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on International Trade |
| By: | Kalina Manova; Zhiwei Zhang |
| Abstract: | This paper provides a detailed overview of China's participation in international trade using newly available data on the universe of globally engaged Chinese firms over the 2003-2005 period. We document the distribution of trade flows and product- and trade-partner intensity across both exporting and importing firms and study the relationship between firms' intensive and extensive margins of trade. We also compare trade patterns across firms of different organizational structure, distinguishing between domestic private firms, domestic state-owned firms, foreign-owned firms, and joint ventures. We explore the variation in foreign ownership across sectors, and find results consistent with recent theoretical and empirical work on the role of credit constraints and contractual imperfections in international trade and investment. Finally, we examine the rapid expansion of China's trade over the 2003-2005 period, and decompose it into its extensive and intensive margins. We also use monthly data and study the frequent churning and reallocation of trade flows across firms and across products and trade partners within firms. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2008-28&r=int |
| By: | Park, Donghyun (Asian Development Bank); Park, Innwon (Division of International Studies, Korea University); Estrada, Gemma Esther B. (Asian Development Bank) |
| Abstract: | The 1997/98 Asian currency crisis has led a once high-flying East Asia to realize its vulnerability to external shocks. This realization has given strong impetus to greater economic integration among East Asian economies, with the ASEAN-Korea Free Trade Area (AKFTA) a case in point. This paper qualitatively and quantitatively examines the economic feasibility of AKFTA: qualitatively using the theory of economic integration, and quantitatively by applying a CGE model. Our two-dimensional analysis provides some, but not overwhelming, support for AKFTA's prospects as an effective means of promoting trade between ASEAN and the Republic of Korea. |
| Keywords: | ASEAN; Korea; trade; free trade area; economic integration |
| JEL: | F10 F14 F15 |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbrei:0021&r=int |
| By: | Vogel, Alexander (University of Lüneburg); Wagner, Joachim (University of Lüneburg) |
| Abstract: | This paper uses a newly available comprehensive panel data set for manufacturing enterprises from 2001 to 2005 to document the first empirical results on the relationship between imports and productivity for Germany, a leading actor on the world market for goods. Furthermore, for the first time the direction of causality in this relationship is investigated systematically by testing for self-selection of more productive firms into importing, and for productivity-enhancing effects of imports ('learning-by-importing'). We find a positive link between importing and productivity. From an empirical model with fixed enterprise effects that controls for firm size, industry, and unobservable firm heterogeneity we see that the premia for trading internationally are about the same in West and East Germany. Compared to firms that do not trade at all two-way traders do have the highest premia, followed by firms that only export, while firms that only import have the smallest estimated premia. We find evidence for a positive impact of productivity on importing, pointing to self-selection of more productive enterprises into imports, but no evidence for positive effects of importing on productivity due to learning-by-importing. |
| Keywords: | imports, exports, productivity, enterprise panel data, Germany |
| JEL: | F14 D21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3854&r=int |
| By: | Chau, Nancy H.; Färe, Rolf |
| Abstract: | Appropriate assessment of the social value of market access is at the core of a broad range of inquiries in trade research. A selection include: the appraisal of industry-level production and consumption distortions due to selective trade liberalization and partial tax reform; the construction of national-level quantity indicators of market access consistent with welfare change, and the use of international trade re-balancing as sanctions to discourage trade agreement violations, or as compensation in trade dispute settlement. In order to obtain shadow prices, we propose a new approach integrating the Luenberger benefit function and the directional output distance function. This yields a trade benefit function which represents trade preferences à la Meade in the context of a canonical general equilibrium model of trade. We first show that our approach is in keeping with well-established and commonly used measurement techniques of trade welfare, for the standard trade expenditure function is in fact dual to the trade benefit function. We then show that this dual relation allows for a direct retrieval of the shadow values of net imports from the trade benefit function. The usefulness and operationality of our approach is then demonstrated in a series of applications and simulations. |
| Keywords: | International Relations/Trade, Research Methods/ Statistical Methods, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:6218&r=int |
| By: | Christopher F. Baum (Boston College; DIW Berlin); Mustafa Caglayan (University of Sheffield) |
| Abstract: | Empirical evidence obtained from data covering Eurozone countries, other industrialized countries, and newly industrialized countries (NICs) over 1980–2006 shows that exchange rate uncertainty has a consistent positive and significant effect on the volatility of bilateral trade flows. A one standard deviation increase in exchange rate uncertainty leads to an eight per cent increase in trade volatility. These effects differ markedly for trade flows between industrialized countries and NICs, and are not mitigated by the presence of the Eurozone. Contrary to earlier findings, our results also suggest that exchange rate uncertainty does not affect the volume of trade flows of either industrialized countries or NICs. |
| Keywords: | exchange rates, uncertainty, volatility, trade flows, industrialized countries, Eurozone, newly industrialized countries |
| JEL: | F17 F31 C22 |
| Date: | 2008–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:695&r=int |
| By: | Rosario Crinò (Bocconi University, Milan - Italy) |
| Abstract: | Using comparable industry-level data for nine Western European countries, this paper finds that the international relocation of service activities (service offshoring) exerts positive and economically large effects on domestic productivity. A one percentage point increase in the proxy for service offshoring (i.e., the share of imported private services in total non-energy input purchases) is found to raise Total Factor Productivity by about 0.5%. |
| Keywords: | Service Offshoring; Total Factor Productivity |
| JEL: | F1 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp220&r=int |
| By: | Michelle Connolly; Kei-Mu Yi |
| Abstract: | South Korea’s growth miracle has been well documented. A large set of institutional and policy reforms in the early 1960s is thought to have contributed to the country’s extraordinary performance. In this paper, we assess the importance of one key set of policies, the trade policy reforms in Korea, as well as the concurrent GATT tariff reductions. We develop a model of neoclassical growth and trade that highlights two forces by which lower trade barriers can lead to increased per worker GDP: comparative advantage and specialization, and capital accumulation. We calibrate the model and simulate the effects of three sets of tariff reductions that occurred between the early 1962 and 1995. Our main finding is that the model can explain up to 32 percent of South Korea’s catch-up to the G7 countries in output per worker in the manufacturing sector. We find that the effects of the tariff reductions taken together are about twice as large as the sum of each reduction applied individually. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2008-23&r=int |
| By: | Baharom, A.H.; Habibullah, M.S.; Royfaizal, R. C |
| Abstract: | This study examines the role of trade openness and foreign direct investment in influencing economic growth in Malaysia during 1975-2005, using the Bounds testing approach suggested by Pesaran et al. (2001). The empirical results demonstrate that trade openness is positively associated and statistically significant determinant of growth, both in short run and the long run. The result also suggested that foreign direct investment is positively associated in the short run and negatively associated in the long run, both significantly. Besides these two variables, the other control variable namely exchange rate is also significant in the short run as well as in the long run. |
| Keywords: | trade openness; foreign direct investment; economic growth; Malaysia |
| JEL: | F10 F43 |
| Date: | 2008–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11928&r=int |
| By: | Alexandre Janiak |
| Abstract: | I illustrate that the welfare improvement property of the Melitz model is due to the shape of the aggregate labor demand curve, which slopes upwards. By slightly changing some assumptions in the model, this curve may have a negative slope. In this case, increases in aggregate productivity result in a reduction in welfare. For example, this may occur when fixed costs are measured in units of aggregate output instead of labor.JEL codes: F12, F16, J23. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:253&r=int |