nep-int New Economics Papers
on International Trade
Issue of 2011‒03‒05
27 papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Firms' Pattern of Trade and Access to Finance By Jože P. Damijan; Črt Kostevc;
  2. Distorted Trade Barriers By Matthew T Cole
  3. Export Strategies of New Exporters: Why is Export Expansion Along the Extensive Margins so Sluggish? By Jože P. Damijan; Črt Kostevc; Sašo Polanec
  4. Improving Import-Export Procedures and Processes in Sri Lanka By Suwendrani Jayaratne; Deshal de Mel; Dharshani Premaratne
  5. Trade Elasticities: A Final Report for the European Commission By Jean Imbs; Isabelle Mejean
  6. Trade Facilitaion in Asia and the Pacific: Which Policies and Measures affect Trade Costs the Most? By Yann Duval
  7. The Effect of European Accession Prospects on Foreign Direct Investment Flows By Hakan Gungor; Ayla Ogus Binatli
  8. Application of factor decomposition techniques to vertical specialisation measurements By Meng, Bo; Yamano, Norihiko; Webb, Colin
  9. Facilitating Trade through Simplification of Trade Processes and Procedures in Bangladesh By Syed Saifuddin Hossain; Md. Tariqur Rahman
  10. Skill distribution and comparative advantage: a comparison of China and India By Asuyama, Yoko
  11. The relationship between trade credit, bank credit and financial structure : from firm-level non-linearities to financial development heterogeneity. A study on MENA firm-level data. By Jézabel Couppey-Soubeyran; Jérôme Héricourt
  12. Private Requirements by European Retailers: Impact on French Exporters By Latouche, Karine; Chevassus-Lozza, Emanuelle; Persillet, Vanessa; Harel, Monique
  13. Do Exporters Share Part of their Rents with their Employees? Evidence from Austrian Manufacturing Firms By Robert Stehrer; Sandra M. Leitner
  14. Terms of Trade and Output Fluctuations in Colombia By Gonzalo Hernández
  15. Remittances: Dutch disease or export-led growth? By Ghada Fayad
  16. Export and Innovation in SMEs and Large Firms: The main determinants By Ana Rita Gomes; Horácio Crespo Faustino
  17. India's trade with USA and her trade balance: An empirical analysis By Tiwari, Aviral; Shahbaz, Muhammad
  18. Is Emission Trading Beneficial? By ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
  19. Assessing Regional Trading Arrangements in the Asia-Pacific By John Gilbert; Robert Scollay; Bijit Bora
  20. Assessing the Impact of Recent Trade Policy Changes in the Banana Market under Alternative Market Structures By Anania, Giovanni; Scoppola, Margherita
  21. Outsourcing with Heterogeneous Firms By Sasan Bakhtiari
  22. Measuring the impact of trade policy reform in Ireland: A disaggregated analysis of household impacts By Miller, Ana Corina; Matthews, Alan; Boysen, Ole; Donnellan, Trevor; O'Donoghue, Cathal
  23. Location Choice of Multinational Enterprises in China: Comparison between Japan and Taiwan By Kuo-I CHANG; Kazunobu HAYAKAWA; Toshiyuki MATSUURA
  24. Global emission ceiling versus international cap and trade: What is the most efficient system when countries act non-cooperatively? By Jacqueline Morgan; Fabien Prieur
  25. Exchange rate pass-through: New evidence from German micro data By Berner, Eike
  26. Migration, Skills and Productivity By Michael Landesmann; Robert Stehrer; Robert Hierländer; Peter Huber; Anna Iara; Klaus Nowotny; Mary O'Mahony; Fei Peng; Catherine Robinson
  27. Foreign Investments and Productivity Evidence from European Regions By Davide Castellani; Fabio Pieri

  1. By: Jože P. Damijan; Črt Kostevc;
    Abstract: This paper summarizes recent advances in the empirical research on firms' learning from trade participation and the role of finance in both starting to trade, surviving in export markets as well as expanding along the intensive and extensive trade margins. It highlights the increased importance of imports, which impacts at firms' performance primarily through relaxed technological constraints by increasing firms' scope of inputs and by lowering their input price index. In addition, imports are shown to boost firms' innovation and introduction of new products, which facilitates firms' decisions to start exporting. Another important aspect that has been highlighted is the essential role of finance in furthering firms' survival and expansion in export markets.
