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on International Trade |
| By: | Kris James Mitchener; Se Yan |
| Abstract: | Chinese imports and exports grew rapidly during the first three decades of the twentieth century as China opened up to global trade. Using a new data set on the factor-intensity of traded goods at the industry level, we show that Chinese exports became more unskilled-intensive and imports became more skill-intensive during these three decades. The exogenous shock of World War I dramatically raised the price of Chinese exports, increased the demand for Chinese goods overseas, and increased the demand for unskilled workers producing these goods. These trends continued even after the war ended. We show that the timing of the rise in export prices is consistent with the observed decline in the skill premium in China. The skill-unskilled wage ratio flattened out during the 1910s and then fell by eight percent during the 1920s. We simulate the price shock of World War I using a general equilibrium factor-endowments model of trade and find evidence consistent with the observed fall in the skill premium in China during the 1920s. |
| JEL: | F15 F33 N25 N75 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15679&r=int |
| By: | Aysu Ýnsel (Marmara University); Mehmet Mahmut Tekçe (Marmara University) |
| Abstract: | This study analyzes the trade flows of the Gulf Cooperation Council (GCC) both among its member countries and with the rest of the world by employing a panel data gravity model in the context of the single country approach in order to capture the impacts of observable and unobservable variables on the bilateral trade flows for the 1997-2002 and 2003-2007 periods. In this paper, the research question is whether the trade flows of each GCC countries with its partners have sustained and/or they have developed new relations over time, mainly after 2003 custom union agreement of the GCC. For this purpose, fixed effects models have been estimated in order to obtain individual country effects variable. Then, trade model- as a function of distance and income variables- with the country effects model- as a function of the time invariant control variables- have been estimated simultaneously within the panel data analysis using the Least Squares and Generalised Method of Moments under the assumption of the presence of cross section heteroskedasticity and the robust standard errors. There are three contributions of this paper: (1) Examination of bilateral trade flows for each GCC country over the two different sample periods. (2) Country ranking for each GCC country over the two different sample periods. (3) Simultaneous gravity model specification for each GCC country over the two different sample periods. |
| Keywords: | Gulf Cooperation Council Countries, Trade Flows, Gravity model, Panel Analysis, System Estimation |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2010/2&r=int |
| By: | Andrea Mantovani; Alireza Naghavi |
| Abstract: | This paper studies the consequences of parallel import (PI) on process innovation of firms heterogeneous in their production technology. In an international setting where foreign markets differ with respect to their intellectual property rights regime, a move by a technologically inferior firm to exploit a new unregulated market can result in imitation and PI. The impact of PI on innovation is determined by the degree of heterogeneity between firms and trade costs. Increasing trade costs shifts from the market share losses brought by PI from the more to the less productive firm. This induces the former to invest more in R&D. At this point, sales in the foreign market become a determinant of the R&D decision by the technologically inferior firm. For low levels of firm heterogeneity, PI increases output by this ?rm targeted for the unregulated market, hence increases its Innovation efforts. A tariff policy accompanied by opening borders to PI only increases welfare when the technological gap between the two firms are suffciently large. |
| Keywords: | Intellectual property rights; Parallel imports; Innovation; Trade costs; Welfare |
| JEL: | F12 F13 L11 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:038&r=int |
| By: | Freund, Caroline; Rocha, Nadia |
| Abstract: | This paper examines the effects of transit, documentation, and ports and customs delays on Africa’s exports. The authors find that transit delays have the most economically and statically significant effect on exports. A one-day reduction in inland travel times leads to a 7 percent increase in exports. Put another way, a one-day reduction in inland travel times translates to a 1.5 percentage point decrease in all importing-country tariffs. By contrast, longer delays in the other areas have a far smaller impact on trade. The analysis controls for the possibility that greater trade leads to shorter delays in three ways. First, it examines the effect of trade times on exports of new products. Second, it evaluates the effect of delays in a transit country on the exports of landlocked countries. Third, it examines whether delays affect time-sensitive goods relatively more. The authors show that large transit delays are relatively more harmful because of high within-country variation. |
