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on International Trade |
| By: | Enrique Martínez-Galán; Maria Paula Fontoura |
| Abstract: | In this paper, we aim at contributing to the new field of research that intends to bring up-to-date the tools and statistics currently used to look to the current reality given by Global Value Chains (GVC) in international trade and Foreign Direct Investment (FDI). Namely, we make use of the most recent data published by the World Input-Output Database to suggest indicators to measure the participation and net gains of countries by being a part of GVC; and use those indicators in a pooled-regression model to estimate determinants of FDI stocks in Organization for Economic Co-operation and Development (OECD)-member countries. We conclude that one of the measures proposed proves to be statistically significant in explaining the bilateral stock of FDI in OECD countries, meaning that the higher the transnational income generated between two given countries by GVC, taken as a proxy to the participation of those countries in GVC, the higher one could expect the FDI entering those countries to be. The regression also shows the negative impact of the global financial crisis that started in 2009 in the world’s bilateral FDI stocks and, additionally, the particular and significant role played by the People’s Republic of China in determining these stocks. Key Words : International fragmentation of production, Globalization, Global Value Chains, Foreign Direct Investment, Pooled-regression model |
| JEL: | C33 C67 F14 F21 F60 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp152016&r=int |
| By: | Bresnahan, Lauren R. (University of Maryland); Coxhead, Ian (University of Wisconsin); Foltz, Jeremy (University of Wisconsin); Mogues, Tewodaj (International Food Policy Research Institute) |
| Abstract: | Theory predicts that trade liberalization should raise average total factor productivity (TFP) among manufacturing firms. However, this is a generic prediction and depends on maintained assumptions about industries, factor markets, and trade patterns that may not fit well for developing countries. Using firm-level data from Ghana, Kenya, and Tanzania during the 1990s, a period of fairly rapid trade policy liberalization, we estimate productivity effects of trade. Our analysis confirms the well-known association between export intensity and higher productivity of the firm; however, the evidence for "learning by exporting," or an increase in productivity associated with greater exports, is mixed, with several instances of negative average TFP growth among exporters. Our analysis indicates that such declines are likely attributable to the effects of lower external tariffs, because the firm-level productivity margin below which exporting is unprofitable moves down as the external tariff rate is reduced. We also find that sales to the rest of the world and sales to other African economies have differential effects on productivity growth rates, and that for country-specific reasons, these effects are not uniform. Controlling for initial productivity and the destination of exports (within or outside Africa) helps us understand why in some cases, export participation is associated with negative rates of TFP growth. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:583&r=int |
| By: | Maria Paula Fontoura; Pedro Serôdio |
| Abstract: | In this paper, we aim at contributing to the new field of research that intends to bring up-to-date the tools and statistics currently used to look to the current reality given by Global Value Chains (GVC) in international trade and Foreign Direct Investment (FDI). Namely, we make use of the most recent data published by the World Input-Output Database to suggest indicators to measure the participation and net gains of countries by being a part of GVC; and use those indicators in a pooled-regression model to estimate determinants of FDI stocks in Organization for Economic Co-operation and Development (OECD)-member countries. We conclude that one of the measures proposed proves to be statistically significant in explaining the bilateral stock of FDI in OECD countries, meaning that the higher the transnational income generated between two given countries by GVC, taken as a proxy to the participation of those countries in GVC, the higher one could expect the FDI entering those countries to be. The regression also shows the negative impact of the global financial crisis that started in 2009 in the world’s bilateral FDI stocks and, additionally, the particular and significant role played by the People’s Republic of China in determining these stocks. Key Words : International fragmentation of production, Globalization, Global Value Chains, Foreign Direct Investment, Pooled-regression model |
| JEL: | C33 C67 F14 F21 F60 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp162016&r=int |
| By: | Alan ASPRILLA (FERDI); Nicolas BERMAN (FERDI); Olivier CADOT (Faculté des hautes études commerciales - Université de Lausanne); Melise JAUD (FERDI) |
