nep-int New Economics Papers
on International Trade
Issue of 2015‒10‒10
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Sustaining Micro Competitiveness to Ensure Convergence and Macro Resilience of the Polish Economy By Albinowski, Maciej; Hagemejer, Jan; Lovo, Stefania; Varela, Gonzalo
  2. ASEAN: Regional Integration and Reforms By Mari PANGESTU; Lili Yan ING
  3. Trade costs and Norwegian salmon export By Straume, Hans-Martin
  4. Study of Mutual Influence of International Trade Agreements and International Trade By Idrisov, Georgy; Istomin, R.; Kaukin, Andrey
  5. The Belgian production network 2002-2012 By Emmanuel Dhyne; Glenn Magerman; Stela Rubínova
  6. Processed Food Trade of Greece with EU and Non-EU Countries: An Empirical Analysis By Ghazalian, Pascal L.
  7. Aging, Trade and Migration By Richard Chisik; Harun Onder; Dhimitri Qirjo
  8. Outward FDI and domestic input distortions: Evidence from Chinese firms By CHEN, Cheng; TIAN, Wei; YU, Miaojie
  9. International Freight and Related CO2 Emissions by 2050: A New Modelling Tool By Luis Martinez; Jari Kauppila; Marie Castaing Gachassin
  10. The advantages of Serbia for Foreign Direct Investments By Tijana Radojevic; Marko Sarac; Dalibor Radovanovic; Nemanja Stanisic
  11. Intrafirm trade and vertical fragmentation in U.S. multinational corporations By Natalia Ramondo; Veronica Rappoport; Kim J. Ruhl
  12. Initiative for Infrastructure Integration in South America : Way toward Regional Convergence By Andrea Bonilla Bolaños
  13. Balance-of-Payments Constraints in Colombia: Effects of International Openness and Trade with Asia By Pavel Vidal Alejandro; Jose Tomas Pelaez Soto; Mauricio de Miranda Parrondo
  14. Measuring the impact of competitiveness (GCI-global competitiveness index) on trade flows of Albania By Dorina Çumani
  15. Trade, Technologies, and the Evolution of Corporate Governance By Schymik, Jan Simon
  16. Globalisation and Conflicts: A Theoretical Approach By Bonginkosi Mamba, André C Jordaan and Matthew Clance
  17. Currency unions and trade: a post-EMU mea culpa By Glick, Reuven; Rose, Andrew K.
  18. Duration and temporary trade By Straume, Hans-Martin; Asche, Frank
  19. Dominant Carrier Performance and International Liberalisation: The case of North East Asia By Xiaowen Fu; Tae H. Oum
  20. Quality standards versus nutritional taxes: health and welfare impacts with strategic firms By Réquillart, Vincent; Soler, Louis-Georges; Zang, Yu
  21. Too Small To Protect? The Role of Firm Size in Trade Agreements By Matthew T. Cole; Ben Zissimos
  22. Logistics and transport in Colombia: factors affecting the export performance By Diana Marcela Escandon Barbosa
  23. Theoretical Questions of the Impact of the Conclusion of Preferential Trade Agreements on International Investment By Idrisov, Georgy; Taganov, Boris
  24. New Approaches to Economic Forcasts of the Flower Export In Iran By Farzaneh Taheri
  25. Explaining Diversification in Exports Across Higher Manufacturing Content: What is the role of commodities? By Jan Rieländer; Bakary Traoré
  26. Effect of consuming imported cultural goods on trading partners’ tolerance toward immigrants: The case of Japanese anime in Korea By Yamamura, Eiji; Shin, Inyong
  27. Product level embodied carbon flows in bilateral trade By Misato Sato
  29. Assessing the Prospects for an E.U.-ASEAN Air Transport Agreement By Alan Khee; Jin Tan
  30. Globalization and Wage Polarization By Giammario Impullitti

  1. By: Albinowski, Maciej (Ministry of Finance of Poland and Warsaw School of Economics); Hagemejer, Jan (National Bank of Poland and University of Warsaw); Lovo, Stefania (London School of Economics and Political Science, Grantham Research Institute on Climate Change and the Environment); Varela, Gonzalo (The World Bank Group)
    Abstract: We use export transaction and firm-level data to analyze Poland's export competitiveness over the period 2005 - 2013. Polish firms have become increasingly internationalized through exports. We observe a substantial increase in the number of exporters and a decrease in their average size, which indicates that fixed costs associated with exporting have decreased – mainly with the EU. Decomposition of export growth reveals that diversification is an increasingly important factor in explaining export growth. Exporters have become more diversified in the analyzed period, and export quality has been converging to the levels of high-income country exporters. We find that the process of quality upgrading is concurrent with market diversification: exporters upgrade in quality as they diversify into new destinations, likely because clients demand improvements in product specifications. Polish export flows are highly sustainable and we identify factors conducive to their survival. When analyzing determinants of participation in the export markets we find that the effect of real exchange rate varies across firms, depending on the extent to which firms participate on regional or global value chains (as measured by the firms' share of imported inputs in the total input bill). Productivity, financial constraints and sunk costs also matter for the export decision. In additional we find substantial evidence of local sectoral spillovers on exports. Finally, productivity dynamics were analyzed. Productivity growth in the analyzed period has been solid and resulted both from within-firm gains and allocative efficiency gains. Both domestic and foreign firms experienced productivity gains during the period. For domestic firms, an important source of these gains appears associated with FDI vertical spillovers through forward linkages. Increased FDI stocks in upstream markets account for between 5 and 30 percent of the TFP gains observed during the period 2005-2013 in most sectors.
