|
on International Trade |
| By: | Raza, Werner; Taylor, Lance; Tröster, Bernhard; von Arnim, Rudi |
| Abstract: | In recent years, a number of studies have been put forth to assess the potential economic effects of the EU-US trade agreement - the Transatlantic Trade and Investment Partnership (TTIP). Most studies report gains for the TTIP-member states. However, the commonly applied CGE models contain questionable assumptions such as full employment. In this report, we present a structuralist CGE-model for the assessment of TTIP with fundamentally different key assumptions with regard to the determination of output, income and employment. These distinct closures are applied within the standard trade liberalization setting including the reduction of tariffs and non-tariff barriers. Importantly, the model delivers results with regard to (i) macroeconomic effects including employment and wages, (ii) sectoral (20 Sectors) and (iii) regional (11 countries/regions) effects. Even though small but positive income effects are reported, the diverging results among TTIP-members, negative effects for real wages for low skill labor and the rest of the world, in particular developing countries, should be highlighted. An extensive sensitivity analysis confirms potential risks associated with TTIP. |
| Abstract: | Seit März 2013 verhandeln EU und USA das Transatlantische Handels- & Investitionspartnerschaftsabkommen (TTIP). Aufgrund ihrer wirtschaftlichen Bedeutung und der weitreichenden Verhandlungsagenda stellt dies die bedeutendste handelspolitische Initiative seit dem Start der WTO Doha Runde im November 2001 dar. Die entscheidende Frage für politische Entscheidungsträger lautet dabei: Cui bono? Genauer: Was sind die zu erwartenden Auswirkungen des Abkommens auf Wirtschaftswachstum, Beschäftigung und Einkommensverteilung? In den letzten Jahrzehnten sind sog. CGE Modelle zum Standardinstrument geworden, um die Effekte der Handelsliberalisierung abzuschätzen. Diese Modelle wurden dafür kritisiert, dass sie erstens meist eine konstante Beschäftigung, ein konstantes Defizit der öffentlichen Haushalte und der Leistungsbilanz annehmen, und dass sie zweitens wichtige strukturelle Eigenheiten von Ländern nicht berücksichtigen. Damit bleiben zentrale Fragen außerhalb des analytischen Blicks. Das gegenständliche Papier präsentiert ein strukturalistisches CGE Modell, das (a) die Auswirkungen von Handelsliberalisierung auf die Beschäftigung, die Faktoreinkommen, die öffentlichen Haushalte und die Leistungsbilanz untersucht, (b) die strukturellen Eigenheiten von Volkswirtschaften berücksichtigt, und (c) flexibel auf verschiedene Szenarien und Handelsabkommen angewendet werden kann. Das Modell wird sodann für die Abschätzung der makroökonomischen Auswirkungen der laufenden EU-USA Verhandlungen (TTIP) verwendet. Damit soll ein Beitrag zur wissenschaftlichen und wirtschaftspolitischen Diskussion zu den Auswirkungen von Handelsliberalisierung auf Wachstum und Verteilung geleistet werden. Das hier vorgestellte Modell ist ein Multi-Sektor, Multi-Regionen Modell mit 20 Wirtschaftssektoren und 11 Regionen bzw. Ländern, und zwei Typen von Arbeitskräften (hochqualifiziert/ niedrig-qualifiziert). Die empirische Datengrundlage wird durch eine Social Accounting Matrix (SAM) auf Basis von Daten des Global Trade Analysis Projekts (GTAP) bereitgestellt. Mit dem Modell können die Auswirkungen von Veränderungen tarifärer wie nicht-tarifärer Handelshemmnisse (NTB) auf die abgebildeten Volkswirtschaften untersucht werden. Einschränkend muss darauf hingewiesen werden, dass die Effekte der Veränderung von NTB nur unvollständig dargestellt werden können. Insbesondere ist eine Bewertung des sozialen Nutzens bzw. der sozialen Kosten von NTB wie z.B. Gesundheitsoder Verbraucherschutzbestimmungen nicht möglich. Stattdessen werden nur die Kostenersparnisse aus dem Wegfall bzw. der Angleichung von NTM für die Privatwirtschaft berücksichtigt. Ebenso wenig können wie bei den meisten anderen Studien die Effekte vieler anderer Elemente der neuen Generation von Freihandelsabkommen abgebildet werden. Dazu gehören unter anderem die Effekte von Investitionsliberalisierung, den Schutz geistiger Eigentumsrechte, oder andere Effekte, wie zum Beispiel Umwelteffekte oder Auswirkungen auf die Menschenrechte. Daher berücksichtigt unser Modell nur einen Teil der Effekte von Handelsabkommen und enthält eine Tendenz zur Überschätzung der positiven wirtschaftlichen Effekte von Handelsliberalisierung. [...] |
| Keywords: | trade impact assessment,non-tariff measures,trade policy |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Parsons, Christopher (University of Western Australia); Vézina, Pierre-Louis (King's College London) |
| Abstract: | We provide evidence for the causal pro-trade effect of migrants and in doing so establish an important link between migrant networks and long-run economic development. To this end, we exploit a unique event in human history, i.e. the exodus of the Vietnamese Boat People to the US. This episode represents an ideal natural experiment as the large immigration shock, the first wave of which comprised refugees exogenously allocated across the US, occurred over a twenty-year period during which time the US imposed a complete trade embargo on Vietnam. Following the lifting of trade restrictions in 1994, US exports to Vietnam grew most in US States with larger Vietnamese populations, themselves the result of larger refugee inflows 20 years earlier. |
