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on International Trade |
| By: | Ricardo Argüello; Andres F. García; Daniel Valderrama |
| Abstract: | Abstract: Recent empirical work emphasizes the importance of the extensive margin of trade (new exporters, new export activities) for long run export growth. In this context, understanding the determinants of duration of new exporters is key for underpinning the dynamics of exports growth. As new exporters tend to show low survival rates, identifying the determinants of export duration is highly relevant for academic and policy purposes. In this paper, we explore whether information externalities arising from different levels of spatial interaction allow new exporters to increase the duration of their trade activities. For this, we use transaction level data on Colombian exports between 2004 and 2011. Results show that export networks, understood as the agglomeration of exporting firms at different spatial levels, reduce the risk of dropping out from exporting and that this effect is stronger the more similar are export activities carried out by firms. |
| Keywords: | Information externalities, export duration, export dynamics, duration analysis, survival of trade |
| JEL: | F14 C41 |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:011035&r=int |
| By: | Lucie Davidova (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Vladimir Benacek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | The purpose of this paper is to examine Austrian foreign trade and estimate the country’s export function. The analysis is based on the gravity model of trade in the log-log form, augmented by additional variables in order to control for the impact of institutions on decision-making. Our panel dataset consists of 3,396 observations of Austrian exports to 211 countries over the period from 1995 to 2011. At that time, the Austrian export was very closely dependant on the German market, which the model proved to be a natural outcome. In other respects it has been, however, diversified among many smaller trade partners whose importance has been gradually shifting eastwards. We employ Fixed Effects and Random Effects as estimation techniques. By taking advantage of the panel data structure, we estimate the gravity equation as two alternative one-way estimators – as 17 segments of cross-sections and as 211 time series. This allows us to estimate factors related to two complementary questions of “where to export” and “how much to export over time”. For each question we test and quantify the relevance of nine economic and ten institutional factors. |
| Keywords: | Austria, export, gravity model, fixed effects, random effects |
| JEL: | C13 C23 F10 F12 F14 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_05&r=int |
| By: | Alessandria, George (Federal Reserve Bank of Philadelphia); Choi, Horag (Monash University); Ruhl, Kim J. (NYU Stern School of Business) |
| Abstract: | We build a micro-founded two-country dynamic general equilibrium model in which trade responds more to a cut in tariffs in the long run than in the short run. The model introduces a time element to the fixed-variable cost trade-off in a heterogeneous producer trade model. Thus, the dynamics of aggregate trade adjustment arise from producer-level decisions to invest in lowering their future variable export costs. The model is calibrated to match salient features of new exporter growth and provides a new estimate of the exporting technology. At the micro level, we find that new exporters commonly incur substantial losses in the first three years in the export market and that export profits are backloaded. At the macro level, the slow export expansion at the producer level leads to sluggishness in the aggregate response of exports to a change in tariffs, with a long-run trade elasticity that is 2.9 times the short-run trade elasticity. We estimate the welfare gains from trade from a cut in tariffs, taking into account the transition period. While the intensity of trade expands slowly, consumption overshoots its new steady-state level, so the welfare gains are almost 15 times larger than the long-run change in consumption. Models without this dynamic export decision underestimate the gains to lowering tariffs, particularly when constrained to also match the gradual expansion of aggregate trade flows. |
| Keywords: | Sunk cost; Fixed cost; Establishment heterogeneity; Tariffs; Welfare; DSGE |
| JEL: | E31 F12 |
| Date: | 2014–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:14-14&r=int |
| By: | Basak Dalgic (Department of Public Finance, Hacettepe University); Burcu Fazlioglu (Department of International Entrepreneurship, TOBB ETU University); Deniz Karaoglan (Department of Economics, METU) |
| Abstract: | We examine the effects of international trading activities of firms on creating productivity gains in Turkey by using a recent firm level dataset over the period 2003-2010. We establish treatment models and investigate the productivity improvements of firms through trade by using Propensity Score Matching (PSM) techniques along with Difference-in-Difference (DID) estimates. Three different groups of treatment are constructed: (i) firms that involve only in importing activities, (ii) firms that involve only in exporting activities, (iii) firms that involve in both exporting and importing activities. The results of the study suggest that both exporting and importing have positive significant effects on total factor productivity (TFP) and labor productivity (LP) of firms. Importing is found to have a greater impact on productivity of firms compared to exporting. Further, two-way trade is found to have more significant effects than those of one-way trade on firm productivity Finally, our results indicate that international trade has greater impact on LP rather than TFP of firms. |
| Keywords: | Productivity, Imports, Exports, Propensity Score Matching. |
| JEL: | F10 D21 D24 C21 C23 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:met:wpaper:1403&r=int |
| By: | Laxmi Prasad Prasai (Nepal Rastra Bank) |
