nep-int New Economics Papers
on International Trade
Issue of 2017‒07‒02
thirty-six papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Reaping the benefits of global value chains in Turkey By Volker Ziemann; Béatrice Guérard
  2. Protective Measures in Integration Agreements and Their Impact on Mutual Trade and Trade with Third Countries: Features of Russia and the Countries of the Eurasian Economic Union By Knobel, Alexander; Baeva, Marina
  3. Online Exports and the Wage Gap By Cruz, Marcio; Milet, Emmanuel; Olarreaga, Marcelo
  4. Trade Openness and Political Distortions By Grechyna, Daryna
  5. The economic impact of Brexit: Evidence from modelling free trade agreements By Belke, Ansgar; Gros, Daniel
  6. Sizing Up the Impact of Embassies on Exports By Ferguson, Shon; Forslid, Rikard
  7. The Long Run and Short Run Impacts of Exports on Economic Growth: Evidence from Gabon By Bakari, Sayef
  8. UK and global wine markets by 2025, and implications of Brexit By Anderson, Kym; Wittwer, Glyn
  9. N-S Trade with Weak Institutions By James E. Anderson
  10. UK Trade and FDI: A Post-Brexit Perspective By Swati Dhingra; Gianmarco Ottaviano; Veronica Rappoport; Thomas Sampson; Catherine Thomas
  11. It pays to be active on many foreign markets Profitability in German multi-market exporters and importers from manufacturing industries By Joachim Wagner
  12. Offshoring Intensities and Skill Upgrading of Employment in the Slovak Republic By Ďurčová, Júlia; Mirdala, Rajmund
  13. Political Instability: The Neighbor vs. the Partner Effect By Grechyna, Daryna
  14. FTAs and the Pattern of Trade: The case of the Japan-Chile FTA By KUNO Arata; URATA Shujiro; YOKOTA Kazuhiko
  15. The impact of service and goods offshoring on employment : Firm-level evidence By Carmine Ornaghi; Ilke Van Beveren; Stijn vanormelingen,
  16. Contesting an International Trade Agreement By Matthew T. Cole; James Lake; Ben Zissimos
  17. International, European and French trade in dairy products: trends and competitive dynamics By Vincent Chatellier
  18. Exchange rate bands of inaction and hysteresis in EU exports to the global economy: The role of uncertainty By Belke, Ansgar; Kronen, Dominik
  19. Spillover effects of Germany`s final demand on Southern Europe By Oliver Picek; Enno Schröder
  20. Global Productions Sharing and Local Entrepreneurship in Developing Countries: Evidence from Penang Export Hub, Malaysia By Prema-chandra Athukorala
  21. Bilateral multifactor CES general equilibrium with state-replicating Armington elasticities By Jiyoung Kim; Satoshi Nakano; Kazuhiko Nishimura
  22. Scenario Analysis of the Impact of Reducing the Export Duty on Oil on the Russian Economy within the Framework of the General Equilibrium Model By Zubarev, Andrey; Polbin, Andrey
  23. The development-related impacts of EU agricultural policy By Alan Matthews;
  24. Political Connections and Antidumping Investigations: Evidence from China By ZHANG Hongyong
  25. Migration when social preferences are ordinal: Steady-state population distribution, and social welfare By Stark, Oded
  26. Trade and Training By Harker, Patrick T.
  27. How to handle state-owned enterprises in EU-China investment talks By Alicia García-Herrero; Jianwei Xu
  28. Productivity premia for many modes of internationalization - A replication study of Békes / Muraközy, Economics Letters (2016) By Joachim Wagner
  29. Trade Liberalization, Transboundary Pollution and Market Size By Forslid, Rikard; Okubo, Toshihiro; Sanctuary, Mark
  30. China’s Current Account : External Rebalancing or Capital Flight? By Anna Wong
  31. Are population and international trade the main factors for environmental damage in China? By Vu, Binh
  32. Import Substitution of Investment Goods in Russia By Idrisov, Georgy; Kaukin, Andrey; Pavlov, Pavel
  33. Assessment of the Export Potential of the Russian Higher Education System in the Long Term By Krasnova, Gulnara
  34. Regional Input-Output Matrices, an Application to Manufacturing Exports in Mexico By Chiquiar Daniel; Alvarado Jorge; Quiroga Miroslava; Torre Cepeda Leonardo E.
