nep-int New Economics Papers
on International Trade
Issue of 2016‒10‒23
27 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Determinants and Potentials of Foreign Trade in Ethiopia: A Gravity Model Analysis By Yeshineh, Alekaw Kebede
  2. Multi-Dimensional Effects of International Trade: The Experience of Chinese Manufacturers By Grieco, Paul L. E.; Li, Shengyu; Zhang, Hongsong
  3. Global Firms By Andrew B. Bernard; J. Bradford Jensen; Stephen J. Redding; Peter K. Schott
  4. The Origins and Dynamics of Export Superstars By Caroline Freund; Martha Denisse Pierola
  5. Does trade liberalization trigger tax competition? Theory and evidence from OECD countries By Nelly Exbrayat
  6. Value-added Trade, Exchange Rate Pass-Through and Trade Elasticity: Revisiting the Trade Competitiveness By Syed Al-Helal Uddin
  7. Comparative Advantage and Agglomeration of Economic Activity By Pflüger, Michael P.; Tabuchi, Takatoshi
  8. US Antidumping Petitions and Revealed Comparative Advantage of Shrimp Exporting Countries By Chia-Lin Chang; Michael McAleer; Dang-Khoa Nguyen
  9. European High-End Varieties in International Competition By Lionel Fontagné; Sophie Hatte
  10. Financing Time to Trade By Pauline Bourgeon; Jean-Charles Bricongne
  11. Two Centuries of Bilateral Trade and Gravity data: 1827-2014 By Michel Fouquin; Jules Hugot
  12. The Fickle Fringe and the Stable Core: Exporters' Product Mix Across Markets By Lionel Fontagné; Angelo Secchi; Chiara Tomasi
  13. Back to the Future: International Trade Costs and the Two Globalizations By Michel Fouquin; Jules Hugot
  14. On the Economics and Politics of Refugee Migration By Dustmann, Christian; Fasani, Francesco; Frattini, Tommaso; Minale, Luigi; Schönberg, Uta
  15. The Role of Services for Economic Performance in Brazil By Dorothée Rouzet; Francesca Spinelli
  16. The Impact of Everything But Arms on EU Relative Labour Demand By Ronald B. Davies; Rodolphe Desbordes
  17. Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth By Colin Davis; Ken-ichi Hashimoto
  18. Foreign Direct Investment, Institutional Framework and Economic Growth By Hayat, Arshad
  19. Risk-Based Capital Requirements for Banks and International Trade By Michalski, Tomasz; Örs, Evren; Pakel, Banu Demir
  20. Information Technology and Global Sourcing By Fromenteau, Phillipe
  21. Technology and Production Fragmentation: Domestic versus Foreign Sourcing By Teresa C. Fort
  22. Preferential Liberalization, Antidumping, and Safeguards: “Stumbling Block” Evidence from Mercosur By Chad P. Bown; Patricia Tovar
  23. Intellectual Property Rights Induced Trade By Juan Felipe Bernal Uribe
  24. Global Talent Flows By Sari Pekkala Kerr; William Kerr; Çaǧlar Özden; Christopher Parsons
  25. Export-led development, employment and gender in the era of globalization By Otobe, Naoko.
  27. Migration and Development: Dissecting the Anatomy of the Mobility Transition By Dao, Thu Hien; Docquier, Frédéric; Parsons, Christopher; Peri, Giovanni

  1. By: Yeshineh, Alekaw Kebede
    Abstract: In this study, attempts are made to provide a theoretical justification for using the gravity model to analyze bilateral trade flows. The augmented gravity model was adopted to analyse Ethiopia's trade with its main trading partners using the panel data estimation technique. Estimations of the gravity model for export, import and total trade (sum of exports and imports) are carried on. The estimated results show that Ethiopia's export, import and total trade are positively determined by the size of the economies, per capita GDP differential and openness of the trading countries' economies. Specifically, the major determinants of Ethiopia’s exports are: size of the economies(GDP's of Ethiopia and that of partner), partner countries’ openness of economies, economic similarity and per capita GDP differential of the countries. All these factors affected Ethiopia's export positively except similarity indicator. The exchange rate, on the other hand, has no effect on Ethiopia's export trade. Ethiopia's imports are also determined by GDP's (of Ethiopia and the partner country), per capita income differentials and openness of the countries involved in trade. Transportation cost is found to be a significant factor in influencing Ethiopia's trade negatively. On the other hand, Ethiopia's export and import trade are not found to be influenced to by common border . The country specific effects show that Ethiopia could do better by trading more with Comesa member countries and newly emerging economies of Asia such as Hong Kong, Singapore and Yemen as well as European countries like Turkey and Russia.
