nep-int New Economics Papers
on International Trade
Issue of 2015‒03‒27
twenty-one papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Specialization Patterns in International Trade. By W. Steingress
  2. Exit from exporting: Does being a two-way trader matter? By Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
  3. The Impact of Political Economic Sensitivities on Trade Regimes among Politically Asymmetric Countries By Young-Han Kim; Hye-Young Lee
  4. Costs of trade and self-selection into exporting and importing: The case of Turkish manufacturing firms By Dalgic, Basak; Fazlioglu, Burcu; Gasiorek, Michael
  5. Pricing-to-market, Trade Policy, and Market Power By Nicolas Berman; Alan Asprilla; Olivier Cadot; Mélise Jaud
  6. Trade Creation and Diversion Under the Thailand-Australia Free Trade Agreement (TAFTA) By Sally Milton; M A B Siddique
  7. Asymmetric industrial energy prices and international trade By Misato Sato; Antoine Dechezlepretre
  8. Foreign Investment and Vertical Specialisation: An Analysis of Emerging Trends in Chinese Exports By Kishor Sharma; Wei Wang
  9. Economic regionalism and FDI inflows in the ASEAN region By Katalin Völgyi
  10. Buyer-Seller Relationships in International Trade: Do Your Neighbors Matter? By Fariha Kamal and Asha Sundaram
  11. Does the Home Bias Explain Missing Trade in Factors? By Robert Stehrer
  12. Credit constraints and the extensive margins of exports: First evidence for German manufacturing By Wagner, Joachim
  13. Could tariffs be pro-cyclcial? By James Lake; Maia K. Linask
  14. An Analysis of the World Market for Tobacco Production and International Trade and Its Importance for Turkey By Alper Sönmez
  15. Export behaviour of SMEs in the Swedish computer service industry By Falk, Martin; Hagsten, Eva
  16. International trade and military expenditure: Friends or foe? By André Jordaan
  17. Global water in a global world a long term study on agricultural virtual water flows in the world By Rosa Duarte; Vicente Pinilla; Ana Serrano
  19. Economic Determinants of Regional Integration in Developing Counties By Eduard Marinov
  20. Can Trade be good for the environment? By Lapan, Harvey E.; Sikdar, Shiva
  21. Determinants of FDI: A Componentwise Analysis By Burcak Polat

  1. By: W. Steingress
    Abstract: The pattern of specialization is key to understanding how trade affects the production structure of an economy. To measure specialization, I compute concentration indexes for the value of exports and imports and decompose the overall concentration into the extensive product margin (number of products traded) and intensive product margin (value of products traded). Using detailed product- level trade data for 130 countries, I find that exports are more concentrated than imports, specialization occurs mainly in the intensive product margin, and larger economies have more diversified exports and imports because they trade more products. Based on these facts, I assess the ability of the Eaton-Kortum model, the workhorse model of modern Ricardian trade theory, to account for the observed patterns. The results show that specialization through comparative advantage induced by technological differences can explain the qualitative and quantitative facts. The key determinants of specialization are: the degree of absolute and comparative advantage, the elasticity of substitution and geography.
    Keywords: Ricardian trade theory, specialization, import concentration, export concentration.
    JEL: F11 F14 F17
    Date: 2015
  2. By: Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
    Abstract: The aim of this paper is to investigate whether the probability of ceasing to export is lower for firms that simultaneously import intermediate inputs and export (vertically specialized firms à la Hummels et al., The Nature and Growth of Vertical Specialization in World Trade, 2001), once other firm characteristics are controlled for. On the basis of the estimation of a random-effects probit model with panel data, the authors find that the superior characteristics of this type of twoway trading firms (in terms of size, productivity, foreign ownership and skilled labor) explain their greater resistance to losing their status as exporters. However, for small firms, even when these distinctive features are controlled for, sourcing inputs from abroad plays an important role in continuing to export. Thus, it seems that small firms which are both importer of intermediates and exporter have an added advantage which enables them to confront the uncertainty of foreign markets in better conditions and translates to a lower likelihood that they will stop exporting.
