nep-int New Economics Papers
on International Trade
Issue of 2013‒06‒04
seventeen papers chosen by
Alessia A. Amighini
Universita' Amedeo Avogadro

  1. Boosting Manufacturing Firms' Exports? The role of trade facilitation in Africa By Hoekstra, Ruth
  2. The Impact of Trade Liberalisation on Export Growth and Import Growth in Sub-Saharan Africa By Lanre Kassim
  3. Export Dynamics in Large Devaluations By George Alessandria; Sangeeta Pratap; Vivian Yue
  4. Heterogeneous Trade Costs and Wage Inequality: A Model of Two Globalizations. By Basco, Sergi; Mestieri, Marti
  5. FDI and firm level export competitiveness in the Indian machinery industry By Keshari, Pradeep Kumar
  6. Drivers and impediments for cross-border e-commerce in the EU By Estrella Gomez; Bertin Martens; Geomina Turlea
  7. The Effects of Exports on Facility Environmental Performance: Evidence from a Matching Approach By Cui, Jingbo; Qian, Hang
  8. Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice? By Maria Bas; Antoine Berthou
  9. The Effect of South Korean FTAs on Trade: Country-level and Industry-level Analyses By Jin, Seung Ha
  10. Micro dynamics of Turkey's export boom in the 2000s By Cebeci, Tolga; Fernandes, Ana M.
  11. A firm level study of the determinants of export performance in machinery and transport equipment industry of India By Keshari, Pradeep Kumar; Saggar, Mridul
  12. Global Trade Imbalances: A Network Approach By Marco Duenas; Giorgio Fagiolo
  13. “Firm exports, innovation, … and regions” By Enrique López-Bazo; Elisabet Motellón
  14. Ownership Choices of Indian Direct Investors: Do FDI Determinants Differ between Joint Ventures and Wholly-owned Subsidiaries? By Peter Nunnenkamp; Maximiliano Sosa Andrés
  15. A Model of Firm Experimentation under Demand Uncertainty: an Application to Multi-Destination Exporters By Cristina Mitaritonna; Zhanar Akhmetova
  16. Who Are the Net Food Importing Countries? By Francis Ng; M.Ataman Aksoy
  17. Phasing out of Multi-fibre Arrangement: implications for the Indian garment exporting firms By Keshari, Pradeep Kumar; Nair, Tara; Avasthi, Dinesh

  1. By: Hoekstra, Ruth
    Abstract: Facilitating trade is essential for Africa's economic development and further integration into the world economy, as business in Africa still suffers from behind-the-border barriers to trade. Using firm level data from the World Bank's Enterprise surveys covering more than 6,500 manufacturing firms, this paper empirically investigates the determinants of African firms' export decisions with a special focus on trade facilitation measures like the energy or telecommunications infrastructure. Overall, trade facilitation can increase African firms' probability to participate in international trade. Furthermore, lower trade barriers are associated with a higher propensity to export, i.e. stimulate the growth of exports.
    Keywords: Trade facilitation; Trade barriers; Africa; Firm-level data; Export probability
    JEL: F13 F15 O24
    Date: 2013
  2. By: Lanre Kassim
    Abstract: This paper adopts panel data methodologies to investigate the impact of trade liberalisation on export growth and import growth across 28 Sub-Saharan African countries from 1981 to 2010. We find that trade liberalisation increases the growth of exports, however, imports grow faster by approximately two percentage points which gives a prima facie evidence that the trade balance in the region deteriorated in the post-liberalisation era. We also find that trade liberalisation significantly raises the price elasticity of demand for exports and imports, however, it does not significantly affect income elasticity of demand.
