nep-int New Economics Papers
on International Trade
Issue of 2018‒10‒29
thirty-one papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. On the competitiveness effects of quality labels: Evidence from the French cheese industry By Sabine Duvaleix-Treguer; Charlotte Emlinger; Carl Gaigné; Karine Latouche
  2. The margins of trade: market entry and sector spillovers, the case of Italy (1862-1913) By Jacopo Timini
  3. Quantifying Welfare Gains of Increased Trade Integration By Jung, Benjamin; Felbermayr, Gabriel; Gröschl, Jasmin
  4. Trade Policy toward Supply Chains after the Great Recession By Chad P. Bown
  5. Reduced "Border Effects", FTAs and International Trade By Franco, Sebastian; Frohm, Erik
  6. Evaluation of the economic and social impact of possible trade negotiations between Jamaica and Central America, Mexico and the countries of the Northern Caribbean By -
  7. New Imported Inputs, Wages and Worker Mobility By Italo Colantone; Alessia Matano; Paolo Naticchioni
  8. The Attraction of Foreign Direct Investment in the East African Community: A Two-edged Sword for Equitable Economic Development By Mbembe Binda
  9. A proposal for a Brexit deal: Why a free trade area for goods is in the interest of the EU and how to achieve a sound balance of rights and obligations By Matthes, Jürgen; Voigtländer, Michael
  10. The potential cost of a Failed Doha Round By Antoine Bouët; David Laborde
  11. What Goes Around Comes Around: The Effects of Sanctions on Swedish Firms in the Wake of the Ukraine Crisis By Gullstrand, Joakim
  12. Trade and Domestic Production Networks By Felix Tintelnot; Ken Kikkawa; Magne Mogstad; Emannuel Dhyne
  13. Les relations commerciales agroalimentaires de la Russie avec l’Union européenne, l’embargo russe et les productions animales By Vincent Chatellier; Thierry Pouch; Cecile Le Roy; Quentin Mathieu
  14. International legal relations in troubled times and their impact on substantive elements of international trade By Adela Kratenova
  15. The impact of FDI on Poverty Reduction in North Africa By Marwa Lazreg; Ezzeddine Zouari
  16. The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?) By Mazhar Yasin Mughal; Natalia Vechiu
  17. The nexus between FDI and environmental sustainability in North Africa By Marwa Lazreg; Ezzeddine Zouari
  18. Can preferential trade agreements enhance renewable electricity generation in emerging economies? A model-based policy analysis for Brazil and the European Union By Yadira Mori-Clement; Stefan Nabernegg; Birgit Bednar-Friedl
  19. Austria’s Economic Competitiveness in a Neighbourhood Context: Is Austria’s Economy Locked-in to the CESEE Region? By Mahdi Ghodsi; Doris Hanzl-Weiss; Philipp Heimberger; Mario Holzner; Olga Pindyuk; Roman Stöllinger
  20. The Costs and Benefits of Duty-Free, Quota-Free Market Access for Poor Countries : Who and What Matters By Antoine Bouët; David Laborde; Elisa Dienesch; Kimberly Elliot
  21. Innovation and SME internationalization in Korea and Latin America and the Caribbean: Policy experiences and areas for cooperation By -
  22. Economic Integration and Productive Specialization in the EU27: does FDI influence Countries’ Specialization? By Natalia Vechiu; Farid Makhlouf
  23. Beyond Aid: How Trade Interests Trumps EU-Asean Development Cooperation By Luís Mah
  24. Trade liberalization, environmental regulation and self-regulation of multinational firms By Fabrice Darrigues; Jean-Marc Montaud
  25. Challenges ahead for Trade Promotion Organizations in Africa By Mauro Boffa; Jaime De Melo
  26. Is globalisation taking away jobs? An empirical assessment for advanced economies By Antonia Lòpez-Villavicencio; Luis Reyes Ortiz
  27. Long-Run Determinants of Japanese Exports to China and the United States: A Sectoral Analysis By Jacques Jaussaud; Serge Rey
  28. Professional services delivery changes with firm growth in the US By Edouard Ribes
  29. Antidumping, Social Quality of Goods and Smear Campaign By Patrice Cassagnard
  30. Policies, institutions and instruments supporting the internationalisation of SMEs in Latin America By Urmeneta, Roberto
  31. Parallel Imports and Manufacturer Rebates By Birg, Laura

  1. By: Sabine Duvaleix-Treguer; Charlotte Emlinger; Carl Gaigné; Karine Latouche
    Abstract: The paper questions the impact of geographical indication labels on firm export competitiveness in the French cheese and cream industry. We use firm level data from the French custom and an original dataset of firms and products concerned by Protected Designations of Origin (PDO). Our estimations show that PDO labeling allows firms to increase their price by 11.5% on average. Moreover these products are perceived by consumers as products of better quality than non-PDO products. Regarding trade margins, while the effect on trade volume (the intensive margin of trade) is not significant, PDO labeling increases the probability of serving a foreign country (the extensive margin of trade). Our estimations show that exports of PDO products would increase by 11.4% if non-EU consumers value PDO label as much as EU consumers.
