|
on International Trade |
| By: | Kara M. Reynolds; Chad P. Bown |
| Abstract: | This paper examines implications of the terms-of-trade theory for the determinants of outcomes arising under the enforcement provisions of international agreements. Like original trade agreement negotiations, we model formal trade dispute negotiations as potentially addressing the terms-of-trade externality problem that governments implement import protection above the globally efficient level so as to shift some of the policy's costs onto trading partners. We first extend the Bagwell and Staiger (1999, 2011) model from trade agreement accession negotiations to the setting of enforcement negotiations, and the resulting theory guides our empirical assessment. We use instrumental variables to estimate the model on trade volume outcomes from WTO disputes over 1995-2009. Our evidence is consistent with theoretical predictions that larger import volume outcomes are associated with products that have smaller increases to foreign exporter-received prices (terms-of-trade losses) as a result of the dispute, larger pre-dispute import volumes, larger import demand elasticities, and smaller foreign export supply elasticities. Dispute settlement outcome differences are also explained by the variation in institutionally-motivated measures of retaliation capacity and the severity of the free rider problem associated with foreign exporter concentration. |
| Keywords: | trade agreements, terms of trade, WTO, dispute settlement |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2015-04&r=int |
| By: | Dao, Ngoc Tien; Pham, Van Nho; Doan, Quang Hung |
| Abstract: | This paper aims at analyzing the determinants of services trade flows between Vietnam and European Union. In this respect, a gravity model has been estimated with panel data and pooled, random and fixed effect estimation covering the period of ten years from 2002 to 2011 for total services trade, services exports and services imports between Vietnam and European Union separately. The estimated results on total services trade indicate that bilateral services trade flows between Vietnam and its European partner countries are mainly affected by GDP per capita gap between Vietnam and partner countries, population of partner countries, real effective exchange rate, colonial relationship and being former members of CMEA. |
| Keywords: | Gravity model, Services Trade, Vietnam, EU |
| JEL: | F1 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63982&r=int |
| By: | Patricia Garcia-Duran (Facultat d'Economia i Empresa; Universitat de Barcelona (UB)); Montserrat Millet (Facultat d'Economia i Empresa; Universitat de Barcelona (UB)) |
| Abstract: | The EU bilateral trade strategy since 2006, including the TTIP, has been justified by the European Commission on the bases that deep and comprehensive trade agreements are compatible with efficient multilateralism. The Commission argument is the following: in a context marked by international supply-chains, preferential agreements that allow for progress on what has been achieved at the multilateral level (topics WTO +) and in areas not already covered by the WTO (items WTO- X) may be considered as a stepping stone, not a stumbling block for multilateral liberalization. In other words, EU recent bilateral negotiations and agreements should be seen at worst as complementary to multilateral negotiations and at best as promoters.This paper challenges this argument by pointing out that the multilateralization potential of a bilateral agreement may not be a sufficient condition for compatibility between the bilateral and multilateral approaches. Their complementarity may also be influenced by what is happening at the multilateral level. Content analysis of a primary source of information - the Bridges Weekly reports - shows that there has been a change in EU actions in the Doha Round towards Brazil, India and China since 2009. Though the EU did not preclude the inclusion of these emerging powers in the high table of negotiations at any time and was in favour of the Bali agreement of 2013, its willingness to respond to their demands reached a plateau in 2008. That may signal a change in the nature of its bilateral strategy. Indeed, from 2006 until 2009 the EU may have sought bilateral partners among new important trade players (India, ASEAN and South Korea) to complement or even facilitate a multilateral agreement. Since then, however, the EU may have focused on reaching agreements with even more important trade partners: the old Quad members (Canada, Japan and the USA) as a way to ensure the market access opportunities that it cannot longer expect to obtain from the Doha Round. Following this analysis, the TTIP should be read, at least in the short time, as an example of efficient bilateralism. |
| Keywords: | EU, TTIP, Trade policy, multilateralism, bilateralism, regional agreements. |
| JEL: | F13 F53 N44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:321web&r=int |
| By: | Melitz, Marc J.; Redding, Stephen J. |
| 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 tradecan 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 quantitativeapproach 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. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:faseco:14596340&r=int |
| By: | Jiandong Ju (Shanghai University of Finance and Economics and Tsinghua University and Hong Kong Institute for Monetary Research); Ziru Wei (Tsinghua University); Hong Ma (Tsinghua University) |
