|
on International Trade |
| By: | Rodolfo Metulini (Department of economics and management, University of Brescia); Massimo Riccaboni (IMT School for advanced studies); Paolo Sgrignoli (Institute for economics, Scuola Superiore Sant'Anna, Pisa); Zhen Zhu (IMT School for advanced studies); zhen.zhu@imtlucca.it |
| Abstract: | The relationship between international trade and foreign direct investment (FDI) is one of the main features of globalization. In this paper we investigate the effects of FDI on trade from a network perspective, since FDI takes not only direct but also indirect channels from origin to destination countries because of firms' incentive to reduce tax burden, to minimize coordination costs, and to break barriers to market entry. We use a unique data set of international corporate control as a measure of stock FDI to construct a corporate control network (CCN) where the nodes are the countries and the edges are the corporate control relation ships. Based on the CCN, the network measures, i.e., the shortest path length and the communicability, are computed to capture the indirect channel of FDI. Empirically we find that corporate control has a positive effect on trade both directly and indirectly. The result is robust with different specifications and estimation strategies. Hence, our paper provides strong empirical evidence of the indirect effects of FDI on trade. Moreover, we identify a number of interplaying factors such as regional trade agreements and the region of Asia. We also find that the indirect effects are more pronounced for manufacturing sectors than for primary sectors such as oil extraction and agriculture. |
| Keywords: | Networks; Foreign direct investment; Corporate control |
| JEL: | C21 F10 F14 F23 L22 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ial:wpaper:4/2017&r=int |
| By: | Chemutai, Vicky; Escaith, Hubert |
| Abstract: | Besides facilitating access to the world market, WTO accession negotiations entail a process of domestic reforms that are expected to improve the supply side of acceding economies. However, measuring the actual impact of accession remains an empirical debate. The present paper contributes to the issue by offering a novel measure of the specific commitments made during the negotiations. These commitments often trigger a series of domestic structural transformations that are expected to impact economic growth. The accession commitment index proposed in the paper reflects the heterogenous distribution of commitments undertaken by Article XII members. This index is used to conduct a thorough statistical exploration of the effect of WTO accession on a series of variables related to economic growth, such as trade and investment. The results show that the impact of WTO membership on the Trade/GDP ratio is significantly higher than previous studies had found for developing countries, both quantitively and qualitatively. The results on investment, be it foreign or domestic, are also encouraging, but are not fully conclusive. |
| Keywords: | WTO Accession,Article XII,synthetic index,exploratory data analysis |
| JEL: | C31 C38 F13 F14 F43 F63 O43 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd201705&r=int |
| By: | Ibrahim Elbadawi; Chahir Zaki (Cairo University and ERF) |
| Abstract: | Exploiting a new dataset available for four countries (Egypt, Jordan, Kuwait and Yemen), this paper assesses the claim that real exchange rate undervaluation affects both the quantity of exports (intensive margin) and the probability of exporting a certain product to a certain destination (extensive margin) of trade in Arab countries. We find robust evidence suggesting that RER depreciation/undervaluation promotes exports at both the intensive and the extensive margins. Moreover, when financial openness is driven by FDI the latter reinforces the RER effects, but it tends to counter it when it is mainly dominated by non-FDI flows. In this case there will be even a more dire need for a higher economy-wide subsidy through an undervalued real currency in order for manufacturing exporting firms to grow at the intensive margin, and especially for overcoming the more challenging impediments of opening new markets or developing new export products. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1004&r=int |
| By: | Voßwinkel, Jan; Birg, Laura |
| Abstract: | This paper studies the interaction of a minimum quality standard and exports in a vertical product differentiation model when firms sell global products. If ex ante quality of foreign firms is lower (higher) than the quality of exporting firms, a mild minimum quality standard in the home market hinders (supports) exports. The minimum quality standard increases quality in both markets. A welfare maximizing minimum quality standard is always lower under trade than under autarky. A minimum quality standard reduces profits for the exporting firm. It increases domestic welfare, but reduces welfare in the export market. |
| JEL: | F12 L13 L50 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145846&r=int |
| By: | Matthieu Crozet; Gianluca Orefice |
| Abstract: | There is a large consensus in the economic literature suggesting the positive impact of globalization on the aggregate well-being of a country. However, a clear-cut conclusion has not been reached on winners and losers from globalization. For this reason, international trade is often accused of increasing wage inequality in both developing and developed countries. A first stream of literature focused on workers characteristics to identify winners and losers from globalization. Workers with characteristics (e.g., education levels) intensively used in import-competing sectors are likely to suffer from international trade; while workers having characteristics intensively needed in exporting sectors will gain. This is a clear-cut explanation but it does not fit the data as the reality is much more complex. Labor market shocks caused by trade openness are diffuse, and it is difficult to group those who suffer/gain into well-identified categories. The firm and the type of task in which workers are employed definitely contribute to identify winners and losers from globalization. Recent CEPII research outputs, based on detailed French firm and worker-level data, confirm that identifying who lost and who gained with globalization is a very difficult task. |
