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on International Trade |
| By: | Enkhbayar Shagdar (Economic Research Institute for Northeast Asia (ERINA)); Tomoyoshi Nakajima (Economic Research Institute for Northeast Asia (ERINA)) |
| Abstract: | Despite growing trade and economic relations among the countries in the Northeast Asian (NEA) region, there are only two bilateral free trade agreements in effect currently. The China?ROK Free Trade Agreement entered into force on 20 December 2015 and the Japan?Mongolia Economic Partnership Agreement (EPA) became effective on 7 June 2016. However, several EPAs and free trade agreements (FTAs) are under negotiation or have prospects to emerge among not only the countries in the region, but also surrounding regions and countries. An analysis of the economic effects of the ongoing FTA (China?Japan?Korea Trilateral Free Trade Agreement (CJK FTA)), and several other prospective FTAs?Northeast Asia Preferential Free Trade Agreement (NEA FTA); Northeast Asia plus the Eurasian Economic Union (EAEU) Preferential Free Trade Area (NEA+EAEU FTA); and Northeast Asia plus the Regional Comprehensive Economic Partnership (RCEP) plus the EAEU Preferential Free Trade Area (NEA+RCEP+EAEU FTA)?using the standard CGE Model and GTAP Data Base 9.0a revealed that all parties of the agreements will benefit from the formation of these free trade agreements, having welfare gains and real GDP expansions regardless of international capital mobility status?i.e. whether the capital is internationally mobile or not. Moreover, the results indicated that for the NEA region as a whole, the NEA FTA is preferable to the CJK FTA alone, and it would be even better off with the formation of wider free trade areas, such as with the other RCEP and EAEU members. |
| Keywords: | free trade; CGE analysis |
| JEL: | F15 C68 |
| URL: | http://d.repec.org/n?u=RePEc:eri:dpaper:1802&r=int |
| By: | Mayer, Thierry; Vicard, Vincent; Zignago, Soledad |
| Abstract: | In this paper we quantify the ``Cost of Non-Europe'', i.e. the trade-related welfare gains each country member has reaped from the European Union. Thirty years after the terminology of Non-Europe was used to give estimates of the gains from further integration, we use modern versions of the gravity model to estimate the trade creation implied by the EU, and apply those to counterfactual exercises where for instance the EU returns to a ``normal'', shallow-type regional agreement, or reverts to WTO rules. Those scenarios are envisioned with or without the exit of the United Kingdom from the EU (Brexit) happening, which points to interesting cross-country differences and potential cascade effects in doing and undoing of trade agreements. |
| Keywords: | European Union; Gravity; trade integration |
| JEL: | F1 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12844&r=int |
| By: | Bandyopadhyay, Subhayu (Federal Reserve Bank of St. Louis); Basu, Arnab K.; Chau, Nancy H.; Mitra, Devashish |
| Abstract: | We present a model which considers both regulatory burden of offshoring barriers and possible terms of trade gains from such barriers. Non-tariff barriers are shown to be unambiguously welfare-reducing, and tariff barriers raise welfare only when associated terms-of-trade gains exceed resulting regulatory burdens, in which case there is a positive optimal offshoring tax. Otherwise, free trade is optimal. Welfare reductions from an offshoring tax are more likely with several developed nations engaging in offshoring. We derive and characterize the Nash equilibrium in such a case. |
| Keywords: | Offshoring tax; labor market; terms of trade |
| JEL: | F1 H8 |
| Date: | 2018–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2018-003&r=int |
| By: | Lionel Fontagné; Gianluca Santoni |
| Abstract: | There has been considerable attention paid to the endogenous nature of regional trade agreements Geography, economic size, or common history help predicting signed agreements. However, not all signed RTAs are “natural" according to economic determinants, as trade negotiations can be used as a tool of external policy. Recent developments in terms of structural gravity help clarifying this debate by taking account of all theoretically relevant determinants of bilateral trade, as well as general equilibrium effects of signing an agreement. Indeed, the endogeneity of trade arrangements has a time dimension and is related to firm strategies. These are the two mechanisms addressed in this paper. We estimate the time-varying probability for a country pair to sign a trade agreement and build upon structural gravity in general equilibrium to determine how the patterns of Global Value Chains shape the evolving geography of optimal trade agreements. Our results confirm that the endogenous geography of RTAs is shaped by the development of GVCs. |
| Keywords: | Preferential Trade Agreements;Global Value Chains;Structural Gravity |
| JEL: | F13 F14 F16 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2018-05&r=int |
| By: | Dai, Mi (Beijing Normal University); Huang, Wei (National University of Singapore); Zhang, Yifan (Chinese University of Hong Kong) |
| Abstract: | We investigate the impacts of trade liberalization on household behaviors and outcomes in urban China, exploiting regional variation in the exposure to tariff cuts resulting from WTO entry. Regions that initially specialized in industries facing larger tariff cuts experienced relative declines in wages. Households responded to this income shock in several ways. First, household members worked more, especially in the non-tradable sector. Second, more young adults co-resided with their parents, and thus household size increased. Third, households saved less. These behaviors significantly buffered the negative wage shock induced by trade liberalization. |
| Keywords: | household adjustments, trade liberalization, WTO |
| JEL: | F14 F16 J20 R23 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11428&r=int |
| By: | Tetyana Payosova (Harvard Law School); Gary Clyde Hufbauer (Peterson Institute for International Economics); Euijin Jung (Peterson Institute for International Economics) |
