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on International Trade |
| By: | Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA), University of Indonesia); Olivier Cadot (University of Lausanne) |
| Abstract: | Trade facilitation should be viewed as a strategic issue rather than a technical one. While ASEAN has been successful in the phasing out of intra-regional tariffs, ASEAN's trade facilitation is not just about reducing cross-border transaction costs but also focusing on (i) rules of origin (RoOs), (ii) NTM (non-tariff measure) transparency, and (iii) NTM streamlining. The RoOs in the ASEAN Trade in Goods Agreement (ATIGA) have a relatively simple structure of which about 40 percent consists of RVC-40 or CTH. In spite of their apparent simplicity, ATIGA's RoOs seem to have substantial trade-inhibiting effects, with recent research putting their ad valorem equivalent at about 3.40 percent. In the case of NTMs, the costs imposed by NTMs on businesses are of three sorts: enforcement, sourcing, and process adaptation. The most important thing lies in the transparency of NTMs which rests on two pillars: accurate data, and open dissemination and dynamic disciplines. The underlying notion is that NTM streamlining should not be viewed as a trade-negotiation issue because NTMs are not pure trade policy instruments. Thus, what we propose is to take it back to the country level and promote the creation of an economic council with a mandate to review and improve key business-relevant regulations. |
| Keywords: | trade facilitation, rules of origin, non-tariff measures, trade in goods, ASEAN |
| JEL: | F10 F14 F15 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2016-20&r=int |
| By: | Matthieu Crozet; Julian Hinz |
| Abstract: | Economic sanctions are a frequent instrument of foreign policy. In a diplomatic conflict, they aim to elicit a change in the policies of foreign governments by damaging their economy. However, sanctions are not costless for the sending economy, where domestic firms involved in business with the target countries might incur collateral damages. This paper evaluates these costs in terms of export losses of the diplomatic crisis that started in 2014 between the Russian Federation and 37 countries, (including the United States, the EU, and Japan) over the Ukrainian conflict. We first gauge the global impact of the sanctions' regime using a structural gravity framework and quantify the trade losses in a general equilibrium counterfactual analysis. We estimate this loss at US\$60.2 billion from 2014 until mid-2015. Interestingly, we find that the bulk of the impact stems from products that are not directly targeted by Russian retaliations (taking the form of an embargo on imports of agricultural products). This result suggests that most of the losses are not attributable to the Russian retaliation but to Western sanctions. We then investigate the underlying mechanism at the firm level using French customs data. Results indicate that neither consumer boycotts nor perceived country risk can account for the decline in exports of products that are not targeted by the Russian embargo. Instead, the disruption of the provision of trade finance services is found to have played an important role. |
| Keywords: | International Trade;Diplomatic sanctions;Trade finance;Boycott |
| JEL: | F14 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2016-16&r=int |
| By: | Paola Conconi; Tania Voon |
| Abstract: | The EC – Seal Products dispute raises fundamental questions about the relationship between public morals and international trade. Can WTO members impose trade restrictions based on moral or ethical concerns? Under what conditions can these concerns trump existing trade liberalization commitments? The dispute was filed in 2009 by Canada and Norway against the EU, which in the same year had banned seal products from being imported and placed on its market. According to the EU, the policy was introduced in response to European moral outrage at the inhumane killing of seals. The EU seal regime included a series of exceptions. In particular, it allowed imports of seal products hunted by Inuit or other indigenous communities, as well as imports of seal products processed and re-exported by EU producers. This article discusses the Appellate Body’s ruling in EC – Seal Products and some of the key legal and economic issues raised by this dispute. |
| Keywords: | WTO trade disputes, public morals, animal welfare. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2015/70&r=int |
| By: | BELLINO, Antonella (University of Foggia - Department of Economics); CELI, Giuseppe (University of Foggia - Department of Economics) |
| Abstract: | This paper provides an exploration of the migration-trade nexus in the case of Italy over the period 2005-2010 by crossing the two dimensions of migration (immigration and emigration) and the two dimensions of intra-industry trade (vertical and horizontal). This empirical strategy turns out to be useful to improve interpretation of econometric results. In general, we find that both immigration and emigration are positively and significantly related to intra-industry trade. However, the magnitude and the statistical significance of migration’s impact on trade vary, depending on the type of trade flows considered (vertical or horizontal), the direction of migration (immigration or emigration) and the partner countries considered (OECD or non-OECD). In particular, we find that immigrants from non-OECD countries have a positive and significant impact both on “variety trade” and “quality trade”, immigrants from OECD countries affect significantly only “variety trade” and emigrants to non-OECD enhance only “variety trade” too. These results are largely consistent with predictions deriving from theoretical models of IIT and from the literature on migration-trade nexus. |
