nep-int New Economics Papers
on International Trade
Issue of 2015‒10‒25
25 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Offshoring and skill-upgrading in French manufacturing: A Heckscher-Ohlin-Melitz view By Juan Carluccio; Alejandro Cuñat; Harald Fadinger; Christian Fons-Rosen
  2. How Firms Export: Processing vs. Ordinary Trade With Financial Frictions By Kalina Manova; Zhihong Yu
  3. Analysis of the Consequences of the RF Foreign Trade Liberalization within Russia's Accession to the WTO and Regional Economic Integration By Gushchin, Evgeny; Taganov, Boris; Ptashkina, M. G.; Istomin, R.
  4. Financial Frictions, Product Quality, and International Trade By Rosario Crinò; Laura Ogliari
  5. Exporter behavior, country size and stage of development : evidence from the exporter dynamics database By Fernandes,Ana Margarida; Freund,Caroline; Pierola Castro,Martha D.
  6. Trade in Value Added: The Case of Viet Nam By VO Tri Thanh; NGUYEN Anh Duong; BUI Trinh
  7. Multinational firms' entry and productivity: some aggregate implications of firm-level heterogeneity By Contessi, Silvio
  8. Determinants of Specific Trade Concerns Raised on Technical Barriers to Trade By Mahdi Ghodsi
  9. Heterogeneous Immigrants and Foreign Direct Investment: The Role of Language Skills By Lücke, Matthias; Stöhr, Tobias
  10. Intensive and Extensive Margins of South–South–North Trade: Firm-Level Evidence By Lili Yan ING; Miaojie YU
  11. Conditional determinants of FDI in fast emerging economies: an instrumental quantile regression approach By Asongu, Simplice; Kodila-Tedika, Oasis
  12. Revisiting National Border Effects in Foreign Trade in Goods of Canadian Provinces By Farrukh Suvankulov
  13. Trade and Towns: Heterogeneous Adjustment to a Border Shock By Brülhart, Marius; Carrère, Céline; Robert-Nicoud, Frédéric
  14. Determining the Common External Tariff in a Customs Union: Evidence from the Eurasian Customs Union By Arevik Mkrtchyan
  15. Global Value Chain Participation in Southeast Asia – Trade and Related Policy Implications By Javier LÓPEZ–GONZÁLEZ; Przemyslaw KOWALSKI
  16. Drivers of FDI in Fast Growing Developing Countries: Evidence from Bundling and Unbundling Governance By Asongu, Simplice; Nwachukwu, Jacinta
  17. The Role of Democracy and Governance in the Enhancement of Indonesian Exports to the Organization of the Islamic Cooperation (OIC) Countries By Aditya Rangga Yogatama, Fithra Faisal Hastiadi
  18. Futures prices, trade and domestic supply of agricultural commodities By Méndez Parra, Maximiliano
  19. TTIP: Challenges and opportunities for the European Automotive Industry By Kolev, Galina
  20. The Welfare Effects of Globalization with Labor Market Regulation By Palokangas, Tapio K.
  21. Measuring Recovery: TTIP: Are 40 Cents a Day Big Gains? By David Rosnick
  22. Divers Twins: The Impact of China on Italian and German Manufacturing Exports By Giorgia Giovannetti; Marco Sanfilippo,; Margherita Velucchi
  23. The impact of skill endowments and collective bargaining on knowledge-intensive greenfield FDI By Sara Amoroso; Mafini Dosso; Pietro Moncada-Paterno-Castello
  24. Thai Automotive Industry: International Trade, Production Networks, and Technological Capability Development By Patarapong INTARAKUMNERD
  25. Agricultural Export and Economic Growth: A Case Study of Pakistan By Abrar ul haq, Muhammd

  1. By: Juan Carluccio; Alejandro Cuñat; Harald Fadinger; Christian Fons-Rosen
    Abstract: We present a factor-proportions trade model in which heterogeneous firms can offshore intermediate inputs subject to fixed offshoring costs. In the skill-abundant country, high- productivity firms offshore a larger range of labor-intensive inputs to the labor-abundant countries than low-productivity firms. Differently from the traditional versions of factor- proportions trade theory, Heckscher-Ohlin forces operate at the within-industry level, leading to endogenous variation in skill intensity across firms that is positively correlated with firm productivity. Using French firm-level data for the years 1996 to 2007, we provide empirical support for the factor proportions channel through which offshoring to labor-abundant countries affects the firm-level skill intensities of French manufacturers.
