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on International Trade |
| By: | Rita Cappariello (Bank of Italy); Milan Damjanovic (Bank of Slovenia); Michele Mancini (Bank of Italy); Filippo Vergara Caffarelli (Bank of Italy) |
| Abstract: | Production networks in the European Union (EU) and the United Kingdom (UK) are highly integrated and Brexit poses a threat to supply and demand linkages across the Channel. In a world of Global Value Chains (GVCs), tariffs might be more harmful than in a world where trade is purely direct. In this paper we highlight the features of GVC-trade between the EU and the UK, disentangling the complex network of bilateral EU-UK value-added flows. Assuming that following Brexit the UK adopts the same Most-Favoured-Nation tariff schedule as the EU, we compute the direct and indirect costs of these tariffs, taking into account the EU-UK GVC-trade patterns. Tariffs would add almost 1 percentage point to the cost of manufacturing inputs in the UK, while the corresponding input cost in the EU would be only marginally affected, despite some heterogeneity at the country-level. |
| Keywords: | Brexit, tariffs, global value chains |
| JEL: | D57 F13 F15 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_468_18&r=int |
| By: | Karemera, D. |
| Abstract: | Abstract The Trans-Atlantic Trade and Investment Partnership (TTIP) agreement has the potential to intensify agricultural trade between the United States and the European Union. In particular, the cooperation on non-tariff barriers including food safety standards and sanitary and phytosanitary issues will expand agricultural trade. Using bilateral trade data at the U.S. state level, we empirically assess the impacts of a TTIP harmonization of food safety regulatory standards on US state agricultural exports to the E.U. We provide the first economic analysis of the possible TTIPagreement with policy implications for individual U.S. states. Quarterly trade series pertaining to major ports in the US and the MRLs that exemplify differences in food safety standards across the Atlantic are used. Deploying state-of-the-art gravity models and probit equations that address the high frequency of missing trade, we find that MRLs significantly diminish agri-food trade. The results reveal that a 10% reduction in MRL stringency would promote trade by nearly 6%. If the final provisions endorse the Codex MRLs, the TTIP agreement would boost US agricultural exports to the EU by more than one billion dollars a year. Coastal states with large agricultural sectors benefit the most from the reforms induced by a TTIP agreement. Acknowledgement : The authors acknowledge the financial support from the National Institute of Food and Agriculture (USDA NIFA grant award 2015-38821-24356 and, U.S. Department of Agriculture, Evans-Allen project number SCX-101-08-15. Kermit Rose provided able computer programming and data tabulation assistance |
| Keywords: | Food Consumption/Nutrition/Food Safety |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277020&r=int |
| By: | Chiara Bentivogli (Bank of Italy); Tommaso Ferraresi (IRPET); Paola Monti (Bank of Italy); Renato Paniccià (IRPET); Stefano Rosignoli (IRPET) |
| Abstract: | This work uses input-output techniques to analyse the value added content of the interregional and international trade of Italian regions, which are characterized by marked differences in their level of development and production structure. Regions differ from one another in their degree of dependence on international and other regions’ demand: in those of the Centre and North, the contribution of foreign demand to regional production of value added is greater than in Southern Italy, where the role of national demand is much more important. Most regions show a significant participation in global value chains for given amounts of exports to other countries and regions which, however, are smaller overall in relation to total production in the South. The latter is also somewhat peripheral in the geography of international trade and depends to a greater extent on national suppliers; moreover, the supply ties between the different regions of the South are weak compared with the ties with some regions of the Centre and North. |
| Keywords: | global value chains, input-output tables, trade in value added, regional trade |
| JEL: | F1 F14 F15 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_462_18&r=int |
| By: | Alfonso Expósito (Department of Economic Analysis and Political Economy, University of Seville, Calle San Fernando 4, 41004 Sevilla (Spain).); Juan A. Sanchis-Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | This paper analyses the involvement of small firms in international trade activities by identifying the comprehensive impact of innovation. Specifically, we study how innovation introduced by these firms determines entrepreneurial decision-making process regarding whether to engage in exporting and/or importing. Moreover, we account for several innovation outputs (product, process, and organisational/managerial innovation) when estimating the potentially interrelated decisions of whether to export and/or import. Results confirm the simultaneity of firms’ exporting and importing decisions and consequently these two decisions should be estimated together when analysing the influence incurred by the introduction of alternative types of innovation on said decisions. Furthermore, findings show complementarity between types of innovation to be relevant in explaining export and import decisions made by SMEs. Specifically, cumulative effects as a result of combining product and process innovation, as well of product, process and organisational innovation, are highly significant in explaining export decisions, while in the case of imports, the combination of product and organisational innovation is shown to be significant. These findings lead to major policy and managerial implications regarding the promotion of SMEs’ participation in international trade flows through alternative innovation strategies. |
| Keywords: | innovation, exporting, importing, SME |
| JEL: | F14 O30 L20 M21 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1814&r=int |
| By: | Byrne, Stephen (Central Bank of Ireland); Rice, Jonathan (Central Bank of Ireland) |
| Abstract: | This paper estimates the potential loss in trade between Ireland and the United Kingdom arising from increases in non-tariff barriers following the UK’s exit from the European Union. Using a difference gravity specification, we estimate a 9.6 per cent decline in trade flows between the UK and Ireland from an increase in border waiting times. This equates to a 1.4 per cent decline in total Irish exports and a 3.1 per cent decline in total Irish imports. We also present evidence of heterogeneity in the exposure (measured by time-sensitivity) across different types of goods, with beverages,fresh foods and raw materials being most exposed. For trade in fuels, chemicals and imperishable foods we do not find evidence of an effect from an increase in time. |
| Keywords: | Brexit, Non-tariff Barriers, International Trade, Gravity Model |
| JEL: | E5 G01 G17 G28 R39 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:wpaper:6/rt/18&r=int |
| By: | Salamat Ali; Richard Kneller; Chris Milner |
