nep-int New Economics Papers
on International Trade
Issue of 2010‒03‒28
24 papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Sequential Exporting By Facundo Albornoz; Hector F. Calvo Pardo; Gregory Corcos
  2. Caribbean Bananas: The Macroeconomic Impact of Trade Preference Erosion By Cleary Haines; Paul Cashin; Montfort Mlachila
  3. Constraints on Trade in the MENA region By Hirut Wolde; Rina Bhattacharya
  4. The pro-competitive effect of imports from China: an analysis of firm-level price data By Matteo Bugamelli; Silvia Fabiani; Enrico Sette
  5. Accelerating Regional Integration: Issues at the Border By Susan F. Stone
  6. The Composition and Cyclical Behavior of Trade Flows in Emerging Economies By Reinout De Bock
  7. Product and process innovation and the decision to export : firm-level evidence for Belgium By VAN BEVEREN, Ilke; VANDENBUSSCHE, Hylke
  8. Jobs Gained and Lost through Trade – The Case of Germany By Maren Lurweg; Andreas Westermeier
  9. The Incidence of Gravity By James E. Anderson
  10. The Opening Up of Eastern Europe at 20-Jobs, Skills, and ‘Reverse Maquiladoras’ in Austria and Germany By Marin, Dalia
  11. Regional Trade Policy Cooperation and Architecture in East Asia By Siow Yue Chia
  12. Antidumping protection hurts exporters : firm-level evidence from France By KONINGS, Jozef; VANDENBUSSCHE, Hylke
  13. How Do FTAs Affect Exporting Firms in Thailand? By Sumet Ongkittikul
  14. On the impact of trade on industrial structures : The role of entry cost heterogeneity By OYAMA, Daisuke; SATO, Yasuhiro; TABUCHI, Takatoshi; THISSE, Jacques-Franois
  15. Terrorism Networks and Trade: Does the Neighor Hurt? By Jose de Sousa; Daniel Mirza; Thierry Verdier
  16. Wage Bargaining and the Boundaries of the Multinational Firm By Maria Bas; Juan Carluccio
  17. Technology Choice and International Trade By Gabriela Schmidt
  18. Numbers for Pascal: explaining differences in the estimated benefits of the Doha Development Agenda By Hess, Sebastian; Cramon-Taubadel, Stephan von; Sperlich, Stefan
  19. Globalization and Price Dispersion: Evidence from U.S. Trade Flows By John Tang
  20. The Gender and Poverty Impacts of Trade Liberalization in Senegal By John Cockburn; Erwin Corong; Bernard Decaluwé; Ismaël Fofana; Véronique Robichaud
  21. Investigating the Effect of Exchange Rate Changes on the People’s Republic of China’s Processed Exports By Willem Thorbecke
  22. The Empirics of Exchange Rate Regimes and Trade: Words vs. Deeds By Charalambos G. Tsangarides; Mahvash Saeed Qureshi
  23. Trade trends from 2000 to 2008 for agriculture, forestry and fisheries of the Western Cape By Jacobs, Elne; Punt, Cecilia
  24. Offshoring, tasks, and the skill-wage pattern By Daniel Baumgarten; Ingo Geishecker; Holger Görg

  1. By: Facundo Albornoz; Hector F. Calvo Pardo; Gregory Corcos
    Abstract: Firms need to incur substantial sunk costs to break in foreign markets, yet may give up exporting shortly after their first experience, which typically involves very small sales. Conversely, other new exporters shoot up their foreign sales and expand to new destinations. We investigate a simple theoretical mechanism that can rationalize these patterns. A firm discovers its profitability as an exporter only after actually engaging in exporting. The profitability is positively correlated over time and across foreign destinations. Accordingly, once the firm learns how good it is as an exporter, it adjusts quantities and decides whether to exit and whether to serve new destinations. Thus, it is the possibility of profitable expansion at both the intensive and extensive margins what makes incurring the sunk costs to enter a single foreign market worthwhile despite the high failure rates. Using a census of Argentinean firm-level manufacturing exports from 2002 to 2007, we find empirical support for several implications of our proposed mechanism, indicating that the practice of "sequential exporting" is pervasive. Sequential exporting has broad but subtle implications for trade policy. For example, a reduction in trade barriers in a country has delayed entry effects in its own market, while also promoting entry in other markets. This trade externality poses challenges for the quantification of the effects of trade liberalization programs, while suggesting neglected but critical implications of international trade agreements.
