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on International Trade |
| By: | Kyle Handley (University of Michigan); Nuno Limao (University of Marylan and NBER) |
| Abstract: | We examine the impact of policy uncertainty on trade, prices and real income through firm entry investments in general equilibrium. We estimate and quantify the impact of trade policy on China's export boom to the U.S. following its 2001 WTO accession. We find the accession reduced the U.S. threat of a trade war, which can account for over 1/3 of that export growth in 2000-2005. Reduced policy uncertainty lowered U.S. prices and increased its consumers' income by the equivalent of a 13 percentage point permanent tariff decrease. These findings provide evidence of large effects of policy uncertainty on economic activity and the importance of agreements for reducing it. |
| Keywords: | China, World Trade Organization, Policy Uncertainty, Welfare |
| JEL: | F12 F13 F14 G31 D8 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:650&r=int |
| By: | Felix Tintelnot |
| Abstract: | Most international commerce is carried out by multinational firms, which use their foreign affiliates both to serve the market of the host country and to export to other markets outside the host country. In this paper, I examine the determinants of multinational firms' location and production decisions and the welfare implications of multinational production. The few existing quantitative general equilibrium models that incorporate multinational firms achieve tractability by assuming away export platforms – i.e. they do not allow foreign affiliates of multinationals to export – or by ignoring fixed costs associated with foreign investment. I develop a quantifiable multi-country general equilibrium model, which tractably handles multinational firms that engage in export platform sales and that face fixed costs of foreign investment. I first estimate the model using German firm-level data to uncover the size and nature of costs of multinational enterprise and show that the fixed costs of foreign investment are large. Second, I calibrate the model to data on trade and multinational production for twelve European and North American countries. Counterfactual analysis reveals that multinationals play an important role in transmitting technological improvements to foreign countries and that the pending Canada-EU trade and investment agreement could divert a sizable fraction of the production of EU multinationals from the US to Canada. |
| JEL: | F12 F23 L23 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22236&r=int |
| By: | Hadili, Abduraawf; Raab, Roman; Wenzelburger, Jan |
| Abstract: | This paper explores the impact of trade liberalisation on the economies of the Arab Maghreb Union (AMU). We investigate the time period from 1995 to 2009 in terms of export growth, import growth, the balance of trade, and the balance of payments. Our empirical evidence shows that trade liberalisation did not enhance export growth in AMU countries during the given period. In contrast, it had a significant positive impact on import growth. Moreover, trade liberalisation worsened the balance of trade and the balance of payments. Governance indicators turn out to be important covariates in order to achieve the intended effects of trade liberalization. |
| Keywords: | Trade Policy-International Trade Organizations; Empirical Studies of Trade; Economic Integration; Structure, Scope, and Performance of Government. |
| JEL: | F13 F14 F15 H11 |
| Date: | 2016–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71123&r=int |
| By: | Gene M. Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson |
| Abstract: | I use an event study approach to present novel evidence on the impact of trade liberalization on firm level profits. Using the uncertainty surrounding the negotiation and ratification process of the Canada-United States Free Trade Agreement of 1989 (CUSFTA), I estimate the impact of different types of tariff reductions on the abnormal returns of Canadian manufacturing firms. I find that Canadian import tariff reductions lead to lower, and reductions in Canadian intermediate input tariffs to higher abnormal returns. The impact of U.S. tariff reductions is less clear and depends on the size of the affected firms. I also calculate the total profit increase implied by my estimates. Overall, CUSFTA increased per-period profits by around 1.2%. This was mainly driven by intermediate input tariff reductions which more than offset the negative effect of Canadian import tariff reductions. |
| Keywords: | Demand; neoclassical growth; balanced growth; technological progress; capital-skill; complementarity |
| JEL: | N0 F3 G3 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66414&r=int |
| By: | Dreyer, Heiko; Fedoseeva, Svetlana; Herrmann, Roland |
| Abstract: | Gravity and pricing to market (PTM) models have been used to elaborate determinants of bilateral trade and export pricing for different countries and branches. Typically, only one of the two methods was chosen. We show in a stepwise approach that a combination of both methods yields novel results on the determinants of exports and export pricing behaviour. For the case of German beer exports, we show that structural differences exist between markets on which exporters apply either PTM or non-PTM strategies. German beer exporters apply PTM strategies, in particular local-currency stabilization, on those markets where imports are very sensitive to exchange-rate changes. Non-PTM strategies, i.e. full exchange-rate transmission, occur on export markets with insensitive reactions. Apart from PTM strategies, German beer exports are strongly dependent on policy variables such as the introduction of the Euro and the partner country’s membership in the EU. |
