nep-int New Economics Papers
on International Trade
Issue of 2017‒04‒16
fifty-four papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Post Bali Doha Round and MC10: Korea's Perspective By Suh , Jin Kyo; Kim, Min-Sung
  2. Exports and FDI Entry Decision: Evidence from Japanese foreign-affiliated firms By Ivan DESEATNICOV; Konstantin KUCHERYAVYY
  3. Revisiting the Link between Trade, Growth and Inequality; Lessons for Latin America and the Caribbean By Kimberly Beaton; Aliona Cebotari; Andras Komaromi
  4. Determinants of Value Added in Exports and Their Implications By Choi, Nakgyoon
  5. Intra-regional versus Inter-regional Trade Liberalization for Central America By Adolfo Cristobal Campoamor; Olexandr Nekhay; Manuel Alejandro Cardenete Flores; Pedro Caldentey del Pozo
  6. Mega FTA 대응전략 연구: TBT 협정을 중심으로 (Study on the Strategies for Mega FTAs: A Comparative Analysis of TBT Chapters of Korea's FTAs) By Yoo , Saebyul
  7. How government procurement measures can affect trade By Julien Gourdon; James Messent
  8. Productivity spillovers in the GVC: The case of Poland and the New EU Member States By Jan Hagemejer
  9. Export Concentration and Competition: Does the Firms Type Matter? By Aya Ahmed; Chahir Zaki
  10. The Impact of Trade Agreements in Latin America using the Synthetic Control Method By Swarnali Ahmed Hannan
  11. New and Improved: Does FDI Boost Production Complexity in Host Countries? By Javorcik, Beata; Lo Turco, Alessia; Maggioni, Daniela
  12. Similarity in trade structure: An evidence from ASEAN + 3 By Thi Nguyet Anh Nguyen; Thi Hong Hanh Pham; Thomas Vallée
  13. FDI and Terrorism in developing Asia: Approaches and Discussion By Metaxas, Theodore; Kechagia, Polyxeni
  14. Trade Liberalization in Peru; Adjustment Costs Amidst High Labor Mobility By Elin Baldárrago; Gonzalo Salinas
  15. Trade Costs and the Suez and Panama Canals By Jules Hugot and Camilo Umaña-Dajud; Camilo Umaña-Dajud
  16. The EU-Ukraine Free Trade Agreement and Russia’s Retaliation: a Negative Side of Free Trade Agreements? By Olexandr Nekhay; Manuel Alejandro Cardenete Flores; Adolfo Cristobal Campoamor; Olexandr Nekhay
  17. Where is the Excess Capacity in the World Iron and Steel Industry? –A focus on East Asia and China– By KAWABATA Nozomu
  18. Does Trade Liberalization Promote Antidumping Protection? A theoretical analysis By MUKUNOKI Hiroshi
  19. Market Size, Product Differentiation and Bidding for New Varieties By Ma, Jie; Wooton, Ian
  20. FDI, Services Liberalisation, and Logistics Development in Cambodia By Vannarith CHHEANG
  21. Joint and Cross-border Patents as Proxies for International Technology Diffusion By Chang, C-L.; McAleer, M.J.; Tang, J-T.
  22. A Quantitative Assessment of the Proposed China-Georgia Free Trade Agreement By Fuenfzig, Michael
  23. How Do Exporters Respond to Exogenous Shocks: Evidence from Japanese firm-level data By TANAKA Ayumu; ITO Banri; WAKASUGI Ryuhei
  24. 중국의 내수용 수입구조 변화와 한국의 대응 (The Structural Changes in China's Import Market for Domestic Demand and its Implications for Korea) By Jung , Jihyun; Jin , Furong
  25. Evaluation of a Decade of Korea's FTA Policy By Kim, Young Gui
  26. Launching Export Accelerations in Latin America and the World By Valerie Cerra; Martha Tesfaye Woldemichael
  27. Globalization and Inclusive Human Development in Africa By Asongu, Simplice; Nwachukwu, Jacinta
  28. The European Union–West Africa Economic Partnership Agreement: By Bouët, Antoine; Laborde Debucquet, David; Traoré, Fousseini
  29. Effects of Timeliness on the Trade Pattern between Primary and Processed Goods By Suprabha Baniya
  30. Currency Valuations, Retaliation and Trade Conflicts Evidence from Interwar France By Thilo Albers
  31. 주요국의 대베트남 진출전략과 시사점 (Overseas Expansion Strategy of Major Countries’ Firms Toward Viet Nam and the Implications for Korea) By Kwak , Sungil; Lee , Jae-Ho
  32. The Economic Impact of East-West Migration on the European Union By Kahanec, Martin; Pytliková, Mariola
  33. Existing data to measure African trade: By Mitaritonna, Cristina; Traoré, Fousseini
  34. 한국 중소기업의 글로벌 가치사슬 진입전략 및 정책적 시사점 연구 (Strategies for Korean Small and Medium Enterprises’ Participation in Global Value Chains and Policy Implications) By Kim , Zukweon
  35. Effects of Trade Wars on Belarus By Aleksandr Vashchilko
  36. Japan's FTA Strategy and Its Implications for Korea By Kim, Gyupan; Lee , Hyong-Kun; Kim, Eunji
  37. Racing to the bottom? Chinese development projects and trade union involvement in Africa By Isaksson, Ann-Sofie; Kotsadam, Andreas
  38. Composition of Trade in Latin America and the Caribbean By Xiaodan Ding; Metodij Hadzi-Vaskov
  39. R&D Effects on Firm Productivity, Exports, and OFDI: Korean Firm-Level Analysis By Lee, Seungrae; Park, Ji Hyun; Kim, Hyuk-Hwang; Lee, Joun Won
  40. Export Tariffs Combined with Public Investments as a Forest Conservation Policy Instrument By Gregor Schwerhoff; Johanna Wehkamp
  41. EU policies and global food security By Jean-Christophe Bureau; Jo Swinnen
  42. Taxi, Takeoff and Landing: Behavioural Patterns of Capital Flows to Emerging Markets By Keskinsoy, Bilal
  43. Dynamics of Trade Specialization in Middle East and North Africa (MENA) By Duddy, D, Roesmara; Tri, Widodo; Sri, Adiningsih
  44. Revealed Comparative Advantage: What Is it Good For? By Scott French
  45. WTO SPS 분쟁 사례 연구 (Study of WTO SPS Disputes) By Kang , Minji
  46. Immigration barriers and net brain drain By Orazbayev, Sultan
  47. Europe’s role in North Africa: development, investment and migration By Uri Dadush; Maria Demertzis; Guntram B. Wolff
  48. Income Inequality Effects of Ukraine’s Trade Liberalization with the EU. Are there 'two Ukraines'? By Miriam Frey
  49. To bi, or not to bi? Differences in Spillover Estimates from Bilateral and Multilateral Multi-country Models By Georgios Georgiadis
  50. The risks of exit from the EMU and the EU (in Italian) By Giuseppe Marotta
  51. Do migrants transfer productive knowledge back to their origin countries? By Jérome Valette
  52. The links between global value chains and global innovation networks: An exploration By OECD
  53. 대북제재로 인한 북·중 접경지역에서의 무역 거래관행 변화 분석 (Analyzing the Changes in Trading Practices in North Korea-China Border Region Due to North Korea Sanctions) By Rhee , Jung-kyun; Kim , Junyoung; Im , So Jeong; An , Guo-shan; Mimura , Mitsuhiro
  54. The First 100 Years of Tariffs in Australia: the Colonies By P. J. Lloyd

  1. By: Suh , Jin Kyo (Korea Institute for International Economic Policy); Kim, Min-Sung (Korea Institute for International Economic Policy)
    Abstract: The July deadline for the Doha Round "work program" was missed. The WTO DG urged delegations to come prepare this autumn to redouble their efforts toward reaching "substantive outcomes" ahead of their December ministerial conference in Nairobi, Kenya. However, it seems hardly likely that WTO members will reach a compromise on the work program any time soon, as the Doha negotiations themselves remain deadlocked. In order to settle on even a small package at the Nairobi ministerial conference, major players such as the U.S., EU, China, India, and Brazil should establish a compromise on the following several key issues through strong political will. First, in domestic support of agricultural negotiations, the OTDS is likely to be a key determinant of possible outcomes as a whole. First attempt to reach an agreement in this area will consist of mutual concession based on self-reflection and mutual recognition. In many ways the significance of this item is small compared to the gains from better market access and the removal of export subsidies. Second, the most important item on the DDA agricultural and NAMA agenda is market access, particularly tariff reduction methods. In order to reach an agreement on tariff reduction formulas in both agriculture and NAMA, additional flexibilities with very strong conditions need to be incorporated into the average tariff cut method. Instead, both the average reduction rate and the minimum reduction rate need to be raised properly in the average tariff cuts. This idea is a kind of trade-off between flexibilities and reduction rates within the average tariff cut approach. Third, the MC10 is the first WTO ministerial to be held in sub-Saharan Africa. Thus, advanced countries should concede the priority demands of developing countries, in particular the African and least-developed countries, with respect to the Development Agenda such as LDC issues. Fourth, WTO members need to pay attention to high costs incurred by delayed implementation of the Trade Facilitation Agreement. WTO member countries should seek to assure that the TFA enters into force before or just after the Nairobi Ministerial in December 2015. Finally, Developing members need to realize that developed countries are leading mega-regional FTA such as TPP and TTIP and engaged in plurilateral negotiations such as TiSA and EWG, which will occupy center stage in world trade policy as a consequence of the DDA's failure. If developed countries create their own league of trade liberalization based on mega FTAs or plurilateral negotiations, then the WTO could fall into a small league composed only of developing countries.
    Keywords: Post; Bali; Doha; Round
    Date: 2015–09–11
    Abstract: Why do aggregate foreign direct investments (FDI) fall with distance? To answer this question, we examine the behavior of Japanese multinational enterprises (MNEs). We are interested in FDI entry decision given export experience in foreign markets. We postulate that one of the firms' strategies is learning the foreign market potential by exporting first, followed by establishment of foreign affiliates if expected profitability is high enough. We propose a theoretical model and test it empirically using firm-level data from two basic surveys of Japanese companies: the Basic Survey of Japanese Business Structure and Activities and the Basic Survey on Overseas Business Activities for the period 1995-2013. We control for export experience and productivity of Japanese MNEs, and find that the probability of FDI entry decreases in distance. We conclude that trade costs shape outward FDI activity in addition to learning by exporting and productivity channels. Our tentative explanation suggests that trade costs limit firms' ability to reveal the foreign market demand. As a result, they may exit the foreign market before realizing the potential of profitability.