| Abstract: | This paper examines the differential effects of domestic and international transportation distances on exports by Pakistan firms. It uses novel data on exports at the transaction-level and on the location of firms within the country, ports of entry/exit and modes of shipment over time. The study exploits a shift in the US security policy and IV estimation to circumvent the potential endogeneity of manufacturing location choice. The paper finds that access to trade-processing facilities is a key limiting factor to exports. On average, the marginal trade-restricting effect of domestic distance to port of exit is larger than that of international distance to ports of entry in export markets. Both elements of distance have negative effects on the intensive margin of firms’ exports and positive effects on extensive margins, albeit with absolutely larger effects due to domestic than international distance. |
| Keywords: | trade costs; domestic distance; structural gravity; trade margins; Pakistan |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:18/13&r=int |
| By: | Jean-marc SOLLEDER (University of Geneva) |
| Abstract: | This paper explores the extent to which market power considerations explain levels of export taxes. Market power is proxied by the inverse import demand elasticities faced by exporters. The paper first provides estimates of market power for exporting countries and products at the 6-digit level of the Harmonized System. It then finds a positive correlation between market power and export taxes. This result supports the theory that, when unconstrained in their trade policy choices, countries take their market power into account when setting their export taxes. |
| Keywords: | Market power, export taxes, export policy, import demand elasticities |
| JEL: | F13 F14 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:4561&r=int |
| By: | Chad P. Bown (Peterson Institute for International Economics); Douglas Irwin (Peterson Institute for International Economics) |
| Abstract: | President Donald Trump has long made clear his disdain for the World Trade Organization (WTO) and has reportedly often stated his desire to pull the United States out of the organization. Given that the president withdrew the United States from the Trans-Pacific Partnership and repeatedly threatened to withdraw from the North American Free Trade Agreement, merely floating the idea that the United States would pull out of the WTO has set off alarm bells in Washington and around the world. Before Trump became president, a US withdrawal from the WTO had never been considered within the realm of possibility. It now raises several important questions. Bown and Irwin address two of them: First, what would be the consequences for US tariffs if the United States withdrew from the WTO? Second, does the president have the legal authority to pull the United States out of the organization and impose higher tariffs without congressional approval? A decision by President Trump to withdraw the United States from the WTO—if deemed legal under US law—could deal a disastrous blow to America’s foreign trade and would likely cripple an organization that has helped foster peaceful commercial relations for over seven decades. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb18-23&r=int |
| By: | Rodrik, Dani |
| Abstract: | Many of the exports of developing countries are channeled through global value chains (GVCs), which also act as conduits for new technologies. However, new capabilities and productive employment remain limited so far to a tiny sliver of globally integrated firms. GVCs and new technologies exhibit features that limit the upside and may even undermine developing countries' economic performance. In particular, new technologies present a double whammy to low-income countries. First, they are generally biased towards skills and other capabilities. This bias reduces the comparative advantage of developing countries in traditionally labor-intensive manufacturing (and other) activities, and decreases their gains from trade. Second, GVCs make it harder for low-income countries to use their labor cost advantage to offset their technological disadvantage, by reducing their ability to substitute unskilled labor for other production inputs. These are two independent shocks that compound each other. The evidence to date, on the employment and trade fronts, is that the disadvantages may have more than offset the advantages. |
| Keywords: | Economic Growth; GVC; International Trade |
| JEL: | O33 O40 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13220&r=int |
| By: | Taguchi, Hiroyuki |
| Abstract: | This article examines the structural changes in domestic value creation in exports in the involvement process of global value chains with a focus on eight Asian economies, through the quantitative analyses using the updated OECD value-added-trade data. The major research questions are: what is an average turning point in terms of per capita GDP in regaining domestic value added share to exports, and which industries, the export industry or supporting industries, have contributed to regaining domestic value added share to exports. The empirical analyses using the dynamic panel analysis, the vector auto-regression estimation for causality tests and the sectoral observation of the decomposed domestic value creations in all the sample economies could identify an accurate turning point at 2,270 US dollars as per capita GDP in regaining domestic value added share to exports, and could also show that the supporting industries including service sector, rather than the exporting industry itself, have played an active role to push up the domestic value added share to exports in the involvement process of global value chains. |
| Keywords: | Domestic value creation, Global value chains, Asian economies, Value-added-trade data, Supporting industries |
| JEL: | F14 L60 O53 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89741&r=int |
| By: | Jaghdani, T. Jamali; Tleubayev, A.; Gotz, L.; Svanidze, M. |
| Abstract: | We study the effects of Russia s food import ban implemented in August of 2014 on the Russian dairy market based on the price transmission and price dispersion approach. Cheese is the only dairy product for which domestic production has significantly increased since the implementation of the import ban whereas cheese imports have strongly decreased. Results show that for most of the regional price pairs under study, cointegration of cheese prices between producing and consuming regions has substantially increased with the import ban. In 29 out of the 39 price pairs cointegration emerged after the implementation of the import ban. Furthermore, in 5 price pairs the degree of long term price transmission and speed of adjustment improved significantly during the import ban regime. Moreover, the dispersion of cheese prices between consuming metropoles and cheese producing regions has significantly increased. The export ban, reduction in import level of cheese and milk, and increase in agricultural price index has affected the dispersion significantly. We conclude that in spite of the observed reinforced integration of regional markets, the market efficiency in general has not increased necessarily by the boosted domestic cheese trade. Acknowledgement : This study was conducted within the STARLAP project, financially supported by the German Ministry of Food and Agriculture (BMEL) through the Federal Office for Agriculture and Food (BLE). |
| Keywords: | Agricultural and Food Policy |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277373&r=int |
| By: | Bosker, Maarten; Westbrock, Bastian |