| Keywords: | Incomplete pass-through, gravity equation, pricing to market, export behaviour, German beer, Demand and Price Analysis, International Relations/Trade, |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:234640&r=int |
| By: | Wilson, Chris M. |
| Abstract: | There is widespread evidence that geographical borders reduce trade. This paper presents a theoretical model capable of providing a succinct comparison of three broad forms of trade barriers involving i) trade costs, ii) localized tastes, and iii) information frictions. Despite being traditionally under-researched, it provides the stark finding that information frictions often provide the relatively more powerful marginal effect in reducing cross-border trade, and associated levels of welfare. This result remains robust under a number of extensions that further document the roles of product differentiation and alternative forms of trade costs. |
| Keywords: | Information Frictions,Search Costs,Trade Costs,Localized Tastes,Product Differentiation |
| JEL: | F10 L13 |
| Date: | 2016–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:130180&r=int |
| By: | Wyatt J. Brooks; Pau S. Pujolas |
| Abstract: | We compare the welfare gains from a reduction in trade costs implied by a dynamic model with capital accumulation to a standard static trade model. The static and dynamic trade models differ in their welfare implications along four dimensions: transition costs, endogenous capital, composition of expenditure between investment and consumption goods, and computation of the trade elasticity. We provide a theoretical decomposition of these four effects, then quantify them in a parameterized example. Gains from trade differ considerably in the two models, even though they imply the same trade elasticity and import penetration ratio. In our base case, removal of a 100% trade cost increases welfare by 14% in the static model and 20% in the dynamic model. Our decomposition demonstrates that the most important difference between the two models is the endogeneity of capital. |
| Keywords: | Gains from Trade, Capital Accumulation, Static Gains, Dynamic Gains |
| JEL: | E13 F11 F41 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2016-03&r=int |
| By: | Andrew B. Bernard; J. Bradford Jensen; Stephen J. Redding; Peter K. Schott |
| Abstract: | Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now standard heterogeneous firm model posits a continuum of firms that compete under monopolistic competition (and hence are measure zero) and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and are large relative to the markets in which they operate. We outline a framework that allows firms to be of positive measure and to decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. We use this framework to interpret features of U.S. firm and trade transactions data and highlight interdependencies across these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics, and explaining their dominance of aggregate international trade. |
| Keywords: | firm heterogeneity; international trade; multinationals; multi-product firms |
| JEL: | E21 E24 F53 O32 O47 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66437&r=int |
| By: | Mujahid, Irfan; Kornher, Lukas; Kalkuhl, Matthias |
| Abstract: | Public food reserves come back into the policy agenda as a result of huge doubts on the reliability of international trade in the current new era of price instability. In addition to national food reserve, ASEAN countries are among the pioneer in establishing food reserve cooperation at the regional level. This study reviews ASEAN food reserve and trade in the cost and benefit framework. Although food reserve has contributed to the economic successes in the region, the operational cost for such policy is high. We show that regional cooperation through risk sharing can significantly reduce the fiscal costs of holding stocks. Moreover, ASEAN countries and their partners can consider to enlarge the cooperation by involving more countries. |
| Keywords: | Price stabilization, Storage, Regional cooperation, ASEAN, APTERR, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, F13, F15, Q17, Q18, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212508&r=int |
| By: | Kazuhiro Kurose; Naoki Yoshihara |
| Abstract: | This paper examines the validity of the factor price equalisation theorem (FPET) in relation to capital theory. Additionally, it presents a survey of the literature on Heckscher-Ohlin-Samuelson (HOS) models that treat capital as a primary factor, beginning with Samuelson (1953). Furthermore, this paper discusses the Cambridge capital controversy, which contends that marginal productivity theory does not hold when capital is assumed to be as a bundle of reproducible commodities instead of as a primary factor. Consequently, it is shown that under this assumption, the FPET does not hold, even when there is no reversal of capital intensity. This paper also demonstrates that the recent studies on the dynamic HOS trade theory generally ignore the difficulties posed by the capital controversies and are thereby able to conclude that the FPET holds even when capital is modelled as a reproducible factor. Our analysis suggests that there is a need for a basic theory of international trade that does not rely on factor price equalisation and a model that formulates capital as a bundle of reproducible commodities. |
