|
on International Trade |
| By: | Connell, William; Simons, Wouter; Vandenbussche, Hylke |
| Abstract: | This paper develops a gravity model with sector-level input-output linkages in production. In contrast to a traditional gravity approach, which relies on direct gross exports between bilateral trade partners, our model additionally includes (1) domestic and global value chain linkages between goods and services sectors, (2) bilateral tariffs that affect direct production for a final destination as well as indirect production (shipped via third countries) to a final destination and (3) value added rather than gross production. Including input-output linkages implies that domestic production of intermediates can serve as inputs in foreign products and subsequently be exported "indirectly" to a final destination. Our input-output model can be taken to the sectoral World Input Output Database (WIOD) and can be used to evaluate trade policy shocks. While our framework is entirely general, we use it to predict the impact of the UK's withdrawal from the European Union ("Brexit") in terms of value added production and employment for every individual EU country involved. We find that Brexit hits the UK relatively harder than the EU-27. In contrast to other studies, we find EU-27 losses from Brexit to be substantially higher than hitherto believed. |
| Keywords: | Armington; Brexit; global value chains; input-output linkages; sectors; WIOD |
| JEL: | F10 F13 F47 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12303&r=int |
| By: | Hylke Vandenbussche; William Connell Garcia; Wouter Simons |
| Abstract: | This paper develops a gravity model with sector-level input-output linkages in production. In contrast to a traditional gravity approach, which relies on direct gross exports between bilateral trade partners, our model additionally includes (1) domestic and global value chain linkages between goods and services sectors, (2) bilateral tariffs that affect direct production for a final destination as well as indirect production (shipped via third countries) to a final destination and (3) value added rather than gross production. Including input-output linkages implies that domestic production of intermediates can serve as inputs in foreign products and subsequently be exported “indirectly” to a final destination. Our input-output model can be taken to the sectoral World Input Output Database (WIOD) and can be used to evaluate trade policy shocks. While our framework is entirely general, we use it to predict the impact of the UK's withdrawal from the European Union (“Brexit”) in terms of value added production and employment for every individual EU country involved. We find that Brexit hits the UK relatively harder than the EU-27. In contrast to other studies, we find EU-27 losses from Brexit to be substantially higher than hitherto believed. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:592605&r=int |
| By: | Banga, Rashmi |
| Abstract: | Abstract A recent study undertaken by Kawasaki (2017) uses a computable general equilibrium (CGE) model to estimate the impact of removal tariffs and non-tariff measures on trade flows and the overall gross domestic product (GDP) of the remaining 11 countries in the Trans-Pacific Partnership (TPP11) partner countries. This note attempts to provide insights into such estimations so as to help in real impact assessments of the tariff and non-tariff provisions of agreements such as the TPP11. It warns that policy makers who seek to rely on such studies need to be aware of the large number of assumptions that underlie the quantification of the non-tariff measures, including that regulation is necessarily negative for trade, and other limitations of the methodology used. The paper also notes these are only one aspect of the broader economic impacts of an agreement that includes chapters on intellectual property, investor protections, government procurement, and state-owned enterprises, among others. |
| Keywords: | TPP11, CGE, NTMS |
| JEL: | D58 F13 F14 F15 F17 |
| Date: | 2017–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81394&r=int |
| By: | Gianluca Orefice; Gianluca Santoni |
| Abstract: | This paper analyses the effect of birthplace diversity on exports of creative and cultural goods, for 19 OECD countries, over the period 1990-2010. By matching UNESCO's creative and cultural exports classification to trade and migration data, we find a strong positive effect of birthplace diversity on the export of creative products. In particular, a 10% increase in the birthplace diversity index implies a 4% increase in creative goods export. These results are robust across several specifications and shed light on a potential new channel through which migrants can contribute to the host country's export performance. It is interesting to note that only diversity of secondary and tertiary educated immigrants contributes to an increase in exports of creative and cultural goods. An instrumental variables approach addresses the potential endogeneity problems and confirms our results. |
| Keywords: | Creative Products;International Trade;Birthplace Diversity;Migration |
| JEL: | F14 F16 F22 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2017-17&r=int |
