nep-int New Economics Papers
on International Trade
Issue of 2012‒11‒17
seventeen papers chosen by
Alessia A. Amighini
University Amedeo Avogadro

  1. Out of sight, not out of mind. Education networks and international trade By Marina Murat
  2. International trade and collective bargaining outcomes : Evidence from German employer-employee data By Felbermayr, Gabriel; Hauptmann, Andreas; Schmerer, Hans-Jörg
  3. Export intensity and the productivity gains of exporting By Miguel Manjón; Juan A. Mañez; María E. Rochina-Barrachina; Juan A. Sanchis-Llopis
  4. The Great Export Recovery in German Manufacturing Industries, 2009/2010 By Joachim Wagner
  5. Trade Sophistication in a Transition Economy: Poland 1980–2009 By Mitchell Kellman; Mitchell Yochanan Shachmurove
  6. Do non-stop flights boost exports? By Marco Alderighi; Alberto Gaggero
  7. What do we know about the relationship between access to finance and international trade? By Silvio Contessi; Francesca de Nicola
  8. Camouflaged Trade Agreements By Elie Appelbaum; Mark Melatos
  9. International trade and Economic growth: cross-country evidence By Josheski, Dushko; Lazarov, Darko
  10. North-South Globalization and Inequality By Joël Hellier
  11. Skill-biased labor market reforms and international competitiveness By Schmerer, Hans-Jörg
  12. Time to ship during financial crises By Nicolas Berman; José de Sousa; Philippe Martin; Thierry Mayer
  13. Understanding the Causal Links between Financial Development and International Trade By Youssouf KIENDREBEOGO
  14. Incentive Schemes in Export and Investment Promotions By Leandro Arozamena; Federico Weinschelbaum
  15. The Effects of Financial Development on Trade Performance and the Role of Institutions By Youssouf KIENDREBEOGO
  16. International trade, technical change and wage inequality in the U.K. economy By Engelmann, Sabine
  17. Irish firms’ productivity and Imported Inputs By Emanuele Forlani

  1. By: Marina Murat
    Abstract: This paper investigates the impact of international students on the UK bilateral trade with 167 partner economies during 1999-2009. The base hypothesis is that transnational social networks lower the invisible trade barriers existing between countries. University students typically develop ties of friendship and trust that can last for decades after graduation and may evolve into economic and business ties. I find robust evidence that education networks boost the bilateral trade between the UK and the home countries of graduates and students. At a more disaggregated level, the strongest effects on exports and imports derive from the networks linked to the Middle East and to the new member countries of the European Union.
    Keywords: international students, higher education, networks, bilateral trade;
    JEL: I23 J24 F14 F20
    Date: 2012–11
  2. By: Felbermayr, Gabriel; Hauptmann, Andreas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schmerer, Hans-Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we exploit individual worker information to construct profitability measures that are free of skill composition. We find that rent-sharing is less pronounced in more export intensive firms or in more open industries. The exporter wage premium is highest for low productivity firms. In line with theory, these findings are unique to the subsample of plants covered by collective bargaining." (Author's abstract, IAB-Doku) ((en))
    Keywords: Außenhandel - Auswirkungen, Tarifverhandlungen, Export, Einkommenseffekte, Gewerkschaftspolitik, Gewinnbeteiligung, produzierendes Gewerbe, IAB-Linked-Employer-Employee-Datensatz
    JEL: F16 J51 E24 J3
    Date: 2012–03–20
  3. By: Miguel Manjón (QURE-CREIP Department of Economics, Universitat Rovira i Virgili); Juan A. Mañez (Department of Applied Economics II and ERICES, Universitat de València); María E. Rochina-Barrachina (Department of Applied Economics II and ERICES, Universitat de València); Juan A. Sanchis-Llopis (Department of Applied Economics II and ERICES, Universitat de València)
    Abstract: This paper analyses whether the productivity gains associated with learning-by-exporting (controlling for self-selection) depend on the intensity of the firm exporting activity. Results from a representative ample of Spanish manufacturing firms indicate that the yearly average gains in productivity are larger for those firms that increase their export to sales ratio.