    Keywords: Gravity Model, Panel Data, Fixed Effect Model, Random Effect Model, Hausman Tyalor Model, Ethiopia’s Trade
    JEL: F14
    Date: 2016
  2. By: Grieco, Paul L. E. (Department of Economics, The Pennsylvania State University); Li, Shengyu (Business School, Durham University); Zhang, Hongsong (Faculty of Business and Economics, The University of Hong Kong)
    Abstract: This paper evaluates the e ect of importing and exporting on firm-level productivity and intermediate input prices for Chinese manufacturing firms. Using a rich data set from Chinese manufacturers from 2000 to 2006, we find that international trade a ects firms through two channels: productivity growth and intermediate input prices. Both importing and exporting tend to increase firm productivity; in contrast, while export leads to higher input prices, importing firms enjoy lower input prices (presumably due to the expanded choice of inputs). We consistently estimate production functions in the presence of unobserved input price dispersion when firms may sell to both domestic and foreign markets. This allows us to jointly recover firm-level productivity and input prices for each firm. We use these values to investigate the sources of gains from international trade at the firm level. We also find that firms with higher productivity and lower input prices are more likely to export and import, and tend to export and import more.
    Keywords: Input Prices, Productivity, International Trade, Gain
    JEL: D24 F14 L11
    Date: 2015–04–24
  3. By: Andrew B. Bernard; J. Bradford Jensen; Stephen J. Redding; Peter K. Schott
    Abstract: Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and to decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using U.S. firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics, and increasing their shares of aggregate trade.
    JEL: F12 F14 L11 L21
    Date: 2016–10
  4. By: Caroline Freund (Peterson Institute for International Economics); Martha Denisse Pierola (Inter-American Development Bank)
    Abstract: This paper uses firm-level data on manufacturing trade from 40 developing countries to explore how the five largest exporters in a country contribute to export growth and diversification. The origins of these firms are also studied. The data show that the top five exporters account for on average one third of exports, over half of export growth, and almost all of export diversification over a five-year period. Controlling for country and industry-fixed effects, the share of exports in the top five firms increases significantly as exports grow. Most top five exporters were already large five years ago or are new firms; it is extremely rare for these export super- stars to emerge from the bottom half of the firm-size distribution. They are producers, not traders, and are primarily foreign owned.
    Keywords: firm size distribution, power law, comparative advantage, export growth
    JEL: D22 L11 L25 F14
    Date: 2016–10
  5. By: Nelly Exbrayat (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article aims at assessing the empirical relevance of New Economic Geography models of tax competition. We rely on a simple model to specify tax reactions functions, which we estimate with a panel covering (up to) 26 OECD countries over the period 1982 to 2006. We provide striking support for the two main predictions regarding the slope and the constant of the reaction function: national governments seem to adjust their corporate tax rate towards the level chosen in countries that are more populated, and they tend to set higher corporate tax rates when their country enjoys a high real market potential. Through the latter effect, trade integration exerts a positive influence on the level of corporate taxation. However, using a theoretically grounded index of bilateral trade integration, we also show that trade liberalization gives rise to significant tax interactions in the setting of effective average tax rates in the case of European countries, thus exerting a downward pressure on corporate tax rates.
