nep-int New Economics Papers
on International Trade
Issue of 2015‒11‒01
forty-five papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trade Dynamics and Trade Costs: First Evidence from the Exporter and Importer Dynamics Database for Germany By Wagner, Joachim
  2. ASEAN Economic Integration through Trade and Foreign Direct Investment: Long-Term Challenges By Kawai, Masahiro; Naknoi, Kanda
  3. Does trade cause long-run development? Theory and evidence from countries behind the Suez channel By Michiel Gerritse
  4. The Ability of Organisations to Adopt Foreign Trade Standards By Ehrich, Malte; Hess, Sebastian
  5. Trade Costs and the Composition of Developing Countries’ Exports By Salamat Ali; Chris Milner
  6. Backfiring with backhaul problems: Trade and Industrial Policies with Endogenous Transport Costs By Jota Ishikawa; Nori Tarui
  7. Effects of RoHs and REACH regulations on firm-level production and export, and the role of global value chains : the cases of Malaysia and Vietnam By Otsuki, Tsunehiro; Honda, Keiichiro; Michida, Etsuyo; Nabeshima, Kaoru; Ueki, Yasushi
  8. Exportaciones de frutas y hortalizas desde Marruecos a la UE: Efectos de las preferencias comerciales By Laura Márquez-Ramos; Víctor Martínez-Gómez
  9. Deep trade agreements and vertical FDI : the devil is in the details By Osnago,Alberto; Rocha,Nadia; Ruta,Michele
  10. The importance of special safeguard tariffs (SSG) for Brazilian sugar exports By Cinthia Costa; Heloisa Burnquis; Joaquim Guilhoto
  11. Countervailing Duties on Green Goods: Implications for the WTO rules (Japanese) By YOMOGIDA Morihiro
  12. How How Deep is Your Love? A Quantitative Spatial Analysis of the Transatlantic Trade Partnership By Michael Pflüger; Oliver Krebs
  13. Do foreign workers reduce trade barriers? Microeconomic evidence By Martyn Andrews; Thorsten Schank; Richard Upward
  14. Does immigration fosters the Algerian exports ? A Static and Dynamic Analysis By Lamara Hadjou
  15. Internationalization choices and Italian firm performance during the crisis By Stefano Costa; Carmine Pappalardo; Claudio Vicarelli
  16. Does trade liberalization boost quality upgrading? : evidence from Indonesian plant-product-level data By Hayakawa, Kazunobu; Matsuura, Toshiyuki; Takii, Sadayuki
  17. The effect of local corruption on ownership strategy in cross border mergers and acquisitions By Emanuela Marrocu; Maria Chiara Di Guardo; Raffaele Paci
  18. Environmental Spillovers from Foreign Direct Investment: Firm-level evidence from Vietnamese manufacturing (Japanese) By JINJI Naoto; TSURUMI Tetsuya
  19. Endogenous Labor Supply and International Trade By Tadashi Morita; Takanori Ago; Takatoshi Tabuchi; Kazuhiro Yamamoto
  20. Comparative Advantage, International Trade, and Fertility By Do, Quy-Toan; Levchenko, Andrei A.; Raddatz, Claudio
  21. The dynamics of international trade in cereals, 1900-1938 By Gema Aparicio; Vicente Pinilla
  22. Measuring the costs of FTA utilization : evidence from transaction-level import data of Thailand By Hayakawa, Kazunobu; Laksanapanyakul, Nuttawut; Urata, Shujiro
  23. Zeros and the Gains from Openness By Timothy Uy
  24. The Similarity of Global Value Chains: A Network-Based Measure By Zhen Zhu; Greg Morrison; Michelangelo Puliga; Alessandro Chessa; Massimo Riccaboni
  25. The organization of knowledge in multinational firms By Gumpert, Anna
  26. Measurement of base erosion and profit shifting phenomena through the analysis of FDI stocks By Paolo Acciari; Francesca Tomarelli; Laura Limosani; Laura Benedetti
  27. Food Safety Standards, Compliance and European Union’s Rejection of African Exports: The role of Domestic Factors. By Kareem, Fatima; Brümmer, Bernhard; Martinez-Zarzosoc, Inmaculada
  28. The EU-China bilateral investment agreement in negotiation: Motivation, conflicts and perspectives By Bickenbach, Frank; Liu, Wan-Hsin; Li, Guoxue
  29. Trade and Towns:Heterogeneous Adjustment to a Border Shock By Marius Brulhart; Celine Carrere
  30. Essays in International Trade and Political Economy By Tommaso Aquilante
  31. The Role of Specific Trade Concerns Raised on TBTs in the Import of Products to the EU, USA and China By Mahdi Ghodsi
  32. The Impact of Windfalls: Firm selection, trade and welfare By Gry Oystenstad; Wessel Vermeulen
  33. Does trade imply convergence? Analyzing the effect of NAFTA on the local convergence in Mexico By Alberto Díaz Dapena; Esteban Fernandez Vazquez; Rafael Garduño; Fernando Rubiera Morollón
  34. Dark costs, missing data : shedding some light on services trade By Anderson,James E.; Borchert,Ingo; Mattoo,Aaditya; Yotov,Yoto Valentinov
  35. System Algorithms of Adaptation of Economies to WTO Criteria By Gubenko, Roman Mikhailovich; Vorobiev, Maxim Alekseevich; Klueva, Alla Gennadievna; Salamatov, V. Y.
  36. Obstacles to Export Strategy implementation in Zimbabwe’s clothing value chain By Arthur Mapanga
  37. Offshoring, Employment and Wages By Alessandro Bramucci
  38. Migration, allocation and reallocation of immigrants in the regional labour markets By Lasse Sigbjørn Stambøl
  39. The Agri-Food trade in Spain: specialization and international competition By María Josefa Garcia Grande; José María López Morales
  40. Trade Volatility and the GATT/WTO: Does Membership Make a Difference? By Chowdhury, Abdur; Xuepeng, Liu; Wang, Miao; Wong, M. C. Sunny
  41. Agricultural (Dis)Incentives and Food Security: is there a link? By Emiliano Magrini; Silvia Nenci; Pierluigi Montalbano; Luca Salvatici
  42. Visa Waivers, Multilateral Resistance and International Tourism: Some Evidence from Israel By Daniel Felsenstein; Michael Beenstock; Ziv Rubin
  43. The Effects of Trade Openness on Regional Inequality in South Korea By Soojeong Heo; Jinhwan Oh
  44. Cross-border tourism: Spain and Portugal, a common destination By Carmen Maiz-Bar; Xulio Pardellas; Carmen Padin
  45. A model of cross-border tourism competition By Tatsuaki Kuroda; Kaifan Chen

  1. By: Wagner, Joachim (Leuphana University Lueneburg and Centre of Excellence for Science and Innovation Studies (CESIS), KTH Stockholm)
    Abstract: This note uses the newly available Exporter and Importer Dynamics Database for Germany to investigate the links between trade dynamics and trade costs. It shows results for the dynamics of Germany’s goods trade as a whole, and for trade with two of the most important partner countries, namely France and China. Furthermore, it reports results from the first empirical study that searches for links between measures of trade dynamics (entry, exit and survival rates, and share of entrants, in total exports and imports) in destination countries of exports and countries of origin of imports on the one hand and characteristics of these countries (distance to Germany, difficulty of foreign trade, and market size) on the other hand.
