|
on International Trade |
| By: | Behncke, Nadine |
| Abstract: | This paper provides evidence of the effect of immigration-based networks on German trade. Germany presents a particular interesting case study to examine the effect of ethnic networks on exports due to its high export dependence and its reserved migration policy. According to our results, we find no trade creating effect from migrant networks on exports but on imports, highlighting the importance of the demand effect for Germany. Allowing for heterogeneous network effects shows that at least some migrant networks positively affect exports. However, the most efficient migrant networks do not originate from EU countries but from African or middle-eastern countries that do not have a large migrant network in Germany. -- |
| Keywords: | migrants,networks,gravity |
| JEL: | F12 F1 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:198&r=int |
| By: | Isao Kamatai |
| Abstract: | An increasing number of regional trade agreements (RTAs) include “labor clauses” that require or urge the signatory countries to commit to maintaining a certain level of labor standards. This paper, starting by classifying more than 200 currently effective RTAs depending on the nature and extent of labor provisions, empirically analyzes the effect of a RTA with labor clauses on domestic labor conditions in the signatory countries as well as the effect on trade growth between the countries, using data for up to 220 countries for the years 1995 through 2012. The study finds that (i) intensive trade with the partner(s) of a labor-clause-inclusive RTA may have a positive impact on labor earnings that concentrate on middle-income countries; but also that (ii) labor clauses may reduce the trade-promoting effect of the RTA for the middle-income countries, especially when the RTA partner is a high-income country. These results offer a policy implication that the inclusion of labor clauses in a trade agreement should involve non-negligible costs for possible benefits that may not be expected for every country. |
| Keywords: | International trade, Regional trade agreements, Labor standards, Labor clauses |
| JEL: | F13 F14 F16 J81 J83 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-13-007&r=int |
| By: | David De Remer |
| Abstract: | Why did countries achieve a consensus to restrict export subsidies and export-promoting domestic subsidies when the World Trade Organization (WTO) began in1995, but not decades earlier under the General Agreement on Tari¤s and Trade(GATT)? This question poses a challenge for the theory of trade agreements becauseexport promotion improves the terms of trade of importers, so subsidy restrictions re-duce the welfare of importing nations. This paper argues that cross-border externalitiesarising from political economy and pro t-shifting can explain the historical pattern ofsubsidy rules. Motives to restrict export promotion do not exist when trade policiesare chosen noncooperatively, because import tari¤ revenue neutralizes any motive forexport promotion. Once import tari¤s fall, as in the 1950s and 1960s, then motivesto restrict export promotion can arise. Governments prefer to protect domestic salesthrough international subsidy restraints rather than to allow consumers to bene t fromunfettered subsidization. Governments could in theory have eliminated the need forsubsidy rules by eliminating domestic intersectoral misallocation or by adjusting bothimport taxes and export subsidies consistent with the GATT principle of reciprocity,but I argue that in practice they have not done so. GATT documents and the WTOnegotiating history provide support for the theory that the WTO subsidy rules addressan international pro t-shifting problem. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/153041&r=int |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses a tailor-made newly available data set for enterprises from manufacturing industries in Germany to investigate for the first time the links between export diversification over destination countries and goods on the one hand and the profitability of the exporting firms on the other hand. We find that profits tend to be larger in firms with less diversified export sales over goods and in firms with more diversified export sales over destination countries. |
| Keywords: | Exports, Exports, diversification, profitability, Germany |
| JEL: | F14 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:297&r=int |
| By: | Jože P. Damijan (Faculty of Business and Economics, University of Ljubljana); Luca Marcolin (Faculty of Economics and Business, KU Leuven) |
| Abstract: | In this paper we explore the extent to which firms engaged in international trade and FDI activities share profits. We allow for differences not only between domestic and foreign owned firms, but also between firms with outward FDI, importers and exporters. We argue that firms engaged in international trade enhance their performance through knowledge spillovers and technology upgrading – similar to what happens to companies that are part of multinational groups – and that this superior performance can translate into substantial wage premia to workers. Using a unique dataset for Slovenian firms for the period 1994-2002, we confirm positive profit-sharing for foreign firms, firms that engage in outward FDI and two-way traders, but not for firms that only import or export. |
| Keywords: | firm heterogeneity, multinational firms, wage determination, profit-sharing |
