We show analytically that fluctuations in measured productivity in our model are not linked across countries through trade, despite the greater transmission of technology shocks implied by higher degrees of vertical specialization. In numerical simulations, we find this transmission is insufficient in generating substantial dependence of business cycle synchronization on trade intensity.
    Keywords: Business cycles ; International trade
    Date: 2008
    Abstract: Export diversification has become a priority goal for the development strategies of the MENA countries. In this paper, we aim at measuring the effects of exports’ diversification on growth in MENA countries. But we also try to assess the way new exports and FDI interact each others in the process of growth. Within the framework of an endogenous growth model, we claim that FDI can act as a complementary factor in the discovery process. The model is estimated by the system-GMM and we provide robust evidence that FDI do not necessarily have the same effect on growth according to the diversification level. We also show that while FDI have a positive and significant effect on the MENA countries’ growth, it is most probably rather linked to the direct effect on value added and employment than to the spillover effects of technological transfer.
    Keywords: Export diversification, FDI, Growth, MENA, GMM system
    JEL: F1 O11
    Date: 2008
  8. By: Michael Moore; Maurizio Zanardi
    Abstract: Many nations have undergone significant trade liberalization in the last twenty years even as they have increased their use of contingent protection measures. This raises the question of whether some of the trade liberalization efforts, at times accomplished through painful reforms, have been undone through a substitution from tariffs to nontariff barriers. Among the new forms of protection, antidumping is the most relevant, as its use has spread from few developed countries to a large set of developing countries that are now among the most intense users of this instrument. This paper uses a newly developed database to examine to what extent the use of antidumping in a large set of countries is systematically influenced by the reduction of applied sectoral tariffs. The data set includes information on 29 developing and 7 developed countries from 1991 through 2002. After controlling for time-varying sectoral information as well as macroeconomic conditions, we find evidence of a substitution effect only for heavy users of antidumping among developing countries. In particular, a one standard deviation increase in sectoral trade liberalization increases the probability of observing an antidumping initiation by 32 percent. There is no similar statistically significant result for other developing countries or developed countries. We also find robust evidence of retaliation and deflection effects as determinant of antidumping filings across all subsamples.
    Keywords: Trade Liberalization, Antidumping
    JEL: F13 F14
    Date: 2008
  9. By: Barbara Fliess; Frédéric Gonzales; Raymond Schonfeld
    Abstract: Since the WTO Agreement on Technical Barriers to Trade (TBT) came into force, Members have invested considerable efforts in adopting and promoting the use of measures intended to reduce conformity assessment (CA) related barriers to trade. Our knowledge of the impact of specific trade facilitating programmes in the CA field is limited so far, making empirical studies of their trade impact desirable. This study investigates the impact of Supplier’s Declaration of Conformity (SDOC) on trade flows. As under SDOC regimes suppliers themselves provide written assurance of conformity to applicable technical regulations of a market, the costs of compliance are assumed to be smaller than for CA regimes requiring certification by third parties. The study focuses on three cases of SDOC introduction in the European Union covering eligible products from the medical devices, telecommunications equipment and machinery sectors. The paper explains the rationale for using SDOC, expected benefits and design characteristics of SDOC regimes. The quantitative analysis uses a gravity model and finds compelling evidence that the introduction of SDOC in the EU was a factor that influenced the evolution of import flows into EU markets positively. Intra-EU trade flows and imports from extra-EU OECD countries increased for SDOC-eligible radio and telecommunications equipment and low-risk medical devices, whereas the results for machinery are ambiguous. The most striking increases, visible in all three sectors, are found for exports to EU markets from non-OECD (developing) countries included in the sample. Analysis of the effect of SDOC for selected individual EU members furthermore suggest that the magnitude of effect depends on the nature of the CA regime that SDOC replaced.
