nep-int New Economics Papers
on International Trade
Issue of 2016‒07‒30
29 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trade Policy Options of Ukraine: East or West By Irena Mikolajun; Richard Paap; Jean-Marie Viaene; Olga Zelenko
  2. Imports, supply chains, and firm productivity By Carol Newman; John Rand; Finn Tarp
  3. Distance, Globalization, and International Trade By Borchert, Ingo; Yotov, Yoto
  4. Hidden Protectionism? Evidence from Non-tariff Barriers to Trade in the United States By Grundke, Robert; Moser, Christoph
  5. Spatial structure and economic network formation of manufacturing exports in Russia By Kuznetsova Maria
  6. Institutional proximity and the size and geography of FDI spillovers: do European firms generate more favourable productivity spillovers in the EU neighbourhood? By Vassilis Monastiriotis
  7. Export characteristics and output volatility: comparative firm-level evidence for CEE countries By Jaanika Meriküll; UrÅ¡ka ÄŒede; Bogdan Chiriacescu; Peter Harasztosi; Tibor Lalinsky
  8. Economic Growth in China and Its Potential Impact on Australia-China Bilateral Trade By Yu Sheng
  9. International Trade and Labor Market Discrimination By Richard Chisik; Julian Emami Namini
  10. General Equilibrium Trade Policy Analysis with Structural Gravity By Larch, Mario; Yotov, Yoto
  11. Reducing trade costs in LDCs: The role of Aid for Trade By Lanz, Rainer; Roberts, Michael; Taal, Sainabou
  12. Has the multilateral Hong Kong Ministerial decision on duty free quota free market access provided a breakthrough in the Least developed countries' export performance? By Gnangnon, Sèna Kimm; Priyadarshi, Shishir
  13. Estimating Trade Policy Effects with Structural Gravity By Piermartini, Roberta; Yotov, Yoto
  14. Lewis revisited : tropical polities competing on the world market 1830-1938 By Tena Junguito, Antonio; Federico, Giovanni
  15. Estimating Income and Price Elasticity of Turkish Exports with Heterogeneous Panel Time-Series Methods By Ihsan Bozok; Bahar Sen Dogan; Caglar Yunculer
  16. Selective Immigration Policy and Its Impacts on Natives: A General Equilibrium Analysis By Serife Genc Ileri
  17. Long-Run Dynamic Relationship between FDI and Domestic Investment in GCC Countries By Hassan B. Ghassan; Hassan R. Alhajhoj
  18. Long Run Relationship between IFDI and Domestic Investment in GCC Countries By Ghassan, Hassan B.; Alhajhoj, Hassan R.
  19. French Textile Specialisation in Long Run Perspective (1836-1938) : Trade Policy as Industrial Policy By Stéphane BECUWE; Bertrand BLANCHETON
  20. The Effect of BRICS Trade Relations on South Africa’s Growth By Adrino Mazenda
  21. A north-south model of trade with search unemployment By Stepanok, Ignat
  22. Supply chain finance and SMEs: Evidence from international factoring data By Auboin, Marc; Smythe, Harry; Teh, Robert
  23. Market shares in manufacturing value-added: is the picture different? By Alberto Felettigh; Giacomo Oddo
  24. A survey of investment provisions in regional trade agreements By Chornyi, Vasyl; Nerushay, Marianna; Crawford, Jo-Ann
  25. Priorities for completing the European Union's Single Market By Jan Stráský
  26. Land grabbing and ethnic conflict By Krieger, Tim; Meierrieks, Daniel
  27. Endogenizing Total Factor Productivity: The Foreign Direct Investment channel in the case of Bulgaria (2004-2013) By Pesheva, Milena; Vasilev, Aleksandar
  28. Adjusting the external adjustment: cyclical factors and the Italian current account By Silvia Fabiani; Stefano Federico; Alberto Felettigh

  1. By: Irena Mikolajun (Erasmus University Rotterdam, the Netherlands); Richard Paap (Erasmus University Rotterdam, the Netherlands); Jean-Marie Viaene (Erasmus University Rotterdam, the Netherlands); Olga Zelenko (Argenta Spaarbank, the Netherlands)
    Abstract: The dissolution of the Soviet Union in 1991 has led to the independence of fifteen new states. Twelve of these, including Ukraine, joined the Commonwealth of Independent States (CIS) whose goal was to form a common economic space with free movement of goods, labor and capital. Twenty five years later, CIS countries still face important trade policy choices, the implementation of which is conditional on the quality of governance and infrastructure. The evaluation of these policy choices gains therefore considerable importance. Using an unbalanced panel data set of bilateral export flows among 159 economies, we estimate the gravity model of trade using alternative estimation approaches that account for zeros in trade: Heckman, Poisson pseudo-maximum likelihood and Martin-Pham Tobit. Our empirical results show robust outcomes and advocate importance of WTO membership, governance and effective distance (corrected for infrastructure). Using scenario analyses we assess counterfactuals for Ukraine and find, for example, that improved infrastructure would on average lead to a 22% increase in Ukrainian exports while improved governance would, ceteris paribus, almost double its trade. Most of these changes originate from the intensive margin of trade.
