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on International Trade |
| By: | Holger Görg; Dennis Görlich |
| Abstract: | The German economy is characterized by a high degree of foreign exposure through exports and imports. This paper considers the link between trade and labour market outcomes in Germany. To that end we combine individual-level data from the German Socio Economic Panel for the period 1999 to 2007 with industry-level data on various aspects of trade – exports, imports and offshoring. We consider their effects on wages and the probability of moving into unemployment. Our econometric analysis suggests that there is little impact of trade-related variables on individual-level wages, whereas there appears to be some impact with respect to employment. We find some important differences between manufacturing and services sectors, in particular with regard to exporting and offshoring. |
| Keywords: | trade, employment, wages, inclusive growth |
| JEL: | F16 |
| Date: | 2011–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:125-en&r=int |
| By: | Dimitra Petropoulou; Kwok Tong Soo |
| Abstract: | One of the main causes behind the trade collapse of 2008–09 was a significant fall in the demand for durable goods. This paper develops a small country, overlapping generations model of international trade in which goods durability gives rise to a more than proportional fall in trade volumes, as observed in 2008–09. The model has three goods—two durable, traded goods and one nondurable, nontraded good and two factors of production. The durability of goods affects consumers' lifetime wealth and their optimal consumption bundle across goods and time periods. A uniform productivity shock reduces consumers' lifetime wealth inducing a re-optimisation away from durables. This gives rise to a more than proportional effect on international trade, provided the nontraded sector is sufficiently capital intensive. The elasticity of trade flows to GDP is found to be increasing in both the degree of durability and the size of the shock.> ; Thus the model provides microfoundations for the asymmetric shock to the demand for durable goods observed in recessions and clarifies the link between this endogenous shift in preferences and international trade flows. It also explains the observation that deeper downturns are associated with a higher elasticity of trade to GDP. Furthermore, the greater the degree of durability of traded goods, the larger is the share of domestically produced goods in consumption, for plausible factor intensities. This provides an alternative explanation for the home bias in consumption, and hence another explanation for Trefler’s "missing trade." |
| Keywords: | International trade |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:94&r=int |
| By: | Susan Stone; Ricardo Cavazos Cepeda |
| Abstract: | The relationship between trade and wages has been subject to intense scrutiny in the academic literature with no clear consensus emerging. This paper adds to this body of research by moving beyond the single country analysis level to a panel including developed and developing countries and data through the mid 2000.s. First we examine the relationship between wages and trade using the approach of Feenstra and Hanson to calculate mandated wage changes for our dataset. We find that imports have a significant and positive impact on wages while the sign on tariffs is negative and significant. We also look at the relationship of wage differentials at the occupation level between partner countries. We find that the difference in occupation wage is smaller for large trade partners. Finally, we discuss the potential role of NTMs in influencing the wage and trade relationship. |
| Keywords: | trade, wages, occupations, mandated wages |
| JEL: | F16 |
| Date: | 2011–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:122-en&r=int |
| By: | Serkan Degirmenci; Zeynep Yilmaz; Gulcin Elif Yucel |
| Abstract: | Standard trade theory relies on the assumption of long-run full-employment, thus implying that although trade can affect wage rates and change the sectoral distribution of employment, it has no effect on the overall level of employment. In the empirical literature, it is a controversial debate that trade openness is good for employment in the long-run. If so, the further question is about the poorer regions in the developing countries which are fully open to trade. Turkey is one of these countries experienced trade liberalization three decades ago. Although its regions’ connection to markets is effective due to limited lack of access to key inputs and low transport costs, their shares in total trade and labor market outcomes strikingly vary depending on the density of local economic activities. While trade volumes and employment creation capacities of some regions are quite high, relevant indicators for some others are disappointing. The aim of this paper is to explore the relation between regional trade volumes and major labor market indicators. To this end, empirical analyses are designed to test the hypothesis that more regional trade volume leads to more employment opportunities and stimulates the job creation capacities of local labor markets. The data sets used in the analyses are from Turkish Statistical Institute, one being trade statistics by province which consists of export and import volume data for 81 provinces. The other set contains individual-based micro data from Household Labor Force Survey and both of these sets are at NUTS level 2, analyzing Turkey with 26 statistical regions. Time-interval for the analyses is from the year 2004 to 2008. Since the nature of labor market data set is cross-sectional and the dependent variable created is a dummy, the methodology used in the study is based on the probit regression. The preliminary results of the paper shows that higher the trade volumes of regions generally improve the indicators of local labor markets in Turkey. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1371&r=int |
