nep-int New Economics Papers
on International Trade
Issue of 2016‒05‒28
forty-four papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The lumpiness of German exports and imports of goods By Wagner, Joachim
  2. How have EU’s trade agreements impacted consumers? By Holger Breinlich; Swati Dhingra; Gianmarco I. P. Ottaviano
  3. Reassessing the Productivity Gains from Trade Liberalization By JaeBin Ahn; Era Dabla-Norris; Romain A Duval; Bingjie Hu; Lamin Njie
  4. Trade patterns in the 2060 world economy By Jean Chateau; Lionel Fontagné; Jean Fouré; Åsa Johansson; Eduardo Olaberría
  5. Calibrating a CGE model with NTBs that Incorporates Standard Models of Modern Trade Theory By Daniel Rais
  6. Self-Selection and Learning-by-Exporting Hypotheses: Micro Level Evidence By Rehman, Naqeeb Ur
  7. Regional synergies of migration, human rights, trade, investment and knowledge transfer to maximize development in countries of origin of the migrants By Daniel Rais
  8. Worker-level consequences of import shocks By Katariina Nilsson Hakkala; Huttunen; Kristiina
  9. China's Industrial and Trade Policies and Economic Growth (Japanese) By ZHANG Hongyong
  10. Trade effects of MRL harmonization in the EU By Daniel Rais
  11. Two Centuries of Bilateral Trade and Gravity Data: 1827-2014 By Michel Fouquin; Jules Hugot
  12. An Economic Inquiry into Ethiopian Exports: Pattern, Characteristics, Dynamics and Survival By Berihu Assefa; Kiflu Gedefe
  13. Do FDI inflows and energy price affect the food import dependency in developing countries? Evidence from panel VAR Models By Medhi Ben Slimane; Marilyne Huchet-Bourdon; Habid Zitouna
  14. Estimating Border Effects: The Impact of Spatial Aggregation By Cletus C. Coughlin; Dennis Novy
  15. The Role of Goods-Trade Networks for Services-Trade Volume By Daniel Rais
  16. The philosophy of non-discrimination in international trade regulation By Daniel Rais
  17. Does the global trade slowdown matter ? By Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
  18. Outward FDI and Domestic Input Distortions: Evidence from Chinese Firms By Cheng Chen; Wei Tian; Miaojie Yu
  19. On the link between current account and oil price fluctuation in diversified economies: The case of Canada By Blaise Gnimassoun; Marc Joets; Tovonony Razafindrabe
  20. Volatility and the Gains from Trade By Treb Allen; David Atkin
  21. Direction of Bulgarian Foreign Trade – Results of the EU Membership By Marinov, Eduard
  22. In Search of Lost Market Shares By Maria Bas; Lionel Fontagné; Philippe Martin; Thierry Mayer
  23. Development level and WTO member participation in Specific Trade Concerns (STCs) and Disputes on SPS/TBT By Daniel Rais
  24. How Offshoring and Global Supply Chains Enhance the US Economy By Lindsay Oldenski
  25. A comment on 'Cross-border merger, vertical structure, and spatial competition' By Konstantinos Eleftheriou; Nickolas J. Michelacakis; Vassilios G. Papavassiliou
  26. Why do Countries Enter into Preferential Agreements on Trade in Services? Assessing the Potential for Negotiated Regulatory Convergence in Asian Services Markets By Daniel Rais
  27. Globalisation, technology and the labour market: A microeconometric analysis for Turkey By Meschi, Elena; Taymaz, Erol; Vivarelli, Marco
  28. On the role of vertical differentiation in enhancing survival of export flows: Evidence from a developing country By Türkcan, Kemal
  29. Identifying the exchange-rate balance sheet effect over firms By César Carrera
  30. Are Asian services markets optimal regulatory convergence areas? By Daniel Rais
  31. TTIP and Climate Change – How real are Race to the Bottom Concerns? By Daniel Rais
  32. Skill Distributions, Effective Endowment and Trade By Xiaoping Chen
  33. Condición Marshall-Lerner y el efecto Curva J: Evidencias para la República Dominicana By Peguero, Anadel G.; Cruz-Rodríguez, Alexis
  34. Compared Performances of French Companies on the Domestic and Foreign Markets By José Bardaji; Jean-Charles Bricongne; Benoît Campagne; Guillaume Gaulier
  35. Determinants of SPS notification submissions for Latin American WTO members By Daniel Rais
  36. Heterogeneous Effects of International Migration: Evidences from Bangladesh. By Silvio Traverso
  37. Literature review of 100 empirical studies of Foreign Direct Investment: 1950-2015 By Metaxas, Theodore; Kechagia, Polyxeni
  38. How does firm heterogeneity information impact the estimation of embodied carbon emissions in Chinese exports? By Yu, Liu; Meng, Bo; Hubacek, Klaus; Xue, Jinjun; Feng, Kuishuang; Gao, Yuning
  39. Seals and the Need for More Deference to Vienna by WTO Adjudicators By Daniel Rais
  40. Un million de migrants arrivés sans visa en Europe en 2015 : Qui sont-ils? By Philippe Fargues
  41. Modes of Supply for US Exports of Services By Daniel Rais
  42. Prospects for Turkey's accession to the EU By Dawid Jabkowski; Ewa Stawicka
  43. What if TTIP Changed the Regulation of Public Services ?Lessons for Europe from Developing Countries By Antonio Estache; Caroline Philippe
  44. Are multinationals better at creating technical linkages with local firms? By Cozza, Claudio; Perani, Giulio; Zanfei, Antonello

  1. By: Wagner, Joachim
    Abstract: This paper looks at a hitherto neglected extensive margin of international trade by investigating for the first time the frequency at which German exporters and importers trade a given good with a given country. Imports and exports show a high degree of lumpiness. In a given year about half of all firm-good-country combinations are recorded only once or twice for trade with EU countries, and this is the case for more than 60 percent of all firm-good-country combinations in trade with non-EU countries. The frequency of recorded transactions tends to decline with an increase in the number of transactions per year. This is in accordance with the presence of per-shipment fixed costs that provide an incentive for trading firms to engage in cross-border transactions infrequently. Empirical models show that for Germany the frequency of transactions at the firm-good-country level tends to decrease with an increase in per-shipment costs when unobserved firm and goods characteristics are controlled for.
