nep-int New Economics Papers
on International Trade
Issue of 2015‒04‒19
thirty-one papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Does input tariff reduction impact firms'export in the presence of import tariff exemption regimes ? By Vargas Da Cruz,Marcio Jose; Bussolo,Maurizio
  2. Export performance in developing countries: A comparative perspective By Ramesh C Paudel
  3. The impact of trade and investment liberalization on the wage skill premium: evidence from Vietnam By Kien Trung Nguyen
  4. Value of WTO Trade Agreements in a New Keynesian Model By Giovanni Ganelli; Juha Tervala
  5. Export specialization in services of the Visegrad countries By Joanna Stefaniak-Kopoboru; Joanna Kuczewska
  6. World trade and regional trade orientation in the context of forthcoming Transatlantic Trade and Investment Partnership By Elzbieta Czarny; Pawel Folfas
  7. Exporters and the Environment By J. Scott Holladay
  8. Global production sharing and the measurement of price elasticities in international trade By Prema-chandra Athukorala; Fahad Hassan Khan
  9. U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America By Sabina Dewan; Lucas Ronconi
  10. Global Value Chains: Implications for the Austrian economy By Veronika Kulmer; Michael Kernitzkyi; Judith Köberl; Andreas Niederl
  12. How to effectively support export activity By Anna Fornalska-Skurczynska
  13. Exchange rate policy and export performance in a landlocked developing country: The case of Nepal By Ramesh C Paudel; Paul J Burke
  14. Aid For Trade as finance for the Poor By Jaime de MELO; Laurent WAGNER
  15. Can trade liberalisation bring benefits to the war affected regions and create economic stability in post-war Sri Lanka? By Athula Naranpanawa; Jayathileka S Bandara
  16. Chinese Outwards Mercantilism – the Art and Practice of Bundling By Joshua Aizenman; Yothin Jinjarak; Huanhuan Zheng
  17. Thailand's Economic Integration with Neighboring Countries and Possible Connectivity with South Asia By Chirathivat, Suthiphand; Cheewatrakoolpong, Kornkarun
  18. Understanding Japan's Capital Goods Exports By THORBECKE, Willem
  19. Exploring multi-layer flow network of international trade based on flow distances By Bin Shen; Jiang Zhang; Qiuhua Zheng
  20. International food aid to Indonesia, 1950s-1970s By Pierre van der Eng
  21. Production Networks, Geography and Firm Performance By Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
  22. Systemic trade-risk of critical resources By Peter Klimek; Michael Obersteiner; Stefan Thurner
  23. Foreign exposure and heterogeneous performance of Italian firms: A survey of the empirical literature (1992-2014) By Valeria Gattai
  24. Comparative Advantage or Economic Policy? Stylized Facts and Reflections on Brazil’s insertion in the world economy – 1994-2005 By Armando Castelar Pinheiro; Regis Bonelli
  25. The impact of the global financial crisis on border-crossing mergers and acquisitions: A continental/industry analysis By Reddy, Kotapati Srinivasa
  26. The Geography of Development: Evaluating Migration Restrictions and Coastal Flooding By Desmet, Klaus; Nagy, David Krisztián; Rossi-Hansberg, Esteban
  27. Imports contents, value added generation and structural change in morocco: input output analysis By Ezzahid, Elhadj; Chatri, Abdellatif
  28. Does the Outsourcing Affect Labour Costs in Enterprises? Evidence from Firm-level Data By Anna Grzes
  29. The World Input-Output Database: Content, Concepts and Applications By Robert Stehrer; Los, Bart; Dietzenbacher, H.W.A.; Timmer, Marcel; Gaaitzen J. de Vries
  30. Mercantilism and China’s hunger for international reserves By Marcel Schroder
  31. Production Dependence on Imports of Russian Industry and Mechanism of Strategic Import Substitution By Berezinskaya, Olga; Vedev, Alexey; Larionova, Dina

  1. By: Vargas Da Cruz,Marcio Jose; Bussolo,Maurizio
    Abstract: In the last decade Morocco undertook substantial, if gradual, trade liberalization by reducing tariffs, reforming trade regulations and signing free and preferential trade agreements with several regions and countries, including the United States, Turkey, the European Union and Arab countries. This paper analyzes the impact of input tariff reduction on Moroccan exporting firms through the channel of intermediate goods. Gaining access to more varied and cheaper inputs can make exporting firms more competitive, and as a result they export more. To evaluate how this policy may impact firms'export performance, the paper analyzes the impact of input tariff reduction on different margins of trade with emphasis on export markets and product diversification. The identification of the effect of input tariffs on exports relies on a difference-in-difference estimator using heterogeneous access to import tariff exemption as a measure of different levels of exposure to input tariff reduction at the firm level. Overall, the analysis finds that firms that are relatively more exposed to input tariff perform better in those sectors with the largest input tariff reduction, with better access to markets, higher probability to survive when exporting new products in those sectors and higher export value growth.
