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on International Trade |
| By: | Kenji Fujiwara (School of Economics, Kwansei Gakuin University) |
| Abstract: | Incorporating recent evidence that FDI _rms are more e_cient than exporters into a general oligopolistic equilibrium model, this paper examines the welfare e_ects of trade and FDI liberalization. We _nd that trade liberalization alone is bene_cial if the di_erence in marginal cost between the exporting and FDI industries is small enough while FDI liberalization unambiguously improves welfare. Combining these results, we further show that simultaneous liberalization of trade and FDI necessarily turns out welfare-improving. |
| Keywords: | Trade liberalization, FDI liberalization, General oligopolistic equilibrium, Welfare |
| JEL: | F12 F13 F23 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:150&r=int |
| By: | Nazli Toraganli; Cihan Yalcin |
| Abstract: | Turkish manufacturing firms are highly exposed to foreign currency (FX) denominated costs in the forms of liability dollarization and high imported input content in domestic production. This might limit the competitiveness effects of currency depreciation on exports. We attempt to uncover the relationship between the real exchange rates and exports of manufacturing firms in Turkey by taking account FX exposures and various firm characteristics. We use a large panel of manufacturing firms to carry out an empirical analysis for the period 2002-2010. We document that a real depreciation of the Turkish lira has a positive impact on export volumes and its impact is muted for manufacturing firms operating in sectors that use imported inputs intensively. That is, the cost of production channel seems to be effective in export performance of firms. In addition, we estimate that exports are less sensitive to real exchange rates for firms having moderate or low FX debt-to-export ratios (naturally hedged) and those are large and mature. Contrary to macro evidence, firm level findings suggest that a depreciation of Turkish lira seems to favor the external competitiveness of firms in general while for naturally hedged, large, mature, and high import intensity firms, the sensitivity is estimated to be smaller. |
| Keywords: | Exports, Real exchange rates, Currency mismatch, Firm characteristics |
| JEL: | F23 F31 G15 G31 G32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1624&r=int |
| By: | Bernard, Christophe; Calmette, Marie-Françoise; Kilkenny, Maureen; Loustalan, Catherine; Pechoux, Isabelle |
| Abstract: | This paper uses a model of international trade under duopoly to investigate under which conditions a large country’s entrance on world markets can lead to lower and less quality diversity available to consumers rather than more. In our partial model, autarky quality is proportional to the willingness to pay for quality and home market size, and inversely proportional to the cost of quality. We formalize strategically interacting firms, and identify the context in which a low-quality producer can lead, driving high-quality producers out of the market. We discuss the feasibility of this ‘predatory strategy’ by an emerging country. It is more likely in contexts where the emerging exporter is much larger and when the difference in willingness to pay for quality between countries is not too large. |
| Keywords: | international trade, market size effect, Stackelberg strategy, quality competition. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31076&r=int |
| By: | Ali Sina Önder (Department of Economics, University of Bayreuth); Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | We analyze the effects of a country's export connections on its income growth using Trade Partner Diversification (TPD) measures that capture the country's relative importance in the international trade network. On top of the standard trade openness measures, TPD measures are shown to enter growth regressions positively and significantly, where one standard deviation increase in TPD is associated with a 1 to 1.5 percentage point increase in the annual growth rate. Threshold analyses show that TPD measures are positively and significantly correlated with growth in countries that have low financial depth, high inflation, low levels of human capital, or high trade openness. |
| Keywords: | Trade, Economic Growth, Export Networks, Thresholds, Cross-Country Analysis, Trade Partner Diversiï¬ cation |
| JEL: | F13 G20 O19 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1606&r=int |
| By: | Matilde Bombardini; Bingjing Li |
| Abstract: | Has the expansion in exports affected pollution and health outcomes across different prefectures in China in the two decades between 1990 and 2010? We exploit variation in the initial industrial composition to gauge the effect of export expansion due to the decline in tariffs faced by Chinese exporters. We construct two export shocks at the prefecture level: (i) PollutionExportShock represents the pollution content of export expansion and is measured in pounds of pollutants per worker; (ii) ExportShock measures export expansion in dollars per worker. The two measures differ because prefectures specialize in different products: while two prefectures may experience the same shock in dollar terms, the one specializing in the dirty sector has a larger PollutionExportShock. We instrument export shocks using the change in tariffs faced