nep-int New Economics Papers
on International Trade
Issue of 2017‒02‒05
thirty-one papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Breaking down world trade elasticities: a panel ECM approach By Martinez-Martin, Jaime
  2. On the comparative advantage of U.S. manufacturing: evidence from the shale gas revolution By Rabah Arezki; Thiemo Fetzer; Frank Pisch
  3. FDI and the task content of domestic employment for U.S. multinationals By Grimm, Alexis; Kim, Mina
  4. Capital Accumulation and Dynamic Gains from Trade By Ravikumar, B.; Santacreu, Ana Maria; Sposi, Michael J.
  5. Does trade contribute to poverty reduction? If it does, where the benefit goes to? By Oh, Saera; Lee, Sang Hyeon
  6. America first! What are the job losses for Belgium and Europe? By Hylke Vandenbussche; William Connell Garcia; Wouter Simons; Elena Zaurino
  7. America first! What are the job losses for Belgium and Europe? By Hylke Vandenbussche; William Connell Garcia; Wouter Simons; Elena Zaurino
  8. The great trade collapse and the Spanish export miracle: Firm-level evidence from the crisis By Eppinger, Peter S.; Meythaler, Nicole; Sindlinger, Marc-Manuel; Smolka, Marcel
  9. Choosing Between Multiple Preferential Tariff Schemes: Evidence from Japan's imports By HAYAKAWA Kazunobu; URATA Shujiro; YOSHIMI Taiyo
  10. Determinants of the Export Demand of U.S. Distillers Dried Grains with Solubles By De Matteis, Maria; Yu, Edward; Boyer, Christopher; Lewis, Karen
  11. Unifying Macro Elasticities in International Economics By Yilmazkuday, Hakan
  12. Why do trade finance gaps persist: Does it matter for trade and development? By Auboin, Marc; DiCaprio, Alisa
  13. Gravity Channels in Trade By Hou, Yulin; Wang, Yun; Yilmazkuday, Hakan
  14. Diversification and specialization of U.S. states By Koech, Janet; Wynne, Mark A.
  15. Statistics to Measure Offshoring and its Impact By Robert C. Feenstra
  16. Foreign direct investment and the relationship between the United Kingdom and the European Union By Randolph Luca Bruno; Nauro Campos; Saul Estrin; Meng Tian
  17. Trade and Manufacturing Jobs in Germany By Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens
  18. The Globalisation of Inflation: the Growing Importance of Global Value Chains By Auer, Raphael; Borio, Claudio; Filardo, Andrew J.
  19. The granularity of Spanish exports By Juan de Lucio; Raúl Mínguez; Asier Minondo; Francisco Requena
  20. Trade and the size distribution of firms: evidence from the German Empire By Marcus Biermann
  21. Multiproduct firms, firm dynamics, and the productive mix of Brazilian manufacturing firms By Juliana Dias Alves; Mauro Sayar Ferreira
  22. Global socio-technical regimes By Fuenfschilling, Lea; Binz, Christian
  23. Export Tax Rebates and Resource Misallocation: Evidence from a Large Developing Countr By Weinberger, Ariel; Xuefeng, Qian; Yasar, Mahmut
  24. Price Transmission along the Supply Chain of Strawberries in Mexico By Aguilar Candelas, Oscar J.; Arana Coronado, Jaime; Trejo-Pech, Carlos O.; Martínez Damián, Miguel Ángel
  25. BIMP-EAGA Investment Opportunities in Corridor Value Chains By Lord, Montague J.; Tangtrongjita, Pawat
  26. Globalization, market structure and inflation dynamics By Guilloux-Nefussi, Sophie
  27. Appendix for How Exporters Grow By Fitzgerald, Doireann; Haller, Stephanie; Yedid-Levi, Yaniv
  28. Scoping Study for The Special Border Economic Zone (SBEZ) In The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) By Lord, Montague J.; Tangtrongjita, Pawat
  29. Does Anti-Bribery Enforcement Deter Foreign Investment? By Brad Graham; Caleb Stroup
  30. Globalization of the world economy and the global financial crisis By Dobrin, Kirill
  31. Domestic vs. International Welfare Gains from Trade By Yilmazkuday, Hakan

  1. By: Martinez-Martin, Jaime (Banco de España)