| Date: | 2016–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tergaa:346&r=int |
| By: | Yu, Wusheng; Cao, Lijuan |
| Abstract: | This paper provides a review on China’s meat trade for the 2000-2012 period and discusses its future development, with reference to China’s grain trade. With marginal decreases in meat exports and slight increases in their imports, China’s net imports of major meat products (including pork, beef, mutton and poultry but excluding meat offal) were just below one million tons in 2012, dwarfed by China’s net imports of grains which reached 66.7 million tons in the same year. This slow growth in meat trade seems to contradict earlier expectations on increasing meat demand and imports, based upon projected shifts in consumption patterns driven by rapid per capita income growth. Several plausible explanations of this paradoxical trade pattern are offered, including mass imports of feed grains, persistent (but shrinking) gaps between Chinese and international meat prices, tariff barriers, and non-tariff measures. In the near future China may not be able to maintain such a lower profile on the world meat markets, as per capita income is projected to continue to rise and domestic production cost advantages erode due to rising labor costs. A model-based projection exercise indicates that under plausible assumptions China’s meat imports may rise sharply by 2030. |
| Keywords: | meat trade, grain trade, China, projection, Crop Production/Industries, International Relations/Trade, Livestock Production/Industries, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212719&r=int |
| By: | Gil S. Epstein (Bar-Ilan University, IZA, CReAM and Centro Studi Luca d'Agliano); Odelia Heizler (Cohen) (Tel-Aviv_Yaffo Academic College) |
| Abstract: | In this paper, we examine possible types of network formation among immigrants in the diaspora and between those immigrants and the locals in different countries. We present the model by considering different possible interactions between immigrants and the new society in their host country. Spread of migrants from the same origin in the diaspora may well increase international trade between the different countries, depending on the types of networks formed. We present possible applications of network structure on the country of origin, such as on international trade. We find that when the size of the diaspora is sufficiently large, the natives in the different countries will be willing to bear the linking cost with the immigrants because the possible benefits increase with increasing size of the diaspora. |
| Keywords: | Immigrants, Networks, Diaspora |
| JEL: | D85 D74 J61 L14 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:389&r=int |
| By: | Céline Carrère; Anja Grujovic; Frédéric Robert-Nicoud |
| Abstract: | We develop a multi-country, multi-sector trade model with labor market frictions and equilibrium unemployment. Trade opening leads to a reduction in unemployment if it raises real wages and reallocates labor towards sectors with lower-than-average labor market frictions. We estimate sector-specific labor market frictions and trade elasticities using employment data from 25 OECD countries and worldwide trade data. We then quantify the potential unemployment and real wage effects of implementing the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), and of eliminating trade imbalances worldwide The unemployment and real wage effects work in conflicting directions for some countries under some trade regimes, such as the US under TTIP. We introduce a welfare criterion that accounts for both effects and splits such ties. Accordingly, US welfare is predicted to decrease under TTIP and increase under TPP. |
| Keywords: | labor market frictions; unemployment; trade |
| JEL: | F15 F16 F17 J64 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66490&r=int |
| By: | Martina Vidovic (Rollins College) |
| Abstract: | The aim of the paper is to investigate the relationship between environmental stringency and export flows in EU countries and to determine whether the recent accessions of the CEECs into the EU and the subsequent changes in the regulatory framework of new members have affected intra-EU trade flows. Two main hypotheses are tested. First, we test whether the stringency of a country’s environmental regulations results in pollution havens or, on the contrary it results in better export performance. Second, we test whether the results differ by industry (dirty versus clean) and by EU membership tenure (old versus new EU member countries).An augmented gravity model is estimated using panel data for 21 European countries during the period 1999-2008 for the full sample and also separately for the CEECS and the old EU members. We find that while exporters’ environmental tax expenditure differences are positively