nep-int New Economics Papers
on International Trade
Issue of 2016‒12‒18
29 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Indonesia and China: Friends or Foes? Quality Competition and Firm Productivity By Lili Yan Ing; Miaojie Yu; Rui Zhang
  2. Do natural disasters stimulate international trade? By Li, C.; van Bergeijk, P.A.G.
  3. Vietnamese footwear export:The direction of trade and determinants of firms’ market penetration By Vu, Hanh; Doan, Hung
  4. Finland in global value chains By Ali-Yrkkö, Jyrki; Rouvinen, Petri; Sinko, Pekka; Tuhkuri, Joonas
  5. The Origin and Dynamics of Export Superstars By Freund, Caroline; Pierola, Denisse
  6. The Multinational Wage Premium and Wage Dynamics By Sly, Nicholas; Orefice , Gianluca; Toubal , Farid
  7. CATs and DOGs By Eckel, Carsten; Riezman, Raymond
  8. The Product and Sector Level Impact of a Hard Brexit across the EU By Lawless, Martina; Morgenroth, Edgar
  9. Exchange Rate Trends and Export Performance in Nigeria: A Descriptive Approach By Obinwata, Bede; OWURU, Joel; FARAYIBI, Adesoji
  10. Effects of Unilateral Trade Liberalization in South Asian countries: Applications of CGE Models By Selim Raihan
  11. Implications of Mega Free Trade Agreements for Asian Regional Integration and RCEP Negotiation By Fukunari Kimura; Lurong Chen
  12. Nonparametric Identification and Estimation of Productivity Distributions and Trade Costs By Quang Vuong; Ayse Pehlivan
  13. The International Trade Commission’s Assessment of the Trans-Pacific Partnership: Main Findings and Implications By Dean Baker
  14. Globalization and Wage Inequality By Helpman, Elhanan
  15. Trade and Environment: Do Spatial Effects Matter? By Azam, Sardor
  16. Import penetration and manufacturing employment growth: Evidence from 12 OECD countries By Köllner, Sebastian
  17. Does stronger protection of intellectual property have effect on trade? By Odilova, Shoirahon
  18. Migration and Development: Dissecting the Anatomy of the Mobility Transition By Thu Hien Dao; Frédéric Docquier; Chris Parsons; Giovanni Peri
  19. Unequal Exchange in International Trade:A General Model. By Andrea Ricci
  20. Trade regulations and global production networks : what is the current impact and what would help to improve working conditions throughout the supply chains? By Scherrer, Christoph.; Beck, Stefan.
  21. How Do Firms Respond to Political Tensions? The Heterogeneity of the Dalai Lama Effect on Trade By Lin, Faqin; Hu, Cui; Fuchs, Andreas
  22. CETA Without Blinders: How Cutting ‘Trade Costs and More’ Will Cause Unemployment, Inequality and Welfare Losses By Pierre Kohler; Servaas Storm
  23. Links between foreign direct investment and human capital formation: Evidence from the manufacturing sector in India By Gunja Baranwal
  24. Trade, poverty, and social protection in developing countries Abstract: How do shifts in trade affect social protections for the poor? Although the fraction of the world’s population considered the ‘extreme’ poor has fallen by over one-half over the past quarter century, many of those lifted above the global poverty line remain vulnerable to shocks that could place them back into poverty. These are the groups that require social protection to stabilize their incomes. Among the shocks to which the absolute poor have been exposed are those created by trade liberalization, particularly in the agricultural sector. The resulting risks, uncertainties, and significant threats to social stability from this type of trade require that the poor are provided with some forms of adjustment assistance. We examine the effects of trade movements on several dimensions of social protection, including spending, coverage, and adequacy over the past two decades. We find that, contrary to previous studies, disaggregating trade may be key to determining which international market variables drive expansion of social protections for the poor. Examining trade in agricultural goods reveals that net food and agricultural exporters provide better social protection than countries that report food deficits. We reason that although both food importers and exporters are vulnerable to shocks, net food exporters generate relatively more revenues to invest in social programs. By Raj M. Desai; Nita Rudra