by Chinese producers exporting to the rest of the world. We find that the pollution content of export affected pollution and mortality. A one standard deviation increase in PollutionExportShock increases infant mortality by 2.2 deaths per thousand live births, which is about 13% of the standard deviation of infant mortality change during the period. The dollar value of export expansion tends to reduce mortality, but is not always statistically significant. We show that the channel through which exports affect mortality is pollution concentration: a one standard deviation increase in PollutionExportShock increases SO2 concentration by 5.4 micrograms per cubic meter (the average is around 60). We find a negative, but insignificant effect on pollution of the dollar-value export shocks, a potential “technique” effect whereby higher income drives demand for clean environment. We find that only infant mortality related to cardio-respiratory conditions responds to exports shocks, while deaths due to accidents and other causes are not affected. |
| JEL: | F1 I1 Q53 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22804&r=int |
| By: | Marinov, Eduard |
| Abstract: | The article briefly presents the concept and framework of regional integration in Africa. It then discusses the principles, history, and current state of negotiations to disclose the effects of EPAs on regional integration efforts in Africa. Then it analyses the trends in international trade relations between the EU and the five EPA regions in Africa for the period 2003-2013, aiming to assess if EPAs have the envisaged positive impact on trade for both the EU, the EPA regions and the participating countries. The analysis includes the direction, dynamics and commodity structure of EU trade with African EPA regions. As a conclusion, the paper presents some general questions posed by the analysis on the future development of EPAs and the trade policy of the EU towards Sub-Saharan African countries. |
| Keywords: | Economic partnership agreement, EPA regions, regional integration in Africa, EU-Africa trade |
| JEL: | F13 F15 F50 F55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74971&r=int |
| By: | Beata Bierut; Kamila Kuziemska-Pawlak |
| Abstract: | Over the last two decades the share of CEE countries’ exports of goods in world exports more than doubled, despite considerable appreciation of their real effective exchange rates. Inspired by this observation, we set out to establish which factors had impact on their export performance. For that purpose, we run a series of panel regressions in which export market shares are explained by various measures of price/cost competitiveness, technological advancement and institutional environment. We make two important contributions to the subject literature. We show that technological factors, specifically innovative outputs (patent applications), had the most significant positive impact on export performance and that was in addition to their impact through the economic potential. Moreover, we verify the impact of the quality of the institutional environment on exports. Specifically, we show that improvements in the overall regulatory quality were conducive to increasing export market shares. The results regarding price/cost competitiveness are less robust and depend on the measure used. Hence, we conclude that further gains in non-price competitiveness should be considered for the region to compete successfully in international markets in the long run. |
| Keywords: | Central and Eastern Europe, open economy, trade, export market shares, price/cost competitiveness, technological competitiveness, institutional environment |
| JEL: | F14 F15 R10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:248&r=int |
| By: | Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business) |
| Abstract: | Using hourly data, we show that the convergence of German and French electricity spot prices depends on the employed generation mix structure, on the trade (export/import) capacity between the two countries, and on characteristics of neighbouring markets. Only when German and French electricity markets employ "similar" generation mixes price spreads vanish, and the likelihood for congestion of electricity flows is significantly reduced. This implies that, at least, a part of the convergence that was documented in recent literature is spurious, because it is not (only) driven by the forces of arbitrage, but by the similarity of the generation structures. The direction of congestion matters in this regard. Furthermore, we document consistent evidence for the most important predictions of trade theory if markets are characterized by increasing marginal cost (i.e. supply) curves and limited cross-border capacities. |
| Keywords: | Market Integration, Electricity, Renewables, Technology Differences, Jaffe Index |
| JEL: | D47 F15 L81 L98 Q42 Q48 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp237&r=int |
| By: | Saara Tamminen; den Berg Marcel van; Marrewijk Charles van |
