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on International Trade |
| By: | Jason Garred (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | Import tariffs have fallen steeply worldwide over the last several decades, but has trade policy persisted through a rise in the use of other instruments? I study this question in the context of China's 2001 accession to the World Trade Organization, using panel data on Chinese export policies. I find that after its entry into WTO, the distribution of China's export restrictions across industries increasingly resembles the inverse of its pre-WTO import tariff schedule. The evidence suggests that increases in export restrictions are likely to have partly restored China's pre-WTO pattern of industrial protection. |
| JEL: | F13 F14 O13 O24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1621e&r=int |
| By: | Crowley, M.; Song, H.; Meng, N. |
| Abstract: | We estimate how a rise in uncertainty about future tariff rates impacts firm decisions to enter into and exit from export markets. Using Chinese customs transactions between 2000-2009, we exploit time-variation in product-level trade policy and find that Chinese firms are less likely to enter new foreign markets and more likely to exit from established foreign markets when their products are subject to increased trade policy uncertainty. Our analysis is based on the phenomenon of “tariff echoing" - after a tariff hike in one country, another country is likely to raise its tariff on the same product. Overall, we find that if there had been no trade policy uncertainty created by the use of contingent tariffs, Chinese entry into foreign markets would have been roughly 2 percent higher per year. We use our model to counterfactually estimate how much entry by Chinese firms over 2001-2009 was due to future trade policy certainty provided by membership in the WTO. |
| Keywords: | Trade policy uncertainty, trade agreements, China shock, Chinese exporters, antidumping, information spillovers |
| JEL: | F12 F13 F14 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1676&r=int |
| By: | Deniz Baglan (Department of Economics, Howard University); Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | Using data on 2380 firms from nine emerging countries, this paper shows that there is a positive and significant relationship between financial health and the intensive margin of trade. The magnitude of this positive relationship is shown to depend on several firm characteristics, where the effects of financial health on firm-level exports are larger for firms with higher levels of export, bigger size (measured by assets), higher productivity (measured by value added per worker), and moderate levels of financial health (measured by cash flow over total assets). The results are robust to the consideration of foreign ownership and country characteristics as well as industry and time fixed effects. |
| Keywords: | Financial Health, Intensive Margin of Trade, Threshold Analysis, Emerging Markets |
| JEL: | D24 F10 F14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1607&r=int |
| By: | Chad P. Bown (Peterson Institute for International Economics) |
| Abstract: | China’s accession to the World Trade Organization (WTO) in 2001 came after lengthy negotiations. More than 160 WTO member countries granted nondiscriminatory tariff treatment to China’s exporters. For its part, China agreed to carry out numerous steps to open itself to global trade and investment markets. In return for its agreement to abide by certain rules that normally govern a market economy, China was led to believe that trading partners like the United States would officially revoke its nonmarket economy status in December 2016. The battle is about to begin over whether the United States and other countries will deliver on their earlier implicit promise. This Policy Brief examines whether granting China market economy status reduces the US government’s access to special trade policies to address imports from China in a way that might result in a sudden surge in imports from China. The answer is likely no, due to a recent US policy decision to begin use of countervailing duties (CVDs) against China. Most US antidumping duties applied against China since 2007 have been accompanied by a simultaneous CVD. A change in China’s nonmarket economy status that reduced the size of applied antidumping duties may thus result in only a modest increase in imports. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb16-24&r=int |
| By: | Annette Schminke (KU Leuven); Johannes Van Biesebroeck (KU Leuven and CEPR) |
| Abstract: | For small open economies, it is essential that many firms find their way to the export market and most governments provide some form of export promotion assistance. We use detailed firm-level data for Flanders, the largest region in Belgium, to evaluate whether its program raises firms' propensity to start exporting outside the EU single market. We find robust evidence for such an effect by relying on the selection-on-observables assumption which we implement using various estimators. Results remain positive and statistically signifcant, but are smaller in size, when we use two strategies to mitigate self-selection concerns: (i) focus on sub-samples of firms where endogenous selection into treatment is less likely, and (ii) use firms that receive the weakest form of support as controls for firms receiving more extensive support. |
