nep-int New Economics Papers
on International Trade
Issue of 2016‒10‒09
39 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Third Country Effect of Migration: the Trade-Migration Nexus Revisited By Erik Figueiredo; Luiz Renato Lima; Gianluca Orefice
  2. Post-crisis foreign trade trends and policies on the periphery of the European Union - comparison of the Iberian, Baltic and Central European region By Andrea Elteto; Katalin Antaloczy
  3. Tariff Liberalization and Trade Integration of Emerging Countries By Anne-Célia Disdier; Lionel Fontagné; Mondher Mimouni
  4. Time, Space and Skills in Designing Migration Policy By Michal Burzynski
  5. Product Standards and Margins of Trade: Firm-Level Evidence Product Standards and Margins of Trade: Firm-Level Evidence By Lionel Fontagné; Gianluca Orefice; Roberta Piermartini; Nadia Rocha
  6. Cascading Trade Protection: Evidence from the US By Aksel Erbahar; Yuan Zi
  7. The Politics of Partial Liberalization: Cronyism and Non-Tariff Protection in Mubarak's Egypt By Ferdinand Eibl; Adeel Malik
  8. Volatility in the Small and in the Large: The Lack of Diversification in International Trade By Kramarz, Francis; Martin, Julien; Mejean, Isabelle
  9. Misreporting of International Trade Flows in Financial Datasets By Breinlich, Holger; Nolen, Patrick J.; Wright, Greg C.
  10. Determinants of Nigeria-China Bilateral Trade in Manufacturing Products By AKPOILIH, Roland; FARAYIBI, Adesoji
  11. "Multiproduct Oligopoly and Trade Between Asymmetric Countries" By Yi-Ling Cheng; Akihiko Takahashi
  12. Trade policy reform and firm-level productivity growth: Does the choice of production function matter? By John Kealey; Pau S. Pujolas; Cesar Sosa-Padilla
  13. Exchange Rate Trends and Export Performance in Nigeria: A Descriptive Approach By OWURU, Joel; FARAYIBI, Adesoji
  14. Quantitative Trade Models: Developments and Challenges By Kehoe, Timothy J.; Pujolas, Pau S.; Rossbach, Jack
  15. On Empirical Distribution of RCA Indices By Deb, Kaveri; Sengupta, Bodhisattva
  16. On the heterogeneous effect of trade on unemployment By Carrère, Céline; Fugazza, Marco; Olarreaga, Marcelo; Robert-Nicoud, Frédéric
  17. On the Economics and Politics of Refugee Migration By Christian Dustmann; Francesco Fasani; Tommaso Frattini; Luigi Minale; Uta SchÓ§nberg
  18. Wage Inequality Dynamics and Trade Exposure in South Korea By Baybars Karacaovali; Chrysostomos Tabakis
  19. FDI and Growth in the MENA countries: Are the GCC countries Different? By Gammoudi, Mouna; Cherif, Mondher; Asongu, Simplice A
  20. The Benefits and Casualties of Trade By Harker, Patrick T.
  21. The Impact of Offshoring and Migration Policies on Migration Flows By Cosimo Beverelli; Gianluca Orefice; Nadia Rocha
  22. The Aid for Trade initiative and the export performance of the Iberian EU-countries By Beata Udvari
  23. Financing Time to Trade By Pauline Bourgeon; Jean-Charles Bricongne
  24. Location Choices of Chinese Multinationals in Europe: The Role of Overseas Communities By Bas Karreman; Martijn J. Burger; Frank G. van Oort
  25. Impact of Globalization on Income Inequality in Selected Asian Countries By Bukhari, Mahnoor; Munir, Kashif
  26. The effect of input-trade liberalization on nonfarm and farm labour participation in rural Vietnam By Hoang Xuan Trung; Luca Tiberti
  27. Globalization and Governance: A Critical Contribution to the Empirics By Asongu, Simplice; Efobi, Uchenna; Tchamyou, Vanessa
  28. Globalization, Inequality and Welfare By Antràs, Pol; de Gortari, Alonso; Itskhoki, Oleg
  29. Brexit and the UK labour market By Barbara Petrongolo
  30. Climatic Factors as Determinants of International Migration: Redux By Michel Beine; Christopher R. Parsons
  31. Environmental taxation and international trade in a tax-distorted economy By Llop Llop, Maria
  32. CGE model closures in a skeleton world model By André Lemelin
  33. Trade Shocks and the Provision of Local Public Goods By Feler, Leo; Senses, Mine Zeynep
  34. Trade Between Creative Regions When the Input Elasticity of Substitution is Less Than Unity By Batabyal, Amitrajeet; Beladi, Hamid
  35. A Political Economy to Examine Brexit By Li, Kui-Wai
  36. Who voted Leave? By Monica Langella; Alan Manning
  37. Diaspora Remittance Inflow, Financial Development and the Industrialisation of Africa By Efobi Uchenna; Simplice Asongu; Chinelo Okafor; Vanessa Tchamyou
  38. La mondialisation économique du football By Wladimir Andreff
  39. The emerging ASEAN approach to mutual recognition : a comparison with Europe, trans-Tasman, and North America By Hamanaka, Shintaro; Jusoh, Sufian

  1. By: Erik Figueiredo; Luiz Renato Lima; Gianluca Orefice
    Abstract: This paper proposes a new channel through which migrants can affect the import demand of the host country. In migrating from origin to destination country, migrants observe a change in the prices of the bundle of consumable goods. In particular, the migration decision can reflect a reduction in the price of imported goods (due to lower applied tariff) for the consumption bundle of migrants: emigration towards less (tariff) protected countries allows the consumption of products that were prohibitively protected in the origin countries of migrants. To test this channel we estimate the import demand effect of migrant groups coming from third high (tariff) protected countries. We use a theory-grounded gravity estimations and a fresh econometric techniques able to address both the zero migration flows problem and the endogeneity of migrants. Our results suggest that such a third-country immigrant effect is significant and positive.