| JEL: | F23 J31 J50 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:164&r=int |
| By: | Ketenci, Natalya |
| Abstract: | The effect of the global financial crisis on the international trade patterns of developed countries has been one of the main focuses of recent studies. However, the dependence level of world trade on emerging markets increases every day. Therefore, it is important to study the level of the negative effect of the crisis on emerging economies and the level of their recovery potential. This paper empirically studies the effects of the financial crisis on changes in the trade elasticities of BRIICS (Brazil, Russia, India, Indonesia, China and South Africa) countries and Turkey. The imperfect substitute model (Goldstein and Khan 1985) for the export and import demand functions is used. The autoregressive distributed lag (ARDL) approach to cointegration is applied to test the cointegration relationships between exports and imports and their determinants and in order to estimate the export and import elasticities in the countries under examination. The empirical results provide enough evidence to conclude that changes in the exchange rate did not play significant role in export and import demand functions before the global financial crisis and after. However, foreign and domestic incomes are found highly significant and elastic in export and import demand functions, respectively. It is found as well that the global financial crisis had increasing effect on export and import responsiveness to foreign and domestic incomes respectively, except for Turkey and Brazil in the export demand function and South Africa in the import demand function. |
| Keywords: | financial markets; international trade; emerging markets. |
| JEL: | F14 F41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54659&r=int |
| By: | Ana Cecília Fieler; Marcela Eslava; Daniel Xu |
| Abstract: | We develop a model of international trade with heterogeneous firms and endogenous quality choices. Producing higher quality involves returns to scale, it is intensive in skilled labor and high-quality inputs. Firms’ quality choices are interrelated because firms sell their goods to consumers and to other firms. We estimate the model using data on manufacturing plants in Colombia before the trade liberalization, simulate a counterfactual liberalization and compare the results to post-liberalization data. Like other unilateral trade liberalizations in developing countries, the skill premium and skill intensity in manufacturing increased, and the size of firms decreased in Colombia. In the model, lower tariffs lead importers and exporters to upgrade quality, increasing the domestic demand and supply of high-quality inputs. Other firms then upgrade their own product quality, thereby amplifying these effects of domestic inputs. Relative demand for skilled labor increases in a wide range of firms, despite a contraction in sales. |
| JEL: | F1 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19992&r=int |
| By: | Wagner, Joachim (Leuphana University Lueneburg and CESIS, Stockholm) |
| Abstract: | This paper uses a tailor-made newly available data set to investigate for the first time the links between profitability and the quality of exports in enterprises from manufacturing industries in Germany, one of the leading actors on the world market for goods. The paper demonstrates that exporters of high-quality goods tend to be more profitable. |
| Keywords: | Exports; export quality; profitability; Germany |
| JEL: | F14 |
| Date: | 2014–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0352&r=int |
| By: | Ketenci, Natalya |
| Abstract: | This paper investigates the effect of the customs union between Turkey and the European Union on the balance of trade in Turkey. The framework for analysis is an extended trade gravity model onto which the impact of the customs union is applied. The gravity model of trade is estimated using dynamic panel data which applies the Generalized Method of Moments to a sample of OECD countries. Separate estimates were made for the periods before and after the process of trade liberalization in Turkey – 1980-1995 and 1996-2012, respectively – as well as for the full period – 1980-2012. The main conclusion is that when the European Union is accounted for as an econometric variable, the empirical results are striking: Turkey’s gains resulting from taking part in the customs union are noteworthy, with significant improvement in the trade balance with European Union countries. However, the trade flows, and specifically imports, have been mainly with OECD countries that are themselves not members of the EU. The model indicates that external common tariffs are responsible for Turkey’s trade growth rather than tariffs abolished in the internal market of the customs union. |
| Keywords: | Gravity model; GMM; Customs Union; European Union; OECD countries, Turkey. |
| JEL: | F13 F14 F15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54662&r=int |
| By: | Rutzer, Christian |
