nep-int New Economics Papers
on International Trade
Issue of 2016‒02‒23
35 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The effects of the CEECS's accession on sectoral trade: A value added perspective By Kaplan, Lennart C.; Kohl, Tristan; Martínez-Zarzoso, Inmaculada
  2. Domestic political competition and pro-cyclical import protection By James Lake; Maia K. Linask
  3. World trade, 1800-1938 : a new data-set By Giovanni Federico; Antonio Tena Junguito
  4. Merger policy in a quantitative model of international trade By Holger Breinlich; Volker Nocke; Nicolas Schutz
  5. Adjusting to globalization - Evidence from worker-establishment matches in Germany By Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens
  6. Task trade and the employment pattern: the offshoring and onshoring of Brazilian firms By Philipp Ehrl
  7. Understanding Agricultural Price Range Systems as Trade Restraints: Peru – Agricultural Products By Kamal Saggi; Mark Wu
  8. Contracting and the division of the gains from trade By Andrew B. Bernard; Swati Dhingra
  9. The Rise of Exporting By U.S. Firms By McCallum, Andrew H.; Lincoln, William F.
  10. No Guarantees, No Trade: How Banks Affect Export Patterns By Niepmann, Friederike; Schmidt-Eisenlohr, Tim
  11. When do multinational companies consider corporate social responsibility? A multi-country study in Sub-Saharan Africa By Holger Görg; Aoife Hanley; Stefan Hoffmann and Adnan Seric
  12. ICT and global sourcing: Evidence for German manufacturing and service firms By Rasel, Fabienne
  13. Offshoring and the geography of jobs in Great Britain By Luisa Gagliardi; Simona Iammarino; Andrés Rodríguez-Pose
  14. Financial constraints and export performance: Evidence from Brazilian micro-data By Fatma Bouattour
  15. Bilateral investment treaties do work: Until they don't By Aisbett, Emma; Busse, Matthias; Nunnenkamp, Peter
  16. Afghanistan’s WTO Accession: Costs, Benefits and Post-accession Challenges By Ahmad Shah Mobariz
  17. With a Little Help from My Friends: Multinational Retailers and China's consumer Market Penetration By Charlotte Emlinger; Sandra Poncet
  18. Regional Trade Agreements and Trade Costs in Services By Sébastien Miroudot; Ben Shepherd
  19. The heterogeneity of FDI in Sub-Saharan Africa: How do the horizontal productivity effects of emerging investors differ from those of traditional players? By Pfeiffer, Birte; Görg, Holger; Perez-Villar, Lucia
  20. The challenge of market power under globalization By David Arie Mayer-Foulkes
  21. Trade in Value Added: Concepts, Estimation and Analysis By Marko Javorsek; Ignacio Camacho
  22. Export Performance with Border Sharing Countries: An Assessment of Pakistan By Munir, Kashif; Sultan, Maryam
  23. Emerging Multinational Corporations: Theoretical and Conceptual Framework By Mustafa Sakr; Andre Jordaan
  24. MFN Clubs and Scheduling Additional Commitments in the GATT: Learning from the GATS By Bernard M. Hoekman; Petros C. Mavroidis
  25. International Technology Diffusion of Joint and Cross-border Patents By Chang, C-L.; McAleer, M.J.; Tang, J-T.
  26. Patent regulation in North-South and South-South Trade Agreements By Salam Alshareef
  27. Utilisation of Existing ASEAN FTAs by Micro-, Small- and Medium-Sized Enterprises   By Tulus Tambunan
  28. Can Africa Compete with China in Manufacturing? The Role of Relative Unit Labor Costs By Janet Ceglowski; Stephen Golub; Aly Mbaye; Varun Prasad
  29. Leading countries in tropical timber trade and consumption in EU. A quantitative analysis. By Koulelis, Panagiotis
  30. Heterogeneous Impacts of a Change in Chinese FDI Regulations on Domestic Market Outcomes: Empirical Evidence from Taiwanese Plant Data By Mitsuo Inada; Yung-Hsing Guo
  31. Donors' openness to immigration and the effectiveness of foreign aid By Minasyan, Anna; Nunnenkamp, Peter
  32. On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution By Arezki, Rabah; Fetzer, Thiemo
  33. A Case Study on Multinational Companies’ Global Innovation Networks and Global Production Networks: Toward a Theoretical Conceptualisation By Liu, Ju
  34. Immigration and Economic Growth in the OECD Countries 1986-2006 By Ekrame Boubtane; Jean-Christophe Dumont; C. Rault
  35. North American Natural Gas Model Impact of Cross-Border Trade with Mexico By Felipe Feijoo; Daniel Huppmann; Larissa Sakiyama; Sauleh Siddiqui

  1. By: Kaplan, Lennart C.; Kohl, Tristan; Martínez-Zarzoso, Inmaculada
    Abstract: International fragmentation of production and economic integration change the structure of international trade. Novel datasets reveal how production processes are unbundled across borders and connected internationally through Global Value Chains (GVCs). Yet, the impact of Economic Integration Agreements (EIAs) on GVCs is still poorly understood. This paper investigates how the accession of 10 Central and Eastern European Countries (CEECs) to the European Union (EU) affected trade in value added in Europe. Using a gravity model of international trade for a sample of 40 countries over the period 1995-2009, we find that EU accession mainly fostered Eastern entrants' integration in other CEECs' value chains. Smaller integration benefits arise for East-West trade in services stemming from low-skill value adding activities.