    Keywords: lumpiness of trade,imports,exports,Germany
    JEL: F14
    Date: 2016
  2. By: Holger Breinlich; Swati Dhingra; Gianmarco I. P. Ottaviano
    Abstract: Over the past two decades, the European Commission has negotiated a number of Free Trade Agreements (FTAs) which contain both traditional elements of bilateral tariff reductions, as well as additional liberalisation measures like non-tariff barriers. According to economic theory, FTAs lower trade barriers on imported goods, leading to consumer welfare gains from increase in product variety, better quality products and lower prices for existing products. We estimate the variety, quality and price effects of EU FTAs, drawing on recent developments in the quality literature and using detailed import price and expenditure data. On average, trade agreements the EU has entered into over the past two decades increased the quality of UK imports from its FTA partners by 26 per cent and lowered the quality-adjusted price of imports by 19 per cent. We find that consumer prices fell by 0.5 per cent for UK consumers as a result of FTAs with trade partners that are not members of the European Community. Price reductions for UK consumers are greater than those for EU12 consumers, whose prices fell by 0.3 per cent from non-EC FTAs. Using the set of non-EC FTA estimates to predict the effects of future FTAs, we find a projected decline in consumer prices for UK consumers of 0.4 per cent from an FTA with the United States (TTIP) and 0.2 per cent an FTA with Japan (EPA). For EU12 consumers, the TTIP and EPA are predicted to reduce consumer prices by 0.3 per cent and 0.1 per cent.
    Keywords: trade agreements; EU; consumers
    JEL: J1
    Date: 2016–03
  3. By: JaeBin Ahn; Era Dabla-Norris; Romain A Duval; Bingjie Hu; Lamin Njie
    Abstract: This paper reassesses the impact of trade liberalization on productivity. We build a new, unique database of effective tariff rates at the country-industry level for a broad range of countries over the past two decades. We then explore both the direct effect of liberalization in the sector considered, as well as its indirect impact in downstream industries via input linkages. Our findings point to a dominant role of the indirect input market channel in fostering productivity gains. A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered. For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average, which do not factor in the presumably larger gains from removing existing non-tariff barriers. Finally, we find strong evidence of complementarities between trade and FDI liberalization in boosting productivity. This calls for a broad liberalization agenda that cuts across different areas.
    Keywords: Trade liberalization;Tariffs;Total factor productivity;Cross country analysis;Econometric models;Time series;Trade, Productivity, Tariffs, Inputs, Liberalization, FDI, Reforms, Growth.
    Date: 2016–03–23
  4. By: Jean Chateau (OECD - OECD); Lionel Fontagné (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Jean Fouré (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Åsa Johansson (OECD - OECD); Eduardo Olaberría (OECD - OECD)
    Abstract: This paper presents long-term trade scenarios for the world economy up to 2060 based on a modelling approach that combines aggregate growth projections for the world with a detailed computable general equilibrium sectoral trade model. The analysis suggests that over the next 50 years, the geographical centre of trade will continue to shift from OECD to non-OECD regions reflecting faster growth in non-OECD countries. The relative importance of different regions in specific export markets is set to change markedly over the next half century with emerging economies gaining export shares in manufacturing and services. Trade liberalisation, including gradual removal of tariffs, regulatory barriers in services and agricultural support, as well as a reduction in transaction costs on goods, could increase global trade and GDP over the next 50 years. Specific scenarios of regional liberalisation among a core group of OECD countries or partial multilateral liberalisation could, respectively, raise trade by 4% and 15% and GDP by 0.6% and 2.8% by 2060 relative to the status quo. Finally, the model highlights that investment in education has an influence on trade and high-skill specialisation patterns over the coming decades. Slower educational upgrading in key emerging economies than expected in the baseline scenario could reduce world exports by 2% by 2060. Lower up-skilling in emerging economies would also slow down the restructuring towards higher value-added activities in these emerging economies.
    Keywords: General equilibrium trade model,long-term trade and specialisation patterns,trade liberalisation
    Date: 2015–11
  5. By: Daniel Rais
    Abstract: Abstract We propose a way to incorporate NTBs for the four workhorse models of the modern trade literature in computable general equilibrium models (CGEs). CGE models feature intermediate linkages and thus allow us to study global value chains (GVCs). We show that the Ethier-Krugman monopolistic competition model, the Melitz ï¬ rm heterogeneity model and the Eaton and Kortum model can be deï¬ ned as an Armington model with generalized marginal costs, generalized trade costs and a demand externality. As already known in the literature in both the Ethier-Krugman model and the Melitz model generalized marginal costs are a function of the amount of factor input bundles. In the Melitz model generalized marginal costs are also a function of the price of the factor input bundles. Lower factor prices raise the number of ï¬ rms that can enter the market proï¬ tably (extensive margin), reducing generalized marginal costs of a representative ï¬ rm. For the same reason the Melitz model features a demand externality: in a larger market more ï¬ rms can enter. We implement the different models in a CGE setting with multiple sectors, intermediate linkages, non-homothetic preferences and detailed data on trade costs. We ï¬ nd the largest welfare effects from trade cost reductions in the Melitz model. We also employ the Melitz model to mimic changes in Non tariff Barriers (NTBs) with a ï¬ xed cost-character by analysing the effect of changes in ï¬ xed trade costs. While we work here with a model calibrated to the GTAP database, the methods developed can also be applied to CGE models based on the WIOD database.
