nep-int New Economics Papers
on International Trade
Issue of 2016‒12‒11
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Export Tax and Tariff Evasion: Evidence of Misinvoicing in China-New Zealand Trade By Kuntal K. Das; Laura Meriluoto; Amy Rice
  2. Producer Heterogeneity, Value-Added, and International Trade By Patrick Alexander
  3. Import Demand Elasticities Revisited By Mahdi Ghodsi; Julia Grübler; Robert Stehrer
  4. A Multifaceted Panel Data Gravity Model Analysis of Peru's Foreign Trade By Xu Wang; Ryan P. Badman
  5. Brexit and Trade: Between Facts and Irrelevance By Phedon Nicolaides; Thibault Roy
  6. Welfare Effects of TTIP in a DSGE Model By Philipp Engler; Juha Tervala
  7. Trade, Growth and Economic Inequality in the AsiaPacific Region: Lessons for Policymakers By Theresa Greaney; Baybars Karacaovali
  8. OECD Anti-Bribery Policy and Structural Differences Inside the EU By Michal Paulus; Eva Michalikova
  9. Trade Creation, Home-Market Effects under Regional Economic Integration By Yo-Yi Huang; Deng-Shing Huang; Ching-lung Tsay
  10. Trade Liberalization, Selection and Technology Adoption with Vertical Linkages By Antonio Navas; Antonella Nocco
  11. Coerência, Convergência e Cooperação Regulatória nos Capítulos de Barreiras Técnicas ao Comércio e Medidas Sanitárias e Fitossanitárias do Acordo Transpacífico By Vera Thorstensen; Alebe Mesquita
  12. Regional Trade Agreements and the Spread of International Labours Standards By Jean-Marc Siroën; David Andrade
  13. Geographic Politics, Loss Aversion, and Trade Policy: The Case of Cotton and China By Wenshou Yan
  14. Optimal tariffs and firm technology choice: An environmental approach By Steffen, Nico
  15. The U.S. Role in the Price Determination of Major Agricultural Commodities By Nigatu, Getachew; Adjemian, Michael K.
  16. Bilateral export trade and income similarity: Does the Linder hypothesis hold for agricultural and food trade? By Steinbach, Sandro
  17. Impediments to wheat export from Ukraine By Kulyk, Iryna; Herzfeld, Thomas
  18. Import, Export and Multinationality. Evidence from Swedish Firms By Castellani, Davide; Fassio, Claudio
  19. Daily Gravity By TAKECHI Kazutaka
  20. Foreign Competition and Domestic Innovation: Evidence from U.S. Patents By David Autor; David Dorn; Gordon H. Hanson; Pian Shu; Gary Pisano
  21. Determinants of export sophistication: Evidence from Monte Carlo simulations By Karen Poghosyan; Evžen Kočenda
  22. Political Economy of Trade and Storage Policies Coordination, and the Role of Domestic Public Storage in the World Market By Wenshou Yan
  23. The Euro’s Trade Effect: A Meta-Analysis By Petr Polak
  24. Four principles for the UK's Brexit trade negotiations By Thomas Sampson
  25. The contribution of different public innovation funding programs to SMEs' export performance By Liu, Rebecca; Rammer, Christian
  26. A dinâmica do crescimento das exportações do agronegócio brasileiro By Rebecca Lima Albuquerque Maranhão; José Eustáquio Ribeiro Vieira Filho
  27. Globalisation and national trends in nutrition and health -a grouped fixed-effects approach to inter-country heterogeneity By Lisa Oberländer; Anne-Célia Disdier; Fabrice Etilé
  29. Foreign labour in agricultural sectors of some EU countries By Siudek, Tomasz; Zawojska, Aldona
  30. The Economic Impact of East‐West Migration on the European Union By Kahanec, Martin; Pytlikova, Mariola

  1. By: Kuntal K. Das (University of Canterbury); Laura Meriluoto (University of Canterbury); Amy Rice
    Abstract: The trade between New Zealand and China has grown rapidly after the signing of their free trade agreement, but it is difficult to gauge the exact growth in trade due to gross inconsistencies in the trade data provided by the two countries. We investigate the roles that tax and tariff evasion play in systematically explaining this discrepancy. We find that exports and imports are heavily underreported at the Chinese border to avoid having to pay China's value-added tax and import tariffs. We also find some evidence of underreporting of imports at the New Zealand border to avoid import tariffs.