    Keywords: economic integration,international fragmentation,gravity model,European Union
    JEL: F13 F15
    Date: 2016
  2. By: James Lake (Southern Methodist University); Maia K. Linask (University of Richmond)
    Abstract: Governments, especially in developing countries, routinely practice binding overhang (i.e. setting applied tariffs below binding WTO commitments) and frequently move applied tariffs for given products up and down over the business cycle. Moreover, applied tariffs are pro-cyclical in developing countries. We explain this phenomenon using a dynamic theory of lobbying between domestic interest groups. Applied tariffs are pro-cyclical when high-tariff interests (e.g. import-competing industries) capture the government: these groups concede lower tariffs to low-tariff interest groups (e.g. exporting firms or firms using imported inputs) during recessions because recessions lower the opportunity cost of lobbying and thereby generate stronger lobbying threats.
    Keywords: Binding overhang, lobbying, tariff bindings, applied tariffs
    JEL: C73 D72 F13
    Date: 2015–02
  3. By: Giovanni Federico; Antonio Tena Junguito
    Abstract: This paper presents our data-base on world trade from 1800 to 1938. We have collected or estimated series of imports and exports, at current and constant (1913) prices and at current and at constant (1913) borders, for 149 polities. After a short review of the available series, we describe the methods for the construction of the data-base. We then deal with the criteria for the inclusion of polities, the representativeness of our series, the main types of sources, the procedures of deflation and, when necessary, of adjustments to 1913 borders. We discuss the details of the estimation of our polity series in Appendix B. Following Feinstein and Thomas (2001), we assess the reliability of our polity estimates. In the last two sections we present our trade series at current and 1913 borders and compare them with other available series. All data are available on:
    Keywords: World Trade , new series , 19th and 20th Century
    JEL: F14 N10
    Date: 2016–01
  4. 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
  5. By: Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, 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: international trade,Individual labour market responses,work biographies,endogenous worker mobility,Germany
    JEL: F16 J31 R11
    Date: 2016
  6. By: Philipp Ehrl
    Abstract: This paper studies the effect of an expansion of imported intermediate inputs on establishments’ average task intensities and employment size in a middle-income country. I use confidential matched employer-employee data and information on trade transactions for the universe of Brazilian firms. Propensity Score Matching indicates that import expansion leads to an overall employment growth, higher intensities in routine and non-routine manual tasks and an increased share of intermediates exports. Thus our findings point out that intermediates imports represent onshored instead of offshored tasks. This result remains unchanged regardless of whether imports from high- or low-wage countries are considered.
    Keywords: task trade, offshoring, onshoring, Brazil
    JEL: F16 J24 O54
    Date: 2014–05
  7. By: Kamal Saggi; Mark Wu
    Abstract: An agricultural price range system (PRS) aims to stabilize local prices in an open economy via the use of import duties that vary with international prices. The policy is inherently distortionary and welfare-reducing for a small open economy, at least according to the canonical economic model. We offer an explanation for why a government concerned with national welfare may nevertheless implement such a policy when faced with risk aversion and imperfect insurance markets. We also highlight open questions arising out of the Peru – Agricultural Products dispute for the WTO’s Appellate Body to address in order to clarify how a PRS consistent with WTO rules could be designed. Finally, we discuss the possibility that a WTO member might resort to a free trade agreement (FTA) to preserve its flexibility to implement a PRS and how an FTA provision of this sort ought to be treated in WTO litigation.