    Keywords: export competitiveness; export decision; export diversification; total factor productivity; vertical spillovers
    JEL: D24 F14
    Date: 2015–10–06
  2. By: Mari PANGESTU (Faculty of Economics, University of Indonesia); Lili Yan ING (Economic Research Institute for ASEAN and East Asia (ERIA) and University of Indonesia)
    Abstract: Over recent decades, the Association of Southeast Asian Nations (ASEAN) has advanced a policy of regional integration, starting with the ASEAN Free Trade Area, followed by the ASEAN+1 free trade agreements with its six main trading partners, and now with ASEAN+6. For ASEAN to further advance regional integration in the East Asian context, it should continue to focus on trade in goods, investment, and services, to smooth out the process of trade creation and investment realisation. East Asian integration is designed not to be just an ‘extensive regional trade agreement’, but more a ‘responsive vehicle’ that consists of trade and investment commitments combined with facilitation, to improve the effectiveness of the implementation of trade and investment agreements and the liberalisation agenda for all members. To keep regional integration viable, it should adopt an open regionalism policy.
    Keywords: ASEAN, integration, global value chains, free trade agreement, reforms
    JEL: F1 F14 F15
    Date: 2015–09
  3. By: Straume, Hans-Martin (Department of Economics, University of Bergen, and Department of Economics, BI Norwegian Business School)
    Abstract: Recent research indicates that transportation costs are more important for foods than other products due to food´s perishability. This paper uses transaction-level data to analyze the effect of trade costs on trade growth of a highly perishable good, fresh farmed salmon. I investigate trade growth, as well as two distinct margins of trade, the number of exporting firms and the shipment frequency. I find that trade growth is influenced by traditional gravity variables, such as distance and GDP. Further, the paper explores how variables, such as internal transportation costs and the exporters’ choice of transportation mode, impact export of salmon. To estimate the two margins of trade, two different count data models are estimated. The results indicate that increased transportation costs have a remarkably large negative effect on trade growth of salmon export from Norway, but that this effect is also highly dependent on aggregation level.
    Keywords: salmon aquaculture; transaction-level data; gravity; margins of trade; count data models
    JEL: F10 F14 Q22
    Date: 2015–10–03
  4. By: Idrisov, Georgy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Istomin, R. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Kaukin, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: World trade has expanded significantly in the second half of the 20th century: in the period from 1948 to 1973 the value of trade at current prices increased from 59 to 579 billion dollars a year. World GDP in nominal terms over the same period increased by 6 times. The growth rate of exports in real terms, faster than the growth rate of real GDP doubled during the second half of the 20th century. A considerable role in this rapid growth of trade relations played the Bretton Woods agreements and the multilateral liberalization of trade regimes pursued in the framework of the GATT. Trade liberalization has in fact decline in trade barriers, expanding production capacity through the involvement of the world economy into the global production chain companies with more low relative cost of production, which contributes to the global division of labor, an increase in world production of equalization between the two countries and marginal rates of substitution of some other goods. In theory, a totally free trade is beneficial to all market participants if they are quite small in comparison with the global market and can not influence world prices. However, trade liberalization does not necessarily lead to an increase in the welfare of even small-sized countries which are not able to influence world prices. International trade theory does not give an unambiguous answer to the question of whether this specific agreement increasing the well-being of participants, or decreases. Effect of preferential trade agreements concluded on the welfare of his country depends on the manner in which trade flows are redistributed as a result of this agreement. If the increase in trade between the members of the agreement is due to the decrease in imports from third countries, the agreement has a negative effect on the welfare of its members. If the increase in trade with partners in the PTS associated with a reduction of trade costs between them and does not reject trade from third countries, the agreement increases the welfare of the members. The question of whether the agreement increasing the well-being of countries that have concluded it is important from the economic and political point of view as the goal of the government should be the welfare of their citizens. In practice, governments often when making a decision on the conclusion of a trade agreement governed the benefits of any industry or a limited group of persons. Such motives usually are in conflict with the objective of maximizing social welfare. The actual total impact of each preferential trade agreement on welfare can be found only empirically. In this paper we present an assessment entered into force in 2010. The agreement on the establishment of the Customs Union of Belarus, Kazakhstan and Russia, and examine whether it has a positive impact on the welfare of the participating countries. Evaluation is done by cross-sectional comparison of the world's trade in different periods of time. Use gravity empirical model of international trade, which has one of the highest explanatory power and, at the same time, a stable theoretical basis, following several general equilibrium models. This econometric model is a cross-sectional model, which means that in reality the long-term effect may be greater than estimated in the work due to the fact that at present not all barriers to trade between the two countries fell to their long-term levels and trade flows could not time to respond to changes that have occurred to date.
