|
on International Trade |
| By: | Crowley, Meredith A; Meng, Ning; Song, Huasheng |
| 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: | antidumping; China shock; Chinese exporters; information spillovers; Trade agreements; Trade policy uncertainty |
| JEL: | F12 F13 F14 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11722&r=int |
| By: | Fredebeul-Krein, Markus |
| Abstract: | To give the exchange of goods and services between the European Union (EU) and the United States (U.S.) new momentum the two parties are currently negotiating the transatlantic free trade agreement Transatlantic Trade and Investment Partnership (TTIP). The aim is to create the largest free trade area in the world. The agreement, once entered into force, will oblige EU countries and the U.S. to further liberalize their markets. The negotiations on TTIP include a chapter on Electronic Communications/ Telecommunications. The challenge therein will be securing commitments for market access to Electronic Communications services. At the same time, these commitments must reflect the legitimate need for consumer protection issues. The need to reduce Electronic Communications-related non-tariff barriers to trade between the Parties is due to the fact that these markets are heavily regulated. Without transnational rules as to regulations national governments can abuse these regulations to deter the market entry by new (foreign) suppliers. Thus the free trade agreement TTIP affects in many respects regulatory provisions on and access to Electronic Communications markets. The objective of this paper is therefore to examine to what extend the regulatory principles for Electronic Communications markets envisaged under TTIP will result in trade facilitation and regulatory convergence between the EU and the U.S. As to this question the result of the analysis is that the chapter on Electronic Communications will be an important step towards facilitating trade in Electronic Communications services. At the same time some regulatory convergence will take place, but this convergence will not lead to a (full) harmonization of regulations. Rather the norm, also after TTIP negotiations will have been concluded successfully, will be mutual recognition of different regulatory regimes. Different regulations being the optimal policy response in different market settings will continue to exist. Moreover, it is very unlikely that such regulatory principles for the Electronic Communications sector are a vehicle for a race to the bottom in levels of consumer protection. |
| Keywords: | regulation,liberalisation,electronic communications markets,TTIP |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse16:148668&r=int |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This study replicates estimation results from Jennifer Abel-Koch, Who Uses Intermediaries in International trade? Evidence from Firm-level Survey Data, published in The World Economy (2013). In this paper she uses firm-level data from Turkey. The pure replication performed here that is based on a sample that differs only arginally from the sample used in the original study is successful. In addition to the pure replication I use firm-level data for Egypt from a highly similar survey. The most important result found by Abel-Koch for Turkey – a negative relationship between firm size and the intensity of use of intermediaries in exports – is found for Egypt, too. Results for the link between other firm characteristics and indirect exports via intermediaries, however, often turn out to be different. |
| Keywords: | Replication study, indirect exports, Turkey, Egypt |
| JEL: | F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:370&r=int |
| By: | Blaum, Joaquin; Lelarge, Claire; Peters, Michael |
| Abstract: | Trade in intermediate inputs allows firms to reduce their costs of production and thus benefits consumers through lower prices of domestically produced goods. The extent to which firms participate in foreign input markets, however, varies substantially. We develop a methodology to measure how consumer prices are affected by input trade in environments that allow for such heterogeneity in import behavior. We provide a theoretical result that holds in a variety of settings: the firm-level data on value added and domestic expenditure shares in material spending are sufficient to compute changes in consumer prices. Approaches that abstract from firm level heterogeneity and rely on aggregate statistics give biased results. In an application to French data, we find that prices of manufacturing products would be 27% higher in the absence of input trade. |
| Keywords: | Gains from trade; Imports; productivity; Sufficient statistic approach |
| JEL: | D21 D22 F11 F12 F14 F62 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11721&r=int |
| By: | Gugler, Klaus; Haxhimusa, Adhurim |