| By: | Lisa Oberländer (PSE - Paris School of Economics); Anne-Célia Disdier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Fabrice Etilé (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Using a panel dataset of 70 countries spanning 42 years (1970–2011), we investigate the distinct effects of social globalisation and trade openness on national trends in markers of diet quality (supplies of animal proteins, free fats and sugar, average body mass index, and diabetes prevalence). Our key methodological contribution is the application of a grouped fixed-effects estimator, which extends linear fixed-effects models. The grouped fixed-effects estimator partitions our sample into distinct groups of countries in order to control for time-varying unobserved heterogeneity that follows a group-specific pattern. We find that increasing social globalisation has a significant impact on the supplies of animal protein and sugar available for human consumption, as well as on mean body mass index. Specific components of social globalisation such as information flows (via television and the Internet) drive these results. Trade openness has no effect on dietary outcomes or health. These findings suggest that the social and cultural aspects of globalisation should receive greater attention in research on the nutrition transition. |
| Keywords: | Nutrition |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01591335&r=int |
| By: | Pavcnik, Nina |
| Abstract: | This paper assesses the current state of evidence on how international trade shapes inequality and poverty through its influence on earnings and employment opportunities. While the focus is mainly on developing countries, in part because we have more evidence in that context, the discussion draws parallels to the empirical evidence from developed countries. The paper also discusses perceptions about international trade in over 40 countries at different levels of development, including perceptions on trade's overall benefits for the economy, trade's effect on the livelihood of workers through wages and jobs, and trade's contribution to inequality. The paper concludes with a survey of evidence on several policies that could mitigate the adverse effects of import competition. |
| Keywords: | inequality; Informality; Local Labor Markets; poverty; trade policy |
| JEL: | F10 F13 F14 F16 J2 O17 O24 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12331&r=int |
| By: | Ojo, Marianne |
| Abstract: | How do we address challenges presented by unequal distribution of the benefits of globalization? Such that the imposition of unduly high tariffs – as well as anti-dumping measures, do not offset positive gains to be derived from trade liberalization and globalization. This article also aims to highlight and address challenges presented to global trade relations as a result of the failure of central bankers to appreciate fully the consequences and impact – as well as contribution of emerging economies to all time low levels of inflation. This not having been demonstrated in the build up to the 2008 Financial Crisis, but also prompting the introduction of Basel III regulations – and particularly the 2010 Basel leverage ratio. |
| Keywords: | monetary policy; interest rates; positive supply shock; inflation; anti dumping tariffs; Uruguay World Trade round; Doha trade round; regional agreements |
| JEL: | E3 G2 G21 G3 K2 M4 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81474&r=int |
| By: | Kwok Tong Soo |
| Abstract: | Anti-globalisation protesters often claim that the gains from trade accrue primarily to large countries. This contradicts conventional trade models, which predict that small countries gain more from trade than do large countries. We first present evidence which shows that the terms of trade do indeed move in favour of countries which become larger. We then develop a model of international trade based on Ricardian comparative advantage, in which the terms of trade are derived based on the bargaining power of the two trading partners. If bargaining power depends on country size, the terms of trade will be in the larger country’s favour. However, general equilibrium adjustments mean that the larger country may not be better off under Nash bargaining than under free trade. The smaller country is unambiguously worse off compared to free trade. |
| Keywords: | Nash bargaining, gains from trade, Ricardian model |
| JEL: | F11 F13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:194613375&r=int |
| By: | Carsten Eckel; Stephen R. Yeaple |
| Abstract: | International trade is primarily conducted by large, multiproduct firms (MPFs) that pay above average wages and exhibit high productivity. In this paper we show that if firms can invest in management technologies for identifying worker skill then they will enjoy a form of market power in the labor market that artificially lowers their labor costs. This market failure results in excessive consumption of resources by large, productive exporting firms relative to the social optimum. Trade liberalization then has an ambiguous effect on aggregate welfare: lower trade costs increase access to foreign goods but also exacerbates the labor market distortion as resources are transferred to large firms. The model highlights the need to know why firms "excel" before drawing welfare conclusions regarding cross firm reallocations of resources. |
| JEL: | F1 F16 J31 J42 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23834&r=int |
| By: | Shaar, Karam |