    Keywords: Trade liberalisation; Export growth; Import growth; Price and Income elasticities of demand; Sub-Saharan Africa
    JEL: C23 F13 F14 O55
    Date: 2013–05
  3. By: George Alessandria (Federal Reserve Bank of Philadelphia); Sangeeta Pratap (City University of New York); Vivian Yue (Federal Reserve Board of Governors and Hong Kong Institute for Monetary Research)
    Abstract: This paper studies export dynamics in emerging markets following large devaluations. We document two main features of exports that are puzzling for standard trade models. First, given the change in relative prices, exports tend to grow gradually following a devaluation. Second, high interest rates tend to suppress exports. To address these features of export dynamics, we embed a model of endogenous export participation due to sunk and per period export costs into an otherwise standard small open economy. In response to shocks to productivity, interest rates, and the discount factor, we find the model can capture the salient features of export dynamics documented. At the aggregate level, the features giving rise to sluggish export dynamics leading to more gradual net export dynamics, sharper contractions in output, and endogenous declines in labor productivity
    Keywords: Export Dynamics, Devaluation, Net Exports
    JEL: E31 F12
    Date: 2013–05
  4. By: Basco, Sergi; Mestieri, Marti
    Date: 2013–03
  5. By: Keshari, Pradeep Kumar
    Abstract: The paper examines the effect of FDI on firm-level export competitiveness by comparing the export behaviour of foreign controlled and domestic firms in Indian machinery industry. It defines the firm-level export competitiveness involving two aspects of export behaviour: i) the export itself or a firm’s decision to export and ii) the exporting firm’s decision on the portion of output to export (export intensity). Findings of the study reveals that the foreign controlled firms have greater likelihood of exporting, even after controlling for the large number of additional factors influencing export activity. However,the export intensity of exporting firms is not affected by FDI but affected favourably by a host of other firm-specific factors such as arms length import of disembodied technology, import of raw material and capital goods, use of labour intensive technology, larger size and years of experience.
    Keywords: FDI, Export Competitiveness, Indian Machinery Industry
    JEL: L25
    Date: 2012–12
  6. By: Estrella Gomez (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS); Geomina Turlea (European Commission – JRC - IPTS)
    Abstract: There are no official statistics on international online trade in goods so far. This paper uses a consumer survey to construct a unique matrix of online B2C domestic and cross-border trade in goods between the 27 EU Member States. We compare online and offline trade patterns for similar goods. We find that the standard gravity model performs well in explaining online cross-border trade flows. The model confirms the strong reduction in geographical distance-related trade costs, compared to offline trade. However, the trade costs associated with crossing language barriers increase when moving from offline to online trade. Institutional variables such as online payments facilities and cost-efficiency of parcel delivery systems might play a significant role in cross-border trade and our analysis confirms this. In a linguistically segmented market like the EU, online home market bias remains high compared to bias in offline cross-border trade. We conclude that it is hard to predict at this stage whether regulators could boost online cross-border trade through improvements in legal and financial systems, and parcel delivery infrastructure.
    Keywords: online trade, e-commerce, gravity, barriers to trade, home bias
    JEL: F15 O52
    Date: 2013–01
  7. By: Cui, Jingbo; Qian, Hang
    Abstract: This paper employs matching techniques to investigate the effects of facility export status on environmental performance. Using facility-level criteria air emission data in the U.S. manufacturing industry, we find the industry-specific effects of export status on emission intensity, measured by emissions per value of sale. In some industries, there is consistent and robust evidence supporting the superior environmental performance of exporters relative to non-exporters in terms of emission intensity for all criteria air pollutants tracked in the paper. In other industries, we find evidence that exporters appear to have higher emission intensity than non-exporters for some pollutants but not all.
    Keywords: criteria air emissions, exports, propensity score matching, Environmental Economics and Policy, International Relations/Trade, F18, Q56,
    Date: 2013
  8. By: Maria Bas; Antoine Berthou
    Abstract: Foreign technology transfers play a key role in economic growth. This paper investigates the effects of input-trade liberalization on firms’ decision to upgrade foreign technology embodied in imported capital goods. We develop a theoretical model of endogenous technology adoption, heterogeneous firms and imported inputs. Assuming that imported intermediate goods and high-technology are complementary and the existence of technology adoption fixed costs, the model predicts a positive effect of input tariff reductions on firms’ technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Using firm-level data from India and imports of capital goods to measure high-technology, we demonstrate that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Our findings also suggest that only those firms in the middle range of the productivity distribution have benefited from input-trade liberalization to upgrade their technology as predicted by the model. These empirical results are robust to alternative specifications that control for industry and firm characteristics, tariffs on capital goods, other reforms and alternative measures of technology.
