nep-int New Economics Papers
on International Trade
Issue of 2016‒02‒12
twenty-two papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Global value chains, development and emerging economies By Gereffi, Gary
  2. The Micro Origins of International Business Cycle Comovement By di Giovanni, Julian; Levchenko, Andrei A.; Mejean, Isabelle
  3. Trade and Foreign Direct Investment: New Theoretical Approach and Empirical Findings for US Exports and European Exports By Paul J.J. Welfens; Tony Irawan
  4. Testing The Core-Competency Model Of Multi-Product Exporters By Eckel, Carsten; Iacovone, Leonardo; Javorcik, Beata; Neary, J Peter
  5. Foreigners Knocking on the Door: Trade in China During the Treaty Port Era By Andres Santiago, Javier; Keller, Wolfgang; Shiue, Carol Hua
  6. From Final Goods to Inputs: the Protectionist Effect of Rules of Origin By Conconi, Paola; García-Santana, Manuel; Puccio, Laura; Venturini, Roberto
  7. Adjusting to Globalization - Evidence from Worker-Establishment Matches in Germany By Dauth, Wolfgang; Findeisen, Sebastian; Südekum, Jens
  8. Learning and the Value of Relationships in International Trade By Ryan Monarch; Tim Schmidt-Eisenlohr
  9. Global Supply Chains and Trade Policy By Blanchard, Emily; Bown, Chad P.; Johnson, Robert
  10. Transatlantisches Freihandelsabkommen EU-USA: Befunde zu den TTIP-Vorteilen und Anmerkungen zur TTIP-Debatte By Paul J.J. Welfens
  12. Routine jobs, employment and technological innovation in global value chains By Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
  13. When The Threat Is Stronger Than The Execution: Trade Liberalization And Welfare Under Oligopoly By Peter Neary; Dermot Leahy
  14. Information, Perceptions and Exporting - Evidence from a Randomized Controlled Trial By Breinlich, Holger; Donaldson, D; Nolen, Patrick J; Wright, Greg C
  15. Is Sino-African trade exacerbating resource dependence in Africa? By Habiyaremye, Alexis
  16. The innovation-trade nexus: Italy in historical perspective (1861-1939) By Domini, Giacomo
  17. Does FDI Crowd out Domestic Investment in Transition Countries? By Cristina Jude
  18. Unraveling Firms: Demand, Productivity and Markups Heterogeneity By Forlani, Emanuele; Martin, Ralf; Mion, Giordano; Muûls, Mirabelle
  19. Migration as a response to differences in human rights and income: A bilateral panel study By Wong, Pui-Hang; Celbis, Mehmet Guney
  20. Trade, wages, and collective bargaining By Denis Fougere; Erwan Gautier; Juan Carluccio
  21. Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement By Jeronim Capaldo; Alex Izurieta; Jomo Kwame Sundaram
  22. Review of International Production and Global Value Chain Studies: the Case of Turkish Regional Networks By Erkan Erdil; H. Tolga Göksidan

  1. By: Gereffi, Gary (Center on Globalization Governance & Competitiveness, Duke University, Durham, NC)
    Abstract: In recent decades, profound changes in the structure of the global economy have reshaped global production and trade and have altered the organisation of industries and national economies into global value chains (GVCs). As GVCs became global in scope, more intermediate goods were traded across borders, and more imported parts and components were integrated into exports. In 2009, world exports of intermediate goods exceeded the combined export values of final and capital goods for the first time. New governance structures reinforce the organisational consolidation occurring within GVCs and the geographic concentration associated with the growing prominence of emerging economies as key economic and political actors. Emerging economies are playing significant and diverse roles in GVCs. During the 2000s, they were simultaneously major exporters of intermediate and final manufactured goods (China, South Korea, and Mexico) and primary products (Brazil, Russia, and South Africa). However, market growth in emerging economies has also led to shifting end markets in GVCs, as more trade has occurred between developing economies (often referred to as South-South trade in the literature), especially since the 2008-09 economic recession. China has been the focal point of both trends: it is the world's leading exporter of manufactured goods and the world's largest importer of many raw materials, thereby contributing to the primary product export boom.