| Keywords: | Trade Liberalization;Job Polarization;Wage Inequality |
| JEL: | F16 F66 J31 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepipb:2017-15&r=int |
| By: | Badri Narayan G. (School of Environmental and Forestry Sciences, University of Washington-Seattle, USA) |
| Abstract: | This paper examines how new trade rules under mega-regional agreements (in the Asia Pacific and the Atlantic) aim to liberalise ‘substantially all trade and investment’ but commitments undertaken by member countries could potentially impact on the health of the public in these countries. The mechanism of impact that the paper examines is through tariff elimination and the requirements of stronger intellectual property commitments for partner countries. We analyse two interlinked policy concerns: first, how tariff reduction/elimination under mega regional agreements impact on prices of tobacco and tobacco products as well as sugar and sugary beverages. Second, how mega regional agreements with Trade-Related Aspects of Intellectual Property Rights (TRIPS) like and TRIPS-plus commitments could modify intellectual property rules among partner countries and impact on developing countries’ access to life saving drugs and access to medicines. Using dynamic-GTAP model we find that there are significant health consequences of commitments undertaken by developing countries. Simulation results reveal: first, production of sugar increases under trade agreements with potential detrimental health effects. Second, stricter intellectual property rules under mega trade agreements lead to net global gains but developing countries suffer in terms of adverse health impact and from regulatory chill effect. |
| Keywords: | Economic Integration; Trade Policy; Government policy |
| JEL: | F15 F13 I18 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:bam:wpaper:bafes09&r=int |
| By: | Chad P. Bown (Peterson Institute for International Economics) |
| Abstract: | A major economic concern with the border tax adjustment blueprint, which House Speaker Paul Ryan and House Ways and Means Committee chair Kevin Brady support, is its potential to reduce US imports and promote US exports in a way that could violate international trade rules. Because of the size of the US economy, the trade distortions resulting from the tax would punish US trading partners, putting pressure on them to retaliate immediately. World Trade Organization (WTO) rules establish a framework for understanding how trading partners' policy response to a US tax reform would proceed. The potential retaliatory costs to US exporters associated with elements of the Ryan-Brady blueprint could be large. If the reform is found to violate WTO rules by restricting US imports, trading partners could be authorized to retaliate by an estimated $220 billion annually. If the new US tax is found to implicitly subsidize exports, partners could be authorized to retaliate by an additional $165 billion annually. The United States would face some of this combined $385 billion in retaliation almost immediately upon implementing the tax, through the imposition of countervailing duties by trading partners. Any durable overhaul of the US tax system requires a frank airing and honest empirical assessment of the international implications of the policy. It is best to tackle the issue with a strong US commitment to international engagement and cooperation with trading partners. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb17-11&r=int |
| By: | Sébastien Miroudot; Charles Cadestin |
| Abstract: | This report provides new evidence on the role of services in global value chains (GVCs). With the release of the Trade in Value Added database, it was highlighted that services account for a larger share of world trade than suggested by traditional statistics. But this evidence does not tell the whole story about services in GVCs. In addition to services bought as inputs, there are also services activities within manufacturing firms. Moreover, manufacturing companies increasingly produce and export services either as complements or substitutes to the goods they sell. This shift to services is related to strategies aiming at adding more value and creating a long-term relationship with customers. The report highlights that services inputs, whether domestic or foreign, account for about 37% of the value of manufacturing exports in the sample of countries covered. By adding service activities within manufacturing firms, this share increases to 53% and the overall contribution of services to exports is close to two-thirds. Across countries, between 25% and 60% of employment in manufacturing firms is found in service support functions such as R&D, engineering, transport, logistics, distribution, marketing, sales, after-sale services, IT, management and back-office support. SMEs are also part of this “servicification” and contribute to exports of services bundled with goods. |
| Keywords: | bundles of goods and services, business functions, Global Value Chains, Services, servicification, trade in services, trade in value-added |
| JEL: | F13 F14 F23 F68 L80 |
| Date: | 2017–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:197-en&r=int |
| By: | Yevgeniya Korniyenko; Magali Pinat; Brian Dew |
