nep-int New Economics Papers
on International Trade
Issue of 2008‒11‒18
thirteen papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. The Euro Effects on the Firm and Product-Level Trade Margins: Evidence from France By Antoine Berthou; Lionel Fontagne
  2. Developing Country Trade: Implications of China€ٳ Changing Trade and Competitiveness in Intensive and Extensive Margin Goods By Somwaru, Agapi; Tuan, Francis; Gehlhar, Mark; Diao, Xinshen; Hansen, Jim
  3. Do Stronger Intellectual Property Rights Protection Induce More Bilateral Trade? Evidence from China's Imports By Awokuse, Titus; Yin, Hong
  4. Tariff Escalation in the Doha Talks--Bringing the Issue to Resolution By Wainio, John; Vanzetti, David
  5. Changing Patterns of InternationalIntegration: Germany and Italy in the Countries of EU Enlargement By Altomonte, Carlo; Rungi, Armando
  6. Are Minimum Quality Standards Acting as Nontariff Trade Barriers? By Saitone, Tina L.
  7. Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs By Jayasinghe, Sampath; Beghin, John C.; Moschini, GianCarlo
  8. The Contribution of Foreign Direct Investment to China's Export Performance: Evidence from Disaggregated Sectors By Gu, Weishi; Awokuse, Titus O.; Yuan, Yan
  9. Determinants of Export Diversification: an Empirical Investigation By Massimo TAMBERI; Aleksandra PARTEKA
  10. The Impact of Economic Geography on Wages: Disentangling the Channels of Influence By Laura Hering; Sandra Poncet
  11. Some Further Results on the Impact of Migrants on Trade By Morgenroth, Edgar; O'Brien, Martin
  12. The Effect of Exchange Rate Changes on China's Labor-Intensive Manufacturing Exports By THORBECKE, Willem; Hanjiang ZHANG
  13. Allowing for Group Effects When Estimating Import Demand for Source and Product Differentiated Goods By MUHAMMAD, Andrew

  1. By: Antoine Berthou; Lionel Fontagne
    Abstract: We investigate the effects of the euro on French exporters. We build three margins corresponding to the decision of exporting, the number of products exported to each destination, and the average value of exports by product, that compose the expected value of exports of each individual firm on a market. Estimation results that rely on the full sample of exporters suggest that the euro adoption had a positive effect on the number of products exported by each individual firm, and no effect on the decision to export and the average value of exports by product. Though, composition effects are in action: the effect on the decision of exporting, and on the average value of exports by products, is positive - but weakly significant - for firms with more than 20 employees. Finally, we find that euro had no effect on least productive firms.
    Keywords: Trade; export margins; euro
    JEL: F15
    Date: 2008–10
  2. By: Somwaru, Agapi; Tuan, Francis; Gehlhar, Mark; Diao, Xinshen; Hansen, Jim
    Abstract: This paper delves into China€ٳ differential growths in trade flows with high income and developing countries by focusing on bilateral content of trade data over the time period 1978-2005. Unlike other studies, we account for end use of traded goods ranging from primary, intermediate, and finished goods because China€ٳ policies impact all segments China€ٳ trade flows. In the last 28 years, China has specialized in deficits in the upstream production segments (parts and components) and rapid diversification in consumption goods (extensive margin). While in the late 1970s China€ٳ export and import growth on all goods with major high income countries is outstanding in the most recent years China€ٳ trade growth with developing countries has taken the lead while China is gaining in extensive margins goods trade. This general pattern evolving is in agreement with some of the new trade theory that gives a dominant role to an expansion of the number of export varieties (the extensive margin), which provides an additional channel for welfare gains from trade.
    Keywords: China, international trade, growth, intensive, extensive margins, developing countries, International Relations/Trade,
    Date: 2008
  3. By: Awokuse, Titus; Yin, Hong
    Abstract: Most of the previous studies on the effect of IPR protection on international trade have been from the perspective of major industrialized nations. However, much of the current debate on the effects of IPR protection involves large developing countries with high threat of imitation. This study contributes to the literature by analyzing the impact of the strengthening of patent laws in China on its bilateral trade flows. We estimate the effects of patent rights protection on China€ٳ imports at the aggregate and detailed product categories for both OECD (developed) and non-OECD (developing) countries. The empirical results suggest that increased patent rights protection stimulate China€ٳ imports, particularly in the knowledge-intensive product categories. Furthermore, while the evidence in support of the market expansion effect is significant for imports from OECD countries, it is rather weak and mostly insignificant for imports from non-OECD countries.
