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on International Trade |
| By: | Meredith A. Crowley; Exton, O.; Han, L. |
| Abstract: | The renegotiation of a trade agreement introduces uncertainty into the economic environment. In June 2016 the British electorate unexpectedly voted to leave the European Union, introducing a new era in which the UK and EU began to renegotiate the terms of the UK-EU trading relationship. We exploit this natural experiment to estimate the impact of uncertainty associated with trade agreement re-negotiation on the export participation decision of firms in the UK. Starting from the Handley and Limão (2017) model of exporting under trade policy uncertainty, we derive testable predictions of firm entry into (exit from) a foreign market under an uncertain 'renegotiation regime'. Empirically, we develop measures of the trade policy uncertainty facing firms exporting from the UK to the EU after June 2016. Using the universe of UK export transactions at the firm and product level and cross-sectional variation in 'threat point' tariffs, we estimate that in 2016 over 5200 firms did not enter into exporting new products to the EU, whilst almost 4000 firms exited from exporting products to the EU. Entry (exit) in 2016 would have been 5.1% higher (4.3% lower) if firms exporting from the UK to the EU had not faced increased trade policy uncertainty after June 2016. |
| Date: | 2018–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1839&r=int |
| By: | Dhingra, Swati; Freeman, Rebecca; Mavroeidi, Eleonora |
| Abstract: | There is a growing recognition that for developed economies, like the UK, tariff-free market access is just one of a number of measures that ease cross-border trade flows. Modern trade agreements go beyond tariff reductions by setting rules, such as market access and regulation of foreign service providers. We examine the contribution of deep non-tariff provisions on international trade in goods and services. Using a gravity model, we find that provisions related to services, investment, and competition make up half of the overall impact of economic integration agreements on trade flows. These deep provisions have larger effects for trade in services than for trade in goods, and their relative contribution is highest in sectors that facilitate supply chain activity, such as transportation and storage. We apply our sectoral estimates of deep provisions to examine two counterfactuals of the UK signing bilateral deals with the US and with China and India. We find that negotiating services, investment, and competition provisions in these future deals would boost trade relatively more in professional, scientific, and technical activities in the UK. |
| Keywords: | trade agreements; integration agreements; EIAs; trade policy; provisions; non-tariff barriers |
| JEL: | F10 F13 F14 F15 |
| Date: | 2018–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88683&r=int |
| By: | Michele Imbruno (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper empirically explores imports' adjustment to reductions in trade policy uncertainty (TPU) considering that firms may face large sunk costs to purchase foreign goods. We investigate how product-level Chinese imports react to tariff binding connected to China's accession to WTO, through distinguishing both country-related margins and firm-related margins. Our main results suggest that a decline in TPU allows the access to a greater variety of foreign goods, associated also with a higher quality. At the same time, tariff binding leads more Chinese producers and trade intermediaries to start importing, allowing more firms and consumers to enjoy potential gains from imports. Finally, we document heterogeneous TPU effects across firms with different ownership, and products with different end use, revealing interesting insights in a context of global value chains. |
| Keywords: | Trade policy uncertainty, Import behaviour, World Trade Organization, Tariff binding, China |
| Date: | 2018–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01823910&r=int |
| By: | Paola Conconi |
| Abstract: | Leaving the customs union may lead multinationals to move out of the UK, resulting in the loss of thousands of jobs. That is the conclusion of research by Paola Conconi. She explains that in a customs union, goods cross borders seamlessly, but in a free trade agreement, border checks are needed to ensure conformity with 'rules of origin'. Rules of origin in free trade agreements distort global value chains, her analysis notes: they will be key to the future UK-EU relationship. |
| Keywords: | trade agreements, rules of origin, input-output linkages |
| JEL: | F23 F53 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:535&r=int |
| By: | Walter, Timo |
| Abstract: | This paper deals with the trade and welfare effects of a potential bilateral trade agreement between the US and Japan. A possible agreement is currently being discussed between Washington and Tokyo, although, there is also the alternative for the US government joining Trans-Pacific Partnership (TPP). Based on the theoretical model of Caliendo and Parro (2015) I analyse the welfare gains of such a bilateral free trade agreement (FTA) in the style of Aichele et al. (2014). In particular, I simulate three scenarios with different levels of integration: The reduction of tariffs only, the scenario of a shallow FTA, and a deep FTA. In addition, the paper compares the trade and welfare changes of a deep FTA to the welfare effects of TPP. The findings are that Japan has the highest welfare gains with a FTA (0.085%), whilst the United States benefits the most from TPP with a welfare gain of 0.05%. |
| Keywords: | Trade agreements,Gravity model,Counterfactual equilibrium,Intermediate goods,Input-output linkages,Japan,United States |
| JEL: | F13 F14 F17 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:162018&r=int |
| By: | Conconi, Paola; García-Santana, Manuel; Puccio, Laura; Venturini, Roberto |
| Abstract: | Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. We focus on the North American Free Trade Agreement (NAFTA), the world’s largest FTA, and construct a unique dataset that allows us to map the input-output linkages in its RoO. Exploiting cross-product and cross-country variation in treatment over time, we show that NAFTA RoO led to a sizeable reduction in imports of intermediate goods from third countries relative to NAFTA partners. Even if external tariffs are unchanged, FTAs may thus violate multilateral trade rules, by substantially increasing the level of protection faced by non-members. |