    Date: 2017–03
  3. By: Kimberly Beaton; Aliona Cebotari; Andras Komaromi
    Abstract: We revisit the relationship between international trade, economic growth and inequality with a focus on Latin America and the Caribbean. The paper combines two approaches: First, we employ a cross-country panel framework to analyze the macroeconomic effects of international trade on economic growth and inequality considering the strength of trade connections as well as characteristics of countries’ export markets and products. Second, we consider event studies of past episodes of trade liberalization to extract general lessons on the impact of trade liberalization on economic growth and its structure and inequality. Both approaches consistently point to two broad messages: First, trade openness and connectivity to the center of the trade network has substantial macroeconomic benefits. Second, we do not find a statistically significant or economically sizable direct impact of trade on overall income inequality.
    Keywords: Trade;Globalization;Growth, Liberalization, Inequality, Latin America, Caribbean, Economic Growth of Open Economies, Globalization: General, General, Economic Growth of Open Economies, Globalization: General
    Date: 2017–03–09
  4. By: Choi, Nakgyoon (Korea Institute for International Economic Policy)
    Abstract: This study decomposes the value added in gross exports into its components, including domestic value added and foreign value added. In contrast to previous studies, we exclude transaction costs such as net taxes on products for this study, which accounted for about 3 percent of total gross world exports from 1995 to 2011 on average. The share of Korean domestic value added in exports to exports in gross value turned out to decrease from 69.9 percent in 1995 to 55.4 percent in 2011, comparable to the shrinkage in the world average from 83.5 percent to 78.3 percent during the same period. This result reveals that Korean exports of parts and raw material have been utilized in a relatively small degree, while foreign components imported to Korea have been utilized for Korean exports in a relatively large degree. This study also investigates the determinants of value added in exports by estimating the expanded multi-sector gravity model, with panel data covering 13 countries and 18 sectors for 17 years from 1995 to 2011. Empirical evidence shows that trade costs such as tax and transportation costs reduce value added in exports, implying that trade facilitation measures and tax policy lowering trade costs are vital for the promotion of value added in exports. We also find that material and service offshoring have a significant positive effect on value added in exports, supporting the notion that efficient offshoring of material and services inputs raises productivity and competitiveness in manufacturing as well as services industries.
    Keywords: Value-Added; Exports
    Date: 2016–01–21
  5. By: Adolfo Cristobal Campoamor; Olexandr Nekhay; Manuel Alejandro Cardenete Flores; Pedro Caldentey del Pozo
    Abstract: The countries in the Central American region (henceforth CA: Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama) have signed multiple trade agreements in the recent past. Sometimes the whole CA worked as a unified agent, for instance vis a vis the United States or the European Union. In other cases, some individual countries took the initiative to extend their list of freely tradeable goods and services. CA exports and imports very extensively with the United States (39% of the aggregate exports). However, the recent growth of the intra-regional trade has been especially remarkable: the experts emphasize that such trade generates more internal added value than the inter-regional one, which may allow for higher local welfare and a more favorable external balance for CA. That happens because most of the CA world exports are agricultural goods or products intensive in the use of natural resources. On the other hand, in the intra-regional markets these countries exchange more elaborate preparations (organic agents, medicines, electrical devices, specialized clothing,,...). Our simulations try to evaluate which alternative is locally preferable, taking into account that any intra-regional trade liberalization would stimulate sectors that compete for productive resources with the world exports. To that purpose, our first shock will be an elimination of existing tariffs at the intra-regional level while keeping the protection against imports from the rest of the world. In our second simulation, we will keep in the benchmark model the current level of tariffs within CA, while reducing with the shock the barriers to the inter-regional transactions with the United States. Our intention is then advising the CA authorities as to which range of trade negotiations should be prioritized today. We will adopt as a modelling tool a perfectly competitive, CGE model, in combination with the GTAP sectoral database, which also contemplates the degree of protection in every productive sector. We expect our results will allow the CA authorities to prioritize the removal of intra-regional trade distortions, as opposed to the inter-regional ones, given their different capacity to insert these countries into the international value chains.
    Keywords: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, United States, General equilibrium modeling, Developing countries
    Date: 2016–07–04
  6. By: Yoo , Saebyul (Korea Institute for International Economic Policy)
    Abstract: Korean Abstract: 본 연구는 WTO TBT(무역기술장벽) 협정에 기초하여 우리나라의 기체결 FTA TBT 협정 및 TPP TBT 협정을 분석함으로써 우리나라 기술규제정책의 시사점을 도출하는 것을 목적으로 한다. 특히 우리나라 기체결 FTA TBT 협정의 주요 핵심조항을 분석한 결과를 토대로 TPP와 RCEP과 같은 Mega FTA가 우리나라에 미칠 영향을 기술정책 및 제도적 측면에서 살펴보고, 향후 TPP 가입 시에 우리 측 입장과 대응전략을 알아보고자 한다. 우리나라가 그동안 체결한 15건의 FTA 협정을 살펴보면, 그중 11개국과 체결한 FTA 협정에서 TBT 협정을 별도의 장으로 구성하고 있다. 본 연구에서는 WTO 협정을 토대로 우리나라 기체결 FTA TBT 협정 중 기술규정, 표준, 적합성 평가절차 및 투명성 등 주요조항을 비교분석하였다. 먼저 표준의 경우 대부분 체결국과 체결한 TBT 협정에서 WTO 협정과 TBT 위원회의 결정 및 권고사항을 준수하도록 명시하고 있다. 한편 EU, 캐나다, 중국과 체결한 협정에서는 WTO보다 높은 수준(WTO )으로 규정되어 있음을 확인하였다. 둘째로 기술규정의 경우 최혜국대우(MFN) 및 내국민대우, 동등성 수용, 불필요한 장벽제거 및 투명성에 대해 규정하고 있다. 그중 MFN 및 내국민대우 조항의 경우 WTO 협정 이상의 의무를 포함하고 있었으나, 동등성 수용 관련 조항은 대부분 WTO 협정과 유사하거나 낮은(WTO-) 수준으로 규정되어 있다. 셋째로 적합성 평가절차의 경우 내국민대우, 결과의 상호인정, 투명성으로 분류하여 협정 조항을 살펴보았다. 그 결과 미국과 체결한 TBT 협정 수준이 가장 높았으며, 여기에는 적합성 평가절차뿐 아니라 평가기관에 대한 내국민대우와 상호인정협정(MRA) 체결에 대한 조항도 구체적으로 적시되어 있다. 마지막으로 투명성 조항은 기술규정과 적합성 평가절차의 투명성을 동시에 다루었다. WTO 협정과 달리 우리나라 기체결 TBT 협정의 경우 투명성 조항을 별도로 신설하여 기술규정, 표준 및 적합성 평가절차의 투명성에 대해 규정하고 있기 때문이다. 본 연구에서는 기술규정 및 적합성 평가절차의 투명성을 준비 및 개발 - 통보 - 채택 - 공포 - 발효 및 시행의 절차 순서대로 구분하여 살펴보았다. 여기에는 새로운 기술규정 및 적합성 평가절차의 통보 시기, 통보 대상, 통보 범위, 공표 위치 등이 포함되어 있다. 투명성 조항 역시 미국, EU와 체결한 TBT 협정이 가장 높은 수준으로 규정되어 있다. English Abstract: This research intends to suggest countermeasures and strategies in response to mega-FTAs, based on a comparative analysis of the Technical Barriers to Trade (TBT) chapters of Korea’s FTAs and the TPP Agreement. A particular focus is placed on the impact that mega-FTAs such as the TPP and RCEP would have on Korea in terms of technical policy and institutions, based on an analysis of the key articles of Korea’s existing FTA TBT agreements. We also examine what stance Korea should take, and what strategies the country should choose, if and when Korea joins mega-FTAs including the TPP. Among the 15 FTAs Korea has signed, 11 lay down TBT agreements in a separate chapter. This study compares and analyses the main articles of existing FTA TBT agreements, especially those on technical regulations, standards, conformity assessment procedures and transparency. (The rest omitted).
    Keywords: FTA; Mega FTA; Economic Cooperation
    Date: 2016–09–12
  7. By: Julien Gourdon (OECD); James Messent (OECD)
    Abstract: A number of countries used discriminatory government procurement policies as part of stimulus packages designed to alleviate the effects of the global economic crisis. This paper collates and updates the evidence related to the size of procurement markets, the level of home bias they exhibit, and the effectiveness of multilateral and bilateral procurement agreements in reducing that bias. The share of procurement in GDP has been increasing gradually since 1995 with clear spikes during 2000-2002 and 2008-2010, the latter in response to the global economic crisis. The analysis presents evidence of domestic bias in government procurement markets, bias which has been increasing over recent years. The analysis in this paper suggests that the results of international efforts to address home bias in government procurement have been mixed to date. The World Trade Organisation's Government Procurement Agreement (GPA) is found to reduce discrimination in procurement markets, although available -- but limited -- evidence does not indicate a significant effect for bilateral agreements. The evidence suggests liberalisation of investment barriers undertaken in parallel with trade agreements increases the ability of those agreements to reduce discrimination. This suggests that countries negotiating procurement agreements could also benefit from negotiating investment agreements in parallel.
    Keywords: Auctions, Government procurement, Government Procurement Agreement (GPA), home bias, International Trade, preferential trade agreements
    JEL: D44 F13 F14 F15 F53 H57
    Date: 2017–04–12
  8. By: Jan Hagemejer
    Abstract: The New Member States have been experiencing firm internationalization not only through inward foreign direct investment but also through exporting, importation of foreign technology in investment goods and increased use of imported intermediates. We argue that there are important productivity spillovers within the global value chains, ie. FDI alone does not tell the whole story of the reallocation processes going on in the economies of the NMS. We augment the standard TFP spillover empirical model with modern measures of GVC participation to contribute to the debate on the 'desired' country/sector/firm position in the GVC. In our study we combine firm-level data with international sectoral input-output data. Firm level data come from the Amadeus database. In order to maximize the number of observations, we combine data from multiple Amadeus waves. The resulting firm-level data sample covers the period of 1997-2011. The study has two parts. In the first part, we analyze the foreign firm producticvity premia over the domestic firms. We check if the foreign productivity premium is affected by the position of the firm in the Global Value Chain and the foreign content of sectoral exports. We do that in order to verify if there are benefits of the positition in the GVC that lead to lowering the productivity gap between foreign and domestic firms. In the second part, we augment the methodology by Smarzynska-Javorcik (2004) with measures of GVC participation to analyze the various channels of internationalization. In order to obtain a measure of total factor productivity we use the now-standard approach by Levinsohn and Petrin (2003). We focus on Poland but we also run the spillover equations on the full New Member States sample and on the individual NMS. All regressions control for country/sector specificity and the business cycles. We show that increased foreign content of exports brings additional productivity gains on top of the ones attributed to exporting and FDI spillovers that are mostly backward in nature. Moreover, we show that in selected cases, participation in the GVC leads to a smaller productivity gap between foreign and domestic firms. In Poland and Hungary the productivity gains for domestic firms are located in production of intermediate goods with high foreign value content as well as in goods located close to the final demand. In many other NMS the benefits are concentrated close to the final demand.