    Keywords: Tax competition, new economic geography, panel data, trade integration, market potential
    Date: 2016
  6. By: Syed Al-Helal Uddin
    Abstract: How is exchange rate pass-through (ERPT) measures affected by increasing participation in global value chains? This paper measures ERPT for value-added trade, where intermediate inputs are shared among sectors and countries in a back-and-forth manner for producing a single final product. Estimation of pass-through was done using World Input-Output Database (WIOD), World Economic Outlook (WEO), and OECD statistics. Empirically estimated findings suggest that ignoring the value-added trade will cause a systematic upward bias in the estimation of ERPT. From empirical investigation, it is also evident that there exists substantial heterogeneity in pass-through rates across sectors: sectors with high-integration into global market functions with a lower rate of exchange in comparison to sectors with less integration.
    JEL: F14 F23 F41 L16
    Date: 2016–10–09
  7. By: Pflüger, Michael P. (University of Würzburg); Tabuchi, Takatoshi (University of Tokyo)
    Abstract: The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction between agglomeration economies and comparative advantage involves a fundamental tension which is intricately affected by trade costs. A reduction of trade costs fosters the dispersive impact of comparative advantage in sectors governed by this force whilst the impact of agglomeration economies is enhanced by trade cost reductions in the increasing returns sector. The key implication for international trade is that the wage ratio between large and small economies is not only shaped by the primitives that determine agglomeration economies and comparative advantage but also, and differentially, by the sectoral levels of trade costs. The fundamental implication for an economic geography context where labor is mobile across locations is that partial agglomeration emerges when agglomeration economies are strong relative to comparative advantage, and this is more likely the lower are trade costs in increasing returns sectors and the higher are trade costs in sectors governed by comparative advantage. The model may serve as a foundation for an urban system where the endogenously emerging larger city exhibits more diversity in production.
    Keywords: comparative advantage, increasing returns, labor mobility, agglomeration, offshoring, urban systems
    JEL: F12 F22 R11 R12 R13
    Date: 2016–10
  8. By: Chia-Lin Chang (National Chung Hsing University, Taichung, Taiwan); Michael McAleer (National Tsing Hua University, Taiwan; Erasmus University Rotterdam, The Netherlands; Complutense University of Madrid, Spain; Yokohama National University, Japan); Dang-Khoa Nguyen (National Chung Hsing University Taichung, Taiwan)
    Abstract: The paper explores the trade competitiveness of seven major shrimp exporting countries, namely Vietnam, China, Thailand, Ecuador, India, Indonesia and Mexico, to the USA. Specifically, we investigate whether the United States (US) antidumping petitions impact upon the bilateral revealed comparative advantage (RCA) indexes for each of the seven shrimp exporting countries with the USA. Monthly data from January 2003 to December 2014 and the panel data model are used to examine the determinants of the RCA for the shrimp exporting countries. The empirical results show the shrimp exporting countries have superior competitiveness against the shrimp market in the USA. Moreover, the RCA indexes are significantly negatively influenced by shrimp prices, and are positively affected by US income per capita. However, the EMS (Early Mortality Syndrome) shrimp disease, domestic US shrimp quantity, exchange rate, and US antidumping laws are found to have no significant impacts on the RCA indexes. In terms of policy implications, the USA should try to reduce production costs of shrimp in the US market instead of imposing antidumping petitions, and the shrimp exporting countries should maintain their comparative advantage and diversify into new markets.
    Keywords: Shrimp; antidumping; revealed comparative advantage; panel data model
    JEL: C23 F13 P45 Q17
    Date: 2016–10–14
  9. 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); Sophie Hatte (PSE - Paris School of Economics, Université de Rouen, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We study international competition in high-end varieties for 416 detailed HS6 product categories marketed by the leading French luxury brands. We construct a world database of trade flows for these products, computing unit values of related bilateral trade flows and analyzing competition among the main exporters. We use the observed distribution of unit values to define a high-end market segment. Exports of high-end varieties are shown to be less sensitive to distance, and found more sensitive to destination country wealth than other varieties, but only in relation to countries already producing a large range of luxury brands, pointing to a first-mover advantage.