| Keywords: | instruction time; education reform; heterogeneous effects; charter schools |
| JEL: | F23 F53 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88676&r=int |
| By: | Bernard, Andrew B.; Bøler, Esther Ann; Dhingra, Swati |
| Abstract: | The vast majority of world trade flows is between firms. Only recently has research in international trade started to emphasize the importance of the connections between exporters and importers both in aggregate trade flows and in the negative relationship between trade and geographic distance. This chapter documents the role of firm-to-firm connections in trade flows and the formation and duration of these importer-exporter relationships. Using customs data from Colombia for 1995-2014, we are able to identify both the Colombian importing firm and the foreign exporter in every Colombian import and export transaction. We document both the nature of these bilateral trading relationships and their evolution over time. |
| Keywords: | exporters; importers; gravity; export growth; margins of trade; heterogeneous firms |
| JEL: | F14 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88693&r=int |
| By: | Frank, Jonas |
| Abstract: | Economic sanctions are a popular diplomatic tool for countries to enforce political demands abroad or to punish non-complying countries. There is an ongoing debate in the literature about whether this tool is effective in reaching these goals. This paper looks at the consequences of sanctions for bilateral trade values between 1987 and 2005. In order to quantify the direct effects of sanctions on the trade flows between countries I use PPML as well as several other econometric specifications to estimate the gravity equation with country pair, sender-time, and target-time fixed effects. Following Heid et al. (2015) I include intra-national as well as international trade flows, to reduce the endogeneity bias of trade policy instruments. The estimates reveal that there is a significant decrease in the value of trade after the introduction of sanctions, which turns out to be driven by moderate sanctions. I also check whether countries that are affected by sanctions switch to other trade partners, but here is no robust evidence for behavior like this. |
| Keywords: | Economic Sanctions,International Trade,Panel Gravity Model,PPML |
| JEL: | F13 F14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:172018&r=int |
| By: | Nick Bloom; Kalina B. Manova; John Van Reenen; Stephen Teng Sun; Zhihong Yu |
| Abstract: | We present a heterogeneous-firm model in which management ability increases both pro- duction efficiency and product quality. Combining six micro-datasets on management prac- tices, production and trade in Chinese and American firms, we find broad support for the model’s predictions. First, better managed firms are more likely to export, sell more products to more destination countries, and earn higher export revenues and profits. Second, better managed exporters have higher prices, higher quality, and lower quality-adjusted prices. Finally, they also use a wider range of inputs, higher quality and more expensive inputs, and imported inputs from more advanced countries. The structural estimates indicate that management is important for improving production efficiency and product quality in both countries, but it matters more in China than in the US, especially for product quality. Panel analysis for the US and a randomized control trial in India suggest that management exerts causal effects on product quality, production efficiency, and exports. Poor management practices may thus hinder trade and growth, especially in developing countries. |
| Keywords: | management, exports, product quality, productivity |
| JEL: | F10 F14 F23 L20 O19 O32 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7113&r=int |
| By: | Escaith, Hubert |
| Abstract: | The paper offers background information for a sectoral analysis of the Brexit implications on the UK value chains. It analyses trade data through the specific angle of inter-industrial relation-ships and international supply chains, including employment implications. The paper benchmarks UK against other key G-20 countries for three specific industries that have a particular relevance from an inter-industrial perspective: Transport equipment, Chemicals and Electronics. In the pro-cess, a number of stylised facts are identified and several synthetic indicators are produced. Be-cause a hard Brexit is expected to increase trade costs and affect prices, the paper estimates the impact of additional tariff and non-tariff trade costs on the competitiveness of these three sectors. Hopes that a devaluation of the Pound may compensate for higher trade costs must take into con-sideration that devaluation affects only the domestic share of the value-added, requiring larger exchange rate adjustment. In the case of Transport equipment, the required devaluation is around 30% if all tariff and non-tariff trade costs are passed to the producers. |
| Keywords: | Global Value Chains; BREXIT; input-output analysis; network analysis; trade costs; competitiveness |
| JEL: | C67 F14 F15 |
| Date: | 2018–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87824&r=int |
| By: | Tabakis, Chrysostomos (KDI School of Public Policy and Management); Zanardi, Maurizio (Lancaster University Management School) |
| Abstract: | Are preferential trade agreements (PTAs) stumbling blocks or building blocks towards multilateral trade liberalization? We address this question by investigating the effects of the negotiation and implementation of PTAs on the use of antidumping (AD) (i.e., the most common form of contingent trade protection) by member countries against non-members, as there has been a concurrent surge in regionalism and AD activity since the 1990s. Theoretically-derived empirical predictions are supported by the empirical analysis based on the 15 most intense users of AD. The results demonstrate that both the negotiation and the implementation of PTAs lead to fewer AD measures against non-member countries, except for members of customs-union agreements in force facing large import surges from non-members. Thus, our results highlight a building-block effect of PTAs on multilateral trade cooperation when it comes to AD protection. |
| Keywords: | Preferential trade agreements, antidumping, multilateral cooperation |
| JEL: | F13 F14 F15 |
| Date: | 2018–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:xjt:rieiwp:2018-07&r=int |
| By: | Malefane, Malefa R; Odhiambo, Nicholas M |