| By: | JINHWAN OH |
| Abstract: | Using a gravity model, this study examines trade patterns of two isolated economies - Myanmar and North Korea. This study finds that two countries' trade is basically consistent with the prediction of the gravity model. However, economic sanctions toward these countries imposed by the U.S. and other developed countries have distorted their trade pattern, and it turns out that China is exerting its power in place of other santion-participating countries. Relevant policy implications follow. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1764&r=int |
| By: | Luisa Alamá Sabater; Laura Marquez Ramos; Celestino Suarez Burguet |
| Abstract: | This paper aims to analyze whether the existing logistics platforms network in Spain affects Spanish transport demand by using a spatial framework. In particular, we use demand for transport to export goods to other Spanish provinces as a proxy for logistics infrastructure demand in Spain. Then, we obtain data for trade flows between provinces (NUTS3) in the year 2007. We also obtain data about the number and area of logistics platforms existing in each Spanish province to proxy for the transportation network structure in Spain. In a first step, we construct weight matrixes considering first-order contiguity and we obtain that spatial dependence is significant in a spatial econometric model of commodity flows (LeSage and Polasek, 2008). Secondly, we incorporate logistics network structure dependence into the model so that the spatial lags measure the impact and significance on trade flows from all origins to all destinations by considering the importance of logistics performance in the neighboring provinces. Finally, we perform the analysis for different economic activities. The results obtained provide evidence about the role of the location of logistics platforms for satisfying existing demand for transport structure in the Spanish provinces.. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1737&r=int |
| By: | P. Lelio Iapadre |
| Abstract: | This paper addresses the relationship between trade, employment and wages in Italy from the perspective of the specific features of its international specialisation pattern. It focuses on several key questions: To what extent has international economic integration, including trade and international outsourcing, changed the structure of the Italian economy? To what extent has exposure to foreign competition helped Italian firms to restructure and upgrade their production, so as to increase the skill intensity of their activities? What are the effects of these processes on employment and wages? The paper opens with a short review of the relevant literature and a description of recent developments in the trade specialisation pattern of the Italian economy, including its linkages with the structure of employment. This is followed by the main original contribution of the paper consisting of an econometric study structured around two parts. The first part presents an estimate of the employment effects of trade and off-shoring in the Italian manufacturing industry based on a panel of 15 sectors for the period from 1999 to 2008. The second part addresses the relationship between trade and wages using a rich micro-level panel of individual workers for the period from 1997 to 2003. In light of the results, the paper then considers the main policies adopted in Italy to facilitate the adjustment of employment and wages to external shocks, including short-term effects of trade liberalisation. The Italian case appears to confirm that international economic integration, while generating important static and dynamic benefits, requires a flexible and efficient social security system, able to assist workers displaced by external competition or other kinds of structural change. In view of shortcomings in the existing system, a comprehensive social security reform, inspired by principles of universal access, medium-term financial equilibrium, and a proper design of individual incentives, may be necessary to better help workers displaced by international integration. |
| Keywords: | trade, employment, wages, inclusive growth |
| JEL: | F16 |
| Date: | 2011–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:126-en&r=int |
| By: | Renato Redondi; Mariasole Bannò; Marco Mutinelli |