    Date: 2015–07–31
  6. By: Rehman, Naqeeb Ur
    Abstract: This aim of this empirical paper is to investigate the self-selection and learning-by-exporting hypotheses. This study addresses the reverse causality between innovation, productivity and exporting using micro level data on 29 countries from Eurasia and Central and Eastern Europe (CEE). CDM estimation results suggest that innovation and productivity positively influence the firm’s exporting and vice versa. This study has supported the self-selection and learning-by-exporting hypotheses. Previous studies provided mixed outcome on the analysis of these two major hypotheses. Similarly, innovation by exporting is examined using multiple proxies of innovation such as product/process innovation, R&D and organizational innovation. Findings imply that innovation is an important determinant of firms’ exporting and this outcome is robust across Eurasian and CEE firms. Moreover, foreign owned firms are more likely to export and innovate than domestic firms due to their technological superiority over domestic firms. Concerning policy implications, economic policies should address the firm’s innovation, productivity and exporting performance. This would result in better economic integration between Eurasian and CEE firms. By removing the firm’s barriers such as access to finance, trade regulations and taxation etc would encourage trade networks between Eurasian and CEE firms.
    Keywords: Innovation, productivity and Exporting.
    JEL: F6 O3
    Date: 2016–05–20
  7. By: Daniel Rais
    Abstract: The aim of this paper is to explore how to raise the synergies of migration, human rights, trade, investment and knowledge transfer to maximize development in countries of origin of the migrants. To reach a deeper understanding of the inter-governmental coherence this paper will additionally examine the level of coherence between free trade and related agreements (such as Regional trade agreement) and Migration agreements as well as certain migration partnership agreements in certain regions: the context of the EU between Spain and France as well as Switzerland with certain African countries and; 2. in the context of NAFTA (Mexico –USA/Canada).
    Date: 2014–11–11
  8. By: Katariina Nilsson Hakkala; Huttunen; Kristiina
    Abstract: We analyse the effects of imports on employment and earnings by distinguishing between import competition in final products and firms? use of imports in production (offshoring). We use Finnish worker-firm data merged with product -level trade data. We focus on Chinese imports and instrument them by changes in China?s share of world exports. Both types of importing increase the job loss risk for all workers and, in particular, for workers in production occupations. An increase in import competition has larger negative effects than an increase in offshoring. Production workers suffer the largest earnings losses, while for high -skilled workers the wage-effect is positive.
    Keywords: Offshoring, Import Competition, Employment, Earnings
    JEL: F16 L24 J63 J31 J23
    Date: 2016–05–16
  9. By: ZHANG Hongyong
    Abstract: This paper investigates the evolution and effects of China's industrial and trade policies after its reform and opening-up in 1979. Specifically, this paper focuses on the effects of various policies (including processing trade regime, accession to the World Trade Organization, special economic zones and foreign direct investment policies, reform of state-owned enterprises, and innovation policies) on trade, investment, and productivity. Using data on China's industry, firms, and trade, there is a large and growing number of studies empirically evaluating the effects of China's industrial and trade policies. By a survey of the previous literature, this paper examines the evolution of China's industrial and trade policies and the mechanism of its economic growth. Furthermore, this paper points out the problems of China's industrial policies and the tasks in the future.
    Date: 2016–05
  10. By: Daniel Rais
    Abstract: Combining original data on Maximum Residue Levels (MRLs) in pesticides with bilateral trade and standard gravity variables over 2005-11, this paper identifies the effect of the complete harmonization of MRLs across EU member states on inter- and intra-EU agri-food trade at both margins. We make an empirical contribution to the impact assessment of standards literature by identifying the trade effects of two different harmonization dynamics in health-related standards: complete harmonization of domestic and foreign regulation (intra-EU members) and harmonization of standards between a large number of foreign markets (non EU-members). Significantly, we find that the harmonization of MRL standards may have led to greater trade at both margins for all different sub-samples, even those including developing country exporters. Our results also suggest that having different MRL regulations is mostly costly at the extensive margin; this is found to be especially true for intra-EU15 agri-trade.
    Date: 2014–05–27
  11. By: Michel Fouquin; Jules Hugot
    Abstract: This document provides a detailed description of the Historical Bilateral Trade and Gravity Data set (TRADHIST) that was put together for Fouquin and Hugot (2016) and designed for historical investigations of international trade. The data set is available on the website of CEPII. Specifically, the data set has been built to explore the two modern waves of globalization: the First Globalization of the nineteenth century and the post-World War II Second Globalization. The data set gathers five types of variables: i) bilateral nominal trade flows, ii) country-level aggregate nominal exports and imports, iii) nominal GDPs, iv) exchange rates, and v) bilateral factors that are known to favor or hamper trade, including geographical distance, common borders, colonial and linguistic links, as well as bilateral tariffs. This data is unique both in terms of temporal and geographical coverage. Overall, we gather more than 1.9 million bilateral trade observations for the 188 years from 1827 to 2014. We also provide about 42,000 observations on aggregate trade, and about 14,000 observations on GDPs and exchange rates respectively.
