nep-int New Economics Papers
on International Trade
Issue of 2014‒06‒14
24 papers chosen by
Luca Salvatici
Universita' di Roma 3

  1. Multinational production and trade in an endogenous growth model with heterogeneous firms By Maemir H.; Ziesemer T.H.W.
  2. The impact of regional trade agreements on agrifood trade flows: Agricultural vs. food products, developed vs. developing countries By Marilyne Huchet-Bourdon; Chantal Le Mouel; Mariana Vijil
  3. What Do We Know About Preferential Trade Agreements and Temporary Trade Barriers? By Chad P. Bown; Baybars Karacaovali; Patricia Tovar
  4. What do we know about preferential trade agreements and temporary trade barriers ? By Bown, Chad P.; Karacaovali, Baybars; Tovar, Patricia
  5. Global Engagement and the Occupational Structure of Firms By Heyman, Fredrik; Sjöholm, Fredrik; Davidson, Carl; Matusz, Steven; Chun Zhu, Susan
  6. How promising is South-South trade as a contributor to economic development in Asia and South America? Insights from estimating income elasticities of import demand By Bernhardt, Thomas
  7. Capital goods trade and economic development By Mutreja, Piyusha; Ravikumar, B.; Sposi, Michael J.
  8. Infrastructure and the international export performance of Turkish regions By Celbis M.G.; Nijkamp P.; Poot J.
  9. Effects of climate shocks to Philippine international trade By Mark Crisostomo Pascasio; Shingo Takahashi; Koji Kotani
  10. Solving the Puzzle: A New Measure of Trade Distance In The Gravity Equation By Juan Felipe Mejía Mejía; Andrés Ramírez Hassan
  11. Compensating the losers of free trade By Zareh Asatryan; Sebastian Braun; Wolfgang Lechthaler; Mariya Mileva; Catia Montagna
  12. Multinational retailers and home country exports By Angela Cheptea; Charlotte Emlinger; Karine Latouche
  13. Exchange rate uncertainty and trade flows between the unites states and china By Marilyne Huchet-Bourdon; Mohsen Bahmani-Oskooee
  14. Technological Changes and Global Value Chains By Ramezan Ali Marvi
  15. Determinants of Foreign Direct Investment in Fast-Growing Economies: A Study of BRICS and MINT By Akpan Uduak; Isihak Salisu; Asongu Simplice
  16. Changes of China's agri-food exports to Germany caused by its accession to WTO and the 2008 financial crisis By Zhichao Guo; Yuanhua Feng; Thomas Gries
  17. Foreign Direct Investment in Japan: A review of the empirical literature (Japanese) By KIYOTA Kozo
  18. Trade policy reform: How to win wide-ranging support? By Fabian Berges; Sylvette Monier-Dilhan
  19. New trade in renewable resources and consumer preferences for diversity By Quaas, Martin F.; Stöven, Max T.
  20. Trade Structure and Growth Effects of Taxation in a Two-Country World By Amano, Daisuke; Mino, Kazuo
  21. Trade Reform, Environment and Intermediation: Implication for Health Standard By Mandal, Biswajit
  22. The WTO in Bali - What MC9 means for the Doha Development Agenda and why it matters? By Rorden Wilkinson; Erin Hannah; James Scott
  23. EU trade regulation for baby food: protecting health or trade? By Federica DeMaria; Sophie Drogue
  24. Agenda de Doha : la poursuite des négociations agricoles est nécessaire pour les pays pauvres, mais le cadre est à revoir By Catherine Laroche-Dupraz

  1. By: Maemir H.; Ziesemer T.H.W. (UNU-MERIT)
    Abstract: This paper offers a unified framework to explore both the static and dynamic welfare effects of trade and multinational production MP in the presence of firm-specific productivity heterogeneity. The model captures the dynamic effects by allowing for RD spillovers between firms in a framework of Helpman et al. 2004 that generates endogenous growth without scale effects. We show that multinational presence improves average productivity by strengthening the selection process among heterogeneous firms, but leads to a lower growth rate of intermediate varieties along the transition path toward the new steady state. Thus the presence of multinationals has an ambiguous effect on overall welfare. We also compare the welfare implications of a change in trade cost in our model and in trade models without multinationals. We find that the gains from trade can be higher or lower than the gains obtained in the trade-only models, depending on the degree of firm heterogeneity, the size of trade and FDI costs, and the magnitude of technology spillover parameters. We further show that firm heterogeneity always magnifies average productivity, international spillovers and fixed costs of developing a new variety, which leads to ambiguous effects on overall welfare. Calibrating the model to the US economy suggests that aggregate welfare improves in response to a reduction in trade and FDI costs for empirically plausible parameter values.Keywords firm heterogeneity, endogenous growth, trade, multinational production, technology spillovers.