| Keywords: | migrant networks, US exports, natural experiment |
| JEL: | F14 F22 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | McDaniels, Devin; Karttunen, Marianna |
| Abstract: | Even if traders adapt to technical regulations and standards in an export market, they still must prove compliance by undergoing conformity assessment procedures (CAPs), such as testing, inspection, or certification. Duplication, delays or discrimination in CAPs can significantly increase trade costs, and this risk is reflected in the growing importance of CAPs in WTO discussions and bilateral and regional free trade agreements. This paper conducts an empirical study of the trade issues that WTO Members encounter with CAPs as described in specific trade concerns (STCs) raised in the WTO Committee on Technical Barriers to Trade (TBT) during 2010-2014. We observe that CAPs raise proportionally more concern among WTO Members than technical regulations do, and that testing and certification are the procedures that most frequently give rise to trade problems. Within the framework of the TBT Agreement, we find that questions around transparency and whether CAPs create unnecessary barriers to trade are the two most prominent issues highlighted by Members. |
| Keywords: | international trade,certification,testing,conformity assessment procedures,international standards,international cooperation,coherence,non-tariff barriers,technical barriers to trade,regulation |
| JEL: | F13 F53 F55 K33 L15 L51 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Piotr Gabrielczak (Faculty of Economics and Sociology, University of Lodz); Tomasz Serwach (Faculty of Economics and Sociology, University of Lodz) |
| Abstract: | The paper investigates the link between firm-level productivity and internationalization (through exports, imports and FDI) in the Lodz Voivodeship, Poland. Two hypotheses have been tested –self-selection and learning by internationalization. It has been found that productivity may affect import and FDI decisions of firms, while there is no evidence of such an effect regarding exports. At the same time, there is no proof for learning, suggesting that within the timeframe of the analysis firms from the Lodz Voivodeship do not experience productivity gains due to international trade or investment. |
| Keywords: | international trade, foreign direct investment, internationalization, productivity, self-selection, learning |
| JEL: | F12 F23 D22 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Isaac Baley; Laura Veldkamp; Michael Waugh |
| Abstract: | How do information frictions affect international prices and trade? In a standard, two-country Armingtonmodel of trade, information frictions impede the coordination of exporting behavior across countries. Because the terms of trade depend on relative exports, less coordination leads to more volatile terms of trade. Volatility in the terms of trade has the potential to reduce the level of trade by making trade more risky, but it also has the potential to increase the level of trade by increasing the expected terms of trade. We derive general conditions on preferences as to which of these forces—the increase in risk or increase in return—dominate. With CES preferences, as long as goods are not too substitutable, information frictions impede trade. With empirically plausible elasticities of substitution, information frictions facilitate trade. |
| Keywords: | information asymmetry, globalization, risk sharing, international trade |
| JEL: | D5 D8 D9 F4 F6 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Soham Baksi; Amrita Ray Chaudhuri |
| Abstract: | We examine the impacts of trade liberalization and border tax adjustment (BTA) on the incentives of heterogeneous countries to cooperate when regulating emissions of a global pollutant. We consider an oligopoly model of trade between two countries, North and South, where production generates transboundary pollution and the pollution damage parameter is higher in the North. Each country imposes a pollution tax on its domestic firm, where the tax rate can be chosen either cooperatively or non-cooperatively. We analyze the sustainability of environmental cooperation between the countries within an infinitely repeated game framework using trigger strategies. While the North has a stronger incentive to cooperate than the South, we find that an increase in the degree of heterogeneity between the two countries in terms of their pollution damage parameter reduces the likelihood of cooperation between them. Trade liberalization increases both the global gains from cooperation as well as the likelihood of cooperation between the countries. Further, we consider the use of a border tax adjustment under non-cooperation, where the North imposes a tariff on imports of the polluting good from the South, and the tariff rate reflects the difference in pollution tax rates across the two countries. We find that imposing the BTA makes the North less likely to cooperate, while the South is more likely to cooperate provided the countries are sufficiently heterogeneous. |