    Keywords: New EU Member States, Trade issues, Growth
    Date: 2016–07–04
  9. By: Aya Ahmed; Chahir Zaki (Cairo University)
    Abstract: Trade liberalization enhances the competition in the market as it increases the quality and the quantity of the products available to domestic buyers. This paper contributes to the literature in two ways. First, using Egyptian firm level data, it attempts to examine how export market concentration is affected by competition at the destination market and how firms adjust their product scope following periods of trade openness. Second, we disentangle this effect by the size of exporter to see how small and large firms adjust their trade in response to a fiercer competition. Our findings show that the market potential exerts a positive and significant impact on the concentration index showing that tougher competition in an export market induces a firm to skew its export sales towards its best performing products. Market potential does matter more for small exporters rather than large ones as it helps them become more specialized.
    Date: 2017–06–04
  10. By: Swarnali Ahmed Hannan
    Abstract: The paper employs synthetic control method (SCM) to determine the impact of trade agreements for 64 Latin American country pairs in the period 1989-1996. The results suggest that trade agreements have markedly boosted exports in Latin America, on an average by 76.4 percentage points over ten years. However, there is variation across countries and agreements. The export gains due to trade agreements are lower than the world average comprising 104 country pairs in the period 1983-1995.
    Keywords: Trade agreements;international trade flows, synthetic control method, General, Country and Industry Studies of Trade
    Date: 2017–03–09
  11. By: Javorcik, Beata; Lo Turco, Alessia; Maggioni, Daniela
    Abstract: This paper examines the relationship between the presence of foreign affiliates and product upgrading by Turkish manufacturing firms. The analysis suggests that Turkish firms in sectors and regions more likely to supply foreign affiliates tend to introduce more complex products, where complexity is captured using a measure developed by Hausmann and Hidalgo (2009). This finding is robust to controlling for omitted variables, sample selection and potential simultaneity bias. It is also in line with the view that inflows of foreign direct investment stimulate upgrading of indigenous production capabilities in host countries.
    Keywords: Backward Linkages; FDI; Product Innovation; Production Upgrading; Turkey
    JEL: D22 F23 L20
    Date: 2017–03
  12. By: Thi Nguyet Anh Nguyen (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes); Thi Hong Hanh Pham (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes); Thomas Vallée (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes)
    Abstract: The present paper aims to explore the competition in exports among ASEAN +3 members by applying the export similarity index for the disaggregation export data from 1990 to 2014. We also discuss the changes of comparative advantage of ASEAN + 3's exports through the revealed comparative advantage index (RCA) and its relation with similarity index. The results find that export similarity varies among ASEAN+3 member states over the period 1990-2014. Second, we find evidence of several communities of export competition. In particular, four countries, notably Malaysia, Singapore, Japan and Korea, durably show the highest competition level, mainly in the sectors of transistors and telecom equipment. Third, the revealed comparative advantage seems to be the key factor defining the similarity level of exports. Lastly, the revealed comparative advantage analysis allows us to verify the Ricardo's theory and New Trade theory in the context of free trade.
    Keywords: trade structure,similarity index,export community,revealed comparative advantage,ASEAN+3
    Date: 2017–02–03
  13. By: Metaxas, Theodore; Kechagia, Polyxeni
    Abstract: International capital flows have a significant social, political and financial impact on the trading countries. These flows are distributed among the geographical regions and as a result over the past decades underdeveloped, developing and transition economies made efforts and proceeded to reforms so as to absorb more foreign capital inflows. A determinant factor of foreign capital inflows is the host country’s political stability. We focus on external conflicts and terrorist attacks, taking into consideration the remarkable increase in total terrorist attacks in recent decades. In addition, we focus on a specific type of foreign capital flows and therefore we study the foreign direct investment (FDI) inflows. We perform a literature review on empirical studies that examined the interaction between FDI and terrorist attacks. The purpose of the essay is to investigate and discuss the correlation between FDI and terrorism in developing economies during the period 1970 – 2015 in the developing Asian countries. We aim at evaluating the impact of terrorism on the FDI inflows in the region. The contribution of the essay refers to the fact that it covers a larger period of time compared to past studies and that it includes both fatalities and injuries occurring from international terrorist attacks. We argue that terrorist attacks have a negative impact on FDI inflows in the region.
    Keywords: Foreign Direct Investment, Developing Countries, International Conflicts, Terrorism, Asia
    JEL: F21 F51 O53 R11
    Date: 2017
  14. By: Elin Baldárrago; Gonzalo Salinas
    Abstract: While trade integration has been an engine of global growth and prosperity some sectors have been negatively affected by increased imports competition, as expected in theory. Higher labor mobility could lower these adjustment costs. This paper measures the cost of trade integration in a context of high internal migration. Specifically, we focus on the 2004- 14 period of trade liberalization in Peru (a major beneficiary of trade integration). Despite significant migration in response to lower tariffs, we find a significant negative relation between tariff reduction and socioeconomic indicators of imports-competing districts. This underscores the need for policy action to support the “losers from trade liberalization†.
    Keywords: Trade liberalization;Peru;Poverty;Tariff, Measurement and Analysis of Poverty, Regional, Urban, and Rural Analyses, General
    Date: 2017–03–09
  15. By: Jules Hugot and Camilo Umaña-Dajud; Camilo Umaña-Dajud
    Abstract: Current estimates offer a puzzling picture of the magnitude and historical evolution of the distance elasticity of trade. We take advantage of historical episodes that changed bilateral distance to estimate the distance elasticity in the time dimension and characterize its evolution over time. The openings of the Suez and Panama Canals – as well as the closure of the Suez Canal from 1967 to 1975 – allow us to control for unobserved time-invariant country pair characteristics in a gravity setting. Our estimates show that the impact of distance on trade remains particularly low, even if it has increased during the last half century. These results reconcile the distance elasticity of trade with its two components: the elasticity of trade to trade costs and the elasticity of trade costs to distance. In a second stage, we use these estimates to quantify the trade and welfare effects associated with the openings of the Suez and Panama Canals. We also perform the counterfactual exercise of closing the Panama Canal in 2012 to evaluate its current welfare effect.
    Keywords: Distance Elasticity, Trade Costs, Gravity, Suez Canal, Panama Canal
    JEL: F14 F15 N70 I
    Date: 2017–03–22
  16. By: Olexandr Nekhay; Manuel Alejandro Cardenete Flores; Adolfo Cristobal Campoamor; Olexandr Nekhay
    Abstract: A Deep and Comprehensive Free Trade Agreement (DCFTA) was signed in 2014 between Ukraine and the EU, although it was only partially enforced immediately after signature. The full implementation of the DCFTA was delayed as Russia alleged that the agreement posed a threat to its economy. However, during 2015 the two sides (the EU & Ukraine on one side and Russia on other side) could not reach an agreement. Subsequently, the Ukraine-EU DCFTA was fully implemented from January 1st 2016. In response, Russia unilaterally broke out a FTA with Ukraine signed in 2011 as well as banning all imports of agricultural products from the latter country. Simultaneously, Russia additionally restricted the transit of all goods from Ukraine to other CIS countries. We used a static comparative GTAP CGE model based on the GTAP 9 database to assess the impact of several possible scenarios, based on to the current trade relationships. We calibrated the economic model with data from the year 2015, which was especially important for Ukraine due to the sharp changes in its GDP and endowments. Our first scenario consists of the abolishment of the tariff and non-tariff barriers between the EU and Ukraine, as implied by a complete implementation of DCFTA. Our second scenario includes the first scenario, plus a ban on Ukrainian agricultural goods and some tariffs on industrial goods, according to Russia´s WTO commitments. Our third scenario includes our first scenario plus a ban on the importation of Ukrainian agricultural goods by all the Russia-led Euro-Asian Custom Union. And our forth scenario includes the first scenario plus a ban on the importation of Ukrainian agricultural goods by all the CIS members of the Russia-led FTA. The tariffs for industrial goods in our third and fourth scenarios are set at the level of the Russian tariffs in our second scenario. The results of these simulations allow us to asses the impact on GDP, welfare and trade balances of the implementation of the DCFTA, together with the Russian restrictive measures. This work should also add to the discussion regarding the benefits and drawbacks of FTAs in general and bring light to claims that these type of FTAs between two countries can hurt a third country’s interests.
    Keywords: The European Union, Ukraine and Russia, Trade issues, General equilibrium modeling
    Date: 2016–07–04
  17. By: KAWABATA Nozomu
    Abstract: The purpose of this study is to identify the location of excess capacity in the world iron and steel industry. Excess capacity is a production capacity that is inferior in competition, surviving due to factors other than competitive advantages, under the condition that world production capacity exceeds demand. As a result of analysis, China was found to have the highest scale of excess capacity, while NAFTA (North American Free Trade Agreement) members, Europe, CIS (Commonwealth of Independent States) members, Japan, South Korea, and ASEAN (Association of Southeast Asian Nations) members were found to have a moderate scale of excess capacity. In China, Russia, Ukraine, Japan, and South Korea, excess capacity coexists with large-scale steel exports. However, excess capacity is considered to promote the exports of low value-added steel products only in China, Russia, and Ukraine. The iron and steel industry in China is not necessarily export-oriented, and its capacity utilization rate is not low compared with other regions. However, the production scale in China is outstanding among all economies. As a result, the scale of excess capacity and steel exports are the largest in the world. Moreover, low value-added products occupy a high share in the total iron and steel exports from China. In the cases of Russia and Ukraine, iron and steel industries are export-oriented. Furthermore, compared with China, low-value added products constitute a higher proportion in their export mix. However, the scale of excess capacity and exports are lower than China, in parallel with their production scale. In the cases of Japan and South Korea, iron and steel industries are export-oriented. However, the most exported products are high-grade flat products and high-grade host materials for business partners and subsidiaries abroad. In other words, the steel exports from Japan and South Korea are not commodity-based. An increasing number of construction projects involving steelworks is in progress or being planned worldwide, especially in Asia. Thus, reduction of excess capacity would become difficult. Furthermore, as state-of-the-art technologies will be embodied in newly installed steelworks, the competition for survival in the iron and steel industry will intensify in the future.
