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on International Trade |
| By: | Andrea Petrella; Sandro Sapio |
| Abstract: | Using firm level data on Italian manufacturing industry, we examine how trade activities are related to workforce composition and wages. We add to the existing literature in two ways. First, we consider the engagement of firms in international transaction, either by means of exports, imports or a combination of the two. We show that failing to control for the importing activities may bias upward the exporters premia. Second, we look at how the wage and the employment structure of trading firms change with the country of destination and origin of trade flows. Our evidence suggests that quality heterogeneity is a relevant determinant of trade behavior. Indeed, to rationalize our results one needs to refer to multi-attribute trade models in which both quality and efficiency requirements play a role and in which firms are active both in the import and export market |
| Keywords: | heterogeneous firms; exports; imports; productivity; market of destination and origin |
| JEL: | C51 G12 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2009/20&r=int |
| By: | Cletus C. Coughlin; Dennis Novy |
| Abstract: | Many studies have found that international borders represent large barriers to trade. But how do international borders compare to domestic border barriers? We investigate international and domestic border barriers in a unified framework. We consider a unique data set of exports from individual U.S. states to foreign countries and combine it with trade flows within and between U.S. states. After controlling for distance and country size, we find that relative to state-to-state trade, crossing an individual U.S. state's domestic border entails a larger trade barrier than crossing the international U.S. border. This finding highlights the concentration of trade flows at the local level and the importance of factors such as informational barriers and transportation costs even for the relatively short distances associated with state-to-state trade. |
| Keywords: | International trade ; International economic integration |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2009-057&r=int |
| By: | Katheryn N. Russ; Diego Valderrama |
| Abstract: | We join the new trade theory with a model of choice between bank and bond financing to show the differential effects of financial policy on the distribution of firm size, welfare, aggregate output, gains from trade, and the real exchange rate in a small open economy. Increasing bank efficiency and reducing bond transaction costs both increase welfare but have opposite effects on the extensive margin of trade, aggregate exports, and the real exchange rate. Increasing the degree of trade openness increases firms' relative demand for bond versus bank financing. We identify a financial switching channel for gains from trade where increasing access to export markets allows firms to overcome high fixed costs of bond issuance to secure a lower marginal cost of capital. |
| Keywords: | Trade ; Bank loans ; Bond market |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2009-27&r=int |
| By: | Raphael Auer (Swiss National Bank) |
| Abstract: | Starting with Krugman (1980), much literature has analyzed how trade liberalization affects the economy based on the notion that trade is motivated by consumer’s love of variety. In this paper, I augment these preferences by the determinants of demand for heterogeneous products. The model features products with heterogeneous attributes and consumers with heterogeneous tastes for attributes. Allowing for international trade, the model predicts a within-industry home market effect, i.e., that high domestic demand for an attribute leads to entry of firms producing a fitting output and, consequently, net exports of products embodying the attribute. Second, the model rationalizes why consumption is home-biased in the short run. Each country’s industry is optimized for the preferences of domestic consumers and thus somewhat inappropriate for the export market. Third, in the long run, countries specialize further and the within-industry home market effect intensifies. Intriguingly, (as long as it is incomplete) this specialization implies that the home bias disappears completely, thus demonstrating that Linder’s (1961) conjecture describes a temporary phenomenon that does not prevail in general equilibrium |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:szg:worpap:0905&r=int |
| By: | Chad Bown; Meredith Crowley |
| Abstract: | This paper empirically examines how governments make trade policy adjustments under a self-enforcing trade agreement in the presence of economic shocks. Using data on US antidumping (AD) policy formation between 1997-2006, we find that US antidumping policy is often consistent with the time-varying “cooperative” tariff increases modeled in the self-enforcing trade agreement of Bagwell and Staiger (1990). Estimates of an empirical model of US antidumping indicate that the likelihood of a US antidumping duty is increasing in the size of the unexpected import surge, decreasing in the volatility of imports and decreasing in the elasticities of import demand and export supply. This suggests that time-varying increases in US tariff rates under antidumping policy could be interpreted as “cooperative” tariff increases that support a self-enforcing trade agreement facing an unexpected import surge. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-09-17&r=int |
| By: | Tim Schmidt-Eisenlohr |
| Abstract: | Cross border transactions are conducted using diffierent payment contracts, the usage of which varies across countries and over time. In this paper I build a model that can explain this observation and study implications from this for international trade. In the model exporters optimally choose payment contracts, trading off differences in enforcement and efficiency between financial markets in different countries. I find that the ability of firms to switch contracts is central to the reaction of trade to variations in financial conditions. Numerical experiments with a two-country version of the model suggest that limiting the choice between payment contracts reduces traded quantities by up to 60 percent. |