    Keywords: Exports; imports; transaction level data; Germany
    JEL: F14
    Date: 2015–10–23
  2. By: Kawai, Masahiro (Asian Development Bank Institute); Naknoi, Kanda (Asian Development Bank Institute)
    Abstract: This paper explores the long-term challenges for trade and foreign direct investment (FDI) of the Association of Southeast Asian Nations (ASEAN). The region has emerged as an important production base for multinational corporations by joining East Asia’s supply chains. While proceeding to establish the ASEAN Economic Community (AEC) by the end of 2015, ASEAN has also forged five major free trade agreements (FTAs) with its dialogue partners (People’s Republic of China, India, Japan, Republic of Korea, and Australia–New Zealand) and is currently negotiating the Regional Comprehensive Economic Partnership (RCEP). In addition, four ASEAN member states are working on the Trans-Pacific Partnership (TPP) negotiations. Econometric evidence suggests that (i) trade flows and inward FDI mutually reinforce each other, i.e., an increase in trade flows stimulates inward FDI and vice versa; (ii) a larger market attracts more inward FDI; (iii) FTAs tend to help stimulate inward FDI; and (iv) strong institutions, good physical infrastructure, and low costs of doing business are critical in boosting inward FDI. The paper concludes that in the long run ASEAN should aim to further integrate itself with the rest of Asia and the world (through a Free Trade Area of the Asia-Pacific and an Asia–Europe FTA), while substantially deepening its internal integration (by moving from the AEC to a customs and economic union) and thereby maintaining ASEAN centrality.
    Keywords: ASEAN; economic integration; foreign direct investment
    JEL: F13 F14 F15 F18
    Date: 2015–10–27
  3. By: Michiel Gerritse
    Abstract: Does trade improve institutions and contribute to long run growth? I develop a theory of trade, in which trade liberalization provides incentive to change institutions in two ways. On the one hand, trade leads to specialization according to comparative advantage, expanding the industries that do not rely on contracting institutions in less developed countries. The Heckscher-Ohlin-type effect lowers the demand for contract enforcement, as documented in earlier literature. On the other hand, if firms are imperfectly competitive, they have an interest in minimizing their marginal costs. As institutional frictions in the factor markets are costly, they raise output prices and cause losses of sales for imperfectly competitive firms. When the economy opens up, the sales-reducing effects of poor institutions are aggravated, because the effective market size increases. As a result, increased market acces through trade liberalization can increase the demand for contract. Thus, trade liberalization may also increase the demand for good institutions. That idea underlies much of the debates on globalization and 'aid for trade', and this is one of the first papers to provide an economic rationale. I exploit the 1967-1975 war-induced closing of the Suez channel as a quasi-natural experiment. The war between Israel and Egypt was not anticipated, let alone caused by countries on the Eastern coast of Africa. During the closing of the channel, countries in the east of Africa had substantially larger trade costs towards Europe than countries on the western coast, which led to significant declines in trade volume. When the Suez channel was closed, countries with increased trade costs specialized in industries that relied less on institutions (less fixed costs, less differentiated products, less contract-intensive inputs). The opening up of the Suez channel in 1975 caused the opposite effect. The trade cost shock is arguably exogenous and I use a dif-in-dif-in-dif (country - industry - trade cost) estimator to control for the effects of trade costs at the country and industry level. The increase in trade costs held exclusively for shipping, thus making access to information, capital or people a less likely explanation for the results. The results persist even though comparative advantage determines trade patterns - capital-intensive industries benefitted from increased trade costs to Europe. The results therefore suggest that trade liberalization does not deteriorate institutions in less developed countries.
    Keywords: institutions and trade; dif-in-dif/quasi experiment; long-run development
    JEL: O19 F43 C31 F11 N77 F12 O43 O11
    Date: 2015–10
  4. By: Ehrich, Malte; Hess, Sebastian
    Abstract: Recent empirical studies argue that the implementation of quality standards among agricultural exporters has the character of a fixed cost. However, this can be misleading if fixed costs are only understood in terms of required investments. Instead, we argue that standard adoption is the result of exporting countries’ private and public organisations managing to solve the standard implementation problem. We demonstrate that a newly developed theoretical approach to the role of problem solving in the production process can be interpreted as a model of a country’s ability to implement foreign trade standards. Predictions of this model are tested within a gravity framework: we compare doing business indicators as proxies for the institutional characteristics of countries that successfully export fruits, dairy products, meat, fish, and vegetables to the EU (as a high standard market) against characteristics of countries that serve all markets. Results indicate that institutional characteristics like e.g. starting a business, enforcing contracts, and getting credits are more relevant for exports to markets with relatively high quality standards than for overall exports.
    Keywords: agricultural trade, food standards, organisations, institutional quality, Agricultural and Food Policy, Food Security and Poverty, Industrial Organization, Institutional and Behavioral Economics, International Relations/Trade, E02, F13, L22, Q17,
    Date: 2015–10
  5. By: Salamat Ali; Chris Milner
    Abstract: This study investigates how trade costs fashion the export composition of the developing countries. It uses the World Bank’s bilateral trade cost dataset and incorporates trade flows of a large set of developing countries. We exploit the variation in trade costs across countries and the differences in trade cost sensitivity across industries in the identification strategy. Moreover, we employ a set of cost shifters as instruments to overcome the endogeneity of trade costs. The paper finds that high trade cost countries gain a relatively lower export share overall compared to lower trade cost countries, and importantly that the share of exports declines more for more trade cost sensitive exports. The policy implications are clear: reducing trade costs would both increase the manufactured exports of developing economies and alter the composition of these exports.
    Keywords: Trade costs, export composition
    Date: 2015
  6. By: Jota Ishikawa (Faculty of Economics, Hitotsubashi University and Research Institute of Economy, Trade, and Industry (RIETI)); Nori Tarui (Department of Economics, University of Hawaii at Manoa and University of Hawaii Economic Research Organization (UHERO))
    Abstract: Trade barriers due to transport costs are as large as those due to tariffs. This paper explicitly incorporates the transport sector into the framework of international oligopoly and studies the effects of trade and industrial policies. Transport firms need to commit to a shipping capacity sufficient for a round trip, with a possible imbalance of shipping volumes in two directions. Because of this “backhaul problem,” trade restrictions may backfire: domestic import restrictions may also decrease domestic exports, possibly harming domestic firms and benefiting foreign firms. In addition, trade policy in one sector may affect other independent sectors.
    Keywords: Transport firm; transport cost; tariffs; subsidies; international oligopoly
    JEL: F12 F13 R40
    Date: 2015–10
  7. By: Otsuki, Tsunehiro; Honda, Keiichiro; Michida, Etsuyo; Nabeshima, Kaoru; Ueki, Yasushi
    Abstract: This paper uses firm-level data to examine the impact of foreign chemical safety regulations such as RoHS and REACH on the production costs and export performance of firms in Malaysia and Vietnam. This paper also investigates the role of global value chains in enhancing the likelihood that a firm complies with RoHS and REACH. We find that in addition to the initial setup costs for compliance, EU RoHS (REACH) implementation imposes on firms additional variable production costs by requiring additional labor and capital expenditures of around 57% (73%) of variable costs. We also find that compliance with RoHS and REACH significantly increases the probability of export and that compliance with EU RoHS and REACH helps firms enter a greater variety of countries. Furthermore, firms participating in global value chains have higher compliance with RoHS and REACH regulations, regardless of whether the firm is directly exporting, when the firm operates in upstream or downstream industries of the countries' supply chain.
    Keywords: Malaysia, Vietnam, International Trade, Productivity, Regulation, Costs, Trade, RoHS, REACH, Cost Function, Market Access, Supply Chain
    JEL: F14 L15 O53
    Date: 2015–04
  8. By: Laura Márquez-Ramos (Economics Department, Universitat Jaume I, Castellón, Spain); Víctor Martínez-Gómez (Department of Economy and Social Sciences, Universitat Politècnica de València, Spain)
    Abstract: This paper analyzes the effect of trade preferences granted to Morocco by the EU on monthly exports of four fruits and vegetables. We rely on a gravity framework and we take into account the potential endogeneity of trade preferences. We consider sectorial and monthly variability of the reduced entry price and the preferential tariffs. Quantitative limits for these preferences are also accounted for. Overall, our results show that although the two types of preferences taken into account are significant in determining positively the trade flows from Morocco to the EU, the preferential entry price system is a more effective strategy to increase exports in quantitative terms. Interestingly, our results show that the effect of the preferences differs by sector, as the reduced entry price is still exportrestrictive for vegetables and not for fruits. Finally, we find that the effect of trade preferences to foster exports differs by importing country, with a general greater effect when France is the destination country. Our results could have implications in negotiations for eventual revisions of the Euro-Mediterranean Agreements.
