nep-int New Economics Papers
on International Trade
Issue of 2015‒05‒16
27 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Input-Trade Liberalization and Markups By Haichao Fan; Yao Amber Li; Tuan Anh Luong
  2. Quality and Export Performance Evidence from Cheese Industry By Duvaleix-Tréguer, Sabine; Emlinger, Charlotte; Gaigné, Carl; Latouche, Karine
  3. How Deep Is Your Love? A Quantitative Spatial Analysis of the Transatlantic Trade Partnership By Krebs, Oliver; Pflüger, Michael P.
  4. Indirect exporters and importers By M. Grazzi; C.Tomasi
  5. Import Response to Exchange Rate Fluctuations: A Micro-level Investigation By Yao Amber Li; Jenny Xu; Carol Zhao Chen
  6. Quality upgrading in the European-Union agri-food exports By Ferto, Imre; Bojnec, Stefan
  7. Why Trading with Dictators May Nevertheless Help the People: On the Interplay between Trade, Political Regimes and Economic Institutions By Khalid, Usman
  8. WTO Dispute Determinants By David J. Kuenzel
  9. Exports, imports, FDI and GDP in Mexico By José Romero
  10. GIs, Food Safety, and Sustainability Challenges and Opportunities By Wirth, David
  11. Democracy and international trade: Differential effects from a panel quantile regression framework By Abeliansky, Ana; Krenz, Astrid
  12. Islands as ‘Bad Geography’. Insularity, Connectedness, Trade Costs and Trade By A.M. Pinna; L. DeBenedictis
  13. Home Bias in Multimarket Cournot Games By Catherine Roux; Luís Santos-Pinto; Christian Thöni
  14. Competitiveness of the European economy By Landesmann, Michael; Leitner, Sandra; Stehrer, Robert
  15. Agricultural trade and development: A value chain perspective By Maertens, Miet; Swinnen, Johan
  16. Employment effects of foreign direct investment. New Evidence from Central and Eastern European Countries. By C. Jude; M. I. Pop Solaghi
  17. Lowering of SPS settings to international standards offers big gains all round: The case of Vietnamese pork trade: Powerpoint By Trewin, Ray
  18. Does the Post-Crisis Weakness of Global Trade Solely Reflect Weak Demand? By Patrice Ollivaud; Cyrille Schwellnus
  19. Geographic Indicators and Rural Development in North Africa Implications for TTIP Negotiations By Petit, Michel; Ilbert, Helene
  20. The Increase of Competitiveness of Serbian Products in International Trade Through a System of Protecting Geographical Indications By Vasić, Aleksandra
  21. International Technology Diffusion of Joint and Cross-border Patents By Chia-Lin Chang; Michael McAleer; Ju-Ting Tang
  22. Convergence in a Dynamic Heckscher-Ohlin Model with Land By Guilló, María Dolores; Pérez-Sebastián, Fidel
  23. Geographical Indications in Progress…Do Latin America Countries Represent a Third Path of Development? By Sidali, Katia Laura; Granja, Nelson; Monteros, Alvaro; Wilson, Usiña
  24. Institutional Dichotomy and Cross-Border Inbound Acquisitions: A Study of Three Cases By Reddy, Kotapati Srinivasa
  25. Assessing European competitiveness : The new CompNet micro-based database By Lopez-Garcia, P. ; di Mauro, F. ; the CompNet Task Force
  26. Backshoring of Production Activities in European Manufacturing By Dachs, Bernhard; Zanker, Christoph
  27. The Legal Protection of GIs in TTIP: Is There an Alternative to the CETA Outcome By O'Connor, Bernard

  1. By: Haichao Fan (School of International Business Administration, Shanghai University of Finance and Economics); 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); Tuan Anh Luong (School of International Business Administration, Shanghai University of Finance and Economics)
    Abstract: This paper presents theory and evidence from Chinese firm-product data that, given firm productivity, trade liberalization increases product markups. This finding calls for a reconsideration of the well-established imports-as-market-discipline hypothesis. This paper further verifies underlying mechanisms behind this finding: input tariff reductions decrease marginal costs, and tariff effects on markup adjustments are more profound among firms of higher import dependence. By comparing results for two trade regimes -- ordinary trade wherein firms pay import tariffs to import, and processing trade wherein firms are not subject to import tariffs -- this paper finds that the aforementioned effects only apply to ordinary trade.