    Keywords: Economic Theory&Research,Water and Industry,Trade Policy,Markets and Market Access,Free Trade
    Date: 2015–04–06
  2. By: Ramesh C Paudel
    Abstract: Landlockedness imposes additional costs on trade and reduces the international competitiveness. This paper examines the determinants of export performance of landlocked developing countries (LLDCs) compared to other developing countries using the standard gravity modelling framework. The results suggest that, despite recent trade policy reforms, the overall export performance of LLDCs is poorer than that of other developing countries because of the inherent additions trade cost associated with landlockedness. The conventional wisdom that export performance is aided by economic openness also applies to LLDCs, but the distance related trade costs has a greater negative impact on exports from LLDCs compared to the other developing countries. The immediate trade policy challenge for landlocked developing countries is therefore to create a more trade-friendly environment by improving the quality of trade-related infrastructure and logistics.
    Keywords: exports performance, trade models, landlocked countries
    JEL: F13 F11 O50
    Date: 2014
  3. By: Kien Trung Nguyen
    Abstract: This paper examines the impact of trade and investment liberalization on the wage skill premium between skilled and unskilled workers in Vietnamese manufacturing. The result from an econometric analysis using a firm-level dataset reveals the important role of trade liberalization as an impetus for narrowing the skill premium. There is also evidence that foreign investment has a significant effect on widening the wage skill premium. More importantly, export-oriented foreign investment is likely to play an important role in the determination of the wage skill premium in the Vietnamese manufacturing.
    Keywords: Wage skill premium, tariffs, firm ownership, trade and investment liberalization
    JEL: F14 F16
    Date: 2014
  4. By: Giovanni Ganelli; Juha Tervala
    Abstract: We revisit the question of the quantitative benefits of WTO trade agreements in a setup that is non-standard from the traditional trade policy point of view. We show that in a New Keynesian model, unilateral trade liberalization reduces welfare due to terms-of-trade deterioration, creating an incentive for a trade agreement. For realistic parameter values, the value of an agreement, which cuts tariffs by one percentage point, is 0.5% to 2% of consumption, much larger than in trade models. The intuition for this result hinges on some New Keynesian features of our framework, such as imperfect competition and endogenous labor supply.
    Keywords: World Trade Organization;International trade agreements;Terms of trade;Trade liberalization;Tariffs;Labor supply;Keynesian economics;Tariffs; terms of trade theory; trade agreement; trade liberalization; WTO
    Date: 2015–02–25
  5. By: Joanna Stefaniak-Kopoboru (University of Gdansk); Joanna Kuczewska (University of Gdansk)
    Abstract: The importance of services and the international trade in services is growing systematically. There are some reasons for that, especially the rapid development of IT technologies. This increase in the international trade in services is a global phenomenon, however there are some other specific issues, other than economic or technological, that might influence the trade in services in particular countries. As for the countries of the Central and Eastern Europe such a factor could be the accession to the European Union (EU). The objective of the paper is to analyse the export specialization of the Visegrad countries in the international trade in services and how it changed over seven years after the EU accession. The service sector comprises of a variety of highly heterogeneous economic activities and the diversity of services is also reflected in the international trade of particular countries. Generally the trade theories deal with trade of goods, but there are some attempts already to apply these theories for services. To find out the export specialization based on the comparative advantage in particular services, the main categories of services are analysed based on the adjusted RCA index assumptions. Analysis prepared in the paper is based on the balance of payment statistics provided by the WTO. The article is concluded by discussing the questions about the export specialization of particular countries and how it changed after the accession to the EU.