    Keywords: probability of ceasing to export,firms' characteristics,imports of intermediate inputs,manufacturing firms
    JEL: F14
    Date: 2015
  3. By: Young-Han Kim (Sungkyunkwan University); Hye-Young Lee (Sungkyunkwan University)
    Abstract: This paper examines the impact of political economic sensitivities of the trade regime among politically asymmetric countries. Our concerns focus on the effects of firm’s lobbying activity in each country, not only tariff setting, but also on the trade regime's decision, especially considering the countries’ asymmetries in political economic sensitivities. We derive the following conclusion from our oligopolistic political economy model. If the country has a greater political bias, then the domestic government prefers to participate in unilateral trade regime or bilateral trade regimes. However, if the country’s political factor is insignificant, then the government prefers to carry out complete free trade. These results imply that Korea-China-Japan FTA negotiation could be accelerated when three countries’ political sensitivities are larger. Moreover, China, which has the greatest political sensitivity, would be more likely to participate in Korea-China-Japan FTA. We find that the sharp contrast between these results and the previous literature stems mainly from the asymmetries of political economic sensitivities when domestic governments determine the political tariff and trade regime.
    Keywords: Political Economic Sensitivities; Trade Regime; Lobbying; Strategic Trade Policy
    JEL: F12 F13 F15
    Date: 2014–12
  4. By: Dalgic, Basak; Fazlioglu, Burcu; Gasiorek, Michael
    Abstract: This paper focuses on self-selection into trade by exporting and importing firms, and on the presence of differential variable and sunk costs between exporters and importers across different categories of imports. In addition the authors consider the role of intensive and extensive margins with respect to products or countries. They use a rich and recent dataset for Turkish manufacturing firms for the period 2003-2010. This allows them to provide a comprehensive analysis of firm heterogeneity and the connection between firm-level performance and international trade. They provide evidence on the remarkable heterogeneity across firms where only-importers (importers) perform better than only-exporters (exporters). They detect a self-selection effect for both importing and exporting firms with a stronger effect for importers. The results suggest that the nature of sunk costs varies between importing and exporting activities with importers facing higher sunk costs. Tariffs represent a potentially important source of variation in the variable costs of trading. When taking the tariffs faced by firms into account, the authors find that the self-selection effect associated with sunk costs is still present but greatly reduced with a smaller reduction for importers compared to exporters.
    Keywords: firm heterogeneity,self-selection,sunk costs,exports,imports
    JEL: D24 F10 M20 L10
    Date: 2015
  5. By: Nicolas Berman (IHEID, The Graduate Institute of International and Development Studies, Geneva and CEPR); Alan Asprilla (University of Lausanne); Olivier Cadot (University of Lausanne and CEPR); Mélise Jaud (World Bank)
    Abstract: This paper studies the determinants of pricing-to-market at the firm-level, with a particular focus on the role of firm-specific and policy-induced market power. We use a large dataset containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries, over several years. We first show that firms in our sample do price to market, i.e. significantly adjust their unit values in home currency in response to exchange-rate variations. The extent of pricing-to-market is quantitatively limited but highly significant and homogenous across origin countries despite their very different levels of development. We then study how firm performance and trade policy affect pricing-to-market at the firm-level. We find that within a given origin-destination-product cell, large, high-performance exporters price more to market. More importantly, we identify significant effects of trade-policy instruments on pricing-to-market: Higher import tariffs on a destination market are associated with less pricing-to-market, whereas non-tariff measures are associated with more. These results are consistent with models where pricing-to-market is increasing in firm size and market share, and suggest that trade policy has deep effects on market power, the direction of which depends on the type of instrument used.
    Keywords: Pricing-to-market, trade policy, exchange rate, tariffs
    JEL: F12 F13 F14 F31
    Date: 2015–03–23
  6. By: Sally Milton (Business School, University of Western Australia); M A B Siddique (Business School, University of Western Australia)
    Abstract: This paper examines the impact of the Thailand-Australia Free Trade Agreement (TAFTA) on bilateral merchandise trade flows between Australia and Thailand. Using aggregated data, an augmented gravity model is estimated in an attempt to quantify the trade creation and/or diversion effects of the agreement. The model includes 178 countries and is estimated using panel data over the period 1998 to 2012. The inclusion of three variables describing TAFTA membership (i.e. intra-TAFFTA trade creation, exporter diversion and importer diversion) allows for the correct identification of Vinerian trade creation and trade diversion effects. The estimation method accounts for country heterogeneity, endogeneity and potential selection bias through the use of time-invariant, time-varying, country-specific and country-pair effects. Diagnostic checks indicate the presence of heteroscedasticity and serial correlation, which are controlled for in a fixed effects model with robust standard errors. The results indicate that the Thailand-Australia Free Trade Agreement has had modest trade creation effects, with little evidence to suggest that this is at the expense of trade diversion. The findings of the study have obvious policy implications.