| Abstract: | Anecdotal evidence suggests the existence of specific choke points in the global trade network revealed especially after natural disasters (e.g. hard drive components and Thailand flooding, Japanese auto components post-Fukushima, etc.). Using a highly disaggregated international trade database we assess the spillover effects of supply shocks from the import of specific goods. Our goal is to identify inherent vulnerabilities arising from the composition of a country’s import basket and to propose effective mitigation policies. First, using network analysis tools we develop a methodology for evaluating and ranking the supply fragility of individual traded goods. Next, we create a country-level measure to determine each country’s supply shock vulnerability based on the composition of their individual import baskets. This measure evaluates the potential negative supply shock spillovers from the import of each good. |
| Keywords: | International trade;External shocks;Manufactured goods;Supply;Imports;International trade, supply shocks, spillovers, network analysis. |
| Date: | 2017–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/30&r=int |
| By: | Fabienne Fortanier (OECD); Guannan Miao (OECD) |
| Abstract: | Although the costs associated with the international transport and insurance of merchandise trade are an important determinant of the volume and geography of international trade, remarkably little (official) data exist. Combining the largest and most detailed cross-country sample of official national statistics on explicit CIF-FOB margins to date with estimates from an econometric gravity model, and using a novel approach to pool product codes across HS vintages, this paper presents the new OECD Database on International Transport and Insurance Costs (ITIC) that aims to fill this gap, and describes the methodology used in its construction. The database details the bilateral, product level international trade and insurance costs for more than 180 countries and partners, over 1 000 individual products, for the 1995-2014 time period, and provides an important new tool to further our understanding of global value chains, whilst also forming an important statistical input to the development of coherent and balanced bilateral trade statistics and to the TiVA database. In particular the database provides potential new insights on how distance, natural barriers such as mountain ranges, and inadequate infrastructure, shape regional (and global) value chains. |
| Keywords: | CIF-FOB margins, International merchandise trade, International transport and insurance costs |
| JEL: | F10 F14 |
| Date: | 2017–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stdaaa:2017/4-en&r=int |
| By: | Alen Mulabdic; Alberto Osnago; Michele Ruta |
| Abstract: | This paper studies the impact of deep agreements on United Kingdom–European Union trade relations. A standard gravity model is applied to assess the effect that European Union membership had on the United Kingdom’s trade. The paper uses new information on the content of trade agreements to build a measure of “depth” based on the number of provisions the agreements cover. The analysis relies on information on goods, services, and value-added trade from the World Input Output Database. Deep trade agreements are found to increase goods and services trade by 42 percent, and value-added trade by 14 percent on average. European Union membership had a particularly strong effect on United Kingdom’s services and global value chain trade. Because of its membership, the United Kingdom’s services trade more than doubled, and the country’s backward and forward participation in global value chains increased by more than 30 percent each. The paper uses these estimates to evaluate the future of United Kingdom–European Union trade under different scenarios. The findings show that United Kingdom–European Union trade declines under all scenarios, ranging between 6 and 28 percent for trade in value added. This drop is sharper (particularly for services and global value chain trade) the lower is the depth of the future arrangement relative to the depth of the European Union agreement. As trade flows adjust slowly to changes in trade costs, these effects are expected to emerge over time. But the trade-off between the depth of trade agreements and trade intensity will delimit policy choices going forward. |
| Keywords: | Deep Trade Agreements, Trade Effects, European Union, United Kingdom JEL Codes: F13, F15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:17/03&r=int |
| By: | Foellmi, Reto; Hepenstrick, Christian; Zweimüller, Josef |
| Abstract: | We incorporate consumption indivisibilities into the Krugman (1980) model and show that an importer’s per capita income becomes a primary determinant of “export zeros”. Households in the rich North (poor South) are willing to pay high (low) prices for consumer goods; hence unconstrained monopoly pricing generates arbitrage opportunities for internationally traded products. Export zeros arise because some northern firms abstain from exporting to the South, to avoid international arbitrage. Rich countries benefit from a trade liberalization, while poor countries lose. These results hold also under more general preferences with both extensive and intensive consumption margins. We show that a standard calibrated trade model (that ignores arbitrage) generates predictions on relative prices that violate no-arbitrage constraints in many bilateral trade relations. This suggests that international arbitrage is potentially important. |
| Keywords: | Non-homothetic preferences, parallel imports, arbitrage, extensive margin, export zeros |
| JEL: | F10 F12 F19 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2017:03&r=int |
| By: | George Sorg-Langhans (Princeton University); Clemens Struck (University College Dublin); Adnan Velic (Dublin Institute of Technology) |
| Abstract: | Theories of international trade have severe difficulties in explaining why, despite i) substantial differences in factor-proportions across industries and ii) considerable cross-country differences in capital-labor ratios, the iii) capital intensity of U.S imports does not vary systematically across countries. We propose a simple explanation: standard trade theories treat the distribution of productivity across industries as exogenous. In a standard macroeconomic model we show that endogenizing this driving force eradicates the gains from factor-proportions trade and can thus reconcile the three aforementioned stylized facts. |
