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on International Trade |
| By: | Forslid, Rikard (Stockholm University and CEPR); Okubo, Toshihiro (Keio university); Ulltveit-Moe, Karen Helene (University of Oslo and CEPR) |
| Abstract: | This paper develops a theoretical model of trade and environmental emissions with heterogeneous firms, where firms make abatement investments and thereby affect their level of emissions. We show that investments in abatement are positively related to firm productivity and firm exports, while emission intensity is negatively related to firms' productivity and exports. The basic reason for these results is that a larger production scale supports more investments in abatement and, in turn, reduces emissions per output. We find that trade liberalization weeds out the least productive and dirtiest firms thereby shifting production away from relatively dirty low productive local firms to more productive and cleaner exporters. The overall effect of trade is therefore to reduce emissions. We test the empirical implications of the model on emission intensity, abatement and exporting using firm-level data from Sweden. The empirical results support our model. |
| Keywords: | Heterogeneous firms; environmental emissions; abatement; international trade |
| JEL: | F12 F14 F18 Q56 |
| Date: | 2015–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2015_0002&r=int |
| By: | Cletus C. Coughlin; Dennis Novy |
| Abstract: | Many studies have found that international borders represent large barriers to trade. But how do international borders compare to domestic border barriers? We investigate international and domestic border barriers in a unified framework. We consider a data set of exports from individual US states to foreign countries and combine it with trade flows between and within US states. After controlling for distance and country size, we estimate that relative to state-to-state trade, crossing an individual US state’s domestic border appears to entail a larger trade barrier than crossing the international US border. Due to the absence of governmental impediments to trade within the United States, this result is surprising. We interpret it as highlighting the concentration of economic activity and trade flows at the local level. |
| Keywords: | international border; intranational home bias; domestic border; gravity; trade costs; distance |
| JEL: | F10 F15 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57358&r=int |
| By: | Dennis Novy |
| Abstract: | This paper derives a micro-founded gravity equation based on a translog demand system that allows for flexible substitution patterns across goods. In contrast to the standard CES-based gravity equation, translog gravity generates an endogenous trade cost elasticity. Trade is more sensitive to trade costs if the exporting country only provides a small share of the destination country's imports. As a result, trade costs have a heterogeneous impact across country pairs, with some trade flows predicted to be zero. I test the translog gravity equation and find empirical evidence that is in many ways consistent with its predictions. |
| Keywords: | translog; gravity; trade costs; distance; trade cost elasticity; import share |
| JEL: | F11 F12 F15 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57367&r=int |
| By: | Céline Carrère; Christopher Grigoriou |
| Abstract: | Empirical studies on international trade extensively rely on the use of mirror trade statistics, i.e data reported by trading partners. However, while extensive reviews have been done on how to use mirror data to compensate poor quality data or to proxy transportation costs, very few has been done to see if and how the gap between the declared and mirrored disaggregated bilateral data could be used to capture informal cross border trade. Indeed, beyond the valid logistic reasons to explain why reported bilateral export flows from one country do not match the respective reported imports of its partner country, deliberate misreporting could significantly contribute to explain those discrepancies, either through misevaluation or misclassification of the imported goods, notably to evade tariffs and taxes. This paper proposes a review of the reasons for the gap between matched partner data, before investigating stylized facts from UN-COMTRADE data. Empirical analysis relying on econometrical panel data over a worldwide set of data at the 6 digits level evidences that discrepancies from the mirror data are not erratically driven. A statistically significant relationship between the gap and macroeconomic variables such bilateral distance, gdp per capita, average tariffs, foreign direct investments (FDI), implementation of regional trade agreements (RTA) have been evidenced. Based on these preliminary correlations, a probit has been run on orphan imports (imports reported by importing country without equivalent by exporting country) and predicts accurately up to 68 per cent of these misclassification cases. Thus, part of the gap can be predicted by macroeconomic variables, some of them suggesting a relationship between cross-border trade flows misreporting and fraud opportunities to evade tariffs and taxes. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unc:blupap:65&r=int |
| By: | Abigail Cooke; Thomas Kemeny; David Rigby |
| Abstract: | This paper examines the role of international trade, and specifically imports from low-wage countries, in determining patterns of job loss in U.S. manufacturing industries between 1992 and 2007. Motivated by intuitions from factor-proportions-inspired work on offshoring and heterogeneous firms in trade, we build industry-level measures of import competition. Combining worker data from the Longitudinal Employer-Household Dynamics dataset, detailed establishment information from the Census of Manufactures, and transaction-level trade data, we find that rising import competition from China and other developing economies increases the likelihood of job loss among manufacturing workers with less than a high school degree; it is not significantly related to job losses for workers with at least a college degree. |
| Keywords: | international trade; import competition; job loss; inequality; manufacturing |
| JEL: | F14 F15 F16 J31 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57869&r=int |
| By: | Baybars Karacaovali (University of Hawaii at Manoa) |
| Abstract: | In this paper, we examine trade policy determinants and trade reform in a devel-oping country setting by using a political economy of trade policy model where the government determines tariffs by balancing the political support from the producers against consumers and places a higher political weight on producersÂ’welfare relative to average citizens. We then expand it in several directions to guide our subsequent estimations at the three-digit industry level for Colombia between 1983 and 1998. We account for import substitution motives for protection and the government's move away from these policies leads to unilateral trade liberalization. We innovatively allow the political weights to vary based on key industry variables beyond a common denominator. The sectors with higher employment, labor cost, and preferential trade agreement (PTA) import shares receive a larger political weight compared to otherwise similar sectors. The novelty of our approach is estimating the effect of sectoral characteristics on protection Â…ltered through the political weights. We obtain more realistic estimates for these weights and provide some evidence for a slowing down effect of PTAs for trade liberalization. |
| Keywords: | Political economy of trade policy, trade liberalization, preferential trade agreements, empirical trade |
