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on International Trade |
| By: | Cantah, William Godfred; Wiafe, Emmanuel Agyapong; Adams, Abass |
| Abstract: | In contrast to previous studies on the relationship between trade openness and FDI inflows, this study develops a new measure of trade openness. Principal component analysis was employed to generate an index to capture trade policy openness. The study used cost of exporting and importing as well as the number of days and the number of documentation it takes to complete a trade transaction (both import and export) in the doing business indicators dataset to create an index for trade policy openness. This provides a better measure of trade openness compared with the traditional measure of trade openness which takes into the volume of trade. The traditional measure of trade openness may be affected by more than ordinary trade policy of an economy. Other factors such as access to foreign markets, the size of the internal market and the size of the an ecnomy can probably affect the trade to GDP ratio. However trade policy openness is free of these problems. The study employed both static and dynamic panel estimation technique to analyse the relationship between trade policy openness and FDI inflow for 29 sub Saharan African countries. The result from the study indicates that, policy openness affect FDI inflows positively. The study recommends that, more efforts should be targeted at reducing cost of trade and also increases the ease of cross boarder trading activities. This would ensure the flow of required level of FDI to the region for economic transformation. |
| Keywords: | FDI, Policy openness, FDI and Openness, Sub-Saharan |
| JEL: | F1 F13 F2 |
| Date: | 2013–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58074&r=int |
| By: | Yoko Uchida; Kazuhiko Oyamada |
| Abstract: | One of the key factors behind the growth of global trade in recent decades is an increase in intermediate input as a result of the development of vertical production networks (Feensta, 1998). Manufacturing goods are no longer produced in a single country. Production processes are subdivided into several stages, in which respective countries specialize in producing parts and components. Many countries are involved in vertical production networks of producing just a single final good for consumers. It is widely recognized that the production networks have formed due to the expansion of multinational enterprises’ (MNEs) activities. Multinational enterprises have been differentiated into two types according to their production structure: horizontal FDI and vertical FDI. However, a new type of FDI which diverges from the vertical one has been proposed in the context of the recent expansion of more complex multinational activities; it is called export-platform FDI. Horizontal FDI maintain affiliates in home and host countries with the headquarters located in the home country, while vertical and export-platform FDI install affiliates in host countries with the headquarters located in the home country. The difference between vertical and export-platform FDI is where their products are sold: vertical FDI seek to sell their products in both the home and host country, while export-platform FDI seek to sell in a third market through the affiliates in the host country (Ekholm et al., 2007). Theoretical research on MNEs has been conducted since the early 1960s (Hymer, 1976), but it developed dramatically from the mid 1980s as a result of the “new” trade theory. There are two important theoretical models of MNEs: one was presented by Helpman (1984) and the other by Markusen (1984). Helpman’s model treats vertical MNEs with monopolistic competition and without trade costs. On the other hand, Markusen’s model treats horizontal MNEs with one factor, assuming firm-level scale economy. Markusen (1997) combines horizontal and vertical motives in a model, so the model allows two types of MNE to exist at the same time. This is called the “knowledge capital” model. Zhang and Markusen (1999) extended the model to consider vertical MNEs that supply intermediate inputs to a final production plant in a host country. While their models were constructed in a two-region framework, Ekholm et al. (2007) extended the model into a three-region framework to include export-platform FDI. Matsuura and Hayakawa (2008) pointed out that recent explorations of FDI theories have shifted from the two-region setting to the three-region setting (for example, Yeaple, 2003 and Grossman et al., 2006). Ekholm et al. (2007) and other models in the three-regional framework assume that skilled-labor-intensive intermediates are produced only at home, and the host country imports intermediate products and assembles final goods, combining intermediates and unskilled labor. However, those models do not adequately explain observed facts where some kinds of intermediate goods are produced in the host country. Our final goal is to extend Ekholm et al. (2007) to treat the procurement of intermediates from the host country in view of the present situation. We start from the simple model in the two-region framework in preparation for further extension. In this paper, we extend Zhang and Markusen (1999) to include horizontal and vertical FDI in the model with traded intermediates. There are no studies which treat vertical and horizontal FDI with traded intermediates at once, although more evolved models which treat vertical, horizontal and export-platform FDI with traded intermediates, such as Ekholm et al. (2007), do exist. This paper serves to bridge the gap between Zhang and Markusen (1999) and Ekholm et al. (2007) in theoretical studies of FDI. we extend the model presented by Zhang and Markusen (1999) to include horizontal and vertical FDI in a model with traded intermediates, using numerical general equilibrium analysis. The simulation results revealed that horizontal MNEs are more likely to exist when countries are similar in size and in relative factor endowments. Vertical MNEs are more likely to exist when countries differ in relative factor endowments, and trade costs are positive. Based on the results of the simulation, lower trade costs of final goods and differences in factor intensity are the condition for attracting vertical MNEs. |
| Keywords: | Developing countries, General equilibrium modeling, Developing countries |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5448&r=int |
| By: | Michael Hübler; Frank Pothen |
| Abstract: | We scrutinize the impact of international productivity gains (spillovers) induced by imports and exports on optimal tariffs. Our research question reads: how do trade-induced international productivity gains influence the choice of the optimal tariff?Trade-induced international technology spillovers (productivity gains) are implemented in a Computable General Equilibrium (CGE) model in GAMS that uses the novel global WIOD data set. The CGE implementation is backed up by a stylized theoretical model, and the strength of productivity spillovers is econometrically estimated by using the WIOD data.First, we show theoretically that (a) productivity gains via exports and imports both reduce the strategically optimal tariff, (b) there exists a certain strength of productivity gains such that the incentive to manipulate the terms of trade strategically vanishes, (c) the welfare gain that can be achieved via a tariff is lower in the presence of productivity gains than in their absence, and (d) these results even hold without power on international markets. Second, we estimate econometrically that import-driven productivity gains are stronger than export-driven productivity gains. Third, we find numerically that optimal tariffs are reduced by 1% for the USA and China and 40% for Brazil when taking trade-induced productivity gains into account. The USA are the only model region that gains from European optimal tariff policy. Overall, we show that trade-induced productivity gains have empirically relevant effects on optimal tariffs. |
| Keywords: | EU, USA, Russia, Brazil, India, China, East Asia, ROW, General equilibrium modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6712&r=int |
| By: | Marilyne HUCHET-BOURDON; Chantal Le Mouël; Mariana Vijil |
| Abstract: | Reviewing the existing literature on openness and growth shows that there is not a clear definition of trade openness. For many authors trade openness implicitly refers to trade policy orientation and what they are interested in is to assess the impact of trade policy or trade liberalization on economic growth. For other authors however, trade openness is a more complex notion covering not only the trade policy orientation of countries but also a set of other domestic policies (such as macroeconomic policies or policies related to law and institutions for instance) which altogether make the country more or less outward oriented. In such a case, what the authors are interested in is to measure the impact of global policy orientation on economic growth. Finally, one may adopt an even more global view of trade openness covering not only the policy dimension but also all other non-policy factors that clearly have an impact on trade and on the outward orientation of countries. Factors such as geography and infrastructures, for instance, do affect trade and the outward orientation of countries, whatever their policy orientation. Many different measures of trade openness have been proposed and used in empirical analyses of the relationship between openness and growth. They more or less relate to the three alternative definitions of openness mentioned above. In line with the trade policy orientation definition, some authors have retained measures based on trade restrictions/distortions, such as average tariff rates , average coverage of quantitative barriers, frequency of non-tariff barriers or collected tariff ratios (see, e.g., Pritchett, 1996; Harrison, 1996; Edwards, 1998, Yanikkaya, 2003). Obviously these indicators are very imperfect partial measures of the overall restrictions/distortions induced by trade policies. Furthermore, data required to compute such indicators are most often available for only a limited set of countries and years. Corresponding to the global policy orientation definition, various “qualitative” indices allowing for classifying countries according to their trade and global policy regime have been proposed (see, e.g., the 1987 World Development Report outward orientation index, the Sachs and Warner, 1995, openness index or the Wacziarg and Welch, 2003). Such indices unfortunately provide only a very rough classification of countries (from rather closed to rather open). Also many of the data required to construct these indices are available only for a few countries and at one point in time. Finally, measures based on trade volumes, which have been very commonly used in empirical analyses, rather relate to the most global definition of trade openness. Trade dependency ratios are the most popular of these measures (see, e.g., Frankel and Romer, 1999; Irwin and Tervio, 2002; Frankel and Rose, 2002; Dollar and Kraay, 2004 and Squalli and Wilson (2011) for a recent contribution). Their main advantage is that the data required to compute them are available for nearly all countries and over a rather long period. Their main weakness is that they are outcome-based measures and as such are the result of very complex interactions between numerous factors so that it is never clear finally what such measures empirically capture exactly. Another limitation of these trade dependency ratios lies in their endogeneity in growth regressions, which requires specific estimation techniques (such as instrumental variables techniques as in Frankel and Romer, 1999, and Irwin and Tervio, 2002, or identification through heteroskedasticity techniques as in Lee et al., 2004). This last limitation may in fact be extended to all trade openness measures and constitutes the second shortcomings in existing empirical evidence on openness and growth that has been pointed out by Rodriguez and Rodrik (2001). As argued by Lee et al. (2004), all measures of openness are generally closely linked to the growth rate. Hence, this is likely that all measures of openness are jointly endogenous with economic