    Keywords: Agriculture, free trade agreement, price range system, WTO law
    Date: 2015–12
  8. 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 dutyfree 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
  9. By: McCallum, Andrew H. (Board of Governors of the Federal Reserve System (U.S.)); Lincoln, William F. (Claremont McKenna College)
    Abstract: Although a great deal of ink has been spilled over the consequences of globalization, we do not yet fully understand the causes of increased worldwide trade. Using confidential microdata from the U.S. Census, we document widespread entry into countries abroad by U.S. firms from 1987 to 2006. We show that this extensive margin growth is unlikely to have been due to significant declines in entry costs. We instead find evidence of large roles for the development of the internet, trade agreements, and foreign income growth in driving these trends.
    Keywords: globalization; barriers to entry; international trade; internet
    JEL: F10 F23 L10 L86 M21
    Date: 2016–02–10
  10. By: Niepmann, Friederike (Board of Governors of the Federal Reserve System (U.S.)); Schmidt-Eisenlohr, Tim (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: How relevant are financial instruments to manage risk in international trade for exporting? Employing a unique dataset of U.S. banks' trade finance claims by country, this paper estimates the effect of shocks to the supply of letters of credit on U.S. exports. We show that a one-standard deviation negative shock to a country's supply of letters of credit reduces U.S. exports to that country by 1.5 percentage points. This effect is stronger for smaller and poorer destinations. It more than doubles during crisis times, suggesting a non-negligible role for finance in explaining the Great Trade Collapse.
    Keywords: trade finance; global banks; letter of credit; exports; financial shocks
    JEL: F21 F23 F34 G21
    Date: 2016–02–10
  11. By: Holger Görg; Aoife Hanley; Stefan Hoffmann and Adnan Seric
    Abstract: While African countries are becoming more and more relevant as host countries for suppliers of multinational companies little is known about corporate social responsibility (CSR) in this region. To fill this gap, the present paper explores CSR considerations of foreign affiliates of multinational companies when choosing local African suppliers. The paper suggests a model of three types of determinants, namely firm characteristics, exports, and intra-trade. Analyses of a large-scale and quite unique firm level data for more than 2,000 foreign owned firms in 19 Sub-Saharan African countries demonstrate that firms importing intermediates from their parent company abroad are more likely to implement CSR. Similarly, CSR plays a larger role for affiliates that export to developed countries. Different determinants affect environmental and social CSR activities.
    Keywords: Global supply chains, corporate social responsibility, multinational companies, Africa
    Date: 2016–01
  12. By: Rasel, Fabienne
    Abstract: This paper analyses the relevance of information and communication technologies (ICT) for firms' probability of global sourcing of inputs. Using firm-level data from Germany in 2009, which include mainly small and medium-sized firms, the empirical analysis differentiates between manufacturing and service firms. The results show some differences between the manufacturing and service sector. Controlling for various sources of firm heterogeneity, the global sourcing probability is increasing in the firms' share of employees with Internet access in the manufacturing sector. E-commerce-intensive firms are more likely to source inputs from abroad but generally, this relationship between e-commerce and global sourcing is only robust in services and much stronger there than in manufacturing. In both sectors, it is strongest in industries with higher upstream industry diversity. Moreover, labour productivity is positively linked to global sourcing. The findings support arguments for the importance of the Internet for global trade and they confirm the productivity advantage of importing in comparison to non-importing firms that is stated in the literature.
    Keywords: global sourcing,importing,information and communication technologies,inputs
    JEL: D22 L23 F14
    Date: 2015
  13. By: Luisa Gagliardi; Simona Iammarino; Andrés Rodríguez-Pose
    Abstract: This paper investigates the impact of the offshoring of production activities on domestic jobs in Great Britain. The paper considers both the spatial heterogeneity across local labour markets and variations in the intensity of outward flows of investments abroad (OFDI) across industries in order to shed new light on the job creation/destruction implications of offshoring. The results suggest that offshoring may generate significant job losses in routine occupations in areas that have been more exposed to the relocation of production abroad, regardless of whether the relocation has been to developed or developing/emerging countries. Offshoring to developing/emerging countries has, by contrast, a positive effect on the generation of non-routine jobs. Efficiency gains accruing from the international reorganization of production increase in the long-run, with compensation mechanisms operating through growth of employment in higher value added activities at home. Overall, our results uncover important spatial and interpersonal inequalities in job creation, which provide new challenges for public policy.
