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on International Trade |
| By: | Chang, Pao-Li (School of Economics, Singapore Management University); Nguyen, Phuong T. B. (School of Economics, Singapore Management University) |
| Abstract: | In this paper, we characterize the position of Singapore in global value chains and identify Singapore's key upstream and downstream trade partners. We trace how the position of Singapore in global value chains has changed in the past two decades: whether it has moved upstream or downstream, how involved it is in global value chains, how its trend compares with other major Asian exporting countries (China, Japan, Korea and Taiwan), and which key sectors of Singapore play a major role in these global trade networks. |
| Keywords: | Global value chain; Gross export decomposition; Value-added exports; Up-stream/downstream trade partners |
| JEL: | F14 F15 |
| Date: | 2019–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2019_001&r=all |
| By: | Sabina Szymczak (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland) |
| Abstract: | This paper examines the relationship between the relative position of industries in Global Value Chains (GVCs) and wages in ten Central and Eastern European countries in the period 2005-2014. We combine GVC measures of global import intensity of production, upstreamness (distance from final use), and the length of the value chain (based on WIOD) with micro-data on workers from EU-SILC. We find that the wages of CEEC workers are higher when their industry is at the beginning of the chain, far from final demand (high upstream) or at the end (low upstreamness – sectors close to final demand) than in the middle. Secondly, wage changes depend on the interplay between upstreamness and GVC intensity. In sectors close to final demand, greater production fragmentation, measured either by global import intensity or by vertical specialisation, is associated with lower wages. Higher upstream, this effect is not sustained. |
| Keywords: | wage, GVC, upstreamness, production fragmentation, CEECs |
| JEL: | F14 F16 J31 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:53&r=all |
| By: | Patrick Bisciari (Economics and Research Department, National Bank of Belgium) |
| Abstract: | This paper reviews a sample of studies on the long-term impact of Brexit on GDP and welfare for both the UK and EU economies. It considers only official and academic studies published before the end of November 2018. The paper highlights the very wide range of results, especially for the UK, reflecting great uncertainty. The negative economic impact is more limited for the EU27 and for most Member States. Small open economies closely related to the UK are more hit than others. This is the case for Ireland due to geographical proximity, for Luxembourg with its economy specialising in financial services and for Cyprus and Malta as they are Commonwealth countries. When only the trade channel of Brexit is estimated, GDP (or welfare) losses are around 1 percentage point of GDP in the Netherlands and in Belgium while these average 0.6 percentage point of GDP in the EU27. For a same Brexit scenario, the results depend on the model specifications, on the channels considered and on some key assumptions. For the UK higher GDP/welfare losses are found for reduced-form approaches, when a productivity shock is added and, also for the EU, for global value chain approaches. Higher GDP/welfare losses are also associated with higher non-tariff trade barriers. Results are sensitive to some parameters such as the reaction of trade volumes to changes in tariffs and non-tariff trade barriers (trade elasticities). Reaching a Free Trade Agreement could limit the GDP/welfare losses both for the UK and the EU Member States compared to an orderly no deal (WTO scenario). If the UK remains in the Single Market or the Customs Union, the GDP/welfare losses induced by Brexit could be even more contained. This justifies the economic interest for both the UK and the EU Member States to reach an agreement on their future relationship. |
| Keywords: | Brexit, trade, integration, EU |
| JEL: | F13 F14 F15 F17 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201901-366&r=all |
| By: | Bart Los; Marcel P. Timmer |
| Abstract: | We provide a unified framework for measuring bilateral exports of value added. We outline a general methodology that encompasses the measures introduced by Johnson and Noguera (2012) (value added consumed abroad) and Los et al. (2016) (value added in exports), to which we refer as VAX-C and VAX-D, respectively. In addition we suggest a novel third measure, VAX-P, which indicates the value added used abroad in the final stage of production. We show that they can all be derived with the method of hypothetical extraction in a general input-output model. This is helpful in comparing and contrasting their characteristics. As a corollary, we show that for VAX-C and VAX-P the sum of bilateral measures is equal to the corresponding aggregate measure, but that this is generally not true for VAX-D. We illustrate all measures with empirical examples computed on the basis of the World Input-Output Database. These indicators can found at www.wiod.org. |
