nep-int New Economics Papers
on International Trade
Issue of 2017‒09‒17
24 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Productivity and Trade Spillovers: Horizontal Crowding-Out Versus Vertical Synergies in Europe as a Response to Foreign Direct Investment By Jan Hanousek; Evzen Kocenda; Pavla Vozarova
  2. Trade Scopes across Destinations: Evidence from Chinese Firm By Miao, Zhuang; Li, Yifan
  3. Globalization and State Capitalism: Assessing Vietnam’s Accession to the WTO By Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky
  4. Measuring Trade Costs and Gains from Trade Facilitation in the Philippines By Ramon L. Clarete
  5. Human Barriers to International Trade By Fensore, Irene; Legge, Stefan; Schmid, Lukas
  6. Pirate’s Treasure By Jenny X. Lin; William Lincoln
  7. Firm heterogeneity and aggregate business services exports: micro evidence from Belgium, France, Germany and Spain By Ariu, Andrea; Biewen, Elena; Blank, Sven; Gaulier, Guillaume; González, María Jesus; Meinen, Philipp; Mirza, Daniel; Martín, Cesar; Tello, Patry
  8. Knowledge Diffusion and Trade across Countries and Sectors By Nan Li; Jie Cai; Ana Maria Santacreu
  9. Impact of International Trade on Unemployment under Oligopoly By Zhou, Haiwen
  10. The relationship between trade openness and economic growth: The case of Ghana and Nigeria. By Moyo, Clement; Kolisi, Nwabisa; Khobai, Hlalefang
  11. Determinantes del déficit comercial de la República Dominicana By Mejía Méndez, Cinthya; Jáquez Polanco, Jaqueli; Cruz-Rodríguez, Alexis
  12. Limited Cross-retaliation and Lengthy Delays in International Dispute Settlement By Richard Chisik; Chuyi Fang;
  13. Foreign Investment and Domestic Productivity: Identifying knowledge spillovers and competition effects By Christian Fons-Rosen; Sebnem Kalemli- Özcan; Bent E. Sørensen; Carolina Villegas-Sanchez; Vadym Volosovych
  14. Machinery Production Networks and Tariff Evasion By Mateus Silva Chang; Chin-Ho Lin
  15. Foreign Investment and Domestic Productivity: Identifying Knowledge Spillovers and Competition Effects By Christian Fons-Rosen; Sebnem Kalemli-Ozcan; Bent E. Sørensen; Carolina Villegas-Sánchez; Vadym Volosovych
  16. Taking into account of the environment in free-trade agreement impact assessments By Robert Joumard
  17. Education Policies and Migration across European Countries By Ainhoa Aparicio Fenoll; Zoe Kuehn
  18. The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification? By Dany Bahar; Rodrigo Wagner; Ernesto Stein; Samuel Rosenow
  19. The Determinants of Foreign Direct Investment in sub-Saharan Africa: What Role for Governance? By Andres Rodrigues-Pose; Gilles Cols
  20. Taken by Storm: Hurricanes, Migrant Networks, and U.S. Immigration By Parag Mahajan; Dean Yang
  21. Impacto de la volatilidad del tipo de cambio real en las exportaciones: Evidencia empírica para Europa, Sudamérica y Oceanía By Ronald Miranda; Gabriela Mordecki; Loenel Muinelo
  22. Exporter Price Premia? By Ina C. Jäkel; Allan Sørensen
  23. A New Measure to Quantify Hysteresis Losses: The case of Italian wine exports to the US By Jolita Adamonis; Laura M. Werner
  24. The role of mobile phones in governance-driven technology exports in Sub-Saharan Africa By Simplice Asongu; Ndemaze Asongu

  1. By: Jan Hanousek; Evzen Kocenda; Pavla Vozarova
    Abstract: We analyze the impact of multinational enterprises (MNEs), via their foreign direct investment (FDI), on domestic firms in 30 European host economies, from 2001 to 2013. We incorporate international industrial and trade linkages into a standard theoretical framework and test them empirically on a unique dataset compiled from the Amadeus, Eurostat, UN Comtrade and BACI data sources. While controlling for horizontal, vertical, and export channels at the upstream and downstream levels, we show that the presence of MNEs significantly affects domestic firms, in terms of both changing the market structure and improving productivity. The impact is not always positive, as domestic firms are often crowded-out. However, those firms that withstand such double competition receive additional benefits stemming from trade (export) spillovers. In our complex model, we did not find significant (positive) interactions of domestic firms with horizontal MNEs which would suggest desirable productivity spillovers.