| Keywords: | International environmental agreements, Transboundary pollution, International trade, Border tax adjustment |
| JEL: | Q54 Q58 F18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Riccardo Crescenzi; Luisa Gagliardi; Simona Iammarino |
| Abstract: | This paper looks at foreign Multinational Enterprises (MNEs) investing in the UK and at their impact on the innovation performance of domestic firms active in their same sector. By employing data on Foreign Direct Investments matched with firm-level information the paper develops a direct measure of capital inflows at a three-digit industry level. In order to capture innovation in both manufacturing and services the paper relies on a broader proxy for firm innovativeness based on the Community Innovation Survey (CIS). The results suggest that domestic firms active in sectors with greater investments by MNEs show a stronger innovative performance. However, the heterogeneity across domestic firms in terms of internationalization of both their market engagement and ownership structure is the main driver of this effect. |
| Keywords: | multinational enterprises; innovation technological change; intra-industry knowledge diffusion; community innovation survey; United Kingdom |
| JEL: | F22 O33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Chabé-Ferret, Bastien (Université catholique de Louvain); Machado, Joel (University of Luxembourg); Wahba, Jackline (University of Southampton) |
| Abstract: | This paper studies how return migration intentions affect immigrants' behavior. Using a unique French data set, we analyze the relationship between return plans and several immigrants' behavior in the host and origin countries addressing the potential endogeneity between return plans and different investment decisions. We also investigate the potential trade-off and complementarities between various immigrants' investment behaviors. We find that temporary migrants are more likely to remit and invest in the country of origin, but less likely to invest in the host country. Moreover, our results show that there is no trade-off between immigrants' investment in the home and in the host country. In turn, we find substantial heterogeneity in behavior across migrants of different origins. |
| Keywords: | temporary migration, return intention, remittances |
| JEL: | F22 F24 D14 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Thierry Mayer; Marc J. Melitz; Gianmarco I. P. Ottaviano |
| Abstract: | We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multi-product firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets .and the induced product mix reallocations - induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial .and explain an important share of aggregate productivity fluctuations for French manufacturing. |
| Keywords: | productivity, trade, competition |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Federico Esposito (Yale University) |
| Abstract: | Firms face considerable uncertainty about consumers' demand. In presence of incomplete financial markets, entrepreneurs may not be able to insure against unexpected demand fluctuations. The key insight of my paper is that firms can hedge demand risk through geographical diversification. I first develop a general equilibrium trade model characterized by stochastic demand and risk-averse entrepreneurs, who exploit the imperfect correlation of demand across countries to lower the variance of their total sales. I show that: i) a firm's exporting decision does not obey a hierarchical structure as in standard models with fixed costs, because it depends on the global diversification strategy of the firm, and ii) the intensity of trade flows to a market are affected by its risk-return profile. To quantify the risk diversification benefits of international trade I calibrate the model with the Method of Moments, using Portuguese firm-level data. One of the counterfactual exercises reveals that the welfare gains from trade can be significantly higher than the gains predicted by models neglecting firm level risk. After a trade liberalization, risk-averse firms boost exports to countries offering better diversification benefits. Hence, in these markets competition among firms is stronger, lowering the price level more and raising welfare gains. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Natasha Agarwal; Zheng Wang |
| Abstract: | This paper investigates the impact of US Export-Import Bank (EXIM) on US exports particularly in the wake of international competition from foreign national export credit agencies (ECAs). We employ a gravity framework on a country-industry-year-level panel dataset that matches EXIM authorizations with US bilateral exports. Our results depict the general ineffectiveness of the Bank in promoting exports within and across industries. Some heterogeneities behind the general finding are also uncovered: industries other than aerospace parts and products are more likely to benefit from EXIM authorizations, and that EXIM authorizations to larger businesses seem to be more effective in encouraging exports. Furthermore, we find no evidence that explains the role of EXIM in encouraging US exports by offsetting foreign ECA competition. These results are neither affected by competing countries’ membership to the OECD Arrangement nor by the size of American firms that received EXIM support. Our results cast doubt on the ubiquitously positive claims made by the Bank and its supporters, yet also provide policy lessons for countries that are either in the inception stages of establishing their own ECAs or are now placing greater importance on ECA financing in encouraging domestic exports. |
