nep-int New Economics Papers
on International Trade
Issue of 2019‒05‒27
29 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Reassessing Trade Barriers with Global Value Chains By Yuko Imura
  2. Is irrigation driven by the economic value of internationally traded agricultural products? By Angela Cheptea; Catherine Laroche-Dupraz
  3. Trade Protectionism and US Manufacturing Employment By Chunding Li; Jing Wang; John Whalley
  4. Increasing the benefits of Slovakia’s integration in global value chains By Claude Giorno
  5. Trade and jobs: a description of Swedish labor market dynamics By Kyvik Nordås, Hildegunn; Lodefalk, Magnus; Tang, Aili
  6. "Global Imbalances and the Trade War" By Jan Kregel
  7. Regularities in the choice of Russian firms for the implementation of export and import deliveries in the context of embedding in the global value chain By Kuznetsov, Dmitriy (Кузнецов, Дмитрий); Knobel, Alexander (Кнобель, Александр)
  8. The Impact of Real Exchange Rate Shocks on Manufacturing Workers: An Autopsy from the MORG By Douglas L. Campbell; Lester Lusher
  9. The effects of US-China trade war and Trumponomics By Evans, Olaniyi
  10. Trade Blocs and Trade Wars during the Interwar Period By David S. Jacks; Dennis Novy
  11. Trade in the Shadow of Power : Japanese Industrial Exports in the Interwar years By Tena Junguito, Antonio; Ayuso-Díaz, Alejandro
  12. Vínculos productivos en América del Norte By Pérez Ludeña, Miguel
  13. Trade Induced Technological Change: Did Chinese Competition Increase Innovation in Europe? By Douglas L. Campbell; Karsten Mau
  14. Innovation Offshoring with Fully Endogenous Growth By Colin Davis; Ken-ichi Hashimoto
  15. Trading activities, productivity and markups: evidence for spanish manufacturing By Juan A. Máñez Castillejo; M. Consuelo Mínguez Bosque; María E. Rochina-Barrachina; Juan A. Sanchis Llopis
  16. Breaking Badly: The Currency Union Effect on Trade By Douglas L. Campbell; Aleksandr Chentsov
  17. Multinational Expansion in Time and Space By Stefania Garetto; Lindsay Oldenski; Natalia Ramondo
  18. Pregatirea României pentru aderarea la Uniunea Europeana By Iancu, Aurel
  19. Foreign Direct Investment (FDI) dynamics in India: what do ARIMA models tell us? By NYONI, THABANI; MUCHINGAMI, LOVEMORE
  20. Understanding Export Diversification: Key Drivers and Policy Implications By Renee A-Jaoudi
  21. The impact of the ruble exchange rate dynamics on the inflow of foreign investment in the Russian economy By (Багдасарян, Княз); (Баева, Марина); (Зайцев, Юрий); (Кнобель, Александр); (Лощенкова, Анна)
  22. Financial Globalization and Instability in the Early 21st Century By Mertens, Johan
  23. The Impact of the 1932 General Tariff: A Difference-in-Difference Approach By Lloyd, S.; Solomou, S.
  24. The impact of globalization on regional development and competitiveness: cases of selected regions By Zane Zeibote; Tatjana Volkova; Kiril Todorov
  25. twexp and twgravity: Estimating exponential regression models with two-way fixed effects By Jochmans, K.,; Verardi, V.