| Abstract: | From 1992 to 2011, the total trade volume between the U.S. and China increased by 25 times, and China's share in U.S. total imports increased from 5% to 20%. However, the U.S.'s share in China's total imports dropped from 11% to 8% in the same period. In the major categories of U.S. exports to China, Waste & Scrap increased from 744 million dollars in 2000 to 7,562 million dollars in 2008, rising 916% times and becoming the No.1 product that the U.S exports to China. It is important to understand what explains these structural changes, and to ask whether the principle of comparative advantage determines the structure of U.S.-China bilateral trade. Interestingly, we find an "Anti-Comparative Advantage" puzzle: the U.S. exports less to China in sectors where it has greater comparative advantage, while China exports more to the U.S. in its sectors with greater comparative advantage. To further study this issue, we extend Eaton-Kortum model of bilateral trade to multiple sectors and test it empirically using US and China trade data. We find that after controlling for the importer's demand, trade costs and factor intensities, etc., comparative advantage cannot explain U.S.-China bilateral trade flows. The puzzle survives various robustness checks. |
| JEL: | F11 F14 F15 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:092015&r=int |
| By: | Lee, GaSeul; Lim, Song Soo |
| Abstract: | While the trade effect of free trade agreements (FTAs) is a global issue, little research has examined the economic effects of trade liberalization on agricultural products with robust empirical methods. In this study, propensity score matching for controlling selection bias is used to examine and analyze the effect of FTAs on the trade of South Korea's agricultural products. To enhance the robustness of estimated results, differences between the FTA treatment effects in 2010 and 2012 are analyzed. The results reveal that the effect of FTAs on agricultural trade varies slightly, depending on the matching approach used; however, the signs of all estimated average treatment effects on the treated (ATT) values are positive, and more values are positive in 2012 than in 2010. Analysis of the difference between selection bias controlled through matching and uncontrolled selection bias shows the value of the average treatment effect (ATE) with uncontrolled bias is greater than the ATT estimate calculated through matching. This implies that controlled versus uncontrolled selection bias can result in different ATE and ATT estimates, and that prior studies on FTA trade effects have overestimated the effect, as selection bias was not addressed therein. |
| Keywords: | free trade agreements,agricultural trades,propensity score matching,selection bias |
| JEL: | C54 F15 Q17 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201525&r=int |
| By: | Ludivine Blanc |
| Abstract: | The pharmaceutical industry is one of the most competitive sectors in the European Union. With its substantial investments in research and development, this industry represents a key asset for the European economy and a major source of growth and employment. However, despite the importance of the pharmaceutical sector for the European Union, few researchers have attempted to assess the determinants of the EU exports of pharmaceuticals. This paper aims at filling the aforementioned gap by examining what drives EU exports of pharmaceuticals. In order to tackle this question, this paper has derived hypotheses from the Gravity Model of Trade and the relevant academic literature on pharmaceuticals. Based on an econometric analysis, the research sheds light on the complex interaction of factors influencing the EU exports of pharmaceuticals. The paper finds that the protection of intellectual property in the receiving countries, their economic size, the importance of their health sector, and the quality of infrastructures constitute major drivers to the EU exports of pharmaceuticals. On the contrary, the research shows that transports costs as well as tariff barriers and non-tariff barriers tend to hinder the EU exports of pharmaceuticals. |
| Keywords: | pharmaceutical industry, exports, gravity model, intellectual property rights, non-tariff barriers, free trade agreements. |
| JEL: | F14 C23 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:coe:wpbeer:31&r=int |
| By: | Crinò, Rosario; Ogliari, Laura |
| Abstract: | An influential literature has documented large differences across countries and industries in terms of product quality. It is important to understand the determinants of these differences, because the production of high-quality goods influences key aspects of economic performance. In this paper, we propose and test an explanation that rests on the interplay between cross-country differences in financial frictions and cross-industry differences in financial vulnerability. We organize the empirical analysis around a trade model with heterogeneous firms, endogenous output quality, country heterogeneity in financial frictions, and industry heterogeneity in financial vulnerability. We estimate the model using novel and unusually rich data on export quality, financial development, and financial vulnerability, covering all manufacturing industries and countries in the world over the last three decades. Our results show that the interplay between financial frictions and financial vulnerability is a first-order determinant of the observed variation in product quality across countries and industries. We also show that quality adjustments are a key channel through which financial development affects international trade and shapes the industrial composition of countries' exports. |