    Keywords: Product differentiation, Market shares, Unit values
    Date: 2016–04–08
  10. By: Pauline Bourgeon (Banque de France, Paris School of Economics, Centre d'Economie de la Sorbonne et Université de Lorraine); Jean-Charles Bricongne (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
    JEL: D22 F10 F14
    Date: 2016–05
  11. By: Michel Fouquin; Jules Hugot
    Abstract: This document provides a detailed description of the Historical Bilateral Trade and Gravity Data set (TRADHIST) that was put together for Fouquin and Hugot (2016) and designed for historical investigations of international trade. The data set is available on the website of CEPII. Speci?cally, the data set has been built to explore the two modern waves of globalization: the First Globalization of the nineteenth century and the post-World War II Second Globalization. The data set gathers ?ve types of variables: i) bilateral nominal trade ?ows, ii) country-level aggregate nominal exports and imports, iii) nominal GDPs, iv) exchange rates, and v) bilateral factors that are known to favor or hamper trade, including geographical distance, common borders, colonial and linguistic links, as well as bilateral tari?s. This data is unique both in terms of temporal and geographical coverage. Overall, we gather more than 1.9 million bilateral trade observations for the 188 years from 1827 to 2014. We also provide about 42,000 observations on aggregate trade, and about 14,000 observations on GDPs and exchange rates respectively.
    Keywords: Globalization, Trade costs, Border e?ect, Distance e?ect
    Date: 2016–08–03
  12. By: Lionel Fontagné (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Angelo Secchi (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Chiara Tomasi (Università di Trento - Dipartimento di Economia e Management)
    Abstract: Multi-product exporters choose their product mix focusing on their best-performing products. Although their product mix varies across countries (the fickle fringe), the interdependence in demand or production technology making vectors of products systematically co-exported leads to commonalities in this mix across destinations (the stable core). In order to uncover the determinants of the fickle and stable parts of firm export product mix, we use a cross section of firm-product-destination level French and Italian data, taking explicitly into account the choice of not exporting a product to a destination. Using dissimilarity measures instead of rank correlations, we observe a great deal of variability among the product-mixes a firm exports to different destinations. We show that market size, but also the market positioning of a firm and market structure explain part of this observed variability. At the same time, together with this fickle part, we highlight the existence of a stable component among the diverse product-mixes exported. The probability of exporting this core set of products increases with the size of the destination market and with the ability to match demand, but is inversely related to market concentration.
    Keywords: multi-product, multi-country firms, product vectors, demand and concentration
    Date: 2016–05–04
  13. By: Michel Fouquin; Jules Hugot
    Abstract: This article provides an assessment of the nineteenth century trade globalization based on a systematic collection of bilateral trade statistics. Drawing on a new data set of more than 1.9 million bilateral trade observations for the 1827-2014 period, we show that international trade costs fell more rapidly than intra-national trade costs from the 1840s until the eve of World War I. This ?nding questions the role played by late nineteenth century improvements in transportation and liberal trade policies in sparking this First Globalization. We use a theory-grounded measure to assess bilateral relative trade costs. Those trade costs are then aggregated to obtain world indices as well as indices along various trade routes, which show that the fall of trade costs began in Europe before extending to the rest of the world. We further explore the geographical heterogeneity of trade cost dynamics by estimating a border e?ect and a distance e?ect. We ?nd a dramatic rise in the distance e?ect for both the nineteenth century and the post-World War II era. This result shows that both modern waves of globalization have been primarily fueled by a regionalization of world trade.
    Keywords: Globalization, Trade costs, Border e?ect, Distance e?ect
    JEL: F14 F15 N70
    Date: 2016–08–15
  14. By: Dustmann, Christian; Fasani, Francesco; Frattini, Tommaso; Minale, Luigi; Schönberg, Uta
    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: 2016–10
  15. By: Dorothée Rouzet; Francesca Spinelli
    Abstract: This paper highlights the large contribution of services to the Brazilian economy and the under-exploited potential of services to sustain productivity gains and international competitiveness. The areas with the largest potential for regulatory reform include improvements in the general business and trading environment as well as specific policies in transport sectors, telecoms and financial services. Reforms targeting services that add value by favouring productivity and quality enhancements, as well as services that increase efficiency by reducing production costs, have strong potential to unlock manufacturing performance. The set of proposed recommendations emerging from this analysis underlines the importance of streamlining sector-level regulatory frameworks to encourage foreign entry and competition, and the role that cross-cutting improvements in the trade and business environment would play to render services providers more competitive.