    Keywords: trade agreements, international trade, trade liberalization
    Date: 2015–06
  5. By: Emmanuel Dhyne (Research Department, NBB and UMons); Glenn Magerman (KULeuven, University of Leuven, Faculty of Business and Economics, Centre for Economic); Stela Rubínova (The Graduate Institute, Geneva)
    Abstract: This paper presents the Belgian inter-firm network for the years 2002 to 2012. Combining raw data from VAT listings, VAT declarations and annual accounts information, we build a unique and consistent database containing values of transactions between enterprises in the Belgian economy. The dataset spans Primary Industries, Manufacturing, Utilities, Market Services and Non-Market Services. This dataset, unparalleled in coverage at the firm-to-firm level and its panel dimension, allows one to analyze a broad spectrum of research questions in industrial organization, international trade, network theory etc. As a simple example of the potential of this dataset, we evaluate the position of enterprises in the Belgian network, their distance to final demand and their relationship with exports and imports. The degree of upstreamness, defined as a weighted distance to final demand, of the average enterprise is 1.6, ranging between 1 and 9.5. While only 5 % of enterprises export, 82 % of the enterprises in the Belgian network are producing goods and services that are either directly or indirectly exported after transformation or use. On the ip side, only 9 % of enterprises are importers but 99 % of firms are either importers or have importers in their supply chain and therefore consume imported inputs indirectly. However, we find large interand intra-sectoral as well as inter-regional heterogeneity in enterprise positions in the Belgian production network.
    Keywords: Enterprises, firm-level analysis, networks, international trade
    JEL: C67 C81 L23
    Date: 2015–10
  6. By: Ghazalian, Pascal L.
    Abstract: This paper examines the implications of the European Union (EU) regional trade preferences for processed food trade between Greece and its EU partners, and between Greece and non-EU countries. The empirical analysis relies on the gravity model, and uses different estimation techniques. The results show that the EU regional trade preferences led to substantial increases in processed food trade between Greece and its EU partners, emphasizing trade creation effects. The magnitudes of these increases are higher than the intra-EU average, and are more pronounced for Greece’s imports than for Greece’s exports. The results also indicate that the EU regional trade preferences brought about decreases in processed food trade between Greece and non-EU countries, implying trade diversion effects. The findings in this paper suggest that the Greek food processing industry would benefit from enhanced production, innovation, and market strategies to expand exports to the EU market and to counter import competition in the domestic market.
    Keywords: European Union, food processing, gravity model, Greece, regional trade agreement, trade creation, trade diversion
    JEL: F13 F14 F15
    Date: 2015–10–05
  7. By: Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada); Harun Onder (The World Bank); Dhimitri Qirjo (Department of Economics & Finance, SUNY Plattsburgh)
    Abstract: We consider the role of demand driven changes arising from popula- tion aging and how they aect the pattern of international trade as well as trade and immigration policy. An aging society can see a wel- fare reducing reduction in its share of manufacturing output and this reduction is magnied by a decrease in trade costs (an increase in glob- alization). Immigration can ameliorate this outcome if it is directed towards younger immigrants. A unilateral tari increase can also re- duce rm delocation from aging country, however, a reciprocated tari increase will unambiguously harm the country with the older average population.
    Keywords: Demographic Transition, Consumption, Trade Policy, Immigration Policy.
    JEL: F12 J14 F22
    Date: 2015–10
  8. By: CHEN, Cheng; TIAN, Wei; YU, Miaojie
    Abstract: This paper studies how discriminations against private enterprises (i.e., non-state-owned enterprises or non-SOEs) in the domestic market affect firms’ investment and production strategies abroad. We first document three puzzling empirical findings using data on Chinese multinational corporations (MNCs). First, private MNCs are less productive than state-owned MNCs. Second, SOEs are less likely to undertake FDI. Third, relative size of state-owned MNCs (compared with non-exporting or non-multinational firms) is larger than that of private MNCs. A theoretical model is built to rationalize these facts. The key economic force is that distortions in the domestic input market incentivize private firms to invest and produce abroad, which results in less tougher self-selection into FDI for those firms (i.e., selection reversal). Compared with state-owned MNCs, private MNCs allocate output disproportionately more in the foreign market, and their size increases disproportionately when they become MNCs. All such theoretical predictions are supported by the data on Chinese MNCs.