| Keywords: | Trade, Global Value Chains, Hypothetical extractions, Input-Output model |
| JEL: | F1 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2019-03&r=all |
| By: | Naoto JINJI; Ayumu TANAKA |
| Abstract: | After a long and heated argument on whether international trade in cultural goods should be an exception to free trade, UNESCO's Convention on Cultural Diversity (CCD) was adopted and entered into force in 2007 to protect and promote cultural diversity. This paper provides the rst empirical assessment of the impact of CCD on trade in cultural goods. By using trade data for 2004{2010 and employing the rst-differenced difference-in-differences method, we estimate the effects of ratifying CCD on the imports of cultural goods and on the extensive margin of cultural imports. Our estimation results provide little evidence that CCD is an instrument of disguised protectionism. Furthermore, we nd that CCD contracting countries tend to increase the country margins of cultural imports for some subcategories of cultural goods more than CCD non-contracting countries. This change implies that CCD contributes to the promotion of cultural diversity. |
| Keywords: | trade and culture; cultural goods; UNESCO's Convention on Cultural Diversity; Difference-in-differences |
| JEL: | F13 F14 Z10 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-18-008&r=all |
| By: | Arif, Rabia; Jamil, Nida |
| Abstract: | This paper proposes a new methodology through which a list of specific intermediate inputs can be generated for a strategic reduction in tariff rates to climb up the export value chain. This methodology can be extended across all the manufacturing sectors in countries where the technology is constrained and the economy relies on great chunk of imported goods. We argue that by reducing the tariffs on selective range of inputs; low priced, high quality intermediate inputs can be made available to the local manufacturer that will lead to better quality exports of the final product. We take a conservative approach to propose a sequence of tariff reduction on intermediate inputs based upon its importance ranging from a scale of being extremely important to less important, ultimately to promote high value added exports. We do so, by comparing the average quality of each respective intermediate input available to the local manufacturer with the quality of the same intermediate input imported from abroad to strategically propose the final list of intermediate inputs that should be considered for tariff reduction (at HS-6 Digit Code). Next, a cross country comparison of tariff rates between Pakistan, India and Sri Lanka is done to show where the potential of tariff reductions exist for Pakistan. Finally, this list at HS-6 digit code is extended at HS-8 digit code to further precisely identify the inputs. We present the case of Pakistan’s textile sector, and apply this methodology as an illustration to identify a list of intermediate inputs for strategic reductions in tariffs. |
| Keywords: | intermediate inputs, tariff, exports,textile, indusrial policy |
| JEL: | F13 F14 L52 L67 |
| Date: | 2018–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90380&r=all |
| By: | Bruno Smichowski; Cédric Durand (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); Steven Knauss (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) |
| Abstract: | This article explores the variety of socioeconomic outcomes from global value chains (GVCs) participation through a crosscountry analysis. In order to bridge the methodological and theoretical gap between GVCs critical insights and recent uses of the framework by international institutions, it proposes a novel definition of trade in GVCs and elaborates new indicators of GVC participation and value capture. Using these indicators and data from the Trade in Value added database it presents new descriptive statistics. Through principal component and cluster analyses it identifies three distinctive development patterns related to various degrees and modes of GVC participation: social upgrading mirage, reproduction of the core, and unequal growth. It finally discusses the complementarity of these patterns and explains why the results obtained challenge the narrative that GVC participation per se is a recipe for development. |
| Date: | 2018–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01817426&r=all |
| By: | Emine Boz; Nan Li; Hongrui Zhang |