| Keywords: | International trade, trade policy, export market entry |
| JEL: | F13 F14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201612-316&r=int |
| By: | BIJOU, MOHAMMED; ELHASSOUNI, MOHAMMED |
| Abstract: | The contribution of foreign subsidiaries to economic growth prompted the Moroccan government to place the attraction of foreign direct investment as one of the economic priorities of the country, which has led to the development of policies aiming to attract multinationals. This thesis therefore proposes to identify the key determinants of foreign investment. It is to identify new investment conditions sought by multinational firms to appreciate the Moroccan territory , and then evaluate using an econometric panel data model the importance of different macroeconomic variables explaining the inflow of FDI in the manufacturing sector in Moroccan flows, and to identify the main factors underpinning the appeal. Our results show that variables such as availability of labor factor, high cost and quality of labor, market size, as well as trade opening, are the most significant factors appealing to industrial companies. We also show that the industrial density attracts the implementation of new investors, and that Morocco has become an attractive industrial platform to foreign exporters. |
| Keywords: | Investissement direct étranger, , l’industrie manufacturière marocaine économique, modèle à effets fixes vs effets aléatoires |
| JEL: | C1 C5 O1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75815&r=int |
| By: | Mayer, Thierry; Melitz, Marc J.; Ottaviano, Gianmarco I. P. |
| Abstract: | We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multiproduct firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets - and the induced product mix reallocations - induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial - and explain an important share of aggregate productivity fluctuations for French manufacturing. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:562&r=int |
| By: | Ayumu Tanaka |
| Abstract: | The rapid growth in the number of temporary workers in Japan during the 2000s gen- erated greater income inequality and greater job insecurity because temporary workers' wages are lower and their jobs are more tenuous than those of permanent workers. How- ever, little is established about the relation between globalization and domestic growth in the temporary workforce. This study examines that relationship. It investigates whether the initiation of foreign direct investment (FDI) into Asia increased temporary workers' share of total wages and employment. This study employs a rst-differenced difference-in- difference estimation with propensity score matching to examine how the initiation of FDI among Japanese manufacturers during 2003{2004 affected domestic employment. Firm- level data cover the period following the 2004 deregulation, which accelerated increases in the number of temporary workers by allowing manufacturers to employ such workers indirectly through employment agencies. Positive effects of vertical FDI are observed on the temporary worker ratio one year after starting FDI, but vanish in subsequent years. Therefore, this study concludes that the relationship between temporary workers and offshoring is complementary in the early stage of FDI and that no persistent effect of offshoring occurs that results in greater income inequality and greater job insecurity through an increase in the number of temporary workers. |
| Keywords: | foreign direct investment; difference-in-difference estimation; propensity score matching; temporary workers |
| JEL: | F16 F21 F23 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-16-011&r=int |
| By: | Carballo, Jeronimo; Ottaviano, Gianmarco I. P.; Volpe Martincus, Christian |
| Abstract: | We use detailed data on exporters from Costa Rica, Ecuador and Uruguay as well as on their buyers to show that: aggregate exports are disproportionally driven by few multi-buyers exporters; and each multi-buyer exporter's foreign sales of any product are in turn accounted for by few dominant buyers. We propose an analytically solvable multi-country model of endogenous selection in which dominant exporters, dominant products and dominant buyers emerge in parallel as multi-product sellers with heterogeneous technologies compete for buyers with heterogeneous needs. The model not only provides an explanation of the existence of dominant buyers but also makes specific predictions on how the relative importance of dominant buyers should vary across export destinations depending on their market size and accessibility. We show that these predictions are borne out by our data and discuss their welfare implications in terms of gains from trade. |
| Keywords: | Firm heterogeneity,taste heterogeneity,import-export relations,competition,selection |
| JEL: | F12 F14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:561&r=int |
| By: | Eva Van Leemput |