    Keywords: exports, learning-by-exports, export expansion, financial constraints, credit crunch
    JEL: D24 F12 F14
    Date: 2011
  2. By: Matthew T Cole (University College Dublin)
    Abstract: Since firm heterogeneity has been introduced into international trade models, the importance of firm entry and exit (the extensive margin) has been highlighted. In fact, Chaney (2008) illustrates how accounting for this extensive margin and heterogenous firms alters the standard gravity equation; thereby reversing the previously predicted effect the elasticity of substitution has on the elasticity of trade flows. Furthermore, Cole (forthcoming) points out that ad valorem tariffs affect the extensive margin quite differently than the commonly used iceberg transport cost. In this paper, I show that the elasticity of trade flows with respect to tariffs is more elastic than that of iceberg transport costs. Thus, elasticity estimates derived from variables such as distance may underestimate the effect caused by a change in tariffs.
    Keywords: Intra-industry Trade; Gravity; Firm heterogeneity; Monopolistic competition
    Date: 2011–02–02
  3. By: Jože P. Damijan; Črt Kostevc; Sašo Polanec
    Abstract: Recent theoretical models of international trade with heterogeneous firms feature instan- taneous adjustment of margins of exports to firm and market characteristics, and equality of distributions of margins of exports between new and incumbent exporters. By using the pop- ulation of Slovenian firms and their transaction-level trade data we document large differences between these firms that cannot be attributed to the differences in total factor productivity. This paper contributes to the field by demonstrating that access to financing, measured by eq- uity, debt-to-asset ratio and access to internal credit markets within firm groups, may account for an important part of observed differences in the extensive margins of exports between new and incumbent exporters.
    Keywords: exports, multi-product …rms, …rm heterogeneity, …nancial constraints
    JEL: D24 F12 F14
    Date: 2011
  4. By: Suwendrani Jayaratne; Deshal de Mel; Dharshani Premaratne (Institute for Policy Studies)
    Abstract: This study examines the trading procedures and processes in detail,for two import and two export products of Sri Lanka- tea, rubber tyres, textiles and motor vehicles. Tea exports to Japan, tyre exports to India, motor vehicle imports from Japan and textile imports from India are mapped through a business process analysis
    Keywords: Trade Facilication, Business Process Analysis, import-export procedures and processes
    JEL: F1
    Date: 2011–01
  5. By: Jean Imbs; Isabelle Mejean
    Abstract: In a demand system with conventional CES preferences, the price elasticitites of aggregate trade flows are weighted averages of sector-specific elasticities of substitution. We describe a methodology that can be used to estimate country-specific values for the price elasticities of aggregate imports and exports. We first use disaggregated trade data to compute structural estimates of international substitutability for a large cross section of countries. We aggregate up the estimates using model-implied, country-specific weights. We obtain structural estimates of the price elasticities of aggregate exports and imports for more than 30 countries, including most developed and developing economies.
    JEL: F32 F02 F15 F41
    Date: 2010–12
  6. By: Yann Duval (Trade and Investmetn Division, United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: This paper presents findings from an initial analysis of new non-tariff trade cost estimates and their determinants, based on a bilateral database of comprehensive trade cost maintained by ESCAP. Although trade costs consist for the most part of non-tariff trade costs, tariff cuts accounted for a very significant portion of trade costs reduction between 1996-99 and 2004-07.