| Abstract: | This paper examines the dynamic impact of trade openness on economic growth in Lesothousing the autoregressive distributed lag (ARDL) bound testing approach. The study employsfour indicators of trade openness, which include three trade-based proxies and an index oftrade openness. The empirical results of this study show that when the ratio of exports andimports to GDP is employed, then trade openness has a significant negative impact oneconomic growth in both the short run and the long run. When the ratio of export to GDP isused as a proxy for trade openness, the results show that trade openness only has a negativeshort-run impact on economic growth. The results also reveal that when the ratio of imports toGDP is used in the analysis, trade openness has a significant negative impact on economicgrowth in the long run, but not in the short run. Moreover, the results indicate that tradeopenness index has no significant impact on economic growth in Lesotho. These empiricalresults have important policy implications for Lesotho. Among other things, the policy makersshould revisit their trade policies and implement policies that will enable the country???seconomic growth to benefit from trade openness that emanates from the imports. The policymakers should also pursue policies that enable the expansion in both international trade andeconomic growth, such that beneficial growth effects can be realized from trade with noexclusions. |
| Keywords: | Trade Openness, Economic Growth; ARDL; Exports; Imports; Lesotho |
| Date: | 2018–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:23787&r=int |
| By: | Chen, Natalie; Novy, Dennis |
| Abstract: | How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to the effect of currency unions on international trade. While we estimate that currency unions are associated with a trade increase of around 38 percent on average, we find substantial underlying heterogeneity. Consistent with the predictions of our framework, we find effects around three times as strong for country pairs associated with small import shares, and a zero effect for large import shares. Our results imply that conventional homogeneous currency union estimates do not provide helpful guidance for countries considering to join a currency union. Instead, countries need to take into account the distribution of their trade shares to assess the impact of trade costs. |
| Keywords: | currency unions; Euro; gravity; heterogeneity; trade costs; trade elasticity; translog |
| JEL: | F14 F15 F33 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88487&r=int |
| By: | Pamina Koenig (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, UNIROUEN - Université de Rouen Normandie - NU - Normandie Université) |
| Abstract: | Activists monitoring global value chains are closely linked to international production and sales by companies. Academic research on international trade is however scarce in empirical work analyzing the behavior of these activists. The Sigwatch campaign database is a new and rich dataset listing campaigns launched by activists against multinational corporations. I provide explanatory notes on the raw data available for academics, and background information on the replication dataset for Hatte and Koenig (2017). Short descriptive statistics on campaigns are also presented. |
| Keywords: | NGOs campaigns,multinational firms,dataset,global value chains |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01671758&r=int |
| By: | Aksel (A.) Erbahar (Erasmus School of Economics) |
| Abstract: | Traditional heterogeneous firms and trade models predict no causal relationship between firms' exports and domestic sales. This paper, using a rich dataset on Turkish firms for the 2005-14 period, analyzes the relationship between firm-product sales in different markets for the first time in the literature to identify the channels that link exports and domestic sales. First, I use an instrumental variables strategy and establish that an exogenous doubling of exports increases a firm's domestic sales by 26 percent on average--a result that is mostly driven by small firms. Second, I do an analogous exercise at the firm-product level, and find coefficients that are 62 percent larger, hinting to the importance of product-specific scale effects. Moreover, I propose a novel approach to isolate the production versus non-production factors that influence firm dynamics by focusing on non-produced (or carry-along trade, CAT) exports. I find that CAT exports also affect domestic sales positively, suggesting that spillovers at the firm level such as the easing of liquidity constraints play a role. In the process, I reveal that export demand shocks influence firms' expansion in terms of employment, wages per employee, and investment. |
| Keywords: | international trade; domestic sales; export shocks; carry-along trade |
| JEL: | F1 F14 L20 |
| Date: | 2018–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180062&r=int |
| By: | Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia |
| Abstract: | We use transaction-level US import data to compare firms from virtually all countries in the world competing in a single destination market. Guided by a simple theoretical framework, we decompose countries'market shares into the contribution of the number of firm-products, their average attributes (quality and efficiency) and heterogeneity around the mean. Our results show that the number of firm-products explains half of the variation in sales, while the remaining part is equally accounted for by average attributes and their dispersion. Quality is the main driver of firm heterogeneity (explaining between 75% and 100%). We then study how the distribution of firm-level characteristics varies across countries, and we explore some of its determinants. Countries with a larger market size tend to be characterized by a more dispersed distribution of firms'sales, especially due to heterogeneity in quality. These countries also tend to be more likely to host superstar firms, although this is not the only source of higher heterogeneity. To further explore the role of exceptional firms, we develop a novel decomposition that separates the contribution of heterogeneity from that of granularity. While individual firms matter, we find that heterogeneity is more important than granularity for explaining sales. |
| Keywords: | US imports, firm heterogeneity, international trade, prices, Quality, variety, granularity |
| JEL: | F12 F14 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1047&r=int |
| By: | Guillermo Cruces (CEDLAS-FCE-UNLP, CONICET.); Guido Porto (FCE-UNLP); Mariana Viollaz (CEDLAS-FCE-UNLP) |