| Keywords: | Credit Market Imperfections; Export Structure; Financial Vulnerability; Product Quality |
| JEL: | F14 F36 G20 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10555&r=int |
| By: | Girma, Sourafel (University of Nottingham); Gong, Yundan (Aston University); Görg, Holger (Kiel Institute for the World Economy); Lancheros, Sandra (University of Nottingham) |
| Abstract: | Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures can contribute positively to China's "science and technology take-off". |
| Keywords: | investment liberalization, FDI, China, propensity score reweighting, doubly robust estimation |
| JEL: | F23 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8997&r=int |
| By: | Stéphanie Monjon; Julien Gourdon; Sandra Poncet |
| Abstract: | This work investigates the motivations behind the Chinese fiscal policy on exports. It relies on very detailed product level (HS 6 digit) data over the period 2002-12 covering both export tax and export VAT rebate. It aims to uncover the respective importance of the various policy motivations and how they evolved over time. Our empirical analysis relates the tax rates to proxies of official objectives pursued by the Chinese public authorities such as those related to the promotion of technology or protection of the environment but also other unstated motives pertaining to subsidization of downstream sectors and terms of trade. Our results suggest that the Chinese fiscal policy targeting exports follows a variety of objectives whose relative importance changed over the period 2002-2012. |
| Keywords: | Trade policy;industrial policy;China;VAT system;export tax |
| JEL: | F10 F14 Q56 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2015-05&r=int |
| By: | HOSONO Kaoru; MIYAKAWA Daisuke; TAKIZAWA Miho |
| Abstract: | This paper investigates the effect of export activities on firm performance by taking into account whether or not exporter firms' affiliated companies (i.e., their own subsidiaries and parent companies' branches) are located in the export markets. To single out a causal impact on firm performance running from starting export, we employ propensity-score matching difference-in-differences estimation. Using a unique firm-level panel dataset that allows us to identify firms starting export and firms staying in domestic markets as well as their affiliated firms' overseas activities, we find that firms exhibited better performance than their non-exporter counterparts prior to export, and that the difference in the performance, especially productivity, significantly widened after export. Such improvement in productivity originated from starting export was found to be statistically and economically significant when exporter firms did not have affiliated firms in overseas markets. On the other hand, the performance gain from export was highly heterogeneous and hence statistically insignificant in the case when these affiliated firms were present in overseas market. The former type of firm fits well to test the learning-by-exporting mechanism hypothesis since it accessed the export markets for the first time by exporting. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15053&r=int |
| By: | Haichao Fan; Yao Amber Li (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology) |
| Abstract: | This paper presents .... |
| Keywords: | trade |
| JEL: | F42 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201502&r=int |
| By: | Ana Cardoso (Faculty of Economics, University of Coimbra, Portugal); António Portugal Duarte (Faculty of Economics, University of Coimbra and GEMF, Portugal) |
| Abstract: | The aim of this paper is to analyze the impact of the Chinese foreign exchange policy on foreign trade with the European Union. After describing the importance of the exchange rate in an open economy and some of the methodologies employed to calculate its equilibrium value, we examine whether the Chinese competitiveness is due to the existence of misalignment (undervaluation) of its exchange rate, or rather, to other sources of competitiveness. For this purpose, we use a Vector Error Correction (VEC) model to estimate a long-run exports equation. The empirical results indicate that over the past few years, Chinese exports have benefited from an ‘unfair’ competitive advantage resulting from the manipulation of its currency value. |
| Keywords: | Competitiveness, China, European Union, foreign trade, misalignments, real exchange rate. |
| JEL: | C39 F10 O24 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2015-09.&r=int |
| By: | Edward J. Balistreri (Division of Economics and Business, Colorado School of Mines); Christoph Bohringer (Department of Economics, University of Oldenburg); Thomas F. Rutherford (University of Wisconsin) |
| Abstract: | Alternative perspectives on the structure of international trade have important implications for climate policy and its interaction with global markets. In this paper we consider carbon policy in the context of three important alternative trade formulations. First, is a neo-classical model based on trade in homogeneous products, which is the natural context for considering competitive effects of trade and environmental policy. Second is a model based on regionally differentiated goods consistent with the Armington assumption adopted in the policy simulation literature. Finally, we consider a monopolistic-competition model, consistent with Melitz (2003), which is the focus of many contemporary theoretic investigations in international trade. These structures have important implications for carbon leakage and the spatial distribution of energy-intensive production. Furthermore, predictions about the transmission of policy burdens to non-participating countries are critically dependent on the assumed structure of trade. |