    Keywords: international trade, services, specialization, comparative advantage, Visegrad countries
    JEL: F14 F15
    Date: 2015–04
  6. By: Elzbieta Czarny (Warsaw School of Economics); Pawel Folfas (Warsaw School of Economics)
    Abstract: We analyse potential consequences of the forthcoming Trade and Investment Partnership between the European Union and the United States (TTIP) for trade orientation of both partners. We do it with the short analysis of the characteristics of the third wave of regionalism and the TTIP position in this process as well as the dominant role of the EU and the U.S. in the world economy – especially – in the world trade. Next we study trade orientation of the hypothetical region created in result of TTIP. We use regional trade introversion index (RTII) to analyze trade between the EU and the U.S. that has taken place until now to get familiar with the potential changes caused by liberalization of trade between both partners. We analyze RTII for mutual trade of the EU and the U.S. than we apply disaggregated data to analyze and compare selected partial RTII (e.g. for trade in final and intermediate goods as well as goods produced in the main sectors of economy like agriculture or manufacturing). The analysis of the TTIP region’s orientation of trade based on the historical data from the period 1999-2012 revealed several conclusions. Nowadays trade between the EU and the U.S. is constrained by the protection applied by both partners. Trade liberalization constituting one necessary part of TTIP will surely help to intensify this trade. Of special concern is trade with agricultural products which is most constrained and hardly will be fully liberalized even in a framework of TTIP. Simultaneously, both parties are even now trading relatively intensively with intermediaries, which are often less protected than the average of the economy for the sake of development of final goods’ production. The manufactured goods are as well relatively often traded, mainly in consequence of their poor protection after many successful liberalization steps in the framework of GATT/WTO. Consequently, we point out that in many respects the TTIP will be important not only for its participants but for the whole world economy as well. TTIP appears to be an economic and political project with serious consequences for the world economy and politics.
    Keywords: international trade, the European Union, the United States, TTIP
    JEL: F14 F15
    Date: 2015–04
  7. By: J. Scott Holladay (Department of Economics, University of Tennessee)
    Abstract: This paper documents a relationship between international trade and environmental performance at the plant level. Using a panel of establishment-level data from 1990-2006, I estimate the relationship be- tween export orientation, import competition and pollution emissions. I find a robust relationship between international trade and pollution levels. Exporters emit 9-13% less after controlling for output, but their is significant heterogeneity across industries. Import competition is associated with the exit of the smallest, most pollution intensive plants. There is no evidence that this result is caused by polluting firms relocating to countries with low levels of environmental regulation and importing back into the U.S.
    JEL: F1 Q5
    Date: 2015–02
  8. By: Prema-chandra Athukorala; Fahad Hassan Khan
    Abstract: This paper examines the implications of global production sharing for the measurement of price elasticities in international trade using a unique disaggregated dataset relating to US manufacturing imports. It is found that imports of parts and components are remarkably less sensitive to changes in relative prices and, consequently, the sensitivity of aggregate trade flows to relative prices tends to diminish as trade cuts ever more rapidly into the production process. This finding casts doubt on the validity of the conventional approach to trade flow modeling which lumps together parts and components and final goods as a homogeneous product.
    Keywords: global production sharing, trade elasticities, import demand function
    JEL: F10 F23 F41
    Date: 2014
  9. By: Sabina Dewan; Lucas Ronconi
    Abstract: This paper analyzes whether Free Trade Agreements (FTAs) signed between the United States and Latin American countries during the last decade produced higher enforcement of labor regulations. The paper computes before-after estimates of the effect of FTAs on labor inspections and exploits variation across countries using non-signers as a comparison group. The empirical strategy benefits from the fact that about half of Latin American countries have signed a trade agreement with the United States. Difference-in-differences estimates suggest that signing an FTA produced a 20 percent increase in the number of labor inspectors and a 60 percent increase in the number of inspections. The North American Free Trade Agreement (NAFTA), however, does not appear to have the same positive impacts on Mexico. The paper concludes with a discussion of these results.
    Keywords: Labor Policy, Trade Agreements, Social Security, Labor regulations, Free trade agreements, Labor inspections, Labor provisions, Labor inspectors, Labor law, Enforcement, Labor, Trade, Latin America
    Date: 2014–11
  10. By: Veronika Kulmer; Michael Kernitzkyi; Judith Köberl; Andreas Niederl
    Abstract: This study focuses on the implications of rising global value chains (GVCs) on international trade and analysis the impacts on small open economies. Small open economies rely heavily on international trade and are highly integrated in global production networks but have so far been hardly considered in the literature. On the example of Austria, an industrialized small open economy in central Europe, we addressed the role of small open economies in a globalized economy. Based on the WIOD database we apply network analysis and use GVC as well as competiveness indicators to measure the associated risks as well as benefits. Findings imply for Austria a sharp turn in the focus of trade policy away from the traditional gross trade perspective. Austria’s competitiveness has been strengthened considerably via the participation in GVCs since resource and endowment constraints have been overcoming easier and foreign inputs are used in the production processes efficiently enabling vast economies of scale. Results also reveal that the promotion of service oriented activities which are a main source of the domestic value added content in manufacturing exports is of key importance for Austria’s competitiveness on the global market. In particular we found a mutual integration of EU enlargement countries of 2004 and Austria: Austria’s intermediate exports are mainly characterized by high knowledge- and service-intensive manufacturing goods, while the EU enlargement countries of 2004 specialize in low-skilled employment and less knowledge intensive services.