| Keywords: | Trade credits; EXIM; export competition; value chain |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Alexander Cordes; Birgit Gehrke; Christian Rammer; Roman Römisch (The Vienna Institute for International Economic Studies, wiiw); Paula Schliessler; Pia Wassmann |
| Abstract: | Abstract This study introduces a suitable method to break down national trade data to the regional level. This allows producing trade indicators at the regional level, revealed export advantages in particular. Identifying industries in which a region realises a strong trade specialisation plays a twofold role in industrial and regional policy-making. Firstly, identifying successful structures at the industry-region level helps to improve the understanding of micro- and meso-foundations for competitiveness as well as scope and cases for policy intervention. Secondly, knowledge of the spatial distribution of competitive industries and required location factors is necessary for differentiated perspectives on future economic development and the choice of policy instruments. The study applies descriptive, econometric and case study analysis to identify regional patterns of trade specialisation, as well as region- and industry-specific factors related to success in international markets. Based on the results obtained, the study develops conclusions for EU regional and smart specialisation policies. |
| Keywords: | EU regions, regional foreign trade, EU regional policy, smart specialisation strategies, regional competitiveness, determinants of competitiveness |
| JEL: | R12 R15 R58 F14 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Einian, Majid; Ravasan, Farshad |
| Abstract: | Specialization models are important in providing a solid theoretical ground for gravity equation in bilateral trade. Some research papers try to improve specialization models by adding imperfect specialization to them, but we believe it is unnecessary complication. We provide a perfect specialization model based on the phenomenon that we call tradability, which overcomes the problems with simpler models. We provide empirical evidence using estimations on panel data of bilateral trade of 40 countries over 10 years that support the theoretical model. |
| Keywords: | bilateral trade, gravity equation, perfect specialization, tradability |
| JEL: | C23 E23 F11 F14 |
| Date: | 2016–06–30 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Brian D. Varian (London School of Economics and Political Science) |
| Abstract: | This paper calculates indicators of revealed comparative advantage (RCA) and revealed symmetric comparative advantage (RSCA) for 17 British manufacturing industries for the years 1880, 1890, and 1900. The resulting indicators show that the late-Victorian ‘workshop of the world’ was at a marked comparative disadvantage in a number of manufacturing industries. The paper then proceeds to identify the factor determinants of Britain’s manufacturing comparative advantages (disadvantages) using a four-factor Heckscher-Ohlin model that relies upon these indicators. In contrast with previous scholarship, the manufacturing comparative advantages of late-Victorian Britain were in the relatively labour non-intensive industries, and this pattern became more pronounced throughout the period. The paper concludes with the observation that the factor determinants of Britain’s manufacturing comparative advantages appear closer to those of the United States than had traditionally been thought. |
| Keywords: | comparative advantage, Heckscher-Ohlin, manufacturing, Britain, nineteenth century |
| JEL: | F11 F14 N63 N73 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Koralova, Petya |
| Abstract: | River Danube is an international inland waterway that is part of the Rhine – Danube Core Network Corridor. The favorable geographic location of Slovakia and Bulgaria, as well as their outlet on the River Danube, are key factors for the insurance of better transport and trade relations among West of Europe and Middle East. In this regard, the main objective of the report is to reveal the perspectives for development of the trade relations between both countries via inland waterway transport. For that purpose, a review of the status quo of Bulgarian and Slovak ports is made, as well as an analysis of the cargo turnover, export, import and balances of trades of the countries. As a conclusion, the results of the current research are summarized. |
| Keywords: | trade relations, inland waterway transport, cargo turnover |
| JEL: | F16 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Knobel Alexander (Gaidar Institute for Economic Policy); Baeva Marina (Gaidar Institute for Economic Policy) |