    Keywords: Gravity;Bilateral Trade;Aggregate Trade;GDP;Exchange Rates
    JEL: C8 F1 N70
    Date: 2016–05
  12. By: Berihu Assefa (Ethiopian Development Research Institute); Kiflu Gedefe (Ethiopian Development Research Institute)
    Abstract: Using both aggregate and firm-level Customs data, this paper examines Ethiopia’s export performance and dynamics over the period 1995/1996 – 2014/2015 from various dimensions. Specifically, we attempt to address the following issues: (i) How concentrated/diversified are Ethiopia’s exports in terms of exporters, products, and markets? Or, over the past decade or so, has Ethiopia added economically significant numbers of new products and markets to its export portfolio. (ii) To what extent do Ethiopian exporters survive beyond their first year of entry to the export market? (iii) And finally we decompose export growth/contraction into intensive and extensive margins to see what drives export change in Ethiopia. Several key patterns emerge from our analysis. First, we observe that Ethiopia’s export base remains quite limited, both in absolute terms and compared to countries with similar level of development. This is reflected in Ethiopia’s small number of exporters and export products as well as its low ratio of merchandise exports to GDP relative to its size and compared to its peers. The country not only has very few exporters, but the average exporter size is also very small. Second, the export diversification analysis reveals that despite a 15.5 percent growth in merchandize exports over the past decade, most of this growth is driven by expansion of exports of existing products in existing markets (growth at the intensive margin) rather than by diversification into new products and into new geographic markets (growth at the extensive margin). Third, the firm-level data analysis shows that the Ethiopian export market shows a high degree of exporter and export product churning but exporter exit and product death are also high. As a result the annual average net exporter entry is found to be about 2.5 percent. Likewise, survival beyond the first export year continues to be a challenge to new entrants. And finally, entry costs and relative size of entrants are found to be key determinants of entry, exit and survival rates.
    Keywords: Ethiopia, export diversification, export dynamics, export survival
    Date: 2016–05
  13. By: Medhi Ben Slimane; Marilyne Huchet-Bourdon; Habid Zitouna
    Abstract: The ability of a country to import food depends on several factors. Considering food security as a priority issue, we focus in this paper on the FDI inflows and the energy price as determinants of food import dependency. Indeed, on the one hand FDI as a substitute/complement to trade flows could impact the depending nation. On the other hand, energy price affects production and transport costs, thereby impacting international trade in food productions. To investigate this relationship, we follow the methodology of Love and Zicchino (2006) by estimating a panel vector autoregressive model (PVAR) of 40 developing countries for the period between 1990 and 2012. The panel is split into two sub-samples. We found that FDI inflows explain food import dependency in low and lower middle-income countries and the energy price proxy influences food import dependency in upper-middle income countries. The impulse response functions’ results are close to those from panel VAR, where an increase in FDI inflows or in energy price leads to more food import dependency in low and lower-middle income countries or in upper-middle income countries, respectively.
    Keywords: FDI, energy price, food security, Panel VAR, developing countries, food import dependency
    JEL: F1 Q4 O1
    Date: 2016
  14. By: Cletus C. Coughlin; Dennis Novy
    Abstract: Trade data are typically reported at the level of regions or countries and are therefore aggregates across space. In this paper, we investigate the sensitivity of standard gravity estimation to spatial aggregation. We build a model in which initially symmetric micro regions are combined to form aggregated macro regions. We then apply the model to the large literature on border effects in domestic and international trade. Our theory shows that larger countries are systematically associated with smaller border effects. The reason is that due to spatial frictions, aggregation across space increases the relative cost of trading within borders. The cost of trading across borders therefore appears relatively smaller. This mechanism leads to border effect heterogeneity and is independent of multilateral resistance effects in general equilibrium. Even if no border frictions exist at the micro level, gravity estimation on aggregate data can still produce large border effects. We test our theory on domestic and international trade flows at the level of U.S. states. Our results confirm the model's predictions, with quantitatively large effects.
    Keywords: Gravity, Geography, Borders, Trade Costs, Heterogeneity, Home Bias, Spatial Attenuation, Modifiable Areal Unit Problem (MAUP)
    JEL: F10 F15 R12
    Date: 2016–05
  15. By: Daniel Rais
    Abstract: Abstract In this paper, we address the role of countries’ goods-trade networks for their services-trade volume. The paper employs a large cross section of bilateral trade data on aggregate cross-border goods and services sales and illustrates that the depth and overlap of two countries’ services networks induce a positive direct impact on their services-trade volume. The evidence takes into account that goods trade flows and networks are potentially endogenous so that the estimated direct effects support a causal interpretation. We find that the magnitude of the multilateral goods-trade network effect on the bilateral services-trade volume is much larger than that of bilateral goods-trade volume.
    Date: 2015–11–08
  16. By: Daniel Rais
    Abstract: The principle of national treatment, or the non-discrimination clause, applies across many fields of international economic law. This book provides a unique horizontal examination of the principle as it applies within international trade law, international investment law and intellectual property law, whilst also offering challenging and perceptive views on commercial practices, trade law and policy. Combining perspectives from practitioners, academics and membersof the judiciary, the book is the first to cover the national treatmentprinciple across the whole field of international economic law – including not only in the domain of WTO law, but also in treaty and contractual settings involving investment and in intellectual property law. It also provides practical insights regarding the application of the principle relevant to inter-state relations, state-investor relations and in the context of intellectual property protection. With its comprehensive interdisciplinary coverage, this book will be of special interest to academics, students and practitioners interested in international economic law and trade, international investment law, and intellectual property law and policy.