    Keywords: Trade-Migration;Third-Country Effect;Quantile Regression;Imputation
    JEL: F14 C21 C36
    Date: 2016–09
  2. By: Andrea Elteto (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Katalin Antaloczy (Faculty of International Management and Business, Budapest Business School)
    Abstract: The year of the great trade collapse in the world was 2009. The international crisis caused a shrinkage of domestic demand and general credit crunch. As a consequence, the growth-enhancing role of exports came into focus in most countries. Exports gained momentum from 2010 but with certain changes in structure and direction. Trade within global value chains has become more pronounced and non-EU markets were targeted by several firms. In certain countries it became a deliberate state policy to turn towards non-EU areas. On the one hand, our paper will describe government foreign trade strategies and institutional framework of the Iberian, Baltic and Central European countries, detecting possible similarities. On the other hand we will analyse the actual foreign trade data in the recent years; what are the main export products and services. Apart from desk research, our methodology consists of detailed trade data analysis from the Eurostat Comext database and service trade database. Based on these we can get a picture on the structure and direction of exports of the peripheric economies and this can be compared to the aims of the given states. Our preliminary hypothesis is that there is a gap between the reality and the intentions of the states. The size of this gap varies and is influenced by certain factors like the different involvement of multinational companies in the foreign trade or the different economic structure of these countries.
    Keywords: export, export promotion, Visegrád countries, Baltic countries, Iberian countries, global value chains
    JEL: F13 F14 P52
    Date: 2016–09
  3. By: Anne-Célia Disdier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Lionel Fontagné (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Mondher Mimouni (Office National de la Météorologie (Tamanrasset) - Office National de la Météorologie)
    Abstract: This paper investigates how tariff liberalization has aected exporting at the product-destination level in emerging countries. We use a highly disaggregated (6 digit level of the harmonized system HS classication) bilateral measure of market access to compare taris applied in 1996 and 2006, which includes the timing of the Uruguay Round and episodes of bilateral liberalization. Our econometric estimations consider impacts of tari cuts on three components of the trade margins: extensive margin of entry (new trade relationships at the product-destination level), extensive margin of exit (disappearance of existing relationships) and intensive margin of trade (deepening existing relationships). Our main estimates indicate that a reduction of bilateral applied taris of 1 percentage point increases the extensive margin of entry by 0.1% and the intensive one by 2.09%, while it reduces the extensive margin of exit by 0.25%.
    Keywords: tariffs,trade liberalization,emerging countries,margins of trade
    Date: 2015–07–24
  4. By: Michal Burzynski (CREA, Université du Luxembourg)
    Abstract: This paper proposes a multi-country model of international migration in which college-educated workers choose their destination country, preferred type of visa, and the optimal duration of stay. Combining these elements into a unified theoretical framework provides a micro-foundation for the multilateral resistance to migration. The proposed theory is applied to investigate the global implications of decreasing the costs of six-year visas for highly skilled professionals in the EU, calibrated as an introduction of H1B visas. This is compared with a policy of reducing income tax for medium-term, college-educated, foreign workers. The two counterfactuals indicate a significant rise in the yearly inflows and total stocks of highly skilled immigrants into the EU. The outcomes of the former policy are driven by a “visa-substitution” effect within the group of current emigrants, while the latter scenario results in an increase in the pool of international migrants. Both policies induce a “destination-substitution” effect—losses of skilled migrants by non-EU states, which is reinforced by a multilateral resistance to migration.
    Keywords: migration policy, temporary migration, discrete choice models, H1B visas
    JEL: F22 J61
    Date: 2016
  5. By: Lionel Fontagné (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Gianluca Orefice (Centre d'Etudes Prospectives et d'Informations Internationales); Roberta Piermartini (WTO); Nadia Rocha (WTO)
    Abstract: This paper considers the heterogenous trade effects of restrictive Sanitary and Phyto-Sanitary (SPS) measures on exporters of different sizes, and the channels via which aggregate exports fall: firm participation, export values and pricing strategies. We do so by matching a detailed panel of French firm exports to a new database of SPS regulatory measures that have been raised as of concern in the dedicated committees of the WTO. By using specific trade concerns to capture the restrictiveness of product standards, we focus only on standards that are perceived as trade barriers. We analyze their effects on three trade-related outcomes: (i) the probability to export and to exit the export market (the firm-product extensive margin), (ii) the value exported (the firm-product intensive margin), and (iii) export prices. We find that SPS concerns discourage the presence of exporters in SPS-imposing foreign markets. We also find a negative effect of SPS imposition on the intensive margins of trade. These negative effects SPS are attenuated in larger firms.
