nep-int New Economics Papers
on International Trade
Issue of 2015‒11‒07
fifty-four papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Do regional trade agreements actually increase Turkey’s foreign trade? By Merve Mavuş Kütük; Elif Akbostancı
  2. Trade and Integration: A Gravity Model of Trade for Selected EU Candidate Countries By Braha, Kushtrim; Qineti, Artan; Ibraimi, Sadudin; Imeri, Amir
  3. Estimating the effects of Non-tariff Measures on U.S.-EU agricultural trade By Arita, Shawn; Mitchell, Lorraine; Beckman, Jayson
  4. The role of trade policies, multinationals, shipping modes and product differentiation in global value chains for bananas. The case of Cameroon. By Anania, Giovanni
  5. Do Foreign Workers Reduce Trade Barriers? Microeconomic Evidence By Andrews, Martyn J.; Schank, Thorsten; Upward, Richard
  6. Price, Quality and Trade Costs in the Food Sector By Curzi, Daniele; Pacca, Lucia
  7. Credit Distribution and Exports: Microeconomic Evidence from China By Yao Amber Li; Albert Park; Chen Zhao
  8. Distorted Trade Barriers: A Dissection of Trade Costs in a "Distorted Gravity" Model By Tibor Besedes; Matthew T. Cole
  9. Measuring Country Competitiveness: A Survey of Exporting-based Indexes By Cyrielle Gaglio
  10. Charting the evolving landscape of services trade policies: Recent patterns of protection and liberalization By Roy, Martin
  11. Merger Policy in a Quantitative Model of International Trade By Holger Breinlich; Volker Nocke; Nicolas Schutz
  12. Contracting and the Division of the Gains from Trade By Andrew B. Bernard; Swati Dhingra
  13. Trade Liberalization on the EU-US GMO Agreement: A Political Economy Approach By Shao, Qianqian; Punt, Maarten; Wesseler, Justus
  14. A Gravity Model of Virtual Water Flows: The Case of Turkey By Elif Akbostancı; Serap Turut Asik; Gül Tunç
  15. Disaggregated Armington Elasticities for Agricultural Sectors of Turkey By Ünal Töngür
  16. Comparative Advantage, International Trade, and Fertility By Quy-Toan Do; Andrei A. Levchenko; Claudio Raddatz
  17. Options to improve food security in North Africa: CGE modelling of deeper trade and investment integration with the European Union By Boulanger, Pierre; Kavallari, Aikaterini; M'barek, Robert; Rau, Marie; Rutten, Martine
  18. EU preferences for agri-food products from developing countires- winning and losing due to the EU GSP reform 2013 By Demaria, Federica; Drogue, Sophie; Rau, Maria Luise
  19. Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey By Meschi, Elena; Taymaz, Erol; Vivarelli, Marco
  20. Agricultural Trade, Biodiversity Effects and Food Price Volatility By Bellora, Cecilia; Bourgeon, Jean-Marc
  21. Global Agri-Food Export Competitiveness By Bojnec, Stefan; Ferto, Imre
  22. Outward Foreign Direct Investment and Economic Growth, the Changing Nature of Turkish Economy By Ahmet İkiz
  23. Productivity Shocks, International Trade and Pass-Through: Evidence from Agriculture By Ferguson, Shon; Gars, Johan
  24. Asymmetric cartel formation under trade liberalization: Heterogeneous firms with capacity constraints By Aya Ahmed
  25. How Does Aid For Trade Contribute To ASEAN`s Trading? By Shwe Sin Oo; Masaru Ichihashi
  26. Drivers of Export Competitiveness in Wine Sector By Balogh, Jeremias; Ferto, Imre
  27. Globalization and Synchronization of Innovation Cycles By Kiminori Matsuyama; Iryna Sushko; Laura Gardini
  28. Financial Vulnerability and Export Dynamics By Marie-Ange VEGANZONES-VAROUDAKIS; Youssouf KIENDREBEOGO; Mélise JAUD
  29. Trade and investment relations between Central and Eastern Europe and Latin America By Andrea Elteto
  30. Is it only suitable for a few? WTO member participation in Specific Trade Concerns and Disputes on SPS/TBT according to their income levels By Boza, Sofia; Fernandez, Felipe
  31. Absorption of Foreign Knowledge: Firms’ Benefits of Employing Immigrants By Jürgen Bitzer; Erkan Gören; Sanne Hiller
  32. Does Trade Make Asian Children Healthier? By Vishalkumar Jani; Dholakia, Ravindra H.
  33. The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets By Beghin, John; Bureau, Jean-Christophe; Gohin, Alexandre
  34. Role of Foreign Trade in Ensuring Food Security of the Countries of Central Asia By Mogilevskii, Roman; Akramov, Kamiljon
  35. The Russian ban on EU agricultural imports: A bilateral extension of AGLINK-COSIMO By Dillen, Koen
  36. Foreign IPR, Trade and Innovation: Does complexity matter? By José Fernández Donoso
  37. Offshoring, Relationship-Specificity, and Domestic Production Networks By FURUSAWA Taiji; ITO Keiko; INUI Tomohiko; Heiwai TANG
  38. The Armington Assumption and the Size of Optimal Tariffs By Li, Chunding; Wang, Jing; Whalley, John
  39. Will the institution of coexistence be re-defined by TTIP? By Maciejczak, Mariusz
  40. International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions By Albuquerque, Rui; Brandão-Marques, Luis; Ferreira, Miguel; Matos, Pedro Pinto
  41. Overcoming Isolation: An Exploration of the Rapid Growth in Pulse Exports from Myanmar By Boughton, Duncan; Haggblade, Steve; Kham, L; Kongabaugh, Steve; Thaung, Myo
  42. Ties of Visegrád countries with East Asia – trade and investment By Andrea Elteto; Agnes Szunomar
  43. The Imlact of the Russian Import Ban on Domestic Pig Meat Prices in Russia By Djuric, Ivan; Gotz, Linde; Glauben, Thomas
  44. FDI and Economic Growth in Developing Countries; A Cross Comparison between Egypt and Turkey By Deena Saleh
  45. International Trade and Local Labor Markets: Are Foreign and Domestic Shocks Created Differently By Mark D. Partridge; Dan S. Rickman; M. Rose Olfert; Ying Tan
  46. State Trading Enterprises and Price Stabilization By Bourgeon, Jean-Marc; Jean, Sebastien; Maillet, Anais
  47. What Drives Local Food Prices? Evidence from the Tanzanian Maize Market By Baffes, John; Kshirsagar, Varun; Mitchell, Donald
  48. Distinguishing Between Genuine and Non-Genuine Reasons for Imposing Technical Barriers to Trade: A Proposal Based on Cost-Benefit Analysis By Mahdi Ghodsi
  49. Same Currency, Different Strategies? The Role of the Exchange Rate in Shaping European Agri-Food Exports By Fedoseeva, Svetlana
  50. Impact of the ECOWAS Common External Tariff on the Rice Sector in West Africa By Fiamohe, Rose; Diallo, Souleymane; Diagne, Aliou; Agossadou, Arsene
  51. Globalization, Chinese Imports, and Skill Premia in a Small Open Economy By Selva Baziki
  52. Chinese outward FDI in Europe and the Central and Eastern European region within a global context By Agnes Szunomar; Zsuzsanna Biedermann
  53. Non-Tariff Measures: Not All that Bad By OLIVIER CADOT; Lili Yan Ing
  54. The International Price System By Gita Gopinath

  1. By: Merve Mavuş Kütük (Middle East Technical University/Department of Economics); Elif Akbostancı (Central Bank of the Republic of Turkey/ Communications and Foreign Relations Department)
    Abstract: Regional trade agreements (RTAs) have important role in Turkey’s foreign trade. Turkey, which has a customs union with the European Union (EU), has to apply the Common Commercial Policy of the EU in line with obligations arisen from the Customs Union Decision. Within this framework, attempts to sign free trade agreements (FTAs) with countries which have a FTA with the EU have been maintained. In the current situation, Turkey has FTAs with 20 countries and Turkey’s foreign trade with the EU members is conducted under provisions of the Customs Union Decision. The aim of this study is to analyze whether the RTAs of Turkey are an increasing factor in her foreign trade or not. In the study, Turkey’s foreign trade with 126 countries or country groups is analyzed using the gravity model. Impacts of the RTAs on Turkey’s foreign trade are measured through panel data estimations of the classical gravity model extended by variables defined for RTAs and fixed effects. In this regard, empirical evidences reveal that the Customs Union does not affect Turkey’s export but it is an increasing factor in import of Turkey. Also, it is obtained that the FTAs do not have any impact on either export or import of Turkey.