    Keywords: Models of Trade with Imperfect Competition and Scale Economies; Multinational Firms; International Business; Economic Growth of Open Economies; Innovation and Invention: Processes and Incentives; One, Two, and Multisector Growth Models;
    JEL: F12 F23 F43 O31 O41
    Date: 2014
  2. By: Marilyne Huchet-Bourdon (Structures et Marchés Agricoles, Ressources et Territoires, INRA; Institut Supérieur des Sciences Agronomiques, Agroalimentaires, Horticoles et du Paysage); Chantal Le Mouel (Structures et Marchés Agricoles, Ressources et Territoires, INRA); Mariana Vijil (Structures et Marchés Agricoles, Ressources et Territoires, INRA)
    Abstract: Regional trade agreements (RTAs) have become increasingly prevalent since the early 1990s. However few studies exist on the effects of RTAs on agrifood trade and very little differentiate trade in raw agricultural products from trade in processed food products. This paper focuses on the agrifood trade. We consider nearly all countries (180 countries over 4 time periods: 2001, 2004, 2007, 2011) and all RTAs in force in agrifood trade. Then we distinguish trade in raw agricultural products and trade in processed food products in order to compare the trade impacts of RTAs in both sectors. Using a gravity model, we introduce dummies for controlling for the multilateral resistance terms and we use the Poisson-Pseudo Maximum Likelihood (PPML) estimation method to deal with zero trade flows. We find a clear positive impact of RTAs on trade between involved countries. As expected, the trade impact of RTA is lower in the case of food products relative to agricultural products. Finally our results show that the positive impact of RTAs on trade between involved countries is greater for South-South trade flows than for North-South trade flows.
    Keywords: regional trade agreements, agricultural trade, food trade, developing countries, gravity, Poisson-Pseudo Maximum Likelihood, commerce agroalimentaire, accord commercial régionalmaximum de vraisemblance, méthode de estimation
    JEL: F1 Q17 O11
    Date: 2013
  3. By: Chad P. Bown (Development Research Group, Trade and International Integration (DECTI);); Baybars Karacaovali (Department of Economics, University of Hawaii at Manoa, Department of Economics); Patricia Tovar (Department of Economics, Pontificia Universidad Católica del Perú,)
    Abstract: Two of the most important trade policy developments to take place since the 1980s are the expansion of preferential trade agreements and temporary trade barriers, such as antidumping, safeguards, and countervailing duties. Despite the empirical importance of preferential trade agreements and temporary trade barriers and the common feature that each can independently have quite discriminatory elements, relatively little is known about the nature of any relationships between them. This paper surveys the literature on some of the political-economic issues that can arise at the intersection of preferential trade agreements and temporary trade barriers and uses four case studies to illustrate variation in how countries apply the World Trade Organization’s global safeguards policy instrument. The four examples include recent policies applied by a variety of types of countries and under different agreements: large and small countries, high-income and emerging economies, and free trade areas and customs unions. The analysis reveals important measurement and identification challenges for research that seeks to find evidence of systematic relationships between the formation of preferential trade agreements, the political-economic implications of their implementation, and the use of subsequent temporary trade barriers.