| Keywords: | factor-proportions trade, Heckscher-Ohlin-Vanek, macroeconomic general equilibrium models, endogenous growth, biased productivity |
| JEL: | F11 F14 F41 O47 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0817&r=int |
| By: | Cathy Ge Bao (University of International Business and Economics); Maggie X. Chen (George Washington University) |
| Abstract: | This paper quantiÖes the threat of foreign competition by exploring news of foreign multinational investment appearing in over 35,000 newspapers, business presses, magazines, newswires, and other forms of media in 200 countries. Using unique time-variant firm-specic measures of foreign multinational threat, the analysis shows that domestic firms respond to the threats by upgrading productivity, raising innovation, investment and wage rate, and altering product composition. However, the responses exhibit substantial heterogeneity across firms: within each industry, the right tail of the domestic productivity distribution responds by increasing innovation while the left tail escapes competition threats by dropping products, leading to a U-shape relationship between initial productivity and productivity growth. Actual multinational competition, in contrast, leads to product dropping only. These previously unexplored responses to the threat of foreign competition constitute an economically important source of gains from globalization and convey new implications for the timing, evolvement, and form of industrial, trade and investment policies. |
| Keywords: | threat, foreign investment news, and domestic Örm responses |
| JEL: | F1 F2 L2 D2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-22&r=int |
| By: | Pothen, Frank; Hübler, Michael |
| Abstract: | This article presents an applied general equilibrium model which combines the theoretical foundations of an Eaton-Kortum type model of international trade with the complexity of a global multi-region, multi-sector Computable General Equilibrium (CGE) model of production and consumption. The Eaton-Kortum model features endogenous trade-induced productivity gains via Ricardian specialization and takes non-tariff trade costs into account. Model regions and sectors can be disaggregated, e.g., representing technology-specific electricity generation. The models is tailored to explicitly study the German Federal State of Lower Saxony, a prime location for renewable electricity generation in Germany with ambitious climate policy goals. The calibration utilizes the structural estimation of a gravity model with constraints, while the disaggregation adapts methods used in regional science and energy economics. With these features the model goes beyond standard CGE models and provides new insights in the nexus between trade policy and climate policy. Simulations suggest that the removal of tariffs creates smaller welfare gains than a comparable reduction of non-tariff barriers to trade but also a slightly smaller increase in global CO2 emissions. Trade policy-induced productivity gains and renewable energy subsidies significantly reduce carbon leakage from the EU to the rest of the world by making the EU more CO2-efficient. With its large wind power potential, Lower Saxony is less susceptible to negative effects of climate policy than the rest of Germany. |
| Keywords: | international trade; regional model; climate policy; renewable energy; CGE |
| JEL: | C68 F10 F18 Q40 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-585&r=int |
| By: | Aleksandra Parteka; Joanna Wolszczak-Derlacz |
| Abstract: | Using a rich dataset on over 110,000 workers from nine European countries and the USA we study the wage response to industry dependence on foreign value added. We estimate a Mincerian wage model augmented with an input-output interindustry linkages measure accounting for task heterogeneity across workers. Low and mediumeducated workers and those performing routine tasks experience (little) wage decline due to major dependency of their industries on foreign inputs. Workers from former EU15 are more in danger of unfavourable wage effects than workers from new EU member states. American workers employed in service industries are more exposed than manufacturing workers. |
| Keywords: | wage, global value chains, foreign value added, interindustry linkages |
| JEL: | F14 F16 J31 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:680&r=int |
| By: | Jacob A. Jordaan; Vassilis Monastiriotis |
| Abstract: | Despite an extensive empirical literature on the factors conditioning the size and prevalence of FDI productivity spillovers, the geographical dimension of these externalities remains relatively under-explored. In this paper we use firm level data from the Greek manufacturing sector to identify how three features of economic geography – spatial heterogeneity (location), spatial proximity (localisation) and spatial concentration (agglomeration) – influence the size and sign of FDI spillovers within and across industries. We find that FDI spillovers predominantly materialise at the sub-national level, with horizontal spillovers being more prominent at the regional scale (NUTS2) and vertical spillovers being highly localised (at the NUTS3 level). Furthermore, we find important synergies between spillovers from FDI and industry-region specific agglomeration. Also, FDI spillovers are found to be conditional on regional characteristics related to each region’s manufacturing base, FDI concentration, urban agglomeration and aggregate productivity. These results highlight the important role played by geography for the materialisation of productivity spillovers accruing from FDI and suggest that these key geographical features (location, localisation and agglomeration) ought to be taken into account both in the study of FDI spillovers and in the design of FDI-promotion and regional development policies. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:105&r=int |
| By: | Irène Selwaness (Cairo University); Chahir Zaki |