    Keywords: extensive/intensive margins; governance; gravity model; infrastructure; regional trade agreements; zero trade
    JEL: C23 F13 F14 F17 F31 F33 O43
    Date: 2016–07–28
  2. By: Carol Newman; John Rand; Finn Tarp
    Abstract: This paper explores the relationship between imports and firm productivity, focusing on imported intermediates. Using firm-level data on over 20,000 manufacturing firms in Viet Nam, we find evidence for competition-induced productivity gains from trade. We show that gains in intermediate sectors spill-over to downstream sectors such that firms using more inputs from import-intensive sectors experience higher productivity gains. The evidence indicates that the main source of spill-over is better quality, domestically produced inputs. Ignoring the gains from trade through this mechanism may significantly underestimate the impact of trade on productivity.
    Keywords: imports, supply chains, productivity, Viet NamCreation-Date: 2016
  3. By: Borchert, Ingo (University of Sussex); Yotov, Yoto (Drexel University)
    Abstract: We offer a robust solution to the distance puzzle in international trade within the structural gravity framework. Then we obtain country-specific estimates of the effects of distance on trade. We find that the effects of globalization on manufacturing trade over the period 1986-2006 are non-monotonic across country income groups. The biggest winners from globalization are countries in the middle of the world income distribution. Advanced economies in our sample have enjoyed gains too; however, according to our estimates, low income countries have not nearly benefitted from globalization as much as middle income countries. The estimated country-specific changes in distance effects are correlated systematically with variables commonly identified as globalization forces.
    Keywords: Distance Puzzle; Missing Globalization; Structural Gravity; Poor Countries
    JEL: F13 F14 F16
    Date: 2016–07–11
  4. By: Grundke, Robert (University of Munich); Moser, Christoph (University of Salzburg)
    Abstract: Can the enforcement of product standards be protectionism in disguise? This paper estimates the costs of non-compliance with U.S. product standards, using a new database on U.S. import refusals from 2002 to 2014. We find that import refusals decrease exports to the United States. This trade reducing effect is driven by developing countries and by refusals without any product sample analysis, in particular during the Subprime Crisis and its aftermath. We also provide evidence that given product standards have been enforced more strictly during the crisis. These results are consistent with the existence of counter-cyclical, hidden protectionism due to non-tariff barriers to trade in the United States.