    Keywords: fruits and vegetables (F&V); trade preferences; EU countries; gravity model; Morocco
    JEL: F14 F15 Q17 Q18
    Date: 2015
  9. By: Osnago,Alberto; Rocha,Nadia; Ruta,Michele
    Abstract: Recent data show that the institutional content of preferential trade agreements has evolved over time. Although pre-1990s preferential trade agreements mostly focused on tariff liberalization, recent agreements increasingly contain deep provisions in diverse areas, such as intellectual property rights, investment, and standards. At the same time, there has been a remarkable increase in the internationalization of production through foreign direct investment and outsourcing. This paper employs the Antràs and Helpman (2008) model of contractual frictions and global sourcing to study how deep trade agreements affect the international organization of production. The paper constructs new measures of the depth of preferential trade agreements and of vertical foreign direct investment to test the theory. Consistent with the model, the analysis finds evidence that the depth of trade agreements is correlated with vertical foreign direct investment, and that this is driven by the provisions that improve the contractibility of inputs provided by suppliers, such as regulatory provisions. Because this implication of the model is specific to the so-called ?property rights? theory of the multinational firm, the findings provide empirical support to this approach vis-à-vis alternative theories of firm boundaries.
    Keywords: Free Trade,Economic Theory&Research,Trade Policy,Trade Law,Emerging Markets
    Date: 2015–10–29
  10. By: Cinthia Costa; Heloisa Burnquis; Joaquim Guilhoto
    Abstract: This paper presents a critical analysis of the SSG and a simulation of its effects for Brazilian sugar exports to countries such as the United States (US) and the European Union (EU) bloc. A first stage involved the identification of tariff lines (TL) for the EU and the US sugar imports from Brazil during the period of 1995 to 2013. Next, WTO notifications about SSGs were examined to identify when the measure was applied for sugar by these countries at each year, since 1995. For the years that the price-based SSG applied, the value of this additional tariff was calculated for each of the relevant TLs. This information was used, with price elasticities, to obtain the corresponding change in imports. Finally, the effect of an increase in Brazilian sugar exports in the absence of SSG tariffs was calculated and also the overall impact on Brazilian economy using its input-output matrix. The results indicated that the additional tariff due to SSG catch up 90% for raw sugar in EU and 30% for white sugar in US in years 1999 and 2002, which the additional tariffs were highest. In period of 2010-2013 the SSG did not work once the sugar price was higher than trigger price in both countries. The additional tariffs applied by EU were always higher than those applied by US. We estimated that the impact of the value of sugar that was not exported to the EU and US markets due to application of SSG tariffs in period 1995-2013 was equivalent to BRL 42 billion in the production value for all economy at 2013 prices (or US$ 20 billion) and almost BRL 22 billion in GDP for this country. This mean that Brazil has failed to produce, in this period, almost 0.8% of its GDP due to the application of this trade policy. Considering that the SSG price-based mechanism is particularly important when international market prices are low, these results suggest that the this policy intervention can be highly perverse as it translates into decreased domestic production in both, exporting and importing countries, and dampened world prices as the excess demand is restricted.
    Keywords: Sugar; import tariff; Brazil; EU; US; input-output matrix
    JEL: F13 C67
    Date: 2015–10
  11. By: YOMOGIDA Morihiro
    Abstract: This paper examines an optimal countervailing duty on green goods such as photovoltaic products. In 2013, the United States imposed a maximum of 49.79% countervailing duty on imports of photovoltaic products from China because subsidized exports of China significantly injured the U.S. producers. In response to this trade conflict, some economists and legal scholars argue that the World Trade Organization (WTO) rule should be modified in order to restrict or prohibit the imposition of countervailing duties on photovoltaic products. The reason is that subsidies for photovoltaic products could improve the environmental quality because it helps to reduce greenhouse gas emissions with promoting the use of solar power, and countervailing duties could counteract such environmental benefits. Although this argument seems to be reasonable from an economic viewpoint, none of them have undergone a formal economic analysis. We develop a theoretical model that incorporates the features of China-U.S. trade in photovoltaic products and use the model to examine how the United States' countervailing duty should be modified when the U.S. government maximizes national welfare that includes external environmental benefits generated by the use of green goods such as photovoltaic products. We show that an optimal countervailing duty should be lowered for green goods as compared to ordinary goods that do not generate environmental benefits even when a domestic production subsidy is optimally set to internalize the external effect. We also discuss implications for existing proposals for modification of the WTO rules on subsidy and countervailing measures for green goods.
    Date: 2015–10
  12. By: Michael Pflüger; Oliver Krebs
    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; sect
    JEL: F10 F20 F16
    Date: 2015–10
  13. By: Martyn Andrews; Thorsten Schank; Richard Upward
    Abstract: This paper provides evidence that foreign workers reduce firms’ trade costs and thus increase the probability that firms export. This informs both the literature on trade costs and the microeconomic literature on firms’ export behaviour. We identify the nationality of each worker in a large sample of German establishments, and relate this to the exporting behaviour of these establishments. We allow for the possible endogeneity of an establishment’s workforce by instrumenting the share of foreign workers with the regional distribution of foreign workers in the wider labour market. We find a significant effect of worker nationality on exporting which is not driven by the industrial, occupational or locational concentration of migrants. The effect is much stronger for senior occupations, which are more likely to have a role in exporting decisions by the establishment. The relationship is also stronger when we consider exports to particular regions and workers from these regions, consistent with a gravity model in which trade flows from country i to j are a function of migrants from j in i.
    Keywords: Firm exporting, foreign workers
    Date: 2015
  14. By: Lamara Hadjou
    Abstract: Abstract Algeria has a large immigrant population. It is the third largest African community in the world after that of Egypt and Morocco. Its role in the international trade of Algeria has never been object of evaluation study. In line with the recent literature developed since the 1990s, through the work of Gould (1994), on the relationship between immigration and international trade, we propose in this paper to assess the impact of Algerian immigration networks on Algerian exports. It is clear that immigrants represent an opportunity for diversification and intensification of Algerian exports. However, the involvement of immigrants in trade flows is not evident. It is then necessary to assess first the impact and degree of involvement, to propose later, elements of trade policy that can improve the impact. Keywords : immigration, export, Algeria
    Keywords: F1
    JEL: F22
    Date: 2015–10
  15. By: Stefano Costa (ISTAT); Carmine Pappalardo (ISTAT); Claudio Vicarelli (ISTAT)
    Abstract: In this paper we focus on the relationship between internationalization choices and performance of Italian firms during the first period of the financial crisis (2007-2010). Making use of a new database matching four firm-level datasets provided by the Italian National Statistical Institute (ISTAT), we firstly build a 6-class taxonomy of firms’ internationalization activities. Secondly, we estimate firms’ performance – in terms of employment and value added dynamics – as a function of internationalization forms. In particular, we assess the effects of the shifts across the taxonomy classes on firms’ performance, also estimating Propensity score and Heckman selection models in order to control for endogeneity and sample selection problems. Descriptive analyses confirm that firms adopting more complex forms of internationalization (e.g. offshoring, or exporting worldwide) are more efficient and export a wider range of goods than traditional exporters. Indeed, over the period 2007-2010, Italian firms moved (on average) towards more complex forms of internationalization. Empirical analysis found that these upward changes are associated to positive employment and value added dynamics at firm level, also in a period characterised by the 2009 trade collapse. These findings put additional emphasis on the issue of the diversification of both products and markets as a goal to be pursued by firms even in times of crisis, as the current ones, to remain competitive and make profits.
    Keywords: heterogeneous firms, internationalization, financial crisis.