    Date: 2014–10–28
  17. By: Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
    Abstract: Since the Global Financial Crisis, world trade growth has been subdued and lagging slightly behind growth of gross domestic product. Trade is growing more slowly not only because growth of global gross domestic product is lower, but also because trade itself has become less responsive to gross domestic product. This paper reviews the reasons behind the changing trade-income relationship, and then investigates its consequences for economic growth. On the demand side, sluggish world import growth may adversely affect individual countries'economic growth, as it limits opportunities for their exports. On the supply side, slower trade may diminish the scope for productivity growth through increasing specialization and diffusion of technologies. The paper finds preliminary evidence that the changing trade-income relationship matters, although the quantifiable effects do not appear to be large.
    Keywords: Free Trade,Economic Theory&Research,Trade Policy,Labor Policies,Emerging Markets
    Date: 2016–05–13
  18. By: Cheng Chen (University of Hong Kong); Wei Tian (University of International Business and Economics, Beijing); Miaojie Yu (Peking University)
    Abstract: This paper examines how domestic distortions a ect firms’ investment strategies abroad. The study first documents puzzling empirical findings concerning Chinese multina- tional corporations, which include that private multinational corporations are less productive than state-owned multinational corporations. A theoretical model is built to rationalize these findings and yields additional empirically consistent predictions. The key insight is that dis- crimination against private firms domestically incentivizes these firms to produce abroad, which results in less tough selection into foreign direct investment for them. A calibra- tion exercise shows the quantitative impacts of domestic distortions on gains in aggregate productivity after investment liberalization.
    Keywords: Outward FDI, Multinational Firms, Institutional Distortion, State-owned Enterprises
    JEL: F13 O11 P51
  19. By: Blaise Gnimassoun (University of Lorraine - BETA UMR CNRS 7522, France); Marc Joets (Banque de France, International Macroeconomics Division, France); Tovonony Razafindrabe (CREM, UMR CNRS 6211, Université de Rennes 1, France)
    Abstract: This study revisits the important link between oil prices and current account for oil exporting countries by paying a particulary attention to the time-varying nature of this link. To this end, we rely on an innovative methodology which is the time-varying parameter vector autoregressive (TVP-VAR) model with sign restriction. We find that while an oil supply shock has a non-significant impact on the current account, an oil demand shock has a positive and significant impact which tends to increase over time. In addition, by studying the economic factors underlying the growing evolution of this relationship, we find that, although the propensity to import of oil revenues has a significant negative influence on the pass-through of oil demand shocks on the current account, deepening of the domestic financial market and accumulation of foreign exchange reserve have a significant positive effect.
    Keywords: curent account, oil prices, time-varying parameters
    JEL: F32 Q43 C32
    Date: 2016–05
  20. By: Treb Allen; David Atkin
    Abstract: By reducing the negative correlation between local prices and productivity shocks, trade liberalization changes the volatility of returns. In this paper, we explore the second moment effects of trade. Using forty years of agricultural micro-data from India, we show that falling trade costs increased farmer's revenue volatility, causing farmers to shift production toward crops with less risky yields. We then characterize how volatility affects farmer's crop allocation using a portfolio choice framework where returns are determined in general equilibrium by a many-location, many-good Ricardian trade model with flexible trade costs. Finally, we structurally estimate the model—recovering farmers' unobserved risk-return preferences from the gradient of the mean-variance frontier at their observed crop choice—to quantify the second moment effects of trade. While the expansion of the Indian highway network would have increased the volatility of farmer's real income had their crop choice remained constant, by changing what they produced farmers were able to avoid this increased volatility and amplify the gains from trade.
    JEL: F1 G11 O13 O18
    Date: 2016–05
  21. By: Marinov, Eduard
    Abstract: The paper analyses the changes in Bulgaria’s direction of trade with goods in the period 2003-2013 – before and after the country’s EU accession, aiming to assess the impact of EU membership on the geographic orientation of the country’s foreign trade. The paper analyses total trade flows, the volume of intra-EU trade as well as trade with specific (leading) trade partners within and outside the EU.
    JEL: F10 F50
    Date: 2015
  22. By: Maria Bas (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Philippe Martin (Sciences Po); Thierry Mayer (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, Sciences Po)
    Abstract: The arrival of powerful new players on world markets –the foremost of these being China– automatically decreases market share for advanced economies. But France's export market share has decreased more than that of other European countries. This is not a result of poor geographic or sectoral specialisation, insuf-fi cient exporter support, under-representation of SMEs in exports or credit constraints, but, more fundamentally, is caused by an inadequate " quality/price ratio " for French products on average. When products are of quality, results are exceptional, as demonstrated by the luxury, aeronautical and electrical distribution goods sectors –sectors, with a flagship– and/or by brands, which appear to play a key role. A country's competitiveness comprises a price dimension and a non-price dimension. Regarding price competitiveness , direct labour costs represent just 23%, on average, of the total value of French exports and 44% when including the cost of labour for domestic intermediate consumption. Price competitiveness is therefore not solely a matter of labour costs for exporting companies. We also need to look at the input side, whether it be at intermediate goods (possibly imported), energy or even services produced in France for exporting companies. The central message here is that competitiveness is everybody's concern, and not just that of industrial companies. Greater effi ciency in non-tradable sectors (business services, construction, public services) also contributes to the creation of price competitiveness.
