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on International Trade |
| By: | Michal Paulus (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic); Eva Michalíková (Brno University of Technology, Brno and Anglo-American University, Prague); Vladimír Benáèek (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | The paper applies the gravity model of international trade in its analysis of German exports. The added value of our research is derived from the innovative shift in focus from the traditional gravity model specifications to the national level in order to interpret its estimations in a non-traditional way, but remain consistent with data structure and thus bring new insights into the analysis of German export performance. Our panel dataset includes German exports to 176 countries and 22 control variables including institutional factors over the period 1995-2011. We estimated a Random Effects model and also a Least Trimmed Squares model to control for the heterogeneity between countries. We distinguish two panel data specifications: time-series and cross-section. This allows us to examine long-term and short-term decision horizons. The general conclusion of our model is that German exporters are more prone to expand the trade to countries that are more distant from their European neighbourhood relative to the world average. Exports are sensitive to both the real exchange rate movements and the price levels of partner countries, even though their elasticity is significantly less than unity, which suggests that German exports would not be impacted very much if the Euro appreciated in real terms. The position of the Euro in German trade seems to be rather ambiguous since not all tests revealed its role as a catalyst. |
| Keywords: | Germany, export, gravity model, fixed effects, random effects, least trimmed squares |
| JEL: | C13 C23 F10 F12 F14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_19&r=int |
| By: | Escaith, Hubert |
| Abstract: | Global Value Chains are a dominant feature of today’s global economy, yet their empirical analysis is still incipient. Building on a recent OECD-WTO database and the results of an on-going research program at WTO, the present essay contributes at filling this gap, after introducing the main concpts used for measuring trade in value-added. The effective protection on industries resulting from tariff duties is analysed from the particular perspective of the international fragmentation of international supply chains. The calculation of effective protection rates provides important insights on the impact of nominal protection on international competitiveness in a trade in tasks perspective. Using Exploratory Data Analysis, the paper identifies also typologies of value-added traders according to economic characteristics and trade policy options. |
| Keywords: | International Trade; Tariff Policy; Effective Protection; Input-Output Analysis; Trade in Value Added; Competitiveness |
| JEL: | C38 C67 D24 F13 F23 O19 |
| Date: | 2014–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59891&r=int |
| By: | Stoyanov, Andrey; Yildiz, Halis Murat |
| Abstract: | In this paper we analyze the effect of the freedom to pursue preferential trade liberalization, permitted by Article XXIV of the GATT, on country's incentives to participate in multilateral negotiations and on the feasibility of the global free trade. We present a model in which countries choose whether to participate in preferential or multilateral trade agreements under political pressures from domestic special interest groups. We show that heterogeneity in political preferences across countries plays an important role for the relative merits of preferential and multilateral approaches to trade liberalization. On one hand, the opportunity to liberalize preferentially may be necessary to induce countries with strong political motivations to participate in multilateral free trade negotiations. On the other hand, when countries share similar political preferences, multilateral free trade that would have been politically supported otherwise becomes unattainable if countries can pursue preferential liberalization. |
| Keywords: | Free Trade Agreements, Multilateralism, Political Economy, Coalition-proof Nash Equilibrium |
| JEL: | C72 F12 F13 |
| Date: | 2014–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59871&r=int |
| By: | TSENG, ERIC |
| Abstract: | This paper extends on work done in the heterogenous-firms trade literature by addressing both heterogeneity in trade costs at the firm level as well as the existence of financial constraints. These extensions to the heterogenous-firms models are also applied in the context of a developing country. Utilizing a framework that endogenizes technological choice, the analysis shows that falling trade costs and improving credit markets (or less financial constraints) improve firm performance. Also, firm-level trade costs are shown to impact a firm’s ability to enter the export market, implying heterogeneity in trade costs at the firm level. The current results show inconclusive evidence for the effect of industry-level trade costs and financial constraints on the ability to enter the export market, but future additions to the robustness of the data in this working paper will address this issue. |
