|
on International Trade |
| By: | Javier López González (OECD) |
| Abstract: | Participation in global value chains (GVCs) can be a pathway for economic development. It is associated with growing productivity, exporting more sophisticated products and a less concentrated export basket (Kowalski et al., 2015). However, it is often argued that these benefits accrue mainly to larger firms and/or multinationals, leaving small and medium sized enterprises (SMEs), which tend to employ the largest share of workers, struggling to benefit from the opportunities offered by the evolving GVC landscape. This paper identifies how SMEs in ASEAN economies participate in GVCs by combining firm level data with the Trade in Value Added (TiVA) database. SMEs in the region might face more constraints than large firms in sourcing competitive inputs, limiting their ability to benefit from GVCs, as indicated by the lower share of foreign value added in their exports. That said, SMEs also tend to export intermediate goods to GVCs either directly, or, importantly, indirectly, through sales to larger domestic or multinational firms which then export. Policies seeking to integrate SMEs into GVCs could aim to address importing constraints through continued unilateral or regional liberalisation or sustained support for trade facilitation and connectivity. At the same time programmes aimed at promoting domestic and international production linkages should allow SMEs to better identify new opportunities and exploit their comparative advantage in the production of intermediate goods and services and integrate, directly or indirectly, into regional and global value chains. |
| Keywords: | globalisation, GVCs, importing, indirect exporting, SMEs, Southeast Asia, trade |
| JEL: | D22 D24 F13 F14 F15 F63 F68 L11 L23 L25 |
| Date: | 2017–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:203-en&r=int |
| By: | Tanaka, Kiyoyasu |
| Abstract: | Openness to international trade and foreign direct investment (FDI) has contributed to the recent growth of the Cambodian economy. This paper documents patterns of international trade and FDI in Cambodia. First, both export and import increased substantially in recent periods. The major export partners are mainly developed countries including the U.S., the U.K., Germany, and Japan. The major import partners are mainly East Asian countries including China, Thailand, Vietnam, and Hong Kong. Second, fabrics and manmade staple fibers are the major import commodities whereas apparels, clothing, and footwear are the major export commodities. Third, inward FDI stock increased substantially from 1.7 billion US dollars in 2001 to 7.8 billion US dollars in 2012, suggesting a substantial growth of economic activity by foreign-owned firms. |
| Keywords: | Cambodia,International trade,Foreign investments,Apparel industry,Trade,Investment,Garment sector,Global Value Chain |
| JEL: | F14 F21 F63 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper667&r=int |
| By: | Lei, Lei; Zhou, Li |
| Abstract: | This paper focuses on the direct impact of avian influenza outbreaks and the impact of the consequent nontariff measures on the international poultry trade in the Global Value Chain Context. Using monthly export data regarding China and its 122 poultry importing countries, a random-effect gravity model is adopted. The research analysis distinguishes between “agri-food goods” (mostly uncooked poultry products) and “processed goods” (mostly cooked poultry products) to understand the trade in global value chain. The results show that domestic avian influenza outbreaks have a large and significant negative impact on a country’s poultry imports compared with such outbreaks in exporting countries. Moreover, nontariff measures induced by avian influenza reduce the uncooked poultry trade but increase the cooked poultry trade temporarily. The results also imply that developing countries that attempt to participate in the global agri-food value chain to access developed countries’ markets should increase and enhance processed food production for more-value adding and competiveness. |
| Keywords: | Poultry,International trade,Trade policy,Poultry trade,Non-tariff measures,Processing trade |
| JEL: | F14 O24 Q17 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper640&r=int |
| By: | Nobuhiro Hosoe (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | We investigate the impact of Brexit (the UK fs planned withdrawal from the European Union) using computable general equilibrium models featuring conventional constant returns-to-scale (CRS) and increasing returns-to-scale (IRS) technology and firm heterogeneity, a la Melitz. We show that the imposition of the tariff and nontariff barriers associated with Brexit triggers the significant contraction of bilateral trade between the UK and the remaining 27 members of the European Union (EU27), exacerbated by firm exit from export markets. Given the imposition of these trade barriers, budget savings, migrants returning to the EU27 from the UK, and intra-EU27 integration and free trade agreements with the US and Japan, the IRS model predicts a total export loss of 5.1?5.8% of UK GDP and a total welfare loss of 1.1?1.5%. This is 60% greater than the CRS model predictions. However, the impact on output would vary between industries, whereby the UK chemical and automobile industries would contract, but its food, business services, and information and communication technology industries would expand. In contrast, the EU27 would gain substantially from other integration programs, but lose very little from the stronger UK? EU27 border barriers. This suggests that the EU27 should have little interest in negotiations aimed at avoiding a ghard Brexit h (the surrendering by the UK of full access to the single market) and that it would be more productive for it to focus on integration programs with trade partners other than the UK. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:17-04&r=int |
| By: | Amiti, Mary (Federal Reserve Bank of New York); Dai, Mi (Beijing Normal University Business School); Feenstra, Robert C. (University of California, Davis); Romalis, John (University of Sydney) |