    Date: 2017–03
  18. By: MUKUNOKI Hiroshi
    Abstract: Reducing trade costs by tariff reductions can be overturned if the tariff reductions induce governments to implement "contingent" protections, such as antidumping (AD) and safeguard measures. Some empirical papers have shown that a commitment to reduce tariffs leads to a more frequent use of contingent protections, while other papers have shown that such substitution effect is rarely observed. This paper theoretically explores the conditions under which a lower import tariff promotes the import country's AD actions. The result shows that the relationship between tariff reductions and AD actions is not monotone, and that lower tariff discourages AD actions under certain conditions.
    Date: 2017–03
  19. By: Ma, Jie; Wooton, Ian
    Abstract: We analyse a firm's investment decision in a regional economy composed of two countries. The firm already manufactures a horizontally differentiated good in the region and we determine the firm's equilibrium location choice for the new good and the welfare consequences of fiscal competition between the two countries. The outcome is the result of interactions among market-size, product-differentiation, and import-substitution effects. The first two effects represent the fundamental trade-off facing the firm. The third effect provides each country with an economic incentive to compete for the FDI. Past papers have addressed the market-size and import-substitution effects but, as far as we know, the product-differentiation effect is new to the literature.
    Keywords: FDI; import substitution; market size; MNEs; product differentiation
    JEL: F21 F23 L22
    Date: 2017–03
  20. By: Vannarith CHHEANG
    Abstract: This paper reviews Cambodia's economic development based on flows of foreign direct investment (FDI) and services sector liberalisation. It uses Cambodia's logistics industry as a case study. Services sector liberalisation in Cambodia has been mainly driven by its commitments under the World Trade Organization (WTO) framework and the ASEAN Framework Agreement on Services (AFAS). Logistics is one of the key contributors to economic growth and competitiveness. To improve the logistics sector, Cambodia needs to develop a comprehensive master plan and national council on logistics to overcome the main issues and challenges such as corruption and informal payments, lack of institutional capacity and coordination, low-quality transport infrastructure, weak urban-rural and cross-border transport networks, limited participation of the private sector, lack of skilled human resources, and low public and private investments. Promoting healthy competition in logistics and removing the impediments to investment are vital to improving the quality and coverage of logistics services.
    Keywords: Foreign direct investment, logistics, services, liberalisation, ASEAN, WTO
    JEL: F21 L80 L90
    Date: 2017–03
  21. By: Chang, C-L.; McAleer, M.J.; Tang, J-T.
    Abstract: With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge, and outward direct investment. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology. It is also found that outward foreign direct investment has no significant impact on either joint or cross-border patents, whereas inward foreign direct investment has a significant negative impact on cross-border patents but no impact on joint patents. Moreover, government expenditure on higher education has a significant impact on both cross-border and joint patents
    Keywords: International Technology Diffusion, Exports, Imports, Joint Patent, Cross-border Patent, R&D, Negative Binomial Panel Data
    JEL: F14 F21 O30 O57
    Date: 2016–12–01
  22. By: Fuenfzig, Michael
    Abstract: This paper discusses the proposed China-Georgia free trade agreement and provides quantitative estimates of its economic effects. The proposed free trade agreement would more than double trade flows between China and Georgia over a time horizon of ten to fifteen years, and would increase Georgian GDP per capita by about 1.5 percent. Chinese exports to Georgia would increase by about 20 to 30 percent, and Chinese GDP per capita would remain virtually unchanged. While these estimates have to be treated with extreme caution, they should serve as a motivation to continue negotiations on the free trade agreement.
    Keywords: Free trade agreement; impact assessment; gravity equation
    JEL: F1 F14 F15 F17
    Date: 2016–02
  23. By: TANAKA Ayumu; ITO Banri; WAKASUGI Ryuhei
    Abstract: This study investigates how exporters respond to an exogenous shock, using the 2012 customer boycott of Japanese products in China that occurred after a political conflict over the islands in the East China Sea. By using Japanese firm-level data for 2011-2013 and employing the difference-in-differences method, we conduct an assessment of the boycott. We find that Japanese firms faced a large decrease in exports to China after the 2012 boycott and that the decrease in exports was more pronounced for arm's length exports than intra-firm exports. In addition, the estimation results provide evidence that Japanese firms exporting to China responded to the exogenous trade shock by reducing their number of temporary workers. This finding suggests that trade shocks due to international conflicts hit the most insecure workers.
    Date: 2017–03
  24. By: Jung , Jihyun (Korea Institute for International Economic Policy); Jin , Furong (Incheon National University)
    Abstract: Korean Abstract: 중국은 지속가능한 성장 추구, 글로벌 금융위기 등 대내외 여건 변화에 대응하기 위해 경제성장방식을 내수 주도형으로 전환하고 있다. 이를 위해 소득분배 개선, 사회보장제도 확충, 신형도시화 추진, 서비스업 발전 등 다양한 내수진작책을 추진하고 있으며 가공무역 억제, 국내기업의 수입대체능력 및 생산성 향상, 산업고도화 등을 독려하고 있다. 이에 따라 중국의 가공무역용 수입이 감소하고, 중국 내 소비용 일반무역 수입이 빠르게 증가하고 있다. 한편 한국은 한·중 FTA 및 양국 경제협력 등을 통해 급성장하고 있는 중국 내수시장에 대한 접근성을 제고하고자 노력하고 있으나, 최근 한국의 대중수출이 석유화학, 디스플레이, 일반기계류 등을 중심으로 위축되면서 대중 수출 전략에 대한 근본적인 점검 필요성이 커지고 있다. 이에 본 연구는 중국의 내수용 수입시장의 구조 변화, 한국을 포함한 주요국의 대중 내수용 수출 현황과 경쟁관계를 분석하고 우리의 대중수출 확대방안을 모색하였다. 이를 위해 내수용 수입시장의 특징을 가공단계별(18개 세부단계), 업종별(24개 세부업종)로 분석하였으며, 시장점유율, 시장비교우위(MCA), 수출경합도 분석 등을 통하여 중국의 내수용 수입시장 내 한국과 대만·일본·미국·독일 간의 경쟁관계를 파악하였다. 연구결과, 한국의 대중수출 둔화는 한국의 수출이 집중된 분야(가공무역, 중간재, 전자·화학)를 중심으로 중국 수입시장에서 차지하는 비중이 축소되고, 중국의 자체 생산능력 부족으로 수입수요가 증가하는 분야에서는 대만·일본 등과의 경쟁이 심화되는데 주로 기인한 것으로 나타났다. 이에 한국은 내수용 부품·부분품의 수출경쟁력 강화, 중국의 수입수요가 급증하는 가정용 식음료품·전기장비·화장품 등 소비재 시장 진출 확대, 비교우위가 있는 전자·화학 분야의 고부가가치화 및 상품차별화, 수출업종의 다변화, 대만(전자부품·컴퓨터·통신장비 제품 관련 부품·부분품 시장) 및 일본(화학제품 관련 반제품 시장)과의 경쟁에 대한 대응책 강구 등이 필요한 것으로 분석되었다. English Abstract: In response to the change of internal and external conditions such as the pursuit of sustainable growth and global financial crisis, China is switching the economic growth method to domestic demand-led growth. For this purpose, it is promoting various plans to boost domestic demand such as the improvement of income distribution, expansion of social security system, promotion of new urbanization, and development of service industry, and it is also encouraging the suppression of processing trade, enhancement of domestic companies’ import-substituting capacity and productivity, and industrial upgrading. As a result, the imports for processing trade has been reduced while the general trade targeting China’s internal consumption (domestic demand) is rapidly increasing. On the other hand, Korea is trying to improve access to China’s domestic market which is showing a rapid growth through the Korea-China FTA and the bilateral economic cooperation between the two countries; however, with the current downswing in Korea’s exports of petrochemical products, displays and general machinery to China, there is a growing need to check its export strategy to China. Thus, this study aims to seek ways to expand Korea’s exports to China by analyzing the structural changes in China’s import market for domestic demand, Korea and other major countries’ export status and competitive relationship. In particular, the characteristics of the import market for domestic demand was analyzed by the processing steps (18 detailed steps) and the type of industry (24 detailed industries), and the competitive relationships between Korea and other major countries(Taiwan, Japan, United States, Germany) in China’s import market for domestic demand were identified through the analysis of market share, market comparative advantage, and export similarity. This study reveals that slowdown of Korea's exports to China is because the importance of the areas (processing trade, intermediate goods, electronics and chemistry) where Korea's exports are concentrated have decreased in China's import market for domestic demand, and because Korea’s competition with Taiwan and Japan is deepening in the areas where demand is increasing due to the lack of China’s own production capacity. Korea need strengthening of export competitiveness of parts and components for China’s domestic demand; expansion of the market entry for China’s consumer goods such as household food and beverage, electrical equipment, cosmetics whose demand is soaring; value addition and product differentiation in the electronics and chemistry areas with comparative advantages; diversification of export industries; and devising countermeasures against competition with Taiwan (electronic parts and computers related parts and components) and Japan (chemical product related semi-finished products).
    Keywords: Import Market; Domestic Market; Korea; Domestic Market; China; Trade; Korea; China
    Date: 2015–12–10
  25. By: Kim, Young Gui (Korea Institute for International Economic Policy)
    Abstract: We analyze Korea's FTA policy based on the outcomes of recent bilateral FTAs, in terms of achieving policy objectives. While many previous studies mainly focused on trade impacts under bilateral FTAs, this study analyzes the overall economic impact of FTAs in terms of growth and welfare, as changes in bilateral trade may affect global trade and the general economy in a variety of ways. In order to analyze the overall effect of FTAs, we adopt the Computable General Equilibrium (CGE) approach. With a CGE model, the macro economic impacts of FTAs can be calculated taking into account the complicated interactions among economic agents and industries. The growth effect in the EU shows the high-est results, followed by 0.9% growth and an additional 0.43% and 0.11%, in the ASEAN and Chile respectively. In addition, by com-paring the overall growth effect of FTA on total economic growth in 2013, the growth impact of FTAs accounted for 1.19% among 3% of total economic growth in Korea. This implies that Korea, as one of the most open economies in the world, could sustain positive growth rates due to FTAs such as the Korea-ASEAN FTA, despite the trade collapse during the global financial crisis.