    Keywords: Gravity model, customs union, free trade agreements, foreign trade, Turkey
    JEL: F14 F15 C23
    Date: 2015
  2. By: Braha, Kushtrim; Qineti, Artan; Ibraimi, Sadudin; Imeri, Amir
    Abstract: In the majority of the EU potential members agricultural sector is playing a prominent role. Such an outcome is based on the high contribution of the agricultural sector on GDP, employment and trade accounts. EU initiated bilateral trade liberalization with the Western Balkans through the establishment of the ATPs. Furthermore, trade liberalization is extended in the regional level through the establishment of renewed CEFTA 2006. Despite the significant improvement, their export competitiveness remains weak. In the long run, agricultural exports might contribute on improvement of the export performance of the EU candidates. Main findings of the gravity model employed in this paper suggest that exports are positively affected by product size (GDP), and to lesser extent by the GDP of trading partners. Exports fall with the increase of the distance, and the fall in the value of exports is greater as larger is the distance between the trading partners. Therefore, the marginal fall in exports increases as far as the geographical distance between the trading partners increase. Initial assumptions that PTAs and cultural ties facilities the trade flows were affirmatively confirmed. Trade liberalization had a positive implication on improving export performance of the EU candidate countries
    Keywords: EU enlargement, economic transformation, agricultural trade, gravity model, International Relations/Trade, F1, F15, Q10,
    Date: 2015
  3. By: Arita, Shawn; Mitchell, Lorraine; Beckman, Jayson
    Abstract: This study investigates the effects of sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT) on U.S.-EU agricultural trade. We review several of the data, methodological, and conceptual challenges to assessing these types of non-tariff measures (NTMs) in the context of free trade agreements and implement an empirical strategy for examining SPS/TBTs in U.S.-EU trade. To assess these NTMs, we combine market analysis with gravity model econometric methods to estimate the forgone levels of trade. In nine out of the eleven sectors we investigated with specific SPS/TBT concerns, actual exports were significantly lower than the predictions of our model. Estimated ad valorem tariff equivalents of NTMs in these sectors were found to be considerably higher than existing tariffs. We conclude by discussing some of the caveats of our estimations and further steps that may be pursued to evaluate potential welfare gains from removing NTMs in U.S.-EU agricultural trade.
    Keywords: Non-tariff measures, NTMs, gravity model, agricultural trade, trade agreement, Transatlantic Trade and Investment Partnership, T-TIP, United States, European Union, sanitary and phytosanitary measures, SPS, technical barriers to trade, TBT, Agribusiness, Environmental Economics and Policy,
    Date: 2015
  4. By: Anania, Giovanni
    Abstract: The first part of the paper discusses changes which occurred in the world market for bananas in recent years. These changes include successive modifications of the EU import regime for bananas (the EU is the single largest importer of bananas, with 1/4 of the world market), innovations in sea shipment modes, increased concentration of the retail sector and the expansion of the demand in developed countries for environment-friendly and Fair Trade bananas. The implications of these changes for the distribution of the value among the actors at the different links of the global chain for bananas are discussed in details. The second part of the paper focuses on banana exports from Cameroon, a value chain representative of ‘traditional’ chains where large multinationals maintain a central role. First this chain is analyzed in detail, then a simple model representing its main characteristics is developed and expected effects of changes in key factors such as production and transportation technologies and fiscal and trade policies, derived.
    Keywords: International Relations/Trade,
    Date: 2015
  5. By: Andrews, Martyn J. (University of Manchester); Schank, Thorsten (University of Mainz); Upward, Richard (University of Nottingham)
    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: international migration, trade barriers, exports, employer-employee data, firm-level analysis
    JEL: F16 F22
    Date: 2015–10
  6. By: Curzi, Daniele; Pacca, Lucia
    Abstract: Recent developments in international trade theory have placed growing emphasis on the quality of products, showing that it affects countries’ export performances. However, as quality is unobservable, a measurement problem emerges. In this paper we apply some of the most recent methods to estimate quality of traded products. We focus on the food sector, where the growing attention on quality and safety issues is leading to an increase in the demand for high quality products. In the first part of our empirical analysis, we investigate the properties of the estimated qualities. We find that, in contrast with what often is assumed in the literature, quality and prices are imperfectly correlated. The second empirical section is dedicated to the study of the relationship between price vs. quality and trade costs. It emerges that the price and the quality of food exports are influenced differently by ad valorem and specific trade costs.
    Keywords: Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2015
  7. By: Yao Amber Li (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Albert Park (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Chen Zhao (Department of Economics, Hong Kong University of Science and Technology)
    Abstract: This paper explores how the distribution of credit supply within an industry affects that industry's export intensity (the export-to-sales ratio) and export propensity (the ratio of the number of exporters to the total number of firms). Using a heterogeneous firm trade model, we derive two opposing hypotheses: for industries with relatively low (high) foreign market penetration costs, a more dispersed credit distribution decreases (increases) the industry's export intensity and the number of exporters. The empirical results using Chinese firm-level data and bank loan data support both hypotheses and confirm the significant heterogeneous impacts of credit distribution on exports across industries.