| Abstract: | This paper quantifies the size of internal versus external trade barriers and assesses the impact on trade and welfare. I develop a quantitative multi-sector international trade model featuring nonhomothetic preferences in which states trade both domestically and internationally. I discipline the model using rich micro data on price dispersion as well as foreign and domestic trade flows at the Indian state level. I find that (1) state-based price data predict internal trade flows well; (2) internal trade barriers make up 40% of the total trade cost on average, but vary substantially by state depending on the distance to the closest port; and (3) the welfare impacts of domestic integration are substantial: reducing trade barriers across states to the U.S. level increases welfare by more (13%) than fully eliminating international import barriers (7%). |
| Keywords: | Internal Trade Barriers ; External Trade Barriers ; Welfare ; India |
| JEL: | F13 F14 O18 O24 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1185&r=int |
| By: | Elena Bobeica (European Central Bank); Olegs Tkacevs (Bank of Latvia); Styliani Christodoulopoulou (European Central Bank) |
| Abstract: | This paper studies the importance of price and cost competitiveness for intra- and extra-euro area trade flows of euro area countries. A standard error correction framework shows that price competitiveness is a relatively more important driver of trade flows outside the euro area as compared to those within the monetary union, especially for exports, that tend to be more sensitive to relative prices than imports. We consider various measures of competitiveness and conclude that it is difficult to single out one that outperforms the others. Using an encompassing test, measures based on labour costs appear to contain relatively more information for trade flows, particularly for exports outside the euro area. The key policy implication is that, in order to adjust competitiveness disequilibria within the monetary union, measures, such as structural policies fostering non-price competitiveness should be pursued in the deficit countries besides those aimed at price and cost adjustments. |
| Keywords: | price and cost competitiveness, intra- and extra-euro area trade, error correction model |
| JEL: | F14 F15 F41 |
| Date: | 2016–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:201604&r=int |
| By: | Douglas L. Campbell (New Economic School (NES)); Lester Lusher (UC Davis) |
| Abstract: | We study the impact of large real exchange rate shocks on workers in sectors initially more exposed to international trade using the Current Population Survey’s (CPS) Merged Outgoing Rotation Group (MORG) from 1979 to 2010 combined with new annual measures of imported inputs, a proxy for offshoring. We find that in periods when US relative prices are high, and imports surge relative to exports, workers in sectors with greater initial exposure to international trade were more likely to be unemployed or exit the labor force a year later, but did not experience significant declines in wages conditional on being employed. Contrary to the usual narrative, we find negative wage effects for higher-wage, but not lower-wage workers, particularly for those who are lesseducated. |
| Keywords: | Real Exchange Rates, Labor Market Impact of Trade Shocks, Inequality, American Manufacturing |
| JEL: | F10 F16 F41 N60 L60 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0223&r=int |
| By: | Ashraf, Ayesha; Herzer, Dierk; Nunnenkamp, Peter |
| Abstract: | This study examines the effects of greenfield FDI and cross-border mergers and acquisitions (M&As) on government size in host countries of FDI. Using panel data for up to 130 countries for the period from 2003-2011, the study specifically tests the compensation hypothesis, suggesting that by increasing economic insecurity, economic openness leads to larger government size. It is found that greenfield FDI increases labour market volatility and thereby economic insecurity while M&As are not significantly associated with labour market volatility. The main results of this study are that greenfield FDI has a robust positive effect on government size, while M&As have no statistically significant effect on government size in the total sample of developed and developing countries, as well as in the sub-samples of developed and developing countries. |
| Keywords: | greenfield FDI,mergers & acquisitions,economic insecurity,government size |
| JEL: | F21 F23 E62 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2068&r=int |
| By: | Leon Podkaminer |