| Abstract: | Using a panel of MENA countries, this paper tries to examine the interaction between trade reforms and labor market regulations on the outcome of the labor market. The theoretical predictions of this literature show that the effects of trade liberalization in any given country are conditional on the nature of labor market regulations since trade liberalization is more likely to have a positive impact on employment and wages in countries with flexible labor markets and vice versa. Moreover, more regulated labor markets tend to have higher wages at the expense of sector wide employment. Our main findings show that labor market rigidity reduces the positive impact of trade reform on employment. While this result is stronger for females, it is not for males. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:970&r=int |
| By: | Riham Ahmed Ezzat (Université Paris 1 Panthéon Sorbonne and Cairo University); Nora Aboushady |
| Abstract: | The past decade has witnessed a significant transformation in the trade and regulatory policies of the telecom sector across the MENA region. Many countries committed to opening up their telecom sector to trade and investment under WTO commitments. However, these commitments do not always reflect actual policies. Although some MENA countries started easing telecom market restrictions and tended to adopt more open policies, other countries are still reluctant to change and continue to adopt highly restrictive policies limiting foreign ownership and control in the market. This paper empirically assesses the impact of the existing telecom restrictions on landline and mobile sector performance, using the World Bank Services Trade Restrictiveness Database (STRD), with a focus on MENA countries. We use three-stage least squares-Seemingly Unrelated Regression (3SLS-SUR) to test for the effect of restrictions and the level of competition in the telecom sector on selected performance indicators. Our findings suggest that restrictive telecom policies are more likely to affect landline rather than mobile communications. Moreover, being a MENA country affects the level of competition in the landline market. MENA countries are very protective of their incumbent operators, irrespective of the stipulated legal restrictions in place. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:949&r=int |
| By: | Olga A. Timoshenko (George Washington University); Erick Sager (U.S. Bureau of Labor Statistics) |
| Abstract: | When firm-level productivity is not assumed to be Pareto distributed, new trade models predict that micro-data such as sales distributions determine the aggregate trade elasticity. In this paper, we document novel features of export sales distributions across destination markets. Notably there is large variation in dispersion and degrees of asymmetry. To capture these features of the export sales data we introduce a novel distribution: the Exponentially Modified Gaussian (EMG) distribution. We show that the EMG distribution fits sales data far better than either of the often assumed log- Normal or Pareto distributions and we provide quantitative evidence that these less accurate distributions can generate highly biased trade elasticities. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-15&r=int |
| By: | Laura Alfaro (Harvard Business School and NBER); Maggie X. Chen (George Washington University) |
| Abstract: | Multinationals exhibit distinct agglomeration patterns which have transformed the global landscape of industrial production (Alfaro and Chen, 2014). Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. In particular, we run a horse-race between two distinct economic forces: location fundamentals and agglomeration economies. We find that location fundamentals including market access and comparative advantage and agglomeration economies including capital-good market externality and technology diffusion play a particularly important role in multinationals’ economic geography. These findings remain robust when we use alternative measures of trade costs, address potential reverse causality, and explore regional patterns. |
| Keywords: | multinational firm, economic geography, agglomeration, location fun-damentals, agglomeration economies |
| JEL: | F2 D2 R1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-18&r=int |
| By: | De Bromhead, Alan; Fernihough, Alan; Lampe, Markus; O'Rourke, Kevin H. |
| Abstract: | International trade became much less multilateral during the 1930s. Previous studies, looking at aggregate trade flows, have argued that discriminatory trade policies had comparatively little to do with this. Using highly disaggregated information on the UK's imports and trade policies, we find that policy can explain the majority of Britain's shift towards Imperial imports in the 1930s. Trade policy mattered, a lot. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:qucehw:201702&r=int |
| By: | Shaar, Karam |
| Abstract: | When two countries report different values about trading with each other, the globally endemic phenomenon of trade data discrepancy arises. Substantial discrepancy in claims raises serious concerns about the quality of international trade data, which has profound implications on policymakers and researchers alike. In this paper, we construct an index which measures the level of consistency between each country’s reports on bilateral trade data and the corresponding data reported by the rest of the world. The index takes into account the relative significance of each trade partner and the level of data availability. The paper investigates 1,517,085 bilateral trade flows from 1962 to 2013 and concludes that: (a) malpractice is the main reason why some countries have lower data quality than others, (b) for most countries, trade data quality is in fact improving over time, (c) countries are generally more aware of the origin of their imports than they are aware of the destination of their exports. Our original findings have impacts on any study which utilizes trade data. |