    Keywords: credit constraints, credit supply, financial development, credit distribution, heterogeneous firms, international trade, liquidity
    JEL: F14 G20 L60
    Date: 2015–11
  8. By: Tibor Besedes (Department of Economics, Georgia Institute of Technology); Matthew T. Cole (Department of Economics, California Polytechnic State University)
    Abstract: It is quite common in the trade literature to use iceberg transport costs to represent variable trade barriers, both tariffs and shipping costs alike. However, in models with monopolistic competition these are, in fact, not identical trade restrictions. This difference is not driven by tariff revenue but by how the two trade costs affect firm profits and the extensive margin. We illustrate these differences in a gravity model `a la Chaney (2008). We show theoretically that trade flows are more elastic with respect to ad valorem tariffs than transport costs and find a linear relationship between the elasticities with respect to ad valorem tariffs, iceberg transport costs, and fixed market costs. We empirically validate these results using data on U.S. product-level imports.
    Keywords: Gravity, firm heterogeneity, monopolistic competition
    JEL: F12 F13 F17
    Date: 2015
  9. By: Cyrielle Gaglio (Université Nice Sophia Antipolis; GREDEG-CNRS)
    Abstract: In the context of increasing globalization and world trade flows, this survey reviews the most recent literature related to country competitiveness. Although Krugman (1994) maintains that competitiveness at country level is a "dangerous obsession", this concept is becoming more prominent in public debate. However, it lacks a clear definition and confusion between the country and firm levels. This survey focuses on competitiveness from an export perspective because "what you export matters" (Hausmann et al., 2007), and tries to fill the gap between the former understanding and the new theoretical insights/stylized facts. More precisely, this literature review investigates four complementary indexes related to a country's productive and export structure: (i) productive diversification, (ii) export sophistication, (iii) product space, and (iv) economic complexity. It proposes nine building blocks for competitiveness at country level.
    Keywords: Country competitiveness, Diversification, Sophistication, Product space, Complexity
    JEL: F10 O10
    Date: 2015–10
  10. By: Roy, Martin
    Abstract: While greater focus has been cast on analysis of policy changes affecting trade in goods in the aftermath of the financial crisis, little is known about the direction of policies affecting trade in services. On the basis of information contained in the I-TIP Services database, this paper provides an overview of the evolution of services trade policies since 2000, where policy changes - whether towards more liberalization or more protection - tend to be less easily reversible and to have a greater impact. Has protectionism increased in the aftermath of the crisis? Which countries, sectors and modes of supply have been associated with most trade facilitating and trade-restrictive measures? The evidence gathered contradicts in many respects basic political economy expectations. Indeed, the countries, sectors and modes of supply where liberalizing and protectionist measures have been implemented are not necessarily those one would have assumed. Most importantly, trade-facilitating measures have clearly outweighed trade-restrictive ones over the recent period, including after the onset of the crisis. This strong push towards autonomous liberalization bodes well for trade negotiations on trade in services. The undertaking of greater commitments would bring benefits by consolidating this recent liberalization and by helping to reduce non-negligible outbursts of protectionism that have been witnessed over the last years. However, bilateral and plurilateral agreements, because of their limited country coverage, would only capture a fraction of the recent autonomous liberalization and, similarly, only help prevent part of the protectionist measures springing up.
    Date: 2015
  11. By: Holger Breinlich; Volker Nocke; Nicolas Schutz
    Abstract: In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is too tough or too lenient from the viewpoint of the foreign country. Calibrating the model to match industry-level data in the U.S. and Canada, we show that at present levels of trade costs merger policy is too tough in the vast majority of sectors. We also quantify the resulting externalities and study the impact of different regimes of coordinating merger policies at varying levels of trade costs.
    Keywords: Mergers and Acquisitions, Merger Policy, Trade Policy, Oligopoly, International Trade
    JEL: F12 F13 L13 L44
    Date: 2015–10
  12. By: Andrew B. Bernard; Swati Dhingra
    Abstract: This paper examines the microstructure of import markets and the division of the gains from trade among consumers, importers and exporters. When exporters and importers transact through anonymous markets, double marginalization and business stealing among competing importers lead to lower profits. Trading parties can overcome these inefficiencies by investing in richer contractual arrangements such as bilateral contracts that eliminate double marginalization and joint contracts that also internalize business stealing. Introducing these contractual choices into a trade model with heterogeneous exporters and importers, we show that trade liberalization increases the incentive to engage in joint contracts, thus raising the profits of exporters and importers at the expense of consumer welfare. We examine the implications of the model for prices, quantities and exporter-importer matches in Colombian import markets before and after the US-Colombia free trade agreement. US exporters that started to enjoy duty-free access were more likely to increase their average price, decrease their quantity exported and reduce the number of import partners.
    Keywords: Heterogeneous firms, exporters, importers, vertical integration, contracts, consumer welfare
    JEL: F10 F12 F14
    Date: 2015–10
  13. By: Shao, Qianqian; Punt, Maarten; Wesseler, Justus
    Abstract: The EU and the US launched negotiations on a Transatlantic Trade and Investment Partnership (TTIP) in July 2013. Among the TTIP aims, there are negotiable terms under which the EU would import more genetically modified (GM) products and change its labeling regulations on GM Organisms (GMOs). This paper discusses a trade agreement of agricultural products between two countries, with different GM regulatory regimes from a political economy perspective. We identify the negotiation equilibrium of the GMO Trade Agreement and compare it with a stricter trade policy. We find that if the trade agreement leads to a lenient GM regulation, lobbying intensifies. However, this effect is moderated if there are exports of non-GM products.
    Keywords: Political Economy, GMOs, international trade, Crop Production/Industries, International Development, International Relations/Trade, F42, Q18, P16,
    Date: 2015–11
  14. By: Elif Akbostancı (Middle East Tecnical University, Department of Economics); Serap Turut Asik (Middle East Tecnical University, Department of Economics); Gül Tunç (Middle East Tecnical University, Department of Economics)
    Abstract: Due to its empirical success gravity model of trade has long been the pillar of empirical research. According to conventional gravity model of bilateral trade, trade is determined by indicators of country size (GDP, population and land area) and of the distance between the pair of countries in question (physical distance as well as dummy variables indicating common borders, linguistic links and cultural similarities). Lately the gravity model of bilateral trade is transformed to include the virtual water concept. Virtual water is defined as the volume of water embedded in the production of an item. This concept and its empirical applications are mostly related to the production of agricultural commodities as water is mainly used by agricultural activities It is argued that water-rich countries should produce and export water-intensive commodities to water-scarce countries. The virtual water trade flows are determined by a number of factors like production technologies, domestic and international prices, trade barriers and quantity of available land; besides water endowments. In line with the existing literature we form a gravity model of virtual water trade flows for Turkey where the dependent variable is the total amount of water embedded in the agricultural products exchanged between Turkey and her major trade partners. The study will cover 2002-2012 period, 326 agricultural products and 196 countries. Water content of the trade flows of Turkish economy is computed by using country specific average water footprint of agricultural commodities provided by Mekonnen, M.M. and Hoekstra, A.Y. (2010) and agricultural trade data extracted from FAOSTAT database. Among the independent variables we include the conventional variables of gravity models like population, GDP per capita, geographical distance between Turkey and her trade partners; and some other variables which try to explain water availability and water pressure.