| Keywords: | trade finance, payment contracts, trade patterns, financial crisis |
| JEL: | F12 F3 G21 G32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2009/43&r=int |
| By: | Michalski, Thomasz; Goh, Ai-Ting |
| Abstract: | Will small countries deindustrialize when opening up to trade with large countries? Davis(1998) shows that for the home market e¤ect to lead to deindustrialization of small countries, trade costs for homogenous goods must be su¢ ciently smaller than trade costs in di¤erentiated goods, a condition which is not supported by empirical evidence. We show that if di¤erentiated goods production uses tradeable inputs small countries can become deindustrialized when trading with a su¢ ciently large country and if trade costs are low. |
| Keywords: | home market e¤ect; deindustrialization; trade costs; economic geography; intermediate goods |
| JEL: | F01 R12 |
| Date: | 2009–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0916&r=int |
| By: | Michael Dotsey; Margarida Duarte |
| Abstract: | The authors show that standard alternative assumptions about the currency in which firms price export goods are virtually inconsequential for the properties of aggregate variables, other than the terms of trade, in a quantitative open-economy model. This result is in contrast to a large literature that emphasizes the importance of the currency denomination of exports for the properties of open-economy models. |
| Keywords: | Exports ; Pricing |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:09-32&r=int |
| By: | Silvia Nenci |
| Abstract: | The aim of this study is to assess the relationship between tariff barriers and world trade growth from a comparative and historical perspective, and –to derive some useful indications for evaluating the effectiveness of the current multilateral trading system for promoting world trade. The novelty of this work is the complex reconstruction of a historical tariffs and trade series for the period 1870-2000, for 23 countries; this constitutes a good proxy for world trade (accounting for over 60%) in this period. The effect of tariff liberalization on trade growth is analysed empirically using panel data and time series. The empirical results, whilst confirming the existence of a world level long-term relationship between tariff reductions and trade growth, demonstrate how this substantial and significant relationship pre World War II gradually diminished in importance and significance after 1950. This result does not conflict with the key role of the GATT/WTO system in the trade liberalization process; however, it underlines the importance of a formalized multilateral trading system, not so much for tariff liberalization, but for building a virtuous process of international coordination of trade policies and ensuring fuller participation in world trade. |
| Keywords: | World Trade, Multilateral Trading System, GATT/WTO, Historical Series, ECM |
| JEL: | C22 F13 F15 N70 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0110&r=int |
| By: | GUISAN, Maria-Carmen |
| Abstract: | One aim of this paper is to relate the evolution of real exchange rate Euro-Dollar to the foreign trade balance, with analysis three European countries: Spain, Germany and France, for the period 1960-2007. A second question is to analyse the effects of changes of REER on the evolution of Exports and Imports. A third point is to evaluate the impact of those changes on industrial and non industrial production and economic growth. We estimate an econometric model for the case of Spain that explains the causes and consequences of the huge increase of the trade deficit during the period 2004-2009 and we insist on the convenience to develop economic policies aimed to get higher levels of industrial production per inhabitant to increase Exports and to moderate foreign trade deficit. |
| JEL: | C51 F1 O52 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eaa:ecodev:100&r=int |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Using an unbalanced panel of about 260,000 Swedish firm-level observations over the period 1997-2006, this paper shows that half of the firms exporting goods are service firms that account for a substantial and increasing share of the total value from exports of goods. Between 1997 and 2006 this fraction increased from 25% to 34%. Previous research provides little systematic evidence of this extension of goods exports among service firms or the benefits of exporting. This paper shows that service firms do become exporters for the same reasons as manufacturing firms. Besides, they are a self-selection of larger, more productive and high-equity firms, with more skilled labour, higher capital intensity and stronger links to multinational groups. However, the export productivity premium is larger for service firms than for manufacturers. No evidence is found to indicate that exporting increases the growth rate of productivity. In contrast, the annual employment growth premium from exporting is substantial for business services, 2% per year, compared to 0.5% for the retail and wholesale business. |
| Keywords: | export productivity premium; manufacturing; services; micro data; panel data |
| JEL: | C16 F14 L25 O33 |
| Date: | 2009–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0205&r=int |
| By: | Ahmed, S. Amer |