| Abstract: | This paper studies the link between trade reforms and labor informality in Argentina using a long time series spanning the 1980-2001 period. We explore cross-section mechanisms, that operate at the industry level, and time-series mechanisms, that operate at a general equilibrium level. We argue that firms can substitute formal with informal workers to smooth a negative trade shock. In this setting, industries exposed to larger tariffs cuts could experience increases in informality. In general equilibrium, there can be additional aggregate impacts in both manufacturing and non-traded sectors through workers reallocation between sectors, wage adjustments, and firm entry and exit. Using the cross-section variation of the data and an instrumental variable strategy we explore empirically the cross-section mechanisms. We find that reductions in industry tariffs increase labor informality, and the effect is differentially stronger in industries with a larger share of small size firms. Using the time-series variation of the data, we are able to identify some of the general equilibrium effects. We find that the fall in the average national tariff decreased aggregate informality in the manufacturing sector but increased it in the non-traded sector. |
| JEL: | F13 F14 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0229&r=int |
| By: | Stiebale, Joel; Vencappa, Dev |
| Abstract: | Recent theoretical contributions provide conflicting predictions about the effects of product market competition on firms' organizational choices. This paper uses a rich firm-product-level panel data set of Indian manufacturing firms to analyze the relationship between import competition and vertical integration. Exploiting exogenous variation from changes in India's trade policy, we find that foreign competition, induced by falling output tariffs, increases backward vertical integration by domestic firms. The effects are concentrated in rather homogenous product categories, among firms that mainly operate on the domestic market, and in relatively large firms. Our results are robust towards different sub-samples and hold with or without conditioning on various firm- and product-level characteristics including input tariffs and firm-year fixed effects. We also provide evidence that vertical integration is associated with higher physical productivity, lower marginal costs and rising markups. |
| Keywords: | Trade Liberalization,Competition,Vertical Integration,Innovation |
| JEL: | F14 L25 L22 L23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:293&r=int |
| By: | Trofimov, Ivan D. |
| Abstract: | The paper considers the effects of income terms of trade (ToT) on GDP per capita in Latin American economies and examines whether improvement in the income ToT (in absolute and relative terms) contributes to the stochastic convergence between respective economies and the US. It is shown that in the majority of the economies, income ToT had positive effects on the level of GDP per capita. The stochastic convergence was documented in Chile, Dominican Republic, and Uruguay. The positive effects of income ToT increase on GDP per capita convergence were documented only in Chile and Uruguay. The growth of the volume of exports played a key role in the process, while the effects on the part of net barter ToT were insignificant. In both economies, the improvement in the income ToT relative to the US level played a positive role in convergence. |
| Keywords: | Terms of trade, convergence, Prebisch-Singer thesis |
| JEL: | C22 F02 F14 N76 |
| Date: | 2018–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87598&r=int |
| By: | Agnes Benassy-Quere; Matthieu Bussière; Pauline Wibaux |
| Abstract: | The debate on trade wars and currency wars has re-emerged since the Great recession of 2009. We study the two forms of non-cooperative policies within a single framework. First, we compare the elasticity of trade flows to import tariffs and to the real exchange rate, based on product level data for 110 countries over the 1989-2013 period. We find that a 1 percent depreciation of the importer’s currency reduces imports by around 0.5 percent in current dollar, whereas an increase in import tariffs by 1 percentage point reduces imports by around 1.4 percent. Hence the two instruments are not equivalent. Second, we build a stylized short-term macroeconomic model where the government aims at internal and external balance. We find that, in this setting, monetary policy is more stabilizing for the economy than trade policy, except when the internal transmission channel of monetary policy is muted (at the zero-lower bound). One implication is that, in normal times, a country will more likely react to a trade “aggression” through monetary easing rather than through a tariff increase. The result is reversed at the ZLB. |
| Keywords: | tariffs, exchange rates, trade elasticities, protectionism |
| JEL: | F13 F14 F31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7112&r=int |
| By: | Cédric Durand (Centre d'Économie Paris Nord, Université Paris 13); William Milberg (Department of Economics, New School for Social Research) |
| Abstract: | More than two decades of scholarship on global value chains (GVCs) has reshaped our understanding of the global economy while tracking the international fragmentation of productive process and its socioeconomic consequences. In this paper we focus on the effort by lead firms to capture market power in the provision of and production of intangible assets. The analysis builds on Pagano’s (2014) notion of “intellectual monopoly”, where government protections of intellectual property have the effect of locking in the monopoly power from intangible asset creation. We extend it to the presence of scale economies and network externalities associated with the production of intangible assets. |
| Keywords: | Global Value Chains, Intellectual Property Rights, Intangible Assets |
| JEL: | D43 F13 F23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1807&r=int |
| By: | Malefane, Malefa Rose; Odhiambo, Nicholas M. |