    Date: 2014
  7. By: Misato Sato; Antoine Dechezlepretre
    Abstract: This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and covering 60% of global merchandise trade, we estimate the short-run effects of sector-level energy price asymmetry on trade. We find that changes in relative energy prices have a statistically significant but very small impact on imports. On average, a 10% increase in the energy price difference between two country-sectors increases imports by 0.2%. The impact is larger for energy-intensive sectors. Even in these sectors however, the magnitude of the effect is such that changes in energy price differences across time explain less than 0.01% of the variation in trade flows. Simulations based on our model predict that a †40-65/tCO2 price of carbon in the EU ETS would increase Europe’s imports from the rest of the world by less than 0.05% and decrease exports by 0.2%.
    Keywords: energy prices; international trade; carbon taxes
    JEL: F14 F18 Q56
    Date: 2015–03
  8. By: Kishor Sharma (Charles Sturt University); Wei Wang (TUC)
    Abstract: This paper contributes to the literature on the role of foreign direct investment and vertical specialisation in China’s growth trajectory. Globalisation of the world economy, together with well-developed physical infrastructure, and falling costs of transport and communications, has led to a significant increase in foreign investment into China to take advantage of its comparative advantage in labour intensive activities. Initially foreign investment came to simple assembly line (such as textile, clothing, electronic goods), but gradually China attracted FDI to sophisticated manufacturing industries (such as, ICT products, office and medical equipments etc), giving rise to vertical specialisation in its exports. Over one quarter of Chinese exports appears to be due to the expansion of back-and–forth transactions in vertically fragmented cross-border production process. Our analysis suggests that foreign input content in Chinese exports is high and rising. When the share of ‘foreign value-added’ in Chinese exports is taken into account the ‘actual trade balance’ is much lower than what ‘raw trade balance’ would indicate.As expected, share of foreign input content (vertical specialization) is high in Chinese exports of high-tech industries (such as, communications equipment, computers and other electronic equipment manufacturing etc) and low in labor-intensive industries such as (food and tobacco, textile, leather products, footwear etc). China’s increased involvement in global production network as an assembly centre has created an opportunity for other countries and countries in the region to benefit from its rapid integration with the world economy as its imports of parts and components have grown dramatically and most of these imports come from advanced economies such as US, Europe and newly industrialised economy. Clearly, China’s success story has led to win-win situation, improving welfare globally. As China is committed to continue to integrate with the world economy, its involvement in processing trade will continue. However, China will require to upgrade skills of its workforce through appropriate human capital development policy, otherwise higher wages (for semi-skilled workers) can wipe out its comparative advantage in low-end assembly trade brought about by globalisation. Policy makers in China should also need to think carefully how to embark on industrial upgrading to sustain growth.