  25. High-Skilled Migration and Agglomeration By Sari Pekkala Kerr; William Kerr; Çaǧlar Özden; Christopher Parsons
  26. Mining and economic development: Did China’s WTO accession affect African local economic development? By Tony Addison; Amadou Boly; Anthony Mveyange
  27. Misallocation in a Global Economy By Lorenzo Caliendo; Fernando Parro; Aleh Tsyvinsky
  28. The US Export-Import Bank Stimulates Exports By Caroline
  29. International Migration in South and South-West Asia: The Case for Regional Perspective and Policy By Wanphen Sreshthaputra

  1. By: Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA), University of Indonesia); Miaojie Yu (Peking University); Rui Zhang (Peking University)
    Abstract: We define and measure “firm-product-destination-year-specific export quality” and investigate how quality competition from China affects Indonesian firm productivity in the domestic and export markets. Our results suggest that an increase in Chinese exported product quality by 10 percent will increase the productivity of Indonesian firms by 0.4 - 0.5 percent in Indonesia’s domestic market, and increase Indonesian exporters’ productivity by 2 percent in the export market. Where we limit our sample to exporters only, an increase in Chinese exported product quality will increase Indonesian firm productivity in the export market, but not in the domestic market. Our findings broaden the horizon through which firms could benefit from opening up to trade.
    Keywords: Quality, productivity, competition, firm-level study, China, Indonesia
    JEL: F1 F12 F13 F14
    Date: 2016–12
  2. By: Li, C.; van Bergeijk, P.A.G.
    Abstract: The empirical findings of this paper offer different perspective on the emerging literature on trade and disasters that based on contradictory and inconclusive evidence has argued that natural disasters reduce trade. We use succinct import demand and export supply functions providing an alternative methodological approach to the question of the impact of disasters on trade flows that has so far been mainly studied by gravity models. Our finding is that disasters are associated with higher import growth and higher export growth. Analysing a panel data set for 63 countries and the years 1970-2014 we find that natural disasters are associated with a positive shift in real annual growth rates of imports (an increase of 1.6 percentage points) and exports (an increase of 1.9 percentage points). Regarding imports, our findings reflect that disasters imply the need for reconstruction and imports to replace domestic production destroyed by the disaster. For exports, our results are in line with the Schumpeterian destructive creation hypothesis and reflect that more autocratic regimes are able to give priority to reconstruction and survival of the export sector. Our econometric analysis offers support for the existence of nonlinearities between disaster impact on exports and level of development. We do not find support for the idea that FDI stocks enhance trade resilience.
    Keywords: natural disaster, trade shock, export, import, resilience
    Date: 2016–11–30
  3. By: Vu, Hanh; Doan, Hung
    Abstract: We investigate determinants of firms’ direction of trade by using panel data of Vietnam’s footwear firms for the 2006-2010 period. Since no variance was found between firms, a pooled multinomial logit model is consequently preferable. Notably, the economies of scale show positive and significant effects for footwear firms serving the USA and EU markets. Although Vietnamese footwear firms are less likely to export to the ASEAN countries, they tend to focus on the diversification of products in this market. Both private and FDI firms are less likely to export to the EU compared with their counter parts owned by the State (SOEs). However, private firms outperform SOES in the U.S market.