| Abstract: | This paper argues that the determinants of the welfare gains from trade have fundamentally changed with the emergence of a global production network. Towards this end, we study a Ricardian trade model featuring trade in intermediate inputs, and develop a novel comparative statics approach to decompose the total welfare effect of an arbitrary trade cost shock into several meaningful, easily quantifiable, channels. This decomposition uncovers a unique feature of supply chain trade: the gains from trade are not so much determined by a country's access to the technologies and markets of its direct trade partners, but rather by a country's network exposure to countries further up- or downstream in the global production network. We develop a set of simple statistics to measure each country's network exposure, show how it predicts the gains from trade, and identify each country's key trade intermediaries, i.e., countries that primarily determine its network exposure. |
| Keywords: | Gains from trade; global production network; network diffusion; network exposure; Supply Chains; trade intermediation |
| JEL: | F10 F11 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13285&r=int |
| By: | Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA)); Olivier Cadot |
| Abstract: | To move forward trade facilitation agenda in ASEAN, this brief presents three recommendations that focus on rules of origin, transparency of non-tariff measures (NTM), and NTM streamlining. Although the ASEAN Trade in Goods Agreement's rules of origin have a relatively simple structure, these require supervision as recent research puts their ad valorem equivalent at about 3.40%. Meanwhile, the transparency of NTMs rests on two pillars: accurate data, and open dissemination and dynamic disciplines. Last but not least, the move for NTM streamlining should not be viewed as a trade negotiation issue because NTMs are not purely trade policy instruments. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2017-07&r=int |
| By: | Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | The 2016 US presidential election resulted in the populist Donald Trump becoming the 45th President of the United States. While many observers assume that this reflects a transitory phase of populism in the US, a closer analysis suggests that there will be a structural populist threat for the US, the West and the world economy. There is survey evidence that US voters consider the inequality which has emerged in the US over many years as unacceptable. At the same time the Lindh-McCall survey results show that the relative majority of US voters expect that big companies rather than government will correct this inequality. This is illusory and wishful thinking and will serve to create continued voter frustration for the lower half of households – this refers to the poorer half of US households – and populism could indeed expand on the basis of such frustration for many years to come. The main drivers of rising inequality in the US, namely ICT expansion, financial globalization and the rise of China’s exports will continue in the medium term so that US voters’ frustration is a structural problem that cannot easily be remedied and that has consequences for transatlantic and global economic relations as well as security policy implications. While the decline of the income share for the lower half of income earners in Western Europe has been rather modest in 1981-2015, the decline of that share in the US has been dramatic, namely from 20% to 13%. The EU is nevertheless threatened by US populism since its political representatives are trying to export their ideology and approach to Italy and other Western continental EU countries. In the UK, a subtle populism is already becoming more apparent under the heading of BREXIT. If the EU27 could defend the model of the Social Market Economy and export this system to Asia and Africa while joining political forces with ASEAN – and possibly China – to defend the multilateral economic order, European impulses could help to contain US populism. |
| Keywords: | Political economy, collective decision making, populism, inequality, international economics |
| JEL: | D7 F00 F02 P16 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei253&r=int |
| By: | Emanuel Ornelas; John L. Turner; Grant Bickwit |
| Abstract: | We study how a preferential trade agreement (PTA) affects international sourcing decisions, aggregate productivity and welfare under incomplete contracting and endogenous matching. Contract incompleteness implies underinvestment. That inefficiency is mitigated by a PTA, because the agreement allows the parties in a vertical chain to internalize a larger return from the investment. This raises aggregate productivity. On the other hand, the agreement yields sourcing diversion. More efficient suppliers tilt the tradeoff toward the (potentially) beneficial relationship-strengthening effect; a high external tariffs tips it toward harmful sourcing diversion. A PTA also affects the structure of vertical chains in the economy. As tariffs preferences attract too many matches to the bloc, the average productivity of the industry tends to fall. When the agreement incorporates "deep-integration" provisions, it boosts trade flows, but not necessarily welfare. Rather, "deep integration" improves upon "shallow integration" if and only if the original investment inefficiencies are serious enough. On the whole, we offer a new framework to study the benefits and costs from preferential liberalization in the context of global sourcing. |
| Keywords: | Regionalism; hold-up problem; sourcing; trade diversion; matching; incompletecontracts. |
| JEL: | F13 F15 D23 D83 L22 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:016857&r=int |
| By: | Jean-marc SOLLEDER (Université de Genève) |
| Abstract: | This paper explores the extent to which market power considerations explain levels of export taxes. Market power is proxied by the inverse import demand elasticities faced by exporters. The paper first provides estimates of market power for exporting countries and products at the 6-digit level of the Harmonized System. It then finds a positive correlation between market power and export taxes. This result supports the theory that, when unconstrained in their trade policy choices, countries take their market power into account when setting their export taxes. |
| Keywords: | Market power, export taxes, export policy, import demand elasticities |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:4560&r=int |
| By: | Antonis Kotidis (University of Bonn); Dimitris Malliaropulos (University of Piraeus and the Bank of Greece) |
| Abstract: | This paper examines the role of imported intermediate inputs and credit constraints on exports adjustment. For identification, we study an episode of capital controls on outflows that exogenously restricted firms’ ability to pay for imports and the large-scale credit crunch that followed the imposition of controls in Greece in June 2015. Exploiting within-firm variation across sectors, we find that lack of imported inputs explains the drop in exports at the intensive margin, while lack of long-term credit is associated with adjustments at the extensive margin. Multinationals overcome liquidity constraints because of access to parents’ internal funds, but not import constraints because of stronger linkages for specialized inputs abroad. Our findings point to a novel result: the importance of both channels – real and finance – in jointly determining trade adjustment, and the different implications for the margins of trade |
| Keywords: | Firm Exports; Imported Intermediate Inputs; Credit Constraints; Capital Controls; Multinational Activity |
| JEL: | F10 F14 F15 F23 F36 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:251&r=int |
| By: | Dengler, Benedikt; Hoekman, Bernard |