    Keywords: antidumping, safeguards, temporary trade barriers, preferential trade agreements, WTO
    JEL: F13
    Date: 2014–06
  4. By: Bown, Chad P.; Karacaovali, Baybars; Tovar, Patricia
    Abstract: Two of the most important trade policy developments to take place since the 1980s are the expansion of preferential trade agreements and temporary trade barriers, such as antidumping, safeguards, and countervailing duties. Despite the empirical importance of preferential trade agreements and temporary trade barriers and the common feature that each can independently have quite discriminatory elements, relatively little is known about the nature of any relationships between them. This paper surveys the literature on some of the political-economic issues that can arise at the intersection of preferential trade agreements and temporary trade barriers and uses four case studies to illustrate variation in how countries apply the World Trade Organization's global safeguards policy instrument. The four examples include recent policies applied by a variety of types of countries and under different agreements: large and small countries, high-income and emerging economies, and free trade areas and customs unions. The analysis reveals important measurement and identification challenges for research that seeks to find evidence of systematic relationships between the formation of preferential trade agreements, the political-economic implications of their implementation, and the use of subsequent temporary trade barriers.
    Keywords: Trade Law,Free Trade,Trade Policy,Currencies and Exchange Rates,Rules of Origin
    Date: 2014–06–01
  5. By: Heyman, Fredrik (Research Institute of Industrial Economics (IFN)); Sjöholm, Fredrik (Lund University); Davidson, Carl (Michigan State University); Matusz, Steven (Michigan State University); Chun Zhu, Susan (Michigan State University)
    Abstract: Engagement in foreign markets can have an impact on firm organization and on the type of occupations that a firm needs. We examine the effect of globalization on the occupational mixes using detailed Swedish data that cover all firms and a representative sample of the labor force for 1997-2005. We find a robust relationship between a firm’s degree of international integration and its occupational mix. Multinationals, which are the most globally engaged firms, have a distribution of occupations skewed toward more skilled occupations. Non-multinational exporters have a distribution of occupations less skewed toward skilled compared to multinationals, but more skewed toward skilled occupations compared to Swedish non-exporters (which are the least globally engaged). Moreover, firms tend to have an even more skill intensive distribution of occupations when they mainly export to far away markets, or when they export differentiated goods. Our results are little changed (1) when we control for firm size, productivity, capital intensity, and firm age, (2) when we control for offshoring and R&D expenditures; (3) when we use alternative methods to rank occupations, or (4) when we conduct alternative robustness tests. In addition, the results are very similar for manufacturing and non-manufacturing, and for foreign and Swedish multinationals. We interpret our results using a decomposition motivated by recent theoretical models of selection into exporting and FDI.
    Keywords: Occupational mix; Globalization; Multinational Enterprises
    JEL: F10 F20
    Date: 2014–05–27
  6. By: Bernhardt, Thomas
    Abstract: The recent global economic crisis which originated in the global North but quickly spread to the global South has raised questions about the desirability and viability of export regimes primarily orientated towards the markets of high-income countries. The experience of crisis and contagion made developing countries intensify their efforts to diversify sources of economic growth and their search for alternative models of economic development. Expanding South-South trade relationships increasingly became viewed as one such alternative. Yet how promising a strategy is this? In an attempt to provide an answer to this question, this paper first documents the dynamic evolution of South-South trade in past decades and puts forward some theoretical considerations. It then undertakes an econometric analysis to estimate income elasticities of import demand for bilateral trade relationships among a sample of developing Asian and South American countries and two key Northern markets, the Eurozone and the US. Applying an ARDL approach to estimation, our econometric analysis yields mixed results with regard to the question whether South-South trade is generally characterized by higher income elasticities of import demand than South-North trade. While this is largely true for trade involving developing Asian economies, the same does not hold for South American countries. Moreover, income elasticities for imports from the global South are comparatively high in the US (and actually higher than for South-South trade flows in many cases) but this does not equally apply for the Eurozone. Still, our findings show that South-South trade can be a promising alternative source of economic growth, especially if South-North income growth and import growth differentials in favor of the former continue to persist. These findings, thus, provide a rationale for policies aimed at facilitating trade among developing countries.
    Keywords: South-South trade, Asia, South America, income elasticity of import demand, ARDL
    JEL: F14 F15 O11 O19
    Date: 2014–03
  7. By: Mutreja, Piyusha (Syracuse University); Ravikumar, B. (Federal Reserve Bank of St. Louis); Sposi, Michael J. (Federal Reserve Bank of Dallas)
    Abstract: Almost 80 percent of capital goods production in the world is concentrated in 10 countries. Poor countries import most of their capital goods. We argue that international trade in capital goods has quantitatively important effects on economic development through two channels: (i) capital formation and (ii) aggregate TFP. We embed a multi country, multi sector Ricardian model of trade into a neoclassical growth model. Barriers to trade result in a misallocation of factors both within and across countries. We calibrate the model to bilateral trade flows, prices, and income per worker. Our model matches several trade and development facts within a unified framework. It is consistent with the world distribution of capital goods production, cross-country differences in investment rate and price of final goods, and cross-country equalization of price of capital goods and marginal product of capital. The cross-country income differences decline by more than 50 percent when distortions to trade are eliminated, with 80 percent of the change in each country’s income attributable to change in capital. Autarky in capital goods results in an income loss of 17 percent for poor countries, with all of the loss stemming from decreased capital.