    Keywords: Trade Cost, Trade Facilitation
    JEL: F1
    Date: 2011–01
  7. By: Hakan Gungor (Department of Economics, University of Verona); Ayla Ogus Binatli (Department of Economics, Izmir University of Economics)
    Abstract: The amount of FDI is increasing than any other international transactions during the last two decades. While countries remove barriers and implement policies to attract FDI inflows, the volume of foreign trade and investment increased .The objective of this paper is to enlighten the impact of EU accession of CEEC countries and Turkey on FDI flows into these countries. We perform Arrenalo-Bond - GMM model for the period of 1990-2009 for Poland, Hungary, Czech Republic, Estonia, Slovakia, Romania, Bulgaria, Turkey Croatia, Macedonia, and Ukraine. The empirical results suggest that as agglomeration effects and trade openness are significant determinants of MNCs’ activity during the period, traditional determinants, risk factors, labor cost, and market size are insignificant. In addition, the effect of EU accession prospects is found to be positive and significant.
    Keywords: European Union, FDI, Turkey, Accession, Candidacy
    JEL: F23
    Date: 2010–10
  8. By: Meng, Bo; Yamano, Norihiko; Webb, Colin
    Abstract: The increasing importance of vertical specialisation (VS) trade has been a notable feature of rapid economic globalisation and regional integration. In an attempt to understand countries’ depth of participation in global production chains, many Input-Output based VS indicators have been developed. However, most of them focus on showing the overall magnitude of a country’s VS trade, rather than explaining the roles that specific sectors or products play in VS trade and what factors make the VS change over time. Changes in vertical specialisation indicators are, in fact, determined by mixed and complex factors such as import substitution ratios, types of exported goods and domestic production networks. In this paper, decomposition techniques are applied to VS measurement based on the OECD Input-Output database. The decomposition results not only help us understand the structure of VS at detailed sector and product levels, but also show us the contributions of trade dependency, industrial structures of foreign trade and domestic production system to a country’s vertical specialisation trade.
    Keywords: Developing countries, Developed countries, International trade, Input-output tables, Vertical specialisation, Factor decomposition, Input-output
    JEL: F14
    Date: 2011–02
  9. By: Syed Saifuddin Hossain; Md. Tariqur Rahman (Centre for Policy Dialogue)
    Abstract: This study analyses the business procedures involved in a typical trade transaction for selected products namely export of ready made garments (RMG) and shrimp and import of cotton fabrics and sugar. The broad objective has been to capture the cost, documentation and time component of such trade transactions with a view to identify areas for further improvement.
    Keywords: Trade Facilication, Business Process Analysis, import-export procedures and processes
    JEL: F1
    Date: 2011–01
  10. By: Asuyama, Yoko
    Abstract: This paper empirically examines the different comparative advantages of two emerging economic giants, China and India, in relation to the different skill distribution patterns in each country. By utilizing industry export data on China and India from 1983 to 2000, we find that a country with a greater dispersion of skills (i.e., India, especially in the earlier years) has higher exports in industries with shorter production chains, whereas a country with a more equal dispersion of skills (i.e., China, especially in the later years) is found to have higher exports in industries with longer production chains. The causal relationship is fairly robust across different specifications. This empirical evidence supports our assumption that the likely mechanism for these results is the negative impact of low-skilled workers on input quality, which accumulates and becomes larger as the length of production chains and the proportion of low-skilled workers in the economy increase.
    Keywords: China, India, Manufacturing industries, Manufactures, Labor productivity, Labor conditions, International competition, Exports, Comparative advantage, Production chains, Sequential production, Skill distribution
    JEL: F14 F16 J2
    Date: 2011–02
  11. By: Jézabel Couppey-Soubeyran (Centre d'Economie de la Sorbonne); Jérôme Héricourt (EQUIPPE-Université de Lille et Centre d'Economie de la Sorbonne)
    Abstract: Using a database of more than 1,100 firms in the MENA region, this article looks at the determinants of demand for trade credit, particularly access to bank credit, size, age and the quality of the firm's financial structure. We show that the difficulty of gaining acces to bank credit positively influences the use of trade credit, and thus demonstrate the substitutability of bank credit and trade credit. Besides, firm's non-financial characteristics, namely age and size do not influence similarly the probability of having trade credit and the volume of trade credit raised. Additional investigations strongly support the existence of non-linearities in the relationship between trade credit and firm's financial structure and size. Finally, financial development emerges as a key feature of the demand for trade credit. Indeed, we show that most firm-level characteristics lose their influence on trade credit when financial development is high enough. With financial development, trade credit gets primarily driven by trade relationships and does not appear any more as a palliative solution when bank credit access is difficult.
