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on International Trade |
| By: | Federico Ciliberto (University of Virginia, USA); Ina C. Jäkel (Department of Economics and Business Economics, Aarhus University, Denmark) |
| Abstract: | In many countries, exports are highly concentrated among a few "superstar" firms. We estimate the export decisions of superstar firms as the result of a complete information, simultaneous, discrete choice, static entry game. We employ a dataset on the universe of Danish trade transactions by firm, product and destination. We also obtain detailed information on applied, preferential tariff protection from the MAcMap-HS6 database. We find evidence of strong negative competitive effects of entry: in the absence of strategic competitive effects, firms would be 54.3 percentage points more likely to export to a given market. Next, we run two counterfactual exercises. We show that failing to account for the strategic interaction among superstar exporters leads to: (i) overstating the probability that firms would start exporting to a market following tariff elimination by 8 percentage points; and, (ii) overstating the probability that firms would stop exporting to a market if tariffs were imposed by 7.5 percentage points. We also show that competitive effects vary across export markets and competitors. This heterogeneity in the competitive effects implies that there exist multiple equilibria, both in the identity and in the number of firms. |
| Keywords: | Export participation, Strategic interaction, Multiple equilibria, Trade policy |
| JEL: | F12 F14 L13 |
| Date: | 2017–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2017-09&r=int |
| By: | Bogang Jun; Aamena Alshamsi; Jian Gao; Cesar A Hidalgo |
| Abstract: | During the last decades two important contributions have reshaped our understanding of international trade. First, countries trade more with those with whom they share history, language, and culture, suggesting that trade is limited by information frictions. Second, countries are more likely to start exporting products that are similar to their current exports, suggesting that knowledge diffusion among related industries is a key constrain shaping the diversification of exports. But does knowledge about how to export to a destination also diffuses among related products and geographic neighbors? Do countries need to learn how to trade each product to each destination? Here, we use bilateral trade data from 2000 to 2015 to show that countries are more likely to increase their exports of a product to a destination when: (i) they export related products to it, (ii) they export the same product to the neighbor of a destination, (iii) they have neighbors who export the same product to that destination. Then, we explore the magnitude of these effects for new, nascent, and experienced exporters, (exporters with and without comparative advantage in a product) and also for groups of products with different level of technological sophistication. We find that the effects of product and geographic relatedness are stronger for new exporters, and also, that the effect of product relatedness is stronger for more technologically sophisticated products. These findings support the idea that international trade is shaped by information frictions that are reduced in the presence of related products and experienced geographic neighbors. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1709.05392&r=int |
| By: | Lorenzo Caliendo (Yale University); Fernando Parro (Johns Hopkins University); Luca David Opromolla (Banco de Portugal); Alessandro Sforza (London School of Economics) |
| Abstract: | The economic e?ects from labor market integration are crucially a?ected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equi¬librium model with trade in goods and labor mobility across countries to study and quantify the economic e?ects of trade and labor market integration. In our model trade is costly and features households of di?erent skills and nationalities facing costly forward-looking relocation decisions. We use the EU Labour Force Survey to construct migration ?ows by skill and na¬tionality across 17 countries for the period 2002-2007. We then exploit the timing variation of the 2004 EU enlargement to estimate the elasticity of migration ?ows to labor mobility costs, and to identify the change in labor mobility costs associated to the actual change in policy. We apply our model and use these estimates, as well as the observed changes in tari?s, to quantify the e?ects from the EU enlargement. We ?nd that new member state countries are the largest winners from the EU enlargement, and in particular unskilled labor. We ?nd smaller welfare gains for EU-15 countries. However, in the absence of changes to trade policy, the EU-15 would have been worse o? after the enlargement. We study even further the interaction e?ects between trade and migration policies and the role of di?erent mechanisms in shaping our results. Our results highlight the importance of trade for the quanti?cation of the welfare and migration e?ects from labor market integration |