    Keywords: International trade,firm heterogeneity,multi-product exporters,non-tariff barriers *
    Date: 2015–09
  6. By: Aksel Erbahar (Erasmus University Rotterdam, the Netherlands); Yuan Zi (The Graduate Institute of International and Development Studies, Geneva, Switzerland)
    Abstract: In a world with increasingly integrated global supply chains, trade policy targeting upstream products has unintended consequences on their downstream industries. In this paper, we examine whether protection granted to intermediate manufacturers leads to petition for protection by their downstream users. We first provide a simple model based on the quantitative framework of Ossa (2014) which identifies the key factors and their interactions that cause cascading protection to motivate our empirical analysis. Then, we test our model by identifying the input-output relationships among the time-varying temporary trade barriers of the US using its detailed input-output tables. As predicted by the theory, we find that measures on imported inputs increase the likelihood of their downstream users' subsequent trade remedy petition over the 1988-2013 period. Moreover, our simulation exercise shows that cascading protection can cause additional welfare losses, and hence we propose that trade policy investigations should take vertical linkages into account.
    Keywords: trade policy; protectionism; global value chains; anti-dumping
    JEL: F1 F13 F14 F68
    Date: 2016–10–03
  7. By: Ferdinand Eibl; Adeel Malik
    Abstract: This paper provides one of the first systematic empirical assessments of the impact of political connections on trade protection. Based on a unique compilation of sector-level data on non-tariff measures (NTMs) and politically connected businessmen in Mubarak-era Egypt, we explore the within-sector variation in NTMs over time, and show that sectors populated by politically connected businessmen witnessed systematically higher incidence and density of non-tariff protection. Our results suggest that the presence of cronies is a strong predictor of the subsequent introduction of NTMs. Crony presence also shapes the density of NTMs as measured by the share of products subject to NTMs. Our results are derived from the robust empirical methods that simultaneously address temporal dependence, fixed effects and endogeneity concerns. To establish causality, we take advantage of the across the board cut in tariffs in the wake of the EU-Egypt free trade agreement in 2004-05 to show that sectors with crony activity were compensated significantly more by new NTMs than non-crony sectors.
    JEL: F13 F14 O24 O53 P26
    Date: 2016
  8. By: Kramarz, Francis; Martin, Julien; Mejean, Isabelle
    Abstract: We study how different sources of fluctuations interact with the micro-structure of trade networks to shape the volatility of exports at the firm-level and in the aggregate. Four shocks affect transactions -- a macroeconomic shock and three individual shocks hitting the exporters, their foreign partners, and their matches. We structurally estimate these shocks using data on the transactions connecting French exporters to their individual European buyers. Individual shocks explain half of aggregate fluctuations and the entirety of individual fluctuations. The volatility of sales across firms and countries are well-explained by the cross-sectional heterogeneity in the diversification of their trade networks.
    Keywords: Aggregate fluctuations; Firm-level volatility; firm-to-firm trade
    JEL: D22 E32 F14
    Date: 2016–09
  9. By: Breinlich, Holger (University of Nottingham); Nolen, Patrick J. (University of Essex); Wright, Greg C. (University of California, Merced)
    Abstract: In this paper we compare firms' self-reported overseas sales, as reported in a commonly used UK financial reporting dataset, with their actual exports, as reported by Her Majesty's Revenue and Customs (HMRC). Finding that these flows are in several dimensions quite different, we then explore the implications of these differences more formally. Since several studies within the international trade literature report findings based on the self-reported export values in financial datasets, we discuss these findings in light of the departure of financial dataset-based exports from "true" (HMRC) export values.
    Keywords: financial datasets, export data
    JEL: F10 F14
    Date: 2016–09
  10. By: AKPOILIH, Roland; FARAYIBI, Adesoji
    Abstract: In the recent times, there has been an increasing spread of trade tentacles of China into the hinterland of many developing nations of the world. The need to secure resources to meet the development aspiration of her country made China to increasingly forged formidable trade ties with almost all African countries, especially Nigeria, in the area of manufacturing products. While these realities have proved to be beneficial to the trading partners, there is still skepticism about the benefits of such trade relations to Nigeria. There is a perceived dis-proportionality in the quantum of bilateral inflow of manufacturing products between Nigeria and China. This study therefore addressed these concerns by applying gravity model to analyze the determinants of bilateral trade relation in manufacturing products between Nigeria and China for the period of 1995 to 2012. Thus, from the stylized facts, we find evidence of increasing influx of China manufactured products into Nigeria while that of Nigeria outflow to them is of low magnitude. This paper therefore recommended the diversification of economic base of Nigeria crucial for a more beneficial China-Nigeria bilateral trade in manufactures.
    Keywords: Nigeria-China Bilateral Trade, Manufacturing Products, Trade Policy, GDP Growth, Socio-economic development
    JEL: F1 F12 F14 F2
    Date: 2015–04–05
  11. By: Yi-Ling Cheng (Department of Economics, Tunghai University and Academia Sinica); Akihiko Takahashi (Faculty of Economics, The University of Tokyo)
    Abstract: This paper develops a general equilibrium model of oligopolistic multiproduct Â…firms conducting trade between asymmetric countries, in which heterogeneous Â…firms entrants choose their product ranges and outputs. We show that there are fewer exporters in the larger country, and each produces a wider range of products but exports fewer varieties. We also show that while trade liberalization increases the total number of consumed varieties, it decreases the total number of Â…rms and may reduce the product range of each Â…firm.