| Abstract: | This paper identifies the effect of trade policy on market power through new data and a new identication strategy. We use a large dataset containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product specific information on tariffs and non-tariff barriers. We identify market power by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of our sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, we find that the effect of non-tariff measures is not isomorphic to that of tariffs: the pricing-to-market behavior we observe suggests that, while tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike. Keywords: Trade policy, non-tariff measures, tariffs, exchange rate, price discrimination |
| Keywords: | trade policy, non-tariff measures, tariffs, exchange rate, price discrimination |
| JEL: | F12 F13 F14 D40 F31 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:3139&r=int |
| By: | Marcus Noland (Peterson Institute for International Economics); Gary Clyde Hufbauer (Peterson Institute for International Economics); Tyler Moran (Peterson Institute for International Economics); Sherman Robinson (International Food Policy Research Institute) |
| Abstract: | Republican candidate Donald J. Trump’s sweeping proposals on international trade, if implemented, could unleash a trade war that would plunge the US economy into recession and cost more than 4 million private sector American jobs, according to an empirical analysis of the two candidates’ trade agendas by the Peterson Institute for International Economics. Trump has proclaimed that he would “rip up” existing trade agreements, renegotiate the North American Free Trade Agreement (NAFTA), and impose a 35 percent tariff on imports from Mexico and a 45 percent tariff on imports from China. Hillary Clinton, the Democratic candidate, has expressed skepticism about trade but in effect represents stasis. Both candidates have come out against the Trans-Pacific Partnership (TPP) between the United States and 11 Pacific Rim countries, which President Barack Obama signed earlier in 2016. The authors of the empirical assessment, Marcus Noland, Tyler Moran, and Sherman Robinson, extend a macroeconomic model from Moody’s Analytics and find that if Trump raises tariffs sharply on China, Mexico, and other trading partners, export-dependent US industries that manufacture machinery used to create capital goods in the information technology, aerospace, and engineering sectors would be the most severely affected. But the shock resulting from Trump’s proposed trade sanctions would also damage sectors not engaged directly in trade, such as wholesale and retail distribution, restaurants, and temporary employment agencies, particularly in regions where the most heavily affected goods are produced. Millions of American jobs that appear unconnected to international trade—disproportionately lower-skilled and lower-wage jobs—would be at risk, according to the empirical study. In a legal analysis, Gary Clyde Hufbauer argues that there is ample precedent and scope for a US president to unilaterally raise tariffs as Trump has vowed to do as a centerpiece of his trade policy. Any effort to block Trump’s actions through the courts, or amend the authorizing statutes in Congress, would be difficult and time-consuming. In a separate chapter Noland analyzes the impact of trade policies advocated by both Trump and Clinton on the United States’ foreign policy interests. Pulling out of the TPP, as both candidates promise to do, would weaken US alliances in Asia and embolden its rivals, thus eroding US national security. Noland also warns that abrogation of NAFTA, as Trump threatens, would deliver a severe blow to Mexico’s economic and political development that could increase, not decrease, the flow of illegal migrants and drugs into the United States. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:iie:piiebs:piieb16-6&r=int |
| By: | Guillaume Corlay (ENSAE); Stéphane Dupraz (Colombia University); Claire Labonne (PSE - Banque de France); Anne Muller (ENSAE); Céline Antonin (OFCE-Sciences Po); Guillaume Daudin (Université Paris-Dauphine OFCE-Sciences PO) |
| Abstract: | Jacks et al. (2011) offer an alternative to price gaps to quantify trade costs. Implementing a method which consists in deducing international trade costs from trade flows, they argue that the reduction in trade costs was the main driving force of trade growth during the first globalization (1870-1913), whereas economic expansion was the main driving force during the second globalization (1950-2000). We argue that this important result is driven by the use of an ad hocaggregation method. What Jacks et al. (2011) capture is the difference in the relative starting trade of dyads experiencing faster trade growth in the first and second globalization. More generally, we cast doubts on the possibility to reach conclusions of such nature with a method that infers trade costs from trade flows, and then uses these costs to explain trade flows. We argue that it can only rephrase the information already contained in openness ratios. |
| Keywords: | Trade Costs, globalization, gravity model, aggregation, structure effect |
| JEL: | F14 N70 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1625&r=int |
| By: | Miguel Fonseca; António Mendonça |