    Keywords: Trade liberalization, Input tariff, Markup, Marginal cost, Ordinary trade, Processing trade, Output tariff
    JEL: F12 F14 L11
    Date: 2015–05
  2. By: Duvaleix-Tréguer, Sabine; Emlinger, Charlotte; Gaigné, Carl; Latouche, Karine
    Abstract: The paper questions the impact of quality label on firm export competitiveness in the cheese and cream industry. We use firm level data from the French custom and an original dataset of firms and products concerned by protected designations of origin (PDO). Our econometric estimations shows that PDO labelling impacts both the extensive margin (the number of destinations) and the intensive margin of trade (the value of trade), and increases the average export unit value. The role of label in export performance varies with the market of destination and is more important when exporting to EU countries.
    Keywords: Quality Label, PDO, Trade Margin, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015–04
  3. By: Krebs, Oliver (University of Würzburg); Pflüger, Michael P. (University of Würzburg)
    Abstract: This paper explores the quantitative consequences of transatlantic trade liberalization envisioned in a Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union. Our key innovation is to develop a new quantitative spatial trade model and to use an associated technique which is extraordinarily parsimonious and tightly connects theory and data. We take input-output linkages across industries into account and make use of the recently established World Input Output Database (WIOD). We also explore the consequences of labor mobility across local labor markets in Germany and the countries of the European Union. We address the considerable uncertainties connected both with the quantification of non-tariff trade barriers and the outcome of the negotiations by taking a corridor of trade liberalization paths into account.
    Keywords: international trade and trade policy, factor mobility, intermediate inputs, sectoral interrelations, transatlantic trade, TTIP
    JEL: F10 F11 F12 F16
    Date: 2015–04
  4. By: M. Grazzi; C.Tomasi
    Abstract: This paper analyses the relation between firms' productivity and the different modes of participation to international trade. In particular, we account for the possibility that firms can not only export their products, but also internationally source their inputs, either directly or indirectly. Using a cross section of firm-level data for several advanced and developing economies, the study confirms the productivity-sorting prediction according to which domestic firms are less efficient than those resorting to an export intermediary, while the latter are less productive than producers which export directly. We show that the same sorting exists also on the import side. Finally, we investigate the effects of source country characteristics on the sorting of firms into different modes of international trade.
    JEL: F14 D22 L22
    Date: 2015–04
  5. By: 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); Jenny Xu (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Carol Zhao Chen (Department of Economics, Hong Kong University of Science and Technology)
    Abstract: This paper presents theory and evidence on firms' import responses to exchange rate fluctuations using disaggregated Chinese imports data. The paper develops a heterogeneous-firm trade model that predicts import responses at both extensive and intensive margins as well as the more profound adjustment under ordinary trade than processing trade. Next, the paper empirically investigates import responses to exchange rate fluctuations at extensive and intensive margins in both the short run and the long run, and confirms the model predictions. We also find variations among import responses under different exchange rate regimes, including fixed exchange rate, expected appreciation, and confirmed appreciation.
    Keywords: exchange rate, import, extensive margin, intensive margin, processing trade, exchange rate regimes, pass-through
    JEL: F14 F31
    Date: 2015–05
  6. By: Ferto, Imre; Bojnec, Stefan
    Abstract: The paper investigates determinants of quality upgrading in the European Union agri-food exports using panel data models in the 2000-2011 period. Employing highly disaggregated data we show that export unit value is positively associated with level of economic development and the size of population. Our results indicate negative impacts of comparative advantages and trade costs on export quality upgrading. Estimations confirm the important role of income distribution in quality specialization. The income inequality increases specialization in high quality varieties for rich countries. Results are robust to alternative subsamples including vertical specialized and final agri-food products.