    Keywords: Gravity model, trade, agriculture, virtual water
    JEL: F18 F14 Q17 Q25
    Date: 2015
  15. By: Ünal Töngür (Middle East Technical University, Department of Economics)
    Abstract: The substitution elasticity between agricultural goods from different countries (Armington elasticities) is of special importance for many trade models. Note that the elasticity of substitution captures the degree of substitutability between import sources of supply. The so called Armington elasticities are key parameters for most of the partial or general equilibrium based trade models because of their critical role in determining model results. The higher the value of this parameter, the higher the degree of substitution. A high value of elasticity of substitution implies that imports from different areas are considered by consumers to be approximately identical. They would be exactly identical if the parameter was infinite which is the case of prefect substitution. On the other hand, a low value for this parameter points out that the two products are weak substitutes. In this study, the substitution elasticites (Armington elasticities) for agricultural goods of Turkey will be estimated by panel data estimation techniques. The data includes Turkey’s agricultural trade data and for the domestic consumption of agricultural products the FAOSTAT data will be employed. In the model, 27 regions are defined in order to differentiate regional impacts.
    Keywords: Agricultural Trade, Elasticities of Substitution, Armington Elasticities, Panel Data
    JEL: C50 F15 F17 Q17
    Date: 2015
  16. By: Quy-Toan Do; Andrei A. Levchenko; Claudio Raddatz
    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.
    JEL: F16 J13 O11
    Date: 2015–10
  17. By: Boulanger, Pierre; Kavallari, Aikaterini; M'barek, Robert; Rau, Marie; Rutten, Martine
    Abstract: This paper presents some macro and food security impacts of deeper economic integration between the European Union and three North African countries, namely Egypt, Morocco and Tunisia. It conducts a quantitative impact assessment of increase in trade and investment flows using the Modular Applied General Equilibrium Tool (MAGNET). Trade liberalization enhances food security by counteracting the rise in food prices, fostered by growing demand for agricultural products in North Africa. Investments either on the whole economy or targeted to cutting down losses (waste) in food production are modelled. Results suggest that economic growth is stimulated mostly by widespread productivity gains (not restricted to agri-food sector) and boosted by trade integration through removal of non-tariff measures.
    Keywords: Food Security and Poverty,
    Date: 2015
  18. By: Demaria, Federica; Drogue, Sophie; Rau, Maria Luise
    Abstract: This paper looks into the general system of preferences of the European Union (EU) (henceforth referred to as the EU GSP system). In order to account for new EU trade agreements and emerging economies, the EU GSP system was reformed according to Regulation (EU) No 987/2012). The new EU GSP system was set into force in 1st January 2014. Focusing on agri-food products, we identify respective products and countries affected by the reform as well as analyse the changes of preferences. In addition to a brief review of the literature, we outline the main provisions of the new EU GSP system. In our analysis, we apply detailed tariff data for 2013. The number of tariff lines and trade under the EU GSP system indicate the effects, and the AVE tariffs of those countries and products that are no longer eligible for GSP reveals if countries really lose out.
    Keywords: Foreign trade, EU general system of preferences (GSP), developing countries, preference margins, Food Consumption/Nutrition/Food Safety, F10, F13, Q17,
    Date: 2015
  19. By: Meschi, Elena (Università Ca’ Foscari di Venezia); Taymaz, Erol (Middle East Technical University); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper studies the interlinked relationship between globalization and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm‐level database that covers all manufacturing firms in Turkey over the 1992‐2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a 2+2 equations model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM‐SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill‐enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. "Learning by exporting" also appears to have a relative skill biased impact, while FDI imply an absolute skill bias.
    Keywords: skill‐biased technological change, international technology transfer, GMM‐SYS
    JEL: O33
    Date: 2015–10
  20. By: Bellora, Cecilia; Bourgeon, Jean-Marc
    Abstract: Biotic elements such as pests create biodiversity effects that increase production risks and impede land productivity when agriculture becomes more specialized. We show in a Ricardian two-country trade setup that production specialization is incomplete under free trade because of the decrease in land productivity. Pesticides allow farmers to reduce these effects, but they are damaging for the environment and for human health. When regulating farming practices under free trade, governments face a trade-off: they are induced to restrict pesticides use compared to autarky because national food consumption depends less on them, but they also want to preserve the competitiveness of their agricultural sector on international markets. We show that at the symmetric equilibrium under free trade, restrictions on pesticides are generally more stringent than under autarky. As a result, trade increases the price volatility of crops produced by both countries, and of some or all of the crops that are country-specific depending of the intensity of the biodiversity effects.
    Keywords: agricultural trade, food prices, agrobiodiversity, pesticides, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Food Consumption/Nutrition/Food Safety, F18, Q17,
    Date: 2015
  21. By: Bojnec, Stefan; Ferto, Imre
    Abstract: The article investigates agri-food export competitiveness of 23 countries on global markets using revealed comparative advantage (B) index in the 2000-2011 periods. Results indicate that main global agri-food exporting countries have revealed comparative advantages. The panel unit root tests suggest convergence in the dynamics of the B indices. Mobility indices indicate relatively low mobility in the B indices at the product level. The Kaplan-Meier survival rates of the B indices on long-term are among the highest for the Netherlands, France, Belgium, the United States, Argentina and New Zealand. The level of economic development, the share of agricultural employment, subsidies to agriculture, and differentiated consumer agri-food products increases the likelihood of failure in comparative advantage, while agricultural land abundance and export diversification reduces.
    Keywords: global agri-food export – revealed comparative advantage – panel unit root tests – intra-distribution dynamics – duration analysis – discrete time models, Agribusiness, Food Consumption/Nutrition/Food Safety, International Development, F01, F14, C23, C41, Q17,
    Date: 2015
  22. By: Ahmet İkiz (Mugla Sıtkı Kocman University)
    Abstract: Liberalization and deregulation policies after 1980's successfully open Turkish economy to global world and increased foreign trade and investment. The focal point of this policy was constructed on increasing FDI to Turkish economy in order to attain high economic growth. In last couple of years there is a enormous amount of change in this process where contrary to inward FDI the outward FDI of Turkish companies significantly increased. That clearly indicates the amount of capital movement abroad for investment purposes. That accompanied with low saving rates which is the main determinants of investment level in home country. The OFDI in Turkish economy is quite neglected area in academic literature and there are few research on its impacts on economic growth. In this paper I am trying observe the impact of OFDI on economic growth for Turkish economy.
    Keywords: NA
    Date: 2015
  23. By: Ferguson, Shon; Gars, Johan
    Abstract: The purpose of this study is to measure the sensitivity of trade to agricul- tural productivity shocks, using country-level data on yield and production combined with bilateral trade data for a wide range of countries and products for the years 2000-2010. We find that traded quantities react in the expected direction but that the magnitudes are smaller than predicted by theory. The results suggest that trade frictions, product differentiation and storage limit the role of international trade as way of coping with production volatility. We find that import unit values increase in years when domestic production is relatively high. We consider alternative explanations for this such as quality sorting or economies of scale in international shipping. Import price declines in years when importers have a poor domestic production may act as a coping mechanism for countries that suffer from adverse food production conditions.
