nep-int New Economics Papers
on International Trade
Issue of 2014‒09‒25
ten papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  2. The Pacific's Connectivity and Its Trade Implications By Helble, Matthias
  3. Efectos de la inversión extranjera directa sobre la inversión en Uruguay By Nicolás Reig
  4. Migration and Regional Trade Agreement: a (new) Gravity Estimation By Gianluca Orefice; Luiz Lima; Erik Figueiredo
  5. Imported Intermediates and Productivity: Does Absorptive Capacity Matter? A Firm-Level Analysis for Uruguay By Adriana Peluffo; Dayna Zaclicever
  6. Employment Implications of Exporting Processed U.S. Agricultural Products By Blandford, David; Boisvert, Richard N.
  7. Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity By Angelo Secchi; Federico Tamagni; Chiara Tomasi
  8. The Effects of Repatriation Taxes on FDI:Evidence from OECD Multinationals By Hirokazu Mizobata; Masaaki Suzuki
  9. State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government By Maria Franco; Carlos Scartascini; Mariano Tommasi
  10. Rethinking borders in a mobile world: An alternative model By Olivier Walther; Denis Retaillé

  1. By: Jaan Masso; Kärt Rõigas; Priit Vahter
    Abstract: Export experience of managers and other top specialists is among the key drivers of export decisions in firms. We show evidence of this regularity based on employer-employee level data from the manufacturing industry in Estonia. We find that hiring managers and other high-wage employees with prior experience in exporting to a specific geographical region is associated with a higher probability of export entry to that region. However, there is little evidence of significant effects on export intensity. Notably, the relationship between export experience and a firm’s export decisions is usually stronger if the prior export experience is from an exporter that is located nearby in the product space. Our findings suggest that the contribution of prior trade experience of employees and the firm’s productivity as drivers of export market entry are of comparable magnitude.
    Keywords: export experience, export entry, labour mobility, learning-to-export
    JEL: F10 F14 J31
    Date: 2014
  2. By: Helble, Matthias (Asian Development Bank Institute)
    Abstract: Pacific economies are confronted with several structural constraints that limit their economic growth, most importantly their small size and remoteness from major world markets. In this paper we study the importance of transport connectivity for Pacific economies when participating in the world economy. The paper first describes the evolution of trade flows of the Pacific economies over the last decade, in terms of both trade in goods and services. It then introduces two new datasets. One contains all shipping connections within the Pacific and with the rest of the world; the second all flight connections within the Pacific and with the rest of the world. Combining both datasets with the corresponding trade flows allows us to assess the importance of connectivity for the Pacific's trade performance. Using a gravity model approach, we find that a direct shipping connection more than doubles trade in goods. Similarly, countries with direct flight connections to the sending country welcome twice as many tourists. The frequency of transport connections is similarly important. Using an instrumental variables approach we are able to confirm the robustness of our results.
    Keywords: trade integration; connectivity; transportation; trade costs
    JEL: F14 F15 R40
    Date: 2014–09–11
  3. By: Nicolás Reig (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: The objective of this paper is to analyze empirically the effects of foreign direct investment (FDI) on investment in Uruguay in a long run perspective (1960-2011). On the basis of varied theoretical and analytic elements, the descriptive analysis and one empirical study with the methodology of investment models and econometrics techniques, I analyze the total effect of FDI on economies capital formation, which are compose to the direct effect, that is the direct impact of FDI on capital accumulation, and the indirect effect, that is the impact of FDI on domestic investment. The last one effect can be positive when crowding in effect between FDI and domestic investment exist, negative if there are crowding out effect to domestic investment, or neutral if the domestic investment not be affected. The main results shows that exist evidence for a positive total effect of FDI on investment composed only by the positive direct effect of FDI, since the indirect effect has been neutral, without crowding in or crowding out effects between FDI and domestic investment in the long run. The positive direct effect can be explained principally by the increase of FDI in the country and its characteristics, while the neutral indirect effect is associate to a different factors likely the low domestic investment and the limited development of linkages or productive chains of multinational corporations to domestic firms.
    Keywords: Foreign direct investment, Multinational corporations, Investment, Domestic investment, Economic growth, Uruguay
    JEL: F21 F23 E22 O40
    Date: 2013–03
  4. By: Gianluca Orefice; Luiz Lima; Erik Figueiredo
    Abstract: This paper investigates the role of Regional Trade Agreements (RTAs) on bilateral international migration. By increasing the information on the potential destination country, RTAs may favour bilateral migration flows among member countries. Building on the gravity model for migration by Anderson (2011), our econometric strategy controls for the multilateral resistance to migration (Bertoli and Fernandez-Huertas Moraga, 2013) and solves the zero migration flows problem by using a censored quantile regression approach. Further, the endogeneity problem of RTAs in migration settlement is addressed by using IV censored quantile regression (Chernozhukov and Hansen 2008). Our results suggest that the presence of a RTA stimulates the migration flows among member countries. The pro-migration effect of RTAs is magnified if the agreement includes also provisions easing bureaucratic procedures for visa and asylum among member countries. Finally, we find a non-linear effect of RTAs across the quantiles of the distribution of migration settlements.
