nep-int New Economics Papers
on International Trade
Issue of 2019‒03‒25
35 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Trade and Economic Effects of IRC: Further Empirical Evidence from SPS and TBT Provisions By Anne-Célia Disdier; Susan F. Stone; Frank van Tongeren
  2. Influencing GVCs through Agro-Food Policy and Reform By Jared Greenville; Kentaro Kawasaki; Dorothee Flaig; Caitlyn Carrico
  3. Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit By Giammetti, Raffaele
  4. Brexit and Indirect Impact Routes through Global Value Chains By Ali-Yrkkö, Jyrki; Kuusi, Tero
  5. Trade and dietary diversity in Eastern Europe and Central Asia By Krivonos, Ekaterina; Kuhn, Lena
  6. Tariffs and Politics: Evidence from Trump's Trade Wars By Fetzer, Thiemo; Schwarz, Carlo
  7. Multinational enterprises in domestic value chains By Charles Cadestin; Koen De Backer; Sébastien Miroudot; Laurent Moussiegt; Davide Rigo; Ming Ye
  8. Job characteristics, job transitions and services trade: Evidence from the EU labour force survey By Sebastian Benz; Louise Johannesson
  9. The determinants of Foreign Direct Investment: Do statutory restrictions matter? By Fernando Mistura; Caroline Roulet
  10. The Microeconomics of New Trade Models By Alfaro, Martin
  12. The Evolution of the Treatment of Agriculture in Preferential Trade Agreements By Clara Thompson-Lipponen; Jared Greenville
  13. Export destinations and skill premium: Evidence from chinese manufacturing industries By Feicheng Wang; Chris Milner; Juliane Scheffel
  14. Wage and Markdowns and FDI Liberalization By Lu, Yi; Sugita, Yoichi; Zhu, Lianming
  15. Regional Migration and Wage Inequality in the West African Economic and Monetary Union By Esther Mirjam Girsberger; Romuald Meango; Hillel Rapoport
  16. Countries' perceptions of China's Belt and Road initiative: A big data analysis By Alicia Garcia-Herrero; Jianwei Xu
  17. Multi-product Firms, Tariff Liberalization, and Product Churning in Vietnamese Manufacturing By Thanh Doan, Ha Thi
  18. The Impact of Contract Enforcement Costs on Outsourcing and Aggregate Productivity By Johannes Boehm
  19. Technological catch-up to the national and regional frontier: Firm-level evidence for India By Shubin Yang; Sandra Lancheros; Chris Milner
  20. Analysis of instruments for the protection of the domestic market by countries that form a free trade zone with the People’s Republic of China By Volovik, Nadezhda (Воловик, Надежда)
  21. Effect of Foreign Direct Investment and Economic Growth in Nigeria By Victoria S, Kenny
  22. Food security and the functioning of wheat markets in Eurasia: A comparative price transmission analysis for the countries of Central Asia and the South Caucasus By Svanidze, Miranda; Götz, Linde; Duric, Ivan; Glauben, Thomas
  23. The economic effects of the introduction of a Russian food embargo on the economies of the EAEU countries By Firanchuk, Alexander (Фиранчук, Александр)
  24. Harmful Pro-Competitive Effects of Trade in Presence of Credit Market Frictions By Foellmi, Reto; Oechslin, Manuel
  25. Geography, Competition, and Optimal Multilateral Trade Policy By Nocco, Antonella; Ottaviano, Gianmarco; Salto, Matteo
  26. OECD Mutual Recognition System as a Tool to Reduce Export Barriers By Levashenko, Antonina (Левашенко, Антонина); Koval, Alexandra (Коваль, Александра)
  27. Separate issues of introducing non-tariff regulation measures and administering their use when moving goods across the customs border and their turnover in the customs territory of the EAEU By Balandina, Galina (Баландина, Галина)
  28. Brexit : le jeu de la poule mouillée By Catherine Mathieu; Henri Sterdyniak
  29. Trends in policy indicators on trade and environment By Grégoire Garsous
  30. Domestic Credit and Export Diversification: Africa from a Global Perspective By Augustin Kwasi Fosu; Abdul Fatawu Abass
  31. Trade Policy Uncertainty and Stock Returns By Marcelo Bianconi; Federico Esposito; Marco Sammon
  32. The Impact of Migration and Remittances on Labor Supply in Tajikistan By Enerelt Murakami; Eiji Yamada; Erica Sioson
  33. Estimating the Heterogeneous Impact of the Free Movement of Persons on Relative Wage Mobility By Naguib, Costanza
  34. Foreign direct investments and "green" consumers By Natalia Vechiu
  35. Export competitiveness - Fuel Price nexus in Developing Countries: Real or False Concern? By Kodjovi EKLOU; Stefania FABRIZIO; Roland Kangni KPODAR

  1. By: Anne-Célia Disdier (Paris School of Economics); Susan F. Stone (OECD); Frank van Tongeren (OECD)
    Abstract: Cutting trade costs, especially those stemming from non-tariff measures, is a growing priority for policy makers. One way to achieve this is for countries to improve their co-operation on regulatory matters. An avenue open to governments is to include provisions related to international regulatory co-operation (IRC) into preferential trade agreements (PTAs). However, there exists little empirical evidence of the benefits of these co-operative mechanisms. This paper provides this evidence, in the context of Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) provisions. It measures the effect of IRC mechanisms on trade flows using the latest developments in the gravity literature and the most recent data sources. The work distinguishes between different forms of co-operation implemented between countries within PTAs while also accounting for the level of commitment between partners. The estimation results suggest that PTAs including SPS and TBT measures have a significant and positive effect on trade flows, with the legal enforceability of IRC mechanisms having the strongest and most robust impact on trade flows. This result holds even when WTO-related provisions and dispute settlement procedures are controlled for, implying that binding commitments are important in maximizing post-PTA trade flows. The work shows that transparency and co-operation are significant and robust factors in increasing trade. It also reinforces the view that the impact takes some time to materialise, which is important when evaluating the effectiveness of deep IRC mechanisms.