    Keywords: Trade misinvoicing, Export VAT rebate, Tax evasion, Tariff evasion
    JEL: F14 F38
    Date: 2016–12–02
  2. By: Patrick Alexander
    Abstract: Standard new trade models depict producers as heterogeneous in total factor productivity. In this paper, I adapt the Eaton and Kortum (2002) model of international trade to incorporate tradable intermediate goods and producer heterogeneity in value-added productivity. In equilibrium, this yields a positive relationship between the international trade elasticity and the share of intermediate goods in production. This relationship is absent from the standard model and is driven by the extensive margin of trade. I then use cross-country sectoral data from 1995 to 2010 and estimate the trade elasticity, finding empirical support for this relationship and for the importance of the extensive margin. This model yields results that are similar to those of the standard model with respect to the overall magnitude of gains from trade. Importantly, however, whereas the standard model suggests that gains from trade are higher in sectors that use intermediate goods, I find that this is no longer true under the value-added heterogeneity model.
    Keywords: Economic models, International topics, Productivity, Trade Integration
    JEL: F11 F12 F14
    Date: 2016
  3. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Julia Grübler (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract In this paper, we present import demand elasticities estimated for 167 countries over 5,124 products at the six-digit level of the Harmonised System. Following the semiflexible translog GDP function approach proposed by Kee et al. (2008), we estimate unilateral import demand elasticities for the period 1996-2014. Results are differentiated by country and product characteristics. South Asia and North America are associated with the most elastic import demand. Countries exhibiting the highest average elasticities belong to the economically most important countries in their respective regions, while countries with the lowest import demand elasticities are typically small island states. Import-weighted results suggest that especially countries rich in natural resources – particularly fossil fuels – are facing an inelastic import demand, with the agri-food sector for these states being more price-responsive than the manufacturing sector. Demand is found to be least price-sensitive for machinery and electrical equipment, and most price-elastic for the energy sectors. Distinguishing between the use of products, the highest import demand elasticities are associated with intermediate goods, which appears particularly noteworthy in the context of an increasing importance of global value chains, the global trade slowdown since 2011 and ongoing negotiations of mega-regional trade deals.
    Keywords: international trade, import demand, elasticity
    JEL: D12 F14
    Date: 2016–11
  4. By: Xu Wang; Ryan P. Badman
    Abstract: Peru's abundant natural resources and friendly trade policies has made the country a major economic player in both South America and the global community. Consequently, exports are playing an increasingly important role in Peru's national economy. Indeed, growing from 13.1% as of 1994, exports now contribute approximately 21% of the GDP of Peru as of 2015. Given Peru's growing global influence, the time is ripe for a thorough analysis of the most important factors governing its export performance. Thus, within the framework of the augmented gravity model of trade, this paper examines Peru's export performance and attempts to identify the dominant economic factors that should be further developed to increase the value of exports. The analysis was conducted from three different aspects: (1) general economic parameters' effect on Peru's export value, (2) more specific analysis into a major specific trade good, copper, and (3) the impact that regional trade agreements have had on Peru's export performance. Our panel data analysis results for each dataset revealed interesting economic trends and were consistent with the theoretical expectations of the gravity model: namely positive coefficients for economic size and negative coefficients for distance. This report's results can be a reference for the proper direction of Peruvian economic policy so as to enhance economic growth in a sustainable direction.
    Date: 2016–12
  5. By: Phedon Nicolaides (Director of Studies and Jan Tinbergen Chair, Department of European Economic Studies, College of Europe (Bruges)); Thibault Roy (Academic Assistant, Department of European Economic Studies, College of Europe (Bruges))
    Abstract: This paper examines four claims of Brexit supporters on the United Kingdom’s post-exit arrangement regarding trade with the EU. It reviews the nature and importance of UK-EU trade links and the possible impact on the UK of leaving the EU customs union. It argues that the claims of pro-Brexit supporters on trade possibilities are based on incongruous arguments which are either logically inconsistent or ignore the extent of commitment required by trade agreements that tackle regulatory barriers, not just tariffs and border restrictions. We demonstrate that the “attractiveness” of the UK market will decline as the UK enters in progressively more agreements. We conclude by analysing the implications for the UK of “taking back control” of its trade policy.