| Keywords: | Transport Economics Policy&Planning,Common Carriers Industry,Transport and Trade Logistics,Trade Policy,Economic Theory&Research |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5184&r=int |
| By: | A. Mantovani; A. Naghavi |
| Abstract: | This paper studies the consequences of parallel import (PI) on process innovation of firms heterogeneous in their production technology. In an international setting where foreign markets differ with respect to their intellectual property rights regime, a move by a technologically inferior firm to exploit a new unregulated market can result in imitation and PI. The impact of PI on innovation is determined by the degree of heterogeneity between firms and trade costs. Increasing trade costs shifts from the market share losses brought by PI from the more to the less productive firm. This induces the former to invest more in R&D. At this point, sales in the foreign market become a determinant of the R&D decision by the technologically inferior firm. For low levels of firm heterogeneity, PI increases output by this firm targeted for the unregulated market, hence increases its Innovation efforts. A tariff policy accompanied by opening borders to PI only increases welfare when the technological gap between the two firms are sufficiently large. |
| JEL: | F12 F13 L11 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:688&r=int |
| By: | Manuel Agosin; Roberto Álvarez; Claudio Bravo-Ortega; Esteban Puentes |
| Abstract: | Using a large dataset of countries during the last forty years, this paper analyzes the main determinants of export diversification. We explore the role of several factors and we use three different indicators of export diversification. We find robust evidence across specifications and indicators that trade openness induces higher specialization and does not favor export diversification. In contrast, financial development helps countries to diversify their exports. Looking at the effects of exchange rates, our results suggest a negative effect of real exchange rate overvaluation, but not significant effects of exchange rate volatility. We also find evidence that capital accumulation contributes positively to diversity exports and that increasing remoteness tend to reduce export diversification. We explore also the role of terms of trade shocks. Some of our results suggest that there is an interesting interaction between this variable and human capital. We find that improvements in terms of trade tend to concentrate exports, but this effect is lower for those countries with higher levels of human capital. This evidence suggests that countries with higher education can take advantage of positive terms of trade shocks to increase export diversification. |
| Keywords: | Export diversification, reforms, exchange rate |
| JEL: | F10 O10 O24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp309&r=int |
| By: | Kaminski, Bartlomiej; Ng, Francis |
| Abstract: | Bosnia and Herzegovina's industrial restructuring, as seen through the lenses of foreign trade performance and its sustainability, has taken off. Bosnia and Herzegovina’s exports have displayed strong dynamics outstripping the pace of growth of exports in almost each year over 1997-2007 combined with the shift to higher value added exportables. Although its performance during the period 1996-2000 following the end of war in late 1995 was not surprising, given relatively low foreign direct investment inflows and weaknesses in the investment climate, its subsequent export performance has come as a surprise. Industrial restructuring, as revealed in the pattern of exports, consisted in rebuilding and modernizing the pre-independence industrial base built around wood products, metalworking, clothing, and automotive products. Although exports still remain relatively low in terms of both per capita and gross domestic product in comparison with other Balkan economies, there has been significant change in their composition, indicating a growing presence of more processed manufactures and the participation of local firms in global networks of production and distribution, mostly as independent suppliers. Firms with foreign participation have been one of the levers of export upgrading and expansion. The dominance of joint ventures as a mode of entry of foreign capital is worrisome for two reasons: first, domestic firms may not have access to the most recent technologies and knowhow; and second, it is always indicative of weaknesses of a domestic economic regime. This also raises concerns about the future sustainability of export performance. |
| Keywords: | Economic Theory&Research,Trade Policy,Free Trade,Agribusiness&Markets,Emerging Markets |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5187&r=int |
| By: | Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Wolfgang Koller |