| Abstract: | The last 50 years have produced a series of revolutionary technological changes. These decades have also witnessed a truly revolutionary systemic change at the global level. The change started with step-wise internal liberalisations and deregulations in the major industrialised countries. The internal systemic changes have been synchronised with the consecutive waves of liberalisation of international economic relations. Advancing globalisation has been paralleled by the global economic growth becoming progressively slower and unstable. Using the standard tools of time series econometrics (VEC,Granger non-causality testing, ARDL) the paper suggests that trade has not been driving global economic growth (or even that expanding trade may have slowed down global output growth). Large and persistent trade imbalances which have become typical since the mid- 1970s are just one possible reason for trade no longer playing the positive role assigned to it in the trade theories. The second reason relates to the ‘race-to-thebottom’ tendencies with respect to the wage rate which have developed under globalisation. These tendencies may have been responsible for the persistent shortage of aggregate demand at the global level and – consequently – weakening global output growth. |
| Keywords: | world income, world trade, globalisation, wage-led growth, VEC, Granger causality |
| JEL: | F43 F15 F16 O47 O49 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:251&r=int |
| By: | Ottaviano, Gianmarco I. P.; Peri, Giovanni; Wright, Greg C. |
| Abstract: | This paper explores the impact of immigrants on the imports, exports and productivity of service- producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may impact the productivity of the firm as well as its export behavior. The first effect can be understood as the re-assignment of offshore productive tasks to immigrant workers. The second can be seen as a productivity or cost cutting effect due to immigration, and the third as the effect of immigrants on specific bilateral trade costs. We test the predictions of our model using differences in immigrant inflows across U.K. labor markets, instrumented with an enclave-based instrument that distinguishes between aggregate and bilateral immigration, as well as immigrant diversity. We find that immigrants increase overall productivity in service-producing firms, revealing a cost cutting impact on these firms. Immigrants also reduce the extent of country-specific offshoring, consistent with a reallocation of tasks and, finally, they increase country-specific exports, implying an important role in reducing communication and trade costs for services. |
| Keywords: | Immigration,Services Trade |
| JEL: | F16 F10 F22 F23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:560&r=int |
| By: | Christophe Perrot; Vincent Chatellier; Daniel-Mercier Gouin; Mélanie Richard; Gérard You |
| Abstract: | With the end of milk quotas, the increasing openness of economies and the increased volatility of international prices, the question of the competitiveness of the French dairy sector is at the heart of many debates. Competitiveness is generally defined as the ability of a company or a country to conquer and/or maintain market shares in the face of competition both on the domestic and export markets. The French dairy sector is not only an important player in European and international trade in dairy products, but it has some good opportunities in the domestic market, including for high-value products. The decline in domestic consumption (in milk equivalent), the gradual saturation of the European demand and competition from several other European countries are now an incentive to develop our exports to more distant markets showing a growth in demand. Compared to other European or international competing countries (New Zealand, United States), the cost of producing milk in France, especially in the West (main French dairy region), is favored by low inputs, particularly because of abundant forage production (autonomy for feeding dairy cows). The way of achieving such a high level of autonomy, however, weights today on the average level of labor productivity and on the structure of expenses (high cost of mechanization) due to the importance of forages now mostly grown, harvested and distributed mechanically |
| Keywords: | dairy sector, quota, competitiveness, price, production costs |
| JEL: | Q12 Q17 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201609&r=int |
| By: | Pawel Gajewski (Institute of Economic Sciences, Polish Academy of Sciences); Grzegorz Tchorek (Faculty of Management, University of Warsaw) |
| Abstract: | We use a unique firm-level survey dataset that draws from the EFIGE (European Firms In Global Economy) questionnaire, to unveil differences in factors driving export performance in structurally most diverse areas of Poland. While conventional results about the role of size, foreign ownership and innovation activity are confirmed at the aggregate level, the picture breaks down when Western and Eastern macroregions are extracted. Our results suggest that the common perception of a more developed West (Poland “A”) and a backward East (Poland “B”) might be outdated. Rather, firms in both regions seem to follow distinct strategies and have dissimilar success factors for competing internationally. Interestingly, export performance in the East is found to benefit from family ties in business, but also product innovation and non-price competitiveness. In the West, it is in turn associated mostly with size and foreign ownership. Overall, our results on the one hand add support to the ‘New’ new trade theory and ‘New’ new economic geography’s premises related to the importance of microeconomic factors and, on the other, shed a new light on the pattern of regional development in Poland. We also discuss some implications for policy makers and managers and suggest directions of further research. |