  35. I’m Neither Racist nor Xenophobic, but: Dissecting European Attitudes towards a Ban on Muslims’ Immigration By Marfouk, Abdeslam
  36. Agenda for Russia in WTO: Theoretical Approaches and Directions for Implementation By Pakhomov, Alexander; Makarov, Andrei; Bagdasarian, Kniaz

  1. By: Volker Ziemann; Béatrice Guérard
    Abstract: Despite major progress, Turkey still lags behind most comparable countries in terms of exported value added per capita. Its remarkable economic performance over the past 15 years has not been sufficiently backed by gains in export market shares, in particular when measured in value added terms. While Turkey incorporates an increasing share of foreign value added in its own exports, its capacity to provide intermediate inputs to other countries’ exports is still limited. This paper argues that Turkey’s participation in global value chains remains below potential owing to institutional features that hamper efficient allocation of capital and labour, obstacles inherent in bilateral trade agreements and entry regulations, underdeveloped human capital and insufficient investment in innovation, R&D and knowledge-based capital. Progress along these dimensions would strengthen Turkey’s backward and forward trade linkages and contribute to rebalancing its growth model. The adjustment process towards a more export-oriented economy operating on a level playing field needs to be flanked by dedicated industrial, social and environmental policies to alleviate adverse consequences on displaced firms and workers and the ecosystem. Tirer les avantages des chaînes de valeur mondiales en Turquie Malgré des progrès, la Turquie accuse toujours un retard par rapport à la plupart des pays comparables en termes de valeur ajoutée exportée par habitant. Sa performance économique remarquable au cours des 15 dernières années n'a pas été suffisamment soutenue par des gains de parts de marché à l'exportation, en particulier lorsque ceux-ci sont mesurés en valeur ajoutée. Alors que la Turquie intègre une part croissante de valeur ajoutée étrangère dans ses propres exportations, sa capacité à fournir des intrants intermédiaires pour les exportations d'autres pays est encore limitée. Ce papier fait valoir que la participation de la Turquie dans les chaînes de valeur mondiales reste inférieure à son potentiel en raison de caractéristiques institutionnelles qui entravent l'allocation efficace du capital et du travail, des obstacles inhérents aux accords commerciaux bilatéraux et des règlements d'entrée de professions, du capital humain sous-développé et de l'insuffisance des investissements dans l'innovation, la R & D et le capital de connaissances. Progresser dans ces dimensions permettrait de renforcer les liens commerciaux en amont et en aval de la Turquie et de contribuer à rééquilibrer son modèle de croissance. Le processus d'ajustement vers une économie plus orientée vers l'exportation opérant avec des règles du jeu équitables doit être encadré par des politiques industrielles, sociales et environnementales dédiées à atténuer les conséquences néfastes sur les entreprises et les travailleurs déplacés et l'écosystème.
    Keywords: export performance, global value chains, trade and investment policies
    JEL: C33 F02 F14 O30
    Date: 2017–02–07
  2. By: Knobel, Alexander (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Baeva, Marina (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: This research provides review of impose trade remedies (antidumping, countervailing measures, safeguard measures) and conduct relative investigation as well as sanitary and phytosanitary measures (SPS) against certain trade partner by different countries in 1995–2015. This research considers theoretical aspects, empirical studies of introduction of trade measures in integration blocks like NAFTA, MERCOSUR, ASEAN, Pacific Alliance, EAEU, TTP (countries-signers) and RCEP (negotiated parties) against members and third countries. Furthermore, trade measures imposed by Russia and imposed against Russia are considered.
    Keywords: international trade, trade and economic cooperation, integration blocks, free trade agreements (FTA), tariff and non-tariff measures, antidumping, countervailing measures, safeguard measures, sanitary and phytosanitary measures (SPS)
    Date: 2017–05
  3. By: Cruz, Marcio; Milet, Emmanuel; Olarreaga, Marcelo
    Abstract: The development of the internet is often seen as a source of demand for skilled workers and therefore a potential driver of the wage gap between skilled and unskilled workers. In this paper we focus on the impact that international trade in online platforms has on the wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets we can a priori expect that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of twenty three developing countries for which we can match online trade and wage gap data, we find that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.
    Keywords: online trade; wage gap
    JEL: F14 J31 L86
    Date: 2017–06
  4. By: Grechyna, Daryna
    Abstract: In this paper we explore the relationship between international trade openness and two major political distortions, political polarization and political instability. We consider the extensive and intensive margins of trade as measured by the number of trade partners and trade volume, respectively. As political distortions and trade characteristics of the country are endogenously related, we instrument political instability by the age difference between the youngest and the oldest effective political leaders of a country and the average neighbors' neighbors political instability. We find that political instability reduces trade openness at the extensive and intensive margin while political polarization negatively affects the extensive margin of trade. We propose a simple model that provides intuition on our findings.
    Keywords: trade openness; political instability; political polarization; instrumental variables.