| Abstract: | The mechanics of US withdrawal from the North American Free Trade Agreement (NAFTA) have been widely explored, with an emerging consensus among legal experts that President Donald Trump does have the authority to pull out of the accord. This Policy Brief examines the legal procedures in Canada and Mexico in the event that either country decides to withdraw or terminate NAFTA. Relative to the United States, Canada and Mexico have clearer legal procedures. To terminate NAFTA in Canada, the Department of International Trade would send the notice to withdrawal upon approval by the Cabinet and the Order in Council. In Mexico, the president can notify withdrawal from NAFTA under Article 2205, following Senate approval. To raise tariffs to the MFN level, Canada requires amendment of federal statutes that requires passage in both chambers of the Parliament through regular procedures. To raise its tariffs, Mexico requires a bill to amend federal legislation that has the approval of the Senate and the Chamber of Deputies. While the legal powers to withdraw from NAFTA commitments are very broad in all three partner countries, political and economic constraints greatly narrow the scope of action. Canada conducts about 64 percent of its two-way merchandise trade with the United States; the figure for Mexico is 63 percent; and the United States depends on Canada and Mexico for 29 percent of its global commerce. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb18-11&r=int |
| By: | GHOSH, Arghya; ISHIKAWA, Jota |
| Abstract: | We examine how trade liberalization affects South’s incentive to protect intellectual property rights (IPR) in a North-South duopoly model where a low-cost North firm competes with a high-cost South firm in the South market. The North firm serves the South market through either exports or foreign direct investment (FDI). The extent of effective cost difference between North and South depends on South’s imitation, which in turn depends on South’s IPR protection and absorptive capacity and North firm’s location choice, all of which are endogenously determined in our model. For a given level of IPR protection, South’s absorptive capacity under exports may be greater than under FDI. Even though innovation is exogenous to the model (and hence unaffected by South’s IPR policy), strengthening IPR protection in South can improve its welfare. The relationship between trade costs and the degree of IPR protection that maximizes South welfare is non-monotone. In particular, South has an incentive to protect IPR only when trade costs are moderate. When masking technology or licensing is incorporated into the model, however, some protection of IPR may be optimal for South even if the trade costs are not moderate. |
| Keywords: | intellectual property rights (IPR), absorptive capacity, imitation, foreign direct investment (FDI), licensing, masking, oligopoly, North-South trade model |
| JEL: | F12 F13 D43 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-67&r=int |
| By: | Lee, Joon-Ho; Lee, Alexander; Lee, April |
| Abstract: | In the Republic of Korea, public export support programmes for small and medium-sized enterprises (SMEs) have played a significant role in the internationalization process of such firms. Multiple non-reimbursable and co-financing instruments that promote export innovation among SMEs have contributed to their export success which, alongside large firms, made the Republic of Korea the world’s fifth largest exporting country in 2015. This study summarizes these support programmes and some key factors in relation to their implementation, some of which may be useful for those responsible for formulating and implementing similar programmes in Latin America and the Caribbean. First, the authors highlight the continuity of these policies since the 1950s. Second, the Republic of Korea has a unique set-up of institutions supporting SMEs exports, including the Ministry of Small and Medium Enterprises and Startups, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea International Trade Association (KITA). Third, some new initiatives have been introduced recently to accelerate SME internationalization, including a voucher scheme, in which eligible SMEs can select specific types of support of their own choice. Fourth, many programmes focus on the integration of SMEs into global value chains, particularly in the case of suppliers of parts and components to large Korean firms. |
| Keywords: | PEQUEÑAS EMPRESAS, EMPRESAS MEDIANAS, EXPORTACIONES, INNOVACIONES, PROMOCION DE LAS EXPORTACIONES, POLITICA DE EXPORTACION, ESTUDIOS DE CASOS, SMALL ENTERPRISES, MEDIUM ENTERPRISES, EXPORTS, INNOVATIONS, EXPORT PROMOTION, EXPORT POLICY, CASE STUDIES |
| Date: | 2018–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:43475&r=int |
| By: | Nogues, Julio |
| Abstract: | For the United Kingdom and the European Union, the costs from the Brexit policy depends crucially on the ensuing structure of bilateral trade protection that they finally come to agree upon. For the rest of the world, Brexit will open new opportunities and create new challenges. The focus of this note is on the opportunities that would emerge for efficient agro industrial exporters in the UK market in the event of a hard Brexit. This scenario would mark the first time since 1973 that third countries face a level playing field vis a vis the EU as potential suppliers to the UK market. Partial equilibrium estimates indicate that a hard Brexit would reduce UK agro industrial imports from the EU by around 61% (from USD 45,915 million imported in 2015). Because of the relatively high protection provided to these products, this percentage is more than double the number that has been estimated for trade in all goods. The increase in food prices that would accompany adoption Brexit would likely push the UK government to liberalize imports unilaterally and/or to sign FTA’s with efficient agro industrial exporters. Apparently, this will occur within a framework of a radical shift in UK agricultural policy away from the Common Agricultural Policy that targets farm income, towards market based incentives. |
| Keywords: | Brexit, agro industrial trade, UK trade policues |
| JEL: | F13 F14 F15 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85643&r=int |
| By: | Stefano Bolatto; Marco Grazzi; Chiara Tomasi |
| Abstract: | This work investigates the di↵erential adjustments of the direct and intermediated export chan- nels in the aftermath of an exchange rate movement. We do this with the help of a relatively parsimonious model that, while replicating the main findings from the literature on export in- termediaries, also puts forth new testable predictions. Exporting through intermediaries entails lower fixed costs, but as a consequence of double marginalization, it also entails lower variable profits. If firms apply heterogeneous pricing-to-market, the joint outcome at the very micro level is a lower exchange rate pass-through for goods traded via intermediaries, whereas at a more aggregate level, there is an adjustment in the number of varieties reaching the foreign destination over the two export channels that varies with the level of country fixed costs. These conjectures are tested employing the Italian cross-border transaction level data; taken together they shed light on the determinants of the impact of intermediaries on aggregate trade flows. |