    Keywords: Outward FDI, Multinational Firms, Institutional Distortion, State-owned Enterprises
    JEL: F13 O11 P51
    Date: 2015–09–01
  9. By: Luis Martinez; Jari Kauppila; Marie Castaing Gachassin
    Abstract: International trade has grown rapidly in the post-war era with trade volume growing twenty-seven fold between 1950 and 2007, three times faster than world GDP growth (WTO, 2007). Growth in trade is expected to outpace the GDP growth also over the next 50 years, according to recent OECD projections. The value of international trade is estimated to grow by a factor of four by 2050 in real terms (Fontagné et al., 2014). Trade patterns will however change due to fragmentation of production processes and integration of emerging markets into global markets. Trade liberalisation, either at global or regional level, will also have an impact on global patterns.
    Date: 2014–12
  10. By: Tijana Radojevic (Singidunum University); Marko Sarac (Singidunum University); Dalibor Radovanovic (Singidunum University); Nemanja Stanisic (Singidunum University)
    Abstract: The aim of this paper is to explain the advantages of Serbia for foreign direct investment. Nowadays, foreign direct investment represents actual topic, due to Serbia is in transition period last fifteen years, and the influx of foreign direct investment is increasing, especially after the mitigation of global economic crisis. Foreign investments promote basic economic goals: stability, development and sharing of knowledge. With regard to the problem of the extremely high foreign trade deficit and the poor economic performance of Serbia, as well as the lack of financial resources for export growth and economic expansion, foreign investment is the most optimal form of investments in Serbian economy. The results of this study shows that the advantages of Serbia for foreign investments are: favorable geographic location (the heart of South-Eastern Europe), high level of education of the population, most people speak good English and have excellent personal skills, free trade agreements between countries such as Russia, Belarus, Kazakhstan, the country's of North-Eastern Europe, the EFTA states and the EU member states. The conclusions drawn from this study will be greatly beneficial to potential investors who would like to invest in Serbia.
    Keywords: foreign direct investments, investments in Serbia, the economic crisis
    JEL: F21 G31 P20
  11. By: Natalia Ramondo; Veronica Rappoport; Kim J. Ruhl
    Abstract: Using firm-level data, we document two new facts regarding intrafirm trade and the activities of the foreign affiliates of U.S. multinational corporations. First, intrafirm trade is concentrated among a small number of large affiliates within large multinational corporations; the median affiliate ships nothing to the rest of the corporation. Second, we find that the input-output coefficient linking the parent’s and affiliate’s industries of operation—a characteristic commonly associated with production fragmentation— is not related to a corresponding intrafirm low of goods.
    Keywords: Intrafirm trade; multinational corporations; international value chains
    JEL: F12 F14 L11 L25
    Date: 2015–09
  12. By: Andrea Bonilla Bolaños (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon Saint-Etienne, Ecully, F-69130, France; Université Lyon 2, Lyon, F-69007, France)
    Abstract: This paper studies how the public provision of transportation infrastructure impact output convergence and trade integration in a two-country dynamic general equilibrium model in which the transportation cost between countries is endogenously determined by the stock of public infrastructure in both countries. Because of its particular conception, the so-called « Initiative for the Integration of Regional Infrastructure in South America (IIRSA) » serves as the case study. Data from Argentina and Brazil is thus used to solve the model. Two main results emerge. First, increasing public investment in infrastructure provides an impetus to commercial integration but does not necessarily generate output convergence. Second, the model shows that the only way for the two countries to achieve output convergence (in a winwin economic growth scenario) is to coordinate their increments on public infrastructure, as proposed by IIRSA.
    Keywords: catch up policy, convergence, economic integration, infrastructure integration, IIRSA, South America, steady state
    JEL: C61 F11 F42 O54
    Date: 2015
  13. By: Pavel Vidal Alejandro; Jose Tomas Pelaez Soto; Mauricio de Miranda Parrondo (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali)
    Abstract: Based on the estimation of the balance-of-payments constrained growth (BPCG) model, this article evaluates the impact of international openness and the trade with Asia on Colombia’s GDP growth. The model provides evidence in favor of the policies of trade liberalization in the 1990s, as well as highlighting the raise of a set of vulnerabilities. With regard to Asia, the dependence of Colombia’s GDP has increased but still continues to be below the contribution of the exports to the USA.