    Keywords: Global value chains, international trade network, input-output modelling, value added in trade
    JEL: O52 F14 C67 O47
    Date: 2015–04
  11. By: Silvia ZAHARCO (The State Agrarian University of Moldova)
    Abstract: This paper presents a study of the development of foreign trade in agricultural products of the Republic of Moldova under the impact of EU integration. The agricultural sector has been and continues to be, traditionally, the main branch of the national economy. The average share of agriculture generates to12% of GDP; in this sector almost half of the working population works. Thus, the development of the agricultural sector directly affects the living standards of the people employed in agriculture. However, the development of agriculture depends largely on agricultural production possibilities of sale on foreign markets, it depends on foreign trade.
    Keywords: trade; integration; agri-food sector; cooperation agreement; export; import.
    JEL: F15 Q17
    Date: 2015–04
  12. By: Anna Fornalska-Skurczynska (University of Gdansk)
    Abstract: Export is crucial for every economy. It influences the level of economic growth, balance of payment and social welfare among many others. Therefore increase in exports becomes one of the main objectives of each government. This raises the question of how to support export activity of the companies in order to ensure the expected increase in export. Approaches towards this problem differ significantly. The fact that this support is covered mainly from public funds raises the question of effectiveness of such assistance. The aim of this paper is to investigate whether to support export activity at all and if so how to do it effectively. To achieve the goal of the article the author analyzed both Polish and foreign literature, with special emphasis on the newest trade theories. Author analyzes secondary data describing factors that determine export activity, describe profile of a company becoming an exporter and investigates actual connection between offered support and increase in export activity.
    Keywords: exporter; export activity; support; heterogeneous firms
    JEL: F10 F23 F40
    Date: 2015–04
  13. By: Ramesh C Paudel; Paul J Burke
    Abstract: This paper examines the implications of Nepal’s exchange rate policy for its export performance over the period 1980–2010. We first document Nepal’s long-standing currency peg against the Indian rupee and that Nepal’s real exchange rate appreciated substantially from the late 1990s. We then employ a gravity modeling approach to confirm that this real exchange rate appreciation has adversely affected Nepal’s exports, especially to third-country markets. Nepal’s exchange rate-related export competitiveness trap provides a motivation to reconsider the current peg.
    Keywords: export performance, real exchange rate, gravity model, Nepal, landlocked
    JEL: F13 F14 O50
    Date: 2015
  14. By: Jaime de MELO (Ferdi); Laurent WAGNER (Ferdi)
    Abstract: The Aid for Trade (AFT) Initiative was announced at the 2005 Hong-Kong World Trade Organisation (WTO) ministerial. Then, Doha round talks were stalled as developing countries were disenchanted with the world trading system they had signed up to a decade earlier under the Single Undertaking, whereby all members signed up to the same rules even though differential treatment for the Least Developed Countries (LDCs) provided some preferential market access to OECD markets and longer time periods to implement the obligations. So when the AFT was started, market access to OECD countries had not improved because of dirty tariffication in agriculture, technical assistance funding to help implement the WTO agreements (customs valuation, sanitary and phytosanitary measures, trade-related aspects of intellectual property rights) was not forthcoming and for the LDCs preferential access was dwindling as preferential agreements signed by developed countries were proliferating.This paper focusses on channels through which AFT flows might help reduce poverty, the top priority-- under the MDGs (goal 1A is “Halve, between 1990 and 2015, the proportion of people living on less than $1.25 a day”). It does not deal with the voluminous literature covering the aid-growth nexus. At around $30 billion a year, AFT is about 30% of Official Development Assistance (ODA) financial flows to developing countries (remittance flows are more than the combined ODA and FDI flows). So trying to isolate the effects of AFT from other financial flows is looking for a needle in a haystack. Hence the focus is about the channels linking AFT to poverty reduction through trickle down effects and a reduction in trade costs; as well as on multiple rather than single-country studies to emphasize generalizable results.[1]Section 1 reviews briefly the history of the AFT Initiative and the challenges it faces and section 2 discusses how the adding of objectives has complicated the evaluation of AFT. Section 3 contends that the evidence supports the view that trade is the engine of growth rather than the other way around and section 4 gives evidence of the trickle down effects of growth. Section 5 reports the evidence on the obstacles to trade caused by poor infrastructure and on the links between AFT disbursements and reduced trade costs. Section 6 concludes that the recently signed Trade Facilitation Agreement provides the opportunity to direct resources towards countries with the highest trade costs and highest poverty rates. [1]  Cadot et al (2014) and Cadot and de Melo (2014a, b, c) provide a critical survey of what we know (and don’t know) about the efficacy of aid-for-trade with a greater focus on lessons from case studies.