| Abstract: | Using hourly data, we show that the convergence of German and French electricity spot prices depends on the employed generation mix structure, on the trade (export/import) capacity between the two countries, and on characteristics of neighbouring markets. Only when German and French electricity markets employ "similar" generation mixes price spreads vanish, and the likelihood for congestion of electricity flows is significantly reduced. This implies that, at least, a part of the convergence that was documented in recent literature is spurious, because it is not (only) driven by the forces of arbitrage, but by the similarity of the Generation structures. The direction of congestion matters in this regard. Furthermore, we document consistent evidence for the most important predictions of trade theory if markets are characterized by increasing marginal cost (i.e. supply) curves and limited cross-border capacities. (authors' abstract) |
| Keywords: | Market Integration; Electricity; Renewables; Technology Differences; Jaffe Index |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:5222&r=int |
| By: | Edward J. Balistreri (Colorado School of Mines - Division of Economics and Business); Christoph Boehringer (University of Oldenburg); Thomas F. Rutherford (University of Wisconsin - Madison) |
| Abstract: | Alternative perspectives on the structure of international trade have important implications for the evaluation of climate policy. In this paper we assess climate policy in the context of three important alternative trade formulations. First is a Heckscher‐Ohlin model based on trade in homogeneous products, which establishes the traditional neoclassical view on comparative advantage. Second is an Armington model based on regionally differentiated goods, which constitutes a popular specification for numerical simulations of trade policy. Third is a Melitz model based on monopolistic‐competition and firm heterogeneity. This heterogeneous‐firms framework is adopted in many contemporary theoretic and empirical investigations in international trade. As we show in this paper, the three alternative trade formulations have important implications for the assessment of climate policy with respect to competitive effects for energy‐intensive production (and hence carbon leakage) as well as the transmission of policy burdens across countries. |
| Keywords: | Heterogeneous firms, carbon leakage, competitiveness |
| JEL: | F12 F18 Q54 Q56 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:57&r=int |
| By: | Laura Alfaro (Harvard Business School, Business, Government and the International Economy Unit); Maggie X. Chen (George Washington University) |
| Abstract: | Falling transportation costs and rapid technological progress in recent decades have precipitated an explosion of cross-border flows in goods, services, investments, and ideas led by multinational firms. Extensive research has sought to understand the geographic patterns of foreign direct investment (FDI). This chapter reviews existing theories and evidence specifically addressing questions including: How is FDI distributed across space? Why does the law of gravity apply? How do the costs of transporting goods, tasks, and technologies influence firms' decisions to separate tasks geographically and locate relative to one another? We discuss a variety of theoretical mechanisms through which transport cost and other geographic friction influence FDI and present the key empirical studies and findings. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:17-061&r=int |
| By: | Paola Conconi; David De Remer; Georg Kirchsteiger; Lorenzo Trimarchi; Maurizio Zanardi |
| Abstract: | This paper shows that electoral incentives crucially affect the initiation of trade disputes. Focusing on WTO disputes filed by the United States during the 1995–2014 period, we find that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election. Moreover, U.S. trade disputes are more likely to involve industries that are important in swing states. To explain these regularities, we develop a theoreticalmodel in which re-election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity. |
| Keywords: | Trade disputes, Elections, Reciprocity. |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/242517&r=int |
| By: | Bullock, David S. |
| Abstract: | The International Agricultural Trade Research Consortium is an informal association of University and Government economists interested in agricultural trade. Its purpose is to foster interaction, improve research capacity and to focus on relevant trade policy issues. It is supported by United States Department of Agriculture (ERS, FAS, and OCE), Agriculture and Agri-Food Canada, and the participating institutions. The IATRC Working Paper series provides members an opportunity to circulate their work at the advanced draft stage through limited distribution within the research and analysis community. The IATRC takes no political positions or responsibility for the accuracy of the data or validity of the conclusions presented by working paper authors. Further, policy recommendations and opinions expressed by the authors do not necessarily reflect those of the IATRC or its funding agencies. For a copy of this paper and a complete list of IATRC Working Papers, books, and other publications, see the IATRC Web Site http://www.iatrc.org |