    Keywords: trade; capital; investment; economic development
    JEL: E22 F11 O11 O4
    Date: 2014–05–01
  8. By: Celbis M.G.; Nijkamp P.; Poot J. (UNU-MERIT)
    Abstract: We estimate the Anderson and van Wincoop model of trade by using the data on the bilateral export flows from 26 Turkish regions to 180 countries for the years 2002 through to 2010. Regional transportation and communication infrastructure capacity, the positioning of point infrastructure in a region, and geography are explicitly accounted for. Our results highlight that land infrastructure, air transport capacity, and private maritime infrastructure presence, together with the distance of regional economies to exit nodes such as ports and airports, are important determinants of export performance. Based on our preferred regression where multilateral resistance terms are accounted for, we estimate that increases in the current land infrastructure, air transport capacity, and number of private ports of 1 per cent increases exports approximately by 0.38 per cent, 0.14 per cent, and 0.045 per cent respectively. Keywords Infrastructure; trade; regions; transportation costs
    Keywords: Empirical Studies of Trade; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure; Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy; General Regional Economics (includes Regional Data); Transportation Systems: General; Regional Development Planning and Policy;
    JEL: F14 O18 O24 R10 R40 R58
    Date: 2014
  9. By: Mark Crisostomo Pascasio (Economics Statistics Office, Philippine National Statistical Coordination Board); Shingo Takahashi (International University of University); Koji Kotani (International University of University)
    Abstract: As climate change is established to occur on scientific bases, it is imperative to identify the effect of climate shocks on economy. According to international organizations, agriculture, forestry and fisheries are the most vulnerable sectors to climate change predominantly for developing and tropical countries, and thus it is hypothesized to have significant impacts on world-wide international trade. Although Jones and Olken (2010) demonstrate the effect of climate shocks on exports with U.S. and world data, the evidence is still highly scarce for developing countries. Given these conditions, we examine how climate shocks affect international trade by focusing on the case of the Philippines as a representative of developing and tropical countries. To this end, we apply a fixed effects model with the data of Philippine international trade and world climate from 1991 to 2009. In particular, the novelty lies in examining both exports and imports within a single empirical framework and in clarifying climate shocks on both flows of international trade. The results show that both Philippine exports and imports are negatively affected by an increase in temperature of the trade partners. We have also identified some specific sectors are highly vulnerable such as agriculture and manufacturing. Overall, these results imply that Philippine international trade shrinks as the world temperature rises, and the same qualitative results may apply to other developing and tropical countries whose features are somewhat similar to those of the Philippines. The findings could be considered an important guidance on collective policy decisions on climate change in an international community especially as developing and tropical countries would have difficulties in mitigating the effect only by themselves.
    Keywords: Climate change and shock, temperature, Philippine international trade
    Date: 2014–07
  10. By: Juan Felipe Mejía Mejía; Andrés Ramírez Hassan
    Abstract: The gravity equation model is a workhorse tool that has been used many times in international trade. However, one philosophical and empirical question that arises when this theory is applied in this ?eld is what is the relevant measure of distance. This question is easily solved in physics, which is the ?eld where this theory was originally developed, but there is not clear answer in international trade. Therefore, we propose an index of distance based on principal component analysis that summarizes in one factor information related to geographical, cultural, political and economic variables that might a?ect international trade between countries. We use this index as proxy of distance, and Gross Domestic Product as proxy of mass, and we run some panel data exercises between 1995 and 2000 for 10 Latin American economies. Estimations indicate that the sign of the load factors in the principal component analysis are intuitively plausible, and that panel data exercises give sensible robust outcomes.