| Abstract: | This paper extends the firm heterogeneity model of Melitz (2003) by introducing a new concept of endegenous investments in process R&D. The novelty is that if a firm invests more R&D its expected innovation return hazard rate stochastically dominates the return of less R&D investments. Due to this property, entrants invest more in R&D in response to trade liberalization. As a result the aggregate productivity is affected by a reallocation of resources to more productive firms and a simultaneous increase in firms´ investments in innovations, which is consistent with empirical findings. At the same time the firms´ increased R&D investments lead to a sector distribution with a higher right-tail compared to the distribution prior to trade liberalization. Hence, the model gives an explanation for the empirically found differences in the distribution tails among sectors with different trade openness levels. Another advantage of this paper´s framework compared to other trade models with innovations is its foundation in and extension of Melitz (2003). It enables most of the heterogeneous firms trade models to be extended by endegenous firm-level R&D in an empirically relevant and analytically tractable way. -- |
| Keywords: | aggregate level,firm size distribution,heterogeneous firms,R&D investments,trade liberalization |
| JEL: | F12 F13 O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:197&r=int |
| By: | Bassem Kahouli; Anis Omri; Anissa Chaibi |
| Abstract: | Since the early 90s, after the implementation of various regulatory multinational agreements, |
| Keywords: | Environmental regulations, FDI, Trade, Gravity Equations, Simultaneous gravity equations. |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-189&r=int |
| By: | Muñoz Sepúlveda, Jesús A. |
| Abstract: | This paper analyzes and quantifies the impact on domestic sales of being an exporter. It is widely assumed that exporters sell in domestic market more than non-exporters, among other important features. However, export participation also slows the growth rates of domestic sales. We will refer to this fall in domestic sales growth as residual export. The empirical analysis uses Spanish microdata provided by the Encuesta Sobre Estrategias Empresariales (ESEE) for the period 1990-2011 in a difference-in-difference model. This method compares domestic sales before and after entry in exporting for two time periods and for two groups of firms: exporters and non-exporters. The results confirm that participation in export activities slows down domestic sales growth significantly, although the amount of this result varies when we distinguish between different types of firms according to their persistence as exporter. |
| Keywords: | Residual exports, domestic sales, difference-in-difference model |
| JEL: | F10 F14 |
| Date: | 2014–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54799&r=int |
| By: | Juan de Lucio (High Council of Spanish Chambers of Commerce); Raúl Mínguez (High Council of Spanish Chambers of Commerce); Asier Minondo (Deusto Business School); Francisco Requena (University of Sheffield) |
| Abstract: | The literature shows that new exporters have small levels of exports relative to regular exporters upon entry, and, if they survive, they have very high export growth rates between the entry year and the next year. However, a recent paper by Bernard et al. (2014), using Peruvian data, has shown that these empirical facts might be biased by the partial year effect firms that start to export late during the year have a lower level of exports upon entry and a higher growth rate between the entry year and the next year. In this paper, we test the partial year effect for Spain, a country with a much larger number of exporters and a more diversified export structure than Peru. We confirm that the partial year undervalues entry levels and overvalues growth rates. However, despite these adjustments, new exporters still have much lower export values and much higher growth rates than regular exporters. |
| Keywords: | new exporters, partial year effect, Spain, exports growth |
| JEL: | F1 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1401&r=int |
| By: | Julian di Giovanni; Andrei A. Levchenko; Francesc Ortega |
| Abstract: | This paper evaluates the global welfare impact of observed levels of migration using a quantitative multi-sector model of the world economy calibrated to aggregate and firm-level data. Our framework features cross-country labor productivity differences, international trade, remittances, and a heterogeneous workforce. We compare welfare under the observed levels of migration to a no-migration counterfactual. In the long run, natives in countries that received a lot of migration – such as Canada or Australia – are better off due to greater product variety available in consumption and as intermediate inputs. In the short run the impact of migration on average welfare in these countries is close to zero, while the skilled and unskilled natives tend to experience welfare changes of opposite signs. The remaining natives in countries with large emigration flows – such as Jamaica or El Salvador – are also better off due to migration, but for a different reason: remittances. The welfare impact of observed levels of migration is substantial, at about 5 to 10% for the main receiving countries and about 10% in countries with large incoming remittances. Our results are robust to accounting for imperfect transferability of skills, selection into migration, and imperfect substitution between natives and immigrants. |
| JEL: | F12 F15 F22 F24 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20002&r=int |
| By: | Han QI (Hong Kong University of Science and Technology); Haichao Fan (Hong Kong University of Science and Technology); Edwin Lai (Hong Kong University of Science and Tech) |