    Keywords: F14, F18, Q11, Q17, Q18 ., Agribusiness, Environmental Economics and Policy, International Relations/Trade, Climate shocks, pass-through, quality sorting, agricultural trade,
    Date: 2015
  24. By: Aya Ahmed (Paris School of Economics)
    Abstract: In a context of trade liberalization , this paper is interested in studying the impact of a decline in trade costs on cartel formation between foreign and domestic firms. In a model that endogenizes the cartel formation be- tween heterogeneous firms in their capacities and their marginal costs, the paper investigates how the decrease in trade tariffs affects the formation of such a cartel. Contrary to previous works in this area, the paper does not study how trade liberalization affects cartel stability, however it is in- terested in testing whether the cartel becomes more or less inclusive after this openness. The model predicts that the price prevailing on the mar- ket following trade liberalization depends on capacity distribution of the foreign firms. If they are large enough, price may increase after openness.
    JEL: L13 L22 L40 F12 D41
    Date: 2015
  25. By: Shwe Sin Oo (Graduate School for International Development and Cooperation, Hiroshima University); Masaru Ichihashi (Graduate School for International Development and Cooperation, Hiroshima University)
    Abstract: The aid for trade program is about helping developing countries to improve their trade abilities. With many developing countries, Asia is one of the largest aids for trade recipients and plays an essential role in world trade. In Asia, ASEAN countries are active aid participant countries and also participate in world trade. This study uses an aid-augmented gravity model to find the relationship between bilateral aid for trade and bilateral trade between recipient ASEAN countries and OECD DAC donors. We consecutively calculate and compare the effects of the overall aid for trade program on trade of ASEAN aid for trade recipients (altogether and recipients grouped by income level) by using data on 8 ASEAN aid recipient countries and 23 OECD DAC donor countries in 1991?2009. We also calculate the effect of disaggregated aid on recipient exports or imports in 2002?2009. We find that, overall, aid for trade has a positive and significant effect on either exports or imports of recipient countries. However, when differentiating recipients by income level, aid for trade is working well only for lower-middle-incomegroups. Aid for economic infrastructure and technical assistance on trade policy and regulation has a positive and significant effect on recipient exports or imports.
    Keywords: data cleaning;
  26. By: Balogh, Jeremias; Ferto, Imre
    Abstract: The purpose of this research is to provide insight into the export competitiveness of wine of the 38 countries on global markets. Four revealed comparative advantage indices are used to analyze the levels, evolutions in patterns of development in the export competitiveness of wine and their drivers over the analysed years of 2000 to 2013. The revealed comparative advantages on the global markets are the most robust for France, Italy, Spain, Chile, Australia and United States. Our estimations suggest a divergence in comparative advantage over time at the world market. The results show that GDP and exchange rates have negative effects on the wine export competitiveness, while agricultural employment, grape area harvested and WTO memberships are positively associated with comparative advantages. Our results are relatively robust for alternative revealed comparative advantage indicators.
    Keywords: Agribusiness, Food Consumption/Nutrition/Food Safety,
    Date: 2015
  27. By: Kiminori Matsuyama (Department of Economics Northwestern University); Iryna Sushko (Institute of Mathematics, National Academy of Science, Ukraine); Laura Gardini (Facoltà di Economia Università degli Studi di Urbino)
    Abstract: We propose and analyze a two-country model of endogenous innovation cycles. In autarky, innovation fluctuations in the two countries are decoupled. As the trade costs fall and intra-industry trade rises, they become synchronized. This is because globalization leads to the alignment of innovation incentives across firms based in different countries, as they operate in the increasingly global (hence common) market environment. Furthermore, synchronization occurs faster (i.e., with a smaller reduction in trade costs) when the country sizes are more unequal, and it is the larger country that dictates the tempo of global innovation cycles with the smaller country adjusting its rhythm to the rhythm of the larger country. These results suggest that adding endogenous sources of productivity fluctuations might help improve our understanding of why countries that trade more with each other have more synchronized business cycles.
    Keywords: Endrogenous innovation cycles and productivity co-movements, globalization, home market effect, synchronised vs. asynchronised cycles, synchronisation of coupled oscillators, basins of attraction, two-dimensional piecewise smooth, noninvertable maps
    JEL: C61 E32 F12 F44 O31
    Date: 2014–12
  28. By: Marie-Ange VEGANZONES-VAROUDAKIS (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Youssouf KIENDREBEOGO; Mélise JAUD
    Abstract: This study documents the implications of financial vulnerability for export diversification in developing economies. Financial crises, by increasing the incidence of sunk costs of entry into exporting, reduce firm export dynamics. Financially-vulnerable exporters are not able to fully realize economies of scale in production and access better-sophisticated technologies. The number of products and destinations per exporter are therefore likely to decrease in times of crisis. We use a comprehensive cross-country dataset on export dynamics, with data covering the 1997-2011 period for 34 developing countries to investigate this issue. Building on the generalized difference-in-differences procedure proposed by Rajan & Zingales (1998) to remove any endogeneity bias, the results point to a negative and economically large effect of financial vulnerability on export diversification. Financial crises reduce export dynamics disproportionately more in financially dependent industries. This effect is less pronounced in countries with initially more open capital account, suggesting that portfolio inflows are good substitutes for underdeveloped domestic financial markets.
    Keywords: Financial crises, Financial vulnerability, Export dynamics
    JEL: O16 G01 F14 F12
    Date: 2015–10
  29. By: Andrea Elteto (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: Economic contacts of the Central and Eastern European countries with Latin America had been relatively strong under the socialist regime but after the political changes contacts were largely lost. This paper intends to describe the present trade and investment relations between the two regions. Main trade partners, products and development trends are described, such as the foreign direct investment patterns. The types and motivations of investor companies are also enumerated giving examples for each. Finally the economic policies and prospects of mutual relations are evaluated.
    Keywords: Latin America, Central and Eastern Europe, foreign trade, FDI
    JEL: F10 F12
    Date: 2014–05
  30. By: Boza, Sofia; Fernandez, Felipe
    Abstract: The objective of this paper is to describe the divergences in the participation of WTO country members in Specific Trade Concerns and disputes in relation to sanitary, phytosanitary and technical measures (SPS/TBTs) according to their income level. For this, data was compiled and synthesized from the WTO I-TIP and Dispute Settlement Gateway databases for the period 1995-2012. This data was then grouped according to the development level of the member(s) involved, using the World Bank annual classification (high income country, upper-middle income country, lower-middle income country and low income country). The results obtained evidence that the participation of WTO members in the mechanisms considered has been very diverse, according to their economic level; with high income countries much more active than developing and least developed countries.