    Keywords: gravity equation, international regulation co-operation, Sanitary and Phytosanitary, technical barriers to trade, Trade, trade agreements
    JEL: F13 F14 F15 F53 F55 C54
    Date: 2019–03–08
  2. By: Jared Greenville (OECD); Kentaro Kawasaki (OECD); Dorothee Flaig (OECD); Caitlyn Carrico (OECD)
    Abstract: Global value chains (GVCs) in agriculture and food sectors contribute to sector growth and development. However, agricultural trade is subject to significant distortions that limit trade which in turn impacts on its competitiveness world-wide. Using the OECD Metro model, this study analyses the impact of trade and domestic support policies on participation in agro-food GVCs and the benefits that flow from them. The results show that current market access barriers and distorting forms of domestic support have a negative effect not only on welfare, but also on the possible benefits from participation in agro-food GVCs. If barriers, i.e. tariffs and quotas, were removed this would offer the potential to increase welfare, increase exports of agro-food domestic value added from all countries, and promote trade by furthering GVC links through value added. This study also shows that regional trade agreements have the potential to deepen GVC linkages amongst members.
    Keywords: agricultural trade, agriculture, CGE modelling, Global value chains, regional trade agreements
    JEL: Q17 F14
    Date: 2019–02–22
  3. By: Giammetti, Raffaele
    Abstract: This paper challenges and complements existing studies on the economic impact of Brexit providing a discussion of the UK's decision to leave the EU and how it will affect international trade networks and value-added. Using the World Input-Output Database, we develop a multi-sector inter-country model that allows us to identify the channels through which the economic effects of Brexit would propagate. The inclusion of global value chains and indirect Brexit effects in the model leads to estimates that diverge with the results of the main literature. Indeed our findings, suggest that Brexit could be risky and costly not only for the UK but also for many EU countries. Furthermore, building on the Dietzenbacher and Lahr (2013) method of hypothetical expansion, we develop a second model and present the first empirical analysis on the consequences of domestic import substitution and trade diversion policies in Input-Output schemes. We found that allowing sectors and countries to partly substitute foreign products, leads to significantly lower losses for both macro-regions. In the second model, the UK and EU27 would lose, at worst, the 0.05 and 0.5 percent of value-added, respectively.
    Keywords: Brexit, trade barriers, tariffs, input-output analysis, value chains, import substitution, production networks.
    JEL: C67 F13 F14 O21 R15
    Date: 2019–03–18
  4. By: Ali-Yrkkö, Jyrki; Kuusi, Tero
    Abstract: Abstract In this study, we analyze the trade linkages between the United Kingdom (UK), Finland, and the European Union (EU). We calculate the value-added content of trade through complex global value chains (GVCs), which may involve numerous production stages and third countries. Our results show that the importance of the UK as a trading partner for Finland has decreased during the last 15 years, and the tendency has been stronger than that between the UK and other EU countries, on average. We compare the importance of the UK to that of other countries by extracting the total amount of the Finnish value added that is generated in the value chains involving individual countries. Through this comparison, we find that the UK ranks as the sixth most important country. We further decompose the total value added into components that quantify the value added that is generated through direct trade with the UK and the indirect trade that is channeled through third countries. We find that roughly one third of the total value added is generated through indirect trade and two thirds through direct trade. Our analysis also suggests that one fifth of both the Finnish and EU value-added trade to the UK passes through the UK to other countries. The main destination countries are the United States (US), Germany, and France.