    Keywords: export quality, income inequality, vertical comparative advantage, agri-food exports, European Union, Agricultural and Food Policy, International Relations/Trade, Q17, D31, C33, C55,
    Date: 2015–04
  7. By: Khalid, Usman (Department of Economics, Lund University)
    Abstract: Recent empirical studies confirm a positive relationship between trade liberalization or trade openness and the quality of domestic economic institutions. An isolated analysis of trade openness per se, however, may grossly simplify the mechanisms at work, as the linkage between open trade and quality of economic institutions is likely to vary for different political regimes. This study examines the causal relationship between trade openness and quality of economic institutions under different political institutions. We find that in the presence of extractive political institutions, the effect of trade openness on economic institutions is reduced significantly.
    Keywords: trade openness; political institutions; economic institutions; institutional change
    JEL: F13 F14 P14 P16
    Date: 2015–05–04
  8. By: David J. Kuenzel (Department of Economics, Wesleyan University)
    Abstract: A functioning enforcement mechanism is crucial to ensure the continued success of the GATT/WTO agreements. In this paper, I examine the WTO members’ dispute selection decisions to judge the effectiveness of the WTO’s enforcement institution, the Dispute Settlement Body. Previous research shows that measures of retaliatory capacity (GDP, trade volumes, export structure) correlate with the incidence of WTO disputes, but fails to account for a number of empirical facts, such as the steady drop in trade quarrels since the early 2000s. To explain the observed dispute pattern, I extend the WTO theory by incorporating a link between endogenous trade policy formation and agreement violation and dispute filing decisions. I show that countries are more likely to engage in trade disputes as complainants or defendants when they have a small “tariff overhang”, which represents the difference between bound tariffs (by WTO negotiations) and the actually applied tariffs. Lower tariff overhangs constrain WTO members’ policy flexibility to respond to adverse shocks, which I motivate in my model by sectoral productivity adjustments due to decreases in trade costs after successful trade negotiations. Guided by this theoretical framework, I present empirical evidence that tariff overhangs are an essential determinant of the WTO dispute pattern.
    Keywords: ATT/WTO, Trade Disputes, Tariff Overhangs
    JEL: F13 F51 F53 F55
    Date: 2015–04
  9. By: José Romero (El Colegio de Mexico)
    Abstract: This paper studies the impact of trade liberalization on economic growth for Mexico. A four-variable vector autoregression (VAR) is used to study the relationships between trade, FDI and economic growth using quarterly data from 1989 to 2013. The estimated results from the Granger causality/Block exogeneity test show that economic growth is affected by real non-oil exports, real imports and real foreign direct investment. There is only one bidirectional causality, that between GDP an FDI, and two additional one-way causalities, one between FDI and imports and one between imports and non-oil exports. Thus the system is circular: all variables directly or indirectly affect each other. The Impulse Response Functions and Variance Decomposition show that non-oil exports and FDI have little or no impact on GDP, not supporting the growth-led hypothesis or the one that postulates that FDI promotes growth; nor do we find that GDP has a significant effect on non-oil exports, rejecting the hypothesis that growth induces exports. Finally we find that imports have a significant effect on GDP, supporting the import-compression hypothesis.
    Keywords: trade liberalization, economic growth, Mexico, FDI, GDP
    Date: 2015–02
  10. By: Wirth, David
    Abstract: This paper examines the legal and policy relationship reinforcement amongst international standards for GIs, food safety standards, and other claims of quality or safety. The paper addresses those relationships within the context of international trade agreements protecting GIs, such as the 1994 TRIPS Agreement, the EU-Canada Comprehensive Economic and Trade Agreement (CETA), and the chapter on intellectual property and geographical indications in the Transatlantic Trade and Investment Partnership (TTIP) currently under negotiation. Trade agreements also discipline food safety measures and non-GI indications of quality or safety such as “organic” and “GMO-free.” Accordingly, the paper also considers the extent to which international trade agreements such as the WTO Agreements on the Application of Sanitary and Phytosanitary Standards (SPS Agreement) and Technical Barriers to Trade (TBT) might interact with the analysis.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015–04
  11. By: Abeliansky, Ana; Krenz, Astrid
    Abstract: There has been a wide debate on whether democracy actually has an effect on economic outcomes, and especially on international trade. With a new estimation strategy, we analyze this relationship taking a look at the distribution of countries´ trading activity. Using a panel quantile estimation framework from Powell (2014), we find a stronger relationship at the lower quantiles, especially for the import activity. Our results suggest that the impact of democratization on trade is more important when countries trade less: the marginal benefit of democratization decreases as countries trade more. This feature supports a widely neglected issue in the literature: economies very active in the international trading network are not necessarily the most democratic countries. The results are robust to different institutional variables and even to instrumental variables estimation. Our results demonstrate that the effect of democracy on trade is underestimated using Ordinary Least Squares estimation for the group of countries for which the effect is statistically significant for, namely those countries that are active in the lower quantiles of the trading distribution. Moreover, our results complement the findings by Barro (1996) which suggest that the effects of democracy for economic growth are not uniform for all countries.