correlated with bilateral net exports of clean industries, the effect of environmental stringency differences on net exports of dirty industries is not significant when all the industries are treated as a homogeneous group. However, when heterogeneity across specific industries and between two groups of countries is considered, the results differ. We find that while for old-EU countries higher differences in environmental revenues between partner countries are associated with lower net exports of dirty goods for four major-polluter industries, namely for iron and steel, non-ferrous metals, metal manufactures, metal manufactures and petroleum products, this happens only for two industries when CEEs are considered as exporters (petroleum products and fertilizers). Thus our results show weak support for the pollution haven hypothesis for some dirty industries, mainly for net exports from Western EU countries to the rest. Instead, we find support for the “Porter hypothesis†for trade in clean goods. |
| Keywords: | Pollution Haven Hypothesis, Porter hypothesis, European Union, Trade Flows |
| JEL: | F14 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:3505823&r=int |
| By: | Rabah Arezki; Thiemo Fetzer |
| 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: | J1 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66410&r=int |
| By: | Das, Joy; Tanger, Shaun; Kennedy, P. Lynn |
| Abstract: | India is one of the largest importers of wood pulp in the world. The total value of wood pulp imported by India during 2004 was $ 171.9 million, which increased to approximately $744.5 million by 2013. With a population of about 1.2 billion people, the demand for paper and wood pulp is very high in India. Despite this harvesting timber for commercial use has been heavily restricted, therefore India has to import wood pulp to meet its growing domestic market demand. With a large population and limited resource access, India remains an attractive market for global wood pulp exporters. Using a pooled ordinary least squared (POLS) regression model of estimation, the study examines a panel of trade flows during 2009-2013, exploring the influence of Regulatory Quality on the pattern of wood pulp imports by India from 67 exporting countries. The effect of Regulatory Quality and other explanatory variables such as the distance between the exporting country and India, total forest area of exporting country, GDP and population indicators on imports of wood pulp by India is estimated with the help of the above-mentioned model. Moreover, the study also looks into the volume of exports from countries belonging to specific regions such as East Asia and Pacific, Latin America & the Caribbean, Europe & Central Asia, North America, South Asia and Sub-Saharan Africa. |
| Keywords: | Wood Pulp, Imports, Regulatory Quality, India, International Relations/Trade, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea16:230097&r=int |
| By: | Andrew B. Bernard; Andreas Moxnes; Karen Helene Ulltveit-Moe |
| Abstract: | This paper develops a multi-country model of international trade that provides a simple microfoundation for buyer-seller relationships in trade. We explore a rich dataset that identifies buyers and sellers in trade and establish a set of basic facts that guide the development of the theoretical model. We use predictions of the model to examine the role of buyer heterogeneity in a market for firm-level adjustments to trade shocks, as well as to quantitatively evaluate how firms’ marginal costs depend on access to suppliers in foreign markets. |
| Keywords: | Heterogeneous firms; exporters; importers; sourcing costs; trade elasticity |
| JEL: | F4 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66444&r=int |
| By: | Brian Varian |
| Abstract: | This paper calculates indicators of revealed comparative advantage (RCA) and revealed symmetric comparative advantage (RSCA) for 17 British manufacturing industries for the years 1880, 1890, and 1900. The resulting indicators show that the late-Victorian ‘workshop of the world’ was at a marked comparative disadvantage in a number of manufacturing industries. The paper then proceeds to identify the factor determinants of Britain’s manufacturing comparative advantages (disadvantages) using a fourfactor Heckscher-Ohlin model that relies upon these indicators. In contrast with previous scholarship, the manufacturing comparative advantages of late-Victorian Britain were in the relatively labour nonintensive industries, and this pattern became more pronounced throughout the period. The paper concludes with the observation that the factor determinants of Britain’s manufacturing comparative advantages appear closer to those of the United States than had traditionally been thought. |
| Keywords: | comparative advantage; Heckscher-Ohlin; manufacturing; Britain; nineteenth century |
| JEL: | N0 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:66488&r=int |
| By: | Sokolovska, Olena |
| Abstract: | The present article considers theoretical analysis of VAT in international trade and examines current problems in the cross-border VAT fraud and main strategies to tackle them. The analysis of the theoretical background of VAT in cross-border trade in goods allowed us to determine both some main features related to the cross-border VAT fraud (organized crime, smuggling, money laundering and estimation problems) and measures to tackle them. We defined, based on the evaluation of current strategies aiming to reduce the possibilities of cross-border VAT fraud, the three main groups of such measures, notably, economic measures, institutional measures and procedural and technical measures. |