    Keywords: offshoring; local labour market; job creation and destruction; routine and non-routine occupatins
    JEL: F21 J23 J24 J42
    Date: 2015–10
  14. By: Fatma Bouattour (LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine)
    Abstract: Despite the growing role of Brazil in international trade, exports still face challenges. Following the theoretical framework of Manova (2013), this paper provides firm-level evidence that financial constraints hamper the export performances. Using customs data from Brazil, I show through a probability model, that Large firms exhibit more probability to have export performances when compared with Small and Medium-sized firms, and that this advantage tends to decrease in industries with high external funding needs. The sectors financial vulnerability is proxied with two measures borrowed from Rajan and Zingales (1998) and computed for Brazilian industries over the recent period of the 2000s. The results are globally robust to the modification of the proxies of sectoral external finance dependence, used in the literature. Other tests demonstrate that Brazilian subsidiaries have greater chances to be export performant, and that there is a "regional effect" that makes some Brazilian regions export more than others. This paper also provides an insight of the effects of the global crisis of 2008 on the export patterns.
    Keywords: Export,firms,international trade
    Date: 2015–06–22
  15. By: Aisbett, Emma; Busse, Matthias; Nunnenkamp, Peter
    Abstract: The recent boom of investor-state disputes filed under international investment agreements has fueled a controversial academic and policy debate. Despite its importance, there has been very little work to date on the impacts of compensation claims by investors on FDI flows to the responding host country. We study this question using a comprehensive dataset of FDI flows, compensation claims and bilateral investment treaty (BIT) participation. We allow for differential impacts of compensation claims against a host on inward FDI flows from BIT-partner and non-partner countries. Focusing on these differences allows us both to shed new light on how investment treaties might influence investor behavior, as well as allowing us to control for unobserved changes in the host-country investment climate. We find that BITs stimulate bilateral FDI flows from partner countries - but only so long as the host country has not had a claim brought against it to arbitration. When a host faces a claim, FDI from sources with a BIT in place falls significantly more than that from unprotected sources. Furthermore, after the host has faced a claim, the entry into force of new BITs is no longer associated with increased FDI flows.
    Keywords: bilateral investment treaties,investor-state dispute settlement,compensation claims,protected and unprotected investors
    JEL: F21 F23 F53
    Date: 2016
  16. By: Ahmad Shah Mobariz (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: The paper undertakes a cost-benefit analysis of Afghanistan’s accession to the WTO while attempting to shed light on the post-WTO accession challenges. For our empirical analysis we have applied the WITS/SMART model to assess the implication of the WTO membership. A cut in tariffs is the independent variable and government revenue, trade creation, consumer welfare and general welfare of the economy are dependent variables. The results indicate that Afghan consumers stand to benefit from tariff reforms with overall positive welfare gains to the economy. However, reduced tariff rates will lead to a fall in government revenue and a substantial increase in imports, subsequently raising concerns over negative trade balances. The final section of this paper studies the post-accession challenges with a particular focus on development, institutional, legal and environmental issues. Our analysis, based on the sectoral mix of Afghanistan’s economy suggests that producers will lose out. The findings of this study support the position that Afghanistan should maintain the maximum policy space in order to achieve its long-term development goals.
    Keywords: Liberalization, WTO Accession, Afghanistan Economy, Policy Space, Accession Challenges
    JEL: F13 F17
    Date: 2015–03
  17. By: Charlotte Emlinger; Sandra Poncet
    Abstract: We study the growing presence of multinational retailers and its role for imports in China. To identify the causal effect of foreign retailers entry on the local import intensity, we use sector and origin country level import data for a panel of Chinese cities between 1997 and 2012 and differentiate between retailer and non retailer goods, and, in a second step, we exploit information on the multinational retailers' headquarters countries. We find that a relative rise in retail imports in cities where multinational retailers settle, which is sharper for imports from the country of origin of the retailer. Our results suggest that a 20% higher multinational retailer presence, amounting to one additional hypermarket in 2012, induces a relative rise in imports in retail goods of 2.8% compared to non retail goods. The import relative gains rise to 5.6% for the multinational retailers' headquarters countries. We find that the observed effect is mainly driven by the food products, which is consistent with the appeal of Western gastronomy and with the structuring role of retail branded products. Our results suggest that global retailers bridgehead for the penetration of the Chinese market by producers from their home base.