    Keywords: Trade credit, bank credit, financial constraints, financial development.
    JEL: F4 G2 O16 O55
    Date: 2011–02
  12. By: Latouche, Karine; Chevassus-Lozza, Emanuelle; Persillet, Vanessa; Harel, Monique
    Abstract: Based on recent development of international economics, this paper aims to evaluate in what extent private standards impact trade, and more precisely trade of French agriâfood firms. Our paper explores an original "handmade" database identifying French agriâfood firms which are certified with the International Food Standard â IFSâ and/or the British Retail Consortium standard â BRC. From this dataset, one can analyse the characteristics and the export behaviour of certified firms compared to that of the non certified ones. First we look at the productivity of the firms; second, we look at export behaviour of the firms: does a certification such as BRC imply export orientation of the firm? Then we propose the estimation of Chaneyâs model (2008) to test for the impact of certification on trade costs faced by certified firms to access EU markets. Our preliminary results show that certification clearly impacts French firms. In the case of BRC certification, we especially show that French certified firms significantly decrease their fixed costs to access EU markets.
    Keywords: Private standards, IFS/BRC, trade costs, productivity, Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods,
    Date: 2010–10
  13. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner
    Abstract: This paper looks at the influence globalization exerts on wage negotiation processes and outcomes. Specifically, it establishes whether, compared to their purely domestically oriented counterparts, exporters share a higher fraction of the rents they generate with their employees. The analysis uses a panel of Austrian manufacturing firms between 2002 and 2006 and demonstrates that, in general, Austrian exporters do not share a higher part of their rents with their employees. Moreover, the analysis also takes into account that exporters are a very heterogeneous group, broadly differing in terms of the degree to which they trade internationally or to which they earn rents from their export activities. Against that backdrop, it determines whether rent-sharing systematically differs by the degree of internationalization of exporters. The results emphasize that particularly the most export-oriented firms are able to cut down on rent-sharing which corroborates the idea that exporters can credibly and effectively exploit their threat-points of either outsourcing or offshoring part of their production which induces employees to concede to more moderate wage changes so as to avert the potential loss of employment.
    Keywords: wage determination, rent-sharing, internationalization, firm-level analysis
    JEL: F16 J31 L6
    Date: 2011–02
  14. By: Gonzalo Hernández (University of Massachusetts Amherst)
    Abstract: This paper explores the importance of the terms of trade to explain output fluctuations in Colombia, a developing country where almost 60% of the exports correspond to four commodities: oil (32%), coal (17%), coffee (5%) and nickel (2%), and where 80% of its imports are intermediate and capital goods. This research is motivated fundamentally by the particular importance of short run fluctuations in developing economies, the fact that the Colombian terms of trade are procyclical and the current debate in Colombia about eventual economic policies toward sterilization of the effects of changes in commodities prices in a context of an appreciation of the nominal exchange rate. The study includes a time series analysis, for the period 1994-2009 with quarterly data, which follows the Box-Jenkins methodology for an ARMAX model. I find robust evidence that indicates that the quarterly growth of GDP is positively and significantly affected by variations in the terms of trade, which explain 1/3 of GDP growth variability. This result is consistent with the possible outcome of the three-goods model for an open small economy in which the terms of trade can be the source of the aggregate output fluctuations. JEL Categories:
    Date: 2011–02
  15. By: Ghada Fayad
    Abstract: The literature on remittances and growth has thus far established a positive link between remittances and overall economic growth in recipient countries using standard growth regressions.In this paper, we identify the main transmission channel through which remittance transfers seem to exert their growth-enhancing effects: the 'export-led growth' channel. We do so by using a methodology that exploits both cross-country and within-country cross-industry variation in data averaged over the 1980s and the 1990s decades and correcting for the endogeneity of remittances by reverting to a set of external instruments, most of which we construct for this purpose. For both decades, we find that remittances are conducive to the relative growth of exporting industries within the manufacturing sector in a large set of remittance recipient countries. We also identify an alternative channel through which remittances affect growth: the financial development channel, where remittances are found to favor growth in industries that are less in need of external financing. In this paper, we give special attention to the potential migrant network complementarity effect with international trade and show in a number of ways that such background e¤ect is not driving our results. Instead, our findings strongly suggest an investment channel through which remittances as financial transfers are, either directly as capital investment transfers or indirectly through their economy-wide investment-enhancing effects,boosting export sector growth in recipient economies.