| Abstract: | This paper presents novel reduced form evidence on the association between international trade agreements that include disciplines on public procurement practices reflected in the WTO Agreement on Government Procurement (GPA) and preferential trade agreements (PTAs) and public sector imports following the 2008 financial crisis. The results are suggestive of such international disciplines acting as an effective commitment device: GPA membership is associated with a significantly higher import share following the crisis than is observed for countries that are not members. We also find evidence that the GPA and PTAs that cover public procurement are partial substitutes. |
| Keywords: | commitment; Government Procurement Agreement; public procurement; Trade agreements; WTO |
| JEL: | F13 F15 H57 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13266&r=int |
| By: | Santos, Eleonora; Khan, Shahed |
| Abstract: | Previous empirical evidence searching for externalities from Foreign Direct investment in Portugal showed mixed results. Using a new database containing 5,045 Portuguese manufacturing firms grouped by technological trajectories, we investigate the occurrence and magnitude of externalities from FDI in 1995-2007. We find both positive and negative externalities in scale-intensive and supplier-dominated industries. The magnitude of externalities is higher in the current period than in lagged periods. Because positive externalities outweigh the negative externalities, on the whole a 1% increase in foreign presence (measured by turnover) increases the Total Factor Productivity of domestic firms by 0.42 percentage points. Thus, the Investment Promoting Agency should capture foreign projects in those technological groups. |
| Keywords: | Technological Trajectories, Multinational Corporations, Productivity. |
| JEL: | F23 L60 O32 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89620&r=int |
| By: | Ayako Obashi; Fukunari Kimura (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Many people have a vague notion that the room for expanding international production networks is almost exhausted and that this is why international trade has slowed down since the recovery from the great trade collapse. This paper presents evidence against such belief in the East Asian context by classifying finely disaggregated international trade data into five categories based on the stages of the production process. Our thorough data examinations show that the slowdown in world trade and East Asian trade was attributed mainly to sluggish growth in trade of primary goods and processed raw materials. In contrast, East Asian trade in manufactured parts and components and the assembled end products within international production networks mostly seen in machinery industries, continued to expand steadily, underpinned by the intensive margin growth. We argue that East Asian production networks did not slow down and the potentiality of the production networks has not been exhausted yet. |
| Keywords: | slow trade, global value chains, machinery trade, extensive and intensive margins, difference-in-difference |
| JEL: | F14 F23 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2018-03&r=int |
| By: | Santos, Eleonora; Khan, Shahed |
| Abstract: | The dynamic effects of Foreign Direct Investment in Portugal allowed for a structural shift in exports towards technology-intensive activities. However, since 2000, several factors, largely triggered by the global financial crisis, led to a drop in industrial output along with a reduction in FDI attraction. This paper assesses the efficacy of the Investment Promoting policies to stimulate innovation and promote the absorptive capacity at national level, by analysing the relationship between FDI inward flows and a set of innovation and absorptive capacity indicators. Results show that the gap between Portugal and the EU-28 average is far from being closed. Rather than being an automatic process triggered by foreign presence, we suggest that the convergence based on the productivity, can be assisted by a reinforcement of supply-side measures, and the coordination between the industrial policy and the instruments of the Investment Promotion Policy, in strategic industries. |
| Keywords: | Industrial Policy, Productivity, Investment Promotion Policies, Innovation, Convergence, Technological Gap |
| JEL: | F15 F23 O11 O33 O40 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89738&r=int |
| By: | Yao Amber Li (Institute of Emerging Market Studies, Hong Kong University of Science and Technology); Valérie Smeets (Aarhus University); Frédéric Warzynski (Aarhus University) |
| Abstract: | In this paper, we use a detailed production survey in the Chinese manufacturing industry to estimate both revenue and physical productivity and relate our measurements to firms' trade activity. We find that Chinese exporters for largely export oriented products like leather shoes or shirts appear to be less efficient than firms only involved on the domestic market based on the standard revenue productivity measure. However, we show strong positive export premium when we instead consider physical productivity. The simple and intuitive explanation of our results is that exporters charge on average lower prices. We focus more particularly on the role of processing trade and find that price differences are especially large for firms involved in this type of contractual arrangements. We suggest three reasons to explain this result. First, lower prices may simply be due to a mechanical effect as processing trade products are not subject to tariffs nor have to pay VAT. Second, some types of processing trade activities entail that the processing trade firm receives the inputs for free from the contracting firm, therefore artificially depressing the values of inputs or materials used for the firm's production. Third, lower prices may also be a consequence of transfer pricing, as multinationals involved in FDI in China may alter the price charged for inter-company transactions to shift funds within the organization. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201858&r=int |
| By: | Bettina Peters; Mark J. Roberts; Van Anh Vuong |
| Abstract: | In this article we study differences in the returns to R&D investment between firms that sell in international markets and firms that only sell in the domestic market. We use German firm-level data from the high-tech manufacturing sector to estimate a dynamic structural model of a firm's decision to invest in R&D and use it to measure the difference in expected long-run benefit from R&D investment for exporting and domestic firms. The results show that R&D investment leads to a higher rate of product and process innovation among exporting firms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest in R&D more frequently than firms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of firms that differ in their export market exposure. Simulating the introduction of trade tariffs we find a substantial reduction in firms' productivity growth and incentive to invest in R&D. |
| JEL: | F14 L25 O3 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25228&r=int |
| By: | Jin, S.; Guo, H.; Wang, H.H.; Delgado, M.S. |