| Keywords: | Agricultural and Food Policy, International Relations/Trade, |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatrwp:252444&r=int |
| By: | Raphael Auer; Claudio Borio; Andrew Filardo |
| Abstract: | Greater international economic interconnectedness over recent decades has been changing inflation dynamics. This paper presents evidence that the expansion of global value chains (GVCs), ie cross-border trade in intermediate goods and services, is an important channel through which global economic slack influences domestic inflation. In particular, we document the extent to which the growth in GVCs explains the established empirical correlation between global economic slack and national inflation rates, both across countries and over time. Accounting for the role of GVCs, we also find that the conventional trade-based measures of openness used in previous studies are poor proxies for this transmission channel. The results support the hypothesis that as GVCs expand, direct and indirect competition among economies increases, making domestic inflation more sensitive to the global output gap. This can affect the trade-offs that central banks face when managing inflation. |
| Keywords: | globalisation, inflation, Phillips curve, monetary policy, global value chain, production structure, international inflation synchronisation, input-ouput linkages, supply chain |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:602&r=int |
| By: | Christoph Böhringer (University of Oldenburg - Economic Policy; Centre for European Economic Research (ZEW)); Jan Schneider (University of Oldenburg); Emmanuel Asane-Otoo (University of Oldenburg) |
| Abstract: | Carbon-based import tariffs are discussed as policy measures to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We assess how the potential of carbon tariffs to increase cost-effectiveness of unilateral climate policy depends on the magnitude and composition of carbon embodied in trade. For our assessment, we combine multi-region input-output (MRIO) analysis with computable general equilibrium (CGE) analysis based on data from the World Input-Output Database (WIOD) for the period 1995 to 2007. The MRIO analysis confirms that carbon embodied in trade has sharply increased during this period. Yet, the CGE analysis suggests that the effectiveness of carbon tariffs in reducing leakage and improving global-cost effectiveness of unilateral climate policy does not increase over time, whereas the potential to shift the economic burden of CO2 emissions reduction from abating developed regions to non-abating developing regions increases substantially. |
| Keywords: | carbon tariffs, unilateral climate policy, computable general |
| JEL: | Q58 D57 D58 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:65&r=int |
| By: | Brambilla, Irene (Asian Development Bank Institute); Porto, Guido (Asian Development Bank Institute) |
| Abstract: | We investigate if trade can help achieve the United Nations Sustainable Development Goal of poverty eradication using microeconomic and macroeconomic mechanisms and the effects of trade and trade policy on consumer prices, producer prices, and wages. As these mechanisms affect the real income of households, they determine the likelihood that a household may be lifted out of or pushed into poverty. The impacts of trade on growth and longer-term consequences of trade liberalization were also analyzed using data from African countries. While there is sound evidence that trade can be pro-poor, there is significant heterogeneity in the poverty impacts of trade, both across households and countries. This highlights the importance of complementary policies such as infrastructure, trade facilitation, and social protection. |
| Keywords: | trade; trade liberalization; trade policy; poverty; poverty eradication; United Nations Sustainable Development Goals |
| JEL: | F14 F16 O24 |
| Date: | 2016–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0629&r=int |
| By: | Aspalter, Lisa |
| Abstract: | In an open economy economic agents distribute their spending between domestic and various import goods and they may reconsider their choice whenever relative international prices change. Armington elasticities quantify these reallocations in demand for goods produced in different countries. Recent analytical frameworks allow to further differentiate between a macro elasticity of substitution between domestic and import goods and a micro elasticity between different import sources. Despite the relevance of Armington elasticities for evaluating trade policy there has been no systematic study on whether micro and macro elasticities significantly differ for highly integrated economies within a free trade area and whether there is a common pattern. Using highly disaggregated data, this paper estimates Armington elasticities for a panel of 15 EMU Member States. Empirical results indicate a significant difference between micro and macro elasticities for up to one half of the consistent product groups considered, implying preferences across EMU countries are not perfectly aligned with non-discriminatory tariffs. I conclude that both the absolute and relative macro elasticities are informative and that heterogeneous preference patterns link to current trade imbalances. (author's abstract) |
