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on International Trade |
| By: | Giovanni Dosi; Marco Grazzi; Daniele Moschella |
| Abstract: | This paper examines the determinants of international competitiveness at the level of sectors and firms. First, we address the relation between cost-related and technological competition in a sample of fifteen OECD countries. Results suggest that the countries' sectoral market shares are indeed mainly shaped by technological factors (proxied by investment intensity and patents) while cost advantages/disadvantages do not seem to be play any significant role. Next, we attempt to identify the underlying dynamics at the firm level. We do that for a single country, Italy, using a large panel of Italian firms, over nearly two decades. Results show that also at micro level in most sectors investments and patents correlate positively both with the probability of being an exporter and with the capacity to acquire and to increase export market shares. The evidence on costs is more mixed. A simple measure like total labour compensation is positively correlated with the probability of being an exporter, while unit labour costs show a negative correlation only in some manufacturing sectors. |
| Keywords: | Trade Competitiveness, Technological Innovation, Input Costs, Firm behaviour, Technology Gap Theories of Trade |
| Date: | 2014–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2014/10&r=int |
| By: | Fabien Rondeau (CREM UMR CNRS 6211, University of Rennes 1, France); Nolwen Roudaut (IREA, University of South Britanny, France) |
| Abstract: | This paper underlines the influence of trade diversification on GDP per capita growth. Using methodologies developed by Brenton and Newfarmer (2007) and Amurgo-Pacheco and Pierola (2008), we breakdown exports of 64 developing countries into intensive margin (old traded flows), extensive margin by new partners (geographic diversification) and extensive margin by new products (product diversification). Estimations of the augmented Solow model by system-GMM for the period 1990-2009, first confirm that trade diversification has a positive e↵ect on growth. However, this positive e↵ect of diversification tends to decrease with the level of GDP per capita. Finally, the e↵ect of product diversification is twice as large as the e↵ect of geographic diversification: to implement economic growth, developing countries should extend exports of new products rather than exports to new partners. |
| Keywords: | Trade, Diversification, Growth, Extensive Margin |
| JEL: | F14 F43 O11 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201407&r=int |
| By: | Dauth, Wolfgang; Suedekum, Jens |
| Abstract: | We analyze how globalization has affected the sectoral anatomy of regional growth in Germany over the period 1978-2008. The aggregate German economy is characterized by a secular decline of manufacturing and a rise of modern service industries. This trend - also known as Petty's law - is not uniform across space, however. Some regions exhibit it at an even accelerated pace, while other regions have reinforced their manufacturing specializations. We first categorize all German regions into one of three groups, with protrend, anti-trend or featureless growth. Afterwards we propose an explanation why a particular region ended up in one of those groups: We argue that the regional profiles of growth and change are systematically related to the initial sizes, and the import and export exposures of the local manufacturing sectors. -- |
| Keywords: | structural change,local industry compositions,trade exposure,local employment growth |
| JEL: | R11 O14 F16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:142&r=int |
| By: | Bulent Ulasan |
| Abstract: | This paper examines the long-run relationship between trade open-ness and economic growth across countries over the period 1960-2000. Two strategies are followed in empirical investigation. First, we extend the augmented neo-classical growth model with an openness variable and estimate it by using a battery of openness measures suggested in the literature. We also construct three composite trade policy indexes consisting of weighted averages of tari® rates, non-tari® barriers and black market premium for foreign exchange rate. Second, we implement Bayesian model averaging technique to deal with the model uncertainty, a fundamental problem which has been plaguing the previous works on the topic. Our ¯ndings show that there is no robust link between trade openness and long-run economic growth. |
| Keywords: | Economic Growth, Trade Openness, Cross-Country Growth Regression, Model Uncertainty, Bayesian Model Averaging |
| JEL: | F43 O47 C11 C21 C52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1407&r=int |
| By: | Józef Antoni Haber |