    Keywords: United Kingdom, European Union, trade, Brexit
    JEL: F13 F15
    Date: 2016–12
  6. By: Philipp Engler; Juha Tervala
    Abstract: Several studies have analyzed the trade and output effects of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, but our paper is the first attempt to study its welfare effects. We measure the welfare effect of TTIP as the percentage of initial consumption that households would be willing to pay for TTIP in order to remain as well off with TTIP as without it. The discounted present value of the welfare gain of TTIP, which leads to the elimination of tariffs and cuts in non-tariff measures by 25%, is in the range of 1% to 4% of initial consumption, depending on the parameterization. The welfare gain increases in the elasticity of substitution between domestic and foreign goods. The bulk of the welfare gain is caused by cuts in non-tariff measures.
    Keywords: Tariffs, TTIP, trade agreement, trade liberalization
    JEL: F13 F41 E60
    Date: 2016
  7. By: Theresa Greaney (Department of Economics, University of Hawaii); Baybars Karacaovali (Department of Economics, University of Hawaii)
    Abstract: This policy brief is intended to provide policymakers with a summary of the results of our research project entitled “Trade, Growth and Economic Inequality in the Asia-Pacific Region†, which explores and documents the linkages between international trade and inequality in the Asia-Pacific Region (APR). The project’s eleven research papers will appear in a special issue of the Journal of Asian Economics in February, 2017. Overall we conclude that the relationships between international trade, foreign direct investment (FDI), economic growth and inequality are extremely complicated, so no single theory should be relied upon for policy guidance across all APR countries with their varying stages of development and unique characteristics. Our studies find some evidence that trade or FDI contribute to inequality, some evidence that it reduces inequality and some evidence of no causal relationship. These seemingly conflicting results are not at all surprising given the complex relationships involved and the different countries, time periods, and means of measuring inequality, trade and FDI our authors adopted. Our main takeaway for policymakers is to be wary of both anti-trade and pro-trade advocates who provide “one size fits all†advice related to trade, FDI and inequality; these economic relationships are much too complex for that.
    Keywords: International trade, foreign direct investment, economic growth, economic inequality
    JEL: F13 F14 F16 F21 F23 J31
    Date: 2016–12
  8. By: Michal Paulus (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic); Eva Michalikova (Brno University of Technology, Brno, Czech Republic; Anglo-American Univesity, Prague, Czech Republic)
    Abstract: We propose a novel application of a gravity model of trade as a policy preference mapping tool that reveals areas of potential interest groups formation. We examine a hypothesis that the EU’s inability of the coordinated anti-corruption effort is caused by its internal heterogeneity in preferences towards the anti-corruption policy. We focus only on anti-corruption effort against bribery in foreign transaction which is reflected in the effectiveness of the enforcement of the OECD anti-bribery convention. Using the gravity model, we estimate and compare preferences of western, eastern and Mediterranean EU members towards the enforcement of the convention. In addition to aggregate exports we estimate the model on disaggregated data and examine preferences across trading sectors and identify those industries which would support or oppose the anti-corruption policy. To analyse the hypothesis, we estimate a micro-founded augmented gravity model for bilateral exports of 131 countries within period 1995-2013. The results reveal significant differences between western and eastern EU members when the eastern countries are much more motivated to oppose the policy and to form a strong interest group also on the EU level. However, there are specific sectors which have potential to form a coalition towards the policy across all country groups. We have found out that the country origin (country group to which it belongs) is much better predictor of the policy preferences than exporting sector.
    Keywords: gravity model; OECD anti-bribery convention; international conflict; policy preference mapping; EU heterogeneity
    JEL: F14 F42 F51 F53 F55 O17
    Date: 2016–11
  9. By: Yo-Yi Huang (Institute of Applied Economics, Natiional Taiwan University); Deng-Shing Huang (Institute of Economics, Academia Sinica, Taipei, Taiwan); Ching-lung Tsay (Department of Diplomacy and International Relations, Tamkang University)
    Abstract: By conventional home-market effect (HME), a big economy with the advantage of big ‘domestic’ market size tends to have more than proportional share in the world export markets. By the common market integration, ASEAN as a whole shall form a large economy of more than 623 millions of population and 2.48 trillion US dollar of GDP. To test whether how effective of the HME for an integrated economy like ASEAN, the conventional gravity approach is adopted. Unlike the HME under regional economic integration (REI), the REI induced HME may not significant depending on the industries. JEL Classification: F12, F14, F15, O53
    Keywords: Home-market Effect, Regional Economic Integration, PQML
    Date: 2016–11
  10. By: Antonio Navas (Department of Economics, University of Sheffield); Antonella Nocco (University of Solento, Department of Management, Economics, Mathematics and Statistics)
    Abstract: Vertical linkages accounts for a large proportion of the volume of intermediate inputs used in an industry. This paper analyses the role played by vertical linkages on the effects of trade liberalization on technology adoption and their consequences on average productivity and welfare in a trade model with heterogeneous firms. We find that the strength of vertical linkages shapes the effects that trade liberalization produces on firms' survival and technology upgrading decisions, having an impact on the average productivity of the economy and, ultimately, on welfare.
