nep-int New Economics Papers
on International Trade
Issue of 2017‒12‒18
thirty-two papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trading firms and trading costs in services: Firm-level analysis By Dorothée Rouzet; Sebastian Benz; Francesca Spinelli
  2. Economic Integration, Foreign Investment and International Trade: The Effects of Membership of the European Union By Randolph Bruno; Nauro Campos; Saul Estrin; Meng Tian
  3. Implications of multilateral tariff bindings on the formation of preferential trade agreements and quest for global free trade By Nken, Moïse; Yildiz, Halis Murat
  4. Special Economic Zones and WTO Compliance: Evidence from the Dominican Republic By Fabrice Defever; Jose-Daniel Reyes; Alejandro Riaño; Miguel Eduardo Sánchez-Martín
  5. Getting the most out of trade in Estonia By Zuzana Smidova; Naomitsu Yashiro
  6. Market implications of the integration scenario of Southeast Asian rice markets By Gen Furuhashi; Hubertus Gay
  7. Productivity and Wage Premiums: Evidence from Vietnamese Ordinary and Processing Exporters By Mai T.P. Vu; Flora Bellone; Marion Dovis
  8. The Gains from Import Variety in Two Globalisations: Evidence from Germany By Wolf-Fabian Hungerland
  9. The Protectionist’s Progress: Year 1 By Uri Dadush
  10. Endowments, Skill-Biased Technology, and Factor Prices: A Unified Approach to Trade By Peter M. Morrow; Daniel Trefler
  11. Export Decision under Risk By José De Sousa; Anne-Célia Disdier; Carl Gaigné
  12. Moving up the global value chain in Latvia By Naomitsu Yashiro; Koen De Backer; Andrés Fuentes Hutfilter; Marco Kools; Zuzana Smidova
  13. Graham-type Trade Model under the Condition of Full Employment: Ricardian Trade Model with Link Commodities By Hideo Sato
  14. Large Investors, Regulatory Taking and Investor-State Dispute Settlement By Kai A. Konrad
  15. Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade By Bahmani-Oskooee, Mohsen; Aftab, Muhammad
  16. Trade, Technological Change, and Wage Inequality:The Case of Mexico By Andrea Waddle
  17. Politicized Trade: What Drives Withdrawal of Trade Preferences? By Gassebner, Martin; Gnutzmann-Mkrtchyan, Arevik
  18. International Value-Added Linkages in Development Accounting By Robert Zymek; Alejandro Cunat
  19. Openness and growth in a historical perspective: a VECM approach By Giovanni Federico; Paul Sharp; Antonio Tena-Junguito
  20. The Future Development of EU Exports in a Global Context By Robert Stehrer; Sandra Leitner; Roman Stöllinger
  21. Financial Development, the Choice of Technology, and Comparative Advantage By Gong, Binglin; Zhou, Haiwen
  22. Trumping the NAFTA renegotiation An alternative policy framework for Mexican-United States cooperation and economic convergence By Blecker, Robert A.; Moreno Brid, Juan Carlos; Salat, Isabel
  23. Barriers to European cross-border E-commerce By Alex Coad; Nestor Duch-Brown
  24. The Effect of Attitudes toward Migrants on Migrant Skill Composition By Besart Avdiu
  25. Globalization, Agricultural Markets and Mass Migration By Rowena Gray; Gaia Narciso; Gaspare Tortorici
  26. Governance over Economics: Making Globalisation Good for the Poor By Mamoon, Dawood
  27. Endogenous growth and global divergence in a multi-country agent-based model By Giovanni Dosi; Andrea Roventini; Emanuele Russo
  28. Vietnamese State-owned Enterprises under International Economic Integration By FUJITA Mai
  29. Foreign aid and asylum immigration. Does development matter? By Marina Murat
  30. Ramsey Taxation in the Global Economy By Chari, V. V.; Nicolini, Juan Pablo; Teles, Pedro
  31. How Migration Policies Moderate the Diffusion of Terrorism By Böhmelt, Tobias; Bove, Vincenzo
  32. International Migration and Regional Housing Markets: Evidence from France By Hippolyte D'Albis; Ekrame Boubtane; Dramane Coulibaly

  1. By: Dorothée Rouzet; Sebastian Benz; Francesca Spinelli
    Abstract: This report presents evidence on how services trade restrictions influence the decisions and performance of firms engaged in international markets, drawing on micro-data from Belgium, Finland, Germany, Italy, Japan, Sweden, the United Kingdom, and the United States. It first describes the patterns of services exports and affiliate sales at the firm level, uncovering a number of stylised facts about the firms engaged in international trade in services, their choices of modes of supply and the links between services trade and manufacturing activities. The report then relates these outcomes to services trade policy barriers in destination markets as measured by the OECD STRI. It demonstrates that complex and restrictive regulatory environments limit the volume of services that firms are able to trade as well as the number of firms that engage with those markets. Hence services trade restrictions reflect not only ad valorem trade costs, but also fixed and sunk costs. Such barriers do not affect all firms equally. Restrictive services trade regulations disproportionately discourage SMEs. Size, productivity and previous exporting experience appear to be decisive factors in dealing with at-the-border and behind-the-border trade barriers. Finally, the cost of regulatory compliance is lower for foreign-owned firms with headquarters located in the export destination country and for firms that trade bundles of services and manufacturing products, than it is for pure services exporters.