| Keywords: | firms heterogeneity, export intermediaries, heterogeneous markups, pricing to market, double marginalization, exchange rate pass-through, export mode selection |
| JEL: | F12 F14 D22 L22 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwprg:2018/02&r=int |
| By: | Lionel Nesta (Université Côte d'Azur; GREDEG CNRS; OFCE Sciences Po. Paris; SKEMA Business School); Stefano Schiavo (University of Trento; OFCE Sciences Po. Paris) |
| Abstract: | The paper investigates the impact of import competition on rent-sharing between firms and employees. First, by applying recent advances in the estimation of price-costs margins to a large panel of French manufacturing firms for the period 1993-2007, we are able to classify each firm into labor- and product-market regimes based on the presence/absence of market power. Second, we concentrate on dirms that operate in an efficient bargaining framework to study the effect of import penetration on workers' bargaining power. We find that French imports from other OECD countries have a negative effect on bargaining power, whereas the impact of imports from low wage countries is more muted. By providing firm-level evidence on the relationship between international trade and rent sharing, the paper sheds new light on the effect of trade liberalization on the labor market. |
| Keywords: | firm heterogeneity, import competition, mark-up, wage bargaining |
| JEL: | F14 F16 J50 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2018-11&r=int |
| By: | Toshiki Kawashima |
| Abstract: | This article sheds new light on the economic globalization in Europe and Asia from the late nineteenth to the early twentieth centuries, with a special focus on the role of bilateral commercial treaties and import tariffs. Countries concluded a number of treaties in those days, and they came to form an extensive ‘conventional tariff network’. This mechanism contributed to the stabilization of international economic-political space by facilitating reciprocal tariff concessions. The extent of this conventional tariff network was both temporally and geographically larger than has been assumed. First, as the recent scholarship has shown, the network, which emerged in the 1860s, survived the political turbulence of the 1890s and spanned Central European countries such as Germany and Italy by the early 1910s. Second, the network spread outside Europe and reached East Asia by the 1910s, when Japan renegotiated its commercial treaties and became a new member of the network. The network embodied so strong a mechanism of self-maintenance based on the coordination of economic interests that it was resilient to a major political shock such as the First World War. While the tariff systems in Europe and in East Asia around 1900 have been separately discussed in the literature, this paper focuses on the treaty partnership between these two areas to show how the mechanism of the conventional tariff network enabled the countries to cooperate for mutual concessions on international trade. |
| Keywords: | Commercial treaty; network; international space; conventional tariff; global economic history; Central Europe and East Asia. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:069&r=int |
| By: | Mainer-Casado, Carolina; Fariñas, José Carlos; Moreno, Lourdes |
| Abstract: | This paper examines the relationship between firms’ heterogeneity and their multinational activity. We examine the scope and the scale of multinational firms following the insights of Yeaple’s (2009) model. The goal of the paper is to contribute to a better understanding of the activity of Spanish multinationals using a sample of Spanish multinational firms. Our dataset is built from two databases, SABI and ORBIS, both from the Bureau van Dijk. Our results confirm that more productive firms have a greater multinational activity in terms of both the scope (the number of foreign markets where they invest) and the scale (the volume of local sales by subsidiaries in foreign markets). The structure of Spanish multinational firms’ activity is also analysed from the perspective of host country characteristics (GDP, population, distance and language) using standard gravity equations. Country characteristics that are positively associated (GDP and common language) with the volume of multinational activity are negatively related to the productivity of firms that go abroad. This asymmetry also holds for bilateral characteristics as distance that appears negatively associated with the level of multinational activity. |
| Keywords: | Multinational firms, heterogeneity, productivity |
| JEL: | F23 L6 L8 |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85766&r=int |
| By: | Asongu, Simplice; Efobi, Uchenna; Beecroft, Ibukun |
| Abstract: | We investigate how foreign aid dampens the effects of terrorism on FDI using interactive quantile regressions. The empirical evidence is based on 78 developing countries for the period 1984-2008. Bilateral and multilateral aid variables are used, while terrorism dynamics entail: domestic, unclear, transnational and total number of terrorist attacks. The main finding is that foreign aid cannot be used as a policy tool to effectively address a hypothetically negative effect of terrorism on FDI. The positive threshold we cannot establish is important for policy makers because it communicates a cut-off point at which foreign aid completely neutralizes the negative effect of terrorism on FDI. From the conditioning information set, we also establish for the most part that the effects of GDP growth, infrastructural development and trade openness are an increasing function of FDI. Policy implications are discussed. |
| Keywords: | FDI; Foreign aid; Terrorism; Quantile regression |
| JEL: | C52 D74 F23 F35 O40 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85488&r=int |
| By: | Frédéric Docquier (FNRS - Fonds National de la Recherche Scientifique [Bruxelles], IRES Department of Economics, Université Catholique de Louvain, FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Aysit Tansel (METU - Middle East Technical University [Ankara]); Riccardo Turati (IRES Department of Economics, Université Catholique de Louvain) |
| Abstract: | This paper empirically investigates whether emigrants from MENA countries self-select on cultural traits such as religiosity and gender-egalitarian attitudes. To do so, we use Gallup World Poll data on individual opinions and beliefs, migration aspirations, short-run migration plans, and preferred destination choices. We find that individuals who intend to emigrate to OECD, high-income countries exhibit significantly lower levels of religiosity than the rest of the population. They also share more gender-egalitarian views, although the effect only holds among the young (aged 15 to 30), among single women, and in countries with a Sunni minority. For countries mostly affected by Arab Spring, since 2011 the degree of cultural selection has decreased. Nevertheless, the aggregate effects of cultural selection should not be overestimated. Overall, self-selection along cultural traits has limited (albeit non negligible) effects on the average characteristics of the population left behind, and on the cultural distance between natives and immigrants in the OECD countries. |