    Keywords: Hidden protectionism; international trade; developing countries; import refusals; regulatory costs; disaggregated; United States
    JEL: F13 F14 F63 O24
    Date: 2016–05–23
  5. By: Kuznetsova Maria
    Abstract: We study the agglomeration effect of exporters on decision of a firm to start exporting and volumes of trade. The unique database of Russian exporters in manufacturing sector for the eight-years period was constructed. It enables us to examine the nature and channels of export spillovers along the product and destination dimensions. At first, we provide the analysis using the existing empirical strategies. Our findings support the previous results, that export spillovers are destination-specific and affect both margins of trade. On the top of that, the large data sample and the usage of multiple fixed effects, that absorb time-variant and time-invariant unobserved characteristics, allowed us to achieve better identification strategy of the export spillover effect. It acts through the narrow group of firms that export the same product to the same destination as exporters nearby. Moreover, we tend to follow network view of international trade (Rauch 1999). The export spillover effect is positive for differentiated goods and negative for homogeneous goods. The presence of other exporters nearby to contiguous or linked country affects positively decision of a firm to export the same product to the same country.
    JEL: F14 R12
    Date: 2016–07–04
  6. By: Vassilis Monastiriotis
    Abstract: The EU association framework provides European businesses with an entry advantage into the associated countries by facilitating production links and encouraging institutional convergence. It is believed that this has multiple beneficial effects for the associated countries, including ones related to productivity spillovers accruing to domestic firms. However, no empirical evidence exists to show that the presence of European firms produces larger productivity spillovers in recipient economies compared to firms from other world regions. We examine this question using firm-level data covering 28 transition countries over the period 2002-2009. We estimate the intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), by origin of investor (EU15 versus non-EU15), across geographical scales (national versus regional) and for different types of locations (capital-city regions versus the rest). Our results suggest that investments of EU origin play a distinctive role, helping raise domestic productivity in the associated countries unlike investments from outside the EU. However, this process operates in a spatially selective manner, potentially enhancing regional disparities and spatial imbalances. This assigns a particular responsibility for EU policy to devise interventions that will help redress these problems within its existing association framework.
    Keywords: EU neighbourhood; FDI spillovers; institutional proximity; regional disparities
    JEL: R14 J01
    Date: 2016–06–24
  7. By: Jaanika Meriküll; UrÅ¡ka ÄŒede; Bogdan Chiriacescu; Peter Harasztosi; Tibor Lalinsky
    Abstract: The literature shows that openness to trade improves longterm growth but also that it may increase exposure to high output volatility. In this vein, our paper investigates whether exporting and export diversification at the firm level have an effect on the output volatility of firms. We use large representative firm-level databases from Estonia, Hungary, Romania, Slovakia and Slovenia over the last boom-bust cycle in 2004–2012. The results confirm that exporting is related to higher volatility at the firm level. There is also evidence that this effect increased during the Great Recession due to the large negative shocks in export markets. In contrast to the literature and empirical findings for large or advanced countries we do not find a statistically significant and consistent mitigating effect from export diversification in the Central and Eastern European countries. In addition, exporting more products or serving more markets does not necessarily result in higher stability of firm sales.
    Keywords: export diversification, export share, volatility of sales, business cycle, Central and Eastern Europe, CEE
    JEL: F14 F43 O57
    Date: 2016–07–12
  8. 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: 2016–07
  9. By: Richard Chisik (Ryerson University, Toronto, Canada); Julian Emami Namini (Erasmus University Rotterdam, the Netherlands)
    Abstract: We embed a competitive search model with labor market discrimination, or nepotism, into a two-sector, two-country framework in order to analyze how labor market discrimination impacts the pattern of international trade and also how trade trade affects discrimination. Discrimination, or nepotism, reduces the matching probability and output in the skilled-labor intensive differentiated-product sector so that the country with more discriminatory firms has a comparative advantage in the simple sector. As countries alter their production mix in accordance with their comparative advantage, trade liberalization can then reinforce the negative effect of discrimination on development in the more discriminatory country and reduce its effect in the country with fewer discriminatory firms. Similarly, the profit difference between non-discriminatory and discriminatory firms increases in the less discriminatory country and shrinks in the more discriminatory one. In this way trade can further reduce discrimination in a country where it is less prevalent and increase it where it is more firmly entrenched.