  26. Regional employment effects of MNE offshoring By Eliasson, Kent; Hansson, Pär; Lindvert, Markus
  27. Russia in the system of global regulation of migration flows: opportunities for the development of international cooperation By Malakhov, Vladimir (Малахов, Владимир); Letnyakov, Denis (Летняков, Денис); Simon, Mark (Симон, Марк); Motin, Alexander (Мотин, Александр)
  28. Is Germany a mercantilist state? The dispute over trade between Berlin and Washington under Merkel and Trump By Pierre Baudry
  29. Globalisation and Female Economic Participation in Sub-Saharan Africa By Asongu, Simplice; Efobi, Uchenna; Tanankem, Belmondo; Osabuohien, Evans

  1. By: Yuko Imura
    Abstract: This paper provides a systematic, quantitative analysis of the short-run and long-run effects of various trade-restricting policies in the presence of global value chains and multinational production. Using a two-country dynamic stochastic general equilibrium model with endogenous firm entry and exit in both exporting and multinational production, I compare the effects of (i) tariffs on final-good imports, (ii) tariffs on intermediate-input imports, and (iii) barriers to accessing foreign markets. I show that, in the long run, all three policies lead to a recession in both countries, but the relative effects on the GDP of the two countries vary across policies. At the firm level, less productive exporters exit from the destination market while the most productive few find it profitable to locate production in the foreign country as multinationals, thereby partially recovering the loss from exporting. In the short run, the dynamics differ across policies and from their long-run outcomes. Final-good tariffs and market-access barriers lead to a temporary production boom in the policy-imposing country, while intermediate-input tariffs result in an immediate recession in both countries. The latter also discourages multinational operation over the short run when the input tariffs dominate the declining costs of labor and capital.
    Keywords: Business fluctuations and cycles; Firm dynamics; International topics; Trade Integration
    JEL: F12 F13 F41
    Date: 2019–05
  2. By: Angela Cheptea; Catherine Laroche-Dupraz
    Abstract: A recent trend of literature investigates how international trade compensates or accentuates the differences in countries’ endowments in water resources and whether trade regulation should be used to improve the use of water resources at the global level. In this paper, we develop a simple model establishing a positive link between the demand for irrigation water of agricultural producers and the international price of irrigated goods. Unlike previous works, that focus on the cost of water resources, we emphasize the price of traded goods as a key element of the shadow value of water used in agriculture. We test our model empirically using data on 159 irrigated crops exported by 183 countries, and find that countries’ irrigation behavior is strongly linked to the global price of crops. This indicates that agricultural producers internalize the price of irrigation water. The export price effect is stronger when countries are net exporters of irrigated crops and weaker for internationally traded crops that constitute a pillar of most countries’ domestic food security, such as cereals. Our results provide elements for the broader issue of the economically efficient use of water resources in agriculture
    Keywords: water resources, virtual water, international trade, agri-food products, irrigation
    JEL: Q17 Q25 F18 N50
    Date: 2019
  3. By: Chunding Li; Jing Wang; John Whalley
    Abstract: This paper uses a numerical global general equilibrium model to simulate the possible effects of US initiated trade protection measures on US manufacturing employment. The simulation results show that US trade protection measures do not increase but will instead reduce manufacturing employment, and US losses will further increase if trade partners take retaliatory measures. The mechanism is that although the substitution effects between domestic and foreign goods have positive impacts, the substitution effects between manufacturing and service sectors and the retaliatory effects both have negative influences, therefore the whole effect is that the US will lose manufacturing employment.