| Abstract: | A view receiving increased support is that the height of trade costs in prime export sectors has a strong effect on current account balances: countries specializing in sectors that face relatively high trade costs, such as services, tend to run current account deficits, and similarly, countries specializing in low trade cost sectors, such as manufacturing, tend to run current account surpluses. To test this view, we first infer comparative advantages and trade costs, by sector, within a large sample of countries for the period 1970–2014. Then we construct effective trade costs—trade costs weighted by sectoral comparative advantage—to gauge the height of a country’s overall trade costs. Results reveal that, although higher effective exporting costs are associated with lower current account balances, their impact is quantitatively limited; furthermore, the effective costs of importing often have no statistically significant effect. |
| Date: | 2019–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/8&r=all |
| By: | Faezeh Raei; Anna Ignatenko; Borislava Mircheva |
| Abstract: | Over the last two decades, world trade and production have become increasingly organized around global value chains (GVC). Recent theoretical work has shown that countries can benefit from participation in GVCs through multiple channels. However, little is known empirically about the economic importance of supply chains. We use the Eora MRIO database to compute different measures of GVC participation for 189 countries and illustrate global patterns of supply chains as well as their evolution over time in order to contribute to this topic. We find that GVC-related trade, rather than conventional trade, has a positive impact on income per capita and productivity, however there is large heterogeneity and the gains appear more signifcant for upper-middle and high-income countries. We document that “moving up” to more high-tech sectors while participating in major supply chains does take place but is not universal, suggesting other factors matter. We confirm the findings of the standard gravity literature for GVC trade; highlighting the key role of institutional features such as contract enforcement and the quality of infrastructure as determinants of GVC participation. |
| Date: | 2019–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/18&r=all |
| By: | Hsu, Wen-Tai (School of Economics, Singapore Management University); Lu, Yi (School of Economics and Management, Tsinghua University); Wu, Guiying Laura (Division of Economics, Nanyang Technological Univeristy) |
| Abstract: | This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 7.1%. The gains are decomposed into a Ricardian component and two pro-competitive ones. The procompetitive effects account for 20% of the total gains. Moreover, the total gains from trade are 13 - 31% larger than what would result from the formula provided by ACR (Arkolakis, Costinot, and Rodríguez-Clare 2012), which nests a class of important trade models, but without pro-competitive effects. We find that head-to-head competition is the key reason behind the larger gains, as trade flows do not reflect all of the effects via markups in an event of trade liberalization. One methodological advantage of this paper’s quantitative framework is that its application is not constrained by industrial or product classifications; thus it can be applied to countries of any size. |
| Keywords: | Gains from trade; Markups; Pro-competitive effects; ACR formula; Head-to-head competition; Chinese economy |
| Date: | 2019–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2019_002&r=all |
| By: | Kozo Kiyota (Keio Economic Observatory, Keio University); Toshiyuki Matsuura (Keio Economic Observatory, Keio University); Lionel Nesta (1. Universite Cote d'Azur, 2. OFCE Sciences Po. Paris, 3. SKEMA Business School) |
| Abstract: | We present a simple framework that allows us to examine the cross-country exporter productivity gap without accessing confidential firm-level data. This gap depends on the three readily available statistics: the productivity gap between two countries; the export participation rates; and export premia. This gap holds irrespective of the distribution underlying firm productivity and irrespective of the presence of fixed costs. Under specific conditions, allocative efficiency may affect the exporter productivity gap. The empirical analysis globally validates this exercise. |
| Keywords: | International productivity gap, Export premia, Competitiveness, Meta analysis |
| JEL: | F1 D24 |
| Date: | 2018–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2018-022&r=all |
| By: | Bertrand Gruss; Suhaib Kebhaj |
| Abstract: | This paper presents a comprehensive database of country-specific commodity price indices for 182 economies covering the period 1962-2018. For each country, the change in the international price of up to 45 individual commodities is weighted using commodity-level trade data. The database includes a commodity terms-of-trade index—which proxies the windfall gains and losses of income associated with changes in world prices—as well as additional country-specific series, including commodity export and import price indices. We provide indices that are constructed using, alternatively, fixed weights (based on average trade flows over several decades) and time-varying weights (which can account for time variation in the mix of commodities traded and the overall importance of commodities in economic activity). The paper also discusses the dynamics of commodity terms of trade across country groups and their influence on key macroeconomic aggregates. |
