nep-int New Economics Papers
on International Trade
Issue of 2011‒08‒15
thirteen papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. South Africa and Chile: Agricultural Trade Relationships By Nyhodo, Bonani; Nakana, Elvis; Phahlane, Heidi; Kotze, Louise
  3. Decomposing the great trade collapse : products, prices, and quantities in the 2008-2009 crisis By Haddad, Mona; Harrison, Ann; Hausman, Catherine
  4. Impacts of EU Accession on Hungarian Primary and Processed Agricultural Trade By Jambor, Attila
  5. Trade Liberalization and Growth: Plant-Level Evidence from Switzerland By Bühler, Stefan; Helm, Marco; Lechner, Michael
  6. Exporting wage premium in the exporting sector: evidence from manufacturing firms in China By Fu, Dahai; Wu, Yanrui
  7. Recent perspectives on trade and inequality By Harrison, Ann; McLaren, John; McMillan, Margaret
  8. The Determinants of Agricultural Export Growth in South Africa By Idsardi, E.
  9. Estimating the impact of trade and offshoring on American workers using the current population surveys By Ebenstein, Avraham; Harrison, Ann; McMillan, Margaret; Phillips, Shannon
  10. The impact of trade liberalisation on South African agricultural productivity By Teweldemedhin, M.Y.; van Schalkwyk, Herman D.
  11. Effects of Terms of Trade and its Volatility on Economic Growth: A Cross Country Empirical Investigation By Syed tehseen, jawaid; Abdul, waheed
  12. Country and border effects in the transmission of maize prices in Eastern Africa: evidence from a semi-parametric regression model By Ihle, Rico; von Cramon-Taubadel, Stephan; Zorya, Sergiy
  13. Border Effects on Spatial Price Transmission between Fresh Tomato Markets in Ghana and Burkina-Faso: Any Case for Promoting Trans-border Trade in West Africa? By Amikuzuno, Joseph

  1. By: Nyhodo, Bonani; Nakana, Elvis; Phahlane, Heidi; Kotze, Louise
    Abstract: This article considers Chile and South Africaâs agricultural policy evolutions in terms of trade. It also looks at Chile and South Africaâs trade with the rest of the world, particularly with regards to agricultural trade. From an agricultural trade perspective, Chileâs position as a direct competitor of South Africa for the EU and USA markets is clearly apparent, primarily due to their joint location in the southern hemisphere. Furthermore, the movement of agricultural products between these nations from a South African export perspective is discussed. This article explores the potential for South Africa to increase its exports to Chile by deepening existing trading and investigating the expansion of trade lines. Two policy observations can be identified from this study with a view to improving South Africaâs current agricultural sector and increasing its exports trade to Chile. The first observation is the manner in which the agricultural budget is allocated (following Chileâs successful budget allocation as a guide). The second observation is, should South Africa negotiate a Free Trade Agreement (FTA) with Chile, the opportunities for agricultural export expansion from the products listed in the annexe shown on the final page.
    Keywords: International Relations/Trade,
    Date: 2010–09
  2. By: Stacie Beck (Department of Economics,University of Delaware); Alexis Chaves (Bureau of Economic Analysis)
    Abstract: Few macroeconomic studies exist on the effects of taxes on international trade. Our hypothesis is that higher tax rates raise a country’s production costs, leading to a decrease in exports in the long run. With panel data for 25 OECD countries, we use average effective tax rates on consumption, labor income and capital income to examine their impact on bilateral trade. We find that that all three types of taxes reduce the flow of international trade.
    Keywords: tax ratio, average effective tax rate, international trade
    JEL: H20 F10 C23
    Date: 2011
  3. By: Haddad, Mona; Harrison, Ann; Hausman, Catherine
    Abstract: The authors identifies a new set of stylized facts on the 2008-2009 trade collapse that they hope can be used to shed light on the importance of demand and supply-side factors in explaining the fall in trade. In particular, they decompose the fall in international trade into product entry and exit, price changes, and quantity changes for imports by Brazil, the European Union, Indonesia, and the United States. When the authors aggregate across all products, most of the countries analyzed experienced a decline in new products, a rise in product exit, and falls in quantity for product lines that continued to be traded. The evidence suggests that the intensive rather than extensive margin mattered the most, consistent with studies of other countries and previous recessionary periods. On average, quantities declined and prices fell. However, these average effects mask enormous differences across different products. Price declines were driven primarily by commodities. Within manufacturing, while most quantity changes were negative, in most cases price changes moved in the opposite direction. Consequently, within manufacturing, there is some evidence consistent with the hypothesis that supply side frictions played a role. For the United States, price increases were most significant in sectors which are typically credit constrained.