| Keywords: | International trade, Factor mobility, Market integration, EU enlargement, Welfare |
| JEL: | F16 F22 F13 J61 R13 E24 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0079&r=int |
| By: | Zouheir El-Sahli (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille) |
| Abstract: | While it is established that tourism benefits growth through increased employment and investments, it is not well understood whether tourism has an effect on exports. This paper explores exports as an additional channel through which tourism affects domestic economic activity. Using bilateral tourist and trade flows, I explore the causal effect of tourist flows on exports. To deal with endogeneity, I construct two instruments that I use on two different sets of exporters. The evidence points in the same direction. I find that tourism affects mainly the exports of differentiated products. Specifically, I find that tourism benefits the exports from non-OECD exporters of processed food products and this effect is only estimated for South-North trade with an elasticity close to 1. For European countries, the findings point in the same direction; tourism affects differentiated consumer products and processed food with elasticity close to 1, which adds plausibility to the earlier results. I also find a lagged effect for tourism mainly on the export of consumer goods (for the two samples) and processed food products (for European countries). The results suggest that exports is an additional channel through which tourism can stimulate domestic economic activity in the tourist destination. |
| Keywords: | tourism, globalization, trade, gravity, terrorism |
| JEL: | F1 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1721&r=int |
| By: | Martino Pelli (Economics Department, Université de Sherbrooke); Jeanne Tschopp (Economics Department, Université de Sherbrooke) |
| Abstract: | The comparative advantage of countries evolves over time, yet firms do not continuously adapt their production structure to this evolution. This slow adaptation may be due to high adjustment costs, such as those associated with the disposal of existing physical capital. In practice, these costs may explain why we observe that countries export goods at both ends of the comparative advantage spectrum. This article investigates what happens if the cost of adjusting to the dynamics of comparative advantage is unexpectedly reduced. We use hurricanes to evaluate whether a negative exogenous shock to firms’ physical capital leads to a reorganization of exports towards comparative advantage industries. Using a panel of 46 countries and 4-digit industries over the period 1980-2000, we show that the effect of hurricanes on exports is monotonically increasing in comparative advantage. Specifically, export levels drop for industries with a low comparative advantage and grow for industries with a high comparative advantage. Our results also indicate that the process of shifting resources towards higher comparative advantage industries intensifies within the three years following the shock. These findings suggest that if the opportunity cost of adjustment decreases, firms tend to build back better and move up the spectrum of comparative advantage. |
| Keywords: | comparative advantage, physical capital, hurricanes. |
| JEL: | F14 O10 Q54 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:17-07&r=int |
| By: | Bemrose, Robby; Brown, W. Mark; Tweedle, Jesse |
| Abstract: | For many goods, such as dairy products and alcoholic beverages, the presence of substantial (non-tariff) barriers to provincial trade is widely recognized. If these non-tariff barriers matter, intraprovincial trade should be stronger than interprovincial trade, all else being equal. However, comparing intraprovincial and interprovincial trade levels is challenging, because intraprovincial trade is heavily skewed toward short-distance flows. When these are not properly taken into account by gravity-based trade models, intraprovincial trade levels?provincial border effects?tend to be overestimated. |
| Keywords: | Economic accounts, Input-output accounts, Transportation, Transportation by rail, Transportation by road |
| Date: | 2017–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2017394e&r=int |
| By: | Hsu, Wen-Tai (School of Economics, Singapore Management University); Lu, Yi (School of Economics and Management, Tsinghua University); Wu, Guiying Laura (Division of Economics, Nanyang Technological University) |
| Abstract: | This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 9:4%. The gains are decomposed into a Ricardian component and two pro-competitive ones. The procompetitive effects account for 25:4% of the total gains. Moreover, the total gains from trade are 17 27% larger than what would result from the formula provided by ACR (Arkolakis, Costinot, and Rodriguez-Clare 2012), which nests a class of important trade models, but without pro-competitive effects. We find that head-to-head competition is the key reason behind the larger gains, as trade flows do not reflect all of the effects via markups in an event of trade liberalization. One methodological advantage of this paper’s quantitative framework is that its application is not constrained by industrial or product classifications; thus it can be applied to countries of any size. |