    JEL: F10 H10 O24
    Date: 2017–05
  5. By: Belke, Ansgar; Gros, Daniel
    Abstract: This paper assesses the economic implications of the United Kingdom leaving the European Union. The basic data on trade in goods and services and investment between the two parties suggest that cost of 'Brexit' could be substantial. Trade between the UK and the EU27 is large and of a similar order of magnitude as transatlantic trade (between the EU and the US). The precise nature of the (hopefully free) trade agreement UK-EU-27 is still being negotiated. But all available studies concur that a significant disruption of trade links will impose economic costs on both sides. However, the EU27 would bear only a disproportionally small share of the total cost - not just because it is about five times larger than the UK in economic terms but also for fundamental reasons such as greater market power of its enterprises. Other studies on different free trade arrangements confirm the general proposition that the smaller party has more to gain from eliminating trade barriers (and to lose from imposing them). This implies that the EU will have the stronger negotiating position.
    Keywords: Brexit,European Union,free trade agreements,trade in goods and services,FDI
    JEL: F15 C63 C68
    Date: 2017
  6. By: Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Forslid, Rikard (Dept. of Economics, Stockholm University)
    Abstract: The purpose of this study is to test for the effects of trade promotion via the foreign service. Heterogeneous firms trade theory predicts that unilateral trade promotion allows medium sized firms to export. We investigate the effects of trade promotion using firm-level data and information on the opening and closing of embassies abroad from the very similar neighboring countries Sweden and Norway. We use a difference-in-difference specification where firms from Norway are used as a control group for Swedish firms. Our results show that large firms as well as medium sized firms respond to the opening of embassies.
    Keywords: heterogeneous firms; trade promotion
    JEL: D21 D22 F12 F15
    Date: 2017–06–26
  7. By: Bakari, Sayef
    Abstract: This study investigates the impact of exports on economic growth in Gabon using annual time series data for the period 1980 - 2015 by implementing cointegration analysis and error correction model. The empirical results show that in the long run, investment and exports affect negatively on economic growth. However, in short run investment and export cause economic growth. These results provide evidence that investment and exports are necessary in Gabon's economy and are presented as an engine of growth since they cause economic growth in the short term. But they are not carried out and treated with a solid and fair manner, which offer new insights into Gabon’s openness policy for promoting economic growth.
    Keywords: Exports, Growth, Error-Correction, Openness policy, Gabon.
    JEL: F1 F11 F13 F14
    Date: 2017–06–18
  8. By: Anderson, Kym; Wittwer, Glyn
    Abstract: The UK has accounted for a major share of the world's wine imports for centuries, and wine accounts for more than one-third of UK alcohol consumption. It is therefore not surprising that both suppliers of those imports and UK wine consumers, producers, traders, distributors, and retailers are focusing on what the UK's planned withdrawal from the European Union (Brexit) might mean for them. In this paper a model of the world's wine markets is used to project those markets to 2025 without, and then with, Brexit. The Brexit scenarios involve adjustment not just to UK and EU27 bilateral tariffs but also to assumed changes to UK's income growth and currency. The relative importance of each of those three components of the shock are reported, as are impacts on bilateral wine trade values and volumes for still and sparkling wines. The results suggest the impact outside the UK will be very minor compared with other developments in the world's wine markets. Inside the UK, however, the effect of Brexit on incomes and the pound are likely to have non-trivial impacts on the domestic wine market, and to be far larger than just the direct impact of changes in bilateral tariffs.
    Keywords: Brexit; global wine market modeling; preferential trading agreements
    JEL: F13 F14 F15
    Date: 2017–06
  9. By: James E. Anderson (Boston College)
    Abstract: States with weak institutions can lose from trade with strong states when trade is subject to predation. The happy liberal idea of trade fostering better institutions and peace can be turned on its head. The Ricardian model of trade subject to predation offered here implies imperialism without capital, contra Marxists. Weak and poor South trades with strong and rich North. Poor South labor is attracted to predation. Labor market effects of predation and enforcement amplify opposing interests in the terms of trade, potentially obviating the standard gains from trade that allows bargaining solutions to surplus division.
    Keywords: Predation, enforcement, colonialism
    JEL: F13 F14 F16
    Date: 2017–06–23
  10. By: Swati Dhingra; Gianmarco Ottaviano; Veronica Rappoport; Thomas Sampson; Catherine Thomas
    Abstract: Leaving the EU will change the UK's economic relations with the rest of the world. This paper discusses the UK's role in the global economy and the consequences of Brexit for the UK's trade, investment and living standards. We emphasize that international integration encompasses investment and labour services flows as well as trade in goods and services and that there are important interdependencies between the different forms of integration which should be considered when evaluating policy changes. Brexit is likely to make the UK poorer by reducing trade and investment flows, but the size of these effects will depend upon the nature of the UK's post-Brexit economic relations with the EU and the rest of the world. We conclude by considering options for UK-EU relations after Brexit and how the UK should approach future trade negotiations.