    Keywords: Geographical Indication;PDO;Trade Margins;Product Quality;Price
    JEL: F10 F14
    Date: 2018–10
  2. By: Jacopo Timini (Banco de España)
    Abstract: Between its Unification and WWI, Italy faced a period of increasing participation in the international economy. The growth of Italian exports was gradual, and alternately promoted by its intensive and extensive margins. In this paper, using a disaggregated database at country-product level, I first construct the intensive (average export per product) and extensive (number of products) margins of trade (for Italian imports and exports) and, second, within a quasi-gravity model framework, I estimate the drivers of market entry for Italian exports (1862-1913), with particular attention to the presence of eventual sector spillover effects. I find that the presence of “similar” exported products increased the probability of entry in the destination market (export spillovers), even if with diminishing marginal effects, potentially linked to a “saturation”/“congestion” of the market. Equally, I find that the higher the imports’ growth rate for a specific product, the more likely it was to be internationalised by Italian exporters (import spillovers).
    Keywords: international trade, market entry, Italy, trade margins, export spillovers
    JEL: F14 N73
    Date: 2018–10
  3. By: Jung, Benjamin; Felbermayr, Gabriel; Gröschl, Jasmin
    Abstract: Since the 1990s,Germany and other European countries have become more open to trade. The period is characterized by the fall of the iron curtain, the surge of China and its accession to the World Trade Organization (WTO), the introduction of the Euro, the creation of the Schengen area, the enlargement of the European Union (EU), and the Global Europe Initiative. Linking the partial trade effects obtained from our sectoral gravity estimations based on the World-Input-Output Database (WIOD) to real income figures from the Penn World Tables, we find that at least one quarter of the welfare gains realized since 1990 are due to trade policy reforms. Feeding a quantitative simulation exercise based on a version of the Melitz (2003) model with multiple countries and sectors and input-output linkages with the trade costs effects implied by our gravity estimations, we find that Germany’s real per capita income would drop by 5.3%, if all trade liberalization steps since 1990were fully undone.
    Keywords: NewQuantitative TradeModels,Gravity equation,European Integration,Gains from Trade
    JEL: F12 F15
    Date: 2018
  4. By: Chad P. Bown (Peterson Institute for International Economics)
    Abstract: How does trade policy treat intermediate inputs relative to other imported products? Slow economic and trade growth during the recovery from the Great Recession, as well as recent political developments in the United Kingdom and the United States, pose a threat to cross-border supply chains and have thus brought this question to the forefront of policy circles. By examining new and detailed data on the Group of 20 (G-20) countries, this paper investigates trade policy use through 2016, with special emphasis on changes in policymaking behavior since 2010. First, there is no evidence that the G-20 economies made significant changes to their applied import tariffs during this period. However, there has been a modest increase in import protection arising through other policy instruments of note such as the temporary trade barriers (TTBs) of antidumping, countervailing duties, and safeguards. More importantly, there is evidence of changes in how countries have applied their TTBs. TTBs were increasingly imposed on imports not only from China but also from other countries, reversing a post-2001 trend. Furthermore, TTB protection has moved away from imports of final goods and toward imports of intermediate inputs. These shifts in policy have several potential contributing causes as well as economic consequences, including for cross-border supply chains.
    Keywords: antidumping, safeguards, temporary trade barriers, tariffs, WTO, supply chains, intermediate inputs
    JEL: F13
    Date: 2018–10
  5. By: Franco, Sebastian (Ecole Polytechnique (CREST)); Frohm, Erik (Monetary Policy Department, Central Bank of Sweden)
    Abstract: This paper studies the role of reduced barriers to international trade from two dimensions: (i) the implementation of Free Trade Agreements and (ii) declining "border effects". Our empirical estimates suggest that diminished border effects accounts for the bulk of the increase in international trade in manufactured goods since 1970. The cost of a national border has fallen by around 10% per year for total exports, whereas it has declined by 13% for exports of final goods and 8% for intermediate inputs. The introduction of FTAs have an important role to play as well, raising international trade by 54% after 10 years according to our estimates. We also find evidence that more recent FTAs have a greater trade effect than those signed in earlier periods. Moreover, when estimating the effect of FTAs, we show that it is important to control for different border effects for final goods and intermediate inputs.
