nep-int New Economics Papers
on International Trade
Issue of 2009‒07‒28
eight papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Exports and Logistics By Alberto Behar; Phil Manners; Benjamin D. Nelson
  2. Trade Flows, Multilateral Resistance and Firm Heterogeneity By Alberto Behar; Benjamin D. Nelson
  3. Antidumping Protection hurts Exporters: Firm-level evidence from France By Jozef, KONINGS; Hylke, VANDENBUSSCHE
  4. Trade Facilitation and Expanding the Benefits of Trade: Evidence from Firm Leval Data By Yue Li; John S. Wilson
  5. Skill Dispersion and Trade Flows By Matilde Bombardini; Giovanni Gallipoli; Germán Pupato
  6. The effect of technological innovation on international trade : a nonlinear approach By Márquez-Ramos, Laura; Martínez-Zarzoso, Inmaculada
  7. Impact of Trade Facilitation Measures and Regional Trade Agreements on Food and Agricultural Tarde in South Asia By Jeevika Weerahewa
  8. Aid and Trade - A Donor’s Perspective By Felicitas Nowak-Lehmann D.; Inmaculada Martínez Zarzoso; Stephan Klasen; Dierk Herzer

  1. By: Alberto Behar; Phil Manners; Benjamin D. Nelson
    Abstract: Do better trade logistics reduce trade costs, raising a country’s exports? Yes, but the magnitude of the effect depends on country size. Applying a new gravity model to a comprehensive logistics index, we find that an average-sized country would raise exports by about 46% after a one-standard deviation improvement in logistics. Most countries are much smaller than average however, so the typical effect is only 6%. This difference is chiefly due to multilateral resistance, which stresses that bilateral trade costs relative to multilateral trade costs matter for bilateral exports. Our method also distinguishes between the effects of logistics on the intensive margin (exports per firm) and the extensive margin (the number of exporting firms) of trade.
    Keywords: Logistics, Trade facilitation, Gravity, Firm heterogeneity, Multilateral resistance
    JEL: F10 F13 F14 F17 O24
    Date: 2009
  2. By: Alberto Behar; Benjamin D. Nelson
    Abstract: We present a gravity model that accounts for multilateral resistance, firm heterogeneity and country-selection into trade, while accommodating asymmetries in trade flows. A new equation for the proportion of exporting firms takes a gravity form: the extensive margin is also affected by multilateral resistance. If all countries reduce their trade frictions, the impact of multilateral resistance is so strong that bilateral trade falls in many cases. This is despite the larger trade elastictiies implied by firm heterogeneity. For isolated bilateral changes in trade frictions, ultilateral resistance effects are small for most countries, but are large when big importers are involved.
    Keywords: Gravity models, Multilateral resistance, Firm heterogeneity
    JEL: F10 F12 F14 F17
    Date: 2009
  3. By: Jozef, KONINGS (CATHOLIC UNIVERSITY OF LEUVEN, Department of Economics and LICOS, Belgium and BEPA, European Commission); Hylke, VANDENBUSSCHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE))
    Abstract: Firms protected by antidumping measures do not unequivocally benefit from them. Antidumping protection benefits non-exporters active on the protected market by raising their domestic sales, but hurts exporters of similar products as the protected ones. Export sales of protected firms fall by almost 8% compared to a relevant control group of unprotected firms. This effect more than doubles for firms that are global, i.e. firms with foreign affiliates. Measured at the product-level, extra-EU exports of goods protected by antidumping fall by 36% while exports to target countries fall by as much as 66% following protection. Protection also has an effect on the extensive margin, by raising the probability to start exporting for firms that were initially nonexporters. Existing exporters face a higher probability to stop exporting during protection. Finally, we find that the productivity of exporters falls while that of non-exporters rises during antidumping protection. We offer a number of plausible explanations for our findings that stem from the heterogeneous firm literature. We also discuss the importance of our findings for policy.