    Keywords: Global value chain, Brexit, United Kingdom, Gross domestic product, Impact, Indirect, Route, Value added
    JEL: F13 F14 F23 L23
    Date: 2019–03–14
  5. By: Krivonos, Ekaterina; Kuhn, Lena
    Abstract: In public and academic debates, the linkages between agricultural markets and nutrition across the world are vividly discussed. This paper contributes to the ongoing debate by analyzing the relationship between greater openness to trade and dietary diversity. It focuses on the post-communist countries of Eastern Europe and Central Asia where trade reforms as part of the economic and political transition provide a natural experiment for studying the effects of trade openness on agricultural markets and consumer behaviour. Reduction in trade barriers, for instance in the context of the accession to the WTO and the EU, and the gradual integration with world markets after 1991 had implications for diets through changes in production, prices and incomes. We utilize country-level panel data for 26 post-communist countries in the period 1996-2013 to assess the effects of trade costs, openness to trade and incomes on dietary diversity measured by the Shannon entropy index. The results arising from fixed effects and instrumental variables estimation are consistent with previous findings that income growth affects dietary diversity positively and provide novel evidence that trade barriers reduce variety of products available in domestic markets, in particular fruits and vegetables.
    Keywords: Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, International Relations/Trade
    Date: 2019
  6. By: Fetzer, Thiemo; Schwarz, Carlo
    Abstract: Are retaliatiory tariffs politically targeted and, if so, are they effective? Do countries designing a retaliation response face a trade-off between maximizing political targeting and mitigating domestic economic harm? We use the recent trade escalation between the US, China, the European Union (EU) and the North American Free Trade Agreement (NAFTA) countries to answer these questions. We find substantial evidence that retaliation was directly targeted to areas that swung to Donald Trump in 2016 (but not to other Republican candidates running for office in the same year). We further assess whether retaliation was optimally chosen using a novel simulation approach constructing counterfactual retaliation responses. For China and particularly, for Mexico and Canada, the chosen retaliation appears suboptimal: there exist alternative retaliation bundles that would have produced a higher degree of political targeting, while posing a lower risk to damage the own economy. We further present evidence that retaliation produces economic shocks: US exports on goods subject to retaliation declined by up to USD 15.28 billion in 2018 and export prices have dropped significantly. Lastly, we find some evidence suggesting that retaliation is effective: in areas exposed to retaliation Republican candidates fared worse in the 2018 Midterm elections, and similarly Presidential approval ratings, especially among Democrats, have declined.
    Keywords: elections; political economy; populism; targeting; Tariff; Trade War
    JEL: D72 F13 F14 F16 F55
    Date: 2019–03
  7. By: Charles Cadestin; Koen De Backer; Sébastien Miroudot; Laurent Moussiegt; Davide Rigo; Ming Ye
    Abstract: Multinational Enterprises (MNEs) play an important role in host countries’ domestic value chains as part of the global activities of these companies in GVCs. MNE affiliates create directly large volumes of output, value added, international trade and jobs, and in addition they generate also important indirect effects. Foreign affiliates in host countries are not only sourcing locally produced inputs, tradeable as well as non-tradeable, but also produce final and intermediate products sold and used within the domestic economy. Based on the OECD Analytical AMNE database, this paper analyses the domestic linkages of MNE affiliates in host economies in order to get better insights in the role MNEs play across countries.
    Date: 2019–03–12
  8. By: Sebastian Benz (OECD); Louise Johannesson (OECD)
    Abstract: This report presents new cross-country evidence on labour market transitions in sectors exposed to growing volumes of international trade, and the job characteristics of workers employed in these sectors. It shows that export growth is significantly associated with lower job loss risk. In commercial services sectors, exports offer over-proportional employment opportunities to those currently outside the workforce. Men and women are not always impacted identically. For example, involuntary part time employment amongst women falls with growing export volumes, while there is no such effect for men. These results show that the distributional effects of international trade are not limited to wage effects or net changes in employment numbers and highlight the need for a comprehensive assessment of trade implications for individual workers.
    Keywords: fixed-term contracts, labour market transitions, non-standard employment, part-time work, services, Trade, worker heterogeneity
    JEL: F14 F16 J21 J63
    Date: 2019–03–18
  9. By: Fernando Mistura (OECD); Caroline Roulet (OECD)
    Abstract: Over the past two decades, governments worldwide have continued to liberalise restrictions on international investment with only occasional relapses. Yet, FDI liberalisation remains an unfinished agenda in various parts of the world and across sectors. This paper sheds light on their potential costs in terms of foregone investments. Applying an augmented gravity model, covering 60 advanced and emerging countries over the period 1997–2016, it estimates the elasticity of bilateral FDI positions and cross-border M&A activity to FDI restrictions as measured by the OECD FDI Regulatory Restrictiveness Index. Results suggest that reforms liberalising FDI restrictions by about 10% as measured by the Index could increase bilateral FDI in stocks by 2.1% on average. Effects are greater for FDI in the services sector, but even manufacturing sectors – which are typically open to FDI – are negatively affected by countries’ overall restrictiveness. Foreign equity limitations and FDI screening policies are also scrutinised.