| Keywords: | International migration,self-selection,cultural traits,gender-egalitarian attitudes,religiosity,MENA region |
| Date: | 2018–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01743729&r=int |
| By: | Li, Yifan; Miao, Zhuang |
| Abstract: | The rise of market power and the decline of labor's share of GDP in the United States in recent decades is well documented and have critical macroeconomic implications, but the determinants of such trends remain unclear. This paper asks how and to what degree increasing import penetration contributes to the more concentrated market structure and the associated rise of mark-ups. We provide a general equilibrium framework linking the change of markup with the extensive margin of foreign-input imports. In the model, a reduction of importing costs induces non-importers to start importing intermediates and existing importing firms to increase the share of imported inputs. But the capability of importing more varieties of inputs depends on productivity as it requires fixed costs to select cost-efficient intermediate inputs to import. We then combine firm-level micro panel data, sector-level trade data and input-output table to present empirical evidence on the relationship between the rise of market power and the increase of imported inputs penetration. At the 6-digit sector level, the rise of imported input penetration induced market concentration, implying that only the most productive firms benefit from trade liberalization. We further test our predictions of heterogeneous firms' decisions on intermediates importing and the implications on the market structure using transaction-level custom data: decreasing trade costs induce non-importing firms to start to import intermediates and allow the existing importing firms to charge higher markups than before. |
| Keywords: | trade cost, import penetration, imperfect market competition, market power, markups |
| JEL: | F14 F15 L13 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85668&r=int |
| By: | Lanati, Mauro (European University Institute); Venturini, Alessandra (University of Turin) |
| Abstract: | Cultural differences play an important role in shaping migration patterns. The conventional proxies for cross country cultural differences – such as common language, ethnicity, genetic traits or religion – implicitly assume that cultural proximity between two countries is constant over time and symmetric, which is far from realistic. This paper proposes a tractable model for international migration which explicitly allows for the time varying and asymmetric dimensions of cultural proximity. Similarly to Disdier et al (2010) we assume that the evolution of bilateral cultural affinity over time is reflected in the intensity of bilateral trade in cultural goods. Our empirical framework includes a comprehensive set of high dimensional fixed effects which enables for the identification of the impact of cultural proximity on migration over and beyond the effect of pre-existing cultural and historical ties. The results are robust across different econometric techniques and suggest that positive changes in cultural relationships over time foster bilateral migration. |
| Keywords: | migration, trade in cultural goods, gravity model |
| JEL: | F16 F22 Z10 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11415&r=int |
| By: | Sara Amoroso (European Commission - JRC); Pietro Moncada-Paterno-Castello (European Commission - JRC) |
| Abstract: | The unprecedented growth in FDI in the last decades has caused drastic changes in the labour markets of the host countries. The major part of FDI takes place in low tech industries, where the wages and skills are low, or in high tech, where they offer a wage premium for the highly skilled workers. This mechanism may increase the polarisation of employment into high-wage and low-wage jobs, at the expenses of middle-skill jobs. This paper looks at the effects of two types of FDI inflows, namely foreign investment in high-skill and low-skill activities, on skill polarization. We match data on greenfield FDI aggregated by country and sector with data on employment by occupational skill to investigate the extent to which differ types of greenfield FDI are responsible for skill polarisation. |
| Keywords: | Greenfield foreign direct investment, labour market, skills |
| JEL: | J21 J24 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc111347&r=int |
| By: | Asongu, Simplice; Leke, Ivo |
| Abstract: | The study assesses how external flows influence inclusive human development in a panel of 48 countries in Sub-Saharan Africa for the period 2000-2012. The empirical evidence is based on Tobit regressions and Generalised Method of Moments. The findings from both estimation techniques reveal that remittances and FDI increase inclusive development whereas foreign aid has the opposite effect. The results suggest some positive and negative impacts of interest for further analysis. First, remittances are negatively associated with: (i) Middle income countries compared to Low income countries where the effect is not significant; (ii) French Civil law countries compared to English Common law countries where the effect is positive and (iii) Resource-rich countries compared to their Resource-poor counterparts where the effect is positive. Second, foreign aid is more negatively linked to Low income, French Civil law, Islam-dominated, Un-landlocked, Resource-rich and Politically-unstable countries. Third, FDI is positively associated with: (i) Low income, French Civil law and Landlocked countries compared to respectively Middle income, English Common law and Un-landlocked countries where the effect is insignificant and (ii) Politically-stable countries compared to their Politically-unstable counterparts where the effect is negative. |
| Keywords: | Foreign investment; Remittances; Foreign aid; Inclusive development; Africa |
| JEL: | F21 F24 F35 I30 O55 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85485&r=int |
| By: | Carolina Mainer-Casado (Departamento de Economía Aplicada II (Estructura Económica y Economía Industrial). Universidad Complutense de Madrid.); José C. Fariñas (Departamento de Economía Aplicada II (Estructura Económica y Economía Industrial). Universidad Complutense de Madrid.); Lourdes Moreno Martín (Departamento de Economía Aplicada II (Estructura Económica y Economía Industrial). Universidad Complutense de Madrid.) |