    JEL: F10 F14 F23
    Date: 2015
  16. By: Hayakawa, Kazunobu; Matsuura, Toshiyuki; Takii, Sadayuki
    Abstract: In this study, we examine the effects of tariff reduction on firms' quality upgrading by employing an Indonesian plant-product-level panel dataset matched with a plant-level dataset. We explore the effects of lower output and input tariffs separately, by focusing on the apparel industry. By estimating the Berry-type demand function, we derive product-quality indicators based on the Khandelwal (Review of Economic Studies, 2010) methodology, which enables us to isolate quality upgrading from changes in prices. Our findings are as follows. First, a reduction in output tariffs does not affect product quality upgrading. Second, a reduction in input tariffs boosts quality upgrading in general. In particular, this impact is greater for import firms, which is consistent with the fact that the source of the boost is the import of high-quality foreign inputs.
    Keywords: Indonesia, International trade, Productivity, Tariff, Trade Liberalization, Input Trade, Quality Upgrading
    JEL: F13 F14 O32
    Date: 2015–10
  17. By: Emanuela Marrocu; Maria Chiara Di Guardo; Raffaele Paci
    Abstract: This paper focuses on how corruption affects an important internationalization behavior of firms: the extent of control - wholly owned subsidiary or equity participation - exercised by firms involved in cross-border mergers and acquisitions (M&A). Recently, scholars have recommended studying the effect on ownership entry mode of the quality of the target country?s overall governance infrastructure, or of its most important dimensions (Slangen and Van Tulder 2009). Among these dimensions, one of the most relevant, due to its broad effect on the economy, is corruption. Corruption can be thought of as anything that counters the legal system or that can be viewed as an inappropriate business practice (Lambert-Mogiliansky et al. 2007), which raises the level of external uncertainty in the target country and thus the cost of doing business abroad in general and specifically in the realm of M&A (see Weitzel and Berns, 2006). Although the level of corruption of the host countries is expected to have a strong influence on management decisions during acquisitions, it has been overlooked in the academic literature, and research on this topic is in its infancy. As a matter of fact, the increasing trend toward international acquisitions has created the need to address whether the extant conceptual framework and empirical evidence on international acquisitions and corruption are adequate in explaining the firm?s decision control-wise. We analyze individual data on cross-border M&A carried out by firms located in the seven largest European countries, namely Germany, France, Italy, the Netherlands, Spain, Sweden and the United Kingdom, and operating in the 10 SIC divisions. We thus consider 20,034 international M&A deals completed in 137 host countries over the period 2000-2012. We find that the relationship between the level of corruption in the host country and the firm?s probability of opting for full control mode in cross-border M&A is U-shaped. Such a relationship suggests that ownership strategy will change depending on whether the corruption is low, moderate or high. Moreover, we contribute to the extant literature by demonstrating that technological relatedness between acquirer and target and the level of connectivity (in terms of trade intensity, historical linkage, and geographic proximity) between home and host countries moderates the relationship between corruption in the host country and the level of control. Finally, after controlling for a wide range of both firm (status, industrial sector, past experience, and ownership structure) and country (culture, legal strength, risk, democracy, and business easiness) features, we found that trade intensity exerts the strongest moderating effect on corruption.
    Keywords: mergers-acquisitions; corruption; ownership strategy; technological relatedness
    JEL: C31 D73 F23 G34
    Date: 2015–10
  18. By: JINJI Naoto; TSURUMI Tetsuya
    Abstract: In this study, we investigate how inward foreign direct investment (FDI) influences the environmental actions of local firms in the host country. We use firm-level data of Vietnam manufacturing firms for the period 2007-2008. Environmental actions are measured in five indexes, including adoption of environmental management system, certification of environmental standards, and application of cleaner production. We estimate the direct effect of foreign ownership share and three types of spillover effects on the environmental behavior of firms. Spillover effects include horizontal, forward, and backward spillovers. We find positive and statistically significant direct effects and negative and significant horizontal spillovers. We also find positive and significant backward spillovers when firms engage in international trade. Moreover, we find heterogeneity in both direct and spillover effects among source countries of FDI.
    Date: 2015–10
  19. By: Tadashi Morita; Takanori Ago; Takatoshi Tabuchi; Kazuhiro Yamamoto
    Abstract: It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.
    Keywords: international trade; variable markup; endogenous labor supply
    JEL: F10 R10
    Date: 2015–10
  20. By: Do, Quy-Toan; Levchenko, Andrei A.; Raddatz, Claudio
    Abstract: We analyze theoretically and empirically the impact of comparative advantage in international trade on fertility. We build a model in which industries differ in the extent to which they use female relative to male labor, and countries are characterized by Ricardian comparative advantage in either female-labor or male-labor intensive goods. The main prediction of the model is that countries with comparative advantage in female-labor intensive goods are characterized by lower fertility. This is because female wages, and therefore the opportunity cost of children are higher in those countries. We demonstrate empirically that countries with comparative advantage in industries employing primarily women exhibit lower fertility. We use a geography-based instrument for trade patterns to isolate the causal effect of comparative advantage on fertility.
    Keywords: comparative advantage; fertility; trade integration
    JEL: F16 J13 O11
    Date: 2015–10
  21. By: Gema Aparicio; Vicente Pinilla
    Abstract: The aim of this paper is to analyse the dynamics of international trade in cereals in the first third of the twentieth century. To this end we will study its evolution over this period, comparing it also with the general trade of food and agricultural products. In addition, we will examine the structure of this trade. For wheat, maize and rice we will examine the operation of their respective markets, with special attention to the import and export flows between consumers and producers. To better understand the functioning of the market for these products, we will examine the changes in supply, demand and prices.
    Keywords: International agrifood trade, Grain trade, Great Depression
    JEL: F14 N50 N70 N76 Q17
    Date: 2015–10
  22. By: Hayakawa, Kazunobu; Laksanapanyakul, Nuttawut; Urata, Shujiro
    Abstract: In this study, we measure the utilization costs of free trade agreement (FTA) tariff schemes. To do that, we use shipment-level customs data on Thai imports, which identify not only firms, source country, and commodity but also tariff schemes. We propose several measures as a proxy for FTA utilization costs. The example includes the minimum amount of firm-level savings on tariff payments, i.e., trade values under FTA schemes multiplied by the tariff margin, in all transactions. Consequently, the median costs for FTA utilization in 2008, for example, are estimated to be approximately US$2,000 for exports from China, US$300 for exports from Australia, and US$1,000 for exports from Japan. We also found that FTA utilization costs differ by rule of origin and industry.
    Keywords: Thailand, International Trade, International Agreements, Costs, Imports, FTA, Fixed Costs
    JEL: F13 F53
    Date: 2015–10
  23. By: Timothy Uy
    Abstract: Despite the enormous growth in global trade and investment, most countries still do not trade or invest with one other. I document that 80% of bilateral trade and FDI relationships are zeros. I construct a model that rationalizes these zeros and allows new bilateral relationships to form (aggregate zero-to-one transitions) following policy reform. Firms incur two types of costs when operating internationally: (1) fixed costs preventing them from operating - identified using the variation in zeros, and (2) iceberg costs reducing the amount they sell when they operate -- identified using variation in positive flows. The global bilateral fixed costs estimated from the zeros are novel to the literature, which has focused on country- or sector-specific fixed costs. I develop an algorithm that enables me to (1) compute an approximate equilibrium where exact equilibria do not exist, and (2) reduce the computational complexity to one that grows linearly, as opposed to exponentially, in the number of countries, mitigating the curse of dimensionality. Welfare gains in models with no aggregate entry and exit account for only 41% of the average gains obtained in the model where zeros matter, signifying that this aggregate extensive margin matters for understanding what countries gain from openness.