    Keywords: Export dynamics, trade liberalisation, experimentation, uncertainty
    JEL: L21 F13 F15 D83
    Date: 2010–02
  2. By: Cleary Haines; Paul Cashin; Montfort Mlachila
    Abstract: This paper examines the macroeconomic effects of the erosion of trade preferences, with a focus on the export of Caribbean bananas to Europe. Estimates are made of the magnitude of implicit assistance provided over a period of three decades to eastern Caribbean countries through banana trade preferences. The value of such assistance rose until the early 1990s, and has declined precipitously since then. Using vector autoregressive analysis, the paper finds that changes in the level of implicit assistance have had a considerable macroeconomic impact, especially on Caribbean real GDP growth.
    Keywords: Agricultural exports , Agricultural production , Agricultural trade , Bananas , Caribbean , Economic models , Export prices , Terms of trade , Trade liberalization , Trade policy , Trade preferences ,
    Date: 2010–03–10
  3. By: Hirut Wolde; Rina Bhattacharya
    Abstract: In this paper we estimate gravity models to see whether trade volumes of countries in the MENA region are significantly lower than what would be expected given their economic, cultural and geographical characteristics. Our empirical results show that the variables used in standard gravity models cannot explain a significant part of MENA's trade performance, particularly on exports. We then go on to 'augment' the standard gravity model with relevant variables from the World Bank's Business Enterprise surveys. Our results further show that these variables, and in particular transport constraints and inefficiencies in customs clearance processes, are important in explaining the MENA region's underperformance in trade.
    Keywords: Cross country analysis , Customs administration , Economic models , Exports , Imports , Labor supply , Middle East , North Africa , Private sector , Skilled labor , Tariff structures , Trade liberalization , Trade policy , Transport ,
    Date: 2010–02–04
  4. By: Matteo Bugamelli (Bank of Italy); Silvia Fabiani (Bank of Italy); Enrico Sette (Bank of Italy)
    Abstract: The entry of China into world markets has been one of the strongest recent shocks to world trade and advanced countries. industrial sectors. This is particularly true for Italy where labour-intensive, low-technology production represents a large share of output. Using Italian manufacturing firm-level data on output prices over the period 1990-2006, we test whether increased import competition from China has affected firms’ pricing strategies causing a reduction in the dynamics of prices and markups. After controlling for other price determinants (demand and cost, domestic competition and import penetration), we find that this is indeed the case. Comparing China’s share of world exports to Italy with China’s total world export market share proves the causal nature of the relationship we find. Inspired by and in line with recent advances in the literature on international trade, we also show that the price effects of Chinese competitive pressures are stronger in less technologically advanced sectors and, within these sectors, on smaller firms.
    Keywords: import competition, China, firms' prices and productivity
    JEL: F14 F15 L2 E31
    Date: 2010–01
  5. By: Susan F. Stone (Asian Development Bank Institute)
    Abstract: The sharp decline in trade volume and value during the current economic crisis has contributed to lower transportation costs and reduced waiting times at border crossings, reducing the urgency of progress on trade facilitation. Meanwhile, greater trade is expected to play a key role in recovery, and in sustaining growth afterwards. The crisis offers an excellent opportunity to make progress on facilitating intra-Asian trade and boosting the region's contribution to global economic recovery. This paper examines the status of, and challenges to, trade facilitation among the Asian Asia-Pacific Economic Cooperation members, and the roles of hard and soft infrastructure (including logistics) in improving that performance. Analysis with a computable general equilibrium framework indicates that even a relatively modest reduction in trade costs can yield significant gains. Gross domestic product in the region expands and countries move into a more diversified trading pattern. Of particular relevance for policy considerations is that the results vary considerably across bilateral trade routes and commodity categories.
