nep-int New Economics Papers
on International Trade
Issue of 2012‒08‒23
23 papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. The Role of Trade Costs in FDI Strategy of Heterogeneous Firms: Evidence from Japanese Firm-level Data By Toshiyuki MATSUURA; Kazunobu HAYAKAWA
  2. FDI Learning from Neighbors’ Export Activities: Evidence from Exporters’ Survival By Ana Fernandes; Heiwai Tang
  3. Global Production Sharing and South-South Trade By Prema-chandra Athukorala; Shahbaz Nasir
  4. Cross-Border and Foreign-Affiliate Sales of Services: Evidence from German Micro-Data By Markus Kelle; Jörn Kleinert; Horst Raff; Farid Toubal
  5. The Connection between Imported Intermediate Inputs and Exports: Evidence from Chinese Firms By Ling Feng; Zhiyuan Li; Deborah L. Swenson
  6. EU-China Economic Relations: Interactions and Barriers By Lu, Zheng
  7. Market Access in Global and Regional Trade By de Sousa, José; Mayer, Thierry; Zignago, Soledad
  8. Trade Costs, International Competition and Selection: The Effects of Unionisation on Market Size By Catia Montagna; Antonella Nocco
  9. Country Image and International Trade By Pao-li CHANG; Tomoki Fujii
  10. The Connection between Imported Intermediate Inputs and Exports: Evidence from Chinese Firms By Ling Feng; Zhiyuan Li; Deborah L. Swenson
  11. Exports and Wages: Rent Sharing, Workforce Composition or Returns to Skills? By Mario Macis; Fabiano Schivardi
  12. Foreign Direct Investment and The Ease of Doing Business By Adrian Corcoran; Robert Gillanders
  13. Emerging economies and the emergence of south-south protectionism By Bown, Chad P.
  14. Migrants and International Economic Linkages: A Meta-Overview By Masood Gheasi; Peter Nijkamp; Piet Rietveld
  15. Information and Export Decisions: Banks as a conduit of information (Japanese) By INUI Tomohiko; ITO Keiko; MIYAKAWA Daisuke; SHOJI Keishi
  16. Quality Uncertainty and Intermediation in International Trade By Kunal Dasgupta; Jordi Mondria
  17. Nationality Matters: The Geographic Origin of Multinationals and the Productivity of their Foreign Affiliates By Christian Arndt; Julia Spies
  18. Camouflaged Trade Agreements By Appelbaum, Elie; Melatos, Mark
  19. Offshoring, Domestic Outsourcing, and Productivity: Evidence for a Number of European Countries By Tillmann Schwörer
  20. Price, Quality, and International Agricultural Trade By Darian Woods; Andrew Coleman
  21. Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008) By Emiliano Magrini; Pierluigi Montalbano
  22. Globalization and social networks By Fischer, Justina A.V.
  23. Sources of Learning-by-Exporting Effects: Does Exporting Promote Innovation? By Keiko ITO

  1. By: Toshiyuki MATSUURA (Toshiyuki MATSUURA Institute of Economic and Industrial Studies, Keio University, Japan); Kazunobu HAYAKAWA (Kazunobu HAYAKAWA Bangkok Research Center, Japan External Trade Organization, Thailand)
    Abstract: This paper attempts to clarify the reasons for the rapid growth of FDI in developing countries, particularly East Asian countries, compared with that of FDI in developed countries. To do this, we will examine the mechanics of HFDI and VFDI, in order to shed light on the role of trade costs. Our empirical analysis by estimating a multinomial logit model of Japanese firmsf FDI choices reveals that the reduction in trade costs between host and home countries attracts even less productive VFDI firms. In contrast, it does not attract HFDI firms. Since developing countries, particularly East Asian countries, have experienced a relatively rapid decrease in trade costs with Japan, our results indicate that the increase in VFDI through trade cost reduction has led to the recent relative surge of FDIs in developing countries.