    JEL: F35 O19
    Date: 2015–04
  15. By: Athula Naranpanawa; Jayathileka S Bandara
    Keywords: trade liberalisation, regional disparities, computable general equilibrium model, post-war reconstruction, South Asia, Sri Lanka
    JEL: R13 F14 C68
    Date: 2015–02
  16. By: Joshua Aizenman; Yothin Jinjarak; Huanhuan Zheng
    Abstract: The Global Financial Crisis (GFC) brought to the fore the limits of the Chinese export led-growth strategy and the need for Chinese rebalancing. The Chinese export-led growth strategy of the 2000s coincided with the country becoming one of the largest net global creditors. Intriguingly, the Chinese net income from its global creditor position was negative, reflecting the large share of its low-yielding assets (mostly international reserves), and its high share of high-yielding liabilities (mostly foreign direct investment in China). Our paper takes stock of what may be the next new chapter of Chinese outward-mercantilism, which aims at securing a higher rate of returns on its net foreign asset position, leveraging its success in becoming the global manufacturing hub and the supplier of swap-lines. The emerging new trend has been manifested by Chinese outward-oriented FDI in natural resources, commodities and mining, and providing a wide spectrum of infrastructure and construction services to developing countries. These activities are frequently bundled with access to finance and the export of Chinese capital products and labor services. We trace and analyze these trends, identifying the positive associations between Chinese outward FDI, trade, and finance. The positive association between Chinese outward FDI and commodities imports increases with the provision of RMB swap-lines to China’s trading partners. The association between Chinese FDI outflows in the natural resources sector and commodities imports has become stronger since the GFC. The association of RMB swap-lines with the Chinese outward FDI in the natural resources sector is especially large, thus supporting the conjecture that in the aftermath of the GFC Chinese outward FDI is bundled with trade and financial linkages.
    JEL: F4 O2
    Date: 2015–04
  17. By: Chirathivat, Suthiphand (Asian Development Bank Institute); Cheewatrakoolpong, Kornkarun (Asian Development Bank Institute)
    Abstract: Thailand's increasing importance as a regional co-production base and as an intra-regional trade and border trade hub is due mainly to recent changes in its economic structure, namely, the lack of operational workers, rises in wages, and increases in outward foreign direct investment (FDI), together with a change of regional policies in Southeast Asia. As a result, improvements in physical connectivity, trade facilitation, energy cooperation, and financing infrastructure play an important role within an ongoing Association of Southeast Asian Nations (ASEAN) framework. Extending connectivity to South Asia could also complement the current promotion of regional trade and regional production networks. This paper reviews the current stages of Thailand's intra-regional trade, physical connectivity, trade facilitation, energy cooperation, and infrastructure funding as there are projects planned in these areas that could impact Thailand and its links to Southeast Asia and beyond to South Asia. However, Thailand's political instability impedes the progress and implementation of such projects. The paper also examines the current financing mechanism of Thailand's infrastructure projects that relies heavily on public spending. The authors propose strategies to promote Thailand's physical infrastructure, trade facilitation, and energy cooperation with the mainland countries of Southeast Asia and South Asia.
    Keywords: thailand; infrastructure; infrastructure financing; project finance; public-private partnerships
    JEL: F15 F36 H54
    Date: 2015–04–07
  18. By: THORBECKE, Willem
    Abstract: Japan is the leading supplier of sophisticated capital goods to East Asian countries. These goods embody advanced technologies and facilitate learning and productivity growth. Capital goods also represent 30%-40% of Japan's exports. This paper investigates the determinants of these exports. Results from dynamic ordinary least squares estimation indicate that exports depend on exchange rates, income in the importing countries, and downstream countries' exports to the rest of the world. Results from out-of-sample forecasts indicate that Japanese exports crashed in 2009 because of the perfect storm of a yen appreciation, a global slowdown, and a collapse in Asia's exports.