growth, which may cause biases in estimation resulting from simultaneous or reverse causation. Various methods have been used to remedy this problem and there is still a debate among scientists about which method is the most appropriate (see, e.g., Dollar and Kray, 2004, and Lee et al., 2004). In this paper, we adopt the most global definition of trade openness and our aim is to contribute to the on-going debate on the growth effect of trade openness. Relative to the existing literature, our contribution is the following. Firstly, we argue that trade openness is a multidimensional concept that cannot be summarized to a single measure such as the most commonly used trade share (calculated as the sum of imports and exports over GDP). Secondly, recent developments in growth theory and in international economics have provided new insights on the relationship between trade and growth, which call for additional measures of trade openness. Hence, we propose a more elaborated way of measuring openness taking into account two additional dimensions of countries’ integration in world trade: quality and diversification. Endogenous growth theory has provided results on the positive growth effect of trade through innovation incentives, technology diffusion and knowledge dissemination (see, e.g., Young, 1991; Grossman and Helpman, 1991). Inspired from these theoretical developments, Hausmann et al. (2007) proposed an analytical framework linking the type of goods (as defined in terms of productivity level) a country specializes in to its rate of economic growth. In order to test empirically for this relationship, they then defined an index aimed at capturing the productivity level (or the quality) of the basket of goods exported by each country. Their growth regression results showed that countries exporting goods with higher productivity levels (or higher quality goods) have higher growth performances. These results suggest that what countries export matter as regards the growth effect of trade. Hence our measurement of trade openness should consider this quality dimension as a complement to the volume (or the dependency) dimension. Monopolistic competition trade models with heterogenous firm and endogenous productivity provide theoretical results supporting the positive growth effect of trade through both increased variety of products and improved productivity due to the exit of less efficient firms (e.g., Melitz, 2003). Based on this literature, Feenstra and Kee (2008) developed a model allowing to link, for each country, relative export variety to average productivity and then to GDP growth. Using Feenstra (1994)’s index of export variety, they tested this relationship on the basis of exports to the US for a panel of 48 countries over the period 1980-2000. Their empirical results indicated that there is a positive and significant relationship between export variety and average productivity. Once again these results suggest that the structure of countries’ exports matter regarding the growth effect of trade. Hence, our measurement of trade openness should also consider this variety/diversification dimension. Our empirical application draws on the Barro and Lee (1994)’s model, which has been extended to take into account our set of three indicators of trade openness: trade dependency ratio, quality index and diversification index. Barro and Lee (1994) study the empirical determinants of growth. They are in line with the endogenous growth theory which calls into question diminishing returns. Unlike the usual neoclassical growth model for a closed economy (Solow (1956)), endogenous growth model questioned the source of technology (human capital, role of government for instance). Openness may play an important role for developing countries in particular: it may help them to import technology from developed countries and thus increase human capital in these countries. We include some proxy for openness in our empirical model. Estimations are performed on annual data over the period 1980-2004 for an unbalanced panel of 170 countries. We use a generalized method of moments (GMM) estimation approach developed for dynamic panel data models in order to deal with potential endogeneity biases due to omitted variables, simultaneity and measurement error. Our results confirm that countries trading higher quality products grow more rapidly. The preliminary results of the impact of diversification are less obvious. They seem to depend on the indicator of diversification that is used. It is expected that countries trading more diversified products could grow more rapidly. |
| Keywords: | 170 countries, Trade issues, Growth |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5131&r=int |
| By: | Byron Gangnes; Alyson C. Ma; Ari Van Assche |
| Abstract: | Previous studies have argued that global value chains (GVCs) have increased the sensitivity of trade to foreign income shocks. This may occur either because GVC trade is concentrated in durable goods industries, which are known to have high income elasticities (a composition effect), or because, within industries, GVC trade has a higher income elasticity than regular trade (a supply chain effect). Using Chinese trade data across customs regimes and industries during the period 1995-2009, we find evidence for the former, but not the latter. |
| Keywords: | global value chains, trade elasticities, supply chain effect, composition effect, |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-31&r=int |
| By: | Bekkhan Chokaev; Aleksandr Knobel |
| Abstract: | This paper investigates the possible economic effects of free trade agreement, implying a mutual zero import tariffs in the trade between the Customs Union (Russia, Belarus, Kazakhstan) and the European Union. Analysis of the effects is made using CGE model.We estimate the impact of an FTA on the economies, both at the level of the entire economy and at the industry level. The sensitivity analysis is made. It is shown that, in both relative and absolute terms, Russia potentially benefits from the agreement more than the EU. The cumulative gain of the CU is strictly positive, but the benefits and costs are unevenly distributed among its members. |
| Keywords: | Russia, General equilibrium modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7026&r=int |
| By: | Cruz, Marcio |
| Abstract: | Do export promotion agencies impact the probability of non-exporting firms to export? In the last decade many countries have introduced export promotion agencies to support their firms to deal with asymmetric information problems and make feasible additional gains from trade. Some recent studies have found that the support of these agencies has been effective with respect to the intensive and extensive margins of trade. Nevertheless, because of the lack of information on non-exporting firms, few of them analyze their impact on the probability of promoting new exporters. This paper evaluates the impact of the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) on firms'export status using a unique firm-level dataset that covers the full manufacturing sector in Brazil. To identify the impact of Apex's assistance on firms'export propensity, the paper relies on a procedure of matching difference-in-difference estimators. The empirical results show evidence of the program's positive impact on the probability of promoting new exporters. The effect is heterogeneous according to firms'size categories and sectors. Furthermore, the findings suggest that the program has spillover effects. Although the evidence of positive effect is robust, the low propensity to export for both the treated and the control groups reinforces the importance of other firms'determinants (for example, productivity), which is widely emphasized by the trade literature. |
| Keywords: | Microfinance,Small Scale Enterprise,E-Business,Debt Markets,Currencies and Exchange Rates |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7004&r=int |
| By: | Jalal Gaytaranov; Lewell F. Gunter |
| Abstract: | We focus on recent differences in export performance of transition countries and use recent research on trade facilitation policies and new data on export costs to examine the effect of domestic export costs and external costs to markets on the exports of transition countries. At the same time, productive capacity and domestic demand along with potential market demand are also included in our study. Our focus is on growth in exports rather than growth in GDP, but we are partially motivated by the relationship between the two. Our analysis is going to focus on specific group of transition countries: Former Soviet Union and Central and Eastern Europe countries. In our study we will try to clarify the reasons why the differences continue to exist and what are the main determinants of these variations. Along with traditional export growth determinants we will try to analyze the impact of the specific factors which are related to our sample of transitions. Specific objectives are: •To describe the differences in economic and export growths among the various transition economies in terms of natural resource endowments. •To identify the issues that cause differences in growth of exports in transition countries •To build an econometric model that estimates the impact of various trade costs on the exports of transitions •To analyze the impact of location factor, economic unions and trade agreements on the growth of exports in transition economies. Our empirical model includes a panel of the 28 transition countries for the years from 2005 through 2011. The data period goes back only to 2005 based on the availability of the Export Cost variable. We used Generalized Method of Moments (GMM) and GMM Instrumental Variables techniques for the estimation. In our estimation we use the instrument variable GMM estimation technique based on Hansen (2000, Ch. 11), Hayashi (2000, Ch. 3) and Wooldridge (2002, Chapter 8) We chose GMM based on advantages of this approach for our model. First, GMM generates efficient estimates in the presence of heteroskedasticity of unknown form. This is the case in our panel data. After applying Breusch-Pagan / Gook-Weisberg tests we observed heteroskedasticity in our data-set. Even though standard IV estimators with the robust standard errors can be consistent, they are relatively inefficient. Second, efficient GMM has an advantage of consistency in the presence of arbitrary heteroskedasticity. Both econometrically and theoretically our instrument is meeting both exogeneity and relevance conditions and was used in the previous studies (Djankov (2010) Both in the base model and as we add other determinants, based on the previous theory and theoretical relevance, estimated signs and significance levels of the important variables is expected not to change considerably. This can be considered as a type of robustness check for the empirical estimation. Expected positive and significant sign of GDP and Natural Resource variables also indicate that the transition countries with larger economies and greater endowments of natural resources tend to export more. The population variable is expected to be negative and in two out of six specifications (in preliminary results) highly significant. This is consistent with our theoretical foundation, as we were expecting negative relation between the domestic demand and the growth of exports. demand in the major exporting market stays significant as we add other control variables to our base model. Positive and significant parameter on the GDP of major export partners indicates the importance of the demand factor in the main markets. Coefficients for distance from major markets are negative, significant, and of similar magnitude across all specifications reflecting the export depressing impact of higher transportation costs. Highly significant parameter of this variable throughout the specifications indicates the robustness and importance of transportation cost for the export performance in transition countries. Lagged Foreign Direct Investment (FDI) was included in five of the specifications and the coefficients were positive, significant, and of approximately the same magnitude across all of them. Consistently with expectations, higher FDI inflows promote exports of countries through utilization of low-cost human capital and natural resources. As we add business climate and later internal export cost variables into our model all the previous determinants keep their signs and significance levels, with an exception of population variable which gets insignificant. Measure of economic competitiveness was significant and positive in the specifications. The last specifications include dummies of being a member of EU and Central European Free Trade Agreement. Being an EU Member state is estimated to have a positive and significant impact on the export growth in transition countries. On the other hand, Central European Free Trade Agreement estimated to have negative and significant impact on the exports, which is primarily because of the fact that the members of CEFTA trade organization are comparatively less developed (in terms of GDP and exports) representatives of Central and Eastern Europe. As these countries expand their economy and meet the requirements of EU membership, they become no more the members of CEFTA. |