| Date: | 2017–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2017_012&r=int |
| By: | Ari Van Assche; Jo Van Biesebroeck |
| Abstract: | Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain. In this paper, we analyze if there is evidence of this type of upgrading in China’s export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000-2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000-2006, both overall and within product categories. Furthermore, we find that this trend has gone hand in hand with improvements in a sector’s labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006-2013. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:590692&r=int |
| By: | Wang, Chih-Chieh |
| Abstract: | Taiwan has embedded itself in the global markets and established strong economic relations with many countries, especially the neighbors in East Asia. However, working in a foreign country, as part of international economic exchange is still constrained by the regulations and/or socio-cultural barriers in respective countries. Nonetheless, it is argued that transnational labor markets, which are primarily constructed by private actors, are emerging in East Asia. Taking up Taiwan as a case, this study investigates how private actors - temporary help agencies - go ahead of the states and forge institutions that facilitate labor mobility across national borders in the absence of supra-national institutions, such as EU or ASEAN Economic Community, where freedom of movement has taken place or is expected to launch. Based on interviews with staffing agencies, union activists and government officials, it is found that staffing agencies serve as a transnational HR management function, as they develop international networks and provide their clients and workers with services such as visa application and employment arrangements that accommodate to business, employment and social welfare regulations in both sending and receiving countries. Moreover, staffing agencies translate and diffuse socio-cultural meanings between countries by engaging in socio-cultural training for workers as well as their clients to ensure the success of cross-border labor placements. This research contributes to the understanding of transnational labor mobility by studying the process of building transnational institutions and how these institutions make sense to the involved actors. |
| Keywords: | transnational labor markets,institution building,staffing agency,employment regulation,industrial relations,Taiwan,East Asia |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:udedao:1162017&r=int |
| By: | Yanga, Shuying; Kim, Seongcheol |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsp17:168549&r=int |
| By: | Giovanni Maggi; Robert W. Staiger |
| Abstract: | Over the WTO years, the frequency of disputes and court rulings has trended downwards. Such trends are sometimes interpreted as symptoms of a dispute resolution system in decline. In this paper we propose a theory that can explain these trends as a result of judicial learning; thus according to our theory such trends represent good news, not bad news. We then offer evidence that the predictions of our model are consistent with WTO trade dispute data, and we take a first step towards estimating the strength and scope of court learning. |
| JEL: | D02 F13 K33 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23774&r=int |
| By: | Kohl, Miriam |
| Abstract: | This paper examines the distributional effects of international trade in a general equilibrium model with heterogeneous agents and a welfare state redistributing income. The redistribution scheme is financed by a progressive income tax and gives the same absolute transfer to all individuals. Ceteris paribus, international trade leads to an increase in income per capita but also to higher income inequality on two fronts. Inter-group inequality between managers and workers increases, and intra-group inequality within the group of managers goes up as well. We show that for constant tax rates, there is an endogenous increase in the size of the welfare state that works against the increase in inequality, yet cannot offset it. The paper also sheds light on the conditions under which trade can actually lead to a Pareto improvement. |
| Keywords: | International trade,Income inequality,Redistribution,Heterogeneous firms |
| JEL: | D31 F12 F16 H24 H25 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:1317&r=int |