| Abstract: | Do firms engaging in international trade have higher or lower profit margins? It is well-established that more productive firms engage in trading activities and as a result have higher profit levels. We use two theoretical models (the Melitz model and the Egger-Kreickemeier model) to clarify the relationship between productivity, trade activity, and profit margins and derive three hypotheses: (I) profit margins rise as productivity rises for domestic firms, (II) profit margins rise as productivity rises for trading firms, and (III) profit margins are not higher for trading firms than for domestic firms. We test these hypotheses using detailed micro-data for Finland (2005-2010) and the Netherlands (2002-2010). We find strong support for hypothesis I (in favour of the Melitz model), hypothesis II (in favour of both models), and hypothesis III (in favour of the Egger-Kreickemeier model). A propensity score matching analysis provides further support for hypothesis III. |
| Keywords: | profit margins, productivity, trade |
| JEL: | F14 L25 |
| Date: | 2016–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:80&r=int |
| By: | Eromenko, Igor |
| Abstract: | Dutch disease or resource curse is an adverse effect of high dependence on exports of natural resources, such as oil and gas, or other inflows, such as remittances or foreign aid. Dutch disease is known to lead to appreciation of the real exchange rate, decline in tradable sectors (mostly industry and agriculture) and surge in non-tradable sectors (services). This means unfavourable development of an economy where retail trade or construction would grow, but production sectors would be atrophied. Such economies become vulnerable and may suffer if inflow of currency from natural resources or remittances dries out. This study tests whether large inflow of foreign currency coming to Kyrgyzstan and Tajikistan from labour migrants has caused Dutch disease as described by Corden (1984) and Corden and Neary (1982): appreciation of the real exchange rate, decline in tradable sectors and surge in non-tradable sectors. Furthermore, the paper takes one step further and looks at this phenomenon from the point of view of importing Dutch disease from resource-rich countries to resource-poor countries. Results show that symptoms of Dutch disease are present in Kyrgyzstan and Tajikistan. There is an evidence of deindustrialisation, higher growth rates and larger share of service sector in GDP. In addition, high oil prices showed strong appreciation effect on local currencies of Kyrgyzstan and Tajikistan indicating the transfer of Dutch disease from resource-rich Russia. |
| Keywords: | Dutch disease, labour remittances, migration, natural resources, exchange rate |
| JEL: | F22 F24 F31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74965&r=int |
| By: | Buera, Francisco J. (Federal Reserve Bank of Chicago); Oberfield, Ezra (Federal Reserve Bank of Chicago) |
| Abstract: | We provide a tractable theory of innovation and technology diffusion to explore the role of international trade in the process of development. We model innovation and diffusion as a process involving the combination of new ideas with insights from other industries or countries. We provide conditions under which each country's equilibrium frontier of knowledge converges to a Frechet distribution, and derive a system of differential equations describing the evolution of the scale parameters of these distributions, i.e., countries' stocks of knowledge. In particular, the growth of a country's stock of knowledge depends only on its trade shares and the stocks of knowledge of its trading partners. We use the framework to quantify the contribution of bilateral trade costs to cross-sectional TFP differences, long-run changes in TFP, and individual post-war growth miracles. |
| Keywords: | Frechet distribution; global outlook; technology diffusion; trade |
| JEL: | F1 F43 O33 O47 |
| Date: | 2015–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2016-13&r=int |
| By: | Ian Coxhead; Rashesh Shrestha |
| Abstract: | This paper examines the effect of increased access to industrial jobs on educational attainment using data from the 2009 Vietnam Census of Population and Housing. Vietnam’s accession to the WTO, concluded in 2006, was the signal for a fourfold increase in foreign direct investment, primarily by firms seeking low-cost blue-collar labor for assembly and light manufacturing. We find that the district-level intensity of jobs in foreign-invested firms has a significant negative association with the likelihood that teenagers will be recorded as being in school, for urban males and females and (to a lesser extent) for rural females. High dropout rates in the hinterlands of booming industrial areas like Ho Chi Minh City are due in part to relatively easy access to industrial labor markets that offer almost no premium for learning acquired in high school. The decision to enter the labor force before completing high school will likely have long-term implications for the individuals themselves, and for aggregate economic growth since competitiveness in the global economy depends on sustained increases in labor productivity. |
| Keywords: | human capital, schooling, globalization, Vietnam |
| JEL: | I25 F63 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2016-17&r=int |
| By: | Lechthaler, Wolfgang |
| Abstract: | Trade liberalization can imply slow and long adjustment processes. Taking account of these adjustment processes can change the evaluation of trade policy, especially when policy makers care more about the next couple of years than the infinite future. In this paper I analyze the setting of tariffs in a two-country model taking account of adjustment processes with special emphasis on the effects of nominal price rigidity and monetary policy. I show that nominal price rigidity induces policy makers with a short planning horizon to set lower tariffs because it enhances the short run boom following a cut in tariffs. Monetary policy that aggressively fights deviations from its inflation target leads to even lower tariffs. |