| Abstract: | In this paper, the dynamic relationship between trade openness and economic growth in Botswana is examined using the Autoregressive Distributed Lag (ARDL) bounds testing approach. In order to test the robustness of the results, four proxies of trade openness were used in the estimation. Three of the four proxies were constructed from trade ratios, while the fourth proxy was a composite index of trade openness. The idea behind the use of different proxies was to ascertain whether the impact of trade openness in Botswana depends on the type of trade openness taken into consideration. The empirical results of this study reveal that, when the ratio of exports plus imports to GDP is used, and when the ratio of exports to GDP is used as a proxy for trade openness, then, trade openness has a significant positive impact on economic growth in Botswana, both in the short run and in the long run. Likewise, when the trade openness index is employed in the empirical investigation, the results show that in both the short run and the long run, trade openness has a significant positive impact on economic growth. The overall results of this study, therefore, have important policy implications for Botswana. Among other things, Botswana???s policy makers should pursue policies that boost the country???s exports and total trade. |
| Keywords: | ARDL; Botswana; economic growth; exports; imports; trade openness |
| Date: | 2018–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:24493&r=int |
| By: | Cristina Herghelegiu (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Over the last decades, non-tari measures (NTMs) have seen an important upsurge. How- ever, little research has focused on the political economy of non-tariff protection, and the existing studies are mainly based on a single country or a specific type of measures. This paper seeks to fill the gap by empirically evaluating the determinants of NTMs in several countries, both developed and developing. Overall results show certain protectionist purposes behind the adoption of NTMs. This conclusion is reinforced for restrictive measures (i.e. subject to trade concerns), but does not hold for non-restrictive measures, suggesting the legitimate goal of several NTMs. Furthermore, transnational lobbying, defined as the influence exerted by national business groups during the Ministerial Conferences - the highest authority of the World Trade Organization (WTO) - increases the probability of adopting NTMs in both developed and developing countries. |
| Keywords: | Non-tariff Measures,Political Economy,International Trade,Lobbying |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01385423&r=int |
| By: | Ascani, Andrea; Crescenzi, Riccardo; Iammarino, Simona |
| Abstract: | This paper aims at investigating the drivers of Multinational Enterprise (MNE) investment in countries linked to the 'core' of the European Union (EU-15) by different degrees of functional, economic and political integration: the EU 'New' Member states, Accession and Candidate countries, European Neighbourhood Policy countries, as well as Russia. Understanding the drivers of Foreign Investment (FDI) in these countries is highly relevant in consideration of their increasing integration into the global market and the strong influence exerted by the EU on this process. By employing data on individual greenfield investment projects for the period 2003 to 2008, this paper aims to disentangle the drivers of FDI in these countries for different industrial sectors, business functions and investment origins. The empirical results suggest that FDI in the area tends to follow market-seeking and efficiency-oriented strategies, and show path-dependency and concentration patterns that may reinforce core-periphery development trajectories in the EU neighbourhood. |
| Keywords: | multinational enterprises; FDI; location choices; European Union; European neighbourhood policy |
| JEL: | R14 J01 |
| Date: | 2017–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:63698&r=int |
| By: | Jan David Bakker; Stephan Maurer; Jörn-Steffen Pischke; Ferdinand Rauch |
| Abstract: | We study the causal connection between trade and development using one of the earliest massive trade expansions: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. We construct a measure of connectedness along the shores of the sea. This connectivity varies with the shape of the coast, the location of islands, and the distance to the opposing shore. We relate connectedness to local growth, which we measure using the presence of archaeological sites in an area. We find an association between better connected locations and archaeological sites during the Iron Age, at a time when sailors began to cross open water very routinely and on a big scale. We corroborate these findings at the level of the world. |
| Keywords: | urbanization, locational fundamentals, trade |
| JEL: | F14 N7 O47 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1558&r=int |
| By: | Kelly, Morgan (University College Dublin, CAGE and CEPR); Cormac ´O Grada (University College Dublin and CAGE) |
| Abstract: | Although urban growth historically depended on large inflows of migrants, little is known of the process of migration in the era before railways. Here we use detailed data for Paris on women arrested for prostitution in the 1760s, or registered as prostitutes in the 1830s and 1850s; and of men holding identity cards in the 1790s, to examine patterns of female and male migration. We supplement these with data on all women and men buried in 1833. Migration was highest from areas of high living standards, measured by literacy rates. Distance was a strong deterrent to female migration (reflecting limited employment opportunities) that falls with railways, whereas its considerably lower impact on men barely changes through the nineteenth century. |
| Keywords: | Migration, gravity, prostitution |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:378&r=int |
| By: | Burzy?ski, Micha? (University of Luxembourg); Docquier, Frédéric (Université catholique de Louvain); Rapoport, Hillel (Paris School of Economics) |
| Abstract: | We investigate the welfare implications of two pre-crisis immigration waves (1991– 2000 and 2001–2010) and of the post-crisis wave (2011–2015) for OECD native citizens. To do so, we develop a general equilibrium model that accounts for the main channels of transmission of immigration shocks – the employment and wage effects, the fiscal effect, and the market size effect – and for the interactions between them. We parameterize our model for 20 selected OECD member states. We find that the three waves induce positive effects on the real income of natives, however the size of these gains varies considerably across countries and across skill groups. In relative terms, the post-crisis wave induces smaller welfare gains compared to the previous ones. This is due to the changing origin mix of immigrants, which translates into lower levels of human capital and smaller fiscal gains. However, differences across cohorts explain a tiny fraction of the highly persistent, cross-country heterogeneity in the economic benefits from immigration. |