| Abstract: | In the last two decades the internationalisation of the Portuguese economy increased, particularly through outward FDI on the Portuguese-speaking countries. Different studies in economic literature conclude for the existence of a complementary relationship between foreign production and trade in traditional outward investing economies, contributing to the long term sustainable path of the country’s trade balance. In our paper we discuss if this hypothesis holds for a new outward investor like Portugal, with reference to the period 1996-2011. We use a panel data analysis within a framework of gravity models for exports and imports, with a sample composed by EU-15, U.S.A., Brazil, Angola, Spain, Japan and China.Our main conclusion is that the Portuguese outward FDI seems to be negatively related to exports, suggesting a substitution effect, and thus a negative trade balance effect, for the majority of countries in our sample. The exception to this tendency seems to be Spain, confirming and reinforcing a former study for the period 1996-2007. Angola also reveals a positive effect on exports but, in this case, the effect on imports outweighs that on exports, contradicting the results obtained in that same former study. The results we achieved now suggest that the expected positive impact on home country ´s trade of the increased internationalisation of the Portuguese economy as an exporter of capital, on the last fifteen years, is not evident and continue to be not predicable with certainty relying on empirical evidence. |
| Keywords: | Foreign Direct Investment, Trade, Gravity Model, Portugal, Portuguese-speaking countries |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cav:cavwpp:wp138&r=int |
| By: | Jan Hagemejer (Faculty of Economic Sciences, University of Warsaw; Economic Institute, National Bank of Poland) |
| Abstract: | We analyze the determinants of value added and productivity growth of New Member States in the period between 1995 and 2009. We show that in the analyzed countries exports contributed to between 30 to over 40% of the overall growth of GDP while the contribution of the domestic component varied from negative to over 60%. We show that in the most important export manufacturing industries of the NMS, the growth in exported value added was substantial, while the growth of the domestic component of GDP was mostly due to the growth in services. We associate growth of sectoral productivity with the foreign direct investment and exporting but, more importantly, with the position of a sector/country in the global value chains. We show that sectors that have imported intermediate goods have experienced higher productivity growth. Moreover, productivity growth was found in sectors further away from the final demand and in sectors exporting intermediate goods. |
| Keywords: | global value chains, productivity, economic growth, openness |
| JEL: | C23 F21 O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2016-24&r=int |
| By: | Coelli, Federica; Moxnes, Andreas; Ulltveit-Moe, Karen-Helene |
| Abstract: | This paper estimates the effect of trade policy during the Great Liberalization of the 1990s on innovation in over 60 countries using international firm-level patent data. The empirical strategy exploits ex-ante differences in firms' exposure to countries and industries, allowing us to construct firm-specific measures of tariffs. This provides asource of variation that enables us to establish the causal impact of trade policy on innovation. Our results suggest that trade liberalization has economically significant effects on innovation and, ultimately, on technical change and growth. According to our estimates, about 7 percent of the increase in knowledge creation during the 1990s can be explained by trade policy reforms. Furthermore, we find that the increase in patenting reflects innovation, rather than simply more protection of existing knowledge. Both improved market access and more import competition contribute to the positive innovation response to trade liberalization. |
| Keywords: | innovation; patents; trade liberalization |
| JEL: | F0 F1 F13 F6 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11506&r=int |
| By: | Richard Chisik (Ryerson University); Julian Emami Namini (Erasmus University Rotterdam) |
| 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 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: | 2016–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:401&r=int |
| By: | Jevan Cherniwchan; Brian R. Copeland; M. Scott Taylor |
| Abstract: | We review recent research linking international trade to the environment, with a focus on new results and methods. The review is given structure by a novel decomposition linking changes in emissions to changes in productive activity at the plant, firm, industry, and national levels. While some new results have emerged from the application of a Melitz-style approach to trade and the environment, its full potential has not yet been exploited. We discuss existing empirical and theoretical work, introduce three new hypotheses, and suggest paths for future researchers to follow. |
| JEL: | F1 F14 F64 Q5 Q56 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22636&r=int |
| By: | Frédéric DOCQUIER (Université Catholique de Louvain); Amandine AUBRY (IRES - Université Catholique de Louvain); Michał BURZYŃSKI (IRES - Université Catholique de Louvain) |