| Abstract: | This study examines the overall trade pattern and flow of trade of Nepal by using pooled ordinary least square (OLS) along with one-year lag gross domestic product (GDP). It has also attempted to find the structural shift in the economy after economic liberalization in Nepal. In this study, gravity model is applied with comprehensive panel dataset for 29 years time period covering Nepal’s 94 trading partners. The results appear robust to specification, time period and trade determinants. Following a convention in this field, this study separates exports and imports instead of using total trade turnover. The empirical results are found consistent with the fundamental of gravity model as the study reveals positive coefficients for economic size and negative coefficients for distance. No significant structural break is found in the determinants of trade after economic liberalization. The results from simulation while comparing actual trade with predicted trade show that Nepal’s trade is not distorted by political decisions such as economical sanctions imposed by other countries. The results also suggest that trade with India in comparison to China is quite substantial. The results suggest that Nepal needs trade diversification in general and trade agreement with China in particular to reap the benefits from the trade. |
| Keywords: | Gravity Model, Panel Data, Bilateral Trade, Export, Import, Trade Pattern, Distortion |
| JEL: | F14 F19 O10 O53 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nrb:wpaper:v:21:y:2014:p:1-20&r=int |
| By: | Ricardo Argüello |
| Abstract: | Abstract: We describe the evolution of international trade and the behavior of export diversification in Colombia during the period 1991-2011. For measuring trade diversification and following up its behavior along the period, we employ alternative ways of decomposing trade flows along its intensive and extensive margins, using the latter as a measure of diversification. Results indicate that, in the short run, trade diversification in Colombia can be characterized as weak but that there is a modest trend for an increase in its importance. With some differences in degree, for both exports and imports, the number of partner countries increases faster than the number of products contained in the average basket traded and, simultaneously, the number of traded products increases faster than the average number of countries with which they are traded. Hence, trade diversification in Colombia seems to follow a pattern that implies that trade with new partners tends to be relatively slowly populated in terms of products or, from the opposite point of view, trade of new products is relatively sluggish in extending to new partner countries. |
| Keywords: | Export diversification, import diversification, trade margins, Colombia, empirical trade studies |
| JEL: | F14 O24 |
| Date: | 2013–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:011016&r=int |
| By: | mahmood, Hamid mahmood; gul, Sidra gul |
| Abstract: | The paper focuses on understanding the dynamics of pre and post Free Trade Agreement (FTA) agreement between Pakistan and Malaysia. It makes use of descriptive analysis and SMART model for simulating the impact of trade liberalization and its impact on the local and ASEAN economy. The impact is measured for top five export product of Pakistan and separate case of automobile sector of Pakistan understanding the changes in export, revenue, trade creation and diversion and welfare impact. The results from the descriptive analysis suggests trade in favor of Malaysia while simulation shows increase in export, welfare and trade diversion with automobile sector showing insignificant impact on welfare. |
| Keywords: | Simulation, trade creation, trade diversion, export revenue and welfare |
| JEL: | F10 F15 F17 |
| Date: | 2014–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55802&r=int |
| By: | Derek Eaton (The Centre for International Environmental Studies, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has continued to be fiercely debated between North and South, par- ticularly with respect to its provisions for the agricultural sector. Article 27.3(b) of the TRIPS Agreement requires WTO member countries to offer some form of intellectual property protection for new plant varieties, either in the form of patents (common in the U.S.) or plant breeder's rights (PBR). This paper analyzes the effects of the introduction of PBRs in almost 80 importing countries on the value of exports of agricultural seeds and planting material from 10 exporting EU countries, including all principal traditional exporters of seeds, as well as the US. A dynamic penalized fixed effects quan- tile regression model, based on a general specication for the gravity model for international trade, is estimated using panel data covering 19 years (1989-2007) of export flows in order to assess the effect of International Convention on the Protection of New Varieties of Plants (UPOV) membership on seed imports. Basing inference on the panel bootstrap, we find no signicant effect from UPOV membership on seed imports. |
| Keywords: | agriculture, inputs, trade, intellectual property rights |
| JEL: | F13 O34 Q17 |
| Date: | 2013–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_20&r=int |
| By: | Doan Thi Thanh Ha (International Graduate School of Social Sciences, Yokohama National University and Faculty of International Economics and Business, Foreign Trade University); Kozo KIYOTA (Keio Economic Observatory, Keio University) |
| Abstract: | This paper examines the relationship between productivity differentials and firm turnover in Vietnamese manufacturing. We utilize firm-level data between 2000 and 2009, including the year 2007, when Vietnam joined the World Trade Organization (WTO). Our major findings are twofold. First, the productivity of entrants, survivors, and exiters increased simultaneously from 2006 to 2007. This result suggests that the cutoff productivity level increased after trade liberalization. Second, the resource reallocation between firms was facilitated after the liberalization. These findings are consistent with the implications of the recent models of international trade and firm heterogeneity. |