| JEL: | F13 F14 F15 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201501&r=int |
| By: | Amanda Jakobsson (Singapore Management University) |
| Abstract: | I present a dynamic general equilibrium model with heterogeneous firms that can innovate, learn how to export and then go on to become multinational firms. Entering the foreign market is a dynamic process where firms first learn how to export and then can learn how to adapt production to a low-wage location. In the model, innovation and international technology transfer are affected by both exporting and FDI which offers new insights about the effects of policy changes such as trade liberalization and intellectual property rights reform on consumer welfare. In particular, I disentangle the effects of such policy changes on reallocation of labor resources within regions: across activities (production, innovation, export-learning and adaption), across high-productivity and low-productivity firms, and within firms. I obtain higher rates of export-learning and FDI for high-productivity firms than for low-productivity firms. As a result, exporters are on average more productive than non-exporters, and multinational firms are on average more productive than exporters. In equilibrium, there are still some low-productivity exporters, some low-productivity multinational firms and some high-productivity non-exporters. Low-productivity firms export and engage in FDI but they are just not as successful in these activities as high-productivity firms. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:831&r=int |
| By: | Gregory Corcos; Delphine M. Irac; Giordano Mion; Thierry Verdier |
| Abstract: | How well does the theory of the firm explain the choice between intrafirm and arms' length trade? This paper uses firm-level import data from France to look into this question. We find support for three key predictions of property-rights theories of the multinational firm. Intrafirm imports are more likely: (i) in capital- and skill-intensive firms; (ii) in highly productive firms; (iii) from countries with well-functioning judicial institutions. We further bridge previous aggregate findings with our investigation by decomposing intrafirm imports into an extensive and intensive margin. Doing so we uncover interesting patterns in the data that require further theoretical investigation. |
| Keywords: | intrafirm trade; outsourcing; firm heterogeneity; incomplete contracts; inter-nationalization strategies; quality of institutions; extensive margin; intensive margin. |
| JEL: | F12 F19 F23 |
| Date: | 2013–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:42706&r=int |
| By: | Thomas Sampson |
| Abstract: | This paper develops an idea flows theory of trade and growth with heterogeneous firms. New firms learn from incumbent firms, but the diffusion technology ensures entrants learn not only from frontier technologies, but from the entire technology distribution. By shifting the productivity distribution upwards, selection on productivity causes technology diffusion and this complementarity generates endogenous growth without scale effects. On the balanced growth path, the productivity distribution is a traveling wave with an increasing lower bound. Growth of the lower bound causes dynamic selection. Free entry mandates that trade liberalization increases the rates of technology diffusion and dynamic selection to offset the profits from new export opportunities. Consequently, trade integration raises long-run growth. The dynamic selection effect is a new source of gains from trade not found when firms are homogeneous. Calibrating the model implies that dynamic selection approximately triples the gains from trade relative to heterogeneous firm economies with static steady states. |
| Keywords: | International trade; firm heterogeneity; technology diffusion; endogenous growth |
| JEL: | F12 O41 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60363&r=int |
| By: | Foellmi, Reto; Legge, Stefan; Tiemann, Alexa |
| Abstract: | This paper examines how trade liberalization affects investments in R&D at the firm level. We provide a model with entrepreneurs differing in their wealth endowment, causing them to rely differently on external funds. In the presence of capital market imperfections, this implies heterogeneous access to external funds such that poor entrepreneurs run smaller firms, are less likely to invest in R&D, and more likely to exit the market. Decreasing trade costs resulting from tariff reductions exacerbate these characteristics. Using firm-level panel data on seven Latin American countries for 2006 and 2010, we find support for our theoretical predictions. While recent studies emphasize a positive impact of trade liberalization on firms' productivity-enhancing activities, we provide novel evidence showing that financial constraints can impair the effect on R&D efforts. These results suggest that imperfect capital markets can prevent welfare gains from trade liberalization to materialize. |
| Keywords: | Financial constraints, innovation, trade liberalization |
| JEL: | F14 O12 O16 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2015:03&r=int |
| By: | Marc J. Melitz; Stephen Redding |
| Abstract: | The theoretical result that there are welfare gains from trade is a central tenet of international economics. In a class of trade models that satisfy a "gravity equation," the welfare gains from trade can be computed using only the open economy domestic trade share and the elasticity of trade with respect to variable trade costs. The measured welfare gains from trade from this quantitative approach are typically relatively modest. In this paper, we suggest a channel for welfare gains that this quantitative approach typically abstracts from: trade-induced changes in domestic productivity. Using a model of sequential production, in which trade induces a reorganization of production that raises domestic productivity, we show that the welfare gains from trade can become arbitrarily large |
| JEL: | F10 F11 F15 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60172&r=int |
| By: | Gavrilescu, Camelia |
| Abstract: | Romania’s international agrifood trade increased significantly during the last decade, and mostly after the EU accession. Since 1990, the Romanian agrifood trade balance showed an almost continuous increasing deficit trend until 2008. In four years only, the trend reversed and in 2013, for the first time in the last two and a half decades, the agrifood trade balance turned positive. The present paper is analyzing the evolution of the trade evolution and its structure, separating the agrifood products in three categories: agricultural commodities, primarily processed products and secondary processed products. A higher ratio of processed products in exports is indicating an increased competitiveness, resulting from higher unit values incorporating more added value, and showing, at the same time, a higher development degree of the country’s food industry. The results for total trade show that the processed products represented at most 46% of the Romanian exports, and at least 63% of imports, indicating a low-competitive structure of the agrifood trade. The analysis is detailed for intra and extra-EU trade and by main partners and groups of products. |
| Keywords: | agrifood trade, competitiveness, processed products |
| JEL: | F10 L69 N50 Q17 |
| Date: | 2014–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61729&r=int |
| By: | Swati Dhingra |