    Keywords: Direction of trade, footwear, export firms, multinomial logit, Vietnam
    JEL: F11 F14
    Date: 2016–12
  4. By: Ali-Yrkkö, Jyrki; Rouvinen, Petri; Sinko, Pekka; Tuhkuri, Joonas
    Abstract: This report uses an international input-output dataset to present an analysis of Finland’s position in global value chains. The results show that intermediate products account for a larger share – some three-quarters – of Finnish exports than they do in most other countries. The share of foreign value added in Finnish export production is around the international average, but it has grown more rapidly than average. A higher share of foreign value added means that exports, on average, have less capacity to generate economic growth. The share of domestic value added has fallen particularly sharply in the fuel refining industry as well as in metal processing and the manufacture of metal products. The share of domestic value added has decreased more in Finnish than in Swedish industry. A value added based analysis changes the picture of Finland’s most important trade partners and our international economic dependencies. Based on the analysis Finnish economic growth is heavily dependent on Chinese and US final demand. Over 10% of Finland’s value added exports are ultimately destined for China, and almost the same proportion goes to the United States. However, the combined final demand from EU-28 countries still outweighs the demand from these two countries.
    Keywords: Globalisation, value chain, value network, global, value added, intermediate, input-output
    JEL: F14 F6 F62 F68
    Date: 2016–11–30
  5. By: Freund, Caroline; Pierola, Denisse
    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: comparative advantage; export growth; firm size distribution; power law
    JEL: D22 F14 L11 L25
    Date: 2016–12
  6. By: Sly, Nicholas (Federal Reserve Bank of Kansas City); Orefice , Gianluca; Toubal , Farid
    Abstract: Multinational firms often enter countries through cross-border mergers and acquisitions. For the domestic firms that are acquired, foreign ownership tends to reverse years of wage declines and even promote wage gains for employees.
    Keywords: Multinational enterprises; Wages; Wage premium; In-kind payments
    JEL: F14 F23 F66
    Date: 2016–11–01
  7. By: Eckel, Carsten; Riezman, Raymond
    Abstract: There is recent firm level evidence that manufacturing firms export products that they do not produce themselves. Bernard et al. (2016) call this "Carry-Along Trade" (CAT) and show that it is a widespread phenomenon among Belgian manufacturing exports. In this paper, we study why manufacturing firms may decide to have their products carried-along instead of exporting their products themselves. We show that if the "Delivery of Own Goods" (DOG) is an alternative option, the profitability of CAT is determined by demand linkages, transportation cost synergies, and the relative productivities of the CAT and DOG firms. Our focus is on the strategic aspects of CAT, and we illustrate that CAT can produce the same outcomes as product-specific, market-specific collusion.
    Keywords: Carry-Along Trade; Collusion; Mode of Exporting; multi-product firms
    JEL: F1 L1 L2
    Date: 2016–12
  8. By: Lawless, Martina; Morgenroth, Edgar
    Abstract: The UK exit from the European Union (Brexit) is likely to have a range of impacts, with trade flows likely to be most affected. One possible outcome of Brexit is a situation where WTO tariffs apply to merchandise trade between the UK and the EU. By examining detailed trade flows between the UK and all other EU members, matching over 5200 products to the WTO tariff applicable to external EU trade this paper shows that such an outcome would result in significantly different impacts across countries. Our estimates of exposure at the country level show an extremely wide range with reductions in trade to the UK falling by 5% (Finland) to 43% (Bulgaria) taking into account the new tariffs and the elasticity of the trade response to this price increase. Food and textiles trade are the hardest hit, with trade in these sectors reducing by up to 90%.