| Keywords: | Heterogeneous firms, carbon leakage, competitive effects |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201502&r=int |
| By: | ITO Kazuyori |
| Abstract: | In 2009, the European Union (EU) introduced a regulation prohibiting the importation and marketing of seal products except for those originated from the hunts by indigenous people or from the hunts for maritime resource management. The measure relates to animal welfare as it is concerned about public moral sentiments that have deteriorated due to the inhumane method of seal hunting. Canada and Norway, countries that export seal products, brought a case to the WTO. The Appellate Body, first of all, denied the applicability of the Agreement on Technical Barriers to Trade (TBT) because the measure permits the importation of seal products originated from the hunts by indigenous people and therefore deviates from the definition of technical regulation (namely, a document which lays down "product characteristics"). This indicates that the WTO discipline over the trade measures for animal welfare could be easily weakened depending on the design of each measure. Second, the Appellate Body admitted that the measure at issue is "necessary to protect public morals" (Article 20(a), GATT). The notion of public morals here seems to be so flexible that quite a wide range of trade restrictions for animal welfare could be justified under this Article. The measure at issue was found to be inconsistent with the chapeau of Article 20 as it has been applied in a manner which constitutes a means of arbitrary or unjustifiable discrimination between indigenous hunts and commercial hunts as well as among indigenous communities. These shortcomings, however, could be addressed thorough a partial amendment of the measure. As an overall assessment, the rulings of the panel and the Appellate Body acknowledged a wide margin of justifying trade restrictions for animal welfare, although some of the findings stemmed from the distinct design of the measure at issue, specifically the dual policy objectives of promoting animal welfare and protecting indigenous culture. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:15005&r=int |
| By: | J. Damijan; C. Kostevc; Philipp Marek; M. Rojec |
| Abstract: | This paper focuses on the effect of foreign presence in the services sector on the productivity growth of downstream customers in the manufacturing sector in six EU new member countries in the course of their accession to the European Union. For this purpose, the analysis combines firm-level information, data on economic structures and annual national input-output tables. The findings suggest that services FDI may enhance productivity of manufacturing firms in Central and Eastern European (CEE) countries through vertical forward spillovers, and thereby contribute to their competitiveness. The consideration of firm characteristics shows that the magnitude of spillover effects depends on size, ownership structure, and initial productivity level of downstream firms as well as on the diverging technological intensity across sector on the supply and demand side. The results suggest that services FDI foster productivity of domestic rather than foreign controlled firms in the host economy. For the period between 2003 and 2008, the findings suggest that the increasing share of services provided by foreign affiliates enhanced the productivity growth of domestic firms in manufacturing by 0.16%. Furthermore, the firms’ absorptive capability and the size reduce the spillover effect of services FDI on the productivity of manufacturing firms. A sectoral distinction shows that firms at the end of the value chain experience a larger productivity growth through services FDI, whereas the aggregate positive effect seems to be driven by FDI in energy supply. This does not hold for science-based industries, which are spurred by foreign presence in knowledge-intensive business services. |
| Keywords: | production, cost, capital, total factor and multifactor productivity, capacity; economic integration |
| JEL: | D24 F15 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:5-15&r=int |
| By: | SATO Hitoshi; ZHANG Hongyong; WAKASUGI Ryuhei |
| Abstract: | Market openness improves the efficiency of business operations through various channels, and firms' usage of imported intermediate goods is one of such conduits. This paper empirically examines the effects of import of intermediates on Japanese manufacturers' productivity and profitability by using firm-level data from the Basic Survey of Business Structure and Activities. We find that (i) productive firms tend to import intermediates; (ii) however, the dependency on imported intermediates decreases as firm productivity increases; (iii) firms with high exports/output ratios, foreign enterprises' investments, or foreign affiliates tend to import intermediates; (iv) firms with high productivity, high exports/output ratios, or foreign enterprises' investments tend to be more profitable; and (v) arm's-length import of intermediates is positively correlated to firm profitability, whereas import of intermediates from foreign affiliates (i.e., in-house import) is negatively correlated. These findings imply that Japanese firms have room to improve productivity and profitability by increasing imports of intermediate goods and that inducing small and medium-sized enterprises unfamiliar to foreign intermediates to import and use them will be significant through policy support such as information dissemination and human resource training. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:15015&r=int |