| Date: | 2019–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/21&r=all |
| By: | Asche, Frank (Institute for Sustainable Food Systems and School of Forestry Resources and Conservation, University); Gaasland, Ivar (Department of Economics, BI Norwegian Business School); Straume, Hans-Martin (* Department of Economics, BI Norwegian Business School); Vårdal, Erling (University of Bergen, Department of Economics) |
| Abstract: | While variation in unit value most commonly has been associated with quality in the trade literature, observed differences in prices between markets might also be explained by variation in market concentration and the degree of competition. Using transaction data on Norwegian exports of salmon, we introduce a Herfindahl index as a measure of competition in a standard gravity model. We find that competition typically is weaker in small and distant markets that due to high trade costs are served by relatively few firms. We argue that the anti-competitive impact of trade costs may explain price differentiation between markets even for homogeneous products. |
| Keywords: | Gravity; Trade costs; Market concentration; Salmon |
| JEL: | C13 F14 Q22 |
| Date: | 2018–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2018_011&r=all |
| By: | Tuccio, Michele; Wahba, Jackline; Hamdouch, Bachir |
| Abstract: | This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, it explores whether households with return and current migrants bear different political preferences and behaviours than non-migrant families. Once controlling for the double selection into emigration and return migration, findings suggest that having a returnee in the household increases the demand for political and social change, driven by returnees mostly from Western European countries, who have been exposed to more democratic norms at destination. However, we find a negative impact of having a current migrant on the willingness to change of the left-behind household, driven by migrants to non-West countries, where the quality of political and social institutions is lower. Our results are robust to also controlling for destination selectivity. |
| Keywords: | International migration,Political change,Transfer of norms,Morocco |
| JEL: | D72 F22 O15 O55 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:309&r=all |
| By: | Efobi, Uchenna; Asongu, Simplice; Beecroft, Ibukun |
| Abstract: | This paper examines the effect of foreign aid in the terrorism-FDI nexus while considering the extent of domestic corruption-control (CC). The empirical evidence is based on a sample of 78 developing countries. The following findings are established: the negative effect of terrorism on FDI is apparent only in countries with higher levels of CC; foreign aid dampens the negative effect of terrorism on FDI only in countries with high levels of CC. The result is mixed when foreign aid is subdivided into its bilateral and multilateral components. Our findings are in accordance with the stance that bilateral aid is effective in reducing the adverse effect of terrorism on FDI. Multilateral aid also decreases the adverse effect of other forms of terrorism that can neither be classified as domestic nor as transnational. Policy implications are discussed. |
| Keywords: | Conflict; Developing countries; Foreign investment; Foreign aid; Terrorism |
| JEL: | D74 F21 F35 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92056&r=all |
| By: | Hippolyte D'Albis (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Ekrame Boubtane (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper evaluates the fiscal effect of international migration. It first estimates a structural Vector Autoregressive model on a panel of 19 OECD countries over the period 1980-2015, in order to quantify the impact of a migration shock. Empirical results suggest that international migration had a positive impact on the economic and fiscal performance of OECD countries. It then proposes an original theoretical framework that highlights the importance of both the demographic structure and the intergenerational public transfers. Hence, OECD countries seems to have benefited from a \demographic dividend" of international migration since 1980. |
| Keywords: | Immigration,public spending,overlapping-generation model,panel VAR |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01852411&r=all |
| By: | Robert Boyer (PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, IDA - Institut des Amériques - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche) |