    Keywords: trade liberalization, heterogeneity, selection, technology adoption, vertical linkages
    JEL: F1
    Date: 2016–12
  11. By: Vera Thorstensen; Alebe Mesquita
    Abstract: Este artigo tem como objetivo desenvolver uma análise sobre a relação do tema de coerência regulatória com as barreiras técnicas ao comércio (Technical Barriers to Trade – TBT) e as medidas sanitárias e fitossanitárias (Sanitary and Phytosanitary Measures – SPS) do Acordo Transpacífico (Trans-Pacific Partnership – TPP). O trabalho delineia os direitos e obrigações mais relevantes desses capítulos, as suas principais inovações, a sua relação com os acordos da Organização Mundial do Comércio (OMC) e a sua sujeição ao sistema de solução de controvérsias tanto do TPP quanto da OMC. This article aims to develop an analysis of the regulatory coherence of theme related to technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS) of the Trans-Pacific Partnership Agreement (TPP). The work outlines the rights and obligations of those most relevant chapters, its main innovations, their relationship with the WTO agreements, and that it is subject to the dispute settlement system of both the TPP as the WTO.
    Date: 2016–10
  12. By: Jean-Marc Siroën (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); David Andrade (IRD - Institut de recherche pour le développement - Aucune)
    Abstract: In the last two decades, international trade agreements havedriven growing economic integration increasingly inclusive of social andlabour provisions. This article investigates the link between labourclauses in trade agreements and national labour standards, comparingtheir effects on the ratification of ILO conventions and worker rightspractices. An empirical estimation using panel data for 141 countriesfrom 1980 to 2013 suggests that labour provisions have not played asignificant role in the improvement of labour practices, and that theireffect has been limited to the ratification of ILO conventions. This gaphighlights the importance of mechanisms that guarantee theenforceability of labour clauses included in trade agreements.
    Keywords: International Labour Organization,Regional Trade Agreements
    Date: 2016–11–21
  13. By: Wenshou Yan (School of Economics, University of Adelaide)
    Abstract: This paper seeks to explain how governments respond to world market price fluctuations. It develops a theoretical model of trade policy incorporating loss aversion and reference dependence. Like Freund and Özden (2008), this paper assumes only trade policy instruments are available to the government, but it goes beyond their model by adding a spatial dimension to interest-group politics. The model suggests that: (1) politically sensitive products receive more trade protection; (2) the governmentÂ’s changing trade distortions insulate the domestic market from international price fluctuations by setting trade protection lower (higher) when the world price is higher (lower) than a targeted domestic reference price; and (3) variations in market intervention help producers at the expense of consumers in periods when the international price is well below trend, and help consumers at the expense of producers in high-price periods. These predictions from theory are shown to still hold when the model is extended to a large country case involving terms of trade effects. The model is tested empirically and found to offer a plausible explanation of the puzzling changes in cotton protection in China.
    Keywords: Political economy, Geographic politics, Loss aversion, Reference dependency, Political sensitive product, Price volatility
    JEL: F13 F14 F59 Q17 Q18
    Date: 2016–11
  14. By: Steffen, Nico
    Abstract: This paper analyzes environmental concerns by a government in a setting of rent-extracting strategic trade policy with endogenous firm investment into production technologies. The simple analysis highlights the importance of investment incentives caused by tariffs in general and shows that the resulting implications for the optimal tariff decision can be completely different between traditional tariff considerations and an environmentally conscious government. We show that an importing country in a dynamic setting with endogenous firm technology choices prefers to impose discriminatory tariffs both ex post and ex ante when emissions matter, while a commitment to uniform tariffs is optimally chosen when environmental concerns do not play a role.