    Abstract: This paper exhaustively analyses the recent decline of international trade elasticities to output growth. We extend an empirical model of import demand functions to account not only for transitory factors, such as relative prices and import intensity-adjusted measures of demand (I-O Tables), but also for habitually neglected permanent factors such as protectionism, vertical integration (i.e. Global Value Chains) and foreign direct investment (FDI). Dealing with a non-stationary heteregenous panel of 27 countries, we estimate a panel Error Correction Model from 1960 to 2015 in order to break down world trade elasticities. Our main findings evidence: i) the presence of panel (cointegrating) structural changes in the trade-to-GDP relationship in 2000 and 2009, private consumption being a source of disruption; ii) although investment and exports are the most sensitive, import-intensive components of demand, this is far from being transitory, which is clearly weighing on the current slowdown; iii) the relevant contribution of GVCs shows a procyclical pattern, questioning the permanent nature of the current levelling-off of vertical integration processes. The lack of progress in reducing import tariffs and the usual discarded, complementary relationship between FDI and imports have a residual role. All in all, our results have substantial policy implications, as they reinforce the idea of a historical break towards a new ‘normal’ trading phase.
    JEL: C23 F14 F40
    Date: 2016–07–18
  2. By: Rabah Arezki; Thiemo Fetzer; Frank Pisch
    Abstract: This paper provides novel empirical evidence of the effects of a plausibly exogenous change in relative factor prices on United States manufacturing production and trade. The shale gas revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world reflecting differences in endowment of difficult-to-trade natural gas. Guided by economic theory, empirical tests on output, factor reallocation and international trade are conducted. Results show that U.S. manufacturing exports have grown by about 10 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins
    Keywords: manufacturing; exports; energy prices; shale gas
    JEL: L71 N52 O13 Q33 R11
    Date: 2016–11
  3. By: Grimm, Alexis (Bureau of Economic Analysis); Kim, Mina (Bureau of Labor Statistics)
    Abstract: Using a unique dataset, we examine how the foreign direct investment activities of U.S. multinational manufacturers are related to the composition of their domestic employment. The analysis is based on a dataset in which Bureau of Economic Analysis (BEA) firm-level data on the foreign operations of U.S. multinationals are matched with Bureau of Labor Statistics (BLS) establishment-level data on occupation and wage distributions. The main implication of our findings is that foreign direct investment is generally positively correlated with domestic labor demand, with automated/routine tasks representing an important exception. For firms that export a significant amount to their foreign affiliates for further processing, foreign labor in low-income countries appears to substitute for domestic labor in automated/routine tasks. Our results show that these firms tend to be younger and smaller. They do not seem to be more engaged in innovative activity at home compared to other multinational manufacturers in our sample.
    JEL: F16 F23
    Date: 2016–09–01
  4. By: Ravikumar, B. (Federal Reserve Bank of St. Louis); Santacreu, Ana Maria (Federal Reserve Bank of St. Louis); Sposi, Michael J. (Federal Reserve Bank of Dallas)
    Abstract: We compute welfare gains from trade in a dynamic, multi-country Ricardian model where international trade affects capital accumulation. We calibrate the model for 93 countries and examine transition paths between steady-states after a permanent, uniform trade liberalization across countries. Our model allows for both the relative price of investment and the investment rate to depend on the world distribution of trade barriers. Accounting for transitional dynamics, welfare gains are about 60 percent of those measured by comparing only the steady-states, and three times larger than those with no capital accumulation. We extend the model to incorporate adjustment costs to capital accumulation and endogenous trade imbalances. Relative to the model with balanced trade, the gains from trade increase more for small countries because they accumulate capital at faster rates by running trade deficits in the short run.