    Keywords: Koreas FTA; CGE; Bilateral Trade
    Date: 2015–11–06
  26. By: Valerie Cerra; Martha Tesfaye Woldemichael
    Abstract: This paper investigates the determinants of sustained accelerations in goods and services exports. Strong predictors of export takeoffs include domestic and structural indicators such as lower macroeconomic uncertainty, improved quality of institutions, a depreciated exchange rate, and agricultural reforms. Lower tariffs, participation in global value chains and diversification also contribute to initiating export accelerations. The paper also finds heterogeneity, with somewhat different triggers for Latin America and the Caribbean, as well as for goods and services. Finally, despite the lack of a robust effect on output, export surges tend to be associated with lower post-acceleration unemployment and income inequality.
    Keywords: Trade;Unemployment;export accelerations, growth, inequality, probit, synthetic control method, Latin America and the Caribbean; globalization, Latin America and the Caribbean, globalization, Country and Industry Studies of Trade, Economic Growth of Open Economies, General
    Date: 2017–03–09
  27. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: This study extents the literature on responses to a recent World Bank report on the African poverty tragedy by assessing the effect of globalisation on inclusive human development in 51 African countries for the period 1996-2011. Political, economic, social and general globalisation variables are used. The empirical evidence is based on Generalised Method of Moments (GMM) and Instrumental Quantile Regressions (IQR). While estimated coefficients are not significant in GMM results, for IQR, globalisation positively affects inclusive human development and the beneficial effect is higher in countries with high initial levels of inclusive development. The main economic implication is that in the post-2015 development agenda, countries would benefit more from globalisation by increasing their levels of inclusive development.
    Keywords: Globalisation; inequality; inclusive development; Africa
    JEL: D60 E60 F40 F59 O55
    Date: 2016–11
  28. By: Bouët, Antoine; Laborde Debucquet, David; Traoré, Fousseini
    Abstract: Despite recent modifications, the Economic Partnership Agreement (EPA) between the European Union (EU) and West African (WA) countries is still being criticized for its potential detrimental effects on WA countries. This paper provides updated evidence on the impact of the EPA on these countries. A dynamic multicountry, multisector computable general equilibrium trade model with modeling of the dual-dual economy and with a consistent tariff aggregator is used to simulate a series of new scenarios that include updated information on the agreement. We also go beyond estimating macrolevel economic effects to analyze the impacts on poverty. The policy simulation results show that the implementation of the EPA between the EU and WA countries would have marginal but positive impacts on Burkina Faso and Côte d’Ivoire and negative impacts on Benin, Ghana, Nigeria, Senegal, and Togo. The impact on poverty indicators in Ghana and Nigeria would be marginal. From the perspective of WA countries, this study supports the view that recent EU concessions are not sufficient and that domestic fiscal reforms are needed in WA countries themselves.
    Keywords: EUROPEAN UNION [INTERNATIONAL AGREEMENTS]; GHANA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; BURKINA FASO; COTE D'IVOIRE; BENIN; NIGERIA; SENEGAL; TOGO, economics; trade; trade agreements; poverty; indicators; impact assessment; fiscal policies; reforms, regional trade agreements; computable general equilibrium model; dual-dual model, F11 Neoclassical Models of Trade; F13 Trade Policy, International Trade Organizations; F15 Economic Integration,
    Date: 2017
  29. By: Suprabha Baniya
    Abstract: This paper investigates the effect of timeliness in accessing the intermediate inputs on the trade pattern. In particular, any country that has a higher ability to transport goods on time has a comparative advantage in industries that place a higher value on the timely delivery of their inputs, and this comparative advantage pattern is stronger for processed goods than for primary goods. To do this, a measure for how intensively any industry demands for the timely delivery of its intermediate inputs is constructed combining Hummels and Schaur (2013)’s calculations of the time sensitivity of products with the input-output tables.
    Keywords: Comparative advantage;Trade;Transportation Infrastructure, Time Sensitivity, Input-Output Linkages, Global Value Chains, Intermediate Inputs, Trade Costs, Logistics, General, Country and Industry Studies of Trade, Regional, Urban, and Rural Analyses
    Date: 2017–03–09
  30. By: Thilo Albers (Department of Economic History, London School of Economics and Political Science. Macrohistory Lab, University of Bonn)
    Abstract: The devaluations of the 1930s facilitated a faster recovery from the Great Depression in the countries depreciating, but their unilateral manner provoked retaliatory commercial policies abroad. This paper explores the importance of the retaliatory motive in French trade policy during the 1930s and its effects on trade. Relying on a novel dataset of bilateral tariff rates and a difference in differences approach, the quantification of the protectionist response suggests that retaliation was an important motive behind increasing tariffs. The resulting beggar-my-neighbour penalty reduced trade to a similar degree that modern regional trade agreements foster trade. Furthermore, the analysis of contemporary newspapers reveals that the devaluations of the early 1930s triggered a lasting Anglo-French trade conflict marked by tit-for-tat protectionist policies. Overall, the quantitative and qualitative results indicate that the unilateral currency depreciations came at a high price in political and economic terms.
    Keywords: Currency Manipulation, Great Depression, Tariff Retaliation, Beggar-my-neighbour Policies
    JEL: N44 N74 F13 F15
    Date: 2017–04
  31. By: Kwak , Sungil (Korea Institute for International Economic Policy); Lee , Jae-Ho (Korea Institute for International Economic Policy)
    Abstract: Korean Abstract: 글로벌 금융위기를 거치면서 베트남은 성장세의 둔화를 경험했다. 최근 FDI 유입 증가, 양자·다자 FTA의 확대 체결, 아세안경제공동체(AEC) 출범 등 대외경제 환경이 우호적으로 조성되면서 베트남의 성장 잠재력이 주목을 받고 있다. 또한 정치적 안정과 풍부한 저임 노동력, 그리고 1억에 육박하는 인구규모 등 긍정적인 대내여건의 개선은 베트남에 대한 주요 투자국의 관심을 증가시켰고, FDI 유입 또한 크게 증가했다. 특히 2015년에는 사상최대인 145억 달러의 FDI가 유입되었고, 경제성장률은 글로벌 금융위기 이전 수준인 6.68%를 기록했다. 반면에 부정부패, 숙련인력 부족, 국영기업 비효율 등의 부정적인 요소가 상존하고 있다는 점을 고려할 때, 베트남의 사업환경이 긍정적인 것만도 아니다. 국가별 비즈니스 환경을 비교분석하는 Doing Business 평가는 베트남의 비즈니스 환경을 189개국 중에서 90위권 수준으로 평가했다. 다만 최근 들어 투자법 및 노동법의 개정을 통해 투자절차 및 인력고용상의 편의를 개선하면서 베트남의 투자환경이 긍정적으로 변화하고 있다는 점에 주목해야 한다. 따라서 한국기업도 베트남을 전략적인 생산기지로 채택하고 대동남아 투자액의 40% 이상을 투자했다. 향후 베트남에서 주요 투자국과 한국 기업간 경쟁심화가 예상되므로 한국의 대베트남 투자전략에 대한 재점검이 필요한 시점이다. 주요 투자국인 미국과 일본의 대베트남 투자전략 사례를 살펴보고 우리기업에 맞는 투자전략을 재정립할 필요가 있다. English Abstract: Vietnam has taken the spotlight as a representative low-wage production base in Southeast Asia. Recently, very high estimates were made regarding Vietnam’s growth potential due to the favorable economic conditions such as stable inflation, robust economic growth, increase in FDI inflow, multi/bilateral FTAs, AEC(ASEAN Economic Community) and so on. As abundant low-wage workers, political stability, large scale population became positive factors attracting investment to Vietnam, FDI inflow to Vietnam is increasing rapidly. Recently, with Korean companies eyeing Vietnam as a strategic production base, Vietnam has emerged as a major investment destination which accounted for 40% of Korea’s investment to Southeast Asia. Therefore, the time has come to review Korea’s investment strategy to Vietnam, considering the country’s increasing strategic importance. That requires us to make reference to cases of investment strategies of the major investors such as USA and Japan, and revise the investment strategy to suit Korean Companies. Although the Vietnamese economy has been sluggish during the global finance crisis, internal and external economic conditions such as inflation, trade, investment, and industrial structure have improved and economic growth rate returned to the pre-crisis level (6.68%) in 2015. Recent robust economic growth of Vietnam is due to the surge of FDI inflow, which reached an all time high of 14.5 billion USD. In terms of trade, China and USA account for the biggest shares in Vietnam’s trade; yet as the amount of trade between Korea and Vietnam increased, Korea also emerged as the 4th largest export and 2nd largest import destination of Vietnam. Vietnam’s potential as a global production base will only get bigger due to recent favorable internal and external economic condition, but there are a few negative factors as well; such as corruption, lack of skilled workers, and inefficiency of SOE (State Owned Enterprises). According to the Doing Business Index of the World Bank Group, which analyzes the business environment across economies, Vietnam ranked 90th out of 189 economies. Among 10 indicators for business environment analysis, Vietnam scored relatively high in dealing with construction permits, registering property, and acquisition of credit; but low in payment of taxes, protecting minority investors and resolving insolvency. Recently, investment environment of Vietnam has become more favorable due to improvement in FDI and employment terms by the revision of foreign investment laws and labor regulations.
    Keywords: Foreign Direct Investment; Economic Cooperation
    Date: 2016–09–13
  32. By: Kahanec, Martin; Pytliková, Mariola
    Abstract: This study contributes to the literature on destination-country consequences of international migration with investigations on the effects of immigration from new EU member states and Eastern Partnership countries on the economies of old EU member states over the years 1995-2010. Using a rich international migration dataset and an empirical model accounting for the endogeneity of migration flows we find positive and significant effects of post-enlargement migration flows from new EU member states on old member states’ GDP, GDP per capita, and employment rate and a negative effect on output per worker. We also find small, but statistically significant negative effects of migration from Eastern Partnership countries on receiving countries’ GDP, GDP per capita, employment rate, and capital stock, but a positive significant effect on capital-to-labor ratio. These results mark an economic success of the EU enlargements and EU’s free movement of workers.