    Date: 2016–09
  12. By: John Kealey; Pau S. Pujolas; Cesar Sosa-Padilla
    Abstract: This paper considers whether a fairly well-established empirical relationship between liberalized trade and firm productivity growth is sensitive to the choice of an identification strategy for production function estimation. We estimate the productivity of Colombian manufacturing plants using the methods of Levinsohn and Petrin (2003), Ackerberg, Caves, and Frazer (2006), and Gandhi, Navarro, and Rivers (2012), and at times come to surprisingly different conclusions about the country's experience with trade policy reform during the 1980s. Results from a quantile regression model and a productivity growth decomposition exercise tend to vary as we experiment with different specifcations of the production function. Research that is concerned with the short and medium-term impact of trade liberalization on domestic manufacturing industries should therefore pay close attention to issues of robustness to alternative strategies for estimating the productivity of firms.
    Keywords: Trade liberalization, production function estimation
    JEL: F1 C14
    Date: 2016–06
  13. By: OWURU, Joel; FARAYIBI, Adesoji
    Abstract: This study examines the exchange rate trends and export performance in Nigeria between 1970-2015 using a descriptive approach. Particularly, the study emphasizes the impacts of exchange rate volatility on export demand in the country. The choice of this period is underscored by the fact that the starting date predates the era of the structural adjustment program (SAP) which is often described as the good days where agricultural and non-oil exports tremendously increased. Again, this date coincides with period when the external trade and exchange rate were indeed liberalized. Findings from descriptive analysis show that despite the policy pronouncements in the period covered, exchange rate volatility greatly affected export performance in Nigeria, in particular, the volume of export demand. The study recommends a deliberate exchange rate policy action that will have good implication for export growth in Nigeria.
    Keywords: Exchange Rate Trend, Export Performance, Nigeria, Descriptive Approach, Demand
    JEL: F2 F20 F41 F43
    Date: 2016–06–15
  14. By: Kehoe, Timothy J. (Federal Reserve Bank of Minneapolis); Pujolas, Pau S. (McMaster University); Rossbach, Jack (Georgetown University Qatar)
    Abstract: Applied general equilibrium (AGE) models, which feature multiple countries or regions, multiple sectors, and input-output linkages across sectors in a Walrasian general equilibrium framework, have been the dominant tool for evaluating the impact of trade liberalization since the 1980s. We provide an overview of the historical development of AGE models and a guide as to how they are used to perform policy analysis. We then review and document shortcomings in the performance of AGE models in predicting the sectoral effects of past trade reforms, that is, we show that AGE models often perform poorly. We provide suggestive evidence that incorporating some of the recent advances in quantitative trade theory in AGE models can improve their predictive ability.
    Keywords: Applied general equilibrium; Trade liberalization; Input-output linkages; Extensive margin
    JEL: F11 F13 F14 F17
    Date: 2016–09–28
  15. By: Deb, Kaveri; Sengupta, Bodhisattva
    Abstract: Revealed Comparative Advantage (RCA) indices form an integral part of the application of trade theory. The indices help in identifying the comparative advantage or disadvantages of countries in various products and thus aid the policy makers in formulation of policies oriented towards export expansion. However, given the application of such indices as cardinal or ordinal measures over time, an important question that arises is how reliable such indices are for the said purposes. In this regard, stability of index distributions has important implications for applicability of the indices as cardinal or ordinal measures over time. This paper therefore makes an important contribution to the literature by trying to analyze the stability of empirical distributions of RCA indices and identify the index that would be most reliable as a cardinal or ordinal measure, among alternative RCA indices suggested in the literature. .
    Keywords: Revealed Comparative Advantage Index, Exports, Imports, Distribution, Cardinal, Ordinal.
    JEL: C12 F14
    Date: 2016–05
  16. By: Carrère, Céline; Fugazza, Marco; Olarreaga, Marcelo; Robert-Nicoud, Frédéric
    Abstract: We embed a model of the labor market with sector-specific search-and-matching frictions into a Ricardian model with a continuum of goods to show that trade reduces unemployment in countries with comparative advantage in sectors with more efficient labor markets and leads to higher unemployment in countries with comparative advantage in sectors with less efficient labor markets. We test this prediction in a panel dataset of 107 countries during the period 1995-2009 and find that the data supports the theoretical prediction. Our results also help reconciliate the apparently contradicting evidence in the empirical literature on the impact of trade on unemployment.