    Keywords: offshoring, heterogeneous firms, firm-level factor intensities, Heckscher-Ohlin
    JEL: F11 F12 F14
    Date: 2015–09
  2. By: Kalina Manova; Zhihong Yu
    Abstract: The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial frictions affect companies' choice between processing and ordinary trade - implicitly a choice of production technology and position in global supply chains - and how this decision affects performance. We exploit matched customs and balance-sheet data from China, where exports are classified as ordinary trade, import-and-assembly processing trade (processing firm sources and pays for imported inputs), and pure-assembly processing trade (processing firm receives foreign inputs for free). Value added, profits and profitability rise from pure assembly to processing with imports to ordinary trade. However, more profitable trade regimes require more working capital because they entail higher up-front costs. As a result, credit constraints induce firms to conduct more processing trade and pure assembly in particular, and preclude them from pursuing higher value-added, more profitable activities. Financial market imperfections thus impact the organization of production across firms and countries, and inform optimal trade and development policy in the presence of global production networks.
    Keywords: China, trade regime, processing trade, global value chain, credit constraints, heterogeneous firms
    JEL: F10 F13 F14 F23 F34 G32
    Date: 2015–10
  3. By: Gushchin, Evgeny (Russian Foreign Trade Academy); Taganov, Boris (Russian presidental academy of national economy and public administration (RANEPA)); Ptashkina, M. G. (Russian presidental academy of national economy and public administration (RANEPA)); Istomin, R. (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: The paper deals with the study of the consequences of Russia's foreign trade liberalization in the wake of accession to the WTO, conclusion of preferential trade agreements including agreements on free trade with CIS member states, establishment of Customs Union with Kazakhstan and Belorus. Special attention is paid to the assessment to the targets of Russian trade and integration policy as well as to the achieved results.
    Keywords: Russian economy, foreign trade, WTO, Customs Union
    Date: 2015–09–17
  4. By: Rosario Crinò (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Laura Ogliari
    Abstract: An influential literature shows that product quality varies widely across countries and industries. 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 simple trade model with heterogeneous firms, endogenous output quality, country heterogeneity in financial frictions, and industry heterogeneity in financial vulnerability. We estimate the model using a unique data set, which contains estimates of export quality, measures of financial development, and indicators of financial vulnerability for all manufacturing industries and countries in the world over the last three decades. We find the interplay between financial frictions and financial vulnerability to be a first-order determinant of the observed variation in product quality across countries and industries. We also show that quality adjustments are a key mechanism through which financial development affects aggregate trade flows and shapes the industrial composition of countries’ exports.
    Keywords: Financial Imperfections; Product Quality; Trade Flows.
    JEL: F14 F36 G20
    Date: 2015–09
  5. By: Fernandes,Ana Margarida; Freund,Caroline; Pierola Castro,Martha D.
    Abstract: This paper presents new data on the micro structure of the export sector for 45 countries and studies how exporter behavior varies with country size and stage of development. Larger countries and more developed countries have more exporters, larger exporters, and a greater share of exports controlled by the top 5 percent. The extensive margin (more firms) plays a greater role than the intensive margin (average size) in supporting exports of larger countries. In contrast, the intensive margin is relatively more important in explaining the exports of richer countries. Exporter entry and exit rates are higher and entrant survival is lower at an early stage of development. The paper discusses the results in light of trade theories with heterogeneous firms and the empirical literature on resource allocation, firm size, and development. An implication from the findings is that developing countries export less because the top of the firm-size distribution is truncated.