    Keywords: Multinational retailers;China;Imports
    JEL: L81 F14 F23
    Date: 2016–01
  18. By: Sébastien Miroudot; Ben Shepherd
    Abstract: This paper analyses the relationship between regional trade integration and trade costs in servicesindustries. The empirical analysis relies, on the one hand, on a dataset of theory-consistentbilateral trade costs calculated for 61 countries over the period 2000-2011 and, on the otherhand, on an analysis of services commitments in 66 regional trade agreements to which thesecountries are parties. Despite the proliferation of services RTAs in the past decade, we do notfind significantly lower bilateral trade costs among countries having signed such agreements.Several possible explanations are discussed. First, the gaps in services trade data and the difficultyto account for all modes of supply could influence our results. Second, the nature ofservices trade liberalisation makes it difficult to discriminate between domestic and foreignservice providers (thus not impacting the relative costs they face). Third, there is no clear evidencethat countries signing services RTAs do intend to create actual preferences for companiesin partner countries. Services RTAs are about preferential “bindings”. Regionalism in the caseof services seems non-discriminatory and does not lead to trade preferences.
    Keywords: Trade policy, Trade in services, Regional trade agreements, services trade liberalisation.
    JEL: F13 F15
    Date: 2015–11
  19. By: Pfeiffer, Birte; Görg, Holger; Perez-Villar, Lucia
    Abstract: This paper analyzes the horizontal productivity effects of foreign direct investment (FDI) from industrialized and developing countries in 10 sub-Saharan African countries. We establish a unique data set by combining data from the World Bank Enterprise Surveys that allow us to distinguish between foreign investors from sub-Saharan Africa, Asia, Europe, the Middle East, and North Africa. We find strong evidence of horizontal productivity spillovers to domestic firms derived from foreign-firm presence. However, these effects are clearly dependent on domestic firms' absorptive capacity. The largest productivity effects seem to be driven by investors from sub-Saharan Africa. Our analysis also shows that productivity effects differ according to the income level of host countries. Overall, the strongest productivity effects seem to materialize in lower-middle-income countries. These key findings emphasize the increasing importance of emerging investors, beyond the traditional players from industrialized countries, in sub-Saharan Africa.
    Keywords: foreign direct investment,productivity,South-South firms,spillovers,sub-Saharan Africa
    JEL: F23
    Date: 2015
  20. By: David Arie Mayer-Foulkes (Division of Economics, CIDE)
    Abstract: The legacy of Adam Smith leads to a false confidence on the optimality of laissez faire policies for the global market economy. Instead, the polarized character of current globalization deeply affects both developed and underdeveloped economies. Current globalization is characterized by factor exchange between economies of persistently unequal development. This implies the existence of persistent extraordinary market power in transnational corporations, reflected in their disproportionate participation in income and policy. These are shown to be steady state features of globalization in a convergence club model of development and underdevelopment including trade and FDI. Moreover, results in tax competition explain how the increased share of transnational profits under globalization leads to lower corporate taxes, more conservative policies, and weaker institutions for balancing market power. The increased level of market power under globalization poses a serious challenge for national and global governance that deeply impacts economic development, distribution, sustainability and democracy everywhere.
    Keywords: globalization, transnational corporations, underdevelopment, concentration, inequality, economic growth
    JEL: F02 F10 F23 O10
    Date: 2014–03
  21. By: Marko Javorsek (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)); Ignacio Camacho (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This working paper introduces the concept of Trade in Value Added (TiVA) and presents an initial analysis of TiVA for selected regional ESCAP economies. The paper introduces Global Value Chains (GVCs) and issues for the measurement of trade statistics due to proliferation of GVCs. It further presents the TiVA estimation methodology, as defined in the literature, and provides an overview of the data requirements for estimation. The paper reviews current initiatives on regional / international input-output tables (IOTs) and TiVA analysis, and availability of data in the Asia-Pacific region. The paper concludes with a TiVA analysis of selected regional ESCAP economies that are available in the current data sources. The paper has been prepared under the Regional Programme on Economic Statistics (PRES) and we hope it will support the efforts of statistical offices in the region to improve related statistics.
    Keywords: International trade statistics, trade in value added, global value chains, Asia and the Pacific, input-output, supply-use
    JEL: C67 D57 F13 F14 F15 F23 O19 O24
    Date: 2015–05
  22. By: Munir, Kashif; Sultan, Maryam
    Abstract: This study analyzed the export performance of Pakistan with its border sharing countries for the year 2014. The study has followed Dalum et al. (1998) revealed symmetric comparative advantage index to measure export performance. The study has split the analysis into highest and marginal comparative advantage and disadvantage. Pakistan is exporting around 160, 155, 133 and 60 commodities at three-digit level of SITC (Rev 3) classification to Afghanistan, China, India and Iran respectively. We found that in more than half of these commodities exported to border sharing countries Pakistan has highest and marginal comparative disadvantage. Result shows that rice and cotton is of worth importance because both are cash crops of Pakistan. Rice is in marginal disadvantage segment for Afghanistan, China and Iran. Political and diplomatic channels are needed to improve the performance of cross border trading among the countries especially with border sharing countries.