| Keywords: | International migration; Intra-industry trade; Economic integration; Human capital |
| JEL: | F12 F15 F22 J24 |
| Date: | 2016–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:sal:celpdp:0137&r=int |
| By: | Adil Khan Miankhel (Embassy of Pakistan) |
| Abstract: | Institutions are source of comparative advantage or disadvantage in international trade. Socio-economic and political constraints also matter for creating comparative advantage and affect the trade pattern of a country. These diverse ‘beyond the border’ and ‘behind the border’ constraints are often not fully captured in the literature on international trade and institutions. The existence of such institutional, socio-economic, and political constraints to Pakistani exports is empirically investigated in this paper through a cross-sectional analysis employing a trade Stochastic Frontier Gravity Model. Aggregate data for 2006-08 and 2009-11 show lower exports in the latter period. This is attributed to demand-suppressing effects emanating from the 2008 global financial crisis and supply-suppressing effects emanating from energy shortfalls and input constraints, due to floods, in Pakistan. The model estimation then demonstrates that behind the border constraints in Pakistan are statistically significant in explaining total exports during 2009-11. The estimation is also presented for four single-digit SIC categories of products for this period. Behind the border constraints are evident for SIC 0 (agriculture, forestry and fish products) and SIC 2 (manufactured products) that combined account for approximately 80 percent of Pakistan’s exports. The estimation results by country further demonstrate that behind the border constraints affect the pattern of trade through the non-realization of bilateral trade potential. In the post-financial crisis era, Pakistan needs to further develop its institutional capacity to promote competitive exports given the explicit and implicit beyond the border trade barriers it faces and work to remove political obstacles to regional trade. |
| JEL: | F13 O24 O19 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:25651&r=int |
| By: | Novignon, Jacob; Atakorah, Yaw Boateng |
| Abstract: | The linkages between international trade integration and economic performance has received significant attention from both policy makers and researchers. There seem to be consensus in the literature to suggest that improved trade openness corresponds to improved economic growth. A missing link in the literature is how trade openness affects specific sectors of the economy. Here we argue that trade openness has significant impact on population health and health financing. The study employed panel data for forty-two (42) Sub-Saharan African (SSA) countries over the period 1995-2013. Population health status was measured by total life expectancy at birth, infant mortality rate and under-five mortality rate. Three main estimation procedures were used; (i) Fixed effect (FE), (ii) Random Effect (RE) and (iii) the Generalized Method of Moments (GMM) models were employed in estimating the relationships. The results showed a positive and significant relationship between trade openness and life expectancy, negative and significant relationship between trade openness and infant mortality rate and negative relationship between trade openness and under-five mortality rate. A positive relationship between trade openness and health financing. The findings of the study support international trade integration across countries in SSA and emphasizes the need for countries to be conscious of gains from trade within sub-sectors of the economy. |
| Keywords: | International trade, health status, health financing, SSA |
| JEL: | E0 F1 I1 |
| Date: | 2016–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72258&r=int |
| 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 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:16/08&r=int |
| By: | Xing Yuqing (National Graduate Institute for Policy Studies) |
| Abstract: | This paper argues that global value chains (GVCs) have transformed bilateral trade relations into multilateral and value added approach is needed to accurately measure the contribution of trade to economic growth and bilateral trade balances. Under GVCs, the impact of exchange rates on bilateral trade balances have been weakened and technological innovations may not necessarily increase domestic employment. The challenges associated with the emergence of GVCs require an in-depth understanding of modern international trade, which in turn calls for new modes of thinking and new theories. For developing countries, focusing on specific segments of GVCs and upgrading industrial capacity along value chains could be an alternative path of industrialization. |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:16-07&r=int |