    Keywords: Free Trade,Economic Theory&Research,Debt Markets,Country Strategy&Performance,Currencies and Exchange Rates
    Date: 2015–10–21
  6. By: VO Tri Thanh (Central Institute for Economic Management (CIEM), Viet Nam); NGUYEN Anh Duong (Central Institute for Economic Management (CIEM), Viet Nam); BUI Trinh (General Statistics Office (GSO), Viet Nam)
    Abstract: This paper seeks answers to two questions – (i) whether Viet Nam is depending more on imported products to meet its export growth; and (ii) whether export growth brings about sufficient benefits for the domestic economy. Apart from reviewing trade data and existing literature, the authors calculate domestic value added in Viet Nam’s exports by sector, using input–output tables for 2007 and 2011. The inducement impact of exports on the economy and income decreased in 2007– 2011. The domestic value added content of exports exhibited a complicated pattern, though overall exports increased. The gross benefits are even higher due to the drastic increase in exports. This relieves the concern about decreasing benefits from trade; the priority should be to focus on ensuring better diffusion of exports to domestic aggregate economic activity and achieving higher gross returns on various production factors. Moreover, Viet Nam should deepen linkages between multinational enterprises and local firms and adopt a more targeted industrial policy.
    Keywords: Economic integration; regional production network; Input–Output; vertical specialisation.
    JEL: F14 F15
    Date: 2015–10
  7. By: Contessi, Silvio (Monash Business School)
    Abstract: Despite the microeconomic evidence supporting the superior idiosyncratic productivity of multinational firms (MNFs) and their affiliates, cross-country studies fail to find robust evidence of a positive relationship between foreign direct investment and growth. In order to study the aggregate implications of MNFs entry and production, I develop a dynamic general equilibrium model with firm heterogeneity where MNFs sort according to their own productivity. The entry and production of MNFs contribute to aggregate productivity growth at decreasing rates and affect domestic producers through general equilibrium effects in the labor market. I argue that the heterogeneous composition of the population of affiliates can help explain the conflicting evidence on the impact of foreign direct investment on growth.
    JEL: F21 F23 F41 F42
    Date: 2015–09–01
  8. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract This contribution evaluates determining factors of Specific Trade Concerns (STCs) raised on Technical Barriers to Trade (TBT) notifications over the period 1995-2011. While multilateral and international agreements bind countries concerning the imposition of tariffs on imports, TBTs have become political instruments to conceal the true motivations of governments. The main legitimate reasons behind the imposition of TBTs are to increase environmental qualities and human health, or to improve market efficiencies. However, in addition to these reasons, governments are also in pursuit of protecting their domestic industries. Various effective factors of TBT STC notifications are considered in the econometric analysis using fixed effect Poisson (FEP) estimation as the main technique, and Poisson GMM as robustness specification. Results suggest that bilateral trade and tariffs are one of the forces of TBT STC notifications, acknowledging the protectionist behaviour of authorities. Moreover, countries with high quality of humans’ health-related environmental issues, and low environmental vitalities, are more likely to impose new TBTs. Overall, this study confirms the complex nature of TBT STCs affected by economic, technological, institutional, and health and environmental issues.
    Keywords: trade policy, technical barriers to trade
    JEL: F13 F14 F18
    Date: 2015–06
  9. By: Lücke, Matthias (Kiel Institute for the World Economy); Stöhr, Tobias (Kiel Institute for the World Economy)
    Abstract: We investigate the interplay of language skills and immigrant stocks in determining bilateral FDI out-stocks of OECD reporting countries. Applying a Poisson panel estimator to 2004-2011 data, we find a robust positive effect of bilateral immigrants on bilateral FDI – provided that residents of the two countries have few language skills in common. We find a similar effect for immigrants from third countries that speak the language(s) of the FDI host country, making them potential substitutes for bilateral migrants. Our findings suggest that immigrants facilitate outgoing FDI through their language skills, rather than through other characteristics like cultural familiarity.
    Keywords: migration, FDI, foreign languages, globalization
    JEL: F21 F22 O14
    Date: 2015–10
  10. By: Lili Yan ING (Economic Research Institute for ASEAN and East Asia (ERIA) and University of Indonesia); Miaojie YU (CCER, Peking University)
    Abstract: The main value added of our paper is twofold. First, we construct a theoretical framework on how South–South trade will affect productivity cut-offs. Second, we present empirical exercises using highly disaggregated data. Our model is based on the South–South–North trade framework. Using a vertical integration among Southern countries (Indonesia and China) and testing it by employing merged Chinese firms and customs trade data, we find that three types of tariff reductions—foreign tariff reductions, home output tariff reductions, and home input tariff reductions—significantly increase home country firm productivity and exports via extensive and intensive margins. Our findings are robust using ex-ante and expost productivity.