| Keywords: | tariffs,dynamic trade model,monetary policy |
| JEL: | E52 F11 F12 F13 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2055&r=int |
| By: | Dorothée Rouzet; Francesca Spinelli |
| Abstract: | This report explores the relationship between services trade policies and mark-ups at the firm level, taken as a measure of competitive pressure. Restrictive regulations are found to enable firms to charge higher mark-ups in a majority of services sectors, suggesting ample scope for pro-competitive gains from trade liberalisation. Barriers to establishment consistently enable incumbent firms shielded from competition to raise their prices, while a lack of regulatory transparency and complex administrative procedures tend to add to all firms’ operating expenses. A “tax equivalent” of trade-restrictive regulations is then inferred from the abnormal price-cost margin of domestic firms in each service sector. These estimates indicate the magnitude of the welfare costs of regulatory trade restrictions across sectors and countries. The sectors with the highest average tax equivalents of STRI indices are broadcasting, construction, storage, and air and maritime transport, while those with the lowest averages are road transport, architecture and cargo-handling. There is however considerable variation between countries in all sectors. |
| Keywords: | competition, trade liberalisation, regulation, services trade restrictions |
| JEL: | D22 F13 F14 F61 L11 L8 L9 |
| Date: | 2016–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:194-en&r=int |
| By: | Binz, Christian (CIRCLE, Lund University); Diaz Anadon, Laura (Harvard University) |
| Abstract: | New clean-tech industries emerge in increasingly complex spatial patterns that challenge existing explanations on industrial path creation. In particular, the case of latecomer regions quickly building up industries in fields that are unrelated to their previous industrial capabilities is not well understood in the literature. This paper aims to address this gap with an analytical framework that draws on technological innovation system and catching-up literatures to specify the place-specific and extra-regional system resources that firms in latecomer regions draw on in the industry formation process. An in-depth case study of the Chinese solar photovoltaics (PV) sector reveals an industry formation process that differs from existing models. Rather than depending on linkages with multinational companies, extensive policy support, or gradual recombination of pre-existing domestic capabilities, early industry formation in the Chinese solar PV sector emerged from path transplantation in a highly internationalized entrepreneurial project. Pioneering actors mobilized knowledge, markets, investment and technology legitimacy developing outside China and re-combined them with the country’s generic capabilities in export-oriented mass manufacturing. This implies that in some industries, globalization may enable a new model of industrial path creation based on bridging domestic resource gaps by directly mobilizing system resources emerging in the international networks of a global innovation system. |
| Keywords: | cleantech; path creation; technological innovation system; solar photovoltaics; China; transnational entrepreneurship |
| JEL: | F64 O33 Q55 |
| Date: | 2016–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_029&r=int |
| By: | Kym Anderson |
| Abstract: | This paper examines the extent to which sectoral trends and fluctuations in the Australian economy can be understood using international trade theory and knowledge of key policy developments. It suggests they are consistent with theory, but it also reveals several features that make Australia’s economy unusual. The most striking are the facts that (1) the agricultural sector’s share of GDP remained fairly constant rather than falling during 1860- 1960 and even during the latest mining boom; and (2) the farm sector continued to enjoy a strong comparative advantage despite periodic spurts of growth in mining exports. |
| Keywords: | agricultural development, mining booms, structural transformation, trade costs, manufacturing protection |
| JEL: | F13 F63 O13 Q17 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2016-18&r=int |
| By: | Marinov, Eduard |
| Abstract: | The paper presents the main features of trade relations between South and East Europe (SEE) and Sun-Saharan Africa (SSA). The main focus is on trade with countries within the Economic Partnership Agreements (EPA) framework. The timeframe under review is 2003-2013. The first section presents the main features of EU trade relations with African EPA regions, summarizing trade dynamics and commodity structure. Section two analyses trade relations between SEE EU Member States and African EPA countries and regions, discussing the dynamics, commodity structure and direction of trade. Finally some conclusions are drawn on the trends in trade relations with SSA regarding both the EU in general, as well as some specifics in the development of trade flows of SEE countries with a special attention paid on Bulgaria’s participation. |