    Keywords: Intellectual property rights, patent laws, international trade, International Relations/Trade, F13, 034,
    Date: 2008
  4. By: Wainio, John; Vanzetti, David
    Abstract: Development objectives dictate that the Doha negotiations address tariff escalation. This could increase the production and export of processed goods in developing countries, expand investment and employment, and reduce dependence on primary product exports. Despite its importance, little progress has been made, notwithstanding that a final resolution to the negotiations will not be possible without bringing this issue to resolution. This paper quantifies tariff escalation within WTO members' tariff schedules and the degree to which a tiered formula could address this problem. Utilizing a detailed partial equilibrium global agricultural trade model we estimate the possible gains to developing countries from reducing tariff escalation.
    Keywords: tariff escalation, agriculture, trade, tariffs, WTO, International Relations/Trade, F13, Q17,
    Date: 2008
  5. By: Altomonte, Carlo; Rungi, Armando
    Abstract: offshoring undertaken in the new members of EU in the period 1998-2006. Recent empirical evidence (Danninger, Joutz 2007 – IMF) shows that dominant factors explaining the increase in German market shares are trade relationships with fast growing countries and regionalized production in the export sector. According to the empirical evidence available for Italy (Di Maio, Tamagni 2006), the productivity/income content of trade specialization has decreased in the last decade. After an in-depth analysis of bilateral trade flows by final goods and intermediate goods categories, trade data are linked to the firm-level productivity analysis of Italian and German presence in the new member states of European Union. The domestic value added content and the imported intermediates content of exports from both countries to new members are disentangled following Hummels, Ishii and Yi (2001), whereas a sample of 38270 firms, located in new member states but owned by residents in old members, allows not only to measure relative firm-level productivity, but also to control for pure ownership effect, vertical versus horizontal FDI strategy and corporate governance characteristics. Data come from different sources: Eurostat-ComExt for trade, national statistics offices for input output tables, AMADEUS for firm-level data.
    Keywords: DYNREG
    Date: 2008
  6. By: Saitone, Tina L.
    Keywords: International Relations/Trade,
    Date: 2008
  7. By: Jayasinghe, Sampath; Beghin, John C.; Moschini, GianCarlo
    Abstract: The United States is a large net exporter of corn seeds. Seed trade, including corn, has been expanding but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding exports flows to various markets. Trade costs include costs associated with distance, tariffs, and sanitary-phytosanitary (SPS) regulations imposed by foreign countries on U.S. corn seed exports. SPS policy information comes from the Excerpt data base of USDA-APHIS. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers. A SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. We use data from 48 countries and for the years 1989 to 2004. We find that all trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most; followed by SPS measures and distance. An extensive econometric investigation reveals that qualitative results are robust to specification changes, but that sample selection bias is present in log-linear specifications based on seed export levels and approximating zero trade data with a small positive number.
    Keywords: Seeds, corn, SPS, phytosanitary, exports, trade cost, technical barriers, tariffs, TBT., Crop Production/Industries, International Relations/Trade,
    Date: 2008
  8. By: Gu, Weishi; Awokuse, Titus O.; Yuan, Yan
    Abstract: There has been a long debate in the theoretical and empirical economic circles on how host country's exports respond to inward foreign direct investment (FDI). This paper examines whether FDI stimulates export performance of the recipient countries using the case of China. It contributes to the literature by investigating the relationship of FDI and export performance using disaggregated manufacturing sectors from 1995 to 2005. The empirical results suggest that FDI flows into China have statistically significant and positive effects on its exports and it exhibits differences across sectors.