| Abstract: | Median voter theory applied to trade policy predicts positive tariffs in capital-abundant countries and negative tariffs in labor-abundant countries. Negative tariffs are rare, and this paper reconciles the median voter theory with observed protectionism across countries. By considering large countries, I show the optimal tariff is a sum of the median voter component and a positive in terms of trade component. Positive terms of trade effects raise tariffs in all countries, and can overcome the negative median voter component in labor-abundant countries. Testing the tariff prediction with cross-section and panel data from the 1990s, I show the median voter component is negative in labor-abundant countries and positive in capital-abundant countries. As expected, terms of trade effects raise tariffs across all countries and are stronger among non-members of the WTO. |
| Keywords: | Median voter; trade policy; Heckscher Ohlin; terms of trade; WTO |
| JEL: | F11 F13 F59 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60354&r=int |
| By: | Gerda Dewit (Department of Economics, Finance and Accounting, Maynooth University.); Dermot Leahy (Department of Economics, Finance and Accounting, Maynooth University.) |
| Abstract: | This paper examines how trade liberalisation affects innovation, profits and welfare in a reciprocal markets model when firms pre-commit to R&D investment. First, we show that, for a range of trade costs, there are multiple equilibria, implying that the path of trade liberalisation is not unique. Second, welfare at “incipient” trade always exceeds welfare in autarky. Third, we show that, if the effectiveness of R&D is sufficiently high, trade always yields higher welfare than autarky. These new results suggests that when firms, operating in an oligopolistic environment, strategically precommit to R&D, the welfare gains from trade liberalisation are enhanced. |
| Keywords: | Reciprocal Markets, Strategic R&D Investment, Trade Costs, Trade Liberalisation, Effectiveness of R&D |
| JEL: | F12 F13 F15 L13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n257-15.pdf&r=int |
| By: | Carlo Altomonte; Tommaso Aquilante; Gábor Békés; Gianmarco I. P. Ottaviano |
| Abstract: | We use a representative and cross-country comparable sample of manufacturing firms (EFIGE) to document patterns of interaction among firm-level internationalization, innovation and productivity across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom). We find strong evidence of positive association among the three firm-level characteristics across countries and sectors. We also find that the positive correlation between internationalization and innovation survives after controlling for productivity, with some evidence of causality running from the latter to the former. Our analysis suggests that export promotion per se is unlikely to lead to sustainable internationalization because internationalization goes beyond export and because, in the medium-to-long term, internationalization is driven by innovation. We recommend coordination and integration of internationalization and innovation policies ‘under one roof’ at both the national and EU levels, and propose a bigger coordinating role for EU institutions. |
| Keywords: | Internationalization; innovation; firm-level data; exports; foreign direct investment; outsourcing |
| JEL: | F13 F23 O31 O38 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60275&r=int |
| By: | Alessandro Nicita; Marina Murina |
| Abstract: | Agriculture plays a fundamental role in the development prospects of many developing countries, especially those at the lower end of the development process for which export earnings are largely related to the export performance of their agricultural sector. Although the last few decades have seen a progressive trade liberalization, market access for agricultural products is increasingly determined by a wide array of regulatory measures. The increase in the use of such measures has been largely driven by non-trade policy objectives such as consumers’ demand for quality and safety of products and to the needs of agri-food businesses to streamline food production chains. Still, regulatory measures have a critical role in determining market access conditions as compliance with them is often a sine-qua-non condition for exporting to developed countries markets. From a trade perspective one of the most important aspects of such regulatory measures is their potential distortionary effect as their cost of compliance is often asymmetrical across countries. Using the UNCTAD's TRAINS database on non-tariff measures, this paper utilizes an econometric model to investigate the effect of the European Union’s sanitary and phytosanitary (SPS) measures across 21 broad categories of agricultural goods. The findings indicate that SPS measures result in relatively higher burdens for lower income countries but that membership in deep trade agreements seems to reduce the difficulties related to compliance with SPS measures. Overall, the additional trade distortionary effect of the European Union SPS measures is quantified in a reduction of lower income countries’ agricultural exports of about 3 billion $US (equivalent to about 14 percent of the agricultural trade from lower income countries to the European Union). These results are consistent with the hypothesis that while many middle and high income countries have the internal capacity to comply with SPS measures, lower income countries do not. In broader terms, these results may be interpreted as an indication that technical assistance is helpful for lower income countries to meet compliance costs related to SPS measures. Further progress with well-targeted technical assistance projects, both at the bilateral and multilateral levels, could generate considerable gains for lower income countries. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unc:blupap:68&r=int |
| By: | Fabrice Defever; Alejandro Riaño |
| Abstract: | This paper presents a simple model of subsidies with export share requirements (ESR) in a heterogeneous firm environment. A two-country general equilibrium version of the model with a single 100% ESR is calibrated using firm-level data from the 2002 wave of the Business Environment and Enterprise Performance Survey collected by the World Bank for China. The calibrated model is used to gauge the change in subsidies with ESR that is consistent with the fall in the share of ‘pure exporters’, firms exporting all their output, observed in China, from 25.7% in 2002 to 11.1% in 2013. Our results indicate that a 6.9% reduction in the ad-valorem subsidy rate available to firms that export all their output is consistent with the observed fall in their share of exporting firms. Expenditure in subsidies (as a share of value-added) falls by 66% and welfare in China increases by 1.76% while real income in the rest of the world falls by 0.59%. |
| Keywords: | Trade Policy; Export Subsidies; Export Share Requirements; China |
| JEL: | F12 F13 O47 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60357&r=int |
| By: | Alessandro Nicita; Marcelo Olarreaga; Peri Silva |