    Keywords: telecommunications, OECD, United Kingdom, France, Italy, European Union, developing countries, technical barriers to trade, certification, targets
    Date: 2008–09–26
  10. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper investigates whether domestic firms’ productivity is an increasing function of imports from the most knowledge intensive economies in the world, i.e. the G7 countries. Using Swedish firm-level data, we confirm an instantaneous causality going from imports to productivity. We also show that productivity is increasing in the G7-fraction of total imports. Our results highlight the importance of import flows from R&D and knowledge intensive economies for productivity and are consistent with imports being a vehicle for technology diffusion. Tests of the sensitivity of the results suggest that G7 imports are particularly important for firms in high-technology sectors and for firms belonging to multinationals and domestic corporations.
    Keywords: Technology diffusion; productivity; imports; panel data; GMM
    JEL: C81 F14 L10 L60 O33
    Date: 2008–10–13
  11. By: Molly Lesher; Sébastien Miroudot
    Abstract: Foreign direct investment (FDI) represents an increasingly important dimension of international economic integration with global FDI flows growing faster than output over the past two decades. FDI is a particular form of investment, as it transfers knowledge as well as finance that may otherwise be unavailable in the domestic economy. This paper uses firm-level data to identify FDI spillovers across countries, sectors and time. The analysis suggests that knowledge-related spillovers from FDI vary considerably across sectors. Services industries enjoy the strongest productivity-enhancing effects of FDI, particularly through backward linkages. There is no strong evidence of horizontal productivity spillovers at the aggregate level. The results also indicate a significant and positive correlation between the degree of trade openness and output when measuring the impact of foreign presence in the domestic economy. A positive interaction is found between trade liberalisation and productivity spillovers. Thus, trade liberalisation can be seen as an important component of any reform package designed to help countries maximise the benefits of FDI.
    Keywords: trade openness, investment, services, micro data, FDI, trade liberalisation, technology, spillovers, backward linkage, forward linkage, IAS 19
    Date: 2008–10–07
  12. By: Harald Fadinger; Pablo Fleiss
    Abstract: Even though differences in sectoral total factor productivity are at the heart of Ricardian trade theory and many models of growth and development, very little is known about their size and their form. In this paper we try to fill this gap by using a Hybrid-Ricardo-Heckscher-Ohlin trade model and bilateral sectoral trade data to overcome the data problem that has limited previous studies, which have used input and output data to back out productivities, to a small number of OECD economies. We provide a comparable set of sectoral productivities for 24 manufacturing sectors and more than sixty countries at all stages of development. Our results show that TFP differences in manufacturing sectors between rich and poor countries are substantial and far more pronounced in skill and R&D intensive sectors. We also apply our productivity estimates to test theories on development that have implications for the patterns of sectoral productivities across countries.
    Keywords: Sectoral Productivity Differences, Trade and Production Data, Ricardo, Heckscher-Ohlin, Comparative Advantage
    JEL: F11 F43 O11 O41 O47
    Date: 2008
  13. By: Persson, Maria (Department of Economics, Lund University)
    Abstract: Exploring the link between trade facilitation and the extensive and intensive margins of trade, the paper has two aims. The first and main objective is to investigate whether the extensive margin of trade in homogeneous and differentiated goods is affected in the same way by cross-border trade transaction costs. The second objective is to compare the implications for the extensive and intensive margins to ascertain the margin at which these transaction costs matter the most, again controlling for the type of goods being traded. Very detailed mirror data on imports to EU countries from developing countries in 2005 is utilized to decompose these countries’ exports into its extensive and intensive margins. Using the number of days needed to export a good as a proxy for trade transaction costs, econometric evidence is found that there is a significant and negative association between export transaction costs and the extensive margin for differentiated goods: developing countries with high transaction costs will export significantly fewer differentiated goods. However, no such negative effect on the extensive margin is found for homogeneous goods. Comparing the two margins’ effects, evidence is found that, for differentiated goods, the extensive margin is more negatively affected by export transaction costs than the intensive margin. Results also indicate that to the extent that there is an overall negative trade effect on homogeneous goods from export transaction costs, this negative effect stems from effects on the intensive margin.
    Keywords: Trade Facilitation; Extensive and Intensive Margins of Trade; Export Diversification; Homogeneous and Differentiated Goods
    JEL: C21 F13 O24
    Date: 2008–09–15

This nep-int issue is ©2008 by Alessia A. Amighini. 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.