| Keywords: | Bilateral trade data, Trade data quality, Data discrepancy, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwecf:6128&r=int |
| By: | Maggie X. Chen (George Washington University); Min Wu (George Washington University) |
| Abstract: | Information frictions are prevalent in the matching of exporters and importers. In this paper, we examine the value of reputation in international trade by exploring T-shirt exports on the worldís leading trade platform, Alibaba. We Örst present four new stylized facts about the distribution of Alibaba exports: (1) exports are exceedingly concentrated in superstar exporters; (2) the distribution of price closely mirrors the distribution of exporter reputation while the distribution of export volume is far more dispersed; (3) the distribution of export revenue becomes more dispersed as exporters age; and (4) the market share of superstar exporters diminishes with the experience of importers. Exploiting qualitative and quantitative features of Alibabaís reputation measures and Russian 2014-2015 ruble crisis, we explain the stylized facts and investigate the heterogeneous trade responses to reputation across countries and during a negative income shock. A dynamic price and reputation model further suggests that exporters use dynamic prices to ináuence the rates of reputation diffusion and export growth. Structural estimation of the model shows that the rise in aggregate exports and export concentration due to reputation is equivalent to raising the mean and variance of exporter quality by 35 and 200 percent, respectively. |
| Keywords: | reputation, information, superstar, and Alibaba |
| JEL: | F1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-20&r=int |
| By: | Derbali, Ahmed; Trabelsi Masmoudi, Lilia; Zitouna, Habib |
| Abstract: | This paper provides evidence on the relationship between foreign direct investment (FDI) and democratic transition. We propose first an econometric analysis of the determinants of the democratization process through a "probit" model. We consider a sample of 173 countries, with 44 that have experienced a democratic transition over the period 1980-2010. Our results reveal that variables related to human development and individual freedom facilitate the initiation of the democratic process in contrast to those related to social heterogeneity. In the second part, we study the impact of the democratic transition on FDI inflows. In order to avoid endogeneity, we limit the analysis to countries in transition and similar ones deduced from a matching process carried out after the first part. Our results confirm that democratic transitions lead to a significant increase in FDI inflows |
| Keywords: | Democratic transition, foreign direct investment, matching |
| JEL: | C23 C25 F21 F31 F59 |
| Date: | 2015–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66057&r=int |
| By: | Mutreja, Piyusha (Syracuse University); Ravikumar, B. (Federal Reserve Bank of St. Louis); Sposi, Michael J. (Federal Reserve Bank of Dallas) |
| Abstract: | International trade in capital goods has quantitatively important effects on economic development through capital formation and aggregate TFP. Capital goods trade enables poor countries to access more efficient technologies, leading to lower relative prices of capital goods and higher capital-output ratios. Moreover, poor countries can use their comparative advantage—non-capital goods production—and increase their TFP. We quantify these channels using a multisector, multicountry, Ricardian model of trade with capital accumulation. The model matches several trade and development facts within a unified framework. Frictionless trade in capital goods reduces the income gap between rich and poor countries by 40 percent. More than half of the reduction in the income gap is due to the TFP channel. |
| Keywords: | Income differences; Capital goods trade; Relative prices; Investment rate |
| JEL: | E22 F11 O11 O4 |
| Date: | 2017–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2017-006&r=int |
| By: | Cosimo Beverelli; Matteo Fiorini (Department of Economics and Robert Schuman Centre for Advanced Studies, European University Institute.); Bernard Hoekman |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1012&r=int |
| By: | Stark, Oded |
| Abstract: | This paper explores the following chain of conjectures: rising use of the internet, the widespread access to global information, and intensified communication between regions and countries brought about, for example, by intensified trade links bring about expansion of people’s social space and their set of comparators; this expansion increases people’s stress and strengthens their inclination to resort to migration as a means of reducing this heightened stress. Other things held constant, the expansion of people’s social space intensifies their inclination to move across geographical space. |
| Keywords: | Expansion of social space, Relative deprivation, Migration, Labor and Human Capital, A12, A14, B41, D01, F15, F22, J61, O15, Z13, |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:253885&r=int |
| By: | Kaltenegger, Oliver; Löschel, Andreas; Pothen, Frank |
| Abstract: | This paper investigates the impact of global value chains on energy footprints. Energy footprints are consumption-based indicators which record the energy used to produce a country's final demand. In order to disentangle key characteristics of global value chains and their effects on the global energy footprint, we employ structural decomposition analyses (SDA). Furthermore, the analysis combines a retrospective with a prospective SDA approach. After an analysis of the global energy footprint for the period between 1995 and 2009, we discuss three scenarios of international integration and their implications for energy footprints for the period from 2009 to 2030. Our results show that the global energy footprint has increased by 29.4 % from 1995 to 2009, and the scenarios indicate that it will increase by another 23.5 % until 2030. Economic activity is the most important driver for the increase in energy footprints. Rising final demand alone would have increased the global energy footprint by 47.0 % between 1995 and 2009. The composition of countries from where consumption and investment goods come adds another 12.6 %. Sectoral energy intensity reductions are the most important decelerator of energy use (-27.8 %). There is a substantial contribution of changing global value chains on the rise in the global energy footprint (7.5 %): Stronger backward linkages in global value chains increased the global energy footprint by 5.5 % between 1995 and 2009. Changes in the regional composition of intermediate inputs raised it by another 1.8 %. The shift of the world economy towards East Asia alone would have increased the global energy footprint by 3.0 %. The sectoral composition of global value chains, on the other hand, had a negligible effect on energy footprints. |