    Keywords: Climate policy,Carbon tariffs,Technology choice,Discriminatory tariffs
    JEL: F13 F18 D24 Q58
    Date: 2016
  15. By: Nigatu, Getachew; Adjemian, Michael K.
    Abstract: The United States has historically played a dominant role in the global trade, and therefore price formation, of major food, feed and fiber commodities. As the share of agricultural commodities exports produced by the US has recently declined, international supply and demand fundamentals likely play a larger role in setting even domestic commodity prices. Using wavelet coherence methods, this article examine the relationship between U.S. and international prices for corn, soybeans, and cotton. Our results reveal that integration between the markets of major exporters and importers of these commodities evolves over time: short-run (around 20 trading days) relationships between domestic and international prices are, in many cases, not stable, and even the long-run relationships between many price pairs is subject to distinct structural breaks. As the two major agricultural commodity exporters of corn and soybeans, the US and Brazil exhibit integration in the form of consistently significant long-run price relationships. In contrast, we show that Chinese agricultural commodity prices share little or no distinguishable relationship with the U.S., even though China is one of the biggest importers of U.S. products. This is likely due to Chinese trade barriers and price support policies that, while insulating domestic prices from external shocks, kept its own prices substantially higher than other countries from 2009- 2016.
    Keywords: agricultural commodity price, cointegration, integration, price discovery, wavelet coherence analysis, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis,
    Date: 2016–11
  16. By: Steinbach, Sandro
    Abstract: In this paper we invesƟgate the Linder hypothesis for bilateral export trade in agricultural and food products by uƟlizing the sectoral gravity equaƟon derived in Hallak (2010). Based on a sample of 152 countries, we study the relaƟonship for 737 agricultural and food products at the 6-digit HS code level, using trade data for 1995-2012. We esƟmate the gravity equaƟon year by and year and sector by sector, analyzing the esƟmates of Linder's term for two specificaƟons of the similarity index. We compare a theoreƟcally jusƟfied definiƟon of the index with an adjusted definiƟon that takes into account relaƟve prices. We show that similar demand structures determine bilateral export trade. AccounƟng for relaƟve prices, we find that the Linder term is more pronounced. Our find¬ings show that the similarity effect is strongest for processed products and weakest for bulk products. From those results we come to the conclusion that similar aggregate preferences are a major driver of export trade in final consumpƟon goods.
    Keywords: Product quality, Linder effect, sectoral gravity model, Agribusiness,
    Date: 2015–05
  17. By: Kulyk, Iryna; Herzfeld, Thomas
    Abstract: According to prospects of international organisations like OECD and FAO, Ukraine will be one of the important suppliers of agricultural products on the world market in the coming decade. Thus, Ukrainian agricultural production and exports are important elements in sustaining global food security. However, the country threatens global food security as well as its own agricultural development when applying grain export restrictions, as happened several times in recent years. Therefore, any impediments to grain trade in the country should be carefully inspected. In this paper we analyse recent developments of Ukrainian agricultural policy influencing grain trade. We show that any export restriction brings large welfare losses compared to a free trade situation. We support our claim by a comparative analysis of the different export policies applied by the Ukrainian government on the domestic wheat market between 2006 and 2014. Additionally, we suggest and discuss alternative policy responses to realise the policy goal of domestic food security. As the policies applied, export tax, export quota and tax reimbursement, cannot be compared directly we quantify the tax equivalent of each trade policy measure. Under a set of specific assumptions the tax equivalent can be used to compare the effects of policies theoretically and empirically. Our findings go along with theory and show that export quotas in 2006 and in 2010 had a more restrictive effect on export than export taxes in 2011. Effects of non-reimbursement of VAT are very close to the effects of export tax in 2011 (at the level of 9%), mainly because most of the time these two measures were implemented simultaneously. We also calculated tariff equivalent of VAT non-reimbursement excluding the period of export taxes. Based on these results, the measure corresponds to a slight decline of the tariff equivalent in absolute terms. As an alternative policy option for the Ukrainian government to respond more efficiently to increasing world market prices in the future it is advised to use consumer-oriented measures for the most vulnerable groups of people instead of distorting market mechanisms.
    Keywords: export restrictions, non-tariff barriers, Ukraine, wheat trade, Agribusiness,
    Date: 2015–05
  18. By: Castellani, Davide (Henley Business School, University of Reading); Fassio, Claudio (CIRCLE, Lund University)
    Abstract: This paper studies the role of imported inputs in explaining firms’ export behaviour. Unlike most of the existing literature we are also able to control for the participation of domestic firms to multinational networks. This allows us to test to what extent the recurrent evidence that importing foster exporting activity is instead a figment of the fact that importers are also part of multinational groups. Our evidence, based on Swedish manufacturing firms, suggests that imported inputs, rather than multinationality, are a key determinant of firms’ export propensity and product scope. This result is particularly strong for SMEs, and it is driven by imported intermediates and (to a lesser extent) capital goods.