| Keywords: | Transition Economies (Former Societ Union countries; Central and Eastern Europe Countries), Trade issues, Regional integration |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:005741:6052&r=int |
| By: | Abdollah Mahmoodi |
| Abstract: | The ECO Regional Integration affects the Trade and Some Macroeconomic Variables of ECO MembersGlobal Trade Analysis Project Modeling Approach Trade policy reform will improve the ECO members' economic performance, by means of greater exports, imports and output, lower import prices, higher endowment demand, and higher consumption, utility and welfare. |
| Keywords: | All Eco Members, Regional integration, Trade issues |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:005741:5805&r=int |
| By: | A. Emre AKEL |
| Abstract: | Turkey’s exports have been experiencing remarkable developments in recent years. Turkey’s exports increased from 47,2 billion dollars in 2003 to 152,5 billion dollars in 2012, which implies more than a two-fold increase in 10 years. During the same period, sectoral and regional breakdowns of Turkey’s exports have changed significantly. The sectoral structure of exports, which was heavily dependent on labor-intensive products in 2003, have become significantly capital intensive in 2012. Similarly, the share of the EU in Turkey’s exports decreased from 58% in 2003 to 38% in 2012, while share of MENA increased from 15% in 2003 to 34% in 2012. Although these basic indicators obviously imply a structural change for Turkey’s overall exports, firm-level reasons and outcomes of these developments are yet to be clear. However, Turkey has already set a target of “500 billion dollars of exports in 2023” in the absence of detailed information on firm-level dynamics of her exporters. The main objective of this study is to analyze firm-level dynamics behind the structural change in Turkey’s exports during 2003-2012 and bring out lessons from the past ten years for the upcoming ten years. In this context, this study tries to answer a number of questions such as “Do Turkish exporters export regularly?”, “What are the entry, exit and survival rates for Turkish exporters?”, “Are there any certain group of firms that dominate the developments in Turkey’s exports?”, “What shares do intensive and extensive margins have in Turkey’s exports?”, “What are the sizes of market portfolio and product portfolio in an average exporter in Turkey?”, “How does size and/or continuous exports activities of a firm influence its exports metrics?” and “What lessons do the most affluent ten years of Turkey’s exports bring forward for the next ten years?”. This study mainly focuses on Turkey’s exports between 2003 and 2012, because Turkey’s exports boom began in 2003, mainly thanks to the increasing global demand, especially in the regions surrounding Turkey. In addition, in 2002, after a decade of political uncertainties due to coalition governments, a single-party government came into force and initiated a wide range of structural reforms that continued throughout the analysis period and maintained a stable economy, which annually grew at 5.1% on average despite the %-4.8 growth rate in 2009 due to the global financial crises. Therefore, Turkey’s exports level reached a record-high level in 2012 with 152,5 billion dollars. The exports data used in the analysis are firm-level exports data from TUIK for 2003-2012 at HS 6-digit breakdown. Therefore, the term “an exports good” refers to an HS-6 digit product. To deal with the compatibility issue between HS2002, HS2007 and HS2012 6-digit codes, all the exports goods are defined in terms of HS2002 products using the correlation tables obtained from the UN. The size of the firms are determined by the number of employees they have, where there are 4 main categories namely micro-sized (1-9 employees), small-sized (10-49 employees), medium-sized (50-249 employees) and large-sized (more than 249 employees) firms. In addition, the firms that have less than 250 employees will be referred as SME’s (Small and Medium-Sized Enterprises). The data regarding “the size of the firms” and “whether they are producer or not” are collected from the Ministry of Finance. Although the analysis is based on firm-level data, only category-based results will be presented to secure commercial privacy of Turkish exporters. While STATA 12 and MS Excel 2010 were used for data manipulation to calculate all the metrics mentioned above, a new type of decomposition was used to assess the contribution of “intensive and extensive margins of exports”. The traditional decomposition used by Eaton, Eslava, Kugler, and Tybout (2008), Bernard, Jensen, and Schott (2009), Lederman, Rodriguez-Clare, and Xu (2011), and Amador and Opromolla (2012) and Cebeci and Fernandes (2013) focuses on assessing the roles of continuing exporters, new exporters, and exiting exporters in explaining “total annual export growth”, while this type of decomposition takes into account only two consecutive years (the current year and the former one) while defining a continuing exporter, new exporter, and exiting exporter; whereas it uses one year before and after the current year while defining a survivor. One implication of this approach is, if “Firm A” exports in 2004 and does not export for the following two years, this approach considers Firm A’s exports in 2007 as “exports of a new firm”. Besides, if Firm A exports to a different country or a different product in 2007, it will not be considered as a “market or product diversification” compared to its export in 2004, because of the same reason that it will be counted as exports of a new firm. At the same time, this approach may lead to an underestimated share for intensive margin, since Firm A may have exported the same products to the same markets in 2007; in which case it should be counted in intensive margin. In other words, if the analysis period is more than 3 years, the traditional decomposition approach has a high risk for miscalculation of “firm entry” and “firm exit” values, which would influence all the calculations regarding ‘intensive and extensive margins of exports’, as well as any empirical analysis based on these outcomes. In this study, instead of calculating the contributions to total annual exports growth, the composition of annual exports values will take place using a number of definitions. At first, an “exporter portfolio” for Turkey that includes ‘every exporter that has exported at least once in any year between 2003 and 2012’ was constructed. This definition enables us to clearly determine first-time exporters (firm entries), as well as all-time exporters (survivors), irregular exporters and those export for the last time (firm exits). Once we determine new firms in each year, the rest will be the firms that are already in the portfolio. Also, when a new firm in any year between 2003 and 2011 exports for a second time in any following year given the analysis period, the latter exports of the firm will be treated as ‘exports of a firm in the portfolio’. In addition, for each firm in the portfolio, we can determine whether “a good is exported for the first time or not” or “the destination market is a new market or not”. The goods that a firm exports constitute its “product portfolio”, while the destination countries that a firm exports constitute its “market portfolio”. Therefore, starting from 2003 and evaluating the growing exporters portfolio within years, once we determine the firms that are already in the portfolio, then for each firm, we can bring out whether: 1- A new product was exported to a new market, 2- A new product was exported to an old market, 3- An old product was exported to a new market, 4- An old product was exported to an old market”. Hence, for each year and each firm, we can calculate the value of product diversification ( using 1 and 2) and market diversification (using 1 and 3). Therefore, “Extensive Margin” of Turkey’s total exports can be tracked by summing up firm level exports values for “1 to 3” combined with the contribution of new firms, as well as “Intensive Margin” that will be reflected by summing up firm level exports values for “4- An old product was exported to an old market”. This structure also enables us to identify which countries were the main sources of market diversification and which products were the main sources of product diversification for Turkish exporters. Initial findings of the study can be summarized as below: • Turkey’s exports portfolio between 2003-2012 consists of 140.214 different exporters. • 57.428 of them are producer-exporters. • There are only 8789 firms that continuously exported between 2003-2012 (10-year-survivors). • These 8789 firms constitute 2/3 of Turkey’s exports each year on average between 2003-2012. • 93% of these firms are SME’s. • Around 50% of these firms are producer-exporters. • In the last 5 years, 10.500 new firms on average has entered Turkey’s exports portfolio. • 53% of these firms are micro-scale firms and 40% are small-scale firms. • Each year, on average, 20 out of 100 firms are exporting for the last time. In other firms, firm exit rate for Turkey is around 20%. • Between 2008-2011, each year, on average, 10.700 firms exported for the last time. • On average, each year, 35 out of 100 new exporter firms has exported for the last time. In other words, on average, each year, only 65 out of 100 new exporter firms exported at least once again in the following years. Therefore, the exit rate for new firms is 35% for Turkey. • When we compare ‘the products and the destination markets of one-time exporters’ to ‘the products and the destination markets of new firms that were able to survive in the following years’, we surprisingly face almost the same products and markets. In other words, most of the new exporters tried to export the same product(s) to the same market(s), and only some of them were able to survive while the others were not able to export again. Besides, these destination markets and products were at the top 10 list of Turkey’s exports in each year. Therefore, it seems that in most of the cases, a firm that has never exported before tries to sell a common exports good of Turkey to a familiar exports market,where some fails to export again while some others continue to export in the following years. • Each year, on average, %70 of exporters had at most 3 destination markets in their market portfolio. In other words, only 30% of exporters had more than 3 destination markets in their market portfolio. • Each year, on average, 60% of exporters had at most 5 different products in their exports product portfolio. In other words, only 40% of exporters had more than 5 products in their exports products portfolio. • Between 2003-2012, each year, on average, 63% of Turkey’s total exports were realized by SME’s, while almost 95% of exporters in each year are SME’s. • On average, the size of “product portfolio of a Turkish exporter” increased from 8,8 products in 2003 to 10,9 products in 2012. • On average, the size of “market portfolio of a Turkish exporter” increased from 3,5 destinations in 2003 to 4,4 destinations in 2012. • In 2012, 20% of total exporters exported only a single good to a single market. In 2003, the share of exporters that exported only