    Keywords: Factor Analysis for Mixed Data; Gravity Equation Model; Panel Data; Trade Distance
    JEL: F11 F14
    Date: 2013–06–21
  11. By: Zareh Asatryan; Sebastian Braun; Wolfgang Lechthaler; Mariya Mileva; Catia Montagna
    Abstract: Fears of rising wage inequality and job loss loom large in current debates on free trade. Surprisingly, however, there exists little academic research on how to compensate those who lose from free trade. This policy paper reviews the existing theoretical literature on trade and compensation, and derives guidelines on how to design compensation schemes in practice. The existing theoretical literature suggests that active labour market policies, targeted to workers who lose from free trade, are a promising way of compensation. In line with this theoretical recommendation, we find that countries open to free trade also spend more on active labour market policies.
    Keywords: Challenges for welfare system, Globalisation, Labour markets, Policy options, Welfare state
    JEL: F10 F20 J30 J60
    Date: 2014–06
  12. By: Angela Cheptea (Structures et Marchés Agricoles, Ressources et Territoires, INRA); Charlotte Emlinger (Centre d'Etudes Prospectives et d'Informations Internationales); Karine Latouche (Laboratoire d'Études et de Recherches en Economie, INRA)
    Abstract: This paper questions whether the overseas expansion of a country’s retailers fosters overall bilateral exports towards these host markets. To address this question, we consider an empirical trade model, where the foreign sales of multinational retailers reduce the fixed and variable trade costs of their co-national firms towards the same destination markets. We test our model with data on bilateral exports on a large panel of countries and the foreign sales of world’s largest one hundred retailers over the 2001-2010 decade. We find a strong positive effect of the overseas presence of a country’s retailers on its exports to those markets. This outcome is far from being trivial, as most products sold in retailers foreign outlets are locallyproduced. It testifies that the overseas presence of a country’s retail companies contributes to the reduction of trade costs towards these markets for other origin country firms. Our result is robust to different specifications, the use of different sets of instrumental variables and econometric approaches.
    Abstract: Ce papier étudie si les exportations de produits alimentaires vers un marché étranger sont affectées par l’implantation dans ce pays d’une chaine de grande distribution domestique. Pour répondre à cette question, nous utilisons un modèle empirique d’échanges de type gravitaire. Nous testons le modèle sur le commerce bilatéral d’un large panel de pays et les ventes à l’étranger des cent plus grosses chaines de distribution du globe sur la période 2001-2010. Nos résultats indiquent un impact positif et significatif de la présence à l’étranger des distributeurs d’un pays sur les exportations de leurs pays d’origine. Cet effet est loin d’être trivial, car la plupart des ventes de la grande distribution dans ses implantations à l’étranger sont des produits locaux. Il suggère plutôt que l’investissement à l’étranger dans le secteur de la distribution améliore l’accès d’autres firmes du pays d’origine aux marchés étrangers concernés. Cet effet est robuste à des différentes spécifications, à l’utilisation des différentes variables instrumentales et approches économétriques.
    Keywords: commerce international, grande distribution
    Date: 2013
  13. By: Marilyne Huchet-Bourdon (Structures et Marchés Agricoles, Ressources et Territoires, INRA; Agrocampus Ouest); Mohsen Bahmani-Oskooee (University of Wisconsin-Milwaukee , Center for Research on International Economics, Department of Economics)
    Abstract: This article assesses the impact of the RMB-dollar exchange rate and volatility on U.S. agricultural exports to and imports from China. Two measures of volatility are employed: one based on the moving standard deviation of the real RMB-dollar rate, the other a GARCH-based measure which yields more significant results. We find that exchange rate volatility has a significantly positive long-run effect only on export earnings of the nonagricultural sector. On the other hand, depreciation of the dollar has an expected long-run effect on the import value of the nonagricultural sector and on export earnings of the agricultural sector. No matter which model we consider, the level of economic activity in both countries seems to be the major long-run determinant of trade flows in both directions.