    Keywords: competition, firm-level data, foreign affiliates, productivity, regulation
    JEL: D22 F13 F14 L22 L25 L8 L9
    Date: 2017–12–12
  2. By: Randolph Bruno; Nauro Campos; Saul Estrin; Meng Tian
    Abstract: This paper investigates the importance of economic integration in simultaneously fostering foreign direct investment (FDI) and international trade. These have rarely been analyzed jointly using contemporary econometric methods. We estimate the effect of European Union (EU) membership on FDI inflows and trade using annual bilateral data from 34 OECD countries over 1985-2013. We find that EU membership increases FDI inflows by on average 28%. We jointly estimate the impact of EU membership on trade and FDI and find that they are substantial, with the one on trade larger than the one on FDI, in the order of double.
    Keywords: special economic integration effects, foreign direct investment, international trade, European Union, gravity model
    JEL: F17 F21 F36
    Date: 2017–11
  3. By: Nken, Moïse; Yildiz, Halis Murat
    Abstract: Using an endogenous preferential trade agreement (PTA) formation model under all possible multilaterally negotiated bound tariff rates, we examine the effects of multilateral trade liberalization on the role of PTAs in achieving global free trade. We first show that, when countries are completely symmetric, no country has an incentive to unilaterally deviate (free ride) from free trade network while exclusion incentives arise when bound tariffs are sufficiently low. Due to the relatively flexible nature of the FTA formation, such exclusion incentives go unexercised and free trade always obtains as the coalition-proof Nash equilibrium (CPNE) of the FTA game. However, such flexibility does not exist under the CU game and thus countries are able to exercise the exclusion incentive and free trade fails to be CPNE when the bound tariff rates are sufficiently low. We then consider a scenario where countries are asymmetric with respect to their comparative advantage. The country with a weaker comparative advantage has an incentive to free ride on trade liberalization of the other two countries and lower bound tariff rates disciplines this incentive via limiting the ability to set optimal tariffs. As a result, multilateral free trade is more likely to be a CPNE as the multilateral negotiated bound tariff rates decline. This result provides support for the idea that multilateral trade liberalization acts as a complement to the FTA formation in achieving global free trade.
    Keywords: Bound Tariff Rates, Coalition proof Nash equilibrium, Free Trade Agreement, Customs Union, Exclusion Incentive, Free Riding Incentive.
    JEL: F1 F11 F13 F15
    Date: 2017–12–07
  4. By: Fabrice Defever; Jose-Daniel Reyes; Alejandro Riaño; Miguel Eduardo Sánchez-Martín
    Abstract: Special economic zones (SEZ), one of the most important instruments of industrial policy used in developing countries, often impose export share requirements (ESR). That is, firms located in SEZ are required to export more than a certain share of their output to enjoy a wide array of incentives - a practice prohibited by the World Trade Organization's Agreement on Subsidies and Countervailing Measures. In this paper we exploit the staggered removal of ESR across products and over time in the SEZ of the Dominican Republic - a reform driven by external commitments to comply with WTO disciplines on subsidies - to evaluate how ESR effect export performance at the product- and firm-level. Using customs data on international trade transactions from the period 2006 to 2014, we find that making the Dominican SEZ regime WTO-compliant made SEZ more attractive locations for exporters to be based in. The reform, however, did not have a significant effect on the country's exports nor on the share of export value originating from SEZ.