    Keywords: economic growth; balance-of-payments constraints; Colombia; Asia
    JEL: C32 F31 F43
    Date: 2015–04
  14. By: Dorina Çumani (European University of Tirana)
    Abstract: Literature and the latest studies have enlarged their focus in the aspect of the factors that affect the economical competitiveness of a state. They have shown that the competitiveness among states doesn’t depend only in the basic factors of production, but also on other social factors; public institutions such as: infrastructure; health; efficiency factors such as: efficiency in the market of goods, commercial flow or the labor market; Higher education or specialized training; innovation, etc. The main purpose of this research paper is to analyze the bilateral trade flows among Albania and 35 other countries regarding the import-export statistics and also based in the “ Gravity Model”. The classical part of ‘Gravity Model” is to study the impact of the size of the economy, local and foreign, distance between particular places, etc. Another strong point of this research paper is the study of the influence of competitiveness (GCI-Global Competitiveness Index) in the commercial flows of Albania. In this research we will be able to give an answer to the question: “What is the information that the global competitiveness index gives to us regarding the performance of Albania in the foreign trade environment”. The data that was included in the study belong to the period from 2005-2012, in the form of annual time series. For the selection of the variables in the model, i relied on the traditional theory, where the exports are affected from the country’s size, distance, exchange rates and the last year’s theories for the evaluation of competitiveness factors in the variable’s complexity that constitute on the GCI index. Other questions that arise are: Why all these elements mentioned above are important to increase competitiveness? What are the factors that affect competitiveness? How much do they affect on Albanians trade flows?
    Keywords: GCI-global competitiveness index, exports, imports, the ‘Gravity Model’, trade.
  15. By: Schymik, Jan Simon
    Abstract: Do international trade and technological change influence how firms create incentives for human capital? I present a model that incorporates agency problems into a framework with firm heterogeneity and human capital. My model indicates that trade liberalizations and skill-biased technological change alter the way how the largest firms in an economy incentivize their managers. Increases in managerial reservation wages lead to a reduction in corporate governance investments and a rise in performance compensation since monitoring managers becomes less efficient. Using data on CEO compensation and entrenchment opportunities in public industrial firms in the U.S., I document strong empirical regularities in support of the model predictions. Firms allow for more managerial entrenchment and offer larger CEO compensation when their industries become more open to trade or when production becomes more I.T. intensive.
    Keywords: International Trade and Firm Organization; Agency Problems in International Trade; Endogenous Managerial Entrenchment; Corporate Governance and CEO Compensation
    JEL: F1 F16 G34 J33 L22 O33
    Date: 2015–09
  16. By: Bonginkosi Mamba, André C Jordaan and Matthew Clance
    Abstract: This paper is aimed at providing insights into the interplay between globalisation and conflicts through a theoretical literature review. The motivation is drawn from a large number of debates advocating globalisation as being a double edged sword. The main argument is drawn from the Liberal premise that globalization, through integration and economic interdependence dampens the likelihood of conflicts, whilst the opposite holds for Structuralist theorists. The key highlight from the study is that, different factors exist in determining the relationship between globalisation and conflicts hence furthering the study by means of conducting an evidence based research design is essential in interrogating and extending the current discourse.
    Keywords: Globalisation and Conflicts, Dyads Integration, Trade Agreements, Inter-State Wars, Intra-State Wars
    JEL: D74 F14 F18 F51 O19
    Date: 2015
  17. By: Glick, Reuven (Federal Reserve Bank of San Francisco); Rose, Andrew K. (Federal Reserve Bank of San Francisco)
    Abstract: In our European Economic Review (2002) paper, we used pre-1998 data on countries participating in and leaving currency unions to estimate the effect of currency unions on trade using (then-) conventional gravity models. In this paper, we use a variety of empirical gravity models to estimate the currency union effect on trade and exports, using recent data which includes the European Economic and Monetary Union (EMU). We have three findings. First, our assumption of symmetry between the effects of entering and leaving a currency union seems reasonable in the data but is uninteresting. Second, EMU typically has a smaller trade effect than other currency unions; it has a mildly stimulating effect at best. Third and most importantly, estimates of the currency union effect on trade are sensitive to the exact econometric methodology; the lack of consistent and robust evidence undermines confidence in our ability to reliably estimate the effect of currency union on trade.
    Date: 2015–07–17
  18. By: Straume, Hans-Martin (Department of Economics, University of Bergen, and BI Norwegian Business School); Asche, Frank (Department of Industrial Economics, University of Stavanger)
    Abstract: While the theory on the dynamics of trade duration is formulated at the firm level, most empirical analysis has been undertaken with data at a country and industry level. In this study, we have access to firm export data including the importing firm for one industry – Norwegain salmon farming. This allow us to study trade dynamics in greater detail. Trade duration is investigated using two approaches; by estimating hazard rates, and by using a multinominal logit model. In the latter approach, we define the length of a trade relationship by number of transactions, including one category with relationships containing only one transaction – hit and run strategies. As expected, the results indicate that the degree of dynamics increases as the data becomes more disaggregated. These results highlight the importance of firm-level data to understand the full extent of trade duration dynamics. It is of particular interest that trade relationships are shorter in larger markets being served by many companies and where competition, accordingly, seems keen, a feature that is masked in industry-level data.