    Keywords: China, Indonesia, Tariff, Exports, Manufacturing
    JEL: F1 F13 F14
    Date: 2015–09
  11. By: Asongu, Simplice; Kodila-Tedika, Oasis
    Abstract: This paper examines FDI determinants in the BRICS and MINT throughout the conditional distributions of FDI for the period 2001-2011. An instrumental variable quantile regression estimation strategy is employed based on the intuition that, the determinants are contingent on initial or existing FDI levels. The following are some of the findings established. First, FDI benefits of GDP growth are more apparent in nations with higher initial levels of FDI. Second, real GDP output would more positively influence FDI in countries where initial levels of FDI are higher. Hence, the market-seeking purposes increases FDI with a larger magnitude in Higher FDI countries. Third, the impact of trade openness has a Kuznets shape for Gross FDI and increasing tendency for Net FDI. The impact of political stability is only significant for Gross FDI in increasing order.
    Keywords: Foreign direct investment; Emerging countries; Quantile regression
    JEL: C52 F21 F23
    Date: 2015–02–01
  12. By: Farrukh Suvankulov
    Abstract: A significant body of empirical studies demonstrates sizable national border effects in foreign trade of Canadian provinces throughout the 1980s and 1990s. This paper revisits and expands the scope of the border effects analysis by estimating the border effect in trade with U.S. states as well as countries in the European Union (EU) and the G 20 using more recent data from 2001–10. Furthermore, we perform the Blinder-Oaxaca nonlinear decomposition (Bauer and Sinning, 2008) to decompose the border effects into various components, including the transaction costs, the tariff and non-tariff measures, and the unexplained component. Results from the Poisson pseudo-maximum likelihood model show that, compared to existing estimates from the 1980s and 1990s, the size of the border effect in trade between Canadian provinces and U.S. states has declined. The border effects for Canada–EU and Canada–G 20 bilateral trade flows sit at somewhat elevated levels. About a third of the border effects in overall trade with EU and G-20 countries can be attributed to the variables related to transaction costs in foreign trade. While the significance of tariffs has declined, the prevalence of non-tariff measures seems to be on a rise. That said, we find that the welfare-changing measures combined—tariff and non-tariff measures—play a limited role in explaining the border effects in comparison with the role of transaction costs and the unexplained component.
    Keywords: International topics
    JEL: F14 F15
    Date: 2015
  13. By: Brülhart, Marius; Carrère, Céline; Robert-Nicoud, Frédéric
    Abstract: We study the effects of changes in trade openness on wages and employment of different-sized towns. To this end, we develop a multi-region model of intra-national adjustment to trade shocks. In equilibrium, small towns have more elastic labor-force responses than large towns. We test this prediction using fine-grained regional data for Austria and the fall of the Iron Curtain as a quasi-experimental setting for the exploration of trade-induced spatial effects. We find improved access to foreign markets to boost both employment and nominal wages, but large towns tend to have larger wage responses and smaller employment responses than small towns. The welfare gains of immobile factors are estimated to be 40% higher in border towns compared to interior towns.
    Keywords: city size; natural experiment; spatial adjustment; trade liberalization
    JEL: F15 R11 R12
    Date: 2015–10
  14. By: Arevik Mkrtchyan
    Abstract: How do member states determine the Common External Tariff (CET) in a Customs Union? While a large theoretical literature studies the incentives faced by governments when negotiating the CET, empirical evidence is so far scant. This paper studies a large panel data set of tariff data from the Eurasian Customs Union and demonstrates the importance of mutual protectionism: member states bargain to expand to their partners the protection of goods that were protected nationally. Moreover, there is almost no evidence of exercising bargaining power to keep keep the CET down for goods where one of the member states would see large tariff increases. Thus countries bargain for mutual protection, rather than mutual liberalisation concessions. I show that the mutual protectionism finding emerges using three methodologies: analysis of variance using unique explanatory power of each variable, determining the Shapley value from analysis of variance and finally OLS regression. Furthermore, I develop a simple model to explain the mutual protectionism effect.