    Date: 2015–04
  19. By: Bin Shen; Jiang Zhang; Qiuhua Zheng
    Abstract: Based on the approach of flow distances, the international trade flow system is studied from the perspective of multi-layer flow network. A model of multi-layer flow network is proposed for modelling and analyzing multiple types of flows in flow systems. Then, flow distances are introduced, and symmetric minimum flow distance is presented. Subsequently, we discuss the establishment of the multi-layer flow networks of international trade from two coupled viewpoints, i.e., the viewpoint of commodity flow and that of money flow. Thus, the multi-layer flow networks of international trade is explored. First, trading "trophic levels" are adopted to depict positions that economies occupied in the flow network. We find that the distributions of trading "trophic levels" have the similar clustering pattern for different types of commodity, and there are some regularities between money flow network and commodity flow network. Second, we find that active and competitive countries trade a wide spectrum of products, while inactive and underdeveloped countries trade a limited variety of products. Besides, some abnormal countries import many types of goods, which the vast majority of countries do not need to import. It may indicate an abnormal economic status. Third, harmonic node centrality is proposed and we find the phenomenon of centrality stratification. It means that competitive countries tend to occupy the central positions in the trading of a large variety of commodities, while underdeveloped countries likely in the peripheral positions in the trading of their limited varieties of products. Fourth, we find that manufactured products have significant larger mean first-passage flow distances from the source to the sink than that of primary products.
    Date: 2015–04
  20. By: Pierre van der Eng
    Abstract: Indonesia experienced growing shortfalls of food supplies during the 1950s and during the 1960s and 1970s it imported increasing amounts of rice, wheat and wheat flour. This paper investigates the role of food aid in this development. In the 1950s,Indonesia received some US PL480 food aid under concessional loans. Despite occasional famines, and the willingness of countries to supply food aid as grants,Indonesia did not request such food aid until 1966. Donations of wheat flour, rice and other food products started to arrive in Indonesia in 1967 and increased quickly since. During the 1970s one-third of Indonesia’s imports of both rice and wheat arrived as aid. Initially donor countries focused on rice aid in efforts to secure shares in Indonesia’s growing rice imports. But their focus shifted to wheat aid, in response to opportunities for them to grow Indonesia’s market for wheat-based products and secure market share. Food aid helped to alleviate food shortages, but it also strengthened the role of the official food logistics agency in Indonesia’s food markets.
    Keywords: rice trade, wheat trade, food aid, Indonesia
    JEL: F14 N55 O19
  21. By: Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
    Abstract: This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.
    JEL: D22 D85 F14 L10 L14 R12
    Date: 2015–04
  22. By: Peter Klimek; Michael Obersteiner; Stefan Thurner
    Abstract: In the wake of the 2008 financial crisis the role of strongly interconnected markets in fostering systemic instability has been increasingly acknowledged. Trade networks of commodities are susceptible to deleterious cascades of supply shocks that increase systemic trade-risks and pose a threat to geopolitical stability. On a global and a regional level we show that supply risk, scarcity, and price volatility of non-fuel mineral resources are intricately connected with the structure of the world-trade network of or spanned by these resources. On the global level we demonstrate that the scarcity of a resource, as measured by its trade volume compared to extractable reserves, is closely related to the susceptibility of the trade network with respect to cascading shocks. On the regional level we find that to some extent the region-specific price volatility and supply risk can be understood by centrality measures that capture systemic trade-risk. The resources associated with the highest systemic trade-risk indicators are often those that are produced as byproducts of major metals. We identify significant shortcomings in the management of systemic trade-risk, in particular in the EU.
    Date: 2015–04
  23. By: Valeria Gattai
    Abstract: This paper surveys 67 contributions on internationalisation and performance of Italian enterprises. It covers empirical studies (including working papers), published between 1992 and 2014, taking a microeconomic perspective and analysing the potential links between firms’ global involvement and heterogeneity in economic, human capital and innovation and financial measures. The discussion is organised in an intuitive and non-technical way. At the same time, we devote particular attention to studying the different papers from many points of view, including their internationalisation measures, performance indicators, empirical approach, causality and results.