    Keywords: trade, economic crisis, intra-Asian trade, APEC
    JEL: F13 F15 F17 O24
    Date: 2010
  6. By: Reinout De Bock
    Abstract: Trade flows data show that the composition and cyclical properties of imports are similar in developed economies and emerging markets (EM) but this is not the case for exports. Unlike developed economies, (i) EM export few or only a selective set of capital goods and (ii) capital good and overall exports tend to be acyclical. The lack of procyclicality in exports drives the strong countercyclicality of EM trade balances observed in previous studies. A quantitative exercise demonstrates how the standard small open economy business cycle model can be improved for EM by incorporating these features.
    Keywords: Balance of trade , Business cycles , Capital goods , Consumption , Cross country analysis , Economic models , Emerging markets , Exports , Imports , International trade , Productivity ,
    Date: 2010–02–23
  7. By: VAN BEVEREN, Ilke (Katholieke Universiteit Leuven, LICOS and Lessuis, Antwerpen, Belgium); VANDENBUSSCHE, Hylke (UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium and KULeuven, LICOS, B- 3000 Leuven, Belgium)
    Abstract: Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firmÕs probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation
    Keywords: exports, product innovation, process innovation, self-selection, firm heterogeneity
    JEL: D24 F14 L25 O31 O33
    Date: 2009–12–01
  8. By: Maren Lurweg; Andreas Westermeier
    Abstract: The nature of international trade has changed significantly. For centuries, trade concentrated on the exchange of finished goods. It now increasingly involves bits of value that are added at different locations to combine into one final product. Therefore, trade in functions or tasks are of growing importance and exports of final goods are no longer an appropriate indicator of the international competitiveness of countries. The process of globalisation has an impact on domestic labour markets. Due to the increasing integration of the world economy, some jobs are gained and others lost in any open economy. Concerns about German workers losing jobs to foreign competition dominate many political debates. Many people fear that being integrated in the world economy is disadvantageous for Germany. In this paper, we use input-output analysis to explore the relationship between trade and both job creation and job destruction in Germany over the period 1995-2006. We present two main findings. First, in an autarkic situation, around 7.0 per cent of total German jobs would not have existed at all in 2006. The job effect of trade was positive in every reporting year. Second, the manufacturing sector contributed most to this positive job effect, but also in the service sector, many jobs were retained through trade.
    Keywords: input-output analysis, international trade, employment
    JEL: F14 F16 C67
    Date: 2010–03–17
  9. By: James E. Anderson (Boston College)
    Abstract: The high trade costs inferred from gravity are rarely used in the wide class of trade models. Two related problems explain this omission of a key explanatory variable. First, national seller and buyer responses to trade costs depend on their incidence rather than on the full cost. Second, the high dimensionality of bilateral trade costs requires aggregation for most practical uses in interpretation or standard trade modeling. This paper provides an intuitive description of a resolution to the aggregation and incidence problems. For each product, it is as if each province or country sells to a world market containing all buyers and buys from from that market containing all sellers, the incidence of aggregated bilateral trade costs being divided between sellers and buyers according to their location. Measures of incidence described here give intuitive insight into the consequences of geography, illustrated with results from Anderson and Yotov (2008). The integration of the incidence measures with standard general equilibrium structure opens the way to richer applied general equilibrium models and better empirical work on the origins of comparative advantage.
    JEL: F10
    Date: 2010–01–10
  10. By: Marin, Dalia
    Abstract: Many people in the European Union fear that Eastern Enlargement leads to major job losses. More recently, these fears about job losses have extended to high skill labor and IT jobs. The paper examines with unique firm level data whether these fears are justified for the two neighboring countries of Eastern Enlargement Austria and Germany. We find that Eastern Enlargement leads to surprising small job losses of less than 0.5 percent of total employment in Germany and of 1.5 percent in Austria, because jobs in Eastern Europe do not compete with jobs in Austria and Germany. Low cost jobs of affiliates in Eastern Europe help Austrian and German firms to stay competitive in an increasingly competitive environment. However, we also find that multinational firms in Austria and Germany are outsourcing skill intensive activities to Eastern Europe taking advantage of cheap abundant skilled labor there. We find that the firms’ outsourcing activities to Eastern Europe are a response to a human capital scarcity in Austria and Germany which has become particularly severe in the 1990s. We indeed find a reverse pattern of ‘Maquiladoras’ emerging with Eastern Enlargement in Austria and Germany compared to what economists have found for the North American Free Trade Agreement. Skilled workers in Austria and Germany are losing from outsourcing. In both countries outsourcing contributes 35 percent and 41 percent, respectively, to changes in relative wages for skilled workers in Austria and Germany. To address the skill exodus to Eastern Europe we suggest liberalizing the movement of high skill labor.
