|
on International Trade |
| By: | Yiagadeesen Samy (Department of Economics, Carleton University); Vivek H. Dehejia (Department of Economics, Carleton University & CESifo) |
| Abstract: | Using a gravity model, we examine whether labor standards are important determinants of bilateral export performance for EU-15 countries over the period 1988-2001. We assess the conventional wisdom that countries with low labor standards and less stringent regulations have performed better in terms of trade performance and use a panel data set in a triple-indexed gravity model to conduct our empirical investigation. Our empirical results indicate that labor standards matter, but that the conventional wisdom does not always hold. The standard variables used in gravity equations conform to theoretical expectations and are highly significant. |
| Keywords: | international trade, labor standards, gravity equation |
| JEL: | F13 F14 F15 |
| Date: | 2008–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:08-08&r=int |
| By: | Lucas Navarro (ILADES-Georgetown University, Universidad Alberto Hurtado) |
| Abstract: | This paper analyzes changes in the product mix by Chilean manufacturing plants in the period 1996-2003. Three-quarters of the surviving plants changed the set of products produced and more than three-quarters of the exporting plants changed the mix of products they exported during the sample period. Plants that changed their product mix contributed 85% of the aggregate growth in real sales of surviving plants between 1996 and 2003. Finally and in contrast to the US evidence, there is a negative correlation between revenue per product and the number of products. Apart from this, new evidence consistent with recent models of multi-product heterogeneous firms and trade is provided. |
| Keywords: | heterogeneous plants, multiple products, entry and exit, trade, development. |
| JEL: | D21 E23 F14 L11 O14 O54 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv210&r=int |
| By: | Richard Brecher (Department of Economics, Carleton University); Zhiqi Chen (Department of Economics, Carleton University) |
| Abstract: | We show how international trade, migration and outsourcing affect unemployment of skilled and unskilled labor, in a framework that integrates the Heckscher-Ohlin model of trade with the Shapiro-Stiglitz model of unemployment. Our approach allows us to analyze changes in not only aggregate unemployment, but also the distribution of unemployment between skilled and unskilled labor. As the analysis demonstrates, the unemployment rates of these two types of labor often move in opposite directions, thereby dampening the change in aggregate unemployment. Results depend on the source of comparative advantage, based on international differences in (for example) unemployment insurance or production technology. |
| Date: | 2008–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:08-07&r=int |
| By: | Baldwin, John R.; Gu, Wulong |
| Abstract: | This paper examines firm turnover and productivity growth in the Canadian retail trade sector. Firm turnover occurs as the competitive process shifts market share from exiting firms and existing firms that contracted to entering firms and existing firms that expanded. There is considerably more firm turnover in the retail sector than in the manufacturing sector and more of it comes from entry and exit. Moreover, contrary to the manufacturing sector where only part of overall productivity growth comes from firm turnover and the re-allocation of resources from the less to the more productive, all of the aggregate productivity growth comes from this source in the retail sector. This suggests that the much-discussed Wal-Mart effect on retail sector productivity mainly comes from the Wal-Mart-created competitive pressure that shifts market share from exitors and declining incumbents to entrants and growing incumbents. Foreign-controlled firms contributed 30% of labour productivity growth and 45% of multifactor productivity growth in the retail trade sector in the period from 1984 to 1996, which are mainly due to the entry of foreign-controlled firms and expansion of more productive foreign-controlled existing firms. |
| Keywords: | Manufacturing, Retail and wholesale, Economic accounts, Productivity accounts |
| Date: | 2008–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2008053e&r=int |
| By: | Tomas Konecny; Jan Myslivecek |
| Abstract: | One of the arguments against the Fair Trade scheme is that the guaranteed minimum price tends to depress world prices and thus the incomes of non-participating farmers (e.g. The Economist, 2006). We develop a model that distinguishes between the impact of the introduction of a Fair Trade market per se and the effect of minimum price policies given that a Fair Trade market actually exists. The model suggests that the claims against Fair Trade might not be correct. The introduction of a Fair Trade market may increase the incomes of both participating and non-participating farmers. The minimum contracting price as part of Fair Trade standards, however, precludes the full realization of the program’s potential benefits. The minimum price also paradoxically increases the profits of the middlemen whose local monopsony power the Fair Trade scheme originally aimed to retrench. Furthermore, the total surplus generated by Fair Trade cooperatives declines as the guaranteed price increases. |
| Keywords: | Certification, regulation, price setting, coffee, Fair Trade, monopsony |
| JEL: | D18 D21 D43 D45 D71 J51 Q17 Q56 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp367&r=int |
| By: | Joseph Francois; Clinton R. Shiells (International Monetary Fund & Joint Vienna Institute) |
| Abstract: | We offer a duality-based methodology for incorporating multi-sector effects of international trade into open economy macroeconomic models, developing the concepts of the dynamic factor price equalization set and the integrated intertemporal equilibrium. Under this approach, the aggregate production function depends on output prices and factor endowment stocks. It preserves all of the structure of a standard GDP function from the trade theory literature. In a two-country version of the model considered below, we examine the properties of the dynamic factor price equalization set. If the global economy is initially outside of this set, the equations of motion will pull the economy back into this set. Inside the dynamic FPE set, factor prices are equalized internationally, and with identical tastes and technology, the economy can be regarded as a fully integrated world equilibrium in a dynamic sense (the integrated intertemporal equilibrium). In this equilibrium, all of the standard properties of a closed economy one-sector neoclassical growth model hold, ruling out cycles and chaos, and allowing us to characterize the evolution of international inequality and the persistence of productivity and endowment shocks. Working from the integrated intertemporal equilibrium, we identify properties of persistence linked to inequality and real economic shocks. Cross-country differences in per capita incomes and wealth, and the factor content of trading patterns, may persist over time and even into the new steady state. This provides yet another reason why we might observe lack of income convergence internationally. In addition, real shocks in one country may be transmitted to the other country through factor markets and product prices, and may have persistent effects into the steady-state as well. The model can also generate an endogenous Balassa-Samuelson effect. |
| Keywords: | Neoclassical Models of Trade, Economic Growth of Open Economies, Cross- Country Output Convergence |
| JEL: | F41 O47 F11 F43 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2008_20&r=int |