| Keywords: | Total factor productivity, Aggregate productivity, Trade Liberalization, Firm turnover, Vietnam |
| JEL: | O12 D22 O47 F14 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-07&r=int |
| By: | Philipp Hühne; Birgit Meyer; Peter Nunnenkamp |
| Abstract: | Our empirical estimations indicate that aid-for-trade granted by OECD donors strengthens the trade relations of recipient countries with other developing countries. By focusing on South-South trade we mitigate endogeneity concerns that have plagued analyses of trade between recipients and donors of aid-for-trade |
| Keywords: | South-South trade, aid effectiveness, aid-for-trade |
| JEL: | F14 F35 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1918&r=int |
| By: | Larry Qiu (University of Hong Kong); Miaojie YU (Peking University) |
| Abstract: | This paper provides a theoretical and empirical analysis of the effects of one-sided tariff cuts on firms’ export product scope. The theoretical model explicitly incorporates cost of management in addition to the commonly used production cost. The analysis predicts that the home country’s tariff cut, a home firm’s export product scope expands (shrinks) if the firm’s management cost is low (high). These predictions are supported by our empirical analysis based on data on Chinese firms from 2000 to 2006. |
| Keywords: | Multiproduct firm, Management cost, Managerial efficiency, Export product scope, Trade liberalization, China |
| JEL: | F12 F13 F15 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-06&r=int |
| By: | Oxana Babecka Kucharcukova (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic and Czech National Bank) |
| Abstract: | This paper aims to quantify the impact of nominal exchange rate volatility on nominal trade flows with a particular focus on the Czech Republic. The paper shows that the magnitude of the impact differs when a dynamic model is used instead of static model. |
| Keywords: | Gravity model of trade, Exchange rate volatility, Poisson estimator |
| JEL: | F14 F31 F4 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_03&r=int |
| By: | Rodolfo Metulini (IMT Lucca Institute for Advanced Studies); Paolo Sgrignoli (IMT Lucca Institute for Advanced Studies); Stefano Schiavo (Department of Economics and Management, University of Trento); Massimo Riccaboni (IMT Lucca Institute for Advanced Studies) |
| Abstract: | This paper studies the relationship between migration and trade, with the aim of measuring both direct and indirect network effects. We analyze trade of diferentiated and homogeneous goods using an econometric approach inspired by spatial econometrics, proposing a new way to define country neighbors based on the most intense links in the migration network. We find that migration significantly affects trade across categories both in direct and in indirect way. The indirect impact highlights a stronger competitive effect of third country migrants for homogeneous goods. We also confirm that the effect of migration channels is higher on differentiated goods. |
| Keywords: | Trade; Migration; Gravity model; Spatial econometrics, Networks |
| JEL: | F14 F22 C21 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ial:wpaper:5/2014&r=int |
| By: | Marco de Pinto (IAAEU & University of Trier); Jochen Michaelis (University of Kassel) |
| Abstract: | Trade unions are typically able to convert their industrial power into political power. We show that, depending on the parameter constellation, stronger trade unions may be welfare-improving in terms of an increase in aggregate employment and output, if they successfully lobby for lower trade barriers set by the government. |
| Keywords: | Trade unions, lobbying, trade liberalization. |
| JEL: | F13 F16 J51 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201418&r=int |
| By: | Auer, Raphael (Swiss National Bank); Mehrotra, Aaron (Bank for International Settlements) |
| Abstract: | Some observers argue that increased real integration has led to greater co-movement of prices internationally. We examine the evidence for cross-border price spillovers among economies participating in the pan-Asian cross-border production networks. Starting with country-level data, we find that both producer price and consumer price inflation rates move more closely together between those Asian economies that trade more with one another, ie that share a higher degree of trade intensity. Next, using a novel data set based on the World Input-Output Database (WIOD), we examine the importance of the supply chain for cross-border price spillovers at the sectoral level. We document the increasing importance of imported intermediate inputs for economies in the Asia-Pacific region and examine the impact on domestic producer prices of changes in costs of imported intermediate inputs. Our results suggest that real integration through the supply chain matters for domestic price dynamics in the Asia-Pacific region. |
| Keywords: | price level; inflation; deflation; international trade |
| JEL: | E31 F14 F15 F40 |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:172&r=int |
| By: | Oliver Polyak (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | The present paper is focused on the impact of introducing the common European currency on export performance. There has been a lot written about the possible effects of euro adoption on economies of the first eurozone participants. The contribution of this research is that we explore the impact of euro introduction on Slovakia, in comparison to the Czech Republic which still uses its own national currency. Our findings suggest that the export performance and other export-related indicators evolved largely in parallel in both countries. Positive trade effects brought about by the introduction of the euro are rather moderate – up to 5%. The results to some extent do confirm the existence of the so called ‘Rose effect’ – the effect that two countries sharing the same currency trade more than they would otherwise. |
| Keywords: | competitiveness, euro adoption, export, Czech Republic, Slovakia |
| JEL: | F14 F15 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_04&r=int |