    Keywords: Internationalisation, Performance, Italy, Firm-level data, Survey
    JEL: F1 F2 L2
    Date: 2015–04
  24. By: Armando Castelar Pinheiro; Regis Bonelli
    Abstract: This paper analyzes export performance in Brazil, discussing the roles played by export diversification, productivity enhancements, policy, and natural resource endowments. First, we provide a brief account of Brazil’s recent export performance and analyze changes in the competitiveness of Brazilian exports in a long-term perspective. This is done by evaluating actual sector export patterns vis-à-vis the rest of the world in an attempt to grasp a broad picture of comparative export behavior. We proceed to evaluate changes in exports competitiveness as described by shifts in the country’s revealed export behavior compared to the rest of the world, for which we rely on a traditional Constant-Market-Share (CMS) decomposition and on an extension of Hummels and Klenow’s approach. Next, we analyze agricultural exports, a discussion followed by an evaluation of the role of trade policy, and in particular export promotion instruments and institutions. Among the conclusions we highlight that there are several commonalities between the present and previous export booms, in the sense that: a) it reinforced the country’s diversified trade relations, with additional exports concentrated in non-traditional markets such as China, Russia, Africa, and South and Central American, non-Mercosur member countries; b) it did not change the relative share of manufactures in Brazil’s export basket, despite the excellent performance of agro-based exports since the early 1990s; and c) both agricultural and manufacture exports have experienced an increasing product diversification. Yet, innovations, defined as new goods entering the export basket, were relatively unimportant, except for some specific markets. O trabalho em epígrafe analisa a performance exportadora brasileira, com foco em uma discussão dos papéis desempenhados pela diversificação das exportações, pelos ganhos de produtividade, pela política econômica e pela dotação de recursos naturais. Isso é feito em várias etapas, começando por uma avaliação comparada dos padrões de crescimento das exportações. Em seguida, analisamos as mudanças na competitividade das exportações conforme reveladas pelo desempenho exportador em relação ao resto do mundo, de acordo com duas abordagens: a primeira é uma análise do tipo Constant- Market-Share (CMS); a segunda, uma extensão da metodologia desenvolvida por Hummels e Klenow. O trabalho se encerra com uma análise das exportações agrícolas na qual discutimos os papéis da política econômica, especialmente dos instrumentos de promoção e das instituições voltadas para o comércio exterior. Entre as conclusões, destacamos a existência de fatores comuns ao atual boom exportador e a expansões anteriores, no sentido de que: a) durante o boom atual o Brasil tem reforçado sua postura de global trader, mas com as exportações adicionais concentrando-se em mercados não tradicionais como China, Rússia, África e países da América do Sul fora do Mercosul e da América Central; b) a participação relativa das manufaturas na cesta exportadora não variou muito, apesar do excelente desempenho das exportações do agribusiness desde o começo dos anos 1990; e c) tanto as exportações industriais quanto as agrícolas experimentaram uma crescente diversificação. No entanto, as inovações, definidas como a introdução de novos produtos na pauta, foram relativamente pouco importantes, exceto em mercados específicos.
    Date: 2015–01
  25. By: Reddy, Kotapati Srinivasa
    Abstract: While referring to the recent study on the 2007-2008 global financial crisis, and cross-border mergers and acquisitions in 26 countries (Reddy, Nangia, & Agrawal, 2014b), this paper aims to further examine the impact of financial crisis on the later form of market in 13 sub-continentals, three sectors and 21 industries. Using their research design, we define and test the hypotheses whilst improve the discussion on historical views of the financial crisis and market for inbound acquisitions in the world economy, developed markets, developing markets and BRIC group. We find that rate of growth in number (value) of cross-border acquisitions has markedly declined reporting to continentals and industries around the crisis. We eventually suggest that emerging market economies in Asia, Africa and Latin American regions are found to be exciting in attracting direct international investments from both developed and other developing markets whilst focusing deeply on fiscal deregulation and policy amendments, particularly during post-crisis.
    Keywords: Global financial crisis; Mergers and acquisitions; Cross-border acquisitions; International investments and acquisitions; Foreign direct investment; World economy
    JEL: F2 F21 F3 F4 G1 G3 G34 M1 M16 O1 O5 O57
    Date: 2015
  26. By: Desmet, Klaus; Nagy, David Krisztián; Rossi-Hansberg, Esteban
    Abstract: We study the relationship between geography and growth. To do so, we first develop a dynamic spatial growth theory with realistic geography. We characterize the model and its balanced growth path and propose a methodology to analyze equilibria with different levels of migration frictions. We bring the model to the data for the whole world economy at a 1º times 1º geographic resolution. We then use the model to quantify the gains from relaxing migration restrictions as well as to describe the evolution of the distribution of economic activity in the different migration scenarios. Our results indicate that fully liberalizing migration would increase welfare more than three-fold and would significantly affect the evolution of particular regions in the world. We then use the model to study the effect of a spatial shock. We focus on the example of a rise in the sea level and find that coastal flooding can have an important impact on welfare by changing the geographic-dynamic path of the world economy.