    Keywords: aquaculture; salmon; duration of trade; hit-and-run; temporary trade
    JEL: C41 F10 F14
    Date: 2015–10–03
  19. By: Xiaowen Fu; Tae H. Oum
    Abstract: Numerous studies on the aviation industry have confirmed that significant benefits can be brought by liberalizing the international market. After a comprehensive review of the recent studies on this issue, Fu and Oum (2014) concluded that there is strong evidence that liberalisation introduces substantial economic benefits to the countries involved. In the airline industry, liberalisation has led to increased airline competition, decreased average fares, increased frequency, improved load factor and airline productivity, increased traffic volumes and new route services. These changes not only lead to higher employment and economic output in the aviation industry, but also provide better inputs to other related sectors such as tourism, trade and logistics. Yet despite such well recognized benefits, mostly developed countries have liberalised their air service agreements, notably the United States followed by the EU. As of 2003, 57 liberalisation agreements out of 87 involved the U.S. As of October 2012, over 400 liberalized agreements were reached among 145 economies, among which more than 100 were U.S. open-skies agreements (ICAO 2013). In most other markets, air liberalisation has made limited progress over the past decades, even in regions characterized with strong economic and international trade growth.
    Date: 2015–01
  20. By: Réquillart, Vincent; Soler, Louis-Georges; Zang, Yu
    Abstract: Up to now, most nutritional policies have been set up to inform consumers about the health benefits induced by more balanced diets. Reviews of the impacts of these policies show that the effects are often modest. This has led governments to implement, in more recent times, policies focused on the market environment, especially on the characteristics of the food supply. The goal of this paper is to deepen the analysis of firms' strategic reactions to nutritional policies targeting food quality improvements and to derive a set of optimal policies. To reach this goal, we propose a theoretical model of product differentiation taking into account both the taste and health characteristics of products, and use it to assess the health and welfare impacts of taxation and MQS-based policies. The model studies how a duopoly of mono-product firms reacts to three alternative policies: an MQS policy, linear taxation of the two goods on the market, and finally taxation of the low-quality good. We find that only the MQS policy and the linear excise tax on the low-quality product are welfare increasing. The choice, however, between the two depends on the priorities of the regulator. On the one hand, for a given moderate level of improvement in health, we show that social welfare increases more with the tax policy than the MQS policy. On the other hand, for a larger increase in the health status of the population, a MQS-based policy may be preferred. Moreover, the policies have distributional effects that must be taken into account, in particular for reasons related to their social acceptability. Finally we show that policies aiming at changing the food market environment allow getting greater health benefits and welfare than policies only based on information campaigns.
    Keywords: Taxation, MQS, Product differentiation, Strategic pricing, Nutritional policies
    JEL: I18 L13 Q18
    Date: 2015–09–03
  21. By: Matthew T. Cole (Department of Economics, California Polytechnic State University); Ben Zissimos (Department of Economics, University of Exeter)
    Abstract: This paper develops a new model of a trade agreement that puts at center stage the competing interests between firms within a sector. Larger firms favor trade liberalization whereas smaller firms favor protection. Lobbying by firms for or against the agreement is modelled as an all-pay auction, thus incorporating the feature that binding contracts over contributions for policies cannot be written. A new motive for trade agreement formation is uncovered in this framework whereby governments' incentives to liberalize are driven by the lobbying process. If a proposed agreement is over non-tariff barriers then it always entails free trade. If a proposed agreement is over ariffs then it either entails free trade, which maximizes lobbying revenue, or the tariff revenue maximizing tariff. This outcome is supported by the surprising result that, off the equilibrium path, any tariff agreement that entails lobbying and positive tariffs yields lower expected revenue for the government than a free trade agreement involving no tariff revenue.
    Keywords: All-pay auction, firm heterogeneity, non-tariff barriers, tariffs, trade agreement
    JEL: F02 F12 F13 D44
  22. By: Diana Marcela Escandon Barbosa (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali)
    Abstract: The election of a country destination to export is one of the problems with greater interest within the field of internationalization of companies. Companies seek to minimize labor costs, transport, tariff and other issues affecting their choice. However, transportation costs and logistics becomes in a key aspect in the enterprise competitiveness for access to international markets. Therefore, from the application of a survey of 319 exporting companies in Colombia a model of neural networks is performed to measure as factors affecting export performance variables such as efficiency in the process of customs clearance and other border agencies, ease and affordability of international shipping, transport infrastructure and technologies adequate, level of competence of the local logistics industry, ability to track and trace consignments and timely deliveries destination. Among the main findings is that the level of competence of the local logistics industry manages to be the most important variable for export performance in Colombian companies because they can improve pricing systems and the existence of lower export costs.