    Keywords: Foreign Investment, Vertical Specialisation, China, Exports
    JEL: F19
    Date: 2014–07
  9. By: Katalin Völgyi (Institute of World Economics, Centre for Regional and Economic Studies, Hungarian Academy of Sciences)
    Abstract: The creation of free trade areas and the implementation of other forms of liberalization covering two or more countries to support the effective functioning and expansion of global value chains is not a new phenomena. Since the second half of the 1980s, the rapid expansion of global value chains due to the emerging North-South production sharing have been facilitated by the growing number of regional economic initiatives. In this study, the ASEAN’s regional economic initiatives/agreements are examined to assess the role of economic regionalism in the attraction of FDI and the spread of production networks.The economic cooperation of the ASEAN countries can be divided into two periods. Between 1976 and 1987, the ASEAN’s regional cooperation was aimed at achieving import substituting industrialization. Since the late 1980s, the regional initiatives and agreements of the ASEAN countries have been embedded in an export-oriented, FDI-dependent strategy. The shift in the regional economic cooperation from import substitution to export-oriented and FDI-based strategy was tiggered by the emerging market-led integration in the region. In the second half of the 1980s, efficiency-seeking FDI started to increase in Southeast Asia. Northeast Asian, American and European transnational corporations have created production networks in electronics, automotive and textile/garment industries in the ASEAN region.In the last two decades, the main aim of ASEAN’s regional agreements and intiatives was to transform the region into a single market and production base which is attractive for foreign direct invetments and where production networks can work efficiently. The birth and/or the acceleration of liberalization efforts of several regional initiatives/agreements (e.g. AFTA, AFAS, AICO, AIA) can be linked to the period of 1997-2003, when due to the Asian financial crisis, FDI inflows into the ASEAN region decreased and later stagnated. In 2003, ASEAN agreed on the creation of ASEAN Economic Community by 2015 which is based on former regional initiatives and agreements. The efforts for accelerating regional integration contributed to the fact that ASEAN managed to increase its share in global FDI inflows in the last decade. In 2012, FDI inflows into ASEAN reached a record level. Nowadays, ASEAN countries can draw together nearly as much FDIs as China does.
    Keywords: ASEAN, single market, production networks, foreign direct investments
    JEL: F15 F21
    Date: 2014–10
  10. By: Fariha Kamal and Asha Sundaram
    Abstract: Using confidential U.S. customs data on trade transactions between U.S. importers and Bangladeshi exporters between 2002 and 2009, and information on the geographic location of Bangladeshi exporters, we show that the presence of neighboring exporters that previously transacted with a U.S. importer is associated with a greater likelihood of matching with the same U.S. importer for the first time. This suggests a role for business networks among trading firms in generating exporter-importer matches. Our research design also allows us to isolate potential gains from neighborhood exporter presence that are partner-specific, from overall gains previously documented in the literature
    Keywords: exporter-importer match, trade networks, partner-specific spillovers
    JEL: F1 F14 L14 R12
    Date: 2015
  11. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract It is now widely accepted that when controlling for international differences in production techniques, the predictions from the Heckscher-Ohlin-Vanek (HOV) theorem are largely satisfied. However, a large amount of ‘missing trade’ remains. This paper makes two main contributions Firstly, the HOV is tested for various production factors including labour by educational attainment levels (high, medium, low) and capital. Secondly, the paper allows for a more general structure of final consumption in the HOV framework with technology differences, which reduces the amount of missing trade. We test for the effects of non-homothetic preferences, home bias of consumption and the role of distance at the country and industry level. We discuss how this can be tackled in the analytical framework both for a country’s total exports but also in a bilateral way. Results are shown both for total trade and bilateral trade. Empirically we draw on the recently released World Input-Output Database (WIOD) and show the extent of reductions in ‘missing trade’ caused by the various assumptions and restrictions on demand structures.
    Keywords: factor content of trade, Heckscher-Ohlin-Vanek, home bias, non-homothetic tastes, technology
    JEL: F1 F15 F19
    Date: 2014–12
  12. By: Wagner, Joachim
    Abstract: This paper uses a unique newly constructed data set to investigate for the first time the link between credit constraints and the extensive margins of exports in Germany, one of the leading actors on the international market for goods. In line with theoretical considerations and comparable results reported for a small number of other countries the author reports a negative impact of credit constraints on both the number of goods exported and the number of export destination countries that is both statistically highly significant and large from an economic point of view.
    Keywords: credit constraints,exports,extensive margins
    JEL: F14
    Date: 2015
  13. By: James Lake (Southern Methodist University); Maia K. Linask (University of Richmond)
    Abstract: Conventional wisdom says that tariffs are counter-cyclical. This paper analyzes the relationship between business cycles and applied tariffs using a disaggregated product-level panel dataset covering 72 countries between 2000 and 2011. Strikingly, and counter to conventional wisdom, we find that tariffs are pro-cyclical. This pro- cyclicality is driven by the pre-Great Recession tariff-setting behavior of developing countries on products not subject to temporary trade barriers and does not depend on the importer's perception of the global business cycle or whether the tariff is bound. Results are robust to controlling for variables emphasized in recent literature as important determinants of tariff setting.