| Keywords: | International Trade; Armington; Substitution Elasticities; Nested CES-preferences; EMU; Industry-level; Matching Trade and Production Data |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:4838&r=int |
| By: | Cororaton, Caesar B. |
| Abstract: | Using a global computable general equilibrium model, the paper analyzes the potential effects of Regional Comprehensive Economic Partnership (RCEP) on the Philippine economy. The analysis involves an 80-percent reduction in tariffs and 10 percent in nontariff barriers within RCEP member-countries over a 10-year period. The results indicate trade creation within RCEP. Exports of RCEP to nonmembers decline. Within RCEP, the improvement in exports of the six non-ASEAN members is relatively higher than the Association of Southeast Asian Nations (ASEAN) members. Viet Nam benefits the most among ASEAN members. Exports of the rest of ASEAN increase as well, including the Philippines. The entry of cheaper rice in the Philippines benefits lower income households. The entry of cheaper textiles benefits the garments industry. On the whole, Philippine gross domestic product improves by 3 percent and welfare by USD 2 billion. Philippine poverty declines from 24.9 percent to 23.3 percent. |
| Keywords: | Philippines, ASEAN, Regional Comprehensive Economic Partnership (RCEP), regional trade, global CGE, poverty indicator |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-30&r=int |
| By: | Rose, Andrew K |
| Abstract: | I investigate whether countries that use unconventional monetary policy (UMP) experience export booms. I use a popular gravity model of trade which requires neither the exogeneity of UMP, nor instrumental variables for UMP. In practice, countries that engage in UMP experience a drop in exports vis-à -vis countries that are not engaged in such policies, holding other things constant. Quantitative easing is associated with exports that are about 10% lower to countries not engaged in UMP; this amount is significantly different from zero and similar to the effect of negative nominal interest rates. Thus there is no evidence that countries have gained export markets through unconventional monetary policy; any currency wars launched have been lost. |
| Keywords: | bilateral; data; easing; empirical; Gravity; interest; negative; nominal; quantitative; Trade |
| JEL: | E58 F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11748&r=int |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses information on more than 160 million export and import transactions by German firms from 2009 to 2012 to document the decisive role of multi-market traders thatare active on many foreign markets, where a market is defined as a combination of a good traded and a country traded with. Using merged information from trade transactions and from surveys conducted by the statistical offices it is shown that, controlling for detailed industry affiliation, the number of foreign markets a firm from manufacturing industries is active on as an exporter or importer is higher in firms that are larger, older and foreign owned and that have higher labor productivity, human capital intensity and R&D intensity. With the exception of labor productivity these results are valid ceteris paribus, too. All these empirical results are in line with hypotheses that are derived from the literature on the links between firm characteristics and the extensive margins of foreign trade. |
| Keywords: | Exports, Imports, Transaction level data, Germany |
| JEL: | F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:368&r=int |
| By: | Christoph Böhringer (University of Oldenburg); Xaquín Garcia-Muros (Basque Centre for Climate Change (BC3), Students); Ignacio Cazcarro (Basque Centre for Climate Change (BC3)); Iñaki Arto (Basque Centre for Climate Change (BC3)) |
| Abstract: | Despite recent achievements towards a global climate agreement, climate action to reduce greenhouse gas emissions remains quite heterogeneous across countries. Energy-intensive and trade-exposed (EITE) industries in industrialized countries are particularly concerned on stringent domestic emission pricing that may put them at a competitive disadvantage with respect to producers of similar goods in other countries without or only quite lenient emission regulation. This paper focuses on climate policy analysis for the United States of America (US) and compares the economic implications of four alternative protective measures for US EITE industries: (i) output-based rebates, (ii) exemptions from emission pricing, (iii) energy intensity standards, and (iv) carbon intensity standards. Based on simulations with a large-scale computable general equilibrium model for the global economy we quantify how these protective measures affect competitiveness of US EITE industries. We find that while protective measures can attenuate adverse competitiveness impacts measured in terms of common sector-specific competitiveness indicators, they run the risk of making US emission reduction much more costly than uniform emission pricing stand-alone. In fact, the cost increase is associated with negative income effects such that the gains of protective measures for EITE exports may be more than compensated through losses in domestic EITE demand. |