    Date: 2015
  24. By: Zhen Zhu (IMT Institute for Advanced Studies Lucca); Greg Morrison (IMT Institute for Advanced Studies Lucca); Michelangelo Puliga (IMT Institute for Advanced Studies Lucca); Alessandro Chessa (IMT Institute for Advanced Studies Lucca); Massimo Riccaboni (IMT Institute for Advanced Studies Lucca and DMSI, K.U. Leuven, Leuven, Belgium)
    Abstract: International trade has been increasingly organized in the form of global value chains (GVCs) where different stages of production are located in different countries. This recent phenomenon has substantial consequences for both trade policy design at the national or regional level and business decision making at the firm level. In this paper, we provide a new method for comparing GVCs across countries and over time. First, we use the World Input-Output Database (WIOD) to construct both the upstream and downstream global value networks, where the nodes are individual sectors in different countries and the links are the value-added contribution relationships. Second, we introduce a network-based measure of node similarity to compare the GVCs between any pair of countries for each sector and each year available in the WIOD. Our networkbased similarity is a better measure for node comparison than the existing ones because it takes into account all the direct and indirect relationships between country-sector pairs, is applicable to both directed and weighted networks with self-loops, and takes into account externally defined node attributes. As a result, our measure of similarity reveals the most intensive interactions among the GVCs across countries and over time. From 1995 to 2011, the average similarity between sectors and countries have clear increasing trends, which are temporarily interrupted by the recent economic crisis. This measure of the similarity of GVCs provides quantitative answers to important questions about dependency, sustainability, risk, and competition in the global production system.
    Keywords: Networks, Node Similarity, Input-Output Analysis, Global Value Chains, Vertical Specialization, International Trade
    JEL: C67 F10 F15
    Date: 2015–09
  25. By: Gumpert, Anna
    Abstract: This paper provides the first in-depth study of the organization of knowledge in multinational firms. The paper develops a theoretical model that studies how firms optimally split knowledge between their headquarters and their production plants if communication costs impede the access of production plants to headquarter knowledge. The paper assumes that the foreign plants of multinational firms face higher communication costs with headquarters than their domestic plants, and shows that multinational firms therefore systematically assign more knowledge to both their foreign and domestic plants than non-multinationals. This helps explain why multinational firms pay higher wages to their production workers than non-multinational firms, and why their sales and their investment probability decrease across space. Empirical evidence from data on corporate transferees confirms the model predictions for multinationals' organization of knowledge. Data on German multinational firms corroborate the implications of the model in relation to the geography of multinationals' sales and investments.
    Keywords: multinational firm,knowledge hierarchy,organization,geography of FDI,multinational wage premium,corporate transferees
    JEL: D21 D24 F21 F23
    Date: 2015
  26. By: Paolo Acciari; Francesca Tomarelli; Laura Limosani; Laura Benedetti
    Abstract: This work is intended to provide a useful contribution to the OECD-G20 project to address the issue of international tax avoidance by multinational corporations, known as Base Erosion and Profit Shifting (BEPS), focused on the issue of “how big a problem is BEPSâ€. The main difficulties encountered in the assessment of the scale and impact of Base Erosion and Profit Shifting stem from: i) the variety and complexity of the tax planning strategies exploited by multinational corporations to reduce their corporate tax burden; ii) the lack of complete and reliable worldwide corporate micro-data sources; iii) the absence of an exhaustive tax variable to identify a low-tax system, since neither the statutory tax rate nor the different specifications of the effective tax rates are sufficiently accurate for this purpose. The assessment strategy described in this work tries to overcome the aforementioned difficulties by basing the analysis on inward FDI stocks for a wide set of countries, leading to an indirect identification of foreign direct investments that are driven by BEPS phenomena as those FDI stocks that are not justified by economic reasons. With particular attention to the consistency and quality of the recorded information, the econometric analysis performed makes use of a database constructed with information provided by different data sources (UNCTAD, The World Bank, International Telecommunications Union International Labour Organization, Transparency International, WTO, UNESCO, IMF, WGI) for the years 2005-2012, and available for a set of 172 countries. The data used for each country refer to structural and context variables identified in the economic literature as FDI determinants, such as: gross domestic product (GDP), infrastructures, labour market, degree of openness to foreign markets, inflation, etc. Through the application of a mixed model on repeated observations, it was possible to identify an econometric function to obtain a point estimate of the inward FDI stock for each country. This point estimate displays two components: a fixed effect (for all countries), regarding the structural and context variables identified in the model, and a variable intercept with a random effect, which captures the individuality of each country in that it explains the differences linked to the exploitation of favourable tax systems, to incentive policies targeted at foreign investors, or to other aspects that are not directly captured by the explanatory variables in the fixed part of the model. Therefore, positive intercepts identify those countries attracting a greater amount of foreign direct investments, and are a proxy of the share of inward FDI stocks at risk of BEPS.
    Keywords: BEPS, MNEs, corporate income tax, inward FDI, mixed models, OECD
    JEL: H26 H25 F21
    Date: 2015–09
  27. By: Kareem, Fatima; Brümmer, Bernhard; Martinez-Zarzosoc, Inmaculada
    Abstract: This paper investigates the causes of rejections of African exports at the EU border as a barrier in accessing EU markets. Our results indicate that natural geographical hurdle, poor trade-related infrastructure, inefficient border procedure and a lack of technical personnel increase the incidences of rejection at the EU border and add to Africa’s challenges in accessing EU markets. In addition, in line with the growing literature, this study finds empirical support for the proposition that institutions, infrastructure and logistic quality matter for increased market penetration and continuous integration into the global trading system. Thus, the barrier created by EU rejection of Africa’s exports can be addressed through the strengthening of African’s institutions and trade facilitation measures particularly her custom and border management including transit regimes.
    Keywords: Non-Tariff Barrier, Export Rejections, Institution, Trade Procedures, Africa, European Union, Agricultural and Food Policy, Health Economics and Policy, Institutional and Behavioral Economics, International Development, International Relations/Trade, F13, F14, L15, O17, C33,
    Date: 2015–10
  28. By: Bickenbach, Frank; Liu, Wan-Hsin; Li, Guoxue
    Abstract: Since January 2014 China and the European Union (EU) have been negotiating a comprehensive bilateral investment agreement. In contrast to the EU-US negotiations on a Transatlantic Trade and Investment Partnership (TTIP), the ongoing negotiations between China and the EU have received little public attention so far. Still, a successful conclusion of these negotiations may be of great importance even beyond the EU-China investment relations. This holds in at least two respects. Firstly, a successfully concluded bilateral investment agreement may pave the way for a future EU-China free trade agreement. And secondly, looking beyond the bilateral relationship, the negotiations between the EU and China may make an important contribution to the establishment of a more liberal global investment framework. Currently, China is also negotiating an investment agreement with the US which is likely to take a similar form as that between China and the EU. In addition, provisions for the future liberalisation of bilateral investment flows are also an important part of the TTIP negotiations between the US and Europe. Rules and provisions, e.g., regarding market access, the prohibition of performance requirements or the transparency with respect to state-owned enterprises, that are part of all three agreements will "be elevated to a de facto global standard" (Berger 2014). Against this background, the present Kiel Policy Brief analyses the key barriers investors from China and the EU currently face in the EU and China, respectively and provides a brief assessment of whether and how these key barriers can be dealt with in the comprehensive EU-China investment agreement currently negotiated.