    Keywords: Brexit, UK trade, UK FDI, negotiations
    JEL: F02 F13
    Date: 2017–06
  11. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper provides the first empirical evidence on the link between the number of foreign markets (where a market is defined as the combination of one traded good and one country traded with) a firm is active on and its profitability. We find that in German manufacturing industries the profitability of a firm increases when the number of markets a firm exports to or imports from increases. The extra costs associated with being active on more foreign markets tend to be smaller than the extra benefits. It pays to be active on many foreign markets.
    Keywords: Exports, Imports, Number of foreign markets, Profitability, Germany
    JEL: F14
    Date: 2017–03
  12. By: Ďurčová, Júlia; Mirdala, Rajmund
    Abstract: Offshoring representing one of the main characteristics of the current stage of globalization contributed to reduction of the demand for relative unskilled workers resulting in falling wages of unskilled labor in developed countries. The shift away from low-skilled workers is driven by offshoring to Central and Eastern Europe (CEE) countries However, the Slovak Republic, like other European countries experienced considerable skill upgrading of employment over past decade. The study of intertemporal sectorial development of employment and growth rate of person engaged clearly indicates a change in the structure of employment. Therefore it is interesting to examine how offshoring and domestic outsourcing influences these trends. In order to estimate the impact of offshoring on skill structure of labor demand in the Slovak Republic the system of cost share equations will be derived from translog cost function. The equations for different cost shares are estimated using seemingly unrelated regression (SUR). Our results indicate that offshoring contribution to the change of employment share in case of low and medium skill-levels was negative while positive for high-skilled labor demand.
    Keywords: offshoring, outsourcing, employment, translog cost function, skill level
    JEL: F14 F16 J31
    Date: 2016–12
  13. By: Grechyna, Daryna
    Abstract: This paper investigates the impact of geographical neighbors on the political instability of a country and the role of a country's international relations in shaping the impact of its geographical neighbors. First, we show that political instability in neighbor countries has a strong positive impact on a given country's political instability. Second, we test whether international relations can reduce this impact of geographical neighbors. We find that more active participation in international governmental organizations is associated with lower impact of neighbor countries' political instability on a given country's political instability. Moreover, a country's dependence on its neighbors can be reduced when six or more main trade partners are non-neighbors. Our results indicate that international relations can be an efficient counterforce to the so-called "neighbor's curse."
    Keywords: political instability; geographical neighbors; neighborhood effect; international relations; trade partners.
    JEL: D74 F13 F50 O19
    Date: 2017–06
  14. By: KUNO Arata; URATA Shujiro; YOKOTA Kazuhiko
    Abstract: Economists have long sought to explain the pattern of trade by developing international trade theories since the theory of comparative cost/advantage was developed by David Ricardo in the 19th century. Applying the Ricardian continuum goods model developed by Dornbusch, Fischer and Samuelson (1977) and by incorporating contributions from a new new trade theory (heterogeneous firm trade theory), we estimate the impacts of the Japan-Chile free trade agreement (FTA) (JCEPA) on extensive and intensive margins of Japan's exports to Chile. Our results show that the tariff liberalization under the JCEPA increases both extensive and intensive margins of Japan's exports to Chile. We also find that a rise in the ranking of comparative advantage caused by the JCEPA increased extensive margins. These findings indicate the importance of expanding FTA networks and promoting the use of FTAs, in order to increase trade. Governments can contribute to an increase in the use of FTAs by implementing the measures such as disseminating information about the benefits of using FTAs and simplifying the procedure for obtaining the certificate of origin, which is required for using FTAs.
    Date: 2017–06
  15. By: Carmine Ornaghi (University of Southampton); Ilke Van Beveren (CBS The Netherlands and KU Leuven); Stijn vanormelingen, (KU Leuven)
    Abstract: Advances in communication technology have led to a remarkable increase in the tradability of services, resulting in a substantial increase in offshoring of services over the last two decades. Research investigating how this surge in service offshoring affects employment, has been largely hampered by the paucity of suitable microdata. This paper tries to fill this gap by using a newly constructed database of Belgian firms that combines individual transaction-level data on international trade in goods and services with annual financial accounts. This unusually rich dataset allows us to produce fresh evidence on the impact of goods and service offshoring on total employment and employment by educational levels for both manufacturing industries and the service sectors. Our results show that: (i) goods offshoring has a positive impact on employment growth among workers with both low and high levels of education in the manufacturing industry but this effect disappears when controlling for scale effects; and (ii) service offshoring has a negative impact on employment growth among highly educated workers in the service sectors. This novel evidence suggests that globalization may threaten job security of higher educated workers too.