| Abstract: | In this paper we study the employment effects of changes in the levels and patterns of trade integration and outsourcing in the Austrian economy over the periods 1995-2000 and 2000-2005. Based on an input-output framework, we apply a hierarchical decomposition analysis to disentangle the employment effects of changes in labour productivity, technical input coefficients and final demand components. Outsourcing is modelled as changes in the shares of domestically produced intermediates. For this some further details can be derived by distinguishing between intermediate imports according to educational intensities of the imported intermediate products. A similar decomposition of the final demand vector allows then to draw conclusions on the employment effects of overall trade integration over this period. We further calculate the employment effects, distinguishing three employment groups by educational attainment levels. The results suggest that the overall employment effect of trade integration has been positive in general. On top of that we do not find that the unskilled workers are hurt more than the other two skill groups. Further we find a distinct pattern of employment effects in the two periods considered: In the period 1995-2000 we observe relatively strong positive employment effects in the production of high skill intensive products and negligible effects in the production of low skill intensive products. However, this pattern changed in the period 2000-2005 where strong positive employment effects are found in the latter but even negative employment effects in the production of high skill intensive commodities. |
| Keywords: | outsourcing, offshoring, employment effects, hierarchical decomposition, input-output modelling |
| JEL: | C67 D57 F16 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:56&r=int |
| By: | Cafiso, Gianluca |
| Abstract: | This paper studies the export performance of the Euro Area and the majority of the Euro Area countries through a Constant Market Share Analysis. We keep a special focus on the three largest countries: Germany, France and Italy. The Constant Market Share Analysis provides a breakdown of an economy’s export performance into the separate components that are due to a Structure Effect, resulting from the product and destination market of its exports, and a broad Competitiveness Effect which is a residual category assumed to capture both price and non-price competitiveness. |
| Keywords: | Constant Market Share Analysis; Export Performance; Specialization; Competitiveness; Euro Area. |
| JEL: | F10 F14 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20263&r=int |
| By: | Leon du Toit (Bureau for Economic Research, University of Stellenbosch); Johan Fourie (Department of Economics, University of Stellenbosch); Devon Trew (Department of Economics, University of Stellenbosch) |
| Abstract: | Tourism flows are usually explained through demand-side factors such as income growth in developed economies and changes in the preferences of visitors. While these models are adequate for short-term forecasts, little theoretical justification is provided to explain why certain countries perform better than others. This paper identifies which countries have a comparative advantage in the export of travel services (tourism). Consequently, the paper seeks to identify the sources of this comparative advantage. We include the standard explanatory variables (factors of production, including natural environment) for Ricardian comparative advantage, plus measures of infrastructure, health, safety and security, tourism prioritization, and various dummy variables. We also develop and test new variables, including a neighbourhood variable, which measures the benefits obtained from regional tourism clusters. Our results have important policy implications; it is clear that the natural environment has a large positive and significant impact on a country’s revealed comparative advantage, as do transport endowments (a measure of relative accessibility) and the neighbourhood variable. These findings correspond to the predictions of the neoclassical trade theories (namely Heckscher-Ohlin) and to some extent the new trade theories (Krugman). |
| Keywords: | tourism, comparative advantage, trade in services |
| JEL: | F11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers100&r=int |
| By: | Jacques-François Thisse |
| Abstract: | By its very nature, transport is linked to trade. Trade being one of the oldest human activities, the transport of commodities is, therefore, a fundamental ingredient of any society. People get involved in trade because they want to consume goods that are not produced within reach. The Silk Road provides evidence that shipping high-valued goods over long distances has been undertaken because of this very precise reason. But why is it that not all goods are produced everywhere? The reason is that regions are specialized in the production of certain products. The first explanation for specialization that comes to mind is that nature supplies specific environments needed to produce particular goods. According to Diamond (1997), spatial differences in edible plants, with abundant nutrients, and wild animals, capable of being domesticated to help man in his agricultural and transport activities, explain why only a few regions have become independent centers of food production. Though relevant for explaining the emergence of civilization in a few areas, we must go further to understand why, in the wake of the Industrial Revolution, interregional and international trade has grown so rapidly. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/13-en&r=int |