| Keywords: | immigration, welfare, crisis, inequality, general equilibrium |
| JEL: | C68 F22 J24 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11610&r=int |
| By: | Malefane, Malefa R; Odhiambo, Nicholas M |
| Abstract: | In this paper, the dynamic relationship between trade openness and economic growth in Botswana is examined using the Autoregressive Distributed Lag (ARDL) bounds testing approach. In order to test the robustness of the results, four proxies of trade openness were used in the estimation. Three of the four proxies were constructed from trade ratios, while the fourth proxy was a composite index of trade openness. The idea behind the use of different proxies was to ascertain whether the impact of trade openness in Botswana depends on the type of trade openness taken into consideration. The empirical results of this study reveal that, when the ratio of exports plus imports to GDP is used, and when the ratio of exports to GDP is used as a proxy for trade openness, then , trade openness has a significant positive impact on economic growth in Botswana, both in the short run and in the long run. Likewise, when the trade openness index is employed in the empirical investigation, the results show that in both the short run and the long run, trade openness has a significant positive impact on economic growth. The overall results of this study, therefore, have important policy implications for Botswana. Among other things, Botswana???s policy makers should pursue policies that boost the country???s exports and total trade. |
| Keywords: | ARDL; Botswana; economic growth; exports; imports; trade openness |
| Date: | 2018–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:23777&r=int |
| By: | Nikola Kutin (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes, National University of Management); Marie-Sabine Saget (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes); Thomas Vallée (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes) |
| Abstract: | This study aims to analyze port hierarchy between 153 container ports. For this purpose, a network analysis was conducted. Particular attention was paid to 68 ports from the ASEAN+31 community. We have created five director weighted networks at both port and country levels. Results reveal that the prevailing structure of the global maritime network is hub and spoke, and that the port rankings change according to different centrality measures. Regarding the intra-ASEAN+3 connectivity, ASEAN member states form a cluster of interconnected ports. A comparative analysis shows that both the Export and Maritime connectivity networks have similar patterns, which indicates that the containerized trade within ASEAN+3 has the same features as the intra-regional exports. |
| Keywords: | Network,ASEAN,Trade,Shipping,Connectivity,Centrality |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01828656&r=int |
| By: | Kohnert, Dirk |
| Abstract: | The international discussion of Trump's dispute over import tariffs for steel, aluminum and even cars is so far focused on the big global players. However, African countries suffer in particular from the planned punitive tariffs, similar to the famous African proverb: ‘When elephants fight, it is the grass that suffers’. After years of talk on partnership for economic development (AGOA, Cotonou Agreement, EPAs, etc) Trump’s tariffs mean a severe blow to participatory foreign trade and sustainable industrialization in Africa. Egypt and South Africa for example, the potentially most affected African countries, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economy and the population in dire poverty. Trump’s intervention thus joins the continued power politics of former colonial powers vis à vis Africa. Nevertheless, despite these asymmetric power relations, unfair trade relations and the desolate state of African infant industries are not necessarily due to externalities. More often than not they are home-made. African agency plays an ambiguous role in enhancing participatory trade and indigenous industrialization. |
| Keywords: | foreign trade, tarrifs, USA, Africa, South Africa, Egypt, Nigeria, agency, corruption |
| JEL: | F13 F51 F52 H21 N67 N77 P16 P52 Z1 |
| Date: | 2018–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87764&r=int |
| By: | Lijun Pan (Nanjing University); Takatoshi Tabuchi (Faculty of Economics, The University of Tokyo) |
| Abstract: | We examine the incentives of free trade agreements (FTA) formation between two countries under endogenous market structure with leaders and followers. We demonstrate that establishing an FTA is neither an equilibrium outcome nor social optimum when consumer demand and fiÂ…xed cost are intermediate and products are close substitutes. This is because the FTA induces exit of followers, which makes the market less competitive and shrinks the leader'Â’s production both in the domestic and foreign markets. We also show that big developing countries are less likely to establish an FTA than small developed countries. |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2018cf1089&r=int |
| By: | Frank Adusah-Poku; William Bekoe |
| Abstract: | Empirically, results from time series and cross country studies have identified foreign capital inflows to play a pivotal role in the growth process of host countries. The goal of this article is to examine the impact of three of the four forms of foreign capital inflows (which include foreign aid, foreign direct investment and personal remittances) on economic growth in Ghana. The study employs the ARDL Bounds testing approach to cointegration on an annual time series data for Ghana from 1980-2012. The results of the study indicate that all the three forms of foreign capital inflows have positive and significant impacts on economic growth both in the short and long run. The results also show that of all the three forms of foreign capital inflows, foreign aid is the main driver of economic growth in Ghana both in the short and long run. The study recommends the design and implementation of good fiscal, monetary and trade policies to complement the flow foreign aid to the country for the realization of its full impact on growth. |
| Keywords: | Economic growth, foreign capital inflows, ARDL, Ghana. |
| JEL: | C1 F43 N17 |
| Date: | 2018–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2018_07&r=int |
| By: | Vacu, Nomfundo P.; Odhiambo, Nicholas M. |