| Abstract: | With Russia’s accession to the World Trade Organization (WTO) on August 22, 2012, the country joined the mechanism of settlement of trade disputes in the WTO. Such a mechanism operates in the WTO in accordance with the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). So, from August 2012 Russia has the right to protect its trade interests by means of the above instrument. |
| Keywords: | Russian economy, foreign trade, WTO, trade disputes |
| JEL: | F10 F13 F19 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Békés, Gábor; Hornok, Cecília; Muraközy, Balázs |
| Abstract: | We use a unique cross-section survey of manufacturing firms from four European countries (France, Germany, Italy, Spain) linked with balance sheet data to study the relationship between key aspects of globalization and firm-level markups. The main results are: (i) Exporting is positively correlated with markups; (ii) Importing intermediate inputs and outsourcing are also positively correlated with markups; (iii) Firms with affiliates have higher markups than other firms, while simply membership in a group or being foreign-owned seems to be less important; (iv) Perceived competition from low-cost markets is negatively correlated with markups; (v) Higher quality production and innovation, especially if it results in IP, has a strong positive relationship with markups; (vi) While these variables are correlated, they are significant in a joint model including all four groups, and 'fully globalized' firms tend to charge around 100% higher markups than non-globalized firms. |
| Keywords: | markups,exporting,importing,FDI,innovation |
| JEL: | D22 D24 F14 L11 L60 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Rosario Crino (Catholic University of Milan); Gino Gancia (CREI); Alessandra Bonfiglioli (Universitat Pompeu Fabra) |
| Abstract: | We study how financial frictions affect firm-level heterogeneity and trade in a model where productivity differences across monopolistically competitive firms are endogenous and depend on investment decisions at the entry stage. By increasing entry costs, financial frictions reduce the exit cutoff thereby lowering the value of investing in bigger projects with more dispersed outcomes. Hence, credit frictions make firms more homogeneous and hinder the volume of exports both along the intensive and the extensive margin. Export opportunities, instead, shift expected profits to the tail and increase the value of technological heterogeneity. We test these predictions using comparable measures of sale dispersion within 365 manufacturing industries in 119 countries, built from highly disaggregated US import data. Consistent with the model, financial development increases sale dispersion, especially in more financially vulnerable industries; sale dispersion is also increasing in measures of comparative advantage. These results are quantitatively important for explaining the effect of financial development and factor endowments on export sales. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Rosario Crino (Catholic University of Milan); Gino Gancia (CREI); Alessandra Bonfiglioli (Universitat Pompeu Fabra) |
| Abstract: | We study the equilibrium determinants of firm-level heterogeneity in a model in which firms can affect the variance of their productivity draws at the entry stage and explore the implications in closed and open economy. By allowing firms to choose the size of their investment in innovation projects of unknown quality, the model yields a Pareto distribution for productivity with a shape parameter that depends on industry-level characteristics. A novel result is that export opportunities, by increasing the payoffs in the tail, induce firms to invest in bigger projects with more spread-out outcomes. Moreover, when more productive firms also pay higher wages, trade amplifies wage dispersion by making all firms more unequal. These results are consistent with new evidence on how firm-level heterogeneity and wage dispersion vary in a panel of U.S. industries. Finally, we use patent data across U.S. states and over time to provide evidence in support of a specific mechanism of the model, namely, that export opportunities increase firm heterogeneity by fostering innovation. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Jo Van Biesebroeck; Joep Konings; C.V. Martincus |
| Abstract: | In the global recession of 2009, exports declined precipitously in many countries. We illustrate with firm-level data for Belgium and Peru that the decline was very sudden and almost entirely due to lower export sales by existing exporters. After the recession, exports rebounded almost equally quickly and we evaluate whether export promotion programs were an effective tool aiding this recovery. We show that firms taking advantage of this type of support did better during the crisis, controlling flexibly for systematic differences between supported and control firms. The primary mechanism we identify is that supported firms are generally more likely to survive on the export market and, in particular, are more likely to continue exporting to countries hit by the financial crisis. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Ana Maria Santacreu (Federal Reserve Bank of Saint Louis and); Fernando Leibovici (York University) |