| Abstract: | Distinctive political compromises prevailed and explained various brands of capitalism observed from WWII to the early 1990s. Is this key finding by régulation research been still valid given the wide diffusion of common structural changes since the 2000s: slow productivity in the industrialized world, overwhelming impact of finance, rise of inequalities within many Nation-States in response to deregulation, social and political polarization, open conflict between capitalism and democracy, the trading place between mature and emerging economies? These stylized facts challenge most economic theories but they can be explained by an institutionalist and historical approach that also helps in redesigning a relevant macroeconomic approach. Each capitalism brand displays specific complementarities among institutional forms and their growing interactions imply more their complementarity than their frontal competition. Consequently, all capitalisms have been transformed but they do not converge towards a canonical configuration. The rise of nationalist movements may challenge the present international relations but they should not underestimate the economic and social costs of their protectionist strategy. |
| Keywords: | Capitalism variety,Institutional complementarity,Global finance,Internationalization,Deregulation,National and international inequality,Capitalism and democracy,International relations |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01908095&r=all |
| By: | Cédric Durand (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); William Milberg |
| Date: | 2018–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01850438&r=all |
| By: | Agnès Bénassy-Quéré (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Matthieu Bussière (Banque de France - Banque de France); Pauline Wibaux (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The debate on trade wars and currency wars has re-emerged since the Great recession of 2009. We study the two forms of non-cooperative policies within a single framework. First, we compare the elasticity of trade flows to import tariffs and to the real exchange rate, based on product level data for 110 countries over the 1989-2013 period. We find that a 1 percent depreciation of the importer's currency reduces imports by around 0.5 percent in current dollar, whereas an increase in import tariffs by 1 percentage point reduces imports by around 1.4 percent. Hence the two instruments are not equivalent. Second, we build a stylized short-term macroeconomic model where the government aims at internal and external balance. We find that, in this setting, monetary policy is more stabilizing for the economy than trade policy, except when the internal transmission channel of monetary policy is muted (at the zero-lower bound). One implication is that, in normal times, a country will more likely react to a trade "aggression" through monetary easing rather than through a tariff increase. The result is reversed at the ZLB. |
| Keywords: | tariffs,exchange rates,trade elasticities,protectionism |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01820745&r=all |
| 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 Antonio 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: | Macroeconomic Impacts of Globalisation,Unemployment,Panel Data Models |
| Date: | 2018–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01895223&r=all |
| By: | Safojan, Romina (Tilburg University, Center For Economic Research) |
| Abstract: | This paper explores the causal impact of exports on the share of informal labor in the Argentinean manufacturing sector. Using an instrumental variable approach to address potential endogeneity concerns, I show that an exogenous 10 percentage points increase in export intensity induces a reduction of the informality rate of 2.2 percentage points. Then, I explore the channel through which exports affect informality. By differentiating exports according to the income group of their destinations, I find that the aggregate effect of exports is explained by the sales to high-income countries. Moreover, the effect is partially explained by an increase in the complexity of the tasks performed in the jobs. Overall, the evidence suggests that under an increase in the demand of higher quality exports, the manufacturing firms increase their productivity by reducing their share of informal workers. |
| Keywords: | exports; labor informality; productivity; task complexity; Argentina |
| JEL: | F16 J24 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:de04345d-1e8f-4b40-afa2-0feb810ad5e0&r=all |
| By: | Gaygysyz Ashyrov; Jaan Masso |
| Abstract: | Until recently, studies have not reached any general agreement on how a corrupt environment influences foreign investments. Furthermore, far too little attention has so far been paid to how corruption relates to the performance of foreign and domestically owned firms. This paper exploits cross-sectional firm-level data from the fifth round of the Business Environment and Enterprise Performance Survey (BEEPS V) for the purpose of investigating how bribery is associated with FDI and firm performance. By using various econometric estimation strategies, we find that foreign owned firms tend to pay larger bribes compared to domestically owned firms, while the negative size of these expenses on firm productivity is larger for foreign owned firms than domestically owned firms in highly corrupt countries. This study suggests that developing countries should fight against informal payments in bureaucracy to create corruption free environments, so that multinationals are incentivized to invest in their countries. |