| Abstract: | China’s rapid rise in the global economy following its 2001 World Trade Organization (WTO) entry has raised questions about its economic impact on the rest of the world. In this paper, we focus on the U.S. market and potential consumer benefits. We find that the China trade shock reduced the U.S. manufacturing price index by 7.6 percent between 2000 and 2006. In principle, this consumer welfare gain could be driven by two distinct policy changes that occurred with WTO entry. The first, which has received much attention in the literature, is the United States granting permanent normal trade relations (PNTR) to China, effectively removing the threat of China facing very high tariffs on its exports to the United States. A second, new channel we identify is China reducing its own input tariffs. Our results show that China’s lower input tariffs increased its imported inputs, boosting Chinese firms’ productivity and their export values and varieties. Lower input tariffs also reduced Chinese export prices to the U.S. market. In contrast, PNTR had no effect on Chinese productivity or export prices, but did increase Chinese entry into the U.S. export market. We find that at least two-thirds of the China WTO effect on the U.S. price index of manufactured goods was through China lowering its own tariffs on intermediate inputs. |
| Keywords: | China; WTO entry; input tariffs; price index; consumers |
| JEL: | F12 F13 F14 |
| Date: | 2017–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:817&r=int |
| By: | Gary Clyde Hufbauer (Peterson Institute for International Economics); Euijin Jung (Peterson Institute for International Economics) |
| Abstract: | Previous US administrations—whether Republican or Democrat—have focused on reducing barriers to trade and investment during trade negotiations, but the Trump administration will prioritize reducing the US trade deficit when it renegotiates the North American Free Trade Agreement (NAFTA). Trump will seek to lower Canadian barriers to US exports and oppose changes that would lower US barriers to Canadian exports. The authors identify well-known US and Canadian trade barriers and speculate on possible “blockbuster” demands that the Trump trade team might make on Canada in keeping with Trump’s concept of unfair trade (e.g., border tax adjustment, rules of origin, and currency undervaluation). NAFTA renegotiation gives the Trump administration an opportunity to resolve longstanding trade grievances with Canada, provided the United States makes its own concessions. Both countries can benefit from updating NAFTA to address issues not foreseen in the early 1990s, such as digital commerce and state-owned enterprises. But US insistence on “blockbuster” demands could put not only the talks but also the entire relationship between Ottawa and Washington at risk. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb17-22&r=int |
| By: | Hayakawa, Kazunobu |
| Abstract: | This paper empirically investigates whether countries included in the “List of Goods Produced by Child Labor or Forced Labor” by the U.S. government reduce their exports to the U.S. To this end, we estimated gravity equations for trade in coffee and tobacco during 2005–2014. In contrast to previous studies in this literature, our paper controls for a “supply-side” mechanism (e.g., change in the amount of unskilled labor) by introducing exporter-year fixed effects. Furthermore, we controlled for time-invariant country-pair specific elements such as U.S. consumers’ aversion to products from a specific country. Our results yielded a robust result that countries in the list do not change the magnitude of their exports to the U.S. Several interpretations are presented. |
| Keywords: | International trade,Child labor,Forced labor,Coffee,Tobacco,Gravity,CSR,U.S. |
| JEL: | F15 F53 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper669&r=int |
| By: | Hazama, Yasushi |
| Abstract: | Trade exhibits two contrasting effects on income inequality in developing countries (DCs). On the one hand, trade openness benefits unskilled labor in preference to skilled labor and capital (the Stolper–Samuelson effect). On the other hand, trade openness increases the demand for skilled (rather than unskilled) labor inputs (the skill premium effect). Recent studies that provide stronger support for the skill premium model have focused on wage inequality or have chosen higher-income DCs. We test the effect of export growth on income inequality for 70 lower income DCs and 36 higher-income DCs, using an unbalanced panel dataset for the 1971–2012 period. The results show that the export/GDP ratio has a negative effect on income inequality for lower-income DCs, but no significant effect was found for higher-income DCs. |
| Keywords: | Exports,Income,International trade,Labor market,Human resources,Income inequality,Skill premium,Stolper–Samuelson theorem |
| JEL: | F16 J46 O15 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper650&r=int |
| By: | Xiao, Hao; Guo, Jiemin; Meng, Bo; Sun, Tianyang |
| Abstract: | The increasing presence of global value chains (GVCs) has been considered one of the most important phenomena of 21st century international trade. A better understanding of GVCs is crucial for both trade policy making and business practices. This study applies various network analysis tools to the new GVC accounting system in which gross exports are decomposed into value-added terms through various GVC routes based on the ADB Multi-Regional Input–Output Tables (2000–2015). Using the proposed decomposition framework, the study helps divide manufacturing-related GVCs into sub-networks with clear visualization of countries’ participation patterns. The empirical results show that GVCs are not always like “chains”, but complex networks of hubs and spokes; GVCs are not very “global”, but still remain to be “regional”. These findings can significantly improve our understanding of the interdependency of countries in GVCs, which are normally invisible in traditional trade statistics. |
| Keywords: | Input-output tables,Manufacturing industries,Value chains,Topology,Networks,International trade,Trade in value-added |
| JEL: | F6 F13 F15 D57 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper637&r=int |
| By: | Cullen S. Hendrix (Peterson Institute for International Economics) |