a single good to a single market was 25%. • The size of the market portfolio and product portfolio is highly correlated to the size of the firm. In addition, survivors have larger market and product portfolios. • For example, in 2012, the average market portfolio size of a micro-scale firm was 2.8, whereas it was 15.8 for a large-scale firm, while it was 23.7 for a ten-year-survivor large-scale firm. Similarly, the average product portfolio size of a micro-scale firm was 9, whereas it was 28.7 for a large-scale firm, while it was 36.2 for a ten-year-survivor large-scale firm. • On average, the share of total market diversification constituted 12.6% of Turkey’s exports each year between 2003 and 2012. • On average, 80% of total market diversification was realized by SME’s each year. • On average, the share of total product diversification constituted 8.3% of Turkey’s exports each year between 2003 and 2012. • On average, 87% of total market diversification was realized by SME’s each year. • On average, contribution of firm entries constituted 3.8% of Turkey’s exports each year between 2003 and 2012. • On average, 80.9% of Turkey’s exports in each year were thanks to the exports of the firms in the portfolio that exported the same product(s) to the same market(s). In other words, on average, intensive margin of Turkey’s exports have 80.9% share in each year. So what lessons do these figures imply and what can be done for a better performance in the next 10 years of Turkey’s exports? The most affluent 10 years of Turkey’s exports were driven by 8789 firms that exported continuously during 2003-2012, constituting 2/3 of all exports in each year. These firms outperfomed the others in all metrics used in this study, which is a clear indication of importance of continuous exports activities and how continuity helps to enhance an exporter’s product and market portfolio. Since nearly all of these firms are SME’s, it is posibble to come up with “success stories”, which would enlight those that were not able to export continuously. In addition, since all of the one-time exporters and other firm exits are identified, the reasons behind their quits can be investigated in detail by implementing surveys. Once the problems are detected, solution-oriented policy options can be generated. At this point, it is obvious that each firm size category imply that different policy options should be genarated for different type of firms. Currently, none of the support mechanisms take into account the different structures that Turkish exporters have, which needs to be fixed to address problems and guide exporters more efficiently. Exports values for intensive margin imply that the firms that exports the same products to same markets are the main reason behind the sharp fall in exports values in 2009, as well as the quick rise in 2010 and onwards. The market portfolio of these firms mainly consist of Euro Zone countries and MENA countries. In this sense, taking into account the global forecasts for these countries on the next ten years combined with the decreasing global demand, Turkey will most likely to face hard times in increasing its exports values unless a structural change occurs on production side, such as shifting to production of high-value added products. Therefore, new policies that focuses on production and exports of high value-added products should be implemented to sustain increase in exports. All in all, given the firm-level structure of Turkey’s exports and the forecasts on decreasing global demand in the upcoming years, reaching 500 billion dollars of exports in 2023 seems not to be rationale for Turkey. |
| Keywords: | Turkey, Trade issues, Developing countries |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7126&r=int |
| By: | Saeed Rasekhi |
| Abstract: | Intra industry trade may promote bilateral and multilateral trade among the ECO members. The paper has investigated IIT and its potentials between the countries. The methodology is based on recent indices of IIT types. The results indicate low but increasing intra industry trade between the selected countries. Furthermore, an important part of this IIT is allocated to Vertical Intra Industry (VIIT). Then, it seems that ECO's cross country trade is based on comparative advantage currently. We suggest that the members should pay more attention to their bilateral and multilateral IIT to promote trade and cooperation with each other. |
| Keywords: | ECO members based on data availibilty, Trade issues, Trade issues |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:005741:6073&r=int |
| By: | Andi M. Alfian Parewangi; Gandy Setyawan; Hairul Triwarti |
| Abstract: | See full paper Matrix of International Trade (MIT) This paper applies Matrix of International Trade (MIT) model to analyze the dynamics of inter-dependencies within APEC member and between Europe, Africa and Middle East. The quarterly portrait for the last ten years (2003Q1-2012Q4) provides interesting dynamics; first, Indonesia, Malaysia, and Thailand gain constant benefit from international trade. Almost reaching its full capacity, Singapore is relatively unable to gain much from the increase of its trading partner’s outlays. India does experience increasing capability to gain from its international trade, and also a better trade polarization, particularly to Middle East and Africa. Second, measured with the increment of net foreign balance (NFB), the average welfare distributed to developed countries (US, Japan, Australia and China) is 20 times higher than the developing ones. Third, China took over and dominates United States on trading with Europe and even Australia since 2007. Fourth, the dependency of developing country group to developed one is averagely 13 times than otherwise. Only Japan and Middle East and Africa have increasing trade dependency on developing country in APEC; Australia and Europe are constant; while United States and China experience declining dependency. Fifth, within APEC, the total trade multiplier of Indonesia with his all trading partners declines; showing its weakening global position. |
| Keywords: | All countries, grouped according to regional arrangement (i.e. FTA's) , Regional modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6892&r=int |
| By: | Dirk Willenbockel |
| Abstract: | This study provides an ex-ante computable general equilibrium assessment of the planned Tripartite Free Trade Agreement between the member states of the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development. Community. The analytical framework is a global 21-region 22-sector CGE trade model.The simulation analysis considers eight distinct trade integration scenarios, that differ in their level of ambition. • All eight trade liberalization scenarios under consideration lead to positive net real income gains for the TFTA area as a whole. • The removal of remaining tariff barriers to intra-COMESA and intra-SADC trade by 2014 in the absence of a TFTA agreement (scenario S1) generates an estimated aggregate annual gain for the TFTA group on the order of US$ 328 million, a modest 0.04 percent of TFTA 2014 baseline final demand for goods and services. • The establishment of a free trade area with a full elimination of all tariffs on trade among all 26 potential partners (scenario S2) is projected to generate an annual welfare gain of US$ 578 million or roughly 0.1 percent of total TFTA area 2014 baseline absorption. Thus, if we assume that complete tariff liberalization within COMESA and SADC without any remaining exceptions for sensitive products will be achieved by 2014 prior to the implementation of TFTA, the additional welfare gain genuinely attributable to TFTA tariff liberalization among the three RECs is around US$ 250 million p.a. for the TFTA group as a whole. • In absolute terms, South Africa enjoys the largest real income gains under full intra-FTA tariff liberalization whereas the largest gains relative to baseline absorption are projected for “Other SACU” (i.e. Swasiland and Lesotho) (+0.8 percent) and Namibia (+0.4 percent).. • Zimbabwe and to a lesser extent Malawi, Zambia, Rwanda, South Central Africa (Angola and DR Congo), Botswana and Other East Africa suffer moderate welfare losses under this scenario as result of a terms-of trade deterioration that dominates the gains from lower consumer prices for TFTA imports. • If Ethiopia, Angola and DR Congo choose not to participate in the TFTA (scenario S3), the aggregate net welfare gain for the area as a whole drops by around US$ 260 million compared to the full participation scenario S2. The simulation results suggest that participation in the free trade agreement would be in Ethiopia’s own interest. • The exclusion of fossil fuels and sugar products as sensitive products from tariff liberalization (scenario S4) would reduce the total welfare gain for the TFTA group by roughly US$ 130 million per annum compared to S2. • The partial tariff liberalization scenario S6, which assumes full liberalisation of capital goods only, 80% tariff cuts on intermediate goods and 50% tariff cut on consumption goods, reduces the net aggregate welfare gain for the TFTA group by nearly US$ 150 million compared to the full liberalization scenario S2, and the increase in aggregate intra-TFTA trade flows is US$ 821 million lower than under S2. • In the least ambitious tariff liberalization scenario under consideration, only baseline tariffs with an ad valorem rate of up to 10 percent are removed completely, whereas tariffs with a higher rate are cut by 50 percent. In this case the aggregate net welfare gain for the TFTA group projected by the model is a meagre 0.04 percent of baseline absorption. • However, the strongest message emerges from the most ambitious TFTA scenario, which combines complete tariff liberalization for intra-TFTA trade with a reduction in non-tariff trade barriers that reduce the costs of border-crossing trade within the TFTA area. The projected aggregate net benefit for the TFTA group amounts to over US$ 3.3 billion per annum, that is nearly 0.4 percent of aggregate baseline absorption and more than five times the gains resulting from full intra-TFTA tariff liberalization alone. • Importantly, in contrast to the S2 scenario all TFTA regions enjoy a positive aggregate welfare gain in this case. The countries with the largest projected percentage increases in real absorption are Zimbabwe (+2.6 percent), Namibia (+2.4 percent), Mozambique (+2.2 percent), Botswana (+1.8 percent) and Other SACU (+1.5 percent). • In this most ambitious scenario, the total volume of intra-TFTA trade is boosted by US$ 7.7 billion, an increase of nearly 20 percent relative to the 2014 baseline volume. • The simulation results do not suggest that TFTA leads to systematic increase in wage inequality. • Significant sectoral production effects with corresponding significant implications for sectoral employment are concentrated in a sub-set of sectors including primarily sugar products with backward linkage effects to sugar cane production, beverages and tobacco and light manufacturing, and to a lesser extent for some TFTA countries in textiles, metals and metal production, and chemicals. |
| Keywords: | Multi-country with focus on Sub-Saharan Africa, Trade issues, General equilibrium modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7232&r=int |
| By: | Ramiro Parrado; Enrica De Cian |