| By: | G. Dosi; M. Grazzi; D. 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 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. |
| JEL: | D22 F10 F14 F19 L25 O32 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp941&r=int |
| By: | Tobias Ketterer; Daniel M. Bernhofen; Chris Milner |
| Abstract: | Opposing theoretical predictions on the effects of trade preferences on multilateral tariff cuts point to the need for empirical analysis to determine whether preferential trade agreements promote or hinder multilateral trade liberalization. This paper examines the impact of Japan’s trade preferences on its multi-lateral tariff reductions. Using detailed product level data, we find that Japan’s Generalized System of Preferences (GSP) acted as a stumbling block for the country’s external tariff liberalization during the Uruguay Round of multi-lateral trade negotiations. |
| Keywords: | Japan’s Generalized System of Preferences; Japan’s Most Favoured Nation tariffs; Uruguay Round |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:14/03&r=int |
| By: | Ung, Luyna; Chhair, Sokty |
| Abstract: | One feature of exporting firms in Cambodia is that they are not of domestic origin but are foreign firms that export from the moment they are established in Cambodia. In this paper we examine the extent to which the presence of foreign-owned export firms |
| Keywords: | exports, foreign direct investment, institutional constraints, spillovers, Cambodia |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-079&r=int |
| By: | C. Veeramani (Indira Gandhi Institute of Development Research); Prachi Gupta (Indira Gandhi Institute of Development Research) |
| Abstract: | Should India's export promotion policies be targeted at accelerating export growth at the extensive (new trading relationships) or at the intensive margin (increase in trade of existing relationships)? To help answer this question, we undertake a comparative study of exports from India and China by analysing the role of extensive and intensive margins in the export market penetration of the two countries during 1995-2011. We further decompose intensive margin into quantity and price margins. As far as extensive margin is concerned, our results show that the gap between the two countries is getting narrower as India is clearly catching up with China. By contrast, India lags significantly behind China in terms of intensive margin due to an abysmally low and stagnant quantity margin. Intensification, rather than diversification, has been the crucial driving force of China's export success. India's exports of capital-intensive products performed better compared to labour intensive products. The lacklustre performance in labour-intensive exports is entirely due to a lack of depth inIndia's market presence even as it expanded the range of its products and markets. Our analysis suggests that India can reap rich dividends by adopting policies aimed at accelerating export growth at the intensive margin. Contrary to the general perception, there exist a great potential for India to expand and intensify its export relationships with the traditional developed country partners. |
| Keywords: | Exports, Extensive Margin, Intensive Margin, India, China |
| JEL: | F10 F14 F15 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2014-011&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Centre, Institute of Developing Economies, Thailand); Toshiyuki MATSUURA (Keio Economic Observatory, Keio University) |
| Abstract: | In this paper, we investigate the dynamic nature of trading using Japanese firm-level data. Specifically, we examine state dependence and cross effects in exporting and importing. Our findings are as follows. First, we found significant state dependence and cross effects in exporting and importing. Second, those effects diminish over time. Third, such state dependence and cross effects are found to be market-specific. Furthermore, such market specificity is more significant in small and medium-sized enterprises. Last, past export/import intensity matters in the current trade status. |
| Keywords: | : Japan, Firm-level, Two-way relationship |
| JEL: | F10 F13 F15 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-08&r=int |
| By: | Spiros Bougheas; Rod Falvey |
| Abstract: | We introduce financial frictions into a simple two sector model of international trade with heterogeneous agents and investigate the impact of differences in the strength of financial institutions and wealth inequality on trade flows, capital movements and entrepreneurial migration. Distinct cost-cutting and career-changing motives for entrepreneurial migration exist, which can lead to two-way entrepreneurial flows. We establish presumptions that countries with stronger financial systems or greater wealth inequality will export the output of the financially dependent sector, will import capital and will be a (net) exporter of entrepreneurs. Important exceptions are shown. |
| Keywords: | entrepreneurial migration; trade flows; capital flows; wealth inequality; financial frictions |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:14/04&r=int |
| By: | Christopher PARSONS (University of Oxford); Pierre-Louis VÉZINA (University of Oxford) |
| Abstract: | We provide cogent evidence for the causal pro-trade effect of migrants and in doing so establish an important link between migrant networks and long-run economic development. To this end, we exploit a unique event in human history, the exodus of the Vietnamese Boat People to the US. This episode represents an ideal natural experiment as the large immigration shock, the first wave of which comprised refugees exogenously allocated across the US, occurred over a twentyyear period during which time the US imposed a complete trade embargo on Vietnam. Following the lifting of trade restrictions in 1994, the share of US exports going to Vietnam was higher and more diversified in those US States with larger Vietnamese populations, themselves the result of larger refugee inflows 20 years earlier. |
| Keywords: | : Migrant Networks, US Exports, Natural Experiment |
| JEL: | F14 F22 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-09&r=int |