    Date: 2017–01–01
  5. By: Oh, Saera; Lee, Sang Hyeon
    Abstract: The linkage between trade and poverty reduction is one of the controversial debate topics. Many studies were conducted and focused on national level poverty but this paper aims to investigate how the effect of trade differs in regional level (rural and urban) in developing countries. The result indicates that 1) an increase of export share contributes to national and urban poverty reduction in Asia and Central and South America but not the rural poverty; 2) an increase of import share is found to be beneficial for poverty reduction especially in Central and South America
    Keywords: Trade, poverty reduction, rural poverty, urban poverty, Developing country, International Development, International Relations/Trade, I32, F69,
    Date: 2017
  6. By: Hylke Vandenbussche; William Connell Garcia; Wouter Simons; Elena Zaurino
    Abstract: This report is the first to estimate employment effects of looming American protectionism under US president Trump. We study the economic impact of a tightening of US trade policy on Belgium and on every EU member state, which we refer to as “America First” or “Trumpit” (like “Brexit”). Our estimates of EU job losses are based on the interconnectedness of an EU country with the US economy. We do this by taking into account the inter‐sectoral linkages between sectors within a country and between EU countries using sectoral input‐output data (World Input Output Database, WIOD). Thus, we consider EU jobs involved in direct EU exports to the US, as well as EU jobs corresponding to indirect exports from Europe to the US. Our study covers both exports of goods and services and accounts for services used as an input in goods. Our estimates are based on domestic value added rather than gross export values, since EU jobs are a function of domestic value added only. For Belgium, job losses of Trumpit range between 1200 and 5000 job losses, depending on the US tariff increase. Similarly, for the EU, job losses range between 50,000 and 240,000 jobs that will be lost depending on the US tariff scenario. For the EU, we find that the export value that will be lost ranges between 5% to 24 %, depending on the extent of the US import tariff increase. This corresponds to European GDP losses that range between 0.1 % to 0.4% of total EU GDP.
    Date: 2017
  7. By: Hylke Vandenbussche; William Connell Garcia; Wouter Simons; Elena Zaurino
    Abstract: This report is the first to estimate employment effects of looming American protectionism under US president Trump. We study the economic impact of a tightening of US trade policy on Belgium and on every EU member state, which we refer to as “America First” or “Trumpit” (like “Brexit”). Our estimates of EU job losses are based on the interconnectedness of an EU country with the US economy. We do this by taking into account the inter‐sectoral linkages between sectors within a country and between EU countries using sectoral input‐output data (World Input Output Database, WIOD). Thus, we consider EU jobs involved in direct EU exports to the US, as well as EU jobs corresponding to indirect exports from Europe to the US. Our study covers both exports of goods and services and accounts for services used as an input in goods. Our estimates are based on domestic value added rather than gross export values, since EU jobs are a function of domestic value added only. For Belgium, job losses of Trumpit range between 1200 and 5000 job losses, depending on the US tariff increase. Similarly, for the EU, job losses range between 50,000 and 240,000 jobs that will be lost depending on the US tariff scenario. For the EU, we find that the export value that will be lost ranges between 5% to 24 %, depending on the extent of the US import tariff increase. This corresponds to European GDP losses that range between 0.1 % to 0.4% of total EU GDP.
    Date: 2017
  8. By: Eppinger, Peter S.; Meythaler, Nicole; Sindlinger, Marc-Manuel; Smolka, Marcel
    Abstract: We provide novel evidence on the micro-structure of international trade during the 2008 financial crisis and subsequent global recession by exploring a rich firm-level data set from Spain. The focus of our analysis is on changes at the extensive and intensive firm-level margins of trade, as well as on performance differences (jobs, productivity, and firm survival) across firms that differ in their export status. We find no adverse effects of the financial crisis on foreign market entry or exit, but a considerable increase in the export intensity of firms after the financial crisis. Moreover, we find that exporters were more resilient to the crisis than non-exporters. Finally, while exporters showed a significantly more favorable development of total factor productivity after 2009 than non-exporters, aggregate productivity declined substantially in a large number of industries in Spanish manufacturing. We also briefly explore two factors that might help explain the surprisingly strong export performance of Spain in the aftermath of the great trade collapse: improved aggregate competitiveness due to internal and external devaluation and a substitutive relationship between domestic and foreign sales at the firm level.