    Keywords: Global Value Chains, Governance Structures, Economic development, Economic Upgrading, Social Upgrading, Emerging Economies, Industrial Policy, China
    JEL: F16 F23 L25 O14 O25
    Date: 2015–12–01
  2. By: di Giovanni, Julian; Levchenko, Andrei A.; Mejean, Isabelle
    Abstract: This paper investigates the role of individual firms in international business cycle comovement using data covering the universe of French firm-level value added, bilateral imports and exports, and cross-border ownership over the period 1993-2007. At the micro level, controlling for firm and country effects, trade in goods with a particular foreign country is associated with a significantly higher correlation between a firm and that foreign country. In addition, foreign multinational affiliates operating in France are significantly more correlated with the source economy. The impact of direct trade and multinational linkages on comovement at the micro level has significant macro implications. Because internationally connected firms are systematically larger than non-internationally connected firms, the firms directly linked to foreign countries represent only 8% of all firms, but 56% of all value added, and account for 75% of the observed aggregate comovement. Without those linkages the correlation between France and foreign countries would fall by about 0.091, or one-third of the observed average business cycle correlation of 0.29 in our sample of partner countries. These results are evidence of transmission of business cycle shocks through direct trade and multinational ownership linkages at the firm level.
    Keywords: comovement; firm-level shocks; international trade; large firms
    JEL: F44
    Date: 2016–01
  3. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tony Irawan (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Trade theory, in the context of economic globalization, is not fully convincing because so far foreign direct investment has not been considered explicitly. The workhorse of modern empirical trade analysis is the gravity model, that however, has only a limited basis in terms of precise derivation of the gravity equation; it is not particularly clear why the domestic GDP figure should be in the export equation. Taking a look at a simple model with two countries producing under Coob Douglas technology we consistently derive that exports depend positively both on the foreign GDP and the GDP of the home country. The empirical error correction model (ECM) approach presented for Germany’s export volume to the US, and for US exports to Germany, give clear evidence that there is a positive effect on the real exchange rate, the foreign GDP and the home GDP – more specifically the ratio of home GDP to foreign GDP – on export quantity. US exports to France, Italy, the Netherlands and Spain also produced similar results. The direct real exchange rate elasticities found are – in a standard perspective – higher than in traditional approaches; but it is shown that the elasticity is a positive function of the relative size of the foreign market and the composite export elasticity is below unity or close to unity. Moreover, the new export equation introduced here is also a basis for refined gravity modeling; Mundell Fleming models should also be adequately re-specified. As regards the euro crisis it seems fairly clear that the fiscal multipliers for countries with inward vs. outward FDI look different from the traditional multiplier models.
    Keywords: Trade, Foreign Direct Investment, Multiplier, USA, EU
    JEL: F10 F15 F21 F40
    Date: 2014–11
  4. By: Eckel, Carsten; Iacovone, Leonardo; Javorcik, Beata; Neary, J Peter
    Abstract: We review the implications of the "core competence" model of multi-product firms, including the "market-size paradox": for most countries, the world market is much larger than the home market, while the costs of accessing foreign markets are relatively low; hence the model predicts that most domestic firms should export more of their core products than they sell domestically; yet, in practice, we do not observe this. Extending the model to allow for investment in export market penetration resolves the puzzle, and Mexican data confirm its predictions: in particular, only the largest firms exhibit the dominance of exports over home sales.
    Keywords: core competence model; export market penetration costs; flexible manufacturing; multi-product firms
    JEL: F12
    Date: 2016–01
  5. By: Andres Santiago, Javier; Keller, Wolfgang; Shiue, Carol Hua
    Abstract: We employ a new, commodity-level dataset on the flow of goods between fifteen major treaty ports to estimate a general-equilibrium trade model for China around the year 1900. The distribution of welfare effects depends critically on each port’s productivity, China’s economic geography because it affects trade costs, and the extent of regional diversity in production because this affects the potential gains from trade. We utilize this framework to quantify the size and distribution of welfare effects resulting from new technology and lower trade costs that came with the treaty ports. Findings show that domestic markets resulted in ripple effects which transmitted the effect of the international trade opening beyond the foreign concessions. However, because differences in relative productivity across regions were relatively low, the welfare gains from domestic trade improvements were limited.