    Date: 2012–06–01
  2. By: Ana Fernandes (University of Exeter); Heiwai Tang (Tufts University, MIT Sloan, and Centro Studi Luca d’Agliano)
    Abstract: Recent studies in international trade report that new exporters often start selling small amounts and cease exporting in the first year. These findings re.ect 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 relation 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 F
    Date: 2012–07–16
  3. By: Prema-chandra Athukorala; Shahbaz Nasir
    Abstract: This paper examines patterns and determinants of trade among developing countries (South-South trade), with emphasis on the role of production sharing in global economic integration of the Southern economies. It begins with an analytical narrative of the emerging trends and patterns of South-South trade using a classification system that helps delineating trade based on global production sharing (network trade) from total recorded trade. Then it undertakes a comparative econometric analysis of the determinants of South-South and South-North trade using the standard gravity model. There is evidence that the share of South-South trade in world trade has increased significantly over the past two decades. However, this increase has predominantly come from the dynamic East Asian countries, reflecting their growing engagement in global production sharing. The growth dynamism of East-Asia centered production networks depends heavily on demand for final (assembled) goods in the Northern markets; South-South trade is largely complementary to, rather than competing with, South-North trade. While regional trading agreements (RTAs) could play a role at the margin, natural economic forces associated with growth and structural change in the economy and the overall macroeconomic climate as reflected in the real exchange rate, and the quality of trade related logistics are far more important in the expansion of South-South network trade.
    Keywords: global production sharing, production fragmentation, South-South trade, gravity model, regional trade agreements, RTA
    JEL: F02 F13 F15 O2
    Date: 2012
  4. By: Markus Kelle (Centro Studi Luca d’Agliano); Jörn Kleinert (Karl-Franzens University of Graz); Horst Raff (Christian Albrechts University of Kiel, Kiel Institute for the World Economy and CESifo); Farid Toubal (University of Angers, Paris School of Economics and CEPII)
    Abstract: We merge German balance-of-payments and foreign-affiliate-trade statistics to obtain data about trade in commercial services at the firm level. We use these data to study export market participation and the choice of export mode: cross-border versus foreign affiliate sales. We find that for firms in our sample productivity is both a statistically significant and economically important determinant of the export participation and export mode choice. We also identify the role of industry- and country-specific determinants.
    Keywords: International Trade, Trade in Services, Supply Modes, Commercial Presence, Foreign Direct Investment, Multinational Enterprises, Firm Heterogeneity
    JEL: F12 F15 L13
    Date: 2012–07–16
  5. By: Ling Feng; Zhiyuan Li; Deborah L. Swenson
    Abstract: We use data on Chinese manufacturing firms to study the connection between individual firm imports and firm export outcomes. Since our panel covers the years 2002 to 2006, we can use changes in import tariffs associated with China’s WTO entry as instruments. Our regression results show that firms that expanded their intermediate input imports expanded the volume of their exports and increased their export scope, though the magnitude of the effects differed by import source, firm organizational form, and industry R&D intensity. On these dimensions, we find that imported intermediate inputs from OECD rather than non-OECD countries generated larger firm export improvements, that private Chinese firms derived larger benefits from imported inputs than did foreign invested firms, and that imported intermediates were especially helpful in expanding the exports of firms operating in high R&D intensity industries. Taken together, these results suggest that product upgrading facilitated by technology or quality embedded in imported inputs helped Chinese firms to increase the scale and breadth of their participation in export markets.
    Keywords: Trade liberalization, imported intermediate inputs, firm export, technology
    JEL: F10 F15 F31
    Date: 2012–06
  6. By: Lu, Zheng
    Abstract: EU-China economic interactions became more and more frequent in the past decades, nowadays EU and China are main trade partner for each other. This paper analyzed EU-China economic interactions from three dimensions: bilateral governmental interactions, trade and investment flows as well as barriers to trade and investment. Findings show that EU-China close relationship is particularly based on goods trade especially on intra-industrial trade of manufacturing industrial products, and trade imbalance is arising from trade in Machinery and Transport Equipment and Other Manufactured Goods (e.g., Clothing and clothing accessories); This paper also found that there exist a myriad of trade and investment barriers to EU-China interactions, including both tariff and non-tariff obstacles. Therefore, this paper argued that if EU and China want to handle the trade imbalance efficiently, they must improve composition of trade in goods, while essentially, it requires lessening or eliminating EU-China trade barriers which hampered trade composition improvement.