    Keywords: trade policy, services, competitiveness, services trade restrictions
    JEL: F13 F14 F15 F6 L8 L9 O24 O54
    Date: 2016–10–20
  16. By: Ronald B. Davies; Rodolphe Desbordes
    Abstract: The Everything But Arms agreement, introduced by the EU in 2001, eliminated duties on most imports from the least developed countries. To avail of these benefits, however, the exported product must contain a sufficiently large share of local content. Thus, the agreement may have affected both the quantity and the factor content of exports from the least developed countries to the EU. Using a panel of sector-level data across countries, our estimates suggest that, contrary to expectations, the agreement may have increased the skill-content of these exports, benefitting the lowest-skilled EU workers at the expense of their highest-skilled counterparts. This result, however, is entirely driven by textile trade; when omitting this industry, we find no significant effects. This suggests that the EBA may have led to the local provision of higher-skill inputs in the textile industry.
    Keywords: Everything but Arms; Local content; Trade agreements; Relative wages
    JEL: F16 F13
    Date: 2016–09
  17. By: Colin Davis (Institute for the Liberal Arts, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University)
    Abstract: This paper investigates the relationship between net offshoring patterns for innovation and manufacturing and fully endogenous productivity growth in a two-country model. The occupational choice of skill-differentiated workers into low-skilled employment in production and high-skilled employment in innova- tion determines labor market allocations, and perfect investment mobility allows firms to shift innovation and manufacturing independently between countries. These mechanisms generate a tension between access to technical knowledge and low-cost high-skilled labor in the location decision for innovation, which results in innovation and manufacturing tending to concentrate in the asset-wealthy (asset-poor) country when trade costs are high (low). The model exhibits a positive relationship between innovation costs and the concentration of industry and innovation, ensuring that a rise in knowledge diffusion between countries coincides with increases in net offshoring flows in innovation and manufacturing from the asset-wealthy country to the asset-poor country, and a faster rate of productivity growth, when the asset-wealthy country has larger shares of innovation and production.
    Keywords: innovation offshoring, manufacturing offshoring, endogenous productivity growth, process innovation, industry location, international trade
    JEL: F12 F43 R11
    Date: 2016–10
  18. By: Hayat, Arshad
    Abstract: The paper explores the role of institutional quality on economic growth and more specifically the role it plays through foreign direct investment. The paper uses an economic performance relevant indicators of institutional quality (both in aggregate and individual indicators) to evaluate its direct impact on economic growth and an indirect impact on economic growth via foreign direct investment. The paper applied instrumental variable model to a larger dataset of 106 countries and found that besides a strong direct positive effect on economic growth the aggregate institutional quality variable as well as all individual variables except for the rule of law have a small but significant indirect impact on economic that takes place through boosting foreign direct investment.
    Keywords: Foreign Direct Investment, Institutional Quality, Economic Growth, Instrumental Variable
    JEL: E14 F23 F43
    Date: 2016–10–14
  19. By: Michalski, Tomasz; Örs, Evren; Pakel, Banu Demir
    Abstract: We find that changes in banks' risk-based capital requirements can affect firm-level exports. We exploit the mandatory Basel II adoption in its Standardized Approach by all banks in Turkey on July 1, 2012. This change affects risk-weights for letters of credit and generates two identification schemes with opposite predicted signs. Using data that cover 16,662 exporters shipping 2,888 different products to 158 countries, we find that the share of letter of credit-based exports decreases (increases) at the firm- country-product level when the associated counterparty risk-weights increase (decrease) after Basel II adoption. However, growth of firm-product-country level exports remains unaffected.