| By: | Metaxas, Theodore; Kechagia, Polyxeni |
| Abstract: | The majority of the developing economies worldwide use foreign capitals inflow so as to achieve economic growth. The host countries proceed to economic and political transformations so as to improve their attractiveness and to become top foreign direct investment destinations. In addition, the foreign inflows enable the host country’s productivity rates and improve the standard of living. A significant amount of these capitals are directed in the developing economies of the Latin American and the Post – Soviet Central Asian countries. The cases of Peru and Uzbekistan are chosen among these developing economies of the regions so as to investigate the impact of the foreign inflows on the economic growth of these countries. |
| Keywords: | F.D.I., developing countries, Peru, Uzbekistan, Latin America, Central Asia |
| JEL: | F21 O16 O18 R11 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63849&r=int |
| By: | Shu Lin (Fudan University and Hong Kong Institute for Monetary Research); Haichun Ye (Shanghai University of Finance and Economics) |
| Abstract: | We make the first attempt in the literature to empirically examine the spillover effects of U.S. monetary policy on trade in other countries. In a large sector-level bilateral trade dataset of 137 countries for the years 1970-2000, we find strong and robust evidence supporting an international credit channel of U.S. monetary policy transmission. We show that: 1) financially more constrained sectors have a more negative exposure of their trade to a tight U.S. monetary policy; 2) this international credit channel works mainly during significant U.S. monetary tightening periods (e.g., a large increase in interest rates); 3) the negative impact of a tight U.S. policy is significantly stronger in financially less developed countries or countries with no monetary autonomy. |
| Keywords: | International Transmission of U.S. Monetary Policy, Trade, Credit Constraints, Credit Channel |
| JEL: | E52 E44 F14 F33 F42 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:082015&r=int |
| By: | Dalgıç, Başak; Fazlıoğlu, Burcu; Gasiorek, Michael |
| Abstract: | This paper contributes to the emprical debate on firm heterogeneity in international trade dealing with the direction of causality from which the performance premium across destination markets originates. For this purpose, we first investigate the selection of firms into markets with asymmetric income levels exploring which firm level characteristics are associated with this selection. Once we identify movements along different statuses on a year to year basis we investigate the factors that drive these movements. We search for the heterogeneity in post-entry effects of trading with different type of markets by establishing treatment models in line with the learning by exporting hypothesis. Our results indicate self-selection mechanisms and post-entry effects differ from market to market for Turkish manufacturing firms. |
| Keywords: | Exports, Geographical diversication, Self-selection, Post-entry effects. |
| JEL: | D24 F14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63854&r=int |
| By: | Hübler, Michael |
| Abstract: | This paper introduces a new trade model type. It combines the gravity model, well-known in international economics, with network theory. With this approach, complicated trade networks can be algebraically solved in form of systems of linear (differential) equations. Business cycles and productivity shocks can be represented via complex numbers or the Laplace transformation. With the help of this model, new mechanisms of international trade are identified. Four theoretical examples with numerical applications are presented. First, it is demonstrated how an increase in trade from Asia to North America affects the world economy. Second, an intuitive rule for finding the welfare-optimal tariff is derived. Third, three possibilities for vanishing trade effects (fluctuations) are explained: trade diversion, the "river-island effect", and overlapping business cycles. Fourth, it is shown how adjustment costs delay the propagation of shocks or business cycles. |
| Keywords: | international trade; gravity model; network theory; business cycles; propagation of shocks |
| JEL: | F11 F42 F44 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-553&r=int |
| By: | Donald A. Hay |
| Abstract: | This paper analyses the effects of the 1990 Brazilian trade liberalization on the total factor productivity, market share and profits of a sample of 349 large manufacturing firms. A panel data production function analysis for the period 1986/94 indicates very large total factor productivity gains in the period to 1994, which were accompanied by large falls in market shares and profits. The explanation advanced is that the shock of trade liberalization to profits was so great that firms were stimulated to improve their efficiency dramatically. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0070&r=int |
| By: | Elhanan Helpman; Oleg Itskhoki; Marc-Andreas Muendler; Stephen Redding |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:28442&r=int |
| By: | Lilia Cavallari (University of Roma Tre); Stefano D’Addona (University of Roma Tre) |