| By: | Yilmazkuday, Demet (Florida International University); Yilmazkuday, Hakan (Florida International University) |
| Abstract: | The role of direct flights in trade costs is investigated by introducing and using a micro price data set on 49 goods across 433 international cities covering 114 countries. It is shown that having at least one direct flight reduces trade costs by about 1,400 miles in distance equivalent terms, while an international border increases trade costs by about 14,907 miles; hence, the positive effects of having at least one direct flight between any two cities can compensate for about 10% of the negative effects of an average international border. Trade costs also decrease with the number of direct flights: on average, one direct flight reduces trade costs by about 305 miles in distance equivalent terms, which corresponds to 7% of the average distance and can compensate for about 2% of the negative effects of an average international border. The results are shown to be robust to alternative empirical strategies. |
| Keywords: | economic integration; foreign exchange |
| JEL: | F15 F31 |
| Date: | 2014–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:179&r=int |
| By: | Holger Görg; Marina-Eliza Spaliara |
| Abstract: | Using a large panel of UK manufacturing firms over the period 2000—2009, we consider how firms responded during the most recent financial crisis, estimating models for export market participation decisions and firm growth and survival. The results indicate that financial variables are highly important in predicting export market entry, especially in the midst of the global financial crisis. With respect to firm growth and survival, we find that starters and continuous exporters are more likely to perform well in and out of the crisis than non-exporters |
| Keywords: | Exports, financial crisis, financial health |
| JEL: | F1 L2 G3 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1919&r=int |
| By: | Robert C. Feenstra; Philip Luck; Maurice Obstfeld; Katheryn N. Russ |
| Abstract: | The elasticity of substitution between goods from different countries---the Armington elasticity---is important for many questions in international economics, but its magnitude is subject to debate: the "macro" elasticity between home and import goods is often found to be smaller than the "micro" elasticity between foreign sources of imports. We investigate these two elasticities in a model using a nested CES preference structure. We explore estimation techniques for the macro and micro elasticities using both simulated data from a Melitz-style model, and highly disaggregate U.S. production data matched to Harmonized System trade data. We find that in up to one-half of goods there is no significant difference between the macro and micro elasticities, but in the other half of goods the macro elasticity is significantly lower than the micro elasticity, even when they are estimated at the same level of disaggregation. |
| JEL: | F12 F14 F42 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20063&r=int |
| By: | Jaime de Melo (FERDI); Mariana Vijil (FERDI) |
| Abstract: | Barriers to trade in Environmental Goods (EGs) and Environmental Services (ESs) are documented for a large sample of countries and compared with barriers to trade in other goods and other services. Some progress at reduction in barriers has occurred at the national, regional and sectoral levels but not at the multilateral level, where countries have been unable to agree on an approach to reduce barriers to trade. For EGs, tariffs and NTBs are highest for low-income countries and low for high-income countries. First-order estimates of the import response to a 50% reduction in tariffs for low-income countries suggest an increase in imports of around 4%. For ESs, estimates draw on the comparison of an Environment Services Liberalization index calculated across modes and services sub-sectors. The limitations of this ordinal index coupled with the inadequacy of the UN CPC list where services are defined in an exclusionary manner so that they cannot appear on two lists, casts greater uncertainty as to the informational content of the commitment measures presented here which, at best, indicate bindings on market access and national treatment rather than actual policies. It would appear nonetheless that at least as great, and probably greater commitments took place in the environmental sectors (as defined by the CPC) both multilaterally and regionally than for ‘other’ services with the same pattern across income groups: greater commitments observed for HIC than for MICs and LICs although it is widely recognized that GATS commitments by HICs largely amounted to consolidated members’ unilateral services policies. North-South Regional Trade Agreements resulted mostly in commitments by the Southern partners indicating greater prospects for reducing barriers to trade in a regional than in a multilateral context. |
| Keywords: | Environmental Goods, Environmental Services, Doha Round, Tariff Reductions |
| JEL: | F18 Q56 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.36&r=int |
| By: | Dalila Nicet-Chenaf (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - Université Montesquieu - Bordeaux IV : EA2954); Eric Rougier (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS : UMR5113 - Université Montesquieu - Bordeaux IV) |
| Abstract: | Macroeconomic determinants of FDI are seldom analyzed from the perspective of source countries, priority being generally given to host country characteristics. In a gravity set-up, we analyze FDI flows from European Union to MENA economies. We find that European investment to our MENA host countries is higher, the lower the source country output volatility, thereby supporting the existence of an income effect for European Transnational corporations. In the case of MENA economies, source country output volatility's adverse impact on FDI is counterbalanced by the positive attraction effect of domestic swings of activity. We also find that 1995's Barcelona agreement has reinforced MENA countries' vulnerability to European short- and medium-term macroeconomic cycles. The emergence of non-traditional sources of European FDI is, however, a positive evolution since Eastern and Central European investment to MENA countries is less sensitive to host and source country macroeconomic volatility that traditional Western and southern European sources tend to be. Our results are robust to various changes in estimator, sample composition or measurement of instability. |