    Keywords: EU-China Relations; Trade; Trade Barriers; FDI
    JEL: F13 F59
    Date: 2012–05–10
  7. By: de Sousa, José; Mayer, Thierry; Zignago, Soledad
    Abstract: This paper develops a method to measure difficulties in market access over a large set of industries and countries (both developing and developed), during the period 1980-2006. We use a micro-founded heterogeneous-consumers model to estimate the impact of national borders on global and regional trade flows. Results show that difficulties faced by developing countries' exporters in accessing developed markets are 50\% higher than those faced by Northern exporters. These difficulties have however experienced a noticeable fall since 1980 in all industries. It is twenty three times easier to enter Northern and Southern markets for a Southern country exporter in 2006 than in 1980. Expressed in tariff-equivalent, the level of protection implied when crossing a border fell from 180 to 89\% for this same sample. While tariffs still have an influence on trade patterns, they do not seem to explain an important part of the border effect. Last, our theory-based measure offers a renewal of the assessment of the impact of regional trading arrangements. The EU, NAFTA, ASEAN and MERCOSUR agreements all tend to reduce the estimated degree of market fragmentation within those zones, with the expected ranking between their respective trade impact.
    Keywords: Border Effects; Distances; Gravity; Market Access; North-South Trade; Regional integration; Tariffs; Trade Costs
    JEL: F12
    Date: 2012–08
  8. By: Catia Montagna; Antonella Nocco
    Abstract: Within a two-country model of international trade in which heterogeneous firms face firm-specific unions, we study the effects of different forms of trade liberalisation on market structure and competitive selection in the presence of inter-country asymmetries in size and labour market institutions. For given levels of trade openness, an increase in a country’s relative unions’ strength reduces the average productivity of its domestic producers but increases that of its exporters. Whilst an unfavourable union power differential, by increasing wages, weakens a country’s firms’ competitive position, the higher wages reinforce standard market access mechanisms to give rise to aggregate income effects. When the initial levels of trade openness are sufficiently low, this ‘expansionary’ aggregate effect can attract industry in the country with stronger unions and also result in an increase in the extensive margin of exports. For sufficiently large inter-country differences in the bargaining power of unions, trade liberalization can then result in a pro-variety effect, with an increase in the total availability of varieties to consumers in both countries, regardless of there being inter-country differences in size.
    Keywords: Competitive selection, international trade, unionisation, pro-variety effect, aggregate demand effects
    JEL: F12 F16 R13 J51
    Date: 2012–07
  9. By: Pao-li CHANG (School of Economics, Singapore Management University); Tomoki Fujii (School of Economics, Singapore Management University)
    Abstract: We study the impact of country image on international trade flows. We find that a one percentage point increase in the positive response ratio – the proportion of people in the importing country who view the exporting country positively – is associated with at least a one percent increase in the aggregate trade flow. By disaggregating trade flows by type of goods, we also find that both homogeneous and differentiated goods are positively affected by better country image and that the impact of country image tends to be larger when more substitutes are available in the international market.
    Date: 2012–07
  10. By: Ling Feng; Zhiyuan Li; Deborah L. Swenson
    Abstract: We use data on Chinese manufacturing firms to study the connection between individual firm imports and firm export outcomes. Since our panel covers the years 2002 to 2006, we can use changes in import tariffs associated with China’s WTO entry as instruments. Our regression results show that firms that expanded their intermediate input imports expanded the volume of their exports and increased their export scope, though the magnitude of the effects differed by import source, firm organizational form, and industry R&D intensity. On these dimensions, we find that imported intermediate inputs from OECD rather than non-OECD countries generated larger firm export improvements, that private Chinese firms derived larger benefits from imported inputs than did foreign invested firms, and that imported intermediates were especially helpful in expanding the exports of firms operating in high R&D intensity industries. Taken together, these results suggest that product upgrading facilitated by technology or quality embedded in imported inputs helped Chinese firms to increase the scale and breadth of their participation in export markets.
    JEL: F10 F15 F23 F31
    Date: 2012–07
  11. By: Mario Macis (Johns Hopkins University and IZA); Fabiano Schivardi (University of Cagliari, EIEF, CEPR and Centro Studi Luca d\'Agliano)
    Abstract: We use linked employer-employee data from Italy to explore the relationship between exports and wages. Our empirical strategy exploits the 1992 devaluation of the Italian Lira, which represented a large and unforeseen shock to Italian firms’ incentives to export. The results indicate that the export wage premium is due to exporting firms both (1) paying a wage premium above what their workers would earn in the outside labor market – the “rent-sharing” effect, and (2) employing workers whose skills command a higher price after the devaluation – the “skill composition” effect. The latter effect only emerges once we allow for the value of individual skills to differ in the pre- and post-devaluation periods. In fact, using a fixed measure of skills, as typically done in the literature, we would attribute the wage increase only to rent sharing. We also document that the export wage premium is larger for workers with more export-related experience. This indicates that the devaluation increased the demand for skills more useful for exporting, driving their relative price up.