    Keywords: customs union, common external tariff (CET), tariff setting,Russia, Belarus, Kazakhstan
    JEL: F14 F15 F55
    Date: 2015–05
  15. By: Javier LÓPEZ–GONZÁLEZ (OECD); Przemyslaw KOWALSKI (OECD)
    Abstract: ASEAN has embraced the new opportunities offered by global value chains (GVCs). Participation, which is linked to growing productivity and increased sophistication and diversification of exports, has grown across the board. The drivers of participation, while mainly structural, such as the size of the economy or the distance to manufacturing hubs, also include trade and investment openness, logistics performance, hard and soft infrastructure, and good governance. Much progress has been made in the process of completing the AEC but with competitive pressures rising, as other countries increasingly look to joining GVCs, there is a strengthened case for continuing the process of reform through further trade and investment openness and domestic regulatory reform.
    Keywords: Global Value Chains; Trade Policy; Investment Opennes; upgrading; intermediate inputs, Southeast Asia; ASEAN; Regional Trade Agreements
    JEL: F1 F2
    Date: 2015–10
  16. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: We assess drivers of FDI in a panel of BRICS and MINT countries for the period 2001-2011. We bundle and unbundle governance determinants using a battery of contemporary and non-contemporary estimation techniques. The following findings are established. First, for both contemporary and non-contemporary specifications, while determinants for gross FDI are significant, they are not for net FDI. Second, for contemporary specifications, the significance of the governance dynamics is as follows in increasing order of magnitude: general governance, political governance, economic governance, political stability, regulation quality and government effectiveness. The motivation to bundle governance variables is articulated by the effect of political governance. Third, for non-contemporary specifications, the significance of governance variables is as follows in ascending order of magnitude: economic governance, institutional governance, general governance, corruption-control, political governance and political stability. The importance of combining governance indicators is captured by the effects of political governance, economic governance and institutional governance. The results indicate that the simultaneous implementation of the various components of governance clarifies a country’s attractiveness for FDI location. Policy implications are discussed with particular emphasis on the timing of FDI and its targeting.
    Keywords: Foreign direct investment, emerging countries, governance
    JEL: C52 F21 F23 P37 P39
    Date: 2015–02–01
  17. By: Aditya Rangga Yogatama, Fithra Faisal Hastiadi (Department of Economics, Faculty of Economics and Business, University of Indonesia)
    Abstract: The formulation of new OIC Charter at the 11 th OIC Summit in Dakar, 2008, has became the momentum for OIC countries to reassert the importance of democracy and institutional reform in promoting economic and trade cooperation among its members. This study aims to explore the role of democracy and governance in the enhancement of Indonesian exports to the OIC countries during 1998-2012 using augmented gravity model. The results showed that both democracy and governance in Indonesia have positive and significant effect in enhancing Indonesian exports to the OIC countries. While the governance in OIC countries also has positive and significant effect in improving Indonesian exports. On the other hand, democracy in OIC countries has negative and significant effect on the same matter, because lower income OIC countries tend to implement closed trade policy.