| Keywords: | Euromediterreanean free trade area, geostrategy |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:uae:sermed:01&r=int |
| By: | Arpita Chatterjee (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | This paper empirically characterizes comovement in monetary policy of G-7 countries during 1980-2009. I estimate a Taylor rule for each country and use residual from the Taylor rules to estimate a dynamic latent factor model with common and Europe speci c factors. I quantify importance of the G-7 factor in explaining comovement in residual variation of monetary policy and show that the G-7 factor is particularly important during a period of globalization (1988-2003). I estimate dynamics of importance of the G-7 factor using rolling sub-samples and show that trade-openness increases comovement in monetary policy in Europe. |
| Keywords: | Symmetry-breaking, Endogenous comparative advantage, Gains from trade, Education policy |
| JEL: | F11 E62 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-19&r=int |
| By: | Arpita Chatterjee (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | Similar countries often choose very di¤erent policies and specialize in very distinct industries. This paper proposes a mechanism to explain policy diversity among similar countries from an open economy perspective. I study optimal policies in a two country model when policies affect determinants of trade patterns. I show that welfare gains from trade can provide sufficient incentive for asymmetric equilibrium policies, even if the two countries have identical economic fundamentals. Any asymmetric equilibrium exhibits greater production specialization than the autarky optimum; this is the source of welfare gains. For this same reason, a more asymmetric Nash equilibrium Pareto dominates a less asymmetric one. All equilibria are asymmetric if aggregate income is sufficiently convex in policy, under suitable restrictions on technology and preferences. As an application, I consider a model where skill distribution is the determinant of trade patterns and the policy in question is education policy. When heterogeneous agents choose their skill level optimally, optimal skill function is convex in government policy. In this application, symmetry-breaking in optimal education policy requires that the education cost of agents is relatively inelastic with respect to skill. |
| Keywords: | Symmetry-breaking, Endogenous comparative advantage, Gains from trade, Education policy |
| JEL: | F11 E62 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-18&r=int |
| By: | Mahmood, Talat |
| Abstract: | German-Pakistani relations cannot be analyzed in isolation of the larger domestic and international trajectories, economic and political, on both sides of the partnership. After a recent democratic power transfer in 2013, Pakistan continues to face complex challenges. The instable security situation in the region exerts pressure on the Pakistani state, multiplying domestic challenges like macroeconomic and trade instability, societal conflicts and crises in energy supply and infrastructure. In light of these aspects, this paper explores the magnitude and development of German-Pakistani relations, focusing especially on trade, economic cooperation and strategic interests on both sides. The analysis of the German-Pakistani trade and investment relations over the last decade show only very moderate volumes with room for expansion. These dynamics are mirrored in private trade business relations with German SME's active on the Pakistani market (mostly through agents) and a lack of internationalization and economic diversification among Pakistan's private businesses. A related structural reason for these predicaments is the lack of a dedicated and clearly-defined policy infrastructure among both states, resembling the long-standing and amicable, though unenthusiastic German-Pakistani relationship. The recent EU-Waiver assignment, the adoption of the EU's GSP+ and related trade diversification programs signify the most significant parts of the EU-Pakistani partnership, and mirror an integral part of the discourse in German-Pakistani relations. Pakistan should attempt to reap the benefits of these developments. Strategic relationships between Germany and Pakistan need to be developed further and strengthened. The content of a recent bilateral signing of a multifaceted roadmap for strategic dialogue among Germany and Pakistan has to be implemented effectively. -- |
| Keywords: | Trade policy,Country and Industry Studies of Trade,International Investment,Foreign aid,International relations and political economy,Intergovernmental Relations,Govt. policy,Joint ventures,Diversification,Asia & Middle East |
| JEL: | F13 F14 F21 F35 F59 H77 I38 L24 L25 N45 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbpre:p2014004&r=int |
| By: | Piyush Chandra; Cheryl Long |