    Keywords: Applied tariff, bound tariffs, binding overhang, tariff water, business cycle
    JEL: F13 F14 E32
    Date: 2015–02
  14. By: Alper Sönmez (Selcuk University)
    Abstract: This research will focus on the analysis of the world market for tobacco and its importance for Turkey covering the years 1990-2004 before the privatization of TEKEL. The reason for choosing specifically tobacco market is the importance of it for the specified years in Turkey. In these periods, as we will see in the analysis, Turkey was achieved to be the fifth largest tobacco producer and sixth largest tobacco exporter in the world. In addition, she was the world's leader in oriental tobacco production and exports. Although Turkey was a significant producer and exporter of oriental tobacco, the monetary value of tobacco imports and exports fluctuated over since 1960s and the composition of them had changed over the years. On the other hand, while oriental tobacco demand was decreasing in World and Turkey, other tobacco and cigarette imports had been growing considerably in Turkey. Turkey strategically placed between Europe and Asia was understandably seen as a key market by tobacco companies with increasing liberalization. However, various global issues such as serious economic problems in key markets in Asia and the former Soviet Union, decreases in support policies of the governments for the tobacco production with increasing liberalization in the World, decreasing demand of cigarettes especially in developed countries, and changes in politics of the countries on tobacco due to its negative effects on health have led to a serious drop in tobacco-cigarette production and consumption in the World, and therefore in Turkey. To sum up, these factors have negatively affected Turkey’s tobacco production and policies for the later years as foregone conclusion.
    Keywords: Tobacco Production, Tobacco Export,Tobacco International Trade, Turkey
    JEL: L66 Q17 F10
    Date: 2014–10
  15. By: Falk, Martin; Hagsten, Eva
    Abstract: Export participation of SMEs in Swedish computer services has increased rapidly over the last decade. Despite the increase, export participation rates of SMEs including micro enterprises remain rather low at 13 percent in 2010. Based on uniquely linked firm-level datasets with full coverage of micro enterprises and sole proprietors, this study investigates the determinants of export participation of Swedish SMEs in the computer service industry. Exports include both goods and services. Estimates based on the conditional logit model show a significantly positive relationship between initial labour productivity and the decision to export. An interesting and new finding is that the magnitude of the relationship between the probability to export and initial labour productivity is low once firm effects are controlled for. Surprisingly, the impact of labour productivity on exporting does not differ between micro enterprises and the remaining SMEs (10-249 employees). Furthermore, skill intensity is significantly related to the probability of exporting with low marginal effects. Overall, labour productivity and skill intensity only explain a small proportion of the export boom of Swedish software SMEs.
    Keywords: exports,productivity,computer service industry,human capital,conditional logit model
    JEL: F14
    Date: 2015
  16. By: André Jordaan (University of Pretoria)
    Abstract: The success of many developing countries, following an outward-orientated development strategy, became increasingly visible during the early 1980s. This stood in sharp contrast to the relatively unsuccessful inward-orientated, import substitution strategy followed by some other countries. East Asian and more recently, Latin American countries, showed the path in terms of following an outward-oriented strategy. Contrary to this, African countries have been hesitant in following this trend, with its share in world trade declining in general. Military expenditure, on the other hand, remains an important aspect in overall government expenditure in most African countries. The purpose of this paper is to determine what the effect is, if any, between the level of trade and military expenditure within a selection of African countries.The relationship between international trade and military expenditure is generally the cause of much debate. It seems that varying arguments are forwarded such as, trade enhances peaceful interaction, trade may influence and cause tension between trading partners and that trade simply has no effect in terms of conflict whatsoever. Different studies on different parts of the world (O’Loughlin and Anselin, 1996; Dorussen, 1999; Martin, Mayer and Thoenig, 2007; Dieter and Higgott, 2007; Yakolev, 2007; Mamoon and Murshed, 2009; Keshk, Reuveny and Pollins, 2010) seem to stimulate this debate of disagreement.This study attempts to empirically show the impact of trade openness on military expenditure as a proportion of gross domestic product. Using the data on a selection of southern African countries over a period of ten years, a linear panel regression model will be used to show the estimated effects of the included variables.