    Keywords: RCA, Exports, Pakistan, Border Sharing
    JEL: F01 F14 R1 R10
    Date: 2016–02–14
  23. By: Mustafa Sakr (Department of Economics, University of Pretoria); Andre Jordaan (Department of Economics, University of Pretoria)
    Abstract: Given the looming significance of emerging multinational corporations, this article outlines the primary theoretical aspects pertaining to this growing phenomenon. The following four main aspects are covered: The concept of emerging multinational corporations, theories explaining their evolution, market penetration modes, and finally the types of such firms. Based on the motive of multinationality, it is proposed to classify the different theories into three groups, namely: Firm advantages (asset exploiting), host country advantages (asset seeking), and both firm and host country advantages. This article distinguishes between 10 different types of emerging multinational corporations, based on the timing and the motives for initiating the multinationality process, the relation between the headquarters and affiliates, and the geographical dispersion of foreign activities. Entry modes adopted by emerging multinational corporations vary significantly according to ownership, the nature of overseas’ operations, the control of parent firms over these activities, and the extent of externalising and internalising.
    Keywords: emerging multinational corporations, foreign market entry modes, theories of emerging multinational corporations, types of emerging multinational corporations
    JEL: P45 F21
    Date: 2016–01
  24. By: Bernard M. Hoekman; Petros C. Mavroidis
    Abstract: Scheduling additional commitments for policies affecting trade in goods in the GATT has been plagued by two sources of ambiguity: the treatment of changes introduced unilaterally by members subsequent to an initial commitment, and the treatment of new commitments by WTO members pertaining to nontariff policy measures affecting trade in goods. This is not the case for trade in services, as the GATS makes explicit provision for additional commitments to be scheduled. Neither secondary law, in the form of decisions formally adopted by the WTO membership, nor case law has clarified the situation for trade in goods. This matter is important for the WTO as it determines the feasibility of clubs of countries agreeing to new enforceable policy disciplines that bind only signatories but are applied on a non-discriminatory basis to all WTO members. In this paper, we discuss the legal state of play and the ‘policy space’ that WTO members have to establish new MFN club-based disciplines for nontariff measures.
    Keywords: Trade agreements, plurilaterals, WTO, clubs, nontariff measures.
    JEL: F13 K40
    Date: 2016–01
  25. By: Chang, C-L.; McAleer, M.J.; Tang, J-T.
    Abstract: __Abstract__ With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology.
    Keywords: International Technology Diffusion, Exports, Imports, Joint Patent, Cross-border Patent, R&D, Negative Binomial Panel Data.
    JEL: F14 F21 O30 O57
    Date: 2015–05–15
  26. By: Salam Alshareef (CREG - Centre de recherche en économie de Grenoble - Grenoble 2 UPMF - Université Pierre Mendès France)
    Abstract: The article provides a comparative examination of patent provisions in both North-South and South-South Preferential Trade Agreements (PTAs). It assesses whether the flexibilities of World Trade Organization Agreement on trade-related aspect Intellectual Property Rights (TRIPS), are getting eliminated, preserved or affirmed in the studied PTAs. The article studies the PTAs of both the United States and European Union with developing countries as examples of North-South agreements, and the PTAs of both China and India with developing countries as examples of South-South agreements. The PTAs of US show systematic efforts to eliminate TRIPS flexibilities. EU chapters on IP engage partner countries to accede or comply with WIPO treaties in its earlier versions, and converge toward US approach in its latest versions. By contrast, China PTAs affirm commitment under TRIPS and emphasis some of its flexibilities. Patent related issues are absent from India’s PTAs.
    Keywords: patent , TRIPS flexibilities , Preferential Trade Agreements , TRIPS plus
    Date: 2015–10–15
  27. By: Tulus Tambunan (Trisakti University)
    Abstract: This policy brief examines the extent to which micro-, small-, and medium-sized enterprises (MSMEs) have benefited from the conclusion of trade agreements involving ASEAN member states.