| Abstract: | A destination-based VAT system without a complete export tax rebate is detrimental to a country's exports, while an increase in the VAT rebate rate helps reduce the negative effects. In this paper, we study the role of VAT rebates in affecting Chinese exports using firm-level panel data for 2000–2006. To address potential endogeneity, we rely on a quasi-natural policy experiment in 2004, when the fiscal conditions of local governments became important in determining the actual VAT rebate rates for exports. The empirical findings demonstrate significant and large effects of VAT rebates on export volume. On average, for each percentage point increase in the VAT rebate rate, the amount of exports increased by 13%, which translates into an additional $4.70 of exports for each $1 of export tax rebates paid. |
| Keywords: | VAT rebate, Export growth, Trade policy, China |
| Date: | 2013–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:journl:002196&r=int |
| By: | Kelleher, Sinead; Reyes, Jose-Daniel |
| Abstract: | Despite the widespread tariff reductions sparked by the Dominican Republic-Central America Free Trade Agreement, borders in the region remain thick, with many hurdles standing in the way of regional trade. Although anecdotal evidence suggests that nontariff measures raise trade costs and inhibit trade in the region, little is known about the magnitude of these economic effects. This paper uses a newly collected data set to quantify the incidence of sanitary and phytosanitary measures and technical barriers to trade in the region and benchmarks it with other parts of the world. The results indicate that the Central American region has the lowest prevalence of technical nontariff measures in the world. However, there is significant heterogeneity of trade-related regulations in Central America; for instance, 48 percent of Salvadoran imports are subject to at least one nontariff measure, compared with just 16 percent of Honduran imports. The paper estimates the impact of these technical measures on border prices and finds that the price impact of sanitary and phytosanitary measures is equivalent to an ad-valorem tariff of 11.6 percent. This price-rising effect is further investigated by looking in detail at the impact of sanitary and phytosanitary measures on the prices of beef, chicken meat, bread, anddairy products in Guatemala. The impact is estimated to be equivalent to an ad-valorem tariff of 68.4 percent, 51.4 percent, 22.0 percent, and 5.0 percent, respectively. The paper shows that efforts to streamline key sanitary and phytosanitary measures affecting these products by, for example, reducing the cost and time required to obtain sanitary registries, would likely reduce the Guatemalan urban extreme poverty rate from 5.07 percent to 4.91 percent. |
| Keywords: | Markets and Market Access,Emerging Markets,Rural Poverty Reduction,Regional Economic Development,Economic Theory&Research |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6857&r=int |
| By: | Serhat Asci; Ali Koç; Sukru Erdem |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:uae:sermed:34&r=int |
| By: | Gustavo Gonzaga (Department of Economics PUC-Rio); Cristina Terra (Universite de Cergy-Pontoise); Batriz Muriel Hernandes |
| Abstract: | We build a theoretical model that incorporates unionization in the labor market into a Heckscher-Ohlin-Samuelson (HOS) framework to in- vestigate the impact of unionization on the Stolper-Samuelson Theorem. To capture the American economy case, we assume that unskilled labor in the manufactured goods sector is unionized, and that sector is intensive in skilled labor, and that trade liberalization increases the relative price of manufactured goods. In the HOS model, trade liberalization induces a reallocation of production towards the sector that uses intensively the country's most abundant factor. The resulting change in relative labor de- mand impacts wage bargaining in the unionized sector, which, in turn, has a dampening eect on the Stolper-Samuelson eect. Moreover, wages of unionized workers are even less responsive to trade liberalization. Through traditional mandated-wages regressions, we show that skilled-wage dier- entials changes were less pronounced among more unionized sectors in the U.S. economy for the 1979-1990 period. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:rio:texdis:619&r=int |
| By: | Zhang, Haimin |