| By: | Ana Margarida Fernandes; Caroline Paunov |
| Abstract: | This paper investigates whether increased import competition leads firms to engage in incremental innovation reflected in product quality upgrading. The econometric analysis relies on a rich dataset of Chilean manufacturing firms and their products. Product quality is measured with unit values (prices) and imports’ transport costs are used as an exogenous proxy for import competition. The estimates show a negative effect of transport costs on product quality. The paper provides explicit evidence that estimated increases in unit values capture product quality upgrading, and that competition effects of imports explain our results. Easier access to intermediate inputs also fosters quality upgrading.<BR>Cet article examine si le fait d’être en compétition avec des produits d’importation affecte la décision des entreprises de s’engager dans l’innovation incrémentale, qui se reflète dans une amélioration de la qualité des produits. Les résultats économétriques sont fondés sur de riches données chiliennes d’entreprises et de leurs produits. La qualité des produits est mesurée par leur valeur unitaire (leur prix) et le coût de transport des importations est utilisé comme une mesure exogène du degré de compétition des importations. Les estimations montrent un effet négatif du coût de transport sur la qualité des produits. L’article démontre que les incréments dans la valeur unitaire reflètent les incréments dans la qualité des produits et que la compétition explique nos résultats. Un accès plus aisé aux produits intermédiaires participe également à une amélioration de la qualité des produits. |
| Keywords: | Chile, transport costs, firm level data, import competition, incremental innovation, multi-product firms, output, product quality, unit values, Chili, données de firmes, compétition des importations, innovation incrémentale, entreprises multi-produits, qualité des produits, coût de transport, valeur unitaire de la production |
| JEL: | F14 L6 O31 |
| Date: | 2010–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:devaaa:286-en&r=int |
| By: | Dean Baker |
| Abstract: | There is widespread concern that the United States and the rest of the world are descending into a round of protectionism and a trade war reminiscent of what the world experienced in the Great Depression. Such concerns are both overblown and misplaced. In the short term, the main concern in the United States and rest of the world should be to promote an increase in demand through whatever means necessary. For the longer term, there has been an excessive fixation on protection for merchandise trade. Other areas, most notably alternative intellectual property regimes and freer trade in highly paid professional services, offer much larger potential gains than further reductions in barriers to trade in goods. |
| Keywords: | Free Trade, trade, protectionism |
| JEL: | F F1 F13 O O3 O34 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-45&r=int |
| By: | Dean Baker; Hye-Jin Rho |
| Abstract: | The huge gap between the cost of health care in the United States and the cost in other countries with comparable health care outcomes suggests the potential for substantial gains from trade. This paper describes one mechanism for taking advantage of these gains – through a globalization of the country’s Medicare and Medicaid programs. The projections in this paper suggest that the country’s long-term budget situation would be substantially improved if beneficiaries of these two programs over the age of 65 were allowed to take advantage of the lower-cost health care available in other countries (that also have higher life expectancies than the U.S.). This could also allow them to enjoy much higher retirement incomes than they would otherwise receive. |
| Keywords: | Free Trade, healthcare, Medicare, Medicaid |
| JEL: | F F1 I I1 I11 I18 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-38&r=int |
| By: | Corinne Bagoulla; Emmanuelle Chevassus-Lozza; Karine Daniel; Carl Gaigné |
| Abstract: | This paper aims at evaluating the impact of increasing imports on the reallocation of agrifood production across regions within countries. From French data for the period 1995-2002, we show that regional agri-food production adjusts differently to increasing imports according to the region where the agri-food firms are located. More precisely, even though proximity to consumers significantly shapes the spatial distribution of agri-food production, an increase in agri-food imports does not make regions with a high demand more attractive but makes low-wage regions more attractive. In addition, an increase in imports of agricultural products processed by agri-food firms leads to the reallocation of agri-food production from regions with good access to agricultural products towards those withlimited access. |
| Keywords: | trade openness, location, agri-food |
| JEL: | R12 F12 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201001&r=int |