    Keywords: Offshoring, trade in services, labour markets
    Date: 2017–05
  16. By: Matthew T. Cole (Department of Economics, California Polytechnic State University); James Lake (Department of Economics, Southern Methodist University); Ben Zissimos (Department of Economics, University of Exeter)
    Abstract: After governments sign an international trade agreement (TA), each government must ratify the TA. Often, this ratification process is lengthy and the outcome highly uncertain. We model a two-country TA where, unlike prior literature, pro-trade and anti-trade interest groups in each country recognize that (i) TA implementation requires ratification by both governments and (ii) they cannot condition contributions on their government's ratification decision. In this new class of contests, which we call 'parallel contests', we show that (i) anti- and pro-trade lobbies lobby in equilibrium, (ii) the probability of TA ratification lends itself to intuitive and tractable comparative statics, and (iii) the protection embodied in negotiated TA tariffs reflects a tension between the liberalizing force of lobbying and inherently protectionist government preferences.
    Keywords: Contests, Trade Agreements, Lobbying
    JEL: F02 F12 F13 D44 D72
    Date: 2017
  17. By: Vincent Chatellier
    Abstract: At the international level, the dairy sector is favored by a growing demand, mainly from Asian countries, where dairy consumption per capita remains much lower than that observed in the European Union (EU) and North America. Over the last fifteen years (2000-2015), New Zealand, the country that has most benefited from the growth of international trade in dairy products, especially under the influence of whole milk powdered Chinese imports was far ahead of the USA and the EU. Despite an increase in imports, especially of cheese and butter, France has regularly improved its trade balance which reached €3.75 billion in 2015. This performance was due mainly to the dynamics of trade with the United Kingdom and China. Since 2010, the trade balance of France with non-European countries has been improving while the internal competition with the EU is becoming more difficult. For the European dairy producers, the slight decline in demand for dairy products in the EU and the rapid increase in milk production in several Member States since the abolition of milk quotas in 2015 is a real threat. This should be an additional incentive to, firstly, increase exports abroad and, secondly, better sell the wide variety of dairy products on the domestic market.
    Keywords: dairy, milk, trade, European Union, competiveness
    JEL: Q13 Q17
    Date: 2017
  18. By: Belke, Ansgar; Kronen, Dominik
    Abstract: This paper estimates the role of policy and exchange rate uncertainty shocks for EU countries' exports to the world economy. We examine the performance of the four biggest economies, namely Germany, France, Italy and the UK, under policy and exchange rate uncertainty in exports to some of the most important global export destinations (United States, Japan, Brazil, Russia, and China). For this purpose, we apply a non-linear model, where suddenly strong spurts of exports occur when changes of the exchange rate go beyond a zone of inaction, which we call "play" area - analogous to mechanical play. We implement an algorithm describing path-dependent play-hysteresis into a regression framework. The hysteretic impact of real exchange rates on exports is estimated based on the period from 1995M1 to 2015M12. Looking at some of the main export destinations of our selected EU member countries, the United States, Japan and some of the BRICs (Brazil, Russia and China), we identify significant hysteretic effects for a large part of the EU member countries' exports. We find that their export activity is characterized by "bands of inaction" with respect to changes in the real exchange.
    Keywords: export demand,global economy,hysteresis,policy uncertainty,BRICs,playhysteresis,real exchange rate,switching/spline regression
    JEL: F14 C51
    Date: 2017
  19. By: Oliver Picek; Enno Schröder
    Abstract: We calibrate a closed multi-country input-output model with data from the World Input-Output Database to estimate the size of spillover effects of Germany?s final demand on GDP, employment, and the trade balance in Southern European countries. We find that spillover effects are rather small. Germany alone will hardly make a significant contribution to the external adjustment process in the European South.
    Keywords: euro area, macroeconomic imbalances, external adjustment, input-output analysis, global value chains, spillover effects
    JEL: F14 F32 F42 C67
    Date: 2017
  20. By: Prema-chandra Athukorala
    Abstract: This article examines opportunities and policy options for developing countries to promote engagement of local firms in global production networks. The article begins with a stage-setting overview of the ongoing process of global production sharing and the emerging opportunities local firm's engagement. It then undertakes an illustrative case study of the export hub in the state of Penang in Malaysia. Forging operational links between multinational enterprises, which set up assembly plants in Penang, and local firms was an integral part of the export-led development strategy of the state. This policy emphasis was instrumental in fostering a domestic supplier network around the operations of the multinational enterprise subsidiaries. A number of local firms, which emerged de novo through production sharing, have become global players in their own right, with production bases in a number of other countries.