| Abstract: | This paper examines the relationship between firms’ heterogeneity and their multinational activity. We examine the scope and the scale of multinational firms following the insights of Yeaple’s (2009) model. The goal of the paper is to contribute to a better understanding of the activity of Spanish multinationals using a sample of Spanish multinational firms. Our dataset is built from two databases, SABI and ORBIS, both from the Bureau van Dijk. Our results confirm that more productive firms have a greater multinational activity in terms of both the scope (the number of foreign markets where they invest) and the scale (the volume of local sales by subsidiaries in foreign markets). The structure of Spanish multinational firms’ activity is also analysed from the perspective of host country characteristics (GDP, population, distance and language) using standard gravity equations. Country characteristics that are positively associated (GDP and common language) with the volume of multinational activity are negatively related to the productivity of firms that go abroad. This asymmetry also holds for bilateral characteristics as distance that appears negatively associated with the level of multinational activity. |
| Abstract: | En este trabajo se analiza la relación entre la heterogeneidad de las empresas españolas y su actividad multinacional contrastando las predicciones del modelo de Yeaple (2009). Se utiliza una base de datos de empresas multinacionales españolas fusionando dos bases de datos, SABI y ORBIS. Los resultados confirman que las empresas más productivas tienen una mayor actividad multinacional tanto en términos de alcance (número de mercados extranjeros donde las empresas matrices invierten) y de escala (el volumen de las ventas de las subsidiarias en los mercados extranjeros). La estructura de la actividad de las empresas multinacionales también se analiza desde la perspectiva de las características del país receptor (PIB, población, distancia, lengua común…) usando ecuaciones de gravedad. Las características del país que están positivamente relacionadas (PIB y lengua común…) con el volumen de la actividad multinacional presentan una relación negativa con la productividad de las empresas que operan en el exterior. Este efecto asimétrico también se produce para otras variables como la distancia que está negativamente asociada con la actividad multinacional y positivamente con la productividad de las empresas multinacionales. |
| Keywords: | Multinational Firms; Heterogeneity; Productivity.; Empresas multinacionales, Heterogeneidad, Productividad. |
| JEL: | F10 F23 L25 R30 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doctra:18-02&r=int |
| By: | Paul Bergin; Ling Feng; Ching-Yi Lin |
| Abstract: | This paper demonstrates theoretically that a financial shock can have very persistent effects on international trade. Motivation is taken from the aftermath of the dramatic trade collapse in 2008-9, which despite a substantial recovery, has left a persistently slower growth rate in trade. We find conditions under which a transitory financial shock significantly reduces the investment by firms in entering the export market, and that this can have long-lasting effects on the range of goods exported and hence overall trade. Important to our mechanism are endogenous capital structure decisions by firms in response to the financial shock, and firm entry investment that requires traded goods. This mechanism provides an example of how firm dynamics can serve as a potent propagation mechanism, generating very long-lasting effects of transitory macroeconomic shocks. |
| JEL: | F4 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24503&r=int |
| By: | Nicola Coniglio; Davide Vurchio; Nicola Cantore; Michele Clara |
| Abstract: | The diversification of production and trade is considered almost unanimously a fundamental policy goal, particularly for developing economies whose export baskets are heavily concentrated on a few products. In what direction trade diversification ought to take place is, however, subject to fierce debate. The Product Space (PS) framework (Hausmann and Klinger, 2007; Hidalgo et al. 2007) is a recent contribution in the economic literature that has proved very influential in policy circles. It argues that the endowment of production capabilities (technologies, production factors, institutions etc.) determines what countries produce today but it also constrains what they can produce in the future as it is uncommon that countries develop a comparative advantage in goods that do not draw from the same pool of capabilities (unrelated products). Contributions along such line argue that defying the initial comparative advantage can be a risky policy decision with high probability of failure. The main objective of this contribution is to use a novel methodology to investigate whether the patterns of diversification of a sample of 177 countries over the period 1995-2015 conform or not to the prediction of the PS framework. We find evidence of a high degree of path-dependence but our analysis suggests also that a significant number of new products that entered countries' export baskets were unrelated to the initial productive specialization (path-defying changes). We shed light on the determinants of these 'radical' patterns of diversification and show they are associated with higher economic growth. The results of this study have important policy implications in particular for the design of industrial policies aimed at actively shaping countries' structural transformation. |
| Keywords: | path-dependence, product space, trade diversification, industrial policy |
| JEL: | F1 O1 O3 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1818&r=int |
| By: | Davide Furceri; Prakash Loungani; Jonathan David Ostry |
| Abstract: | We take a fresh look at the aggregate and distributional effects of policies to liberalize international capital flows—financial globalization. Both country- and industry-level results suggest that such policies have led on average to limited output gains while contributing to significant increases in inequality—that is, they pose an equity–efficiency trade-off. Behind this average lies considerable heterogeneity in effects depending on country characteristics. Liberalization increases output in countries with high financial depth and those that avoid financial crises, while distributional effects are more pronounced in countries with low financial depth and inclusion and where liberalization is followed by a crisis. Difference-indifference estimates using sectoral data suggest that liberalization episodes reduce the share of labor income, particularly for industries with higher external financial dependence, those with a higher natural propensity to use layoffs to adjust to idiosyncratic shocks, and those with a higher elasticity of substitution between capital and labor. The sectoral results underpin a causal interpretation of the findings using macro data. |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/83&r=int |