    Keywords: EU enlargement,free mobility of workers,migration impacts,European Single Market,east-west migration,Eastern Partnership
    JEL: J15 J61 J68
    Date: 2017
  33. By: Mitaritonna, Cristina; Traoré, Fousseini
    Abstract: One finds a broad consensus in the literature regarding the lack of good information on trade in Africa, particularly intraregional trade. This paper attempts to identify gaps and remedies in measuring and tracking trade in Africa. We review the major international and regional databases that track trade in Africa, identifying the gaps therein. We also review the studies that have attempted to track informal trade between African countries, and we look at the major ongoing initiatives to track such informal trade. It appears that both international and regional databases suffer from a lack of reporting or from faulty reporting of African trade statistics. Informal trade flows pose an ongoing problem when measuring intraregional trade, although actual border-monitoring initiatives ongoing in selected countries constitute an interesting option for their quantification. When no direct monitoring method is available, estimating gravity equations represents an alternative with which to measure the potential trade between two partner countries, giving us an estimate of missing trade. A final avenue consists of estimating unregistered trade via national accounts data by comparing consumption, production, and declared trade.
    Keywords: AFRICA, trade; informal sector; production; consumption, trade databases; informal trade; missing trade, F10 Trade: General; F14 Empirical Studies of Trade; F19 Trade: Other,
    Date: 2017
  34. By: Kim , Zukweon (Konkuk University)
    Abstract: Korean Abstract: 최근의 대표적인 글로벌 경영환경 변화 중 하나는 세계 경제활동이 소수 다국적기업들의 글로벌 가치사슬(GVC: Global Value Chain)에 의해 상당한 영향을 받고 있다는 점이다. 이러한 GVC는 국가와 기업들의 글로벌화 확대, 운송수단 및 정보통신기술의 발달, 신흥국 및 신흥국 글로벌 기업들의 성장, 그리고 지역경제통합에 따른 무역자유화의 확대로 인한 다국적기업의 전략 변화 등에 의해 더욱 세분화되고 지역적으로 빠르게 확산되는 모습을 보이고 있다. 급속도로 발전하는 정보통신기술, 운송기술의 발달, 관세장벽의 축소 등 최근의 글로벌 경영환경은 기업들로 하여금 국제적으로 분업화된 생산 및 기타 경제 활동의 조정비용(Coordinations costs)을 감소시켜 글로벌화를 더욱 가속화하였다. 이러한 글로벌 경영환경의 변화는 대기업뿐만 아니라 중소기업에 기회와 위협을 동시에 제공하고 있다. 중소기업들은 GVC 참여를 통해 재무적인 안정성을 확보하고 생산력의 증가, 그리고 세계시장으로의 진출을 확대할 수 있는 기회를 얻을 수 있다. 하지만 중소기업들이 GVC에 참여하기 위해선 수준 높은 관리능력, 풍부한 재무자원, 국제표준을 맞출 수 있는 능력, 그리고 자체 지적재산권을 보호할 수 있는 능력 등이 필수조건으로 요구되며, 보다 많은 글로벌 경쟁에 노출된다는 위협요소들도 존재한다. 이렇듯 중소기업들의 GVC 참여는 기회뿐만 아니라 위협요소들도 동시에 존재하기 때문에 개발도상국 또는 신흥국 중소기업뿐만 아니라 선진국의 중소기업 역시 정부의 적절한 보호와 지원정책을 필요로 한다(OECD 2007; UNCTAD 2010). 본 연구의 목적은 확대되고 있는 글로벌 가치사슬의 기본 개념을 살펴보고, GVC와 한국 경제의 관계, 그리고 GVC와 한국 중소기업들의 연관관계를, 부가가치 기준의 통계를 중심으로 분석하고 세계 경제에서 한국 중소기업 글로벌 경쟁력의 현 위치와 산업별 비교우위를 검토하여, 한국 중소기업들의 GVC 참여를 촉진하는 전략과 이러한 전략을 지원할 수 있는 정부의 정책적 대응 및 전략적 시사점을 도출하는 데 있다. 1990년대 이후 가속화되는 글로벌화에 따라 기업의 국제적 수직분업활동이 촉진되면서 글로벌 가치사슬이라는 개념이 등장하고 GVC와, 특히 중소기업의 관계에 대한 연구가 활발해지기 시작했다. 또한 2013년부터 가능해진 부가가치 기준 무역(TiVA: Trade in Value Added) 자료를 활용한 GVC와 중소기업의 관계, GVC를 통해 글로벌화를 촉진하려는 중소기업들의 글로벌화 전략, 그리고 이러한 전략을 지원하려는 정부의 정책에 관한 연구가 더욱 활발하게 진행되었다. 하지만 세계 경제에서 한국 중소기업의 경쟁력을 2차 자료를 기반으로 분석한 것은 본 연구가 처음이다. (후략) English Abstract: One of the major changes in the current global business environment is that the global value chains (GVCs) of just a few multinational enterprises (MNEs) conduct most of the global business activities. These GVCs are structurally subdivided and regionally dispersed as a result of these MNEs’ new strategies, which are influenced by the globalization, liberalization and deregulation of nations and enterprises, the development of transportation and telecommunication technologies, and the growth of emerging market economies. The process of such globalization is further accelerated by the decreasing costs of coordinating international division of labor activities and simultaneously provides threats and opportunities not only for multinational enterprises, but also for small and medium enterprises (SMEs). Small and medium enterprises (SMEs) can secure financial stability, increase productivity and enter the global market by participating in GVCs of the MNEs. However, SMEs require higher levels of financial and managerial resources and face more global competition to successfully participate in GVCs. Due to the many opportunities and threats to SMEs that come with participating in GVCs, appropriate government policies providing protection and support are needed for SMEs in developing, emerging, as well as developed markets (OECD 2007; UNCTAD 2010). The purpose of this study is to examine the political and strategic implications of supporting the participation of Korean SMEs in GVCs through detailed analyses of the current global competitiveness and industrial revealed comparative advantages (RCAs) of Korean SMEs. While previous studies on this topic exist, this study differentiates itself in three main ways: (1) This is the first time trade in value added (TiVA) is used to analyze Korean SMEs’ industrial competitiveness. (2) The methods of Korean SME participation in GVCs are classified by domestic and foreign production, of which competitiveness is measured by domestic value added and foreign direct investment, respectively. (3) This study proposes the linkage strategy between Korean MNEs and SMEs based on the evaluation of their industrial competitiveness.
    Keywords: Global Value Chain; Small And Medium Corporation; Korea
    Date: 2016–07–15
  35. By: Aleksandr Vashchilko
    Abstract: This paper looks at the effects of the trade wars that followed 2014 events in Ukraine on Belarus. The estimation of the model predicts the increase in the tariff revenue collected by Belarus. Because of ban on imports, the tari§ revenue of Russian Federation declines. Being a part of Customs Union, Belarus needs to participate in the tariff revenue redistribution. The need to participate in the tariff revenue redistribution and the decline in the tariff revenue collected by Russian Federation lead to the decrease in the welfare of Belarus. To avoid this decrease, Belarus should argue for the modification of the redistribution schedule.
    Keywords: trade wars, FTA, CU
    JEL: F13 F14
    Date: 2016–05
  36. By: Kim, Gyupan (Korea Institute for International Economic Policy); Lee , Hyong-Kun (Korea Institute for International Economic Policy); Kim, Eunji (Korea Institute for International Economic Policy)
    Abstract: This research examines Japan's FTA strategies with the focus on Japan's 13 bilateral FTAs, and ongoing negotiations on the TPP and the EU-Japan FTA. Especially, this research sheds light on the differences between the Japan's 13 existing FTAs and the ongoing two Mega FTA negotiations in terms of Japan's FTA strategy. Also, this research analyze GVC(Global Value Chains) using the European Commission's World Input-Output Tables (EC-WIOT1995~2011) to understand the relationship between the Japanese government's FTA strategy and its domestic manufacturing firms' role and strength.
    Keywords: FTA; TPP; Japan-EU FTA
    Date: 2015–03–27
  37. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University); Kotsadam, Andreas (The Frisch Centre; University of Oslo, Department of Economics)
    Abstract: Chinese firms operating in Africa are often accused of violating international labour standards and not adhering with national labour laws. Considering China’s tendency to maintain control over development projects throughout the entire implementation phase, using Chinese contractors for work performed in the recipient countries, the present paper investigates whether China impacts African labour practices in their capacity as a donor. Specifically, we use a new data material allowing for systematic quantitative analysis of Chinese development finance to investigate whether Chinese development projects affect trade union involvement. Matching geo-referenced data on the subnational allocation of Chinese development projects to Africa over the 2000-2012 period with 41,902 survey respondents across 18 African countries, our estimation strategy relies on comparing the trade union involvement of individuals who live near a site where a Chinese project is being implemented at the time of the interview to those of individuals living near a site where a Chinese project will appear in the future, but where implementation had yet to be initiated at the time of the survey. The results consistently indicate that Chinese development projects – unlike the projects of other major donors – discourage trade union involvement in the local area.
    Keywords: China; aid; trade unions; Africa
    JEL: D71 F35 O10 O55
    Date: 2017–04
  38. By: Xiaodan Ding; Metodij Hadzi-Vaskov
    Abstract: This study analyzes composition of goods trade in Latin America and the Caribbean (LAC) along four main dimensions: revealed comparative advantage, product complexity, sophistication, and diversification. After describing some key trade patterns over the last half century, it compares the findings for LAC with other regions. Second, the study investigates how infrastructure quality, education, and tariff levels affect export composition. Third, using an approach based on product proximity, it aims to predict changes in LAC’s future composition of exports. The study concludes that policies to upgrade human capital and infrastructure are essential for increasing LAC’s export share in high-skill products.
    Keywords: Comparative advantage;Caribbean;Latin America;Trade;Export Composition, Economic Complexity, Diversification, General, Country and Industry Studies of Trade, Technological Change: Choices and Consequences
    Date: 2017–03–09
  39. By: Lee, Seungrae (Korea Institute for International Economic Policy); Park, Ji Hyun (Korea Institute for International Economic Policy); Kim, Hyuk-Hwang (Korea Institute for International Economic Policy); Lee, Joun Won (Korea Institute for International Economic Policy)
    Abstract: This report empirically analyzes the effects of firm R&D on firm performance, particularly on firm productivity, exports, and outward foreign direct investment (OFDI) by using Korean firm-level data. While this report lies in line with prior literatures that examined firm R&D effects on firm performance, we further explores the pathway connection between the two. That is, we not only examine firm R&D effects on particular firm performance, but also study the significance of firm productivity as a pathway that links firm R&D with firm exports and OFDI. Our estimation results indicate that firm R&D significantly heightens firm performance, particularly by showing stronger impact on firm performance over time. On the other hand, by using firm productivity as a mediator variable in a triangular structural equation to estimate direct R&D effects and indirect R&D effects through firm productivity, our results show that firm R&D has significant effects on export and OFDI increase directly and indirectly through firm productivity increase. Examining direct and indirect firm R&D effects across different industry sectors, we found that firm R&D is significantly effective on exports and OFDI among capital-intensive sectors, while it does not exhibit a significant influence among labor-intensive sectors. Our estimation results imply that while R&D promotion policies towards the private sector are effective for improving firm performance, these policies would yield more effective consequences if they are targeted at specific industry sectors. In particular, our results suggest that R&D promotion policies towards firms inside capital-intensive sectors would be more effective on exports and OFDI than policies towards firms inside labor-intensive sectors.