| Abstract: | It has been long recognized that in the presence of market power, positive import tariffs can be optimal. The rationale is that higher tariffs reduce import demand, which in the presence of inelastic export supply from the rest of the world allows the importing country to increase its terms of trade. Indeed, there is empirical evidence suggesting that countries often set tariffs to exploit their market power when they have policy space to do so. However, optimal tariff-setting often results in a negative externality for trading partners. Such externalities create incentives for trading partners to cooperate within a negotiating framework such as the World Trade Organization (WTO) or regional trade agreements. Indeed, there is large empirical evidence suggesting that WTO negotiations do facilitate cooperation in tariff-setting by providing a negotiating table to internalize terms-of-trade externalities. This paper empirically explores whether any cooperative behaviour in tariff-setting extends beyond the WTO accession process. In principle, the possibility of further cooperation is provided by the presence of policy space in regard to tariffs within the WTO framework. Indeed, a key aspect of the WTO process is the negotiation of bound tariffs, rather than applied tariff levels. WTO members can apply tariffs below the bound, if they choose to do so. The difference between the tariff that a country applies at the border and the country’s commitments to other WTO members is referred to as “tariff water”, or “binding overhang”. In principle, tariff waters provide the policy space for country to set their tariff at non-cooperative levels. The findings of this paper suggest that countries do cooperate both during the accession process and beyond it. However, non-cooperative tariff-setting is observed in the presence of sufficiently large amounts of tariff water. We find that in the absence of tariff water, importing countries’ market power tends to be negatively correlated with applied tariffs, which is consistent with a cooperative tariff-setting. On the other hand, in the presence of tariff water, the relationship between importers’ market power and tariffs tends to become positive, suggesting a tendency towards non-cooperative tariffs. However, the positive correlation between importers’ market power and tariffs is only observed when levels of tariff water are above 20 percentage points. In the presence of moderate levels of tariff water, WTO members tend to set their tariffs cooperatively. One possible explanation for setting tariffs at non-optimal levels in the absence of legal constraints is the fear of retaliation from trading partners. We show that WTO members that have little to lose from retaliation tend to set tariffs non-cooperatively within their tariff waters, while WTO members that may have more to lose in case of retaliation are more likely to set tariffs cooperatively within their tariff waters. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unc:blupap:62&r=int |
| By: | Stratan, Alexandru; Moroz, Victor; Ignat, Anatolie |
| Abstract: | The purpose of this paper is to identify opportunities for modernization of the agri-food sector of the Republic of Moldova in the context of the recent developments in the international and regional trade. Participation of the Republic of Moldova in various foreign trade agreements was analyzed. The assessment of the agri-food export was performed in order to show the impact of the trade barriers introduced by Russian authorities over the most important groups of agri-food products. The impact of the recent trade barriers over the economic stability and country’s food security was analyzed. The possible directions of the agro-food sector modernization in order to overcome external trade shocks were discussed. |
| Keywords: | agriculture, agri-food export, trade barriers, commercial risks, modernization |
| JEL: | F13 Q17 Q18 |
| Date: | 2014–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61719&r=int |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60500&r=int |
| By: | Willis, Jonathan L. (Federal Reserve Bank of Kansas City); Ruhl, Kim J. |
| Abstract: | Models in which heterogeneous plants face sunk export entry costs are standard tools in the international trade literature. How well do these models account for the observed dynamics of new exporters? We document that new exporters initially export small amounts and — conditional on continuing in the export market — grow gradually over several years. New exporters are most likely to exit the export market in their first few years. We construct a dynamic discrete choice model of exporting and find that the standard model cannot replicate the behavior of new exporters: New exporters grow too large too quickly and live too long. We assess the quantitative importance of accounting for new exporter dynamics by extending the model to account for these facts. In this model, the present value of exporting falls relative to the baseline model. As a result, the entry costs needed to account for the data are three times smaller than in the baseline model |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp14-10&r=int |
| By: | Dennis Novy; Alan M. Taylor |
| Abstract: | We offer a new explanation as to why international trade is so volatile in response to economic shocks. Our approach combines the uncertainty shock idea of Bloom (2009) with a model of international trade, extending the idea to the open economy. Firms import intermediate inputs from home or foreign suppliers, but with higher costs in the latter case. Due to fixed costs of ordering firms hold an inventory of intermediates. We show that in response to an uncertainty shock firms optimally adjust their inventory policy by cutting their orders of foreign intermediates disproportionately strongly. In the aggregate, this response leads to a bigger contraction in international trade flows than in domestic economic activity. We confront the model with newly-compiled monthly aggregate U.S. import data and industrial production data going back to 1962, and also with disaggregated data back to 1989. Our results suggest a tight link between uncertainty and the cyclical behaviour of international trade. |
| Keywords: | Uncertainty shock; trade collapse; inventory; real options; imports; intermediates |
| JEL: | E3 F1 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60280&r=int |
| By: | Blyde, Juan; Iberti, Gonzalo; Mussini, Micaela |
| Abstract: | A growing number of studies that look at the relationship between innovation and exports find that more innovation tends to allow firms to export more. But very little is known about the heterogeneous impacts of innovation on exports. Since innovation is not a costless activity, it is important to know the specific situations in which a firm most likely needs to innovate to raise its exports. Using data from Chile, we combine information on innovation activities at the firm level with a rich dataset on exports at the transaction level. We find that the firms that engage in innovation tend to export more than other firms because they are able to sell goods and target markets that reward innovation. We show that the goods and markets in which innovative exporters outperform non-innovative exporters are those where innovation can lead to substantial differences in terms of quality. Innovative firms do not have an edge in exporting goods and in targeting markets that do not reward innovation. In particular, innovative firms do not outperform non-innovative firms when exporting goods and penetrating markets in which differentiation in terms of quality is not possible or not relevant. |
| Keywords: | Innovation, exports, product quality |
| JEL: | F10 F14 O30 |
| Date: | 2015–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61574&r=int |
| By: | Birte Pfeiffer; Holger Görg; Lucia Perez Villar |
| Abstract: | This paper analyzes the horizontal productivity effects of foreign direct investment (FDI) from industrialized and developing countries in 10 sub-Saharan African countries. We establish a unique data set by combining data from the World Bank Enterprise Surveys that allow us to distinguish between foreign investors from sub-Saharan Africa, Asia, Europe, the Middle East, and North Africa. We find strong evidence of horizontal productivity spillovers to domestic firms derived from foreign-firm presence. However, these effects are clearly dependent on domestic firms’ absorptive capacity. The largest productivity effects seem to be driven by investors from sub-Saharan Africa. Our analysis also shows that productivity effects differ according to the income level of host countries. Overall, the strongest productivity effects seem to materialize in lower-middle-income countries. These key findings emphasize the increasing importance of emerging investors, beyond the traditional players from industrialized countries, in sub-Saharan Africa |