    Keywords: importing; exporting; multinational enterprises; Sweden
    JEL: F14 F23 O52
    Date: 2016–12–02
  19. By: TAKECHI Kazutaka
    Abstract: We estimate trade costs under large zero trade by using daily data on agricultural goods trade within a country. Because of the nature of daily data, there is prominent zero daily trade between regions, and daily delivery is subject to noisy demand and supply shocks, which tend to create heteroskedasticity in the data. Hence, we use Poisson Pseudo Maximum Likelihood (PPML) to estimate the gravity model and investigate the nonlinear nature of trade costs. Empirical analysis shows a statistically significant and economically large nonlinearity in trade costs. We also aggregate daily data to the monthly level to examine whether shocks are smoothed which result in dampened impacts. Our estimation shows that the difference is minor. Comparisons of the results with other estimation methods such as the least squares of linear-in-log model and various Tobit procedures are also conducted. There is a large difference in the results between simple least squares and PPML, suggesting significant heteroskedasticity. We also calculate outward and inward multilateral resistance terms to derive the incidence of trade costs and find that a large portion is the buyer's burden.
    Date: 2016–10
  20. By: David Autor; David Dorn; Gordon H. Hanson; Pian Shu; Gary Pisano
    Abstract: Manufacturing is the locus of U.S. innovation, accounting for more than three quarters of U.S. corporate patents. The rise of import competition from China has represented a major competitive shock to the sector, which in theory could benefit or stifle innovation. In this paper we empirically examine how rising import competition from China has affected U.S. innovation. We confront two empirical challenges in assessing the impact. We map all U.S. utility patents granted by March 2013 to firm-level data using a novel internet-based matching algorithm that corrects for a preponderance of false negatives when using firm names alone. And we contend with the fact that patenting is highly concentrated in certain product categories and that this concentration has been shifting over time. Accounting for secular trends in innovative activities, we find that the impact of the change in import exposure on the change in patents produced is strongly negative. It remains so once we add an extensive set of further industry- and firm-level controls. Rising import exposure also reduces global employment, global sales, and global R&D expenditure at the firm level. It would appear that a simple mechanism in which greater foreign competition induces U.S. manufacturing firms to contract their operations along multiple margins of activity goes a long way toward explaining the response of U.S. innovation to the China trade shock.
    JEL: F14 F6 O31 O34
    Date: 2016–12
  21. By: Karen Poghosyan (Central Bank of Armenia, Economic Research Department, Yerevan, Armenia); Evžen Kočenda
    Abstract: In this paper we analyze the determinants of export sophistication based on a large panel dataset (2001–2014; 101 countries) and using different estimation algorithms. Using Monte Carlo simulations we evaluate the bias properties of estimators and show that GMM-type estimators outperform instrumental-variable and fixed-effects estimators. We show that when we apply the panel data over a different period and different set of countries, the findings of Hausmann et al. (2007) remain robust. We provide new evidence of export sophistication path-dependency and confirm that GDP per capita and the size of the economy exert significant and positive effects on export sophistication. Institutional quality positively affects only countries with low institutional quality. The high persistence of export sophistication is also a sign that export diversification promotes not only productivity and sustainable economic growth but also resistance during economic downturns.
    Keywords: international trade, export sophistication, specialization, dynamic panel data, Monte Carlo simulation, panel data estimators
    JEL: C52 C53 F14 F47 O19
    Date: 2016–10
  22. By: Wenshou Yan (School of Economics, University of Adelaide)
    Abstract: In this paper, a standard theoretical model of trade policy is extended to incorporate domestic public storage policy, so as to explore government political motivations in the context of border and domestic policy coordination. Theoretically, domestic storage policy can add to price stabilization in the presence of trade policy, and can reinforce a price-insulating trade policy through increasing the countryÂ’s market power. However, the effects of these two price stabilization instruments on the international market price are in opposite directions. Furthermore, the effect of domestic public storage on the world market is then tested, using China cotton as a case study. The VAR econometrics reveal that in the case of cotton during 2011-14, China as a large player in the global market was able to stabilize to a non-trivial extent the international price of cotton through altering its public stockpile.