    Keywords: états-unis, chinepolitique agricoletaux de changevolatilité
    Date: 2013
  14. By: Ramezan Ali Marvi (Bocconi University - Bocconi University, AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM))
    Abstract: This paper focuses on the pattern of task and income distribution within a Global Value Chain. Using the recently developed WIOD database, collecting data on the trade in value added within a world Input/Output matrix, we reveal a high heterogeneity of countries in terms of their trends of skill premia. The latter is a stylized fact at odds with the assumption of a recent theoretical model of Global Value Chains (Costinot et al. [2013]), which we extend by allowing for different types of labor and different types of production stages. The model generates a pattern of vertical specialization in which the position of each country in the chain is a function of two factors: its productivity and skill intensity of its labor endowments. Moreover, the wage of each labor type depends on the position of the country, its skill intensity and productivity of skilled workers. As a result, depending on the model parameters and labor endowments, technological innovations will induce various trends in the relative position of countries, prices, wages and exports, in line with the stylized fact. The model thus represents a suitable candidate for addressing the heterogeneity of countries in terms of skill premia.
    Keywords: global value chains; technological changes; wage premium; vertical specialization
    Date: 2014–05
  15. By: Akpan Uduak (SPIDER Solutions, Nigeria); Isihak Salisu (SPIDER Solutions, Nigeria); Asongu Simplice (Yaoundé/Cameroun)
    Abstract: This study employs panel analysis to examine the determinants of foreign direct investment (FDI) in Brazil, Russia, India, China, and South Africa (BRICS) and Mexico, Indonesia, Nigeria, and Turkey (MINT) using data for eleven years i.e. 2001 – 2011. First, it uses pooled time-series cross sectional analysis to estimate the model on determinants of FDI for three samples: BRICS only, MINT only, and BRICS and MINT combined; then, random effects model is also employed to estimate the model for BRICS and MINT combined. The results show that market size, infrastructure availability, and trade openness play the most significant roles in attracting FDI to BRICS and MINT while the roles of availability of natural resources and institutional quality are insignificant. Given that FDI inflow to a country has the potential of being mutually beneficial to the investing entity and host government, the challenge is on how BRICS and MINT can sustain the level of FDI inflow and ensure it results in economic growth and socio-economic transformation. To sustain the level of FDI inflow, governments of BRICS and MINT need to ensure that their countries remain attractive for investment. BRICS and MINT also need to ensure that their economies absorb substantial skills and technology spillovers from FDI inflow to promote sustainable long-term economic growth by investing more in their human capital. The study is significant because it contributes to literature on determinants of FDI by extending the scope of previous studies which often focus only on BRICS.
    Keywords: FDI, determinants, fast-growing economies, BRICS, MINT
    Date: 2014–01
  16. By: Zhichao Guo (Beijing Technology and Business University); Yuanhua Feng (University of Paderborn); Thomas Gries (University of Paderborn)
    Abstract: The purpose of this paper is to investigate changes of China's agri-food exports to Germany caused by China's accession to WTO and the global financial crisis in a quantitative way. The paper aims to detect structural breaks and compare differences before and after the change points. The structural breaks detection procedures in this paper can be applied to find out two different types of change points, i.e. in the middle and at the end of one time series. Then time series and regression models are used to compare differences of trade relationship before and after the detected change points. The methods can be employed in any economic series and work well in practice. The results indicate that structural breaks in 2002 and 2009 are caused by China's accession to WTO and the financial crisis. Time series and regression models show that the development of China's exports to Germany in agri-food products has different features in different sub-periods. Before 1999, there is no significant relationship between China's exports to Germany and Germany's imports from the world. Between 2002 and 2008 the former depends on the latter very strongly, and China's exports to Germany developed quickly and stably. It decreased however suddenly in 2009, caused by the great reduction of Germany's imports from the world in that year. But China's market share in Germany still had a small gain. Analysis of two categories in agri-food trade also leads to similar conclusions.
    Keywords: Agri-food trade, structural breaks, China's accession to WTO, financial crisis, change of trade relationship financial crisis of 2008, growth causes, structural breaks
    Date: 2013–11
  17. By: KIYOTA Kozo
    Abstract: This paper surveys the recent literature that empirically examines foreign direct investment (FDI) in Japan. This paper focuses on the quantitative evidence on the following questions: 1) Did FDI in Japan accelerate economic growth? 2) What are limiting factors for FDI in Japan? 3) Are there any differences between foreign-owned firms and Japanese-owned firms? 4) Why is the productivity of foreign-owned firms high? 5) Do foreign-owned firms undergo massive restructuring? 6) Does the entry of foreign-owned firms cause severe competition? 8) Are there any spillover effects from foreign-owned firms to domestic firms? This paper summarizes the facts and issues on FDI in Japan.