| Keywords: | foreign direct investment, productivity, South–South firms, spillovers, sub-Saharan Africa |
| JEL: | F23 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1983&r=int |
| By: | Grodea, Mariana |
| Abstract: | Although the international milk market has registered a permanent demand increase, in the analyzed period (2002-2012), the dairy products export made by Romania, have registered relatively modest values, in meeting the demand. In this period, the Romanian trade with dairy products has known an ascending trend, and, especially after the year 2007, increases were massive o imports side, but low, in comparison with those made by the main players on the international market. The method used was the comparative analysis, in the period 2000-2012, of some sets of indicatives specific for the trade with dairy products, having as source of information international reports and studies elaborated by the European Commision, the data of FAOSTAT Agriculture and EUROSTAT. From the analyses made, as a conclusion we can observe the fact that Romania is a net importer of dairy products, this category of products presenting a strongly deficit balance (in 2012, the debt trade balance for milk and dairy products was of -157552 thousand i euros, decreasing from the preceeding year by 8.2%). |
| Keywords: | import, export, dairy products, trade balance |
| JEL: | F19 O52 Q17 |
| Date: | 2014–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61731&r=int |
| By: | Céline Carrère; Marco Fugazza; Marcelo Olarreaga; Frédéric Robert-Nicoud |
| Abstract: | Insights from a novel Trade-and-Employment theoretical framework are used to assess the relationship between openness to trade and unemployment. The impact of trade on unemployment depends on the covariance between comparative advantage and sector level labour market frictions. If the covariance is positive then trade liberalization may lead to an increase in unemployment, whereas if the correlation is negative then unemployment falls as the economy opens up to international trade. This prediction is empirically confirmed in a panel of 97 countries during the period 1995-2009. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unc:blupap:64&r=int |
| By: | Adam S. Posen (Peterson Institute for International Economics); Gary Clyde Hufbauer (Peterson Institute for International Economics); Cathleen Cimino (Peterson Institute for International Economics); Tyler Moran (Peterson Institute for International Economics); Jaana Remes (McKinsey Global Institute); Theodore H. Moran (Peterson Institute for International Economics); Lindsay Oldenski (Peterson Institute for International Economics); Barbara Kotschwar (Peterson Institute for International Economics); Jeffrey J. Schott (Peterson Institute for International Economics); Thomas F. McLarty (McLarty Associates); Eduardo M. Mora (Ambassador of Mexico to the United States) |
| Abstract: | Enactment of the North American Free Trade Agreement (NAFTA) among the United States, Mexico, and Canada 20 years ago advanced economic integration and started a public debate running to today about the merits of trade agreements in the era of globalization. As the first major trade accord between two wealthy countries and a relatively poor country, NAFTA created enormous opportunities in all three economies while generating anxieties about job losses and other kinds of displacement. Mexico and the United States have clearly reaped great gains at the aggregate level from their more open trading and investment relationship, but NAFTA is frequently invoked as a job-killing precedent by opponents of further US trade agreements with poorer countries. On July 15, 2014, the Peterson Institute for International Economics convened a conference, "Mexico and the United States: Building on the Benefits of NAFTA," to assess both benefits and costs derived from this important trade accord. In addition, the Institute's president, Adam S. Posen, has summarized his view of the impact in an op-ed essay. This report, part of a new series of publications called PIIE Briefings, collects recent writings by PIIE scholars on NAFTA, including some previously published papers and the transcript of the NAFTA conference. The Institute is proud that these papers and presentations are in keeping with our customary intellectual rigor, objectivity, and research-based conclusions. |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:iie:piiebs:piieb14-3&r=int |
| By: | Md Rajibul Ahsan; Son Ngoc Chu |
| Abstract: | Although the economic importance of environmental goods (EGs) is on a rise with increasing focus on global climate change issues, it is surprising that export growth of environmental goods is witnessing a downward trend in developing countries compared to developed countries. Researchers are divided over explanations for possible reasons: while some argue that lack of technological availability and insufficiency of the technology transfer isolate developing countries from the world market; others contend that country-specific ‘behind the border’ constraints prevent these countries from fully exploiting their export potential. This paper examines the potentials and constraints for Bangladesh EGs exports by applying a stochastic frontier gravity type model. The estimation results show that Bangladesh remained far from reaching its export potential during 2001 and 2007 despite there being an increased level of realization with the East Asian economies. The results also suggest that reducing ‘explicit beyond the border’ constraints by partner countries aided Bangladesh in attaining positive export growth between 2001 and 2007. |
| Keywords: | Environmental goods, Bangladesh, ‘behind the border’ constraints, ‘beyond the border’ constraints, stochastic frontier gravity model |
| JEL: | Q56 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2014-05&r=int |
| By: | Jesse Perla; Christopher Tonetti; Michael E. Waugh |
| Abstract: | This paper develops a dynamic model of trade and growth that we use to study how openness affects economic growth. In our model, heterogeneous firms choose to either produce with their existing technology or search within the domestic economy to adopt a better technology. These choices determine the productivity distribution from which firms can acquire new technologies and, hence, the equilibrium rate of technological diffusion. Opening to trade changes the relative profitability between high and low productivity firms through expanded export opportunities and foreign competition. These reallocation effects change the timing of when firms adopt new technologies and, thus, the rate of technological diffusion. This results in growth effects from openness via within-firm productivity improvements. |
| JEL: | A1 E1 F00 F43 O4 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20881&r=int |
| By: | Cristina Constantinescu; Aaditya Mattoo; Michele Ruta |
| Abstract: | This paper focuses on the sluggish growth of world trade relative to income growth in recent years. The analysis uses an empirical strategy based on an error correction model to assess whether the global trade slowdown is structural or cyclical. An estimate of the relationship between trade and income in the past four decades reveals that the long-term trade elasticity rose sharply in the 1990s, but declined significantly in the 2000s even before the global financial crisis. These results suggest that trade is growing slowly not only because of slow growth of Gross Domestic Product (GDP), but also because of a structural change in the trade-GDP relationship in recent years. The available evidence suggests that the explanation may lie in the slowing pace of international vertical specialization rather than increasing protection or the changing composition of trade and GDP. |