    Keywords: search frictions; Trade; Unemployment
    JEL: F10 F13 F16
    Date: 2016–09
  17. By: Christian Dustmann (University College London); Francesco Fasani (Queen Mary University London); Tommaso Frattini (University of Milan); Luigi Minale (Universidad Carlos III de Madrid); Uta SchÓ§nberg (University College London)
    Abstract: This paper provides a comprehensive analysis of refugee migration, with emphasis on the current refugee crisis. After first reviewing the institutional framework laid out by the Geneva Convention for Refugees, we demonstrate that, despite numerous attempts at developing a common European asylum policy, EU countries continue to differ widely in interpretation and implementation. We then describe key features of the current refugee crisis and document the overall magnitudes and types of refugee movements, illegal border crossings, and asylum applications to EU member states. We next turn to the economics of refugee migrations, contrasting economic and refugee migrants, discussing the trade-offs between long-term asylum and temporary protection, and highlighting the economic advantages of increasingly coordinating the different national asylum policies. Finally, we illustrate the economic integration of past refugee migrants to EU countries and conclude with several policy recommendations.
    Keywords: asylum policy, asylum seekers, refugee crisis
    JEL: F22 J15 J61
    Date: 2016–09–28
  18. By: Baybars Karacaovali (Department of Economics, University of Hawaii); Chrysostomos Tabakis (KDI School of Public Policy and Management, Korea)
    Abstract: South Korea has experienced a great U-turn in its inequality trends during the past few decades. In this paper, we explore the role of international trade in its wage inequality dynamics over the period 1998-2012, using a unique labor-related panel dataset. Our analysis reveals that most of the overall wage inequality occurs within sectors and educational groups rather than between sectors and educational groups. Moreover, we document that almost the entire aggregate wage inequality in both manufacturing and services occurs within different trade-exposure categories rather than between them. Finally, we demonstrate that a higher trade exposure in manufacturing is associated with less skill-biased technological change.
    Keywords: Wage inequality, trade exposure, South Korea
    Date: 2016–09
  19. By: Gammoudi, Mouna; Cherif, Mondher; Asongu, Simplice A
    Abstract: This paper examines the relationship between Foreign Direct Investment (FDI) and per capita Gross Domestic Product (GDP) in the Middle East and North Africa (MENA) region for the period 1985-2009. The empirical evidence is based on an endoeneity-robust Generalised Method of Moments. Results show that the effect of FDI on per capita income in the Gulf Cooperation Council (GCC) countries is positive but negative in Non-GCC countries. Results also reveal that in contrast to the GCC countries, the financial openness policy in the Non-GCC countries have reduced the benefits of FDI on growth, this finding is explained by the fact that most of the Non-GCC countries that have engaged in the process of financial reforms have poor quality of institutions. These results are confirmed with both annual data and five year average data.
    Keywords: FDI, growth, GMM, financial openness, Institutions
    JEL: C52 F21 F23 O40 P37
    Date: 2016–06
  20. By: Harker, Patrick T. (Federal Reserve Bank of Philadelphia)
    Abstract: It’s time for fiscal and other policies to take the lead in growing the American economy, Federal Reserve Bank of Philadelphia President Patrick T. Harker said in a speech today at the Global Interdependence Center’s Central Banking Series in Dublin, Ireland. President Harker’s comments focused on the benefits and casualties of international trade
    Keywords: fiscal policies; international trade
    Date: 2016–09–29
  21. By: Cosimo Beverelli; Gianluca Orefice; Nadia Rocha
    Abstract: In a theoretical framework that extends Ottaviano et al. (2013) to three countries, we investigate two research questions. First, whether offshore workers directly compete with migrants from the same origin country to perform tasks of low/medium complexity (migration-offshoring substitutability). Second, whether migrants from different origin countries compete among each other (migration diversion). These questions are addressed empirically using a dataset covering 28 OECD high-income countries (as destinations of migrants flows) and 144 non high-income countries (as origins of migrant flows) for the period 1996-2010. The empirical results suggest strong direct substitutability between migrant and offshore workers from the same origin country and the absence of policy driven migration diversion across different origin countries.
    Keywords: Migrant Employment;Migration-Offshoring Substitutability;Migration Diversion
    JEL: F22 F23
    Date: 2016–09
  22. By: Beata Udvari (University of Szeged, Faculty of Economics and Business Administration)
    Abstract: As a result of the global economic crisis and crisis in the EU, Iberian exports have been temporarily directed towards other regions such as Africa or Asia, meaning that developing countries have gained larger share in their trade. Nevertheless, trade performance of EU Members is influenced by several EU policies directly or indirectly. Among others, industry policy and international development cooperation policy may have impact on it. Regarding the European international development cooperation development policy, the Aid for Trade (AfT) initiative has a crucial role aiming to improve the supply side capacities in recipient countries. Its overall objective is to help developing countries participate in international trade more effectively. According to Udvari (2013), Aid for Trade assistance provided by the EU generally increases trade between the EU and the recipient countries: 1 percent growth in AfT provided by the EU increases trade 0.1 percent between the EU and the recipient countries. However, there is no information how this increase is distributed among the EU Members, and whether the larger colonizers are in a better position or not. Consequently, this research aims to respond the question how Aid for Trade initiative influences the trade performance of Spain and Portugal. The research – besides analysing the existing literature – is based on an empirical investigation using a gravity model. The results show that Aid for Trade provided by the EU to ACP-countries have a small significant impact on the exports of Spain and Portugal.