| Keywords: | Output volatility, Inflation, FDI, gravity model, source countries, European Union, MENA |
| Date: | 2014–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00985795&r=int |
| By: | Frigant, Vincent; Zumpe, Martin |
| Abstract: | In this paper, we examine the evolution of international exchanges of auto parts over the 2000-2012 period. The first part of our study proposes an analysis of the organisation of automotive supply chains based on the global production networks framework. We give details about this approach by stating the nature of trade flows that occur in these networks, and by highlighting the importance of intra-firms flows. The second part poses the question of reasons for an eventual increase of intercontinental flows at the expense of intra-continental flows. In the third part, we evaluate the assumptions made in this context. On the basis of Chelem data about auto parts exchanges, we examine in a comparative way the evolution of intra-continental and intercontinental flows for nine zones of regional integration that cover the world’s entire set of countries. Our results highlight the heterogeneity of situations and of trajectories in the different zones. We explain this state of affairs by the history and the trajectory of the industrial actors, by institutional opportunities/constraints, and by the balance of power between the industries engaged in the setting up of automotive production networks. |
| Keywords: | Global Production Networks; Automotive; Auto parts industry; Globalisation; Regionalisation; International economics. |
| JEL: | F14 F15 F23 L62 R12 |
| Date: | 2014–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55727&r=int |
| By: | Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University) |
| Abstract: | Applying a standard model of endogenous quality choice to the case of multiple national markets (i.e., a developed and a less developed country), we consider the effect of an economic integration (i.e., a movement from segmented markets into a single integrated market through the removal of trade barriers) on price, quality, and consumer surplus. We show that the effect depends on the difference between the consumer distributions of the two countries and the degree of trade barrier costs. In particular, if the difference between the consumer distributions of them is large (small) and/or the degree of trade barrier costs is low (high), an economic integration decreases (increases) the quality level and the welfare of the two countries. |
| Keywords: | segmented market, integrated market, trade barrier costs, economic integration, price discrimination, uniform price, quality choice, demand dispersion, monopoly |
| JEL: | D42 L12 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:118&r=int |
| By: | Cruz, Antonio; Newman, Carol; Rand, John; Tarp, Finn |
| Abstract: | In this paper, we aim to analyse the learning by exporting hypothesis in the Mozambican context. Due to the presence of the born-global phenomenon among exporters, we address the endogeneity introduced by self-selection by combining a generalized BO appro |
| Keywords: | firm level analysis, export, Mozambique |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-066&r=int |
| By: | Longmore, Rohan; Jaupart, Pascal; Cazorla, Marta Riveira |
| Abstract: | This paper contributes to the predominant diversification debate that has been ongoing in Trinidad and Tobago for more than three decades. The paper makes a determination of the key impediments to the country's attempts at diversification. Econometric techniques are applied on panel data to identify the most significant obstacles to economic diversification for a set of 183 countries. The results indicate that openness to foreign direct investment inflows is the most fundamental driver of diversification. The findings are then applied to the specific case of Trinidad and Tobago through a detailed analysis of the links in the trends followed by foreign direct investment and diversification between 1980 and 2011. Greater openness to foreign direct investment and improving the business climate appear to be key policies the twin-island republic could implement further in order to expand the range of activities of its economic structure. |
| Keywords: | Economic Theory&Research,Emerging Markets,Access to Finance,Debt Markets,Currencies and Exchange Rates |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6840&r=int |
| By: | Guimón, José (Department of Economic Structure and Development Economics, Universidad Autónoma de Madrid); Salazar, Juan Carlos (Department of Economic Structure and Development Economics, Universidad Autónoma de Madrid) |
| Abstract: | Collaboration between foreign subsidiaries and universities is relevant for multinational companies that aim at absorbing knowledge from abroad, as well as for policymakers attempting to maximize the spillovers associated with FDI. In this paper, we explore how multinational companies collaborate with universities in the foreign countries where they locate and provide new empirical evidence for Spain as a host country. Using a probit model with panel data from the Community Innovation Survey, we failed to find significant differences between the propensity of foreign subsidiaries and comparable Spanish firms to collaborate with universities. Subsequently, building on a new survey and five case studies, we were able to relate the scale and scope of such collaborations with the dynamic mandates of foreign subsidiaries in global innovation networks and to explore further the variety of motivations that drive collaboration. |
| Keywords: | collaboration in innovation; FDI; foreign subsidiaries; global innovation networks; multinational companies; open innovation; spillovers; university-industry collaboration |
| JEL: | F23 O32 |
| Date: | 2014–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_005&r=int |