    Keywords: Firm R&D; Productivity; Exports; OFDI
    Date: 2015–10–08
  40. By: Gregor Schwerhoff (Mercator Research Institute on Global Commons and Climate Change (MCC)); Johanna Wehkamp (Mercator Research Institute on Global Commons and Climate Change (MCC) and Technical University of Berlin)
    Abstract: The forest conservation policy instrument REDD+ (Reducing Emissions from Deforestation and Forest Degradation) is designed to compensate governments of tropical countries for their efforts to conserve forests. Food insecure countries that are specialized in agriculture and have weak institutions, are likely to face difficulties to enforce forest conservation. This article explores how far export tariffs on agricultural goods combined with public investments, could be used as a forest conservation policy mix in such contexts. We first show empirically that structural constraints to forest conservation policies are particularly pronounced in one third of countries where REDD+ programs are planned to be rolled out. We then develop a two sector competing land use model with a domestic food producing and an exporting agricultural sector. We show that it is possible to combine export tariffs with public investments such that deforestation decreases, while agricultural production levels and food prices remain constant.
    Keywords: Deforestation, REDD+, Export Tariffs, Public Investments, Two Sector Competing Land Use Model
    JEL: O24 Q17 Q23 Q24 Q56
    Date: 2017–04
  41. By: Jean-Christophe Bureau; Jo Swinnen
    Abstract: This paper reviews evidence on the impact of EU policies on global food security, focusing on four EU policy areas: agricultural policy, bioenergy policy, trade policy, and development (food aid) policy. Old concerns related to the detrimental impact of EU farm subsidies, food aid and tariffs on poor countries’ food security. New concerns relate to impacts of EU food standards and bioenergy policies. The EU policies which created the largest distortions on global markets (in the area of trade, agriculture, food aid, and bioenergy) have been substantially reformed over the past decades. Recent global food price fluctuations have also re-emphasized that the impact of EU policies on the poor’s food security differ depending on whether these are consumers or producers, or whether countries are exporters or importers. Overall, our review explains that in many areas the impact of EU policies on global food security is less obvious and more complex than often argued.
    Date: 2017–03
  42. By: Keskinsoy, Bilal
    Abstract: This paper analyses volatility, persistence, predictability, correlation, comovement (or contagion risk) and sudden stop (reversibility) of capital flows (foreign direct investment (FDI), foreign portfolio equity investment, long-term and short-term debt flows) using time series econometric techniques for 24 emerging economies over 1970-2014. This is informative on the pattern and relationship between capital inflows, with implications for accommodating macroeconomic policies in countries receiving inflows. The paper also addresses the predictions of conventional theory, that differences are associated with the maturity of the capital (long-term vs. short-term), with the information based trade-off model of Goldstein and Razin (2006), that differences are associated with the structure of the capital (equity vs. debt). In line with the latter, equity flows (FDI and portfolio) are less volatile and persistent, more predictable and less susceptible to sudden stops than debt flows. Contrary to conventional theory, short-term flows are not more volatile, but there is evidence that correlations and risks of contagion are strong within all capital flow components.
    Keywords: Capital flows, Volatility, Persistence, Forecasting, Comovement, Sudden stop
    JEL: F21 F32 F34 F37 G01 O57
    Date: 2017–03–30
  43. By: Duddy, D, Roesmara; Tri, Widodo; Sri, Adiningsih
    Abstract: This paper examines the dynamics of trade specialization in the MENA region and countries for the period 2000 and 2010. An econometric model, Wald test, and the Spearman’s rank correlation are applied. By both, industry and country group classifications analysis, all countries in the MENA region have shown de-specialization with different speed, where Qatar has the fastest speed and Tunisia has slowest speed.
    Keywords: comparative advantage, dynamics of specialization, MENA, RSCA, econometric analysis, Wald test, Spearman’s rank correlation
    JEL: F13 F14
    Date: 2017–03–11
  44. By: Scott French (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: This paper applies a widely-used class of quantitative trade models to evaluate the usefulness of measures of revealed comparative advantage (RCA) in academic and policy analyses. I find that, while commonly-used indexes are generally not consistent with theoretical notions of comparative advantage, certain indexes can be usefully employed for certain tasks. I explore several common uses of RCA indexes and show that different indexes are appropriate when attempting to (a) uncover countries' fundamental patterns of comparative advantage, (b) evaluate the differential effect of changes in trade barriers across producers of different products, or (c) identify countries who are relatively close competitors in a given market.
    Keywords: Relative productivity, index, Ricardian, trade barriers, trade policy, trade elasticity
    JEL: F10 F13 F14 F15
    Date: 2017–01
  45. By: Kang , Minji (Korea Institute for International Economic Policy)
    Abstract: Korean Abstract: 과거에는 온전히 국가주권에 속한다고 생각되던 위생검역조치의 정당성 판단이 무역자유화의 흐름에 따라 국제무역 규범하에 놓이게 되면서 WTO 체제하에서는 위생검역조치의 정당성을 ‘위생 및 식물위생조치의 적용에 관한 협정(SPS 협정)’에 따라 판단하고 있다. 그러나 SPS 협정은 이해가 상반된 국가들간 타협의 산물로 모호하게 규정되어 있어 협정의 해석과 적용에 대한 의견이 분분하다. SPS 분쟁 사례 연구를 통해 SPS 협정이 어떻게 해석·적용되고 있는지 분석하여 SPS 협정에 대한 이해를 높이고, 이를 국내 위생검역정책 및 국제통상 정책에 반영할 필요가 있다. 본 연구는 지금까지 WTO 분쟁해결기구에서 다룬 SPS 협정 관련 분쟁 사례를 검토하여 WTO SPS 협정 규범의 해석 및 적용을 분석하였다. 이를 바탕으로 SPS 조치 관련 쟁점 및 동향을 파악하고 정책적 시사점을 모색함으로써 우리나라의 위생검역 및 관련 대응에 활용할 수 있는 참고자료를 제공하고, 향후 학술연구를 위한 기초자료를 마련하고자 하였다. English Abstract: Although the judgment on the legitimacy of SPS measures fell completely under the state's sovereign rights in the past, it has been placed under international trade regulations due to increased trade liberalization. The WTO agreement judges the legitimacy of SPS measures based on The Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS agreement"). However, the ambiguous regulations of the SPS Agreement make it difficult to identify its original meaning. As the WTO DSB has defined and clarified the meaning of the SPS agreement recently, it would be important to prepare for possible SPS disputes through research on established SPS dispute cases. This study briefly explains the contents of the SPS agreement and dispute settlement procedures of the WTO SPS, reviews SPS dispute cases handled by the WTO DSB (Dispute Settlement Body), and analyzes the interpretation and application of WTO SPS regulations. Furthermore, it investigates various issues related to SPS measures and identifies the policy implications of the SPS Agreement. The study also intends to provide a reference for Korea's sanitary quarantine policies and to build the basic data for future academic research. This study deals with the EC-Hormones case (1998), Australia-Salmon case (1998), Japan-Agricultural Products case (1999), Australia-Salmon (21.5) case (2000), Japan-Apples case (2003), Japan-Apples (21.5) case (2005), EC-Biotech Products ("GMOs") case (2006), Canada/U.S.-Hormones Suspension case (2008), U.S.-Poultry case (2010), Australia Apples case (2010), India-Agricultural Products case (2015), U.S.-Animals case (2015), and Russia-Pigs case (2016). The major issue in the SPS dispute cases so far has been whether the measures are based on risk assessments (§5.1). Additionally, whether the measures are more trade-restrictive than required (§5.6) and whether there are arbitrary or unjustifiable distinctions (§5.5) were often checked too. In recent cases, the WTO DSB reviewed whether the measures are based on international standards (§3.1) and whether the Members recognize the concepts of pest- or disease-free areas and areas of low pest or disease prevalence (§6.2) and ensure that their SPS measures are adapted to the SPS characteristics of the area (§6.1). The implications that this research holds for Korea are as follow: Firstly, Korea will try to conduct comprehensive and specific risk assessments to obtain sufficient scientific evidence that demonstrates the measures are based on rigorous and scientific principles. Secondly, it will be necessary to prepare for newly-arising issues such as adaptation to regional conditions and equivalence. Third, there is a need to promote interest and understanding about international standards. Beginning with the publishing and updating of Korean translations for major international standards, it will also be important to actively contribute toward the establishment of proper international standards throughout negotiations, and to ensure that Korea's SPS policies develop in a manner that is in line with these international standards, thus reducing potential trade conflicts with our trade partners. Lastly, as Mega FTAs stipulate similar provisions to the guidelines of the SPS committee and recent decisions of the WTO DSB, it is important to keep an eye on the recent Mega FTAs' SPS Agreement. The SPS agreement does indeed contribute to the elimination of unreasonable sanitary standards. However, the SPS agreement is overly dependent on the concept of "scientia vincit omnia (scientific panacea)," as the purpose of the SPS agreement is to prevent SPS measures from being used as disguised protectionism. Therefore thorough preparation with respect to scientific evidence is required to introduce and maintain the sanitary-quarantine system. We expect Korea to take objective and proper SPS measures that fully protect human, animal or plant life or health by developing and improving the quarantine system.
    Keywords: WTO; SPS
    Date: 2016–09–13
  46. By: Orazbayev, Sultan
    Abstract: Education and employment histories of more than 650 thousand scientists contained in ORCID data can shed light on the patterns of brain drain and brain gain in over 200 countries (and territories) over the last 40 years. The incidence of brain drain and brain gain is positively correlated across space and time. More restrictive immigration policy towards skilled workers and students is associated with lower levels of skilled emigration (brain drain), consistent with competition of domestic and foreign scientists for a limited number of domestic academic posts. However, after controlling for time and country heterogeneity, increased barriers to immigration are associated with a relatively larger effect on the inflow of skilled immigrants (brain gain), so more restrictive policy is associated with net brain drain.