| Abstract: | By integrating the theoretical perspective of international business, economic geography and transportation science, we develop a novel framework to investigate the relationship between the localization of foreign direct investments (FDI) and air connectivity. In particular the key research question for this study is whether and in which ways the spatial network structure offered by the global airline system contributes to the development of both outward and inward FDI. Due to the widespread diffusion of multinationals, air travel is often required as a mean to engage face-to-face contacts at various levels within the organization, by the board of directors, managers, entrepreneurs and staff. The introduction of a new route, by reducing transport costs, should increase the likelihood of FDI exchange between the regions newly connected. Several studies have already analyzed the linkage between air traffic and various urban or regional characteristics, among which its degree of internationalization, and have unanimously demonstrated that the geography of FDI is related to the desire of large multinational companies to easily access the main international airports. However, literature traditionally focused on larger multinational companies located in global cities. To the best of our knowledge, no study has yet considered the effect of air travel on FDI by SMEs in secondary regions. We aim to test whether the geography of FDI between Italy and Europe is related to the desire of overseas companies to directly access international airports. This paper employs an event study methodology to determine the impact of new routes on the generation of both inward and outward FDI considering both SMEs and large companies. In particular, we built an original database covering the period 1997-2010 where for each FDI between Italy and Europe we collected information about the locations of both the overseas company and the newly created subsidiaries at a municipality level. That enables us to estimate the impact of a new route to the FDI subsequently generated between the catchment areas of the connected airports. We account for the existence of a possible endogeneity bias by considering several control variables. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p249&r=int |
| By: | Fernando Rubiera Morollon; Ana Viñuela |
| Abstract: | What is region? From an economic point of view, a region is a unit in which capital and labour move freely and goods and services are totally open to trade with other regions without any frontiers or limitations. The openness of the regions and their interaction with other regions are their main characteristics. From a statistical point of view internal homogeneity and also heterogeneity between the regions are both desirable properties of a set of regions. The objective of this chapter is revise the concept of region and propose a division of the territory which satisfy the statistical and economical region concept requirements in the way of propose a classification that has economic theoretical meaning but, at the same time, satisfy the internal homogeneity and heterogeneity among classes. Using micro data from the latest Census available, the Spanish territory can be divided into functional regions that emphasize the importance of location and agglomeration economies (a classification with theoretical economic meaning). A set of contrast and indexes is applied to prove that, when studying labor economic issues, such classification based on economic criteria results on more convenient regions than the administrative ones commonly used. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p206&r=int |
| By: | Weslem Faria; Alexandre Almeida |
| Abstract: | The Brazilian Amazon is a large piece of land that hosts only 12% of Brazilian population. Even this low figure and people mostly living in urban areas, the overexploitation of the forest resources driven by economic activities seems to be out-of-control. In the 1970s, abundant government subsidies/incentives for mining, crop and beef production, and gigantic road projects provided infra-structure to the new settlers coming from other parts of the country. For the last decades, frontier regions of Amazon have been a major scene of land conflicts between farmers, squatters, miners, indigenous group and public authorities. Furthermore, from the openness of economy in the 1990s, we also find some evidence that the very attractive demand of international markets for timber, and recently, the attractive international prices of agricultural commodities are determinants that have been also pushing to more deforestation through the conversion of forest to new agricultural areas. The main objective of this paper is to investigate how international trade has affected the dynamics of deforestation in the Brazilian Amazon. The analysis also focuses on the expansion of crop and cattle activities, and other determinants such as gross domestic product, demographic density and roads. To achieve such goal, we combine standard econometrics with the spatial econometrics in order to capture, across the space, the socio-economic interactions among the agents in their interrelated economic system. The data used in this study correspond to a balanced panel for 732 counties from 2000 to 2007 totalizing 6,256 observations. The main findings suggest that the openness to trade indicator used--export plus import over GDP--goes up, the result is more deforestation. We also find that beef cattle and the production of soybeans, sugarcane and cotton are pushing to more deforestation in the region. The extraction of firewood and timber had both a positive and significant in impact on deforestation, as expected. Moreover, as the GDP goes up, it pushes to more deforestation as well. On the other hand, as the square of GDP goes up indicate less deforestation, supporting, to some extent, the environmental Kuznets Curve hypothesis. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1013&r=int |