    Keywords: human capital; intra-firm trade; multinationals and jobs; outsourcing to Eastern Europe; R&D policy
    JEL: F21 F23 J24 J31 L24 O3 P33
    Date: 2010–03
  11. By: Siow Yue Chia (Asian Development Bank Institute)
    Abstract: The global financial and economic crisis has affected East Asia mainly through the trade channel. The region remains heavily dependent on export markets in Europe and North America through both direct exports to these destinations and indirect exports via the export of parts and components to other East Asian countries, particularly the People’s Republic of China, which are then assembled and exported as final goods to Europe and North America. The need to rebalance growth in East Asia in the post-crisis era requires measures to strengthen domestic demand and emphasize intra-regional demand. Production networks have been integrating East Asia and this integration process is being hastened by the rapid growth of regional and bilateral trade and economic agreements since the late 1990s. The trigger point for regionalism in East Asia appears to be the 1997–1998 Asian financial crisis, and regionalism is being accelerated by the dismal outlook for the Doha Development Round, the economic rise of the People’s Republic of China and India, and the ongoing global financial crisis. Proposals on regional trade architecture include Association of Southeast Asian Nations (ASEAN)+3 and ASEAN+6 for East Asia, the Free Trade Area of the Asia Pacific, and an extension of the Trans-Pacific Strategic Economic Partnership. The case for a new regional trade architecture includes improved competitiveness and economic dynamism from a large integrated market; increased intra-regional flows of trade, investment, and human resources; expansion and deepening of production networks; a rebalancing of growth towards regional demand; and a stronger and cohesive voice in international fora and organizations. Challenges include the pressures of protectionism in an economic recession, the question of whether there is a common political vision, the existence of multiple and overlapping free trade agreements with the accompanying problem of the noodle bowl, and the wide development gap among the region’s economies.
    Keywords: global financial crisis, trade, East Asia, production networks, regional trade architecture
    JEL: F13 F15
    Date: 2010
  12. By: KONINGS, Jozef (Catholic University of Leuven and LICOS, Department of Economics); VANDENBUSSCHE, Hylke (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: antidumping, firm-level exports, intensive margin, extensive margin, productivity, dif-in-dif
    JEL: F13 L41 O30 C2
    Date: 2009–07–01
  13. By: Sumet Ongkittikul (Asian Development Bank Institute)
    Abstract: Thailand—an outward-oriented regional production hub—is one of East Asia's most active users of free trade agreements (FTAs) as an instrument of commercial policy. By December 2009, Thailand had 11 concluded FTAs, and more were either under negotiation or proposed. Thai trade negotiators have striven to secure market access via FTAs, but little is known on how FTAs actually affect exporting firms. A survey of 221 exporters in leading sectors forms the basis for the first systematic study of the business impact of FTAs in Thailand. Key findings are as follows: (i) 24.9% of respondents used Thai FTAs as of 2007–2008, and this figure seems set to rise; (ii) 45.9% of respondents said that FTAs had influenced their business plans; (iii) 26.2% of firms felt that dealing with multiple rules of origin adds to business costs, and this is estimated to be less than 1% of export sales; (iv) more than half the sample firms have consulted with government and business associations on FTAs; and (v) a significant demand existed for business development services to adjust to FTAs, particularly for small and medium enterprises (SMEs). The findings suggest that Thailand should refine its FTA strategy to take better advantage of regional trade agreements. The study concludes with specific recommendations to improve business awareness of FTAs, encourage greater utilization of FTA preferences, increase competitiveness of local firms, and mitigate the potential effect of multiple rules of origin.