    Keywords: Border effect; Free trade agreements; international trade; global value chains
    JEL: F13 F14 F15 F23
    Date: 2018–06–01
  6. By: -
    Abstract: This study was prepared under the United Nations Development Account project “Enhancing the Contribution of Preferential Trade Agreements to Inclusive and Equitable Trade”, implemented by the United Nations Regional Commissions for Asia (ESCAP), Africa (ECA) and Latin America and the Caribbean (ECLAC). The project’s objective is to facilitate the negotiation of fair and equitable trade agreements that can contribute to a vision of development that combines growth with social inclusion. The study evaluates the economic and social impacts resulting from the potential increase of commercial relations between Jamaica and Mexico, the member countries of the Central American Common Market (henceforth referred to as Central America) and those of the Northern Caribbean after signing a Free Trade Agreement (FTA) with each party. Jamaica is currently a party to trade agreements with a number of countries in the study through its membership in the Caribbean Community (CARICOM), and the study assesses the potential results from further liberalizing trade with these partners and others in the region. The results of this analysis can be used to inform future trade negotiations and identify specific opportunities for export diversification and expansion.
    Date: 2018–10–08
  7. By: Italo Colantone (Bocconi University); Alessia Matano (AQR-IREA, Department of Econometrics, Statistics and Applied Economics, Universitat de Barcelona); Paolo Naticchioni (Roma Tre University, IZA and INPS)
    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: New imported inputs, wages, matched employer-employee data.
    JEL: F14 F16
    Date: 2018–10
  8. By: Mbembe Binda (University of Rwanda)
    Abstract: Created in 1999, the East African Community (EAC) is regional integration community constituted by six sub-Saharan countries, i.e. Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda. One of the purpose of this integration is the promotion of equitable economic development of its member states through the attraction of foreign direct investment. However, although all EAC member states are developing countries, there exist deep discrepancies between their economies regarding key investment determinants such as their economic productivity, human capital, infrastructure, and normative framework. Despite these discrepancies, the member states have adopted a common market consecrating the free movement of goods, persons, services and capital. Yet, according to well tested New Economic Geography theory, a common market between highly asymmetric economies tend to cause agglomeration of FDI in the territories of the common market?s member states that present the best comparative advantage in terms of FDI determinants. Accordingly, only one or two EAC member states will end up reaping all the benefits of the common market in attracting the majority of FDI. This would definitely jeopardize the attainment of the EAC goal to reach an equitable distribution of FDI between its members states. As a consequence, the worse-off member states would be tempted to defect from the regional integration, which might lead to the collapse of the EAC just as it already happened in 1964 and in 1977 against the background of economic imbalances claims between member states.This paper takes this threat seriously and examines which legal and institutional framework is needed to mitigate the divisive nature of FDI in the EAC. It is postulated that partial transfer of competence on investment from the member states to a central body within the EAC in accordance with the principle of subsidiarity would effectively address the side effects of an intra-EAC competition for FDI attraction. But to be successful, this must be done within the framework of a robust common investment policy that the member states have to adopt. Otherwise, instead of being the wished catalyst of equitable economic development of the EAC member states, FDI is highly likely to rather become the trigger of a fatal intra-EAC competition.
    Keywords: regional integration, common market, foreign direct investment, east african community
    JEL: F15 K33 K29
    Date: 2018–07
  9. By: Matthes, Jürgen; Voigtländer, Michael
    Abstract: In the political declaration of the Withdrawal Agreement the EU should leave the door open for a free trade area for goods that has been suggested by the UK's Chequers proposals. The EU would profit from such an arrangement due to its comparative advantage in goods. However, in order to achieve the EU's main objective to avoid bandwagon effects, such a trade agreement must not be depicted as a favourable deal for the UK. The narrative of the four freedoms is not indispensable to prevent bandwagon effects. A narrow interpretation can be even counterproductive, if the EU continues to regard a lesser degree of service trade integration (as suggested by the UK) as a key stumbling block for a free trade area for goods. On closer inspection, less service trade integration is not a real problem, because it would not lead to relevant competitive distortions as feared by the EU, as other areas like labour costs and social contributions are more relevant cost factors which are not (and should not) be harmonised in the EU. Moreover, the UK proposes to agree to binding rules to prevent distortions of a level playing field in terms of environmental regulations, state aid and competition policy. [...]
    JEL: F1 F2 O52
    Date: 2018
  10. By: Antoine Bouët (IFPRI - International Food Policy Research Institute, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); David Laborde (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: This study offers new conclusions on the economic cost of a failed Doha Round. The first section is devoted to an analysis of how trade policies evolve in the long and medium runs. We show that even under normal economic conditions, policymakers modify tariffs to cope with the evolution of world markets. We then use the MIRAGE Computable General Equilibrium model to assess the potential outcome of the Doha Round, and then examine four protectionist scenarios. Under a scenario where applied tariffs of major economies increase up to the currently bound tariff rates, we find that world trade decreases by 7.7 percent and world welfare drops by US353 bn. We then compare a resort to protectionism when the Doha Development Agenda (DDA) is implemented versus a resort to protectionism when the DDA is not implemented. We find that this trade agreement could prevent the potential loss of US 809 bn of trade, and could therefore act as an efficient multilateral insurance scheme against the adverse consequences of "beggar-thy-neighbor" trade policies.