    Keywords: Discrimination; Nepotism; International Trade; Competitive Search
    JEL: F16 F66 J71
    Date: 2016–07–28
  10. By: Larch, Mario (University of Bayreuth); Yotov, Yoto (Drexel University)
    Abstract: The objective of this manuscript is to serve as a practical guide for evaluation of the general equilibrium (GE) effects of trade policy using the structural gravity model. We try to achieve this objective in four steps. First, we focus on the original Armington-CES gravity model, as a representative framework for a large class of GE models, to offer a deep analysis of the structural relationships underlying the general equilibrium gravity system, and how they can be exploited to make trade policy inferences. Second, we present and discuss a series of indexes that can be used to summarize the GE effects of trade policy. Third, we summarize the standard procedures to perform counterfactual analysis with the gravity model, and we outline recent methods to obtain theory-consistent GE effects of trade policy with a simple estimation procedure that can be performed in any statistical software package capable of estimating a poisson model (e.g.\ Stata). Finally, we demonstrate how gravity can be integrated with a broader class of general equilibrium models by nesting the Armington-CES model within a dynamic production superstructure with capital accumulation.
    Keywords: Structural Gravity; Trade Policy; General Equilibrium Analysis
    JEL: F13 F14 F16
    Date: 2016–07–11
  11. By: Lanz, Rainer; Roberts, Michael; Taal, Sainabou
    Abstract: This study analyses the role of Aid for Trade in reducing trade costs in least developed countries (LDCs). The analysis builds on questionnaires and case stories submitted as part of the Aid-for-Trade monitoring and evaluation exercise for the Fifth Global Review of Aid for Trade. Trade costs are high in LDCs and constitute a major impediment to their participation in international trade. The most important sources of trade costs in LDCs are inadequate transport infrastructure, cumbersome border procedures and compliance with non-tariff measures for merchandise exports. In the case of LDC services exports, major drivers of trade costs include ICT networks, poor regulation, low skill levels, the recognition of professional qualifications and restrictions on the movement of natural persons. LDCs are well aware of the issue of high trade costs, which is addressed by more than 90% of LDCs in their national strategies. Trade facilitation is the top Aid-for-Trade priority for LDCs, which is also reflected in increasing Aid-for-Trade flows. The analysis of questionnaires, case stories, diagnostic trade integration studies and existing econometric work illustrates the important role played by Aid-for-Trade interventions in lowering trade costs in LDCs.
    Keywords: trade costs,aid for trade,trade facilitation,least developed countries
    JEL: F13 F35 F63
    Date: 2016
  12. By: Gnangnon, Sèna Kimm; Priyadarshi, Shishir
    Abstract: This paper assesses the impact of the 2005 multilateral Hong Kong Ministerial decision on duty free quota free (DFQF) market access for products originating in Least developed countries (LDCs) on the latter's export performance. The analysis is conducted over a sample of 41 LDCs, with data spanning the period 1998-2013. The empirical analysis examines both the average effect and the short term/medium term effect. Results indicate that on average, this multilateral decision has exerted a positive effect on LDCs' performance on merchandise exports, with this average positive effect being solely driven by a positive effect on LDCs' export performance on primary products; the average effect on manufacturing exports has been statistically nil. In the short and medium term, this decision has exerted a positive effect on LDCs' merchandise export performance, as well as on the components of the latter, namely both primary product exports and manufacturing exports. However, the positive effect on primary product exports appears to be far higher than that on manufacturing exports. These findings have important policy implications regarding reflections on the way LDCs could utilize their policy flexibilities in the WTO Agreements to diversify their exports away from the primary sector and toward manufacturing and/or services sector.
    Keywords: Multilateral Hong Kong Ministerial Decision on DFQF,Export Performance,Least Developed Countries
    JEL: F13 F14 F15 F40
    Date: 2016
  13. By: Piermartini, Roberta (World Trade Organization); Yotov, Yoto (Drexel University)
    Abstract: The objective of this manuscript is to serve as a practical guide for estimations with the structural gravity model. After a brief review of the theoretical foundations, we summarize the main challenges with gravity estimations and we review the solutions to address those challenges. Then, we integrate the latest developments in the empirical gravity literature and we offer six recommendations to obtain reliable partial equilibrium estimates of the effects of bilateral and non-discriminatory trade policies within the same comprehensive, and theoretically-consistent econometric specification. Our recommendations apply equally to analyses with aggregate and disaggregated data. Interpretation, consistent aggregation methods, and data challenges and sources for gravity estimations are discussed as well. Empirical exercises demonstrate the usefulness, validity, and applicability of our methods.