| Keywords: | trade, region, firm, competitiveness |
| JEL: | F14 R12 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ann:wpaper:1/2017&r=int |
| By: | Borrs, Linda; Knauth, Florian |
| Abstract: | We use a large sample of German workers to analyze the effect of low-wage competition with China and Eastern Europe (the East) on the wage structure within German manufacturing industries. Utilizing the method by Abowd et al. (1999), we decompose wages into firm and worker components. We find that the rise of market access and competitiveness of the East has a substantial impact on the dispersion of the worker wage component and in part on positive assortative matching. Trade fails to explain changes in the firm wage premium. The rising dispersion in worker-specific wages can be attributed to increasing skill premia and to changes in the extensive margin of the workforce, leading to a wage polarization for the remaining within-industry workers. We also account for technological change by considering how many routine-intensive jobs are substituted within an industry. The more routine jobs are cut, the higher is the effect on wage inequality, especially on the dispersion of worker-specific wages. Overall, trade explains up to 19% of the recent increase in wage inequality and slightly exceeds the technology effect that accounts for approximately 17%. |
| Keywords: | wage decomposition,wage inequality,globalization,gravity |
| JEL: | F16 J31 O33 F14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:241&r=int |
| By: | Hatzigeorgiou, Andreas (Ratio); Karpaty, Patrik (Örebro University School of Business); Kneller, Richard (University of Nottingham); Lodefalk, Magnus (Örebro University School of Business) |
| Abstract: | Offshoring is an important aspect of firms’ internationalization. However, offshoring comes at a cost, especially where information or trust is lacking. Immigrant employees could reduce such offshoring costs through their knowledge of their former home countries and via access to foreign networks. We develop a framework of heterogeneous final-good firms to guide our empirical analysis and draw on new employer-employee data for approximately 12,000 Swedish firms during the time period 1998-2007. Our results support the hypothesis that immigrant employees spur offshoring activities by firms through lower offshoring costs. Hiring one additional foreign-born worker can increase offshoring up to three percent on average, with skilled migrants having the strongest effects. |
| Keywords: | offshoring; migration; networks; trust; information; trade barriers |
| JEL: | D21 D83 F14 F22 F23 |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2016_007&r=int |
| By: | MALEN, Joel; YAMANOI, Junichi |
| Abstract: | We examine how stronger environmental regulations influence MNE international expansion decisions by attending to two sources of firm heterogeneity that moderate this effect: possession of pollution reduction capabilities and firm multinationality. Empirical tests on 523 cases of international manufacturing expansion into 49 potential host countries by 124 Japanese chemical industry firms between 2001 and 2010 reveal that the market entry deterring effect of stronger environmental regulations is weaker for firms possessing unique capabilities for pollution reduction and for more multinational firms. Moreover, because more multinational firms have greater incentives and skills for modifying capabilities to create value in host-country environments, the positive moderating effect of PR-capabilities are strengthened yet further for high multinationality firms. |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:16-13&r=int |
| By: | Davide Castellani (Henley Business School, University of Reading); Claudio Fassio (CIRCLE, Lund University, Sweden and BRICK, Collegio Carlo Alberto, Torino, Italy); ; |
| 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: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:jhdxdp:jhd-dp2016-08&r=int |
| By: | John McLaren; Myunghwan Yoo |
| Abstract: | We investigate the effects of inward FDI on income distribution and absolute living standards in Vietnam using census data from 1989-2009. We compute the number of employees of foreign establishments in each of Vietnam's provinces for each year, and use that as a measure of local FDI. We estimate the effects of FDI on local households' living standards as reported in the data, broken down by educational background to allow us to analyze effects on inequality. Estimates based on the repeated cross section indicate that rising FDI in a province is associated with a slight decline in living standards for households there if they do not have a member employed by the foreign enterprises, with only modest gains for households who do have a member employed by the foreign enterprises. These estimates may reflect composition effects, however, since we find large movements of people toward the provinces receiving the FDI. The findings show that measuring the effect of FDI on household welfare is more difficult than measuring the effect of trade policy, and may pose a difficulty for the view of FDI as a general anti-poverty strategy. |