    Keywords: Export Wage Premium, Linked Employer Employee Data
    JEL: F16 J31
    Date: 2012–07–16
  12. By: Adrian Corcoran (University College Dublin); Robert Gillanders (University College Dublin)
    Abstract: This paper examines the effect that a country’s business regulatory environment has on the amount of foreign direct investment it attracts. We use the World Bank’s Ease of Doing Business ranking to capture the costs that firms face when operating in a country. Several interesting results emerge. Firstly, the Doing Business rank is highly significant when included in a standard empirical FDI model estimated on data averaged over the period 2004-2009. Secondly, the significance of the overall Doing Business is driven by the Ease of Trading Across Borders component. We argue that this is a more intuitively appealing proxy for trade costs than the often used openness variable. The relationship does not seem to exist for the World’s poorest region, Sub-Saharan Africa, or for the OECD. Finally, we find no evidence that the ease of doing business of nearby countries has an effect on the FDI that a country gets in general. However, in terms of attracting FDI from the US, it helps to be near countries with good trade regulation and bad regulation in other respects.
    Keywords: Foreign Direct Investment, Business Regulation
    Date: 2012–08–03
  13. By: Bown, Chad P.
    Abstract: Do exports resume when import-restricting temporary trade barriers such as antidumping are finally removed? To establish the importance of this question for emerging economies, this paper uses newly available data from the World Bank's Temporary Trade Barriers Database to update a number of inter-temporal indicators of import protection along three dimensions: additional time coverage through 2011, additional policy-imposing country coverage, and a more comprehensive depiction of impacted trading partner coverage. It then turns to the emerging economy exporters affected by temporary trade barriers and highlights the economic significance of frequently bilateral import restrictions imposed by other emerging economies, i.e., South-South protectionism. Finally, it then investigates empirically whether country-level exports resume when the previously imposed -- but temporary -- import protection is finally removed. China's exporters respond quickly and aggressively to the market access opening embodied in the removal of such import restrictions. This differs markedly from the slow and tepid export response of other emerging economies, especially when the import protection had been imposed by another emerging economy trading partner. This evidence suggests a previously unidentified long-run cost associated with such South-South protectionism that merits further research and inquiry.
    Keywords: Economic Theory&Research,Debt Markets,Emerging Markets,Free Trade,Trade Policy
    Date: 2012–08–01
  14. By: Masood Gheasi (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: The rapid growth in the foreign-born population in many high and middle-income countries in the past decades has prompted much research on the socio-economic impacts of immigration. The migration issue has become one of the most debated subjects in many developed countries. Since the early 1990s, many applied studies have been conducted on the impact of international migration on international trade, foreign direct investment, and tourism. These studies have largely adopted the same specification, viz. the log-linear gravity model in combination with the knowledge capital model, where the (logarithm of the) stock of migrants from a specific source country may be included as an additional explanatory variable. Our study provides a concise review of the relationship between migrants and their international economic linkages. It then focuses on Foreign Direct Investment (FDI), for both inward and outward FDI. The main aim of our study is to offer a synthesis by means of a meta-analysis of various studies undertaken worldwide, in order to test the robustness of the relationship between migration and foreign direct investment. Our primary results confirm that immigration has a positive impact on FDI investment in both directions (inward and outward), and that these impacts are higher when migrants are highly-educated and skilled.
    Keywords: immigration; diasporas; foreign direct investment; gravity model; meta-analysis
    JEL: F22 P45
    Date: 2011–10–13
  15. By: INUI Tomohiko; ITO Keiko; MIYAKAWA Daisuke; SHOJI Keishi
    Abstract: This paper examines how firms' decision to start exporting is affected by the availability of information on export markets. Unlike existing studies which focus on information sharing among firms, we examine the information provided by firms' top lender banks (main banks). Specifically, using a unique dataset containing information on both Japanese firms' export activities and their main banks' experience in transacting with other exporting firms, we study whether main banks act as a conduit of information on export markets. We find that information spillovers through main banks positively affect client firms' decision to start exporting (extensive margin), implying that information on foreign markets provided by banks substantially reduces the fixed entry cost of exporting. On the other hand, we do not find any evidence that information provided by banks has an effect on the export volume or on the growth rate of exports (intensive margin). Our results highlight that channels of information spillovers other than those examined in the literature hitherto may be of considerable importance.