    Keywords: special economic zones, export share requirements, export subsidies, agreement on subsidies and countervailing measures, Dominican Republic
    JEL: F12 F13 O47
    Date: 2017–11
  5. By: Zuzana Smidova; Naomitsu Yashiro
    Abstract: Estonia is highly integrated into the global trade system: it exports approximately 80% of GDP and around half of domestic employment is sustained by foreign demand. Given that international trade and foreign direct investment are considered as major channels of technology diffusion and productivity growth, this bodes well for reviving income convergence. To capitalize on the country’s high trade intensity, policymakers need to remove remaining trade barriers and improve policies fostering knowledge diffusion as well as talent retention and attraction. At the same time, to ensure that benefits of more trade are shared across the population, the social safety net should be bolstered, and participation in upskilling programmes and their labour-market relevance increased. This Working Paper relates to the 2017 OECD Economic Survey of New Zealand ( y-estonia.htm).
    Keywords: global value chains, innovation, migration, productivity, social safety net
    JEL: F22 F43 I31 O24 O52
    Date: 2017–11–22
  6. By: Gen Furuhashi (OECD); Hubertus Gay (OECD)
    Abstract: This paper explores how the integration of rice markets in ASEAN countries influences the import, export, production, consumption, and prices of rice in those countries, as well as in the rest of the world. The analysis describes current policies applied to ASEAN rice markets, then evaluates the ten-year impacts of two reform scenarios using the OECD-FAO Aglink-Cosimo model. The first scenario involves the elimination of tariffs within the region, while protection vis-à-vis countries outside the region remains unchanged. The second scenario involves closer price integration across the region, again with protection versus countries outside the region unchanged. The analysis finds that opening up the regional trade market will lead to greater overall production, consumption and trade across the region. The overall welfare gains are over fifteen times higher with full price integration, as opposed to just tariff reform. Significant price changes create winners and losers within all countries, underscoring the need for complementary policies to accompany a rice market integration agenda.
    Keywords: partial equilibrium model, self-sufficiency, Tariffs
    JEL: Q10 Q11 Q17 Q18
    Date: 2017–12–12
  7. By: Mai T.P. Vu (Foreign Trade University); Flora Bellone (Université Côte d'Azur; GREDEG CNRS); Marion Dovis (Aix-Marseille University; GREQAM)
    Abstract: We propose some new stylized facts on Vietnamese exporters that emphasize firm heterogeneity in trade regimes and firm ownership. We show first that the distribution of firms export intensities is U-shaped with more than half of Vietnamese exporters exporting more than 50% of their output. This contrasts with the export patterns in industrialized countries but is similar to the export intensity distribution for other emerging economies with strong participation in global value chains. Second, we show that export premia, evaluated in terms of both productivity and wage indexes, are positive only for Vietnamese exporters involved primarily in ordinary trade, and that processing exporters exhibit lower productivity indexes and pay lower wages than their non-exporting counterparts. This pattern is more pronounced among the group of foreign-owned firms in Vietnam compared to the group of domestic firms and is in line with previous ndings for China.