| Abstract: | This study investigates the determinants of import demand in South Africa from 1985 to 2015, using the autoregressive distributed-lag estimation approach. Unlike some previous studies that used a single model, the study uses four models, incorporating both the aggregate and disaggregated import demand. The study employs exports of goods and services, gross national income, investment spending, relative import price, consumer spending, government spending, and a dummy for trade liberalisation policy as independent variables. The empirical results suggest that the elasticity of import demand varies for each of these variables and depends on the import category used as a dependant variable. The long-run findings show that aggregate import demand is positively determined by trade liberalisation policy, investment spending, and gross national income. Import demand for consumer goods and import demand for capital goods appear to be positively associated with gross national income and trade liberalisation policy, while import demand for intermediate goods is positively determined by trade liberalisation policy. In the short run, the results suggest that aggregate import demand is positively determined by gross national income, investment spending, and consumer spending, but negatively determined by government spending. Import demand for consumer goods is positively associated with gross national income and trade liberalisation policy, while import demand for intermediate goods is positively determined by investment spending, trade liberalisation policy and consumer goods, but negatively determined by exports of goods and services and relative import price. Finally, import demand for capital goods is found to be positively and negatively determined by gross national income and investment spending, respectively. |
| Keywords: | ARDL Approach, Import demand, South Africa |
| Date: | 2018–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:24069&r=int |
| By: | Ayoki, Milton |
| Abstract: | The focus on development adopted at the WTO’s Doha Ministerial Meeting in 2001 has changed the architecture of multilateral trade negotiations, with development issues assuming a central position in the WTO negotiation spaces and agreements. In this paper, we assess the extent to which the concerns of developing countries have been addressed in the TFA substantive provisions and special and differential treatment (S&DT) provisions for developing countries. We find that the TFA approach resembles a traditional approach to addressing concerns of developing countries and follows closely the already trodden path of the Uruguay S&DT discipline. An important cluster of issues that did not find its way into the TFA is that relating to regional approach in implementation of TFA. The TFA holds the promise of contributing positively to the development process in less developed countries if the promise of support is realized and developing countries set clear and objective targets to make effective use of the assistance, but in itself may not guarantee the realization of development objectives for developing and least developed countries. Provision of support and capacity building are unguranteed by nonbinding nature of the relevant provisions. This is the input that international partners could, and should, make to the realization of development objec-tive of TFA. |
| Keywords: | Trade faciliation agreement, development issues, special and differential treatment, developing countries, trade and development, WTO. |
| JEL: | F13 K33 |
| Date: | 2017–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87299&r=int |
| By: | Frank, Jonas |
| Abstract: | In this essay I use the GLOBE research study by House et al. (2013) as a proxy for measuring cultural distance. Unlike other studies, GLOBE introduces nine cultural dimensions and focuses exclusively on managers, allowing for a distinct glimpse into the values of people actually making trade decisions. I make use of a state-of-the-art PPML approach using data on international trade flows together with intra-national trade flows (Yotov, 2012) and a comprehensive set of fixed effects to consistently estimate a gravity equation using a panel from 1995 to 2004. I distinguish between different industries by following the goods classification introduced by Rauch (1999). The results show that cultural differences indeed effect trade values differently over time, but their size and impact depends on the chosen measure of cultural distance and on the industry classification. |
| Keywords: | Cultural Distance,International Trade,Panel Gravity Model,PPML |
| JEL: | F14 M14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:182018&r=int |
| By: | Claudia Noumedem Temgoua |
| Abstract: | This paper investigates the role of Chinese and Indian highly skilled diaspora in the internationalization of knowledge networks, for a sample of OECD destination countries. We mainly focus on two types of knowledge networks: co-inventorship and co-authorship. We jointly exploit country-level data on highly skilled migration and information on co-authorship and co-inventorship from publication and patent data. Based on a gravity model regression analysis, we find that OECD country pairs hosting sizeable portions of the Indian or Chinese highly skilled diasporas tend to collaborate more on publications and patents, after controlling for other migration trends. When extending the analysis to other countries, we find similar results for Vietnam, Pakistan and Iran. |
| Keywords: | migration, highly skilled, publications, R&D cooperation, diffusion, patent |
| JEL: | C8 F22 J61 O31 O33 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-16&r=int |
| By: | Leah Brooks; Nicolas Gendron-Carrier; Gisela Rua |
| Abstract: | We investigate how containerization impacts local economic activity. Containerization is premised on a simple insight: packaging goods for waterborne trade into a standardized container makes them dramatically cheaper to move. We use a novel cost-shifter instrument -- port depth pre-containerization -- to contend with the non-random adoption of containerization by ports. Container ships sit much deeper in the water than their predecessors, making initially deep ports cheaper to containerize. Consistent with New Economic Geography models, we find that counties near container ports grow an additional 70 percent from 1950 to 2010. Gains predominate in counties with initially low population density and manufacturing. |
| Keywords: | Containerization ; Globalization ; Local economic activity |
| JEL: | R11 F15 |
| Date: | 2018–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2018-45&r=int |
| By: | David S. Jacks; Dennis Novy |