| Keywords: | International trade;Income;Gross domestic product;Demand;Global Trade Slowdown, Trade Elasticity |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/6&r=int |
| By: | Joao Santos Silva; Silvana Tenreyro; Kehai Wei |
| Abstract: | Understanding and quantifying the determinants of the number of sectors or firms exporting in a given country is of relevance for the assessment of trade policies. Estimation of models for the number of exporting sectors, however, poses a challenge because the dependent variable has both a lower and an upper bound, implying that the partial effects of the explanatory variables on the conditional mean of the dependent variable cannot be constant. We argue that ignoring these bounds can lead to erroneous conclusions and propose a flexible specification that accounts for the doubly-bounded nature of the dependent variable. We empirically investigate the problem and the proposed solution, finding significant differences between estimates obtained with the proposed estimator and those obtained with standard approaches. |
| Keywords: | bounded data; estimation of trade models; number of sectors |
| JEL: | C13 C25 C51 F11 F14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55937&r=int |
| By: | Holger Görg; Aoife Hanley; Adnan Seric |
| Abstract: | This paper looks at the importance of CSR considerations in the decision taken by a foreign affiliate of a multinational company about the choice of local suppliers. We investigate this empirically using unique firm level data for more than 2,000 foreign owned firms in 19 Sub-Saharan African countries. In terms of the role of global value chains we find that firms that import intermediates from their parent company abroad are more likely to implement CSR. Similarly, CSR plays a larger role for affiliates that export their output to developed countries. This suggests that the immediacy of the production chain provides a strong link to CSR: Intermediate inputs are imported from HQ and are then processed, together with locally sourced inputs, into a final good, which is then exported for consumption in developed countries. Furthermore, our results show that the determinants of environmental and social CSR activities are likely to be different |
| Keywords: | corporate social responsibilities, global supply chains, multinational companies |
| JEL: | F23 M14 O14 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1986&r=int |
| By: | TANAKA Kiyoyasu |
| Abstract: | Inward foreign direct investment affects industrial productivity in a host country through a wide range of channels as the presence of foreign firms is heterogeneous across industries, regions, and their characteristics such as entry mode and nationality. Because a wide variety of potential variables pose serious model uncertainty, I adopt a Bayesian-model averaging (BMA) approach to estimate the impact of foreign firms on industry- and prefecture-level productivity in Japan. I find that the foreign presence may contribute to industrial efficiency directly through their above-average productivity and indirectly through positive spillovers in intra-industry and local backward linkages. These positive impacts are likely to occur as a result of the foreign firms being owned by North American and European investors and the foreign firms making joint venture and merger and acquisition (M&A) investments to enter the Japanese market. By contrast, the foreign presence in distant downstream sectors and local upstream sectors may have negative impacts. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15009&r=int |
| By: | Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Grünwald, Luise |
| Abstract: | "Theoretical and empirical contributions on export behavior highlight the importance of firms' productivity and their levels of economies of scale on firms' export success in 'foreign' markets. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to competitors or upstreaming industries and they benefit from knowledge spillovers and other positive externalities. In such a stimulating environment, firms become more prone to be exporters. Beyond the role played by externalities, firms may benefit when they employ a diverse workforce and when the interaction of distinct knowledge and related problem-solving abilities increases productivity and secures export success. In this paper, we ask whether German firms (i. e., establishments) benefit from localization and urbanization externalities and face higher export proportions. We also control for a variety of establishment characteristics and workforce diversity. For this purpose, a comprehensive German data set that combines survey data and administrative data is used. While controlling for firm heterogeneity in a fractional response model, we provide evidence that manufacturing establishments and smaller establishments (up to 250 employees) benefit most from externalities and especially from knowledge spillover. There is weak evidence supporting the benefit of workforce diversity; however, that factor could explain between-establishment variation." (Author's abstract, IAB-Doku) ((en)) |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201503&r=int |
| By: | Francisco Costa; Jason Garred; João Paulo Pessoa |
| Abstract: | A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality. |
| Keywords: | China; trade; commodities-for manufactures; wages; employment; informality |
| JEL: | F14 F16 O17 Q17 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60282&r=int |
| By: | Ronald B Davies (University College Dublin); Benjamin H Liebman (St. Joseph’s University, Philadelphia); Kasaundra Tomlin (Oakland University, Rochester) |
| Abstract: | We investigate the response of US trucking firms to the removal of barriers to crossborder trucking under NAFTA. This was done via a program implemented in 2007, cancelled in 2009, and reinstated in 2011. We find that, unsurprisingly, the program’s start resulted in lower stock returns, particularly for border firms. However, later policy changes indicate that investors, and particularly those in US multinationals, viewed the pilot as beneficial. We use a model of endogenous exporting to show that this can arise from incorrect expectations of import competition. |
| Keywords: | Non-tariff Barriers; Services; Commercial Policy; Protection; Promotion; Trade Negotiations |
| JEL: | F13 F15 F20 |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201501&r=int |
| By: | Karim Barhoumi; Laurent Ferrara |
| Abstract: | This paper develops a new monthly World Trade Leading Indicator (WTLI) that relies on nonparametric and parametric approaches. Compared to the CPB World Trade Monitor’s benchmark indicator for global trade the WTLI captures turning points in global trade with an average lead between 2 and 3 months. We also show that this cyclical indicator is able to track the annual growth rate in global trade, suggesting that the recent slowdown is due in part to certain cyclical factors. This new tool can provide policy makers with valuable foresight into the future direction of economic activity by tracking world trade more efficiently. |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/20&r=int |
| By: | Colin Hottman; Stephen 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. |
| Keywords: | Firm heterogeneity; multiproduct firms; cannibalization effects |
| JEL: | L11 L21 L25 L60 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60448&r=int |