    Keywords: Processing trade, wage, firm productivity, firm-level data, Vietnam
    JEL: F10 F14 L60
    Date: 2017–12
  8. By: Wolf-Fabian Hungerland (Institute of Economic History, School of Economics and Business, Humboldt-University of Berlin, Spandauer Strasse1, 10178 Berlin, Germany)
    Abstract: What are the gains from trade today compared to those in the globalisation hundred years ago? To answer this question I rely on Krugman’s (1980) idea that consumers value growing import variety, and very granular German product-level data from the first globalisation (ahead of World War I), and today. First, I derive structural estimates of the elasticity of substitution at the product-level for both globalisation episodes. I find substantial heterogeneity in terms of how elastic demand over goods and their varieties is, especially when compared over the long run. The median elasticity is 3.8 in the first globalisation, but only 2.5 in the second. This suggests that demand was more elastic in the first globalisation and that the structure of demand is not easily approximated by using a single elasticity of substitution, which is often done in the literature. Second, I use these estimated elasticities and calculate the consumer gains from growing import variety ahead of World War I and for today. The welfare calculations suggest that the gains from trade in the first globalisation are twice as much as today. Welfare turns out much lower—falling down to a fifth of the benchmark— when using non-contemporary, that is, inadequate elasticities. Simply taking one single elasticity or a set of ahistorical elasticities can be easily misleading because gains from international trade as well as the effects of changes in trade costs may be wrongly captured.
    Keywords: Product variety, elasticity of substitution, gains from trade, first globalisation
    JEL: F12 F14 N33 N74
    Date: 2017–12
  9. By: Uri Dadush
    Abstract: President Trump’s actions on trade have not quite matched his rhetoric, but the worst may be to come. Though the political opposition to his protectionism is formidable, so are his conviction and determination and he possesses a wide array of instruments to pursue his goals. The trade doctrine he has espoused makes for trade policy instability both at home and abroad. It may lead to a large deterioration in the operating environment of international business. America’s tradedependent industries and her trading partners should not wait. They need to anticipate and deter the administration’s actions. Policies must be adjusted to minimize the damage to world trade.
    Keywords: Trump, Trade, Policy, Protectionnism, Business, United States, WTO
    Date: 2017–12
  10. By: Peter M. Morrow; Daniel Trefler
    Abstract: We develop a multi-factor, multi-sector Eaton-Kortum model in order to examine the impact of trade costs, factor endowments, and technology (both Ricardian and factor-augmenting) on factor prices, trade in goods, and trade in the services of primary factors (value-added trade). This framework nests the Heckscher-Ohlin-Vanek (HOV) model and the Vanek factor content of trade prediction. We take the model to the data using skilled and unskilled data for 38 countries. We have two findings. First, the key determinants of international variation in the factor content of trade are endowments and international variation in factor inputs used per dollar of output. Input-usage variation in turn is driven by (1) factor-augmenting international technology differences and (2) international factor price differences. Second, our estimates of factor-augmenting international technology differences — which imply cross-country variation in skill-biased technologies — are empirically similar to those used to rationalize cross-country evidence on income differences and directed technical change.
    JEL: F1 F11 F14
    Date: 2017–11
  11. By: José De Sousa; Anne-Célia Disdier; Carl Gaigné
    Abstract: Using firm and industry data, we unveil two empirical regularities: (i) Demand uncertainty not only reduces export probabilities but also decreases export quantities and increases export prices; (ii) The most productive exporters are more affected by higher industry-wide expenditure volatility than are the least productive exporters. We rationalize these regularities by developing a new firm-based trade model wherein managers are risk averse. Higher volatility induces the reallocation of export shares from the most to the least productive incumbents. Greater skewness of the demand distribution and/or higher trade costs weaken this effect. Our results hold for a large class of consumer utility functions.
    Keywords: firm exports, demand uncertainty, risk aversion, expenditure volatility, skewness
    JEL: D21 D22 F12 F14
    Date: 2017
  12. By: Naomitsu Yashiro; Koen De Backer; Andrés Fuentes Hutfilter; Marco Kools; Zuzana Smidova
    Abstract: Stronger integration in global value chains would speed up economic convergence to advanced OECD economies and raise living standards. Participation in global value chains (GVCs) offers opportunities for boosting productivity through knowledge transfer and intensive use of technologically advanced inputs. It also enables Latvia to diversify exports into high value added goods and services. Latvia’s participation in GVC lags behind its Baltic and Central European peers. It also draws less value added from GVCs compared to many OECD economies. Nevertheless, GVC participation boosts the productivity of Latvian firms and enables them to increase employment and wages. Strong skills, high innovation capabilities and efficient resource allocation are essential for Latvian firms to engage in more knowledge intensive activities within GVCs. Improving access to higher education, promoting innovation cooperation between Latvian firms and foreign research institutes, reducing the large informal economy and establishing an effective judiciary and insolvency regime would unlock productivity growth through stronger integration in GVCs. This Working Paper relates to the 2017 OECD Economic Survey of Latvia. ( y-latvia.htm).