| Keywords: | International Trade Financial Constraints Firm Performance Trade Costs Heterogenous Firms, Financial Economics, International Development, International Relations/Trade, Productivity Analysis, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169786&r=int |
| By: | Sato, Hitoshi |
| Abstract: | This paper reviews the evolution of the economic and political relationship between the Association of Southeast Asian Nations (ASEAN) Member States and Japan since the 1970s, from the perspectives of trade in goods and services, foreign direct investment (FDI) and international labour movements. ASEAN economic integration is likely to yield mutual benefits for both ASEAN Member States and Japan. The larger ASEAN market will not only attract new Japanese FDI but also encourage Japanese multinational enterprises to relocate their affiliates, enhancing the agglomeration effect and productivity in the new host economy’s. To fully realize these gains, approrpirate monitoring of the integration process is important. Some extensions of the ASEAN Economic Community deserve consideration to enhance the effect of integration. They include further liberalization in services trade and FDI, arrangements on government procurement and expansion of the scope of international labour movements. |
| Keywords: | economic integration, regional cooperation, foreign investment, productivity, wages, human resources development, labour migration, trend, ASEAN countries, Japan |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:486388&r=int |
| By: | De Backer, Koen; Miroudot, Sébastien |
| Abstract: | World trade and production are increasingly structured around “global value chains” (GVCs). The last years have witnessed a growing number of case studies describing at the product level how production is internationally fragmented, but there is little evidence at the aggregate level on the prevalence of GVCs. The main objective of this paper is to provide for more and better evidence allowing to examine the position of countries within international production networks. We propose a number of indicators that give a more accurate picture of the integration and position of countries in GVCs, as well as a more detailed assessment of the value chain in four broad industries: agriculture and food products, motor vehicles, electronics and business services. JEL Classification: F14, F23, L16, L23 |
| Keywords: | global value chains, world trade |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141677&r=int |
| By: | Debashis Chakraborty (Indian Institute of Foreign Trade, New Delhi, India); Sacchidananda Mukherjee (National Institute of Public Finance and Policy, New Delhi, India) |
| Abstract: | Over the last decade cross-country trade and investment flows have increased considerably, which is often linked to climate change concerns. The present analysis attempts to understand the influence of trade and investment flows on CO2 emissions through panel data model estimation for a set of 181 countries over 1990-2009. The empirical findings confirm that both in case of lower and higher income countries, higher merchandise trade growth in general and service and merchandise export growth in particular leads to the higher CO2 emission growth in their territories. Both FDI inward and outward stock is found to be positively related to CO2 emission, reflecting a complementary relationship between the two. The empirical results indicate that the composition, scale and technology effects significantly influence the trade-climate change interrelationship |
| Keywords: | environment and trade, foreign direct investment, climate change; democracy |
| JEL: | F21 Q56 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ift:wpaper:1021&r=int |
| By: | Michal Paulus (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic); Eva Michalíková (Brno University of technoglogy, Brno and Anglo-American University, Prague) |
| Abstract: | The results generally confirm that Czech trade is oriented towards European countries and determined primarily by key economic factors of domestic and foreign GDP. The institutional variables remain largely insignificant, except corruption due tothe counterintuitive result that a higher corruption level in partner country should boost mutual trade. We interpret this finding as a result of “corruption matching”. The exclusion of outliers (LTS) significantly increases R-square and extends the number of significant determining factors (e.g. population or other institutional variables). The outliers, according to the LTS, are composed mainly of African, Asia and South or Central America states. |
| Keywords: | Czech Republic, export, gravity model, fixed effects, LSDV, least trimmed squares |
| JEL: | C13 C23 F10 F12 F14 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_32&r=int |
| By: | Brian McCaig; Nina Pavcnik |
| Abstract: | We study the effects of an export shock on labor allocation across household businesses and employers in the formal enterprise sector in a low-income country, Vietnam. We find that workers reallocate from household businesses to employers in the formal enterprise sector, with greater reallocation in industries that experience larger declines in U.S. tariffs on Vietnamese exports due to the United States-Vietnam Bilateral Trade Agreement. The reallocation is greater for workers in more internationally integrated provinces and in younger cohorts. Labor productivity of household businesses is relatively low, so our findings suggest this reallocation increases aggregate labor productivity. |