| JEL: | F16 F21 O24 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22930&r=int |
| By: | Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | One channel of welfare-improving globalization is through the increasing integration of trade. Although this is attributed to decreasing effects of distance across countries, the workhorse models of gravity fail to capture it, the so-called the missing globalization or the distance puzzle. This paper shows that this puzzle may be due to the restricting assumption of constant elasticity of substitution (CES) preferences working behind the gravity models. We test the validity of this assumption for different trade intervals and show that it is violated due to the distance elasticity of trade decreasing with the amount of trade. Accordingly, we consider a type of non-CES utility function, namely constant absolute risk version (CARA), and analytically show that the negative relation between trade and distance elasticity of trade is captured by CARA preferences. We estimate the gravity equation implied by CARA preferences, empirically confirm the endogenous relation between trade and distance elasticity of trade, and show that the distance puzzle is solved under CARA preferences. According to the data set used, CARA preferences are also econometrically selected over CES preferences based on their goodness of fit. |
| Keywords: | Distance Puzzle, Non-CES Preferences, CARA Preferences |
| JEL: | F12 F13 F14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1608&r=int |
| By: | Maria D. Tito |
| Abstract: | In this paper, we revisit the link between innovation activity, measured by the number of patent applications, and import flows. |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2016-12-16&r=int |
| By: | Luke Emeka Okafor; Mita Bhattacharya; Harry Bloch |
| Abstract: | This paper analyses whether the use of imported intermediates improves productivity using firm-level panel data of manufacturing firms in Ghana covering the period between 1991 and 2002. This includes examining the importance of absorptive capacity in enhancing the productivity gains from imported intermediates. We propose lagged relative productivity as a new measure of absorptive capacity (ABC). For any given period, ABC is defined as the natural logarithm of a firm’s total factor productivity in the previous period relative to the firm’s initial total factor productivity. An alternative measure of ABC considers real value added per worker in lieu of total factor productivity. Overall, we find that firms with high levels of absorptive capacity derive productivity gains from the contemporaneous and prior use of imported intermediates, particularly for firms operating in the input-intensive industries. Our findings are robust to different specifications of the base model and different estimation techniques. |
| Keywords: | Trade, Absorptive capacity, Productivity, Manufacturing, Imported intermediates,Ghana. |
| JEL: | F14 D22 D24 O33 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2016-22&r=int |
| By: | Sultan Orazbayev (University College London) |
| Abstract: | The literature on diffusion of knowledge has shown positive influence of physical and cultural proximity, common Language and contiguity on the speed and magnitude of international knowledge flows. Knowledge diffusion is also facilitated by co-location, even temporary one, which helps researchers form personal ties and exchange tacit information through face-to-face contact. However, the ability of researchers to disseminate the results of their work, especially recent or on-going research, through temporary co-location (including international conferences, workshops and seminars) will be affected by the administrative barriers to mobility (‘paper walls’), for example travel visas. This paper uses a gravity-style empirical model to examine the link between the administrative barriers to mobility of the skilled work- ers (and students) and the magnitude/direction of international knowledge flows between 45 countries from 1990 to 2014. Additional calculations use information on travel visa requirements between 134 countries in year 2004. The results suggest that higher administrative barriers to mobility between countries are associated with reduced bilateral knowledge flows, especially of recent knowledge, and this negative effect can persist for about 9 years. The persistent effect of ‘paper walls’ is asymmetric and a country’s ability to import knowledge is affected more by the administrative barriers of the knowledge-exporting country, suggesting that co-location plays an important role for successful transfer of knowledge. |
| Keywords: | visa; diffusion of knowledge; academic mobility; skilled workers; immigration policy |
| JEL: | F10 F29 O33 R10 |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:410&r=int |
| By: | Fernanda Ilhéu |