    Keywords: Input-trade liberalization;firms’ decision to import capital goods;firm heterogeneity and firm level data
    JEL: F10 F14 D24
    Date: 2013–04
  9. By: Jin, Seung Ha
    Keywords: International Relations/Trade, Research Methods/ Statistical Methods,
    Date: 2013–05
  10. By: Cebeci, Tolga; Fernandes, Ana M.
    Abstract: This paper examines the microeconomics behind the dramatic export boom experienced by Turkey during the 2000s. Using disaggregated customs data covering the universe of export transactions for Turkey during the period 2002-2011, it characterizes firm-level dynamics in the export sector and decomposes export growth at the aggregate, sector, and destination market levels to identify the role of firm turnover, destination turnover, and product turnover. The paper shows that in the short-run, aggregate export growth is dominated by growth in continuous exporters, and for these, growth is dominated by exports to their continued destinations and of their continued products. However, the observed high degree of churning across firms, destinations, and products accounts in the long run for a substantial part of Turkey's export growth. The patterns of micro-dynamics of export growth are verified across sectors and across groups of destination markets with some exceptions regarding exports to new emerging markets where net entry by Turkish-based exporters plays a more critical role for long-run growth.
    Keywords: Debt Markets,Export Competitiveness,Free Trade,Currencies and Exchange Rates,Economic Theory&Research
    Date: 2013–05–01
  11. By: Keshari, Pradeep Kumar; Saggar, Mridul
    Abstract: The paper seeks to analyse the determinants of export performance for large firms operating in the machinery and transpoprt equipment Industry of India. The study follows the neo-factor proportion and neo-technology approaches relevant for firm level export. The study establishes the importance of skill factors and technological collaborations in explaining the export performance of firms operating in the Indian machinery and transport equipment Industry. Skilled workers, whether they are employed for product innovation/adaptation, production engineering, or export marketing have contributed immensely to improved export performance in this industry.
    Keywords: neo-factor proportions, neo-technology theory, firm level export, machinery and transport equipment, India
    JEL: F12 F14 O3
    Date: 2013–05–21
  12. By: Marco Duenas; Giorgio Fagiolo
    Abstract: We study trade imbalances between world countries in the period 1960-2000 using a complex-network approach. We show that trade imbalances in absolute value are characterized by a hierarchical arrangement wherein few rich economies display high clustering and carry an important amount of global-trade imbalances. In contrast, trade imbalances in relative terms show a more fragmented topology, with less concentrated clustering which is particularly high for emergent economies. In addition, we find that traditional null random-network models and the gravity model poorly predict the topology of trade imbalance networks. Our main finding is that the evolution of the international trade has caused very heterogeneous imbalances in world economies, which may have important consequences for global instability and development
    Keywords: Trade Imbalances; International Trade Network; Gravity Model; Null Models
    Date: 2013–05–21
  13. By: Enrique López-Bazo (Faculty of Economics, University of Barcelona); Elisabet Motellón (Faculty of Economics, University of Barcelona)
    Abstract: This paper uses firm-level data for each of the Spanish NUTS2 regions to estimate the effect of product and process innovations on firm’s export performance. It shows that the firm’s propensity to innovate and its export activity vary substantially across regions. Remarkably, results prove that the effect of innovation on exports is far from regionally uniform. The gap in the propensity to export between innovative and non-innovative firms, conditional to other sources of firm heterogeneity, is shown to be particularly wide in regions with high extensive margin of exports. However, differences in the propensity to innovate do not originate regional disparities in the share of sales abroad by exporting firms. Consequently, stimulate firm’s innovation in the less innovative regions can be an effective tool to increase the share of exporting firms.
    Keywords: export propensity, export intensity, product and process innovations, Spanish regions, firm heterogeneity. JEL classification: F14, R10.