    Date: 2015
  29. By: Marius Brulhart; Celine Carrere
    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: trade liberalization, city size, spatial adjustment, natural experiment
    JEL: F15 R11 R12
    Date: 2015–07
  30. By: Tommaso Aquilante
    Abstract: This dissertation consists of three independent essays which contribute to the literatures on International Trade and Political Economy. The first essay addresses questions related to the political economy of antidumping (AD). With the remarkable falling in tariff barriers that has characterized the post-World War II period, AD has become the most used non-tariff barrier (NTB).1 Studying the use of AD is thus of great importance, also because the restrictive effects of AD measures on trade can be sizable (see for instance Ruhl, 2014). Moreover, there is an increasing concern that AD has turned to be an industrial policy tool rather than a mean that governments can use to restore the “level-playing field” (Vandenbussche and Zanardi, 2008). This worry is in line with the findings presented in the first chapter of this dissertation, Bureaucrats or Politicians? Political Parties and Antidumping in the US, which shows that the adoption of ADmeasures in the US is heavily shaped by political parties’ interests. I focus on the voting behavior of the International Trade Commission (ITC), a US quasijudicial agency composed by six non-elected commissioners who are supposed to conduct (an important part of the) AD investigations in a fair and objective manner. Using a newly collected dataset containing all ITC commissioners’ votes on AD over the period 1980-2010, I show that political parties can affect the ITC voting behavior in two ways: by selecting ITC commissioners who have a similar stance on trade policy as their own (selection effect) and by influencing them while they are in office (pressure effect). While other studies have emphasised that Congress can put pressure on the ITC, the novelty of this work is to show that this pressure is party-specific. First, I show that Democratic-appointed commissioners are systematically more protectionist than Republican-appointed ones. This effect is sizable (the probability of voting in favor of AD is at least 8 percentage points higher for Democratic-appointed commissioners) and suggests that political parties can play an important role by influencing the choice of ITC commissioners who have a similar preferences on trade. This result is insensitive to several changes in the econometric specifications and to the use of different methodologies. Moreover, commissioners’ votes on AD depend on the trade policy interests of key senators (i.e. Trade subcommittee members) in the party they are associated to.2 In particular, whether (Democratic) Republican-appointed commissioners vote in favor of AD depends crucially on whether the petitioning industry is key (in terms of employment) in the states represented by leading (Democratic) Republican senators at the time. This result is robust to several checks also holds when controlling for any unobserved time-invariant characteristic of ITC commissioners (e.g. the state of origin) that could influence their votes on AD and be correlated with the pressure variables, i.e. when commissioner fixed effects are included in the specifications. In addition, the pressure effect can actually overcome the selection effect, making a Republican-appointed commissioner more protectionist than the average Democratic-appointed one. The second essay, Internationalization and Innovation of Firms: Evidence and Policy, analyzes the link between internationalization and innovation at the firm level.3 The evidence presented Chapter 2 shows that the degrees of involvement in internationalization and innovation activities are inextricably linked. However, the European policy context seems at odds with this evidence: trade-promotion and innovation-enhancing policies are largely unrelated and often carried out through various agencies (see EIM, 2010).4 Thus, understanding the interaction between internationalization and innovation can be crucial for policy makers, especially in a world which is increasingly characterized by global value chains.5 The interplay between internationalization and innovation is investigated in a unique, representative and cross-country comparable sample of manufacturing firms with at least ten employees (EFIGE), across seven European countries (Austria, France, Germany, Hungary, Italy, Spain, UK) for the year 2008. We find that firms in the sample at hand are quite active in both innovation and internationalization: 87% of firms devote resources to R&D projects, IT solutions, or patent/design/ trademark registrations, while 77% of our firms are active in international trade, cross-border outsourcing relations, or FDI. For modes of internationalization, there is a clear ranking of associated firm performance: FDI makers show the highest productivity, followed by outsourcers and traders. Innovation differences across modes are less clear cut. Moreover, defining internationalization (innovation) intensity as the number of internationalization (innovation) modes in which firms are involved, we show that firms with high innovation intensity tend also to show high internationalization intensity. Instrumenting innovation intensity by the share of firms that have benefitted from R&D financial incentives in a given (NACE 2 digits) industry-country pair and by the share of investment in R&D over the value added in the same industry-country pair, for the years 2002-2006, we are not able to find conclusive evidence of a causal effect of innovation on internationalization. Finally, a positive association between innovation and internationalization intensities appears at both firm level and country-industry (milieu) level, and at country level when average intensity is calculated disregarding the relative numbers of firms in the different industries. If country average intensities are computed weighting by firm numbers in the various industries, the correlation between innovation and internationalization intensities across countries appears weaker, suggesting that innovation matters more than internationalization for driving differences across countries. Based on the evidence we collected, we suggest a higher coordination/integration of internationalization and innovation policies at both the national and EU levels, and propose a bigger coordinating role for EU institutions, in order to reduce the current paradox of generally uncorrelated policies aimed at mostly correlated outcomes. The third essay, Cooperation Among Criminal Organizations: Evidence from Organized Crime in Italy, uncovers new facts about the behavior criminal organizations on the Italian territory. Since Becker (1968) the economic analysis of crime has especially focused on the behavior of individual offenders. Much less attention has been devoted to the activities of criminal organizations, especially from an empirical point of view. Nevertheless, organized crime is a prominent and alarming presence in the world economy: it destroys physical and human capital and deteriorates the business environment, ultimately lowering the growth potential of an economy (Acconcia et al. 2014; Pinotti, 2015). The third chapter of this dissertation contributes to the literature on economics of organized crime by shedding light on the interaction between domestic and foreign organizations in Italy, showing that the probability of cooperation among them depends both on the type of crime committed and on the presence of traditional (incumbent) organizations in some regions of the country. More specifically, cooperation between domestic and foreign criminal organizations is studied using a novel dataset containing information on their activities in the Italian territory during 2007-2010. Italian territory during 2007-2010. We first show that cooperation among Italians and foreigners is skewed towards specific crimes (e.g. counterfeiting activities). We then show that the presence of traditional (incumbent) organizations in some regions reduces the probability of cooperating. Interestingly, in these areas the same probability is higher when cooperation takes place for criminal activities in which foreign organizations can play an important role in providing inputs.
    Keywords: Innovation Policy; Antidumping Policy; Political Parties; Internationalization; Innovation; Firm Heterogeneity; Trade Policy; Organized Crime
    Date: 2015–08–28
  31. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract The Specific Trade Concerns (STC) data on Technical Barriers to Trade (TBT) notifications of WTO members report 317 TBT notifications between 1995 and 2011. This contribution provides evidence concerning the impact of TBT STCs on the imports of products at 4-digit level of the Harmonised System to three major economies – the EU, the United States and China – over the period 1995-2011 using an augmented gravity model controlling for the endogenous characteristics of TBTs and tariffs. Robustness checks are provided using Fixed Effect (FE) Estimation, and Poisson FE. Further, since TBTs are generally imposed on non-food products, food and non-food products are analysed in separate specifications. Bootstrapped robust results suggest that these policy measures have negatively influenced trade flows to the EU and China, while they have enhanced the imports of products to the United States. The quality impact of these measures is assessed using unit values of imports. The results suggest that US notifications improve the quality and values of imports, while in the case of the EU notifications this effect is observed only for the high-income trade partners. Lower imports to China due to quality improvement of products, on the other hand, may refer to low preference of Chinese consumers for higher quality.
    Keywords: trade policy, technical barriers to trade, specific trade concerns
    JEL: F13 F14
    Date: 2015–06
  32. By: Gry Oystenstad; Wessel Vermeulen
    Abstract: We ask how a small open economy with heterogeneous rms responds to a resource windfall. A resource windfall boosts demand but also aects wages such that production costs increase. The result is a higher number of firms and renewed selection among firms: New firms at the lower end of the productivity continuum can produce for the domestic market, while only the most productive firms continue to export. While the share of firms that sell traded varieties decreases, the average productivity of exporting firms increases. The increase in the number of varieties following the increase in the number of firms and the in flow of additional imports implies that there is an increase in aggregate welfare over and above the direct windfall gain. We provide analysis in a model with two types of labor. The windfall causes a reallocation of labor types and a change in relative wages, thereby implying different welfare outcomes for each type of labor and the possibility of rising inequality.
    Keywords: Resource windfalls, heterogeneous firms, trade, welfare
    JEL: F12 Q37
    Date: 2015
  33. By: Alberto Díaz Dapena; Esteban Fernandez Vazquez; Rafael Garduño; Fernando Rubiera Morollón
    Abstract: Regional Economics and Economic Growth focus on the question of trade leads to a greater concentration of economic activity. Yet little empirical work has assessed the regional convergence impacts of trade. Therefore this paper studies the regional convergence from trade in Mexico after NAFTA. Unlike previous papers, working with municipal-level data allows to observe more clearly the convergence patterns across space and to identify the effect of NAFTA, respectively. Result shows that after NAFTA, convergence in regions near the U.S. border grew faster than those further away. However, there is a significant reduction of the beta coefficient after NAFTA indicating a slowdown in the convergence rate. Additional, we find that those municipalities in the south have not been integrated in the world markets, and have, instead, lagged behind their counterparts after NAFTA.