| JEL: | F14 F16 O17 O47 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20455&r=int |
| By: | Christian Rutzer (University of Basel) |
| Abstract: | This paper extends the firm heterogeneity model of Melitz (2003) by introducing a new concept of endogenous investments in process R&D. The novelty is that if a firm invests more in R&D its expected innovation return hazard rate stochastically dominates the return of less R&D investments. Due to this property, entrants invest more in R&D in response to trade liberalization. As a result, the aggregate productivity is affected by a reallocation of resources to more productive firms and a simultaneous increase in firms' investments in innovations, which is consistent with empirical findings. At the same time the firms' increased R&D investments lead to a sector distribution with a higher right-tail compared to the distribution prior to trade liberalization. Hence, the model gives an explanation for the empirically found differences in the distribution tails among sectors with different trade openness levels. Another advantage of this paper's framework compared to other trade models with innovations is its foundation in and extension of Melitz (2003). It enables most of the heterogeneous firms trade models to be extended by endogenous firm-level R&D in an empirically relevant and analytically tractable way. |
| Keywords: | Aggregate Level, Firm Size Distribution, Heterogeneous Firms, R&D Investments, Trade Liberalization |
| JEL: | F12 F13 O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2014/02&r=int |
| By: | Lejour, Arjan; Rojas-Romagosa, Hugo; Veenendaal, Paul |
| Abstract: | The increasing importance of global supply chains has prompted the use of analytical tools based on trade in value added – instead of traditional measures in gross value. We use this analytical framework to develop indicators that identify hubs and spokes in international supply chains. Using these indicators and the Global Trade Analysis Project (GTAP) databases we identify the importance of redirected value added trade and the hub and spoke relationships at the aggregate level and for specific highly integrated industries. JEL Classification: F1, C67, D57 |
| Keywords: | global input-output tables, global supply chains, hubs and spokes, trade in value added, vertical specialization |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141670&r=int |
| By: | Fernando Leibovici; Michael E. Waugh |
| Abstract: | This paper studies the dynamics of international trade flows at business cycle frequencies. We show that introducing dynamic considerations into an otherwise standard model of trade can account for several puzzling features of trade flows at business cycle frequencies. Our insight is that because international trade is time-intensive, variation in the rate at which agents are willing to substitute across time affects how trade volumes respond to changes in output and prices. We formalize this idea and calibrate our model to match key features of U.S. data. We find that, in contrast to standard static models of international trade, our model is quantitatively consistent with salient features of U.S. cyclical import fluctuations. We also find that our model accounts for two-thirds of the peak-to-trough decline in imports during the 2008-2009 recession. |
| JEL: | E0 F0 F1 F4 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20498&r=int |
| By: | Dautovic, Ernest; Orszaghova, Lucia; Schudel, Willem |
| Abstract: | The rapid increase in intra-industry trade (IIT) between the EU15 and Central, Eastern and South-Eastern European (CESEE) countries after the collapse of the Soviet Union indicates a structural change in the nature of trade in CESEE and a new process of transition and real convergence to the EU. Using a product-level trade flows database and employing linear and non-linear panel data specifications, this paper assesses the determinants of intra-industry trade between the EU15 as the main trading block and CESEE, which are further divided into the ‘new’ EU member states (NMS) and the EU candidate countries and potential candidates (CCPC). The analysis highlights the importance of intra-industry trade in terms of achieving real convergence. The paper finds that there exist some common factors driving IIT across the sample, such as the corporate tax rate, the flexibility of exchange rate regimes and the quality of political institutions. However, the determinants of IIT between NMS and EU15 countries deviate considerably from those between CCPC and EU15 countries. JEL Classification: F14, F15, F10 |
| Keywords: | Central and Eastern Europe, convergence criteria, economic integration, emerging Europe, EU candidate countries, horizontal IIT, intra-industry trade, panel data, real convergence, South-Eastern Europe, transition, vertical IIT, Western Balkan |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141719&r=int |
| By: | John Christopher Beghin (Iowa State University - Iowa State University); Anne-Célia Disdier (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Stéphan Marette (ECO-PUB - Economie Publique - Institut national de la recherche agronomique (INRA) : UMR0210 - AgroParisTech) |