| Abstract: | We derive a simple equation to calculate the global welfare impact of the simultaneous reduction of trade costs between multiple country-pairs. Interestingly, we find that we obtain the same equation for a broad class of trade models. Moreover, balanced trade is mostly not required for the equation to work, nor does trade elasticity need to be known. The global welfare impact only depends on two sets of statistics: (i) the ratio of bilateral trade flow between each pair of trading partners and global income; and (ii) the percentage change in exporting cost for each pair of trading partners. The class of models includes the many-country, many-good neo-classical-type model, and the Armington-type models such as Eaton and Kortum (2002), Krugman (1980), Melitz (2003) with Pareto distribution of firm productivity, and the extensions of these models to the multi-country and multi-sector case, multi-factor production technology, multi-stage production, the existence of intermediate good and the existence of a non-traded good sector in each country. We then apply the equation to estimate the global welfare impact of the worldwide reduction of international shipping costs in the last five decades. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed013:1283&r=int |
| By: | Julien Martin (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); Florian Mayneris (UCL - Université Catholique de Louvain - Université Catholique de Louvain (UCL) - Belgique, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, IRES - Institut de recherches économiques et sociales - Université Catholique de Louvain (UCL) - Belgique) |
| Abstract: | We develop a new methodology to identify high-end variety exporters in French fi rm level data. We show that they do not export to many more countries, but they export to more distant ones. This comes with a greater geographic diversi cation of their aggregate exports. In contrast to low-end export(er)s, we find that distance has almost no eff ect on high-end variety export(er)s. We also show that high-end export(er)s are more sensitive to the average income of the destination country. Because of this di erent sensitivity to gravity variables at the micro-level, specializing in the production of high-end varieties has two macroeconomic implications for countries. First, the sources of a country's aggregate exports volatility are modi ed. The higher sensitivity to per capita income increases the sensitivity of high-end variety exports to destination-speci c demand shocks, and thus their volatility on a given market. However, their lower sensitivity to distance allows for a greater geographic diversi cation of their exports, which in turn reduces aggregate volatility through a portfolio e ect. Second, the lower sensitivity to distance allows highend varieties to bene t more from demand growth, especially when it arises in distant markets. |
| Keywords: | Vertical di erentiation ; Gravity ; Distance ; Volatility |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00959404&r=int |
| By: | Juyoung Cheong (School of Economics, The University of Queensland); Shino Takayama (School of Economics, The University of Queensland) |
| Abstract: | This paper studies the effects of Trans-Pacific Partnership (TPP) on trade flows and welfare in a general equilibrium framework following the Eaton and Kortum (2002) model. Using comprehensive data including prices, wages, output, and bilateral trade in manufacturing for 38 countries including ASEAN and OECD members, we estimate each country’s various parameters (e.g. openness, competitiveness, state of technology) and conduct calibrations. Our calibration results indicate that the TPP does not always improve all member countries’ welfare, while outside countries may gain from positive externalities. It is found that accession to the TPP is not welfare-enhancing to Japan when labor is internally mobile between manufacturing and non-manufacturing, while Japan is better off from the TPP membership under labor immobility. It is also shown that the TPP benefits more countries, including both members and non-members, if Japan joins the TPP. |
| Date: | 2014–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:509&r=int |
| By: | Sandra Poncet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jérôme Héricourt (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies - Université Lille II - Droit et santé - Université Lille III - Sciences humaines et sociales - PRES Université Lille Nord de France) |
| Abstract: | This paper studies how firm-level export performance is affected by Real Exchange Rate (RER) volatility and investigates whether this effect depends on existing financial constraints. Our empirical analysis relies on export data for more than 100,000 Chinese exporters over the 2000-2006 period. We confirm a trade-deterring effect of RER volatility. We find that the value exported by firms, as well as their probability of entering new export markets, decrease for destinations with a higher exchange rate volatility and that this effect is magnified for financially vulnerable firms. As expected, financial development seems to dampen this negative impact, especially on the intensive margin of export. These results provide micro-founded evidence that financial constraints may play a key role in determining the macro impact of RER volatility on real outcomes. |
| Keywords: | Exchange rate volatility ; Financial development ; Exports |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00960664&r=int |
| By: | Ketenci, Natalya |