    Keywords: multinational enterprise (MNE); foreign direct investment (FDI); European firms; spillovers; international trade
    JEL: C33 F15 F21 F23 O24
    Date: 2017–08
  2. By: Miao, Zhuang; Li, Yifan
    Abstract: Abstract We examine how Chinese exporters adjust their number of exported varieties with respect to different characteristics of destination countries and varying trade cost. Using the Chinese firm-level customs data from the years 2001 and 2006, we show that: (i) firms export fewer varieties (indexed by HS6 code) to the destinations which are with higher exchange rate volatility, farther from China, or impose higher import-tariff rate; (ii) in response to the tariff reduction process by the destination countries after China entering to the WTO in 2001, the high productivity firms expanded the export scope while the low productivity firms reduced it.With a theoretical framework which considers firms' optimization decision involving both production and export varieties, we explain all our empirical findings, highlighting the relation between the exchange rate volatility and the number of export varieties.
    Keywords: Multiproduct firm; Product scope; Exchange rate volatility; Transportation distance; Tariff Reduction;
    JEL: F12 F14 F31
    Date: 2017–03–15
  3. By: Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky
    Abstract: What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. We embed some of these features characterizing SOEs operations in a model of trade with firm heterogeneity and show that they can hinder the selection effects of openness and tame the aggregate productivity gains from trade. We empirically test these predictions analyzing the response of Vietnamese firms to the 2007 WTO accession. Our result show that WTO accession is associated with higher probability of exit, lower markups, and substantial increases in productivity for private firms but not for SOEs. Domestic barriers to entry and preferential access to credit are key drivers of the different response of SOEs to trade liberalization. Our estimates suggest that the overall productivity gains would have been about 66% larger in a counterfactual Vietnamese economy without SOEs.
    Keywords: State Capitalism, State-Owned Enterprises, Trade Liberalization, Heterogeneous Firms, Gains from Trade, WTO, Vietnam.
    Date: 2017
  4. By: Ramon L. Clarete (School of Economics, University of the Philippines Diliman)
    Abstract: This paper provides estimates of trade costs of the Philippines with her key trading partners, and develops a framework for assessing their welfare cost. With tariff restrictions reduced significantly following several rounds of multilateral and regional trade negotiations, non-tariff barriers (NTBs) have emerged as key in slowing down trade flows. Given the proliferation of NTMs in the world today, chances are some of those are disguised NTBs. More importantly however, the inefficiencies associated with implementing legitimate NTMs such as the SPS on agricultural imports become unnecessary barriers to trade. This is the fat in trade costs that need to be eliminated through trade facilitation, while policy reforms would have to deal with redundant NTMs, whose claim to resources adds to the cost imposed by inefficient implementation of legitimate NTMs. This paper came up with a CGE model analytical structure for assessing the gains of lowering trade costs.
    Keywords: Trade costs; Economic development; Trade policy
    JEL: F15 O24
    Date: 2017–09
  5. By: Fensore, Irene; Legge, Stefan; Schmid, Lukas
    Abstract: This paper investigates whether the relatedness of populations across the world shapes international trade flows. Using data on common ancestry for 172 countries covering more than 99% of global trade, we document that country pairs with a larger ancestral distance are less likely to trade with each other (extensive margin) and, if they do trade, they trade fewer goods and smaller volumes (intensive margin). The results are robust to including a vast array of control variables capturing other sources of heterogeneity, including micro-geographic, political, linguistic, and religious differences. We discuss the role of several determinants of trade that lead to this negative relationship, namely differences in trust, values, consumption structures, political institutions, technology, as well as recent migration networks. Exploring the robustness of our findings, we use detailed census information on ancestry and show that U.S. states trade significantly more with ancestrally close countries.