| Keywords: | corruption, FDI, firm performance |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:114&r=all |
| By: | Altangerel, Khulan (Tilburg University, School of Economics and Management) |
| Abstract: | This Ph.D. dissertation consists of three chapters on immigration economics. The main objective of the thesis is to explore how legal and unauthorized immigration systems interact and explore some of its consequences based on the case of the United States. Chapter 2 studies the U.S. immigration reform of 1986 and how it affected the migration dynamics of Mexican immigrants. Chapter 3 investigates the effect of documentation on immigrants' labor market outcomes. Chapter 4 studies the connection between a selective legal immigration system and the prevention of unauthorized immigration. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:954c6300-249e-496c-8cef-01ab4172207b&r=all |
| By: | Shahbaz, Muhammad; Balsalobre-Lorente, Daniel; Sinha, Avik |
| Abstract: | This study examines the association between foreign direct investment (FDI) and carbon emissions for the Middle East and North African (MENA) region in 1990–2015, including biomass energy consumption as an additional determinant of carbon emissions. We apply the generalized method of moments (GMM) to validate the existence of the pollution haven hypothesis (PHH). The N-shaped association is also validated between FDI and carbon emissions. The link between economic growth and carbon emissions is inverted-U and N-shaped; that is, it satisfies the environmental Kuznets curve (EKC) hypotheses. Biomass energy use lowers carbon emissions, and the causality analysis reveals that FDI causes CO2 emissions. Clearly, the results confirm the existence of a feedback effect between economic growth and carbon emissions. The connection between biomass energy use and CO2 emissions is also bidirectional. The empirical findings suggest policy makers to design comprehensive trade and energy policies by targeting the cleaner production practices, for not only to ensure environmental sustainability, but also to fulfil the objectives of sustainable development goals. |
| Keywords: | Foreign Direct Investment, Carbon Emissions, Middle East and North Africa, Generalized Method of Moments, Biomass Energy |
| JEL: | Q5 |
| Date: | 2019–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:91729&r=all |
| By: | Geoffrey Barrows (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique); Hélène Ollivier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | With asymmetric climate policies, regulation in one country can be undercut by missions growth in another. Previous research finds evidence that regulation erodes the competitiveness of domestic firms and leads to higher imports, but increased imports need not imply increased emissions if domestic sales are jointly determined with export sales or if emission intensity of manufacturing adjusts endogenously to foreign demand. In this paper, we estimate for the first time how production and emissions of manufacturing firms in one country respond to foreign demand shocks in trading partner markets. Using a panel of large Indian manufacturers and an instrumental variable strategy, we find that foreign demand growth leads to higher exports, domestic sales, production, and CO2 emissions, and slightly lower emission intensity. The results imply that a representative exporter facing the average observed foreign demand growth over the period 1995-2011 would have increased CO2 emissions by 1.39% annually as a result of foreign demand growth, which translates into 6.69% total increase in CO2 emissions from Indian manufacturing over the period. Breaking down emission intensity reduction into component channels, we find some evidence of product-mix effects, but fail to reject the null of no change in technology. Back of the envelope calculations indicate that environmental regulation that doubles energy prices world-wide (except in India) would only increase CO2 emissions from India by 1.5%. Thus, while leakage fears are legitimate, the magnitude appears fairly small in the context of India. |
| Keywords: | leakage,trade and environment,product mix,technological change |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01945848&r=all |
| By: | Stéphane Auray; Michael B. Devereux; Aurélien Eyquem |