| Keywords: | VAT, fraud, international trade, cross-border transactions |
| JEL: | F1 F10 H26 H3 H30 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70504&r=int |
| By: | Holger Breinlich |
| Abstract: | I use an event study approach to present novel evidence on the impact of trade liberalization on firmlevel profits. Using the uncertainty surrounding the negotiation and ratification process of the Canada- United States Free Trade Agreement of 1989 (CUSFTA), I estimate the impact of different types of tariff reductions on the abnormal returns of Canadian manufacturing firms. I find that Canadian import tariff reductions lead to lower, and reductions in Canadian intermediate input tariffs to higher abnormal returns. The impact of U.S. tariff reductions is less clear and depends on the size of the affected firms. I also calculate the total profit increase implied by my estimates. Overall, CUSFTA increased per-period profits by around 1.2%. This was mainly driven by intermediate input tariff reductions which more than offset the negative effect of Canadian import tariff reductions. |
| Keywords: | profitability; trade liberalization; stock market event studies; Canada-U.S. free trade agreement |
| JEL: | J1 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66412&r=int |
| By: | Ozkan Eren; Masayuki Onda; Bulent Unel |
| Abstract: | This paper investigates the impact of Foreign Direct Investment (FDI) on entrepreneurial activity at the individual-owner level in U.S. states over 1996- 2008. Our results indicate that FDI has no effect on entrepreneurial activity in Right-to-Work (RTW) states. In non-RTW states, however, we find that an increase in FDI decreases the average monthly rate of business creation and destruction. Specifically, a 10-percent increase in FDI decreases the average monthly rate of business creation and destruction by roughly 4 and 2.5 percent (relative to sample mean), respectively. |
| URL: | http://d.repec.org/n?u=RePEc:lsu:lsuwpp:2016-04&r=int |
| By: | Phouphet Kyophilavong (National University of Laos) |
| Keywords: | Trade liberalization, developing countries, Laos |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb20160459&r=int |
| By: | Jin, Shaosheng; Guo, Haiyue; Delgado, Michael; Wang, H. |
| Abstract: | This paper systematically investigated the impact of foreign direct investment (FDI) on Chinese food firms’ total factor productivity (TFP) by using the firm-level census data between 1998 and 2007 (174,539 sample food firms). We tested for “own-plant” effects, intra-industry effects, regional effects and vertical effects. The results show that food firms’ foreign ownership has weakly positive or no impact on the productivity of invested firms. At the industry level, FDI generates adverse influences on domestic firms productivity in some sub food sectors. Further, mixed regional effects are observed in different sub food sectors and across investment with different origins. Finally, both positive backward and forward spillovers generated by FDI originating outside Hong Kong, Macaw and Taiwan (HMT) are observed, while HMT investment has negative vertical spillovers. |
| Keywords: | food industry, foreign direct investment (FDI), China, productivity, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Q13 Q17 Q18, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211813&r=int |
| By: | KIMURA Fukunari (Economic Research Institute for ASEAN and East Asia (ERIA)); CHEN Lurong (Economic Research Institute for ASEAN and East Asia (ERIA)); LLIUTEANU Maura Ada (Economic Research Institute for ASEAN and East Asia (ERIA)); YAMAMOTO Shimpei (Economic Research Institute for ASEAN and East Asia (ERIA)); AMBASHI Masahito (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Protection of intellectual property rights (IPR) is essential to economic growth, innovation, and competitiveness. As the global economy is increasingly organised within global value chains, disciplining and enforcing IPR in a coherent international framework have become a critical issue in the trade system of the 21st century. The Trans-Pacific Partnership (TPP) flags America's achievement in setting a new standard on international IPR enforcement under the mega free trade agreement framework that involves countries from Asia-Pacific; yet such standards run the risk of becoming the new norm at the international level. The establishment of TPP tends to accelerate the pace of emerging Asian economies in IPR enforcement. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2016-02&r=int |
| By: | Alessandro Barattieri |
| Abstract: | In this paper, I show a strong positive correlation between the value-added share of manufacturing in 2000 and current account balances in 2007 for the Euro area countries. I propose asymmetries in the timing of trade liberalizations as a new mechanism affecting the dynamics of the current account. I build intuition using a simple model. Then, I use an international business cycle model to show how the asymmetric dynamics of trade costs in manufacturing and services in 2000-2007 can partially explain the rise in the German surplus. Lastly, I provide broad empirical support for the key predictions of the theory. |
