nep-int New Economics Papers
on International Trade
Issue of 2010‒08‒06
fifteen papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Entrepreneurship and the extensive margin in export growth : a microeconomic accounting of Costa Rica's export growth during 1997-2007 By Lederman, Daniel; Rodriguez-Clare, Andres; Yi Xu, Daniel
  2. Market-Creating Effect of the Internet on Food Trade By Bojnec, Å tefan; FertÅ, Imre
  3. Expo 2015: an impact analysis on international trade. By Gabriele Maria Sada
  4. Industrial Localization and Countries\' Specialization in the European Union: An Empirical Investigation By Astrid Krenz; Gerhard Rübel
  5. The Effects of Ownership Structure and Industry Characteristics On Export Performance By Dahai Fu; Yanrui Wu; Yihong Tang
  6. Trade and SPS regulations: The importance of being Earnest? By JOUANJEAN, Marie-Agnès; LE VERNOY, Alexandre
  7. Estimating the Social Welfare Effects of New Zealand Apple Imports By Cook, David C.; Liu, Shuang; Fraser, Rob W.; Siddique, Abu-Baker; Paini, Dean R.
  8. How do firms’ outward FDI strategies relate to their activity at home? Empirical evidence for the UK By Helen Simpson
  9. The Collapse of Global Trade: What a Tangled Web We Weave By Spehar, Ann / AOS
  11. Copenhagen meets Doha: greenhouse gas emission reduction and trade liberalization in Norwegian agriculture By Blandford, David; Gaasland, Ivar; Vardal, Erling
  12. Climate change and trade policy : from mutual destruction to mutual support By Messerlin, Patrick A.
  13. Exports and Property Prices in France: Are They Connected? By Balázs Égert; Rafal Kierzenkowski
  14. From traded to tradable services: an application to French data By M. BARLET; L. CRUSSON; S. DUPUCH; F. PUECH
  15. The Internationalization of Small and Medium Enterprises in Regional and Global Value Chains By Lim, Hank; Kimura, Fukunari

  1. By: Lederman, Daniel; Rodriguez-Clare, Andres; Yi Xu, Daniel
    Abstract: The literature on the correlation between exports and economic development runs deep into the history of economic thought and permeates policy debates. This paper studies the microeconomic structure of export growth in Costa Rica, with special emphasis on the extensive margin of trade, encompassing new exporting firms, new products, and new export markets, as well as the unit values of new versus incumbent products. The data suggest that few new firms survive the test of exporting -- more than 40 percent of firms exit export activities after one year -- and this firm turnover is associated with a steady deterioration of export unit values (prices). Furthermore, most new export products are associated with product switching by incumbent exporting firms. The typical new product introduced by incumbent firms tended to be priced at about 90 percent of the unit values of incumbent products. In contrast, the usual suspected obstacles to export growth, such as the inability of small firms to enter exporting activities or to grow their exports, appear to be important sources of export growth. In fact, the smallest exporting firms experienced the fastest growth in their export values. Some of these results are compared withthose from other countries that have been examined in related literature.
    Keywords: Economic Theory&Research,Markets and Market Access,Airports and Air Services,Microfinance,Tax Law
    Date: 2010–07–01
  2. By: Bojnec, Å tefan; FertÅ, Imre
    Abstract: This paper analyses the impact of the number of the Internet users on food industry trade between developed OECD countries using both panel and cross-sectional data. We find the positive, significant and over time increasing effect of the Internet on food industry exports confirming that the Internet reduces market-specific entry costs for food industry exports. The significant positive effect pertained to the Internet is found in the importing countries. The significant positive effects on food industry exports are found for the countryâs economic size and bilateral common features and proximities. The Internet mitigates the countries proximities, but increased the distance between the countries.
    Keywords: Internet, Distance, International trade, OECD countries, International Development,
    Date: 2010–03–29
  3. By: Gabriele Maria Sada (Cattaneo University (LIUC))
    Abstract: In the last decades an increasing number of countries candidates to host a mega-event. This paper analyze (in the light of Expo Milan will host in 2015) if an exposition impacts in a significant manner on interna-tional trade, justifying countries’ interest in their organization. Based on performed analysis using gravity model, we conclude that a permanent and significant exposition effect exists on host country international trade flows; it involve both an increase of exports and an increase of imports, pointing out a commercial openness of host country; this effect exists also for candidates countries. So, we propose an hypothesis about the nature of exposition impact on international trade: it’s interpretable as a true and proper political and in-stitutional signal with which host country sends a signal to general public of a liberalisation process of its commerce in progress, showing own competences, abilities, means and resources. In the light of results, we point out potentialities and risks of Expo Milan 2015.