    JEL: C68 F16
    Date: 2019–05
  4. By: Claude Giorno
    Abstract: Heavy involvement in international trade and global value chains has been an effective way for promoting Slovakia's economic and social catch-up. Large foreign direct investment inflows have helped develop a competitive export-led manufacturing industry, with a strong specialisation in the automotive and electronics sectors, fostering robust growth and productivity performance with good fiscal and external balance results. However, the benefits of this development strategy have diminished since the 2008-09 crisis and the subsequent slowdown in world trade growth. Moreover, over the years Slovakia’s integration into world trade has remained for a large part based on downstream activities of value chains that incorporate little domestic value added, such as the assembly of imported intermediate goods, and further expansion of this growth model is hindered by employers’ increasing difficulties in finding skilled labour. There is a need to help local firms to better benefit from foreign companies’ know-how, further prepare the workforce for the increasing digitalisation and automation of most industries, promote the diversification of the economy and, in particular, strengthen the role of the services sector. This assessment, which is derived from the first part of this chapter, is followed by a discussion of the changes required to better leverage Slovakia’s experience with global value chains. All in all, a broad range of well-coordinated policies is called for. This entails better adapting the skills of the workforce to the changing needs of the labour market, enhancing the business environment, improving transport infrastructure and stimulating firms’ innovation capacity.This Working Paper relates to the 2019 OECD Economic Survey of Slovak Republic( veys/slovak-republic-economic-snapshot/)
    Keywords: Global value chain, infrastructure, productivity, regulation, skills
    JEL: F21 F22 I23
    Date: 2019–05–24
  5. By: Kyvik Nordås, Hildegunn (Örebro University School of Business); Lodefalk, Magnus (Örebro University School of Business); Tang, Aili (Örebro University School of Business)
    Abstract: We perform a granular analysis of Swedish labor market dynamics, using matched employer employee and firm level trade data for Sweden over a 15-year period. The employment share in firms that are directly exposed to international trade has decreased, due to a shift in employment towards personal and public services. Analyzing the dynamics, we find that workers in firms that change export status are slightly less likely to obtain the same wage rise as their peers. However, workers that stay in the same job in trading firms are less affected by changes in export and offshoring volumes, with the exception of high-skilled workers in manufacturing firms who face a downward pressure on wages from services offshoring, but higher wages from services exports. Finally, we find that exports and offshoring of goods and services stimulate labor demand. While exports and offshoring of services increase relative demand for skilled workers, exports and offshoring of goods stimulate relative demand for middle and low skilled workers.
    Keywords: Worker flows; Job flows; Trade; Wages; Labor Demand
    JEL: E24 F16 J63 P23
    Date: 2019–05–21
  6. By: Jan Kregel
    Abstract: Against the background of an ongoing trade dispute between the United States and China, Senior Scholar Jan Kregel analyzes the potential for achieving international adjustment without producing a negative impact on national and global growth. Once the structure of trade in the current international system is understood (with its global production chains and large imbalances financed by international borrowing and lending), it is clear that national strategies focused on tariff adjustment to reduce bilateral imbalances will not succeed. This understanding of the evolution of the structure of trade and international finance should also inform our view of how to design a new international financial system capable of dealing with increasingly large international trade imbalances.
    Date: 2019–05
  7. By: Kuznetsov, Dmitriy (Кузнецов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration); Knobel, Alexander (Кнобель, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper studies the systematic differences in the behavior of Russian manufacturing exporters and intermediaries. The theory indicates that intermediaries are an important for small and medium-sized enterprises to gain access to export markets. Russian data is supportive to this prediction, as well as to a number of other regularities regarding the behavior of intermediaries and direct exporters, which follow from theory and are observed in data from other countries. For example, there are systematic differences in the role of intermediaries depending on the different characteristics of the import-country market, the characteristics of exported goods. In conjunction with international experience of using intermediaries for export promotion, the results of this work can be used to develop optimal incentives for intermediaries and, therefore, to increase Russian non-oil exports.
    Keywords: export, foreign trade, intermediaries, firm-level data, detailed customs statistics, outsourcing, “new” new trade theory, heterogeneous firms theory
    Date: 2019–04
  8. By: Douglas L. Campbell (New Economic School (NES)); Lester Lusher (UC Davis)
    Abstract: We study the impact of large real exchange rate shocks on workers in sectors initially more exposed to international trade using the Current Population Survey’s (CPS) Merged Outgoing Rotation Group (MORG) from 1979 to 2010 combined with new annual measures of imported inputs, a proxy for offshoring. We find that in periods when US relative prices are high, and imports surge relative to exports, workers in sectors with greater initial exposure to international trade were more likely to be unemployed or exit the labor force a year later, but did not experience significant declines in wages conditional on being employed. Contrary to the usual narrative, we find negative wage effects for higher-wage, but not lower-wage workers, particularly for those who are lesseducated.