| Keywords: | Current Account Dynamics, Relative Trade Liberalization Measures |
| JEL: | F1 F32 F40 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:447&r=int |
| By: | E. Monnet; D. Puy |
| Abstract: | This paper assesses the strength of business cycle synchronization between 1950 and 2014 in a sample of 21 countries using a new quarterly dataset based on IMF archival data. Contrary to the common wisdom, we find that the globalization period is not associated with more output synchronization at the global level. The world business cycle was as strong during Bretton Woods (1950-1971) than during the Globalization period (1984-2006). Although globalization did not affect the average level of co-movement, trade and financial integration strongly affect the way countries co-move with the rest of the world. We find that financial integration de-synchronizes national outputs from the world cycle, although the magnitude of this effect depends crucially on the type of shocks hitting the world economy. This de-synchronizing effect has offset the synchronizing impact of other forces, such as increased trade integration |
| Keywords: | International Business Cycles, Synchronization, Financial integration, Trade integration, Globalization. |
| JEL: | E32 F41 F42 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:592&r=int |
| By: | Bui, Tuan; Dungey, Mardi; Nguyen, Cuong; Pham, Phuong |
| Abstract: | Economic integration has been accelerated in Vietnam as in other East Asia countries with the aim to reduce poverty and inequality. However, challenges including widening income gap between urban and rural and between households have emerged. This article examines the effect of economic integration on poverty and inequality of rural households in Vietnam. Corrected for fixed effects and other potential bias we find that the effect of economic integration on household welfare is minimal and statistically insignificant. Our study suggests policy agendas will require a redistributive household and community level component in addition to macroeconomic growth to effectively reduce poverty. |
| Keywords: | Economic integration, poverty, inequality, Vietnam |
| JEL: | F1 I3 |
| Date: | 2016–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71129&r=int |
| By: | Takaaki Kizu; Stefan Kühn; Christian Viegelahn |
| Abstract: | In its recent World Employment and Social Outlook, the ILO published estimates of the number of jobs related to global supply chains (GSCs) for 40 countries in 1995-2013. This paper provides a detailed description of the methodology that was used for the estimation and documents in more detail global linkages in production, becoming apparent on the labour market. The paper also shows new evidence on the number of jobs supported by different export destinations and analyzes the number of GSC-related jobs in different country groups. In particular, we find evidence for the changing role of China, from a country in which GSC-related jobs are located to a country whose import demand creates these jobs elsewhere. We also show that production linkages between emerging economies create an increasing number of jobs. When focusing on jobs related to manufacturing GSCs, trends in GSC-related jobs reveal the increasing importance of the services sector. Finally, we conduct a sectoral regression analysis and provide evidence that increased GSC participation of a sector as a supplier can be associated with a drop in the wage share. |
| JEL: | F16 F66 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2016:i:170&r=int |
| By: | Asongu, Simplice; Tchamyou, Vanessa |
| Abstract: | The study assesses the role of globalization-fuelled regionalization policies on financial allocation efficiency in four economic and monetary regions in Africa for the period 1980 to 2008. Banking system and financial system efficiencies are used as dependent variables whereas seven bundled and unbundled globalization variables are employed as independent indicators. The bundling exercise is achieved by means of principal component analysis while the empirical evidence is based on interactive Fixed Effects regressions. The following findings are established. First, financial allocation efficiency is more sensitive to financial openness compared to trade openness and most sensitive to globalization. The relationship between allocation efficiency and globalization-fuelled regionalization policies is: (i) Kuznets or inverted U-shape in the UEMOA and CEMAC zones (evidence of decreasing returns to allocation efficiency from globalization-fuelled regionalization) and (ii) U-shape overwhelmingly in the COMESA and scantily in the EAC (increasing returns to allocation efficiency from globalization-fuelled regionalization). Established shapes are relevant to specific globalization dynamics within regions. ‘Economic and monetary’ regions are more prone to surplus liquidity than purely economic regions. Policy implications and measures of fighting surplus liquidity are discussed. |
| Keywords: | Globalization; Financial Development; Regional Integration; Panel; Africa |
| JEL: | D60 E40 I10 O10 P50 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71173&r=int |