    Keywords: Aid for Trade, export performance, Spain, Portugal
    JEL: F14 F35
    Date: 2016–09
  23. By: Pauline Bourgeon (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Jean-Charles Bricongne (Centre de recherche de la Banque de France - Banque de France)
    Abstract: This paper provides new firm-level evidence of the impact of financial frictions on international trade. First, by drawing on a unique instrument to capture financial frictions at firm level, we address concerns about endogenous measures of firms' financial constraints. Second, we test empirically the role of distance and long trading time in reinforcing the negative effect of financial frictions on firms' exports. We use detailed customs and balance sheet data combined with a unique dataset on payment incidents to conduct this empirical analysis. We find that financial frictions significantly reduce firm's export sales. Our estimations show a significant effect of distance and trading time in reinforcing the negative effect of financial frictions on export sales.
    Keywords: distance,financial frictions,firms' exports,international trade,trading time
    Date: 2016–05
  24. By: Bas Karreman (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands); Martijn J. Burger (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands); Frank G. van Oort (Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands)
    Abstract: Overseas Chinese communities are an important determinant in the location choice of greenfield investments made by mainland Chinese multinational enterprises across European regions. Conceptually embedded in a relational approach, this effect is shown through an empirical analysis of an exhaustive set of investment projects across NUTS-1 regions in 26 European countries for the period 2003-2010. When controlling for endogeneity bias and the embeddedness of existing Chinese economic activity, we find that the importance of overseas communities in the location choices of Chinese firms is based on increased access to strategic information. Our results confirm that the relationship between the size of an overseas Chinese community and the probability of Chinese investment is stronger for communities hosting newer generations of Chinese migrants; in addition, they partially corroborate that this relationship is stronger when the education level of the community’s Chinese migrants is higher. Our findings are particularly robust in the context of knowledge-intensive sectors and high value-added functions.
    Keywords: Overseas Chinese communities; China; Europe; greenfield FDI; relational view
    JEL: F20 L20 R30
    Date: 2016–09–30
  25. By: Bukhari, Mahnoor; Munir, Kashif
    Abstract: The primary objective of this study is to investigate the relationship between globalization and income inequality in selected Asian economies i.e. Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Singapore, South Korea and Thailand. The specific objectives of this study are to analyze the relationship between trade globalization, financial globalization and technological globalization on income inequality. For attaining these objectives this study used panel data for selected Asian countries from 1980 to 2014 for trade and technological globalization model and from 1990 to 2014 for financial globalization model. The study used pooled OLS and instrumental variable least square technique for estimation. Results show that trade and technological globalization in the selected Asian economies significantly contributes to reduce income inequality while financial globalization increase income inequality. Education has inverse impact on income inequality while foreign direct investment has positive relationship with income inequality. Therefore, the study suggest that government should promote education, invest in research and development activities, establish efficient financial system, reduce trade restrictions and provide subsidies that help to increase the volume of trade.
    Keywords: Trade, Financial, Technological Globalization, Income Inequality, Panel Data, Asia
    JEL: C23 F62 O53
    Date: 2016–09–09
  26. By: Hoang Xuan Trung; Luca Tiberti
    Abstract: This paper examines the impact of the trade liberalization of chemical fertilisers on the allocation of labour between nonfarm and farm sectors in rural Vietnam during the period 1993-1998. To do that, we use a panel dataset controlling for fixed effects and instrumenting the volume of chemical fertilisers and the exogenous change in fertilisers’ prices is exploited. The study shows that a higher volume of chemical fertilisers reduces the employment of rural households in the nonfarm sector and increases labour participation in farm activities. A larger use of chemical fertilisers would also generate other complementary effects such as a higher demand for organic fertilisers, increased on-farm hired labour, a bigger cultivated area with chemical fertilisers and a larger number of crops grown with chemical fertilisers. Also, we find that a larger use of chemical fertilisers creates larger incentives for on-farm family labour for small landholders compared to those with larger agricultural land, and that the magnitude of the effects is relatively larger for new farmers.
    Keywords: instrumental variable, chemical fertiliser price, nonfarm activity, rural Vietnam.
    JEL: F16 H31 J01
    Date: 2016
  27. By: Asongu, Simplice; Efobi, Uchenna; Tchamyou, Vanessa
    Abstract: This study assesses the effect of globalisation on governance in 51 African countries for the period 1996-2011. Ten bundled and unbundled governance indicators and four globalisation variables are used. The empirical evidence is based on Generalised Method of Moments. The following findings are established. First, on political governance, only social globalisation improves political stability while only economic globalisation does not increase voice & accountability and political governance. Second, with regard to economic governance: (i) only economic globalisation significantly promote regulation quality; (ii) social globalisation and general globalisation significantly advance government effectiveness and (iii) economic globalisation and general globalisation significantly promote economic governance. Third, as concerns institutional governance, whereas only social globalisation improves corruption-control, the effects of globalisation dynamics on the rule of law and institutional governance are not significant. Fourth, the impacts of social globalisation and general globalisation are positive on general governance. It follows that: (i) political governance is driven by voice and accountability compared to political stability; (ii) economic governance is promoted by both regulation quality and government effectiveness from specific globalisation angles and (iii) globalisation does not improve institutional governance for the most part. Theoretical contributions and policy implications are discussed.
