nep-int New Economics Papers
on International Trade
Issue of 2013‒05‒24
six papers chosen by
Alessia A. Amighini
Universita' Amedeo Avogadro

  1. Firm Heterogeneity and the Localization of Economic Activities By Pamela Bombarda
  4. Foreign Trade and Investment: Firm-Level Perspectives By Elhanan Helpman
  5. Impact of Growing Imports: A comparison of international and domestic firms in the Japanese manufacturing industry (Japanese) By ITO Koji
  6. Going global: markups and product quality in the Chinese art market By Jennie Bai; Jia Guo; Benjamin Mandel

  1. By: Pamela Bombarda (THEMA, Universite de Cergy-Pontoise)
    Abstract: This paper examines how market access strategies, export and FDI, respond to changes in level of integration. Empirical evidence shows that both rm exports and multinational activity are affected by trade liberalization episode. To account for the strong positive correlation between export and FDI, we develop a general equilibrium model that features firm heterogeneity, trade and FDI with final and intermediate products. Dierent spatial networks are considered to quantify the effect of a preferential trade agreement (PTA) on supply mode decisions, for both partner and excluded countries. The model sheds new light on the mechanisms through which geography reshapes the concentration of economic activities inside and outside the PTA area.
    Keywords: Heterogeneous firms; PTA; Spatial networks; Intrafirm trade
    JEL: F12 F15 F23 R12
    Date: 2013
  2. By: Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This paper presents empirical evidence on the diversification process concerning Polish exports (1994-2010), compared to European and global samples of countries. It analyzes both the commodity structure of Polish trade and the geographical diversification of Poland’s trading partners. The analysis draws on highly disaggregated data on exports (HS 6digit) and combines descriptive analysis with non-parametric, semi-parametric and parametric estimation models. The results suggest that Poland (exporting 84% of all goods present in the sample) can be placed among countries with well-diversified export products. In terms of geographical diversification, Poland exploits approximately one-fifth of its theoretical overall market reach potential (the best score among new member states) and the diversification of its partner countries increased in the period analyzed. The Polish export portfolio, in terms of the variety of both its products and receiving markets, is more diversified than what is typical for countries at approximately the same stage of economic development.
    Keywords: diversification, trade, export, Poland
    JEL: F14 F41 O11
    Date: 2013–05
  3. By: Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland)
    Abstract: The paper presents the dynamics of trade diversity with respect to stages of development in the European context. The analysis focuses on EU27 countries observed across the years 1988-2010 and compared to a sample of 136 international economies at all levels of income per capita. We use product level statistics (six digit HS0) and confront export and import patterns of absolute diversification/concentration. The results show that in line with ‘stages of diversification’ approach (Imbs and Wacziarg, 2003), EU27 countries are characterized by high degree of trade diversity (on average, EU27 countries export 78% and import 90% of goods effectively exported and imported at the world level) and within the analyzed period most of them registered a reconcentration of trade structures. Obtained estimation results confirm positive relationship between trade diversity and economic development levels (conditional mainly upon the size of the country) with a possibility of reconcentration at higher stages of development (observable in nonparametric estimates).
    Keywords: diversification, concentration, trade, economic development
    JEL: F14 O11 O52
    Date: 2013–03
  4. By: Elhanan Helpman
    Abstract: This Economica Coase Lecture reviews research that has revolutionized the field of international trade and foreign direct investment. It explains the motivation behind the development of new analytical frameworks, the nature of these frameworks, and the empirical studies that sprouted from them.
    JEL: F12 F16 J64
    Date: 2013–05
  5. By: ITO Koji
    Abstract: Emerging economies, with steady and high growth, have been increasing their share of the world trade, as well as strengthening their export competitiveness in industries where developed countries have captured the world market.<br />Based on recent trade theory and empirics, the commencement of exporting is a possible countermeasure against increasing import volume from emerging economies, aside from the downsizing of production or market exits. However, this is not applicable if the influence of imports is broadly spread across firms in the same industry.<br />Thus, this paper confirms the impact of imports on Japanese manufacturing firms classified by their internationalization status. In concrete terms, we classify the data from the "Basic Survey of Japanese Business Structure and Activities," implemented by the Ministry of Economy, Trade and Industry, into firms that are in charge of internationalization (exporting, importing, and having foreign affiliates) and others, and examine the significance of imports from three areas (Asian countries, other developing countries, and developed countries) on the variability in the number of employees, real turnover, etc.<br />The result shows that the impact of imports from all three areas on firms in charge of internationalization is weaker than the other firms in terms of employees, implying the potential of internationalization to weaken the influence of imports.
    Date: 2013–05
  6. By: Jennie Bai; Jia Guo; Benjamin Mandel
    Abstract: We analyze two reasons for export prices to be different across markets--namely, quality differentiation and variable markups--and attempt to parse their relative importance and some of their underlying drivers. To overcome the substantial measurement issues in this task, we consider a particular industry as a special case: Chinese fine art. The simplicity of the supply side of art vis-á-vis marginal cost and the wealth of data on its quality characteristics make it possible to separately identify the markup and quality components of international relative prices for Chinese artworks. Through this lens, we trace the process of growth and internationalization of Chinese art since the year 2000. We find strong support for quality sorting into international markets at both the level of artist and artwork, as well as substantial markup differences across destinations. Using a structural model of endogenous quality choice by Feenstra and Romalis (2012), we argue that much of the international quality premium is driven by per unit distribution costs (whether physical or informational) rather than destination-specific preferences for quality.
    Keywords: Exports - China ; Prices ; International trade ; Supply and demand
    Date: 2013

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