| Abstract: | We extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them. We focus on standard-like non-tariff measures (NTMs) affecting cost of production and potentially enhancing demand by increasing product quality or reducing negative externalities. We apply the framework to the database of Kee et al. (2009) and derive ad valorem equivalents (AVEs) for NTMs. Half of the product lines affected by NTMs exhibit negative AVEs, indicating a net trade-facilitating effect of NTMs. Accounting for these effects significantly reduces previous measures of countries' trade policy restrictiveness obtained while constraining NTMs to be trade reducing. |
| Keywords: | Non-tariff measures ; Externalities ; Ad valorem equivalents ; Trade restrictiveness indices |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00961727&r=int |
| By: | Marin, Dalia; Schymik, Jan; Tarasov, Alexander |
| Abstract: | We incorporate trade in tasks à la Grossman and Rossi-Hansberg (2008) into a small open economy version of the theory of firm organization of Marin and Verdier (2012) to examine how offshoring affects the way firms organize. We show that the offshoring of production tasks leads firms to reorganize with a more decentralized management, improving the competitiveness of the offshoring firms. We show further that the offshoring of managerial tasks relaxes the constraint on managers but toughens competition, and thus has an ambiguous impact on the level of decentralized management and CEO wages of the offshoring firms. In sufficiently open economies, however, managerial offshoring unambiguously leads to more decentralized management and to larger CEO wages. We test the predictions of the model based on original firm level data we designed and collected of 660 Austrian and German multinational firms with 2200 subsidiaries in Eastern Europe. We find that offshoring firms are 33.4% more decentralized than non-offshoring firms. We find further that the average fraction of managers offshored reduces the level of decentralized management by 3.1%, but increases the level of decentralized management by 4% in industries with a level of openness above the 25th percentile of the openness distribution. Lastly, we find that one additional offshored manager lowers CEO wages relative to workers by 4.9%. |
| Keywords: | international trade with endogenous organizations; the rise of human capital; theory of the firm; multinational firms; CEO pay |
| JEL: | F12 F14 L22 D23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:21741&r=int |
| By: | Christodoulopoulou, Styliani; Tkacevs, Olegs |
| Abstract: | This study examines the marginal effects of traditional determinants of exports and imports with a focus on the role of price competitiveness in restoring external balances. It is a first attempt to compare marginal effects of various harmonised competitiveness indicators (HCIs) on both exports and imports of both goods and services across individual euro area countries. We find evidence that HCIs based on broader cost and price measures have a larger marginal effect (with some exceptions) on exports of goods. Exports of services are sensitive to HCIs in big euro area countries and Slovakia, where exports of services are also found more sensitive to competitiveness indicators based on broader price measures. Imports of goods and imports of services are quite insensitive to changes in relative prices. Finally, in some cases measures of fit indicate that a large unexplained residual part is present, implying that other non-price related factors might play an important role in driving foreign trade. JEL Classification: F14, F31, F41 |
| Keywords: | euro area, export, imports, price competitiveness, real exchange rate |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141736&r=int |
| By: | Monarch, Ryan (Board of Governors of the Federal Reserve System (U.S.)); Park, Jooyoun (Kent State University); Sivadasan, Jagadeesh (University of Michigan) |
| Abstract: | We construct a new linked data set with over one thousand offshoring events by matching Trade Adjustment Assistance program petition data to confidential data on U.S. firm operations. We exploit these data to assess how offshoring affects domestic firm-level aggregate employment, output, wages and productivity. Consistent with heterogenous firm models where offshoring involves a fixed cost, we find that the average offshoring firm is larger and more productive than the average non-offshorer. After initiating offshoring, firms experience large declines in employment (46.2 per cent), output (38.5 per cent) and capital (28.8 per cent) relative to their industry peers. We find no significant change in average wages or in total factor productivity measures for offshoring firms. These results are consistent across two separate difference-in-differences (DID) approaches, an instrumental variables approach, and a number of robustness checks. Thus, we find offshoring to be a strong substitute for domestic activity in this large sample of offshoring events. |
| Keywords: | Outsourcing; manufacturing; employment; trade; productivity; firm performance |
| JEL: | F14 F16 F23 |
| Date: | 2014–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1124&r=int |
| By: | Nti, Frank; Hendricks, Nathan |
| Keywords: | Banana exports, Preference erosion, EU banana policy, economic growth, Agricultural and Food Policy, International Development, International Relations/Trade, O100, F1, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170707&r=int |
| By: | Colin Hottman; Stephen J. Redding; David E. Weinstein |