    Date: 2012–07
  16. By: Kunal Dasgupta; Jordi Mondria
    Abstract: Uncertainty about product quality is endemic in international trade. We develop a dynamic, two country model where home producers differ in terms of the quality of the products they sell. This quality is imperfectly observed by foreign consumers initially but known once the product is consumed. We show that this uncertainty generates an information cost of exporting, over and above the usual fixed costs used in standard heterogeneous firm models. We use the model to examine the role played by intermediaries in alleviating quality uncertainty. An intermediation technology involving higher marginal cost but lower fixed cost arises endogenously in our model. We analyze the sorting of exporters into different exporting modes. In the process, we uncover a novel externality of using intermediaries. We go on to study how the equilibrium depends on the degree of product heterogeneity, the level of information and the measure of available intermediaries.
    Keywords: Intermediaries, quality, uncertainty, screening, asymmetric information
    JEL: D83 F10 F19 L15
    Date: 2012–08–01
  17. By: Christian Arndt; Julia Spies
    Abstract: While quantifying the foreign ownership premium has received a lot of attention in the empirical literature, there is only little known about productivity variations between foreign affiliates of multinational firms. In order to enhance the understanding of the economic causes of this heterogeneity we analyze the impact of various institutional and economic characteristics of the countries in which the multinational parent companies are located on the productivity of their affiliates. Using a full record of the population of foreignowned affiliates in Germany we find that affiliates’ mean performances differ markedly when grouped by the country of their parent firm. We show that gravitational forces and institutional characteristics of the country of the parent, such as the availability of credit and the freedom to trade internationally, co-determine the foreign-owned affiliates’ performances in a significant way. Moreover, the intensity of the impact depends on the intensity of the ownership link between the parent and its affiliate. Some residual impact of nationality remains.
    Keywords: foreign direct investment & productivity spillover & investor country characteristics
    JEL: F2 O2 O1
    Date: 2012–02
  18. By: Appelbaum, Elie; Melatos, Mark
    Abstract: We raise the possibility that at least some of the free trade areas observed in practice are customs unions in disguise. We distinguish between generalized and standard customs unions. While members of the former can choose different external tariff rates, members of the latter levy a common external tariff. The chief insight is that, in practice, it is typically not possible to differentiate between a generalized customs union and a free trade area. We demonstrate that generalized customs unions will be established and offer an ex­planation for the design of Article XXIV of the General Agreement on Tariffs and Trade.
    Keywords: World Trade Organization; Trade Agree­ment; General Agreement on Tariffs and Trade; Free Trade Area; Common External Tariff; Customs Union
    Date: 2012–05
  19. By: Tillmann Schwörer
    Abstract: The economic effects of offshoring have been subject to extensive empirical analysis in the past, but many studies have not accurately distinguished between offshoring, domestic outsourcing, and the substitution of domestic by foreign suppliers. In this study I provide stylized facts on offshoring in Europe between 1995 and 2008 taking into account this distinction. I show that service inputs have been offshored and domestically outsourced, whereas material inputs have been either offshored or moved from domestic to foreign suppliers. The strong overall decline in the share of internal production evokes the question whether this has led to productivity gains within firms. I address this question by combining industry-level data on offshoring and domestic outsourcing with a firm panel. I find that offshoring of non-core activities has led to productivity gains whereas offshoring of core activities and domestic outsourcing have had no such effects. The estimated productivity gains are in particular driven by offshoring to low-wage countries and by the gains of multinational firms
    Keywords: offshoring, domestic outsourcing, productivity
    JEL: F23 D24 L24 L60
    Date: 2012–07
  20. By: Darian Woods (The Treasury); Andrew Coleman (Motu Economic and Public Policy Research and the Treasury)
    Abstract: The average value of a particular class of agricultural exports varies widely across different destinations. This raises the question: in the event of a supply shock, such as the implementation of the Emissions Trading Scheme, can farmers offset higher costs by raising their average prices by contracting exports to lower value destinations? If the difference in value reflects different prices because producers have market power, the answer will be “yes”. If the difference in value reflects differences in the quality of goods exported to different destinations, the answer is “no.” This paper use a variety of trade data and techniques to examine which explanation is most likely to be relevant. While the answers are not definitive, there is little support for the hypothesis that exports are curtailed.