| By: | Maria V. Sokolova (IHEID, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | This paper documents the novel fact that Regional Trade Agreements (RTA) decrease bilateral trade imbalances as measured by conventional measure of the net export share in gross trade. While on average an RTA decreases bilateral trade imbalance by 7%, greater trade integration through a deeper RTA is associated with a reduction of up to 50% among the sample of over 160 countries since 1960. This implies, that the recent surge in net trade balances has appeared on behalf of the trade between countries that are not involved in RTA integration. The driving channel is the enhancement of cross-border activity and increase in the global value chain integration among RTA members. Overall, this paper implies that the levels of RTA integration should be accounted for in the assessment of aggregate trade balances as the share of GDP, as trade flows bounded by different level of RTA integration will have different reactions to the same shocks. Additionally, I show that RTAs made trade more balanced among its members, and that global increase in the global trade imbalances happened on the expense of the non-RTA trading partners. |
| Keywords: | trade balance, regional trade agreements, competitive depreciation, economic integration, terms-of-trade |
| JEL: | F10 F13 F14 F15 F40 F41 F45 |
| Date: | 2016–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp06-2016&r=int |
| By: | Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland) |
| Abstract: | This paper extends the literature on the implications of offshoring for labour markets by investigating its effect on the wages of different skill groups in a broad global context. The analysis draws on input-output data from the WIOD project, and in the panel analysed (13 manufacturing industries, 40 countries, 1995 – 2009) we capture up to 96% of the international trade in manufacturing inputs. Being particularly interested in the wage effects of offshoring to low wage countries (LWC), we employ precise LWC classifications (varying across industries and time) to decompose overall offshoring by source country. We employ a decomposition of the conventional offshoring measure in order to capture its pure international component, which is further instrumented using a gravity-based strategy. According to the estimation results, the negative impact of offshoring on wages mainly concerns low and medium skilled workers. However, in terms of magnitude, the downward pressure on domestic wages exhibited by offshoring to LWC is relatively small. LWC (Low wage countries) classifications employed in this paper are downloadable at: http://zie.pg.edu.pl/aparteka/publications [file LowWageCountries_classifications_Wolszcz akDerlacz_Parteka]. |
| Keywords: | wage, offshoring, input-output, low-wage countries |
| JEL: | F14 F16 F66 C67 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:36&r=int |
| By: | Yu Sheng (Crawford School of Public Policy) |
| Abstract: | This paper uses the GTAP Static model to predict the potential impact of economic growth in China on bilateral trade between China and Australia in 2025, under three different scenarios representing the business-as-usual, the successful reform and the stagnation cases respectively. The results show that exports from Australia to China will continue to increase in both absolute and relative terms, irrespective of which economic growth path China takes, partly due to the strong complementary relationship of production between the two countries. The results also indicate that education service exports will become a new engine of bilateral trade in addition to agricultural and mineral products. Furthermore, comparing the results obtained from the three scenarios shows how successful reform will bring more benefits to both China and Australia in trade, which provides useful insights for policy making to facilitate bilateral economic relationship. |
| JEL: | E17 F17 F43 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:25642&r=int |
| By: | Holger Breinlich; Anson Soderbery; Greg C. Wright |
| Abstract: | This paper investigates whether importing intermediate goods improves firm-level environmental performance in a developing country, using data from the Indonesian manufacturing sector. We build a simple theoretical model showing that trade integration of input markets entails energy efficiency improvements within importers relative to nonimporters. To empirically isolate the impact of firm participation in foreign intermediate input markets we use ‘nearest neighbour’ propensity score matching and difference-indifference techniques. Covering the period 1991-2005, we find evidence that becoming an importer of foreign intermediates boosts energy efficiency, implying beneficial effects for the environment. |
| Keywords: | Services Trade, Trade Liberalization, Import Competition |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:16/07&r=int |
| By: | Muhammad Ali (Friedrich Schiller University, Jena, Germany) |