    Date: 2016–11
  9. By: Obinwata, Bede; OWURU, Joel; FARAYIBI, Adesoji
    Abstract: This study examines the exchange rate trends and export performance in Nigeria between 1970-2015 using a descriptive approach. Particularly, the study emphasizes the impacts of exchange rate volatility on export demand in the country. The choice of this period is underscored by the fact that the starting date predates the era of the structural adjustment program (SAP) which is often described as the good days where agricultural and non-oil exports tremendously increased. Again, this date coincides with period when the external trade and exchange rate were indeed liberalized. Findings from descriptive analysis show that despite the policy pronouncements in the period covered, exchange rate volatility greatly affected export performance in Nigeria, in particular, the volume of export demand. The study recommends a deliberate exchange rate policy action that will have good implication for export growth in Nigeria
    Keywords: Exchange Rate Trend, Export Performance, Nigeria, Descriptive Approach, Demand
    JEL: F1 F10 F13
    Date: 2016–06–15
  10. By: Selim Raihan
    Abstract: This paper explores the economy-wide effects of trade liberalization in five South Asian countries (Bangladesh, India, Nepal, Pakistan and Sri Lanka) using updated Social Accounting Matrices (SAM) and the static Computable General Equilibrium (CGE) models of these countries for the year 2012. The CGE framework captures the impact of unilateral trade liberalization on macro-economy, trade, employment and household welfare in the selected countries by tracing the price effects of exogenous shocks, where the variations in prices lead to re-allocation of resources among competing activities, which may alter the factorial income and, hence, the distribution of household income. The results show that trade liberalization measures stimulates growth in employment, for skilled and unskilled labour, as well as real income for all the five South Asian countries. Tariff elimination increases real GDP at factor cost by 3.1 percent in Bangladesh, by 2.5 percent in India, by 2 percent in Nepal, by 0.9 percent in Pakistan, and by 0.6 percent in Sri Lanka. The relative price and wage changes in these five economies are also observed to culminate in a general depreciation of real exchange rates, making their exports more competitive in the world markets.
    Keywords: South Asia, Unilateral Trade Liberalization, Computable General Equilibrium Models, Trade and Employment, Household Income Distribution
    JEL: F14 F16
    Date: 2015–07
  11. By: Fukunari Kimura (Economic Research Institute for ASEAN and East Asia (ERIA)); Lurong Chen (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: As mega free trade agreements (FTAs) are reshaping the rules of global governance, there is urgency for member states of the Association of Southeast Asian Nations (ASEAN) to take proper actions in response to the changing world economic order. On one hand, they should closely observe the progress of negotiations and follow up the issues that are under discussion in mega FTAs. On the other hand, they have to accelerate the pace in concluding the negotiations of the Regional Comprehensive Economic Partnership (RCEP).
    Date: 2016–12
  12. By: Quang Vuong (New York University); Ayse Pehlivan (Bilkent University)
    Abstract: This paper studies the nonparametric identification and estimation of productivity distributions and trade costs in an Eaton and Kortum (2002) type model. Our identification and estimation strategy gains insights from the empirical auction literature, however, our methodology is novel since we face additional problems resulting from the nature of the trade data. Our methodology does not require data on prices which are usually quite hard to obtain and manages to identify the underlying structure by using disaggregated simple bilateral trade data consisting only of trade values and traded quantities. We recover destination-source-sector specific productivity distributions and trade costs nonparametrically. The fact that these productivity distributions and trade costs are both country and sector specific provides important insights about not only cross country differences but also differences across sectors. Moreover, it has now become a common tradition in models of international trade to use either Fréchet or Pareto distributions to represent the distribution of productivities. They provide great analytical convenience; however, recent studies show gains from trade estimates are very sensitive to these parametrizations. To quantify the welfare gains from trade and answer related policy questions, checking the validity of these parametrizations and analyzing how productivity distributions behave is very important.
    Date: 2016
  13. By: Dean Baker
    Abstract: In May of 2016 the United States International Trade Commission (ITC) issued its assessment of the impact of the Trans-Pacific Partnership (TPP). This paper highlights the main findings of the ITC report and explains their derivation and implications. It also examines several issues that were explicitly excluded from analysis in the ITC report.
    JEL: F F1 F4 F10
    Date: 2016–11
  14. By: Helpman, Elhanan
    Abstract: Globalization has been blamed for rising inequality in rich and poor countries. Yet the views of many protagonists in this debate are not based on evidence. To help form an evidence-based opinion, I review in this paper the theoretical and empirical literature on the relationship between globalization and wage inequality. While the initial analysis that started in the early 1990s focused on a particular mechanism that links trade to wages, subsequent studies have considered several other channels, and the quantitative assessment of the size of these influences has been carried out in multiple studies. Building on this research, I conclude that trade played an appreciable role in increasing wage inequality, but that its cumulative effect has been modest, and that globalization does not explain the preponderance of the rise in wage inequality within countries.