| Abstract: | We estimate a structural model of heterogeneous multiproduct firms to examine the sources of firm heterogeneity emphasized in the recent trade and macro literatures. Using Nielsen barcode data on prices and sales, we estimate elasticities of substitution within and between firms, and use the estimated model to recover unobserved qualities, marginal costs and markups. We find that variation in firm quality and product scope explains at least four fifths of the variation in firm sales. Most firms are well approximated by the monopolistic competition benchmark of constant markups, but the largest firms that account for most of aggregate sales depart substantially from this benchmark. Although the output of multiproduct firms is differentiated, cannibalization is quantitatively important for the largest firms. This imperfect substitutability of products within firms, and the fact that larger firms supply more products than smaller firms, implies that standard productivity measures are not independent of demand system assumptions and probably dramatically understate the relative productivity of the largest firms. |
| JEL: | D24 F12 F14 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20436&r=int |
| By: | Douglas A. Irwin |
| Abstract: | Direct empirical evidence on whether domestic consumers or foreign exporters bear the burden of a country's import duties is scarce. This paper examines the incidence of U.S. sugar duties using a unique set of high-frequency (weekly, and sometimes daily) data on the landed and the duty-inclusive price of raw sugar in New York City from 1890 to 1930, a time when the United States consumed more than 20 percent of world sugar production and was therefore plausibly a "large" country. The results reveal a striking asymmetry: a tariff reduction is immediately passed through to consumer prices with no impact on the import price, whereas about 40 percent of a tariff increase is passed through to consumer prices and 60 percent borne by foreign exporters. The apparent explanation for the asymmetric response is the asymmetric response of demand: imports collapse upon a tariff increase, but do not surge after a tariff reduction. |
| JEL: | F13 F14 N11 N12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20635&r=int |
| By: | Gafarova, Gulmira; Perekhozuk, Oleksandr; Glauben, Thomas |
| Abstract: | As a result of some recent changes in the international wheat market, market shares of leading wheat exporters have recently altered. The Black Sea region countries – Kazakhstan, Russia and Ukraine (KRU) – have become important wheat exporters, since they implemented substantial restructuring in total agricultural production, consumption and trade in the 1990s, and subsequently achieved a massive increase in grain production during the 2000s. Consequently, the pricing behaviour of these countries has become a key issue. By applying the pricing-to-market model to annual wheat exports, this study analyses the price discriminating behaviour of the KRU exporters in foreign markets during 1996-2012. The results demonstrate that even though the KRU countries are able to exercise price discrimination in different importing countries, they usually face perfect competition in most destinations. |
| Keywords: | fixed-effects model, price discrimination, pricing-to-market, wheat export, Crop Production/Industries, Demand and Price Analysis, |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi14:187583&r=int |
| By: | Casieri, Arturo; De Gennaro, Bernardo; Medicamento, Umberto |
| Abstract: | Aim of this paper is to test weather or not the Network Analysis (NA) could possibly help to grasp Country level competitiveness in the International Trade Network (ITN) of a specific commodity. We focus over the positions that each Country occupies within the net of international trade exchanges assuming this could lead to competitive advantage. Starting from Ronald Burt's structural holes theory, we move forward analyzing the whole network evolution in the last years. We apply NA to the world network of valued exchange relationships of virgin olive oils building a 12 years time series of weighted directed networks (WDN). |
| Keywords: | olive oil, international trade network., Agribusiness, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164744&r=int |
| By: | Hong Chen; Lanieta Rauqeuqe; Shiu raj Singh; Yiqun Wu; Yongzheng Yang |
| Abstract: | International trade is vital for economic prosperity in Pacific island countries, but their trade performance has been weak over the past decade with the exception of resource-rich countries. Small country size and remoteness from global economic centers may have contributed to this relatively poor performance. However, the emergence of Asia as a global economic center presents Pacific island countries with an unprecedented opportunity to develop trade with Asia, particularly in tourism for a number of PICs. Moreover, if a strong two-way linkage is established between tourism and agriculture, Pacific island countries stands a better chance to improve broad-based growth. |
| Keywords: | Trade integration;Pacific Island Countries;Asia;Tourism;Agriculture;Patterns of trade;International trade;Econometric models;Pacific island countries, trade, tourism, agriculture, inclusive growth |
| Date: | 2014–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/158&r=int |
| By: | C. Fritz Foley; Kalina Manova |