    Keywords: Migration;Gravity Equation;Censored Quantile Regression
    JEL: C13 C23 F22 F13
    Date: 2014–09
  5. By: Adriana Peluffo (Instituto de Economía Facultad de Ciencias Económicas Universidad de la República); Dayna Zaclicever (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: International trade is considered a vehicle for technology diffusion, which in turn can induce productivity growth. Particularly, trade may give domestic firms access to a larger variety and/or better quality of intermediate or capital inputs in which new technologies are embodied. However, the lack of sufficiently skilled labour, an issue especially relevant for small developing countries, may prevent firms from taking advantage of these technologies. Using a panel of Uruguayan manufacturing firms covering the period 1997-2008, we explore the impact of imported inputs on firms’ productivity and evaluate whether the effect is mediated by the firm’s absorptive capacity (proxied by the proportion of skilled labour). We apply an indirect (two-stage) approach by first estimating firms’ productivity and then using impact evaluation techniques to analyze causality between imported inputs and productivity. Our results show that imported intermediates have an enhancing effect on Uruguayan firms’ productivity and absorptive capacity plays a role on this effect.
    Keywords: productividad, importaciones, capacidad de absorción
    JEL: F14 D24 O33
    Date: 2013–07
  6. By: Blandford, David; Boisvert, Richard N.
    Keywords: Agribusiness, International Relations/Trade,
  7. By: Angelo Secchi; Federico Tamagni; Chiara Tomasi
    Abstract: The paper examines the causal effect of financial constraints on firm exports. We exploit a firm-level proxy of constraints based on credit ratings and available for a large panel of Italian exporting and non exporting firms. Our estimation strategy allows to cure for self-selection into exports and endogeneity of financial constraints. At the same time, we can control for unobserved firm fixed effects both in the selection and in the export equation, thus identifying the effect on exports of within firm changes in financial constraints status. We find that financial constraints produce a sizable reduction in the value of firm foreign sales
    Keywords: financial constraints, firm exports, self-selection, endogeneity
    Date: 2014–09–09
  8. By: Hirokazu Mizobata (Kyoto University); Masaaki Suzuki (Mizuho Research Institute)
    Abstract: This study empirically investigates whether the tax differentials between home and host countries differently affect multinationals' foreign investment and profit shifting decisions under contrasting international tax systems. In particular,we compare these differential tax effects between credit and exemption systems, using firm-level data on selected OECD countries. Based on the presented analysis, we find that tax differentials affect multinationals' foreign investment decisions to a larger degree under the exemption system than under the credit system when a home country's tax rate is larger than that in the host country.By contrast, our results show that the tax effects on profit shifting are similar under both these systems.
    Keywords: Corporate taxation, International tax system, Multinational firms
    JEL: H25 H87
    Date: 2014–09
  9. By: Maria Franco; Carlos Scartascini; Mariano Tommasi
    Abstract: The literature has identified that countries with higher levels of openness tend to present a larger government sector as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies that can mitigate trade-induced risks, many of which do not have the necessary implication of increasing public spending. Yet, many such policies require governmental capabilities not available to any country. For that reason, the relationship between openness and the size of government might be mediated by the quality of its public sector. While countries with weak government capabilities will tend to rely on spending expansions to deal with trade-induced volatility, countries with stronger governmental capabilities might address such challenges by more efficient and less costly means. The empirical analysis in this paper shows that the effect of openness on government consumption is mediated by the quality of government institutions.
    Keywords: Policy evaluation, Public Administration & Policy Making, Government size, Openness, Quality of policies, Government capabilities
    Date: 2014–08
  10. By: Olivier Walther (Department of Border Region Studies, University of Southern Denmark); Denis Retaillé (ADES Laboratory, University of Bordeaux)
    Abstract: The purpose of this exploratory article is to conceptualize the new types of boundaries born of globalization. The first part of the article summarizes the unique territorial characteristics of States and the methods that they use to affect international flows through control over their own national borders. The second section elaborates the fundamentals of an alternative model that is not reliant, as is classical spatial analysis, on points, lines and surfaces to represent movement. The article then presents three types of limits: the confines, the threshold and the horizon, which result from the divergence, convergence or intersection of flows.
    Keywords: space, mobility, borders, places, networks, globalization
    JEL: R10
    Date: 2014–05

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