    Keywords: Thailand, free trade agreement, trade
    JEL: F1 F15 O24
    Date: 2010
  14. By: OYAMA, Daisuke (Graduate School of Economics, Hitotsubashi University, Japan); SATO, Yasuhiro (Graduate School of Economics, Hitotsubashi University, Japan); TABUCHI, Takatoshi (Faculty of Economics, University of Tokyo, Japan); THISSE, Jacques-Franois (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: entrepreneurship, trade liberalization, externality, heterogeneity, stability
    JEL: F12 F16 J24 O14 R12
    Date: 2009–08–01
  15. By: Jose de Sousa; Daniel Mirza; Thierry Verdier
    Abstract: We study the impact of transnational terrorism diffusion on security and trade. We set a simple theoretical model predicting that the closer a country to a source of terrorism, the higher the negative spillovers on its trade. The idea is that security measures, which impede trade, are directed both against the source country of terror and its neighbor countries where terrorism may diffuse. In contrast, we demonstrate that countries located far from terror could benefit from an increase in security by trading more. Taken to the test, we empirically document these predictions. We find (1) a direct negative impact of transnational terrorism on trade; (2) an indirect negative impact emanating from terrorism of neighbor countries; and (3) that trade is increasing with remoteness to terror. These results are robust to various definitions of the neighboring relationships among countries.
    Keywords: Terrorism; trade; security
    JEL: F12 F13
    Date: 2010–03
  16. By: Maria Bas; Juan Carluccio
    Abstract: Do variations in labor market institutions across countries affect the cross-border organization of the firm? Using firm-level data on multinationals located in France, we show that multinational firms are more likely to import intermediate inputs from external independent suppliers instead of importing from their own subsidiaries when importing from countries with empowered unions. Moreover, this effect is stronger for firms operating in capital-intensive industries. We propose a theoretical mechanism that rationalizes these findings. The fragmentation of the value chain weakens the union’s bargaining position, by limiting the amount of revenues that are subject to union extraction. The outsourcing strategy reduces the share of surplus that is appropriated by the union, which enhances the firm’s incentives to invest. Since investment creates relatively more value in capital-intensive industries, increases in union power are more likely to be conducive to outsourcing in those industries. Overall, our findings suggest that multinational firms use their organizational structure strategically when sourcing intermediate inputs from unionized markets.
    Keywords: Wage bargaining; trade unions; sourcing; multinational firms
    JEL: F10 J52 L22
    Date: 2010–03
  17. By: Gabriela Schmidt
    Abstract: This paper develops two extensions of the dynamic model presented in Melitz (2003). The first extension consists in the introduction of technology choice between three alternative production technologies: L, M and H. L is assumed to be the same as Melitz’s single production technology, while M and H are assumed to be superior production technologies, stemming this superiority from the fact these technologies substitute the more primitive capital goods used in technology L with newer, updated versions which embody technological advances, and also from the fact that M and H are more skill-intensive than L. Technologies M and H are equally skill-intensive, but H still is superior to M because it incorporates world-technology-frontier capital goods, while the capital goods used in M are below such frontier. The second extension consists in the introduction of two different exporting profiles: “Low-Commitment Exporters” –who make the minimum possible investment required to penetrate export markets- and “High-Commitment Exporters” –who are ready to make additional trade-related investments in order to gain additional export sales-
    Keywords: technology choice – heterogeneous firms – export profiles – embodied technology –resources’ redistribution – monopolistic competition
    JEL: O14 O33
    Date: 2010–03
  18. By: Hess, Sebastian; Cramon-Taubadel, Stephan von; Sperlich, Stefan
    Abstract: Economists use partial and general equilibrium trade simulation models to estimate the impact of changes in domestic policies and international trade rules. During the WTO Doha Development Agenda (DDA) negotiations economists have produced many different estimates of the gains that would result from global trade liberalisation scenarios. However, these estimates differ quite widely even for apparently similar liberalisation scenarios. The result is confusion about the true magnitude of the gains from trade liberalisation, and a reduction in the perceived credibility of the theories and models that economists use. We apply meta-analysis to a dataset extracted from 110 studies that present simulated assessments of global trade liberalisation scenarios under the DDA. Initial meta-regression analysis demonstrates that covariates that capture model characteristics, the nature of the data used in the modelling exercise, and the nature of the simulated liberalisation scenarios can explain roughly one-third of the variance in the dependent variable ‘simulated global welfare change’. We test whether additional explanatory power can be obtained by adding information about the authors of the simulation studies. We find significant fixed effects for the top 20 authors in the field. We interpret this as evidence that leading authors in the field employ model specifications that reflect their individual preferences and beliefs about how economies function and the impact of liberalisation, specifications that are hidden in the complex interactions of simulations models and therefore difficult to capture in a meta-analysis. We use these results to generate a confidence interval for the gains that would result from trade liberalisation under the DDA. --