    Keywords: export intensity; learning-by-exporting; productivity; endogenous Markov; semi-parametric approach
    JEL: C13 C14 C33 C36 D24 F1
    Date: 2012–11
  4. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper uses comprehensive high-quality panel data from official statistics for exporting enterprises to investigate the micro-structure of the recent export recovery in 2010 in manufacturing industries in Germany after the great recession of 2008/2009. Almost all of the increase in exports was due to positive changes of exports in firms that continue to export (i.e. at the so-called intensive margin) while the increase of exports due to export starters (at the so-called extensive margin) was tiny. It is shown that Idiosyncratic shocks to very large firms played a decisive role in shaping the export recovery. These findings are remarkably symmetric to the results from an analysis of the great export collapse of 2008/09.
    Keywords: Exports, great export recovery, granular economy, Germany
    JEL: F14 E32
    Date: 2012–11
  5. By: Mitchell Kellman (The City College of New York and The Graduate Center of the City University of New York); Mitchell Yochanan Shachmurove (The City College of New York and The Graduate Center of the City University of New York)
    Abstract: Poland has historically demonstrated exceptional resiliency in the face of change. This paper examines how Poland coped with huge structural realignments from the rise of Solidarity until the present, seeking to provide an objective analysis of Poland’s evolution of trade structures while it developed into a competitive member of the European Union. Employing four methodologically unrelated measures, this study looks at how the degree of sophistication of Poland’s manufactures responded and contributed to these changes. The result is that each distinct index reveals a common trend of rapid adaptation within the competitive environment of the European Union.
    Keywords: Trade Patterns in a Transition Economy; Machinery and Transport Equipment; Exports; Poland; Solidarity; Structural Change; Sophistication Indices; Trade Specialization Index; Intra-Industry Trade; Shock Therapy; Revealed Comparative Advantage; Herfendahl- Hirschman Index; Standard International Trade Classification; Compositional Shifts; Data Aggregation; Dispersion; Market Power
    JEL: F0 F1 L0 L1 L6 N0 N6 O1 O52 P2 R1
    Date: 2012–11–06
  6. By: Marco Alderighi (University of Valle d'Aosta and Bocconi University); Alberto Gaggero (Department of Economics and Management, University of Pavia)
    Abstract: We study empirically the role of air service in boosting exports. We focus on the link between non-stop flights and outgoing trade of the Italian manufacturing sector in Europe using a panel of 12,000 half- yearly observations ranging from 1998 to 2010. The analysis shows that the supply of non-stop flights provided by Full-Service Carriers (FSCs) has a positive impact on the exports of Italian regions, whilst no significant evidence of this is found for Low-Cost Carriers. After taking the endogeneity of flight frequency into account, the estimates indicate that the elasticity of exports to FSC non-stop flights is about 10 percent.
    Keywords: airlines, export, full-service carriers, low-cost carriers, manufacturing.
    JEL: C23 F10 L20 L60 L93
    Date: 2012–10
  7. By: Silvio Contessi; Francesca de Nicola
    Abstract: In part as a response to the recent financial crisis, the relationship between access to finance and international trade has received much attention in the recent years. This article reviews trade finance, its role and functioning. It discusses the relevance of the more general concept of access to credit for firms engaging in international trade both in normal times and during times credit may be scarcer because of a banking and financial crisis. Part of the paper focuses on the evidence from the recent episode of the Great Trade Collapse, and argues that the mixed empirical evidence is at least partially explained by the heterogeneous measurements of access to finance used in the empirical literature.
    Keywords: International trade ; Exports ; Credit
    Date: 2012
  8. By: Elie Appelbaum (Department of Economics, York University, Toronto, Canada); Mark Melatos
    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: Customs Union, Common External Tariff, Free Trade Area, General Agreement on Tariffs and Trade, Trade Agreement, World Trade Organization
    JEL: F12 F13 F15
    Date: 2012–05–30
  9. By: Josheski, Dushko; Lazarov, Darko
    Abstract: Many empirical studies have been done to investigate whethere growth is influenced by international trade. But despite the great effort that has been devoted to studying the issue, there is little persuasive evidence concerning the effect of trade on growth. The main subject of our paper is to summarize the main findings based on empirical research that have been done to investigate the relationship between the trade and economic growth by using data for 208 regions and countries in OLS regression analysis. Our results from empirical investigation show: 1) the ratio of trade volume (sum of exports and imports at current prices-current openness or sum of exports plus sum of imports) to GDP as a proxy of trade openness has positive effect on economic growth, 2) black market premium as a proxy for imbalance in macroeconomic policies has negative effect, 3) in the presence of macroeconomic policies, trade has statistically and economic significant positive influence on growth, and 4) in an institutional environment trade lacks influencing growth, the coefficient on institutions is positive and statistically significant.