| Keywords: | unilateral climate policy, competitiveness, computable general equilibrium |
| JEL: | D21 H23 D58 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:67&r=int |
| By: | Olarreaga, Marcelo (Asian Development Bank Institute) |
| Abstract: | This paper surveys the literature on trade and development, especially on complementarities associated with trade infrastructure. The empirical literature shows that, on average, trade causes growth, but the relationship is far from homogeneous across countries since initial conditions matter. Although the empirical literature shows that investment in soft and hard infrastructure has an unambiguously positive impact on trade flows, the theoretical literature argues that priority should be given to investments in national rather than international infrastructure in countries with relatively poor national infrastructure. This paper finds that data support this prediction. |
| Keywords: | trade; trade infrastructure; investments; development |
| JEL: | F10 O19 O47 |
| Date: | 2016–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0626&r=int |
| By: | Serafica, Ramonette B. |
| Abstract: | Services are critical inputs in manufacturing production, and this is likely to intensify with the advent of new technologies. Based on the trade in value-added data of the Organisation for Economic Co-operation and Development, the share of services embodied in Philippine manufacturing exports is among the lowest in the region. Moreover, value added from "ICT services" and "Other business services" seem inadequate compared to patterns observed in other countries, while the share of "Wholesale and retail services" is significantly high. To sustain manufacturing resurgence, reliable, good quality, and affordable services are essential. Thus, the government should vigorously undertake structural reforms particularly in services needed by producers and exporters. Improving the regulatory regime for services trade is especially crucial to enable manufacturing firms to participate and move up global value chains. |
| Keywords: | Philippines, services, global value chains, manufacturing, trade, value added, wholesale, retail |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-46&r=int |
| By: | Cosar, Kerem; Pakel, Banu Demir |
| Abstract: | We quantify the effect of container technology on transport costs and trade by estimating the modal choice between containerization and breakbulk shipping using micro-level trade data. The model is motivated by novel facts that relate container usage to shipment, destination and firm characteristics. We find container transport to have a higher first-mile cost and a lower distance elasticity, making it cost effective in longer distances. At the median distance across all country pairs, the box decreases variable shipping costs between 16 to 22 percent. The box explains a significant amount of the global trade increase since its inception: a quantitative exercise suggests that Turkish and U.S. maritime exports would have been about two-thirds of what they are today in the absence of containers. |
| Keywords: | Containerization; Globalization; International Trade; Transportation |
| JEL: | F10 F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11750&r=int |
| By: | Fichet de Clairfontaine, Aurélien; Hammer, Christoph |
| Abstract: | Using a New Economic Geography (NEG) model, this study estimates the relationship between regional per capita income and the market accessibility of regions. This accessibility cannot be observed directly, so it has to be constructed. We follow a two-step-procedure as suggested by Redding and Venables (2004) and use results of a gravity-type model to infer \real market potential". To this end, we make use of a novel dataset of bi-regional trade ows between (and within) 254 European NUTS-2 regions (for 26 European countries excluding Bulgaria and Romania) for the year 2010. In a second step we test the hypothesis that access to domestic as well as to large foreign markets increases factor incomes. We find evidence that supports this hypothesis on a regional level. This also holds when we control for other potential income determinants. In order for the estimates to be unbiased, we additionally take the spatial structure of the data into account. Our findings indicate that, although the specification derived from theory should be able to capture some spatial spillovers, additionally controlling for spatial autocorrelation in the residuals is necessary to fit the European data. (authors' abstract) |