    Keywords: international trade,financial crisis,Spain,manufacturing,firm-level data
    JEL: F10 F14 G01 D24
    Date: 2016
  9. By: HAYAKAWA Kazunobu; URATA Shujiro; YOSHIMI Taiyo
    Abstract: Mega regional trade agreements (RTAs), such as the Trans-Pacific Partnership, are likely to overlap with existing RTA networks. When RTA networks overlap, firms are required to choose from multiple RTA schemes when they trade. This study investigates how RTA tariff rates affect the use of both own and other tariff schemes when multiple RTA schemes are available. We first theoretically explore such choice and derive some propositions. Then, we empirically test those propositions for Japan's imports because Japan already has not only bilateral but also multilateral RTAs with some Association of Southeast Asian Nations (ASEAN) countries. The key finding is that the utilization rate of an RTA scheme is higher when its preferential rates are lower compared to the rates in the other RTAs.
    Date: 2017–01
  10. By: De Matteis, Maria; Yu, Edward; Boyer, Christopher; Lewis, Karen
    Abstract: The production and utilization of distillers dried grains with solubles (DDGS), a co-product of corn ethanol, have surged since the Energy Policy Act of 2005 in the United States. The exports of U.S. DDGS have also rapidly grown more than five folds over the last decade. The objective of this study was to identify the determinants of U.S. DDGS exports and project the growth of DDGS exports to major international buyers. A commodity-specific gravity model was applied to U.S. DDGS exports to 29 countries from 2000 through 2013. Results suggest that importing country meat production, technical barriers to trade, tariffs, and U.S. ethanol production influence U.S. DDGS export quantities.
    Keywords: DDGS, Biofuels, Livestock Feed, Gravity Model, Agricultural and Food Policy, International Relations/Trade, Q13, Q17, F13,
    Date: 2017
  11. By: Yilmazkuday, Hakan (Florida International University)
    Abstract: International trade studies have higher macro (Armington) elasticity measures compared to international finance studies. This observation has evoked not only mixed policy implications regarding tariffs and exchange rates but also mixed welfare gains from trade. Regarding the policy implications, this so-called international elasticity puzzle is solved in this paper by distinguishing between elasticities of substitution and price elasticities of demand that are connected to each other through expenditure shares. It is shown theoretically and confirmed empirically that the macro elasticity in international trade is a weighted average of the macro elasticity in international finance and the elasticity of substitution across products of foreign countries. It is implied that one can always find an elasticity of substitution across foreign countries that would be consistent with different macro elasticities in the two literatures; therefore, the puzzle is something artificial due to the way that the foreign products are aggregated at destination countries. Regarding the welfare gains from trade, the two literatures are shown to have the very same implications when international finance studies have a unitary macro elasticity of substitution between home and foreign products or unitary terms of trade. As opposed to the existing literature that has offered many supplyside solutions to the puzzle, the results in this paper are independent of the supply side and thus are consistent with any production structure.
    Date: 2017–01–01
  12. By: Auboin, Marc; DiCaprio, Alisa
    Abstract: Trade finance shortfalls now appear regularly. Does this matter for trade expansion and economic development in developing countries? Global trade finance has resumed following the 2009 global financial crisis. However, the pattern of recovery has been uneven across countries and categories of firms. The recovery has been robust for the main routes of trade and for large trading companies. By contrast, access to trade finance remains costly and scarce in countries which have the strongest potential for trade expansion. The policy response to this problem depends on whether this represents a market failure, or a new global equilibrium. We introduce new data from a global survey of firms to argue that real shortfalls are exacerbated by perception gaps in a way that has enabled market failures to persist. This has troubling implications most directly through its effect on the ability for small firms to benefit from the reallocation of production and investment within global supply chains.