| Abstract: | This paper explores the relationship between exchange rate adjustment and trade policy in a simple New Keynesian open economy macro model. We show that movement in exchange rates have a direct implication for trade policy when governments choose tariffs endogenously. In particular, we show that the strategic incentive to impose trade restrictions is greater under flexible exchange rates than when exchange rates are fixed. This surprising result goes counter to conventional wisdom, which suggests that pressures to impose trade restrictions are greater when countries resist adjustments in exchange rates. But in fact, we show that the empirical evidence supports the model predictions. The paper goes on to characterize the path of equilibrium sustainable tariffs in the presence of sticky prices and flexible exchange rates. In our baseline model, tariff rates will rise in response to monetary policy shocks, but fall in response to productivity shocks. Estimating an SVAR model, we also find evidence in support of this prediction. |
| JEL: | F13 F33 F41 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25517&r=all |
| By: | Sara Signorelli (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | In recent yearsWestern countries are expressing growing concerns about the regulation of migration flows and many are considering adopting some form of selective immigration policy. This paper analyzes the labor market effects of one of such reforms introduced in France in 2008 with the aim of encouraging the inflow of foreign workers with skills that are scarce among the local labor force. The analysis relies on administrative employer-employee data and it is based on a difference-in-differences approach. Results show that the reform increased the hiring of foreign workers in target occupations without causing any harm to native employment. As a result, the overall stock of labor grew in these jobs. Entry wages are lowered by 4% among natives and by 9% among foreigners, suggesting that these two groups may not be perfect substitutes, even when they are employed for the exact same task. Yet, the negative pressure on salaries seems to disappear after the first three years, as opposed to the positive impact on employment. The effects are stronger for the occupations with the most severe lack of native candidates and for those with an average salary largely above the minimum wage, indicating that the reform was successful in attracting candidates with rare skills and relatively high productivity. |
| Keywords: | Immigration,Employment,Wage,Occupations,France |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01983071&r=all |
| By: | Hippolyte D'Albis (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Ekrame Boubtane (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper shows that the macroeconomic and fiscal consequences of international migration are positive for OECD countries, and suggests that international migration produces a demographic dividend by increasing the share of the work- force within the population. The estimation of a structural vector autoregressive model on a panel of 19 OECD countries over the period 1980-2015 reveals that a migration shock increases GDP per capita through a positive effect on both the ratio of working-age to total population and the employment rate. International migration also improves the fiscal balance by reducing the per capita transfers paid by the government and per capita old-age public spending. To rationalize these findings, an original theoretical framework is developed. This framework highlights the roles of both the demographic structure and intergenerational public transfers and shows that migration is beneficial to host economies characterized by aging populations and large public sectors. |
| Keywords: | Immigration,public finances,overlapping-generation model,panel VAR |
| Date: | 2018–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01955539&r=all |
| By: | Davide Furceri; Swarnali Ahmed Hannan; Jonathan David Ostry; Andrew K. Rose |
| Abstract: | We study the macroeconomic consequences of tariffs. We estimate impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963-2014. We find that tariff increases lead, in the medium term, to economically and statistically significant declines in domestic output and productivity. Tariff increases also result in more unemployment, higher inequality, and real exchange rate appreciation, but only small effects on the trade balance. The effects on output and productivity tend to be magnified when tariffs rise during expansions, for advanced economies, and when tariffs go up, not down. Our results are robust to a large number of perturbations to our methodology, and we complement our analysis with industry-level data. |
| Date: | 2019–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/9&r=all |
| By: | Blagov, Boris |
| Abstract: | This paper analyses the effects of exchange rate uncertainty on the pricing behaviour of import firms in the euro area. Uncertainty is measured via the volatility of the structural shocks to the exchange rate in a non-linear VAR framework and is an important determinant of import prices. An increase in exchange rate uncertainty is associated with a fall in prices on average, which suggests that the exchange rate risk is borne by the importers. The analysis utilizes a dataset on industrial import prices, disaggregated by origin of imports. Controlling for intra- and extra-euro area trade is important. |
| Keywords: | exchange rate uncertainty,exchange rate pass-through,non-linearities,import price inflation,extra-euro area trade |