    Keywords: Trade negociations,CGE modeling,Bound duties,Domestic support
    Date: 2018–10–01
  11. By: Gullstrand, Joakim (Department of Economics, Lund University)
    Abstract: This paper focuses on the effects of sanctions on Swedish firms' sales across markets, as well as sanctions’ effects on their domestic production. As a case study, the paper uses sanctions imposed on Russia and by Russia in 2014. The results suggest that the total costs of these sanctions due to a drop in sales for Swedish firms amounts to around 1 billion SEK in 2013 prices, which implies a rather limited impact on the Swedish economy overall, which amounted to a total of around 4000 billion SEK in 2013. The total impact may be divided into a target effect and a sender effect. The target effect is reflected in a 65% drop in sales of banned products in the Russian market, while the sender effect on exports outside Russia was less important. The ripple effects on other markets of these sanctions were, however, asymmetrical and complex. Sales on the domestic market was on average intact while exports to markets facing the same type of sanctions fell. The most vulnerable firms could face a loss in sales of more than 40\% of their value added, and the most important firm-level mechanism, as to how firms responded in their domestic production, was financial distress. I found, however, an additional mechanism within firms regarding their export response on markets other than Russia, since the negative impact was concentrated on their fringe products, while their core business remained intact after the sanctions were implemented.
    Keywords: Sanction; embargo; export; production; Sweden
    JEL: F13 F14 F51 R11
    Date: 2018–10–23
  12. By: Felix Tintelnot (University of Chicago, USA); Ken Kikkawa (UBC Saunder School of Business, Canada); Magne Mogstad (University of Chicago, USA); Emannuel Dhyne (Economics and Research Department, National Bank of Belgium)
    Abstract: We use Belgian data with information on domestic firm-to-?rm sales and foreign trade transactions to study how international trade affects ?rm efficiency and real wages. The data allow us to accurately construct the domestic production network of the Belgian economy, revealing several new empirical facts about firms’ indirect exposure to foreign trade through their domestic suppliers and buyers. We use this data to develop and estimate models of domestic production networks and international trade. We ?rst consider a model of trade with an exogenous network structure, which gives analytical solutions for the effects of a change in the price of foreign goods on ?rms’ production costs and real wages. To examine how gains-from-trade calculations change if buyer-supplier links are allowed to form or break in response to changes in the price of foreign goods, we next develop a model of trade with endogenous network formation. We take both models to the data and compare the empirical results to those we obtain using existing approaches. This comparison highlights the relevance of data on and modeling of domestic production networks in studies of international trade.
    Keywords: Production Networks, Network formation, Indirect imports and exports, Gains from trade
    JEL: F14 L14
    Date: 2018–09
  13. By: Vincent Chatellier (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Thierry Pouch (URCA - Université de Reims Champagne Ardenne, APCA - Assemblée Permanente des Chambres d'Agriculture); Cecile Le Roy (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Quentin Mathieu (APCA - Assemblée Permanente des Chambres d'Agriculture)
    Abstract: Russia has been for many years an important outlet for the European Union (EU) in the agrifood sector. Following the break-up of the Union of Soviet Socialist Republics (USSR) in 1991, Russian agriculture, which until then had been dominated by sovkhozes and kolkhozes, had suffered a drastic fall in domestic production, in particular in animal production. Over the past fifteen years, and due to a policy encouraging investment in agriculture, especially in agro-industrial complexes where the integration model prevails, agricultural production progressed rapidly, at least in certain sectors, including cereals, poultry meat and pork. This development of domestic supply and the diversification of supplier countries (including the United States, Brazil, etc.) had, even before the embargo imposed since August 2014, led to a substantial loss of European exports to Russia. Since the embargo was effective, Russia is no longer a privileged partner for European animal productions. Thanks to the growth of imports in several Asian countries, especially in China, several European animal sectors have nevertheless managed, despite the closure of the Russian market, to increase their exports. This paper deals, first of all, with the main stages of the Russian agricultural and trade policy, the development of agricultural production in this country, and the implementation of the embargo. Using customs statistics data (from BACI and COMEXT databases) over the period 2000 to 2016, it then discusses the evolution of trade flows following the implementation of the embargo, with particular emphasis on Russia's bilateral relations with the EU in four animal sectors: milk and milk products, beef and veal, poultry meat, and pork.