    Keywords: Markets and Market Access,Access to Markets,Economic Theory&Research,Emerging Markets,Commodities
    Date: 2011–08–01
  4. By: Jambor, Attila
    Abstract: In 2004, Hungary joined the European Union (EU) along with nine other Central and Eastern European Countries, causing several changes in the field of agriculture. One of the major changes was the transformation of national agri-food trade. The aim of the paper is to analyse the effects of EU accession on the Hungarian primary and processed agri-food trade, especially considering revealed comparative advantages, by using recent data. Results suggest that EU accession raised the intensity of trade contacts but had a negative impact on trade balance. Nominal values of both exports and imports increased after 2004, however, Hungarian agriculture is increasingly based on raw material export and processed food import. It also turned out that revealed comparative advantages of Hungarian primary agri-food products in EU15 remained almost constant after accession, while comparative advantages of processed agri-food products has been gradually increasing by time and even reached the satisfactory level in some cases. From the policy perspective, it is apparent that there is a need for deeper structural reforms of the Hungarian agricultural and food sector is the future.
    Keywords: EU accession, agri-food trade, primary and processed products, Agribusiness, Q17, Q18,
    Date: 2011–04
  5. By: Bühler, Stefan; Helm, Marco; Lechner, Michael
    Abstract: This paper estimates the effect of trade liberalization on growth, using plant-level data from Switzerland. We employ a natural experiment framework to quantify the effect of a bundle of treaties liberalizing trade between Switzerland and the EU enacted in June 2002 ("Bilateral Agreements I") on the growth of Swiss plants. Using both a semi-parametric difference-indifferences and a matching approach, we find that the liberalization of trade increased the growth of affected plants by 1-2 percent during the first six years after liberalization. Our results suggest that trade liberalization has a relevant effect on growth.
    Keywords: Trade liberalization, growth, plant size, policy evaluation
    JEL: C31 F13 F43 L25 O47 O52
    Date: 2011–08
  6. By: Fu, Dahai; Wu, Yanrui
    Abstract: This paper investigates whether exporting firms pay average higher wages than non-exporting firms by analyzing a large sample of Chinese manufacturing firms in 2004. Through rigorous exercises involving robust regressions, quantile regressions and nonparametric matching estimators, we find that the wage premium of exporting activities is not a prevailing phenomenon in China. It is unevenly distributed among firms with different ownerships, export-orientations and locations. Overall, exporters located in coastal regions but Guangdong province are more likely to pay higher average wages than nonexporters, while those producing in Guangdong offer a lower pay.
    Keywords: Exporters; Wage premium; Manufacturing; China
    JEL: F16 J31 L6
    Date: 2011–06–06
  7. By: Harrison, Ann; McLaren, John; McMillan, Margaret
    Abstract: The 1990's dealt a blow to traditional Heckscher-Ohlin analysis of the relationship between trade and income inequality, as it became clear that rising inequality in low-income countries and other features of the data were inconsistent with that model. As a result, economists moved away from trade as a plausible explanation for rising income inequality. In recent years, however, a number of new mechanisms have been explored through which trade can affect(and usually increase) income inequality. These include within-industry effects due to heterogeneous?firms; effects of offshoring of tasks; effects on incomplete contracting; and effects of labor-market frictions. A number these mechanisms have received substantial empirical support.
    Keywords: Labor Markets,Economic Theory&Research,Labor Policies,Trade Policy,Emerging Markets
    Date: 2011–08–01
  8. By: Idsardi, E.
    Abstract: South Africa has relatively not been affected that significantly by the global food end economic crises. Although, the exports of South Africaâs traditional agricultural exports showed a moderate dip over the last two years. However, the countryâs agricultural export base that earns valuable foreign currency is quite shallow. Against this background the study indentified ten agricultural export products which showed a significant increase in exports over the last years. These emerging agricultural exports form the basis for the analysis of the determinants of export growth. The identified determinants will provide a guideline for future trade diversification. An augmented gravity model was applied to investigate factors such as transaction cost, market size, the stage of economic development, exchange rate fluctuations and the impact of trade agreements on the export flows of the selected products. Various factors were found to have an significant impact on trade flows amongst which: economic market size, supply capacity and physical market size.