| Abstract: | This paper contributes to the literature on determinants of export diversification by introducing related variety (RV) and unrelated variety (UV) in the analysis in addition to the traditional entropy based measure at three-digit SITC level, overall variety (OV). RV measures variety in cognitively related industries, while UV measures variety in industries that are unrelated to each other. Studies on RV and UV have shown that the dynamics of their relationship with economic growth and innovation may differ and one would expect that the determinants of RV and UV may also be different. Therefore, using data on manufacturing sector exports for 130 countries from 1996 to 2011, this paper analyzes the determinants of export diversification with primary focus on foreign direct investment as an external source of knowledge and a stimulus to entrepreneurship and human capital as a measure of productive capabilities. Considering the concern of endogeneity bias, estimations of the econometric models were performed using generalized method of moments. Findings show that the determinants of variety have different effects for different types of variety. The size of an economy and its trade openness significantly and positively affect all three types of diversification. Results also show that FDI negatively affects RV while there is no significant relationship with OV and UV. Moreover, interaction of human capital with FDI appears to be positive and significant for UV and RV while interaction of human capital with openness only appears to be significant and positive for RV showing the importance of knowledge through external sources in the process of diversification. |
| Keywords: | Export diversification, Related variety, Unrelated variety, Human Capital, Foreign direct investment, Generalized Method of Moments |
| JEL: | F14 F21 O33 |
| Date: | 2016–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-014&r=int |
| By: | Daniel Rais |
| Abstract: | Article by Wolfgang Alschner and Dmitriy Skougarevskiy in the Journal of World Investment and Trade 17 (2016) pp339-373: The Trans-Pacific Partnership (TPP) has been labelled a ‘new, high-standard trade agreement’. But just how ‘new’ and ‘high’ are the standards it sets? To answer that question we combine traditional legal analysis with computational text comparisons situating the TPP in the universe of international investment agreements (IIAs). We find that the TPP investment chapter offers few truly novel features — 81% of its text is taken from prior American treaties. Compared to the majority of IIAs, however, the TPP goes beyond existing practice: it sets high levels of investment protection, explicitly safeguards host state sovereignty and establishes a sophisticated investment arbitration architecture. Nevertheless, the TPP is unlikely to revolutionize the IIA universe. Its innovations are open to circumvention given that older treaties remain in force. |
| Date: | 2016–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:990&r=int |
| By: | Bernard Hoekman |
| Abstract: | Most governments have yet to agree to binding disciplines on government procurement regulation, whether in the WTO or a preferential trade agreement. Empirical research suggests that reciprocally-negotiated market access commitments have not been effective in inducing governments to buy more from foreign suppliers. Foreign sourcing by governments has been rising for most countries, however, independent of whether States have made international commitments to this effect. The stylized facts suggest a reconsideration of the design of international cooperation on procurement regulation, away from specific market access reciprocity in trade agreements, towards greater efforts to boost transparency and improve the efficacy and efficiency of procurement processes more generally. |
| Keywords: | Government procurement, regulation, trade agreements, WTO |
| JEL: | F13 H57 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2015/88&r=int |
| By: | Chad P. Bown; Jennifer A. |
| Abstract: | This paper provides a legal-economic assessment of issues arising in the Panel Report over the WTO’s India – Agricultural Products dispute, one of a growing list of disputes arising at the intersection of the WTO and domestic regulatory policy over human, animal or plant health. This dispute featured allegations that India’s import measures applied against avian influenza (AI) infected countries over poultry and related products were too restrictive, in light of the World Organisation for Animal Health’s (OIE’s) scientifically-motivated standards and guidelines. We rely on insights from a set of economic models of commercial poultry markets in the presence of negative externalities such as AI. We use such models to motivate critical tradeoffs arising at the intersection of government regulatory regimes designed to deal with AI, and how they fit alongside trade agreements such as the WTO and standard-setting bodies such as the OIE, which combine to impose constraints on regulatory and trade policy. While we find the institutional design of the OIE to be well-motivated and we are in broad agreement with the overall thrust of the Panel Report in the dispute, we also highlight a number of subtle issues which pose long-term challenges for the multilateral trading system’s ability to balance trade rules with public health concerns. |
| Keywords: | WTO, dispute settlement, bird flu, OIE, health regulation, avian influenza |