    Keywords: Real Exchange Rates, Labor Market Impact of Trade Shocks, Inequality, American Manufacturing
    JEL: F10 F16 F41 N60 L60
    Date: 2018–06
  9. By: Evans, Olaniyi
    Abstract: Trumponomics describes the economic policies of U.S. President Donald Trump and has “America-first” approach. The Trump administration risks creating a more fragmented global economy and has started the biggest global trade war. The various sides are still on tenterhooks to impose additional tariffs worth hundreds of billions of dollars. Using deadweight loss (also known as excess burden or allocative inefficiency) and Harberger's triangle, this study shows that: the trade war is devastating not just for the US and China, but for the whole world economy: (i) the prices of items that directly affect consumers’ welfare will rise; (ii) firms will face extra costs for exports; (iii) investors will become more nervous; (iv) some investors will diversify into Bitcoin and other cryptocurrencies; (v) the trade war could turn into a currency war; (vi) even developed countries could be hit by the trade war; and (vii) tariffs applied on developing countries’ exports would rise steeply. In a trade war, everyone may lose.
    Keywords: Trumponomics, US-China Trade War, Consumers, Stocks, Cryptocurrency, Brexit
    JEL: F4 O1 P0
    Date: 2019
  10. By: David S. Jacks; Dennis Novy
    Abstract: What precisely were the causes and consequences of the trade wars in the 1930s? Were there perhaps deeper forces at work in reorienting global trade prior to the outbreak of World War II? And what lessons may this particular historical episode provide for the present day? To answer these questions, we distinguish between long-run secular trends in the period from 1920 to 1939 related to the formation of trade blocs (in particular, the British Commonwealth) and short-run disruptions associated with the trade wars of the 1930s (in particular, large and widespread declines in bilateral trade, the narrowing of trade imbalances, and sharp drops in average traded distances). We argue that the trade wars mainly served to intensify pre-existing efforts towards the formation of trade blocs which dated from at least 1920. More speculatively, we argue that the trade wars of the present day may serve a similar purpose as those in the 1930s, that is, the intensification of China- and US-centric trade blocs.
    Keywords: Commonwealth, distance, gravity, interwar period, trade blocs, trade wars
    JEL: F1 F3 N7
    Date: 2019–05
  11. By: Tena Junguito, Antonio; Ayuso-Díaz, Alejandro
    Abstract: During the interwar years, Japanese industrialisation accelerated alongside the expansion of industrial exports to regional markets. Trade blocs in the interwar years were used as an instrument of imperial power to foster exports and as a substitute for productivity to encourage industrial production. The historiography on Japanese industrialisation in the interwar years describes heavy industries' interests in obtaining access to wider markets to increase economies of scale and reduce unit costs. However, this literature provides no quantitative evidence that proves the success of those mechanisms in expanding exports. In this paper we scrutinise how Japan—a relatively poor country—used colonial as well as informal power interventions to expand regional markets for its exports, especially for the most intensive human capital sector of the industrializing economy.
    Keywords: Interwar Years; Japan; Trade Blocs; Empires; International Trade
    JEL: N75 N15 F14
    Date: 2019–05–01
  12. By: Pérez Ludeña, Miguel
    Abstract: Las economías del Canadá, los Estados Unidos y México están fuertemente unidas entre sí, aunque esta unión no es equilibrada y tampoco se ha incrementado durante los 25 años del Tratado de Libre Comercio de América del Norte (TLCAN). El espacio económico que se ha creado en América del Norte ha facilitado el desarrollo de cadenas de valor en estas industrias y esto ha permitido a las empresas enfrentar con éxito la fuerte competencia internacional, especialmente la de Asia. Para México, la integración ha desarrollado mucho la industria exportadora pero no se ha traducido en convergencia en el ingreso con los Estados Unidos y el Canadá. México ha aprovechado sus ventajas comparativas, pero no ha conseguido atraer inversiones que aumenten el valor añadido en el país, ni tampoco aquellas intensivas en actividades de I+D. Además, el tipo de industrias que la integración con América del Norte ha promovido no ha ayudado a la integración territorial del país, que continúa siendo extremadamente desigual.