    Keywords: Basel II; international trade finance; letters of credit
    JEL: F14 G21 G28
    Date: 2016–10
  20. By: Fromenteau, Phillipe
    Abstract: This paper examines how IT influences global sourcing decisions. It develops a theoretical model to study how IT determines the decisions of firms located in the high-wage North whether to offshore production to a low-wage country in the South. Offshoring to South however is subject to costly communication reflected by partially incomplete contracting. More sophisticated IT allows more efficient communication between the Northern headquarter and its Southern intermediate input supplier and alleviates contractual frictions. The model provides several predictions about the impact of IT on the organization of the global supply chain. Complex industries for which codifiability and verifiability of information is a much harder task, are more likely to source intermediate inputs in countries with more efficient IT infrastructure. Considering the mode of firm organization, more efficient IT infrastructure is expected to reduce the share of intra-firm trade in more complex industries. These predictions are examined and validated using disaggregated industry-level trade data. Most importantly, these findings are robust to controlling for well-known sources of comparative advantage and determinants of firm organization such as factor endowments, financial development and contract enforcement.
    Keywords: Information Technology; Global Sourcing; Multinational Firm; Firm Organization; Tasks
    JEL: D23 F14 F23 L23 O33
    Date: 2016–07
  21. By: Teresa C. Fort
    Abstract: This paper provides direct empirical evidence on the relationship between technology and firms’ global sourcing strategies. Using new data on U.S. firms’ decisions to contract for manufacturing services from domestic or foreign suppliers, I show that a firm’s adoption of communication technology between 2002 to 2007 is associated with a 3.1 point increase in its probability of fragmentation. The effect of firm technology also differs signifcantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifcations that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital.
    Keywords: fragmentation, offshoring, technology, contract manufacturing services
    JEL: F14 F23 L23
    Date: 2016–01
  22. By: Chad P. Bown (Peterson Institute for International Economics); Patricia Tovar (Pontificia Universidad Católica del Perú)
    Abstract: There is no consensus in the literature on trade agreements as to whether preferential liberalization leads to more or less multilateral liberalization. Research has focused mostly on tariff measures of import protection. We develop more comprehensive measures of trade policy that include the temporary trade barrier (TTB) policies of antidumping and safeguards. Studies in other contexts have similarly shown how these policies can erode some of the trade liberalization gains that appear based on an assessment of tariffs alone. We examine the experiences of Argentina and Brazil during the formation of the Mercosur customs union (1990–2001) and find that an exclusive focus on applied tariffs may lead to a mischaracterization of the relationship between preferential liberalization and liberalization toward nonmember countries. We find that any “building block” evidence associated with a focus on tariffs during the period in which Mercosur was a free trade area can disappear once we include changes in import protection from TTBs. Furthermore, there is evidence of a “stumbling block” effect of preferential tariff liberalization for the period in which Mercosur became a customs union, and this result tends to strengthen upon inclusion of TTBs. Finally, we provide a first empirical examination of whether market power motives can help explain the patterns of changes to import protection that are observed in these settings.
    Keywords: preferential trade agreements, tariffs, MFN, antidumping, safeguards, temporary trade barriers, Argentina, Brazil, Mercosur
    JEL: F13
    Date: 2016–10
  23. By: Juan Felipe Bernal Uribe
    Abstract: A positive relationship between a country’s strength of Intellectual Property Rights (IPRs) and the volume of imports of patent-sensitive goods has been empirically demonstrated. We provide a theoretical explanation of this link. Strengthening IPRs in a given economy generates a reallocation of R&D resources (in the form of skilled labor) out of the imitative activity and into the innovative activity and the production of consumption goods. Foreign patent owners perceive this reallocation of resources as a reduction in the imitation risk arising from the economy undertaking the change. This fall on the risk of imitation is translated as an increase in the expected value of that market. In average, a higher fraction of foreign innovators decide to incur in the ?xed cost of exporting after the change has taken place. This mechanism does not rely on technological assumptions about the innovative capabilities of any country, but rather on the interaction between endowments of R&D resources and national institutions related to IPRs. A calibrated model of this economy predicts an increase in skilled capital remunerations in the North. In the South, the remuneration of exporting innovators increases, while that of imitators and skilled workers in the Final sector decreases. The total number of skilled labor engaged in innovation in the world falls after the change, leading to a decrease in the rate of growth of the world.
