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on International Trade |
| By: | Ana Fernandes; Heiwai Tang |
| Abstract: | Recent studies in international trade report that new exporters often start selling small amounts and cease exporting in the first year. These findings reflect a substantial amount of uncertainty facing new exporters. In this paper we study whether export activities in the neighborhood reveal information about export profitability and thus enhance new exporters' performance. Using transaction-level data for the universe of exporters in China over the period of 2001-2005, we find that new exporters; first-year sales and probability of survival are both higher in cities where there are more existing export activities in the same market (industry or destination country). Export activities in other markets do not generate any positive spillovers, and in some cases we find negative spillovers. Spillovers from processing exporters are weaker. Foreign exporters benefit less from neighboring export activities. The relaion between the magnitude of spillovers and the proxies for demand uncertainty is non-monotonic. We empirically verify that our findings are unlikely to be spurious or resulted from spillovers through the credit- constraint or the imported-material channels. |
| Keywords: | Knowledge spillovers, uncertainty, export dynamics, multi-product exporters. |
| JEL: | F1 F2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0766&r=int |
| By: | Luljeta Hajderllari (Institute of Food and Resource Economics, University of Copenhagen); Kostas Karantininis (Institute of Food and Resource Economics, University of Copenhagen; Swedish University of Agricultural Sciences (SLU)); Lartey G. Lawson (Department of Business and Management, University of Aalborg) |
| Abstract: | We investigate factors affecting Foreign Direct Investment (FDI) outflow from Danish agri-food firms to the rest of the world. We develop a conceptual model and subsequently use a gravity model based on data from 127 countries receiving Danish FDI in agri-food in 2004-2008. We find higher Danish FDI towards countries with large exports of agri-food, thereby supporting the hypothesis that FDI is used as an export-platform. FDI is coupled with high exports from Denmark, probably of raw or semi-processed food products for further processing and exports. We also find that FDI is higher in countries with stable political regimes. |
| Keywords: | FDI, export-platform, Danish Agri-Food, gravity model |
| JEL: | F14 F23 Q17 Q13 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2012_7&r=int |
| By: | G bor B‚k‚s (Institute of Economics, Research Center for Economic and Regional Studies, Hungarian Academy of Sciences); Lionel Fontagn‚ (Professor of Economics at the Paris School of Economics, University of Paris 1, Panth‚on-Sorbonne, Part-time Professor - European University Institute); Murak”zy Bal zs (Institute of Economics, Research Center for Economic and Regional Studies, Hungarian Academy of Sciences); Vincent Vicard (Banque de France) |
| Abstract: | This paper proposes studying export frequency of firms. While extensive margins of products and destination define the scope of firm's export, export shipment frequency is determined by sale method choice and cost structure of the trade technology. Exporters optimize the frequency of international trade transactions to save on costs and gain maximum exposure to clients. Their decisions can be related to a more general problem a la Baumol (1952), where the choice is about the optimal number of transactions in presence of a fixed cost and variable transportation costs. This opens an additional margin of trade: the number of shipments of a firm to a given market in a year. While extensive margins of products and destination define the scope of firm's export, export shipment frequency is determined by sale method choice and cost structure of the trade technology. This paper both presents a framework to think about shipment frequency and analyzes its behavior on French data. We argue that given the decision to export and the anticipated demand, the decision on the number of shipments is guided by the trade technology. In line with the Baumol-Tobin model, the optimal number of shipments will be positively afiected by demand (controlling for distance to destination) and inventory costs and negatively affected by the fixed cost of shipment. Using monthly firm-productdestination level export data from France, we show that key predictions of the model are validated in a gravity model setting that also allows for comparing various margins of trade. During the recent trade collapse, our results point to a strong resilience of export ows despite the drop in demand, which was mainly absorbed at the intensive margin. |
| Keywords: | Gravity, transport costs, frequency of trade, Baumol-Tobin model, customs data |
| JEL: | D40 F12 R40 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1217&r=int |
| By: | Karel Janda; Eva Michalikova; Jiri Skuhrovec |
