nep-int New Economics Papers
on International Trade
Issue of 2014‒11‒17
24 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Firm age and the margins of international trade: Comparable evidence from five European countries By Wagner, Joachim
  2. Product Sophistication and Spillovers from Foreign Direct Investment By Katharina Eck; Stephan Huber
  3. Trade linkages and the globalisation of inflation in Asia and the Pacific By Raphael Anton Auer; Aaron Mehrotra
  4. Strategic trade policy for network goods oligopolies By Anomita Ghosh; Rupayan Pal
  5. European Integration and the Gains from Trade By Gianmarco I. P. Ottaviano
  6. Does Access to Foreign Markets shape Internal Migration? Evidence from Brazil By Laura Hering; Rodrigo Paillacar
  7. Virtual water trade and country vulnerability: A network perspective By Sartori, Martina; Schiavo, Stefano
  8. The Multiple Impacts of the Exchange Rate on Export Diversification By Daniel Goya
  9. Three Images of Trade: On the Place of Trade in a Theory of Global Justice By Risse, Mathias; Wollner, Gabriel
  10. The Opportunity Cost of Exporting By Alexander McQuoid; Loris Rubini
  11. The Critical Mass Approach to Achieve a Deal on Green Goods and Services: What is on the Table? How Much to Expect? By Jaime de Melo; Mariana Vijil
  12. Coercive Trade Policy By Vincent Anesi; Giovanni Facchini
  13. Contrasting the Perception and Response of Domestic Manufacturing Firms to FDI in Sub-Saharan Africa By Penelope Pacheco-Lopez
  14. Services Trade Restrictiveness Index (STRI): Computer and Related Services By Hildegunn Kyvik Nordås; Massimo Geloso Grosso; Frédéric Gonzales; Iza Lejárraga; Sébastien Miroudot; Asako Ueno; Dorothée Rouzet
  15. Implied Comparative Advantage By Hausmann, Ricardo; Hidalgo, Cesar A.; Stock, Daniel P.; Yildirim, Muhammed A.
  16. CGE analysis of the impact of foreign direct investment and tariff reform on female and male wages By Latorre, Maria C.
  17. Services Trade Restrictiveness Index (STRI): Distribution Services By Asako Ueno; Massimo Geloso Grosso; Iza Lejárraga; Hildegunn Kyvik Nordås; Sébastien Miroudot; Frederic Gonzales; Dorothée Rouzet
  18. Services Trade Restrictiveness Index (STRI): Legal and Accounting Services By Massimo Geloso Grosso; Hildegunn Kyvik Nordås; Frédéric Gonzales; Iza Lejárraga; Sébastien Miroudot; Asako Ueno; Dorothée Rouzet
  19. French Colonial Trade Patterns: European Settlement By Cristina Terra; Tania El Kallab
  20. International competition and firm performance : Evidence from Belgium By Jan De Loecker; Catherine Fuss; Johannes Van Biesebroeck
  21. Import competition, productivity and multi-product firms By Emmanuel Dhyne; Amil Petrin; Valerie Smeets; Frederic Warzynski
  22. The Influence of Oil Price Shocks on China’s Macroeconomy : A Perspective of International Trade By Shiyi Chen; Dengke Chen; Wolfgang K. Härdle;
  23. A practitioners' guide to gravity models of international migration By Michel Beine; Simone Bertoli; Jesús Fernández-Huertas Moraga
  24. The Natural Resource Curse in Post-Soviet Countries : The Role of Institutions and Trade Policies By Roman Horváth; Ayaz Zeynalov

  1. By: Wagner, Joachim (Leuphana University Lueneburg, Germany, and CESIS, KTH Stockholm, Sweden)
    Abstract: This note uses comparable representative data for manufacturing firms from five European countries (Germany, France, Italy, Spain, and the United Kingdom) to investigate the links between firm age and the participation of the firms in export, the share of exports in total sales, the number of countries exported to, and the participation in import. The big picture revealed is in line with the theoretical considerations. Older firms tend to be more often exporters and importers, they export to more different destination countries, and they export a higher share of their total sales in three out of five countries.