    Keywords: International trade, military expenditure, southern Africa
    JEL: F10 F14
    Date: 2014–07
  17. By: Rosa Duarte (Faculty of Economics and Business Studies, Universidad de Zaragoza); Vicente Pinilla (Faculty of Economics and Business Studies, Universidad de Zaragoza); Ana Serrano (Faculty of Economics and Business Studies, Universidad de Girona)
    Abstract: : Agricultural and food products have been increasingly exchanged during the last half century. With them, water has been virtually transferred among countries. Thus, this paper studies the evolution of virtual water flows on the long term, analyzing the main factors driving them by means of a Decomposition Analysis. In particular, our study points at a gradual increase in virtual water consumption as a result of agricultural and food products trade in the world from 1965 to 2010. At the global level, the increase in the volume of trade has been the main factor driving water consumption increase.
    Keywords: : Virtual water trade, Decomposition Analysis, Global environmental change
    JEL: F18 N50 N70 Q25 Q27
    Date: 2015–03
  18. By: Adem Öğüt (Selcuk University); Mehmet Mucuk (Selcuk University); Mustafa Tahir Demirsel (Selcuk University)
    Abstract: Foreign direct investment has an important role for developing countries. This study aims to investigate the impact of foreign direct investment on export in Turkey over the period of 1992:01-2014:05. The Johansen cointegration, impulse response functions and variance decomposition techniques are used in order to analyse the causal relationship between foreign direct investment and Turkish export. According to obtained findings there is a relationship between these variables in long term. In other words, foreign direct investment and export are cointegrated. Impulse response functions showed that Turkish export reacts positively to shocks in foreign direct investment. Empirical findings suggest that export is affected by foreign direct investment.
    Keywords: Foreign Direct Investment, Turkish Export, Turkish Economy
    JEL: A10 F00 F21
    Date: 2014–10
  19. By: Eduard Marinov (Economic Research Institute at BAS)
    Abstract: Regional integration is often viewed as a way to support development and economic growth in developing countries through the related with it benefits to trade and welfare. Economic integration theory goes through two development stages each of which addresses the political and economic context relevant for its time. The first stage is regarded as classic theory or static analysis and includes the traditional theories of economic integration that explain the possible benefits of integration. The second stage includes the new economic integration theories that are often referred to as dynamic analysis of economic arrangements. Besides these two, there is a third type of integration theories that deals with the effects, benefits and constrains of the economic integration arrangements of developing and least developed countries because in most cases, theories of economic integration and its benefits – of dynamic ones, but even more of static ones, are not fully applicable to integration agreements among developing and least developed countries. The current paper tries to come up with a conclusion on what parts of classic and new integration are applicable to the integration arrangement among developing countries and tries to summarize these theories in three main groups – general economic, market-related and trade-related factors and effects.
    Keywords: Economic Integration Theory, Developing Countries Integration
    JEL: F02 F15
    Date: 2014–07
  20. By: Lapan, Harvey E.; Sikdar, Shiva
    Keywords: Strategic environmental policy; leakage eect; intra-industry trade; transboundary pollution.
    JEL: F F18 H H23 Q Q56
    Date: 2014–09–23
  21. By: Burcak Polat (Eastern Mediterranean University)
    Abstract: For two decades, the questions of what really motivates foreign investors to invest in a certain country remains unanswered and a controversial issue. Moreover, previous studies have overwhelmingly treated FDI as unidimensional rather than multidimensional. In reality, FDI is rather multidimensional in that it is composed of components (equity capital, reinvested earnings, and other capital), each with its intrinsic characteristics in response to the same economic fundamentals, such as growth, institutional quality, exchange rate, taxes, market size, skill abundance, etc. Therefore, the main objective of this study was to seek the major determinants of each sub-component of the total FDI inflows in Turkey separately to avoid a distorted empirical prediction concerning the total FDI, which is greatly neglected in the FDI literature. Accordingly, we employed the panel corrected standard error model for annual data between 2003 and 2012. We found that reinvested earning and other capital as sub-components of FDI are responsive to the country risk indices of both Turkey and EU and to the tax measures of 2006. On the other hand, the variations in equity capital flows may be due to some other macroeconomic fundamentals. The responsiveness of the reinvested earning and other capital can be attributed to the nature of these components which are thought to be reversible in general.
    Keywords: FDI, Reinvested earnings, Other capital, Equity capital
    JEL: C23 F21 F29
    Date: 2014–05

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