nep-int New Economics Papers
on International Trade
Issue of 2009‒05‒16
ten papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. The sensitivity of trade flows to trade barriers By Raimondi, Valentina; Olper, Alessandro
  2. Economic costs and payoffs of bilateral/regional trade agreements By Vollrath, Thomas L.; Hallahan, Charles B.
  3. Impact of Foreign Intellectual Property Rights Protection on U.S. Exports and FDI By Gu, Weishi
  4. Where the Girls Are: Trade and Labor Market Segregation in Colombia By Ederington, Josh; Minier, Jenny; Troske, Kenneth
  5. The crisis-resilience of services trade By Borchert, Ingo; Mattoo, Aaditya
  6. Does the World Trade Organization Promote Trade? An Empirical Assessment of Agricultural and NonâAgricultural Trade Flows By Grant, Jason H.; Boys, Kathryn A.
  7. ISO 9000 Standards: Implicit Barrier or Trade Facilitation Strategy? By Boys, Kathryn A.; Grant, Jason H.
  8. Offshoring and Unemployment: The Role of Search Frictions and Labor Mobility By Mitra, Devashish; Ranjan, Priya
  9. Taxation, Infrastructure, and Endogenous Trade Costs in New Economic Geography By S. Gruber; L. Marattin
  10. Brazil's Rising Agricultural Productivity and World Competitiveness By Rada, Nicholas E.; Buccola, Steven T.; Fuglie, Keith O.

  1. By: Raimondi, Valentina; Olper, Alessandro
    Abstract: This study analyzes the sensitivity of trade flows to trade barriers from gravity equations, using different econometric techniques recently highlighted in the literature. Specifically, we compare a benchmark OLS fixed effects specification a la Feenstra (2002) with three emerging estimation methods: the standard Heckman correction for selection bias, to account for zero trade flows; the Eaton and Tamura (1994) Tobit estimator, to solve limited-dependent variable issues; and, finally, the Poisson pseudo-maximum-likelihood (PPML) technique, to correct for the presence of heteroskedasticity. Our gravity model includes trade among 193 exporter and 99 importer countries, in 18 food industry sectors. The paper achieves two goals: First it provides estimates of the elasticity of substitution obtained using the four estimation techniques; Second, it gives dimension to trade flow sensitivity, simulating the effect of a full trade liberalization scenario on 18 food sectors. The estimates reveal interesting variations in the elasticity of substitution across products and procedures. The simulation indicates that trade liberalization will strongly increase food exports, especially from high income and emerging countries, while the increase in food exports from developing countries appears quite low.
    Keywords: Gravity model, Food Trade, Substitution elasticity, trade liberalization, International Relations/Trade, F1, F13, F14,
    Date: 2009–05–01
  2. By: Vollrath, Thomas L.; Hallahan, Charles B.
    Abstract: The rapid increase in the number of bilateral and regional free-trade agreements since 1995 is a striking development. The proliferation of these agreements has raised questions among academicians and policymakers about whether they have, in fact, opened markets, created trade, promoted economic growth, and/or distorted trade. This study uses panel data from the 1975-2005 period and the gravity framework to identify the influence of bilateral/regional free-trade agreements on bilateral trade in merchandise, agriculture, and clothing sectors. A benchmark, Heckman sample-selection, and two generalized models, one of which accounts for reciprocal-free-trade-agreement phase-in effects, are used to gauge the impact on partner trade of mutual as well as asymmetric RTA membership.
    Keywords: trade policy, bilateral, regional, missing trade, gravity models, reciprocal trade agreements, Agricultural and Food Policy,
    Date: 2009
  3. By: Gu, Weishi
    Abstract: This version of the paper is subject to changes.
    Keywords: export, FDI, technology transfer, intellectual property rights, GMM, International Development, International Relations/Trade, Research and Development/Tech Change/Emerging Technologies, C33, F21, F23, F14, O34, K33,
    Date: 2009
  4. By: Ederington, Josh (University of Kentucky); Minier, Jenny (University of Kentucky); Troske, Kenneth (University of Kentucky)
    Abstract: Gary Becker's theory of discrimination argues that increasing competition will reduce discrimination in the labor market. We use the Colombian trade liberalization episode over the period 1984–91 to investigate this claim on plant-level data in three ways. First, we examine whether women are concentrated in exporting plants. Second, we examine whether the increase in foreign competition due to unilateral trade liberalization disproportionately drove discriminating plants out of the market. Finally, we investigate whether trade liberalization affected hiring decisions (and thus gender segregation) by Colombian firms.