    Abstract: La Russie fut pendant de nombreuses années un débouché important de l'Union européenne (UE) dans le domaine agroalimentaire. A la suite de l'éclatement de l'Union des Républiques Socialistes et Soviétiques (URSS) en 1991, l'agriculture russe jusqu'alors dominée par des sovkhozes et des kolkhozes, a en effet subi une baisse drastique de sa production intérieure, notamment en productions animales. Depuis une quinzaine d'années, et moyennant une politique favorable à l'investissement en agriculture, surtout dans des complexes agroindustriels où le modèle de l'intégration prévaut, la production agricole progresse rapidement, du moins dans certaines filières dont celles des céréales, de la viande de volailles et de la viande porcine. Ce développement de l'offre intérieure et la diversification des pays fournisseurs (dont les Etats-Unis, le Brésil, etc.) ont, avant même l'embargo appliqué depuis août 2014, entraîné une perte substantielle des exportations européennes vers la Russie. L'embargo ayant été efficace, la Russie ne constitue plus un partenaire privilégié pour les productions animales européennes. Grâce à la croissance des importations dans plusieurs pays asiatiques, surtout vers la Chine, plusieurs filières animales européennes sont néanmoins parvenues, en dépit de la fermeture de ce marché, à augmenter leurs exportations. Ce papier traite, tout d'abord, des principales étapes de la politique agricole et commerciale russe, du développement des productions agricoles dans ce pays et des conditions de la mise en oeuvre de l'embargo. Moyennant la valorisation des données statistiques des douanes (bases de données BACI et COMEXT) sur la période 2000 à 2016, il discute ensuite de l'évolution des courants d'échanges consécutive à la mise en oeuvre de l'embargo, en insistant surtout sur la relation bilatérale de la Russie avec l'UE pour quatre filières animales : le lait et les produits laitiers, la viande bovine, la viande de volailles et la viande porcine.
    Keywords: russia,import ban,competitiveness,trade,animal production,livestock farms,russie,embargo,échange commercial,production animale,compétitivité
    Date: 2018
  14. By: Adela Kratenova (Nottingham Trent Uviversity)
    Abstract: Trade between different countries forms a significant part of national economic development worldwide. The significance of the interdependence of countries is increasing with rising globalisation (Helpman, 2011). To facilitate cross-border cooperation, including trade, countries form associations and other cooperative units with established rules, often with economic advantages, amongst the Member States. The European Union (the ?EU?) and the European Economic Area (the ?EEA?) are relevant examples of the above cooperation. One of the main objectives of the EU is the establishment of an internal market without internal frontiers ensuring the free movement of goods, persons, services and capital (Consolidated version of the Treaty on the Functioning of the European Union 2012, Art. 26). The EEA unites the EU countries with Iceland, Liechtenstein and Norway, allowing the non-EU members to enjoy the free movement of goods, persons, services and capital without internal frontiers similarly (Agreement on the European Economic Area, 1994, Art. 1). The United Kingdom (the ?UK?) is a Member State of the EU (and therefore the EEA) allowing it to be part of the concept of an internal market. However, the situation for the UK might be changed in the future due to the UK?s EU membership referendum which took place on 23rd June 2016 resulting in the majority of voters expressing their desire for the UK to leave the EU (the UK leaving the EU also ?BREXIT?). BREXIT will inevitably impact various aspects of the existing legal establishment. The area of Private international law (the ?PIL?), encompassing the determination of applicable law, jurisdiction of courts and enforcement of foreign judgement, will be influenced to a significant extent. The paper will briefly examine the current legal establishment and the options the UK has concerning future arrangements of the PIL rules. Further, the paper will investigate future jurisdictional competence, enforceability of foreign judgements taking into consideration the development in a field of international arbitration, specifically the enforcement of arbitration awards and control of arbitration proceedings in the BREXIT context. The paper aims to identify the challenges brought by the potential removal of the current EU PIL regime which can be considered as a ?safety net?.
    Keywords: Brexit, Private International Law, International Commercial Law, Trade, Enforcement
    JEL: K00 K33 K20
    Date: 2018–07
  15. By: Marwa Lazreg (Université de Sousse, FSEG, CML); Ezzeddine Zouari
    Abstract: The aim of this paper is to study the impact of FDI on poverty in the case of the North African country during the period from 1985 to 2005. The sample used in this paper consists of 6 countries of North Africa during the period from 1985 to 2005. So we can use the cointegration test. For the cointegration test, we have certified the existence of a cointegration relationship between the different series studied in our paper. Indeed, the result of the null hypothesis test of no cointegration was rejected at the 5% threshold, which explains the presence of a cointegration relationship. Also, to test the effect of FDI on poverty in the countries of North Africa, we will perform a FMOLS estimate. Thus, for the short-term dynamics, we noticed that FDI have a positive and significant impact on a threshold of 1% on the GINI index for the case of the countries of North Africa and a significant negative a threshold of 1% for the other two indicators of poverty; LPOV1_91 $ and LPOV3_1 $. Then we found that is statistically significant and positive at a 1% level. The LIDE variable measuring foreign direct investment has a negative impact on the Gini index to a threshold of 5%.For the Granger causality test; we notice that there is a unidirectional relationship between the consumption of energy and poverty Granger. Only the GINI index can cause Granger consumption of energy.