| Abstract: | Despite agriculture’s modest contribution to GDP in all three partner countries, agricultural issues will be a thorny aspect of the NAFTA renegotiation—just as they are in other trade agreement negotiations. US and Canadian agricultural producers like NAFTA and will fight hard to preserve it. Aside from some wrangling over market access issues for dairy, poultry, and eggs and recent spats over Canadian soft lumber, farm organizations in both countries view NAFTA positively. Public opinion in Mexico is more ambivalent, but NAFTA has created strong export-oriented agricultural interests in the country’s north that balance more protectionist interests in the south. NAFTA has created complex cross-border agricultural supply chains that create value added for the US economy, particularly in GOP-leaning states. Disrupting NAFTA could create big problems for Trump-voting states and states with GOP and split Senate delegations, especially those that rely heavily on agricultural exports and intra-NAFTA trade. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb17-24&r=int |
| By: | Knobel Alexander (Gaidar Institute for Economic Policy); Baeva Marina (Gaidar Institute for Economic Policy) |
| Abstract: | On August 22, 2012, the Russian Federation joined the World Trade Organization (WTO), as well as dispute settlement mechanisms designed to resolve WTO trade disputes and governed by the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). Hence Russia has since August 2012 been entitled to apply this instrument to uphold its commercial interests. |
| Keywords: | Russian economy, foreign trade, WTO, trade disputes |
| JEL: | F10 F13 F19 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2017-281&r=int |
| By: | Caroline Freund; Martha Denisse Pierola |
| Abstract: | This paper uses firm-level data on manufacturing trade from 40 developing countries to explore how the five largest exporters in a country contribute to export growth and diversification. The origins of these firms are also studied. The data show that the top five exporters account for on average one third of exports, over half of export growth, and almost all of export diversification over a five-year period. Controlling for country and industry fixed effects, the share of exports in the top five firms increases significantly as exports grow. Most top five exporters were already large five years ago or are new firms; it is extremely rare for these export superstars to emerge from the bottom half of the firm-size distribution. They are producers, not traders, and are primarily foreign owned. |
| Keywords: | Exporting Firm, Export Diversification, Exports Growth, Export Performance, Manufacturing Exports, Comparative Advantage, Enterprises, Firms, Trade, Exports |
| JEL: | F14 L25 L11 D22 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:96478&r=int |
| By: | SEKINE Takemasa |
| Abstract: | To date, many countries have introduced various policies to promote the diffusion of renewable energy. However, as many of those policies tend to incorporate local content requirements, there is often a lack of consistency with the rules under the World Trade Organization (WTO) agreements. The present case is the second decision by the WTO adjudicators in a series of disputes that encompass the issue relating to renewable energy policy. The factual background of the present case resembles the first case in the aforementioned series of disputes, namely Canada-FIT, and has contributed in further clarifying the precise meaning of legal elements contained in Articles III:8(a) and XX(d) of the General Agreement on Tariff and Trade (GATT). Moreover, it was the first to interpret Article XX(j). This policy discussion paper analyzes the case and considers the impact of the decisions of the WTO adjudicators on the various domestic policies including those related to government procurement and renewable energy. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:17018&r=int |
| By: | Andrea Éltető (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | European small and medium-sized enterprises were severely hit by the international crisis of 2008 and export activity – as a form of internationalisation - was an important component of the recovery. This paper concentrates on the post-crisis period of the Iberian, Baltic and Visegrád countries. As for born global firms have spread and these countries are strongly involved in global production networks, the theory of international new ventures and the network approach can especially be appropriate for them. The significance of SMEs in employment, value added and export and their pace of recovery is different in the three regions. Apart from the structural rearrangements in exporting enterprises, the geographical direction of exports has also changed temporarily towards non-EU markets after the crisis. Based on existing enterprise surveys the second part of the article focuses on the export enhancing and hindering factors in the post-crisis period. Overall, product features and manager attitude proved to be the most important in export competitiveness. Lack of finance and contacts, strong foreign competition and high market entry costs are the leading export barriers for SMEs. |
| Keywords: | SMEs, export, export barriers |
| JEL: | F10 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:228&r=int |
| By: | C. Fred Bergsten (Peterson Institute for International Economics) |
| Abstract: | The Trump administration’s strategy toward trade agreements in general, and the North American Free Trade Agreement (NAFTA) in particular, is fundamentally misplaced for two reasons: (1) its apparent desire to use trade policy rather than macroeconomic policy including exchange rate policy to reduce trade imbalances and (2) its focus on the bilateral rather than global scope of those imbalances. Bergsten outlines the dangerous and self-defeating implications for the negotiation of such an unusual approach. Accordingly, provisions that could be included in the agreement to pursue that purpose are not likely to be feasible. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb17-23&r=int |
| By: | Bakari, Sayef |
| Abstract: | This paper investigates the relationship between domestic investment, exports, imports, and economic growth in Sudan. In order to achieve this purpose, annual data were collected from the reports of World Bank for the periods between 1976 and 2015, was tested by using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationary test, co integration analysis of Vector Error Correction Model and the Granger-Causality tests. According to the result of the analysis, unit root tests show that economic growth, domestic investment, exports and imports series become stationary when first difference is considered. Also, it was determined by using co integration analysis that there is relationship between the four variables in Sudan. Also, and according to the Vector Error Correction Model, there is no relationship between variables in the long run term. On the other hand, and according to the Granger-Causality tests, we defined that in the short run term, only economic growth cause domestic investment. These results provide evidence that Reforms and measures in economic strategies are still insufficient to make trade and domestic investment able to boost the Sudan's economy. |