    Keywords: Ancestral Distance, Trade Barriers, Trade Flows
    JEL: F14 F15 O33
    Date: 2017–09
  6. By: Jenny X. Lin; William Lincoln
    Abstract: Do countries that improve their protection of intellectual property rights gain access to new product varieties from technologically advanced countries? We build the first comprehensive matched firm level data set on exports and patents using confidential microdata from the US Census to address this question. Across several different estimation approaches we find evidence that these protections affect where US firms export.
    Keywords: trade, innovation, intellectual property rights, patents
    JEL: F13 F14 M21 O31 O3
    Date: 2017–01
  7. By: Ariu, Andrea; Biewen, Elena; Blank, Sven; Gaulier, Guillaume; González, María Jesus; Meinen, Philipp; Mirza, Daniel; Martín, Cesar; Tello, Patry
    Abstract: This paper uses detailed micro data on service exports at the firm-destination-service level to analyse the role of firm heterogeneity in shaping aggregate service exports in Belgium, France, Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate service exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growth. JEL Classification: F14
    Keywords: cross-country micro data study, firm heterogeneity, service exports
    Date: 2017–09
  8. By: Nan Li (International Monetary Fund); Jie Cai (Shanghai University of Finance and Economics); Ana Maria Santacreu (St. Louis Fed)
    Abstract: Countries and sectors interact through knowledge spillovers and international trade flows. These interactions drive differences in income per capita and innovation not only across countries, but also across sectors within a country. We develop and quantify a model of innovation, knowledge diffusion and trade that can explain these differences. Using data on intersectoral patent citations, R&D expenditures and international trade flows, we calibrate the model and perform several counterfactual exercises. Decreases in trade costs or increases in the speed of diffusion reallocate resources across countries and sectors, generating a distributional effect on aggregate innovation and growth.
    Date: 2017
  9. By: Zhou, Haiwen
    Abstract: By studying a two-sector general equilibrium model in which firms engage in oligopolistic competition and unemployment is a result of the existence of efficiency wages, we derive the following results analytically. A country’s comparative advantage in producing manufactured goods increases with the level of efficiencies in the labor market. The opening of international trade leads to the equalization of wage rates even though countries differ in their factor endowments and labor market efficiencies. If countries have the same level of labor market efficiencies but differ in their endowments of labor and land, the opening to international trade leads to an increase in the wage rate in both countries.
    Keywords: Unemployment, international trade, oligopoly, efficiency wages, increasing returns
    JEL: E24 F12 J64
    Date: 2017–09–13
  10. By: Moyo, Clement; Kolisi, Nwabisa; Khobai, Hlalefang
    Abstract: This study purposed to determine the long run relationship between trade openness and economic growth in Ghana and Nigeria covering the period between 1980 and 2016. It incorporated investment, exchange rates and inflation as the additional variables. To test for stationarity of the data, the augments Dickey-Fuller (ADF) (Dickey and Fuller, 1981), the Phillips and Perron (1988) and the DF-GLS test proposed by Elliot, Rothenberg and Stock (1996) were used. The Autoregressive distributed lag (ARDL) model was employed in this study to examine the long run relationship between the variables. The findings of the study suggested existence of a long run relationship among the variables for both countries. The results further showed that trade openness has a positive impact on economic growth and significant at the 1% level in Ghana while in Nigeria trade openness has a negative but insignificant effect on economic growth. These results imply that different policy measures should be put into place for each of these two countries.