| Abstract: | This paper quantifies the effect of global migration on the welfare of non-migrant OECD citizens. We develop an integrated, multi-country model that accounts for the interactions between the labor market, fiscal, and market size effects of migration, as well as for trade relations between countries. The model is calibrated to match the economic and demographic characteristics of the 34 OECD countries and the rest of the world, as well as trade flows between them in the year 2010. We show that recent migration flows have been beneficial for 69 percent of the non-migrant OECD population, and for 83 percent of non-migrant citizens of the 22 richest OECD countries. Winners are mainly residing in traditional immigration countries; their gains are substantial and are essentially due to the entry of immigrants from non OECD countries. Although labor market and fiscal effects are non-negligible in some countries, the greatest source of gain comes from the market size effect, i.e. the change in the variety of goods available to consumers. |
| JEL: | C68 F22 J24 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:3061&r=int |
| By: | John C Beghin; Miet Maertens; Johan Swinnen |
| Abstract: | We assess the literature on public and private quality standards and their impact in food markets, international trade, and global supply chains. We focus on their effects on welfare, trade, industrial organization, and labor markets and with special attention to the North-South context. We also attempt to better characterize when these measures constitute protectionism, a complicate task. We look at studies investigating public and private standards and across various quantitative approaches and countries. These standards have complex effects. The evidence is mixed regarding standards as catalyst for or impediment against trade and development, reflecting the complexity of these effects and their specificity to industries and countries. The analysis of standard-like nontariff measures and their impacts does not lead to sweeping prescriptions for policy reforms. We identify more modest prescriptions and make some recommendations for fruitful research directions. |
| Keywords: | supply chain, standards, nontariff measures, SPS, NTM, trade, welfare, North-South |
| JEL: | F13 F15 Q17 O19 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:36315&r=int |
| By: | Kwok Tong Soo |
| Abstract: | This paper develops a Ricardian model of trade in which there are indivisibilities in both production and consumption. Indivisibilities give rise to new results compared to the standard model with perfectly divisible production and consumption. Production indivisibility may result in complete specialisation even in autarky, while consumption indivisibility may result in consumption heterogeneity even amongst ex ante identical consumers. Indivisibilities lead to efficiency losses relative to the perfectly divisible case. |
| Keywords: | Ricardian model, CES preferences, indivisible production, indivisible consumption |
| JEL: | F11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:127876284&r=int |
| By: | Guncavdi, Oner; Kayam, Saime Suna |
| Abstract: | In this study we reveal the structure of exports in an emerging economy, Turkey, to shed light on the impediments not only this country but also other developing countries might face in pursuit of increasing exports to tackle their current account problems. We employ panel data econometrics for estimating exports, labour and imports market specifications simultaneously to address endogeneity issues. The data covers 13 manufacturing industry sectors, 25 main export markets over the period 2000-2011. Our findings reveal that unlike conventional assumptions, export supply is not infinitely elastic, and the supply side of the market plays a critical role in reviving export earnings in Turkey. |
| Keywords: | Export demand and supply; exchange rate policy; Turkey |
| JEL: | F14 F41 O24 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73890&r=int |
| By: | Edurkar, Ashok; Shaikh, Dr.Atik Asgar |
| Abstract: | In view of effective financing of domestic and foreign trade, foreign banks have been given more free hand in Indian banking sector after India’s accession to WTO. Under WTO regime, developed countries are seeking progressive removal of the limitations relating to further opening of branches and allowing establishment of wholly-owned subsidiaries. After 2005 RBI’s Road Map for foreign banks, which allowed fair competition and geographical expansion, foreign banks became aware of new strategic possibilities. Trade financing activity received new momentum as foreign banks are free to enter new markets either by acquiring existing competitor bank franchises or by opening one of their own set up under Wholly-Owned Subsidiary (WOS) model proposed by RBI. The aim of this paper is to assess the role of foreign banks operating in India specifically post RBI Road MAP 2005. Financing function of foreign banks is summarized in the form of allocation of advances, investments, India’s GDP figures and inflation rate during the period covering financial years 2003-04 to 2012-13. |
| Keywords: | Finance, Financing Function, Foreign Banks, RBI Road MAP 2005 |
| JEL: | G2 G21 |
| Date: | 2016–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73869&r=int |
| By: | Kwok Tong Soo |