    JEL: F15 F21 K20
    Date: 2019–03–01
  10. By: Alfaro, Martin (University of Alberta, Department of Economics)
    Abstract: I provide a uni ed framework to analyze models of monopolistic competition with firm heterogeneity a la Melitz under standard demands and any productivity distribution. By using this methodology, I disentangle the effects of trade liberalizations on the domestic market in terms of new export opportunities and tougher import competition. I show that while the former entails pro-competitive effects, contrary to what might be expected, tougher import competition has no impact on either domestic firms' prices, quantities or their survival productivity cutoff; it only affects the mass of domestic incumbents. The results applied to the case of two big economies imply that a unilateral liberalization only entails worse export conditions for the liberalizing country, thus explaining the Metzler paradox found under this setup. In a model in which firms have knowledge of their productivity and are heterogeneous, I show that the disciplinary effects from the import-competition channel are reactivated.
    Keywords: monopolistic competition; Melitz model; import competition; export opportunities; trade liberalization
    JEL: D43 F10 F12 L13
    Date: 2019–03–12
  11. By: Erdal Özmen (Department of Economics, Middle East Technical University, Ankara, Turkey); Fatma Taşdemir (Department of Economics, Sinop University, Sinop, Turkey)
    Abstract: This paper investigates whether the impacts of the main push (global financial conditions, GFC) and pull (growth) factors on capital inflows are invariant to endogenously estimated threshold levels for structural domestic conditions (SDC) represented by governance/institutional quality, trade openness, de facto international financial integration and de jure financial openness in emerging market and developing economies. Our results strongly suggest that, for all the components of capital inflows, the impact of the domestic pull factor is substantially much higher for the episodes of better governance, higher trade and de jure financial openness and de facto international financial integration. The sensitivity of non-FDI and aggregate inflows to GFC is highly significant and tends to be considerably higher for countries with better SDC. FDI inflows are found to be basically determined by the domestic pull factor across all these regimes. The impact of GFC on FDI inflows appears not to considerably change across the SDC.
    Keywords: Capital Inflows, Developing Countries, Emerging Market Economies, International Financial Integration, Financial Openness, Foreign Direct Investments, Global Financial Conditions, Governance, Panel Threshold Model
    JEL: E02 F21 F30 F32 F41
    Date: 2019–03
  12. By: Clara Thompson-Lipponen (OECD); Jared Greenville (OECD)
    Abstract: Preferential trading agreements are becoming a more common feature of the global agro food trading environment, a trend that has increased since the early 2000s. While they increasingly cover the majority of trade worldwide, there remains a question as to the extent to which their treatment of agriculture has changed over time, and whether the liberalising elements contained in these agreements are increasingly addressing distortions in world agro-food markets. This paper presents findings on the evolution of the treatment of agriculture within preferential trade agreements. Changes in various aspects of liberalisation achieved through these agreements have been explored, such as provisions related to market access, export competition and domestic support. The report finds that agriculture appears to be increasingly treated in a similar manner to other goods trade, with expansion in the scope of agreements extending to agriculture. Agreements are delivering reduced tariffs among members across the majority of agricultural commodities – however, heterogeneity of rules of origin between agreements is likely to be undermining these benefits. Reflecting multilateral rules, provisions related to Sanitary and Phytosanitary measures and Technical Barriers to Trade have become a standard feature of agreements. Overall, preferential trade agreements are strongly influenced by the multilateral framework.
    Keywords: Agricultural trade, regional trade agreements
    JEL: Q17 F14
    Date: 2019–02–27
  13. By: Feicheng Wang; Chris Milner; Juliane Scheffel
    Abstract: This paper examines the relationship between average income of export destinations and skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within-industry export share to each destination as weight, and then link it with industry-level wages and skill premium. We find that industries that export more to high-income destinations tend to pay a higher skill premium, suggesting that on average, skilled workers benefit more from high-income exports than unskilled workers. Our IV estimates confirm a causal relationship and the results are robust to various specifications. Our paper contributes to the understanding of the influence of export destinations on the uneven distributional effects of globalisation for different types of workers.
    Keywords: Export destinations; Skill premium; Manufacturing industries; China JEL Classification: F14; F16; F66; J24; J31
    Date: 2019
  14. By: Lu, Yi; Sugita, Yoichi; Zhu, Lianming
    Abstract: This paper examines whether foreign direct investment (FDI) liberalization reduces firms' monopsony power in labor markets. We estimate firm-level wage markdown, wage over marginal revenue of labor, from China's production data and identify the causal effect of FDI liberalization on wage markdown, using China's regulation changes upon its accession to the World Trade Organization. Large and productive firms, state-owned firms, exporters, and foreign firms set narrower wage markdowns. FDI liberalization widened wage markdowns and decreased labor income share in value-added. These findings are contrast to classical monopsony theory based on concentration but consistent with modern theory based on search friction.