| Keywords: | Wage equation; Gravity; European regions; New Economic Geography |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:4887&r=int |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses information on import transactions by German firms from 2009 to 2012 merged with information on characteristics of the importers taken from surveys by the Statistical Offices to document that a large share of importers engage in multiple import sourcing by importing the same good from more than one source country in a year and that a large share of total imports is due to multiple sourcing. It is shown that the probability of multiple import sourcing and the share of imports from multiple sourcing in total imports increase with firm productivity and firm size after controlling for detailed industry affiliation. |
| Keywords: | Imports, Multiple import sourcing, Transaction level data, Germany |
| JEL: | F14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:369&r=int |
| By: | Mariachiara Barzotto (Birmingham Business School, University of Birmingham); Giancarlo Corò (Ca’ Foscari University Venice); Ilaria Mariotti (DAStU – Polytechinic of Milan); Marco Mutinelli (University of Brescia) |
| Abstract: | Countries are increasingly competing to attract inward foreign direct investments (FDIs) to benefit from the superior performance of the international firms. Yet there is still scant evidence about the effects of inward FDIs on the high-income countries’ industrial base. In advanced economies a specialised, skilled workforce has emerged as a pivotal economic development asset to enhance innovation capabilities. The paper aims at investigating how the use of a local, skilled workforce differs according to the firms’ ownership; being either affiliates of foreign multinationals (MNEs), or uni-national firms (firms that have neither been acquired in the period of analysis, nor have invested abroad; henceforth NATs). We empirically investigate this issue by adopting a novel database linking regional labour force characteristics with economic data on inward FDIs and NATs, operating in the manufacturing industry in the Veneto NUTS2 region (northeast of Italy) between 2007 and 2013. Descriptive statistics and counterfactual estimation have been developed, focusing on firms’ skill composition (e.g. skill level, age, gender and nationality). The results show that the two groups of firms differ in terms of workforce skill composition, and the affiliates of foreign MNEs positively impact on the regeneration of the host country’s human capital by attracting and employing a wider share of more highly skilled labour force. |
| Keywords: | Host Country, Labour Market, Advanced Economies, Skill Composition, Propensity Score, Manufacturing Industry, FDI |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cme:wpaper:1612&r=int |
| By: | Aidan Regan (School of Politics and International Relations, University College Dublin); Samuel Brazys (School of Politics and International Relations and Geary Institute for Public Policy, University College Dublin) |
| Abstract: | In this paper we argue that Ireland’s post-crisis economic recovery in Europe was driven by foreign direct investment (FDI) from Silicon Valley, and whilst this growth model was made possible by Ireland’s low corporate tax rates, it was also a result of these firms using Ireland to directly access the European labour market. We evidence this contention via sectoral and geographic analyses while simultaneously showing that Irish fiscal policies have not redistributed gains from the recovery to the broader population. As a result, the economic recovery has been most actively felt by those in the FDI sectors, including foreign-national workers from the EU and beyond. We suggest that this experience indicates that Ireland’s FDI-led model of capitalist development has created clear winners and losers, with significant distributional implications. The FDI growth regime been made possible by inward migration and European integration, but given the unequal distribution of the economic benefits that this generates, it is unlikely to be politically, or electorally, sustainable. |
| Date: | 2017–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201701&r=int |
| By: | Bakari, Sayef |
| Abstract: | This paper investigates the relationship between exports, imports, and economic growth in Canada. In order to achieve this purpose, annual data for the periods between 1990 and 2015 was tested by using Johansen co-integration analysis of Vector Auto Regression Model and the Granger-Causality tests. According to the result of the analysis, it was determined that there is no relationship between exports, imports and economic growth in Canada. On the other hand, we found that there is a strong evidence of bidirectional causality from imports to economic growth and from exports to economic growth. These results provide evidence that exports and imports, thus, are seen as the source of economic growth in Canada. |