| Keywords: | Exports, Imports, Economic Growth, Sudan, Cointegration, Vector Error Correction Model and Causality |
| JEL: | F1 F11 F13 F14 |
| Date: | 2017–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79788&r=int |
| By: | Graziella Bertocchi |
| Abstract: | The slave trades out of Africa represent one of the most significant forced migration experiences in history. In this paper I illustrate their long-term consequences on contemporaneous socio-economic outcomes, drawing from my own previous work on the topic and from an extensive review of the available literature. I first consider the influence of the slave trade on the “sending” countries in Africa, with attention to their economic, institutional, demographic, and social implications. Next I evaluate the consequences of the slave trade on the “receiving” countries in the Americas. Here I distinguish between the case of Latin America and that of the United States. Overall, I show that the slave trades exert a lasting impact along several contemporaneous socio-economic dimensions and across diverse areas of the world. |
| Keywords: | slavery, development |
| JEL: | J15 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:125&r=int |
| By: | Javier Cravino (University of Michigan and NBER); Sebastian Sotelo (University of Michigan) |
| Abstract: | We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. We document that manufacturing production is unskilled-labor intensive, so that these changes increase the skill-premium. We incorporate this mechanism in a quantitative trade model and show that trade has had a negative impact on manufacturing employment and the relative wage of unskilled workers. The impact on the skill premium was larger in developing countries where manufacturing is particularly unskilled-labor intensive. |
| Keywords: | Trade, Skill Premium, Manufacturing Employment, Structural Change, Gains From Trade |
| JEL: | F16 F62 F63 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:658&r=int |
| By: | Machikita, Tomohiro; Sato, Hitoshi |
| Abstract: | This paper proposes a monopolistic competition model in which firms facing demand uncertainty use both permanent and temporary workers to evade the labor adjustment costs associated with permanent workers, and explores links between the demand for temporary and permanent workers and economic globalization. The model highlights intensified product market competition as a driving force behind the shift in demand from permanent to temporary workers. In addition, our model shows that international outsourcing effectively reduces labor adjustment costs, which decreases the demand for permanent workers. We empirically test these links using industry-level data from the Japanese manufacturing sector. We find a positive correlation between foreign outsourcing and the replacement of permanent workers with temporary workers in domestic production. Additionally, we find that industries losing their global share of value-added tend to decrease their employment of permanent workers and increase the proportions of temporary workers. |
| Keywords: | Labor market,Temporary workers,Permanent workers,Outsourcing,International trade,Monopolistic competition |
| JEL: | F16 F66 J23 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper655&r=int |
| By: | Andrea Éltető (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Katalin Antaloczy (Faculty of International Management and Business, Budapest Business School) |
| Abstract: | Investments (FDI) have become more connected to the global value chains (GVCs) in the past decated. As known, the Visegrád countries intensively participate in GVCs and have collected considerable stock of FDI. The purpose of the paper is to analyse how governmental investment promotion policies of these countries reacted to these phenomena. Investment can be promoted in a wide sense – creating stabile business environment – and in a narrow sense (grants, tax allowances, etc). Narrow sense FDI incentives serve in most cases large multinationals. The Visegrád countries have applied several type of state incentives on a large scale. Based on official data and press information we provide insight into the narrow sense FDI promotion steps, from grants to special industrial zones. Using international surveys and indices we show that several factors that favourable for FDI in a wide sense, have deteriorated recently. Legal stability has been shaken, corruption increased and education indices declined. The shortage of qualified labour force became acute. Visegrád countries continue competing for large investments, therefore costly, tailored grants for foreign firms (narrow tools) will be more and more important. However, this cannot endlessly compensate for worsening business climate (wide tools). |
| Keywords: | global value chains, FDI, state aid |
| JEL: | F13 F14 P52 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:229&r=int |
| By: | Lei, Lei |
| Abstract: | Food safety standards have become stricter and are currently major barriers in the international agri-food trade. These standards negatively affect developing countries exports to markets in developed countries. We use tea exports from two major tea exporting developing countries, China and Sri Lanka, as an example to discuss the effects of standards on their tea supply chains. China and Sri Lanka share some similar characteristics in tea production and exports. First, we conduct a general comparison between the two countries’ tea exports based on port rejection data from UNIDO, and then we provide a detailed supply chain analysis. Finally, we summarize our work and discuss the policy implications. |
| Keywords: | International trade,Standards,Tea,Exports,Supply Chain |
| JEL: | O10 Q13 Q17 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper642&r=int |
| By: | Kang, Byeongwoo; Sato, Yukihito; Ueki, Yasushi |