    Keywords: IDF,poverty,North Africa,cointegration,FMOLS 2
    Date: 2018–04–02
  16. By: Mazhar Yasin Mughal (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Natalia Vechiu (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: This paper studies the impact of FDI inflows on higher education in developing countries for the period 1998-2008. A large panel of developing countries is analyzed using different econometric techniques and specifications. We find evidence of short-term negative effect of the FDI on tertiary education measured by school enrolment. The negative effect of FDI is confirmed for both secondary and tertiary education when measured as the adult population having acquired the level. Among other control variables, GDP, demographic growth and the services sector value added seem to have a significant impact on higher education. GDP and services value-added show the expected positive impact, while population growth appears to affect education enrollment and attainment negatively. The study highlights the need for considering the differential aspects of foreign investments' nature and characteristics, rather than treating them as a cure-all pill for the developing countries' development problem.
    Keywords: FDI,Education,Human capital,Developing countries
    Date: 2018–10–01
  17. By: Marwa Lazreg (Université de Sousse, FSEG, CML); Ezzeddine Zouari
    Abstract: This paper provides a study of the relationship between sustainable development and foreign direct investment (FDI) from an empirical point of view in the case of the North African country during the period from 1985 to 2005. We used the FMOLS estimate and the causality test to examine this relationship. According to the results found, we confirmed the existence of a cointegration relationship between the different series studied in this paper. Indeed, the results of the null hypothesis test of no cointegration were rejected at the 5% threshold, which explains the presence of a cointegration relationship. The cointegration test can determine the use of a model error correction. Also, to test the effect of FDI on sustainable development in the countries of North Africa, we will make an estimate by FMOLS method. We found that the LIDE variable measuring foreign direct investment has a positive impact on sustainable development. Also, we notice that there is a bidirectional relationship between FDI and emissions CO2 Granger. That is to say, the IDE can cause Granger emissions of CO2 and CO2 emissions can cause Granger FDI.
    Keywords: foreign direct investment,sustainable development,CO2,Poverty, panel data
    Date: 2018–04–02
  18. By: Yadira Mori-Clement (University of Graz, Austria); Stefan Nabernegg (University of Graz, Austria); Birgit Bednar-Friedl (University of Graz, Austria)
    Abstract: Preferential trade agreements with climate-related provisions have been suggested as alternative to a New Market Mechanism due to its potential not only to achieve Nationally Determined Contributions (NDCs) in emerging economies but also to lead to more ambitious targets in the first UNFCCC global stocktake in 2023. The objective of this research is therefore to analyze the effectiveness and quantify the economic impacts of such a trade agreement between Brazil and the European Union that aims to support renewable electricity generation. Using a multi-regional computable general equilibrium model, we find that the environmental effectiveness of a preferential trade agreement targeting renewable electricity generation strongly depends on its design. In particular, preferential trade agreements require additional elements to effectively contribute to mitigation as the sole removal of import tariffs on renewable energy technology is quite ineffective in scaling up the share of wind, solar, and biomass in Brazil. In contrast, a preferential trade agreement triggering FDI flows towards renewable electricity generation is effective in increasing the share of renewables in the generation mix and in reducing CO2 emissions, while positively affecting the Brazilian economic performance. Finally, we compare the two previous approaches to a domestic energy policy: a combination of higher fossil fuel taxes and subsidies to renewable electricity generation. We find that although this domestic energy policy is more effective in mitigation terms than the FDI policy, economic performance is negatively affected in several sectors. When such economic costs are socially not acceptable, as it is likely in many emerging economies, properly designed preferential trade agreements could therefore be a suitable instrument for supporting the achievement of NDCs, and potentially increase their stringency for the next stock taking period.
    Keywords: Preferential Trade Agreements with climate-related provisions; environmental goods; renewable energy; FDI; emerging economies; Brazil; European Union
    JEL: Q27 Q28 Q42
    Date: 2018–10
  19. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Since the Eastern enlargement of the EU in 2004, Austria has lost global export market shares. At the same time exports to Central, East and Southeast Europe (CESEE) have gained a significant portion of Austria’s total exports. Moreover, in recent years Austrian GDP growth has slowed down and unemployment increased. In this context our main research question is whether the opening to the East has had a structural lock-in effect for Austria’s economy. In a novel approach on the territorial lock-in effect we apply a multi-perspective view from a microeconomic (firm-level), mesoeconomic (industry-level) and macroeconomic (country-level) perspective. The major finding is that by and large Austria is not subject to a lock-in effect into CESEE markets. On the contrary, the results suggest a growing internationalisation of the Austrian export structure. Nevertheless, policy recommendations that aim at further improving Austria’s competitiveness include a productivity‑oriented wage policy, an industrial policy that aims at technological upgrading, support for European policy measures that speed up income convergence across the continent as well as additional measures to internationalise Austrian businesses with a focus on the booming emerging markets in India and Africa.