    Keywords: Democracy, Governance, Exports, Indonesia, OIC
    JEL: F14 P33 H11
    Date: 2015–07
  18. By: Méndez Parra, Maximiliano
    Abstract: Commodity markets display substantial volatility both in prices and in the quantities traded. This has led to the development of different instruments designed to address this volatility. Processors and traders, who are actively involved in the international market, participate in these commodity markets using cross-hedging strategies by their export and domestic supply decisions. Spot and future prices, as well as the cross-hedging strategies, affect export and the domestic supply decisions. Understanding this complex interaction calls for further and newer insights and this research contributes to this. The primary objective of Chapter 1 of this thesis is to develop a model which explains the export and domestic supply decisions when traders, producers and speculators participate in a futures market for a primary commodity, which can be stored and for which future markets operate. As a result, exports and domestic supply are affected by the prices of the primary product, and jointly by the prices in the external and domestic market. Chapter 2 provides the historical, political and economic context of the Argentine economy and the agricultural sector, specifically on the three agricultural commodities used in the empirical part of this research. In Chapter 3, we perform a comprehensive analysis of the seasonal unit roots of monthly series of exports and domestic supply, using time series that include zero values. In the past, this technique has mostly been applied to quarterly data but never to monthly series that display periods of inactivity. The results indicate that, in general, the seasonality observed in the series analysed can be sufficiently explained by a deterministic approach. The estimation and further analysis of the supply equations derived in Chapter 1 are undertaken in Chapter 4. A comprehensive analysis of seasonal cointegration using monthly data was conducted but, in light of the results obtained in Chapter 3, only the Engle-Granger cointegration is applied. The results indicate weak cointegration relationships. This may indicate the need for improved data and/or alternative econometric techniques.
    Date: 2015–04
  19. By: Kolev, Galina
    Abstract: The European automotive industry is the second largest manufacturer of motor vehicles worldwide (after China) and generates directly and indirectly millions of jobs EU-wide. It is characterized by a high degree of export orientation and the largest share of exports can be ascribed to the US market. TTIP offers a unique chance to liberalize trade and to push the development of international safety and environmental regulations for products of the automotive industry. Eliminating tariffs on transatlantic trade bears a substantial opportunity for cost reduction and welfare increase. A particular opportunity arises for the EU from the divergence of tariff rates for passenger cars (2.5 per cent in the US and 10 per cent in the EU). From a mercantilist point of view, the EU should use the high EU import tariff rates for passenger cars as a bargaining chip to motivate the US negotiators to agree on trade liberalization, e.g. via elimination of non-tariff barriers. TTIP should break new ground in regulatory cooperation, but eliminating NTBs and regulatory cooperation as a whole must not compromise the level of existing passenger and environmental safety, the EU's precautionary principle or democratic legitimacy. This can only be achieved based on sound evidence, that technical standards and product regulations lead to the same safety level for cars driven both on the EU and US roads.
    Keywords: Europäische Union,Exporte und Importe,USA,Weltwirtschaft
    JEL: F13 L62
    Date: 2015
  20. By: Palokangas, Tapio K. (University of Helsinki)
    Abstract: I examine how globalization affects wages and welfare in a general equilibrium model of international trade with partly oligopolistic markets. Globalization is modeled as reducing trade costs or opening up shielded sectors to trade. There is a national or international common agency that determines minimum wages for the oligopolists, either directly or through supporting labor unions. The lobbies of employers and labor unions influence that agency, relating their prospective political contributions to the latter's decisions. Both a shift from national to international regulation and a decrease in trade costs promote aggregate welfare, but decrease open-sector relative wages.
    Keywords: globalization, international trade, common agency, regulation, labor unions
    JEL: C72 F16 J51
    Date: 2015–10
  21. By: David Rosnick
    Abstract: This issue brief examines widely cited studies on the potential gains from the Trans-Atlantic Trade and Investment Partnership (TTIP) and finds that they would deliver no more than 40 cents per person per day in the U.S., and 0.2 euros per person per day in the EU. These projections are also optimistic, as they result in part from significantly underestimating the costs from patent protections for pharmaceuticals, copyright enforcement and other protections under the TTIP that could increase the price of a product by thousands, or tens of thousands, of percent.