    Keywords: Africa; Governance; Globalization
    JEL: F10 F30 I30 O10 O55
    Date: 2016–05
  28. By: Antràs, Pol; de Gortari, Alonso; Itskhoki, Oleg
    Abstract: This paper studies the welfare implications of trade opening in a world in which trade raises aggregate income but also increases income inequality, and in which redistribution needs to occur via a distortionary income tax-transfer system. We provide tools to characterize and quantify the effects of trade opening on the distribution of disposable income (after redistribution). We propose two adjustments to standard measures of the welfare gains from trade: a 'welfarist' correction inspired by the Atkinson (1970) index of inequality, and a 'costly-redistribution' correction capturing the efficiency costs associated with the behavioral responses of agents to trade-induced shifts across marginal tax rates. We calibrate our model to the United States over the period 1979-2007 using data on the distribution of adjusted gross income in public samples of IRS tax returns, as well as CBO information on the tax liabilities and transfers received by agents at different percentiles of the U.S. income distribution. Our quantitative results suggest that both corrections are nonnegligible: trade-induced increases in inequality of disposable income erode about 20% of the gains from trade, while the gains from trade would be about 15% larger if redistribution was carried out via non-distortionary means.
    Keywords: costly redistribution; Globalization; inequality; social welfare; trade integration
    JEL: D3 D6 F1 F6 H2
    Date: 2016–09
  29. By: Barbara Petrongolo
    Abstract: Following the referendum vote to leave the European Union, the UK faces a trade-off between retaining access to the Single Market and restricting free movement of labour. Barbara Petrongolo considers the likely impact of tougher immigration controls on the wages and employment prospects of the UK-born and the current stock of immigrants.
    Keywords: Brexit, EU Referendum, UK economy, immigration, labour market
    Date: 2016–10
  30. By: Michel Beine (CREA, Université du Luxembourg); Christopher R. Parsons (University of Western Australia)
    Abstract: In this paper, we revisit the issue of environmental change as a potential determinant of international migration, thereby providing an extension of our earlier paper. In contrast to Beine and Parsons (2015) and in light of recent empirical contributions, we adopt an alternative identification strategy in which we only include fixed effects together with our measures of climatic change in order to quantify the net partial effect of climatic change on bilateral migration. Again drawing on panel data from 1960-2000, we further exploit the dyadic dimension of our data to highlight the importance of neighbouring countries and former colonial powers in determining the direction of climate-induced emigration. We additionally highlight the importance of how differences in modelling climate change can lead to differing results. Our baseline results suggest that climatic change affects individuals’ credit constraints more than their desire to move. Our key findings are that natural disasters deter emigration from all origin countries but importantly spur emigration to neighbouring countries while for middle income origins, natural disasters while deterring migration, foster emigration to former colonial powers.
    Keywords: International Migration, Environmental change; Natural disasters
    JEL: F22 J61
    Date: 2016
  31. By: Llop Llop, Maria
    Abstract: International environmental agreements have met with the reluctance of some countries to accept general commitments aimed at reducing greenhouse gas emissions. While acknowledging the crucial significance of the climate change process, politicians and regulators in some export-oriented countries have argued that pollution measures would have a negative impact on their domestic welfare. Despite the literature having thoroughly analysed those impacts from various points of view, using different methodological approaches, the second-best general equilibrium analysis has not to date been used to analyse the relationship between environmental taxation and trade. This paper fills this gap by presenting a general equilibrium model to examine the welfare effects of taxing a polluting exported good through an explicit representation of the trade relations of the economy in the presence of pre-existing taxes. The results extend the scope of the literature on second-best taxation by demonstrating that trade affects all the traditional welfare components proposed in the previous studies. In addition, trade neutrality on welfare not only depends on partial equilibrium effects but also general equilibrium impacts, involving the ability to replace the distortionary income tax with the new tax and the influence of environmental improvements on the labour-leisure choice. Keywords: environmental taxation; trade-substitution effect; welfare trade neutrality. JEL classification: F18, H21, H23.
    Keywords: Comerç internacional -- Aspectes ambientals, Medi ambient -- Impostos, 339 - Comerç. Relacions econòmiques internacionals. Economia mundial. Màrqueting,
    Date: 2016
  32. By: André Lemelin
    Date: 2015
  33. By: Feler, Leo (Johns Hopkins University); Senses, Mine Zeynep (Johns Hopkins University)
    Abstract: We analyze the impact of trade-induced income shocks on the size of local government, and the provision of public services. Areas in the US with declining labor demand and incomes due to increasing import competition from China experience relative declines in housing prices and business activity. Since local governments are disproportionately funded through property and sales taxation, declining property values and a decrease in economic activity translate into less revenue, which constrains the ability of local governments to provide public services. State and federal governments have limited ability to smooth local shocks, and the impact on the provision of public services is compounded when local income shocks are highly correlated with shocks in the rest of the state. The outcome is greater inequality not only in incomes but also in the quality of public services and amenities across US jurisdictions.
    Keywords: trade shocks, housing prices, intergovernmental transfers, public finance, public goods
    JEL: F14 F16 H41 H70 R12 R23
    Date: 2016–09
  34. By: Batabyal, Amitrajeet; Beladi, Hamid
    Abstract: We analyze a model of trade between J heterogeneous regions that are creative in the sense of Richard Florida. There are two non-traded final goods that are used for consumption and investment. There is a continuum of inputs that are freely traded between the creative regions. There is no borrowing or lending between the creative regions. Specifically, we study the impacts of free trade in inputs when the elasticity of substitution between the traded inputs that are used to produce the final consumption and investment goods is less than unity. We first show that creative regions that have lower discount rates will be relatively poor and hence worse off with trade when the above elasticity of substitution is less than one. Next, we explain in detail why this negative result obtains.