    Keywords: competitiveness, lock-in effect, total factor productivity, value added trade, real exchange rate, Eastern Europe, Austria
    JEL: D24 F14 F41 E64
    Date: 2018–10
  20. By: Antoine Bouët (IFPRI - International Food Policy Research Institute); David Laborde (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Elisa Dienesch (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Kimberly Elliot
    Abstract: This paper examines the potential benefits and costs of providing duty-free-quotafree market access to the least-developed-countries (LDCs), and the effects of extending eligibility to other small and poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goal of this paper is to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance and to assess the distribution of costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.
    Keywords: CGE modeling,Trade policy,Duty-free market access,Technical barriers to trade,Preference erosion
    Date: 2018–10–01
  21. By: -
    Abstract: Economic relations between the Republic of Korea and Latin American and the Caribbean have expanded rapidly since 2000. Bilateral trade in goods increased more than fivefold, while the region has also become an important destination for Korean foreign direct investment. The region’s interest in Korea also stems from this country’s successful economic and social development experience, as it developed from being one of the poorest countries in the world to a high-income economy within less than six decades. To better understand the divergent trends in Korea and the region, this document reviews the most important innovation and small and medium-sized enterprises (SMEs) internationalization policies in both in three sections. The first section looks at the role of Latin America within Korea’s trade and integration strategy. The second reviews policies from both partners related to science, technology, innovation and labor skills. The final section focuses on SME internationalization policies. These reviews are complemented by a synthesis of recent bilateral cooperation initiatives and suggestions to increase these ties further.
    Date: 2018–10–09
  22. By: Natalia Vechiu (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Farid Makhlouf (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: The objective of this article is two folded. Firstly, we proceed to an analysis of the evolution of productive specialization in the enlarged EU, taking into account all its actual 27 member countries. Given their decomposability properties, we use the entropy-based indices to measure countries' relative specialization and then, given our rather short period of analysis, we use the bootstrap method to analyze the evolution of the specialization index. We first analyze all economic sectors and then, our analysis is more detailed focusing on manufacturing industries. Globally, we find that specialization is decreasing across all economic sectors, while it is increasing across manufacturing industries. Secondly, we study specialization determinants, with a special interest for the impact of foreign direct investment (FDI). For homogeneity reasons, we analyze two separate samples, one including only developed countries of the European Union and the other, only developing member countries. In order to take into account endogeneity highly probable of most of our independent variables, we use the vector autoregression (VAR) technique and analyse the impulse response functions. Globally, FDIs seem to positively influence countries' relative specialization, for our both samples and for both economic sectors and manufacturing industries. However, their impact appears weaker than most of the other independent variables, such as market potential or relative endowments.
    Keywords: Entropy,Specialization,Foreign Direct Investment,European Union
    Date: 2018–10–01
  23. By: Luís Mah
    Abstract: The EU Agenda for Change adopted in 2011 is the basis of the current EU´s development policy and aims at responding to the changes undergoing in the international development arena. One of the key principles and policy priorities of this agenda is differentiation which manifests the EU intention to increasingly provide aid only to Low Income countries (LICs). This paper will critically analyse to what extent this shift to differentiation is shaping the relations between the EU and ASEAN. It will argue that EU relations with ASEAN have always been differentiated from other developing countries as they have been subordinated to trade interests rather than development goals.
    Date: 2018–10
  24. By: Fabrice Darrigues (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Jean-Marc Montaud (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: Using a monopolistic competition model with mobile capital, where firms may choose between a "dirty" or a "clean" technology, this work explores the relationship between environment, trade liberalization, geographical and technical choices of multinational firms. We show that beside of environmental regulation, the ecological sensitivity of consumers can also be a market mechanism which may urge firms to self-regulate. We show in particular that a local sensitivity of environmental issues amplifies the phenomenon of Pollution Haven induced by an environmental tax, while a more comprehensive environmental awareness attenuates or cancels it gradually as the liberalization progresses.
    Keywords: Globalization,Geographical Economics,Environmental Economics
    Date: 2018–09–24
  25. By: Mauro Boffa; Jaime De Melo (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, University of Geneva [Switzerland])
    Abstract: This study provides an anatomy of the activities of Trade Promotion Organizations (TPOs) in Sub-Saharan Africa, mostly LDCs. Both opportunities and challenges facing TPOs were identified by using a quantitative survey administered online and a structured questionnaire used during phone interviews. The study relied on ITCs' TPO Network and contacts through FERDI and IGC. Of the 40 online invitations, 12 were filled out and of the 20 invitations for phone interviews, 6 were obtained. Almost all answers were from TPOs not covered in previous evaluations. Data from the online survey were compared with results from previous surveys mostly outside SSA. TPOs in SSA are young, relative to those elsewhere (half were started after 2007) and relatively small (average of 25 employees). Strategic objectives from 88 TPOs previously evaluated are systematically compared. Comparisons with the data gathered for this study reveal a higher elasticity of budget size to employee for SSA than elsewhere probably suggesting greater diversification into new supporting activities in SSA than elsewhere. The study summarizes the challenges and opportunities in each area of operation gathered from the phone interviews (see table 7). The phone interviews revealed that successes were concentrated in the agricultural activities. Word-cloud analysis uncovered convergence of themes (market access, audit, performance). Two challenges facing TPOs in the future are issues relating to the use of the internet and helping firms integrate into value chains (regional or global).