| Abstract: | This paper studies the dynamics of output and export margins in the aftermath of external shocks in fixed and floating exchange rate regimes. Using a panel VARX model, it traces the mean responses of output, terms of trade, extensive and intensive margins to real and nominal shocks in 22 developed economies over the period 1988-2011. It finds remarkable differences in the transmission of shocks depending on the exchange rate regime. In the sample of peggers, trade switches from previously traded goods towards trade of new products and previously non-traded goods in response to external shocks. This in turn exacerbates output fluctuations. Overall, our findings provide novel evidence in support of the stabilization advantages of flexible exchange rates based on their ability to smooth extensive margins. These findings are consistent with the predictions of theoretical models with firm entry. |
| Keywords: | extensive margin of trade, international business cycle, panel VARX, panel VAR, exchange rate regimes, firm entry, product creation |
| JEL: | E32 E52 F41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:rcr:wpaper:05_14&r=int |
| By: | Cirera, Xavier; Lederman, Daniel; Máñez, Juan A.; Rochina, María E.; Sanchis, Juan A. |
| Abstract: | This paper explores the link between exports and total factor productivity (TFP) for Brazilian manufacturing firms over the period 2000-2008, both under the assumption of an exogenous or an endogenous law of motion for productivity. The authors first obtain TFP estimates under each alternative assumption following Wooldridge (On estimating firm-level production functions using proxy variables to control for unobservables, 2009) GMM procedure. Second, using stochastic dominance techniques they analyse whether the ex-ante most productive firms are those that start exporting (self-selection hypothesis). Finally, the authors test whether exporting boosts firms TFP growth (learning-by-exporting hypothesis) using matching techniques, to control for the possibility that selection into exports may not be a random process. Their results confirm the self-selection hypothesis and show that starting to export yields firms an extra TFP growth that emerges since the first year exporting but lasts only from this year to the next. Further, this extra TFP growth is much higher under the assumption of an endogenous law of motion for productivity, which reinforces the importance of accounting for firm export status to study the evolution of productivity. |
| Keywords: | TFP,export status,exogenous vs. endogenous Markov,semi-parametric approach,self-selection,stochastic dominance,learning-by exporting,matching techniques |
| JEL: | F14 D24 C14 C33 C36 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201526&r=int |
| By: | V. Kandiah; H. Escaith; D. L. Shepelyansky |
| Abstract: | Using the new data from the OECD-WTO world network of economic activities we construct the Google matrix $G$ of this directed network and perform its detailed analysis. The network contains 58 countries and 37 activity sectors for years 1995 and 2008. The construction of $G$, based on Markov chain transitions, treats all countries on equal democratic grounds while the contribution of activity sectors is proportional to their exchange monetary volume. The Google matrix analysis allows to obtain reliable ranking of countries and activity sectors and to determine the sensitivity of CheiRank-PageRank commercial balance of countries in respect to price variations and labor cost in various countries. We demonstrate that the developed approach takes into account multiplicity of network links with economy interactions between countries and activity sectors thus being more efficient compared to the usual export-import analysis. The spectrum and eigenstates of $G$ are also analyzed being related to specific activity communities of countries. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1504.06773&r=int |
| By: | Gralf-Peter Calliess |
| Abstract: | Lex mercatoria or Law Merchant (‘LM’) is said to be the self-made law of international commerce. According to its proponents, LM is an autonomous legal order that not only supplements state commercial law, but works as a substitute for it. The ‘ancient’ LM, which accompanied the commercial revolution in late medieval Europe, is taken as a blueprint for ‘new’ LM, a transnational law that develops in international commercial arbitration to govern modern global commerce. According to its opponents, ancient LM as a uniform customary law of Europe never existed. Rather it was dreamed-up in order to support the neo-liberal agenda of new LM. This paper investigates the historical and empirical foundations of these claims in the three dimensions of transnational dispute resolution, norm making, and enforcement. It is concluded that truly autonomous transnational legal regimes are industry-specific exceptions, where socio-economic sanctions are formally organized. Transnational commercial law in general is characterised by a hybrid mode of governance, which combines institutions of private (norms, arbitration, and social sanctions) and public (laws, courts, and enforcement) origin. However, the latter are disembedded from their domestic context to a considerable extent. |
| Keywords: | Law Merchant, international commercial arbitration, transnational law, cross-border contracts, international trade, private international law, conflict of laws, contract enforcement, general principles of law, party autonomy, trade usage, standard form contracts |
| JEL: | A14 B11 B15 F13 F14 F15 F23 K12 K33 K41 K49 L14 L22 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:52&r=int |