    Keywords: brain drain; brain gain; high-skilled migration; scientific mobility; immigration policy
    JEL: F2 F22 F6 F63 J61 O15
    Date: 2017–03–31
  47. By: Uri Dadush; Maria Demertzis; Guntram B. Wolff
    Abstract: This paper was prepared for, and presented at, the informal ECOFIN meeting of EU finance ministers in Malta on 8 April 2017, with the title Boosting private investment in North Africa and beyond - what role for European Institutions? Africa’s population is projected to reach almost 2.5 billion by 2050. Migration from Africa to the EU is relatively stable, at around 500,000 migrants per year, or 0.1 percent of the EU population, yet irregular immigration into the EU has increased recently. Development is often seen as the way to reduce migration but the development-migration nexus is complex. At low levels of development, migration might increase with rising GDP per capita. This applies to most of sub-Saharan Africa. By contrast, North African countries are among the continent’s more developed economies. Their geographical positions make them natural partners for the EU. The region is diverse but political instability has been a common feature that in recent years has hindered economic development. Cyclical factors and deep-rooted structural weaknesses have also contributed to weak economic performance. Conditions for business are relatively poor and trade barriers in some sectors have prevented integration either between these countries or into global value chains. The authors of this Policy Contribution propose five ways in which EU policymakers can contribute to development in North Africa and build partnerships on trade, investment and migration.
    Date: 2017–04
  48. By: Miriam Frey
    Abstract: This paper analyzes the effects of Ukraine's trade liberalization with the EU on income inequality using a computable general equilibrium (CGE)-microsimulation model for Ukraine. Special focus is thereby given to between- and within-parts income inequality to study whether the Western and the Eastern part of Ukraine are affected differently. Even though overall income distribution effects are rather small, Ukraine's unilateral tariff elimination turns out to act more on the within- rather than on the between-parts income inequality. Taking into account the distributional effects of trade liberalization requires an appropriate modeling approach. Thus, a computable general equilibrium (CGE) model is linked with a microsimulation model for Ukraine in a sequential way (top-down approach). This means that Ukraine’s trade integration with the EU is first simulated in the CGE model to obtain changes in factor returns and prices. In the second step, those are used as exogenous variables in the microsimulation model to simulate the effects on endogenous variables like labor income and labor market status. Based on this outcome, the main variable of interest - real income per equalized person - is calculated for all households in the sample. As indicated by the Gini index, overall income distribution effects in Ukraine are rather small. However, looking at the impact on income inequality measured by the Theil index gives some interesting insights as it allows for a decomposition across the western and the eastern part of Ukraine. The biggest share of total income inequality in Ukraine is explained by within-parts inequality. Accordingly, trade liberalization affects total income inequality in Ukraine only via its impact on within-parts inequality. It turns out that the more relevant grouping criterion to identify between-groups income inequality effects is a rural/urban rather than a west/east division of households. In this respect, the answer to the initial question whether there are 'two Ukraines' must be 'no'.
    Keywords: Ukraine, General equilibrium modeling, Microsimulation models
    Date: 2016–07–04
  49. By: Georgios Georgiadis
    Abstract: Asymptotic analysis and Monte Carlo simulations show that spillover estimates obtained from widely-used bilateral (such as two-country VAR) models are significantly less accurate than those obtained from multilateral (such as global VAR) models. In particular, the accuracy of spillover estimates obtained from bilateral models depends on two aspects of economies' integration with the rest of the world. First, accuracy worsens as direct bilateral transmission channels become less important, for example when the spillover-sender accounts only for a small share of the spillover-recipient's overall integration with the rest of the world. Second, accuracy worsens as indirect higher-order spillovers and spillbacks become more important, for example when the spillover-recipient is more integrated with the rest of the world overall. Empirical evidence on the global output spillovers from US monetary policy is consistent with these generic results: Spillover estimates obtained from two-country VAR models are systematically smaller than those obtained from a global VAR model; and the differences between spillover estimates obtained from two-country VAR models and a global VAR model are more pronounced for economies for which the US accounts for a smaller share of their overall trade and financial integration with the rest of the world, and for economies which are more integrated with the rest of the world overall. Multilateral multi-country models (global VAR) and bilateral models (two-country VAR) Asymptotic analysis and Monte Carlo simulations show that spillover estimates obtained from widely-used bilateral (such as two-country VAR) models are significantly less accurate than those obtained from multilateral (such as global VAR) models. In particular, the accuracy of spillover estimates obtained from bilateral models depends on two aspects of economies' integration with the rest of the world. First, accuracy worsens as direct bilateral transmission channels become less important, for example when the spillover-sender accounts only for a small share of the spillover-recipient's overall integration with the rest of the world. Second, accuracy worsens as indirect higher-order spillovers and spillbacks become more important, for example when the spillover-recipient is more integrated with the rest of the world overall. Empirical evidence on the global output spillovers from US monetary policy is consistent with these generic results: Spillover estimates obtained from two-country VAR models are systematically smaller than those obtained from a global VAR model; and the differences between spillover estimates obtained from two-country VAR models and a global VAR model are more pronounced for economies for which the US accounts for a smaller share of their overall trade and financial integration with the rest of the world, and for economies which are more integrated with the rest of the world overall.
    Keywords: USA, Macroeconometric modeling, Monetary issues
    Date: 2016–07–04
  50. By: Giuseppe Marotta
    Abstract: The recipe of leaving the Euro, and therefore the EU, in order to foster Italian net export through a devaluation of the new Lira, offers hardly credible benefits compared to certain costs of the ensuing triple financial crisis. The costs would be heightened given the economic, legal ad geopolitical constraints of the country.
    Keywords: Italexit, redenomination risk, triple financial crisis, global value chain, EMU trilemma.
    JEL: E40 E61
    Date: 2017–04
  51. By: Jérome Valette (CERDI - Centre d'études et de recherches sur le developpement international - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper analyses whether international migrants contribute to foster innovation in developing countries by inducing a transfer of productive knowledge from destination to the migrants’ home countries. Using the Economic Complexity Index as a proxy for the amount of productive knowledge embedded in each countries, and bilateral migrant stocks to 20 OECD destination countries, we show that international emigration is a strong channel of technological transmission. Diasporas foster the local adoption of new technologies by connecting high technology countries with low ones, reducing the uncertainty surrounding their profitability. Our empirical results support the fact that technological transfers are more likely to occur out of more technologically advanced destinations and when emigration rates particularly high.
    Keywords: International migration,Technology transfer,Export sophistication,Diaspora externalities.
    Date: 2017–01–03
  52. By: OECD
    Abstract: Economic globalisation has given rise to two types of networks that stretch out across OECD and emerging economies. At the one side, global value chains (GVCs) can be thought of as the “material” transfers of goods and services (final as well as intermediate) across borders. At the other side, Global Innovation Networks (GINs) refer to the transfers of intangibles and immaterial assets between countries. Concerns are increasingly raised in policy discussions that countries are not able to capture the value of their innovative activities, hence the clear need to better understand the interdependencies between these two types of networks.
    Date: 2017–04–10
  53. By: Rhee , Jung-kyun (Korea Institute for International Economic Policy); Kim , Junyoung (Korea Institute for International Economic Policy); Im , So Jeong (Korea Institute for International Economic Policy); An , Guo-shan (Yanbian University); Mimura , Mitsuhiro (Independent)
    Abstract: Korean Abstract: 북한의 핵실험과 UNSC의 대북제재로 인하여 북·중 간 무역을 포함한 경제협력은 국제적으로 가장 주목받고 있는 이슈 중 하나이며, 이와 관련한 많은 분석과 연구가 진행되고 있다. 본 연구에서는 중국의 대북무역에서 전초기지 역할을 하는 랴오닝성, 지린성 등 접경지역을 중심으로 UN 안보리 (UNSC)의 대북제재(2006~16년(2270호))와 한·미·일의 양자제재로 인한 북·중 접경지역에서의 무역거래 관행 변화를 분석하였다. 연구결과 북·중 간 전체 무역과 접경지역에서의 무역 구조, 특징을 동시에 고려해볼 경우, 기존의 대북제재가 북·중 무역에 미치는 영향은 매우 미약하다는 점과 대북제재로 인해 북·중 간 거래관행의 지도가 변화하고 있음을 볼 수 있다. 본 연구를 통해 북·중 무역의 현황과 체계에 대한 이해를 제고하는 한편, 대북제재로 인한 접경지역에서의 북·중 간 경제협력 변화를 살펴봄으로써 향후 우리의 대북정책과 효과적인 대북제재 방안 수립을 위한 자료를 제공하고자 한다. English Abstract: Due to North Korea's nuclear test and the UNSC's sanctions on North Korea, economic cooperation including North Korea-China trade is one of the most internationally recognized issues, and many analyzes and studies are underway. However, there is little research on the comprehensive trading practices of North Korea and China, centering on the border areas of Liaoning Province and Jilin Province, which serve as outposts in China's trade with North Korea. In this study, we analyzed the changes in trading practices in the UNSC sanctions against North Korea (2006 ~ 2016 (No. 2270)) and bilateral trade between North Korea and China due to bilateral sanctions. The disconnection of trade between North Korea and Japan stemming from Japan's ban on trade with North Korea in 2006 and the suspension of inter-Korean trade due to the implementation of the 5.24 measures in 2010 seemed to have a considerable influence on North Korea's foreign trade. However, in the late 2000s, the rapid increase in demand for mineral resources due to the economic development of China, the increase of Chinese enterprises' trade and investment in North Korea replaced the place, and the dependence of North Korea on China trade became even more increased. The UNSC's sanctions against North Korea and the independent bilateral sanctions imposed by the South Korea, the United States, and Japan have contributed to the deepening of North Korea's dependence on China and the increase of trade in North Korea and China. In addition, considering the trade structure and characteristics of the North-China whole-trade and the border region, the effect of the existing North Korean sanctions on the North Korean and Chinese trade is very weak and the North- You can see that the map has changed...(The rest is omitted.)
    Date: 2016–12–30
  54. By: P. J. Lloyd (Department of Economics, University of Melbourne)
    Abstract: This paper reviews the history of tariffs imposed by the six Australian colonies during the 19th century. First, in each of the colonies, it identifies the starting points for the first tariffs, first preferences, and other features and the turning points in the levels of tariffs. It then constructs time series of the average tariff levels in the individual colonies and an average for All Six Colonies Combined. The conclusion notes general features of the pattern of tariffs and how the main features of colonial tariffs carried over to the Commonwealth Customs Tariff in the 20th century.
    Keywords: colonies, average tariff rates, tariff revenue, protection
    JEL: N1 F13
    Date: 2016–01

This nep-int issue is ©2017 by Luca Salvatici. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.