    Keywords: export performance, foreign direct investment, China, panel data, International Relations/Trade, F21, F14, C33,
    Date: 2008
  9. By: Massimo TAMBERI (Universita' Politecnica delle Marche, Dipartimento di Economia); Aleksandra PARTEKA (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: Empirical findings confirm that relatively high specialisation of economic structures tends to be associated with low levels of income per capita, but countries diversify their export structures along their path of growth. However, usually only per capita income, and eventually, country-specific fixed effects are the sole explanatory variables taken into consideration in the estimation of specialisation curves. We extend the analysis of specialisation - economic development nexus and search for the determinants of trade diversification process. Using a panel data-set for 60 countries and twenty years (1985-2004), we combine synthetic specialisation measures obtained with manufacturing exports data (SITC Rev2, 3 digit) with a wide range of country-specific variables characterising their size, geographical conditions, endowments, human capital or institutional setting. It turns out that distance from major markets and country size are the most relevant and robust determinants of export diversification process, explaining together around half of between country variability in specialisation patterns. The results are robust to changes in the disaggregation scheme and in the estimation procedure.
    Keywords: sectoral diversification, structural change, trade
    JEL: C23 F15 O14 O33
    Date: 2008–11
  10. By: Laura Hering; Sandra Poncet
    Abstract: This paper evaluates the role of economic geography in explaining regional wages in China. It investigates the extent to which market proximity can explain the evolution of wages, and through which channels. We construct a complete indicator of market access at the provincial level from data on domestic and international trade flows; this is introduced in a simultaneous-equations system to identify the direct and indirect effect of market access on wages. The estimation results for 29 Chinese provinces over 1995-2002 suggest that access to sources of demand is indeed an important factor shaping regional wage dynamics in China. We investigate three channels through which market access might influence wages beside direct transport-cost savings: export performance, and human and physical capital accumulation. A fair share of benefits seems to come from enhanced export performance and greater accumulation of physical capital. The main source of influence of market access remains direct transport costs.
    Keywords: Economic geography; international trade; wage; trade openness; capital accumulation; China
    JEL: F12 F15 R11 R12
    Date: 2008–10
  11. By: Morgenroth, Edgar (Economic and Social Research Institute (ESRI)); O'Brien, Martin (Economic and Social Research Institute (ESRI))
    Abstract: This paper investigates the relationship between migration and trade. Specifically it adds to the existing literature by allowing for the endogeneity of migration, as predicted by theory, while also allowing for the relationship between trade and migration to be non-linear. In contrast to previous single country studies this paper utilises a large cross section dataset for 26 countries and their trading partners.
    Keywords: DYNREG, International Migration, International Trade, Gravity Model
    JEL: F16 F22
    Date: 2008
  12. By: THORBECKE, Willem; Hanjiang ZHANG
    Abstract: Chinese policymakers have resisted calls for faster renminbi appreciation partly because they fear it will reduce low technology exports. We investigate this issue using a panel data set including China's exports of labor-intensive goods to 30 countries. We find that an appreciation of the RMB would substantially reduce China's exports of clothing, furniture, and footwear. We also find that an increase in foreign income, an increase in the Chinese capital stock, and an appreciation among China's competitors would raise China's exports. Since Europe is the second leading exporter of labor-intensive manufactures behind China, these results indicate that the large appreciation of the euro relative to the RMB since 2001 has crowded out European exports.
    Date: 2008–11
  13. By: MUHAMMAD, Andrew
    Abstract: In this study an import demand model (differential production model) is presented that is used in estimating the demand for source and product differentiated goods simultaneously. Unlike the traditional import demand models, this model can account for changes in relative group expenditures. Expenditure estimates differed when comparing the differential production model and Rotterdam model results. Results showed that if group revenue shares are relatively fixed, then the bias in expenditure estimates due to omitting group effects will be small when using traditional demand models such as the AIDS or Rotterdam models. As relative group shares significantly change and diverge the bias increases, particularly for imports representing a larger share of group expenditures.
    Keywords: Import demand, AIDS model, Rotterdam model, product differentiation, source differentiation, Demand and Price Analysis, International Relations/Trade, F17, Q17, Q11.,
    Date: 2008

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