| By: | Robert Kollmann; Marco Ratto; Werner Roeger; Jan in’t Veld; Lukas Vogel |
| Abstract: | We estimate a three-country model using 1995-2013 data for Germany, the Rest of the Euro Area (REA) and the Rest of the World (ROW) to analyze the determinants of Germany’s current account surplus after the launch of the Euro. The most important factors driving the German surplus were positive shocks to the German saving rate and to ROW demand for German exports, as well as German labour market reforms and other positive German aggregate supply shocks. The convergence of REA interest rates to German rates due to the creation of the Euro only had a modest effect on the German current account and on German real activity. The key shocks that drove the rise in the German current account tended to worsen the REA trade balance, but had a weak effect on REA real activity. Our analysis suggests these driving factors are likely to be slowly eroded, leading to a very gradual reduction of the German current account surplus. An expansion in German government consumption and investment would raise German GDP and reduce the current account surplus, but the effects on the surplus are likely to be weak. |
| Keywords: | Current Account, intra-European imbalances, monetary union, Eurozone crisis, estimated DSGE model. |
| JEL: | F4 F3 F21 E3 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2014-35&r=int |
| By: | de Melo, Jaime; Tsikata, Yvonne |
| Abstract: | Political motives, geography, and the uneven distribution of gains trumped the traditional efficiency gains across Africa.s Regional Economic Communities (RECs). The small, sparsely populated, fragmented, and often isolated economies across Africa make a |
| Keywords: | regional integration, Africa, trade creation, trade diversion, Franc zone, trade liberalization |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-037&r=int |
| By: | Claudia Steinwender |
| Abstract: | The telegraph was the Victorian equivalent of today's 'big data', helping firms to forecast future demand. Analysing such unique historical 'experiments' helps understand how firms and markets respond when new technology leads to a dramatic change in the availability of information. |
| Keywords: | trade, technology, markets, consumer demand, economic history |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:cepdp417&r=int |
| By: | Elizaveta Archanskaia (KU Leuven, Sciences-Po-OFCE); Guillaume Daudin (PSL, Université Paris-Dauphine, LEDa, UMR DIAL, Sciences-Po, OFCE) |
| Abstract: | (english) This paper shows that declining exporter-specific product heterogeneity can explain the nondecreasing distance elasticity of trade in 1963-2009. The paper first examines common explanations of the distance puzzle: sample and sectorial composition effects and the rise of FTAs. In the Armington framework, perceived increasing substitutability of exporter specific product bundles, i.e. the elasticity of trade flows to trade costs, can explain an increase in the distance coefficient. We provide robust empirical evidence that was the case over 1963-2009. Consequently, the well-documented increase in the distance coefficient is compatible with a reduction in the elasticity of trade costs to distance. _________________________________ (français) Cet article montre que la diminution de l'hétérogénéité des variétés de produits par chaque exportateur peut expliquer l'absence de réduction de l'élasticité du commerce à la distance entre 1963 et 2009. L'article examine tout d'abord des explications courantes de ce « paradoxe de la distance » : l'effet d'échantillon, l'effet de composition et la montée des traités de libre-échange. Dans le cadre d'Armington, l'augmentation de la substituabilité subjective entre les paniers de biens produits par chaque exportateur, autrement dit l'élasticité des flux commerciaux aux coûts du commerce, peut expliquer l'augmentation du coefficient de la distance. Nous fournissons des données empiriquement robustes pour montrer que cela a été le cas entre 1963 et 2009. En conséquence, l'augmentation du coefficient de la distance est bien compatible avec une baisse de l'élasticité des coûts du commerce à la distance. |
| Keywords: | Gravity equation, distance puzzle, trade elasticity, trade costs, Equation de gravité, paradoxe de la distance, élasticité du commerce, coûts du commerce. |
| JEL: | F15 N70 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201209&r=int |
| By: | Olga Kuzmina (New Economic School); Natalya Volchkova (New Economic School); Tatiana Zueva (New Economic School) |
| Abstract: | This paper studies the effect of poor governance quality on foreign direct investment in Russia. Using a survey of businesses across forty administrative districts, we find that higher frequency of using illegal payments and higher pressure from regulatory agencies, enforcement authorities, and criminals, negatively affect foreign direct investment. Our identification strategy builds on the exogenous cross-regional variation in worker strikes during 1895-1914, the period before the October Revolution. We find that moving from the average to the top governance quality across Russian regions more than doubles the FDI stock. |
| Keywords: | foreign direct investment, quality of governance, corruption, Russia |
| JEL: | F21 G15 O17 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0205&r=int |
| By: | Piscitello , Lucia (School of Management - Politecnico di Milano); Rabellotti , Roberta (Università di Pavia); Scalera , Vittoria Giada (School of Management - Politecnico di Milano) |
| Abstract: | The present paper is about the ownership choices by Emerging Market Multinational Enterprises (EMNEs) when they invest in Europe through M&As, and the relationship with the main motivations underlying their international expansion. Namely, we claim that EMNEs prefer to acquire less control and keep the local partner when they invest for seeking knowledge. Additionally, EMNEs choose partial acquisitions in case of high dissimilarity in terms of culture, industry and knowledge base. Our empirical analysis relies on a dataset of M&As undertaken by Chinese and Indian MNEs in high and medium-high tech sectors, in the period 2003-2011. We use content analysis of public announcements and company reports for classifying the main motivation of the acquisitions, and econometric analysis for testing our hypotheses. Our results confirm the expectations. |