| Abstract: | This paper examines the bilateral trade dynamics of the EU with its major trade partners. Previous studies on the bilateral trade dynamics of the EU have been based on estimations without the consideration of the presence of structural breaks. This paper examines the impacts of the real exchange rate and real income on the trade balance of the EU with its major trade partners in the presence of structural breaks. The empirical analysis includes ten major trade partners of the EU for 1980-2012, on a quarterly basis. The paper applies the Bai and Perron (1998) structural break test to determine the presence of structural breaks in series. In order to test the cointegration relationships of series, three different cointegration techniques were applied to the data. First, the Gregory and Hansen (1996) cointegration test was applied, which allows for one structural shift; then, for cases where two breaks were detected, the Hatemi-J (2008) cointegration test was employed. Finally, for countries where more than two breaks are detected, the Maki (2012) cointegration test was applied, which allows for an unknown number of breaks. The parameters of the model were estimated using the Bai and Perron (1998) procedure, which allows for structural breaks, and the OLS procedure without consideration of structural breaks. The paper investigates how the different dynamics of the bilateral trade balance of the EU appear after possible structural breaks consideration. |
| Keywords: | Bilateral trade balance, J-curve, cointegration, structural breaks, EU. |
| JEL: | F14 F31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54661&r=int |
| By: | Han, Jianyu; Ma, Yeqing; Tan, Yong |
| Abstract: | Following Nocke(2012), we develop a model to explain how firms allocate their organizational capital to different products. Using the Chinese export and tax rebate data, we find that the reduction of export tax rebate causes contraction of product scope , and the less competitive products are more likely to be dropped. |
| Keywords: | Following Nocke(2012), we develop a model to explain how firms allocate their organizational capital to different products. Using the Chinese export and tax rebate data, we find that the reduction of export tax rebate causes contraction of product scope , and the less competitive products are more likely to be dropped. |
| JEL: | F10 F14 L10 |
| Date: | 2014–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54709&r=int |
| By: | Gregory Clark (University of California, USA); Kevin Hjortshøj O’Rourke (All Souls College, Oxford University, UK); Alan M. Taylor (University of California, USA) |
| Abstract: | Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the rest of the world, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain’s growing dependence on trade during the Industrial Revolution. |
| Keywords: | British Industrial Revolution, Great Divergence, trade, colonies, growth, specialization |
| JEL: | F11 F14 F43 N10 N70 O40 |
| Date: | 2014–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:esohwp:_126&r=int |
| By: | Keiko Ito; Ayumu Tanaka |
| Abstract: | This paper focuses on non-internationalized supplier firms and investigates how the expansion of overseas activities by their main customer firms affects their employment, utilizing a unique dataset that includes information on buyer-supplier transaction relationships for Japanese manufacturing firms for the period 1998-2007. We do not find any negative effect of top buyers’ overseas expansion on domestic suppliers’ employment. Instead, we find a significant positive effect. Our result implies that, contrary to fears of a potential hollowing out of domestic supporting industries, the expansion of overseas activities of customer firms has a positive impact on suppliers’ employment. Expansion of overseas production by downstream firms may increase purchases from upstream firms in Japan and this would be the case if downstream firms can increase their world-wide sales by expanding overseas production. Therefore, our result suggests that having a transaction relationship with successful downstream multinational firms that expand their global sales through overseas production is important for non-internationalized suppliers in Japan. |
| Keywords: | Labor demand; Supplier firms; Multinational enterprises; Transaction relationships; Japan. |
| JEL: | F23 F14 F16 J23 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-13-008&r=int |
| By: | Felix Chan; Mark N. Harris; William Greene; László Kónya |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ste:nystbu:14-08&r=int |
| By: | Nazli Karamollaoglu (MEF University, Turkey); M. Ege Yazgan (Istanbul Bilgi University) |
| Abstract: | Micro-level empirical research has begun to obtain important results on the effects of currency variations on firms' survival. To date, the literature has lacked detailed analysis of the effects of exchange rates on firms' survival behavior in emerging markets due to a scarcity of firm level information. Using a unique firm-level dataset, we test the impact of currency appreciation on the survival behavior of Turkish firms in manufacturing industries for 2002-2009. The results suggest that real exchange rate appreciation decreases the probability of survival in manufacturing industries. We also find that high (low) productivity firms have higher (lower) probability of survival than low (high) productivity firms as a result of domestic exchange rate appreciation. This evidence indicates that economic events/policies leading to appreciation in domestic currency should be cautiously managed, especially in a resource constrained emerging market economy such as Turkey. |