| Abstract: | An emerging new literature brings unique ideas from corporate finance to the study of international trade and investment. Insights about differences in the development of financial institutions across countries, the role of financial constraints, and the use of internal capital markets are proving central in understanding international economics. The ability to access financial capital to pay fixed and variable costs affects choices firms make regarding export entry and operations, and, as a consequence, influence aggregate trade patterns. Financial frictions and the use of internal capital markets shape decisions that multinationals make regarding production locations, integration, and corporate governance. This article surveys this recent research with the goal of highlighting the main themes it explores, the key results it establishes, and the leading open questions it raises. |
| JEL: | F10 F20 F23 F36 G3 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20634&r=int |
| By: | Ferto, Imre; Podruzsik, Szilard; Balogh, Jeremiás |
| Keywords: | International Relations/Trade, |
| Date: | 2014–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa142:169092&r=int |
| By: | Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (University of California, San Diego); Song, Jae (U.S. Social Security Administration) |
| Abstract: | We analyze the effect of exposure to international trade on earnings and employment of U.S. workers from 1992 through 2007 by exploiting industry shocks to import competition stemming from China's spectacular rise as a manufacturing exporter paired with longitudinal data on individual earnings by employer spanning close to two decades. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings, face elevated risk of obtaining public disability benefits, and spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, and low attachment to the labor force. Low-wage workers churn primarily among manufacturing sectors, where they are repeatedly exposed to subsequent trade shocks. High-wage workers are better able to move across employers with minimal earnings losses, and are more likely to move out of manufacturing conditional on separation. These findings reveal that import shocks impose substantial labor adjustment costs that are highly unevenly distributed across workers according to their skill levels and conditions of employment in the pre-shock period. |
| Keywords: | trade flows, labor demand, earnings, job mobility, social security programs |
| JEL: | F16 H55 J23 J31 J63 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8514&r=int |
| By: | Bastola, Umesh; Marsh, Thomas L. |
| Keywords: | Trade, Foot and Mouth Disease, Reporting, Spatial tobit, Demand and Price Analysis, International Development, International Relations/Trade, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170539&r=int |
| By: | Kong, Wen; Knapp, Keith C. |
| Abstract: | International natural resources are typically subject to intense conflict, something likely to increase with population and economic growth. International cooperation over natural resources and the environment is the subject of a substantial literature (Kolstad), and is normally formulated as a game with given payoff functions for the individual countries. Within the literature on international rivers (the motivation here), Ambec and Sprumont (2002) assume a strictly increasing and strictly concave water benefit function, while Ambec and Ehlers (2007) assume that the benefit function exhibits satiation. Both of the papers are cooperative games. Ansink (2009) analyzes self-enforcing agreements on water allocation in a bargaining game. Fundamentally, the resource conflict might stem from the self-perception that an individual country will gain with additional resource allocation. This is reflected in the associated economic literature which is typically sector-level models with monotonic welfare functions. The overall objective of this work is to consider a broader setting such that cooperation over the natural resource might be joint self-interest for the political entities. The analytical framework is economic and political equilibrium when countries with joint resource access also trade produced goods/services. General equilibrium prices are functions of the water allocation, and these in turn identify country welfare as affected by water allocation. Political equilibrium is formulated as a game-theoretic problem. Here the welfare functions from the economic model are the payoff functions for individual countries, and standard solution concepts identify negotiated water allocations. A complete analytical solution is derived with this setup. Autarchic country welfare is increasing in water allocation as expected. However, with free trade the welfare functions can be non-monotone in some instances: starting from some initial allocation, it can be self-interest for one country to give up water to another country. Furthermore, there can be instances in which the highest level of welfare for one country is achieved with joint use of the resource as opposed to having a full allocation of the resource. At a minimum, where productivity coefficients imply a comparative advantage such that trade occurs, then the level of conflict as measured by the gains from an additional allocation of the resource will be reduced. |
| Keywords: | Natural resource allocation, welfare functions, international trade, game-theory., International Relations/Trade, Public Economics, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170591&r=int |