    Keywords: Structural Gravity; Trade Policy; Estimation; Partial Equilibrium Analysis
    JEL: F13 F14 F16
    Date: 2016–07–14
  14. By: Tena Junguito, Antonio; Federico, Giovanni
    Abstract: Since the seminal work by W.A. Lewis, exports of primary products have been deemed the main or sole source of growth in tropical countries before the Great Depression. This conventional wisdom, however, relies on very limited evidence. This paper analyses the growth of exports with a constant market share analysis for 84 tropical polities. Exports grew a lot, but less than total trade, while relative prices of tropical products remained roughly constant. We thus tentatively infer that the decline in the tropical shares on world trade reflects an insufficient demand for tropical products. Asia mastered well these headwinds throughout the whole period, while African polities blossomed after World War One. The loser was (South) America, and most notably the Caribbean former slave colonies especially before 1870.
    Keywords: Twentieth Century; Nineteenth Century; World Trade; Tropical trade; International Trade
    JEL: N10 F14
    Date: 2016–07–01
  15. By: Ihsan Bozok; Bahar Sen Dogan; Caglar Yunculer
    Abstract: In this paper, we employ panel time-series methods Dynamic OLS, Mean Group and Common Correlated Effects Mean Group to estimate the long-run price and income elasticities of Turkish exports to country groups categorized by geographical regions (EU27, other European countries, Asia, Middle East and North Africa (MENA)) and development levels (developed and developing). In doing so, we use bilateral trade data of Turkey with 67 countries over the period 2005Q1-2013Q4. We find that price and income elasticities vary across country groups. Income elasticity estimates are statistically significant in every country group classification and range between 1.82 and 3.35. Exports to the EU27, other European and the developed countries have higher income responsiveness. On the other hand, price elasticity ranges between -1.56 and -0.27 and is found statistically significant only in exports to the EU27, the MENA and the developing countries. Empirical results imply that region-specific measures have to be taken in trade policy design. In addition, policies based on real exchange rate depreciation would have fewer roles in boosting exports, whereas sustainable growth in trading partners is a more crucial factor to achieve sustainable growth in Turkish exports.
    Keywords: Panel data, Time-Series, Elasticity, Cross-Dependence, Mean group estimation, Common correlated effects
    JEL: C23 F14
    Date: 2015
  16. By: Serife Genc Ileri
    Abstract: This paper uses a quantitative general equilibrium model to analyze the impacts of selective immigration policy targeting skilled immigrants on the college attainment rate, earnings inequality and welfare of natives. 1981-2008 period is analyzed in Canada, which is a country with a unique immigration policy explicitly targeting highly educated individuals. The results from the quantitative analysis reveal that the increase in the share of highly skilled immigrants generates a 7 percentage points lower college attainment rate among natives. The size and compositional changes in the immigrant population together lead to a 2.15 percentage points higher growth rate of college premium during this period. This increase is mainly driven by the rise in the relative size of the foreign-born labor force. An analysis of the long-run compensating differentials reveals that immigration generates a loss that corresponds to 3.59 to 4.45 percent permanent reduction in the consumption of natives. The increase in the relative share of immigrants is the main reason for this welfare loss. On the other hand, the compositional change towards college graduates benefits natives at the bottom and middle of the ability distribution.
    Keywords: International Migration, Aggregate Factor Income Distribution, Human capital, Wage differentials by Skill
    JEL: F22 E25 J24 J31
    Date: 2015
  17. By: Hassan B. Ghassan; Hassan R. Alhajhoj
    Abstract: The paper aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.