| By: | Judit Ricz (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | Recently we have seen a fundamental shift in the news regarding Brazilian multinational companies: as long as during the 2000s their successful expansion into global markets was celebrated, today their involvement in the widespread corruption scandal, originating from the kickback scheme (via systematic overpricing of contracts) from Petrobras is on a daily basis in the newspapers. The paper aims to analyse the going global strategy of Brazilian firms, with special emphasis on the home country push factors. After a general panorama on the numbers and main players, we look at the main driving forces behind the international expansion strategy (incl. government policies to support the internationalization of Brazilian MNEs), as well as the various obstacles Brazilian companies have faced on their dumpy road towards the global markets. Then we look at the main destinations of Brazil’s outward FDI, and analyse their localization strategies, with a special focus on the role of Europe (more specifically the Eastern Central European region). We provide some preliminary findings on the Brazilian companies present in the ECE region especially in Hungary), while also try to reveal some region specific driving forces and obstacles that might lie beyond the numbers. |
| Keywords: | Brazilian multinationals, internationalization strategy, OFDI |
| JEL: | F21 F23 G11 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:231&r=int |
| By: | Tiziano Distefano (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Francesco Laio (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Luca Ridolfi (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Stefano Schiavo (Department of Economics and Management, Università di Trento, Italy; Observatoire Français des Conjonctures Economiques - DRIC, France.) |
| Abstract: | Food Security is a longstanding concern worldwide. The expansion of global food markets brings benefits but also risks, such as shock transmission within the global network of trade relations. We focus on this last issue, from an empirical point of view, by analysing the di usion of trade shocks - defined as relevant drops in exported quantities - during the period 1986 - 2011, for four major staples (wheat, maize, rice, and soybeans) both at country level and global scale. We find that: (i) income per capita of importing countries matters in shock propagation; (ii) developing countries tend to absorb most of the negative export variation (i.e., the trade shock), and (iii) global food prices and real (tonnes) uxes of commodities are only weakly correlated, meaning that a quantity-based investigation provides additional information with respect to a price-based analysis. This work o ers a novel framework, complementary to the price-based literature, for the definition and measurement of the propagation of international food shocks. |
| Keywords: | food crisis, shock propagation, food security, international grain trade |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0617&r=int |
| By: | O'Rourke, Kevin Hjortshøj |
| Abstract: | In this paper, I offer some preliminary comparisons between the trade collapses of the Great Depression and Great Recession. The commodity composition of the two trade collapses was quite similar, but the latter collapse was much sharper due to the spread of manufacturing across the globe during the intervening period. The increasing importance of manufacturing also meant that the trade collapse was more geographically balanced in the later episode. Protectionism was much more severe during the 1930s than after 2008, and in the UK case at least helped to skew the direction of trade away from multilateralism and towards Empire. This had dangerous political consequences. |
| Keywords: | Great Depression; great recession; protectionism; Trade collapse |
| JEL: | F13 F14 N70 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12286&r=int |
| By: | Jeong, Hyung-Gon (Korea Institute for International Economic Policy); Bang, Ho Kyung (Korea Institute for International Economic Policy); Lee, Boram (Korea Institute for International Economic Policy); Pek, Jong-Hun (Korea Institute for International Economic Policy) |
| Abstract: | 본 연구는 아세안 FDI 특징과 비즈니스 여건을 살펴본 후 그 결정요인을 실증적으로 분석함으로써 한아세안 경제협력을 보다 심화시키기 위한 정책적 시사점을 도출하는 데 그 목적이 있다. 본 연구에서는 실증분석을 통해 아세안 FDI 유입 결정요인을 분석하여 그 결과를 제시하였으며, 한국의 대아세안 FDI 활성화를 통한 상호 호혜적 경제성장동력 창출의 측면에서 우리 기업과 한국정부에 시사점을 제시하였다. 본 보고서는 향후 우리 정부의 통상정책과 아세안 지역의 경제협력 정책수립에 큰 기여를 할 수 있을 것으로 판단되며, 아울러 우리 기업의 투자 및 진출전략 수립에도 큰 키여를 할 수 있을 것으로 기대된다. Since the global economic crisis triggered in the United States in 2008, the East Asian economic region has received particular attention as it achieved relatively solid economic growth compared to developed countries, which struggled with recession. The discussion on economic cooperation and economic liberalization within East Asia has mainly focused on the RCEP, with this discussion being led by ASEAN as it calls for ASEAN centrality. ASEAN is currently the second-largest overseas investment destination and second-largest trading partner for South Korea, making it an important partner in economic cooperation for South Korea. Particularly, as China is openly implementing economic retaliatory measures against South Korea for the deployment of THAAD missiles in the nation, South Korea has become more interested in the ASEAN market as it strives to diversify its trade and investment portfolio. Under this background, this research