    Keywords: Convergence; local level; clusters; international trade; NAFTA and Mexico
    JEL: R11 R15
    Date: 2015–10
  34. By: Anderson,James E.; Borchert,Ingo; Mattoo,Aaditya; Yotov,Yoto Valentinov
    Abstract: A structural gravity model is used to estimate barriers to services trade across many sectors, countries, and time. Since the disaggregated output data needed to infer border barriers flexibly are often missing for services, this paper derives a novel methodology for projecting output data. The empirical implementation sheds light on the role of institutions, geography, size, and digital infrastructure as determinants of border barriers. The paper finds that border barriers have generally fallen over time, but there are differences across sectors and countries. Notably, border effects for the smallest economies have remained stable, giving rise to a divergent pattern across countries.
    Keywords: Trade and Services,Economic Theory&Research,Trade Policy,Trade Law,Emerging Markets
    Date: 2015–10–29
  35. By: Gubenko, Roman Mikhailovich (Russian presidental academy of national economy and public administration (RANEPA)); Vorobiev, Maxim Alekseevich (Russian presidental academy of national economy and public administration (RANEPA)); Klueva, Alla Gennadievna (Russian presidental academy of national economy and public administration (RANEPA)); Salamatov, V. Y. (Russian presidental academy of national economy and public administration (RANEPA))
    Abstract: International practice shows convincingly that the newly acceding to the World Trade Organization (WTO) countries, the period of economic adjustment to the criteria of the organization is not limited to the date of accession. Despite the fact that most of the adaptation measures are usually carried out before the formal date of accession, a substantial part of the actions should be undertaken in the first years of membership in the WTO. This, in particular, due to the presence of transition periods for reducing import duties on sensitive commodity items for acceding to the WTO, the economy. In addition, work continues to bring the legislation to the economy of the acceding to WTO rules, both at the federal and regional levels. Russia became a full member of the WTO 23 August 2013. By separate headings transition period, according to the commitments made in the framework of the accession procedure is completed in 2019. During this period, there will be changes that will have an impact on some sectors of the economy and of economic operators carrying out their business activities in these sectors. Therefore, a systematic understanding of the processes of adaptation of the economy to the WTO criteria and the availability of algorithms adaptation measures can reduce the risk of negative consequences for Russia's participation in the organization and improve the effect of the use of instruments of the WTO Russian economic operators.
    Keywords: WTO, adaptation of economy
    Date: 2014–08–08
  36. By: Arthur Mapanga (North West University)
    Abstract: This paper investigates the barriers to the implementation of the export strategy in the clothing sector of Zimbabwe. The government of Zimbabwe in its efforts to stimulate trade and socioeconomic development has formulated a five year export strategic blue-print for the resuscitation of clothing value chain. However, to date, no visible movement towards the implementation of the export strategy has materialised. The sector is on the brink of collapse due to the influx of cheap foreign imports. The welfare and livelihood of over two million people dependent on the sector are severely threatened due the continued non-performance of the sector. An understanding of the barriers to strategy implementation improves strategy implementation success.A case study design was used in this research. Firstly, desk research on industry reports and the media was conducted followed by key informant interviews to understand the barriers causing inertia in the implementation of the export strategy. Cotton farmers’ representatives, cotton ginners association, the spinning industry , garment manufacturers, clothing retailers, workers’ unions and government representatives were important sources of information towards the discovery of the barriers. From the research, leadership, consensus and commitment deficiencies could be the major barriers (among others) militating against the implementation of the export strategy in the clothing value chain. There is also a lack of trust among the value chain actors leading to the dislocation of efforts resuscitate the sector. Trust building may be needed to align the different value chain relationships and actions to enable the successful implementation of the export strategy in clothing sector of Zimbabwe. The successful implementation of the export strategy in the sector is expected to regenerate the whole economy as the viability of the clothing sector has a ripple effect from agricultural input suppliers to retail functions of the economy.
    Keywords: barriers, export strategy, value chain, clothing sector, implementation, trust building
    JEL: D29 D23 D22
  37. By: Alessandro Bramucci (Ph.D. at University of Urbino, Department of Economics, Society, Politics, Università di Urbino "Carlo Bo")
    Abstract: This paper reviews the debate on the economic effect of the international fragmentation of production also known as “offshoring” and provides a preliminary investigation on the impact of imports of intermediate products on labor demand and wages in five European countries (Germany, Spain, France, Italy, United Kingdom). Data are obtained from the Sectoral Innovation Database (SID) of the University of Urbino, a large database that merges statistical material from various sources (LFS; CIS; OECD STAN; WIOD). The first part of this work is devoted to a discussion of the concepts, the economic effects of offshoring and the debate that followed. The second section presents offshoring trends and discusses the results of a preliminary econometric analysis on the offshoring effect on wages and employment. Results suggest that offshoring has a general negative impact on labour demand and wages although at a more careful examination high-tech offshoring appear to have a positive influence on wages of medium and high-skilled workers.
    Keywords: Offshoring, International Outsourcing, Innovation, Employment, Wages
    JEL: F1 F2
    Date: 2015
  38. By: Lasse Sigbjørn Stambøl
    Abstract: The aim of this paper is to analyse immigrants? mobility, both geographically and in terms of transitions into and out of the regional labour markets in Norway, in order to uncover the extent to which the workings of local labour markets contribute to integration versus exclusion. For comparisons, we have followed groups of Norwegian-born children of immigrants and the general population in and out of jobs in the same local labor markets through the same period. We also investigate whether migration contribute to change the labor market status of immigrants (like in job, in education, unemployed or outside labor force) using a ?cohort-analysis? where we follow selected cohorts of immigrants through some years after they immigrated for the first time. To measure the specific effects of migration on change of labor market status, we have compared the labor market status achieved by those who relocate compared with corresponding groups in the population that does not move. Among immigrants, we have selected the cohorts in 2004 and 2008 and then followed each of them through the five subsequent years after recorded immigrated for the first time. The analyses are undertaken based on micro panel data featuring all immigrants in Norway, mostly recognized by their reason for immigration, from the turn of millennium to as recent year as possible. Particular attention is given to examining the mobility of immigrants and native control groups relative to the gross demand for labour in regional labour markets measured by means of a complete annual regional vacancy account for each of the years involved in the study. These data and methods also allow us to specify each person's labor market status in each year during the investigation period, thus also each person's annual change in employment status during the same period. Preliminary results show that immigrants have been of great importance in order to cover part of the demand for labor in the regional labor markets. On the other hand, the results indicate that immigrants have replaced some labor without immigrant background, alongside a tendency that new immigrants replace previous immigrants in the regional labor markets. Domestic migration has to a certain extent been beneficial for immigrants to obtain employment or to carry out an education. The effect of relocation as the ease of access varies, however, according to the immigrants? reason for immigration and their regional settlement patterns by centrality. Some groups have both immediate and permanent positive impact of moving with respect to work participation, while others may have positive short-term but not long-term effects or vice versa
    Keywords: Migration; Immigration; Labour partcipation
    JEL: J1 J6
    Date: 2015–10
  39. By: María Josefa Garcia Grande; José María López Morales
    Abstract: Abstract Agri-food Industry, as the sum of the Agriculture, Livestock, Forestry and Fishing and Food Industry (Food, Beverages and Tobacco) is, except some service activities, the highlight industry of the Spanish economy, not only for their GVA (5.3% in 2013) and employment contribution (6.4% on the same date), but above all for its relevant presence in international markets. The importance of Agri-Food Industry in the Spanish economy is much higher than this sector has in the European Union (EU-28) or in the Euro Area (3.8% and 3.7% of GDP, respectively), and its contribution in the EU agri-food production (11.8% in 2012) reaches a similar level of the great European countries (Germany and Italy -11.8 and 12.6 per 100, respectively) and only below the contribution of France -16.2 per 100-. Internationally, Spain is one of the major exporting countries of the world. It is the second largest exporter of Fruits, the third exporter of Legumes and other edible vegetables, the fifth exporter of Animal, vegetable fats and oils, sixth exporter of Meat and seventh of Beverages. The aim of this paper it is to analyze the territorial specialization in the agri-food trade and to study the diversification both in respect of exported products as in regard to customers who purchase those products. The final purpose will be to determine the competitive advantages and weaknesses, both from a sectorial or spatial perspective, to determine which possibilities of expansion shows this trade and what policy measures should be taken to correct the weaknesses of the sector and enhance the strengths of some activities with significant international presence. To perform the analysis, we use information about global imports and exports (annual frequency) from Comtrade Database, United Nations, which uses the Standard International Trade Classification (SITC Rev.3). We work with a disaggregation level of 2 and 3 digits. For certain aspects, we will use information from DataComex, from Ministry of Economy and Finance of Spain; that it is consistent with that provided by Comtrade.