| Abstract: | Growing investment from developing and transition economies flows to global agri-food industry, among which Chinese outward foreign direct investment (OFDI) in the agri-food industry attracted much more global attention in recent years. In this paper, the authors documented the evolution of Chinese OFDI in the agri-food industry from 1950s. Besides, conditional logit model is mainly used to econometrically analyze how the host country characteristics affect Chinese firms country choices on investing in foreign agri-food industry based on the panel data between 2006 and 2015. Both the conditional logit result and the robustness check (negative binomial result) show that Chinese OFDI in the agri-food industry has both motivations of agricultural resources seeking and market seeking. The result of sub agri-food industries indicates that market seeking motivation is distinct in the agriproduct processing and food manufacturing industries. Chinese OFDI flowing to these two industries are attracted by both GDP and population growth rate. In addition, lack of sufficient food is also an attraction to Chinese OFDI to flow into target country s food manufacturing industry. Acknowledgement : The authors would like to thank research assistant Yue Jin, Suxian Ma, Sai Du for their helpful support. The authors gratefully acknowledge the support from the National Natural Science Foundation of China (NNSFC-71273233, 71333011) and the Major Program of the Key Research Institute of Chinese Ministry of Education (No. 15JJD790032). |
| Keywords: | Marketing |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277186&r=int |
| By: | Corsetti, Giancarlo; Crowley, Meredith A; Han, Lu |
| Abstract: | In this paper, we provide novel micro evidence from UK customs transactions which supports the view that the currency in which exports and imports are invoiced is a good proxy for the currency in which firms set prices. First, we document that pricing to market, in the form of destination-specific markup adjustment, is substantial only for export shipments which are invoiced in the destination market's currency. Conversely, we find no destination-specific markup adjustments by firms that invoice a shipment in either their own currency or a vehicle currency. Second, we document that while the aggregate shares of invoicing currencies for the UK's exports and imports are stable over time, firms often change their invoicing currency; this practice is more pronounced for firms that use multiple invoicing currencies, are multi-product, and serve several destinations. |
| Keywords: | currency choice; firm pricing; invoicing currency; Markups |
| JEL: | F12 F14 F31 F41 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13282&r=int |
| By: | Faber, Marius (University of Basel) |
| Abstract: | Robots in advanced economies have the potential to reduce employment in offshoring countries by fueling reshoring. Using robots instead of humans for production may reduce the relative cost of domestic production and, in turn, lower demand for imports from offshoring countries. I analyze the impact of robots on employment in an offshoring country, using data from Mexican local labor markets between 1990 and 2015. A recent literature shows that the effect of robots on local employment can be estimated by regressing the change in employment on exposure to domestic robots in local labor markets. I similarly construct a measure of exposure to foreign robots , assuming that the share of US robots competing with Mexican labor is proportional to that industry's initial reliance on Mexican imports. Using robot penetration in the rest of the world (i.e., neither in Mexico nor in the US) as an instrument for domestic and foreign robotization, I show that the use of robots in the US has a robust and sizable, negative impact on employment in Mexico by reducing exports to the US. The effect is not driven by pre-existing trends, the automotive industry or migration patterns. It is strongest for low-skilled machine operators and technicians in highly robotized manufacturing industries as well as high-skilled managers and professionals in the service industry. |
| Keywords: | Technology: trade; robots; reshoring; offshoring |
| JEL: | F16 O14 O33 |
| Date: | 2018–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2018/27&r=int |
| By: | Hélène Latzer (Université Paris1 Panthéon-Sorbonne - Centre d'Economie de la Sorbonne and Université Saint-Louis (CEREC) - Belgique); Florian Mayneris (Université du Québec à Montréal(UQAM)- Canada) |
| Abstract: | This paper analyses the relationship between a country's income distribution and its exports' unit values. Using bilateral export flows, we not only confirm the positive relationship between a country's average income and the quality of its exports, but further identify a heterogeneous impact of income inequality: we find a greater income spread to be deneficial for an exporter's unit values in the case of poor countries only. These results are robust to the inclusion of controls for other determinants of export unit values, as well as to the use of alternative measures of income inequaltity and of the quality index. We finally show that this heterogeneous impact of income inequality along the average income dimension is consistent with models emphasizing the role of the composition of local demand in detemining the comparative advantage of countries in terms of quality |
| Keywords: | Income distribution; Export Unit Values; Product quality; Trade; Home market effect |
| JEL: | F12 L15 O15 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:18031&r=int |
| By: | Jakhotiya, Girish |
| Abstract: | The recent developments in the global market are a reasonable evidence of the growing inability of the WTO to sustain integrated economic performance of its member countries. The latest trade dispute between the USA and China cannot be restricted to an apparent analysis of the flaws in the WTO mechanism. This dispute should be viewed as a tip of the iceberg in the context of a growing disequilibrium in the entire globe, caused by complex socio-economic and geo-political factors. These factors are so deep rooted that they are to be treated with certain fundamental reforms. But to ascertain the definition and direction of such reforms we need to agree and understand that the unfortunate process of global economic collapse has already begun. This paper presents the intangible intricacies of this process of collapse by connecting the socio-economic factors with the geo-political factors. In other words, this paper is an attempt to integrate various micro issues to bring out a realistic macro picture of the global economic collapse. This paper defines the fearful journey of socio-economic deterioration, based on author’s impartial view of the world economy and the serious undercurrents in five different socio-cultural groups defining the globe. These five groups are further influenced by a few important economies, which have been causing the overall socio-economic turbulence leading towards an unprecedented global collapse. |
| Keywords: | Economic collapse, globalization, economic equality, rich, poor, sustainable growth, WTO, BRICS, geo-political factors, global deterioration, fire of frustration |
| JEL: | F5 O11 |
| Date: | 2018–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89428&r=int |
| By: | Wang, X.; Dietrich, J.P.; Lotze-Campen, H.; Biewald, A.; Munson, T.S.; Muller, C. |
| Abstract: | The study analyzes the impacts of agricultural trade liberalization on cropland use dynamics, focusing not only on the total amount of cropland area, but also on the spatial allocation among regions. With an agro-economic dynamic optimization model, the study is able to analyze the leakage effects resulted from trade liberalization as well as climate impacts on crop yields, by using crop yields simulation output from a vegetation model based on different climate models. In the scenario of high-end climate impacts on crop yields, although trade liberalization mitigates the negative impacts of climate impacts on agricultural supply and spares the land resource on the global scale, it further deteriorates the virtual trade of cropland among regions. The absolute amount of total cropland imbalance will increase by 272.2 million hectares at the end of the twenty-fist century. Latin America and China are the main exporters of cropland relate to food production, while Sub-Saharan Africa and South Asia are the regions of exporting cropland. By considering climate projection uncertainty, the study finds that the general trend of cropland displacement remains, although there exists a wide range for the amount of traded cropland in Sub-Saharan Africa, South Asia and Latin America. Acknowledgement : |