| Keywords: | EPAs, SEE, Sub-Saharan Africa, EU trade |
| JEL: | F10 F50 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74969&r=int |
| By: | Rocco Macchiavello; Ameet Morjaria |
| Abstract: | This paper provides evidence on the importance of reputation in the context of the Kenyan rose export sector. A model of reputation and relational contracting is developed and tested. A seller's reputation is defined by buyer's beliefs about seller's reliability. We show that (i) due to lack of enforcement, the volume of trade is constrained by the value of the relationship; (ii) the value of the relationship increases with the age of the relationship; and (iii) during an exogenous negative supply shock deliveries are an inverted-U shaped function of relationship's age. Models exclusively focusing on enforcement or insurance considerations cannot account for the evidence. |
| JEL: | D86 F14 L14 O13 O19 Q17 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68207&r=int |
| By: | International Labour Office. |
| Keywords: | social clause, trade agreement, free trade, labour policy, dispute settlement, international labour standards, ILO standards, case study, Bangladesh, Cambodia, Canada, Chile, EU, USA |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilosge:994907223402676&r=int |
| By: | Julia Bredtmann (RWI - Leibniz-Institut für Wirtschaftsforschung); Fernanda Martínez Flores (RWI, Ruhr); Sebastian Otten (University College London) |
| Abstract: | Research on the relationship between high-skilled migration and remittances has been limited by the lack of suitable microdata. We create a unique cross-country dataset by combining household surveys from five Sub-Saharan African countries that enables us to analyze the effect of migrants’ education on their remittance behavior. Having comprehensive information on both ends of the migrant-origin household relationship and employing household fixed effects specifications that only use within-household variation for identification allows us to address the problem of unobserved heterogeneity across migrants’ origin households. Our results reveal that migrants’ education has no significant impact on the likelihood of sending remittances. Conditional on sending remittances, however, high-skilled migrants send significantly higher amounts of money to their households left behind. This effect holds for the sub-groups of internal migrants and migrants in non-OECD countries, while it vanishes for migrants in OECD destination countries once characteristics of the origin household are controlled for. |
| Keywords: | migration, remittances, skill level, brain drain, Sub-Saharan Africa |
| JEL: | F22 F24 O15 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1627&r=int |
| By: | Julio cesar Ramirez Montañez (Universidad Pontificia Bolivariana, Bucaramanga, Colombia) |
| Abstract: | The central purpose of this document is to present the most relevant aspects of the regional economic integration agreement more ambitious and with best projections in Latin America, as is the undertaken between Mexico, Peru, Chile and Colombia in the framework of the Treaty of the Alliance of the Pacific. These four countries known as the Pumas of the Pacific along the western coast of Latin America have made great strides in recent years and are about to emerge as regional leaders. The central thesis of this article is focused on raising that the geostrategic significance of the Alliance of the Pacific lies the possibility of to be the bridge to Latin America with the Asia Pacific through the implementation of production chains that emerge from the generation and consolidation of relations within the private sector, with the aim of generating value added products and more competitive |
| Keywords: | Economic Integration, Open Regionalism, Pacific Alliance, Pacific Cougars |
| JEL: | F41 F41 F41 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ibmpro:4406730&r=int |
| By: | Sanika Sulochani Ramanayake (Indira Gandhi Institute of Development Research); Keun Lee (Seoul National University) |
| Abstract: | In the existing literature, we find a huge debate on the impact of exchange rate undervaluation (depreciation) on growth and exports. Some argue that undervaluation has positive effects on growth, especially in the case of developing countries. However there is ample criticism against the undervaluation leads to growth argument as well. The critics argue that large undervaluation discourages investment and in fact may lead to negative economic growth. Our premise is that the impact of currency undervaluation (overvaluation) would be different in countries with different exports structure, particularly between manufacturing vs. mineral exporting countries. This paper aims to analyze the differential impact of exchange rate undervaluation on growth and exports in different countries. We consider two sets of countries in our dataset-18 countries are included in manufactures- exporting sample while 16 countries are included in the minerals-exporting sample; Countries included in the former group have at least 70 percent share of manufactured products in total exports in 2010; while those in the latter contribute to more than 40 percent in total exports. This paper uses a cross sectional panel analysis using both five years average data and one year average data; pooled OLS, panel fixed effects, random effects estimations. It controls for the endogeneity problem by using a system generalized method of moments estimations. Estimation results of our study suggest currency overvaluation is good for mineral resource exporting countries. Moreover, results show a negative impact of undervaluation on growth and exports in both the long-run and the short-run for mineral and manufacture exporting countries. At the same time, negative coefficients on share of mineral exports on growth and exports implies the need of export diversification in many Latin American countries and Africa. |