| Abstract: | China has already given a fundamental contribution to the present globalization process and have also highly benefited from it by integrating becoming the final stage of the Global Chains Production networks in Asia. This process in China was the result of a survival economic strategy that saw in the attraction of Foreign Direct Investment in intensive low cost workmanship oriented to exports, a fundamental condition to overpass it´s millenary delay. This strategy accepted that the add value that remain in China, although very small was very important to give jobs to millions of Chinese and take them out of the absolute poverty line where they were in 1978 when Deng Xiao Ping launch the 4 Modernizations and the Open Door Policies. Other policies token during the first 30 years of the China Economic Reform, like the Grasp the Big Let Go the Small, the Socialist Market Economy, the Go West and the Go Global were equally important transforming Chinese economy in the second world biggest one. This first globalization stage had its big push in 2001 when China joined the WTO we can say that a new world economic order had begun in that date, placing China in the center of the world. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:cav:cavwpp:wp145&r=int |
| By: | Jouchi Nakajima (Bank of Japan); Kosuke Takatomi (Bank of Japan); Tomoko Mori (Bank of Japan); Shinsuke Ohyama (Bank of Japan) |
| Abstract: | Global trade growth has slowed down since the global financial crisis in 2008 and has been below the global GDP growth rate. This sluggish growth of global trade, the so-called "Slow Trade," has been remarkable in emerging economies and for capital, intermediate, and consumer durable goods. There are three main backgrounds of this global trade slowdown: (1) a decline in the global real GDP growth, (2) a structural decline in the long-run income elasticity of trade due to changes in the global demand structure, expanding in-house production in China, and deceleration in the expansion of global value chains, and (3) short-term negative shocks. Our quantitative analysis indicates that structural factors such as declines in global potential output growth and in the long-run income elasticity of trade explain about 70 percent of the global trade slowdown, and cyclical factors such as remaining negative output gap and temporary negative shocks explain the rest, about 30 percent. It is unlikely that the part of the slowdown caused by structural factors will be immediately restored, while the negative impact of cyclical factors is expected to gradually become smaller. Our empirical result indicates that the current estimate of the long-run income elasticity of trade is about 1.0, which implies that the growth rate of global trade is expected to recover up to the growth rate of global real GDP. However, there still remain large uncertainties in terms of global trade, such as the economic relationship between the United Kingdom and the European Union and the development of rebalancing in emerging countries, and thus the effects of those uncertainties on global trade should be noted. |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojron:ron161222a&r=int |
| By: | Fatma Bouattour (PSL, University of Paris-Dauphine, LEDa, DIAL UMR 225, IRD) |
| Abstract: | This paper explores the e§ects of Önancial constraints on export performances of Brazilian exporters in 2010. SpeciÖcally, I revisit the role of Örm size as a predictor of Örm-level Önancial constraints and take into account the sector-level Önancial constraints. In order to capture the speciÖcities of the Brazilian market, I use sector-level measures of dependence on external Önance computed over Brazilian data and following the method of Rajan and Zingales (1998, RZ). Since Brazilian export data are presented in ranges of value, I estimate an interval regression model (Conroy, 2005). The results conÖrm that larger Örms have better export performance, and that the size advantage is reduced in Brazilian sectors that depend on external Önance/ have better access to Önance. These Öndings remain robust when I control for the regional heterogeneity in Brazil and the legal status of the exporting Örms. I then consider the sector-level heterogeneity in terms of inherent needs of external Önance by using RZ indicators. The results show that large Örms are less export performant in sectors that are by nature more dependent on external Önance. This result can be explained by the imperfections that characterize the Brazilian Önancial market. |
| Keywords: | Firm size, Sector-level external Önance dependence, Financial market imperfections, Exports, Brazil, Interval Regression. |
| JEL: | F10 F12 F14 G30 G32 L25 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201618&r=int |
| By: | Martin von Lampe; Koen Deconinck |
| Abstract: | This report provides a conceptual foundation for the analysis of international regulatory co-operation (IRC) and its potential benefits through reduced trade costs. Different forms of IRC aiming to reduce specification, conformity assessment and information costs - which can arise from regulatory heterogeneity, costly conformity assessment procedures and insufficient regulatory transparency – are addressed. The report argues that trade costs need to be balanced against the regulatory objectives of mitigating various market imperfections. Integrating these two elements often allows significant gains in terms of national welfare, gains that can be augmented by negotiated outcomes among trading partners. IRC may also have important effects on trade with third countries. Related welfare implications are, however, ambiguous and depend on the specifics of the IRC outcome as well as on third countries’ own regulations. |