| Abstract: | This paper studies the role of trade openness for the design of monetary policy. We extend a standard small open economy model of monetary policy to capture cyclical fluctuations of international trade flows, and parameterize it to match key features of the data. We find that accounting for trade fluctuations matters for monetary policy: when the monetary authority follows a Taylor rule, inflation and the output gap are more volatile. Moreover, we find that the volatility of these variables is significantly higher when the central bank follows the optimal policy based on a model that cannot account for international trade fluctuations. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Gurgul, Henryk; Lach, Łukasz |
| Abstract: | We suggest original modifications and extensions of the recently presented methodological developments in ex-post accounting framework in global value chains in order to obtain empirical results both for the analyzed group of ten CEE economies as well as at a country-and-sector-specific level. The empirical results confirm that the role of the selected CEE economies in transition in creating value added with respect to the total value added in the European Union in the GVC framework was biggest in the cases of agriculture-, wood-products-, metal-production, and travel-and-tourism-related sectors. We also found that, after two decades of transition, the measures of productivity in the examined economies in 2009 were still much lower as compared to the EU average for most of the sectors. Moreover, in the transition period, these indexes were increasing, especially after EU accession. In contrary, after two decades of transition, the measures of capital efficiency in the ten CEE economies in 2009 were comparable to the EU average for most of the sectors. Moreover, during this period, the growth rates of these indexes were, in general, positive. However, their growth rates dropped after EU accession. |
| Keywords: | value added; productivity; capital efficiency; CEE economies; international input-output matrices; transition |
| JEL: | C67 D57 F1 |
| Date: | 2016–07–01 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Abeba Nigussie Turi (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | This paper presents the spillover effect resulting from the foreign direct investment with a focus on the manufacturing firms in Ethiopia. Being one of the pillars of the Growth and Transformation Plan (GTP), identifying the productivity spillovers arising from the FDI to the sector is timely. The research covers extensive econometric analysis based on the Central Statistics Agency’s (CSA) survey, for the years 2004 up to 2010, on the manufacturing firms and an Input-Output matrix, for the year 2005/6, constructed by the Ethiopian Development Research Institute (EDRI). My analysis suggests that there is an econometric evidence for positive Backward spillovers and negative Forward spillovers to the total productivity of the manufacturing firms in the country. The paper’s findings on this aspect are limited. Because, the analysis entirely rely on industry level secondary data and only one year Input-Output matrix. Therefore, there is a potential for further research work; given this benchmark finding. |
| Keywords: | Foreign Direct Investment, Spillover Effect, Total Factor Productivity |
| JEL: | F2 F21 F23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | de Matías Batalla, David |
| Abstract: | In this paper, the author presents the impact of new players and factors in international business activities, which have a direct influence on international economic structure. One of the most important determinants over the last decades has been foreign direct investment, which has encouraged the dislocation of business activities in many industries. This, together with the rest of foreign direct investment, makes the author think of extending the OLI model to OLIM, where M is the mode of entry. One type of this mode is offshoring which makes easier the relocation of business activity from developed economies to developing economies. The study of offshoring activities is the focus of this paper, with the data coming from a survey of 166 Spanish multinational firms. Empirical evidence should provide us the main factors that motivate Spanish multinational firms to be engaged in foreign direct investment via offshoring. |
| Keywords: | foreign direct investment,eclectic paradigm,internationalization process,offshoring,multinational firms |
| JEL: | D23 F21 F23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Razvan GRECU (Student, Masters Financial Management, Faculty of Economics, Ecological University of Bucharest) |