    Keywords: Foreign direct investment, Monopsony, Wage, Search, Firm heterogeneity
    Date: 2019–03
  15. By: Esther Mirjam Girsberger (Economics Discipline Group, University of Technology Sydney); Romuald Meango (Max-Planck Institute for Social Law and Social Policy, Munich); Hillel Rapoport (Paris School of Economics, Universit´e Paris 1 Panth´eon-Sorbonne; CEPII; IZA)
    Abstract: This paper investigates the impact of regional migration on average wages and wage inequality in the West African Economic and Monetary Union (UEMOA). We exploit a unique data from a unified labour force household survey which covers natives and migrants in the seven economic capitals of the region. We estimate the counterfactual wage distributions of UEMOA migrants in absence of migration to evaluate the effect of regional migration. We find that regional migration increases the average wage by 1.8% and it entails a decrease in inequality in the UEMOA region between -1.5% (for the Gini coefficient) and -4.5% (for the interquartile ratio). The decrease in inequality in the UEMOA region is driven by a reduction in inequality between countries, while the migration effect on within-inequality differs across countries and remains overall small. When accounting for possible general equilibrium effects of migration on stayers’ wages, we find a similar or even stronger decrease in inequality, yet a smaller increase in the average wage. With general equilibrium effects, (negatively-) intermediately selected UEMOA migrants depress the average wage of natives in their host country and lead to a slight increase of the average wage among natives in the sending country, with the former effect dominating. Moreover, regional migration in the UEMOA mostly flows from countries with low wages to countries with higher wages. In combination with the general equilibrium effects described above this leads to a larger decrease in between-country inequality than in a setting with exogenous wages.
    Keywords: Migration; inequality; Gini index; West Africa
    JEL: F22 J61
    Date: 2019–02–21
  16. By: Alicia Garcia-Herrero (Adjunct Professor, Department of Economics, Hong Kong University of Science and Technology; Chief Economist for Asia Pacific, NATIXIS; Institute for Emerging Market Studies , Hong Kong University of Science and Technology); Jianwei Xu (Associate professor, Beijing Normal University)
    Abstract: Drawing on a global database of media articles, we quantitatively assess perceptions of ChinaÃs Belt and Road Initiative (BRI) in different countries and regions. We find that the BRI is generally positively received. All regions as a whole, except South Asia, have a positive perception of the BRI, but there are marked differences at the country level, with some countries in all regions having very negative views. Interestingly, there is no significant difference in perceptions of the BRI between countries that officially participate in the BRI and those that do not. We also use our dataset of media articles to identify the topics that are most frequently associated with the BRI. The most common topics are trade and investment. Finally, we use regression analysis to identify how the frequency with which these topics are discussed in the news affects the perceptions of the BRI in different countries. We find that the more frequently trade is mentioned in the media, the more negative a countryÃs perception of the BRI tends to be. On the other hand, while investment under the BRI seems also to attract attention in the media, it is not statistically relevant for countriesà perceptions of the BRI.
    Date: 2019–03
  17. By: Thanh Doan, Ha Thi (Asian Development Bank Institute)
    Abstract: Utilizing firm-level data during 2010–2015, we examine the frequency and characteristics of multi-product firms in Vietnamese manufacturing. Our major findings are as follows. First, multi-product firms are larger, more capital-intensive, more productive, and are more likely to export. Second, multi-product firms are active in the market. Approximately 60% of firms adjust their product scope within a 6-year period. Third, the contribution of firms’ product extensive margin to aggregate output growth is limited due to the prevalence of product dropping, which offsets the positive impact of product adding. Much of output growth during the period is thus generated by the intensive margin. Turning to the link between tariff reduction and product shedding, we do not detect any significant impact. However, we find that exporters play an important role in product adding, which suggests that they may contribute to aggregate growth through the channeling of product scope expansion. Contrary to our expectations, our analysis offers limited support for the heterogeneity of product turnover across ownership types. While we find that state-owned enterprises are more likely to spread economic activities across products and industries, there is little difference in terms of product churning among foreign direct investment, state-owned enterprises, and the domestic private sector.
    Keywords: multi-product firms; trade liberalization
    JEL: F15 L23
    Date: 2019–01–23
  18. By: Johannes Boehm (Département d'économie)
    Abstract: Contracting frictions affect the organization of firms, but how much does this matter on the aggregate level? This paper studies how costly supplier contract enforcement shapes the patterns of intermediate input use and quantifies the impact of these distortions on aggregate productivity and welfare. Using the frequency of litigation between US firms to measure the potential for hold-up problems, I find a robust relationship between countries’ input-output structure and their quality of legal institutions: in countries with high enforcement costs, firms have lower expenditure shares on intermediate inputs in sector pairs where US firms litigate frequently for breach of contract. I adapt a Ricardian trade model to the study of intersectoral trade, and show that the variation in intermediate input shares that is explained by contracting frictions is large enough to generate sizeable welfare increases when enforcement institutions are improved.