| Abstract: | Attracting highly skilled workers is a major element for the economic development of many countries, especially developing countries. However, the general international mobility of workers is from developing countries to developed ones. Historical evidence has indicated that Korean and Taiwanese firms scout for highly skilled Japanese workers (either retired or soon-to-retire) to accrue knowledge and achieve catch-up. Therefore, this paper investigates how the highly skilled Japanese workers were scouted by firms in Korea and Taiwan. Aiming at producing evidence rather than testing hypotheses, the findings of this paper shed practical information for firms in developing countries to attract highly skilled workers for their growth. In addition, this paper provides insights into the international mobility of highly skilled workers from a developed country to developing countries, which has not been examined in previous literature. |
| Keywords: | Labor market,Human resources,Highly skilled,Mobility,Japan,Korea,Taiwan |
| JEL: | F22 J61 O15 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper657&r=int |
| By: | Robert Grundke (OECD); Stéphanie Jamet (OECD); Margarita Kalamova (OECD); François Keslair (OECD); Mariagrazia Squicciarini (OECD) |
| Abstract: | This study follows a job task-based approach to measure the skills of individuals. It exploits information contained in the OECD Survey of Adult Skills (PIAAC) and conducts an exploratory state-of-the-art factor analysis to obtain six task-based skills indicators that are comparable across 31 countries. By combining the PIAAC-based skills indicators with OECD Trade in Value Added (TiVA) data, light is shed on the way skills and their distributions (at the country-industry level) relate to industry performance and to integration into global value chains (GVCs). The results underline the importance of cognitive skills such as literacy, numeracy and problem solving for any industry to thrive in the global economy. Also, a persistent and positive association with labour productivity and participation in GVCs is observed, at the industry level, for non-cognitive skills such as managing and communication skills, ICT skills and workers’ readiness to learn and to think creatively. |
| Date: | 2017–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2017/05-en&r=int |
| By: | Nabeshima, Kaoru; Kashcheeva, Mila; Kang, Byeongwoo |
| Abstract: | Many countries are interested in strengthening their technological capabilities to achieve high growth rates. Knowledge flow is a key to build technological capabilities. This paper investigates how competition in international trades affects knowledge flow between countries. There are two findings. First, the results in the current paper shows that import is indeed an important avenue for knowledge flow, conforming with the results from the previous literature. Second, what is interesting and new is that export competition in the third market (in our study, the US market) seems to also have a positive impact on the flow of knowledge. The finding from this study contributes to the debate on “learning-by-exporting”. |
| Keywords: | Research & development,Industrial technology,Technological innovations,Technology transfer,International trade,Knowledge flow,Learning-by-export,East Asia |
| JEL: | F14 D83 D53 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper654&r=int |
| By: | Chad P. Bown (Peterson Institute for International Economics) |
| Abstract: | The Trump administration has quickly adopted an aggressive and antagonistic approach to using US trade laws as a protectionist tool. The effect on trade relations may not be as immediately disruptive as if Trump had followed through on campaign threats to pull the United States out of the North American Free Trade Agreement or impose 45 percent tariffs on China. However, the escalating trade barriers and the means through which the Trump administration is motivating their use have the potential to severely weaken the rules-based trading system. Rather than blowing it up by simply withdrawing, the end result of the Trump administration's tactics may be that the World Trade Organization implodes from within. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb17-21&r=int |
| By: | Sarah Clifford (Department of Economics, University of Copenhagen) |
| Abstract: | Using a large panel dataset on worldwide operations of multinational firms, this paper studies one of the most advocated anti-tax-avoidance measures: Controlled Foreign Corporation rules. By including income of foreign low-tax subsidiaries in the domestic tax base, these rules create incentives for multinationals to move income away from low-tax environments. Exploiting variation around the tax threshold used to identify low-tax subsidiaries, we find that multinationals redirect profits into subsidiaries just above the threshold and place more new subsidiaries just above compared to just below the threshold. The resulting increase in global corporate tax revenue partly accrues to the rule-enforcing country. |
| Keywords: | CFC legislation; Multinational firms; Tax avoidance; Corporate taxation |
| JEL: | F23 H25 K34 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:17-02&r=int |
| By: | Jaroslaw Michal Nazarczuk (University of Warmia and Mazury in Olsztyn); Stanislaw Uminski (Institute for Development; Faculty of Economics, University of Gdansk); Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development, Sopot) |
| Abstract: | In the light of the hereto insufficient empirical evidence on the determinants of location of exporters and given the access to a unique GIS-based database for counties in Poland (LAU 1) on the distances to diverse points of interest (POIs) and infrastructure endowment, and data on regional heterogeneity, we investigate the deep determinants of exporters’ location in Poland. Our analysis is mostly driven by the concepts of NEG theory and the firms’ heterogeneity concept. With the use of econometric modelling, in the first step, we identify the determinants of regional location of exporting firms. In the second step, we try to identify the differences in the locational decisions of firms distinguished by ownership form, namely domestic and foreign-owned exporters. Our findings indicate the more predictable behaviour of foreign-owned exporters, for which the quality of transport endowment and inputs plays a more significant role in the decision in comparison to indigenous exporters, affected to a larger extent by deep-rooted factors and path-dependency. The locational preferences of FOEs are more influenced by the proximity to the airport and the motorways as well as subject to agglomeration externalities. The results point furthermore to the significance of accessibility to markets as evidenced by the role of infrastructure endowment and the role of the greater regional human capital endowment. |