    Keywords: democracy,international trade,panel quantile fixed effects
    JEL: C21 F14 O11
    Date: 2015
  12. By: A.M. Pinna; L. DeBenedictis
    Abstract: In this paper we explore the geographical dimension of insularity, measuring its effect on a comprehensive measure of trade costs (Novy 2012). Controlling for other geographical characteristics, connectedness (spatial proximity) and the role of historical events in shaping modern attitudes towards openness (measured through a quantification of routes descriptions in logbooks between 1750 and 1850), we give evidence that to be an island is not bad per se in terms of trade costs. Bad geography can be reversed by connectedness and open institutions.
    Keywords: trade, Islands, gravity model, Geography, Connectedness
    JEL: F14 F10
    Date: 2015
  13. By: Catherine Roux; Luís Santos-Pinto; Christian Thöni
    Abstract: We explore the role played by trade costs for the home bias in trade. In a series of Cournot duopoly experiments with a home and an export market, we compare output choices when firms face different levels of export costs. We find that there is two-way trade in identical products and that firms hold the majority market share in their home market. The resulting home bias turns out to be, however, stronger than that predicted by theory, and it even occurs without trade costs. We have strong evidence that collusion contributes to the home bias observed in our experiment.
    Keywords: Intra-Industry Trade; Spatial Oligopoly; Home Bias; Collusion; Experiment
    JEL: F12 L13 C91
    Date: 2015–04
  14. By: Landesmann, Michael; Leitner, Sandra; Stehrer, Robert
    Abstract: This paper examines developments in market share, export structure and revealed comparative advantage within the EU and in comparison with other regions of the world. It pays special attention to shifts in specialisation and export structure with regard to manufacturing and services, lower and higher technology industries and business services. Data are taken from the World Input-Output Database (WIOD), which provides information on international production process linkages and allows calculation of measures of "trade in value added".
    Date: 2015
  15. By: Maertens, Miet; Swinnen, Johan
    Abstract: The system of global agricultural and food trade is undergoing rapid processes of change, with important implications for economic development. In this paper we document and discuss these changes; including the rapid growth and structural change in agri-food trade, the increased consolidation in food supply chains, the proliferation of public and private food standards, high and volatile food prices, and increased vertical coordination in the chains. We investigate what the implications are of these changes for developing countries, for their participation in international agricultural trade as well as for economic development, income mobility and poverty reduction in rural areas.
    Keywords: global food supply chains,vertical coordination,food standards,food prices,developing countries
    JEL: F13 L14 O19 O24 Q17 Q18
    Date: 2015
  16. By: C. Jude; M. I. Pop Solaghi
    Abstract: This paper examines the role of foreign direct investment (FDI) as a determinant of employment by using a dynamic labor demand model applied for a panel of 20 Central and Eastern European Countries during the period 1995-2012. Our results indicate that FDI leads to a phenomenon of creative destruction. The introduction of labor saving techniques leads to an initial negative effect on employment, while the progressive vertical integration of foreign affiliates into the local economy eventually converges towards a positive long run effect. However, this phenomenon is only observed in EU countries. Our analysis thus gives partial support to the worries that FDI may displace jobs. Still, the relative importance of FDI as a determinant of employment is modest compared to economic restructuring and output growth. Finally, our results show evidence of a skill bias of production in foreign affiliates, as human capital favors a positive contribution of FDI to employment.
    Keywords: FDI, employment, labor demand, transition countries, dynamic panel.