| Abstract: | International technology spillovers can be categorised in two types: disembodied and embodied. Disembodied international technology spillovers are the flow of ideas that take place without the exchange of commodities. Examples of disembodied spillovers are present through workers’ mobility, students exchange programs, international conferences and journals. Embodied international technology spillovers are linked to the exchange of goods, particularly capital goods. The use of new equipment in the manufacturing and industrial sectors is considered an important source of technological progress and thus of economic growth. The degree of embodied technological spillovers is related to the level of capital imports, absorptive capacity, education, and knowledge stocks among other determinants. These in turn may depend on country specific policies. Trade within different classes of goods leads to different degrees of knowledge spillovers because technology intensity varies across sectors, leading to different degrees of embodied technology. Technology spillovers are neither automatic nor costless but they require adoption capabilities, e.g. human capital and indigenous research capacity. The absorptive capacity of a country is related to its economic, human, and technological development. This paper analyses the relationship between trade, technology, and the environment using a multi-sector and multi-region dynamic recursive CGE model. In this context, the main objectives of the paper are: i) to include endogenous factor-biased technical change based on trade flows in a CGE model, particularly for energy and capital, ii) to analyse the implications of specific spillovers embodied in trade of capital goods (machinery and equipment), and iii) to highlight the implications of accounting for indirect effects induced by spillovers. The paper models embodied spillovers based on international trade of capital goods. The main vehicles of spillovers are machinery and equipment (M&E) commodities. In particular, we consider the endogenous relationship between M&E imports and energy-biased technical change as well as capital-biased technical change. Estimates of the factor-biased technical change due to capital goods imports are drawn from Carraro and De Cian (2012). The model has been calibrated taking into account the influence of machinery and equipment imports only in capital and energy-biased technical change. This study takes advantage of a global trade database to implement spillovers by specifying technology source and destination regions. This allows modelling trade-embodied knowledge transfers in order to analyse the net effects of climate policy both in developed (technology source) and developing (technology recipient) regions. We find that explicitly modelling trade spillovers reveals significant effects thanks to the transmission mechanisms underlying imports of capital commodities. We then assess the net contribution of modelling trade spillovers within three policy scenarios. The aggregated net effects of spillovers are rather small confirming findings from previous studies. However, we identified important international and intersectoral redistribution effects due to technology transfers represented as embodied spillovers. |
| Keywords: | Multi-region and Multi-sector model, Energy and environmental policy, General equilibrium modeling |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5426&r=int |
| By: | World Bank |
| Keywords: | Law and Development - Tax Law Macroeconomics and Economic Growth - Markets and Market Access Economic Theory and Research International Economics and Trade - Trade Policy International Economics and Trade - Free Trade |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19320&r=int |
| By: | Tang, Heiwai (Johns Hopkins University and CESIfo); Wang, Fei (University of International Business and Economics); Wang, Zhi (United States International Trade Commission) |
| Abstract: | This paper proposes methods to incorporate firm heterogeneity in the standard IO-table based approach to portray the domestic segment of global value chains in a country. Using Chinese firm census data for both manufacturing and service sectors, along with constrained optimization techniques, we split the conventional IO table into sub-accounts, which are used to estimate direct and indirect domestic value added in exports of different types of firm. We find that in China, both state-owned enterprises (SOEs) and small and medium domestic private enterprises (SMEs) have much higher shares of indirect exports and ratios of value-added exports to gross exports (VAX), compared to foreign-invested and large domestic private firms. Based on IO tables for both 2007 and 2010, we find increasing VAX ratios for all firm types, particularly for SOEs. By extending the method proposed by Antràs et al. (2012), we find that SOEs are consistently more upstream while SMEs are consistently more downstream within industries. These findings suggest that SOEs still play an important role in shaping China’s exports. |
| Keywords: | China; input-output; trade |
| JEL: | C67 C82 F1 |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:186&r=int |
| By: | Tiziano Distefano (IMT Institute for Advanced Studies Lucca, Italy.); Giovanni Marin (CERIS-CNR Milano, Italy; SEEDS Sustainability Environmental Economics Dynamics Studies, Ferrara, Italy.); Massimo Riccaboni (IMT Institute for Advanced Studies Lucca, Italy.) |
| Abstract: | The consideration of both the direct and the indirect effects of global production and trade is the first step in order to assess the sustainability of resource exploitation, in particular water usage. This paper applies the Global Multi-Regional Input-Output model to quantify the interdependencies of different sectors and to determine the overall water consumption of each country. This procedure allows the measurement of Virtual Water Trade, that is the volume of water embedded in traded goods. This paper introduces further extensions based on network analysis to overcome the limitations of I-O models. To the best of our knowledge, this is the first attempt to build a bridge between two different, but related, methodologies. Firstly, we assess the evolution of the structure of international trade in Virtual Water (VW). Secondly, we present the results from the Structural Decomposition Analysis. Finally, we introduce other measures from Network Theory, in order to integrate the previous results. Community Detection assessment reveals the emergence of regional VW systems composed by a limited set of countries. Thus our study confirms the need of elaborating and implementing transboundary policies for water management, especially in the European Union. |
| Keywords: | virtual water trade, multi-regional input-output model, network analysis, community detection |
| JEL: | C67 Q25 F18 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:2314&r=int |
| By: | Amin, Mohammad; Islam, Asif |
| Abstract: | For a representative sample of manufacturing firms in 26 countries, this paper shows that changes in the cost of importing over time are significantly and negatively correlated with changes in the percentage of firms'material inputs that are of foreign origin. Furthermore, the paper shows that there may be a nonlinear relationship between import costs and imports. These findings are important, as recent studies point toward a significant positive effect of imported inputs on productivity and growth. It is hoped that the present paper inspires more work on the determinants of the use of imported inputs, especially in developing countries. |
| Keywords: | Economic Theory&Research,Trade Policy,Achieving Shared Growth,Free Trade,Debt Markets |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7005&r=int |
| By: | Ana Paula Ribeiro; Paula Gracinda Teixeira Santos; Vitor Carvalho |
| Abstract: | From the late 70s onwards, the literature has produced numerous studies, mostly for developing countries, relating exports and economic growth. Since several European Union (EU) countries face strong recessions in the sequence of the economic crisis and the related fiscal consolidation measures, exports emerge as a meaningful source of growth for developed countries with rather stagnant domestic markets. In this context, we assess if and how the product and the destination structures of exports shape the growth dynamics for the EU countries. Estimation of fixed effects model using panel data of 23 European Union (EU) members over the period 1995-2010. We find that economic growth is foster through export specialization in high value-added products, such as manufactures and high-technology. Moreover, we find evidence that higher growth is fostered by export diversification across partners while enlarging the portfolio of partners, mainly to less developed and more distant countries, has negative impacts on European growth. Unambiguously, relative concentration of exports should be directed towards higher growth countries. |
| Keywords: | European Union (EU)., Growth, Macroeconometric modeling |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5265&r=int |
| By: | Ansgar Belke; Anne Oeking; Ralph Setzer |
| Abstract: | Traditional specifications of export equations incorporate foreign demand as a demand pull factor and the real exchange rate as a relative price variable. However, such standard export equations have failed to explain the export performance of euro area countries during the crisis period. In particular, the significant gains in export market shares in a number of vulnerable euro area crisis countries did not coincide with an appropriate improvement in price competitiveness. This paper argues that, under certain conditions, firms consider export activity as a substitute of serving domestic demand. The strength of the link between domestic demand and exports is dependent on capacity constraints. Our econometric model for six euro area countries suggests domestic demand pressure and capacity constraint restrictions as additional variables of a properly specified export equation. As an innovation to the literature, we assess the empirical significance through the logistic and the exponential variant of the nonlinear smooth transition regression model. In the first case, we differentiate between positive and negative changes in capacity utilization and in the second case between small and large changes of the same transition variable. We find that domestic demand developments are relevant for the short-run dynamics of exports when capacity utilization is low. For some countries, we also find evidence that the substitution effect of domestic demand on exports turns out to be stronger the larger is the deviation of capacity utilization from its average value over the cycle. |
| Keywords: | Euro area countries: Spain, Portugal, Italy, France, Ireland and Greece, Macroeconometric modeling, Monetary issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6780&r=int |
| By: | Carlos A. Cinquetti; Keith E. Maskus |
| Abstract: | We reassess, with industry-level data, the scale effect from trade protection, by means of a comprehensive fixed-cost variable, composing both technology coeficient and firms size, and a comparative (international) analysis. Evidence is based on Brazil’s manufacturing industries during its import-substitution industrialization, comparatively to the USA. The panel-data analysis clearly shows a correlation between comparative increases in the number of firms with average costs, corroborating the scale (entry) effect. See full paper See full paper |
| Keywords: | Brazil and the USA, Trade issues, Modeling: new developments |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5440&r=int |
| By: | Normizan Bakar |
| Abstract: | To analyse the optimal landlocked and coastal countries' policies in an international imperfect competition. In particular the model shows the rivalry condition of the landlocked country's firm and coastal country's firm. In addition, we incorporates the interdependent condition of the landlocked country on its coastal seaport.The model assumes the three-stage game of international duopolists where; At first stage governments determine the trade policies; at the second stage governments determine the transport policies;and at the third stage the firms determine the price.The transport policy, i.e. toll fee by the coastal country (transit country) is positive. |
| Keywords: | landlocked countries, Trade issues, Other issues |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:005741:6004&r=int |
| By: | Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ; |