    Keywords: Public storage policy; Trade policy; Policy coordination; World cotton price; VAR simulation; China
    JEL: C32 E64 F14 Q17
    Date: 2016–11
  23. By: Petr Polak (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: The effect of common currency on bilateral trade also called Rose effect has been examined extensively in past decade. There is a huge variance of results in primary research which drives a large debate. Using meta-analysis we exploit 51 studies and 3254 estimates of rose effect and provide empirical review. Our results are in contrast with the most recent studies examining the effect of euro on bilateral trade and we found that publication bias in this area of research is diminishing. This study finds the effect of euro on bilateral trade to be between 2 and 6%. Using meta regression we conclude that data source, data structure and control variables are significantly affecting the estimated effect size, but estimation technique used does not.
    Keywords: Rose effect, euro, trade, meta-analysis, publication bias
    JEL: C83 O12 O32 D24
    Date: 2016–11
  24. By: Thomas Sampson
    Abstract: The first priority in the UK government's plans for Brexit trade negotiations should be to agree a transitional deal to cover its relations with the European Union (EU) until a long-term agreement is reached. What's more, triggering Article 50 by March 2017 would be a mistake and should be avoided. These are among the conclusions of a research report by Thomas Sampson, which sets out four principles that should guide the UK's approach to future negotiations, most immediately with the European Union. He explains that to achieve its post-Brexit objectives, whatever they turn out to be, the UK government needs a trade negotiating strategy based on a clear-eyed understanding of how trade agreements work. Trade negotiations are not a cooperative endeavour; rather, they are a bargain between countries with competing objectives. And in the case of UK-EU negotiations, the UK has a weak hand because it needs a deal more than the EU does.
    Keywords: Brexit, trade, UK economy, UK politics
    Date: 2016–12
  25. By: Liu, Rebecca; Rammer, Christian
    Abstract: This paper studies the effects of different public innovation funding programs on the innovation output and export performance of small and medium-sized enterprises (SMEs). We evaluate the effectiveness of regional, national and European funding programs implemented in Germany for both product and process innovations. Our panel study shows that public financial support contributes to higher innovation outputs, which in turn translates into higher export success in later years. This relation however only holds for certain sources of public funding and certain types of innovation output. Innovation support from the European Union and national programs for cutting-edge technology that results in higher sales with new-to-market products shows a significant positive effect on SMEs' export performance. For funding programs run by regional authorities, we find similar though relatively smaller impacts on both innovation output and exporting. Bottom-up funding at the national level-which allows firms to freely define the design of the funded innovation projects in terms of content and cooperation-increases sales with innovations that are only new to the firm, but these innovations have limited impacts on export success. Our results suggest that public innovation programs should challenge SMEs to go for more ambitious innovations in order to strengthen their competitiveness.
    Keywords: Public Funding,SMEs,Innovation Outputs,Exporting,Panel Study,Matching
    JEL: O32 O38 F14
    Date: 2016
  26. By: Rebecca Lima Albuquerque Maranhão; José Eustáquio Ribeiro Vieira Filho
    Abstract: O objetivo deste trabalho é avaliar as fontes de crescimento das exportações brasileiras do conjunto de produtos soja, milho, açúcar, trigo, laranja, algodão, café e carnes (bovina, suína e de frango) durante o período de 1992 a 2013. Os procedimentos metodológicos envolveram a aplicação do modelo constant market share para decompor o crescimento das exportações entre os efeitos de crescimento mundial, de composição da pauta, de destino e de competitividade. Na década de 1990, o crescimento mundial foi relativamente baixo; entretanto, as exportações brasileiras, com a abertura comercial e a estabilização monetária do país, obtiveram taxas positivas, sendo impulsionadas pela composição da pauta e pelo destino das exportações. De 2000 em diante, o crescimento do comércio mundial foi bastante significativo, motivado pelo aumento da demanda de países emergentes, o que proporcionou o boom das commodities. O bom desempenho das exportações agropecuárias brasileiras esteve relacionado não somente ao crescimento mundial, mas também aos ganhos de competitividade, que estão associados à modernização tecnológica com consequente expansão da produtividade. Contudo, ao comparar a primeira década com a segunda, verificou-se a redução do fator competitividade, o que aponta a necessidade de estimular os investimentos produtivos. The main objective in this study is to analyze the sources of growth of Brazilian exports of soybeans, maize, sugar, wheat, orange, cotton, coffee and meat (beef, pork and poultry) during 1992 to 2013. The methodological procedures involved the application of Constant Market Share model to decompose the exports growth as the effects of global growth, exports composition, market distribution and competitiveness. In the 1990s, global growth was relatively low; however, with the trade liberalization and monetary stabilization, Brazilian exports achieved positive rates driven by the exports composition and market destination. From 2000s onwards, the growth of world trade was very significant, driven by increased demand from emerging countries, which provided the commodity boom. The favorable performance of Brazilian agricultural exports was not only related to global growth, but also to the competitive gains that are associated with technological modernization which promoted the expansion of productivity. However, when comparing the first decade with the second, there was a reduction in competitiveness, which indicates the need to encourage productive investments.