    Keywords: FDI, Domestic investment, GMM, Long-run Elasticities, GCC.
    JEL: F2 C5
    Date: 2016–01–16
  18. By: Ghassan, Hassan B.; Alhajhoj, Hassan R.
    Abstract: The paper aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.
    Keywords: FDI, Domestic investment, GMM, Long-run Elasticities, GCC.
    JEL: C5 F2
    Date: 2015
  19. By: Stéphane BECUWE; Bertrand BLANCHETON
    Abstract: By using a new database covering French international trade between 1836 and 1938 this paper focuses on the country’s specialisation in textiles. It demonstrates, for the first time, the major influence of trade policy on French international trade in textiles during the first globalisation. Tariffs appear to be crucial determinants of specialisation measured by the Lafay Index. Tariffs are also major determinants of intra-industry trade in textiles. By analysing changes in tariffs between raw textiles and finished textiles and decorrelation between tariffs we show that an effective trade protection approach was applied by successive French governments in order to sustain the industrial competitiveness of textiles. Trade policy slowed down textile de-specialisation until WWI.
    Keywords: textile, effective protection, specialisation, international trade, France
    JEL: F6 N23 N73
    Date: 2016
  20. By: Adrino Mazenda
    Abstract: The article addressed the central issue on whether South Africa’s joining of the BRICS has led to a sustainable growth as was envisaged. An econometric assessment was done using the Autoregressive Redistributive modelling on quarterly data from 1990 to 2014. Empirical results were insignificant to explain the long-run relationship between South Africa’s trade, direct foreign investment and growth with the BRIC countries. The short-run trade effect was little to instil any significant effect on South Africa’s growth. BRICS trade does not Granger Cause growth in South Africa. Trade and investment policy should be reviewed to correct the negative trade effect.
    Keywords: BRICS; Trade; Economic Growth.
    JEL: F13 F43
    Date: 2016–01–11
  21. By: Stepanok, Ignat (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: In this paper I build a North-South model of international trade, economic growth and search-frictional unemployment in the North. Growth is driven by a process of creative destruction in the North followed by imitation in the South. I study the effects of intellectual property rights protection and trade liberalization on unemployment and welfare in the North. Intellectual property rights protection decreases unemployment and increases welfare. Trade liberalization increases welfare but has an ambiguous effect on unemployment. It decreases unemployment if workers in the North have a high outside option and increases it if their outside option is low. I provide empirical evidence in support of the last result using data for 20 OECD countries.
    JEL: F12 F16 F43 J63 O31 O34 O41
    Date: 2016–07–26
  22. By: Auboin, Marc; Smythe, Harry; Teh, Robert
    Abstract: The unbundling of trade across regions offers unique opportunities for SMEs to integrate into global trade notably through their involvement into supply-chains. With supply-chains shifting and expanding into new regions of the world, the challenge for SMEs to accessing financing remains an important one; in many developing and emerging market economies, the capacity of the local financial sector to support new traders is limited. Moreover, after the financial crisis, several global banks have "retrenched", for various reasons. In this context, supply-chain finance arrangements, and other alternative forms of financing such as through factoring, have proven increasingly popular among traders. This paper shows that factoring has a positive effect in allowing SMEs to access international trade, in countries in which it is available. Factoring also appears to be employed by firms involved in global supply chains. We employ for the first time data on factoring from Factor Chain International (FCI), the most extensive dataset on factoring available at the moment, for the period of 2008-2015. Using an instrumentation strategy we identify a strong, stable effect of factoring on SMEs access to capital for some of the main traders in the world.
    Keywords: trade credit,financial crisis,trade
    JEL: F13 F34 G21 G23
    Date: 2016
  23. By: Alberto Felettigh (Bank of Italy); Giacomo Oddo (Bank of Italy)
    Abstract: Using an extension of the methodology proposed by Koopman, Wang and Wei (2014) for quantifying the domestic value added in a country’s exports of manufactures, this paper provides calculations of the market shares in value-added for a number of countries and compares them with the standard shares in global gross exports. The data show different levels and dynamics between advanced and developing countries, with 2004 apparently marking a watershed. Focusing on the four main euro-area countries, the paper offers a sectoral interpretation for the falling intensity of the domestic value added in exports.