| Keywords: | Exchange rate, firm-level, export, emerging markets, survival. |
| JEL: | F14 F31 F41 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1411&r=int |
| By: | Picard, Pierre M. (University of Luxembourg); Worrall, Tim (University of Edinburgh) |
| Abstract: | This paper studies the costs and benefits of the adoption of the policy of free movement for workers. For the countries to agree on uncontrolled movement of workers, the short run costs must be outweighed by the long term benefits that result from better labor market flexibility and income smoothing. We show that such policies are less likely to be adopted when workers are impatient and less risk averse workers, when production technologies display decreasing returns and when countries trade a share of their products. |
| Keywords: | labor market flexibility, migration, sustainable plan |
| JEL: | F22 J61 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8035&r=int |
| By: | Gabriele Standardi (Fondazione Eni Enrico Mattei); Federico Perali (University of Verona, Department of Economic Sciences); Luca Pieroni (University of Perugia, Department of Economics, Finance and Statistics) |
| Abstract: | This paper aims at modeling a global CGE trade model for the EU15 subnational regions. This model is used to assess production reallocation across sectors in each EU15 region, assuming a scenario in which world tariff liberalization is implemented in the agricultural sector. The model is parsimonious in terms of data, focusing on unskilled and skilled labor as the source of heterogeneity across regions. A stylized model is built to interpret trade policy effects. Results show decreases in agricultural production in the EU15 of about 0.93%. All regions reduce agriculture but show different magnitudes in the relative changes of production. Large reallocation effects are observed between manufactures and services, some regions specializing in the former and others in the latter. In addition, the introduction of labor mobility within the EU15 and the EU27 causes strong amplification effects in manufactures and services. |
| Keywords: | CGE modeling; International trade; Agriculture |
| JEL: | F13 D58 Q17 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.25&r=int |
| By: | John Christopher Beghin (Iowa State University - Iowa State University); Anne-Célia Disdier (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Stéphan Marette (ECO-PUB - Economie Publique - Institut national de la recherche agronomique (INRA) : UMR0210 - AgroParisTech) |
| Abstract: | We extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them. We focus on standard-like non-tariff measures (NTMs) affecting cost of production and potentially enhancing demand by increasing product quality or reducing negative externalities. We apply the framework to the database of Kee et al. (2009) and derive ad valorem equivalents (AVEs) for NTMs. Half of the product lines affected by NTMs exhibit negative AVEs, indicating a net trade-facilitating effect of NTMs. Accounting for these effects significantly reduces previous measures of countries' trade policy restrictiveness obtained while constraining NTMs to be trade reducing. |
| Keywords: | Non-tariff measures ; Externalities ; Ad valorem equivalents ; Trade restrictiveness indices |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:hal-00961727&r=int |
| By: | Matthew T. Cole (Department of Economics, Florida International University); Carsten Eckel (University of Munich and CESifo) |
| Abstract: | Historically, tari?s have been an attractive policy tool to protect domestic industries.The bene?ts of such a policy are based on theoretical models that assume foreign manufacturers sell directly to consumers. However, recent empirical evidence suggests that wholesalers and retailers play an active role in international trade. We present a model of retailers that illustrates how accounting for these strategic intermediaries can actually make some domestic manufacturers worse off in response to an increased tariff. Moreover, any production gains that occur are biased towards higher cost domestic manufacturers. This result is not driven by the cannibalization effect of the multi-product ?rm literature rather it is the fact that retailers compete over the marginal consumer (the extensive margin). |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1404&r=int |
| By: | Daisuke Amano (Otaru University of Commerce); Jun-ichi Itaya (Hokkaido University); Kazuo Mino (Kyoto University) |
| Abstract: | This paper explores the long-run impacts of tax policy in a two-country model of endogenous growth with variable labor supply. We focus on international spillover effects of tax reforms under alternative trade structures. It is shown that if the instantaneous utility function of the representative family in each country is additively separable and if international capital mobility is absent, then a change in taxation in one country does not directly affect capital formation in the other country. Such a conclusion is fundamentally modified if international lending and borrowing are allowed. In the presence of financial capital mobility, a change in tax policy in one country directly diffuses to the growth performance of the other country, even though preference structures are assumed to be log-additive forms. |
| Keywords: | factor-income tax, consumption tax, equilibrium dynamics, two-country model, endogenous growth, variable labor supply |
| JEL: | F43 O41 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:891&r=int |