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on International Trade |
| By: | World Bank |
| Keywords: | International Economics and Trade - Trade and Regional Integration International Economics and Trade - Trade Policy International Economics and Trade - Free Trade Macroeconomics and Economic Growth - Economic Theory & Research International Economics and Trade - Customs and Trade |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:2722&r=int |
| By: | Spring, Eva; Grossmann, Volker |
| Abstract: | Trust in the citizens of a potential partner country may affect the decision to trade with or to migrate to a foreign country. This paper employs panel data to examine the causal impact of such bilateral trust on international trade and migration patterns. We apply instrumental variables (IV) approaches that capture the exogenous variance of bilateral trust separately with eight indicators of genetic ("somatic") distance between country-pairs. These indicators work equally well at the first stage. However, second-stage results very much depend on the exact measure employed as instrument. Overall, we find little evidence that bilateral trust affects international movements of goods and labor. More generally, we highlight the potential fragility of IV estimations even when the instruments seem plausible on theoretical grounds and when standard statistical tests confirm their validity. |
| Keywords: | Bilateral trust; International migration; International trade; Instrumental variables; Somatic distance |
| JEL: | F10 F22 Z10 |
| Date: | 2013–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00442&r=int |
| By: | Sugata Marjit |
| Abstract: | We build up a simple Ricardian trade model with imperfection in the market for credit which affects the pattern of production. Workers/entrepreneurs are endowed with different levels “capital†and need to borrow to produce the credit intensive good. We argue that in such a framework identical countries will gain from trade without the assumption of comparative advantage. Thus we show that we do not need monopolistically competitive models to generate trade between similar countries. Trade in this set up takes place in fragments and that helps alleviating credit constraints. Moreover, very poor firms and very rich ones are not likely to gain from trade in fragments, but the middle ones will. |
| Date: | 2013–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:479&r=int |
| By: | M. Macis; F. Schivardi |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201208&r=int |
| By: | Murphy, Daniel (University of Michigan) |
| Abstract: | Empirical studies show that tradable consumption goods are more expensive in rich countries. This paper proposes a simple yet novel explanation for this apparent failure of the law of one price: Consumers' utility from tradable goods depends on their consumption of complementary goods and services. Monopolistically competitive firms charge higher prices in countries with more complementary goods and services because consumer demand is less elastic there. The paper embeds this explanation within a static Krugman (1980)-style model of international trade featuring differentiated tradable goods. Extended versions of the model can account for the high prices of services in rich countries, as well as for several stylized facts regarding investment rates and relative prices of investment and consumption across countries. The paper provides direct evidence in support of this new explanation. Using free-alongside-ship prices of U.S. and Chinese exports, I demonstrate that prices of specific subsets of tradable goods are higher in countries with high consumption of relevant complementary goods, conditional on per capita income and other country-level determinants of consumer goods prices. |
| Keywords: | real exchange rates, investment, demand complementarity, monopolistic competition |
| JEL: | E22 E31 F12 F14 L11 O16 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:636&r=int |
| By: | Veronica Rappoport (Columbia University); Kim Ruhl (New York University Stern School of Busi); Daniel Paravisini (Columbia University) |
| Abstract: | We propose a model that can account for both the dynamics of the firm's exports and debt stock along its life cycle, and the short-term responses of large and small exporters to credit shocks. In our model, the demand for external credit results from two different motives: i) to finance fixed investment, i.e., to increase the fixed capital stock or to pay upfront costs to enter new export markets, and ii) to finance short-term working capital, i.e., wages or inputs. Early in the life of the firm most credit is used for the expansion of the capital stock and the number of export markets. For large and established firms, on the other hand, external credit is mostly used to finance working capital. In our model, the impact of a credit shock on exports varies across firms, depending on their age and size. In the short term, most of the effect of a credit shock on aggregate exports is explained by the drop in the intensive margin of trade by large firms. However, a permanent change in credit conditions affects the steady state number and size of exporters. We calibrate this model to match our data parameters and perform different counterfactual simulations. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:706&r=int |