| JEL: | F13 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2015/71&r=int |
| By: | Khan, Bilal M.; Xia, Junjie |
| Abstract: | This paper analyzes the link between export destination, skill utilization and skill premium. We develop the mechanism behind these links: the difference in quality valuation of the product across exporting destinations and the distribution of level of skill among the skilled workers in the labor market. Theory suggest that the consumers in the high income countries value the quality of the same product more than their counterparts in middle or low income countries. To produce a higher quality product, a firm needs not only more skilled workers but also higher quality skilled workers. To attract and keep the higher quality worker, firm needs to incentivize her by providing higher wage as compared to the firms that would be exporting to middle or low income countries. We test this theory using cross-section of more than 160,000 single product Chinese Manufacturing firms survey data, of which nearly 22,000 are exporting to more than 200 countries across the world. We find that firms exporting to high income countries pay higher average wages, hire more skilled workers, defined by education level, and pay higher skill premium as compared to firms exporting to middle or low income countries or selling domestically. Similar to the recent literature, we also didn’t find the impact of exporting per se on the proportion of skilled workers or the skill premium in the firm. |
| Keywords: | China, Manufacturing firms, Exports, Export destination, labor productivity, wages, Firm heterogeneity, Trade |
| JEL: | F1 F14 F16 J24 L60 O14 O19 |
| Date: | 2016–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72408&r=int |
| By: | Stefania Borelli (Dipartimento di Scienze Sociali ed Economiche, Sapienza-Università di Roma); Giuseppe De Arcangelis (Dipartimento di Scienze Sociali ed Economiche, Sapienza-Università di Roma) |
| Abstract: | This paper assesses the effect of the immigration on the production structure in a selection of European countries in 2001-2009 with a task-based approach. The infl ow of immigrants represents an increase in the relative supply of manual-physical (or simple) tasks, hence favoring simple-task intensive sectors. We use a new OECD dataset, PIAAC, to calculate the index of simple-task intensity at the country-industry level. The analysis con rms that the increase in migration stocks caused a positive impact on the value added of sectors that use more intensively simple tasks. These effects are more intense when considering countries as Italy and Spain characterized by a recent, rapid and intense in flow of migrants. Endogeneity issues are discussed and instruments based on a gravity approach are used in estimation. |
| Keywords: | Rybczynski Effect, International Migration, PIAAC, Gravity Equation. |
| JEL: | F22 C25 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:4/16&r=int |
| By: | Bajo Rubio, Oscar; Berke, Burcu; Esteve García, Vicente |
| Abstract: | According to the conventional wisdom, "peripheral" Southern European countries members of the euro area (Greece, Italy, Portugal, and Spain) suffer from a problem of competitiveness. Since devaluation is not possible because they are part of the euro, the adjustment should come through decreasing wages and prices in these countries, which, by improving the trade balance, should lead to recover the previous levels of employment and growth. In this paper, the authors estimate trade balance equations for the Southern European countries, both for total trade and for the trade performed with the European Union; and taking three alternative measures of the real exchange rate, i.e., based on consumption price indices, export prices and unit labour costs, respectively. Their main conclusion is that demand seems to be more relevant than relative prices when explaining the evolution of the trade balance. |
| Keywords: | trade balance,real exchange rate,competitiveness |
| JEL: | F31 F41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201630&r=int |
| By: | Andrea Ascani; Riccardo Crescenzi; Simona Iammarino |
| Abstract: | This paper aims to investigate the economic integration between the European Union and its neighbouring countries by exploring the location drivers of Italian Multinational Enterprises (MNEs) in 33 destination countries including the New Member States of the European Union (NMs) and the European Neighbouring countries (NCs). The paper compares market- and efficiency-seeking motivations with asset-seeking strategies. The analysis is based on a mixed-method approach. The quantitative analysis assess the location determinants of 518 Italian MNEs that invested in the area in the years 2003-2008, while qualitative information on strategic location decisions is collected by means of in-depth interviews with executives in two of the largest Italian MNEs active in the region. Market-seeking considerations are still predominant drivers of location decisions in EU Neighbouring Countries together with resource-seeking motivations. However, different MNEs develop diversified strategies to increase their access to these areas which are of increasing interest for global investors. |