    Date: 2013–05
  14. By: Peter Nunnenkamp; Maximiliano Sosa Andrés
    Abstract: Using count data on Indian joint ventures (JVs) and wholly owned subsidiaries (WOS), we present an empirical analysis of FDI-related ownership choices and their relation with host country characteristics and indicators of transaction costs. Our Negative Binomial regression models offer only weak support for the bargaining perspective, according to which JVs should be more likely if the host countries were particularly attractive in terms of market access or resource endowments. Geographical and cultural distance has ambiguous effects on the choice between JVs and WOS. The composition of FDI projects tends to shift toward WOS where investment risks are contained by bilateral treaties and better control of corruption
    Keywords: outward FDI; ownership choices; transaction costs; host country characteristics; India
    JEL: F21
    Date: 2013–05
  15. By: Cristina Mitaritonna; Zhanar Akhmetova
    Abstract: Firm level data exhibits that new exporters tend to start small, a large fraction of these drops out by the second year of exporting, and the survivors expand rapidly. To take into account this stylized fact, we propose a theory of firm behavior that assumes demand uncertainty about the profitability of exporting in a new market. The firm can postpone paying the sunk cost of full-scale entry and test the market by observing individual sales to a few consumers. The firm optimally chooses the experimentation intensity, as well as the exit/entry policy. Applying Bayesian econometric techniques, we structurally estimate the model using French firm-level export data. A given geographical regions is viewed as a target market,and countries within the region as consumers. The estimate of the sunk cost is higher than in a model where the sunk cost cannot be postponed, like Melitz (2003). We also perform counterfactual simulations (exchange rate, sunk cost and experimentation cost).
    Keywords: Demand Uncertainty;Optimal Experimentation;Heterogeneous Producers;New Exporter Dynamics;Structural Estimations;Bayesian Methods
    JEL: D21 D83 F14 C11 C33
    Date: 2013–04
  16. By: Francis Ng (World Bank); M.Ataman Aksoy (World Bank)
    Abstract: The purpose of this paper is to update the information on net food importing countries, using different definitions of food, separating countries by their level of income, whether they are in conflict and whether they are significant oil exporters. The study also estimates the changes in net food importing status of these countries over the last two and a half decades, and, most important, the study measures the relative importance of these net food imports in the import basket of the countries. Our results show that while many low-income countries are net food importers, the importance and potential impact of the net food importing status has been highly exaggerated. Many low-income countries that have larger food deficits are either oil exporters or countries in conflict. Food deficits of most low-income countries are not that significant as a percentage of their imports. Our results also show that only 6 low-income countries have food deficits that are more than 10 percent of their imports. Last two decades have seen a significant improvement in the food trade balances of low-income developing countries. SSA low-income countries are an exception to this trend. On the other hand, there are a group of countries which are experiencing civil conflicts which are large importers of food, and these countries can not meet their basic needs. They also need special assistance in the distribution of food within their boundaries. Therefore, one should modify the WTO Ministerial Declaration, and focus on these conflict countries rather than the broad net food importers.
    Date: 2013
  17. By: Keshari, Pradeep Kumar; Nair, Tara; Avasthi, Dinesh
    Abstract: The study suggests that the entrepreneurs in the Indian clothing industry is all set to take on the challenges and opportunities created by the signing of the GATT-94's Final Act by the Government of India. Small and medium enterprises in the industry are confident about their inherent competitive advantage that would facilitate greater market penetration. Yet, they realize that China, Pakistan and Bangladesh would emerge as major rivals in the global market along with multinationals.They have serious doubt about the distribution of actual gains during the transition period as they view the process and pace of integration envisaged in the GATT-94 Agreement as disproportionately biased towards the developed countries. The pattern of phasing out of MFA would practically deprive them of their access to real benefits. Similarly, along with the disappearances of the restrictive regime of quotas, they see the possibility of new types of barriers emerging in future. It is this uncertainty, which spreads over the optimism of Indian firms in the garment sector like a layer of mist that needs attention in the policy making fora.
    Keywords: General Agreement on Tariff and Trade, Multi-fibre Arrangement, Indian clothing industry, Small and medium enterprises
    JEL: F13 F53 L67
    Date: 2013–05–23

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