    Date: 2010–03
  4. By: Astrid Krenz; Gerhard Rübel
    Abstract: The aim of this study is to empirically investigate the development of Industrial Localization and Countries\' Specialization Patterns in the European Union, to explain the driving forces behind and to find out dynamic tendencies. We extend existing research work by using a broader data set, covering a longer period of time and by applying several econometric methods in order to explain Localization and Specialization. Explanatory variables are derived from Traditional Trade Theory, New Trade Theories and the New Economic Geography. Taking EU-KLEMS data for 14 European countries covering 20 industries over the period from 1970 to 2005 we compute both regional and locational Gini coefficients. There is a clear increase in Industrial Concentration but only a slight increase in Countries\' Specialization in the EU evident over time. Especially, low technology or labor intensive industries experienced the highest increase in Industrial Concentration. New Trade Theory and New Economic Geography can explain both Industrial Concentration and Countries\' Specialization in the EU best. As regards Countries\' Specialization our results indicate that trade costs seem to have declined so much and European liberalization has proceeded so far that dispersion among countries occurs again. We show that it\'s important to consider multicollinearity problems of variables. Furthermore, we test for cointegration between our regression variables. For the EU, results of an error correction modeling framework show that imbalances in European Countries\' Specialization are being set off at a rate of about 68 to 105 percent (according to the regression framework taken) within the next period. New Economic Geography is the best explanatory force within the error correction model. Adjustments rates for Sweden and Italy appear to be much lower than for the EU as a whole. These results might be valuable for understanding agglomeration processes in the EU. Also, as European Integration continues to progress, it is important to know how and how quickly countries will specialize and industries will agglomerate.
    Keywords: New Economic Geography, Concentration, Specialization, European Integration, Cointegration
    JEL: C50 F14 F15
    Date: 2010–07–04
  5. By: Dahai Fu (UWA Business School, The University of Western Australia); Yanrui Wu (UWA Business School, The University of Western Australia); Yihong Tang (School of International Trade and Economics, University of International Business and Economics Beijing)
    Abstract: Ownership structure and industry characteristics as internal and external factors respectively significantly impact the export performance of Chinese manufacturing firms. Three different yet related models, namely, logit, tobit and ordered probit models, that correspond to three different indicators of export performance are considered. It was found that the export performance of Chinese manufacturing firms is related not only to foreign capital involvement but also to the extent of foreign investors’ control. Foreign controlled enterprises are more likely to show better export performance than those controlled by domestic investors. Furthermore, the impact of industry concentration on export performance is unclear, while both industry export-orientation and industry capital intensity have a strong impact on the export performance of Chinese firms.
    Keywords: Export performance; Chinese firms; Ownership; Industry characteristics
    Date: 2010
  6. By: JOUANJEAN, Marie-Agnès; LE VERNOY, Alexandre
    Abstract: There is a pending question regarding the impact of food safety standards promulgated by governments or imposed by buyers from the private sector. Their effects on the capacity for developing countries to access developed countriesâ markets for high value agricultural and food products is a vivid research theme that up-till-now provided mixed results. While some advocates that food safety standards may hamper exporting abilities, others present evidence that they enable competitiveness and act as a pro-poor growth. This paper contributes to this debate. We offer an analysis on how the intensity of trade flows in fruits and vegetables in Central American countries, Dominican Republic and the U.S. respond to both the level of Sanitary and Phytosanitary regulations and to products reputation on the U.S. market subsequent to import detention/refusal. We emphasize the specific case of non-traditional horticultural products introduced in Central American countries in the 70s and 80s under structural adjustment frameworks. To this end, we implement a gravity model of bilateral trade flows to (1) identify the effect through time of food safety standards on exports from Central America to the US, and (2) measure the degree of adaptation to detention/refusal what we define as resilience of the supply chains. First (and highly preliminary) results show that there is indeed a negative relationship between unit prices and reputation on export markets.
    Keywords: SPS â Agricultural Trade â Reputation â Alerts, International Relations/Trade, F13, O13, Q17,
    Date: 2010–03–29
  7. By: Cook, David C.; Liu, Shuang; Fraser, Rob W.; Siddique, Abu-Baker; Paini, Dean R.
    Abstract: This paper provides a demonstration of how a comprehensive economic framework, which takes into account both the gains from trade and the costs of invasive species outbreaks, can inform decision-makers when making quarantine decisions. Using the theoretical framework developed in Cook and Fraser (2008) an empirical estimation is made of the economic welfare consequences for Australia of allowing quarantine-restricted trade in New Zealand apples to take place. The results suggest the returns to Australian society from importing New Zealand apples are likely to be negative. The price differential between the landed product with SPS measures in place and the autarkic price is insufficient to outweigh the increase in expected damage resulting from increased fire blight risk. As a consequence, this empirical analysis suggests the net benefits created by opening up this trade are marginal.