    Keywords: Exports; imports; firm age; trade margins; EFIGE data
    JEL: F14
    Date: 2014–09–24
  2. By: Katharina Eck (University of Munich); Stephan Huber
    Abstract: Foreign direct investment (FDI) in developing countries is often associated with higher economic growth due to knowledge and technology spillovers to local firms. One way how FDI speeds up growth is that it facilitates the manufacturing of more sophisticated products by local firms. So far, firm-level evidence is missing on how the presence of multinational firms affects the product sophistication of firms in a developing country. This paper aims to fill this gap. We compile an extensive firm-product-level dataset of Indian manufacturing firms which we complement with information on product sophistication and spillovers from FDI. We then explore different channels through which spillovers from multinationals to local Indian firms foster the manufacturing of sophisticated products. We find evidence that spillovers through supplier linkages strongly increase the manufacturing of sophisticated products in India.
    Keywords: Multinational Firms, Spillovers, Sophistication, Technological Change
    JEL: F23 O1 O3
    Date: 2014–05
  3. By: Raphael Anton Auer; Aaron Mehrotra
    Abstract: Some observers argue that increased real integration has led to greater co-movement of prices internationally. We examine the evidence for cross-border price spillovers among economies participating in the pan-Asian cross-border production networks. Starting with country-level data, we find that both producer price and consumer price inflation rates move more closely together between those Asian economies that trade more with one another, ie that share a higher degree of trade intensity. Next, using a novel data set based on the World Input-Output Database (WIOD), we examine the importance of the supply chain for cross-border price spillovers at the sectoral level. We document the increasing importance of imported intermediate inputs for economies in the Asia-Pacific region and examine the impact on domestic producer prices of changes in costs of imported intermediate inputs. Our results suggest that real integration through the supply chain matters for domestic price dynamics in the Asia-Pacific region.
    Keywords: globalisation, inflation, Asian manufacturing supply chain, price spillovers
    JEL: E31 F4 F14 F15
    Date: 2014
  4. By: Anomita Ghosh (Indira Gandhi Institute of Development Research); Rupayan Pal (Indira Gandhi Institute of Development Research)
    Abstract: We analyze strategic trade policy for differentiated network goods oligopolies under alternative scenarios, when there is export rivalry between two countries. We show that, under price competition without managerial delegation, it is optimal to tax (subsidize) exports, if network externalities are weak (strong). But, the oppos ite is true under price competition with relative performance based managerial delegation in firms. In contrast, under quantity competition, the optimal trade policy always involves subsidization of exports. Nonetheless, the optimal rate of export subsidy under quantity competition is always higher than that under price competition. We also show that, under quantity (price) competition without managerial delegation, trade policy interventions in the presence of sufficiently strong (weak or very strong) network externalities lead to higher social welfare of each exporting country compared to that under free trade. However, under quantity (price) competition with managerial delegation, trade policy interventions result in Pareto inferior outcomes always (unless network externalities are strong).
    Keywords: Strategic trade policy, network goods, relative performance based managerial delegation, price competition, quantity competition
    JEL: F12 F13 L13 L22 D21
    Date: 2014–09
  5. By: Gianmarco I. P. Ottaviano
    Abstract: This chapter discusses whether and how .new quantitative trade models.(NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed the potential of being used to supplement traditional 'computable general equilibrium' (CGE) analysis thanks to their tight connection between theory and data, appealing micro-theoretical foundations, and enhanced attention to the estimation of structural parameters. On the other hand, further work is still needed in order to fully exploit such potential.
    Keywords: Gains from trade, European integration, quantitative trade models, gravity equations, structural estimation
    JEL: F10 F15 F17
    Date: 2014–09
  6. By: Laura Hering (Erasmus University Rotterdam, the Netherlands); Rodrigo Paillacar (University of Cergy-Pontoise, France)
    Abstract: This paper investigates how internal migration is a affected by Brazil's increased integration into the world economy. We analyze the impact of regional differences in access to foreign demand on sector-specific bilateral migration rates between the Brazilian states for the years 1995 to 2003. Using international trade data, we compute a foreign market access indicator at the sectoral level, which is exogenous to domestic migration. A higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels: higher wages and new job opportunities. Our results show that both channels play a significant role in internal migration. Further, we find a heterogeneous impact across industries according to their comparative advantage on the world market. However, the impact of market access is robust only for low-educated wor kers. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.