| Keywords: | European Union; European Neighbourhood Policy (ENP); multinationals; FDI |
| JEL: | F23 P33 R30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64862&r=int |
| By: | Mouna Gammoudi (Université de Reims Champagne Ardenne- F); Mondher Cherif (Université de Reims Champagne Ardenne- F); Simplice Asongu (Yaoundé/Cameroon) |
| Abstract: | This paper examines the relationship between Foreign Direct Investment (FDI) and per capita Gross Domestic Product (GDP) in the Middle East and North Africa (MENA) region for the period 1985-2009. The empirical evidence is based on an endoeneity-robust Generalised Method of Moments. Results show that the effect of FDI on per capita income in the Gulf Cooperation Council (GCC) countries is positive but negative in Non-GCC countries. Results also reveal that in contrast to the GCC countries, the financial openness policy in the Non-GCC countries have reduced the benefits of FDI on growth, this finding is explained by the fact that most of the Non-GCC countries that have engaged in the process of financial reforms have poor quality of institutions. These results are confirmed with both annual data and five year average data. |
| Keywords: | FDI, growth, GMM, financial openness, Institutions |
| JEL: | C52 F21 F23 O40 P37 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:16/015&r=int |
| By: | Maurice Schiff |
| Abstract: | Immigrants or their children founded over 40% of the Fortune 500 US companies. This suggests that ‘ability drain’ is economically significant. While brain drain associated with migration also induces a brain gain, this cannot occur with ability drain. This paper examines migration’s impact on ability, education, and productive human capital or ‘skill’ (which includes both ability and education) for source country residents and migrants, under three different regimes: (i) a points system that accounts for educational attainment; (ii) a ‘vetting’ system that accounts for both ability and education or skill (e.g., the US H1-B visa program); and (iii) a points system that combines the points and vetting systems (as in Canada since 2015). It finds that migration reduces (raises) source country residents’ (migrants’) average ability and has an ambiguous (positive) impact on their average education and skill, with a net skill drain more likely than a net brain drain. These effects increase the more unequal is ability, i.e., the higher the variance in ability. The average ability drain for highly educated US immigrants from 42 developing source countries is 84 percent of the brain drain, a ratio that increases with source countries’ income and is greater than one for most Latin American and Caribbean countries. Heterogeneity in ability is the ultimate cause of both ability and brain drain (as they are equal to zero under homogeneous ability). Policy implications are provided. |
| Keywords: | Migration, points system, vetting system, ability drain, brain drain |
| JEL: | F22 J24 J61 O15 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2016/22&r=int |
| By: | Marco Di Cintio (Department of Economics, Management, Mathematics and Statistics, University of Salento); Sucharita Ghosh (Department of Economics, The University of Akron); Emanuele Grassi (Department of Economics, Management, Mathematics and Statistics, University of Salento) |
| Abstract: | This paper studies firms’ decisions to export and invest in R&D and their effects on employment growth and labor flows for a sample of Italian SMEs operating in the manufacturing industry. After accounting for the under-reporting of R&D in SMEs, our quantile regressions reveal that (i) R&D is associated with higher employment growth rates, higher hiring rates and lower separation rates; (ii) R&D-induced exports are negatively related to employment growth and accessions and positively related to separations; and (iii) pure exports are not a driver of employment growth and labor flows. |
| Keywords: | Exports, R&D, Firm Growth, Quantile Regression |
| JEL: | J63 M51 O31 F14 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.44&r=int |
| By: | Daqing Yao; John Whalley |
| Abstract: | This paper argues that the pursuit of special and differential treatments (SDT) by developing countries has hampered the liberalization of global service trade, which is one of the causes of the only slowing improving of service efficiency globally. We use value added per worker as a proxy of production efficiency, and show the growth rate of service efficiency is much lower than agriculture and industry. Despite the progress in world commodity market integration in past half century, the world service market remains highly segmented, which can be seen clearly from the World Bank’s STRD index and CHB index. We argue that the SDT negotiation contributes to the service market segment, and give three reasons on why it is difficult for developing countries to be granted SDT in service. In the last part we present some suggestions on trade negotiations in the future. |
| JEL: | F13 F42 F55 F61 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22362&r=int |
| By: | Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development, Sopot); Dorota Ciolek (University of Gdansk, Faculty of Management, Department of Econometrics, Sopot, Poland; Institute for Development, Sopot, Poland;) |