    Keywords: 19th century China; domestic trade; economic integration; welfare gains
    JEL: F1 N15 O1
    Date: 2016–01
  6. By: Conconi, Paola; García-Santana, Manuel; Puccio, Laura; Venturini, Roberto
    Abstract: Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. In this paper, we show that the sourcing restrictions embedded in RoO greatly distort trade in intermediaries. We focus on the North American Free Trade Agreement (NAFTA), the world's largest FTA, and construct a unique dataset that allows us to map the input-output linkages in its RoO. Using a difference-in-differences approach, we find that RoO on final goods reduced imports of intermediate goods from third countries by around 30 percentage points. Even if external tariffs are unchanged, FTAs may thus violate multilateral trade rules, by substantially increasing the level of protection faced by non-members.
    Keywords: input-output linkages; rules of origin; trade agreements
    JEL: F23 F53
    Date: 2016–01
  7. By: Dauth, Wolfgang; Findeisen, Sebastian; Südekum, Jens
    Abstract: This paper addresses the impact of rising international trade exposure on individual earnings profiles in heterogeneous worker-establishment matches. We exploit rich panel data on job biographies of manufacturing workers in Germany, and apply a high-dimensional fixed effects approach to analyze endogenous mobility between plants, industries, and regions in response to trade shocks. Rising import penetration reduces earnings within job spells, and it induces workers to leave the exposed industries. Intra-industry mobility to other firms or regions are far less common adjustments. This induced industry mobility mitigates the adverse impacts of import shocks in the workers' subsequent careers, but their cumulated earnings over a longer time horizon are still negatively affected. By contrast, we find much less evidence for sorting into export-oriented industries, but the earnings gains mostly arise within job spells. These results point at an asymmetry in the individual labour market response to trade shocks: Import shocks trigger substantial ``push effects'', whereas the ``pull effects'' of export shocks are weaker.
    Keywords: endogenous worker mobility; Individual labour market responses; International trade; work biographies
    JEL: F16 J31 R11
    Date: 2016–01
  8. By: Ryan Monarch; Tim Schmidt-Eisenlohr
    Abstract: How valuable are long-term supplier relationships? To address this question, this paper explores relationships between U.S. importers and their suppliers abroad. We establish several facts: almost half of U.S. imports involve relationships three years or older, relationship survival and traded quantity increase as a relationship ages, and long-term relationships were more resilient in the 2008-09 financial crisis. We present a model of importer learning and calibrate it using our data. We estimate large differences in the value of relationships across countries. Counterfactuals show that relationships are central to trade dynamics.
    Keywords: International Trade, Firm Relationships, Learning, Institutions
    JEL: F11 F14 L14 D22
    Date: 2016–02
  9. By: Blanchard, Emily; Bown, Chad P.; Johnson, Robert
    Abstract: How do global supply chain linkages modify countries' incentives to impose import protection? Are these linkages empirically important determinants of trade policy? To address these questions, we introduce supply chain linkages into a workhorse terms-of-trade model of trade policy with political economy. Theory predicts that discretionary final goods tariffs will be decreasing in the domestic content of foreign-produced final goods. Provided foreign political interests are not too strong, final goods tariffs will also be decreasing in the foreign content of domestically-produced final goods. We test these predictions using newly assembled data on bilateral applied tariffs, temporary trade barriers, and value-added contents for 14 major economies over the 1995-2009 period. We find strong support for the empirical predictions of the model. Our results imply that global supply chains matter for trade policy, both in principle and in practice.