| Keywords: | locational determinants, the spatial distribution of exporters, regional trade, foreign investors, Poland |
| JEL: | R12 F14 R15 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1701&r=int |
| By: | Bobylev Yuri (Gaidar Institute for Economic Policy) |
| Abstract: | The oil and gas sector is among principal sectors of the Russian economy and is the driving force in shaping the state budget revenues and the trade balance. In 2016, Russia’s crude oil production hit an all-time peak since 1990, and crude oil exports were close to an all-time high. Under the so-called tax maneuver in force in the oil industry, refining depth went up noticeably, production and export of fuel oil moved down and export of crude oil, a highly lucrative source of the budget revenues, increased. |
| Keywords: | Russian economy, oil and gas sector, oil production, oil prices, oil and gas export |
| JEL: | L71 L72 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2017-274&r=int |
| By: | Goyal, Ashima |
| Abstract: | The chapter discusses the evolution of Base Erosion and Profit Shifting (BEPS) from an emerging market (EM) perspective. It shows how treaties meant to prevent double taxation were used for double non-taxation and the problem was especially severe in EMs. It presents evidence of BEPS in India using firm level panel data. Since one country acting alone can frighten away foreign capital, global co-ordination is necessary. This makes BEPS one of the most productive initiatives G-20 has taken up. It aims to build global norms and agreements to ensure that taxes are paid where profit is earned. India should reform its corporate tax and regimes and bilateral investment treaties in line with international developments even while simplifying them and making them more business friendly. |
| Keywords: | Base Erosion and Profit Shifting (BEPS); emerging market; firm panel data |
| JEL: | E61 F23 F36 F59 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79819&r=int |
| By: | Amodio, Francesco (McGill University); Baccini, Leonardo (McGill University); Di Maio, Michele (University of Naples Parthenope) |
| Abstract: | To address security concerns, governments often implement trade barriers and restrictions on the movement of goods and people. These restrictions have negative economic consequences, possibly increasing the supply of political violence. To test this hypothesis, we exploit the restrictions imposed by Israel on imports to the West Bank as a quasi-experiment. In 2008 Israel started enforcing severe restrictions on the import of selected dual-use goods and materials, de facto banning a number of production inputs from entering the West Bank. We show that after 2008 (i) output and wages decrease in those manufacturing sectors that use those materials more intensively as production inputs, (ii) wages decrease in those localities where employment is more concentrated in these sectors, and (iii) episodes of political violence are more likely to occur in these localities. Our calculations suggest these effects account for 18% of the violent political events that occurred in the West Bank from 2008 to 2014. |
| Keywords: | security, trade, political violence |
| JEL: | D22 D24 F51 N45 O12 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10819&r=int |
| By: | Kohn, David (Universidad Cat´olica de Chile); Leibovici, Fernando (Federal Reserve Bank of St. Louis); Szkup, Michal (University of British Columbia) |
| Abstract: | We study the role of financial frictions and balance-sheet effects in accounting for the dynamics of aggregate exports in large devaluations. We investigate a small open economy with heterogeneous firms, where firms face financing constraints and debt can be denominated in foreign units. We find that these channels can explain only a small fraction of the dynamics of exports observed in the data. While these frictions distort production and investment decisions, they affect exports significantly less since firms reallocate sales across markets in response to real exchange rate changes. We document the importance of this mechanism using plant-level data. |
| Keywords: | Financial frictions; large devaluations; export dynamics; balance-sheet effects. |
| JEL: | F1 F4 G32 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2017-013&r=int |
| By: | Volovik Nadezhda (Gaidar Institute for Economic Policy) |
| Abstract: | In early 2017, international financial organizations adjusted their short- and medium-term forecasts. The World Bank report Global Economic Prospects[1], released in January 2017, and estimated global growth in 2016 at a post-crisis low of 2.3%. It was noted that growth in emerging markets and developing economies (EMDEs) is projected to rise in 2017 to 2.7%, reflecting receding obstacles to activity in commodity exporters and continued solid domestic demand in commodity importers. An increase in commodity prices will trigger the bottoming out in the largest emerging markets, including Russia and Brazil. |
| Keywords: | Russian economy, foreign trade, terms of trade, regional pattern |
| JEL: | F10 F13 F19 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2017-280&r=int |
| By: | Eric Tchouamou Njoya (University of Huddersfield); Panayotis Christidis (European Commission – JRC) |
| Abstract: | Intercontinental air services between Europe and Africa are mainly governed by bilateral agreements negotiated between the individual countries of the EU and the various African governments. This paper provides an overview of the regulatory trends and development of air transport between EU and Africa, focussing on passenger traffic developments over the past five years and discusses the impact of liberalisation between Africa and the EU on the degree of concentration in airport traffic shares. Results indicate a growing role of Dubai and Istanbul and a decreasing role of European hubs as gateways to Africa. While Johannesburg, Cairo, Nairobi and Lagos remain the main international hubs in Africa, regional airport hubs have emerged in Algiers, Dar es Salaam and Casablanca. Liberalisation of EU-African aviation markets is likely to result in the emergence of further African regional hubs. |
| Keywords: | Transport economics, transport policy, aviation, air transport, EU, Africa |
| JEL: | R40 R41 R49 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc106855&r=int |
| By: | Kaitila, Ville |