    Keywords: Trade Openness, Economic growth, ARDL, Nigeria and Ghana
    JEL: C1 F14 F41 F43
    Date: 2017–09–12
  11. By: Mejía Méndez, Cinthya; Jáquez Polanco, Jaqueli; Cruz-Rodríguez, Alexis
    Abstract: The objective of this paper is to identify the factors that influenced the trade deficit of the Dominican Republic for the period 2000-2014. For them, the role of the real exchange rate, private consumption and foreign direct investment are examined using a ordinary least square model (OLS) and an error correction mechanism (ECM). The results indicate that an increase in private consumption and increased foreign direct investment increases the trade deficit, while an increase in US GDP as well as the depreciation of the real exchange rate implies an improvement in the trade balance.
    Keywords: Real exchange rate, private consumption, foreign direct investment, trade deficit.
    JEL: F10 F14 F31 F32
    Date: 2017–09–07
  12. By: Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada); Chuyi Fang (Department of Economics, Ryerson University, Toronto, Canada);
    Abstract: We aim to provide a compelling explanation about why the World Trade Organi- zation (WTO) permits retaliation only after a lengthy delay and, furthermore, why it usually rejects requests for retaliation (or a reciprocal withdrawal of concessions) in other related international agreements. We take a dynamic mechanism design approach and compare the welfare effects between same and cross-sector retaliation with as well as without, delay. We show that the same-sector retaliation mechanism generates higher welfare and supports a higher self-enforcing level of cooperation than does the cross-sector retaliation mechanism. This result holds irrespective of whether there is a time lag between the initial violation and the corresponding retaliatory action. Furthermore, welfare is higher when retaliation is administered with a delay.
    Keywords: WTO, dispute settlement, trade agreements, cross-sector retaliation, reciprocity, dynamic mechanism design.
    Date: 2017–09
  13. By: Christian Fons-Rosen; Sebnem Kalemli- Özcan; Bent E. Sørensen; Carolina Villegas-Sanchez; Vadym Volosovych
    Abstract: We study the impact of foreign direct investment (FDI) on total factor productivity (TFP) of domestic firms using a new, representativ firm-level data set spanning six countries. A novel finding is that firm-level spillovers from foreign firms to domestic companies can be significantly positive, non-existent, or even negative, depending on which sectors receive FDI. When foreign firms produce in the same narrow sector as domestic firms, the latter are negatively affected by increasing competition and positively a ected by knowledge spillovers. We find that the positive spillovers dominate if foreign firms enter sectors where firms are "technologically close," controlling for the endogeneity of their entry decision into such sectors. Positive technology spillovers also affect firms in other sectors, if those sectors are technologically close to the sectors receiving FDI. Increasing FDI in sectors that are technologically close to other sectors boosts TFP of domestic firms by twice as much as increasing FDI by the same amount across all sectors.
    Keywords: Multinationals, competition, technology, selection, FDI, TFP.
    JEL: E32 F15 F36 O16
    Date: 2017–07
  14. By: Mateus Silva Chang (Graduate School of Economics, Keio University); Chin-Ho Lin (Graduate School of Economics, Keio University)
    Abstract: In this paper we followed Fisman and Wei's (2004) approach to estimate the effects of import tariff rates on import tariff evasion. We focus on East Asian countries import of machinery products. Our main objective is to test if the trade realized inside production networks (intra-regional) is less prone to import tariff evasion than imports from countries outside it (inter-regional). In this study we considered the differences in tariff evasion between intra and inter-regional imports; parts and components and final products; and the heterogeneity between electric machinery and transport equipment. The data provide evidences that intra-regional imports are less prone to tariff evasion than inter-regional imports. Besides this, we identify differences in the channels employed to evade tariff. The results suggest that underreport of quantities was the main channel employed in intraregional imports tariff evasion, while inter-regional import tariffs were evaded through unit price misreport.