    Keywords: Remittances, manufacturing, export-led growth, Dutch disease, migrant networks
    JEL: F2 F4 O1 Q3
    Date: 2011
  16. By: Ana Rita Gomes; Horácio Crespo Faustino
    Abstract: This study analyses the main determinants of exports and research and development (R&D) expenses of small and medium enterprises (SME) and large companies operating in Portugal during the period 2004- 2008. From a sample of 200 SMEs and 30 major exporting companies, the study uses a panel data analysis and fixed-effects and random-effects estimators to estimate the effects on exports and on R & D. Regarding exports, the study found a positive effect in terms of increased productivity and R & D in both SMEs and large companies. The results also suggest that SMEs that are owned by foreign enterprises export more than national SMEs. In relation to the determinants of spending on R & D, the study concludes that the increase in equity and net income has a positive effect on R & D spending in large companies, while in SMEs, increased expenditure on R & D is a consequence of increasing exports, whereas the increase in net income has a negative effect on R& D
    Keywords: Exports, R & D, Enterprise, SME, Panel Data, Portugal
    Date: 2011–01
  17. By: Tiwari, Aviral; Shahbaz, Muhammad
    Abstract: This study explores the affect of India's exchange rate with US on Indian trade balance over the period of 1965-2008. We use ARDL bounds testing approach to cointegration and for dynamic analysis IRFs and VDs. For dynamic analysis impulse response functions and variance decompositions are used. We find cointegrating relationship among the tested variable, positive impact of depreciation in Indian rupee against US dollar and trade policies in previous period on Indian trade balance while an negative impact of money supply and economic growth on trade balance in short span of time. Moreover, J-curve is validated in case of India with US.
    Keywords: ARDL; VDs; IRFs; exchange rate; J-curve; India-US trade relationship
    JEL: C13 C22
    Date: 2011–01–04
  18. By: ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
    Abstract: We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding Southfs production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries.
    Date: 2011–02
  19. By: John Gilbert (Department of Economics and Finance, Utah State University); Robert Scollay; Bijit Bora
    Abstract: Using both a gravity model to consider the natural trading bloc hypothesis, and simulation using a CGE model to make welfare estimates, we examine the potential effect of a subset of the new RTA proposal in the APEC region. In broad terms the two approaches appear consistent in their ability to identify RTAs that are beneficial in terms of the welfare of the proposed members. However, comparison of the two alternative approaches does not lead to support for the hypothesis that natural blocs are less likely to be damaging to those economies that remain on the outside of the new proposals.
    Keywords: Trade policy, Asia, CGE
    JEL: F13 F15 C21 C68
    Date: 2011–01–20
  20. By: Anania, Giovanni; Scoppola, Margherita
    Abstract: The paper focuses on the importance of the assumptions made about market structure and firm behaviors in empirical trade policy analysis. It does it with reference to the most recent changes in the EU import regime for bananas, namely the Economic Partnership Agreements and the December 2009 WTO agreement on bananas. The paperâs contribution to the literature on the issues addressed is threefold: it develops two original models which incorporate imperfectly competitive market structures in a spatial modeling framework; it provides an assessment of the degree of market power in international banana trade and, finally, it assesses how the analysis of the implications of the most recent changes in the EU import regimes for bananas is affected by the assumptions made regarding the prevailing market structure.