    Keywords: market shares, value-added exports, global value chains, competitiveness
    JEL: F12 F14 F15
    Date: 2016–07
  24. By: Chornyi, Vasyl; Nerushay, Marianna; Crawford, Jo-Ann
    Abstract: The liberalization and protection of investment flows has become an increasingly indispensable pillar of economic integration. The objective of this study is to contribute to a better understanding of the ways in which RTAs achieve such liberalization and protection. To this end, we have surveyed the investment provisions contained in 260 RTAs notified to the WTO by 31 December 2015 and in force on that date. More than half of these RTAs contain investment chapters, though they vary in terms of their substantive scope and coverage. Given the unabated increase in the number of RTAs and the push towards greater economic integration we expect this figure to further increase. The main categories of investment provisions in RTAs reviewed in the paper include the definitions of investment and investor, investment liberalization, investment protection and ISDS. Also included in our analysis are provisions supporting the investment framework, host state flexibilities, investment promotion, as well as provisions on sustainable and socially responsible investment.
    Keywords: Regional Trade Agreements,investment
    JEL: F15 F21
    Date: 2016
  25. By: Jan Stráský
    Abstract: The EU Single Market remains far from completed: progress in goods and services market integration has stalled, financial markets are still fragmented along national lines and the barriers to labour mobility remain high. Restrictive regulation within countries and regulatory heterogeneity across them hamper the internal market, reducing trade and investment flows. Network sectors, such as energy and transportation, are insufficiently interconnected and open to competition, and inefficient as a result. Reinvigorating the single market is one of the key tools to strengthen the recovery of the European Union and restore faster growth of income per capita. To support the recovery, structural reforms that yield short-run as well as long-run gains should be prioritised. Policies enhancing labour and capital mobility are especially relevant, as they provide channels of adjustment to country-specific shocks and reinforce the effectiveness of stabilisation policies. Policies enhancing capital mobility include improved securitisation, better collection and sharing of credit information regarding smaller firms and the convergence of insolvency regimes. Labour mobility within the European Union would profit from reduced administrative and regulatory burden, such as faster recognition of professional qualifications and better portability of social and pension rights. Product markets reforms also have the potential to deliver benefits swiftly, not least by unlocking investment. Regulatory burdens could be alleviated by better impact assessment for legislative proposals and ex post evaluation of policies. Product market reforms in network sectors should include harmonisation of regulations and technical specifications, with the target of establishing single EU regulators. This Working Paper relates to the 2016 OECD Economic Survey of the European Union ( Priorités pour l'achèvement du marché unique dans l'Union Européenne Le marché unique de l’UE est encore loin d’être achevé : les progrès en matière d’intégration des marchés de produits et services marquent le pas, les marchés financiers demeurent fragmentés par pays et les obstacles à la mobilité de la main-d’oeuvre restent nombreux. La réglementation restrictive dans les pays et l’hétérogénéité des réglementations entre eux entravent le marché intérieur, ce qui provoque une réduction des courants d’échanges et des flux d’investissement. Les industries de réseau, comme l’énergie et les transports par exemple, ne sont pas suffisamment interdépendantes et ouvertes à la concurrence, d’où leur inefficience. La redynamisation du marché unique est l’un des principaux outils pour consolider la reprise dans l'Union européenne et renouer avec une croissance plus rapide du revenu par habitant. Pour stimuler la reprise, les réformes structurelles qui sont à l’origine de progrès à court et long terme devraient avoir la priorité. Les mesures qui renforcent la mobilité de la main-d’oeuvre et des capitaux sont particulièrement importantes puisqu’elles offrent des solutions d’ajustement aux chocs propres à certains pays et améliorent l’efficacité des mesures de stabilisation. Les mesures qui renforcent la mobilité des capitaux englobent une titrisation