    Keywords: Regional migration, international trade, market access, Brazil
    JEL: F16 R12 R23
    Date: 2014–07–07
  7. By: Sartori, Martina; Schiavo, Stefano
    Abstract: In this paper, we analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that more openness makes countries more dependent on foreign food suppliers and especially more susceptible to external shocks. Our evidence reveals that the increased globalization witnessed in the last 30 years is not associated with the increased frequency of adverse shocks (in either precipitation or food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to the interaction between the distribution of shocks and the network topology, we find that the world is more interconnected, but not necessarily less stable.
    Keywords: virtual water trade, vulnerability, complex network, shocks
    JEL: F14 F18 Q25 Q56
    Date: 2014–10
  8. By: Daniel Goya
    Abstract: There is evidence that suggests that one of the channels through which the exchange rate could have an impact on growth is export product diversification. I distinguish between the variety and concentration dimensions of export diversification and review the theoretical and empirical literature relating these two dimensions to the level and the volatility of the exchange rate. Using disaggregated trade data for a long panel of countries, I investigate these relationships employing an econometric methodology that allows for heterogeneity of coefficients across countries, and discuss two sources of bias which are often overlooked. I find that the variety dimension of export diversification is positively related to a weaker exchange rate and negatively related to exchange rate volatility. These relationships seem to be stronger for goods with higher technological intensity. I do not find a clear relationship between the exchange rate and the concentration of exports.
    Keywords: export diversification, variety, concentration, exchange rate, exchange rate volatility, pooled mean group.
    JEL: F14 F40 O30
    Date: 2014–10–03
  9. By: Risse, Mathias (Harvard University); Wollner, Gabriel (London School of Economics and Political Science)
    Abstract: Economic theory teaches us that it is in every country's own best interest to engage in trade. Trade therefore is a voluntary activity among consenting parties. On this view, considerations of justice have little bearing on trade, and political philosophers concerned with matters of global justice should stay largely silent on trade. According to a very different view that has recently gained some prominence, international trade can only occur before the background of an existing international market reliance practice that is shaped by states. On this view, trade is a shared activity among states, and all participating states have in principle equal claims to the gains from trade. Trade then becomes a central topic for political philosophers concerned with global justice. The authors find fault with both of those views and argue instead for a third view about the role of a trade in a theory of global justice. That view gives pride of place to a (non-Marxian) notion of exploitation, which is developed here in some detail.
    Date: 2014–02
  10. By: Alexander McQuoid (Florida International Universtiy); Loris Rubini (Universidad Catolica de Chile and Universidad Carlos III de Madrid)
    Abstract: Recent evidence suggests that firms face tradeoffs between serving domestic and foreign markets. We advance this literature by first differentiating between two types of exporters, transitory and perennial exporters, and then documenting differential behaviors for these firms. Using data on Chilean firms, we find a negative correlation (-0.30) between domestic and foreign sales for transitory exporters, but a mild positive correlation (+0.14) for perennial exporters, with an overall correlation of -0.19. To address these facts, we build a model that combines a linear demand system a la Melitz and Ottaviano (2008) with decreasing returns to scale in production and shocks to demand and productivity. The key departure is that costs can no longer be separated and treated in isolation across markets. While a positive productivity shock increases both foreign and domestic sales, a positive foreign demand shock increases exports but decreases domestic sales. We then calibrate the model and find that the model matches the data well, generating correlations of the right sign for each type of exporter and accounts for nearly 80% of the overall correlation. To evaluate the economic significance, we consider the counterfactual experiment of reducing trade costs. Contrary to exisiting studies, decreasing trade costs has on average positive effects on firms’ domestic sales. Furthermore, while markups are higher for exporters than non-exporters, markups within a firm tend to decline when firms start exporting. Both results would be absent in a model where markets are treated independently.