| Keywords: | Environmental Economics and Policy |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276997&r=int |
| By: | Kellard, Neil M; Kontonikas, Alexandros; Lamla, Michael J; Maiani, Stefano; Wood, Geoffrey |
| Abstract: | All Foreign Direct Investment (FDI) involves risk. Supplementing the IB literature, we assess the effects of financial system risk on FDI trends. Specifically, we propose a new theoretical paradigm combining institutional risk aversion and institutional affinity, suggesting MNE-generated FDI will be sensitive to sovereign and bank-related risks. Employing a large panel of bilateral FDI holdings from 112 origin countries in the Eurozone, results show that financial stability in origin and host countries, matters for FDI. Policymakers in countries seeking to attract FDI should be attentive to both domestic conditions and the financing environment that MNEs encounter in their home countries. |
| Date: | 2018–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:esy:uefcwp:23409&r=int |
| By: | abe Harraf (University of Northern Colorado) |
| Abstract: | The purpose of this study is to examine the decision Eurasian countries face with joining an economic bloc or remaining independent. The two different economic blocs discussed throughout this study are the European Union (EU) and the Eurasian Economic Union (EAEU). The former is an overall integration of countries, whereas the latter integrates countries through just the economies. Research and data evaluation revealed Eurasian countries face the greatest chance of economic success if they become members of the Eurasian Economic Union. It offers the countries certain advantages, such as trade freedoms, while reducing the political and social risks to other member states. Countries with similar economies and sanctions for free trade also reduce industry conflicts and obstacles for companies conducting business in Eurasia. |
| Keywords: | Eurasia(n), Industry, Economic Bloc(s), European Union, Eurasian Economic Union |
| JEL: | O57 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:6508528&r=int |
| By: | Belke, Ansgar; Domnick, Clemens |
| Abstract: | This paper examines the linkages between the trade of goods and financial assets. Do both flows behave as complements (implying a positive correlation) or as substitutes (negative correlation)? Although a classic topic in international macroeconomics, the empirical evidence has remained relatively scarce so far, in particular for the Euro area where trade and financial imbalance played a prominent role in the build-up of the European sovereign debt crisis. Consequentially, we use a novel dataset, providing estimates for financial flows and its four main categories for 42 countries and covering the period from 2002-2012, to test the so-called trade-finance nexus. Since theoretical models stress that both flows might be influencing each other simultaneously, we introduce a novel time-varying instrumental variable based on capital control restrictions to estimate a causal effect. The results of the gravity regressions support theories that underline the complementarity between exports and capital flows. When testing the trade-finance nexus for different types of capital flows, the estimated coefficient is most pronounced for foreign direct investment, in line with theories stressing informational frictions. Robustness checks in the form of different estimation methods, alternative proxies for capital flows and sample splits confirm the positive relationship. Interestingly, the trade-finance nexus does not differ among countries belonging to the EMU, the European Union or among core and peripheral Euro area countries. |
| Keywords: | Capital flows,economic integration,Heckscher-Ohlin paradigm,interaction between trade integration and capital mobility,trade |
| JEL: | F14 F15 F21 F41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:269&r=int |
| By: | Juan de Lucio (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Raúl Mínguez (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Asier Minondo (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain). Research aliate of Instituto Complutense de Estudios Internacionales.); Francisco Requena (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | The severe reduction in domestic demand between 2008 and 2013 in Spain forced many firms to seek new customers in foreign markets. In this paper, we explore whether the increase in the crisis-motivated number of new exporters led to a larger number of regular exporters once domestic demand returned to pre-crisis levels. Using an instrumental variable approach, we find that a 10% increase in new exporters led to a 5% increase in new regular exporters. Since the economic crisis was not anticipated in Spain, our results establish a causal link between experimentation in foreign markets and discovery of new regular exporters. This evidence is consistent with alternative narratives where _rms had capacity constraints, were uncertain about the pro_tability of their export operations, and averse to risk or satis_ed with their non-exporter status prior to the crisis. |
| Keywords: | capacity constraints, risk aversion, experimentation, exports, Spain, Great Recession |
| JEL: | F10 F23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1812&r=int |
| By: | Rikard FORSLID; OKUBO Toshihiro |
| Abstract: | In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multiproduct firms concentrate to the larger market as a result of trade liberalization. Given some relocation costs, we also find that these firms will expand their product range in the larger market while firms in the smaller market will contract their product scope. These effects are magnified with firm-level productivity. The findings are consistent with Japanese manufacturing firm data. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:18075&r=int |
| By: | Fabian J. Baier (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | The City of London has been the global leader for the provision of international banking services since the 1980s when Thatcher-era deregulation, followed by the EU single market program, stimulated big international FDI inflows – mainly of US banks – into the UK. The “single passport” rule allowed international banks in the UK to serve the whole of the EU28 market from London whose supply-side dynamics contributed to economic growth in the UK and a rising output share of the UK banking system in British GDP. With BREXIT there are serious challenges for the City since the passporting of banks will end and the regulatory framework will be seriously adjusted; EU equivalence rules for UK banks that might be valid after the implementation of BREXIT cannot be a substitute for passporting so that lower FDI inflows and higher FDI outflows in the banking sector should be expected; inflow dynamics should also be shaped by international M&A dynamics influenced by the real Pound depreciation in 2016, while the prospects of reduced EU market access post-BREXIT also became relevant in 2017/18 and should influence the FDI dynamics of the UK – a similar pattern might occur in the BREXIT implementation year (i.e. 2019) and the following adjustment period where the change in City banks’ access to the single market will matter; as regards the latter, quasi-tariff-jumping FDI outflows from the UK can be expected where the FDI of City of London banks could go primarily to the EU27/Eurozone or the US. The empirical findings confirm the expected FDI pattern for the UK banking sector – overall FDI inflows in the wake of the BREXIT referendum have increased, in line with the Froot-Stein effect, while FDI inflows to the UK banking sector have reduced. |