| Abstract: | International trade data are in substantial measurement error. Data reported by some countries mean next to nothing. This study develops an index of trade data quality based on the consistency between a country’s claims on bilateral trade and the corresponding claims of the rest of the world from 1962 to 2014. The index takes the relative significance of each partner and data availability into account. We produce a more reliable set of bilateral and total international trade data using the index. Findings include (a) the actual exports of most countries with low data quality are considerably higher than self-reported. (b) Corruption and poor data quality are strongly correlated. (c) Global trade data quality has been deteriorating in the past three decades even though more countries have improved their data quality over time. This is because low-quality reporters have recently increased their share in global trade. (d) China tends to under-report exports and over-report imports. (e) There is only a trivial difference between US self-reported and reconciled data. The same applies to all high-quality reporters. We recommend future studies on trade use our reconciled data. |
| Keywords: | Trade data quality, data discrepancy, trade data reconciliation |
| JEL: | C02 C18 F1 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81572&r=int |
| By: | Jaime Bonet-Morón; Maria Camila Barakat-Niño; Lewis Enrique Polo-Espinosa |
| Abstract: | Con frecuencia se argumenta que el Gran Caribe es una de las oportunidades que tiene Colombia para incrementar su comercio exterior. El país muestra unos vínculos comerciales fuertes con algunas naciones de esta región, particularmente con México, Panamá y Venezuela. Sin embargo, el comercio exterior con otros países centroamericanos y los de la zona insular es muy débil. En general, las relaciones comerciales entre los países miembros del Gran Caribe son escasas y solo se encuentra un intercambio destacable entre vecinos o entre las economías más grandes. Ello es, en gran parte, resultado de las comunicaciones insuficientes y el transporte limitado que existe entre la mayoría de los miembros, así como de los tratados existentes con países desarrollados que les entrega acceso preferencial a algunos países. Para Colombia, existen oportunidades en algunos productos con ventajas comparativas en ciertos países. No obstante, esto requiere una estrategia comercial fuerte, especialmente en aquellos territorios con una apertura económica amplia que llevan a una competencia significativa por el acceso al mercado. ******ABSTRACT: It is often argued that the Caribbean Basin is one of the greatest opportunities that Colombia has to increase its foreign trade. The country shows strong trade ties with some countries of the Caribbean Basin, particularly Mexico, Panama and Venezuela. However, foreign trade with other Central American countries and those of the insular zone is weak. In general, trade relations between members of the Caribbean Basin are scarce and there is only a remarkable exchange between neighbors or between the larger economies. This is the result of infrequent communications and limited transport between the majority of the members of the Caribbean basin, as well as the existing free trade agreements with developed countries that provide preferential access to these markets. For Colombia, there are opportunities in some products with comparative advantages in some countries. Nevertheless, it requires a robust commercial strategy, especially in those territories with a strong economic opening in which there is significant competence to access those markets. |
| Keywords: | Comercio exterior, Gran Caribe, exportaciones, importaciones. |
| JEL: | J01 J31 L8 |
| Date: | 2017–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:col:000102:015739&r=int |
| By: | Ojo, Marianne |
| Abstract: | “………in the long run, the lack of commitment to multilateral trade that sank the Doha round this week, will also start to corrode the trading system as a whole……. America, the animating spirit behind earlier trade rounds, declared that a bad deal was worse than no deal at all – and meant it…. The underlying rationale of unilateral trade liberalization had been buried and forgotten long ago.” (The Economist, 2006a) The Uruguay and Doha trade rounds of agreements, do not only accentuate the difficulties of multilateral trade agreements, but also highlight the growing importance of regional agreements. In a phase where new territory is being experienced – particularly with the need for the United States to address its current account deficit, will it be willing to compromise in any deals involving America’s interest – in favor of diplomatic relations or will it stick to the widely held principle in Washington that “no deal at all is better than a bad deal”? Or will the United Kingdom’s involvement in the present trade dispute involving Bombardier and Boeing bring about an unprecedented and unexpected turn in events? |
| Keywords: | current account deficit; multilateral trade agreements; bilateral agreements; Doha Trade Round; tariffs |
| JEL: | E3 F4 G2 G28 G3 K2 M4 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81475&r=int |
| By: | Kaushal, Kevin R. (School of Economics and Business, Norwegian University of Life Sciences); Rosendahl, Knut Einar (School of Economics and Business, Norwegian University of Life Sciences) |
| Abstract: | Unilateral actions to reduce CO2 emissions could lead to carbon leakage such as relocation of emission-intensive and trade-exposed industries (EITE). To mitigate such leakage, countries often supplement an emissions trading system (ETS) with free allocation of allowances to exposed industries, e.g. in the form of output-based allocation (OBA). This paper examines the welfare effects of supplementing OBA with a consumption tax on EITE goods. In particular, we investigate the case when only a subset of countries involved in a joint ETS introduces such a tax. The analytical results suggest that the consumption tax would have unambiguously global welfare improving effects, and under certain conditions have welfare improving effects for the tax introducing country as well. Numerical simulations in the context of the EU ETS support the analytical findings, including that the consumption tax is welfare improving for the single country that implements the tax. |