    Date: 2014
  11. By: Jaime de Melo (Fondation pour les Etudes et Recherches sur le Développement International (FERDI)); Mariana Vijil (DG Treasury, French Ministry for the Economy and Finance and FERDI)
    Abstract: At the Davos forum of January 2014, a group of 14 countries pledged to launch negotiations on liberalising trade in ‘green goods’ (also known as `environmental goods’(EGs)), focussing on the elimination of tariffs for an ‘APEC list’ of 54 products. The paper shows that the ‘Davos group’, with an average tariff of 1.8%, has little to offer as countries have avoided submitting products with tariffs peaks for tariff reductions. Even if the list were extended to the 411 products on the ‘WTO list’, taking into account tariff dispersion, their tariff structure on EGs would be equivalent to a uniform tariff of 3.4%, about half the uniform tariff-equivalent for non EGs products. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 percent. However, because of the strong complementarities between trade in Environmental Goods and trade in Environmental Services, these should also be brought to the negotiation table even though difficulties in reaching agreement on their scope are likely to be great
    Keywords: Environmental Goods, Environmental Services, Doha Round, APEC, Davos Initiative, Tariff Reductions
    JEL: F18 Q56
    Date: 2014–08
  12. By: Vincent Anesi; Giovanni Facchini
    Abstract: Empirical evidence suggests trade coercion exercised unilaterally is significantly less likely to induce concessions than coercion exercised through an international organization. In this paper we build a two-country model of coercion that can provide a rationale for this finding, and forhow “weak” international institutions might be effective, even if their rulings cannot be directly enforced. In particular we show that if coercion is unilateral, the country requesting the policychange will demand a concession so substantial to make it unacceptable to its partner, and a trade war will ensue. If the parties can instead commit to an international organization (IO), compliance is more likely, because the potential IO ruling places a cap on the Foreign government's incentives to signal its resolve.
    Keywords: GATT, WTO, Dispute Settlement, Political Economy. JEL classification: F12, F16, L11
    Date: 2014
  13. By: Penelope Pacheco-Lopez
    Abstract: This paper uses the data set from the fourth survey by UNIDO of manufacturing firms in Sub-Saharan Africa to identify whether foreign direct investment affects the behaviour of local firms with respect to investment, product innovation and process innovation. We look at the perception and response of 1,140 manufacturing firms in 9 sectors in 19 countries. Using Probit models the results suggest that, once controlling for firm's characteristics, there is a marked difference between perception and reality. The presence of foreign investment has not affected the behaviour of the vast majority of domestic firms in terms of their investment, production of similar products to foreign firms, production of different products to avoid competition or adopt similar production technologies.
    Keywords: FDI; investment; technology; Sub-Saharan African countries
    JEL: O14 O55
    Date: 2014–10
  14. By: Hildegunn Kyvik Nordås; Massimo Geloso Grosso; Frédéric Gonzales; Iza Lejárraga; Sébastien Miroudot; Asako Ueno; Dorothée Rouzet
    Abstract: This paper presents the services trade restrictiveness indices (STRIs) for computer services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for computer services and captures regulations in force in 2013. The scores range between 0.08 and 0.34, with a sample average of 0.18. Explicit barriers to trade in computer services are rare, but the sector is subject to a number of economy-wide restrictions facing all sectors. Among these, restrictions on movement of people (mode 4 in GATS terminology) make the largest contribution to the index value, followed by regulatory transparency issues. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.
    Keywords: services trade, services trade restrictions, computer services, regulation
    JEL: F13 F14 K33 L86
    Date: 2014–11–04
  15. By: Hausmann, Ricardo (Harvard University and Santa Fe Institute); Hidalgo, Cesar A. (MIT and ISCV, Valparaiso); Stock, Daniel P. (Harvard University and MIT); Yildirim, Muhammed A. (Harvard University)
    Abstract: Ricardian theories of production often take the comparative advantage of locations in different industries to be uncorrelated. They are seen as the outcome of the realization of a random extreme value distribution. These theories do not take a stance regarding the counterfactual or implied comparative advantage if the country does not make the product. Here, we find that industries in countries and cities tend to have a relative size that is systematically correlated with that of other industries. Industries also tend to have a relative size that is systematically correlated with the size of the industry in similar countries and cities. We illustrate this using export data for a large set of countries and for city-level data for the US, Chile and India. These stylized facts can be rationalized using a Ricardian framework where comparative advantage is correlated across technologically related industries. More interestingly, the deviations between actual industry intensity and the implied intensity obtained from that of related industries or related locations tend to be highly predictive of future industry growth, especially at horizons of a decade or more. This result holds both at the intensive as well as the extensive margin, indicating that future comparative advantage is already implied in todays pattern of production.