    Keywords: International Relations/Trade,
    Date: 2015
  31. By: Jürgen Bitzer (University of Oldenburg, Department of Economics); Erkan Gören (University of Oldenburg, Department of Economics); Sanne Hiller (Ruhr University Bochum)
    Abstract: This paper explores the question of how immigrant employees affect a firm’s capacity to absorb foreign knowledge. Using matched employer-employee data from Denmark for the years 1996 to 2009, we are able to show that non-Danish employees from technologically<br>advanced countries contribute significantly to a firm’s total factor productivity (TFP) through their ability to access foreign knowledge. The empirical results suggest that the impact increases if the immigrants come from technologically advanced countries, are highly educated, and work in high-skilled positions.
    Keywords: R&D Spillovers, Absorptive Capacity, Firm-Level Analysis,<br>Foreign Workers, Immigrants
    JEL: D20 J82 L20 O30
    Date: 2015–10
  32. By: Vishalkumar Jani; Dholakia, Ravindra H.
    Abstract: This paper empirically examines the impact of globalization and international trade on the child health status of the Asian countries. In contrast to previous studies we have introduced the initial level of development and income status that seem to play an important role. We have also checked whether the impact on child health status of trade in services is different from the trade in goods. The fixed effects panel data analysis shows that economic and political globalization have positive impact on the child health status measured by child mortality rates and malnutrition. International trade across all countries has no impact on child health but when different groups of countries classified by their initial levels of income and development are considered, trade shows significant impact on the child health. Further decomposing the trade, trade in services show more positive impact on the child health status than the trade in goods.
  33. By: Beghin, John; Bureau, Jean-Christophe; Gohin, Alexandre
    Abstract: We assess the impact of a potential TTIP bilateral free trade agreement on the EU and US bio-economies (feedstock, biofuels, by-products, and related competing crops) and major trade partners in these markets. The analysis develops a multi-market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to OECD-FAO baseline for 2013–2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and TRQ liberalization and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US HFCS production. EU sugar and isoglucose productions expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify nontariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP.
    Keywords: TTIP, bilateral trade agreement, biofuel, ethanol, biodiesel, sugar, nontariff measure, International Relations/Trade, F13, Q17, Q42, Q48,
    Date: 2015
  34. By: Mogilevskii, Roman; Akramov, Kamiljon
    Abstract: This paper discusses trends in and patterns of trade in agricultural and food products in Central Asia. The analysis shows that these products’ exports lose and imports increase its importance for all economies of Central Asia. Trade policies with regards to agricultural and food products vary greatly in the region from very liberal to quite protectionist. No correlation is observed between the type of trade regime and performance of agricultural production and trade. The paper also provides an overview of the recent changes in trade policies including those related to the creation of the Customs Union of Belarus, Kazakhstan and Russian Federation and their potential impact on agricultural and food trade in the region.
    Keywords: Food Security and Poverty, International Relations/Trade,
    Date: 2015
  35. By: Dillen, Koen
    Abstract: Type On August 6 2014 the Russian Federation introduced a one year ban on imports into the Russian Federation of agricultural products, raw materials and food, originating from selected countries including the EU. This paper provides an initial assessment of the potential impact of this import ban on EU agricultural markets. Furthermore it provides an insight in the shifting trade patterns and price effects at EU, Russian and world level. We use the Aglink-Cosimo model, a recursive partial equilibrium model of the agricultural sector. Its gross trade specification is problematic for the study of bilateral trade. Therefore the model was extended with an ad hoc incorporation of bilateral trade. The initial results show that the impact for the EU remains rather limited as the EU can divert a considerable part of its trade with Russia to other markets. The impact on the Russian market is however expected to be considerable as imports can't be easily substituted and domestic production has problems to expand productions significantly within the timeframe of the ban.
    Keywords: Agricultural Finance, International Relations/Trade,
    Date: 2015
  36. By: José Fernández Donoso (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This paper studies the relation between foreign intellectual property rights affect exporting firms' productivity when industries have different technological complexity. Using simple functional forms, the dynamic model derives endogenous steady state distributions of exporting firms' productivity. Numerical simulations show a non-monotonic effect of complexity on productivity, and a positive effect of IPR. Empirical evidence using labor productivity measures support the findings of the theoretical model
    Keywords: Export-led growth, Intellectual Property Rights, Imitation, Patents, Productivity
    Date: 2015–10
  37. By: FURUSAWA Taiji; ITO Keiko; INUI Tomohiko; Heiwai TANG
    Abstract: An economy is an interlinked web of production units. This paper examines both theoretically and empirically how firms' offshoring decisions lead to reorganization of domestic production networks. We build a buyer-seller model that features supplier heterogeneity in efficiency and distance, as well as intermediate inputs that vary in the degree of specificity to the relationship with the buyer. The model predicts that the more productive buyers will source inputs from a larger range of domestic regions, especially for generic inputs. Inputs that are more relationship-specific are more likely to be insourced and less likely to be outsourced from distant regions or foreign countries. A drop in offshoring costs will induce the more productive final good producers to replace some of the less efficient domestic suppliers with foreign ones, and generic input suppliers are more likely to be dropped despite their higher productivity. The resulting reduction of input costs will induce them to expand the geographic scope of domestic outsourcing. Using unique and exhaustive data on the buyer-seller network in Japan, we find evidence supporting the main predictions of the model.
    Date: 2015–10
  38. By: Li, Chunding (Institute of World Economics and Politics Chinese Academy of Social Sciences); Wang, Jing (University of Western Ontario); Whalley, John (University of Western Ontario)
    Abstract: There has been commentary on the seeming success of the world trading system responding to the large shock of the 2008 financial crisis without an outbreak of retaliatory market closing. The threat of large retaliatory tariffs and fears of a 1930s style downturn in trade have been associated with numerical trade modelling which project post retaliation optimal tariffs in excesses of 100%. In the relevant numerical modelling it is common to use the Armington assumption of product heterogeneity by country. Here we argue and show by numerical calculation that the widespread use of this assumption gives a large upward bias to optimal tariffs, both first step and post retaliation, relative to alternative homogenous good models used in trade theory.
    Date: 2015
  39. By: Maciejczak, Mariusz
    Abstract: The coexistence between genetically modified (GM) and non-GM based agricultural supply chains is an economic institution that defines rules of the games, the objectives of which are set more broadly than economic rationality and efficiency. Institution of coexistence covers the formal rules as well as informal constraints devoted principally to identity preservation and segregation, and the ways how they are imposed and enforced in the GM and non-GM based supply chains from agri-food sector. They applies to the dynamic process of formulation, selection and adaptation of behaviors and rules, which form the institutional orders in local, regional and international dimensions, under the circumstances of constant changes in the socio-economic systems. The paper is an attempt to describe the coexistence as an economic institution in the light of New Institutional Economics. Using the results of foresight technique it also examine how the Transatlantic Trade and Investment Partnership under negotiation between the European Union and the United States could re-define both legal regulations and market-based standards of coexistence. In the Delphi method panels participated stakeholders from both GM and non-GM based agri-food supply chains, who forecasted that the institution of coexistence will be re-defined by the rules that TTIP would set up.