| Keywords: | conformity assessment costs, game theory, information costs, Nash equilibrium, regulation, specification costs, trade costs |
| JEL: | C72 K23 D61 L51 F13 C71 C73 D60 |
| Date: | 2016–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:195-en&r=int |
| By: | Claudio Loser (Centennial Group International and the Emerging Markets Forum); Ieva Vilkelyte (Centennial Group International & Emerging Markets Forum) |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:emf:glpapr:2016africatot&r=int |
| By: | Mustafa, Ghulam; Rizov, Marian; Kernohan, David |
| Abstract: | The paper draws on Ghulam Mustafa’s doctoral research; nevertheless, the authors’ contributions to this paper are equal. We thank Michela Vecchi and John Grahl for contributions to earlier versions of the paper. |
| Keywords: | economic growth, human development, trade, openness, Asia, International Development, F43, O10, O15, O19, O53, |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ulefwp:250248&r=int |
| By: | Rene Belderbos; Bart Leten; Shinya Suzuki |
| Abstract: | We examine the influence of host countries’ scientific research strengths on global R&D location choices by multinational firms. In an analysis of 277 new R&D activities identified for 175 firms in 40 host countries and 30 technology fields, we find that the strength of relevant university research positively affects the likelihood that host countries attract foreign R&D. When allowing for firm heterogeneity, university scientific research appears only a significant factor for firms with a strong science orientation in their R&D activities. Host countries’ corporate scientific research has no systematic influence on R&D location choices. Empirical results are replicated in an analysis at the regional level covering regions in Europe the US, and Japan. |
| Keywords: | R&D Internationalization, Knowledge sourcing, Absorptive capacity, Industry-science links |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:562201&r=int |
| By: | Caterina Conigliani; Nadia Cuffaro; Giovanna D'Agostino |
| Abstract: | Recent years have witnessed an increasing interest in land-based investments for food, feed, fuel and fiber, driven by volatility in commodity prices, economic growth of emerging economies, policy drivers of biofuel demand and investor strategies in the wake of the global economic crisis. This has led to a surge of foreign and local investments in developing countries, where land can be obtained at lower cost, and has led to fears of land grabbing. In this paper we consider the problem of identifying the determinants of large scale land acquisitions in Africa, and employ unilateral beta regression to explore the link between investments and a number of indicators related both to land supply and to institutional features. The results on the resource seeking nature of investments and on the impact of the land governance indicators are mostly in line with the findings of other studies; on the contrary, the results on forest land being a driver for large scale land acquisitions in Africa differ from previous findings, and indicate commercial pressure on African forests that may lead to accelerating degradation and deforestation. |
| Keywords: | beta regression, foreign direct investments, land grabbing, large scale land acquisitions |
| JEL: | F21 O13 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0213&r=int |
| By: | Hasan Tuluy (Centennial Group International) |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:emf:glpapr:2016africaintegration&r=int |
| By: | Roger Alejandro Banegas-Rivero (Instituto de Investigaciones Económicas y Sociales 'José Ortiz Mercado' (IIES-JOM), Universidad Autónoma Gabriel René Moreno.); Luis Fernando Escobar Caba (Instituto de Investigaciones Económicas y Sociales 'José Ortiz Mercado' (IIES-JOM), Universidad Autónoma Gabriel René Moreno.); Marco Alberto Núñez Ramírez (Instituto tecnológico de Sonora) |
| Abstract: | In this document the transmission channel between natural resource dependence and its dynamic effects on growth is evaluated (Dutch disease hypothesis). An exemplification is done through a small open economy (Bolivia case) according to representative characteristics of high concentration in exports of hydrocarbon and minerals, and their implications in the productive sectors: boom (B), tradable (T), and non-tradable (NT) [Boom TNT model], plus the addition of domestic demand and relative prices (foreign and domestic) in alternative econometric specifications by structural restrictions (SVAR) for quarterly period from 2000 to 2015. The results show statistical predominance of long-terms responses over short-term specifications, and different magnitudes between positive and negative shocks. |
| Keywords: | Dutch disease, Growth, Resource booms, Dependence, Tradable, Non-tradable. |
| JEL: | O13 P28 Q33 O41 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:grm:wpaper:201610&r=int |