    Keywords: Bananas, Economic Partnership Agreements, WTO, Agricultural and Food Policy, International Relations/Trade, Q17, Q18, F13,
    Date: 2011–02–10
  21. By: Sasan Bakhtiari (School of Economics, The University of New South Wales)
    Abstract: A general framework for the study of outsourcing is introduced that incorporates dynamics and heterogeneity among both upstream and downstream producers to mimic an exit approach (Hirschman, 1970) to building vertical relations. The environment is one of search friction and incomplete contracts, where final-good producers require a specialized input and, upon matching with a supplier, can only contract the quantity of input. The results imply an assorted matching between producers and suppliers, so that more productive producers pair with more productive suppliers in the long run. It is shown that most efficient producers have some propensity to outsource, but only when there is a thick enough density of highly productive suppliers. Average employment in this model might increase or decrease with outsourcing, which is an observed pattern in the data. Some other diversities in plant-level behavior are also present in the results.
    Keywords: Outsourcing; Productivity; Heterogeneity; Search Friction; Incomplete Contracts; Exit Strategy
    JEL: D21 D23 L21 L24
    Date: 2011–01
  22. By: Miller, Ana Corina; Matthews, Alan; Boysen, Ole; Donnellan, Trevor; O'Donoghue, Cathal
    Abstract: The purpose of this paper is to assess the impacts of further trade liberalisation on the agricultural sector in Ireland. In addition to evaluating the aggregate impacts on agricultural production as well as the spill-over effect of this on the non-agricultural sector and for overall Irish GDP, we evaluate the effects for different types of households. In order to capture economy-wide impacts of the policy reform, a CGE model was formulated and implemented using a social accounting matrix constructed for Ireland for the year 2005. Household effects are captured using representative households. The simulation results suggest a positive impact on the Irish economy as well as on the representative households. Many agricultural sectors contract in the process but a more efficient reallocation of resources into manufacturing and services sectors more than compensates those losses.
    Keywords: Trade policy, CAP reform, CGE model, Macro and welfare effects, Agricultural and Food Policy, International Relations/Trade, F13, D58, I3,
    Date: 2011–02–10
  23. By: Kuo-I CHANG (Department of Applied Economics, National Chung Hsing University, Taiwan); Kazunobu HAYAKAWA (Inter-disciplinary Studies Center, Institute of Developing Economies, Japan); Toshiyuki MATSUURA (Institute of Economic and Industrial Studies, Keio University,Japan)
    Abstract: This paper explores the location choice of MNEs in China, shedding special light on the role of agglomeration of same-nationality firms. In particular, we examine how its role differs according to investors’ productivity. Furthermore, we compare the location choice of Japanese and Taiwanese MNEs in China, because Taiwanese MNEs are expected to experience less uncertainty in investing in China than Japanese MNEs, due to Taiwan’s linguistic and cultural advantages in China. We find that, less productive Japanese firms prefer to locate close to larger same-nationality agglomerations, there are no differences in location according to firms’ productivity in the case of Taiwanese firms.
    Date: 2011–02–01
  24. By: Jacqueline Morgan (Università di Napoli Federico II and CSEf); Fabien Prieur (LAMETA, Université Montpellier I and INRA)
    Abstract: We model climate change negotiations as a two-stage game. In the first stage, players have to agree on a global emission cap (GEC). In the second stage, they non cooperatively choose either their emission level or their emission quota, depending on whether emission trading is allowed, under the cap that potentially binds them together. When the cap is non binding, there exists a unique Nash equilibrium. When the emission cap is binding, among all the coupled constraints Nash equilibria (solutions of an equivalent quasi-variational inequality), we select a normalized equilibrium by solving a variational inequality which has a unique solution. In both cases (with or without emission trading), we can show that there exists a non-empty range of values for which setting a binding cap improves all players’ payoff. We can also identify a non empty set of values, for the global cap, such that the GEC system alone allows the world economy to reach a level of aggregate payoff (respectively of aggregate emissions) higher than (respectively lower than) the level resulting from the international cap and trade (ITC) system alone. In other words, from a global perspective, the GEC outperforms the ITC system.
    Keywords: climate change, international cap and trade system, national emission quotas, global emission cap, normalized equilibria, variational and quasi-variational inequalities.