réactivée, un recueil et un partage améliorés des données sur le crédit concernant les petites entreprises et la convergence des régimes de faillite. La mobilité de la main-d’oeuvre au sein de l’Union européenne aurait tout à gagner d’une réduction de la charge administrative et du poids de la réglementation, par exemple via une reconnaissance plus rapide des qualifications professionnelles et une meilleure transférabilité des prestations sociales et droits à pension. Les réformes des marchés de produits sont aussi susceptibles d’avoir des effets positifs rapides, notamment en facilitant l’investissement. Le poids de la réglementation pourrait être allégé grâce à une analyse d’impact de meilleure qualité pour les propositions législatives et à une évaluation ex post des mesures. Les réformes des marchés de produits dans les industries de réseau devraient inclure une harmonisation des réglementations et spécifications techniques dans le but de créer une autorité de régulation unique à l'échelle de l'UE. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l'Union Européenne ( ique-union-europeenne-et-zone-euro.htm)
    Keywords: economic integration, labour migration, EU single market, non-bank financial institutions, Capital Markets Union, intégration économique, institutions financières non bancaires, migration de la main-d'oeuvre, Marché unique européen
    JEL: F15 F22 F36 G23 L51 L88 L98
    Date: 2016–07–26
  26. By: Krieger, Tim; Meierrieks, Daniel
    Abstract: We study the effect of large-scale land acquisitions on the risk of ethnic tensions for a sample of 133 countries for the 2000-2012 period. Running a series of fractional response models, we find that more land grabbing activity is associated with a higher risk of ethnic tensions, indicating that the negative effects of land deals outweigh their potential benefits. In addition to that, we also show that democratic institutions may moderate the relationship between land deals and ethnic tensions. That is, non-democratic countries face a substantially higher risk of ethnic tensions as the level of large-scale land acquisitions increases; by contrast, strongly democratic countries tend to see lower ethnic tension risk.
    Keywords: large-scale land acquisitions,land grabbing,conflict,ethnic tensions,democratic accountability,weak institutions
    JEL: F21 F63 O13 O43 Q15
    Date: 2016
  27. By: Pesheva, Milena; Vasilev, Aleksandar
    Abstract: This paper estimates the contribution of Foreign Direct Investment (FDI) to the Total Factor Productivity (TFP) of Bulgaria for the period 2004-2013. Since TFP captures the joint efficiency of capital and labor, it is likely to be influenced by investments from abroad. As predicted by theory, a positive relationship between TFP and FDI is documented. The effect of ignoring the implications of this model on the economy is explored through simulations and it is proven that this action leads to a distorted view of the growth path of the economy. The standard Ramsey (optimal) growth model, augmented with the FDI channel is used to compare the speed of convergence to an identical setup without FDI. The results of the study can serve as justification for introduction of policies and development of governmental strategies for attracting FDI inflows.
    Keywords: TFP,FDI
    JEL: E13 E22
    Date: 2016
  28. By: Silvia Fabiani (Bank of Italy); Stefano Federico (Bank of Italy); Alberto Felettigh (Bank of Italy)
    Abstract: We investigate the role of cyclical factors in the adjustment of Italy’s external balance from 2010, developing a model that infers the potential levels of domestic demand and of imports and exports from an exogenous measure of potential output, in an internally coherent fashion and also taking composition effects into account. According to our results, in 2015 Italy’s cyclically-adjusted current account surplus came to about 0.5 percentage points of GDP; the overall external rebalancing of the Italian economy has largely been of a non-cyclical nature, with a positive contribution from the decline in the prices of energy commodities. By applying our methodology to the other major euro-area countries, we find that current account imbalances over the recent period are amplified when assessed in cyclically-adjusted terms.
    Keywords: current account, business fluctuations, macroeconomic imbalances, output gap
    JEL: F32 F40
    Date: 2016–07
  29. By: Lee, Youngjae; Kennedy, P. Lynn
    Keywords: Demand and Price Analysis, International Relations/Trade,
    Date: 2016–08–01

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