| Abstract: | We analyse the number of different HS8 products in the EU countries’ ex-ports in 1995–2015. We review what share, or coverage, of the total possible number of these products the countries exported each year. We analyse whether the development in this coverage rate as opposed to concentration of exports as measured by the Her-findahl-Hirschman index is associated with GDP per capita growth. We find that chang-es in the coverage rate relate positively, but that the development of the HH index has no statistically significant relation to economic growth. |
| Keywords: | Exports, export products, GDP growth, EU |
| JEL: | F14 F43 O47 |
| Date: | 2017–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:50&r=int |
| By: | Julien Bueb (Centre d’analyse, de prévision et de stratégie (CAPS)); Lilian Richieri Hanania (Centre for Studies on Society and Technology (CEST)); Alice Leclezio (Centre de recherches internationales) |
| Abstract: | [...] Based on the discrepancy between the urgency of climate issues and the meagre results achieved in international negotiations, this chapter weighs the usefulness of BCAs as a complement to strong regional or domestic environmental regulation. This leads us to discuss the interplay of economic competitiveness and climate change, before the economic challenges posed by BCAs in order to reach fairness in its design and implementation (Section 4.2). Section 4.3 sheds light upon the legality of BCAs according to international trade law, while Section 4.4 provides an assessment of policy-related implications. It outlines, in particular, how BCAs could be used as an engine of a necessary economic transition, for developed and developing countries equally, according to the common but differentiated responsibilities principle [...] |
| Keywords: | environmental regulation; border carbon adjustment; international trade law; General Agreement on Tariffs and Trade; sustainable development; political economy |
| Date: | 2017–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/3fenpfdsd19soqn2m1kt5noml0&r=int |
| By: | Jérôme Creel (Observatoire français des conjonctures économiques) |
| Abstract: | L’économie européenne 2017 permet de faire un large tour d’horizon des questions que pose aujourd’hui le projet d’Union européenne. Brexit, migrations, déséquilibres, inégalités, règles économiques rigides et souples à la fois : l’UE reste une énigme. Elle donne aujourd’hui l’impression d’avoir perdu le fil de sa propre histoire et d’aller à rebours de l’Histoire. Celle, récente, de la crise financière internationale. Celle, plus ancienne, de la Grande Dépression. |
| Keywords: | Union européenne; Zone Euro; Désintégration européenne; Politique européenne |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/73gc4g65eu98s8d48h8bs1d0eo&r=int |
| By: | Luciano Fanti; Domenico Buccella |
| Abstract: | This paper revisits the strategic trade policy issue by considering a bargaining process over managerial contracts and different firms' organizational structures, that is, either family ownership keeping also the firm's control or atomistic shareholders whose board of directors delegate output choice to managers. We show that, in contrast to the traditional results, a plethora of Nash equilibria emerges and the implementation of trade policies in both countries may be efficient (i.e. national social welfares are higher than under free trade) in the presence of a bargaining process in a sales delegation game, depending on the manager's bargaining power as well as the degree of product competition. |
| Keywords: | Export subsidy/tax; Prisonerâs dilemma; Managerial Delegation; Owner-Manager Bargaining; Cournot duopoly. |
| JEL: | F16 J51 L13 |
| Date: | 2017–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2017/215&r=int |
| By: | Leila Baghdadi (World Trade Organization Chair Holder, Université de Tunis); Sonia Ben Kheder; Hassen Arouri |
| Abstract: | The main purpose of this paper is to examine the offshore regime in Tunisia and to assess the overall effects of this export promoting strategy for the years 2002-2014. Using firm-level data, we look in particular at its impact on turnover, productivity, wages, job creation, profitability and survival of firms. We compare offshore firms to onshore firms to assess if the incentives that were provided to the former have been successful. Analysis of offshore premium on samples including all firms and only exporting firms show that both categories of offshore firms have a better performance for all indicators. Generally, the important gap between the performance indicators such as turnover, productivity and wages and the very high level of profitability displayed by offshore firms, all categories considered, compared to onshore firms points out that incentives given by the Tunisian Investment Code is benefiting more firms than to the country. When considering the specific example of offshore exporting and importing firms, performance is weaker than their onshore counterparts across the board, except in the areas of gross job creation and profitability. Lower productivity of two way offshore traders suggest that these firms are low performers and that they self-select in the offshore regime in order to cover their export fixed costs. The survival analysis highlights an increased probability that offshore two-way traders will exit the market once tariffs and tax exemptions privileges end, usually after 10 years. Thus, incentives given in the Tunisian Investment Code are attracting mainly firms in lower rungs of the Global Value Chains. Instead of incentives, Tunisia should rethink its Investment Code in favor of highly added sectors that requires more complex skills and capital. |
| Date: | 2017–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1118&r=int |
| By: | Kamata, Isao; Sato, Hitoshi; Tanaka, Kiyoyasu |
| Abstract: | This study examines the role of management practices in the internationalisation of domestic firms through directly exporting and/or supplying to local affiliates of multinationals. An original survey of manufacturing firms in Viet Nam was conducted, investigating their management practices such as human resource management and internationalisation status. The survey results shed light on similarities and dissimilarities among firms in several dimensions of management practices. We found that internationalised firms tended to be more enthusiastic about the formal training of production workers, the modernisation of production and operation, and product and process innovation. Differences in skills and experience requirements for newly employed managers were less recognisable, but internationalised firms tended to have managers who studied overseas. Furthermore, the use of public support to employee training, teamwork in production, and unionisation of employees did not show a significant difference between internationalised and non-internationalised firms. |