| Abstract: | There is growing belief in many developed countries, including Canada, that the large influx of the foreign-born population increases crime. Despite the heated public discussion, the immigrant-crime relationship is understudied in the literature. This paper identifies the causal linkages between immigration and crime using panel data constructed from the Uniform Crime Reporting Survey and the master files of the Census of Canada. This paper distinguishes immigrants by their years in Canada and defines three groups: new immigrants, recent immigrants and established immigrants. An instrumental variable strategy based on the historical ethnic distribution is used to correct for the endogenous location choice of immigrants. Two robust patterns emerge. First, new immigrants do not have a significant impact on the property crime rate, but with time spent in Canada, a 10% increase in the recent-immigrant share or established-immigrant share decreases the property crime rate by 2% to 3%. Neither underreporting to police nor the dilution of the criminal pool by the addition of law-abiding immigrants can fully explain the size of the estimates. This suggests that immigration has a spillover effect, such as changing neighbourhood characteristics, which reduces crime rates in the long run. Second, IV estimates are consistently more negative than their OLS counterparts. By not correctly identifying the causal channel, OLS estimation leads to the incorrect conclusion that immigration is associated with higher crime rates. |
| Keywords: | Immigration; Crime |
| JEL: | F22 J15 K42 |
| Date: | 2014–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-20&r=int |
| By: | Karyne B. Charbonneau |
| Abstract: | This paper considers the adaptability of estimation methods for binary response panel data models to multiple fixed effects. It is motivated by the gravity equation used in international trade, where important papers such as Helpman, Melitz and Rubinstein (2008) use binary response models with fixed effects for both importing and exporting countries. Econometric theory has mostly focused on the estimation of single fixed effects models. This paper investigates whether existing methods can be modified to eliminate multiple fixed effects for two specific models in which the incidental parameter problem has already been solved in the presence of a single fixed effect. We find that it is possible to generalize the conditional maximum likelihood approach of Rasch (1960, 1961) to include two fixed effects for the logit. Surprisingly, despite many similarities with the logit, Manski’s (1987) maximum score estimator for binary response models cannot be adapted to the presence of two fixed effects. Monte Carlo simulations show that the conditional logit estimator presented in this paper is less biased than other logit estimators without sacrificing on precision. This superiority is emphasized in small samples. An application to trade data using the logit estimator further highlights the importance of properly accounting for two fixed effects. |
| Keywords: | Econometric and statistical methods |
| JEL: | C23 C25 F14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:14-17&r=int |
| By: | Bouoiyour, Jamal; Miftah, Amal |
| Abstract: | In this paper, we examine the effect of migrants’ remittances on poverty and inequality. The survey data were collected in Morocco, in the rural areas of the region Souss-Massa-Draa. By applying an original approach, we estimate the counterfactual income of remittance-recipient households corresponding to a hypothetical value of its average income calculated for a scenario without remittances; this is then compared with its current income. We find that the poverty rate and the vulnerability of non-poor households are significantly dropped due to remittances. Our findings also suggest that remittance inflows have increased income inequality compared to the no-migration counterfactual situation. |
| Keywords: | Remittances; Poverty; Income distribution; Morocco. |
| JEL: | F22 F24 I32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55686&r=int |
| By: | Puman Ouyang; Shihe Fu |
| Abstract: | In many countries inward foreign direct investment (FDI) typically concentrates in a few regions. However, there is little empirical evidence on whether spatially concentrated FDI boosts economic growth in other regions within the same country. We use a dataset that covers 96% of Chinese cities from 1996–2004 and find that “inter-regional spillovers†from FDI concentrated in China’s coastal cities have a positive and significant effect on the growth of inland cities. In addition, an inland city’s industrial development affects its absorptive capacity to gain such interregional spillovers from coastal FDI. |
| Keywords: | D124Foreign direct investment, Regional inequality, Inter-regional spillovers, Absorptive capacity, Growth |
| JEL: | F21 R12 O40 O14 O18 |
| Date: | 2013–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:journl:002154&r=int |
| By: | Michele Gradoli |