    JEL: F23 J23
    Date: 2015
  17. By: Trewin, Ray
    Keywords: Livestock Production/Industries, Productivity Analysis,
    Date: 2015–02
  18. By: Patrice Ollivaud; Cyrille Schwellnus
    Abstract: Global trade growth over the past few years has appeared extraordinarily weak, even in relation to weak global GDP growth. This paper shows that the apparent breakdown in the relationship between global trade and global GDP growth is largely explained by two factors: an inappropriate measurement of global GDP and extraordinary demand weakness in the euro area. As a measure of demand for traded goods, global GDP at market exchange rates is more appropriate than the conventional purchasing power parity-based measure. Moreover, extraordinary demand weakness in the euro area – which is a particularly trade intensive region – has had a substantial negative effect on intra-euro area trade flows, which are commonly counted towards global trade. When global GDP is measured at market exchange rates and intra-euro area flows are removed from the measure of global trade, econometric estimations suggest that over the past 15 years the long-term elasticity of global trade to GDP has been similar to that of the 1990s. Indeed, the overwhelming part of post-crisis trade weakness can be attributed to weak global demand rather than structural changes, according to the econometric estimations in this paper and supporting evidence on changes in global investment, international production fragmentation and protectionism.<P>La faiblesse du commerce mondiale après la crise reflète-t-elle seulement une faible demande?<BR>La croissance du commerce mondial a été particulièrement faible ces dernières années, même relativement à la croissance du PIB mondial. Ce papier montre que cette apparente rupture dans la relation entre croissance du commerce mondial et du PIB mondial est due dans une large mesure à deux facteurs : une mesure inappropriée du PIB mondial et une faiblesse exceptionnelle de la demande dans la zone euro. Pour mesurer la demande en biens échangeables, le PIB mondial agrégé avec des taux de change du marché est plus adapté que la mesure conventionnelle basée sur des conversions en parité de pouvoir d’achat. De plus, la faiblesse exceptionnelle de la demande dans la zone euro (où l’intensité du commerce est particulièrement forte) a eu un effet négatif substantiel sur les flux intra-zones, qui sont habituellement comptabilisés dans le commerce mondial. Une fois que le PIB mondial est agrégé avec des taux de change de marché et que l’on soustrait les flux intra-zone-euro au commerce mondial, les estimations économétriques suggèrent ainsi que sur les 15 dernières années, l’élasticité de long-terme du commerce au PIB mondial a été similaire à celle des années 90. En effet, la faiblesse du commerce mondial après la crise est essentiellement due à une faiblesse de la demande mondiale plutôt qu’à un changement structurel. Cela est montré par les estimations économétriques de ce papier et également confirmé par l’observation des évolutions de l’investissement mondial, de la fragmentation de la production internationale et du protectionnisme.
    Keywords: forecasting, trade elasticity, élasticité du commerce, prévisions, Commerce mondial
    JEL: C53 F10 F17
    Date: 2015–05–07
  19. By: Petit, Michel; Ilbert, Helene
    Abstract: In an earlier paper we interpreted the resolution of the 2005 WTO dispute on GIs as a stalemate and suggested a shift of the balance of power in favor of the pro-GI coalition. Since then, international negotiations continue to be stalled. The record of GIs as a tool for the promotion of rural development shows that few non-European GIs have been registered. The case of Morocco illustrates the difficulties faced by a government eager to use GIs as a development instrument. International recognition of GIs is difficult. The TTIP might not resolve institutional and doctrinal GIs problems.
    Keywords: Geographical Indication, Rural Development, European Registration, Moroccan Terroir Policy, Bilateral Free Trade Agreement., Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015–04
  20. By: Vasić, Aleksandra
    Abstract: This Article analyzes harmonization of regulations adopted by the Republic of Serbia in the field of protecting geographical indications with the EU relevant regulations. Full harmonization with the acquis communautaire should create a possibility for Serbia to sell its products on the World Market and to protect these brands legally. Serbia is rich in natural, agricultural and food products produced in undeveloped rural areas. However, unlike European producers, producers in Serbia have not sufficiently recognized their economic interest to protect their products with geographical indications and are less likely to use this type of protection. Therefore, we believe that an adequate system of protection harmonized with European and International Standards represents a significant economic potential for developing rural areas and can provide competitiveness of Serbian products labeled with geographical indications both on European and International Market.