| Keywords: | Energy footprints; Global value chains; Structural decomposition analysis; Logarithmic mean Divisia index; Multi-regional input-output analysis; Environmental-economic accounting |
| JEL: | C43 C67 C82 F18 Q43 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-587&r=int |
| By: | Khalid Sekkat (University of Brussels and ERF) |
| Abstract: | This paper uses firm level data from 28 developing countries to examine the relationship between manufactured firms’ export orientation and exchange rate. The analysis incorporates the role of firm heterogeneity and country characteristics. We capture firms’ heterogeneity through the share of imported inputs, the size of the firm and labor productivity and country characteristics through the quality of domestic institutions and the degree of financial development. The data set allows constructing three sub-samples according to firms’ status on the export market (survivors, entrants and exitors). The results show important differences between survivors, entrants and exitors. Firm characteristics have little effect on survivors while many of these characteristics have significant effect on entry and on exit. Among the country characteristics of interest, only financial development has consistent effect across samples. The effect of exchange rate on exports volume is influenced by firm size and country financial development. The effect on entry is influenced by firm size and imported inputs but not by country characteristics. In contrast to entry, no firm characteristic has an impact on the effect of exchange on firm exit while financial development does on exit but not on entry. Splitting the REER into Equilibrium REER and misalignment shows that both components have effects on firm export orientation. Such effects depend only on the level of financial development but the dependence is not monotonic. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:989&r=int |
| By: | Ernest MIGUELEZ; Claudia NOUMEDEM TEMGOUA |
| Abstract: | This paper documents the influence of networks of highly-skilled migrants on international knowledge flows. It adds to the growing literature on highly-skilled international migration and its contribution to international knowledge diffusion, in migrants’ home as well as host countries. In particular, it first explores knowledge feedbacks to home countries generated by migrant inventors, a representative category of high-skilled migrants, most of them scientists and engineers. Second, it investigates the knowledge inflows to host countries brought by inventors. We test our hypothesis of a positive relationship between knowledge flows and highly skilled migration in a country-pair gravity model setting, for the period 1990-2010, using patent citations across countries as a measure of international knowledge diffusion. Our results confirm our initial assumption on the positive impact of highly skilled migrants on knowledge flows to their homelands as well as to their host countries. We find doubling the number of inventors of a given nationality at a destination country, leads to an 8.3% increase in knowledge outflows to their home economy from that same host land; while a similar increase in the number of migrant inventors produces a 6% increase in the knowledge inflows to the host economy. |
| Keywords: | migration, brain gain, diaspora, diffusion, inventors, patents, PCT patents |
| JEL: | C8 J61 O31 O33 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2017-07&r=int |
| By: | Casas, Camila (Banco de la República (Colombia)); Diez, Federico J. (Federal Reserve Bank of Boston); Gonzalez, Alejandra (Banco de la República (Colombia)) |
| Abstract: | We combine two detailed datasets on Colombian manufacturing firms and document several stylized facts on exporter heterogeneity of total factor productivity (TFP) and export-market orientation, refining some previously known facts and unveiling some new others. We first show that the exporter productivity premium is remarkably robust across the methodologies used to recover TFP. We then document that the most productive exporters are those that export (1) a higher share of their total production, (2) to a larger number of countries, (3) to destinations less frequently reached by other exporters, (4) a larger number of products, and (5) with greater frequency and stability. In contrast, (6) the type of destination country or (7) the type of exported product has no significant effect on exporter productivity differences. These facts are robust to alternative definitions and specifications and can provide useful guidelines for policy makers. |
| Keywords: | productivity premium; export intensity; export extensive margins |
| JEL: | D24 F14 L60 |
| Date: | 2017–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:16-26&r=int |
| By: | Mélise Jaud; Youssouf Kiendrebeogo (The World Bank and University of Auvergne (CERDI)); Marie-Ange Veganzones-Varoudakis |