    Date: 2019–05–16
  13. By: Douglas L. Campbell (New Economic School (NES)); Karsten Mau (Maastricht University)
    Abstract: Bloom, Draca, and Van Reenen (2016) find that Chinese competition induced a rise in patenting, IT adoption, and TFP by 30% of the total increase in Europe in the early 2000s. We find that the average patents per firm fell by 94% for the most Chinacompeting firms in their sample, but also by 94% for non-competing firms (starting from an initially higher level), and that various intuitive controls, such as controls for sectoral trends, renders the impact on patents-per-firm insignificant. We also find that while TFP appears to be positively correlated with the rise in Chinese competition, IV estimates are inconclusive, and other measures of productivity, such as value-added per worker and profits, are not correlated. Various instrumental and proxy variable approaches also do not support a positive impact of the rise of China on European patents.
    Keywords: Patents, China, Europe, Textiles, Trade Shocks, Manufacturing
    JEL: F14 F13 L25 L60
    Date: 2019–05
  14. By: Colin Davis; Ken-ichi Hashimoto
    Abstract: In recent years firms have started to offshore their innovation activities to emerging economies. This paper investigates the implications of innovation offshoring for productivity growth in a two-country framework that features a tension between access to technical knowledge and low-cost high-skilled labor in the innovation location decision. Industry and innovation tend to concentrate in the asset-wealthy country when trade costs are relatively high. A positive relationship between innovation costs and industry concentration then ensures that improved international knowledge diffusion coincides with an increase in net offshoring flows in innovation from the asset-wealthy country to the asset-poor country, and potentially with faster productivity growth.
    Date: 2019–05
  15. By: Juan A. Máñez Castillejo (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); M. Consuelo Mínguez Bosque (IVIE, Carrer de la Guàrdia Civil 22, 46020 València (Spain).); María E. Rochina-Barrachina (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Sanchis Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This work analyses the firms’ internationalization strategies of importing intermediates and exporting output, and the potential rewards of these activities in terms of total factor productivity (TFP), as a proxy for marginal costs, and markups. It further deepens into the study of the relationship between internationalization strategies and markups by disentangling whether it operates through affecting firms’ marginal costs and/or firms’ prices. The panel database employed in this paper is the Spanish Survey on Business Strategies (ESEE) for the period 2006- 2014. Results in the paper distinguish between SMEs and large firms and indicate that there is high persistence in the performance of these activities and in firms’ TFP and markups. In addition, the internationalization strategies are especially relevant for SMEs, as for this group we obtain rewards of the two activities in terms of both TFP and markups. Furthermore, we also find that these strategies allow SMEs to charge higher output prices.
    Keywords: Exports, imports of intermediates, total factor productivity, markups, output prices, manufacturing, firm-level data
    JEL: D24 F14 L11
    Date: 2019–05
  16. By: Douglas L. Campbell (New Economic School (NES)); Aleksandr Chentsov (New Economic School)
    Abstract: As several European countries debate entering, or exiting, the Euro, a key policy question is how much currency unions (CUs) affect trade. Recently, Glick and Rose (2016) confirmed that currency unions increase trade on average by 100%, and that the Euro has increased trade by a still-large 50%. In this paper, we find that the apparent large impact of CUs on trade is driven by other major geopolitical events correlated with CU switches, including communist takeovers, decolonization, warfare, ethnic cleansing episodes, the fall of the Berlin Wall and the whole history of European integration. We find that moving from robust standard errors to multi-way clustered errors alone reduces the t-score of the Euro impact by 75%. Looking at individual CUs, we find that in no cases does the time series evidence support a large trade effect, and that the effect breaks particularly badly once we find suitable control groups. Overall, we find that intuitive controls and omitting the CU switches coterminous with war and missing data render the trade impact of the Euro and all CUs together statistically insignificant.