    Keywords: Tariff evasion, Import tariff, Machinery Production Networks, East Asia
    JEL: F14 K42 H26
    Date: 2017–08–08
  15. By: Christian Fons-Rosen; Sebnem Kalemli-Ozcan; Bent E. Sørensen; Carolina Villegas-Sánchez; Vadym Volosovych
    Abstract: We study the impact of foreign direct investment (FDI) on total factor productivity (TFP) of domestic firms using a new, representative firm-level data set spanning six countries. A novel finding is that firm-level spillovers from foreign firms to domestic companies can be significantly positive, non-existent, or even negative, depending on which sectors receive FDI. When foreign firms produce in the same narrow sector as domestic firms, the latter are negatively affected by increasing competition and positively affected by knowledge spillovers. We find that the positive spillovers dominate if foreign firms enter sectors where firms are “technologically close,” controlling for the endogeneity of their entry decision into such sectors. Positive technology spillovers also affect firms in other sectors, if those sectors are technologically close to the sectors receiving FDI. Increasing FDI in sectors that are technologically close to other sectors boosts TFP of domestic firms by twice as much as increasing FDI by the same amount across all sectors.
    Keywords: multinationals, competition, technology, selection, FDI, TFP
    JEL: E32 F15 F36 O16
    Date: 2017–09
  16. By: Robert Joumard (IFSTTAR/AME/LTE - Laboratoire Transports et Environnement - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - PRES Université de Lyon)
    Abstract: Several large treaties are being negotiated or ratified today: between the European Union and the United States or Canada, the Trade in service agreement, three projects between EU and Africa, or the Transpacific agreement. We evaluate the methods of the many socio-economic impact studies of these treaties. Most of them take into account only the direct costs for the companies and not the external costs, social or environmental, which are much higher. The environmental impacts are taken into account only through sustainability impact assessments, whose input data are results of socio-economic impact studies. These impact assessments, in their most serious part, translate the economic impact assessments into impacts on pollutant emissions, consumption of raw materials or waste generation through inventory methods. But an inventory is only the first phase of an impact assessment. These studies try also to assess the impacts on other environment and sustainability aspects, as biodiversity, culture, inequalities, etc. but with a biased strictly economic rationality, without drawing on the variety of disciplines necessary for such exercises.
    Abstract: Plusieurs traités de grande envergure sont actuellement en cours de négociation ou de ratification : entre l'Union européenne et les États-Unis ou le Canada, l'Accord sur le commerce des services, trois projets de traités entre l'Union européenne et l'Afrique, ou le traité transpacifique. Ces traités ont fait l'objet de nombreuses études d'impact socio-économiques dont nous évaluons les méthodes. La plupart d'entre elles ne tiennent compte que des coûts directs pour les entreprises et non des coûts externes, sociaux comme environnementaux, qui sont très nettement plus élevés. Les impacts sur l'environnement ne sont pris en compte qu'au travers des études de l'impact sur le développement durable, qui prolongent les études d'impact socio-économiques dont elles prennent les résultats comme données de base. Ces études d'impact, pour leur partie la plus solide, traduisent les estimations d'impact économique en impacts sur les émissions de polluants, la consommation de matières premières ou la production de déchets par des méthodes de type inventaire. On ne peut cependant réduire une étude d'impact à un inventaire, qui n'en est que la première phase. Ces études tentent en outre d'évaluer l'impact sur d'autres aspects de l'environnement et du développement durable comme la biodiversité, la culture, les inégalités, etc. mais dans une vision strictement économique assez biaisée, sans faire appel à la variété des disciplines nécessaires à ce type d'exercice. En 2015, 262 accords commerciaux régionaux étaient en vigueur dans le monde. Ce sont, du plus simple au plus intégré, des accords commerciaux préférentiels, des accords ou traités de libre-échange, des unions douanières, ou des accords d'intégration économique. S'y ajoutent près de 3 000 traités bilatéraux (éventuellement multilatéraux) d'investissement. Ils assurent aux investisseurs étrangers (individus et sociétés) un haut niveau de protection contre le traitement éventuellement arbitraire des États dans lesquels ils possèdent du patrimoine. Les accords de libre-échange intègrent des dispositions semblables à celles des traités d'investissement à côté d'autres dispositions sur le commerce.