| By: | KUNO Arata |
| Abstract: | It is frequently argued that the Trade Adjustment Assistance (TAA) program works not only as a "remedial device" for compensating losers from trade liberalization, but also as a "political device" for easing protectionist pressure and materializing further liberalization. This paper presents new evidence from a survey experiment in Japan conducted in 2012 on the determinants of voters' preferences toward a remedial as well as a political device of TAA.<br />Our results suggest that: 1) When people are primed to think about the remedial aspect of TAA, "would-be losers" from trade are more likely to support TAA. 2) However, preference toward trade liberalization is not necessarily correlated with the same individual's preference toward TAA, implying that monetary compensation cannot mitigate people's non-economic concerns over liberalization. 3) If we primed respondents to think about the political device of TAA, a wide range of respondents, except for potential losers, become more supportive toward compensating trade losers.<br />This additional and conditional support toward TAA by some respondents including expected trade winners may be undermined, if they find the ex-post level of trade liberalization to be unsatisfactory. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:15002&r=int |
| By: | Masood, Amjad; Brümmer, Bernhard |
| Abstract: | Adopting a gravity framework and using data from 2010 to 2012 for 74 countries, we investigate whether the intensity of GlobalGAP standard adoption has a positive impact on EU banana import values. Intensity is measured by using number of GlobalGAP certified producers and hectares harvested under GlobalGAP certification. Using random and fixed effect estimation we find that intensity of certification, in terms of producers and hectares are associated with higher banana imports. However the estimated elasticities of imports in all models are less than 1 indication an inelastic response of imports to GlobalGAP certification intensity. This also indicates that the small farmers in developing countries who find it difficult to comply with the GlobalGAP standard requirements are driven out of the international banana market. For the gravity variables distance is found to have negative impact, but banana production in the exporting countries and presence of common language and RTA between the trading countries improves trade. |
| Keywords: | Banana imports of EU, Private food standard, GlobalGAP, Gravity model, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Industrial Organization, International Relations/Trade, Q17, Q18, O19, |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:187539&r=int |
| By: | Behrens, Kristian; Bougna, Théophile; Brown, W. Mark |
| Abstract: | We provide evidence for the effects of changes in transport costs, international trade exposure, and input-output linkages on the geographical concentration of Canadian manufacturing industries. Increasing transport costs, stronger import competition, and the spreading out of upstream suppliers and downstream customers are all strongly associated with declining geographical concentration of industries. The effects are large: changes in trucking rates, in import exposure, and in access to intermediate inputs explain between 20% and 60% of the observed decline in spatial concentration over the 1992–2008 period. |
| Keywords: | geographical concentration; input-output linkages; international trade exposure; transport costs; trucking rates |
| JEL: | C23 L60 R12 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10356&r=int |
| By: | Giovanni Facchini; Maurizio Zanardi |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/191190&r=int |
| By: | Marco Fugazza; Jan Hoffmann; Rado Razafinombana |
| Abstract: | This paper presents a unique database reporting the shortest liner shipping routes between any pair of countries for a reference sample of 178 countries over the 2006–2012 period. Computed maritime distances are retrieved using an original database containing all existing direct liner shipping connections between pairs of countries and the corresponding sea distance. The number of transhipments necessary to connect any country pair to allow for containerizable trade is also retrieved. The contribution of this database is threefold. First, it is expected to be a useful tool for a better appreciation of transport costs and access to regular container shipping services and their impact on trade. Secondly, as presented in this paper, it helps to describe and analyse the structure of the existing global network of liner shipping services for containerizable trade, i.e. most international trade in manufactured goods. Finally, our database is expected to facilitate the construction of a bilateral liner shipping connectivity index building on UNCTAD’s original work. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unc:blupap:61&r=int |
| By: | Auer, Raphael |
| Abstract: | Import competition from China is pervasive in the sense that for many good categories, the competitive environment that US firms face in these markets is strongly driven by the prices of Chinese imports, and so is their pricing decision. This paper quantifies the effect of the government-controlled appreciation of the Chinese renminbi vis-à-vis the USD from 2005 to 2008 on the prices charged by US domestic producers. In a panel spanning the period from 1994 to 2010 and including up to 519 manufacturing sectors, import price changes of Chinese goods pass into US producer prices at an average rate of 0.7, while import price changes that can be traced back to exchange rate movements of other trade partners only have mild effects on US prices. Further analysis points to the importance of trade integration, variable markups, and demand complementarities on the one side, and to the importance of imported intermediate goods on the other side as drivers of these patterns. Simulations incorporating these microeconomic findings reveal that a substantial revaluation of the renminbi would result in a pronounced increase of aggregate US producer price inflation. |
| Keywords: | China; exchange rate pass-through; inflation; monetary policy; price complementarities |
| JEL: | E31 E37 F11 F12 F14 F15 F16 F40 L16 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10344&r=int |
| By: | Chaudhuri, Sarbajit |
| Abstract: | This paper shows that developing countries possess an inherent shock-absorbing mechanism that stems from their peculiar institutional characteristics and can lessen the gravity of detrimental welfare consequence of exogenous terms-of-trade disturbances in terms of a two-sector, full-employment general equilibrium model with endogenous labour market distortion. The supply of foreign capital in the economy is a positive function of the return to capital and a decreasing function of the degree of prevailing restrictions in the economy in the process of free inflow of foreign capital. The analysis leads to a couple of important policies that should be adhered to preserve this in-built system. Finally, it offers three important statistically testable hypotheses, empirical validation of which might have an important bearing on formulation of developmental policies in these countries. |
| Keywords: | Terms-of-trade shocks; Endogenous labour market imperfection; Supply function of FDI; Shock-absorbing mechanism; Social welfare; Developing countries; General equilibrium. |
| JEL: | D59 D6 D60 F21 J42 J52 |
| Date: | 2015–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61594&r=int |
| By: | Alberto Galasso; Mark Schankerman; Carlos J. Serrano |