    Keywords: GSP; preferences; supply chains; tariffs; temporary trade barriers; trade agreements; value added
    JEL: F13
    Date: 2016–01
  10. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW); Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: The expected extent of the long-term benefits of TTIP will initially be presented from the combined perspectives of trade, direct investment and innovation dynamics. The advantages of TTIP are substantially higher than the CEPR study, completed on behalf of the European Commission, suggest, however the positive income effects are clearly less significant than the Ifo-study for the Federal Government of Germany (2013) maintains; the EIIW analysis also presents a different outlook with respect to wage structure effects as that asserted by Ifo (for the Bertelsmann Foundation). According to this analysis, the benefit of TTIP for the EU as a whole amounts to ca. 2% of Gross Domestic Product, for Germany in particular these benefits are estimated at 2-3% of GDP and an additional real growth bonus cannot be ruled out: a 2% increase in income would mean that TTIP could bring an additional €60 billion in income for Germany alone, or €278 billion for the EU, which could be even greater as a result of transatlantic multiplicator effects. The wages of high-skilled workers will, in the event of an EU-US Free Trade Agreement – with a resulting reduction in barriers to transatlantic trade and investment – increase, on a temporary basis, slower than wages for low-skilled workers; in the longer term, however, the wages of high-skilled labour will increase more strongly, as rising levels of direct investment and a growing intensity of innovation by businesses will lead to a rising demand for well-qualified employees. As an aside, the anti-TTIP book by Thilo Bode – economist and head of the NGO foodwatch – can be regarded as a good example of unsound economic analysis of TTIP which is lacking a solid foundation of fundamental rationale. It would be advisable that actors in the field of economic policy undertake measures which support the TTIP project.
    Keywords: Innovation, European Union, Economic Integration, Growth, Euro Crisis, Political Union
    JEL: O52 F15 O11 G01
    Date: 2015–06
  11. By: Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)
    Abstract: This paper investigates differences in productivity by destination market of firms exports. The total factor productivity (TFP) is used as measure of productivity. The productivity differences by export destination are estimated using multilevel approach considering the first destination country of the firm’s exports as the second level group of the model. The analysis is based on a dataset that provides comparable cross-country data of manufacturing firms in seven European countries (Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom). The results are as follows. Productivity differs from market to market and, thus, it gives support to the expectations derived from Chaney’s model (2008). The estimates confirm that non-exporters are, on average, the less productive. On the contrary, the European firms that export to China and India register the highest positive difference. A positive difference also exists for firms that export to the USA and Canada. On the contrary, there is no relevant TFP difference for firms exporting to the EU-15 area. The difference is positive but slight for the Other Asian countries and Other EU countries, while it is negative for Other areas, Other non EU countries and Central and South America. Among firm-specific characteristics only size and sector membership help to explain the productivity differences by destination market and the role of size is by far the most dominant factor.
    Keywords: Productivity, Heterogeneous firms, Export, Market of destination, Multilevel model
    JEL: D22 F10 F14 C31
    Date: 2016–01
  12. By: Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
    Abstract: This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring, domestic outsourcing, and the services content of manufacturing. The results suggest that comparatively higher skills are associated with higher employment in non-routine (NR) and low routine-intensive (LR) occupations. Also, employment in all types of occupations, both routine and non-routine ones, shows to positively relate to innovation, as measured by patents. A generally positive relationship also emerges between employment and the ICT intensity of industries, with the notable exception of jobs in high-routine occupations, where ICTs seemingly displace workers. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Conversely, the offshoring of final assembly in manufacturing leads to the shedding of jobs in NR occupations and a relatively higher service content of manufacturing relates negatively with employment in HR occupations. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology, industry structure and trade, which do not allow for a neat identification of “winners” and “losers” in a GVC context. While the effects appear heterogeneous across quartiles of routine intensity, a persistent and positive role of skills and innovative output for employment is found across all quartiles of routine intensive occupations.
    Date: 2016–01–14
  13. By: Peter Neary; Dermot Leahy
    Abstract: Abstract: We compare trade liberalization under Cournot and Bertrand competition in reciprocal markets. In both cases, the critical level of trade costs below which the possibilityof trade affects the domestic firm's behavior is the same; trade liberalization increases trade volume monotonically; and welfare follows a U-shaped pattern. However, welfareis usually greater under Bertrand than Cournot competition, despite the fact that for higher trade costs the volume of trade is greater under Cournot competition. In general,there exists a “Nimzowitsch Region” in parameter space, where welfare is higher under Bertrand competition even though no actual trade takes place.