examines the characteristics of ASEAN FDI by income level and doing business conditions, then conducts an empirical analysis of determination factors to draw policy implications for stronger economic cooperation with ASEAN. This report consists of five chapters in total. In Chapter 2 we examine FDI determination factors which have been discussed from a theoretical and empirical viewpoint in the field of international economics. In Chapter 3 we look into the current situation of ASEAN FDI and the characteristics of ASEAN FDI by income level, along with conditions for doing business in the region. In Chapter 4, we conduct an empirical analysis of the determination factors for ASEAN FDI inflow, utilizing a covariance structure analysis. Lastly, in Chapter 5, we suggest implications for the Korean government and enterprises to generate mutually beneficial economic growth momentum by promoting Korea's FDI to ASEAN. |
| Keywords: | ASEAN; FDI |
| Date: | 2017–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2017_001&r=int |
| By: | Vera Danilina (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille) |
| Abstract: | Growing ecological concerns give rise to salient discussions of green policy impact within different social sciences domains. This research studies the outcomes of voluntary environmental labelling in autarky and upon trade integration in the presence of two types of heterogeneity, across countries and across producers. It investigates the impact of the two main types of eco-labels - multiple-criteria-based programmes (ISO Type I) and self-declared environmental claims (ISO Type II), both of which are simultaneously introduced due to the environmental concerns of consumers. The model illustrates the polarisation of eco-labels when the least productive firms tend to avoid green strategies, lower-middle productive and the most efficient firms are incentivized to greenwash, and the upper-middle productive firms choose trustful programmes. It also shows that voluntary green restrictions lead to substantial productivity effects in the market upon opening to international trade, conditionally, depending on the type of the labelling and the relative degree of environmental awareness across trading countries. The model predicts average market productivity losses and within segments productivity gains for the relatively more eco-concerned country, while the effects for the relatively less eco-concerned country are the opposite. |
| Keywords: | eco-labelling, Firm heterogeneity, trade integration, voluntary environmental regulation, firms productivity |
| JEL: | F18 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1725&r=int |
| By: | Gábor Túry (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | The paper investigates the role of the automotive industry in the Baltic, Visegrád and Iberian region, summarizing the relevant literature. In the analysis of each country, the study discusses the importance of the automotive industry in the national economy and the role of individual countries in the global trade. Based on the literature there are different approaches regarding the activities belonging to the automotive industry. The vehicle production is vertically integrated, therefore the industry involves many other activities that sell their products to other industries as well. On the other hand economic contribution of the automotive industry can be interpreted in a broad way including downstream activities related to the use of the motor vehicle, and the socioeconomic employment as well. The broader definition of automotive industry in this paper is based on this previous approach. The study defines the automotive spillovers on the basis of the NACE nomenclature to show how these activities contribute to employment, production and value added in the examined countries. |
| Keywords: | automotive industry, spillovers, external trade, Baltic countries, Central Europe, Iberian countries |
| JEL: | F1 L62 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:230&r=int |
| By: | Christophe Gouel (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech, AgroParisTech) |
| Abstract: | Many countries adjust their trade policies counter-cyclically with food prices, to the extent that the use of restrictions by food-exporting countries has occasionally threatened the food security of food-importing countries. These trade policies are inconsistent with the terms-of-trade motivation often retained to characterize the payoff frontier of self-enforcing trade agreements, as they can worsen the terms of trade of the countries that apply them. This article analyzes trade policy coordination when trade policies are driven by terms-of-trade effects and a desire to reduce domestic food price volatility. This framework implies that importing and exporting countries have incentives to deviate from cooperation at different periods: the latter when prices are high and the former when prices are low. Since staple food prices tend to have asymmetric distributions, with more prices below than above the mean but with occasional spikes, a self-enforcing agreement generates asymmetric outcomes. Without cooperation, an importing country uses its trade policy more frequently because of the concentration of prices below the mean, but an exporting country has a greater incentive to deviate from a cooperative trade policy because positive deviations from the mean price are larger than negative ones. Thus, the asymmetry of the distribution of commodity prices can make it more difficult to discipline export taxes than tariffs in trade agreements. |