| Keywords: | Carbon leakage; Output-based allocation; Consumption tax |
| JEL: | D61 F18 H23 Q54 |
| Date: | 2017–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2017_005&r=int |
| By: | Jo Swinnen |
| Abstract: | This dataset includes annual data on agricultural production, prices, trade and derived policy indicators for various commodities and nine European countries since the second half of the 19th century until the countries joined the EU. The countries are Belgium, France, UK, Netherlands, Germany, Finland, Sweden, Spain and Italy. The data was collected from a variety of sources, mostly national statistics, and the commodity and time coverage varies between countries. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:591903&r=int |
| By: | Kevin Hjortshøj O'Rourke |
| 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. |
| JEL: | F13 F14 N70 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23825&r=int |
| By: | Mostafa Beshkar (Indiana University); Jee-Hyeong Park |
| Abstract: | We analyze a settlement bargaining game in which one player receives a private and noisy signal of another player’s private type, thereby generating second-order uncertainty. Specifically, we develop a pretrial settlement bargaining game on contingent protection between governments in the presence of random and private pressure for protection. When the bargaining is a signaling game, the divine equilibrium entails a fully separating and inefficient action combination. As the quality of noisy signal improves, the likelihood of litigation decreases and the settlement tariff pair moves toward the Paretoefficient frontier. If the noisy signal of types is known to both players prior to the settlement offer stage, eliminating the second-order uncertainty, then the informational value associated with the signal of types completely disappears. For the presence or absence of second-order uncertainty to drastically affect the equilibrium of a settlement bargaining game, the player with private type information should be the one to make an offer. |
| Keywords: | Dispute Settlement, Second Order Uncertainty |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2017010&r=int |
| By: | Asghar, Ali; Ali, Shazad; Mamoon, Dawood |
| Abstract: | The paper analyses the pattern of career choice among the fresh recruits in multinational corporations. The paper finds that competence skills that are required within a borderless corporation tend to positively influence the employee satisfaction and expectation at the early stages of his/her career. The work environment prevalent at such peculiar and dominant corporations usually exceeds developing country corporate practices that are common within a local market landscape. We finally find that globalization favors the work culture to the benefit of its employees. |
| Keywords: | Globalisation, International Business |
| JEL: | F2 F23 |
| Date: | 2017–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81484&r=int |
| By: | Andrea Ascani Author-X-Name-First: Andrea; Simona Iammarino |
| Abstract: | This paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades: the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy. The aim of the study is to examine the structural transformation of regional economic systems within the UK by focusing on the role played by foreign multinational enterprises (MNEs) in manufacturing in facilitating the development of services. From a conceptual perspective, this research relies on different strands of literature on the impact of foreign direct investment (FDI) on recipient economies, on outsourcing and regional structural transformation, and on the identification of local multipliers. The empirical analysis focuses on a specific demand-side channel for structural change: the forward linkage established by foreign manufacturing MNEs with local service providers through outsourcing. Descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts. On this basic premise, we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets. In order to produce reliable estimates of a local multiplier, the methodology adopts an instrumental variable approach. Our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages. Length: |
| Keywords: | multinational enterprises, service outsourcing, regional structural change, local labour markets, multiplier |
| JEL: | R1 O3 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1724&r=int |
| By: | Nicolas Raimbault (Luxembourg Institute of Socio-Economic Research) |
| Abstract: | En 2015, les échanges internationaux de marchandises et la production mondiale progressent au même rythme (+2,8%), poursuivant la tendance de ces dernières années. Depuis la crise de 2008-2009 émerge en ce sens un nouveau régime d’articulation entre commerce international et croissance mondiale évoluant désormais de manière synchrone. Le contraste est saisissant par rapport aux deux décennies d’avant crise, où la croissance des échanges (6,8% par an) a été deux fois plus rapide que celle de la production mondiale (3% par an). |
| Keywords: | transports internationaux, commerce international, production mondiale, incertitudes, France Logistique 2025, nœuds de transport, mouvements sociaux |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01432573&r=int |