    Date: 2016–05–24
  24. By: Sari Pekkala Kerr; William Kerr; Çaǧlar Özden; Christopher Parsons
    Abstract: The global distribution of talent is highly skewed and the resources available to countries to develop and utilize their best and brightest vary substantially. The migration of skilled workers across countries tilts the deck even further. Using newly available data, we first review the landscape of global talent mobility, which is both asymmetric and rising in importance. We next consider the determinants of global talent flows at the individual and firm levels and sketch some important implications. Third, we review the national gatekeepers for skilled migration and broad differences in approaches used to select migrants for admission. Looking forward, the capacity of people, firms, and countries to successfully navigate this tangled web of global talent will be critical to their success.
    JEL: F15 F22 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2016–10
  25. By: Otobe, Naoko.
    Abstract: The paper explores the viability of such an export-led development strategy in terms of its contribution to the creation of more and better jobs in general, and the gender dimensions thereof. It reviews gender dimensions of overall global employment trends with a focus on selected key labour market indicators and the impact of export-led strategy on employment and labour.
    Keywords: precarious employment, informal employment, women workers, gender and development, export, globalization, case study, Cambodia, Mauritius, emploi précaire, emploi informel, travailleuses, genre et développement, exportation, mondialisation, étude de cas, Cambodge, Maurice, empleo precario, empleo informal, trabajadoras, género y desarrollo, exportación, globalización, estudio de casos, Camboya, Mauricio
    Date: 2015
  26. By: Palakiyem Kpemoua (Université de Lomé - Université de Lomé)
    Abstract: The purposes of this paper are to analyze empirically the impact of exports on Togo’s economic growth with a model that relies on an augmented neoclassical production function and to test the causality between those exports and the economic growth. The data cover the period 1960-2014. The methodological approach is based on the cointegration and the causality tests. The results obtained indicate that the impact of exports on economic growth in the long-run is positive and significant at 1% level. The results indicate also the existence of causality and show that exports cause economic growth according to Toda and Yamamoto.
    Abstract: Cet article à pour objectifs d'analyser empiriquement l'impact des exportations sur la croissance économique au Togo ainsi que l'existence d'une relation de causalité entre ces exportations et la croissance économique en utilisant un modèle qui repose sur une fonction de production de type néoclassique. Les données couvrent la période 1960-2014. L'approche méthodologique utilisée s'appuie sur des techniques de cointégration et de causalité. Les résultats empiriques révèlent une corrélation positive et significative au seuil de 1% à long terme entre les exportations et la croissance économique et une causalité au sens de Toda et Yamamoto, des exportations vers la croissance économique.
    Keywords: economic growth,cointegration,causality,exports,exportations,causalité,croissance économique,Togo
    Date: 2016–06–05
  27. By: Dao, Thu Hien (IRES, Université catholique de Louvain); Docquier, Frédéric (Université catholique de Louvain); Parsons, Christopher (University of Western Australia); Peri, Giovanni (University of California, Davis)
    Abstract: Emigration first increases before decreasing with economic development. This bell-shaped relationship between emigration and development was first hypothesized by the theory of the mobility transition (Zelinsky, 1971). Although several mechanisms have been proposed to explain the upward segment of the curve (the most common being the existence of financial constraints), they have not been examined in a systematic way. In this paper, we develop a novel migration accounting methodology and use it to quantify the main drivers of the mobility transition curve. Our analysis distinguishes between migration aspirations and realization rates of college-educated and less educated individuals at the bilateral level. Between one-third and one-half of the slope of the increasing segment is due to the changing skill composition of working-age populations, and another third is due to changing network size. The microeconomic channel (including financial incentives and constraints) only accounts for one fourth of the total effect in low-income countries, and for less than one fifth in lower-middle-income countries. Finally, our methodology sheds light on the microfoundations of migration decisions.
    Keywords: Migration, Development, Aspirations, Credit Constraints
    JEL: F22 O15
    Date: 2016–10

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