| Keywords: | Cross-border acquisitions; Ownership choice; Foreign direct investment motives; Emerging market firms |
| JEL: | F23 G34 O32 |
| Date: | 2014–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_003&r=int |
| By: | Slobodan Djajić; Michael S. Michael (IHEID, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | We study the interaction between the optimal immigration policy of a host country and education policy of a source country in a model of international migration of skilled workers. Acquisition of human capital is driven by the academic and career opportunities at home and abroad. Greater opportunities to migrate are found to increase the source country's net stock of human capital only under very stringent conditions concerning the shape of the utility function and of the production function for human capital, the country's emigration rate, and the international wage dierential. We use the model to examine the eects of technological improvements in the educational sector, changes in the academic curricula in the source country, and attitudes to immigration in the host country. Of key interest are the implications for the optimal spending on education in the source country and the optimal immigration quota of the host country. |
| Keywords: | Migration of skilled workers, immigration policy, education policy |
| JEL: | F22 J24 O15 |
| Date: | 2014–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp09-2014&r=int |
| By: | Arnaud Costinot; Dave Donaldson; Cory B. Smith |
| Abstract: | A large agronomic literature models the implications of climate change for a variety of crops and locations around the world. The goal of the present paper is to quantify the macro-level consequences of these micro-level shocks. Using an extremely rich micro-level dataset that contains information about the productivity---both before and after climate change---of each of 10 crops for each of 1.7 million fields covering the surface of the Earth, we find that the impact of climate change on these agricultural markets would amount to a 0.26% reduction in global GDP when trade and production patterns are allowed to adjust. |
| JEL: | F0 O0 Q0 R0 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20079&r=int |
| By: | Carlo Devillanova (University of Bocconi); Francesco Fasani (Queen Mary University); Tommaso Frattini (University of Milan) |
| Abstract: | This paper estimates the causal effect of the prospect of legal status on the employment outcomes of undocumented immigrants. Our identification strategy exploits a natural experiment provided by the 2002 amnesty program in Italy that introduced an exogenous discontinuity in eligibility based on date of arrival. We find that the prospect of legal status significantly increases the employment probability of immigrants that are potentially eligible for the amnesty relative to other undocumented immigrants. The size of the estimated effect is equivalent to about two thirds of the increase in employment that undocumented immigrants in our sample normally experience in their first year after arrival in Italy. These findings are robust to several falsification exercises. |
| Keywords: | Illegal immigration, Natural experiment, Legalization |
| JEL: | F22 J61 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1415&r=int |
| By: | Newman, Carol; Rand, John; Tarp, Finn; Thi Tue Anh, Nguyen |
| Abstract: | In this paper, we investigate the relationship between exporting and productivity in the case of Vietnam using an extensive firm level panel dataset for the period 2005-11. We separate out productivity effects of exporting due to self-selection allowing u |
| Keywords: | learning by exporting, self-selection, productivity, Vietnam, firm ownership, innovation |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-070&r=int |
| By: | Renee Luthra; Lucinda Platt & Justyna Salamonska |
| Abstract: | The expansion of the European Union eastwards in 2004, with an ensuing massive increase in East-West migration from the accession countries has been represented as a new migration system of a kind unique in recent migration history, with its specific features of rights of movement and low mobility and information costs accompanying persistent East-West wage differentials. In principle, it provides an ideal context in which to develop understandings of the ‘new migration’ reflecting complex motivations and migration trajectories as well as chain migration and transnational lives. Despite a rapid expansion of research in this area, new insights into the complexities of mixed migration motivations and migrant heterogeneity have tended to be focused on country-specific qualitative studies.In this paper we utilise a unique, four-country data source covering over 3,500 Poles migrating to Germany, the Netherlands, London and Dublin in 2009-2010, to enable the quantitative characterization of the new migration. Exploiting information on pre-migration experience as well as expressed migration motivations and post-migration structural, subjective and social measures of integration in the receiving country, we conduct a three-stage analysis. First we employ latent class analysis to allocate the migrants to six migrant types. Second, we link these migrant types to pre-migration characteristics and estimate multinomial logit models for class membership. Third, controlling for these pre-migration characteristics we are able to explore how the migrant types are associated with measures of integration.We reveal substantial heterogeneity among migrants and some evolving ‘new’ migrant types alongside more traditional labour migrants. We show how these types are associated with differences in pre-migration human capital, region of origin and employment experience and with post-migration social and subjective integration in receiving societies. |
| Date: | 2014–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:erp:leqsxx:p0074&r=int |