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on International Trade |
| By: | Ronald B. Davies (University College Dublin; Institute for International Integration Studies, Trinity College Dublin; CES-Ifo); Tine Jeppesen (University College Dublin) |
| Abstract: | In this paper we directly test the proposed productivity hierarchy of direct, indirect and non-exporters using firm-level data from 105 developing and transition countries. Using both regression analysis and propensity score matching, we find strong evidence to suggest that direct exporters are on average more productive than both indirect and non-exporters. However, only the results obtained using regression analysis support a similar ranking between indirect and non-exporters. Furthermore, we test the underlying relationship between source-specific fixed trade costs and the average productivity differences between the three firm-types. We find a significant and positive relation between such costs and the average productivity premium of direct exporters only. While other studies have shown that exports by trade intermediaries increase with destination-specific fixed costs, our results suggest that this is also true for source-specific costs, as an increase in the average productivity of direct exporters indicate that a larger share of less productive direct exporters choose to make use of a trade intermediary as export costs rise. |
| Keywords: | Heterogeneous firms; Export mode; Exporting Costs |
| JEL: | F1 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp408&r=int |
| By: | Giuliano CONTI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alessia LO TURCO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Daniela MAGGIONI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali) |
| Abstract: | We provide evidence on the firm-level productivity effects of imports of intermediates. Exploiting a large panel of Italian manufacturing firms we are able to separately test the role of offshoring to high and low income countries. Contrary to our expectations, no significant impact is found out for purchases from developed countries, while firmefficiency seems to be positively affected by imported inputs from developing countries. Anyway, we prove that this result may be driven by the omission of another important firm internationalisation strategy, the export activity. Due to the strict linkage existing between export and import activity at firm level, we investigate whether the significant role of offshoring still stay after controlling for the firms' sales in foreign markets. Positive effects of offshoring disappear, while we confirm the existence of learning-by-exporting, already displayed in literature for Italy. |
| Keywords: | Exports, Imports, Productivity |
| JEL: | D22 F10 F14 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:381&r=int |
| By: | Rollo, Valentina |
| Abstract: | . This paper uses firm-level data to study the pricing-behavior of Tanzanian exporters. The important question of how exporting firms make pricing decisions has not received significant attention in the trade literature, which is more focused on factors that determine export flows. The results of the paper show that the free on board price of Tanzanian exports is differentiated both across exporters -- within product-destination pairs -- and across markets -- within firm-product pairs. Moreover, contrasting with existing evidence, price differentiation across destinations seems to be mainly relevant for homogenous goods. This result could indicate either that goods classified as homogeneous can potentially be differentiated by their intrinsic quality (such as coffee), or that firms charge different mark-ups in different markets. Although further work is needed to confirm what leads to price dispersion, allowing for the possibility that food products can be vertically differentiable amplifies the spectrum of existing opportunities for developing countries to exploit product differentiation and market niches. The study also discusses the implications of the empirical findings in light of the predictions of price and quality competition models, but finds that the results cannot be explained by a single trade model of quality or price competition. |
| Keywords: | Markets and Market Access,Economic Theory&Research,Access to Markets,Commodities,Emerging Markets |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6225&r=int |
| By: | Piyusha Mutreja; B. Ravikumar; Raymond Riezman; Michael Sposi |