    JEL: F10 F11 F14 O41 O47 O50
    Date: 2014–01
  16. By: Latorre, Maria C.
    Abstract: This study analyzes the impact on male and female wages of tariff reform and the reduction of regulatory barriers faced by domestic and foreign firms operating in business services. The study applies the model to Tanzania and develops a data set that distinguishes labor and wages by gender for 52 sectors and four skill categories. The model is the first to incorporate modern trade theory to assess the gender implications of trade reform. Given that the Dixit-Stiglitz framework results in productivity gains from additional varieties of services, the analysis finds that real wages increase across all worker categories. However, the increase in wages is higher for males than for females, because business services use males more intensively than females. The most skilled (female and male) workers, who are also the most intensively used in the business services sectors, benefit more from the real increases in wages. The model illustrates that as the development process continues and developing countries become more business service oriented, these sectors demand more educated workers and their wages will increase relative to those of unskilled workers. The policy conclusion from this model is that it is crucial to invest in the education of females so their human capital increases and their skills are more marketable in business services and other more technologically modern occupations. Otherwise, the wage gap between males and females would likely widen further.
    Keywords: Economic Theory&Research,Labor Policies,Labor Markets,Gender and Health,Housing&Human Habitats
    Date: 2014–10–10
  17. By: Asako Ueno; Massimo Geloso Grosso; Iza Lejárraga; Hildegunn Kyvik Nordås; Sébastien Miroudot; Frederic Gonzales; Dorothée Rouzet
    Abstract: This paper presents the services trade restrictiveness indices (STRIs) for distribution services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for distribution services and captures regulations in force in 2013. The scores range between 0.02 and 0.40, with a sample average of 0.13. It is observed that the regulatory profile differs across countries. Restrictions on foreign ownership and other market entry conditions significantly contribute to the results for almost half of the countries covered by the STRI. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.
    Keywords: services trade, distribution services, services trade restrictions, regulation
    JEL: F13 F14 K33 L81
    Date: 2014–11–04
  18. By: Massimo Geloso Grosso; Hildegunn Kyvik Nordås; Frédéric Gonzales; Iza Lejárraga; Sébastien Miroudot; Asako Ueno; Dorothée Rouzet
    Abstract: This paper presents the services trade restrictiveness indices (STRIs) for the regulated professions of legal and accounting services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, China, India, Indonesia, Russia and South Africa. This report presents the first vintage of indicators for legal and accounting services and captures de jure regulations in force in 2013. The STRI supports the view that legal and accounting services are subject to a relatively high level of regulation. Restrictiveness for legal services ranges from 0.11 to 0.73, with an average of 0.31. Accounting and auditing services show an average of 0.3 and STRI values ranging from 0.13 to 1. The results provide useful policy insights, particularly in order to identify priorities for reform at the national and international levels. Notably, in the case of legal and accounting services, easing a few prominent restrictions could result in a significantly more liberal and competitive market environment.
    Keywords: services trade, legal services, auditing services, services trade restrictions, regulation, accounting services
    JEL: F13 F14 K33 L84
    Date: 2014–11–04
  19. By: Cristina Terra; Tania El Kallab (Université de Cergy-Pontoise, THEMA)
    Abstract: We investigate how the colonial strategy through the settlement decision aected French trade patterns. In this regard, we construct a new database relying on various primary histori- cal sources containing information on the value of French sectoral trade between 1880 and 1913. Our results show that French colonies with more European settlements traded more with France, whereas the opposite is true for other colonies. We also investigate two channels through which European settlements might have aected the French trade pattern with colonies: institutions and networking. We nd that better institutions brought by European settlements had a nega- tive impact on trade with French colonies, while it promoted trade with British colonies. These results are consistent with the extractive nature of French trade relations with its colonies. As for networking, it increases overall French trade within French colonies but reduces it in other colonies.
    Keywords: European Settlement, Institutions, Networking, Trade, Colonization
    JEL: D85 N50 N53 N70 P16 P51
    Date: 2014
  20. By: Jan De Loecker (Princeton University, NBER and CEPR); Catherine Fuss (National Bank of Belgium and Université Libre de Bruxelles); Johannes Van Biesebroeck (University of Leuven and CEPR)
    Abstract: We evaluate the impact of international competition on firm-level perfor- mance in Belgium. In the manufacturing sector we consider both the impact of global competition through measures of import penetration and the impact of within-EU competitiveness using measures of relative labor cost. In selected manufacturing sectors we identify the strength of international competition through a firm's proximity to the border. In both instances, we consider the impact on a variety of performance dimensions to learn about the mechanisms and about firms' adjustment to these competitive pressures
    Keywords: Efficiency; Markup; Competition, Import penetration
    Date: 2014–10
  21. By: Emmanuel Dhyne (NBB, UMons); Amil Petrin (U. Minnesota); Valerie Smeets (Aarhus U.); Frederic Warzynski (Aarhus U.)