    Keywords: economic institution, co-existence, GMO, TTIP, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, B52, L51, O43,
    Date: 2015–11
  40. By: Albuquerque, Rui; Brandão-Marques, Luis; Ferreira, Miguel; Matos, Pedro Pinto
    Abstract: We test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country non-target firms. Using firm-level data from 22 countries, we find that cross-border M&A activity is associated with subsequent improvements in the governance of target firms’ rivals. The spillover is more pronounced when the acquirer’s country has stronger investor protection than the target’s country, and when the target operates in a competitive industry. Cross-border M&As also lead to increases in valuation and reductions in overinvestment of non-target firms. Our results suggest that the international market for corporate control promotes functional convergence in corporate governance.
    Keywords: Corporate governance; Cross-border mergers and acquisitions; Foreign direct investment; Spillovers
    JEL: G32 G34 G38
    Date: 2015–11
  41. By: Boughton, Duncan; Haggblade, Steve; Kham, L; Kongabaugh, Steve; Thaung, Myo
    Abstract: Pulse exports from Myanmar have grown into a $1 billion export industry in the 25 years since liberalization. As the first major agricultural sector to be liberalized in 1988, pulses offered uniquely attractive returns to both smallholder farmers and traders in the early years following government decontrol. By 1991, pulses had surpassed rice to become Myanmar’s most valuable agricultural export. This paper examines how private sector traders in Myanmar managed this exceptional feat, despite financial sanctions, acute limitations on all forms of communication and information flows and with the weakest rural infrastructure in South East Asia --- all hangovers from Myanmar’s three decades of international isolation and underinvestment in agriculture. Yet critical barriers remain that could eventually undermine Myanmar’s global competitiveness. Field interviews with key value chain actors in Myanmar between February and August 2014 form the basis for this market diagnostic.
    Keywords: International Development, International Relations/Trade, O130, P230, Q170, Q180,
    Date: 2015
  42. By: Andrea Elteto (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Agnes Szunomar (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: As a consequence of the European recession, interest of Central European firms has increased towards Asian markets. Trade and investment relations seem to have intensified between the four Visegrád countries and East Asia. This paper aims to analyse trends of foreign direct investment and the development, geographical and commodity structure of the mutual trade. Our paper also briefly outlines the economic policy of the given countries for the further development of Visegrád-Asian relations. The applied method is the statistical analysis of Eurostat and National Bank data as well as Chinese statistics. Our main findings are the following: first, trade between the Visegrád region and East Asia is largely influenced by multinational companies in global value chains; second, these networks have interlinked the two regions increasingly strongly in the past years; third, the pattern and intensity of connection to multinational networks vary among Visegrád countries. Based on these findings we propose an economic policy that – apart from the support of local small firms – considers the efficient participation in global value chains.
    Keywords: Visegrad countries, East Asia, trade relations, global value chains, foreign direct investment
    JEL: F1 F23 F43
    Date: 2015–08
  43. By: Djuric, Ivan; Gotz, Linde; Glauben, Thomas
    Abstract: In this paper we analyze the impact of the Russian ban on import of pig meat originating in the EU on the domestic pig meat price developments in Russia. We use a regime-switching price transmission model in order to identify possible changes in the long-run equilibrium between the pig meat prices of Russia and its main non-EU trading partners. Our results indicate the reduction of transaction costs in pig meat trade between Russia and its main non-EU trading partners, followed by the increase in transmission of price changes in the long-run. Though, our results indicate completely opposite results concerning domestic price relations between wholesale and end consumer pig meat prices in Russia. Overall, faced with the scarcity of pig meat on the domestic market, Russian consumers bear the biggest burden from the ban in the medium term by being faced with the significant increase in end consumer pig meat prices.
    Keywords: EU, import ban, pig meat, price transmission, Russia, Food Consumption/Nutrition/Food Safety, International Relations/Trade, C22, P22, Q17, Q18.,
    Date: 2015
  44. By: Deena Saleh (Hacettepe University, Department of Economics)
    Abstract: The following paper examined the relationship between Foreign Direct Investment and Economic Growth in Developing Countries; the main focus is on Turkey and Egypt due to similarities between two countries in terms of economic, political and historical terms. An overview on FDI; types, motivations and domestic country factors is presented. Strategies attracting FDI are examined: Fiscal and Financial Incentives, Location Strategic and Marketing Strategies. The impact of FDI on host countries is discussed. Finally, the research gap discusses factors related to both Egyptian and Turkish economy.
    Keywords: FDI, Economic Growth, Developing Countries
    Date: 2015
  45. By: Mark D. Partridge (Ohio State University); Dan S. Rickman (Oklahoma State University); M. Rose Olfert (University of Saskatchewan); Ying Tan (Oklahoma State University)
    Abstract: Despite the attention given to international trade in discussion of the economic struggles of many U.S. regions, it is unclear whether international trade shocks impact local economies more, or differently than shocks originating within the domestic economy. A challenge in making this discernment is separating trade shocks from common or domestic shocks. Therefore, using U.S. county-level data for 1990-2010, this study carefully constructs shocks to local economies, isolating those arising from international imports and exports to assess whether trade shocks have different effects from domestic shocks. In confirmatory analysis, we also employ a novel combination of IV and matching strategies. We examine a variety of indicators including employment growth, population growth, employment rates, wage rates and poverty rates. The results suggest that international trade shocks have some different effects than overall domestic shocks, though likely less than commonly perceived. We also find that domestic shocks dominate international trade shocks in explaining variation in regional labor market outcomes.
    Keywords: international trade, local labor markets, economic shocks, economic geography, regional and urban economics
    JEL: R00
    Date: 2015–09
  46. By: Bourgeon, Jean-Marc; Jean, Sebastien; Maillet, Anais
    Abstract: The widespread use of State Trading Enterprises (STEs) in international trade of commodities is often justified by price-stabilizing objectives. In investigating the theoretical underpinnings of such interventions, we point out that STEs combine the possibility to stabilise domestic prices with the opportunity to redistribute custom duty proceeds to producers. Using a two-country general equilibrium model with import STEs, we show that global welfare is maximized when a non-zero, non-prohibitive tariff is applied. Whatever the restriction on the border, letting farmers be the only recipients of tariff revenues is optimal, because it allows income insurance to be provided.
    Keywords: International Relations/Trade,
    Date: 2015
  47. By: Baffes, John; Kshirsagar, Varun; Mitchell, Donald
    Abstract: We quantify the relationship between Tanzanian and external maize markets while also accounting for domestic influences. We conclude that external influences on domestic prices originate from regional, rather than global, markets. We also show that, compared to external factors, domestic factors exert a greater influence on Tanzanian maize markets. Further, the mechanisms through which trade policies influence maize markets involve interactions with both external market shocks and domestic weather shocks. Overall, we provide evidence that the intermittent imposition of export bans in Tanzania has had adverse impacts on its maize markets, and consequently, on the development of its agrarian economy.