| Abstract: | This paper documents a negative relationship between country size and the share of consumption goods in total exports. A model is developed, based on the division of labour and comparative advantage, to explain this relationship. Labour is used to produce traded intermediate inputs which are used in the production of traded final goods. Large countries gain relatively more from comparative advantage than from the division of labour, while the opposite is true for small countries. As in the data, large countries export a smaller share of final goods and a larger share of intermediate goods than small countries. |
| Keywords: | Country size, division of labour, comparative advantage, gains from trade, intermediate goods trade |
| JEL: | F11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:127876352&r=int |
| By: | Richard Pomfret; Patricia Sourdin (School of Economics, University of Adelaide) |
| Abstract: | The geographical composition of the EU has changed dramatically since 1989 as the enlargements of 1995 (Austria, Sweden and Finland) and 2004-13 (Eastern European countries plus Cyprus and Malta) more than doubled the number of EU member countries. This paper reviews the level, direction and composition of Australian trade with EU member countries from 1990 to 2015. Australia-EU trade remains dominated by relations with the original six member countries and the UK. A striking feature has been the rapid increase in trade between Australia and the Eastern European countries that joined the EU in 2004. Analysis of the new EU members' trade with Australia highlights intra-EU regional value chains as a pathway by which the new EU members rapidly became exporters of manufactured goods such as cars. Thus, the 2004 EU enlargement benefited Australia by providing cars that fitted many Australian consumers' preferences and budgets, and rapid economic growth in the Eastern European economies provided markets for Australian exports. Part of the reason why EU countries have remained attractive trade partners is that the costs of international trade between Australia and EU countries have remained low relative to trade costs between Australia and other countries; the level and determinants of bilateral trade costs are analyzed using disaggregated ABS data. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2016-10&r=int |
| By: | Leone Walters (Department of Economics, University of Pretoria, South Africa); Heinrich R. Bohlmann (Department of Economics, University of Pretoria, South Africa); Matthew W. Clance (Department of Economics, University of Pretoria, South Africa) |
| Abstract: | This paper analyses the e¤ects of the COMESA-EAC-SADC Tripartite Free Trade Agreement (TFTA) on the South African economy using a global Computable General Equilibrium (CGE) model. Simulation results show that South Africa’s economy gains from the implementation of the trade agreement with GDP rising by more than 1 per cent relative to the baseline. This win in overall economic activity occurs on the back of a term of trade increase and a surge in regional trade, which allows for higher levels of both exports and imports. The boost to exports stimulates local industries, whilst relatively cheaper imports lead to welfare gains for local consumers. Increased trade and industry activity causes higher demand for endowments, including skilled and unskilled labour, capital and land, pushing up wages and capital rentals. |
| Keywords: | Computable General Equilibrium (CGE) Modelling, Free Trade Agreement, South Africa |
| JEL: | C68 F13 O55 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201669&r=int |
| By: | David Autor; David Dorn; Gordon Hanson; Kaveh Majlesi |
| Abstract: | Has rising trade integration between the U.S. and China contributed to the polarization of U.S. politics? Analyzing outcomes from the 2002 and 2010 congressional elections, we detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts initially in Republican hands become substantially more likely to elect a conservative Republican, while trade-exposed districts initially in Democratic hands become more likely to elect either a liberal Democrat or a conservative Republican. Polarization is also evident when breaking down districts by race: trade-exposed locations with a majority white population are disproportionately likely to replace moderate legislators with conservative Republicans, whereas locations with a majority non-white population tend to replace moderates with liberal Democrats. We further contrast the electoral impacts of trade exposure with shocks associated with generalized changes in labor demand and with the post-2006 U.S. housing market collapse. |
| JEL: | D72 F14 H11 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22637&r=int |
| By: | Jintai Lin; Dan Tong; Steven Davis; Ruijing Ni; Xiaoxiao Tan; Da Pan; Hongyan Zhao; Zifeng Lu; David Streets; Tong Feng; Qiang Zhang; Yingying Yan; Yongyun Hu; Jing Li; Zhu Liu; Xujia Jiang; Guannan Geng; Kebin He; Yi Huang; Dabo Guan |