| By: | Jorge Saba Arbache |
| Abstract: | The aim of this paper is to present a review of the theoretical and empirical literature about the effects of trade liberalization on the labor markets of developing countries. We discuss models which seek to explain the empirical finding that openness has increased the wage inequality in several developing countries. O objetivo deste artigo é apresentar uma revisão teórica e empírica da literatura sobre os efeitos da abertura comercial no mercado de trabalho dos países em desenvolvimento. Discutem-se modelos que procuram explicar os resultados empíricos de que a liberalização comercial aumenta a desigualdade nos países em desenvolvimento. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0110&r=int |
| By: | Christoph Böhringer (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra); Brita Bye (Statistics Norway, Research Department); Taran Fæhn (Statistics Norway, Research Department); Knut Einar Rosendahl (Norwegian University of Life Sciences, School of Economics and Business) |
| Abstract: | Climate effects of unilateral carbon policies are undermined by carbon leakage. To counteract leakage and increase global cost-effectiveness carbon tariffs can be imposed on the emissions embodied in imports from non-regulating regions. We present a theoretical analysis on the economic incentives for emission abatement of producers subjected to carbon tariffs. We quantify the impacts of different carbon tariff designs by an empirically based multi-sector, multi-region CGE model of the global economy. We find that firm-targeted tariffs can deliver much stronger leakage reduction and higher efficiency gains than tariff designs operated at the industry level. In particular, because the exporters are able to reduce their carbon tariffs by adjusting emissions, their competitiveness and the overall welfare of their economies will be less randomly and less adversely affected than in previously studied carbon tariff regimes. This beneficial distributional impact could facilitate a higher degree of legitimacy and legality of carbon tariffs. |
| Keywords: | carbon leakage, border carbon adjustment, carbon tariffs, computable general equilibrium (CGE) |
| JEL: | Q43 Q54 H2 D61 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:51&r=int |
| By: | Kumo, Kazuhiro; Korgun, Irina |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:44&r=int |
| By: | Reddy, Kotapati Srinivasa |
| Abstract: | The purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with Asian emerging market-India, namely Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal with oil and gas exploration industry. To do so, we adopt a legitimate method in qualitative research, that is, case study method and thereby perform a unit of analysis and cross-case analysis. We suggest that government officials’ erratic nature and ruling political party influence were more in foreign inward deals that characterize higher bid value, listed target company, cash payment, and stronger government control in the industry. Importantly, the liability of foreignness and liability of localness was found to be severe in Indian-hosted deals that describe higher valuation, cash payment and dynamic industry. We eventually propose implications of mergers and acquisitions for extractive industries thus to enhance productivity and improve welfare measures during post-integration phase. |
| Keywords: | Cross-border mergers and acquisitions; Foreign direct investment; Oil and gas exploration industry; Telecommunications industry; Institutional theory; legal and regulatory framework; Internationalization |
| JEL: | F2 F23 F4 G3 G34 L2 M1 M16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63940&r=int |
| By: | Reddy, Kotapati Srinivasa |
| Abstract: | The purpose of this paper is to review and summarize earlier studies analyzing the determinants of cross-border mergers and acquisitions (M&As). We primarily describe the motives of cross-border acquisitions and present the market performance for corporate control transactions over the period 1994-2013. Then, we illustrate the factors affecting cross-border investments and acquisitions in various taxonomies, namely deal-specific factors, firm- and industry-specific attributes, organizational learning and prior-acquisition experience, and country-specific factors. We draw special attention to the country-specific taxonomy for various reasons include economic and financial markets environment, institutional and regulatory framework, political situation (including corruption), tax system, accounting and valuation matters, geographical factors and cultural issues. We also provide a synopsis of earlier studies addressing the diversification motive in M&A decision. We thus propose that a host-country’s institutional laws and regulatory system, accounting and tax provisions, economic performance, financial markets development, investor protection, geographical, political and cultural factors distinctly affect cross-border acquisition’s completion. Lastly, we outline contemporary issues in M&A research, and suggest promising areas for future exploration. |
| Keywords: | Literature review; Cross-border mergers and acquisitions; Internationalization; Foreign market entry strategies; International diversification; Foreign direct investment; International business research |
| JEL: | E6 F2 F23 F4 G3 G34 G38 K2 L2 M1 M16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63969&r=int |
| By: | Octávio Augusto Fontes Tourinho; Honorio Kume; Ana Cristina de Souza Pedroso |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0124&r=int |