| Abstract: | The formation of a Regional Technical Group (RTG) on Aid for Trade for Asia and the Pacific was a key recommendation to emerge from the Aid for Trade Regional Review Meeting at the Asian Development Bank (ADB) headquarters in Manila in 2007 and the Global Aid for Trade Review Meetings at the World Trade Organization in Geneva in 2007 and 2009. Reflecting the principles of country ownership of Aid for Trade, the RTG operates under the stewardship of RTG co-chairs, representatives of Cambodia and Japan. The RTG comprises members from recipient and donor countries involved in formulating and implementing Aid for Trade policies and development agencies in the region. ADB is a member and serves as the Secretariat to the RTG. The RTG started as a pilot project to provide an informal regional forum for discussing Aid for Trade issues and proposals, sharing good practices, taking stock of available analytical work on Aid for Trade in the region, and building partnerships among actors and stakeholders. It seeks to formulate an integrated approach to operationalize Aid for Trade in the medium term. |
| Keywords: | development assistance, trade, aid for trade, aft, asia and the pacific, value chains, global value chains, private sector participation, World Trade Organization, public-private partnership, regional technical group, official development assistance, investment climate, south-south cooperation, trade finance, frontier economies |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135685-2&r=int |
| By: | TANAKA Kiyoyasu |
| Abstract: | Inward foreign direct investment (FDI) in Japan is expected to contribute to the Japanese economy, but an empirical analysis on its causes and consequences has not been widely conducted partly because of a lack of comprehensive panel data on foreign firms. This paper seeks to construct a panel dataset on foreign firms for the years 1995-2011 by carefully correcting and improving firm-level data published by the Ministry of Economy, Trade and Industry. Based on the dataset, we find that: (1) foreign firms' presence increased rapidly during 1995-2007; (2) the growth of foreign firms was larger in wholesale, retail, telecommunications, and other services sectors; (3) direct investment from East Asian economies such as China, Korea, and Taiwan increased recently; (4) foreign firms concentrated in Tokyo in terms of the headquarters location, but the spatial concentration in Tokyo was relatively weaker in terms of the establishment location; (5) greenfield investment has been the most frequent mode of entry to the Japanese market since 2002. |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:14021&r=int |
| By: | Roberto Roson; Kazuhiko Oyamada |
| Abstract: | The aim of this work is analyzing the practical relevance, from a qualitative perspective, of a new methodology which is intended to include firm heterogeneity, as modeled by Melitz (2003), in computable general equilibrium effects. We assess to what extent the inclusion of industries with heterogeneous firms in a CGE framework does not simply make the Melitz model “operational”, but allows accounting for structural effects that may significantly affect the nature, meaning and implications of the model results.We develop two applied models, which are calibrated with the same data set. A first "simple" model is based on the original Melitz specification, with one sector, one primary factor, and two regions. A second model includes a full fledged general equilibrium structure, with two industries and two primary factors. Furthermore, fixed costs in heterogenous industries are related to demand for services. We carry out the same simulation exercise, a classic lowering of trade costs, with the two models. We contrast the models results, highlighting any possible qualitative difference. Finally, we trace back any divergence in terms of differences in the structure of the two models.The typical experiment of lowering trade barriers, leading to firm selection and aggregate productivity gains in Melitz (2003), now also triggers a reallocation of production among industries and a change in relative returns of primary factors, as it is typical in multi-sectoral general equilibrium models. An increase in the number of exporting firms, for instance, generates an additional demand for services in both the origin and destination countries, because of variable and fixed trade costs. |
| Keywords: | N/A, Modeling: new developments, General equilibrium modeling |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6669&r=int |
| By: | Osaro Agbontaen; Kelikume, Ikechukwu.; Agbontaen, Osaro. |
| Abstract: | Empirically investigates the shock relationship of exchange rate volatility on bilateral trade flows between Nigeria and India. Vector Autoregressive Model (VAR) 1. The innovations of Nigeria trade flows shocks to related India price and income shocks shows that it generates inconsistencies that distorts the levels of Nigeria imports and exports due to uncertainties created as a results of the volatile nature of the domestic rate of interest. 2. The innovations of Nigeria trade flows shocks weakens the levels of exports, suppress the levels of imports and transmit negative shocks that cause inconsistencies in the level of domestic income. |
| Keywords: | Nigeria, Macroeconometric modeling, Trade issues |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5407&r=int |
| By: | Fabian Unterlass |
| Abstract: | This paper discusses the interplay between exports and innovation and both their effects on economic performance. The European Union makes major efforts to improve the innovation performance of its companies with the aim to improve the global competitive position of the Union and create jobs and wealth. Firms that are involved in international activities through exports or foreign direct investment are typically top performers in terms of their capability to generate value added as well as employment and productivity (see e.g. Mayer and Ottaviano 2007). From the policy point of view this implies that more of Europe's innovative companies should compete and be competitive on global markets and create revenue and jobs at home. However, the relationship between innovation, exporting and economic performance is by no means unidirectional. It is difficult to show whether superior export performance is determined by a superior innovation performance, or whether internationalisation supports innovation. The major issue here is to control for endogeneity between these two dimensions. Exporting might positively affect innovation via learning effects, resource effects and / or incentive effects. On the other hand, innovation improves productivity and therefore increases a company's competitiveness such that it selects itself into the export market. Alternatively, product innovations might also create (temporary) monopolies in niche markets. Testing these issues emerging from the literature we use firm level data from the 3rd European Community Innovation Survey (CIS3) for 21 countries for the years 1998-2000 accessed at the Eurostat Safe Centre in Luxemburg. In order to overcome problems referring to endogeneity, we empirically investigate the effects of exporting in the first year of the observed time frame on innovation input, while we explain in a second model exports in the final observed year by innovation output indicators. We find strong evidence that innovation improves the export performance of companies, whereas this pattern varies with the stage of economic development. While firms in highly innovative sectors in the more advanced member states need high degrees of appropriability, i.e. the possibility to protect their innovations, and have to continuously improve their knowledge base to participate in export markets, it is productivity and price-based competitiveness for low innovation-intensive sectors. This reflects the alternative patterns of niche markets on one hand, and self-selection on the other, that allow firms to export. While the nature of the data does not allow us to draw satisfactory conclusions on the causal link between exports and innovation, we could find positive effects of exporting on innovation activities only for small companies, while large companies are not more likely to innovate when they are exporting. We therefore conclude that the positive impact of exports results from additional financial resources available for exporting SMEs, while learning effects are comparably small. However, we only investigated exports but did not consider different kinds of internationalisation due to data constraints. The picture might change in this case. Finally, we argue that both innovation and exports have positive effects on a firm's economic performance. We find strong evidence that innovation is an important driver for productivity growth, whereas the positive effect increases when a company (and the country the firm is located in) approaches the technology frontier. Furthermore, our results indicate that in the medium to low innovation intensive sectors productivity growth is mainly driven by process innovations, while in high-technology sectors in the more advanced member states productivity growth is strongly driven by product innovations. This is in line with the idea that in high-tech niche markets it is product quality which leads to higher prices. Competition in these markets is not based on prices but on product quality. In the low-technology sectors, competition is mainly based on prices and therefore process innovation plays a decisive role. In addition, we also find evidence that the effects of innovation and exporting on employment and turnover growth follow patterns that are dependent of the stage of technological development. The impact of exports on employment growth increases with an increasing distance of the company's home country from the technological frontier. Companies in these countries have a comparative advantage in wage levels. Interestingly, exporting has positive effects on labour productivity mainly in highly innovation-intensive sectors in the more advanced countries on the one hand, and in less innovation-intensive sectors in countries that are further away from the technological frontier. Probably, this result reflects comparative advantages and volume effects (economies of scale) of exporting. The prior companies increase their export share by increased competitiveness based on high-quality products, the latter based on wage levels. Finally, the joint effects of exporting and innovation on turnover growth and therefore also productivity growth are positive for high-tech sectors in technologically advanced countries. This indicates that companies that are active in these sectors have to internationalise their economic activities to reap the benefits from their innovation efforts. Domestic markets tend to be too small and niche. This result claims for supporting innovative companies in these sectors to start exporting. See above See above |
| Keywords: | EU, Impact and scenario analysis, Impact and scenario analysis |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5655&r=int |
| By: | Fernandes, Ana (University of Exeter); Tang, Heiwai (Johns Hopkins University and CESIfo) |
| Abstract: | This paper studies how learning from neighboring firms affects new exporters’ performance. We develop a statistical decision model in which a firm updates its prior belief about demand in a foreign market based on several factors, including the number of neighbors currently selling there, the level and heterogeneity of their export sales, and the firm’s own prior knowledge about the market. A positive signal about demand inferred from neighbors’ export performance raises the firm’s probability of entry and initial sales in the market but, conditional on survival, lowers its post-entry growth. These learning effects are stronger when there are more neighbors to learn from or when the firm is less familiar with the market. We find supporting evidence for the main predictions of the model from transaction-level data for all Chinese exporters from 2000 to 2006. Our findings are robust to controlling for firms’ supply shocks, countries’ demand shocks, and city-country fixed effects. |
| Keywords: | export; sales |
| JEL: | F1 F2 |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:185&r=int |
| By: | Kazuhiko Oyamada |