| Abstract: | De nombreux pays ajustent leur politique commerciale de manière contracyclique par rapport aux prix alimentaires, au point que les restrictions aux exportations utilisées par beaucoup de pays exportateurs ont occasionnellement menacé la sécurité alimentaire des pays importateurs. Notre article analyse la coordination des politiques commerciales lorsque celles-ci sont motivées à la fois par la manipulation des termes de l'échange et par le désir de limiter la volatilité des prix alimentaires domestiques. Ce cadre théorique implique que les pays importateurs et exportateurs ont des incitations à dévier de la coopération à des périodes différentes: les exportateurs lorsque les prix sont élevés et les importateurs lorsque les prix sont bas. Dans la mesure où les prix des matières premières alimentaires ont une distribution asymétrique avec une queue de distribution étalée vers les prix élevés, un accord commercial tendrait à générer des résultats asymétriques. En l'absence de coopération, un pays importateur utilise plus fréquemment sa politique commerciale du fait de la concentration des prix mondiaux en dessous de leur moyenne, mais un pays exportateur aura une plus grande incitation à dévier de la coopération car les déviations positives des prix par rapport à leur moyenne sont plus importantes que les déviations négatives. L'asymétrie de la distribution des prix alimentaires pourrait donc rendre difficile tout accord international pour discipliner l'usage des restrictions aux exportations. |
| Keywords: | Commodity price stabilization,Export restrictions,Food security,Repeated game,wto,pricing policies,organisation mondiale du commerce,prix alimentaire,exportation,politique des prix |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01532572&r=int |
| By: | Serfraz, Ayesha |
| Abstract: | Developing economies tremendously benefit from FDI inflows since it leads to their economic growth. This study empirically analyzes the effects of sector-wise FDI inflows on respective sector-wise labor productivity for a panel of seven major sectors of Pakistan's economy covering time period of 1997-2016. In empirical analysis sector-wise FDI inflows has been used as an independent variable while sector-wise labor productivity is a dependent variable. Initial tests conclude that LSDV fixed effects model is the most appropriate test for the data being used for empirical analysis. Further tests confirm the existence of a long run Cointegration between these two variables. Wald test shows that a uni-directional short-run causality exists, running from sector-wise labor productivity to sector-wise FDI inflows. Pair-wise Granger-Causality test further shows that the effects of FDI inflows are not limited to one sector, rather there is an evidence of spillover effect from one sector to an-other. All empirical tests conclude that sector-wise FDI inflows positively affect sector-wise labor productivity in case of Pakistan. |
| Keywords: | Sector-wise FDI Inflows,Sectors-wise labor Productivity,Panel Cointegration,Pakistan |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cessdp:65&r=int |
| By: | Hinlo, Jennifer E.; Arranguez, Grace Ivy S. |
| Abstract: | The study investigated the relationship of export geographical diversification and economic growth among ASEAN countries for the period 1980-2014. With a sample of 5 countries- Indonesia, Malaysia, Philippines, Singapore and Thailand- the study computed for the geographical diversification of countries using the Herfindahl index. Using time series analysis, with Vector Autoregressive (VAR) analysis and Granger causality tests, the relationship of the two variables among ASEAN countries were tested. The results showed a generally decreasing trend of HHI values of all 5 countries. Results of the analysis of the relationship showed a bidirectional relationship for Malaysia and a unidirectional relationship from export geographical diversification to economic growth in the case of Philippines. For countries Indonesia, Singapore and Thailand, results showed no causality which indicates that the variables are independent for these countries. Based on the results, the study recommendeds the followng: (1) formulation and implementation of appropriate strategies to improve export structure and improve economies for Malaysia and Philppines; and (2) diversification of export structure in terms of market destinations for Philippines to improve its economy. |
| Keywords: | ASEAN, Export geographical Diversification, Herfindahl index |
| JEL: | E01 F1 F13 |
| Date: | 2017–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81333&r=int |