| Abstract: | In this paper we show that price equalization alone is not sufficient to establish that there are no barriers to international trade. There are many barrier combinations that deliver price equalization, but each combination implies a different volume of trade. Therefore, in order to make statements about trade barriers it is necessary to know the trade flows. We demonstrate this first theoretically in a simple two-country model. We then extend the result quantitatively to a multicountry model with two sectors. We show that for the case of capital goods trade, barriers have to be large in order to be consistent with the observed trade flows. Our model also implies that capital goods prices look similar across countries, an implication that is consistent with data. Zero barriers to trade in capital goods will deliver price equalization in capital goods, but cannot reproduce the observed trade flows in our model. |
| Keywords: | International trade |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:129&r=int |
| By: | Pramila Crivelli; Jasmin Gröschl |
| Abstract: | In an attempt to disentangle the impact of sanitary and phytosanitary (SPS) measures on trade patterns, we estimate a Heckman selection model on the HS4 disaggregated level of trade. We find that aggregated SPS measures constitute barriers to agricultural and food trade consistently to all exporters. But conditional on market entry, trade flows are positively affected by SPS measures. Additionally, we find that SPS measures related to conformity assessment hamper market entry and trade flows, while SPS measures related to product characteristics pose an entry barrier but increase bilateral trade flows conditional on meeting the standard. |
| Keywords: | Agriculture, International Trade, Sanitary and PhytosanitaryMeasures, Conformity Assessment, Heckman Selection Model |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:gen:geneem:12092&r=int |
| By: | Verico, Kiki |
| Abstract: | This study attempts to analyze the impact of intra regional trade agreement on FDI inflows in Southeast Asia. The agreement is ASEAN Free Trade Area (AFTA). The observed countries are Indonesia, Malaysia and Thailand. These three countries have been selected based on several considerations. Trade indicators of Revealed Comparative Advantage (RCA), Constant Market Share Analysis (CMSA) and Net Export (NX) show these three countries have intra trade advantage in primary products. These indicators are useful to assess how effective AFTA in accommodating her member’s trade advantage products into her priority products list. Furthermore this study attempts to assess the impact of AFTA on FDI inflows as a proxy of its effectiveness on investment. This study adopts econometric model of Panel Data Analysis on both the Static Fixed Effects and Dynamic Panel Data (DPD) Analysis to find the impact of AFTA and other variables to FDI inflows. |
| Keywords: | Trade; Neoclassical Models of Trade; Long-Term Capital (FDI inflows); AFTA; Asian Economic Crisis |
| JEL: | F11 F1 F21 |
| Date: | 2012–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42087&r=int |
| By: | Hayakawa, Kazunobu |
| Abstract: | The international export and investment activities of firms have been widely studied by scholars. In particular, prior studies have focused on two main hypotheses about firms engaged in international activities such as exporting and investing abroad; namely, self-selection of more productive firms into international activities and learning-by-doing international activities. This paper is the first study that explores these hypotheses in regard to firms’ use of free trade agreements (FTAs). We first estimate the propensity score for firms’ use of FTA schemes, and find that larger firms are more likely to participate. Then, by conducting matching analysis using the propensity scores, we find that the use of FTA schemes does not change employment in firms, but does result in more local inputs used and increased exports. |
| Keywords: | Asia, International trade, International economic integration, International agreements, FTA, Microdata, Propensity score matching |
| JEL: | F15 F53 O53 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper366&r=int |
| By: | Daria Taglioni (The World Bank); Veronika Zavacka (EBRD) |
| Abstract: | The failure of trade economists to anticipate the extreme drop in trade post-Lehman Brothers bankruptcy suggests that the behaviour of trade in exceptional circumstances may still be poorly understood. In this paper we explore whether uncertainty shocks have explanatory power for movements in trade. Our VAR estimations on US data suggest that domestic uncertainty is a strong predictor of movements in imports, but has little effect on exports. Guided by these results, we estimate a bilateral model with focus on the impact of importer uncertainty on foreign suppliers. We find that there is a strong negative relationship between uncertainty and trade and that this relationship is non-linear. Uncertainty matters most when its levels are exceptionally high. We find no evidence of learning from past turmoils, suggesting that prior experience with major uncertainty shocks does not reduce the effect on trade. In line with our expectations, the negative effect of uncertainty shocks on trade is higher for trade relationships more intensive in durable goods. Surprisingly, however, the effect of durability is non-linear. Supply chain considerations or the possibility that the relationships with the highest durability lead to important compositional effects may have a bearing on the results. Our results are robust to excluding the post-Lehman shock, suggesting that the trade response during the 2008-09 crisis has been similar to past uncertainty events. |