    Keywords: globalization, trade policy, multinational enterprises, global production networks
    Date: 2017–03–03
  21. By: Jiyoung Kim; Satoshi Nakano; Kazuhiko Nishimura
    Abstract: We measure elasticity of substitution between foreign and domestic commodities by way of two-point calibration, in order that the Armington aggregator can replicate the two temporally distant observations of market shares and prices. Along with the sectoral multifactor CES elasticities which we estimate by way of regression using a set of isaggregated linked input-output observations, we integrate domestic production of the two countries, i.e., Japan and the Republic of Korea with bilateral trade modules and construct a bilateral general equilibrium model. Thereupon we make assessment of a tariff elimination scheme between the two countries.
    Date: 2017–06
  22. By: Zubarev, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Polbin, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The article studies macroeconomic effects of reducing oil export duty in the neoclassical general equilibrium model for the Russian economy. It is shown that in the current economic environment with low oil prices, this tax reform can be virtually painless for the economy. At the same time, if considered economic policy measure will force the oil refining industry to modernise its production facilities, there will be a positive effect on output in the economy and the welfare of domestic economic agents in the long run.
    Keywords: ýêñïîðòíàÿ ïîøëèíà íà íåôòü, íàëîãîâûé ìàíåâð, äèíàìè÷åñêèå ìîäåëè îáùåãî ðàâíîâåñèÿ, ðîññèéñêàÿ ýêîíîìèêà, oil export duty, tax reform, DSGE model for the Russian economy
    Date: 2017–05
  23. By: Alan Matthews (Department of Economics, Trinity College Dublin);
    Abstract: The European Commission launched a process for the modernisation and simplification of the Common Agricultural Policy (CAP) in early 2017 which will lead to a Commission Communication on the future of the CAP post 2020 towards the end of 2017. The impact assessment for this Communication must consider the impact of future changes to the CAP on developing countries. This paper first provides an assessment of the development-related impact of important CAP instruments. It discusses some of the main proposals of stakeholders for the CAP post 2020 and draws conclusions on their implications especially for the poorest developing countries. Finally, the paper identifies key demands which development groups should consider raising in this debate. The paper concludes that the CAP (as distinct from accompanying trade policy) now has limited effects on the least developed countries and that potential changes to the policy post 2020 are unlikely to change this assessment. Campaigning groups have a role to play in helping to prevent any back-sliding in the direction of CAP reform. However, they should assess whether devoting limited resources to attempting to influence the direction of changes in the CAP would give the greatest return in terms of poverty alleviation and meeting sustainable development goals in the poorest developing countries.
    Keywords: Common agricultural policy, policy coherence for development, least developed countries, agricultural trade, agricultural policy
    JEL: F13 O13 Q17
    Date: 2017–06
  24. By: ZHANG Hongyong
    Abstract: Do political connections affect antidumping (AD) investigations? To address this question, we use antidumping filings data combined with micro data on Chinese manufacturing firms for the period 1998-2007. The political connections of a firm are defined by whether it has state-owned capital or whether it is under the administration of central or provincial government. Estimating a probit model of AD filings at the firm level, we find that strong political connections significantly increase the likelihood of AD petitions and affirmative final dumping decisions. State-owned enterprises, firms affiliated with the central or provincial government, low productivity firms, and large firms tend to file AD investigations in China. The industry-level estimation results also confirm that industries with a greater presence of state-owned enterprises are likely to receive trade protection from the Chinese government, controlling for import penetration, year, and industry fixed effects.
    Date: 2017–06
  25. By: Stark, Oded
    Abstract: This paper adds three dimensions to the received literature: it models migration when the individuals' preferences regarding their relative income are ordinal, it works out the resulting spatial steady-state distribution of the individuals, and it shows that the aggregate of the individuals' migration choices in the spatial steady-state distribution sums up to the social optimum. This finding does not apply when the individuals' preferences regarding their relative income are cardinal. We highlight the importance of the assumption about the nature of the individuals' social preferences (whether ordinal or cardinal) to studying and predicting their migration behavior, and to elucidating the consequences of that behavior for social welfare.