| Keywords: | Brexit, UK, FDI, banking, financial markets |
| JEL: | F02 F4 F21 G1 G2 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei254&r=int |
| By: | Anita Prakash (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Africa’s young demography and developing economy require integration and expansion into the global value chains. Asia can share its growth experience with Africa. Africa can benefit from trade, investment, and development cooperation through a measured combination of investments and development assistance. The policy challenge facing the countries of Africa and their development partners is to balance official development assistance programmes with foreign direct investment initiatives, as physical, institutional, and human resource capacities must grow simultaneously |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2018-01&r=int |
| By: | Julia Grübler (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Since the beginning of 2017, a paradigm change in international trade policy is observed. While protectionist agendas are on the rise, the EU and Japan signed an Economic Partnership Agreement (EPA) on 17 July 2018. It is the EU’s most ambitious agreement with any Asian state. The study estimates the effect of the EU-Japan EPA for Austria based on qualitative analysis and a structural gravity model. The model predicts small but positive effects of around 0.01% of GDP for Austria. Highest gains are expected for manufactured goods, particularly in the medium- and high-tech sectors. Abstract in German language Seit Anfang des Jahres 2017 vollzieht sich in der internationalen Handelspolitik ein Paradigmenwechsel. Während protektionistische Agenden an Fahrt gewinnen, unterzeichneten die EU und Japan am 17. Juli 2018 ein Wirtschaftspartnerschaftsabkommen (EPA). Es ist das ambitionierteste Abkommen der EU mit einem asiatischen Staat. Die Studie schätzt die Effekte des EU-Japan-EPA für Österreich mithilfe von qualitativen Analysen und einem strukturellen Gravitationsmodell ab. Für Österreich wurde ein kleiner, aber positiver Effekt von rund 0,01% des BIP errechnet. Es wird erwartet, dass vor allem der Fertigungsbereich in Mittel- und High-Tech-Sektoren von diesem Abkommen profitieren wird. |
| Keywords: | economic partnership, free trade, EPA, FTA, EU, Japan, JEFTA, South Korea, tariffs, non-tariff measures, structural gravity model |
| JEL: | D58 F13 O24 Q17 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:434&r=int |
| By: | Christophe Gouel; David Laborde |
| Abstract: | Climate change effects on agricultural yields will be uneven over the world with a few countries, mostly in high latitudes, that may experience gains, while most will see average yield decrease. This paper aims at quantifying the role of international trade in attenuating the effects of climate change by allowing the expression of the new climate-induced pattern of comparative advantages. To do this, we develop a quantitative general equilibrium trade model where the representation of acreage and land use choices is inspired from modern Ricardian trade models but also consistent with theoretical and empirical literature on land use choices. The model is calibrated on spatially explicit information about potential yields before and after climate change coming from the agronomic literature. The results show that the climate-induced yield changes generate large price movements that incentivize adjustments in acreage and trade. The new trade pattern is very different from the current one, showing the important role of trade flows in adapting to climate change. This is confirmed by larger welfare losses from climate change when adjustments in trade flows are constrained versus when they are not. |
| JEL: | D58 F18 Q17 Q54 R14 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25221&r=int |
| By: | Losilla, L.; Engler, A.; Otter, V. |
| Abstract: | There is a continuing debate regarding firms internationalization pathways and the approaches used for firm categorization, resulting in controversial identification of the degree of firms globalization. The aim of this paper is to establish a framework to examine the changes in the internationalization strategies of agricultural export companies from emerging economies over time. Thereby seeking to identify conceptual and empirical differences in what is known of export firms acting in non-agricultural sectors in industrialized countries. The matrix of multi-nationality developed by Aggarwal et al. (2011) is extended and tested to classify 233 Chilean fresh fruit exporters according to their internationalization strategies. A longitudinal analysis is conducted over a seven-year period (2009-2015) to explore the dynamics on that internationalization process. Most firms are transregionally (65.12%) and globally oriented (16.06%), mainly following a linear internationalization path in terms of number of markets but acting more as born-global firms in terms of psychic distance. This study provides a more inclusive and nuanced framework than those used in previous studies to classify the level of firms internationalization. It also contributes to existing literature by studying companies from the agricultural sector in Chile longitudinally, as a prime example of emerging economies from Latin America. Acknowledgement : The authors acknowledge the support of the German Academic Exchange Service (DAAD) and the University of Costa Rica on doing this research. |
| Keywords: | International Relations/Trade |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277400&r=int |
| By: | Sakuyama, T. |
| Abstract: | This article aims to clarify the linkage between electoral rules and politicians protectionist motives. Specifically, hypotheses on the positive impacts of the proportional representation formula and constituency size on candidates attitudes toward the Trans-Pacific Partnership (TPP) are tested by estimating an ordered probit model using survey data on Japan s national elections in 2012, 2013, and 2016. By extending the coverage to the upper house elections, this article adds value to the previous literature. The estimation results confirm that proportional representation formula and constituency size have a positive impact on candidates support for the TPP in the lower house election in 2012, but have no influence in the upper house elections in 2013 and 2016. Moreover, constituency size is no longer significant once the sample is limited to single-member district candidates even in the 2012 lower house election. It is therefore concluded that, contrary to the previous literature, constituency size that manifests electoral incentives is not a notable cause of candidates protectionist bias. In contrast, it is found that candidates political ideology, such as their affinity for agriculture and Asia as well as antipathy to small government and immigrants, is proved to be the main drivers of candidates protectionist motives. Acknowledgement : I am grateful to the participants to the Annual Conference of the Japan Public Choice Society at Kwansei Gakuin University in 2017. This work is supported by a Grant-in-Aid for Scientific Research from the Japan Society for the Promotion of Science, Grant Number 16K07911. |