    Keywords: international financial institutions,coherence,G-20,financial crisis,trade and development,trade finance,economic development
    JEL: F13 F34 F36 O19 G21 G32
    Date: 2016
  13. By: Hou, Yulin (Florida International University); Wang, Yun (Florida International University); Yilmazkuday, Hakan (Florida International University)
    Abstract: Gravity variables such as distance, adjacency, colony, free trade agreements or language are used to capture the effects of trade costs in empirical studies. By using actual data on trade costs, this paper decomposes the overall effects of such variables on trade into those through three gravity channels: duties/tariffs (DC), transportation costs (TC), and dyadicpreferences (PC). When PC is ignored as is typical in existing studies in the literature, it is shown that nearly all gravity effects are due to distance, 29 percent through DC and 71 percent through TC. The tables turn as the additional channel of PC is introduced and shown to dominate other channels, with adjacency contributing about 45 percent, distance about 32 percent, colony about 14 percent, free trade agreements about 7 percent, and language about 2 percent. It is implied that gravity variables mainly capture the effects of demand shifters rather than supply shifters (as implied by the existing literature). The results are further connected to several existing discussions in the literature, such as welfare gains from trade and the distance puzzle.
    Date: 2017–01–01
  14. By: Koech, Janet (Federal Reserve Bank of Dallas); Wynne, Mark A. (Federal Reserve Bank of Dallas)
    Abstract: This paper documents the evolution of the international relationships of individual U.S. states along three dimensions: trade, migration, and finance. We examine how specialized or diversified state economies differ in terms of the products they export and with whom they trade, the origins of the immigrants who live in the state, and the origins of the foreign banks operating in the state. We show that states that are diversified along one of these dimensions are often quite specialized along others. New York is–perhaps, not surprisingly–the most diversified state in terms of global linkages.
    JEL: F10 F16 F22 F30 G21
    Date: 2016–09–01
  15. By: Robert C. Feenstra
    Abstract: We identify “first generation” statistics to measure offshoring as the share of imported intermediate inputs in costs, along with O*NET data to measure the tradability of tasks. These data were used to measure the shifts in relative labor demand and relative wages due to offshoring. A limitation of these statistics is that they cannot be used to measure the impact on real wages, and for that purpose, we need price-based measures of offshoring. More recently, “second generation” statistics have arisen from global input-output tables. These measures include the foreign value-added in exports, or its counterpart, the domestic value-added in exports. We illustrate the foreign value-added component in the surge of Chinese exports following its WTO entry in 2001. We argue that such second-generation statistics should also be supplemented by price-based measure of offshoring, and we propose one simple measure that extends the effective rate of protection on imports to apply to exported goods.
    JEL: F12
    Date: 2017–01
  16. By: Randolph Luca Bruno; Nauro Campos; Saul Estrin; Meng Tian
    Abstract: This paper investigates whether and to what extent foreign direct investment inflows into the United Kingdom are caused by its membership in the European Union (EU). It reports two main sets of econometric estimates: (a) synthetic counterfactual method with annual data for large sample of developing and developed countries over 1970-2014 and (b) gravity estimates using 34 OECD countries bilateral data for 1985-2013. The two sets of estimates strongly concur: EU membership increases FDI inflows by about 30%. This result is robust to changes in specification, country samples, time windows, and the use of different estimators (panel, PPML and Heckman).
    Keywords: foreign direct investment; gravity; SMC; European Union
    JEL: R14 J01 L81
    Date: 2016–10
  17. By: Dauth, Wolfgang (Institute for Employment Research (IAB), Nuremberg); Findeisen, Sebastian (University of Mannheim); Suedekum, Jens (Heinrich Heine University Düsseldorf)
    Abstract: The German economy exhibits rising service and declining manufacturing employment. But this decline is much sharper in import-competing than in export-oriented branches. We first document the individual-level job transitions behind those trends. They are not driven by manufacturing workers who smoothly switch to services. The observed shifts are entirely due to young entrants and returnees from non-employment. We then investigate if rising trade with China and Eastern Europe causally affected those labor flows. Exploiting variation across industries and regions, we find that globalization did not speed up the manufacturing decline in Germany. It even retained those jobs in the economy.
