nep-int New Economics Papers
on International Trade
Issue of 2013‒07‒20
nine papers chosen by
Alessia A. Amighini
Universita' Amedeo Avogadro

  1. Skill upgrading and exports By Antonio Accetturo; Matteo Bugamelli; Andrea Lamorgese
  2. The Tip of the Iceberg: A Quantitative Framework for Estimating Trade Costs By Alfonso Irarrazabal; Andreas Moxnes; Luca David Opromolla
  3. Financial Liberalization and the Relationship-Specificity of Exports By Defever, Fabrice; Suedekum, Jens
  4. Proximity as a Source of Comparative Advantage By Elizaveta Archanskaia
  5. Trade elasticity and vertical specialisation By Ines Buono; Filippo Vergara Caffarelli
  6. A Theory of Just-in-Time and the Growth in Manufacturing Trade By Dalton, John
  7. How Do Banking Crises Affect Bilateral Exports? By Youssouf KIENDREBEOGO
  8. Spacey Parents and Spacey Hosts in FDI By Badinger Harald; Peter Egger
  9. Trade Adjustment: Worker Level Evidence By David H. Autor; David Dorn; Gordon H. Hanson; Jae Song

  1. By: Antonio Accetturo (Bank of Italy); Matteo Bugamelli (Bank of Italy); Andrea Lamorgese (Bank of Italy)
    Abstract: This paper analyzes the effects of international trade on the relative demand for skilled workers in Italian local labor markets. We find that exports cause a sizable skill upgrading in the labor force by increasing the average level of education of the workforce and the share of white-collars workers.
    Keywords: international trade, labor demand, schooling, skill composition
    JEL: F12 J23 J24
    Date: 2013–07
  2. By: Alfonso Irarrazabal; Andreas Moxnes; Luca David Opromolla
    Abstract: Casual empiricism suggests that additive trade costs, such as quotas, per-unit tariffs, and, in part, transportation costs, are prevalent. In spite of this, we have no broad and systematic evidence of the magnitude of these costs. We develop a new empirical framework for estimating additive trade costs from standard firm-level trade data. Our results suggest that additive barriers are on average 14 percent, expressed relative to the median price. The point estimates are strongly correlated with common proxies for trade costs. Using our micro estimates, we show that a reduction in additive trade costs produces much higher welfare gains and growth in trade flows than a similar reduction in multiplicative trade costs.
    JEL: F1 F10 F14
    Date: 2013–07
  3. By: Defever, Fabrice (University of Nottingham); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: We investigate the causal impact of equity market liberalizations in the period 1980‐1997 on sectoral export performance across 91 countries. The increased availability of external finance has boosted trade of industries that intensively use relationship‐specific inputs, and lowered exports of industries using standardized inputs.
    Keywords: financial liberalization, credit constraints, relationship‐specificity, international trade
    JEL: F14 F36 G20
    Date: 2013–06
  4. By: Elizaveta Archanskaia
    Abstract: This paper establishes that production unbundling has coincided with an inscreasing role of input costs in shaping the pattern of comparative advantage. I show that the wedge in the cost of the input bundle across countries in a multisectoral Ricardian model is given by a composite index of trade frictions incurred in sourcing inputs. As the cost share of inputs is sector-specific this wedge becomes source of comparative advantage whereby countries characterized by relatively high proximity to input suppliers specialize in sectors which use inputs more intensively. I find robust empirical evidence that the input cost channel has growing importance over 1995-2009. Nonetheless, consistently with the fundamental intuition of Ricardian models, the ranking of relative sectoral technology stocks still determines intersectoral specialization. Between 53-55% of intersectoral variation in relative sectoral exports is explained by technology while the input cost channel contributes 3 to 8% in the full sample, and 3 to 13% for the EU-15.
    Keywords: Ricardian model, Intersectoral specialization, Trade costs
    JEL: F10 F15
    Date: 2013–02
  5. By: Ines Buono (Bank of Italy); Filippo Vergara Caffarelli (Bank of Italy)
    Abstract: This paper shows that vertical specialisation can increase the elasticity of trade to income, hence explaining dramatic events such as the great trade collapse. We argue that a change in the extent of vertical specialisation affects the elasticity of trade to income, while a mere change in global production levels for a given extent of vertical specialisation does not. In the model we show that only large demand shocks induce firms to vary the extent of vertical specialisation. Using panel data starting from the late 1990s that include the 2008-09 global crisis, we consistently find that the correlation between trade elasticity and vertical specialisation increases precisely in years of large demand shocks, such as the ICT euphoria and the great trade collapse.