| Abstract: | Comparing simulation results obtained by applied general equilibrium (AGE) models using intra-industry trade specifications based on the theoretical models presented by Armington (1969), Krugman (1980), and Melitz (2003) may be important in evaluating trade-related economic policies today. The purpose of this paper is to reveal some of the behavioral characteristics of AGE models that include the Armington-Krugman-Melitz encompassing (AKME) module developed by Dixon and Rimmer (2012).To fully verify the significance to include the AKME module, both static and forward-looking dynamic types of three-region, three-sector AGE model are prepared mainly based on the GTAP 8.1 database for 2007. The original 129 countries/regions and 57 commodities/activities are respectively aggregated to three. The regions consist of the Asia-Pacific (r01), the North and South Americas (r02), and the European Union and the Rest of the World (r03). The three sectors are the primary industries (i01), manufacturing (i02), and services (i03). As noted previously, the manufacturing sector (i02) is assumed to be imperfectly competitive with increasing returns to scale (IRTS), while the other two are characterized by constant returns to scale (CRTS). The primary industries sector (i01) uses a sector specific factor, such as land and natural resources, in addition to capital, labor, and intermediate goods in its production process. The services sector (i03) provides a fraction of its output as the inter-regional shipping supply. Some of the parameters and exogenous variables are determined by the author based on the empirical studies such as done by Ardelean (2006), Balistreli et al. (2011), and Hummels and Klenow (2005). The forward-looking dynamic model is calibrated assuming that the global economy captured by the benchmark data set is in a steady state.Simulations with a special focus on the strength of the importer’s love of variety (LoV), the key findings can be summarized as follows: (A) the introduction of imperfect competition into the manufacturing sector largely inflates the effects of trade liberalization. A higher level of LoV may contribute to further expansions of the effects; (B) the Melitz-type trade specification does not always enhance effectiveness of a certain policy change more than the one obtained with the Krugman-type, especially when the importer’s LoV is not so strong. There are likely to be points where the volumes of effects obtained with the Melitz-type exceed the ones with the Krugman-type; (C) with the Melitz-type trade specification, combinations of the number of registered firms and the proportion of active firms, which often change in opposite direction from each other, make the behaviors of the total variety non-monotonic so that effects of an exogenous shock become more complicated than the ones observed in a model with the Krugman-type specification; (D) in the case of intra- and inter-regional trade liveralization, a stronger LoV may have effects to invigorate inter- rather than intra-regional trade with the Melitz-type specification, making the inter-regional markets more accessible; and (E) when a multi-lateral trade liberalization takes place sequentially, the regions/countries that liberalizing trade faster may have the leader’s advantage such that firms in the leader regions/countries can operate with relatively lower productivity. |
| Keywords: | None, General equilibrium modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6704&r=int |
| By: | Zoryana Olekseyuk; Hannah Schürenberg-Frosch |
| Abstract: | CGE models are a widely used and accepted technique for policy evaluation and impact analysis. The modeling technique is especially useful in the analysis of trade reforms, tax reforms, energy sector reform and development policy analysis. However, the results of such models are often argued to be sensitive to the choice of exogenous parameters such as elasticities. Apart from the elasticities of substitution between production factors in the production function, the so-called Armington elasticities which determine the substitutability between domestic goods and imports are often mentioned as one of the caveats of CGE models. McDaniel & Balisteri (2002), Schuerenberg-Frosch (2012), Siddig & Grethe (2012) and others show that the choice of the so-called Armington elasticities in the import demand function has a strong influence on the simulation results. Hence, it is very important to choose these elasticities in a sensible way. Unfortunately, many CGE papers are not very transparent concerning the choice of elasticities and the sensitivity of the results with respect to this choice. As e.g. Welsch (2008) points out ”In practice, the elasticities employed are frequently based on 'guestimation' or on estimates picked from the literature.” Armington (1969) and most CGE modelers use the constant elasticity of substitution (CES) function to model demand for domestic goods and imports. The Armington elasticity is hereby defined as the proportionate change in the ratio of quantities divided by the proportionate change in the marginal rate of substitution in demand between domestic and foreign goods. There exist a number of estimations for Armington elasticities and the results of these are frequently used in CGE studies. In this paper we argue that this strategy could lead to severely biased model results as the estimated elasticities might not be applicable to either the specific model or the country in question. The reasons we give for this argument are the following: Most of the existing studies provide results only for the U.S. Even among the estimated elasticities for the U.S. there is some variance found. More importantly, the very few studies for other countries[such as Gibson (2003), Welsch (2006, 2008)] find substantially differing results. But studies for other countries are very scarce. Thus, the often formulated argument that time-series studies find rather small elasticities might simply be driven by rather small elasticities in the specific U.S. case. Moreover, the higher elasticities for other countries (e.g. Gibson (2003)) can be explained by the fact that these studies are more recent and consider the effects of globalization, market integration and increasing competition, which lead to higher substitutability between domestic and foreign goods. Welsch (2006) argues that the Armington elasticities decrease over time due to intra-industry specialization among open economies. He also finds indications for this hypothesis in French data. Thus, elasticities from older studies (e.g. from the 1990s or earlier) might not be useful in models based on recent data as the trade pattern and trade motives might have undergone important changes since then. One result that emerges quite clear from the literature is that elasticities differ depending on the level of aggregation used in the data. It is uniformly found across most of the studies that elasticities tend to be higher the more disaggregate the underlying data is. Thus, a CGE modeler should use estimated elasticities from a study with the same level of sectoral disaggregation he uses in his model. However, the mentioned studies for the U.S. have a rather high level of disaggregation with 180-200 industries included. Most CGE studies are much more aggregate. Nonetheless, as McDaniel & Balisteri (2002) points out, authors simply calculate the average elasticity across subsectors and use this number for their aggregated sector. This might lead to an aggregation bias and thus to biased CGE results. Bloningen & Wilson (1999) investigate the determinants of Armington elasticities. In addition to sector-specific effects they also find country-specific determinants such as trade policy. This implies that the usage of elasticities from another country might be misleading. In addition, a comparison of estimated elasticities across countries is very difficult as the studies often not only differ in the country but also in the degree of disaggregation, the method applied, the time horizon, the data frequency and even the underlying structural model. This paper aims at providing additional insights in the aforementioned aspects by providing estimated elasticities based on recent data for a larger group of European countries. We focus here on elasticities for CGE modeling. Thus, we aggregate our data to the 2-digit level of NACE Rev.2 which is the degree of disaggregation also used in the EU and OECD SAMs and thus used in many CGE studies for these countries. We also derive our functional form from these models. Using cointegration analysis we estimate the first order condition resulting from cost minimization or utility maximization subject to the CES subutility function in imports and domestic goods. The results show a rather big variance across sectors and countries. The elasticities are between 0 and 3.7 what indicate a plausible magnitude comparable with the recent studies of Welsh (2006) and Saito (2004). Thus, there are significant differences between the minimum and maximum values for different countries. While for Austria and France the estimates are in the interval from 0.5 to 3.7 and 3.2 respectively, the values for Italy reach only a maximum of 1.6. These large differences are also observed for individual sectors. For instance, the elasticities for wood and cork products vary from 0.9 in France to 2.11 in Finland. The same can be observed for beverages (from 1.9 in Finland to 3.7 in Austria) and paper products (from 1.6 in France to 2.95 in Finland). Our results indicate higher values of Armington elasticities in comparison to the U.S. studies from the 1980s and 1990s despite a higher level of aggregation and the usage of annual data (i.e. a lower frequency). This confirms the statement that elasticities have increased since the 1980s due to increased internationalization of production and increasing competition on world markets. Moreover, this also confirms that higher values are found for countries outside the USA, just like the finding of Gibson (2003) for South Africa. However, the significant cross-country differences illustrate clearly that it is not acceptable to use estimated elasticities for another country when specifying a CGE model - which is very often done in practical CGE work. See above See above |
| Keywords: | NA, Trade issues, Trade issues |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5696&r=int |
| By: | Hanna Armelius; Carl-Johan Belfrage; Hanna Stenbacka |
| Abstract: | See full paper See full paper See full paper |
| Keywords: | World, Forecasting and projection methods, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6933&r=int |
| By: | Carlos A. Cinquetti; Keith E. Maskus |
| Abstract: | To access, with industry-level data, an ampler set of trade-policy effects under imperfect competition, which are: the competition, the scale and allocative effects. In theoretical terms, we rely on comparative advantages, underpinning the general-equilibrium analysis, and on spatial monopolistic competition, underpinning the industrial organization analysis. The empirical strategy is based on a reduced equation regression model restricted to the period under protection. Accordingly, the identification of each of those trade-policy effects is drawn from within-period counterfactuals, which entail not only simulation with distinct variables but also with distinct statistical tools. In the case of two fixed-cost variables, comparison is limited to the US economy, under the assumption that this technology would not substantially change across those developed countries. To identify the following effects from protectionism within the regression model: 1. a reduction in the singular comparative contribution of the scale (size) of the Brazilian firms; 2. an increase in the singular negative impact of price distortion, stemming from higher market power, or rather from lower competition; 3. a smaller contribution from comparative (marginal) cost. Each of these effects are expressed by a coefficient value under trade protection as compared to that of the simulated free-trade economy. |
| Keywords: | Brazil, comparatively with a set of six developed countries , Trade issues, Developing countries |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5398&r=int |
| By: | Nihal Bayraktar |