| By: | Chiacchio, Francesco; Gradeva, Katerina; Lopez-Garcia, Paloma |
| Abstract: | Using micro-aggregated firm information for nine Central and Eastern European (CEE) countries and data from input-output tables, we examine the role of Global Value Chains (GVCs) for technology diffusion across EU countries. Our empirical results provide support for a two-stage diffusion process of technology across countries. In the first stage, the most productive firms in the host economy benefit from their direct exposure to new technology created in parent firms as a result of their GVC participation. In the second stage, technology spills over to the rest of firms in the host economy via domestic production networks. In addition, we show that the import of intermediate inputs –i.e. backward linkages- is the main channel of technology diffusion within GVCs. We use these results to explain the pronounced post-crisis drop in Total Factor Productivity (TFP) growth in CEE countries. We show that due to their deep integration in GVCs, CEE countries have been exposed to two recent developments highly correlated with their TFP performance: (i) a slowdown in TFP growth of parent firms located in non-CEE EU countries; and (ii) a global slowdown in the growth rate of GVC participation, which is evident also for CEE countries from 2011 onwards. Moreover, we find that the capacity of host firms in CEE countries to absorb and understand new knowledge has decreased since the crisis. We argue that this is related to the drop in R&D investment in the CEE region during the post-crisis period. JEL Classification: O33, O47, O57, C33 |
| Keywords: | Central and Eastern Europe, Global Value Chains, technology diffusion, TFP growth |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20182143&r=int |
| By: | Genthner, Robert; Kis-Katos, Krisztina |
| Abstract: | Based on a yearly census of Indonesian manufacturing firms for 2000-2014, we investigate the effects of a sector-specific investment policy reform on firm productivity. Hereby we exploit a protectionist foreign direct investment reform (the so-called negative investment list) that designated certain sectors at the five-digit level to become closed or only conditionally open to foreign investors. The list was first released in 2000 and has been repeatedly revised by the Indonesian authorities since. Our empirical analysis links the changes within this regulatory framework to variation in firm-level productivity in a large firm panel. Controlling for an extensive set of fixed effects as well as potential drivers of endogeneous regulation, we find robust evidence of declining foreign capital shares in sectors subject to restrictions on foreign direct investment, followed by a sizable decrease in firm productivity. From the different types of conditions, sector-wide FDI bans were linked to the largest productivity declines. We also document the presence of negative backward productivity spillovers of regulation that propagate throughout the value chain. |
| Keywords: | FDI,regulation,Indonesia,total factor productivity,spillovers |
| JEL: | F23 L51 D24 F21 L6 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:345&r=int |
| By: | Will Martin |
| Abstract: | The irony facing many developing countries today is that increased food trade and the implications of globalization has created a situation where certain segments of the population are simply put, eating too much, while just in their proximity lies a more significant segment of the population who are suffering from the complete opposite, malnutrition. This policy brief aims at explaining this double sided sword. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb1807&r=int |
| By: | Enrico D'Elia (Ministry of Economy and Finance); Roberta De Santis (ISTAT) |
| Abstract: | DThis paper analyzes trade and financial openness effects on growth and income inequality in 35 OECD countries. Our model takes into account both short run and long run effects of factors explaining income divergence between and within the countries. We estimate, for the period 1995-2016, an error correction model in which per capita GDP and inequality are driven by changes over time of selected factors and by the deviation from a long run relationship. Stylised facts suggest that trade and financial openness reduce the growth gaps across the countries but not income inequality, and the effects of finance are stronger in high income countries. Nevertheless, low and middle income countries benefit more from international trade. Our contribution to the existing literature is threefold: i) we study the short and long run effects of trade and financial openness on income level and distribution, ii) we focus on developed countries (OECD) rather than on developing and iii) we provide a sensitivity analysis including in our baseline equation an institutional indicator, a trade agreement proxy and a dummy of global financial crisis. Estimates results indicate that trade openness significantly improved the conditions of low income countries both in short and long run mostly, consistently with the catching up theory. It also decreased inequality, but only in low and middle income countries. Differently financial openness had a positive and significant impact only in the short run on middle income countries and increased income disparities within countries in the short term in low income countries and in the long term in high income countries. |
| Keywords: | Bank capitalization, zombie lending, capital misallocation |
| JEL: | D63 D31 H23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lui:lleewp:18140&r=int |
| By: | Kohnert, Dirk |
| Abstract: | The international discussion of Trump's dispute over import tariffs for steel, aluminum and even cars are so far focused on the big global players. However, smaller African countries in particular could suffer too from the planned punitive tariffs, analogous to the famous African proverb, "When elephants fight, it is the grass that suffers". Egypt and South Africa for example, the potentially most affected countries in Africa, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economy and their population in dire poverty. |
| Keywords: | USA, tariffs, trade war, WTO, steel, aluminium, cars, Africa, Egypt, South Africa, China, EU, |