    Keywords: Cournot and Bertrand Competition, Cross-Hauling, Nimzowitsch Region,Oligopoly and Trade,Trade Liberalization
    JEL: F12 F13
    Date: 2015–12–31
  14. By: Breinlich, Holger; Donaldson, D; Nolen, Patrick J; Wright, Greg C
    Abstract: We present novel evidence from the results of a randomized controlled trial on the role that information plays in the perceptions of the benefits and costs of exporting. We first present results from a baseline survey of approximately 1,000 UK manufacturing firms to show that non-exporters hold substantially more negative beliefs about the costs and benefits of exporting relative to exporters. We then explore the extent to which these di¤erences in perceptions are due to a biased understanding of the true costs and benefits of exporting on the part of non-exporters, or are instead a reflection of underlying differences in performance characteristics across firms, the view assumed by most theories of international trade. To do this, we make targeted information available to a randomly selected subset of these firms in the form of information from the UK's export promotion agency about the benefits and costs of exporting. The results of our intervention reveal a surprising, asymmetric response on the part of exporters and non-exporters. Instead of revising their negative perceptions upward, treated non-exporters become more likely to report lower perceived benefits and higher perceived barriers compared to non-treated non-exporters. In contrast, the attitudes of existing exporters improve. We discuss different behavioral and non-behavioral explanations for this result and highlight possible implications for export promotion policies.
    Keywords: Exporting, Information, Perceptions, RCTs
    Date: 2016
  15. By: Habiyaremye, Alexis (Department of Economics, Antalya International University)
    Abstract: Over the past decade, trade between China and Africa has rapidly expanded and has led to strong growth rates in Africa mainly buoyed by natural resource export. The boom in trade has partly been made possible by the use of resource-for-infrastructure swap agreements (the so-called "Angola-mode deals"), in which Chinese companies finance and build infrastructure in Africa in exchange for access to natural resources. The concomitant increase in resource export to China has however raised serious concerns that these trade arrangements may reinforce Africa's resource dependence rather than reduce it. In this article we use a dynamic panel data model to examine whether the Angola-mode deals have reinforced resource dependence and impeded export diversification in African countries. Our results indicate that by helping African countries reduce existing infrastructure bottlenecks, resources-for-infrastructure swap deals enabled them to increase their diversification capacity.
    Keywords: Africa, China, trade, resource export, resource dependence, Angola-mode, infrastructure, natural resources, export diversification
    JEL: F40 O13 O33 O55 Q32
    Date: 2015–11–23
  16. By: Domini, Giacomo (UNU-MERIT, and Department of Economics and Statistics, University of Siena)
    Abstract: This work investigates the relationship between trade and technological specialisation in Italy, during the long time span ranging from Unification to the eve of the Second World War. To do this, new series of Italy's indices of specialisation in trade and technology are calculated on the base of offcial data. Empirical analysis, based on Spearman rank correlation coefficients and fixed-effects regression, shows the emergence of a positive relationship between specialisation in technology and specialisation in trade after the start of the country's modern economic growth, around the turn of the twentieth century. This, however, was uniquely driven by a negative relationship between technological specialisation and import shares, while no significant relationship between the former and export shares emerges. Furthermore, this finding excludes the most important sector, leading Italian industrialisation, i.e. textiles, the outstanding performance of which can be seen as largely determined by its being particularly suited to the country's factor endowment.
    Keywords: innovation, industrial specialization, trade, import-export, economic history, Italy, specialisation, comparative advantage
    JEL: N73 N74 O14 O33
    Date: 2015–12–10
  17. By: Cristina Jude (Centre de recherche de la Banque de France - Banque de France, LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The aim of this paper is to empirically test the hypothesis of FDI led capital accumulation in Central and Eastern European countries. More precisely, we investigate the relationship between FDI and local investment, using a sample of 10 CEEC over the period 1990-2010. We find FDI to crowd out domestic investment, while the effect decreases with time. Our results also indicate that greenfield FDI may develop long run complementarities with domestic investment, while mergers and acquisitions do not prove any significant effect on domestic investment. Finally, financial development seems to foster a certain crowding-in effect in the case of mergers&acquisitions.
    Keywords: investment, FDI, crowding-out, economic transition, financial development
    Date: 2015
  18. By: Forlani, Emanuele; Martin, Ralf; Mion, Giordano; Muûls, Mirabelle
    Abstract: We develop a new econometric framework that simultaneously allows recovering heterogeneity in demand, TFP and markups across firms while leaving the correlation among the three unrestricted. We do this by systematically exploiting assumptions that are implicit in previous firm-level productivity estimation approaches. We use Belgian firms production data to quantify TFP, demand and mark-ups and show how they are correlated among them, across time and with measures obtained from other approaches. We also show to what extent our three dimensions of heterogeneity allow us to gain deeper and sharper insights on two key firm-level outcomes: export status and size.