    JEL: Q28 C72
    Date: 2011–02–21
  25. By: Berner, Eike
    Abstract: This paper examines exchange rate pass-through into German import unit values over the last 20 years. I find incomplete pass-through to be the predominant characteristic for German imports with an average rate of 42% over three months. This result holds when considering monthly 8-digit data, the most disaggregated German import data available. Furthermore, I distinguish 16 German trading partners and estimate substantial cross-country differences in the pass-through to import unit values. Imports coming from European countries generally exhibit statistically zero pass-through. By contrast, non-European trading partners are characterized by statistically significant incomplete pass-through rates. I also study whether there are differences in the pass-through rates for appreciations and depreciations, as well as for small and large exchange rate shocks. Moreover, I test for a negative correlation between the goods' quality and its pass-through rate. --
    Keywords: exchange rate,pass-through,import prices,Germany
    JEL: F42 F31 F14
    Date: 2011
  26. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Robert Hierländer; Peter Huber; Anna Iara; Klaus Nowotny; Mary O'Mahony; Fei Peng; Catherine Robinson
    Abstract: The literature on international migration has repeatedly emphasized that the extent and structure of migration has an important impact on the competitiveness of regions and countries. This report provides an overview of the extent and the potential effects of high-skill migration to the EU27. It shows how many high-skilled migrants live in the EU, where these migrants come from, and how the European Union is positioned in the international competition for talent. Second, we examine how high-skilled migrants fare in European labour markets. Finally we address the issue of the effects of high-skill migration on multifactor productivity, gross value added and GDP per capita growth as well as patenting activities at the sectoral and regional levels. We find that - despite substantial heterogeneity among individual EU countries - high-skilled foreign-born are an important source for high-skilled labour in the EU27. There was some evidence that - on average - EU OECD economies (EU) had a lower share of highly qualified migrants than the (arithmetic) average of the (high migration) non-EU OECD economies. However, our results also suggest that this increasing selectivity of immigration regimes is countered by a relatively low qualification structure of short-term migrants in the EU. A second important policy relevant finding of this study is that high-skilled migrants in the EU face a number of challenges when entering the European labour market, that make them distinct from other migrant groups such as less skilled migrants. In particular the high-skilled migrants - in contrast to less skilled migrants - have lower labour market participation rates, higher unemployment rates and lower employment rates than comparable natives and face substantially higher risks of being employed in jobs that do not fit their skill structure. Our analysis regarding the impact of migration and of high-skilled migration in particular on sectoral productivity and gross value added (levels and growth) yielded a number of interesting results though still being preliminary. Particularly interesting was the difference of the impact of the share of migrants in levels and growth specifications, as well as the importance of a break-down by different groups of migrants (from EU and RoW). There was also a relatively robust result of a positive impact of the share of high-skill migrants and of an interactive effect of high-skill migrant share and ICT technology. As regards the analysis of migrants and regional growth and regional technological development (proxied by patents per capita) we found a positive relationship between the share of high-skilled employed persons and of high-skilled migrants and the growth rate of regional GDP per capita.
    Keywords: migration patterns, high-skill migration, job mismatch, productivity effects
    JEL: J61 I21 J11
    Date: 2010–11
  27. By: Davide Castellani; Fabio Pieri
    Abstract: Differences in productivity across regions have been mainly attributed to agglomeration economies, technology and human capital, while almost no evidence has been provided on the role of internationalization. In this paper we build unique measures of outward and inward foreign direct investment (FDI) counts at the NUTS 2 level and we assess the relationship between regional productivity and foreign investments in Europe. Regions with larger outflows of foreign investments show higher productivity growth, but this correlation fades down with the number of investments and eventually becomes negative in regions with very high outward orientation. Inward investments are also positively associated with regional productivity growth, but only above a certain threshold. Results are robust to the introduction of a number of regional characteristics, to the control for endogeneity of foreign investments, and for spatial dependence.
    Keywords: Regional productivity, foreign investments, Europe, spatial econometric models, instrumental variables.
    JEL: C23 F23 O47 O52 R11
    Date: 2011–01–01

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