    Keywords: International transport, Export Performance, Logistics
    JEL: F14 M16
    Date: 2015–09
  23. By: Idrisov, Georgy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Taganov, Boris (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper presents the results of an empirical analysis of investment effects of accession to the various preferential trade agreements, meaningful interpretation of the quantitative estimates is worked out. Based on the results, practical recommendations for the economic policy of Russia are developed.
    Keywords: investment effects, preferal trade agreements, international investment, economic policy, Russia
    Date: 2015–06
  24. By: Farzaneh Taheri (Department of Agricultural Economics,Marvdasht Branch,Islamic Azad University,Marvdasht,Iran)
    Abstract: The main purpose of this study was to determine the factors affecting the export of flowers in Iran. After data collection using by the index of Revealed Comparative Advantage (RCA), the condition of business of flowers in Iran was compared with a number of countries exporting the product. According to the results of study, the small elasticity of the exportation price in the function of export demand is negative and smaller than one, and it indicates that flowers are inelastic goods; moreover, the income from its export could be increased by increasing the price. It can be concluded that the domestic price increase will lead to a decrease in exports due to the high elasticity and negative of export supply in comparison with the domestic price. Partial elasticity obtained for the variable of the value of domestic production of flowers in the export supply function in this study indicates that uncontrolled increase production by increasing the acreage under cultivation makes the decrease of exportation price of flowers, and at the most it causes reducing of exportation income because of higher effect of low price in comparison with the effect of an increase in demand; thus, the income from the export of flowers can be increased by controlling the production and the value of export
    Keywords: supply and demand functions, export, flower, comparative advantage.
    JEL: Q11 Q11 Q17
  25. By: Jan Rieländer; Bakary Traoré
    Abstract: Most low-income countries export mainly unprocessed commodities. Yet, in their pursuit of structural transformation, they also seek a more diversified economic structure, including developing a strong manufacturing sector to create jobs and spur innovation as in more advanced economies. What is the best way for them to promote economic diversification? Should countries aim straight for anufacturing? Should they focus on the products most in line with their already-known and used endowments? Should they follow some sort of ladder of activities towards a well-diversified economy? Or should they simply lean back and let the markets sort it out? Finally, do the answers vary depending on the country? A body of recent research suggests that a country’s diversification process would tend to move along pathways of “nearby” products: the “new” products it specialises in would build on the existing productive capabilities and knowledge used to produce the “old” ones. It would follow then that low-income, raw commodity exporting countries should build on their naturalresource endowments. This would not always imply moving downstream and transforming those resources locally. Depending on learning processes, capabilities and the types of endowments, value addition at the local level may or may not make economic sense.<BR>Ce document apporte de nouvelles preuves empiriques à la littérature récente sur les façons dont les pays développent de fortes capacités productives, en analysant plus finement les trajectoires de diversification des exportations entre différents types de produits. Les données COMTRADE à 4-chiffres pour 176 pays sur la période 1992-2011 sont utilisées pour classer les produits selon trois catégories dans le processus de fabrication : produits non-transformés, semitransformés et produits finis. Il ressort que les performances de diversification dans les produits non-transformés et la diversification dans les produits plus élaborés sont étroitement corrélées entre elles. En particulier, la diversification des exportations de produits de base au cours des trois dernières années, un objectif relativement facile à atteindre pour de nombreux pays pauvres, est un fort indicateur d'expansion de “l’avantage comparatif révélé (ACR)” dans les produits intermédiaires et finis. Ce lien est robuste à différents modèles économétriques et différents groupes de pays, et s’avère plus fort lorsqu’on considère uniquement la liste des produits exportés avec avantage comparatifs (méthodes ACR) que quand on utilise tous les produits d’exportation. Ainsi, au lieu de ralentir la trajectoire de transformation structurelle, un secteur primaire diversifié est une étape cruciale vers un accroissement des capacités de production et l’accélération de la création d’emploi.
    Keywords: export diversification, diversification
    JEL: C23 F14 F43 O11 O5
    Date: 2015–09
  26. By: Yamamura, Eiji; Shin, Inyong
    Abstract: there is political tension and conflict between countries. Because of this historical background, political conflict exists between Korea and Japan. This paper examines the effect of viewing Japanese anime (animation) on the attitudes of Koreans toward Japanese living in Korea. The major findings of the study show that the more frequently adult Koreans view Japanese anime, the more likely they are to accept Japanese as workplace colleagues and neighbors after controlling for endogeneity bias using instrumental variables. The findings of this paper imply that via the consumption of imported cultural goods, people are exposed to positive traits of the trading partner, and thus consumers have a stronger affinity with the export country. From this, we derive the policy implication that promoting trade of modern cultural goods is effective to increase mutual understanding between trade partners, reducing political tension between them.