    Keywords: Micro-, small-, and medium-sized enterprises, free trade agreements, rules of Origin
    JEL: F1
    Date: 2015–05
  28. By: Janet Ceglowski; Stephen Golub; Aly Mbaye; Varun Prasad (Université Cheikh anta Diop de Dakar; Professor of Economics)
    Abstract: In this paper we examine Sub-Saharan Africa’s (SSA) bilateral trade and cost competitiveness with China. We review patterns of bilateral trade between SSA and China, showing an extraordinary imbalance in the structure of trade, in that China overwhelmingly exports manufactured products to SSA and almost exclusively imports primary products in return. Our principal means of assessing the competitiveness of SSA’s manufacturing sector, vis-à-vis China, are measures of relative unit labor costs (RULC). We find that African RULC levels have generally been very high relative to China, but declined over the 2000s as China’s wages have risen faster than Chinese productivity, while the reverse is true for the SSA countries in our sample. Nevertheless, RULC vis-à-vis China remained elevated for many SSA countries as of 2010. Generally high RULC along with weaknesses in the business climate suggest that most SSA countries are unlikely to be competitive in labor-intensive manufacturing any time soon.
    Keywords: Sub-Saharan Africa, China, relative unit labor costs, trade, manufacturing
    JEL: J08 J20 J21 J30 J38
    Date: 2015–10
  29. By: Koulelis, Panagiotis
    Abstract: The EU is an important market for both legally and illegally harvested timber entering international trade. The demand from the European countries for tropical wood for national consumption or for trade reasons possibly is connected with illegally harvested tropical timber from origin countries in the Tropics, with the known subsequent degradation of forestland. In this study the trade in tropical timber that takes place in the EU is analyzed, and more specifically with four separate tropical categories. The leading EU countries in imports, re-exports and consumption are presented in order to underline their basic trading role in the European tropical timber market. Belgium is indicated as one of these together with France, Italy, Netherlands and UK. Belgium’s trade role was found to be significant, taking the leading role as re-exporter in sawnwood, veneer and industrial roundwood. The leader in consumption per capita seems to be the Netherlands regarding sawnwood and plywood, while Portugal ranked first in tropical industrial roundwood consumption per capita on average during the examined period. Italy seems to be a large consumer of tropical veneer. An analysis of some trade flows is also applied to better understand the role of the other trade partnerships inside the EU. The role of the EU in general with the parallel construction of policy instruments to combat illegal logging is also highlighted.
    Keywords: tropical wood, illegal logging, timber flows, timber consumption
    JEL: F1 Q56
    Date: 2015
  30. By: Mitsuo Inada (Division of Natural Resource Economics, Graduate School of Agriculture, Kyoto University, and Research Fellow of Japan Society for the Promotion of Science); Yung-Hsing Guo (Department of International Business, National Taichung University of Science and Technology)
    Abstract: The domestic market outcomes of firms investing abroad have attracted the attention of both economists and policymakers. In particular, accelerating the relocation of domestic production abroad has raised public concern about the hollowing out of domestic technologies and employment. This study investigates the impact of foreign direct investment (FDI) policies toward China on plant productivity and employment, using Taiwanese manufacturing plant-level data and exploiting an FDI regulation change in China in 2002 as a significant variation. Our difference-in-differences estimates reveal the heterogeneous responses of Taiwanese plants to this regulation change: plants in deregulated industries that newly invested in China after 2000 experienced an increase in their productivity, employment, and sales, while plants in those industries that had already invested in China in 2000 decreased both employment and sales. We do not find any differential trends between plants in deregulated industries and those in other industries before the regulation change. We also check our crucial assumption of whether the regulation change expanded Taiwanese firms’ activities in China. We find that the regulation change increased the capital inflows and net sales generated by new entrant subsidiaries in the Chinese market. Furthermore, we do not find statistical evidence of the hollowing out effects on domestic market outcomes in deregulated industries.
    Date: 2016–02
  31. By: Minasyan, Anna; Nunnenkamp, Peter
    Abstract: We argue that donors could improve the effectiveness of foreign aid by pursuing complementary and coherent non-aid policies. In particular, we hypothesize that aid from donors that are open to immigration has stronger growth effects than aid from closed donors. We estimate the aid-growth nexus in first differences to mitigate endogeneity concerns. Our empirical results support the hypothesis that donors' openness to immigration strengthens the growth effects of foreign aid.