    Keywords: vertical specialisation, trade elasticity, global crisis, trade collapse
    JEL: F10 F12 L23
    Date: 2013–07
  6. By: Dalton, John
    Abstract: This paper argues the widespread adoption of Just-in-Time (JIT) logistics provides a key to understanding the growth in the U.S. trade share. To do so, I develop a dynamic trade model based on the choice of the logistics technology used in a firm's supply chain. The model's predicted trade dynamics depend on how the set of firms using JIT with international suppliers changes over time. A numerical example shows the model is capable of generating growth in the trade share. I present evidence showing the theory is consistent with aggregate data as well as industry-level panel data.
    Keywords: trade growth, Just-in-Time, newsvendor problem, airplane transportation
    JEL: F10 F14 L60 M11
    Date: 2013–01
  7. 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 investigates whether banking crises are associated with declines in bilateral exports. We first develop a simple open economy model in which banking crises translate into negative liquidity shocks, leading to collapses in exports through supply-side and demand-side shocks. We then estimate a gravity model using a sample of developed and developing countries over the period 1988-2010. The results suggest that crisis-hit countries experience lower levels of bilateral exports, particularly in developing countries where supply-side shocks are found to be relatively more important than demand shocks. In developing countries, exports of manufactured goods are disproportionately hurt by banking crises and this negative effect is stronger in industries relying more on external finance. These findings are robust to correcting for potential endogeneity, to changes in the sample, and to alternative estimation methods.
    Keywords: Banking Crises;Exports;Trade Finance F14;G01
    Date: 2013–07–10
  8. By: Badinger Harald (Department of Economics, Vienna University of Economics and Business); Peter Egger (ETH Zürich)
    Abstract: Empirical trade economists have found that shocks on foreign direct investment (FDI) of some parent country in a host country affect the same parent country’s FDI in other hosts (interdependent hosts). Independent of this, there is evidence that shocks on a parent country’s FDI in some host economy affect other parent countries’ FDI in the same host (interdependent parents). In general equilibrium, shocks on FDI between any country pair will affect all country-pairs’ FDI in the world, including anyone of the two countries in a pair as well as third countries (interdependent third countries). No attempt has been made so far to allow simultaneously for all three modes of interdependence of FDI. Using cross-sectional data on FDI among 22 OECD countries in 2000, we employ a spatial feasible generalized two-stage least squares and generalized moments estimation framework to allow for all three modes of interdependence across all parent and host countries, thereby distinguishing between market-size-related and remainder interdependence. Our results highlight the complexity of multinational enterprises’ investment strategies and the interconnectedness of the world investment system.
    Keywords: Foreign direct investment, Spatial econometrics, Generalized method of moments estimation
    JEL: C21 F21 F23
    Date: 2013–07
  9. By: David H. Autor; David Dorn; Gordon H. Hanson; Jae Song
    Abstract: In the past two decades, China’s manufacturing exports have grown spectacularly, U.S. imports from China have surged, but U.S. exports to China have increased only modestly. Using representative, longitudinal data on individual earnings by employer, we analyze the effect of exposure to import competition on earnings and employment of U.S. workers over 1992 through 2007. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings and are at elevated risk of exiting the labor force and obtaining public disability benefits. They spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, low attachment to the labor force, and those employed at large firms with low wage levels. Import competition also induces substantial job churning among high-wage workers, but they are better able than low-wage workers to move across employers with minimal earnings losses, and are less likely to leave their initial firm during a mass layoff. These findings, which are robust to a large set of worker, firm and industry controls, and various alternative measures of trade exposure, reveal that there are significant worker-level adjustment costs to import shocks, and that adjustment is highly uneven across workers according to their conditions of employment in the pre-shock period.
    JEL: F16 J62
    Date: 2013–07

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