| By: | Elena Arnal |
| Abstract: | Spain and Denmark are two European countries differing considerably in their development and productive structures as well as in their internationalisation process. This affects many dimensions of each economy, most notably their trade volumes, market sizes and product specialization. Spain and Denmark also differ significantly in labour market outcomes as well as in the design of labour market policies and institutions and the role they played in facilitating labour reallocation. For these reasons, it is instructive to compare them, in particular as they have demonstrated substantial labour market adjustments due to changing international economic conditions. While the results of direct comparisons cannot always be translated into policy action due to country-specific institutional settings and varying economic circumstances, comparative analysis has the potential to yield useful insights into best practices and transferrable policy lessons. With this in mind, the purpose of this paper is to consider the evolution of trade and labour market outcomes in Denmark and Spain since the early 1990s, in order to provide policy-relevant insights on the relationship between production, trade and labour markets in these countries. Special focus is given to the increased weight of some emerging economies in world trade patterns and how they have affected the trade patterns of these two European countries and their employment behaviours. |
| Keywords: | trade, employment, wages, inclusive growth |
| JEL: | F16 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:123-en&r=int |
| By: | Zizi Goschin; Monica Roman; Aura Popa |
| Abstract: | In the past few years, there has been a renewed interest in remittances of international migrants, as their strong recent increase shed more light on the effects at both micro and macro level. The remittances not only contribute to the well-being of the receiving households, but are also a large source of external financing, second only to FDI. The remittances are particularly important for Romania as in 2010 it was on the 5th place in the European top of emigration countries and on the 4th place as remittance recipient country. Therefore the determinants of remittance behavior need to be better understood. Following increasing interest and significant public debate on migration in Romania, our paper examines the significance of selected economic and demographic factors associated with the remittance behavior of Romanian international migrants, as characterized by the propensity to remit and the amount remitted. In particular we address the question of the role played by the geographic distance, as potentially affecting the immigrants’ ties with their homeland and consequently the remittance decisions. Our present work builds on a recent source of data on immigrant cohort resulting from an online survey conducted during August-December 2010. Respondents were asked questions on a variety of topics including income, employment, remittances, regions of origin and destination, graduated studies both in Romania and in emigration country, length of migration and intention to return to Romania. The final database consisted of 1514 Romanian immigrants from 55 destination countries. We developed several multivariate models to study the determinants of remittances by employing regression analysis. Among the main findings is that the geographic distance is not related to the remittances. Although contrasting with the existing literature, this result can be explained by factors such as modern instant communication and fast travel supporting very strong and resilient transnational links despite geographic distance. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p1001&r=int |
| By: | Michael J. Artis (University of Manchester and CEPR); Toshihiro Okubo (Keio University) |
| Abstract: | This paper reports estimates based on long-run data sets for GDP and trade, with three subsamples chosen to reflect the first globalization period, the "bloc economy" period and the second globalization period. The business cycle is identified as the series of deviates from a Hodrick-Prescott filtered trend, and turning points are identified. Cross-correlations of the cyclical deviates are calculated for all the pairs of the 21 countries examined. It is apparent from casual inspection that the business cycle characteristics and the pattern of crosscorrelations in the bloc economy period are different from those found for the two globalization periods whilst there is less difference between the two globalization periods. Estimation is undertaken of equations to explain the pattern of cross correlations in terms of trade and currency union membership. A dummy for the countries that belong to the Eurozone is found to be significant for the period of the first globalization, that is, well before any manifestation of a common Euro-currency is available. By contrast, Asian business cycle co-movement cannot be found. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:kei:dpaper:2011-019&r=int |