    Keywords: Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015–04
  21. By: Chia-Lin Chang (National Chung Hsing University, Taiwan); Michael McAleer (National Tsing Hua University, Taiwan; Erasmus University Rotterdam, the Netherlands; Complutense University of Madrid, Spain); Ju-Ting Tang (National Chung Hsing University, Taiwan)
    Abstract: With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology.
    Keywords: International Technology Diffusion; Exports; Imports; Joint Patent; Cross-border Patent; R&D; Negative Binomial Panel Data
    JEL: F14 F21 O30 O57
  22. By: Guilló, María Dolores (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica); Pérez-Sebastián, Fidel (Departamento de Fundamentos del Análisis Económico)
    Abstract: Heckscher-Ohlin versions of the two-sector neoclassical growth model predict that late-blooming nations can remain permanently poorer. This is an important result that warns us about the dangers of international trade. We show, however, that the result vanishes once inputs in fixed supply such as land are introduced into the model.
    Keywords: Fixed factors; international trade; neoclassical growth; convergence
    JEL: F43 O41
    Date: 2015–05–04
  23. By: Sidali, Katia Laura; Granja, Nelson; Monteros, Alvaro; Wilson, Usiña
    Abstract: Geographical Indications (GIs) are names of regions, specific places or, in exceptional cases, countries, used to describe an agricultural product or a foodstuff (EC 510/2006, Art. 2). They have received much attention in the last years not only at the European level, where they stem from, but also at different international forums such as at the World International Organization (WTO). Being a particular form of intellectual property these certifications schemes could have the potential to be applied also to non-agrifood commodities or even services. Furthermore, due to the severe menace of biodiversity loss caused by globalization, GIs could serve as a tool to promote biodiversity if linked to plant varieties menaced of disappearance or rare animal species. However, international negotiations to achieve these purposes are long and results are minimal (REF). For these reasons the purpose of this paper is to introduce a new stance to the topic of GIs borrowing from the Latin-american implementation of GIs which in some aspects can be considered quite innovative. In the remainder of this paper the authors will present a short description of GIs as they are discussed at different international forums. Further, the innovative implementation of GIs in Latin America will be illustrated by means of three examples: the Sombrero of Montecristi, the GIs of a Brasilian technology and science park (TSP) and the cacao Arriba. Eventually, some conclusions will be presented.
    Keywords: Geographical Indications, WTO, TRIPS, Local Culture, Biodiversity, Latin America, Niche Products, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015–04
  24. By: Reddy, Kotapati Srinivasa
    Abstract: The extant literature on cross-border mergers and acquisitions suggested that firm-specific, deal-specific, and country-specific determinants affect both negotiation process and post-merger integration. In particular, a great extent of strategy, international business and finance scholars argued that legal and regulatory infrastructure, level of investor protection, financial markets development, international taxation provisions, and macroeconomic indicators have been most important factors significantly affecting the cross-border acquisitions completion. In fact, we found significant knowledge gap on why cross-border acquisitions often litigate, delay and unsuccessful, especially when target firm is associated with developing country. With this in mind, we develop and analyze three litigated cross-border acquisitions connected to the host country-India: (i) Vodafone acquisition of Hutchison in 2007, (ii) unsuccessful cross-border merger between Bharti Airtel and MTN Group in 2008-09, and (iii) Vedanta Resources acquisition of Cairn India in 2010-11. To do so, we adopt qualitative case study research both to test existing theory and to build new theory. Hence, we accomplish research goals based on our new multi-case research design that assist qualitative researchers to overcome institutional barriers accountable for data collection as well as to study the emerging markets phenomenon. Regarding theory testing, we test seventeen theories propounded in management-related literature. Based on limitations of the existing theories and multi-case proofs, we develop new theory and offer lawful propositions for future research that would advance the current knowledge on institutional role in cross-border acquisitions. In addition, we also recommend an alternative foreign market entry model for making successful business entry in developing countries. We therefore conclude that a given country’s weak regulatory system benefits acquirer, target, or both; simultaneously, the behavior would adversely affect on economic benefit of that host country.