| Abstract: | During the last twenty years, Europe started to search for a new approach towards the Mediterranean region: after the re-start of its internal economy after the World War II, and after the re-launch of the economic integration process, Europe began a diffuse reflection on its relationships with the Northern African and Middle Eastern countries. This reflection produced several forms of partnerships and alliances and my intention with this paper is to highlight the main steps of this convergent pathway that started in 1995 with the EuroMediterranean Partnership (EMP) |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:uae:sermed:19&r=int |
| By: | José Miguel Martín Rodríguez |
| Abstract: | As we know, the European Union has faced the challenge of harmonization in the tax field with varied results. We may think that the advanced harmonization in indirect taxes (custom duties, VAT and excise duties) has reduced the distortions that they may create in the intra-EU commerce. Far from this assumption, in the paper we will underline how the lack of a complete harmonization may create competitive advantages in certain countries and sectors. Specifically, we will examine how the road haulage sector is affected by the differences in diesel excise duties among Member States. The proposal for a Euro-Mediterranean Free-Trade Area would face the same problems as the European Union. If there are distortions inside the European Union, the extension of the free trade area to other mediterranean countries would possibly worsen it. This is why we suggest the establishment of a system equivalent to the IFTA (International Fuel Tax Agreement), existing in the United States and Canada, in order to achieve an efficient haulage system free of tax distortions. |
| Keywords: | excise duties, diesel, fuel tourism, IFTA, tax harmonization |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:uae:sermed:35&r=int |
| By: | Chuanglian Chen; Guojin Chen; Shujie Yao |
| Abstract: | A decline in the relative price of imported goods compared to that of domestically produced goods, e.g., caused by domestic currency appreciation, may have different effects on domestic consumption. Such effects may not be accurately detected and measured in a classical permanent-income model without considering consumption habit formation as pointed out by Nishiyama (2005). To resolve this problem, this paper employs an extended permanent-income model which encompasses consumption habit formation. Both cointegration analysis and GMM are used to estimate the (modified) intertemporal elasticities of substitution (IES) between imports and domestic consumption and the parameters of habit formation as well as the (modified) intratemporal elasticities of substitution (AES). We find that import and domestic consumptions are complements in China, but substitutes in Japan and Korea. Different per capita incomes and consumer behaviors between China and the other two countries are two possible reasons for different relationships between import and domestic consumptions. |
| Keywords: | Habit formation; Imports and domestic consumption; China, Japan and Korea |
| JEL: | D01 D11 D91 |
| Date: | 2013–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:journl:002188&r=int |
| By: | Ezzahid, Elhadj; Maouhoub, Brahim |
| Abstract: | This paper explores the links between gradual capital account liberalization and the exchange rate regime in Morocco where the process of economic and financial openness is relatively advanced. Using a game theory model with two economic agents, that are monetary authorities and domestic firms, we explore the best choice concerning the exchange rate regime for Morocco in a context characterised by increasing openness especially of capital account. The results show that welfare under a flexible exchange rate regime is higher compared to welfare under a fixed exchange rate regime. The analysis also shows that the flexible exchange rate will improve competitiveness. However, flexibility will undermine price stability. -- |
| Keywords: | capital account liberalization,exchange rate regime,competitiveness,inflation,Morocco |
| JEL: | F31 F32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201418&r=int |
| By: | Jensen, Hans Grinsted; Kym Anderson |
| Abstract: | A recent World Bank research project has generated an annual time series of distortions to agricultural incentives over the past half century for 82 countries, the majority of which are low-and middle-income countries. In this memorandum, the current GTAP version 8 Data Base may be modified to incorporate this dataset, using an Altertax simulation. The files required for this Altertax simulation, including parameter files and shock files are generated by the DAItoGTAP.tab file which will accommodate any level of aggregation of the GTAP database. In this memorandum the data files required to modify the GTAP v8.1 database can be downloaded. Data required to modify the GTAP v9 database will be available at a later date when v9 is released. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gta:resmem:4364&r=int |