    Keywords: college wage premium; inequality; International Trade; residual inequality
    JEL: F10 F61 F66
    Date: 2016–12
  15. By: Azam, Sardor
    Abstract: This study tests the suitability of spatial effects in trade context. The paper analyzes the effect of the strictness of environmental regulations on trade performance on the basis of augmented gravity model. It compares spatial estimates with those of OLS and concludes that spatial effects are important. The results indicate that Spatial Error Model fits best to the data at hand. It is shown that environmental standards are positively correlated with trade.
    Keywords: Exports, Augmented gravity model, Environmental Performance Index, Spatial econometrics, Multilateral resistance
    JEL: C31 F18 Q56
    Date: 2016–02
  16. By: Köllner, Sebastian
    Abstract: This paper investigates the relationship between growing import penetration and manufacturing employment growth in 12 OECD countries between 1995 and 2011, accounting for various model specifications, different measures of import penetration and alternate estimation strategies. The application of the latest version of the World Input-Output Database (WIOD) that has become available only recently allows to measure the effect of increasing imported intermediates according to their country of origin. The findings emphasize a weak positive overall impact of growing trade on manufacturing employment. However, intermediate inputs from China and the new EU members are substitutes to manufacturing employment in highly developed countries while imports from the EU-27 act as complements to domestic manufacturing production. A three-level mixed model implies that the hierarchical structure of the data only plays a minor role, while controlling for endogeneity leaves the results unchanged.
    Keywords: Import Penetration,Manufacturing,Labor Markets,Hierarchical Mixed Model
    JEL: E24 F16 J23 L60
    Date: 2016
  17. By: Odilova, Shoirahon
    Abstract: In thus study we explore the association between patent protection and international trade, using data for 114 countries for the 2010-2015 years. Our results suggest non-linear (inverted U shape) link between IPR protection index and trade as a share of GDP.
    Keywords: trade; IPR; copyright; patents
    JEL: F1
    Date: 2016–12–10
  18. By: Thu Hien Dao (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Frédéric Docquier (FNRS, UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FERDI (France)); Chris Parsons (Business School, University of Western Australia); Giovanni Peri (Department of Economics, University of California, Davis, United States)
    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: 2016–12–06
  19. By: Andrea Ricci (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    Abstract: Increasing world inequality and mass migration make the topic of unequal exchange ever more important. In literature, two main sources of unequal exchange have been identified: differences in industrial specialization and differences in factors remunerations between countries. Many empirical studies measured the quantitative dimension of value transfers. However, the lack of a coherent theoretical framework limited empirical research. A disaggregated model of world economy with heterogeneous labour and non-specific commodities is presented on the grounds of the New Interpretation of Marx’s LTV. The model is able to explain, within a coherent theoretical framework, all the various forms of international value transfers, without incurring in traditional impasses. The social distribution of benefits/losses of unequal exchange emerges as a pragmatic and historical question rather than a theoretical one. Recent empirical approaches based on the difference between nominal and PPP exchange rates could only partially capture the full extent of unequal exchange in world economy. The operational character of the model provides a consistent theoretical basis for further empirical research on international value transfers deriving from the unfair distribution of value added in trade between countries and between social classes.