    Keywords: trade, structural transformation, manufacturing, labor markets
    JEL: F16 J21 R11
    Date: 2017–01
  18. By: Auer, Raphael (Bank of International Settlements); Borio, Claudio (Bank of International Settlements); Filardo, Andrew J. (Bank of International Settlements)
    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 tradebased 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.
    Date: 2017–01–01
  19. By: Juan de Lucio (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Raúl Mínguez (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Asier Minondo (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain). Research aliate of Instituto Complutense de Estudios Internacionales.); Francisco Requena (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: Using data for the universe of exporters, we show that few firms dominate exports in Spain. For example, in 2015 half of Spanish exports were accounted by the top 200 firms. This concentration has not changed substantially over the period 1997-2015. The dominance of few firms, a phenomenon denoted as granularity, is larger in exports than in sales or employment. Granularity also defines the specialization of Spanish exports. If top exporters disappeared, Spain would lose revealed comparative advantage in industries accounting for 26% of Spanish exports. Finally, granularity explains around one-third of the fluctuation of Spanish exports.
    Keywords: exports, granularity, superstars, Spain, firm-level data
    JEL: F1 F10 F23
    Date: 2017–01
  20. By: Marcus Biermann
    Keywords: Firm size distribution; firm heterogeneity; technology adoption; German Empire
    JEL: F14 F15
    Date: 2016–10
  21. By: Juliana Dias Alves (Cedeplar-UFMG); Mauro Sayar Ferreira (Cedeplar-UFMG)
    Abstract: This is a pioneer study on the Brazilian manufacturing sector focused on: i) the role and characteristics of multi-product (MP) plants; and ii) on the determinants and impact of product switching within firms. MP corresponds to 37% of the manufacturing firms, but generates 81% of the output. They employ more workers, are more likely to be exporters, have higher labor productivity and higher TFP. The extensive margin due to adding and retirement of products contributes more to output growth than entry and exit of firms. Among continuing firms, half of the annual output growth (from 2005 to 2009) was originated in firms that switched products. Firms that have net added (dropped) items had higher (smaller) increase in output, in employers, and in the TFP. Higher TFP, more employers, or being exporter increased the probability to only add or only drop items in the future.
    Keywords: Multiproduct, scope, total factor productivity, heterogeneous firms
    JEL: D2 F23 L1 L16 L6
    Date: 2016–06
  22. By: Fuenfschilling, Lea (CIRCLE, Lund University); Binz, Christian (CIRCLE, Lund University)
    Abstract: This paper addresses the question why socio-technical transitions follow similar trajectories in various parts of the world, even though the relevant material preconditions and institutional contexts vary greatly between different countries. It takes a critical stance on the implicit methodological nationalism in transition studies’ socio-technical regime concept and proposes an alternative ‘global’ regime perspective that embraces the increasingly multi-scalar actor networks and institutional rationalities which influence transition dynamics beyond national or regional borders. By drawing on globalization theories from sociology and human geography we show that socio-technical systems often develop institutional rationalities that are diffused via international networks and thus become influential in various places around the world. In so doing, we shed light on the multi-scalar interrelatedness of institutional structures and actors in socio-technical systems and elaborate on the implications for the conceptualization of transition dynamics. The paper illustrates this with the case study of an unsuccessful transition in the Chinese water sector. Recent studies indicate that key decisions on wastewater infrastructure build-up were not only influenced by path-dependencies stemming from China’s national context, but equally (or even more critically) by an import of the dominant rationality of the water sector’s global socio-technical regime. We conclude by discussing the contours of a new research agenda around the notion of global socio-technical regimes.