    Keywords: discrimination, trade, competition
    JEL: J7
    Date: 2009–04
  5. By: Borchert, Ingo; Mattoo, Aaditya
    Abstract: Much attention has focused on the impact of the current crisis on goods trade; hardly any on its impact on services trade. Using new trade data from the United States, and more aggregate data from other OECD countries, the authors show that services trade is weathering the current crisis much better than goods trade. As of February 2009, the value of US goods imports had declined year-on-year by 33 percent and the value of goods exports by 21 percent; services imports and exports each had declined by less than 7 percent. Within services, interesting patterns are emerging. Trade in goods-related transport services and crisis-related financial services has shrunk, as has expenditure on tourism abroad. But trade in a range of business, professional, and technical services is still increasing, with US exports growing even faster (at 10 percent) than US imports (at 7 percent). Developing countries like India, which are relatively specialized in business process outsourcing and information technology services, have suffered much smaller declines in total exports to the United States than countries like Brazil and China and regions like Africa, which are specialized in exports of goods, transport services, or tourism services. On the basis of new evidence from Indian services exporters, the authors suggest that services trade is buoyant relative to goods trade for two reasons: demand for a range of traded services is less cyclical, and services trade and production are less dependent on external finance. Even though few explicitly protectionist measures have so far been taken in services, the changing political climate and the widening boundaries of the state in crisis countries may introduce a national bias in firms'procurement and location choices.
    Keywords: Transport Economics Policy&Planning,Trade Policy,Economic Theory&Research,ICT Policy and Strategies,Commodities
    Date: 2009–04–01
  6. By: Grant, Jason H.; Boys, Kathryn A.
    Abstract: In this paper we ask whether the GATT/WTO has actually failed to increase membersâ agricultural trade. Surprisingly, there is very little empirical econometric support to shed light on this question despite the fact that agricultural trade is often at the forefront of multilateral negotiations. We address this issue by considering GATT/WTO effects across agricultural and nonâagricultural sectors. Despite much âhoopla and hypeâ that the GATT/WTO has done nothing to boost membersâ agricultural trade, our results suggest that the multilateral institution has delivered significant positive effects on agricultural trade over the period 1980â2004. Moreover, in many cases the trade flow effect of membership in the GATT/WTO exceeds that of nonâagriculture, merchandise trade. The results have important policy implications when one considers the growing body of literature that often presumes that the GATT/WTO has done nothing to stimulate members' agricultural trade.
    Keywords: International Relations/Trade,
    Date: 2009
  7. By: Boys, Kathryn A.; Grant, Jason H.
    Keywords: International Relations/Trade,
    Date: 2009
  8. By: Mitra, Devashish (Syracuse University); Ranjan, Priya (University of California, Irvine)
    Abstract: In a two-sector, general-equilibrium model with labor-market search frictions, we find that wage increases and sectoral unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economywide unemployment. With imperfect intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non-offshoring sector. Imperfect labor mobility can result in a mixed equilibrium in which only some firms in the industry offshore, with unemployment in this sector rising.
    Keywords: trade, offshoring, search, unemployment
    JEL: F11 F16 J64
    Date: 2009–04
  9. By: S. Gruber; L. Marattin
    Date: 2009–04
  10. By: Rada, Nicholas E.; Buccola, Steven T.; Fuglie, Keith O.
    Abstract: Brazil now is the largest coffee, sugar, and fruit juice producer, second-largest soybean and beef producer, and third-largest corn and broiler producer. It has overtaken the U.S. in poultry exports, nearly matches the U.S. in soybean exports, and dominates global trade in frozen orange juice. To test and better understand these advances, we draw on decennial farm censuses to examine technical change and efficiency in Brazilian agriculture. Our approach is to estimate a stochastic, multi-product, output distance frontier, using a translog functional form and data disaggregated to the micro-region (sub-state) level. Using two consecutive decennial farm censuses, we combine state-level Fisher productivity-change indexes with state-level translog distance function estimates of technical efficiency change to impute state-level technical shifts. We find, leading up to the soon-to-be-released 2006 agricultural census, that Brazilâs multi-factor productivity growth rate between 1985 and 1996 was 20.2%. Mean state-level technical efficiency was 91.2%, which implies the production frontier expanded 22.2% over the reference time period.
    Keywords: Brazil, Shephard distance function, stochastic frontier, technical change, technical efficiency, International Development, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2009

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