| Keywords: | Export, Import, Economic Growth, Canada, Cointegration, VAR and Causality. |
| JEL: | F1 F10 F14 |
| Date: | 2016–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75910&r=int |
| By: | Bellak, Christian |
| Abstract: | Based on a thorough analysis of theoretical arguments, this meta-analysis does not find a genuine empirical effect of Bilateral Investment Treaties on Foreign Direct Investment after correcting for publication selection bias. (author's abstract) |
| Keywords: | bilateral investment treaty (BIT); foreign direct investment (FDI); policy evaluation |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:4625&r=int |
| By: | Bendetta Frassi; Christian Hagist; Fabio Pammolli |
| Abstract: | Our paper estimates the impact of immigration on the sustainability of the Italian public finances using the methodology of Generational Accounting. We take into account socio-economic differences between the main migrants’ communities resident in Italy and we present three possible scenarios to reflect the potential economic degree of integration of foreigners in the Italian territory. Moreover, for each scenario we propose several options for migrants concerning both the length of permanence in Italy and the possible collection of retirement benefits. Our results show that the burden of current fiscal policy reduces as integration of the foreign-born increases. If migrants’ children are economically perfectly integrated, the fiscal gap is reduced from 71.9 to -15.3 percent of GDP. |
| Keywords: | accounting, economic integration, generations, migration, public pensions, social security |
| JEL: | E62 H60 J10 |
| Date: | 2017–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:whu:wpaper:17-01&r=int |
| By: | Bakari, Sayef; MABROUKI, Mohamed |
| Abstract: | This paper studies the nexus between exports, imports, and economic growth in Turkey. Annual data for the periods between 1960 and 2015 was tested by practicing Johansen co-integration analysis of Vector Auto Regression Model and the Granger-Causality tests. According to the result of the analysis, there is no relationship between exports, imports and economic growth in Turkey. On the other hand, we found that there is a strong evidence of bidirectional causality from imports to economic growth and from exports to economic growth. |
| Keywords: | Export, Import, Economic Growth, Turkey, Cointegration, VAR and Causality. |
| JEL: | F1 F14 |
| Date: | 2016–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76044&r=int |
| By: | Ramstetter, Eric D.; Trung Nguyen, Kien |
| Abstract: | This paper examines the role of foreign multinational enterprises (MNEs) have played in Vietnam’s exports in 1995-2014. Economy-wide estimates suggest MNE share of Vietnam’s export grew from about one quarter to about two-thirds during this period. MNE shares of GDP were much smaller (6 to 18 percent); correspondingly export-production ratios were much (4.7 to 9.6 times) higher in MNEs than in the non-MNEs sector. If comparisons are limited to formal enterprises, wholly-foreign MNEs (WFs), which account for the vast majority of MNEs in Vietnam, tend to have relatively high export propensities and account for the vast majority of MNE exports. These data thus suggest that MNEs, and particularly WFs, make unusually large direct contributions to exports in Vietnam compared to other economic activities. On the other hand, these compilations cannot establish if export propensities differ significantly among ownership groups after accounting for other, related firm-level and industry-level characteristics. Most importantly, this paper highlights several substantial problems revealed by compilations of the firm-data which much be addressed before more reliable, rigorous analysis of the firm-level data will be possible. |
| Keywords: | Multinational enterprises, state-owned enterprises, ownership, exports, Multinational enterprises, state-owned enterprises, ownership, exports, F14, F23, L33, L60, L81, O53 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000119&r=int |
| By: | Ali-Yrkkö, Jyrki; Mattila, Juri; Seppälä, Timo |
| Abstract: | In this study, we analyse Estonia’s position in global value chains using World Input-Output Data and firm-level data. We find that 69% of Estonia’s total exports are intermediate goods and services, exceeding the EU average (65%). Two-thirds of Estonian imports are intermediates. Our findings suggest that Estonia is heavily involved in vertically and geographically fragmented production even though its most significant trading partners are its neighbouring countries. We also analyse the value chains of two significant companies operating in the Estonian economy along with their GDP contributions. According to our findings, the GDP contributions generated by the exports of these two companies vary significantly from one another. The euros generated from exports do not contribute equally to the national economy. |