    Keywords: Cross-border mergers and acquisitions; Internationalization; Foreign market entry strategies; International diversification; Foreign direct investment; International business research; Institutional theory; Case study research; Emerging markets; Asian markets; India
    JEL: F2 F21 F23 G3 G34 G38 K2 K22 L1 M1 M16
    Date: 2014
  25. By: Lopez-Garcia, P. ; di Mauro, F. ; the CompNet Task Force (Research Department, NBB)
    Abstract: Drawing from confidential firm-level balance sheets for 17 European countries (13 Euro-Area), the paper documents the newly expanded database of cross-country comparable competitivenessrelated indicators built by the Competitiveness Research Network (CompNet). The new database provides information on the distribution of labour productivity, TFP, ULC or size of firms in detailed 2-digit industries but also within broad macro-sectors or considering the full economy. Most importantly, the expanded database includes detailed information on critical determinants of competitiveness such as the financial position of the firm, its exporting intensity, employment creation or price-cost margins. Both the distribution of all those variables, within each industry, but also their joint analysis with the productivity of the firm provides critical insights to both policymakers and researchers regarding aggregate trends dynamics. The current database comprises 17 EU countries, with information for 56 industries, including both manufacturing and services, over the period 1995-2012. The paper aims at analysing the structure and characteristics of this novel database, pointing out a number of results that are relevant to study productivity developments and its drivers. For instance, by using covariances between productivity and employment the paper shows that the drop in employment which occurred during the recent crisis appears to have had “cleansing effects” on EU economies, as it seems to have accelerated resource reallocation towards the most productive firms, particularly in economies under stress. Lastly, this paper will be complemented by four forthcoming papers, each providing an in-depth description and methodological overview of each of the main groups of CompNet indicators (financial, trade-related, product and labour market).
    Keywords: cross country analysis, firm-level data, competitiveness, productivity and size distribution, total factor productivity, allocative efficiency.
    JEL: L11 L25 D24 O4 O57
    Date: 2015–04
  26. By: Dachs, Bernhard; Zanker, Christoph
    Abstract: This note presents empirical evidence on production backshoring – the movement of production activities from locations abroad back to the home country. Between 2010 and Mid-2012, only four percent of all firms moved production activities back to their home country. For every backshoring firm, there are more than three offshoring firms. Thus, from today’s perspective it is unlikely that backshoring will be an important driver of a ‘manufacturing renaissance’ in Europe. The most frequent reason for backshoring is poor quality of the goods produced at foreign locations, followed by the loss of flexibility and too high transport costs. Sectors with a high backshoring propensity are electrical equipment, communications equipment and the automotive industry. These sectors are the most obvious candidates for policy intervention to increase the frequency of backshoring in European manufacturing.
    Keywords: Backshoring, offshoring, manufacturing, relocation
    JEL: F23 L6
    Date: 2015–04–20
  27. By: O'Connor, Bernard
    Abstract: The protection of European Geographical Indications has been a point of conflict between the European Union and the United States for many years. The essential difference is in how GIs should be protected, if they should be protected at all. The US considers that they can be protected as a sub-set of Trade Marks. The EU considers that GIs are a distinct form of Intellectual Property requiring a distinct system of law. The practical issue today is the extent to which EU GIs can be protected in the US. The US seeks to limit the availability of protection on the basis that many EU food names are descriptive of types of foods rather than names specifically linked to a particular origin. For the EU, protection of GIs is a reflection of the EU’s vast food culture and goes hand in hand with the reform of the Common Agricultural Policy. Protection of EU GIs in third countries is a quid pro quo for abandoning the management of production and protection of the EU market. It has not been possible to come to agreement in the WTO Doha Round. Can agreement be found in TTIP? This paper suggests that the solution must be rooted in intellectual property law rather than in agricultural policy
    Keywords: TTIP, GIs, CETA, Legal, Agricultural and Food Policy, Institutional and Behavioral Economics, International Relations/Trade, Political Economy, Public Economics,
    Date: 2015–04

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