    Keywords: socio-technical regime; globalization; geography of transitions; institutional change
    JEL: F55 F60 L95 O33
    Date: 2017–01–27
  23. By: Weinberger, Ariel (University of Oklahoma); Xuefeng, Qian (Zhongnan University of Economics and Law); Yasar, Mahmut (UT-Arlington and Emory University)
    Abstract: The export tax rebate (ETR) policy is one of the most frequently used policy instruments by Chinese policy makers. This paper therefore provides a vital analysis of its allocation effects. To motivate our empirical analysis for the allocation effects of the ETR policy, we first add a tax rebate to the Melitz and Ottaviano (2008) model and examine the impact of this policy on firms' markup size and resource allocation between eligible and non-eligible firms for the rebates. We use customs transactions, tax administration, and firm-level data to measure the effect of variation in export tax rebates, taking advantage of the large policy change in 2004. A difference-indifference approach allows us to compare the production and pricing decisions of eligible versus non-eligible firms and the distributional implications. We find that an increase in tax rebates shifts production to eligible firms and that tax rebates increase allocative efficiency.
    Date: 2017–01–01
  24. By: Aguilar Candelas, Oscar J.; Arana Coronado, Jaime; Trejo-Pech, Carlos O.; Martínez Damián, Miguel Ángel
    Abstract: By combining data from multiple sources, we model supply and demand of strawberry in Mexico for the 1970-2013 period. The main purpose of the study is to measure transmission of prices in this sector. Producer prices, wholesaler prices, exporter prices, and consumer prices are components of the model. Our three-stage least squares regression results show, consistent with the literature, that the pass-through of price changes is imperfect; that is, a price change at the producer level is not fully transmitted to domestic consumers and exporters. (Dickey-Fuller Augmented and Ljung-Box tests were performed to ensure efficiency of estimators.) Furthermore, a change in producer prices has a higher impact on the domestic market than in the exports market, in percentage basis. However, higher price mark-ups in the export market compared to domestic market’s make exporting more attractive to Mexican strawberry producers. Results of this study may have important implications as both supply and exports of strawberry from Mexico have experienced high growth in the last decade, with more than 90% of strawberry being exported to the U.S. According the Mexican Department of Agriculture, volume harvested of strawberry grew 2.14 times from 2003 to 2014 while exports did 2.88 times.
    Keywords: Strawberry, price transmission, simultaneous equations, Agribusiness, Demand and Price Analysis, L11, D12,
    Date: 2017
  25. By: Lord, Montague J.; Tangtrongjita, Pawat
    Abstract: The study examines potential investment opportunities for cross-border value chains in the economic corridors of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). offers an investment perspective that is grounded on extensive interviews with company representatives and public sector officials. Qualitative and quantitative-based surveys were conducted over a six-week period by the study team that interviewed 70 companies distributed over 20 industry classifications or divisions in six BIMP-EAGA corridor states and provinces. It presents the results of three approaches to identifying and rating corridor value chains based on (a) provincial and state development priorities along the corridors; (b) business perceptions about corridor-wide opportunities; and (c) mapping the comparative advantages revealed by the exports from corridor provinces and states into different types of industry classifications. Overall, the study finds that opportunities for investment in corridor value chains abound in both BIMP-EAGA corridors. Among the most compelling reasons to invest in these types of cross-border value chains are their internal and external effects generated by knowledge transfers, scale economies, upstream and downstream linkages, the ability of corridor value chains to attract investment from multinational enterprises, the subregion’s favorable policy and regulatory environment, and the ability of these types of investments to substantially broaden existing markets for goods and services in the subregion.
    Keywords: value chains, cross-border investment, cross-border value chains, BIMP-EAGA, Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area
    JEL: F14 F15 L1
    Date: 2016–11–30
  26. By: Guilloux-Nefussi, Sophie (Banque de France)
    Abstract: The decline in the sensitivity of inflation to domestic slack observed in developed countries since the mid 1980’s has been often attributed to globalization. However, this intuition has so far not been formalized. I develop a general equilibrium setup in which the sensitivity of inflation to marginal cost decreases when international trade costs fall. In order to do so, I add three ingredients to an otherwise standard two-country new-Keynesian model. Strategic interactions generate a time varying desired markup; endogenous entry and heterogeneous productivity engender a self-selection of the most productive firms (also the largest ones) in international trade. Hence the weight of large firms in domestic production increases. These firms transmit less marginal cost fluctuations to price adjustments, rather absorbing them into their desired markup in order to protect their market share. At the aggregate level, domestic inflation reacts less to real activity fluctuations.