| Abstract: | This paper deals with export credit promotion in the Czech Republic. The development and structure of Czech trade and export support is presented first. This is followed by an econometric analysis of the gravity model of Czech trade. A panel of 160 countries in 1996–2008 is analyzed and two gravity models of exports for the Czech Republic are estimated, the static model by fixed effects (LSDV estimator) and the dynamic model by System GMM. Finally, robust LTS estimator is used. We show that guarantees are a significant factor that influences positively the volume of exports in the Czech Republic. |
| Keywords: | export; government promotion; gravity model; panel data; |
| JEL: | F14 G28 C23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp461&r=int |
| By: | Tomás Castagnino (Central Bank of Argentina) |
| Abstract: | I build a model to show that if some export costs are sunk and shared between alike destinations, the decision of a firm to enter a market is a function of its experience in a similar one. Using a rich firm-level dataset for Argentina I test this prediction and I provide evidence on the role and nature of shared export costs. Product adaptation costs, associated to market similarities in geography and culture, and quality upgrading costs, associated to market similarities in income level, are found to be significant. Finally, I show that the failure to consider firms´ idiosyncratic experience in international markets leads to an underestimation of the difficulty to enter export markets. |
| Keywords: | experience, export costs, firm-level, geographic diversification, quality |
| JEL: | F10 F12 F13 F14 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:bcr:wpaper:201152&r=int |
| By: | Klimek, Peter (Medical University of Vienna); Hausmann, Ricardo (Harvard University and Santa Fe Institute); Thurner, Stefan (Medical University of Vienna and Santa Fe Institute) |
| Abstract: | We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite--disappearances followed by periods of appearances--is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e. creative destruction. We find a tendency that more complex products drive out less complex ones, i.e. progress has a direction. Finally we show that the growth trajectory of a country's product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-022&r=int |
| By: | Matthias Flückiger; Markus Ludwig (University of Basel) |
| Keywords: | China, Export Competition, Deindustrialization |
| JEL: | F12 F14 F16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2012/09&r=int |
| By: | Bahar, Dany (Harvard University); Hausmann, Ricardo (Harvard University); Hidalgo, Cesar A. (MIT and Harvard University) |
| Abstract: | In this paper we document that the probability that a product is added to a country's export basket is, on average, 65% larger if a neighboring country is a successful exporter of that same product. We interpret our result as evidence of international intra-industry knowledge diffusion. Our results are consistent with the overall consensus in the literature on technology spillovers: diffusion is stronger at shorter distances; is weaker for more knowledge-intensive products; and has become faster over time. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-020&r=int |
| By: | Julian di Giovanni (International Monetary Fund and University of Toronto); Andrei Levchenko (University of Michigan and NBER); Francesc Ortega (Queens College - CUNY) |
| Abstract: | This paper evaluates the welfare impact of observed levels of migration and remittances in both origins and destinations, using a quantitative multi- sector model of the global economy calibrated to aggregate and firm-level data on 60 developed and developing countries. Our framework accounts jointly for origin and destination characteristics, as well as the inherently multi-country nature of both migration and other forms of integration, such as international trade and remittance flows. In the presence of firm heterogeneity and imperfect competition larger countries enjoy a greater number of varieties and thus higher welfare, all else equal. Because of this effect, natives in countries that received a lot of migration – such as Canada or Australia – are better off. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The quantitative results show that the welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% for the main sending countries. |
| Keywords: | Migration, Remittances, International Trade, Welfare |
| JEL: | F12 F15 F22 F24 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1218&r=int |
| By: | Kayam, Saime Suna; Ecer, Sencer; Gupta , R |
| Abstract: | The foreign direct investment (FDI) strategy has imbued India’s once stagnant industrial sector with capital and job opportunity. However, as India’s GDP grows ever larger, there is a concern that the growth within the country is not evenly distributed and may in fact exacerbate current economic disparities. This paper seeks to look at potential avenues poorer states can take to attract FDI if they choose to as a method to stay competitive within the country. Our hypothesis is that measures such as power rating (as a proxy for infrastructure), literacy, and minimum wage would be highly significant related to inward FDI. |
| Keywords: | foreign direct investment; regional diversification; socioeconomic factors |
| JEL: | R58 C23 F21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39153&r=int |