| JEL: | C11 C22 F31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:789&r=all |
| By: | Esposito, Piero; Collignon, Stefan; Schicchitano, Sergio |
| Abstract: | In this paper, we assess the impact of immigration and unemployment for a sample of 15 EU countries between 1997 and 2016. We test for the existence of a core-periphery dualism based on differences in macroeconomic fundamentals and labour market characteristics. We use a Panel Error Correction Model to assess the direction and persistence of the impact of immigration on domestic unemployment in the short and in the long run. In the long run, immigration is found to reduce unemployment in all peripheral-countries. In core countries, we find no long-run impact of immigration on unemployment due to substantial heterogeneity. As for short-run dynamics, we find a confirmation of the result that immigration reduces unemployment for the whole sample. Based on differences in employment protection and activity rates, larger impacts are found for Scandinavian and Anglo-Saxon countries, while lower and less significant impacts are found for Italy, Greece and Portugal. |
| Keywords: | International Migration,Unemployment,European Union,Panel Data |
| JEL: | C23 E23 F22 J61 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:310&r=all |
| By: | Pamina Koenig (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, UNIROUEN - Université de Rouen Normandie - NU - Normandie Université); Sandra Poncet (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, PSE - Paris School of Economics) |
| Abstract: | This paper studies the effect of activism on the imports of consumer products, by focusing on an event which generated massive consumer mobilization against neglecting firms, namely the collapse of the Rana Plaza building affecting the textile industry in Bangladesh. We hypothesize that this episode was a main shock in the perceived quality of clothing producers sourcing in Bangladesh. Using detailed import flows on textile goods from OECD countries, we analyze whether the imports of consumer products were affected by the disclosure of information, in countries differently exposed to the collapse. To proxy the amount of information received by individuals in different countries, we use the nationality of the firms involved in the Rana Plaza building: soon after the disaster, NGOs and the media insisted on the origin countries of the neglecting companies, publishing the list of misbehaving firms by nationality. We use a difference-indifference approach to compare the imports from Bangladesh of countries having been differently associated in the news to the Rana Plaza collapse. Results show a post-disaster decrease in imports for countries whose firms were directly involved in the Rana Plaza building. The effect has to be interpreted relatively to the evolution of imports of similar countries, however not linked to the collapsed Rana Plaza knitting factories. While aggregate imports from Bangladesh continue to increase during the whole period (2010-2016), there is a marked disruption that affects countries whose brands were named and shamed by activists and the media after the disaster. No such differential pattern is observed for non-textile goods. Our results are robust to a variety of checks. |
| Keywords: | activism,multinational firms,trade,imports,clothing industry Keywords: activism,clothing industry |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01959943&r=all |
| By: | Fornaro, Paolo; Maliranta, Mika; Rouvinen, Petri |
| Abstract: | Abstract We study immigrants’ effects on firm-level innovativeness. Managers, innovators, and other employees are considered as separate groups both in firm employment and in local areas. For each, we estimate the effects of foreignness, the share of immigrants in each group, and diversity, while controlling for an extensive set of employment and other firm characteristics. Pooled cross-section estimates suggest that a higher initial share of immigrant innovators is associated with a subsequently higher probability of a product innovation; the reverse holds for process innovation. In other words, product innovation benefits from a wider spectrum of innovator perspectives brought about by foreign influence, while process innovation suffers from it. The estimated effect for product innovation is modestly large but nevertheless indicates that a host of other covariates besides immigration are important for innovation. When measured by a fractionalization index, diversity among innovators does not promote product innovation. However, culturally the closest groups of migrants have a positive effect, when considered independently. Thus, in our interpretation, diversity does offer some benefits, provided that enough cultural homogeneity of the group is retained. |
| Keywords: | Immigration, Ethnicity, Diversity, Innovation, Knowledge production function, Finland |
| JEL: | D22 F22 J61 O31 |
| Date: | 2019–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:63&r=all |