    Keywords: Trade Liberalisation,Global Welfare Gain,Applied Trade Model,Meta-Analysis
    Date: 2010
  19. By: John Tang
    Abstract: Historically, the integration of international markets has corresponded with decreasing prices for traded goods due to higher competition among suppliers, scale economies, and consumption demand. In recent years, product differentiation and multinational firm pricing behavior across markets and between suppliers make it difficult to assess the degree to which this still occurs. Using a confidential panel dataset comprising the universe of U.S. import trade transactions between 1992 and 2007, this paper explores the change in prices for imported commodities across American trade partners. Overall price dispersion appears to decline, albeit unevenly, over time; nevertheless, there is considerable heterogeneity within commodity groups, geographic regions, and income levels, which may owe to increased product and quality differentiation within commodity categories. Unusually, after controlling for gravity trade factors, trade openness and extensive measures of globalization are positively associated with price dispersion, which suggests a more disaggregated approach both at the commodity and firm level to account for these differences.
    Keywords: price convergence, offshoring, product differentiation, multinational firm, law of one price
    Date: 2010–03
  20. By: John Cockburn; Erwin Corong; Bernard Decaluwé; Ismaël Fofana; Véronique Robichaud
    Abstract: Developing countries are deeply engaged in trade negotiations at the bilateral, regional and international (WTO) levels. As imports, exports and tariff duties all occupy an important part of their economies, far-reaching impacts on production, labor and capital markets, household incomes and, perhaps most importantly, economic growth will indubitably ensue. As men and women occupy very different roles in these economies, particularly in terms of the import and export orientation of the sectors in which they work, they will be affected very differently by these reforms. To anticipate these changes, a dynamic economy-wide model is developed with an application to Senegal. Whereas most similar existing studies consider the comparative static resource reallocation effects of trade reforms, ours is the first to focus on the growth effects (“dynamic gains from trade”), which are thought to be possibly much larger. The trade-productivity link is revealed to be the strongest growth channel, raising GDP by over three percentage points by the end of our 15 year simulation period. Trade liberalization is found to increase the gender wage gap in favor of men, especially among unskilled workers, as men are more active in export-oriented sectors such as cash crops and mining whereas women contribute more to import-competing sectors such as food crops. Furthermore, the ensuing growth effects further widen the over-all gender wage gap, as the productivity gains from increased openness are greatest in female-intensive sectors in which imports rise markedly. Thus, this suggests the need to implement policies aimed at increasing both unskilled and skilled women’s exposure in labor-intensive export industries, which is currently male dominated. A linked microsimulation analysis, based on a survey of Senegalese households, show that trade liberalization reduces poverty in Senegal, particularly in rural areas. While the fall in the relative wages of rural workers would initially lead us to believe that rural households would lose the most from trade liberalization, they are in fact compensated by greater consumer price savings, given that they consume more goods from the initially protected agricultural and agro-industrial sectors.
    Keywords: Senegal, Trade, Gender, Poverty, Growth
    JEL: C68 F17 F43 I32 J16 O24 O33 O55
    Date: 2010
  21. By: Willem Thorbecke (Asian Development Bank Institute)
    Abstract: Many argue that the yuan needs to appreciate to rebalance the People’s Republic of China’s trade. However, empirical evidence on the effects of a CNY appreciation on the People’s Republic of China’s exports has been mixed for the largest category of exports, processed exports. Since much of the value-added of these goods comes from parts and components produced in Japan, the Republic of Korea, and other East Asian supply chain countries, it is important to control for exchange rate changes in these countries. Employing dynamic ordinary least squares, or DOLS, techniques and quarterly data, this paper finds that exchange rate appreciations across supply chain countries would cause a much larger drop in processed exports than a unilateral appreciation of the yuan.