    Keywords: environnement, traité, libre-échange, méthode
    Date: 2016–10–26
  17. By: Ainhoa Aparicio Fenoll; Zoe Kuehn
    Abstract: Two leading explanations as to why migration across European countries remains relatively limited are: (i) language barriers and (ii) lower educational attainment in Europe compared to the US. Both aspects are malleable via education policies which thus have the potential to affect migration. This paper tests whether and how (i) increasing the length of compulsory schooling and (ii) introducing foreign languages into compulsory school curricula, influence migration of ffected cohorts across European countries. We construct a novel data base that includes information on such education reforms for thirty-one countries spanning four decades. Combining this data with information on recent migration flows by cohorts, we find that an additional year of compulsory education reduces the number of migrants from affected cohorts by almost 14%. Increasing the length of compulsory schooling shifts educational attainment for a significant fraction of the population from low towards medium levels. Our findings are thus in line with the fact that in the majority of European countries medium educated individuals display lower emigration rates compared to low educated individuals. Introducing a foreign language into compulsory school curricula on the other hand, almost doubles the number of migrants from affected cohorts who move to the country where the language is spoken, and it increases the overall number of migrants from these cohorts by 23%.
    Keywords: migration, compulsory schooling, foreign language proficiency, education
    Date: 2016
  18. By: Dany Bahar (Center for International Development at Harvard University); Rodrigo Wagner; Ernesto Stein; Samuel Rosenow
    Abstract: Export diversification is associated with economic growth and development. Our paper explores competing mechanisms that mediate the emergence and growth of export products based on their economic relatedness to pre-existing exports. Our innovation is to simultaneously consider supply factors like labor, sourcing and technology; as well as demand factors like industry specific customer-linkages in a global setting. We find that, while technology and workforce similarity explain emergence and growth, pre-existing downstream industries remain a robust predictor of diversification, especially for jump starting new exports in developing countries. Our global stylized fact generalizes Javorcik’s (2004) view that spillovers are more likely in backward linkages.
    Keywords: comparative advantage, exports, relatedness, spillovers, R&D, patents, labor, upstream, downstream
    JEL: O14 O33 F14
    Date: 2017–09
  19. By: Andres Rodrigues-Pose; Gilles Cols
    Abstract: For the past quarter of a century, foreign direct investment (FDI) flows have grown exponentially across the world. Sub-Saharan Africa has, however, lagged behind and only lured on average a mere 2% of global FDI. The investment that the region attracts tends, moreover, to be concentrated in a number of commodity-rich countries. Natural resources and the size of national markets have generally been considered as the main drivers of FDI. The quality of local institutions has, by contrast, attracted less attention. This paper uses institutional data for 22 countries in order to demonstrate that the quality of governance plays a far from negligible and enduring role in the distribution of FDI in sub-Saharan Africa. It is shown that factors such as political stability, government effectiveness, lower corruption, voice and accountability, and the rule of law not only are more important determinants of FDI than the size of local markets, but also that their influence on the capacity of African countries to attract FDI is long-lasting.
    Keywords: Foreign direct investment (FDI), good governance, institutions, markets, natural resources, sub-Saharan Africa
    Date: 2017–09
  20. By: Parag Mahajan; Dean Yang
    Abstract: How readily do potential migrants respond to increased returns to migration? Even if origin areas become less attractive vis-à-vis migration destinations, fixed costs can prevent increased migration. We examine migration responses to hurricanes, which reduce the attractiveness of origin locations. Restricted-access U.S. Census data allows precise migration measures and analysis of more migrant-origin countries. Hurricanes increase U.S. immigration, with the effect increasing in the size of prior migrant stocks. Large migrant networks reduce fixed costs by facilitating legal immigration from hurricane-affected source countries. Hurricane-induced immigration can be fully accounted for by new legal permanent residents (“green card” holders).