    Date: 2014–06
  18. By: Fabian Berges (Groupe de Recherche en Economie Mathématique et Quantitative, INRA; Institut d'Economie Industrielle); Sylvette Monier-Dilhan (Observatoire des Programmes Communautaires de Développement Rural , INRA)
    Abstract: This article analyzes the effects of international trade policies on an imperfectly competitive domestic market, taking account of consumers, as well as upstream and downstream firms. We first study the impact of a classic import tax decrease and find that this policy harms upstream firms and may decrease domestic fiscal revenues. We then examine the effect of an increase in non-tariff barriers, which reduce the degree of substitutability between domestic and imported goods. This results in an improvement in each agent’s situation, as international competition becomes less fierce. Finally, we show that market conditions may exist such that a coupled policy (import tax decrease and non-tariff barrier increase) makes all agents better off. This can explain the proliferation of domestic standards at national level in order to counterbalance the effect of lower tariffs negotiated by governments.
    Abstract: Cet article analyse l’effet d’une politique de commerce international sur un marché domestique en concurrence imparfaite, en prenant en compte les consommateurs et les firmes amont/aval. Nous étudions l’impact d’une baisse des droits de douane et montrons que le profit des firmes en amont diminue et parfois les recettes fiscales. Nous modélisons ensuite un accroissement des barrières non-tarifaires, qui se traduit par une faible substituabilité entre les biens domestiques et importés. La situation de chaque agent s’améliore grâce à une moindre concurrence internationale. Enfin, nous montrons que sous certaines conditions une politique de diminution des droits de douanes et d’augmentation des barrières non-tarifaires est profitable à tous les agents. Ce résultat peut expliquer la prolifération des normes nationales comme contrepartie de droits de douanes plus faibles négociés par les gouvernements.
    Keywords: trade policy, non-tariff barriers, vertical structure, commerce international, structure verticale, politique du commerce international, concurrence imparfaite, droit de douanebarrière non tarifaire
    JEL: F12 F13 F14
    Date: 2013
  19. By: Quaas, Martin F.; Stöven, Max T.
    Abstract: The literature on trade in renewable resources implicitly assumes that the traded resources are perfect substitutes. We model trade in renewable resources as stipulated not only by autarky price differences, but also by consumers' love of variety. We show that the love-of-variety effect enables welfare gains from trade even if total consumption decreases. Total consumption may decrease because the love of variety weakens the link between resource scarcity and demand. If consumers are willing to pay the rising prices for harvests from increasingly depleted stocks, trade liberalization may end in stock collapse. The love of variety may thus threaten variety. --
    Keywords: trade,environment,renewable resources,open access,love of variety
    JEL: Q21 Q22 Q23 Q27 F18
    Date: 2014
  20. By: Amano, Daisuke; Mino, Kazuo
    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 borrowing and lending are allowed. Due to free financial flows, 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,
    Date: 2014–05
  21. By: Mandal, Biswajit
    Abstract: Health standard of a region or economy significantly depends on environmental quality. And informal sector has a striking role for overall environmental quality as sometimes producers prefer not to produce in the formal sector as formal production calls for stringent environmental and other governmental regulations. Under such circumstances the informal counterpart of the economy becomes heaven for those producers who do not want to abide by the rules. Extralegality of informal production, by definition, indicates the emergence of intermediation activity. In light of these concerns here I build a standard general equilibrium structure to capture these phenomena and to focus on the effects of trade reform. It has been shown in this paper that tariff reform may lead to greater usage of abatement technology under certain factor intensity assumption. However, interestingly, this can not unambiguously ensure a better environmental quality in broader sense.