    Abstract: Using detailed firm-product level quarterly data, we develop an estimation framework of a Multi-Product Production Function (MPPF) and analyse firm-product level TFP estimations at various levels (industries, products). After documenting our estimation results, we relate productivity estimates with import competition, using firm and product level measures of import competition. We find that if productivity at the firm level tends to positively react to increased import competition, the multi-product firms response varies according to the relative importance of the product that faces stronger import competition in the firm’s product portfolio. When import competition associated to the main product of a firm increases, the firm tend to increase its efficiency in producing that core product, in which it has a productivity advantage. However, when the degree of foreign competition increases for non core products of a firm, it tends to lower its efficiency in producing those goods.
    Keywords: multi-product production function, productivity, import competition
    JEL: D24 L22 L25
    Date: 2014–10
  22. By: Shiyi Chen; Dengke Chen; Wolfgang K. Härdle;
    Abstract: International trade has been playing an extremely significant role in China over the last 20 years. This paper is aimed at investigating and understanding the relationship between China’smacro-economy and oil price fromthis newperspective. We find strong evidence to suggest that the increase of China’s price level, resulting fromoil price shocks, is statistically less than that of its main trade partners’. This helps us to understand the confused empirical results estimated within the SVAR framework and sheds light on recent data. More specifically, as for the empirical results, we find China’s output level is positively correlated with the oil price, and oil price shocks slightly appreciate the RMB against the US dollar. Positive correlation between China’s output and oil price shocks presumably results from the drop in China’s relative price induced by oil price shocks, which is inclined to stimulate China’s goods and service exports. The slight appreciation of the RMB could be justified by the drop in China’s relative price, which is indicated by economic theory. Moreover, constructing a simple model, our new perspective also helps us to understand the recent fact that together with the dramatic surge of the world oil price, while the oil imports of the other major countries (especially the largest oil import country US) in the world steadily decline or remain stable, China’s oil imports, in contrast, have kept rising steeply since the year 2004.
    Keywords: Oil price shocks, International trade, China’s macro-economy
    JEL: F41 Q43 Q48
    Date: 2014–10
  23. By: Michel Beine (CREA, Université de Luxembourg); Simone Bertoli (CERDI, University of Auvergne and CNRS); Jesús Fernández-Huertas Moraga (FEDEA and IAE, CSIC)
    Abstract: The use of bilateral data for the analysis of international migration is at the same time a blessing and a curse. It is a blessing since the dyadic dimension of the data allows researchers to address a number of previously unanswered questions, but it is also a curse for the various analytical challenges it gives rise to. This paper presents the theoretical foundations of the estimation of gravity models of international migration, and the main difficulties that have to be tackled in the econometric analysis, such as the nature of migration data, how to account for multilateral resistance to migration or endogeneity. We also review some empirical evidence that has considered these issues.
    Keywords: Gravity equation; discrete choice models; international migration
    JEL: F22 C23
    Date: 2014
  24. By: Roman Horváth (Institute of Economic Studies, Charles University); Ayaz Zeynalov
    Abstract: We examine the effect of natural resource abundance on economic performance during the 1996–2011 period in the 15 independent countries that formerly comprised the Soviet Union. These countries were a largely homogeneous group with respect to institutional development, liberalization and economic performance; however, these countries began to demonstrate marked differences from one another with respect to these factors during the transition, which has resulted in unique cross-section and time variation. Using several panel regression models that address the endogeneity issues, our results suggest that natural resources crowd out manufacturing sector unless the quality of domestic institutions is sufficiently high. Conversely, trade policies do not help convert the natural resource curse into a blessing.
    Keywords: natural resource curse, institutions, manufacturing, post-Soviet countries
    JEL: O11 O13 Q30
    Date: 2014–06

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