| Abstract: | We study how the market for innovation affects enforcement of patent rights. We show that patent transactions arising from comparative advantages in commercialization increase litigation, but trades driven by advantages in patent enforcement reduce it. Using data on trade and litigation of individually owned patents in the United States, we exploit variation in capital gains tax rates across states as an instrument to identify the causal effect of trade on litigation. We find that taxes strongly affect patent transactions, and that trade reduces litigation on average, but the impact is heterogeneous. Patents with larger potential gains from trade are more likely to change ownership, and the impact depends critically on transaction characteristics. |
| JEL: | L81 E6 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:51080&r=int |
| By: | Andrea Gauselmann; Felix Noth |
| Abstract: | In our analysis, we consider the distribution of decision power over financing and investment between MNEs’ headquarters and foreign subsidiaries and its influence on the foreign affiliates’ financial restrictions. Our research results show that headquarters of multinational enterprises have not (yet) moved much decision power to their foreign subsidiaries at all. We use data from the IWH FDI Micro Database which contains information on corporate governance structures and financial restrictions of 609 enterprises with a foreign investor in Hungary, Poland, the Czech Republic, Slovakia, Romania and East Germany. We match data from Bureau van Dijk’s AMADEUS database on financial characteristics. We find that a high concentration of decision power within the MNE’s headquarter implicates high financial restrictions within the subsidiary. Square term results show, however, that the effect of financial constraints within the subsidiary decreases and finally turns insignificant when decision power moves from headquarter to subsidiary. Thus, economic policy should encourage foreign investors in the case of foreign acquisition of local enterprises to leave decision power within the enterprise and in the case of Greenfield investment to provide the newly established subsidiaries with as much power over corporate governance structures as possible. |
| Keywords: | corporate governance, financial restrictions, multinational firms, European post-transition economies |
| JEL: | F23 G11 G34 R11 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:3-15&r=int |
| By: | Max Nathan |
| Abstract: | In recent years, the economics of migration literature has shown a substantial growth in papers exploring host country impacts beyond the labour market. Specifically, researchers have begun to shift their attention from labour market and fiscal changes, towards exploring what we might call ‘the wider effects of migration’ on the production and consumption sides of the economy – and the role of high-skilled migrants in these processes. This paper surveys the emerging ‘wider impacts’ literature, including studies from the US, European and other countries. It sets out some simple, non-technical frameworks, discusses the empirical findings and identifies avenues for future research. |
| Keywords: | immigration; high-skill migrants; innovation; entrepreneurship; investment; trade; productivity; cities |
| JEL: | N0 R14 J01 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57370&r=int |
| By: | Mengel, Carolin; von Cramon-Taubadel, Stephan |
| Abstract: | In a meta-analysis of spatial price transmission (PT) literature we aim to test for the presence of distance and border effects on price transmission. We use PT estimates for 1189 cereal market pairs extracted from 57 studies and seek to explain them by airline distance and existence of a border. The findings indicate distance and border effects on both price cointegration and price transmission. A border separating two markets reduces the probability of cointegration of price series by 23% compared with markets located in the same country. 1000 kilometers of distance reduces the probability of cointegration by 7%. The speed of price adjustment is on average 13% slower in international than in intra-national market pairs. 1000 kilometers of distance within a country on average yields 6-20% slower price adjustment. Distance effects become negligible and economically insignificant for international market pairs. Maize price pairs are less often cointegrated compared to rice prices and cointegration is most prevalent for barley. Price transmission is slowest in wheat markets. In peer reviewed studies cointegration is more prevalent and price transmission is faster. However the explanation need not be a publication bias but can also result from higher quality methodologies. Moreover, we identify a set of model specifications that significantly affect price transmission estimates. The study contributes to the literature by presenting a first meta-analysis of spatial PT literature and providing insights into distance and border effects on price transmission. |
| Keywords: | meta-analysis, cointegration, spatial price transmission, distance, borders, developing countries, agricultural trade, cereals, rice, maize, wheat, Demand and Price Analysis, International Relations/Trade, C32, L11, Q11, Q17, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:170988&r=int |
| By: | Antoine Dechezlepretre; Matthieu Glachant |
| Abstract: | This paper analyses the relative influence of domestic and foreign demand-pull policies in wind power across OECD countries on the rate of innovation in this technology. We use annual wind power generation to capture the stringency of the portfolio of demand-pull policies in place (e.g., guaranteed tariffs, investment and production tax credits), and patent data as an indicator of innovation activity. We find that wind technology improvements respond positively to policies both home and abroad, but the marginal effect of domestic policies is 12 times greater. The influence of foreign polices is reduced by barriers to technology diffusion, in particular lax intellectual property rights. Reducing such barriers therefore constitutes a powerful policy leverage for boosting environmental innovation globally. |
| Keywords: | innovation; international technology diffusion; renewable energy policy; wind power |
| JEL: | O31 O42 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58155&r=int |
| By: | Iain Cockburn; Jean O. Lanjouw; Mark Schankerman |
| Abstract: | This paper studies how patent rights and price regulation affect how fast new drugs are launched in different countries, using newly constructed data on launches of 642 new drugs in 76 countries for the period 1983-2002, and information on the duration and content of patent and price control regimes. Price regulation strongly delays launch, while longer and more extensive patent protection accelerates it. Health policy institutions, and economic and demographic factors that make markets more profitable, also speed up diffusion. The effects are robust to using instruments to control for endogeneity of policy regimes. The results point to an important role for patents and other policy choices in driving the diffusion of new innovations. This project was initiated by Jean (Jenny) Lanjouw. Tragically, Jenny died in late 2005, but had asked us to complete the project. This took much longer than expected because it involved complete reconstruction of the data set and empirical work. It is essentially a new paper in its current form, but it remains an important part of Jenny’s legacy and a topic to which she devoted much of her intellectual and policy efforts. We hope she would be satisfied with our work which, for us, was a labor of love. |
| Keywords: | Patents; pharmaceuticals; diffusion; drug launches; price regulation |
| JEL: | I18 K19 L65 O31 O33 O34 O38 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60450&r=int |