| Abstract: | This article addresses a whole evolution of the European integration - deepening, broadening, reforming, relations with third parties - precisely from this perspective of the efforts to obtain more important positions in the global competition. Used after the 1950s, the term globalization is present in all major languages of the world, be it the "globalization" for the English speakers, "mondialisation" for the French speakers, "globalizzazione" for the Italian speakers, "Globlisierung" for the German speakers or "Quan Quai Hua" for the Chinese speakers. The global attribute has a common use in phrases like "global market", "global institutions", "global communications". The widespread use of the term, both in everyday language and in the academic world, is produced since about the 1970s. However, the emergence of the industrial capitalism also marks the presence in the intellectual discourses of the references to a series of events similar to those that today retain the attention in the globalization context: the reduction of time and space as a result of the evolution and the development of transportation and communication, which substantially increases the possibilities of human interaction. It is, however, difficult to trace the border between cause and effect in terms of the globalization process. The world economies evolutions in regards to the trade, production, finances, led on one hand to the global nature of the economy and, on the other hand have influenced and boosted each other. |
| Keywords: | globalization, regionalization |
| JEL: | F60 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Volovik Nadezhda (Gaidar Institute for Economic Policy) |
| Abstract: | In 2015, economic growth rates in countries, which are main trade partners of the Russian Federation, turned out to be below forecast of a year earlier. In 2015, according to the data released by the National Bureau of Statistics of China[1], the China's GDP went up by 6.9% annualized, which is the minimum over the recent 25 years. Production growth in 2015 has slowed down to 6.0% and growth of the service sector up to 8.3%. In 2014, growth rates posted 7.3% and 7.8%, respectively. |
| Keywords: | Russian economy, foreign trade, terms of trade, regional pattern |
| JEL: | F10 F13 F19 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Donaubauer, Julian (Helmut Schmidt University, Hamburg); Dreger, Christian (DIW Berlin) |
| Abstract: | China's government is promoting the shift towards a consumption-based economy since a few years. The explicit goal to significantly raise the percentage of wages in the national household income is integral part of the 12th Five-Year Plan (2011-15). The changes in the economic strategy are likely to affect the attractiveness of the country to foreign investors. In this paper, we raise the hypothesis that soaring wages negatively affect FDI inflows to China and alter the distribution of FDI over Chinese provinces. In addition, low-wage countries in the geographical surrounding might benefit from the changed direction of FDI inflows. By performing panel models with spatial effects for both Chinese provinces and developing ASEAN countries, regional dependencies are explicitly addressed. We provide strong and robust evidence that the wage increases change the distribution of FDI within China. In addition, we show that the changes in China's economic strategy improve the chances of its low-income neighbours to attract FDI. |
| Keywords: | foreign direct investment, Chinese economic transformation, spatial correlation |
| JEL: | F15 F21 F63 E22 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Rapoport, Hillel (Paris School of Economics) |
| Abstract: | This paper reviews a growing literature on migration and globalization, focusing on its relevance for developing and emerging economies. It documents the role of diaspora networks in enhancing cross-border flows of goods, capital, and knowledge, eventually contributing to efficient specialization, investment, and productivity growth in the migrants' home-countries. Particular attention is paid to the role of skilled migrants, and to information imperfections reduction as the main channel for the documented effects. Overall, the evidence suggests that migrants contribute to the integration of their home-countries into the global economy. |
| Keywords: | migration, globalization, trade, FDI, financial flows, knowledge diffusion, development |
| JEL: | F21 F22 F63 J61 O11 O15 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Isabel Teichmann |
| Abstract: | It is heavily discussed whether trade liberalization is good or bad for the poor in a given (developing) country. The answer depends on a wide variety of factors, such as the type of trade barrier removed, the economic and institutional environment in the country, and the characteristics of the poor in that country (Winters 2002; Winters et al. 2004). In addition, the results can also be driven by the specific method used to measure the impact of the trade-policy reform on poverty. For an informed discussion, it is, therefore, important to understand the corresponding empirical methods at hand.Most generally, empirical studies on trade impacts can be divided into ex-post and ex-ante analyses. Whereas ex-post studies focus on the effects of trade policies that have already been implemented, ex-ante analyses simulate the effects of potential future (and actual) trade policies (Piermartini and Teh 2005). In other words, ex-post studies have both pre- and post-reform data at their disposal, while ex-ante studies rely exclusively on pre-liberalization data. Ex-post analyses have the advantage of being grounded on real-world observations; however, their difficulty lies in applying appropriate statistical methods to separate the impact of a given trade-policy reform from any other shock