| Keywords: | uncertainty, international trade |
| JEL: | F02 F10 G01 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:149&r=int |
| By: | Stéphane BECUWE (GREThA, CNRS, UMR 5113); Bertrand BLANCHETON (GREThA, CNRS, UMR 5113); Léo CHARLES (GREThA, CNRS, UMR 5113) |
| Abstract: | This article offers an exhaustive quantitative analysis of the French foreign trade during the second part of the 19th century (1850-1913). It uses both geographical and sectoral dimension. Products are analyzed at a highly disaggregated level (corresponding to the SITC rev.3). We have studied imports from 41 countries and exports to 63 destinations.\r\nThe article shows that France has faced problems to benefit from the global economic growth induced by the first globalization from the end of the 1870’s because of a weakness in geographical and sectoral diversification. Indeed, France withdraws on close markets and is not able to take advantage of emerging countries’ economic development. |
| Keywords: | International trade, Intra-Industry trade, 1st globalization, France |
| JEL: | N7 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2012-22&r=int |
| By: | Baybars Karacaovali (Department of Economics, University of Hawaii at Manoa, USA) |
| Abstract: | In this paper, I start out with a standard political economy of trade policy model to guide the subsequent estimation of the determinants of trade policy in a developing country. I carefully test the model with Colombian data from 1983 to 1998 accounting for endogeneity and omitted variable bias concerns and then expand it empirically in several directions. I show that it is important to control for the impact of a drastic trade reform shock that a¤ects all sectors and disentangle its e¤ect from preferential trade agreements (PTAs). I ?nd that protection is higher in sectors that are impor- tant exports for preferential partners which may be seen as a stumbling block e¤ect of PTAs for Colombia. I also relax the assumption of ?xed political weights that measure the extra importance of producers?welfare relative to consumers in the government objective. I measure the impact of sectoral characteristics on tari¤s indirectly through political weights as a novel alternative to nonstructurally estimating them as deter- minants of protection. Accordingly, I obtain more realistic estimates for the political weights further contributing to the literature. |
| Keywords: | Political economy of trade policy, trade liberalization, preferential trade agreements, empirical trade |
| JEL: | F13 F14 F15 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201220r&r=int |
| By: | Wagner, Joachim (Leuphana University, Lueneburg and CESIS, Stockholm) |
| Abstract: | This study uses newly available enterprise level data for firms from manufacturing industries in Germany to test for the link between credit constraints, measured by a credit rating score from the leading credit rating agency Creditreform, and exports. In line with hypotheses from theoretical model we find a positive link between a better credit rating score of a firm and both the probability that the firm is an exporter and a higher share of exports in total sales. This link, though statistically highly significant, is not very strong from an economic point of view. While empirical evidence for the hypothesis that credit constrained firms are less likely to start to export is at best weak, we find no evidence for a statistically significant difference in credit rating scores between firms that stopped to export and firms that continued to export. |
| Keywords: | Credit constraints; exports; Germany |
| JEL: | F14 |
| Date: | 2012–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0286&r=int |
| By: | Cebeci, Tolga; Fernandes, Ana M.; Freund, Caroline; Pierola, Martha Denisse |