| Keywords: | Industrial management,Business enterprises,Globalization,Management Practices,Firm Heterogeneity,Global Value Chains |
| JEL: | F23 F61 M11 M50 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper658&r=int |
| By: | Juliana Araujo (International Monetary Fund); Povilas Lastauskas (Bank of Lithuania); Chris Papageorgiou (International Monetary Fund) |
| Abstract: | Motivated by the rise in capital flows to low-income countries (LICs), we examine the nature of these flows and the factors affecting foreign investors’ decision. Recognizing the presence of fixed investment costs, we analyze capital flows at both intensive and extensive margins. To fix ideas, we resort to the gravity literature for the estimating relationships which we embed into a two-tier econometric framework with cross-sectional dependence. Our main finding is that market entry costs are statistically and economically very detrimental to LICs. We also obtain the gravity-type relationship for the destination income unconditionally but not after conditioning on relevant variables, as well as establish labor productivity as a robust attractor of capital inflows. |
| Keywords: | Bilateral capital flows, foreign direct investment, portfolio flows, low-income countries, extensive and intensive margins, cross-sectional dependence |
| JEL: | C33 C34 F21 F62 O16 |
| Date: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:lie:wpaper:37&r=int |
| By: | Patt, Alexander (Catholic University of Eichstätt-Ingolstadt); Ruhose, Jens (Leibniz University of Hannover); Wiederhold, Simon (Ifo Institute for Economic Research); Flores, Miguel (EGAP Tecnológico de Monterrey CEM) |
| Abstract: | We present the first evidence that international emigrant selection on education and earnings materializes through occupational skills. Combining novel data from a representative Mexican task survey with rich individual-level worker data, we find that Mexican migrants to the United States have higher manual skills and lower cognitive skills than non-migrants. Conditional on occupational skills, education and earnings no longer predict migration decisions. Differential labor-market returns to occupational skills explain the observed selection pattern and significantly outperform previously used returns-to-skills measures in predicting migration. Results are persistent over time and hold within narrowly defined regional, sectoral, and occupational labor markets. |
| Keywords: | international migration, selection, skills, occupations |
| JEL: | F22 O15 J61 J24 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10837&r=int |
| By: | Julien Bueb (Centre d’analyse, de prévision et de stratégie (CAPS)); Lilian Richieri Hanania (Centre for Studies on Society and Technology (CEST)); Alice Leclezio (Centre de recherches internationales) |
| Abstract: | This paper examines, from a multidisciplinary perspective, plausible hypotheses for implementation of border carbon adjustment mechanisms, seen as a complement to strong environmental regulation. It highlights economic, legal, and political difficulties raised by border carbon adjustments. After thoroughly reviewing their economic practicability, it analyses these mechanisms from an International Trade Law perspective, particularly vis-à-vis the General Agreement on Tariffs and Trade, sustainable development, and the principle of shared but differentiated responsibilities. It concludes with an assessment of policy-related implications of such mechanisms and outlines, in particular, how border carbon adjustments may be used as an engine of economic and energy transition, for developed and developing countries equally. |
| Keywords: | environmental regulation; border carbon adjustment; international trade law; General Agreement on Tariffs and Trade; sustainable development; political economy |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/1gt6nhe6vs8pbb86oi81bt6838&r=int |
| By: | Marius Brulhart (Faculté des Hautes Etudes Commerciales (HEC Lausanne) (HEC Lausanne)); Céline Carrère (Geneva School of Economic and Management Univeristé de Genève); Frederic Robert-Nicoud (Center for Economic Policy Research) |
| Abstract: | Comment l'ouverture au commerce international affecte-t-elle les régions qui y sont le plus exposées de par leur proximité aux frontières? Ce document résume les résultats de recherches empiriques récentes sur la question. Nos résultats démontrent que l'emploi et les salaires des bourgades et villages proches des frontières internationales croissent plus rapidement lors d'épisodes de libéralisation du commerce international que leurs équivalents plus éloignés de la frontière. Les bourgs les plus grands bénéficient d'avantage sous forme de croissance des salaires. Ces résultats sont obtenus sur la base d'une analyse quasi-expérimentale de l'Autriche avant et après la chute du Rideau de fer. Une analyse à l'échelle du monde d'images satellites nocturnes confirme que la libéralisation du commerce international dynamise d'avantage l'activité économique des régions frontières que celle des régions intérieures. Puisque les régions frontières sont en généralement moins développées économiquement, nous en concluons que la libéralisation des échanges commerciaux contribue à la réduction des disparités régionales. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/qbqni4d3o824qe33b2ckl202c&r=int |
| By: | Yanai, Akiko |
| Abstract: | The African Growth and Opportunity Act (AGOA) has successfully supported for the sub-Saharan countries to achieve trade-led economic development on one hand, it has been criticized for the limited method for selecting beneficiaries and its legal instability. After the AGOA was renewed for another ten years in 2015, African countries are facing the new challenges such as AGOA reciprocation and the out-of-cycle eligibility review. Based on the active discussions in the AGOA Forum in 2015 and 2016, this paper examines the future potential structures that are most appropriate for U.S.–African trade and investment relationship. |
| Keywords: | International trade,Economic development,AGOA,Preferential trade arrangement,Trade policy,Sub-Sahara Africa |
| JEL: | F13 O24 O55 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper661&r=int |