| Keywords: | Currency undervaluation, economic growth, exports growth, mineral exporting countries, manufacture exporting countries |
| JEL: | O10 O40 O24 N50 N60 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2016-023&r=int |
| By: | Pia Orrenius and Madeline Zavodny |
| Keywords: | Unauthorized Immigrants, Illegal Immigration, Temporary Foreign Workers |
| JEL: | J15 J18 J61 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:436&r=int |
| By: | Chiara Bentivogli (Bank of Italy); Litterio Mirenda (Bank of Italy) |
| Abstract: | The paper studies the impact of foreign ownership on a firm’s economic performance. We use a unique panel dataset to test the foreign ownership premium by comparing our sample of firms based in Italy and owned by a foreign subject with a sample of purely domestic firms that, in order to have a proper counterfactual, were selected using propensity score matching. Our difference-in-differences results show the existence of a premium for the size, profitability and financial soundness of the foreign-owned companies. The premium increases with time, is concentrated in the service sector, and disappears if the foreign investor is based in a fiscal haven. |
| Keywords: | multinational enterprise, ownership, foreign direct investment, firm performance |
| JEL: | F23 F61 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1085_16&r=int |
| By: | Sascha O. Becker (University of Warwick); Thiemo Fetzer (Economic geography, market potential, structural gravity, trade costsAbstract: The 2004 accession of 8 Eastern European countries (plus Cyprus and Malta) to the European Union (EU) was overshadowed by feared mass migration of workers from the East due to the EU’s rules on free mobility of labour. While many incumbent EU countries imposed temporary restrictions on labour mobility, the United Kingdom did not impose any such restrictions. We document that following accession at least 1 million people (ca. 3% of the UK working age population) migrated from Eastern Europe to the UK. Places that received large numbers of migrants from Eastern Europe saw a significant increase in anti-European sentiment after 2004, measured by vote shares for the UK Independence Party (UKIP) in elections to the European Parliament. We show that the migration wave depressed wages at the lower end of the wage distribution and contributed to increased pressure on public services and housing.) |
| Keywords: | Political Economy, Migration, Globalization, Voting, EU JEL Classification: R23, D72, N44, Z13creation-date: 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:306&r=int |
| By: | Wanjiku, Julliet; Guthiga, Paul; Macharia, Eric; Karugia, Joseph |
| Abstract: | Trade stakeholders such as national governments and regional economic communities have been investing to enhance intra-regional trade in Eastern and Southern Africa region. To measure the results of these investments, good and reliable trade data are essential. Any trade related policy decision making and planning are made based on analysis of available data. If the quality of trade data has a problem, the resultant macro-economic analysis and policy recommendation are misleading. Country A’s recorded exports to Country B should match Country B’s recorded imports from Country A, i.e. identical mirror records. Due to weak data infrastructure (entailing difficulties in data harmonization, different data collection methodologies and missing data), mirror statistics are often very different. The focus of this paper is to analyze the status of the quality of trade data in ESA region by use of total and absolute average discrepancy for the period 2010-2014. The methodology analyses consistency of trade data involving a specific product and on bilateral trade involving a sample of products. Focus products are grains and pulses, livestock/products, processed flour and vegetables, chosen based on data availability and prominence in food trade. The results show mixed scenarios: for some countries and products trade statistics are consistent while for others discrepancies were noted. We recommend continuous capacity building and strengthening of systems for collecting, analyzing and reporting trade data. There is need for joint data reconciliation and synchronizing data collection systems and procedures. We also recommend studies to establish the causes and characteristics of data discrepancies. |
| Keywords: | Data Quality, Exports, Import, Maize, Trade, Crop Production/Industries, International Relations/Trade, Research Methods/ Statistical Methods, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246392&r=int |
| By: | Bruno Lanz (University of Neuchâtel, Department of Economics and Business; ETH Zurich, Chair for Integrative Risk Management and Economics; Massachusetts Institute of Technology, Joint Program on the Science and Policy of Global Change.) |