    Keywords: Demand; Export status; Firm size; Markups; Production function estimation; Productivity
    JEL: D24 F14 L11 L25
    Date: 2016–01
  19. By: Wong, Pui-Hang (UNU-MERIT); Celbis, Mehmet Guney (UNU-MERIT)
    Abstract: This study addresses the question of why migration persists despite welfare improvements in migrant-sending countries. We show that migrants proceed to a location where the difference in freedom and income relative to their original location is large. Moreover, it is not only the origin-destination differences that play a role, but also the differences of these locations with the rest of the world. We reach our results by controlling for this dependency and possible sample selection biases in the context of origin-destination models.
    Keywords: International migration, human rights, freedom, income differences, bilateral flow
    JEL: F22 F50 O15 P16
    Date: 2015–12–03
  20. By: Denis Fougere (Observatoire sociologique du changement); Erwan Gautier (Université de Nantes); Juan Carluccio (University of Surrey (UNIS))
    Abstract: Collective bargaining modify the impact of exports and imports on wages? In a seminal paper, Calmfors and Driffill (1988) show that, in firms covered by firm‑level wage agreements, wages are better linked to productivity than in firms covered by industry‑level agreements. Gürtzgen (2009) lends support to these predictions using data for German manufacturing firms. Our study looks at data from individual French firms on wages, exports/imports and collective bargaining over the period 2005‑2009. Our sample comprises more than 8,000 firms (among the largest French exporters/importers) which account for over two thirds of French exports and imports of manufactured goods. Using micro‑econometric techniques, we examine two questions: (i) do exporting and offshoring lead to higher wages and, if so, is the effect heterogeneous across workers? (ii) to what extent does wage bargaining shape the effect of trade on wages? International trade favours exports but also creates opportunities for offshoring. This Rue de la Banque studies the impact of firm-level trade activities on wages, as well as the role of collective bargaining. Both exports and offshoring have a positive impact on wages, but exports increase wages for all occupational categories, while the impact of an increase in offshoring is stronger for executives. The elasticity of wages with respect to exports and offshoring is positive and is higher for firms with collective bargaining. However, we find that collective bargaining reduces only moderately wage inequalities induced by offshoring.
    Keywords: Wages; Micro‑econometric techniques; Firm-level trade activities; Collective bargaining
    Date: 2016–01
  21. By: Jeronim Capaldo; Alex Izurieta; Jomo Kwame Sundaram
    Abstract: Proponents of the Trans-Pacific Partnership agreement (TPP) emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited projections suggest modest GDP gains after ten years, varying from less than half a percentage point in the United States to 13 percent in Vietnam. However, these projections assume full employment and constant income distribution in all countries excluding some of the major risks of trade liberalization. In this paper, we provide alternative projections of the TPP’s economic effects using the United Nations Global Policy Model. Allowing for changes in employment and income distribution, we obtain very different results. We find that the benefits to economic growth are even smaller than those projected with full-employment models, and are negative for Japan and the United States. More important, we find that the TPP will likely lead to losses in employment and increases in inequality.
    Date: 2016–01
  22. By: Erkan Erdil (TEKPOL, Science and Technology Policy Studies, Middle East Technical University); H. Tolga Göksidan
    Abstract: This study focuses on how Turkey’s small and medium-sized enterprises (SMEs) can participate in global markets. In fact, developing countries provide a means for accelerating the development of enterprises and countries, providing openings that developing country enterprises can exploit to upgrade their capabilities. For such enterprises, or local clusters of enterprises, the task is to insert themselves into the wider networks. This may be regarded as the main achievement for sustaining competitiveness, in similarities with the re-structuring of regional networks in developing countries that often compete by participating in extensive inter-firm networks. As another dimension in our study, we will investigate and argue whether if it is possible to increase and improve the participation of Turkish’s SMEs in the global economy, which is explicitly the baseline hypothesis of this study. The literature on regional networks and global value chain (GVC) will provide us some new insights to show the international linkages of Turkish SMEs, which often lack the capabilities to participate effectively in global markets.
    Keywords: Global Value Chains, GVC, Turkey, regional networks
    Date: 2015–12

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