    Keywords: Agri-Food; Food Industry; Agri-Food imports and exports; Food; Beverages and Tob
    Date: 2015–10
  40. By: Chowdhury, Abdur (Department of Economics Marquette University); Xuepeng, Liu (Kennesaw State University); Wang, Miao (Department of Economics Marquette University); Wong, M. C. Sunny (University of San Francisco)
    Abstract: The Bitcoin phenomenon, and the technological innovation that made it possible, is interesting - but for investors large and small, the more pertinent question is whether they should buy the virtual currency or avoid it. We analyze a Bitcoin investment from the standpoint of a U.S. investor with a diversified portfolio. Bitcoin investment shows high average return as well as volatility. Mean-variance Spanning tests show that Bitcoin investment offers significant diversification benefits. Well diversified portfolios with a small Bitcoin component (2%) shows small improvement in the risk-return trade-off.
    Keywords: trade volatility, WTO, gravity model
    JEL: F02 F13 F14
    Date: 2014–01
  41. By: Emiliano Magrini; Silvia Nenci; Pierluigi Montalbano; Luca Salvatici
    Abstract: This paper analyzes the impact of agricultural (dis)incentives on food security for a wide sample of countries over the period 1990-2010 using the World Bank database on distortions to agricultural incentives. We adopt a continuous treatment approach applying a generalized propensity score matching to reduce potential biases stemming from difference in observed country characteristics. The results provide strong evidence of self-selection and heterogeneous food security impacts at different levels of policy intensity. Estimates of the dose-response functions show that both discrimination against agriculture and large support lead to poor performances in several dimensions of FS.
    Keywords: Food security, agricultural incentives, impact evaluation, GPS, cross-country analysis
    JEL: C21 F14 O50 Q17
    Date: 2015–10
  42. By: Daniel Felsenstein; Michael Beenstock; Ziv Rubin
    Abstract: This paper tests the visa-led tourism hypothesis (VTH) which contends that easing of visa restrictions increases international tourism. Israel acts as a natural laboratory in this case with clear before and after junctures in visa restrictions. We use panel data on tourism to Israel from 60 countries during 1994-2012. In contrast to previous work we take account of non-stationarity in the data and test for the effect of multilateral resistance on tourism. Partial waivers of visa restrictions are estimated to increase tourism by 48 percent and complete waivers increase tourism by 118 percent. Other results include the adverse effect of Israel?s security situation on tourism, the beneficial effect of real devaluation on tourism, and the fact that the elasticity of tourism to Israel with respect to tourism to all destinations is very small.
    Keywords: International tourism; visa arrangements; multilateral resistance; panel data
    JEL: C23 R23
    Date: 2015–10
  43. By: Soojeong Heo; Jinhwan Oh
    Abstract: This paper is to analyze the effect of trade openness on regional inequality of South Korea. Trade has been the driving force of Korea¡¯s economic growth since the 1960¡¯s and it still expands its trade openness through active participation on bilateral and multilateral free trade agreements. In regard to this, this study measures the impact of Korea¡¯s trade openness on the country¡¯s regional inequality using several sub-national panel dataset covering between 2003 and 2012. All data set for the 16 regional units (nine provinces and seven metropolitan cities) are collected from archival materials in Korean Statistical Information Service (KOSIS). The dependent variable is the growth rate of GDP per capita from.2000 to 2012, while the explanatory variables include human capital, trade openness, infrastructure, and per capita income. More specifically, human capital is measured by the number of people who have achieved university level education and infrastructure is measured by either road density or per capita number of cars, depending on data availability. Unlike other studies, this paper finds that trade openness contributes to higher level of economic growth on the regions with lower levels of education, implying that trade openness leads reducing regional inequality of Korea. In addition, trade benefits the areas with relatively lower per capita income, which also supports the claim that trade contributes to narrowing the regional income discrepancies. However, a seemingly contradictory finding has been made; more trade openness benefits regions which have rich infrastructure, thereby leading more regional inequality. We argue that the former two effects exceed the latter, thereby leading concluding that trade openness has been playing a positive role in reducing the country¡¯s regional income gap.
    Keywords: Regional Inequality; Trade; Openness; Per capita income; Human Capital; Infra
    JEL: R11 R12 R58
    Date: 2015–10
  44. By: Carmen Maiz-Bar; Xulio Pardellas; Carmen Padin
    Abstract: ABSTRACT: A new approach to the analysis of the border between Spain and Portugal, a basically rural territory, requires a debate about local development problems, among which we can find the effects of its configuration as a common tourist destination. This paper presents an assessment of several elements for that debate, and the common resources that can define the area as a common tourist destination. A design model is also provided, which can enable territory planning through the appraisal of those resources. Key words: common tourist destination, cross-border territory, destination design
    Keywords: common tourist destination; cross-border territory; destination design
    Date: 2015–10
  45. By: Tatsuaki Kuroda; Kaifan Chen
    Abstract: Tourism has long been important part of the economy. Specifically, it serves as a kind of resource that performs a significant role in national economies. With the rise of globalization, cross-border tourism has grown and induced intense competition among counties. The present paper highlights the situation in which the citizens of two countries have the opportunity to travel domestically and cross the border of the other country. The governments of both countries are assumed to be attempting to maximize the social welfare of their respective countries by choosing the appropriate domestic tax rates. The domestic tax serves as the source of funding for the improvements to the infrastructure of domestic tourism, including the areas of security, public facilities, natural areas, and artificial scenic construction. In the process, both governments compete for the attention of tourists. Each country in this game has a tourism industry in place. The two competing industries set the price of their services, including entrance fees or so, to maximize their profits and overtake each other. We consider two cases in the sequential game: (1) the case in which the tourism industry is the leader and (2) the case in which the government is the leader. We consider the factors that influence the tax rate and national income of both countries and identify a feasible strategy for their governments to maintain the attractiveness of their respective countries to tourists while remaining competitive. In the case in which the tourism industry is the leader, tax rates are found to be strategic complements, but each tax rate is independent of the wage rates of both countries. Moreover, the prices set by the tourism industries may be strategic substitutes under certain condition of parameters, in Nash equilibrium of this sequential game (1). In the case in which the government is the leader, the prices set by the tourism industries are found to be strategic substitutes. The price is in reverse proportion to the domestic wage rate, yet is in direct proportion to the foreign wage rate. The tax rate is in reverse proportion to the domestic wage rate, yet is independent the foreign wage rate, in Nash equilibrium of this sequential game (2). Finally, assuming some specific values for the parameters, we compare the outcomes of the two-type games. We found that the leadership of the governments is not always beneficial even from the consumersÂf point of view by the simulation.
    Keywords: tourism; competition; cross-border; sequential game
    JEL: F2 L1 L9 R1
    Date: 2015–10

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