    Keywords: Anime; Immigrants; Workplace; Neighbor; Trade; Externality; Cool Japan.
    JEL: D12 D74 F16 Z11 Z18
    Date: 2015–10–02
  27. By: Misato Sato
    Abstract: As increasingly complex modelling approaches to quantifying embodied carbon in trade have become popular, the lack of disaggregation has been identified as a key weakness. This paper quantifies embodied carbon in bilateral trade at the product level. This is done using the material balance approach, by collecting product carbon intensity factors from multiple data sources and combining with bilateral trade data in physical quantities. The dataset covers trades between 195 countries for 1080 products in 2006. The detailed mapping of trade embodied carbon provides detailed insights into the nature of the flows that were previously masked or under-reported. For example, it finds that the lion's share of global trade embodied emissions are concentrated in a relatively small number of product categories of traded goods, suggesting that focusing mitigation efforts and trade-measures on these products would be an effective strategy to address potential carbon leakage, and to decarbonise international supply chains. The results also highlight that embodied carbon is focused in regional trade, thus regional harmonisation of climate mitigation policy will be effective in mitigating leakage.
    Keywords: embodied carbon; International trade; carbon intensity; material balance approach
    JEL: N0
    Date: 2014–09
  28. By: Edlira Aliaj (Universiteti i Vlorës \)
    Abstract: FDI into Albania has been rising steadily since the early 2000s. These investments are essentially in the oil, metal ore, infrastructure, construction and telephony sectors. Albania has applied a policy framework favorable to FDI, and has more recently introduced policies to support private sector development in general. In recent years, the government has enacted reforms to improve the overall business climate in the country by streamlining business procedures through e-government reforms and improved legislation in a variety of sectors. The government currently is drafting a new Law on Investment that will provide investment incentives and fast-track registration and licensing procedures for strategic foreign investors. The Albanian legal system does not discriminate against foreign investors. Albania has implemented a liberal foreign investment regime with the goal of increasing foreign direct investment. Additionally, in September 2010, the parliament approved several amendments to this law that provide special protection for foreign investment in the tourism, energy and agriculture sectors. Aiming at encouraging foreigners willing to invest in Albania, the law provides considerable guarantees to them, consisting of: Judicial protection of foreign investors with respect to the legal rights related to their investments. Foreign investors may bring disputes before an Albanian court, or refer the case to arbitration. The relevant provisions governing domestic and international commercial arbitration are incorporated in the Albanian Code of Civil Procedure.Investors in Albania are entitled to judicial protection of the rights related to their investment. The parties to a dispute may agree to submit disputes for consideration by an arbitration institution. In the event of a failure of such arbitration, foreign investors have the right to submit the dispute to an Albanian court or to the Arbitration Court in Tirana. In the event of a dispute regarding discrimination, transfer of assets, or indirect expropriation of foreign investment by the Government, the investor may submit the dispute to the International Centre for Settlement of Investment Disputes (ICSID). Ratified international agreements have legal superiority over domestic legislation in Albania in matters relating to FDI.
    Keywords: Foreign Direct Investments (FDI), Arbitration, Albania
    JEL: A10 J52
  29. By: Alan Khee; Jin Tan
    Abstract: In February 2014, transport officials from the European Union (E.U.) and the Association of Southeast Asian Nations (ASEAN) met on the sidelines of the Singapore Airshow to discuss a possible comprehensive air transport agreement between both sides. At the meeting’s conclusion, the ASEAN states invited the European Commission to launch the internal processes necessary to secure a mandate to commence negotiations on an agreement. In particular, ASEAN welcomed Vice President of the European Commission and Commissioner for Transport Siim Kallas’ statement that he would propose to the Commission to seek authorization from the Council of the European Union to start negotiations (E.U.-ASEAN Joint Declaration, 2014).
    Date: 2015–01
  30. By: Giammario Impullitti (University of Nottingham)
    Abstract: The US labour market has experienced a remarkable polarization in the 1980s and 1990s. At the same time, the US faced a fast technological catch-up as European countries and especially Japan drastically improved their global innovation and patenting activity. Is foreign technological convergence an important source of the recent evolution of the US wage and employment structure? To answer these questions, we set up a Schumpeterian model of endogenous technological progress with two asymmetric countries, heterogeneous workers, endogenous skill formation and occupational choice. Calibrating the model to match key facts of the US economy, we find that foreign technological catching-up observed between the late 1970s and early 1990s reproduces a non-negligible part of US wage polarization. Moreover, the model delivers predictions on the US wealth to income ratio consistent with empirical evidence in that period.
    Date: 2015

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