| Abstract: | A lot of recent empirical research points to the superior performance of exporting firms in comparison to non-exporters. Exporters on average are found to be larger, more productive, more capital and skilled-intensive than non-exporters At the same time, innovation and exporting seem to be inextricably linked at firm-level. Apart from several recent studies, the literature on it for Poland is scarce. This paper analyses the relationship between innovation behaviour, declared innovation strategy and internationalization in a panel of firms from Poland from an extensive survey conducted by the Institute for Development. The results support the idea that the superior performance of the exporters is linked to a large extent to their superior innovation performance. Exporters prove to be more focused on innovations, are more aware of the need to implement changes, and are better prepared to introduce them in reality. They are more probable to be creative and are more likely to behave in a more strategic manner assuming the position of a market leader. We positively identify critical linkages between the declared innovation strategy and export states of Polish companies. Utilizing the classification of Hobday, Rush & Bessant (2004) and controlling for the significance of innovation (firm or market) level, we show that innovatively passive firms have, ceteris paribus, a significantly lower probability of obtaining exporter status. The introduction of innovations at ad hoc manner has a positive however statistically insignificant effect. Only permanent innovators or creative firms enjoy a clear and robust increase in their exporting probability potential. It simply pays off to be innovative. At the same time, our results support the postulates by Altomonte et al. (2013), on the close connection between innovation and internationalization extents. |
| Keywords: | Innovation, Innovation strategy; Internationalization; Trade; Firms survey; Logit modelling |
| JEL: | F14 C83 C21 D22 L25 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1601&r=int |
| By: | Maria V. Sokolova (IHEID, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | This paper shows that a regional bias resulting from trade integration alters the transmission of a country’s monetary policy by shifting the burden of the exchange rate adjustment towards the less integrated trading partners. I first develop a simple model which illustrates how a concentration of trade flows among regional trading partners affects the sensitivity of the trade balance to the terms-of-trade. In particular, the trade balance becomes less sensitive to the terms-of-trade vis-a-vis regional partners and more sensitive to the terms-of-trade vis-a-vis the other country. I then test the implication of the model using a panel of 133 countries between 1985 - 2010 that includes information on Regional Trade Agreements (RTA). I find that movements in the terms-of-trade vis-a-vis non-RTA members affect a country’s trade balance, while movements vis-a-vis RTA partners do not. |
| Keywords: | trade balance, regional trade agreements, competitive depreciation, economic integration, terms-of-trade |
| JEL: | F10 F13 F14 F15 F40 F41 F45 |
| Date: | 2016–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp05-2016&r=int |
| By: | Natalia Zugravu-Soilita (CEMOTEV, Université de Versailles Saint-Quentin-en-Yvelines) |
| Abstract: | We investigate the causal effects of trade intensity in environmental goods (EGs) on air and water pollution by treating trade, environmental policy and income as endogenous. We estimate a system of reduced-form, simultaneous equations on extensive data, from 1995 to 2003, for transition economies that include Central and Eastern Europe and the Commonwealth of Independent States. Our empirical results suggest that although trade intensity in EGs (pooled list) reduces CO? emissions mainly through an indirect income effect, it increases water pollution because the income-induced effect does not offset the direct harmful scale-composition effect. No significant effect is found for SO2 emissions with respect to the list of aggregated EGs. In addition to diverging effects across pollutants, we show that results are sensitive to EGs’ classification: e.g., cleaner technologies and products, end-of-pipe products, environmentally preferable products, etc. For instance, a double profit—environmental and economic—is found only for “cleaner technologies and products” in the models explaining greenhouse gases emissions. Interesting findings are discussed for imports and exports of various classifications of EGs. Overall, we cannot support global and uniform trade liberalization for EGs in a sustainable development perspective. Regional or bilateral trade agreements taking into account the states’ priorities could act as building blocks towards a global, sequentially achieved liberalization of EGs. |
| Keywords: | trade liberalization, environmental goods, environmental policy, pollution, transition countries |
| JEL: | F13 F14 F18 Q56 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2016.16&r=int |
| By: | Etzo, Ivan; Massidda, Carla; Piras, Romano; Mattana, Paolo |