    Date: 2018–12
  19. By: Shubin Yang; Sandra Lancheros; Chris Milner
    Abstract: This paper studies productivity convergence to the regional and national frontiers among manufacturing firms in India, using panel data over the period 1999 to 2010. We find evidence of convergence by lagging firms to both their national and regional frontiers, with faster convergence to the national frontier than to their regional frontier. We examine the effects of export behaviour on this process of convergence, and the results demonstrate that exporting promotes productivity growth but slows down the convergence process since export firms tend to be nearer to frontiers. We also investigate the effect of outward FDI (OFDI) on firms’ productivity growth and convergence. Likewise, the results show that OFDI facilitates firms’ productivity growth but decelerates the speed of convergence.
    Keywords: Productivity convergence, technology frontiers, globalisation
    Date: 2019
  20. By: Volovik, Nadezhda (Воловик, Надежда) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: With the development of Eurasian economic integration, the number of countries expressing a desire to join the free trade zone with the Eurasian Economic Union (EAEU) is increasing. In addition to Vietnam, with which the process of forming an FTA has already begun, about 40 countries are ready to sign similar Agreements with the EAEU, including India and China. By decision of a number of Western countries and, above all, the US, there was a noticeable reduction in access to their markets for Chinese export products, protectionist measures were introduced, customs duties were increased, etc., which forced China to search for new approaches to its foreign economic activity. Among them - the search for new markets, resources and supply chains, which ultimately could lead to a noticeable reduction in the cost of Chinese products and increase its competitiveness. This is reflected in the concepts of the “Economic Belt of the Silk Road” and “Sea Silk Road of the 21st Century”, which received the general name “One Belt and One Road”, which today represents one of the main directions of the foreign economic and foreign policy of China.
    Date: 2019–03
  21. By: Victoria S, Kenny
    Abstract: This study examined the influence of foreign direct investment and exchange rate on economic growth in Nigeria from 1971 to 2013. The study employed trend lines and percentage to analysis the influence of both FDI and exchange rate on the economic growth of the country. From the analysis, this study found that exchange rate exerts most influence on economic growth than FDI in Nigeria.
    Keywords: Foreign direct investment, exchange rate and growth
    JEL: E00
    Date: 2019–03–20
  22. By: Svanidze, Miranda; Götz, Linde; Duric, Ivan; Glauben, Thomas
    Abstract: We investigate wheat price relationships between the import-dependent countries in Central Asia and the South Caucasus and the Black Sea wheat exporters to assess wheat market efficiency which is crucial for ensuring availability and access to wheat and for reducing food insecurity. Results of linear and threshold error correction models suggest strong influence of trade costs on market integration in Central Asia, while those costs are of minor importance in the South Caucasus. In particular, wheat trade in Central Asia is characterized not only by higher transportation costs but also unofficial payments play a large role. In addition, wheat price volatility is substantially higher in the wheat importing countries of Central Asia compared to the South Caucasus. To foster market functioning, wheat trade should be facilitated by policies reducing trade costs. This includes investments in grain market infrastructure, eliminating unofficial payments, but also resolving geopolitical conflicts. However, wheat trade in this region is characterized by large distances, low scope for import diversification and repeated export restrictions by Black Sea exporters. Therefore, trade enhancing policies should be complemented with policies increasing wheat self-sufficiency to enhance food security.
    Keywords: Crop Production/Industries, Demand and Price Analysis, Food Security and Poverty
    Date: 2019
  23. By: Firanchuk, Alexander (Фиранчук, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In this paper, we study the question of the impact of this trade restriction on the prices of Russian imports. This task has important applied and academic value. First, the practical benefit is to assess the impact of the embargo on import prices (at the border). Secondly, the academic significance of the work stems from the fact that the trade restriction introduced occurred at the time of the sharp decline in the ruble exchange rate. Thus, the econometric questions of assessing the impact of two, almost simultaneous events on import prices become fundamental. Namely, we will pay attention to how modern econometric methods allow us to take into account the effect of the embargo and not to mix it with the effect of transferring the exchange rate to import prices. The analysis uses monthly FCS data on Russia's imports, Central Bank data on exchange rates, Rosstat data on consumer prices and production volumes.
    Date: 2019–03
  24. By: Foellmi, Reto; Oechslin, Manuel
    Abstract: We explore the consequences of international trade in an economy that encompasses technology choice and an endogenous distribution of mark-ups due to credit market frictions. We show that in such an environment a gradual opening of trade may – but not necessarily must – have a negative impact on productivity and overall output. The reason is that the procompetitive effects of trade reduce mark-ups and hence make access to credit more difficult for smaller firms. As a result, smaller firms – while not driven out of the market – may be forced to switch to less productive technologies.