    Keywords: Antidumping, firm-level exports, intensive margin, extensive margin, productivity, dif-in dif
    JEL: F13 L O30 C2
    Date: 2009–06
  4. By: Yue Li; John S. Wilson (the World Bank, Washington D.C, USA)
    Abstract: Existing empirical studies on trade costs and trade facilitation largely focus on aggregate impacts of reform due to data availability. We take a step toward filling in this gap in literature. Using the World Bank Enterprises Surveys, the study extends the scope of empirical literature to firm dimension with a focus on SMEs.
    Keywords: Trade Facilitation, Expanding the Benefits of Trade
    JEL: F1
    Date: 2009–07
  5. By: Matilde Bombardini (University of British Columbia, CIFAR, NBER and RCEA); Giovanni Gallipoli (University of British Columbia and RCEA); Germán Pupato (University of British Columbia)
    Abstract: Is skill dispersion a source of comparative advantage? While it is established that a country's aggregate endowment of human capital is an important determinant of comparative advantage, this paper investigates whether the distribution of skills in the labor force can play a role in the determination of trade flows. We develop a multi-country, multi-sector model of trade in which comparative advantage derives from (i) differences across sectors in the complementarity of workers' skills, (ii) the dispersion of skills in the working population. First, we show how higher dispersion in human capital can trigger specialization in sectors characterized by higher substitutability among workers' skills. We then use industry-level bilateral trade data to show that human capital dispersion, as measured by a standard international metric, has a signi…cant effect on trade flows. We …nd that the effect is of a magnitude comparable to that of aggregate endowments. The result is robust to the introduction of several controls for other proximate causes of comparative advantage
    JEL: F12 F16 J82
    Date: 2009–01
  6. By: Márquez-Ramos, Laura; Martínez-Zarzoso, Inmaculada
    Abstract: This paper focuses on the relationship between technological innovation and international trade. In particular, the effect of technological achievement on exports is studied. In order to measure technological innovation, the technological achievement index (TAI) is used, thus providing a summary of a society’s technological achievements and allowing countries to be classified into four groups according to their level of technological innovation: Leaders, Potential Leaders, Dynamic Adopters and Marginalised. The effect of technological variables on sectoral exports is analysed using a gravity model of trade. The existence of a possible non-linear relationship is also investigated, since the effect of improved technological innovation on trade could vary according to the technological achievement in countries. Results show the expected positive effect of technological innovation on export performance and the existence of non-linearities is confirmed. A “U-shaped” relationship is found between exports and creation of technology and between exports and diffusion of old innovations, whereas an inverted–“U-shaped” relationship is found between exports and diffusion of recent innovations and between exports and human skills.
    Keywords: Technological innovation, sectoral exports, gravity model, panel data, non-linearities
    JEL: F10
    Date: 2009
  7. By: Jeevika Weerahewa (University of Peradeniya, Peradeniya Sri Lanka)
    Abstract: The study assess the extent to which trade facilitation in South Asia help to improve trade flows in South Asian countries and their trading partners.
    Keywords: Trade Facilitation, Regional Trade Agreements, Food and Agricultural Trade, South Asia
    JEL: F1
    Date: 2009–06
  8. By: Felicitas Nowak-Lehmann D. (Georg-August University Göttingen, Germany); Inmaculada Martínez Zarzoso (Georg-August University Göttingen, Germany); Stephan Klasen (Georg-August University Göttingen, Germany); Dierk Herzer (Johann-Wolfgang Goethe University Frankfurt, Germany)
    Abstract: One reason donors provide foreign aid is to support their exports to aid-recipient countries. Time series data for Germany suggests an average return of between US$ 1.04 to US$ 1.50 for each US dollar of aid spent by Germany. Although this is well below previous estimates, the value is robust to different specifications and econometric approaches. Interestingly, we find strong evidence of crowding out between bilateral donors in the sense that bilateral aid from other EU members significantly reduces exports from Germany to the recipients. The evidence suggests that, in the long-run, aid causes exports and not vice versa. We discuss the implications these findings might have for aid volumes and allocation.
    Keywords: trade; foreign aid; donors; time series based panel estimation techniques
    JEL: F10 F35 C23
    Date: 2009–07–15

This nep-int issue is ©2009 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.