    Keywords: education, global value chains, innovation
    JEL: F12 F43 O38
    Date: 2017–11–27
  13. By: Hideo Sato
    Abstract: This paper provides a Graham-type trade model, which is a multi-country multi-commodity Ricardian (one-factor) trade model and attaches great importance to commodities produced in common in more than one country, or link commodities: e.g. automobiles among Japan, USA, and Germany, IT products among Japan, Korea, and China, and beef among Brazil, Australia, and USA. The link commodities determine the relative wage rates of all the countries producing the same link commodities, thereby determining the relative prices of all commodities produced in these countries. Among the pattern of the international division of labor (IDL pattern) formed in the multi-country multi-commodity trade model, the linkage type IDL patterns linking all the countries directly and indirectly is overwhelmingly many, the limbo type IDL patterns having more than one disconnection accounts for a small part, especially one of them, the perfect specialization patterns (PSPs) having no link commodities are uncommon. When small changes in demand occur, quantity adjustments without price changes are conducted among countries linked directly and indirectly (the Graham case), and price adjustments among countries disconnected (the Mill case). Conventional trade theories have focused their attention on the PSP and have not incorporated the link commodities into their models. The link commodities, therefore the quantity adjustments or the Graham case matters. We need to free ourselves from undue emphasis on the PSPs.
    Date: 2017–08
  14. By: Kai A. Konrad
    Abstract: This paper offers an economic analysis of an international investorstate dispute settlement regime (ISDS) in markets with large investors. It identifies a reason for strategic overinvestment by the domestic industry, leading to permissive regulation in the absence of ISDS. An "ideal" investor-state dispute settlement arrangement (e¢ ciency- oriented, transaction-cost free, with untouchable, fully reliable, and unbiased judges) has positive and negative effects in this framework. It generates an equal level playing field for domestic and foreign investors, but it magnifies an existing overinvestment problem and may reduce world welfare. The results explain anecdotal evidence according to which ISDS that protects foreign investors is liked by the domestic industry and disliked by other interest groups in the host country.
    Keywords: Investment arbitration, settlement courts, time-consistent regulation, strategic investment
    JEL: K11 F21 F55
    Date: 2016–11
  15. By: Bahmani-Oskooee, Mohsen; Aftab, Muhammad
    Abstract: Previous research that considered the response of the trade balance between Malaysia and China to exchange rate changes used a linear model and did not find any significant long-run link. Suspecting that the results suffer from aggregation bias as well as ignoring nonlinear adjustment of the exchange rate, we consider the trade balance of 59 industries that trade between the two countries and use a nonlinear ARDL model to show that almost 1/3rd of the industries are affected by ringgit depreciation against yuan, in an asymmetric manner. The largest industry which accounts for more than 25% of the trade is found to benefit from ringgit depreciation but not hurt from appreciation. In total, 15 industries that account for 40% of the trade enjoy this property.
    Keywords: Nonlinear ARDL, Asymmetry, 65 Industries, Malaysia, China
    JEL: F1 F3
    Date: 2017–02–13
  16. By: Andrea Waddle (University of Richmond)
    Abstract: In the decade following the Mexico-U.S. trade integration, the manufacturing skill premium rose by almost 60 percent in Mexico and by only 12 percent in the U.S. Standard trade theory predicts that when countries with different levels of skilled labor integrate, the skill premium should fall - not rise - in the skill-scarce country. In this paper, I reconcile theory and data by building a model in which intermediate goods are produced using rented technology. After integration, producers in Mexico begin to rent technologies from the United States, which are more advanced and, hence, more skill-intensive. This has two effects: The skill premium in Mexico rises due to adoption of the more advanced technology and the skill premium in the U.S. rises due to increased investment in this technology, which is driven by the increased marginal return on technology arising from its adoption in Mexico. The mechanism is supported by industry-level evidence: Mexican industries which are integrated into the U.S. supply chain have higher skill premia than their non-integrated counterparts. The calibrated model can account for about two-thirds of the increase in the skill premium in each country.