    Keywords: Ordinal preferences,Distaste for low relative income,An ordinal measure of income relative deprivation,Interregional migration,Steady-state spatial distribution,Social Welfare
    JEL: C61 C62 D50 D60 D62 I31 R13 R23 Z13
    Date: 2017
  26. By: Harker, Patrick T. (Federal Reserve Bank of Philadelphia)
    Abstract: "Trade fosters peace and cooperation” among nations, said Philadelphia Fed President Patrick Harker in a June 27 speech to the European Economics and Financial Centre in London, UK. But he said help should be given to the workers and industries that are negatively affected by trade
    Keywords: trade; international cooperation; international trade; peace
    Date: 2017–06–27
  27. By: Alicia García-Herrero; Jianwei Xu
    Abstract: Chinese state-owned enterprises (SOEs) are one of the main obstacles preventing China and the European Union from agreeing a bilateral investment agreement (BIT). Given the benefits that both China and EU could obtain from a BIT, the question of SOEs should be addressed in the most effective way. We examine the main differences between Chinese and European SOEs, in terms of their sectoral coverage and, most importantly, their corporate governance. We argue that preferential market access for Chinese SOEs in China is the key to their undue competitive advantage globally, and is also the reason why global consumers might not necessarily benefit from Chinese SOEs in terms of welfare gain. Preferential market access in China, rather than ownership of SOEs, should be the key factor when evaluating the undue advantage enjoyed by Chinese corporates because private companies with ties to the Chinese government might also benefit from preferential market access. We also offer a checklist of issues for EU-China investment talks in relation to Chinese SOEs. First, creating barriers to prevent Chinese companies acquiring European assets will not solve the problem. Instead, equal market access in China is a much better goal to pursue in order to reduce the seemingly unlimited resources that Chinese SOEs seem to have to compete overseas. Second, bringing Chinese corporate governance closer to global market principles is also essential to ensure European and Chinese corporates operate on an equal footing in their cross-border investment decisions.
    Date: 2017–06
  28. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This study attempts to replicate estimation results from Gábor Békés and Balázs Muraközy, Measuring productivity premia with many modes of internationalization, published in Economics Letters (2016). In this paper the authors use comparable firm-level data for seven European countries based on the EFIGE dataset to estimate the productivity premia of firms with various modes of internationalization by several empirical methods to demonstrate how results differ due to the method applied. While the EFIGE data are available free of charge from the web one core variable used by Békés and Muroközy is not, because total factor productivity (tfp) as computed by the authors is based on data from a commercial data base and, therefore, is available for users with a license to this database only. The freely available EFIGE data, however, come with another tfp-variable that can be used instead. In this replication study I use the EFIGE data with this publicly available tfp-variable to replicate (parts of) the estimations of Békés and Muraközy (2016) to see whether their results hold with the widely used public use version of the EFIGE data, too. It turns out that the big picture that emerges from using both productivity measures tends to be very similar. The use of the public use version of the EFIGE data for empirical investigations that deal with productivity, therefore, seems to be feasible.
    Keywords: Replication study, EFIGE data, productivity premia, internationalization modes
    JEL: F14
    Date: 2017–03
  29. By: Forslid, Rikard (Dept. of Economics, Stockholm University); Okubo, Toshihiro (Keio University); Sanctuary, Mark (Stockholm School of Economics, Royal Swedish Academy of Sciences)
    Abstract: This paper uses a monopolistic competitive framework to study the impact of trade liberalization on local and global emissions. We focus on the interplay of asymmetric emission taxes and the home market effect and show how a large-market advantage can counterbalance a high emission tax, so that trade liberalization leads firms to move to the large high-tax economy. Global emissions decrease when trade is liberalized in this case. We then simulate the model with endogenous taxes. The larger country, which has the advantage of the home market effect, will be able to set a higher Nash emission tax than its smaller trade partner, yet still maintain its manufacturing base. As a result, a pollution haven will typically not arise in this case as trade is liberalized. However, global emission increases as a result of international tax competition, which underscores that the importance of international cooperation increases as trade becomes freer.
    Keywords: Market size; emission tax; trade liberalisation; pollution haven effect
    JEL: D21 F12 F15
    Date: 2017–06–26
  30. By: Anna Wong
    Abstract: This paper examines an anomaly in China’s current account: its large and rapidly growing travel expenditure. Drawing evidence from counterparty data, Chinese international arrival statistics, and gravity equation models extended to travel trade, I find that a significant amount of China’s travel spending in the period 2014-2016 could not be explained by accounting factors or economic fundamentals. The unexplained travel imports are inversely associated with domestic growth and positively associated with renminbi depreciation expectations against the dollar, suggesting that they are less likely to be consumption of goods and services abroad than domestic residents’ acquisition of foreign financial assets. Adjusted for these potential disguised outflows, China’s current account balance could be higher than reported by around 1 percent of GDP in 2015 and 2016, a period when the Chinese economy slowed noticeably as it shifted away from investment-driven growth (i.e.“internal rebalancing”). These results suggest that Chinese households, through the travel channel, have in part replaced the official sector in directing domestic surplus savings abroad in recent years. While the official sector preferred liquid foreign government assets, Chinese households appear to prefer private foreign assets.