affecting the economy in the observation period (Hertel and Reimer 2005; Piermartini and Teh 2005). This identification problem is absent in ex-ante studies, conducting counterfactual analyses, as they allow to explicitly and exclusively simulate the trade-policy shock (Hertel and Reimer 2005). However, simulation studies encounter yet other challenges, namely to verify the assumptions concerning the model specification (e.g., parameters and functional forms) and, thus, to ensure the quality of the results (Piermartini and Teh 2005; Winters et al. 2004). Their strength, in turn, is to reveal possible orders of magnitude of a policy impact, to identify relative winners and losers, and to give insights into the quantitative importance of the mechanisms behind the effects of a given trade-policy reform on poverty (Winters 2003; Winters et al. 2004; Bourguignon et al. 1991).While examples of ex-post methods to analyze the effects of trade liberalization on poverty can be found in Winters et al. (2004), this Roundup gives an overview of some basic ex-ante methods available to quantify and evaluate the impact of a trade-policy reform – or, more generally, a macro-economic shock – on the distribution of household income for poverty (and inequality) analysis, i.e. on the micro-economic level. The methods considered here center all around so-called computable general equilibrium (CGE) models. On the one hand, they include the standard CGE approach with (one or) several representative households; on the other hand, they cover macro-micro simulations, subdivided into the top-down approach, the top-down/bottom-up approach, and the integrated approach. For each method, the Roundup provides a brief description, some applications, and a critical assessment. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | McGrattan, Ellen R. (Federal Reserve Bank of Minneapolis) |
| Abstract: | Foreign investment into China has surged since the 1990s and become a topic of keen interest for both scholars and the media. While China has encouraged this investment with the goal of catching up technologically, close analysis reveals that only a small share of its foreign investment comes from the United States and other nations with the technology China seeks. Instead, inward foreign direct investment flows predominantly from Hong Kong and a few Caribbean nations. Two key factors behind this: China’s tax policy toward foreign investment and its “industrial” policies to encourage development and growth. Specifically, preferential tax treatment for foreign investment leads many Chinese businesses and households to “round-trip” investments; and policies requiring joint ventures between Chinese and foreign high-tech companies—while benefiting China enormously—discourage investment by multinationals from advanced countries. |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Goedele Van den Broeck; Johan Swinnen; Miet Maertens |
| Abstract: | This paper is the first to present panel data evidence on the longer-term impact of expansion of global value chains and large-scale export-oriented farms in developing countries. Using panel data from two survey rounds covering a seven-year period and fixed effects regression, we estimate the longer-term income effects of wage employment on large-scale farms in the rapidly expanding horticultural export sector in Senegal. In addition to estimating average income effects, we estimate heterogeneous income effects using fixed effects quantile regression. We find that poverty and inequality reduced much faster in the research area than elsewhere in Senegal. Employment in the horticultural export sector significantly increases household income and the income effect is strongest for the poorest households. Expansion of the horticultural export sector in Senegal has been particularly pro-poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population. These pro-poor employment effects contrast with insights in the literature on increased inequality from rural wage employment. |
| Keywords: | globalisation, hogh-value supply chains, rural wage employment, quantile regression, panel data, long-term effects |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=int |
| By: | Uzun Vasily (Gaidar Institute for Economic Policy); Shagaida Natalia (Gaidar Institute for Economic Policy); Gataulina Ekaterina (Gaidar Institute for Economic Policy); Yanbykh Renata (RANEPA) |
| Abstract: | In 2015 the war of sanctions and the shutting down of access to Russian food markets for countries included in the sanction list[1] created favourable conditions for domestic farm producers. The limiting factor was the drop of ruble exchange rate that dramatically lifted prices for many farm inputs, both imported (hybrid seeds, pesticides, breeder stock, etc.) and exported (fertilizers, fuels). Therefore, there were fears that farmers would fail to benefit from the shutting down of markets and to increase domestic agricultural output. However, farm producers did not reduce areas sown in all major crops as compared with the previous year. |
| Keywords: | Russian economy, import substitution, food embargo, sanctions, counter sanctions |
| JEL: | Q13 Q14 Q15 Q16 Q17 Q18 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=&r=int |