    Keywords: Immigration, migrant networks, returns to migration, natural disasters, hurricanes
    JEL: F22 O15 Q54
    Date: 2017–01
  21. By: Ronald Miranda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriela Mordecki (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Loenel Muinelo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This paper investigates empirically the impact of real exchange rate (RER) volatility, as a proxy of exchange rate uncertainty, on total exports for a panel of European, South American and Oceania countries during the period 1994 – 2014. The methodology used for the estimation consists of the combination of panel data models with autoregressive vectors (panel VAR) technique, analysis of the impulse-response functions and the variance decomposition. RER volatility was modeled by two alternatives: the standard deviation moving average and the conditional variance. Considering the total panel of countries, regardless of the measure of volatility used, it does not have a significant effect on exports. However, considering separately different groups of countries, RER volatility has a significant and positive effect on commodity-exporting countries, and significant and negative on manufacturing exporting countries. Nevertheless, in both cases the effects were very low. This study is relevant since it provides empirical evidence on the understanding of the exchange rate uncertainty effects on the stability of international trade, and hence on the stability of economic growth for economies with different characteristics.
    Keywords: Real exchange rate volatility; Exports; Panel vector autoregression
    JEL: C33 F31 F41
    Date: 2017–09
  22. By: Ina C. Jäkel (Department of Economics and Business Economics, Aarhus University, Denmark); Allan Sørensen (Department of Economics and Business Economics, Aarhus University, Denmark)
    Abstract: This paper provides new evidence on manufacturing firms' output prices: in Denmark, on average, exported varieties are sold at a lower price (i.e. a negative exporter price premium) relative to only domestically sold varieties. This finding stands in sharp contrast to previous studies, which have found positive exporter price premia. We also document that the exporter price premium varies substantially across products (both in terms of sign and magnitude). We show that in a standard heterogeneous firms model with heterogeneity in quality as well as production efficiency there is indeed no clear-cut prediction on the sign of the exporter price premium. However, the model unambiguously predicts a negative exporter price premium in terms of quality-adjusted prices, i.e. prices per unit of quality. This prediction is broadly borne out in the Danish data: while the magnitude of the premium varies across products, its sign is (nearly) always negative.
    Keywords: Exporters, Pricing, Exporter price premia, Firm-level data
    JEL: F12 F14 L15
    Date: 2017–09–07
  23. By: Jolita Adamonis (University of Gießen); Laura M. Werner (University of Gießen)
    Abstract: This paper introduces a new measure to capture dynamic losses for exporting firms on markets that exhibit hysteresis on the supply side. This new indicator quantifies dynamic losses caused by sunk adjustment costs in case of exchange rate fluctuations. While the standard procedure in welfare analysis is to compare two equilibria in order to determine certain consumer and producer surplus effects (comparative statics), we focus on special welfare effects that take place during dynamics - the process of adjustment towards an equilibrium. More precisely, we analyze negative dynamic effects on producers' income that are generated due to writing off sunk adjustment costs. As an example we investigate Italian wine exports to the US over 1995-2013. After testing the existence of hysteresis on the market, using the play-algorithm proposed by Belke and Göcke [2001], we present a new indicator of hysteresis losses. It captures a continuous increase of dynamic losses during the period from 2003 to 2008 and over proportionately large hysteresis losses if the pain threshold of the exchange rate is passed, which seems to be about 1.25 $/€.
    Date: 2017
  24. By: Simplice Asongu (Yaoundé/Cameroun); Ndemaze Asongu (Yaoundé, Cameroon)
    Abstract: This study assesses how the mobile phone influences governance to improve information and communication technology (ICT) exports in Sub-Saharan Africa with data from 2000-2012. The empirical evidence is based on Generalised Method of Moments and three main governance concepts are used, namely: (i) institutional (comprising the rule of law and corruption-control); (ii) political (involving political stability/no violence and voice & accountability) and (iii) economic (including regulation quality and government effectiveness) governance. The following findings are established. First, there are positive net effects on ICT goods exports from independent interactions between mobile phones and ‘political stability’ ‘voice and accountability’ and corruption-control. Second, significant net effects are not apparent from independent interactions between mobile phones and government effectiveness, regulation quality and the rule of law. Theoretical and practical implications are discussed.
    Keywords: Knowledge economy; Development; Africa
    JEL: L59 L98 O10 O30 O55
    Date: 2017–01

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