    Keywords: coastal flooding; development; gains from mobility; geography; growth; migration; spatial economics; trade; world economy
    JEL: F1 F22 O1 O15 O18 Q54 R11 R12
    Date: 2015–04
  27. By: Ezzahid, Elhadj; Chatri, Abdellatif
    Abstract: Our main goal in this paper is to classify productive sectors according to the combination of two effects. The first effect lies in the change of their external dependency on imported inputs. The second effect is related to the change of their ability to generate value-added by unit of final demand. To perform this ordering of productive sectors, we use an input-output model after domesticating inter-industries tables of flows for the period 1999-2009. The domestication of the available matrix of intermediate consumption is necessary because the statistical authority in Morocco does not distinguish between imported and domestically produced inputs. Two of our results worth to be highlighted. First, the imports elasticity with respect to growth is superior to unity. This means that 1% increase of Gross Domestic Product produces an increase of imports of more than 1%. The second result is that there are no productive sectors belong to the most virtuous classes of sectors characterized by an increase of their ability to generate more value added and to reduce their reliance on imports. The higher imports dependency (leakages) is the consequence of increased openness of the Moroccan economy, but also from lower linkages between domestic productive sectors.
    Keywords: Input-output analysis, Backward linkages, Leakages, Structural change, Value added, imports Morocco.
    JEL: C67 D57
    Date: 2015–04–02
  28. By: Anna Grzes (University of Bialystok)
    Abstract: This empirical paper examines an impact of materials and services outsourcing on labour costs in two groups: industrial and construction enterprises, and services enterprises in Poland in the period 2005-2013. The analysis of this dependence was based on data of Central Statistical Office included in financial statement F-01/I-01. The preliminary analysis and econometric model showed that Polish industrial and construction, and service enterprises applied both types of outsourcing, but services outsourcing had more important effect on labour costs than materials outsourcing. However, the depreciation cost understood as technological progress had the biggest impact on labour costs, especially in industrial and construction firms.
    Keywords: cost; materials outsourcing, services outsourcing; Poland
    JEL: J30 L24 L60 L80
    Date: 2015–04
  29. By: Robert Stehrer; Los, Bart; Dietzenbacher, H.W.A.; Timmer, Marcel; Gaaitzen J. de Vries (Groningen University)
    Abstract: This article describes the contents and construction of the World Input-Output Database (WIOD). This database contains annual time-series of world inputoutput tables, covering the period from 1995 onwards. Underlying concepts, construction methods and data sources are considered. In addition, the WIOD provides data on labour and capital inputs for forty countries, making it useful for a wide range of applications. We illustrate this by analysing recent trends in international production fragmentation, competitiveness and patterns of specialisation. We give guidance to prudent use and discuss possible improvements and extensions.
    Date: 2014
  30. By: Marcel Schroder
    Abstract: This paper is motivated by the popular view that the surge in China’s foreign exchange reserves is due to a distortionary exchange rate policy aimed at keeping the real exchange rate undervalued to support export-led growth. It undertakes an in-depth empirical investigation to quantify how much "mercantilist" and "precautionary" motives have contributed to the reserve build-up in China during 1998Q4-2011Q4. A substantial problem is that theory is consistent with employing two vastly differing approaches to defining and estimating the role of mercantilist reserve accumulation. A priori, either method could generate misleading results. The study shows, however, that the distinction between the two approaches is immaterial in China’s case. The results suggest that mercantilism accounts for less than 10 percent of reserve accumulation. Precautionary motives and other factors seem to be the dominant determinants of the surge in China’s international reserves.
    Keywords: international reserves, precautionary demand, mercantilism, China
    JEL: E58 F31 F36
    Date: 2015
  31. By: Berezinskaya, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Vedev, Alexey (Gaidar Institute for Economic Policy - Financial Research Laboratory); Larionova, Dina (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper is devoted to analysis of production dependence of Russian industry from imports. The share of imports in the cost of industrial enterprises for raw materials, purchased semi-finished products and components is significantly grew up in the post-crisis period and the weakening of the ruble has some risks of deterioration of operating and financial performance of companies. In this work the most vulnerable industrial sectors the identified. Special attention is paid to the analysis of mechanism of import depending production of the Russian industry. Potentials for different sectors are identified, for import substitution especially. The results will contribute to a deeper understanding of the reasons for the growth of production dependence of Russian industry from imports and the nature of strategic import.
    Keywords: production dependence, import, industry, Russia
    Date: 2015–03

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