    Keywords: Creative Capital, Creative Region, Elasticity of Substitution, Input, Trade
    JEL: F12 R11
    Date: 2016–01–09
  35. By: Li, Kui-Wai
    Abstract: This short article shows an political economy analysis on Brexit, pointing out the economic calculations the British voters could have considered. Brexit could be used as an instrument for the next general election. It is argued that Brexit could be an indication on the end of socialist policies and a return of the rightist policies.
    Keywords: Political economy, Brexit
    JEL: P1 P16
    Date: 2016–09–29
  36. By: Monica Langella; Alan Manning
    Abstract: If EU immigration had remained at its 1991 level, the Leave vote share may have been considerably lower. That is one of the conclusions of CEP research by Monica Langella and Professor Alan Manning, which explores the effects of the demographic and industrial composition of local areas on the share of the Leave vote. Their study finds that while individual demographics were a key influence on the Leave vote, so too were characteristics of local areas. They conclude that politics, immigration and the decline of manufacturing all played a role in the referendum outcome.
    Keywords: Brexit, EU Referendum, immigration, demographics, UK politics, UK economy
    Date: 2016–10
  37. By: Efobi Uchenna (Covenant University, Nigeria); Simplice Asongu (Yaoundé/Cameroun); Chinelo Okafor (Covenant University, Nigeria); Vanessa Tchamyou (Yaoundé, Cameroon)
    Abstract: The paper assesses how remittances directly and indirectly affect industrialisation in a panel of 49 African countries for the period 1980-2014. The indirect impact is assessed through financial development channels. The empirical evidence is based on three interactive and non-interactive simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to control for persistence in industrialisation and (iii) Instrumental Quantile Regressions (QR) to account for initial levels of industrialisation. The non-interactive specification elucidates direct effects of remittances on industrialisation whereas interactive specifications explain indirect impacts. The findings broadly show that for certain initial levels of industrialisation, remittances can drive industrialisation through the financial development mechanism. Policy implications are discussed.
    Keywords: Africa; Financial development; Industrialisation; Remittances
    JEL: F24 F43 F63 G20 O55
    Date: 2016–09
  38. By: Wladimir Andreff (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: La mondialisation de l'économie s'est étendue à l'économie du sport dans les années 1990 pour devenir aujourd'hui une caractéristique majeure de la plupart des marchés du sport (Andreff, 2012). Le football est en pointe dans ce mouvement: en 2011, le marché mondial des biens et services sportifs était estimé à 600 milliards €, dont 270 milliards € pour le seul football (soit 45% du total). La mondialisation concerne la pratique du football, le spectacle football et ses sponsors, le football télévisé, les paris sportifs sur le football, les articles de sport destinés à la pratique du football et le marché du travail des footballeurs professionnels (1). Il s'ensuit que les grands clubs de football ressemblent à des firmes transnationales (FTN), notamment par leur modèle de financement (2). Les problèmes que rencontre le football sont désormais à la même échelle: mondiale; on examine ici la corruption, notamment la plus répandue, liée aux matchs truqués (3). 1. Les marchés mondiaux du football La pratique du football est née en Angleterre, s'est d'abord répandue en Europe continentale, puis dans le monde entier, 208 pays à présent. Le Big Count de la FIFA dénombrait 265 millions de pratiquants et 5 millions d'arbitres et de dirigeants dans le monde en 2006. Ces chiffres n'incluent pas la pratique hors des structures fédérales. Le nombre réel de joueurs s'adonnant effectivement au football est probablement de plus d'un demi-milliard de personnes sur la planète, la troisième population du monde après celles de la Chine et de l'Inde. Mondialisation de la pratique du football que précise un peu le Tableau 1. Tableau 1: La mondialisation de la pratique du football, 2000-2006
    Keywords: économie du sport,mondialisation, football
    Date: 2015–05–01
  39. By: Hamanaka, Shintaro; Jusoh, Sufian
    Abstract: Existing studies on mutual recognition agreements (MRAs) are mostly based on the European experience. In this paper, we will examine the ongoing attempts to establish a mutual recognition architecture in the Association of Southeast Asian Nations (ASEAN) and seek to explain the region's unique approach to MRAs, which can be classified as a "hub and spoke" model of mutual recognition. On one hand, ASEAN is attempting to establish a quasi-supranational ASEAN-level mechanism to confer "ASEAN qualification" effective in the entire ASEAN region. On the other hand, ASEAN MRAs respect members' national sovereignty, and it is national authorities, not ASEAN institutions, who have the ultimate power to approve or disapprove the supply of services by ASEAN qualification holders. Such a mixed approach to mutual recognition can be best understood as a centralized mechanism for learning-by-doing, rather than centralized recognition per se.
    Keywords: International agreements, International economic integration, International trade, Regionalism, Mutual recognition agreement (MRA), Professional qualifications, Trade in services, Hub and spoke, Supranational mechanism, ASEAN
    JEL: F15 F53 F55
    Date: 2016–09

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