    Keywords: International trade, credit market frictions, productivity, polarization
    JEL: O11 F13 O16
    Date: 2019–02
  25. By: Nocco, Antonella; Ottaviano, Gianmarco; Salto, Matteo
    Abstract: How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a model of monopolistic competition in which variable markups increasing in firm size are a key source of misallocation across firms and countries. We use `disadvantaged' to refer to countries with smaller market size, worse state of technology (in terms of higher innovation and production costs), and worse geography (in terms of more remoteness from other countries). We show that, in a global welfare perspective, optimal multilateral trade policy should: promote the sales of low cost firms to all countries, but especially to disadvantaged ones; trim the sales of high cost firms to all countries, but especially to disadvantaged ones; reduce firm entry in all countries, but especially in disadvantaged ones. This would not only restore efficiency but also reduce welfare inequality between advantaged and disadvantaged countries if their differences in market size, state of technology and geography are large enough.
    Keywords: Firm Heterogeneity; International trade policy; monopolistic competition; multilateralism; Pricing to market
    JEL: D4 D6 F1 L0 L1
    Date: 2019–03
  26. By: Levashenko, Antonina (Левашенко, Антонина) (The Russian Presidential Academy of National Economy and Public Administration); Koval, Alexandra (Коваль, Александра) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper analyzed the benefits and risks of Russia's participation in the mutual recognition system of OECD non-clinical laboratory research, which is based on internationally agreed principles of good laboratory practices and uniform test methods and avoids re-testing of chemicals. As a result of the study, the authors formulated proposals for the optimal scenario of Russia's accession to the system of mutual recognition of OECD non-clinical laboratory research data, including taking into account Russia's membership in the EAEU.
    Keywords: OECD data mutual recognition system, chemicals, good laboratory practices, barriers to trade
    Date: 2019–03
  27. By: Balandina, Galina (Баландина, Галина) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper deals with individual issues of introduction of non-tariff regulation measures and administration of their application by moving goods across the customs border and their turnover in the customs territory of the EAEU. In particular, the situation with the introduction of electronic licensing in Russia is critically assessed, examples from the international practice of the introduction of automatic licensing and control technology based on the "single window" principle are cited.
    Date: 2019–03
  28. By: Catherine Mathieu (Observatoire français des conjonctures économiques); Henri Sterdyniak (Observatoire français des conjonctures économiques)
    Abstract: Le 29 mars 2019, le Royaume-Uni devrait quitter l’UE. Mais plus de 2 ans et demi après le vote des Britanniques pour une sortie de l’UE, rien n’est réglé. L’accord de retrait et la déclaration politique négociés par l’UE-27 et le gouvernement britannique et approuvés lors du Conseil européen du 25 novembre 2018[1] ont été massivement rejetés par le parlement britannique le 15 janvier 2019 (432 voix contre, 202 voix pour). Le 29 janvier, le parlement britannique a voté deux amendements : l’un refusant une sortie sans accord, l’autre demandant à Theresa May de rouvrir les négociations avec l’UE sur la question de la frontière irlandaise. L’UE-27 a immédiatement répliqué que cela n’était pas envisageable. Face à la menace d’une sortie sans accord, un No Deal, que ni l’UE-27, ni le gouvernement et le Parlement britannique ne souhaitent, qui calera le premier ? L’UE-27, qui accepterait de renoncer à un filet de sécurité irlandais sans date limite de sortie ? Le Royaume-Uni, qui resterait dans l’Union douanière ?
    Keywords: Brexit; Marché unique; Royamum Uni
    Date: 2019–02
  29. By: Grégoire Garsous (OECD)
    Abstract: Addressing the relationship between domestic environmental regulations and international trade policies is essential to better understand the need for consistency and complementarity between these areas. The set of trade and environment indicators developed by the OECD aims to provide insights on this relationship by shedding light on topical debates regarding the interactions between trade and environmental policies. Issues covered include: carbon emissions embodied in trade; embodied raw materials in trade; the volume of trade in environmentally-related goods; tariffs on environmentally-related goods; support measures for fossil fuels; enabling policy and regulatory environment for renewable energy; the volume of trade in waste and scrap; and nutrient balances of exported grains. Although initial insights are provided for these indicators, no detailed analyses is developed at this stage. Rather, these indicators are building blocks to analyse, for instance, the determinants of identified trends or to allow for a better understanding of the issues at hand. Possible avenues for further policy-relevant investigations using the indicators are identified and discussed for each topic covered.