    Keywords: International trade, Unequal Exchange, Labour Theory of Value, Exchange rates
    JEL: B51 D46 E11 F10
    Date: 2016
  20. By: Scherrer, Christoph.; Beck, Stefan.
    Keywords: trade agreement, workers rights, working conditions, value chains, role of ILO
    Date: 2016
  21. By: Lin, Faqin; Hu, Cui; Fuchs, Andreas
    Abstract: Little is known about the firm-level dynamics behind trade responses to political tensions. This article reinvestigates variation in the travel pattern of the 14th Dalai Lama to study how political tensions affect trading decisions of Chinese importers. Using monthly trade data from China Customs covering imports of machinery and transport equipment from 173 countries over the 2000-2006 period, our empirical results show a significant reduction of imports in response to foreign government members’ meetings with the Dalai Lama. In line with the idea that Chinese importers face a trade-off between bearing costs from suboptimal trade transactions and costs from not accommodating the government, this ‘Dalai Lama Effect’ operates at the intensive margin, i.e., via a decrease in the import volume per importer. Examining differential effects across types of firm ownership, we find that the observed effect is driven by state-owned enterprises (and foreign-invested firms) and not by private companies. Moreover, while direct importers temporarily reduce their trade with Dalai Lama-receiving countries, there is some evidence that trade intermediaries even benefit. Overall, we find the effects to be much more short-lived than previously thought.
    Keywords: international trade; political tensions; extensive margin; intensive margin; state-owned enterprises; firm ownership; trade intermediation; China; Tibet; Dalai Lama
    Date: 2016–12–14
  22. By: Pierre Kohler; Servaas Storm
    Abstract: Proponents of the Comprehensive Economic and Trade Agreement (CETA) emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited official projections suggest modest GDP gains after about a decade, varying from between 0.003% to 0.08% in the European Union and between 0.03% to 0.76% in Canada. However, all these quantitative projections stem from the same trade model, which assumes full employment and neutral (if not constant) income distribution in all countries, excluding from the outset any of the major risks of deeper liberalization. This lack of intellectual diversity and of realism shrouding the debate around CETA’s alleged economic benefits calls for an alternative assessment grounded in more realistic modeling premises. In this paper, we provide alternative projections of CETA’s economic effects using the United Nations Global Policy Model (GPM). Allowing for changes in employment and income distribution, we obtain very different results. In contrast to positive outcomes projected with full-employment models, we find CETA will lead to intra-EU trade diversion. More importantly, in the current context of tepid economic growth, competitive pressures induced by CETA will cause unemployment, inequality and welfare losses. At a minimum, this shows that official studies do not offer a solid basis for an informed decision on CETA.
    Date: 2016–09
  23. By: Gunja Baranwal
    Abstract: This paper is related to the literature on the effect of foreign direct investment (FDI) on the labour market of host countries. Labour market literature has focused on the demand side of FDI; that is, increasing wage inequality by demanding more skilled workers or just increasing the overall average wages. On the supply side, FDI can enrich the skilled labour force of the host country by provision of on-the-job training or learning or through indirect technological spillover effects. This paper takes into account both these effects and tests for human capital formation effect of FDI in India for core manufacturing sector firms for the period 2001–15 using the Prowess database of the Centre for Monitoring Indian Economy. It also takes into account the endogeneity of decision-making on the part of foreign firms in locating FDI. Five different determinants of FDI are used: market size, distance from main market area, length of national highways, availability of non-agricultural land, and a cast and religion fractionalization index. The most significant factor determining FDI is market size and the distance from main market area and fractionalization index. Different dynamic panel data methods are used with static and dynamic generalized method of moments techniques. This study does not find any positive supply side human capital formation effects of FDI, but finds positive demand side effect of FDI of raising wage inequality and average wages. The results remain robust while taking into account heterogeneities at region, industry, size, and age of the firms.
    Keywords: foreign direct investment, human capital, labour demand, labour supply, wages
  24. By: Raj M. Desai; Nita Rudra
    Keywords: globalization, social protection, trade
  25. By: Sari Pekkala Kerr; William Kerr; Çaǧlar Özden; Christopher Parsons
    Abstract: This paper reviews recent research regarding high-skilled migration. We adopt a data-driven perspective, bringing together and describing several ongoing research streams that range from the construction of global migration databases, to the legal codification of national policies regarding high-skilled migration, to the analysis of patent data regarding cross-border inventor movements. A common theme throughout this research is the importance of agglomeration economies for explaining high-skilled migration. We highlight some key recent findings and outline major gaps that we hope will be tackled in the near future.