    Keywords: The Euro, Currency Unions and Trade, Gravity Regressions for Policy Analysis
    JEL: F15 F33 F54
    Date: 2017–06
  17. By: Stefania Garetto (BU, CEPR, and NBER); Lindsay Oldenski (Georgetown University); Natalia Ramondo (UCSD and NBER)
    Abstract: This paper studies the expansion patterns of the multinational enterprise (MNE) in time and space. Using a long panel of US MNEs, we document that: MNE affiliates grow by exporting to new markets; the activities of MNE affiliates persist during the affiliate’s life, usually starting with sales to their host market and eventually expanding to export markets; and MNE affiliates’ entry into new locations does not depend on the location of preexisting affiliates. Informed by these facts, we develop a multi-country quantitative dynamic model of the MNE that features heterogeneity in firm-level productivity, persistent aggregate shocks, and a rich structure of costs that affect MNE expansion. Importantly, MNE affiliates can decouple their locations of production and sales, and endogenously choose to enter or exit the host and the export markets. We introduce a compound option formulation that allows us to capture in a tractable way the rich heterogeneity that is observed in the data and that is necessary for quantitative analysis. Using the calibrated model, our quantitative application to Brexit reveals that export platforms are important for understanding the reallocation of MNE activity in time and space, and that the nature of the frictions to MNE activities matters for aggregate firm dynamics.
    Keywords: Economic Growth, Innovation, Credit Constraints, Convergence, Policy Analysis, Money, Inflation
    JEL: O11 O23 O31 O33 O38 O42
    Date: 2019–04
  18. By: Iancu, Aurel (Institutul National de Cercetari Economice al Academiei Române)
    Abstract: Romania’s lead-up to the accession to the European Union lasted quite a long time (1991-2007). The first steps had been taken by the conclusion and the enforcement of the Trade and Cooperation Agreement (1990) and the Association Agreement (1993) which paved the way for the transition to higher forms of cooperation and integration for expanding the domains and improving these forms. An important step for the accession was the negotiation for transposing and implementing the EC legislation in Romania, to be followed by economic, institutional and administrative changes and restructuring, which needed significant efforts. The wish of the majority of the Romanian citizens in favour of the country’s accession to the EU had a positive impact on the European Communities, which offered a substantial aid provided that the new candidate fulfils some requirements for ensuring the political, economic, institutional, legal and administrative compatibilities and all obligations of an EU member. The main actions taken by Romania, by the EU officials and by the EU member countries are presented below.
    Keywords: trade agreements, association agreement, accession criteria, negotiation for the accession to the EU
    JEL: F02 F15 F21 F33 F35 F36 F41 F53
    Date: 2018–12
    Abstract: Using annual time series data on net FDI inflows in India from 1960 to 2017, the study examines net FDI inflows using the Box – Jenkins ARIMA methodology. The ADF tests reflect that India FDI net FDI inflows data is I (1). Based on the AIC, the study presents the ARIMA (1, 1, 0) model. The diagnostic tests further show that the presented parsimonious model is not only stable but also suitable for explaining net FDI dynamics in India. The results of the study indicate that, net FDI inflows in India are likely to weaken over the next 10 years. The study identifies two (2) significant policy recommendations in an effort to aid policy makers on how to promote and stimulate the much expected net FDI inflows in India.