| Abstract: | This paper studies how immigrants impact on Italian economy. The issue is addressed following the channel output decomposition approach by means of which the effect of immigration is measured with respect to per capita value added and its components. The investigation is carried out at sector level during the 2008–2011 time period. The results show that the main channel through which migration impacts on value added varies on sectoral basis. While at aggregate level, in Manufacturing and in Other Services the impact goes mainly through capital intensity, in the Construction and in the Commerce sectors the principal channel is via total factor productivity. |
| Keywords: | channel output decomposition approach, immigrants. |
| JEL: | F22 F62 J61 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72300&r=int |
| By: | Weisbach, David (The University of Chicago Law School); Kortum, Sam |
| Abstract: | We consider the economics and the design of border adjustments (BAs) under a carbon tax. BAs are taxes on imports and rebates on exports on the emissions from the production of a good. They are thought to be a method of reducing inefficiencies from a unilateral carbon price, such as shifts in the location of production, known as leakage. After examining the basic economics of BAs, we examine three design issues: which goods BAs should apply to, which emissions from the production of those goods should be taxed, and from and to which countries BAs should apply. We conclude that BAs will impose high administrative costs and need strong welfare justifications. |
| Keywords: | carbon taxes, leakage, border adjustments |
| Date: | 2016–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-16-09&r=int |
| By: | Kechagia, Polyxeni; Metaxas, Theodore |
| Abstract: | The majority of the Latin American countries proceeded to political, financial and social reforms so as to improve their attractiveness and to absorb more foreign capitals in order to achieve economic growth. Among the developing countries of the region, Peru managed to attract significant amounts of foreign direct investment mostly because of the abundance of natural resources. Nevertheless, Peru did not manage to become the top foreign capitals destination among the Latin American countries for several reasons. It is observed that the foreign investors’ dominant policy in FDI, the fact that the majority of the infrastructure realized in urban regions, the investment conditions, the external debt, the private sector and the ineffective use of natural resources held back the country’s attractiveness to foreign investors. |
| Keywords: | Peru, Latin America, Foreign Direct Investment, foreign capital |
| JEL: | F21 O16 O54 R11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72399&r=int |
| By: | Mercedes Campi; Marco Duenas; Matteo Barigozzi; Giorgio Fagiolo |
| Abstract: | This paper analyses whether the strengthening of intellectual property rights (IPRs) systems affects decisions of cross-border mergers and acquisitions (M&As), and whether their influence is different for developed and developing countries and across industrial sectors. We estimate an extended gravity model to study bilateral flows of M&As using data for the post-TRIPS period (1995-2010) and two different indexes that measure the strength of IPRs systems at the country level. We find that IPRs influence decisions of cross-border M&As and facilitate the creation of investment linkages. However, we detect a heterogeneous impact of IPRs on M&As depending on specificities of countries and sectors. |
| Keywords: | Intellectual Property Rights; Mergers and Acquisitions; Technological Intensity; Gravity Model |
| Date: | 2016–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/28&r=int |
| By: | Adusei Poku, Eugene; Broni-Pinkrah, Samuel; Effah Nyamekye, Gabriel |
| Abstract: | The effect of income on service export have been modelled and assessed in a trivariate model using time series annual data for Ghana for the period 2005-2013. The analysis is based on ordinary least square (OLS) method of regression. The results seem to suggest that income is positively associated with service export. The findings support theories on income and trade. The implication of the findings is that income is a policy variable to influence service trade. Future study should use larger sample size to ensure there is more external validity of the findings. Causal studies should be considered in future studies. |
| Keywords: | Service Trade, Technology, Income |
| JEL: | F10 F11 F14 F43 |
| Date: | 2016–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72312&r=int |
| By: | Anda David; Jean-Noël Senne |
| Abstract: | This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper was presented and discussed at the OECD Working Party on Migration in June 2015. The paper examines immigration to, and emigration from, the European Union, and compares them with migrant inflows and outflows to other OECD destinations. It investigates how the migrants are distributed in terms of gender, age, education and labour force status, depending on their country of origin as well as of destination. Drawing upon the Database on Immigrants in the OECD countries (DIOC), changes in migration rates and stock are analysed over time, focusing on whether the EU is facing a net gain or loss of skills. |
| JEL: | F22 J11 N34 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:184-en&r=int |