| JEL: | F13 F51 F52 H21 P16 P52 |
| Date: | 2018–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85730&r=int |
| By: | Will Martin |
| Abstract: | African exports of high-value agricultural products, such as processed agricultural goods and horticultural products have been growing rapidly. Some observers seem to feel that expanding these exports might be key to generating the new export revenues needed to promote development. While there is a lot of potential for expanding these exports, it seems likely that they constitute only one part of the solution. Agricultural exports, at little more than 10 percent of total exports, are simply too small to provide the base for dramatic future growth in exports. What seems to be needed is policies that allow producers to try new products and processes, and help for them to build on the successes that they identify. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb1803&r=int |
| By: | Italo Colantone (Bocconi University); Alessia Matano (AQR-IREA, University of Barcelona.); Paolo Naticchioni (Roma Tre University IZA and INPSA.) |
| Abstract: | We provide a comprehensive assessment of the effects of new imported inputs on wage dynamics, on the skill-composition of the labor force, on worker mobility,and on the efficiency of matching between firms and workers. We employ matched employer-employee data for Italy, over 1995-2007. We complement these data with information on the arrival of new imported inputs at the industry level. We find new imported inputs to have a positive effect on average wage growth at the firm level. This effect is driven by two factors: (1) an increase in the white-collar/blue-collar ratio; and (2) an increase in the average wage growth of blue-collar workers, while the wage growth of white collars is not significantly affected. The individual-level analysis reveals that the increase in the average wage of blue collars is driven by the displacement of the lowest paid workers, while continuously employed individuals are not affected. We estimate the unobserved skills of workers following Abowd et al(1999). We find evidence that new imported inputs lead to a positive selection of higher-skilled workers, and to an improvement in positive assortative matching between firms and workers. |
| Keywords: | F14, F16. JEL classification: New imported inputs; wages; matched employer-employee data. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201804&r=int |
| By: | Arnold McIntyre; Mike Xin Li; Ke Wang; Hanlei Yun |
| Abstract: | The paper considers concepts of economic diversification with respect to exports (including service sectors) for small states. We assessed the economic performance of different groups of 34 small states over the period of 1990-2015 and found those more diversified experienced lower output volatility and higher average growth than most other small states. Our findings are consistent with conventional economic theories but we found that export diversification has a more significant impact on reducing output volatility than improving long run growth in small states. Diversification requires fundamental changes and should be contemplated in the context of a cohesive development strategy. |
| Date: | 2018–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/86&r=int |
| By: | Philippe Chalmin |
| Abstract: | Après un recul de 10 % en 2016, les prix mondiaux des principales matières premières échangées dans le monde ont rebondi de 15 %, de 8 % si l’on exclut de l’indicateur CyclOpe le pétrole et les métaux précieux. Pour la plupart des produits, on reste loin des sommets atteints durant le « choc » de 2007/2014. On reste ainsi très loin de l’euphorie qui a régné sur les marchés boursiers de la planète, les bourses des valeurs atteignant des niveaux record à la fin de 2017 et au début de 2018. Le rebond des marchés de matières premières a été plus modeste et surtout fort inégal avec de profondes divergences entre l’énergie et les métaux d’une part, les produits agricoles d’autre part. Au chapitre des hausses, les plus notables concernent le charbon dans le champ de l’énergie, ce qui peut paraître paradoxal alors que sa condamnation est renouvelée de COP en COP, toutes aussi peu efficaces. Parmi les autres « stars »,notons le cobalt, le fret maritime sec (marchandises solides en vrac), le palladium et de manière plus anecdotique le beurre et la vanille. Au chapitre des baisses, la palme revient au cacao et au sucre, tout ce qui est nécessaire pour faire du chocolat ! |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb1804&r=int |
| By: | Ivlevs, Artjoms (University of the West of England, Bristol); Nikolova, Milena (University of Groningen); Graham, Carol Lee (Brookings Institution) |
| Abstract: | Despite growing academic and policy interest in the subjective well-being consequences of emigration for those left behind, existing studies have focused on single origin countries or specific world regions. Our study is the first to offer a global perspective on the well-being consequences of emigration for those staying behind using several subjective well-being measures (evaluations of best possible life, positive affect, stress, and depression). Drawing upon Gallup World Poll data for 114 countries during 2009-2011, we find that both having family members abroad and receiving remittances are positively associated with evaluative well-being (evaluations of best possible life) and positive affect (measured by an index of variables related to experiencing positive feelings at a particular point in time). Our analysis provides novel results showing that remittances are particularly beneficial for evaluative well-being in less developed and more unequal contexts; in richer countries, only the out-migration of family members is positively associated with life evaluations, while remittances have no additional association. We also find that having household members abroad is linked with increased stress and depression, which are not offset by remittances. The out-migration of family members appears more traumatic in contexts where migration is less common, such as more developed countries, and specific world regions, such as Latin America and Sub-Saharan Africa, as well as among women. Relying on subjective well-being measures, which reflect both material and non-material aspects of life and are broad measures of well-being, allows us to provide additional insights and a more well-rounded picture of the possible consequences of emigration on migrant family members staying behind relative to standard outcomes employed in the literature, such as the left-behind's consumption, income or labor market responses. |
| Keywords: | migration, remittances, depression, stress, Cantril ladder of life, happiness, Gallup World Poll |