    JEL: E31 F41 F62
    Date: 2016–11–03
  27. By: Fitzgerald, Doireann (Federal Reserve Bank of Minneapolis); Haller, Stephanie (University College Dublin); Yedid-Levi, Yaniv (University of British Columbia)
    Abstract: No abstract
    Keywords: Firm dynamics; Exporter dynamics; Customer base
    JEL: E20 F10 L10
    Date: 2017–01–24
  28. By: Lord, Montague J.; Tangtrongjita, Pawat
    Abstract: The report provides a review and analysis of the findings from the scoping study on the proposed Malaysian–Thailand Special Border Economic Zone (SBEZ).Each border crossing has been assessed on the basis of the following components, details of which are presented in the main body of this report: (a) special economic zone (SEZ) potential; (b) cross-border value chains; (c) transport and logistics; (d) socio-economic development strategy for the area; (e) SME development and business development services: (f) linkages to Indonesia.
    Keywords: SBEZ, border economic zones, special border economic zones, Thailand, Malaysia, IMT-GT
    JEL: F14 F15 L6
    Date: 2016–06–01
  29. By: Brad Graham (Department of Economics, Grinnell College); Caleb Stroup (Department of Economics, Davidson College)
    Abstract: We hand-collect data on individual FCPA enforcement actions initiated by the U.S. Department of Justice and use them in a panel difference-in-difference estimator to provide the first systematic empirical evidence that anti-bribery enforcement is followed by a reduction in U.S. fixed capital investments in countries targeted by enforcement actions. Publication Status: Published in Applied Economics Letters, 2016, 23(1):63-67.
    Keywords: Foreign Corrupt Practices Act, multinational firms, cross-border mergers, foreign direct investment, anti-bribery legislation
    JEL: F21 K22 G38
    Date: 2015–05
  30. By: Dobrin, Kirill (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: In recent years, are increasingly faced with the negative processes of globalization. This occurs in such priority spheres of human activity as politics, culture and economy of course. Let us dwell on the contradictions that exist in the global world and global economy. Hallmark of globalization are such processes as the internationalization of the world economy and international capital, international trade and the international division of labor. These processes are deployed, especially between industrialized countries and developing countries cover only partly and mainly concern their executive function. Thus, strengthening the position of economically developed countries. Developing same are not actors, and objects of globalization. Why is this happening? Global firms in developed countries view the world as a whole, which erases national differences and preferences, there is a standardization of consumption. Products such corporations like Mars, Siemens, Sony, Samsung, IBM and many others are sold worldwide. International quality standards, management systems (TQM, CPI, TQC, ISO 9000), introduced by the western countries set the bar competitiveness of the rest. This situation leads to an increase in the magnitude of the spread of the crisis in the world. Keywords : globalization, the internationalization of the world economy, the financial crisis, the global economy, financial system, financial resources.
    Date: 2016
  31. By: Yilmazkuday, Hakan (Florida International University)
    Abstract: Using varieties of a rich model that considers sectoral heterogeneity and input-output linkages, this paper shows that the overall welfare gains of a region within a country can be decomposed into domestic versus international welfare gains from trade. Empirical results based on state-level data from the U.S. suggest that about 91 percent of the overall welfare gains of a state are due to domestic trade with other states, on average across alternative model specifications, with a range between 72 percent and 99 percent across states. When national-level data are used for the U.S., international welfare gains are shown to be almost identical to the those obtained by the aggregation of state-level results, suggesting that one can use the implications of a region-level analysis to have national-level results based on welfare gains from trade. We use this implication to propose an approximation to measure the domestic welfare gains from trade when domestic trade data are not available. Accordingly, using the implications of the model introduced, a Dispersion of Economic Activity Index (DEAI) is introduced that depends on internal distance and elasticity measures. It is empirically shown that DEAI can capture domestic welfare gains from trade within the U.S. when standard internal distance and elasticity measures in the literature are employed. Important policy suggestions follow.
    Date: 2017–01–01

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