    Keywords: market shares,competitiveness
    Date: 2015–05
  23. By: Daniel Rais
    Abstract: SECO Working Paper 17/2014 by Sofía Boza and Felipe Fernández
    Date: 2014–11–01
  24. By: Lindsay Oldenski (Peterson Institute for International Economics)
    Abstract: The 2016 US presidential election campaign has rekindled the debate over offshoring—locating business operations and jobs overseas—by US-based multinational corporations (MNCs). Some presidential candidates have assailed investments abroad by US-based MNCs as damaging to economic growth and jobs at home. They have proposed imposing a higher tax on US companies that engage in offshoring and outsourcing. These proposals will not not bring back the lost jobs and plants. Instead they would disrupt global supply chains that link the US economy to the rest of the world and are crucial for US exports and US employment, ultimately harming US competitiveness worldwide and threatening existing jobs. In addition, protectionist efforts to impede trade will likely trigger a backlash from trading partners.
    Date: 2016–04
  25. By: Konstantinos Eleftheriou (Department of Economics, University of Piraeus, Greece); Nickolas J. Michelacakis (Department of Economics, University of Piraeus, Greece); Vassilios G. Papavassiliou (University College Dublin, Ireland; The Rimini Centre for Economic Analysis, Italy)
    Abstract: The aim of this paper is to revise and correct the results obtained in Beladi et al. [Beladi, H., Chakrabarti, A., Marjit, S., 2010. Cross-border merger, vertical structure, and spatial competition. Economics Letters 109, 112-114]. Specifically, we prove that in the pre-merger free-trade case, Nash equilibrium locations coincide with the equilibrium locations of the two downstream firms, following a cross-border upstream merger.
    Date: 2016–05
  26. By: Daniel Rais
    Abstract: More than a third of the World Trade Organization (WTO)-notified services trade agreements (STAs) in effect over January 2008 - August 2015 have involved at least one (South or Southeast) Asian trading partner. Drawing on Baier and Bergstrand's (2004) determinants of preferential trade agreements and using the World Bank's database on the restrictiveness of domestic services regimes (Borchert 2012), we examine the potential for negotiated regulatory convergence in Asian services markets. Our results suggest that countries within Asia with high levels of pre-existing bilateral merchandise trade and wide differences in services regulatory frameworks are more likely candidates for STA formation. Such results lend support to the hypothesis that the heightened servicification of production generates a demand for the lowered service input costs resulting from negotiated market opening.
    Date: 2016–02–02
  27. By: Meschi, Elena (Ca Foscari University of Venice); Taymaz, Erol (Middle East Technical University, Ankara); Vivarelli, Marco (UNU‐MERIT, Maastricht University, IZA, Bonn and Università Cattolica del Sacro Cuore, Milano)
    Abstract: This paper studies the interlinked relationship between globalisation and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm-level database that covers all manufacturing firms in Turkey over the 1992-2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM-SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill-enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. "Learning by exporting" also appears to have a relative skill- biased impact, while FDI imply an absolute skill bias.
    Keywords: Skill-biased technological change, international technology transfer, GMM-SYS
    JEL: O33
    Date: 2016–05–17
  28. By: Türkcan, Kemal
    Abstract: This paper analyzes the role of vertical differentiation linked with global production networks in increasing the chance of export survival using highly disaggregated machinery exports data from Turkey for the 1998-2013 period. Results obtained from descriptive statistics analysis suggest that duration of Turkey’s machinery exports is remarkably short with the median duration of merely one year. In addition, the likelihood of the survival of exports widely varies across product types (total machinery products, finished machinery products and machinery parts and components) and across trade types (horizontally differentiated products and vertically differentiated products). Based on discrete-time duration models, the empirical results demonstrate that vertical differentiation as well as product and market diversification are associated with a higher export survival rate, particularly for parts and components linked with global production networks. The evidence hence supports the hypothesis that global production sharing activities greatly increases the chances of survival in export markets.
    Keywords: Export duration, Survival analysis, Vertical Differentiation, Global production networks
    JEL: C41 F10 F14
    Date: 2016–04–29
  29. By: César Carrera (Banco Central de Reserva del Perú)
    Abstract: I use firm-level data on investment and evaluate the balance sheet effect of changes in the exchange rate. The fact that a depreciation not only generates an expansion (for a small open economy that exports raw materials) but also has the potential of recession (in a dollarized economy in which most firms’ liabilities are in foreign currency) brings up the question on what the final effect of a depreciation over either investment or production is. Following Bleakley and Cowan (2008), I evaluate if this channel is operating. My estimations indicates that this effect tends to disappear when terms of trade are considered, result that is robust to different specifications.
    Keywords: Balance sheet effect, exchange rate, investment
    JEL: E22 F41 G31
    Date: 2016–04
  30. By: Daniel Rais
    Abstract: One of the striking features of trade diplomacy in recent years has been the seemingly unstoppable march of preferential trade liberalization and rule-making (Kawai and Wignajara, 2010). Of the 83 preferential trade agreements (PTAs) in force prior to the year 2000, 73 (88%) featured provisions dealing exclusively with trade in goods. By August 2013, 105 of the additional 176 PTAs in force (60%) also included provisions on services trade. The above trends signal the heightened importance of services trade in general, the growing need felt by countries to place such trade on a firmer institutional and rule-making footing and the attractiveness of doing so on an expedited basis through preferential negotiating platforms (Sauvé and Shingal, 2011).