    Date: 2017
  17. By: Gassebner, Martin; Gnutzmann-Mkrtchyan, Arevik
    Abstract: While it is well understood that industrialized countries use aid to grant political favors, little research covers alternative channels such as trade policy towards developing countries. We analyze eligibility investigations and revoking of U.S. Generalized System of Preferences (GSP) benefits to see whether political friends of the U.S. receive favorable treatment. While countries politically aligned with the U.S. are equally likely to be investigated, they are significantly less likely to have their benefits suspended.
    Keywords: Trade Policy; Development; Generalized System of Preferences; United Nations General Assembly
    JEL: F13 F53 O19 O24
    Date: 2017–11
  18. By: Robert Zymek (University of Edinburgh); Alejandro Cunat (University of Vienna)
    Abstract: Development accounting evaluates how much of the variation in per-worker incomes across countries can be attributed to quantifiable factor endowments, and how much is due to unobserved TFP differences. We use a standard trade model to generalise the development accounting framework to a setting in which countries are open to trade, and consume both domestic and foreign value added. In addition to differences in factor endowments and TFPs, the generalised framework highlights differences in relative factor costs as source of real-income variation across countries. In turn, countries' relative factor costs are determined by their trade linkages, and the international distribution of factor endowments and expenditures. We use information on value-added trade from international input-output tables for 40 major economies in the period 1995-2011 to back out their relative factor costs in a model-consistent manner. Incorporating this information into the development accounting equation reduces the variation in unobserved TFPs required to explain the distribution of per-worker incomes among our sample countries by more than one half. Our findings suggest that the large international TFP differences found in traditional development-accounting exercises are in part due to their implicit assumption that countries are closed.
    Date: 2017
  19. By: Giovanni Federico (University of Pisa, CEPR); Paul Sharp (University of Southern Denmark, CAGE, CEPR); Antonio Tena-Junguito (Universidad Carlos III Madrid)
    Abstract: Since Adam Smith, most economists have held the belief that trade fosters economic growth, although it has not been possible to establish a strong causal relationship. The results of growth regressions are, at best, mixed, and several historical studies have found a positive relationship between tariffs and economic growth in the nineteenth century. This paper adopts a different strategy. We look for cointegration between GDP per capita and openness for about thirty countries since 1830. About half return no cointegration – i.e. no relationship. The rest show mixed results, which change through time. An ordered probit model suggests that significantly positive relationships are more likely at low-to-middle income levels.
    Keywords: Openness, growth, VECM, cointegration, trade
    JEL: F1 N1 N7
    Date: 2017–12
  20. By: Robert Stehrer; Sandra Leitner; Roman Stöllinger
    Abstract: Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
    Keywords: global trade patterns, gravity scenarios, EU industrial policy
    JEL: F14 F17
  21. By: Gong, Binglin; Zhou, Haiwen
    Abstract: In this general equilibrium model, banks and manufacturing firms engage in oligopolistic competition. A more advanced manufacturing technology has a higher fixed cost but a lower marginal cost of production. We show that manufacturing firms located in a country with a more efficient financial sector choose more advanced technologies and this country has a comparative advantage in the production of manufactured goods. Even though the foreign country has a less developed financial sector than the home country, the opening up of trade with the foreign country leads domestic manufacturing firms to adopt more advanced technologies. An increase in the level of efficiency in the financial sector of one country causes manufacturing firms in both countries to adopt more advanced technologies.
    Keywords: Financial development, the choice of technology, comparative advantage, oligopolistic competition, increasing returns
    JEL: D43 F12 O16
    Date: 2017–12–07
  22. By: Blecker, Robert A.; Moreno Brid, Juan Carlos; Salat, Isabel
    Abstract: The effects of globalization and regional integration have not worked well for many Americans and Mexicans. The objective of this document is to assess the proposals of the Trump administration for revising NAFTA, the responses of the Mexican government, and progressive alternatives to both. Therefore, this paper will address what kind of economic policies are needed to achieve more inclusive and sustainable growth in both Mexico and the United States, given their current degree of integration and the changing character of global production and technology.