    Date: 2078–09–19
  26. By: Antonia Lòpez-Villavicencio (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique, GATE - Health System Analysis Laboratory - Université de Lyon); Luis Reyes Ortiz (AFD - Agence française de développement)
    Abstract: We empirically investigate the link between economic globalisation and unemployment for a sample of 20 OECD countries over the 1981-2013 period. Controlling for the usual determinants of unemployment, our results show that unemployment is related in a complex way to global economic factors. Specifically , we show that outflows of foreign direct investment and restrictions reduce the unemployment rate, whereas capital account openness raises it. We also find that the standard trade openness measure does not explain unemployment in advanced economies. Finally, the increase in the share of China's imports is not to be blamed for slack in Western labour markets. JEL Classification: E24, F62, C33.
    Keywords: Unemployment,Macroeconomic Impacts of Globalisation,Panel Data Models
    Date: 2018–10–14
  27. By: Jacques Jaussaud (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Serge Rey (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: We show that during the period 1971–2007, Japanese sectoral exports to China and the United States have depended on real exchange rate fluctuations and external demand (gross domestic product of the country of destination). This result holds for six sectors: foods, textile, metal products, chemicals, non-metal products, and machinery and equipment, as well as for both geographical destinations. Generally, the real exchange rate fluctuations and GDP have had the expected effects. In particular, a real appreciation of the yen and a bigger uncertainty has reduced the Japanese exports. But there is an important exception, as we find a price inelasticity of the principal Japanese exports to USA, i.e. Machinery and Equipment, which represent 80 percent of total exports to USA. So, a real depreciation of the yen may constitute an inappropriate policy to favor a process of growth export-led.
    Keywords: Exchange rate,Yen,Exports,International Trade,Japan,Long-run relationships
    Date: 2018–09–24
  28. By: Edouard Ribes (CERNA i3 - Centre d'économie industrielle i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: The delivery model of professional services firms is evolving because of trade and technology opportunities. Using a task based framework, it can be estimated that 22% of the content of professional services occupations can either be displaced or replaced. Both opportunities could each impact between 10 to 12% of the overall labor landscape. However those numbers must be nuanced and embedded in a context of firm growth. This paper therefore proposes a growth blueprint for professional services firms where trade and technology opportunities can be seized in phases depending in firms' size. This notably stresses the difference between small and large firms. Finally this service delivery model blueprint is used to discuss the overall occupational wage landscape evolution. This paper draws on the US firm size landscape and the existing wage literature to suggest that trade and technology will affect all jobs and increase the wage structure polarization of the US PSFs sector.
    Keywords: Trade,Technological change,Firm growth,Professional services
    Date: 2018–10–06
  29. By: Patrice Cassagnard (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: This article proposes to uncover another motivation behind the introduction of antidumping duties through the interaction between a Northern firm, a Southern one and an administering authority in charge of setting an antidumping procedure. The goods from the South are assumed to be ethically unsound while those from the North are ethically sound. Both firms compete on price in order to satisfy the demand of the North. We show that a smear campaign engaged by the domestic firm may influence the antidumping duty by reducing the credence of the consumers in the Southern good. Moreover it can discourage the foreign firm to actively cooperate in the antidumping investigation and this reaction of the Southern firm may increase the antidumping duty.
    Keywords: Antidumping,Facts available,Social quality,Smear campaign,Ethics,Protectionism
    Date: 2018–09–24
  30. By: Urmeneta, Roberto
    Date: 2018–10–09
  31. By: Birg, Laura
    Abstract: This paper studies the effect of a change in the mandatory manufacturer rebate on wholesale prices for pharmaceuticals on competition by parallel imports. First, it analyzes the effect of a manufacturer rebate on competition by parallel imports in a two-country model. An increase in the manufacturer rebate increases the market share of parallel imports. Second, the paper exploits a policy reform in Germany in 2010, which increased the manufacturer rebate by 10 percentage points. Using a data set with prescription drugs with competition from parallel imports, I estimate the e¤ect of the change in the manufacturer rebate on competition by parallel imports. Estimation results suggest that an increase in the manufacturer rebate has increased the market share of parallel imports and the number of importers.
    Keywords: parallel imports,manufacturer rebate,pharmaceuticals,regulation
    JEL: F12 I11 I18 F12 I11 I18
    Date: 2018

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