    Date: 2014–05–27
  31. By: Daniel Rais
    Abstract: Abstract This paper examines concerns about the impact that TTIP could have on existing and future climate policies and laws from the inclusion of provisions on investment protection including investor-to-State dispute settlement (ISDS), the reduction of non-tariff barriers and the introduction of rules for trade in energy and raw materials. It argues that from an environmental perspective, ISDS should not necessarily be seen as a regime that goes against the defence of the environment or prevention of climate change. Although it might be used to challenge policies of an EU home State that increase levels of environmental protection, it can also be used to contest changes in an EU home State’s environmental policies that would reduce the protection of the environment, if foreign investment is affected. To a large extent, this also holds true for other areas of TTIP negotiations. While the achievement of a balance between rules that promote trade and those that maintain policy space for governments to respond to environmental concerns has to be closely monitored, benefits for climate could be seized from harmonisation of carbon laws at the level of the strictest regulations of two parties, provisions that promote trade in low carbon technologies and renewable energy and bilateral cooperation on climate change.
    Date: 2015–05–12
  32. By: Xiaoping Chen (Division of Economics, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332.)
    Abstract: This paper revisits the role of skill distributions in trade using a variant of the Heckscher-Ohlin model with multidimensional skill endowment and specialized production organized in teams. The equilibrium is characterized by the effective endowment", the part of endowment that is actually utilized in production, which depends on the team matches and the task specialization within teams. It is shown that: (1) The endowment correlation between skill dimensions for each agent and the skill dispersion across agents, additional to the aggregate endowment, both matter for the pattern of trade; (2) There are new gains from trade, attributed to potential adjustments of the effective endowment upon trade integration; (3) Different endowment distributions can also generate different wage inequality levels across countries; An empirically found job polarization pattern can be generated in all developed countries in the global economy; (4) Additionally, it reveals a new channel through which the institutions may have effects on trade, by shaping the skill distributions. In particular, the potential effects of different educational policies and some labor market institutions on the skill distributions and trade are discussed.
    Keywords: skill distribution, multidimensional endowment, team production, effective endowment, gains from trade, job polarization, wage inequality
    JEL: F11 F16 J31
    Date: 2016–03
  33. By: Peguero, Anadel G.; Cruz-Rodríguez, Alexis
    Abstract: The aim of this paper is to analyse the effects of a change in the real exchange rate on the trade balance of the Dominican Republic. For this a vector error correction model (VECM) is used. The results show no evidence of the J-Curve effect, but if the Marshall-Lerner Condition is met.
    Keywords: J-Curve, Marshall-Lerner Condition, trade balance, real exchange rate.
    JEL: F11 F14
    Date: 2016–05–05
  34. By: José Bardaji; Jean-Charles Bricongne; Benoît Campagne; Guillaume Gaulier
    Abstract: In France, the balance of trade has deteriorated almost continuously since the late 1990s to the early 2010s. Many studies have focused on losses in export market share. But how does the performance of French companies stand up on the domestic market? An examination of the macroeconomic data shows that the performance of companies in France has declined fairly sharply in exports, but that this decline has been rather smaller on the domestic market. At the firm level, a given company’s export performance and domestic market performance have a tendency, albeit slight, to move in opposite directions. This may be due to factors such as a deliberate company strategy to target a specific market or the presence of production constraints. However, our analysis shows that a positive demand shock in the domestic market in which the company is present, resulting in a rise in domestic sales, then leads to an increase in exports. This complementarity seems to be driven by small companies and could reflect the existence of liquidity constraints. Increased sales in one market could lessen these constraints, by facilitating funding for company development in the second market. Strong domestic demand during the pre-crisis period in France is therefore not an explanatory factor of losses in export market share.
    JEL: F10 F44 L20
    Date: 2016–02
  35. By: Daniel Rais
    Abstract: SECO Working Paper 3/2016
    Date: 2016–04–01
  36. By: Silvio Traverso
    Abstract: Despite the general consensus regarding the important role played by international migration in the development of Bangladesh, little has been done to quantitatively estimate its effects. Within the framework of Rubin's causal model, this paper contributes to the literature estimating the net impact of international migration on the welfare of the members of households with migration experience. By taking advantage of the non-parametric nature of matching estimators, the effect of migration is disaggregated on the basis of expenditure quartiles and length of migration period. Additionally, the estimated counterfactual outcomes of migrant households are used to build a transition matrix showing the effect of migration on social mobility. The effect of migration turns out to be positive and statistically significant, even though its magnitude is considerably affected by technical assumptions regarding household economies of scale. International migration appears to be a risky strategy which, if successful, leads to a substantial increase of the well being of migrant households' members. Finally, moving on to normative considerations, the paper argues that the resources deployed for pro-migration policies do not directly benefit the poorer sections of the population.
    Date: 2016
  37. By: Metaxas, Theodore; Kechagia, Polyxeni
    Abstract: International capital allocation influences has a social, political and economic impact on the trading countries. Thus, it has been investigated so as to determine the key factors of capital flows and their impact on the host country’s economy. The present essay involves a literature review of 100 empirical papers focusing on capital movement and in particular in Foreign Direct Investment (F.D.I.) inflows worldwide. The papers are discussed based on the statistical method applied, the sample chosen and the trends on the variables used. More recent empirical papers include larger samples of countries and the researchers don’t tend to focus on case studies. Furthermore, it is argued that the empirical studies involve countries of every geographical region despite the fact that most of them focus on the largest recipients of F.D.I., that is to say the Asian and the Latin American countries.