    Keywords: aid effectiveness,migration,remittances,economic growth
    JEL: F35 F24 O11
    Date: 2015
  32. By: Arezki, Rabah (International Monetary Fund, Washington DC); Fetzer, Thiemo (University of Warwick)
    Abstract: This paper provides the first empirical evidence of the newly found comparative advantage of the United States manufacturing sector following the so-called shale gas revolution. The revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world owing to the physics of natural gas. Results show that U.S. manufacturing exports have grown by about 6 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins.
    Keywords: manufacturing, exports, energy prices, shale gas JEL Classification: Q33, O13, N52, R11, L71
    Date: 2016
  33. By: Liu, Ju (CIRCLE, Lund University)
    Abstract: The recent wave of globalisation has been characterised not only by an increased number of cross-border production networks of multinational companies (MNCs) but also by an increasing number of their cross-border innovation networks. However, the differences, commonalities, and interaction between a MNC’s global innovation network (GIN) and global production network (GPN) have not been theoretically and empirically clarified. Using case study and social network analysis, this paper simultaneously captures the network characteristics of the case MNCs’ GINs and GPNs. It finds that the case MNCs’ GINs and GPNs 1) interact; 2) are different in terms of network composition and network centralisation; 3) are similar in terms of pattern of ties; nevertheless, 4) the interaction, the differences and the commonality clearly present firm or industrial differences. The paper argues that theoretically considering GIN and GPN as two different but interwoven layers of a MNC’s global value creation network may provide better conceptual clarity for reality interpretation and theoretical development. It suggests knowledge base perspective in future research for better understanding the dynamics of MNCs’ GINs and GPNs.
    Keywords: global innovation network; global production network; multinational companies; Social network analysis
    JEL: M16 O32
    Date: 2015–12–02
  34. By: Ekrame Boubtane (CERDI - Centre d'études et de recherches sur le developpement international - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Jean-Christophe Dumont (OECD - Organisation for Economic Cooperation and Development); C. Rault (LEO - LEO - UO - Université d'Orléans)
    Abstract: This paper offers a reappraisal of the impact of migration on economic growth for 22 OECD countries between 1986-2006 and relies on a unique data set we compiled that allows us to distinguish net migration of the native - and foreign - born populations by skill level. Specifically, after introducing migration in an augmented Solow-Swan model, we estimate a dynamic panel model using a system of generalized method of moments (SYS-GMM) to address the risk of endogeneity bias in the migration variables. Two important findings emerge from our analysis. First, there exists a positive impact of migrants' human capital on GDP per capita, and second, a permanent increase in migration flows has a positive effect on GDP per worker. Moreover, the growth impact of immigration is high even in countries that have non-selective migration policies.
    Keywords: Immigration , Growth , Human capital , Generalized Methods of Moments
    Date: 2016–01–07
  35. By: Felipe Feijoo; Daniel Huppmann; Larissa Sakiyama; Sauleh Siddiqui
    Abstract: Natural gas as a source of energy has attracted a lot of interest as its emissions rate and price are lower than other fossil fuel energy sources. In the U.S., natural gas-fired power generation has been rising, as coal has declined as a share of the fuel mix. Likewise, Mexico recently launched its energy reform with focus on greatly expanding use of natural gas over other fossil fuels, primarily in the energy sector, by opening the market to private investors. These recent economic and policy changes, along with increasing gas production in the U.S. (shale gas boom) are likely to drive the natural gas market in North America in a new direction. For instance, the Annual Energy Outlook 2015 describes the U.S. for the first time as a net exporter of natural gas (via pipelines and LNG) by 2017. In order to study the current North American gas market with its new regulations like the Mexican energy reform, this paper presents the North American Natural Gas Market Model(NANGAM). We propose a long-term partial-equilibrium model of the United States, Mexican, and Canadian gas markets. NANGAM considers more granular details regarding market regions and pipelines in Mexico than other existing models, allows for endogenous infrastructure expansion, and is built in five year time-steps up to 2040, considering three seasons (low, high, and peak demand) for each time-step. NANGAM is calibrated using up-to-date data, which reflects current gas market trends, such as the increasing U.S. shale gas production. Using NANGAM, we assess the implications of the Mexican energy reform using a set of ad-hoc future scenarios. Results from the model show that, in the case of disappointing development of natural gas production in Mexico, the census region US7 (Texas and adjacent states) is the most affected, reaching an increase of natural gas production of up to 12% by 2040 compared to baseline projections.
    Keywords: North American natural gas scenarios, Mexican energy reform, dynamic market equilibrium model, mixed complementarity problem, infrastructure investment, capacity investment
    JEL: Q41 L71 Q37 C61
    Date: 2016

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