    Keywords: International Relations/Trade,
    Date: 2010–03–29
  8. By: Helen Simpson
    Abstract: This paper investigates the structure of firms’ outward FDI and their behaviour at home in both manufacturing and business services sectors. UK multinationals with overseas affiliates in low-wage economies invest simultaneously in a large number of high-wage countries. I find that more productive multinationals operate in a greater number of countries, consistent with their being able to bear the fixed costs of investing in numerous locations abroad. UK manufacturing plants owned by large-scale, low-wage economy outward investors display lower domestic employment growth, in particular in low-skill activities, consistent with low-wage economy labour substituting for low-skill labour in the UK.
    Keywords: multinational enterprises, skills, globalisation
    JEL: F2
    Date: 2010–05
  9. By: Spehar, Ann / AOS
    Abstract: A unique feature of the financial crisis is the unprecedented collapse in global world trade. The objective of this paper is to explain some of that collapse as a move toward protectionism triggered not by nationalistic interests but by ‘competing’ objectives among trading partners from the Mundell-Fleming Trilemma. Even with the best of intentions, efforts toward internal re-balancing necessarily implies harming your trading partner unintentionally if they should be using conflicting policy objectives of the Trilemma. National interests are at odds between two such countries and their policy prescriptions counteract, and paralyze re balancing and coordination efforts between nations. Policymakers may be forced into protectionists’ stances in an effort to counteract the internal re-balancing efforts of their neighbors.
    Keywords: International Trade; Financial Crisis; Global Trade Collapse
    JEL: F0 E12 F59 F51 F43 F42 F15 E58 F02 F01 F41 E61
    Date: 2010–07–08
  10. By: Feix, Rodrigo Daniel; Miranda, Sílvia Helena G. de
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade,
    Date: 2010
  11. By: Blandford, David; Gaasland, Ivar; Vardal, Erling
    Abstract: As a result of substantial government support, Norway is more or less self-sufficient in its main agricultural products. This contributes to both trade distortions and higher greenhouse gas (GHG) emissions. In multinational negotiations separate efforts are being made to liberalize trade (through the World Trade Organization) and to reduce global GHG emissions (through the United Nations). Using a model of Norwegian agriculture, we explore interconnections between trade liberalization and GHG emission reductions. We show that the Doha proposals would involve no major cut in either agricultural production or GHG emissions due to weakness in the disciplines on trade distorting support. We contrast further trade liberalization and the use of a carbon tax to achieve emission reductions. Trade liberalization involves relatively large impacts on agricultural activity. Trade distortions decrease, and, economic welfare increases substantially due to lower production. For a high cost country like Norway, this indicates that the GHG abatement cost is negative in the sector if no value is attributed to agricultural activity beyond the world market price of food. A more targeted policy to reduce GHG emissions is to use a carbon tax. Compared to the trade liberalization case, both production and land use can be kept at a higher level with only a modest decrease in economic welfare. The side-effect is, however, higher trade distortions.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,
    Date: 2010
  12. By: Messerlin, Patrick A.
    Abstract: Contrary to what is still often believed, the climate and trade communities have a lot in common: a common problem (a global"public good"), common foes (vested interests using protection for slowing down climate change policies), and common friends (firms delivering goods, services, and equipment that are both cleaner and cheaper). They have thus many reasons to buttress each other. The climate community would enormously benefit from adopting the principle of"national treatment,"which would legitimize and discipline the use of carbon border tax adjustment and the principle of"most-favored nation,"which would ban carbon tariffs. The main effect of this would be to fuel a dual world economy of clean countries trading between themselves and dirty countries trading between themselves at a great cost for climate change. And the trade community would enormously benefit from a climate community capable of designing instruments that would support the adjustment efforts to be made by carbon-intensive firms much better than instruments such as antidumping or safeguards, which have proved to be ineffective and perverse. That said, implementing these principles will be difficult. The paper focuses on two key problems. First, the way carbon border taxes are defined has a huge impact on the joint outcome from climate change, trade, and development perspectives. Second, the multilateral climate change regime could easily become too complex to be manageable. Focusing on carbon-intensive sectors and building"clusters"of production processes considered as having"like carbon-intensity"are the two main ways for keeping the regime manageable. Developing them in a multilateral framework would make them more transparent and unbiased.