| JEL: | F22 F24 I3 J61 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11437&r=int |
| By: | Jean Mercenier (Department of Economics, Université Panthéon-Assas, and CIRED, Paris, France); Ebru Voyvoda (Department of Economics, Middle East Technical University, Ankara, Turkey) |
| Abstract: | Based on two strands of research, namely 'barriers to technology adoption' and 'appropriate technology', we propose a formal reappraisal of 'deep integration', a broad concept often used in trade policy discussions. We then evaluate the 2004-7 EU enlargement wave utilizing this operational reappraisal. More specifically, we first estimate, using 2007 data, total labor productivity (TLP) in the 27 EU member states, and show that in all but a few sectors, new member states clearly stand below the lower envelope technology frontier of the older members in their use of skilled and unskilled labor. We interpret this as being the result of past barriers to technology adoption that are likely to be removed by the integration process into the EU, with these new counties' TLP shifting to the incumbent members' lower envelope. We then explore the potential effects on all 27 EU member states of this 'deep integration' experiment using a calibrated intertemporal multisectoral general equilibrium model. Our main finding is that, for most parameter configurations, workers' welfare in incumbent member countries is not negatively impacted despite the rather drastic improvement in competitiveness experienced by new members. |
| Keywords: | Barriers to technology adoption, appropriate technology, technological upgrading, deep integration, European integration, calibrated general equilibrium |
| JEL: | D58 E23 F12 J31 O14 R13 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:met:wpaper:1806&r=int |
| By: | van Wijnbergen, Sweder |
| Abstract: | What could be the drivers of low real rates? What are the implications of the Zero Lower Bound for economic policy? To discuss these questions we introduce a full general equilibrium model of the world economy with a simple (2 period) intertemporal structure. The model is simple enough to allow for full analytical solution yet sufficiently complex to allow us to address the impact of anticipated future productivity slow down, aging, structural reform and fiscal policy on real interest rates if markets clear and on aggregate economic activity if they do not because of the ZLB. We extend both the equilibrium model and the ZLB variant to a more-goods-per-period set up with complete specialization to address (real) exchange rate policy and the macroeconomic impact of trade tariffs. |
| Keywords: | aging; equilibrium real interest rates; import tariffs; productivity change; the ZLB; real exchange rates |
| JEL: | E62 F13 F40 F41 H30 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12837&r=int |
| By: | Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter |
| Abstract: | In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. We find that an increase in the first type of immigrants decreases the share of the Republican vote, while an inflow of the second type increases it. These effects are mainly due to the local impact of immigrants on votes of U.S. citizens and they seem independent of the country of origin of immigrants. We also find that the pro-Republican impact of low-skilled immigrants is stronger in low-skilled and non-urban counties. This is consistent with citizens' political preferences shifting towards the Republican Party in places where low-skilled immigrants are more likely to be perceived as competition in the labor market and for public resources. |
| Keywords: | Economic and Fiscal Channels; Electoral Effects; Immigration; Republican Party |
| JEL: | F22 J61 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12848&r=int |
| By: | Alexander Monge-Naranjo; Juan M. Sánchez; Raül Santaeulàlia-Llopis |
| Abstract: | Is human capital allocated efficiently across countries? To answer this question, we need to differentiate misallocation from factor intensity differences. We use newly available estimates on natural resources shares from Monge-Naranjo et al. (2017) to correctly measure the factor shares of physical and human capital for a large number of countries and periods. We find that the global efficiency losses of the misallocation of human capital are around 60% of the world's output. Moreover, the misallocation of human capital seems to have worsened in the more recent years. Interestingly, we show that when physical and human capital can both be reallocated, physical capital would often ow from poor to rich countries, contrary to Lucas (1990)'s paradox. |
| Keywords: | natural rents, factor shares, misallocation, Migration, human capital |
| JEL: | O11 O16 O41 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1037&r=int |
| By: | Wolfgang Britz; Roberto Roson |
| Abstract: | We motivate and detail the newly developed G-RDEM recursive-dynamic Computable General Equilibrium model as a tool for long-term counterfactual analysis and baseline generation from given GDP and population projections. It encompasses an AIDADS demand system with non-linear Engel curves, debt accumulation from foreign saving and introduces sector specific productivity changes, endogenous aggregate saving rates, as well as time-varying input-output coefficients. Parameters for these relationships are econometrically estimated or taken from published work. The core of the model is derived from the GTAP standard model and seamlessly incorporated into the modular and flexible CGEBox modelling platform. Accordingly, it can be applied with various other extensions such as GTAP-AEZ, GTAP-Water or a regional breakdown for Europe to 280 NUTS2 regions. G-RDEM maintains the flexible aggregation from the GTAP data base. It is open source, encoded in GAMS and can be steered by a Graphical User Interface, which also encompasses a tool to analyse results with tables, graphs and maps. Existing GDP and population projections for the Socio-Economic Pathways 1-5 can be directly incorporated for baseline construction. A comparison of the generated long-term structural composition of the economy against a simple recursive-dynamic variant, using the basic CDE demand system of the standard GTAP model, uniform productivity growth, fixed saving rates and technology parameters, and no debt accumulation shows that G-RDEM brings about much more plausible results, as well as a more realistic, internally consistent representation of the economic structure in a hypothetical future. |
| Keywords: | Computable General Equilibrium models; Long-run economic scenarios; Structural change. |
| JEL: | C68 C82 C88 D58 E17 F43 O11 O40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp105&r=int |