| Keywords: | International Relations/Trade |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:277151&r=int |
| By: | Guy Abel (School of Sociology and Political Science, Shanghai University); Michael Brottrager (Department of Economics, Johannes Kepler University); Jesus Crespo Cuaresma (Department of Economics, Vienna University of Economics and Business); Raya Muttarak (School of International Development, University of East Anglia) |
| Abstract: | Despite the lack of robust empirical evidence, a growing number of media reports attempt to link climate change to the ongoing violent conflicts in Syria and other parts of the world, as well as to the migration crisis in Europe. Exploiting bilateral data on asylum seeking applications for 157 countries over the period 2006-2015, we assess the determinants of refugee flows using a gravity model which accounts for endogenous selection in order to examine the causal link between climate, conflict and forced migration. Our results indicate that climatic conditions, by affecting drought severity and the likelihood of armed conflict, played a significant role as an explanatory factor for asylum seeking in the period 2011-2015. The effect of climate on conflict occurrence is particularly relevant for countries in Western Asia in the period 2010-2012 during when many countries were undergoing political transformation. This finding suggests that the impact of climate on conflict and asylum seeking flows is limited to specific time period and contexts. |
| Keywords: | forced migration, climate change, conflict |
| JEL: | F22 Q54 D74 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp272&r=int |
| By: | Gupta, Apoorva (University of Nottingham); Patnaik, Ila (National Institute of Public Finance and Policy); Shah, Ajay (National Institute of Public Finance and Policy) |
| Abstract: | The positive correlation between firm productivity and export status is well established. This correlation can arise from multiple alternative casual models. We investigate these relationships, harnessing the transition of several firms from serving the domestic market to exporting, in a dataset of Indian firms from 1989 to 2015. Each firm which made the transition is matched against a control which did not. The transitions take place across many years, thus permitting a matched event study in firm outcomes. We find there is self-selection of more productive firms into exporting. Firms that make the transition become bigger, but there is little evidence of learning by exporting, of improvements in productivity right after exporting commences. However, there is evidence of mprovement in productivity of export starters a couple of years before they begin to export. |
| JEL: | F43 L1 D24 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:npf:wpaper:18/243&r=int |
| By: | Abel, Guy; Brottrager, Michael; Crespo Cuaresma, Jesus; Muttarak, Raya |
| Abstract: | Despite the lack of robust empirical evidence, a growing number of media reports attempt to link climate change to the ongoing violent conflicts in Syria and other parts of the world, as well as to the migration crisis in Europe. Exploiting bilateral data on asylum seeking applications for 157 countries over the period 2006-2015, we assess the determinants of refugee flows using a gravity model which accounts for endogenous selection in order to examine the causal link between climate, conflict and forced migration. Our results indicate that climatic conditions, by affecting drought severity and the likelihood of armed conflict, played a significant role as an explanatory factor for asylum seeking in the period 2011-2015. The effect of climate on conflict occurrence is particularly relevant for countries in Western Asia in the period 2010-2012 during when many countries were undergoing political transformation. This finding suggests that the impact of climate on conflict and asylum seeking flows is limited to specific time period and contexts. |
| Keywords: | forced migration, climate change, conflict |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:6625&r=int |
| By: | Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Based on a panel data set for 38 European countries over the period 1995-2014 and by using the definition of ’foundational competitiveness’, which we operationalise as GDP per working-age individual at PPP, this paper analyses how much trading partners matter for the national competitiveness of European countries. Results based on a growth regression framework show that higher growth of trading partners’ competitiveness has a positive impact on the growth of national competitiveness. We find evidence that there are diminishing national returns to increasingly competitive trading partners, but we cannot find strong evidence for a lock-in effect of Austria with the CESEE region. Furthermore, regression results on the determinants of the Austrian bilateral export market shares with European trading partners over 1995-2016 provide evidence that Austria’s export performance is sensitive to changes in its trading partners’ business cycle position, but not more sensitive than that for other selected eurozone countries. |
| Keywords: | competitiveness, export performance, exports, trade, Austria, Europe |
| JEL: | F14 L60 L80 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:435&r=int |
| By: | Rashesh SHRESTHA (Economic Research Institute for ASEAN and East Asia (ERIA)); Ian COXHEAD |
| Abstract: | Indonesia has enjoyed a long spell of sustained and relatively rapid economic expansion, largely on the back of strong commodity prices. No commodity boom lasts forever, however, and threats to the continuation of this growth are mounting. Indonesia now faces the challenge of locking in gains and setting a course to sustain future development in less favourable times. Post-2000 growth differs from earlier experiences in that exports of agricultural products, especially palm oil, now play a leading role. In contrast to the country’s earlier oil and gas export boom, the gains from agricultural export growth accrue mainly to private actors that include corporations, smallholders, and the agricultural labour force, with a much smaller share passing through to government budgets. Government can no longer simply mandate the use of funds for development purposes; many other actors and institutions are involved. It is reasonable to assume that the benefits from such a decentralised export boom would be widely diffused, with relatively large effects on rural and farm households and lower-skilled workers. However, this boom has been accompanied by a sharp rise in inequality and virtually no real wage growth. Moreover, while spending rose robustly during the boom, it is not clear whether poor, farm-based households have chosen (or been able) to use the gains to smooth consumption or to invest for future generations. The capacity to lock in gains at micro and macro levels is subject to significant policy influence. The maxim that ‘while the sun is shining is the best time to repair the roof’ applies: currently healthy global economic conditions present an opportune moment for Indonesian policymakers to reflect and to look ahead, with an eye towards achieving optimal development policy settings |
| Keywords: | development policy, commodity market, palm oil, poverty |
| JEL: | F16 J43 O11 O13 O15 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2018-04&r=int |