| Abstract: | We examine the evolution of market potential and its role in driving economic growth over the long twentieth century. Theoretically, we exploit a structural gravity model to derive a closed-form solution for a widely-used measure of market potential. We are thus able to express market potential as a function of directly observable and easily estimated variables. Empirically, we collect a large dataset on aggregate and bilateral trade flows as well as output for 51 countries. We find that market potential exhibits an upward trend across all regions of the world from the early 1930s and that this trend significantly deviates from the evolution of world GDP. Finally, using exogenous variation in trade-related distances to world markets, we demonstrate a significant causal role of market potential in driving global income growth over this period. |
| Keywords: | economic geography, market potential, structural gravity, trade costs |
| JEL: | F1 N7 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1560&r=int |
| By: | Adekunle, Wasiu; Sulaimon, Mubaraq |
| Abstract: | Abstract The study was carried out to re-examine the relationship between foreign capital flows and economic growth in Nigeria by collecting annual data over the period of 1986 to 2015 from various sources. The study employed a combination of stationary and nonstationary series. Similarly, irrespective of specifications, the study reported the absence of a long-run relationship between economic growth and its determinants in Nigeria. Furthermore, owing to absorptive capacity constraints (such as, infrastructural deficit, underdeveloped local financial market and negative and/or very weak positive spill-over effect on domestic investment), net FDI inflows exerted positive short-run influence on growth, while net portfolio flows and net foreign remittance had significant negative short-run effects on growth. Also, lower levels of net foreign aids and net external debt promote growth, while excessive levels of these flows dampen growth. All these imply that the relationship between foreign capital flows and economic growth in Nigeria is both linear and nonlinear. It is therefore recommended that policy makers in Nigeria encourage the inflow of capital that would be beneficial to the nation, in terms of stimulating domestic investment and economic growth. Putting measures in place to develop the nation’s financial sector is also suggested to attract and make efficient use of capital flows in the country. |
| Keywords: | Keywords: Foreign capital, Economic growth, and Financial crisis |
| JEL: | F2 F21 F23 F24 F29 |
| Date: | 2018–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87754&r=int |
| By: | Nyoni, Thabani |
| Abstract: | This study attempts to model and forecast net FDI inflows in Zimbabwe over the next 2 decades. Spanning from 1980 – 2017, annual time series data for net FDI inflows in Zimbabwe was used. The ADF test indicates that FDI data is I (1). The study identifies the minimum AIC value and subsequently presents ARIMA (1, 1, 1) model as the optimal model to forecast FDI in Zimbabwe. The ADF test also indicates that the residuals of the ARIMA (1, 1, 1) model are I (0), thus confirming its adequacy. A diagnosis of the inverse roots of AR/MA polynomials confirms that our estimated model is stable. The predicted net FDI inflows over the next 2 decades show a relatively poor and unimpressive growth trend. Amongst the main policy prescriptions, the study recommends that policy makers in Zimbabwe ought to come up with investor – friendly policies in order to attract the much needed FDI. |
| Keywords: | AR, ARIMA, ARMA, Foreign Direct Investment (FDI), forecasting, MA, Zimbabwe |
| JEL: | E0 E3 E37 E6 G1 |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87737&r=int |
| By: | Moloney, Niamh |
| Abstract: | This article considers the potential impact of the withdrawal of the UK on EU financial services law and its institutional arrangements. While speculation is currently perilous, this article suggests that the impact of Brexit on EU financial governance will be contained and most likely limited. The greatest uncertainty relates to the EU’s evolving supervisory/institutional arrangements. Brexit may be one of the factors which leads to a significant future empowerment of the European Supervisory Authorities, and in particular the European Securities and Markets Authority. But it is only one of a range of complex, dynamic and symbiotic political forces, institutional interests, legal constraints and functional challenges which must combine in the EU’s governance reform crucible if material reform is to follow. |
| JEL: | F3 G3 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87409&r=int |
| By: | Thomas Sampson |
| Abstract: | Writing in the summer 2018 issue of CentrePiece magazine, Thomas Sampson notes that the full economic consequences of the UK's leave vote will not be realised for many years. But two years after the referendum, we can already detect how Brexit is starting to affect the UK economy. |
| Keywords: | EU, Brexit, UK economic growth, real wages, living standards |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:528&r=int |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01649540&r=int |
| By: | Alberto Alesina (Harvard University [Cambridge], IGIER); Johann Harnoss (UP1 - Université Panthéon-Sorbonne); Hillel Rapoport (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | We analyze the effect of immigration on attitudes to redistribution in Europe. Using data for 28 European countries from the European Social Survey, we .nd that native workers lower their support for redistribution if the share of immigration in their country is high. This effect is larger for individuals who hold negative views regarding immigration but is smaller when immigrants are culturally closer to natives and come from richer origin countries. The effect also varies with native workers' and immigrants' education. In particular, more educated natives (in terms of formal education but also job-specic human capital and ocupation task skill intensity) support more redistribution if immigrants are also relatively educated. To address endogeneity concerns, we restrict identification to within country and within country-occupation variation and also instrument immigration using a gravity model. Overall, our results show that the negative .First-order effect of immigration on attitudes to redistribution is relatively small and counterbalanced among skilled natives by positive second-order effects for the quality and diversity of immigration. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01707760&r=int |