| Abstract: | This paper introduces the Exporter Dynamics Database. The database includes exporter characteristics and measures of exporter growth based on firm-level customs information from 38 developing and seven developed countries, primarily for the period between 2003 and 2010. The measures are available at different levels of aggregation, including: a) country-year, b) country-year-product, and c) country-year-destination. Several new stylized facts about exporter behavior across countries emerge from the database. (i) Larger or more developed economies have more exporters, larger and more diversified exporters, and lower entry and exit rates than smaller or developing economies. (ii) In the short run, expansions along the intensive margin (exporter size) contribute more to export growth than expansions along the extensive margin (number of exporters). (iii) Exit rates are highly correlated with entry rates and both are negatively correlated with survival rates, average exporter size, and diversification. (iv) The number of exporters and the entry and exit rates in a country-product group are partially driven by country and product-group effects; however, the average size of exporters in a country-product group is not. Although the first three facts can be explained by models incorporating firm heterogeneity and uncertainty, the fourth fact is more difficult to explain with existing models. Several findings are confirmed in this database, including the importance of large multi-product firms. This database can be a valuable tool to improve the understanding of the micro-foundations of export growth, by providing new insights about exporter characteristics and dynamics. |
| Keywords: | Debt Markets,Free Trade,Currencies and Exchange Rates,Economic Theory&Research,Trade Policy |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6229&r=int |
| By: | Mauro Boffa; Marcelo Olarreaga |
| Abstract: | During the recent financial crisis many countries resorted to protectionist measures to try to boost demand for domestically-produced goods. In this paper we explore the extent to which the adoption of protectionist measures led to retaliation by other countries undermining the increase in demand. We found no evidence of retaliation. On the contrary, there is strong evidence of chicken-games being played. Indeed, the probability of a protectionist measure being imposed on a trading partner’s export bundle is significantly smaller when the partner imposes a protectionist measure on home exports. |
| Keywords: | Trade Retaliation, Chicken-games, Financial Crisis. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:gen:geneem:12034&r=int |
| By: | Amjad, Rashid; Ghani, Ejaz; Din, Musleh ud; Mahmood, Tariq |
| Abstract: | This study attempts to evaluate exporters’ perceptions of the problems they face in exploiting their full competitive potential in the international market. Using firm-level survey data, we find that a shortage of skilled labor, the energy crisis, institutional rigidities, market imperfections, and weaknesses in physical infrastructure are the key impediments to achieving export competitiveness. Policies geared toward improving the quality of skilled labor, resolving the energy crisis, and reducing transaction costs by improving the institutional and physical infrastructure are key to expanding Pakistan’s exports on a sustained basis. |
| Keywords: | Pakistan; export competitiveness; exporting procedures; certifications |
| JEL: | F13 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41978&r=int |
| By: | Resiandini, Pramesti |
| Abstract: | This paper compares data on Japanese and Korean automobile exports to the United States to examine consistency with the Alchian-Allen theorem. The theorem suggests that imposing a per unit charge such as transport cost will lower the relative price and increase the relative consumption of higher quality cars. Results show that the relative price of higher-quality cars is not necessarily lower with increased shipping costs, measured by CIF charges (cost, insurance, and freight). A possible explanation is that insurance and other shipping charges are imposed based on the car price, and these charges reduce or eliminate the Alchian-Allen effect of per-unit freight charge. |
| Keywords: | International Trade; Transport Costs; Alchian-Allen Theorem; Dynamic OLS |
| JEL: | F14 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41928&r=int |
| By: | Joël Hellier (EQUIPPE, University of Lille 1, and LEMNA, University of Nantes) |
| Abstract: | The predictions from the traditional North-South HOS approach are at variance with the main characteristics of the Inequality-Globalization nexus. It is shown that by modifying this model and relaxing some of its most restrictive assumptions, it is possible to generate these characteristics. Four series of extensions are analysed: 1) divergent factor endowments between the North and the South and growing size of the South; 2) labour market rigidities resulting from a minimum wage or from the fair wage hypothesis; 3) the introduction of technological differences between countries, of technological transfers, of technological catching up and of technological biases; 4) the inserting of production segmentation and international outsourcing. Further possible extensions are also discussed. The resulting augmented North-South HOS approach provides suitable modelling of the Inequality-Globalization nexus. |
| Keywords: | Globalisation; H-O-S; Inequality; North-South model. |
| JEL: | D33 E24 F16 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-244&r=int |