    Date: 2017–11
  23. By: Alex Coad (European Commission – JRC); Nestor Duch-Brown (European Commission – JRC)
    Abstract: We analyse survey data to investigate the main barriers to European cross-border e-commerce. We investigate the determinants of selling online, as well as the frequency and determinants of cross-border e-commerce, and the role of barriers. Large firms, which are part of a group, are more likely to sell online. Firms generally make most of their online sales to their home country, although EU firms are more likely to engage in cross-border online trade with EU countries than non-EU countries. Firms report that they are facing a variety of barriers to e-commerce. Regulatory barriers are negatively associated with online sales. There is weak evidence that firms which use their own websites are more vulnerable to financial, market and information barriers. Firms that use a large platform experience fewer financial and market barriers. On the positive side, we find that small and young firms do not seem to be more vulnerable to barriers than large or more experienced firms.
    Keywords: digital single market, e-commerce, cross-border trade
    JEL: D23 K11 K12 L86
    Date: 2017–11
  24. By: Besart Avdiu
    Abstract: I investigate the effect of attitudes toward migrants on the average skill composition of immigrants in destination countries. A model is presented showing that negative attitudes toward migrants in general can reduce the average skill composition. The intuition for the result is that the highly skilled are more mobile and hence more sensitive to negative attitudes. I use survey data on attitudes toward migrants as well as data on migrant stocks by education level and origin country. The empirical analysis is based on two classes of theoretical models and I find consistent evidence for the hypothesis that more positive attitudes increase the skill composition of immigrants. The results imply that general attitudes toward migrants can be relevant for policies seeking to attract highly skilled migrants.
    Keywords: International migration, High-skilled immigration, Immigration Attitudes
    JEL: F22 J15 J61
    Date: 2017–09
  25. By: Rowena Gray (University of California-Merced); Gaia Narciso (Trinity College Dublin); Gaspare Tortorici (Trinity College Dublin)
    Keywords: Age of mass migration; determinants of migration; agricultural shocks
    JEL: N93 N13 F22 O15
    Date: 2017–12
  26. By: Mamoon, Dawood
    Abstract: The paper employs different definitions of inequality/ equality and investigates how globalisation is associated with these welfare measures. The nations’ proximity to post modernism development culture through international cooperation may enable countries to strengthen their social, economic, legal and political institutions. We find that adopting well developed institutional governance practices as matter of greater integration with modern 21st century governance culture creates thriving middle classes in developing countries enabling a downward pressure on inequality of incomes and wages. In contrast, integration of goods and services with world markets puts upward pressure on the wages of skilled in contrast with the unskilled causing industrial wage inequalities in both developed and developing countries. The paper recommends in line with the recent literature on pre mature de industrialisation phenomenon that countries may protect their local industries to provide jobs to locals and thus enable the gains of trade to be more equally distributed among the populations. This can be done by choosing the second best option towards global integration and that is to promote regionalism within geographical clusters.
    Keywords: Globalisation, Governance, Middle Class, Inequality
    JEL: P52
    Date: 2017–11–24
  27. By: Giovanni Dosi; Andrea Roventini; Emanuele Russo
    Abstract: In this paper we present a multi-country, multi-industry agent-based model investigating the different growth patterns of interdependent economies. Each country features a Schumpeterian engine of endogenous technical change which interacts with Keyneasian/Kaldorian demand generation mechanisms. National growth trajectories are driven by firms' accumulation of technological knowledge, which in turn also leads to emergent specialization patterns in different industries. Interactions among economies occur via trade flows, stemming from the competition of firms in international markets. Simulation results show the emergence of persistent income divergence among countries leading to polarization and club formation. Moreover, each country experiences a structural transformation of its productive structure during the development process. Such dynamics results from firm-level virtuous (or vicious) cycles between knowledge accumulation, trade performances, and growth dynamics. The model accounts for a rich ensemble of empirical regularities at macro, meso and micro levels of aggregation.
    Keywords: Endogenous growth, structural change, technology-gaps, global divergence, absolute, advantages, agent-based models.