| Keywords: | Global value chains, GVC, GDP, exports, gross domestic product, value added, Estonia, granular |
| JEL: | D22 F14 F6 F62 F68 L2 |
| Date: | 2017–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:69&r=int |
| By: | Eckel, Carsten; Unger, Florian |
| Abstract: | This paper analyzes the effects of credit frictions on within-firm adjustments and selection into exporting when both cost-based productivity and product quality matter for the success of a producer. Our model shows that whether FOB prices are positively or negatively correlated with credit frictions and variable trade costs depends on the sectoral R&D intensity. If the latter is high, prices decrease in credit and trade costs, and vice versa. Furthermore, we show that the aggregate effects of financial shocks also depend on the R&D intensity. Stronger credit frictions lead to firm exit, inefficiently high innovation activity among existing suppliers, and welfare losses that are larger in sectors with low R&D intensity. To analyze the effects of credit frictions, we allow for both cost-based and quality-based sorting in a general equilibrium model of international trade. Producers differ in capabilities to conduct process and quality innovations, and external finance is needed for investments. |
| Keywords: | credit constraints; external finance; innovation; International Trade; moral hazard; product prices; Quality |
| JEL: | F12 G32 L11 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11727&r=int |
| By: | Cai, Dapeng (Nanzan University); Jørgensen, Jan Guldager (Department of Business and Economics) |
| Abstract: | We model a two-country bargaining process over the coordination of a horizontally differentiated product standard. We show that the necessary conditions for bargaining to take place are (i) firm heterogeneity and (ii) sufficiently high complying costs. When firms compete à la Cournot in the Home market and when bargaining takes place, our results suggest that mutual recognition of standards, and not the harmonization of standards, inevitably emerges as Home’s optimal choice. We also demonstrate that mutual recognition can maximize global welfare. Our results largely hold when firms compete à la Bertrand. |
| Keywords: | Product standards; mutual recognition; harmonization; international bargaining; lobbying; horizontal differentiation |
| JEL: | C71 D72 F12 F13 |
| Date: | 2017–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2017_001&r=int |
| By: | Revilla, Ma. Laarni D. |
| Abstract: | The increasing level of competition for foreign direct investment (FDI) in the 1990s triggered many countries to offer various fiscal incentives. Specifically, many Asian countries persistently keep their tax rates competitive. To empirically investigate the relationship between the two variables, this paper examines the impact of fiscal incentives on FDI using panel data from 1996 to 2012 for five ASEAN countries. The analysis utilized five-panel data regression models, of which two are fixed-effects models and the remaining three are random-effects models. The results show that tax rate is negatively related to FDI. Another finding reveals the importance of infrastructure in increasing FDI. However, there is no significant link between governance indicators and FDI. To prevent a "race-to-the-bottom" effect on tax rates, the study recommends closer coordination between ASEAN countries in determining the optimal size and scope of these tax rates and other investment incentives. Additionally, focus on other country-specific factors affecting FDI flows, such as infrastructure, income, and population, is encouraged. |
| Keywords: | Philippines, fiscal incentives, ASEAN, foreign direct investment (FDI), tax policy, tax competition |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-17&r=int |
| By: | Italo Colantone; Rosario Crinò; Laura Ogliari |
| Abstract: | We study the effect of import competition on workers’ mental distress. To this purpose, we source information on the mental health of British workers from the British Household Panel Survey, and combine it with measures of import competition in more than 100 industries over 2001-2007. We find an increase in import competition to have a positive, statistically significant, and large impact on mental distress. The effect is strikingly robust to controlling for a wide range of individual, household, and industry characteristics. We show that part of the effect is due to import competition worsening the current labor market situation of individuals, in terms of higher probability of job displacement and lower wage growth. Additionally, and most importantly, we show that import competition worsens mental health also for individuals witnessing no change in observable labor market conditions, by increasing stress on the job and worsening expectations about the future. |
| Keywords: | Subjective well-being, trade adjustment costs, individual-level panel data |
| JEL: | F1 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp1511&r=int |