| By: | Antonio Accetturo (Bank of Italy, Italy); Valter Di Giacinto (Bank of Italy, Italy); Giacinto Micucci (Bank of Italy, Italy); Marcello Pagnini (Bank of Italy, Italy) |
| Abstract: | Two main hypotheses are usually put forward to explain the productivity advantages of larger cities: agglomeration economies and firm selection. Combes et al. (2012) propose an empirical approach to disentangle these two effects and fail to find any impact of selection on local productivity differences. We theoretically show that selection effects do emerge when asymmetric trade and entry costs and different spatial scale at which agglomeration and selection may work are properly taken into account. The empirical findings confirm that agglomeration effects play a major role. However, they also show a substantial increase in the importance of the selection effect when asymmetric trade costs and a different spatial scale are taken into account. |
| Keywords: | agglomeration economies, firm selection, market size, entry costs, openness to trade |
| JEL: | C52 R12 D24 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:24_13&r=int |
| By: | Castelli , Cristina (Italian Trade Promotion Agency (ICE), Csil Milano); Castellani, Davide (University of Perugia, Italy; CIRCLE; Sweden; IWH and LdA) |
| Abstract: | This paper presents the sectoral and geographic distribution of R&D-related activities, in comparison with manufacturing activities, by analysing data (from the fDi Markets database) on the number of cross-border greenfield investment projects. Results show that crossborder R&D investments are concentrated in fewer sectors and countries (of origin and destination) than manufacturing, and they are less sensitive to the obstacles related with the distance between home and host countries. More than the two-thirds of all cross-border investments in R&D-related activities are in ICT/Electronic and Life Sciences/Chemicals sectors, but these sectors differ in their propensity towards R&D and Design, Development and Testing activities. Almost half of the investments is due to multinationals from North America, and over one third from Western Europe, but the two areas show a different sectoral specialization. Considering the areas of destination, Asia is the largest recipient, and specializes in the ICT/Electronics and Industrial Machinery, while Western Europe ranks second and attracts relatively more research investments in Life Sciences/Chemicals, as well as in the Machinery industry |
| Keywords: | Internazionalization of R&D; Multinational Firms; Europe; North America; Asia |
| JEL: | F23 L23 O30 |
| Date: | 2013–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_009&r=int |
| By: | Gael Raballand; Salim Refas; Monica Beuran; Gozde Isik |
| Keywords: | Transport and Trade Logistics Ports and Waterways Infrastructure Economics and Finance - Infrastructure Economics Transport Economics Policy and Planning Industry - Common Carriers Industry Transport |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:10039&r=int |
| By: | Nobuaki Yamashita (La Trobe University, Melbourne); Toshiyuki Matsuura (Keio University, Tokyo); Kentaro Nakajima (Tohoku University, Sendai) |
| Abstract: | This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995-2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:kei:dpaper:2012-042&r=int |
| By: | Bernard Hoekman; Will Martin |
| Keywords: | International Economics and Trade - Access to Markets Social Protections and Labor - Labor Policies Macroeconomics and Economic Growth - Markets and Market Access Private Sector Development - Emerging Markets Economic Theory and Research |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:10041&r=int |
| By: | Storeygard, Adam |
| Abstract: | Transport costs are widely considered an important barrier to local economic activity but their impact in developing countries is not well-studied. This paper investigates the role of inter-city transport costs in determining the income of Sub-Saharan African cities, using two new data sources. Specifically, it asks how important access to a large port city is for the income of hinterland cities in 15 countries. Satellite data on lights at night proxy for city economic activity, and shortest routes between cities are calculated using new road network data. Cost per unit of distance is identified by world oil prices. The results show that an oil price increase of the magnitude experienced between 2002 and 2008 induces the income of cities near a major port to increase by 6 percent relative to otherwise identical cities 500 kilometers farther away. Cities connected to the port by paved roads are chiefly affected by transport costs to the port, while cities connected to the port by unpaved roads are more affected by connections to secondary centers. These are important findings for economic development in Sub-Saharan Africa since the majority of its population growth over the next few decades is expected to be in urban areas. |
| Keywords: | Transport Economics Policy&Planning,Rural Roads&Transport,Subnational Economic Development,E-Business,Roads&Highways |
| Date: | 2013–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6444&r=int |
| By: | Harun Onder |
| Keywords: | Law and Development - Trade Law Environment - Climate Change Mitigation and Green House Gases Macroeconomics and Economic Growth - Climate Change Economics Economic Theory and Research Private Sector Development - Emerging Markets |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:10036&r=int |