| Abstract: | This study documents the implications of financial vulnerability for export diversification in developing economies. Financial crises, by increasing the incidence of sunk costs of entry into exporting, reduce firm export dynamics. Financially-vulnerable exporters are not able to fully realize economies of scale in production and have little access to more sophisticated technologies. The number of products and destinations per exporter are therefore likely to decrease in times of crisis. We use a comprehensive cross-country dataset on export dynamics, with data covering the 1997-2011 period for 34 developing countries, to investigate this issue. Building on the generalized difference-in-differences procedure proposed in the literature to remove any endogeneity bias, the results point to a negative and economically large effect of financial vulnerability on export diversification. Financial crises reduce export dynamics disproportionately more in financially dependent industries. This effect is less pronounced in countries with an initially more open capital account, suggesting that portfolio inflows are good substitutes for underdeveloped domestic financial markets. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:948&r=int |
| By: | AfDB AfDB |
| Date: | 2017–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2361&r=int |
| By: | Suchita Srinivasan |
| Abstract: | The objective of this paper is to evaluate the effectiveness of different policies in facilitating the diffusion of green innovations through trade. Focusing on developing countries, this paper develop analyses the effectiveness of policies such as information, subsidies, and banning the use of the incumbent technology in encouraging the use of a clean technology. The empirical model uses a novel dataset of a sample of 72 low and middle-income countries, spanning the period 1993- 2013 to evaluate the effectiveness of these policies, and analyse the determinants of policy choice. Results suggest that domestic policies pay a pivotal role in facilitating the transfer of CFL, especially subsidies; however, simultaneous implementation of policies need not necessarily be effective. Moreover, countries learn from the experiences of other countries in deciding whether to implement a particular policy. Results also suggest a role for trade policy instruments, such as trade agreements with top exporters, to facilitate clean technology diffusion. |
| Keywords: | Technology Diffusion; Policy Effectiveness; International Trade. |
| JEL: | D78 D83 F13 H30 O33 O38 Q48 |
| Date: | 2016–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_45&r=int |
| By: | Susan Ariel Aaronson (George Washington University) |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2017-2&r=int |
| By: | Assaf Razin |
| Abstract: | The exodus of Soviet Jews to Israel in the 1990s was a unique event. The extraordinary experience of Israel, which has received migrants from the Former Soviet Union (FSU) at the rate of 17 percent of its population, within a short time, is also relevant for the current debate about migration and globalization. The immigration wave was distinctive for its large high skilled cohort, and its quick integration into the domestic labor market. Among various ethnic groups the FSU immigrants ranked at the top of intergenerational upward mobility. Immigration also changed the entire economic landscape: it raised productivity, underpinning technological prowess, and had significant impact on income inequality and the level of redistribution in Israel’s welfare state. |
| JEL: | F02 F22 J1 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23210&r=int |
| By: | Hillel Rapoport |
| Abstract: | In “Debating Brain Drain”, Brock and Blake (2015) discuss the pros and cons of high-skill mobility prevention to curb the brain drain from developing countries from a legal and political perspective. I complement this discussion with the insights from recent economic research on brain drain, globalization and development. Two main results are emphasized: the fact that educational investments are higher when high-skill migration is not constrained, and the role of skilled diasporas in promoting the integration of migrants’ home countries into the global economy. Both results strengthen the rationale for letting skilled people go. |
| Keywords: | Brain Drain;Migration;Globalization;Development |
| JEL: | F21 F22 F63 J61 O11 O15 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepipb:2017-14&r=int |
| By: | Shaar, Karam; Khaled, Mohammed |
| Abstract: | This study suggests that testing the impact of exchange rate on trade should be done using high frequency data. Using different data frequencies for identical periods and specifications between the US and Canada, we show that low frequency data might suppress and distort the evidence of the impact of exchange rate on trade in the short-run and the long-run. |
| Keywords: | Data frequency, Exchange rate and trade, J-Curve Theory, ARDL Cointegration, US-Canada trade, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwecf:6125&r=int |
| By: | Meloni, Giulia; Swinnen, Johan |
| Keywords: | Agricultural and Food Policy, International Development, International Relations/Trade, Political Economy, |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:253853&r=int |
| By: | Anda David (Université Paris-Dauphine); Joachim Jarreau |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:977&r=int |
| By: | Leila Baghdadi; Hendrik Kruse (University of Goettingen); Inma Martínez-Zarzoso |
| Abstract: | In this paper we evaluate the extent to which changes in tariffs and in international prices are transmitted into consumer prices in Tunisia over the period 2000 to 2008. A pass-through equation is estimated using sectoral panel data at the retail-product level and controlling for unobserved sectoral heterogeneity. The main results show that on average tariff pass-through is 7 percent and that it varies across sectors. In particular, agricultural products seem to be driving the results. Summarizing, the change in Tunisian tariffs has affected local prices, but the effect is lower in magnitude than that found for other developing countries. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:963&r=int |