    Keywords: China, exchange rate policy, exchange rate appreciations, trade
    JEL: F32 F41
    Date: 2010
  22. By: Charalambos G. Tsangarides; Mahvash Saeed Qureshi
    Abstract: This paper examines the impact of exchange rate regimes on bilateral trade while differentiating the effects of "words" and "deeds". Our findings-based on an extended database for de jure and de facto exchange rate classifications-show that while fixed exchange rate regimes increase trade, there is no systematic difference in the effects of policy announcements versus actions to maintain exchange rate stability. The trade generating effect of more stable exchange rate regimes is however more pronounced when words and actions are aligned, both in the short and long-run. Policy credibility therefore plays an important role in determining the effects of de jure and de facto exchange rate arrangements such that deviations between the two could be costly. In addition, we find evidence that (i) the impact of hard pegs such as currency unions is broadly similar to that of conventional pegs; (ii) the currency union and direct peg effects evolve over time; and (iii) the effects of more stable regimes are heterogeneous across country groups.
    Keywords: Bilateral trade , Currency pegs , Economic models , Exchange rate regimes , Exchange rate variability , International trade , Monetary unions ,
    Date: 2010–02–25
  23. By: Jacobs, Elne; Punt, Cecilia
    Abstract: This paper aims to identify trade trends for primary products from the Western Cape agricultural, forestry and fisheries sector for the period 2000 until 2008. Annual trade data was received from the South African Revenue Service (SARS). The postal code information were used to identify from which province exports were sent or for which province the imports were destined. The postal code provided is that of the exporter or importer, and thus does not reflect the final destination in South Africa of imports or the origin (province) of our exports. Traded goods are classified using the Harmonised System (HS) that is used internationally. Results indicate that in South Africa and the Western Cape, the value of total imports are more than total exports, but in the agricultural sector of both South Africa and the Western Cape exports still dominate, i.e. South Africa and the Western Cape are still net exporters of agricultural products. For the Western Cape horticultural products, especially fruits, are at the top of the list of agricultural exports. The two main export countries for horticultural products are the Netherlands and the United Kingdom. Agricultural imports to the Western Cape are mostly field crops such as wheat, rice and tobacco, mainly from Argentina, Thailand and the United States of America. The values of exports and imports of fisheries and forestry from 2000 to 2008 indicate that the value of fish trade varies over time and the main trading partners also changes notable every year. The value of forestry trade is more stable than fish trade and since 2004, the main export country was Vietnam, but the United States dominates for imports. Nominal values are reported.
    Keywords: General Trade, Country and Industry Studies of Trade, International Relations/Trade, F10, F14,
    Date: 2009–11
  24. By: Daniel Baumgarten; Ingo Geishecker; Holger Görg
    Abstract: The paper investigates the relationship between offshoring, wages, and the ease with which individuals' tasks can be offshored. Our analysis relates to recent theoretical contributions arguing that there is only a loose relationship between the suitability of a task for offshoring and the associated skill level. Accordingly, wage effects of offshoring can be very heterogeneous within skill groups. We test this hypothesis by combining micro-level information on wages and demographic and workplace characteristics as well as occupational infor- mation relating to the degree of offshorability with industry-level data on offshoring. Our main results suggest that in partial equilibrium, wage effects of offshoring are fairly modest but far from homogeneous and depend significantly on the extent to which the respective task requires personal interaction or can be described as non-routine. When allowing for cross-industry movement of workers, i.e., looking at a situation closer to general equilibrium, the magnitude of the wage effects of offshoring becomes substantial. Low- and medium-skilled workers experience significant wage cuts due to offshoring which, however, again strongly depend on the degree of personal interaction and non-routine content
    Keywords: tasks, offshoring, outsourcing, skills, wages
    JEL: F1 F2 J3
    Date: 2010–03

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