| Abstract: | Indian gross domestic product per capita increased rapidly between 2001 and 2006 in a climate of increasing services trade, with the export-oriented services sector responsible for rising shares of growth in gross domestic product. Due to its contribution to aggregate economic growth, there is a great need for empirical examination of the distributional consequences of this growth, especially in light of the challenges in obtaining theoretical solutions that can be generalized. This paper fills this gap in the literature by using a global simulation model to examine how sensitive factor incomes across different industries may have been to the historical changes in India's services exports and imports, and provides insight on the distribution of the national income growth attributable to the expansion of the services industry. Rent on capital in the service sector and wages of all workers would have increased as a result of greater services trade in this period, while income from capital specific to agriculture and manufacturing would have declined. The factors involved with the urban-based services sector may thus benefit from the services trade growth, while the total factor income involved in rural agriculture may decline. |
| Keywords: | Economic Theory&Research,Labor Policies,Trade Policy,ICT Policy and Strategies,Emerging Markets |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5155&r=int |
| By: | Seker, Murat |
| Abstract: | Recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only exporters, only importers, and non-traders. Extending the existing models of firm evolution in open economies by incorporating importing decision, I show that: i) globally engaged firms are larger, more productive, and grow faster than non-traders; ii) two-way traders are the fastest growing and most innovative group who are followed by only-exporters; iii) estimating export premium without controlling for import status is likely to overestimate the actual value by capturing the import premium; and iv) R&D investment contributes to growth of traders significantly more than to non-traders. Finally I show the robustness of the findings by providing evidence from the panel data constructed from the original dataset and controlling for variables that are likely to affect firm growth. |
| Keywords: | E-Business,Labor Policies,Microfinance,Economic Theory&Research,Emerging Markets |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5156&r=int |
| By: | van Tongeren, Frank; Beghin, John C.; Marette, Stephan |
| Abstract: | This report develops a conceptual framework for the assessment of costs and benefits associated with non-tariff measures that allows an evidence-based comparative assessment of alternative regulatory approaches. It was prepared by Frank van Tongeren (OECD Secretariat), John Beghin (Iowa State University), and Stéphan Marette (INRA). |
| Keywords: | Information and product quality; standardization and compatibility, economics of regulation, agriculture in international trade, trade policy; international trade organisations. |
| Date: | 2009–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13146&r=int |
| By: | Gordhan K Saini |
| Abstract: | This paper reports findings from the survey of India’s textiles and clothing exporters. The survey method has been used to identify and assess the impact of Non-Tariff Measures (NTMs) and the Cost of Compliance (COC) expenditure by the exporters. A structured questionnaire has been used to gather data from a sample of 135 exporters across eight export centers of India that is Bangalore, Chennai, Coimbatore, Ludhiana, Mumbai, New Delhi, Panipat and Tirupur. [WP-2009-008] |
| Keywords: | Coimbatore, Ludhiana, Mumbai, New Delhi, Panipat, Coimbatore, Ludhiana, Mumbai, textiles, clothing, Bangalore, Chennai, exporters, Non-tariff measures, NTM, compliance, expenditure, export, India, chemicals, pharmaceuticals |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2336&r=int |
| By: | Amelie Constant; Klaus F. Zimmermann |
| Abstract: | This chapter deals with the economic and ethnic diversity caused by international labor migration, and their economic integration possibilities. It brings together three strands of literature dealing with the neoclassical economic assimilation, ethnic identities and attitudes towards immigrants and the natives, and provides an analysis in understanding their interactions. The issue of how immigrants fare in the host country especially in terms of their labor force participation and remuneration has been the core of research in the labor migration literature. If immigrants fare as well as the natives, then they are economically assimilated. While some immigrant groups do, most do not, especially in Europe. Of equal importance is how immigrants identify with the culture of their home and receiving countries, and if natives and immigrants have the right attitudes about each other. Ethnic identities and attitudes seem to be less affected by the economic environment but have implications for economic performance. |
| Keywords: | Ethnicity, ethnic identity, acculturation, migrant assimilation, migrant integration, work, cultural economics |
| JEL: | F22 J15 J16 Z10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp957&r=int |
| By: | Antonio Cosma; antonio.cosma@uni.lu (Luxembourg School of Finance, University of Luxembourg); Michel Beine (CREA, University of Luxembourg and CES-info); Robert Vermeulen (CREA, University of Luxembourg and Department of Economics, Maastricht University) |
| Abstract: | We measure stock market coexceedances using the methodology of Cappiello, Gerard and Manganelli (2005, ECB Working Paper 501). This method enables us to measure comovement at each point of the return distribution. First, we construct annual coexceedance probabilities for both lower and upper tail return quantiles using daily data from 1974-2006. Next, we explain these probabilities in a panel gravity model framework. Results show that macroeconomic variables asymmetrically impact stock market comovement across the return distribution. Financial liberalization significantly increases left tail comovement, whereas trade integration significantly increases comovement across all quantiles. |
| Keywords: | stock market comovement; trade integration; financial integration |
| JEL: | F15 F36 F41 G15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:crf:wpaper:09-05&r=int |