    Keywords: environmental regulations, Trade policies
    JEL: F14 F18 Q17 Q56 Q58
    Date: 2019–03–01
  30. By: Augustin Kwasi Fosu (Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon, Ghana; Faculty of economic and Management Sciences (FEMS), University of Pretoria, Pretoria, South Africa; and Research Associate, Centre for the Study of African Economies (CSAE), University of Oxford, Oxford, UK.); Abdul Fatawu Abass (Department of Economics, and Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon)
    Abstract: As open economies, African countries need to diversify their exports for economic transformation, sustained growth, and development. Meanwhile, there has been increasing importance of development financing. Following the discussion of theoretical issues on the importance of domestic credit as a potential instrument for overcoming the liquidity constraint of developing countries, as in the case of Africa, this paper empirically explores the determinants of export diversification, with particular attention to domestic credit. The estimation is based on a five-year panel regression analysis for the 1962-2010 period involving 80 countries around the world, of which 62 are developing and 29 African countries, using as covariates variables that are traditionally viewed as affecting export diversification. System GMM estimates provide robust evidence supporting the importance of domestic credit for African countries, while its role in other countries seems rather marginal. In addition, human capital in the form of schooling, governance as measured by constraint on the chief executive of government, and being land-locked, all exert significant effects, as anticipated, on export diversification among African countries. However, except for governance, appropriately controlling for the interactive effect of domestic credit with ‘Africa’ yields generally insignificant impacts of these variables, together with domestic credit, on export diversification in non-African countries. These results point to the dominant role of domestic credit in Africa vis-à-vis other countries globally.
    Keywords: Export diversification, domestic credit, Africa, global perspective
    Date: 2019–03
  31. By: Marcelo Bianconi; Federico Esposito; Marco Sammon
    Abstract: This paper documents new stylized facts on the effects of trade policy uncertainty on stock returns. We exploit quasi-exogenous variation in exposure to policy uncertainty arising from annual votes by US Congress to revoke China's MFN tariff rates between 1990 and 2000. Before the uncertainty was resolved by granting China permanent MFN rates, US manufacturing industries highly exposed to trade policy uncertainty had stock returns 10.4% higher per year than less exposed sectors. We argue that this difference in average returns is a risk premium for exposure to trade policy uncertainty. Indirect exposure to trade policy uncertainty through Input-Output linkages also commands a substantial risk premium.
    Date: 2019
  32. By: Enerelt Murakami; Eiji Yamada; Erica Sioson
    Abstract: major labor migrant sending and remittance dependent country in Central Asia. We contribute to the literature in two ways. First, we effectively address the common methodological issues that result in biased estimates in analyses of migration and remittances. Our empirical work accounts for the endogeneity of migration and remittances with respect to the labor supply decisions of household members left at home, and for the self-selection of migrants and remittance senders through the application of a control function approach. Second, we apply our empirical model to unique high-frequency household panel data that further helps to remedy methodological problems present in cross-sectional studies. The findings suggest that having a migrant member and receiving remittances increases the reservation wages of the household members left at home, thereby reducing their labor supply and economic activity rate. This result is robust to different model specifications and definitions of migration and remittances.
    Keywords: Migration, remittances, labor market participation, economic activity rate, endogenous switching, Tajikistan
    Date: 2018–12
  33. By: Naguib, Costanza
    Abstract: We analyse the impact of an inflow of foreign workers on positional wage mobility in a small open economy like Switzerland. We exploit the quasi-natural experiment constituted by the entry into force of the Agreement on the Free Movement of Persons between Switzerland and the EU on 1st June 2002. We compute conditional average treatment effects with machine learning methods, and we find evidence of relevant heterogeneity in the impact of this policy on wage mobility.
    Keywords: Wage mobility, Bilateral Agreements, causal forest, Conditional Average Treatment Effect
    JEL: C14 J31
    Date: 2019–02
  34. By: Natalia Vechiu (CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université)
    Abstract: In this paper, we focus on the relationship between foreign direct investment, environmental norms and consumers' ecological preferences. This empirical study is based on previous theoretical models showing that weak unilateral environmental regulations create pollution havens attracting FDIs, which leads to even more pollution. However, our first non parametrical estimations on data coming from both developed and developing countries show that outward FDIs decrease with local consumers' "greenness". This is further confirmed by a deeper analysis, showing that home and host consumers' "greenness" has a very strong negative impact on outward FDIs. The results also show that consumers' "greenness" may act as a counterweight to the pollution haven effect.
    Date: 2018–02
  35. By: Kodjovi EKLOU (International Monetary Fund (IMF)); Stefania FABRIZIO (International Monetary Fund (IMF)); Roland Kangni KPODAR (International Monetary Fund (IMF))
    Abstract: This paper investigates the impact of domestic fuel price increases on export growth in a sample of 77 developing countries over the period 2000-2014. Using a fixed-effect estimator and the local projection approach, we find that an increase in domestic gasoline or diesel price adversely affects real non-fuel export growth, but only in the short run as the impact phases out within two years after the shock. The results also suggest that the negative effect of fuel price increase on exports is mainly noticeable in countries with a high-energy dependency ratio and countries where access to an alternative source of energy, such as electricity, is constrained, thus preventing producers from altering energy consumption mix in response to fuel price changes.
    JEL: F10 O13 Q43
    Date: 2019–02

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