    Keywords: Foreign Direct Investment, Empirical Studies, Literature Review, Statistical Method
    JEL: F21 O47
    Date: 2016
  38. By: Yu, Liu; Meng, Bo; Hubacek, Klaus; Xue, Jinjun; Feng, Kuishuang; Gao, Yuning
    Abstract: Using an augmented Chinese input–output table in which information about firm ownership and type of traded goods are explicitly reported, we show that ignoring firm heterogeneity causes embodied CO2 emissions in Chinese exports to be overestimated by 20% at the national level, with huge differences at the sector level, for 2007. This is because different types of firm that are allocated to the same sector of the conventional Chinese input–output table vary greatly in terms of market share, production technology and carbon intensity. This overestimation of export-related carbon emissions would be even higher if it were not for the fact that 80% of CO2 emissions embodied in exports of foreign-owned firms are, in fact, emitted by Chinese-owned firms upstream of the supply chain. The main reason is that the largest CO2 emitter, the electricity sector located upstream in Chinese domestic supply chains, is strongly dominated by Chinese-owned firms with very high carbon intensity.
    Keywords: Environmental problems, Global warming, Input-output tables, Embodied CO2 emissions, Carbon intensity, Supply chains, Ownership, Processing trade
    JEL: C67 E01 F18 H23 F64
    Date: 2016–03
  39. By: Daniel Rais
    Abstract: SIEL CONFERENCE 2014 Regulatory Challenges in International Economic Law:Convergence or Divergence? Paper submitted to PANEL XII: Signed, Sealed and Delivered: Fragmentation orCoherence Between PIL and IEL after EC – Seals and other Recent WTO Cases
    Date: 2014–07–08
  40. By: Philippe Fargues (Ined)
    Abstract: Le nombre de migrants arrivés en Grèce et en Italie et de personnes ayant demandé l’asile en Allemagne a dépassé le million en 2015. Présentant une synthèse des statistiques disponibles, Philippe Fargues examine s’il s’agit d’une crise de migrants ou de réfugiés. Quels en ont été les facteurs déclencheurs ? Quelles sont les solutions pour en sortir ?
    Date: 2016
  41. By: Daniel Rais
    Abstract: Abstract We examine the choice of modes of delivery in services based on US data, including both cross-border exports and sales through foreign affiliates. We focus on characteristics of destination markets and how this impacts on mode choice. We find that market size, distance and policy all play a role in where firms establish, and in how many markets firms enter. The importance of sales through affiliates relative to total foreign sales also depends on factors like market size, geographic and economic distance and the policy regime in place. Precisely, how important these factors are depends on the sector in question.
    Date: 2015–10–26
  42. By: Dawid Jabkowski (Poznan University of Life Sciences); Ewa Stawicka (Poznan University of Life Sciences)
    Abstract: The European Union is an economic and politician union that currently comprises 28 member states. Turkey's accession to the EU may be a key factor leading to changes in trade system and socio-economic situation of the EU. The purpose of this article is to present the prospects of Turkey's accession to the EU. It explores the genesis and evolution of Turkey's accession negotiations to the EU. Furthermore, it examines the benefits and risks of the potential accession of Turkey to the EU. The research problem formulated in this article has been solved on the basis of the statistical data from Eurostat. The method of analysis used in this work is both descriptive and comparative. We analyzed the basic indicators of the macroeconomic situation of Turkey and the EU before and after the potential accession of Turkey to the EU, such as population, GDP, GDP per capita, inflation, unemployment and trade balance.
    Keywords: regional economic integration; Turkey; European Union; macroeconomic situation; benefits and dangers
    JEL: B22 F15 F50
    Date: 2016–05
  43. By: Antonio Estache; Caroline Philippe
    Abstract: This paper argues that the TTIP negotiators may be underestimating some of the risks associated with the treatment of public services. De facto opening the door to supranational regulation of key public services may be well intended to protect investors. But when the bargaining power of these investors operating in non-competitive markets (which is the case for most public services) becomes excessive as a result, the experience of developing countries in interactions with many of the same large players points to risks. It is likely that outcomes in terms of the usual policy criteria (efficiency, equity and fiscal viability) will not be as positive as promised in an environment in which regulation ends up weaker (because it is captured or less specialized). Ignoring these lessons and failing to internalize them in the design of negotiation is likely to cost Europe.
    Date: 2016–05
  44. By: Cozza, Claudio (University of Trieste); Perani, Giulio (ISTAT & Eurostat); Zanfei, Antonello (University of Urbino)
    Abstract: Using data on R&D investors active in Italy and controlling for various indicators of absorptive capacity and for the regional distribution of research activities, we show that multinationality is associated with a higher propensity to technical linkage creation. We also find that domestic owned multinationals are more inclined to R&D contracting out, while foreign multinationals are better at developing R&D cooperation with external parties. However, foreign multinationals are less prone than domestic companies to set up linkages with local counterparts. This suggests that while foreign multinationals generally possess advantages in terms of absorptive capacity and economies of common governance, they might as well face relative disadvantages in terms of experience of local contexts, inhibiting their propensity to set up on-site technical linkages.
    Keywords: Absorptive capacity; R&D; technical linkages; Multinationals
    JEL: F10 F23 O33
    Date: 2016–04–27

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