    Keywords: agricultural exports, diversification, South Africa, augmented gravity model, determinants of trade, International Relations/Trade,
    Date: 2010–09
  9. By: Ebenstein, Avraham; Harrison, Ann; McMillan, Margaret; Phillips, Shannon
    Abstract: The authors link industry-level data on trade and offshoring with individual-level worker data from the Current Population Surveys. They find that occupational exposure to globalization is associated with larger wage effects than industry exposure. This effect has been overlooked because it operates between rather than within sectors of the economy. The authors also find that globalization is associated with a reallocation of workers across sectors and occupations. They estimate wage losses of 2 to 4 percent among workers leaving manufacturing and 4 to 11 percent among workers who also switch occupations. These effects are most pronounced for workers who perform routine tasks.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Emerging Markets,E-Business
    Date: 2011–08–01
  10. By: Teweldemedhin, M.Y.; van Schalkwyk, Herman D.
    Abstract: This study attempts to examine the empirical relationship between trade and total factor productivity (TFP) in the agricultural sector using both cross -sectiona, (across nine agricultural commodities), and time -series analysis. The Error Correction Model of ordinary least square (OLS) results from the cross -sectional analysis confirm that export shares and capital formation were found to be positive and significant; whereas, import shares and real exchange rate were found to be related negatively. However, the net effect of export and import shares had a positive effect. This implies that trade liberalisation causes productivity gains. Moreover, the time -series analysis goes in the same direction as the cross -sectional results, showing that there is a robust relationship among TFP, degree of openness, and capital formation. Whereas, debt was found to be inversely related, this implies that agricultural industries / farmers lack debt management skills.
    Keywords: TFP, OLS, Trade liberalization or degree of openness, capital formation, International Relations/Trade,
    Date: 2010–09
  11. By: Syed tehseen, jawaid; Abdul, waheed
    Abstract: This study examines the effects of terms of trade and its volatility on economic growth for a sample of 94 developed and developing countries, using five year average annual data from 2004 to 2008. The cross country ordinary least square estimation results indicate significant positive effect of terms of trade on economic growth. Furthermore, volatility of terms of trade has significant positive effect on economic growth. To test the robustness of initial results, sensitivity analysis has been performed using different additional variables, sample size and various proxies of volatility variable. The initial results were found robust despite the inclusion of various variables in the basic model and use of various proxies for volatility of terms of trade.
    Keywords: Terms of trade; Volatility; Economic Growth
    JEL: F42 F13 D80
    Date: 2011–05–07
  12. By: Ihle, Rico; von Cramon-Taubadel, Stephan; Zorya, Sergiy
    Abstract: This study uses a rich dataset of 85 market pairs between January 2000 and October 2008 for Kenya, Tanzanian and Uganda, the three largest member countries of the East Africa Community, to analyze the factors determining national and cross-national maize price transmission. Although the three countries are members of the communityâs customs union and they each claim to pursue maize trade without borders, their agricultural trade policies still differ, thus affecting prices and trade flows to different extents. This analysis extends the existing border effects literature in three ways. First, it assesses the magnitude of price transmission, instead of analyzing trade flows or price variability. Second, distance is shown to have a significant impact on price transmission in the region and to be of nonlinear nature, which is modelled using a semiparametric partially linear model. Third, the border effect is found to be heterogeneous, that is, it matters which national border is crossed. A strongly negative effect of the Tanzanian-Kenyan border appears, while no significant effect for the crossing of the Ugandan-Kenyan border exists. These results are of high political relevance because they show that Tanzania represents a rather isolated and internally fragmented island within the East African maize markets. Bilateral maize trade with Nairobi appears to display substantially higher price transmission than with the rest of the markets, confirming its economic importance in the East African region and the structural maize deficit in Kenya.
    Keywords: border effect, spatial market integration, cointegration, semi-parametric regression, partially linear model, Eastern Africa, maize, Demand and Price Analysis, C32, Q11, Q13, Q17, Q18,
    Date: 2010–09
  13. By: Amikuzuno, Joseph
    Abstract: Cross-border trade in food commodities within sub-regional economic blocks in Sub-Sahara Africa (SSA) is believed to be faster, cheaper, more convenient and welfare-enhancing than trade between SSA countries and the USA or EU. The difficulty of commodity arbitrage across borders in SSA is however a fundamental impediment to price transmission, market integration and the realisation of the welfare-enhancing role of cross-border trade. This study examines the impact of border and distance on price transmission between tomato in Ghana and Burkina-Faso. The analysis applies a linear and a regime-switching vector error correction model to estimate wholesale prices of tomato in four tomato markets in Ghana and a producer market in Burkina-Faso. The estimated parameters contain evidence of border and distance effects. This is expected since high transfer costs, including cross-border formal and non-formal tariffs are incurred by traders in moving tomato across the border. Moreover, the perishable nature of tomato, and the poor quality of roads and transportation facilities linking markets on both sides of the border imply additional risks, and constrain Just in Time delivery and price transmission from producing to retail and consuming markets. The findings have implications for interstate trade between landlocked and coastal countries in West Africa.
    Keywords: Price Transmission, Border, Tomato, Ghana, Burkina-Faso, International Relations/Trade, C32, Q11, Q13, Q17, Q18,
    Date: 2011–04

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