    Keywords: Agriculture, exports, emissions trading scheme, price, quality, market power, international trade, New Zealand
    JEL: D43 F12 F14 F18 Q17 Q56
    Date: 2012–07
  21. By: Emiliano Magrini (Sapienza University); Pierluigi Montalbano (University of Sussex and Sapienza University)
    Abstract: Following on from the existing poverty assessments of trade liberalisation in Vietnam under "doi moi", the aim of this paper is to provide a parallel assessment of vulnerability from trade. Taking advantage of the existence of extensive household data from two different sets of Vietnamese household surveys (VLSS and VHLSS) covering the entire period 1992-2008, it applies a new vulnerability measure to assess empirically the presence of robust heterogeneity in the vulnerability of Vietnamese households according to their relative position in trade related activities. The contribution of this paper is twofold: it sheds light on the timely debate on vulnerability to poverty from trade openness focusing on micro linkages between trade liberalisation and household consumption over a longer time span than is usually covered by current literature; it proposes a new vulnerability measure capable of assessing, besides the non-stochastic poverty determinants and the observed impact of shocks on households, the net welfare effect of risk-induced "ex-ante" changing behaviour, using cross-sectional data. The main results of this paper are the following: it highlights the presence of a growing phenomenon of vulnerability induced by risk exposure alongside the reduction of poverty rates in Vietnam; it demonstrates the presence of a negative welfare effect of "ex ante" changing behaviour induced by risk exposure. On the top of that, it assesses robust heterogeneity in vulnerability according to households' relative position in trade related activities. Our empirical results are relevant for policymaking. They highlight that the so-called “economic stabilisation policies” should receive more consideration even in absence of downside shocks.
    Keywords: trade openness, vulnerability, poverty, Vietnam
    JEL: F14 O12 D12 C31
    Date: 2012–07
  22. By: Fischer, Justina A.V.
    Abstract: Globalization is a universal phenomenon that not only makes domestic economies restructure, but also may impact other areas of local societies. This paper studies the effect of globalization on human relations, in particular on the formation of social networks, both bonding and bridging: I postulate that globalization induces labor market and workplace dynamics that would be destructive. Data come from the European and World Values Survey (1981-2008) on about 320’000 people’s values and attitudes, in this study spanning up to 22 years in about 80 countries, which have been matched with an index of economic globalization. In this pseudo micro panel I find robust evidence for a diminishing effect of globalization for bridging social networks with friends, but an enforcing one for bonding social networks among relatives. These results do not appear to be driven by a change in individuals’ preferences with respect to consuming and forming social ties. My findings are consistent with theories that claim growing physical distance and stronger reliance on family resources to lower the level of bridging social networks in society.
    Keywords: social capital; social networks; globalization; international trade; World Values Survey
    JEL: F15 F16 O15 Z13
    Date: 2012–07–31
  23. By: Keiko ITO (Keiko ITO School of Economics, Senshu University)
    Abstract: This paper examines whether first-time exporters achieve productivity improvements through learning-by-exporting effects. The results suggest that starting exporting to North America/Europe has a strong positive effect on sales and employment growth, R&D activity, and productivity growth. On the other hand, starting exporting to Asia does not have any strong productivity enhancing effects, although it does tend to raise the growth rates of sales and employment and be associated with an increase in R&D expenditure. However, even for these variables, the positive impact of starting exporting to North America/Europe is much larger. Further analysis shows that export starters to North America/Europe are larger, more productive, more R&D intensive, and more capital intensive than export starters to Asia even before they start exporting, suggesting that the former are potentially better performers than the latter. In other words, the former have greater absorptive capacity, and this absorptive capacity itself may be a source of the larger positive learning-by-exporting effects. Moreover, export starters to North America/Europe become more innovative than export starters to Asia after starting exporting. The results obtained imply that potentially innovative non-exporters should be supported through an export promotion policy. Firms that have the potential to be sufficiently innovative to export to developed regions are likely to benefit from doing so through the positive interaction between exporting and innovation.
    Date: 2012–06–01

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