    Keywords: Capital flight ; Current account ; Trade mis-invoicing ; Services trade
    JEL: F32 F21 F14 G15
    Date: 2017–06–19
  31. By: Vu, Binh
    Abstract: This paper investigates whether population and international trade, along with energy consumption, are the main factors for environmental damage in China during the period 1971-2011. The stationary analysis is examined by the Zivot–Andrews unit root test and the ARDL bounds testing approach is used for a long run relationship between the series in the presence of structural breaks. The causality between CO2 emissions, energy consumption, economic growth, population and international trade is examined by the VECM Granger causality technique. Our results show that the selected variables are cointegrated; it means that the long run relationship exists in the presence of structural breaks. The empirical findings indicate that in long run, energy consumption and population increase CO2 emissions, while in short run, energy consumption and international trade decrease CO2 emissions. The VECM causality analysis shows that CO2 emissions Granger cause energy consumption, while energy consumption and population Granger cause trade. The VECM analysis also indicates the feedback hypothesis between trade and CO2 emissions. Policy recommendations are made following the obtained results.
    Keywords: CO2 emissions; population; international trade; energy consumption.
    JEL: C22 O44 Q43 Q53 Q56
    Date: 2017–02–17
  32. By: Idrisov, Georgy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Kaukin, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Pavlov, Pavel (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The main purpose of the research is to test hypotheses about the impact of the real effective exchange rate, the level of business confidence, the prices of imported and domestic substitute investment goods, income (gross value added/revenue) of Russian industry, the EU and US sectoral sanctions on indicators of investment dynamics in Russia at different time intervals. Factors of demand of Russian companies on the import of capital goods were researched in detail.
    Keywords: import substitution, investment goods, capital goods, a model of demand for imports, Rotterdam model, the real effective exchange rate, sectoral EU and US sanctions, èìïîðòîçàìåùåíèå, òîâàðû èíâåñòèöèîííîãî íàçíà÷åíèÿ, êàïèòàëüíûå áëàãà, ìîäåëü ñïðîñà íà èìïîðò
    Date: 2017–06
  33. By: Krasnova, Gulnara (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper examines and evaluates the export potential of the Russian higher education system in the long term up to 2030. The main external and internal factors affecting the expansion and development of exports of Russian higher education are described, as well as a package of measures and mechanisms for attracting foreign students to study in Russia.
    Date: 2017–06
  34. By: Chiquiar Daniel; Alvarado Jorge; Quiroga Miroslava; Torre Cepeda Leonardo E.
    Abstract: Based on the national Input-Output Matrix (IOM) 2012 calculated by INEGI, we use Flegg's approach to estimate four regional Input-Output Matrices (RIOMs) using Banco de México's regionalization (Northern, North-Central, Central and Southern). The RIOMs are employed to evaluate the impact on regional gross output, value added and employment resulting from a 10,000 million dollar shock on Mexican manufacturing exports. The results show that the effects on the absolute values of gross output, value added and employment in the North are clearly larger than those estimated for the other regions. Another finding is that the total effects of the regional shocks tend to concentrate in the manufacturing sector, with the highest concentration observed in the North, and the lowest in the South. We also find that indirect effects of these shocks tend to be larger in regions far from the US border.
    Keywords: Input-Output Model;Regional Analysis;Multiplier Effects;Exports
    JEL: R11 R12 R15
    Date: 2017–06
  35. By: Marfouk, Abdeslam
    Abstract: During his presidential campaign, the new elected President of U.S., Donald Trump, called for a complete ban on Muslims from entering the United States. Although numerous European observers have been shocked by his racist proposal, using the most recent round of the European Social Survey, this paper found that a sizeable proportion of Europeans support a similar ban in their own countries, e.g. Czech Republic (54%), Hungary (51%), Estonia (42%), Poland (33%), and Portugal (33%). The paper also provides evidence that racism and immigration phobia play a key role in shaping Europeans’ support of a ban on Muslim immigration. This finding challenges the discourse and campaigns of the populist groups who exploit the ‘Islamization of Europe’ rhetoric successfully and use various pretexts to justify a call for a ban on Muslims’ immigration, e.g. the threat to security, secularism, democracy, Western ‘identity’, culture and values.
    Keywords: Anti-immigrants sentiment, Anti-Muslim sentiment, Islamophobia, Racism, Xenophobia,
    JEL: F22 J61 J71
    Date: 2016–11
  36. By: Pakhomov, Alexander (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Makarov, Andrei (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Bagdasarian, Kniaz (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: In this research the review of the activity of Russian delegation in the World Trade Organization into 2012-2016 is analyzed, as well as the preliminary results of the impact of membership in the organization in the foreign economic sector of Russia. The active search for a solutions and directions of actions on the intermediate-term prospect in this significant sphere for elaborating the foreign economic policy of Russia is required in the present stage. Over the intermediate-term long term – in proportion to the possible formation of the bases of the new economy - will grow demand and significance for the “WTO factor” in Russia. In turn, the synergetic effect can arise, which will make it possible to carry out the effective foreign economic policy of the country taking into account the interests of the progressive development of national economy.
    Date: 2017–05

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