    Keywords: Environment, International Trade; Intermediation; General Equilibrium
    JEL: D5 D73 F1 O1 O13
    Date: 2014
  22. By: Rorden Wilkinson; Erin Hannah; James Scott
    Abstract: Abstract The conclusion of the World Trade Organization’s (WTO) ninth ministerial meeting—held in Bali 3-7 December 2013—is at one and the same time momentous, marginal, and business-as-usual. It is momentous because it marks the first multilateral agreement reached in the WTO since the organisation began operations on 1 January 1995; it is marginal because the deal reached will have only a limited impact on the global trading system; and it is business as usual because the Bali package will be of disproportionally greater value to the industrial states than to their developing and least developed counterparts. We examine what happened in Bali covering the principal issues at stake and the content of the outcome, what this means for the WTO and for the Doha Development Agenda (DDA), and why it all matters. We argue that while the Bali ministerial is significant and the agreements reached important, the conclusion of the meeting and the package agreed represents only a limited movement forward in addressing the fundamental problems and inequities of the WTO system.
    Date: 2014
  23. By: Federica DeMaria (Dipartimento di Economia e Statistica, Università degli Studi della Calabria); Sophie Drogue (Marchés, Organisations, Institutions et Stratégies d'Acteurs, INRA)
    Abstract: This article explores the effect of European Union (EU)’s food safety regulations on the trade of baby food products. A large number of medical studies have shown that pesticides and contaminants contribute to various health problems including cancer, lung disease or reproductive, endocrinal and immune system disorders. They also agree that children are more vulnerable to the dangers of pesticides and contaminants because as soon as they start eating solid foods, they eat a limited number of food items most of which are fruits and vegetables. In order to protect the health of the most vulnerable part of the population, the EU’s regulations establish that no more than 0.01 mg/kg of any single pesticide residue is permitted in baby food products. In this respect, the EU differs from most of its trading partners, the majority of which do not differentiate food safety regulations according to the consumer population age. The purposes of this paper is to compare the EU regulations on Maximum Residual Level of pesticides to those of its major trading partners through a severity index and quantify the impact of the specific European regulations on the trade of baby food products. Results show that the specific EU regulations may be considered as a tool protecting vulnerable population.
    Abstract: Cet article explore l'effet des réglementations de l'Union européenne (UE) sur la sécurité des aliments sur le commerce d'aliments pour bébé. Un grand nombre d'études médicales ont montré que les pesticides et les contaminants contribuent à divers problèmes de santé comme cancers, maladies pulmonaires ou des désordres du système immunitaire, endocrine ou reproducteur. Ces études s'accordent aussi sur le fait que les enfants sont plus vulnérables aux dangers des pesticides et contaminants car dès qu'ils commencent à manger des aliments solides, ils mangent un nombre limité de produits dont la plupart sont des fruits et légumes. Pour protéger la santé de la partie la plus vulnérable de sa population, l'UE a mis en place une réglementation qui établit que la limite maximale de résidus (LMR) pour n'importe quel pesticide ne doit pas excéder 0.01 mg/kg dans les aliments pour bébé. A ce niveau, la réglementation européenne est très différente de celle de la plupart de ses partenaires commerciaux qui ne différencient pas les réglementations en fonction de l'âge. L'objectif de cet article est de comparer la réglementation de l'UE sur les LMR de pesticides par rapport à celle de ses partenaires commerciaux grâce à un indicateur de sévérité et de quantifier l'impact de de cette réglementation européenne spécifique sur le commerce des produits pour bébé. Les résultats montrent que la réglementation de l'UE représente une barrière à l'entrée sur ses marchés, mais qu'elle a aussi un effet positif sur le volume du commerce.
    Keywords: food safety, pesticides, baby food products, market access, gravity modeling, sécurité des aliments, pesticidesécurité sanitaire, alimentation du nourrisson, modèlealimentation infantileaccès au marché
    Date: 2013
  24. By: Catherine Laroche-Dupraz (Structures et Marchés Agricoles, Ressources et Territoires)
    Abstract: Les négociations commerciales à l’Organisation mondiale du commerce (OMC) ont été relancées en 2001. Le Cycle de développement de Doha (Doha Development Agenda, DDA) présentait l’ambition de déboucher sur un accord favorable aux pays en développement, en particulier les pays les moins avancés (PMA), notamment en ce qui concerne le volet agricole des négociations. Douze ans après le lancement du DDA, la perspective d’un accord semble s’éloigner. Bonne ou une mauvaise nouvelle pour les PMA ?
    Keywords: négociation internationale, cycle de doha, politique agricole, politique publique, organisation mondiale du commercecycle de développementpma
    Date: 2013

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