| Abstract: | The changing direction of foreign direct investment (FDI) from developed countries towards developing ones, especially after the crisis, has started to attract more attention in the literature. In this paper, the link between FDI and “ease of doing business” indicators, as one possible source of the changing direction of FDI, is investigated. The data source is the World Bank’s Doing Business Database. The study covers the years from 2004 to 2010. Because the paper includes the years right before the economic and financial global crisis, as well as the crisis period, the impact of changing “ease of doing business” on the changing direction of FDI towards developing countries can be better evaluated. Emperical. Statistical and graphical analysis. Econometric analysis with panel data The initial results show that countries which have better records of “doing business” tend to attract more FDI. The improvement in “ease of doing business” indicators in developing countries can have a partial explanatory power in determining higher FDI flows to these countries. |
| Keywords: | International, Sectoral issues, Developing countries |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5294&r=int |
| By: | Jean Louis Brillet |
| Abstract: | To study the consquences of the Trans Pacific Partnership on the Vietnamese economy Using a five product econometric modelto measure the impact of individual elements, then synthetize the full set of measures. Vietnam, along with 11 other countries having a Pacific coast (including the USA and Canada), is now finalizing negotiations on an agreement, which will change profoundly the conditions of trade in the region. Our goal is to understand the consequences of the agreement, and test if it will have favorable consequences for Vietnam, considering that, as all treaties of this kind, we have to measure the balance of both positive and negative individual decisions. For this we shall use a five product model, developed for the Vietnamese Ministry of Planning and Investment. The products are: Agriculture, Manufacturing, Construction, Non-Financial Services and Financial Services. The model will use annual data for the period 1995-2012, built especially for the project by the General Statistical Office. Its structure can be described as short term Keynesian, with long term classical features. Its uses a Cobb-Douglas production function, and it features a price-wage loop, with a WS-PS wage determination. Its equations follow globally an error correction framework. It identifies Foreign Direct Investment, through its motivations and its impact on structural parameters of the economy. It has been estimated using a system method, and the process mostly met with success, in spite of the volatility of data and the ongoing transition process, which questions the stability of formulations. In our study, we shall start from a reasonable 10 year forecast, and shock in success the elements of the agreement: tariffs rates, quotas, local subsidies. Then we will use the actual decisions, or what we know of them at the time of the study, to summarize the outcome of the actual agreement. |
| Keywords: | Vietnam, Macroeconometric modeling, Trade issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6983&r=int |
| By: | Ihtiyor Bobojonov; Dr. Aden Aw-Hassan |
| Abstract: | There are several regional trade agreements made amongst Central Asian countries during the transition period. However, the implementation of these agreements remains very restricted which causes limited exchange and flow of agricultural commodities between the countries. The market imperfections caused by state policies, poor market infrastructure and trade restrictions remain as the main challenge for small scale producers in Central Asia. This study analyses input and output price differentiations between the countries and main factors causing those prices. Furthermore, the paper examines the impact of easing those trade barriers on farm level welfare, especially under different climate change scenarios. Therefore, the paper aims at filling in the gap of knowledge about effects of trade barriers on farm gate prices and farmers’ welfare in Central Asia. The farm level prices, production and consumption patterns are analyzed using the data obtained from farm surveys conducted in Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. Changes in income and expenditure under trade liberalization at country, region (Central Asia and CIS) and world market level is estimated. Per capita income and expenditure changes are estimated for alternative market conditions. The impact of climate change on farm utilities is analyzed using integrated modeling tool which incorporates the climate change module and crop growth simulation model in the expected utility framework. The results show significant difference of farm gate prices of many agricultural commodities except wheat. Salient differences also found between the energy and fertilizer prices among these countries. Political disputes between some Central Asian countries are explained to be the main challenge for restricted trade between the countries. Liberalization of trade may create favorable economic conditions for many regions in Central Asian countries. However, potential gains from market integration are very region and country specific. The integrated model results show that easing commodity exchange between the countries may improve the adaptive capacity of the small scale producers especially in Uzbekistan, Tajikistan and Kyrgyzstan under different climate change scenario. |
| Keywords: | Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Agriculture, Regional integration |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:005741:5946&r=int |
| By: | Miriam Frey |
| Abstract: | This paper analyzes the effects of the planned free trade agreement (FTA) between the European Union (EU) and Ukraine on inequality and poverty in the latter using a CGE-microsimulation model for Ukraine. Special attention is thereby given to the in-house production of agricultural and processed food goods generated by the Ukrainian households. Due to a lack of information on these activities in the national accounts data, this type of household production is neglected in an already existing CGE analysis of the welfare effects resulting from the EU-Ukraine FTA. However, in-house production of food products for own consumption plays a crucial role in Ukraine. According to a household expenditure survey for Ukraine 60.5% of the households are engaged in the production of agricultural goods like potatoes, eggs and cabbage and an even slightly higher percentage (61.6%) of them reported to produce processed food goods like dairy products and preserves. The CGE-microsimulation model used in this paper follows the top-down approach, meaning that variables, such as prices and factor returns which change as a result of the simulation of the trade integration in the CGE model are then transferred to the microsimulation model where they are treated as exogenous variables. The CGE model used here is a rather standard, small open economy, single-country model for Ukraine exhibiting perfect competition and constant returns to scale. It incorporates 38 sectors of production and a representative household which is disaggregated into four types according to the domestic poverty line and the place of residence (rural or urban). Labor is differentiated based on the level of education in skilled and unskilled labor and is assumed to be fully employed. The microsimulation model consists of a log-income and a discrete choice labor supply equation as well as of accounting identity and arithmetical computation equations. In-house production of agricultural and processed food products is not treated as being part of the – in most of the literature existing – labor market alternative “being self-employed”, but is modeled explicitly and analogous to the labor status as a discrete choice. This is mainly done for the following two reasons. Labor market status is assumed to be a choice made on the individual level, whereas the decision whether or not to participate in household production of agricultural and processed food goods for own consumption is made on the household level. The second reason is that the explanatory variables which influence the choice of the labor market alternative do not necessarily have to coincide with the ones that determine the decision on in-house production of food products. The data needed for the CGE model include the Ukrainian national accounts and input-output tables for 2007, additional statistics from national sources like information on indirect taxes, labor remuneration and tariffs, international trade statistics and a household expenditure survey for 2007 covering more than 10,000 Ukrainian households and more than 20,000 household members. The latter is also the basis for the microsimulation model. Concerning the household level, information on expenditures, place of residence, characteristics of the household head and land ownership are the most important variables. With respect to the household members, information on sex, age, education, labor market status and income are crucial. |
| Keywords: | Ukraine, Trade issues, General equilibrium modeling |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5587&r=int |
| By: | Kwasi Camara OBENG; Vijay K. Bhasin |
| Abstract: | This study examined the impact of using corporate tax to compensate for lost tariff revenue from trade liberalization on poverty in Ghana. Trade has been considerably liberalized in Ghana, which necessitated fiscal reforms to make up for the shortfall in government revenue. As part of the fiscal reforms, the corporate tax rate was reduced for all sectors and the basis for assessment changed from profits to income. Recursive dynamic computable general equilibrium modeling The results showed that the reduction in the incidence, depth and severity of poverty at the national and household levels is greater when corporate tax rate is increased than when it is reduced. |
| Keywords: | Ghana, Trade issues, Impact and scenario analysis |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5335&r=int |
| By: | Elisabeth Nindl |
| Abstract: | The present papers establishes a framework that allows to investigate the determinants of the extensive and intensive margin of participation in the Fairtrade certification scheme. We use this knowlegde to identify a causal effect of Fairtrade certification on growth in the agricultural sector in low- and middle-income countries in order to assess whether participation in Fairtrade indeed reduces poverty among smallholders and marginalized farmers. First of all we compile a unique dataset on the number of Fairtrade certified producer cooperatives across countries and time. With this dataset at hand, the determinants of the extensive and intensive margin of participation in Fairtrade are modelled in a two-stage problem using a zero inflated negative binomial model. The growth regressions are estimated with a set of different estimation methods with Blundell-Bond system GMM estimation as our preferred method. We find that large countries with a labor intensive agricultural sector are most likely to have Fairtrade certified producer cooperatives. Finally, the growth regressions show that there is indeed a small positive effect on agricultural growth, suggesting that the benefits of Fairtrade (fixed minimum price, price premium etc.) indeed help to reduce poverty. |
| Keywords: | All low- and middle-income countries as listed by the World Bank , Agricultural issues, Developing countries |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6866&r=int |
| By: | KEIDA Masayuki |
| Abstract: | In this paper, we analyze how the volume of rice imports would be affected if the Japanese government were to reduce tariffs on rice by looking at the current state of the Simultaneous Buy-and-Sell (SBS) system for rice imports. The Japanese government is required to import 770,000 tons of rice per year to maintain minimum access. However, a large portion of minimum access rice is not used for domestic consumption—only 100,000 tons of SBS rice is used for human consumption. Under the SBS system, the total amount of rice fell short of the government's 100,000-ton annual quota in 2010 and 2013. This was due to a drop in domestic market prices as well as an increase in overseas market prices. The lack of bids on SBS rice in recent years suggests that reducing rice tariffs would have no effect on the domestic market. As a result, we argue that rice tariffs of between 150% and 200% do not affect the Japanese rice market. |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:14043&r=int |