    Keywords: International trade, economic growth, institutions, macroeconomic imbalances
    JEL: F43
    Date: 2012–09–17
  10. By: Joël Hellier (EQUIPPE, Univ. of Lille 1, and LEMNA, Univ. of Nantes)
    Abstract: To analyse the globalization-inequality relationship, we extend the North-South HOS model by assuming (i) that the size of the South (emerging countries) increases over time and that the North (advanced countries) and the South never stand simultaneously inside the diversification cone, (ii) several northern and southern countries with different skill endowments, and (iii) North-South technological differences, productivity catching up and technological transfers. The model generates three phases of globalization, corresponding to different production patterns and to specific changes in inequality in the North and in the South. In the North, inequality continuously increases and unskilled workers purchasing power continuously decreases during the first phase of globalization, and inequality diverges across countries. In the South, very different profiles in terms of inequality dynamics are possible, depending on the country’s skill endowment and on the its technological gap with the North. Unlike the traditional North-South HOS approach, the model predictions are consistent with observed facts.
    Keywords: globalization, inequality, North-South trade, technology.
    JEL: D33 D63 F16 J31
    Date: 2012–10
  11. By: Schmerer, Hans-Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper proposes a multi-industry trade model with integrated capital and goods markets. Labor market imperfections in line with Mortensen and Pissarides (1994) give rise to unemployment and a channel for the government to influence markets through institutional changes. Labor market interventions feedback into the product market through changes in a country's competitiveness. Moreover, the distinction between high- and low-skill workers facilitates the analysis of skill-biased institutional changes that have stronger impact on certain skill groups. The comparative static exercise in this paper shows that high-skilled benefit from low-skill biased labor market reforms through higher wages. Lower labor costs reduce unemployment of the low-skilled and increases the reforming country's competitiveness. One-sided labor market interventions have feedback effects through adjustments at the extensive margin, which affect all workers at home and abroad irrespective of their level of skill. Governments in the non-reforming countries may react to this loss in competitiveness by initiating cooperative labor market reforms instead." (Author's abstract, IAB-Doku) ((en))
    JEL: F16 E24 J6 F21
    Date: 2012–10–08
  12. By: Nicolas Berman; José de Sousa; Philippe Martin; Thierry Mayer
    Abstract: We show that the negative impact of financial crises on trade is magnified for destinations with longer time-to-ship. A simple model where exporters react to an increase in the probability of default of importers by increasing their export price and decreasing their export volumes to destinations in crisis is consistent with this empirical finding. For longer shipping time, those effects are indeed magnified as the probability of default increases as time passes. Some exporters also decide to stop exporting to the crisis destination, the more so the longer time-to-ship. Using aggregate data from 1950 to 2009, we find that this magnification effect is robust to alternative specifications, samples and inclusion of additional controls, including distance. The firm level predictions are also broadly consistent with French exporter data from 1995 to 2005.
    Keywords: Time-to-ship;Financial crises;international trade
    JEL: F10 G01 G32
    Date: 2012–10
  13. By: Youssouf KIENDREBEOGO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper analyses the causal relationship between financial development and international trade using data of 21 developed and developing countries from 1961 to 2010 and appropriate time series techniques that allow us to decompose the source of causation according to the order of integration of the variables and the possible presence of a cointegrating relationship. We analyze in detail the issue of integration of our series in order to use the most appropriate stationarisation techniques on non-stationary series. We also account for the major problems encountered in empirical studies on issues of causality link between finance and the real economy. Our results provide little support to the view that financial development is a leading factor in the participation of countries in international trade. Mainly, we find a bi-directional relationship between the levels of finance and trade. Moreover, it appears that the causality pattern varies across countries with different levels of economic development. Overall, the development of the financial sector contributes more to the causal relationship in the developing countries than in the developed countries. These results are robust to the use of an alternative method of testing for causality and to the use of alternative indicators or financial development and international trade.