    Keywords: TTIP, trade, TPP, terms of trade, growth, patents
    JEL: F F1 F4
    Date: 2015–08
  22. By: Giorgia Giovannetti (Dipartimento di Scienze per l'Economia e l'Impresa); Marco Sanfilippo,; Margherita Velucchi
    Abstract: Germany and Italy are two major manufacturing producers and export a substantial part of their products – over 70 per cent- to OECD countries. While they share many characteristics, in term of specialization and destination markets, they are also “diverse twins”. Italy has a productive structure still largely based on so-called “traditional” sectors, while Germany specialized mainly in high tech goods. Italy is therefore more likely to be more vulnerable to the competitive pressure by emerging economies, and especially China, which experienced a strong increase in its export market share during the last decades. This paper addresses the issue of the impact of China on the export performance of Italy and Germany to their main trading partners to assess how well they withstood competition. Using data for the period 1995-2009, we implement a longitudinal multilevel model on quantiles to take into account two very important data characteristics: their hierarchical hidden structure (captured by a multilevel model) and the heterogeneity of the export shares (captured by a quantile approach). This innovative estimation method, together with the introduction of Chinese export shares as explanatory variable to account for the potential Chinese competition, allows us to estimate the impact of China on Italy and Germany’s market shares. Results show that China has affected Italy’s and Germany’s market shares in different ways, in different sectors, characterized by different market shares. However, Italy does not seem to have been “more at risk”. These results are relevant also for their policy implications and for an ex post analysis of the “response” to the Chinese competition.
    Keywords: China; Longitudinal multilevel, Quantile analysis, Market Shares, export competition
    JEL: F10 F14
    Date: 2015
  23. By: Sara Amoroso (European Commission – JRC - IPTS); Mafini Dosso (European Commission – JRC - IPTS); Pietro Moncada-Paterno-Castello (European Commission – JRC - IPTS)
    Abstract: This paper assesses the contribution of skilled employment and labour market conditions to the ability of attracting knowledge intensive and manufacturing greenfield FDI. We carry out our analysis by controlling for a wide range of labour market features, such as the collective bargaining coverage rate, the non-wage labour costs, and the occupational skills of employment. It departs from the existing literature in two respects. First, it deepens the analysis on the effect of labour market regulations and skills endowments on greenfield FDI inflows. Second, it investigates the extent to which labour market characteristics matter for discriminating among ‘resource-seeking’ and ‘efficiency/strategic asset-seeking’ greenfield FDI activities (e.g. manufacturing versus knowledge-intensive foreign investments, respectively). Our empirical analysis suggests that the quality of employment and the technological knowledge base have different impact on the location of knowledge-intensive and on low-cost labour-intensive manufacturing foreign investments. Further, associating the collective bargaining coverage of unions with the level of regulation in the labour market, our results can provide insights into the effectiveness of labour market policies that aim at attracting knowledge-intensive investments. Length: 25 pages
    Keywords: foreign direct investment, unions R&D
    JEL: O32 F16 J51
    Date: 2015–08
  24. By: Patarapong INTARAKUMNERD (National Graduate Institute for Policy Studies (GRIPS))
    Abstract: Over a span of 50 years, Thailand’s automotive industry changed from a small, import-substituting one to a large and vibrant exporting one. Intra-industry trade between Thailand and other countries in East Asia has risen markedly, especially in automotive parts. Its sectoral innovation system has evolved from a passive-learning and fragmented system to a more active-learning and coherent one. Foreign carmakers and first-tier suppliers as well as several local suppliers made considerable effort to enhance their technological capabilities. Universities and research institutes started to have sector-specific teaching and research programmes and closer collaboration with the industry. The sector-specific government promotion agency has been increasingly acting as an ‘intermediary’ organisation. The system gradually upgraded from being a ‘production’ system to a somewhat ‘innovation-oriented’ and ‘R&D-intensive’ one. It has also become more ‘product specific.’
    Keywords: automotive industry, Thailand, technological and innovative capabilities, sectoral innovation system, production networks
    Date: 2015–10
  25. By: Abrar ul haq, Muhammd
    Abstract: The main concern of this study is to analyze the impact of agricultural exports on macroeconomic performance of Pakistan. This study estimated the relationship between Gross domestic product (GDP) and agricultural and non-agricultural exports for Pakistan employing Johansen co-integration technique by using secondary data for the period 1972-2008.The main findings of the study depict that agricultural exports have a negative relationship with economic growth of Pakistan while non-agricultural exports have positive relation with economic growth. On the basis of empirical results this study suggested that Pakistan have to do structural changes in agricultural exports by converting its agricultural exports into value added products.
    Keywords: Pakistan, Agricultural exports, non-agricultural exports, economic growth, Capital
    JEL: E00 Q00
    Date: 2015

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