    Date: 2017–12–11
  28. By: FUJITA Mai
    Abstract: This paper examines the progress and outcomes of state-owned enterprise (SOE) reforms under international economic integration in Vietnam. While the literature has focused primarily on strategic SOEs that have been largely treated as exceptions under international commitments or domestic reforms, the paper focuses on the Vietnam National Textile and Garment Group (Vinatex), a major SOE group in the textile and garment (T&G) industry in which the impact of international economic integration was expected to be substantial. The main findings are as follows. First, unlike large-scale SOEs in strategic sectors that receive the most attention in the literature, the transformation of Vinatex in terms of ownership, organization, policy roles, and relationship with the state, albeit incomplete, has made significant progress. Second, nevertheless, there are indications that Vinatex's relationship with the state and its non-commercial roles may continue in subtle and indirect forms. Third, with the entry and growth of foreign-invested and domestic private enterprises, both SOEs and Vinatex have lost shares in the T&G industry. However, some Vinatex members stay among the country's top garment exporters, successfully competing with their foreign-invested rivals. These findings suggest the recent realities of Vietnamese SOEs that are increasingly hybrid, similar to those in many other countries.
    Date: 2017–11
  29. By: Marina Murat
    Abstract: This paper tests the influence of aid from rich to developing economies on bilateral asylum inflows. Results show that aid effects on asylum applications are significant, but vary with the level of development of the recipient country. Aid to poor economies – especially in Sub-Saharan Africa – deters asylum inflows, while aid to medium-income developing countries attracts asylum seekers. Aid leads to negative spillovers on applications across donors. At the same time, foreign aid has no incidence on voluntary immigration. Overall, the deterring effects of aid on inflows from poor countries are stronger when transfers are coordinated across donors and are made conditional on economic and institutional improvements in the recipient economy.
    Keywords: foreign aid, asylum seekers and refugees, development
    JEL: F35 F22 J15
    Date: 2017–12
  30. By: Chari, V. V. (Federal Reserve Bank of Minneapolis); Nicolini, Juan Pablo (Federal Reserve Bank of Minneapolis); Teles, Pedro (Banco de Portugal)
    Abstract: We study cooperative optimal Ramsey equilibria in the open economy addressing classic policy questions: Should restrictions be placed to free trade and capital mobility? Should capital income be taxed? Should goods be taxed based on origin or destination? What are desirable border adjustments? How can a Ramsey allocation be implemented with residence-based taxes on assets? We characterize optimal wedges and analyze alternative policy implementations.
    Keywords: Capital income tax; Free trade; Value-added taxes; Border adjustment; Origin- and destination-based taxation; Production efficiency
    JEL: E60 E61 E62
    Date: 2017–12–11
  31. By: Böhmelt, Tobias (University of Essex); Bove, Vincenzo (University of Warwick)
    Abstract: There is an ongoing debate among practitioners and scholars about the security consequences of transnational migration. Yet, existing work has not yet fully taken into account the policy instruments states have at their disposal to mitigate these, and we lack reliable evidence for the effectiveness of such measures. The following research addresses both shortcomings as we analyze whether and to what extent national migration policies affect the diffusion of terrorism via population movements. Spatial analyses report robust support for a moderating influence of states’ policies: while larger migration populations can be a vehicle for the diffusion of terrorism from one state to another, this only applies to target countries with extremely open controls and lax regulations. This research sheds new light on the security implications of population movements, and it crucially adds to our understanding of governments’ instruments for addressing migration challenges as well as their effectiveness.
    Keywords: Terrorism; Diffusion; Immigration; National Migration PoliciesJEL Classification:
    Date: 2017
  32. By: Hippolyte D'Albis (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); Ekrame Boubtane (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article examines the causal relations between immigration and the characteristics of the housing market in host regions. We constructed a unique database from administrative records and used it to assess annual migration flows into France's 22 administrative regions from 1990 to 2013. We then estimated various panel VAR models, taking into account GDP per capita and the unemployment rate as the main regional economic indicators. We find that immigration has no significant effect on property prices but that higher property prices significantly reduce immigration rates. We also find no significant relationship between immigration and social housing supply.
    Keywords: Immigration,Property Prices,Social Housing,Panel VAR
    Date: 2017–11

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