| Abstract: | International trade separates regions consuming goods and services from regions where goods and related aerosol pollution are produced. Yet the role of trade in aerosol climate forcing attributed to different regions has never been quantified. Here, we contrast the direct radiative forcing of aerosols related to regions? consumption of goods and services against the forcing due to emissions produced in each region. Aerosols assessed include black carbon, primary organic aerosol, and secondary inorganic aerosols, including sulfate, nitrate and ammonium. We find that global aerosol radiative forcing due to emissions produced in East Asia is much stronger than the forcing related to goods and services ultimately consumed in that region because of its large net export of emissions-intensive goods. The opposite is true for net importers such as Western Europe and North America: global radiative forcing related to consumption is much greater than the forcing due to emissions produced in these regions. Overall, trade is associated with a shift of radiative forcing from net importing to net exporting regions. Compared to greenhouse gases such as carbon dioxide, the short atmospheric lifetimes of aerosols cause large localized differences between consumption- and production-related radiative forcing. International efforts to reduce emissions in the exporting countries will help alleviate trade-related climate and health impacts of aerosols while lowering global emissions. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:453052&r=int |
| By: | Coxhead, Ian (University of Wisconsin); Shrestha, Rashesh (University of Wisconsin) |
| Abstract: | For a decade from 2000 Indonesia underwent a natural resource export boom. Aggregate income rose, but real labor earnings stagnated. Employment rose mainly in low-skill sectors with predominantly informal employment arrangements. In this paper we reveal causal connections from the aggregate phenomenon of Dutch Disease to these labor market outcomes. We first explain broad sectoral trends, then, integrating data from several national surveys, investigate sources of variation in boom-era labor earnings. We use instrumental variables to address issues of endogeneity and selection in earnings equations. After controlling for individual and district features we find that intensity of oil palm production, a key booming resource export, robustly predicts diminished formal employment, and that lower formality, in turn, robustly predicts lower earnings. Our findings establish causal linkages absent from prior studies, and so provide a structural dimension to ongoing debates over persistent poverty, rising inequality, and lack of educational progress in Indonesia. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:582&r=int |
| By: | Autor, David; Dorn, David; Hanson, Gordon; Majlesi, Kaveh |
| Abstract: | Has rising trade integration between the U.S. and China contributed to the polarization of U.S. politics? Analyzing outcomes from the 2002 and 2010 congressional elections, we detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts initially in Republican hands become substantially more likely to elect a conservative Republican, while trade-exposed districts initially in Democratic hands become more likely to elect either a liberal Democrat or a conservative Republican. Polarization is also evident when breaking down districts by race: trade-exposed locations with a majority white population are disproportionately likely to replace moderate legislators with conservative Republicans, whereas locations with a majority non-white population tend to replace moderates with liberal Democrats. We further contrast the electoral impacts of trade exposure with shocks associated with generalized changes in labor demand and with the post-2006 U.S. housing market collapse. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11511&r=int |
| By: | Beck, Günter W.; Kotz, Hans-Helmut; Zabelina, Natalia |
| Abstract: | Studies employing micro price data to examine the extent of international goods market integration tend to find that borders induce arbitrage-impeding transaction costs which contribute to segment national markets. Analyzing household scanner price data from the three euro area countries Belgium, Germany and Netherlands, we document that Belgian households living in the vicinity of the border to Netherlands pay almost 10% more for the same good as their Dutch counterparts. German consumers on the other hand face prices that are on average up to around 3% smaller than those in the neighboring Netherlands. Counterfactual evidence for within-country price discontinuities provides no evidence of any existing border effects. The induced costs of crossing national borders amount to at least 13%. We also find evidence on border discontinuities in various household preference characteristics (such as demand elasticities and goods valuation) and household shopping patterns such as shopping frequencies. |
| Keywords: | goods market integration,international price setting,border effects,price discrimination,demand elasticities,habit formation,scanner price data |
| JEL: | D12 D40 F40 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:536&r=int |
| By: | Rudy Colacicco (Department of Economics, Finance and Accounting, Maynooth University.) |
| Abstract: | I build a two-country general oligopolistic equilibrium model, in which sectors differ in emissions and technologies, and pollution can be transboundary. I derive the optimal bilateral environmental policy for the economy as a whole, for the cases in which the environmental damage either linearly or quadratically increases in total pollution. The analysis highlights that the optimal emission tax can even be negative, and bilateral trade liberalization should be matched with either a rise or a fall in the optimal emission tax. The moments of the emission distribution and technology distribution across sectors are fundamental to implement optimal environmental policies. |