    Keywords: Financial Development;Manufacturing Trade;Granger Causality test;Error Correction Model
    Date: 2012–10–31
  14. By: Leandro Arozamena; Federico Weinschelbaum
    Abstract: This study examines the use of incentive mechanisms for employees in export and investment promotion agencies intended to improve their performance. It briefly describes these organizations and presents the contributions from economic theory that are useful to understand the agency problems that arise. It proposes a framework to study the issues that need to be considered to design a sound incentive mechanism. The study concludes that such a design should be carried out carefully, analyzing all of the possible drawbacks of rewarding each measure of employee performance, and identifies the main issues that need to be resolved.
    Keywords: Labor :: Workforce & Employment, Economics :: Investment, Integration & Trade :: Trade Facilitation, Incentive Mechanisms, Employees, Export and Investment Promotion Agencies,
    JEL: D23 J24 M50
    Date: 2012–10
  15. By: Youssouf KIENDREBEOGO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper aims to address the empirical question of whether a country's level of manufacturing trade is affected by its financial sector development and to investigate the role of institutions in this relationship. Countries endowed with better-developed financial systems tend to specialize in industries that rely on ex- ternal fi nance in production. This e ffect is likely to be stronger in countries with high-quality institutions. Using pure cross-sectional and panel speci fications on a sample of 75 countries over the period 1971-2010, we find that financial development strongly and robustly exerts a positive eff ect on manufacturing exports, even after controlling for the eff ect of banking crises. Furthermore, institutional quality is found to have a favorable eff ect on the extent to which finance influences manufacturing trade, suggesting a multiplicity of experiences of the largest exporters of manufactured goods.
    Keywords: Financial Development, Manufacturing Exports, Comparative Advantages, Institutional Quality
    Date: 2012–11–05
  16. By: Engelmann, Sabine
    Abstract: "This paper examines the joint impact of international trade and technical change on U.K. wages across different skill groups. International trade is measured as changes in product prices and technical change as total factor productivity (TFP) growth. We take account of a multi-sector and multi-factor of production economy and use mandated wage methodology to offer a close theoretical-empirical relationship. We use data of the EU KLEMS database and analyse the impact of both, product price changes and TFP changes of 11 U.K. manufacturing sectors on factor rewards of high-, medium- and low-skilled workers. Results show that real wages of skill groups are driven by the sector bias of price change and TFP growth of selected sectors of production. Furthermore, for each year 1970-2005 we estimate the share of the three different skill groups on added value which indicate structural change in the U.K. economy. Empirical results show a structural change in the U.K. economy by the declined share of low-skilled workers and the increased share of medium-skilled and high-skilled workers over the years." (Author's abstract, IAB-Doku) ((en))
    Keywords: Außenhandel, technischer Wandel, Einkommenseffekte, Lohnunterschied, verarbeitendes Gewerbe, Reallohn, Lohnhöhe, Qualifikationsstruktur, Arbeitskräftenachfrage, Beschäftigungseffekte, berufliche Qualifikation, Qualifikationsniveau, Hochqualifizierte, Niedrigqualifizierte, mittlere Qualifikation, Preisentwicklung, Produktivitätsentwicklung, Großbritannien
    JEL: F11 F16 J31
    Date: 2012–03–20
  17. By: Emanuele Forlani (Department of Economics and Management, University of Pavia)
    Abstract: In this paper, we investigate the empirical relationship between firms’ productivity, and imports of intermediate inputs at plant level. Using a unique dataset for Ireland, we focus our analysis on manufacturing firms by distinguishing for ownership and relative efficiency. Our findings show that an increase in the intensive margin of imports positively affects the efficiency of domestic firms, in particular through the imports of materials. Most importantly, we find heterogeneous responses to variations in import intensity, depending on the initial level of productivity. The more efficient a domestic firm is, and the larger the benefits from importing are. The results are robust to potential endogeneity of imports’ decisions, and to reverse casualty: past efficiency levels are not correlated with current import intensity.
    Keywords: Firms’ Productivity, Inputs, Import
    JEL: F10 F14 D24 L25
    Date: 2012–10

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