    Date: 2016–11
  27. By: Lisa Oberländer (PSE - Paris School of Economics, 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)); Anne-Célia Disdier (PSE - Paris School of Economics, 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)); Fabrice Etilé (PSE - Paris School of Economics, 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))
    Abstract: Using a panel dataset of 70 countries spanning 42 years (1970-2011), we investigate the distinct effects of economic and social globalisation on national trends in markers of diet quality (supplies of animal protein, free fat and sugar, prevalence of diabetes, average body mass index). Our key methodological contribution is the application of the grouped fixedeffects estimator, which extends linear fixed-effects models to include both time-invariant and time-varying unobserved heterogeneity, under the assumption that both the latter and the former follow group-specific patterns. We find that increasing social globalisation has a significant impact on the supplies of animal protein and sugar available for human consumption. Specific components of social globalisation like personal contacts with foreigners and above all information flows drive these results. Economic globalisation has no effect on dietary outcomes, and has a negative impact on health. These findings suggest that the social and cultural aspects of globalisation should deserve greater attention in studies of the nutrition transition.
    Keywords: obesity,economic globalisation,social globalisation,grouped fixed-effects,panel data
    Date: 2016–11
  28. By: Idowu Raheem (U.I - University of Ibadan.)
    Abstract: This study investigated the role of oil and non-oil exports on the Nigerian economy over the period of 1981 to 2015. The ADF and PP unit root test, Johansen cointegration test, Granger causality test, impulse response functions (IRF) and variance decomposition (VD) were used in the analysis of the study. The cointegration test indicates that GDP, Oil and Non-oil exports were cointegrated. The Granger causality test indicates short run unidirectional causality running from oil export to GDP. There are also bidirectional long run causality relationship between oil export and GDP, and unidirectional long run causality running from non-oil export to GDP. The study result indicates that oil exports have inverse relationship with economic growth while non-oil exports have positive relationship with economic growth.
    Keywords: oil exports,non-oil exports and Granger causality,Economic growth
    Date: 2016–11–24
  29. By: Siudek, Tomasz; Zawojska, Aldona
    Abstract: The majority of studies on rural migration in the EU have tended to focus rather on the scale and implications of exodus from rural societies than on rural areas as receivers of migrants, especially foreign ones. This research examines the foreign employment in the agricultural sectors of the selected countries as well as ‘pull’ and ‘push’ factors of foreign labour supply. It presents both positive and negative views on the process of rising inflow of foreign workers into rural areas that leads or can lead to reshaping the rural job markets, economies and communities. The theoretical background lies in economic, social and integrated theories and concepts of migration (political economy of migration, dual labour market theory, network theories, human capital models, relative deprivation theory etc.). The study is mainly devoted to migrant agricultural workers from Poland (being the largest source of post-accession migrants) in the UK (being second, after Germany, the most popular migrant destination for Polish-born citizens).
    Keywords: agriculture, rural areas, labour market, foreign workers, migration, Institutional and Behavioral Economics, Labor and Human Capital, Political Economy, Public Economics,
    Date: 2016
  30. By: Kahanec, Martin (Central European University); Pytlikova, Mariola (CERGE-EI)
    Abstract: This study contributes to the literature on destination‐country consequences of international migration with investigations on the effects of immigration from new EU member states and Eastern Partnership countries on the economies of old EU member states over the years 1995‐2010. Using a rich international migration dataset and an empirical model accounting for the endogeneity of migration flows we find positive and significant effects of post‐enlargement migration flows from new EU member states on old member states' GDP, GDP per capita, and employment rate and a negative effect on output per worker. We also find small, but statistically significant negative effects of migration from Eastern Partnership countries on receiving countries' GDP, GDP per capita, employment rate, and capital stock, but a positive significant effect on capital‐to‐labor ratio. These results mark an economic success of the EU enlargements and EU's free movement of workers.
    Keywords: EU enlargement, free mobility of workers, migration impacts, European Single Market, east‐west migration, Eastern Partnership
    JEL: J15 J61 J68
    Date: 2016–11

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