| Keywords: | Cournot Competition; Environmental Policy; Emission Tax; General Oligopolistic Equilibrium (GOLE); Trade Liberalization; Transboundary Pollution |
| JEL: | F12 F13 F18 Q53 Q56 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n273-16.pdf&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, High-value supply chains, Rural wage employment, Quantile regression, Panel data, Long-term effects |
| JEL: | F16 J14 O19 Q17 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:38016&r=int |
| By: | Alexis Grimm; Mina Kim (Bureau of Economic Analysis) |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:bea:wpaper:0136&r=int |
| By: | Bertoli, Simone (CERDI, University of Auvergne); Ruyssen, Ilse (Ghent University) |
| Abstract: | Social networks are known to influence migration decisions, but connections between individuals can hardly be observed. We rely on individual-level surveys conducted by Gallup in 147 countries that provide information on migration intentions and on the existence of distance-one connections for all respondents in each of the potential countries of intended destination. The origin-specific distribution of distance-one connections from Gallup closely mirrors the actual distribution of migrant stocks across countries, and bilateral migration intentions appear to be significantly correlated with actual flows. This unique data source allows estimating origin-specific conditional logit models that shed light on the value of having a friend in a given country on the attractiveness of that destination. The validity of the distributional assumptions that underpin the estimation is tested, and concerns about the threats to identification posed by unobservables are substantially mitigated. |
| Keywords: | international migration, networks, intentions |
| JEL: | F22 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10213&r=int |
| By: | Michele Caraglio; Fulvio Baldovin; Attilio L. Stella |
| Abstract: | We analyze export data aggregated at world global level of 219 classes of products over a period of 39 years. Our main goal is to set up a dynamical model to identify and quantify plausible mechanisms by which the evolutions of the various exports affect each other. This is pursued through a stochastic differential description, partly inspired by approaches used in population dynamics or directed polymers in random media. We outline a complex network of transfer rates which describes how resources are shifted between different product classes, and determines how casual favorable conditions for one export can spread to the other ones. A calibration procedure allows to fit four free model-parameters such that the dynamical evolution becomes consistent with the average growth, the fluctuations, and the ranking of the export values observed in real data. Growth crucially depends on the balance between maintaining and shifting resources to different exports, like in an explore-exploit problem. Remarkably, the calibrated parameters warrant a close-to-maximum growth rate under the transient conditions realized in the period covered by data, implying an optimal self organization of the global export. According to the model, major structural changes in the global economy take tens of years. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1609.04956&r=int |
| By: | Elena Briones Alonso; Johan Swinnen |
| Abstract: | We develop an extended Nominal Rate of Assistance (NRA) methodology to disentangle the welfare impacts of policies for various interest groups along the value chain (to disaggregate effects within the "producer" and "consumer" umbrellas). We apply our value chain NRA methodology to the case of Pakistan's price and trade policy. We analyse the welfare implications for various agents in the wheat-flour value chain from 2000 to 2013, a period characterized by major global price volatility and by regular adjustments of domestic policies. We find that the wheat price policy has generally benefitted flour consumers and wheat traders at the expense of wheat farmers and to a lesser extent flour millers. Our findings illustrate that the welfare implications of policies can be quite different within the "producer" and "consumer" umbrellas, which has potentially important implications for economic and political economy analyses and for the design of policies that aim to target the poorest groups along value chains. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:36615&r=int |
| By: | Generalova Svetlana Vladimirovna (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration) |
| Abstract: | The article reveals the essence and purpose of the diversification of agricultural production in the conditions of import substitution. Settle the causes that gave rise to the need to deepen the process of diversification of agricultural production to meet the requirements of import substitution in Russia. |
| Keywords: | diversification, import substitution, agricultural products |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:ppaper:g9166&r=int |