    Keywords: Export ban, Food prices, Weather anomalies, Price transmission, Tanzania, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, E31, O13, Q02, Q13, Q18,
    Date: 2015
  48. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract This contribution provides a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a prohibitive non-tariff measure (NTM) aimed at a foreign product with perceived negative characteristics. Two groups of consumers are distinguished one that is indifferent to the negative attributes of the foreign product and another that is concerned about them. Different scenarios concerning the welfare gains from the introduction of an NTM are explored. The results depend on consumer awareness and information policies pursued by the government. The theoretical model is illustrated with data on the consumption of cattle in eight northern states of the United States of America; this is related to Dispute Settlement 384 on Certain Country of Origin Labelling (COOL). The findings suggest that when the government informs consumers after an NTM that a harmful product is no longer available on the market, that favours domestic producers rather than consumers. Such a framework could assist the Dispute Settlement Body of the World Trade Organisation in determining the true motivations behind the imposition of an NTM.
    Keywords: welfare, trade policy, non-tariff measures, technical barriers to trade, dispute settlement
    JEL: D61 F13
    Date: 2015–07
  49. By: Fedoseeva, Svetlana
    Abstract: This paper uses a nonlinear autoregressive distributed lag framework to assess the role that the exchange rate plays in shaping European agri-food exports after the introduction of Euro. Although the ten countries of this study share the same currency, cross-country discrepancies of exports’ reactions to exchange rate changes are evident. Moreover, exchange rate changes influence exports asymmetrically especially in the long run. Euro appreciations are harmful to a lesser extent than Euro depreciations are beneficial for European agri-food exports. The magnitude of this effect is country-specific and varies considerably between individual exporting countries. Exported quantities are less affected by exchange rate fluctuations than export values.
    Keywords: Agricultural Finance, Financial Economics,
    Date: 2015
  50. By: Fiamohe, Rose; Diallo, Souleymane; Diagne, Aliou; Agossadou, Arsene
    Abstract: Rice is the first strategic product in West Africa since 2008 crisis. To create a customs union, ECOWAS has adopted in October 2013 the final structure of its Common External Tariff (CET). This CET established a fifth band of 35% but taxes milled rice at 10% and will come into force on January, 2015. As the adoption of this CET will have significant effects on the rice sector, it is necessary to assess its potential ex-ante impact on this sector within the region. The results obtained using a GCE model show that this CET will have various effects on the regional rice economies. Urban poverty was more pronounced than rural poverty and intra-regional trade experienced a remarkable increase. The negatives effects of the CET are more pronounced in Nigeria and Guinea. Therefore, the current version of the CET will have rather mixed effects if support measures are not implemented.
    Keywords: ECOWAS, CET, Rice, impact, GCE, Crop Production/Industries, D58, E37, O55, O57,
    Date: 2015
  51. By: Selva Baziki (Central Bank of the Republic of Turkey, Banking and Financial Institutions Department)
    Abstract: This paper studies the effect of increased competition from low wage countries on the earnings gap between skilled and unskilled workers by using matched worker-firm micro data covering the total population of workers in private manufacturing firms in Sweden, 1996-2007. Treating Chinese accession into WTO as an exogenous shock to domestic competition, the paper shows that higher Chinese import penetration increases the wage gap between low educated and college educated workers, translating into a rise in wage inequality. Estimations show that the skill wage gap has increased due to a significant increase in the premium for college educated workers. This effect remains even after taking a time trend in the return to college education into account. The effect on high-skilled workers in response to an average of 2.9 percentage point increase in Chinese import penetration is 2.7 percent higher wages. Since real skilled wages have risen about 27 percent in this period, suggesting that rising competition from low-wage countries has contributed to around 10 percent of the increase in skilled wages. Skilled workers appear to be complementary to the goods imported from low-wage countries, and therefore command a higher wage with rising imports from China. Firms may even upgrade their production technologies in response to rising competition from China, which should further increase the demand for and wages of these workers. One of the reasons why wages for non-college workers are not significantly affected by changes in Chinese imports could be due to the institutional setting in Sweden where contracts negotiated with labor unions impose lower limits on wages. The results of the paper differ from previous work by both utilizing a detailed matched employer-employee database and by finding a robust and significant positive effect on the return to college education even after controlling for a time trend in return to education.
    Keywords: Chinese Imports, Wage Dynamics, Import Competition, Skill Premium, Return to Education
    JEL: E24 F16 J24 J31 L60
    Date: 2015
  52. By: Agnes Szunomar (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Zsuzsanna Biedermann (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: The paper analyses Chinese OFDI to Europe by presenting its main trends, patterns and motivations with a special focus on the impact of these investments on the EU and Central and Eastern European region, respectively. In order to assess the role and importance of OFDI from China towards Europe, the authors evaluate it within a global context. The authors will conclude their investigation by arguing that although the majority of Chinese investments are directed to the developing world, European countries are at the forefront of Chinese OFDI to developed countries, complemented by a growing trend of Chinese OFDI to the Central Eastern European region in the post-crisis period.
    Keywords: outward foreign direct investment, China, European Union, Central and Eastern Europe, Chinese OFDI
    JEL: F21 O16 P33
    Date: 2014–06
  53. By: OLIVIER CADOT (University of Lausanne); Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA), University of Indonesia)
    Abstract: While tariffs have been reduced, the number of non-tariff measures (NTMs) is increasing, and is often blamed to be one source of the lack of integration in ASEAN. Yet, the discovery of Volkswagen’s large-scale attempt to seemingly go around US emissions tests serves as a reminder of a stark truth. NTMs can play a role of check and balance for the quality of goods. To make NTMs work for the common good, ASEAN should break from the ‘trade negotiation’ approach and strive instead for three objectives: (1) a drive for transparency, (2) cooperation in conformity assessment procedures, and (3) dynamic disciplines. Such ‘dynamic deep integration’ would largely eliminate the high-visibility political friction, poorly designed—or those captured by special interests— NTMs.
    Date: 2015–10
  54. By: Gita Gopinath
    Abstract: I define and provide empirical evidence for an "International Price System" in global trade, employing data for thirty-five developed and developing countries. This price system is characterized by two features. First, the overwhelming share of world trade is invoiced in very few currencies, with the dollar the dominant currency. Second, international prices, in their currency of invoicing, are not very sensitive to exchange rates at horizons of up to two years. In this system, a good proxy for a country's inflation sensitivity to exchange rate fluctuations is the fraction of its imports invoiced in a foreign currency. U.S. inflation is consequently more insulated from exchange rate shocks, while other countries are highly sensitive to it. Exchange rate depreciations (appreciations) make U.S. exports cheaper (expensive), while for other countries they mainly raise (lower) mark-ups and hence profits. U.S. monetary policy has spillover effects on inflation in other countries, while spillovers from other countries monetary policies on to U.S. inflation are more muted.
    JEL: E31 F0 F41
    Date: 2015–10

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