    Keywords: Climate Change Mitigation and Green House Gases,Climate Change Economics,Emerging Markets,Carbon Policy and Trading,Debt Markets
    Date: 2010–07–01
  13. By: Balázs Égert; Rafal Kierzenkowski
    Abstract: France has seen a marked deterioration in its export performance in the last 10 years or so. Previous empirical research pointed out that weak export performance was due to i) vigorous domestic demand; ii) lower mark-ups due to head-to-head competition with Germany; iii) low non-price competitiveness of French export goods; iv) offshoring of entire production processes (especially in the automobile sector); and v) difficulties of French manufacturing firms to reach critical size for exporting. This paper adds an additional explanation to this list. We argue that resource reallocation from the exporting to the construction sector triggered by fast rising property prices hindered France to meet world export demand vis-à-vis its products. Our econometric analysis shows that the resource reallocation argument helps explain French export performance between the early 2000s and 2007, unexplained by traditional models. This result is confirmed for a set of OECD countries that experienced a marked decline in their export performance and sustained real-estate boom after 2000.<P>Les exportations et les prix immobiliers en France : Sont-ils connectés ?<BR>La France a connu une détérioration marquée de sa performance à l’exportation au cours des dix dernières années. Les travaux empiriques antérieurs ont mis en évidence qu’une faible performance à l’exportation était due à i) une demande intérieure vigoureuse ; ii) des marges plus faibles en raison d’une concurrence directe avec l’Allemagne ; iii) une faible compétitivité hors prix des biens d’exportation français ; iv) le transfert de la totalité du processus de production à l’étranger (en particulier dans le secteur automobile) ; et v) les difficultés des entreprises manufacturières françaises pour atteindre une taille critique à l’exportation. Cet article ajoute une explication supplémentaire à cette liste. Nous soutenons que la réallocation des ressources du secteur exportateur vers le secteur de la construction déclenchée par une hausse rapide des prix immobiliers a empêchée la France de satisfaire la demande d’exportation mondiale adressée à ses produits. Notre analyse économétrique montre que l’argument de réallocation de ressources aide à expliquer la performance à l’exportation française entre le début des années 2000 et 2007, inexpliquée par les modélisations traditionnelles. Ce résultat est confirmé pour plusieurs pays de l’OCDE, qui ont connu un déclin de leur performance à l’exportation et un boom immobilier soutenu après 2000.
    Keywords: OECD, France, exports, house prices, construction, competitiveness, export performance, resource allocation, OCDE, France, construction, exportations, compétitivité, prix immobiliers, performance à l'exportation, allocation des ressources
    JEL: F10 F14 O14 O52
    Date: 2010–04–19
  14. By: M. BARLET (Drees); L. CRUSSON (Dares); S. DUPUCH (CEPN Université Paris 13); F. PUECH (LET Université de Lyon,CNRS,ENTPE)
    Abstract: This paper is a first attempt, for metropolitan France, to identify the service activities that are internationally traded and of those that could become so, i.e. those that can be technically produced and consumed in different places. Our estimates show that only half of service activities are internationally traded currently. But thirty out of the thirty-six activities covered by our study appear as potentially tradable. However, even if the number of potentially tradable service activities is high, non-tradable activities still represent one third of total employment for metropolitan France.
    Keywords: Services, international trade, outsourcing
    JEL: F14 F16 R12
    Date: 2010
  15. By: Lim, Hank (Asian Development Bank Institute); Kimura, Fukunari (Asian Development Bank Institute)
    Abstract: <p>Production networks and the regional division of labor have been established in East Asia resulting in massive vertical intra-industry trade in parts and components within the region. This phenomenon is known as cross-border production sharing or the fragmentation of production processes into many stages across different countries. New development strategies claim that participation in international production and distribution networks is the key to accelerating economic development in the era of globalization. This process suggests that vertical input-output linkages between local firms and multinational corporations are the most powerful channels to accelerate technology transfers and spillovers. <p>Given the trends of globalization and economic integration in East Asia, there is significant potential for the small and medium enterprise (SME) sector to increase its contribution to the region's development through greater participation in global value chains. However, multiple market failures exist with regard to the development of SMEs and local entrepreneurship. These risks can be mitigated by proper policy measures such as strengthening technological and human resource capabilities through better networking and facilitating access to financing for SMEs. Despite many distortions and inefficiencies in implementing regional economic integration schemes in East Asia, there are many cumulative positive effects contributing to the emerging trend internationalization of SMEs in the region. This process can be significantly strengthened by creating a positive business environment through the standardization of products and services, rules and regulations, and a seamless market infrastructure in the region.
    Keywords: internationalization SMEs; regional development policies; regional market failure
    JEL: D20
    Date: 2010–07–29

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