    JEL: F15 F22 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2016–12
  26. By: Tony Addison; Amadou Boly; Anthony Mveyange
    Abstract: This paper investigates China’s influence on local economic development in 37 African countries between 1997 and 2007. We compare the average changes in economic growth, migration, spatial inequality, and welfare of mineral-rich districts, both prior and after China’s WTO Accession, to the corresponding changes in districts without any mineral endowment. Using this exogenous variation, we show that during 2002–07, mining activities in response to the global commodity price-boom increased welfare as measured by spatial Sen Index but were insignificant for local economic growth, migration, and spatial inequality. Our findings suggest that policy needs to do more to improve the local benefits of positive external shocks (such as China’s WTO Accession): it is not enough to assume, given Africa’s high spatial inequality, that local economies will automatically benefit from higher national growth.
    Keywords: mining, commodity boom, local development, Africa, China, WTO
  27. By: Lorenzo Caliendo (Yale University); Fernando Parro (Federal Reserve Board); Aleh Tsyvinsky (Yale University)
    Abstract: We develop a general equilibrium model where producers purchase intermediate goods from the lowest cost supplier in the world. Factor prices, productivities and domestic frictions (misallocation) affect the mobility of goods across sectors within a country. In our model, changes in misallocation in a given country have welfare implications in foreign countries through two main mechanisms. First, a reduction in misallocation in a given country impacts production costs, and foreign countries benefit from the access to cheaper goods as a result. Second, lower domestic frictions allow countries to substitute foreign intermediate for domestic ones, which leads to a decline in production and wages in foreign countries. The relative importance of each of these two channels determines the international welfare effects of reducing domestic misallocation. In our model we also incorporate frictions of moving final goods as well as frictions of moving goods from a different sector and country. Using information from the world’s input output databases, we are able to separate changes in productivity from changes in misallocation. Using these estimates, we run a variety of counterfactuals to show the importance of reducing misallocation for the global economy.
    Date: 2016
  28. By: Caroline (Peterson Institute for International Economics)
    Abstract: One year after the US Export-Import Bank (EXIM) was reauthorized by Congress, the debate over its future continues to rage. EXIM, meanwhile, remains hampered by lack of a three-member quorum on its Board, preventing it from approving transactions over $10 million. Currently the five-member Board has only two serving directors. The main issue in the debate is whether the Bank, which provides financing and insurance for US businesses that want to export, substitutes for the private sector or whether--as its advocates argue--it helps US companies compete in markets where private financing opportunities are scarce. This Policy Brief analyses the relationship between historical EXIM financing and export volumes and shows that EXIM lending stimulates US exports. In fact, every dollar authorized by EXIM results in $1.35 in greater exports. EXIM is not a substitute for private finance but is additive, helping US companies to be competitive in foreign markets. The Bank expands US exports, reducing the trade deficit, and returns the profits from its business to the US Treasury. Over the period studied, 2007-14, EXIM transferred more than $4 billion to the Treasury.
    Date: 2016–12
  29. By: Wanphen Sreshthaputra (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office)
    Abstract: International migration is a key factor behind the socio-economic development of South and South-West Asia (SSWA), one of the fastest growing subregions in the world. International migration has alleviated population pressures and unemployment while remittances from overseas migrants have helped reduce poverty. In 2011, South and South-West Asian countries received an estimated $90 billion in workers’ remittances, more than five times the $15 billion in official development assistance received over the same period. This brief synthesizes some of the key recommendations of the Situation Report on International Migration in South and South-West Asia, published by the Asia-Pacific RCM Thematic Working Group on International Migration including Human Trafficking, which is co-chaired by ESCAP and IOM. It also draws on additional recommendations from the South and South-West Asia Development Report 2012/13 issued by ESCAP South and South-West Asia Office.
    Keywords: International Migration, South and South-West Asia, remittance

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