| Abstract: | This paper describes the implementation in GAMS of an economic equilibrium model based on the GTAP version 9 dataset. We call this model and the ancillary programming tools GTAPINGAMS, version 9. Relative to previous installments of GTAPINGAMS, an innovation in this model is that it can easily switch between global multiregional (GMR) and small open economy (SOE) closures. We also include the possibility to evaluate results for alternatives representations of final demand, based on Cobb-Douglas preferences, linear expenditure system or the constant difference in elasticities function. In this paper we outline the model structure, document the associated equilibrium conditions and describe computer programs which calibrate the model to the desired regional and sectoral aggregation from the GTAP9 dataset. We perform a few calculations which illustrate how alternative structural assumptions influence the policy conclusions derived from the model. |
| Keywords: | Applied economic analysis; Multiregional models; Small open economy models; Regulation; Trade policy; Computational models; Calibration. |
| JEL: | C6 C8 D5 F1 R1 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:16-08&r=int |
| By: | Monge-Naranjo, Alexander (Federal Reserve Bank of St. Louis) |
| Abstract: | Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness under an optimal taxation program the self-funding taxes on domestic and foreign firms that maximize the welfare of the recipient country, subject to the equilibrium behavior of national and foreign firms. Under optimal taxation, openness is always welfare enhancing and leads lagging countries to catch up with the world frontier. Yet, a country may want to subsidize the entry of foreign firms only if it can also subsidize the domestic accumulation of know-how. I also consider the optimal tax program under a number of restrictions that developing countries typically face. For instance, a country must not subsidize entry of foreign firms if doing so requires taxing the concurrent cohort of domestic firms. Similarly, an international agreement that requires equal taxation of domestic and foreign firms can be welfare reducing for a country close to the knowledge frontier. |
| Keywords: | Pigou taxes; Ramsey program; Multinational firms; Gains from openness Fiscal Constraints. |
| JEL: | H21 H25 O19 O31 O33 O34 O38 |
| Date: | 2016–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2016-020&r=int |
| By: | Sascha O. Becker, (University of Warwick); Thiemo Fetzer (University of Warwick); Dennis Novy (University of Warwick) |
| Abstract: | On 23 June 2016, the British electorate voted to leave the European Union. We analyze vote and turnout shares across 380 local authority areas in the United Kingdom. We find that fundamental characteristics of the voting population were key drivers of the Vote Leave share, in particular their age and education profiles as well as the historical importance of manufacturing employment, low income and high unemployment. Migration was relevant only from Eastern European countries, not from older EU states or non-EU countries. We also find an important role for fiscal cuts being associated with Vote Leave. Our results indicate that modest reductions in fiscal cuts could have swayed the referendum outcome. In contrast, even drastic changes in immigration patterns would probably not have made a difference. We confirm the above findings at the much finer level of wards within cities. Our results cast doubt on the notion that short-term campaigning events had a meaningful influence on the vote. |
| Keywords: | JEL Classification: Political Economy, Voting, Migration, Austerity, Globalisation, UK, EU |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:305&r=int |
| By: | Farina, Francesco; Tamborini, Roberto |
| Abstract: | The aim of the 'Five Presidents Report' cited in the title acknowledges that an important driver of the European economic crisis has been the faulty original design of the Monetary Union, and that substantial steps are urgently needed towards the creation of truly supranational institutions. Yet economists tend to neglect that however compelling economic analyses may be, the stumbling block on the way of the reform of the Monetary Union is political will, and that in democracies the ultimate source of political will comes from electors. In this paper, first of all the authors wish to bring to the economists' attention some recent analyses of citizens' attitudes towards Europe from political science. Then, by cross-referencing the results of the 2014 elections of the European Parliament with Eurobarometer opinion polls eliciting judgements for the EU vis-à-vis home countries and an indicator of economic pain, they show the presence of a geo-economicpolitical cleavage across four groups of countries. This is more complex, and perhaps worse, than the simplistic divide between 'North' and 'South' or 'Core' and 'Periphery'. The main implication is that the EU experiences a stalemate between 'more Europe vs. less Europe' at the level of peoples, which seriously undermines support for further integration 'from below'. |
| Keywords: | European Economic and Monetary Union,economic crisis,European integration,Eurobarometer opinion polls,2014 elections of the European Parliament |
| JEL: | E02 E42 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201644&r=int |