    Keywords: Foreign direct investment; forecasting; India
    JEL: C53 E27 F21
    Date: 2019–05–06
  20. By: Renee A-Jaoudi
    Abstract: We identify key factors, from large set of potential determinants, that explain the variation in export diversification across countries and over time using Bayesian Model Averaging (BMA), which addresses model uncertainty and ranks factors in order of importance vis-a-vis their explanatory power. Our analysis suggests, in order to diversify, policy makers should prioritize human capital accumulation and reduce barriers to trade. Other policy areas include improving quality of institutions and developing the financial sector. For commodity exporters reducing barriers to trade is the most important driver of diversification, followed by improving education outcomes at the secondary level and financial sector development.
    Date: 2019–05–10
  21. By: (Багдасарян, Княз) (The Russian Presidential Academy of National Economy and Public Administration); (Баева, Марина) (The Russian Presidential Academy of National Economy and Public Administration); (Зайцев, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); (Кнобель, Александр) (The Russian Presidential Academy of National Economy and Public Administration); (Лощенкова, Анна) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Portfolio and foreign direct investment (FDI) is an important source of capital that complements domestic private investment and is often associated with new jobs, the stimulation of technological exchange and the promotion of overall economic growth in host countries. Important factors for FDI inflows are the level of the exchange rate and its volatility. The need for an empirical analysis of the impact of the exchange rate on FDI inflows to Russia is due to the currency crisis of 2014–2015, when the Russian ruble devalued due to a fall in world oil prices, as well as a number of foreign policy events.
    Keywords: exchange course, foreign investments, foreign direct investments, investment climate, import substitution, economic sanctions, globalization, Russian Federation
    Date: 2019–04
  22. By: Mertens, Johan
    Abstract: This article provides the figures of the volatility of economic growth in poor and rich countries and analyzes it. The conclusion is that while volatility has declined almost everywhere in advanced countries, the picture is much more mixed in developing countries. This article then examines the case of India, where GDP volatility has been declining for the last twenty years. The figures show that by moving away from an agricultural economy, the Indian economy has stabilized. Increased financial depth and the favorable evolution of the terms of trade had a similar effect. Finally, this article examines the relationship between economic instability and insecurity at the global level.
    Keywords: Globalization
    Date: 2018–12–18
  23. By: Lloyd, S.; Solomou, S.
    Abstract: We evaluate the effect of the 1932 British General Tariff on the output, labour productivity and employment growth of British industries. We provide a new disaggregated data set that matches industry-level Census of Production data with industry-specific tariff rates to accurately isolate treatment and control groups and estimate the effect of the General Tariff using difference-in-difference regressions. We evaluate a two-group comparison, between newly and non-newly protected industries, and a three-group comparison, between non-newly protected industries and newly protected industries further divided into those given a baseline 10 percent tariff rate and those given additional tariffs. In the two-group comparison, we identify a tariff effect that is large and statistically significant on output and productivity. In the three-group comparison, we show that the positive output and productivity effects of the tariff arise from the additional tariff protection, over and above the 10 percent level. These effects are observed over the periods 1930-35 and 1930-48, suggesting both short-run and medium-term effects on output and productivity of UK industries protected by the 1932 General tariff.
    Keywords: Trade Policy, General Tariff, Difference-in-Difference
    JEL: F13 N64
    Date: 2019–01–17
  24. By: Zane Zeibote (LU - University of Latvia); Tatjana Volkova (BA School of Business and Finance); Kiril Todorov (UNWE - University of National and World Economy)
    Abstract: The objective of this study is to conduct an analysis of regional development and competitiveness in the EU and Latvia under current conditions of economic globalization. This paper makes an attempt to evaluate a theory of regional development and regional competitiveness concept in relation to regional competitiveness in the light of current global economic changes. The authors emphasise that the regional development is based on competitive advantages, which has been a subject of fundamental research by Michal Porter and that serves as a basis for the current scientific methodology to assess competitiveness of regions and countries. The authors support a view of many scholars to consider regional competitiveness as the capacity of a region (or country) to create and support competitive economic environment. Further research reveals the impact of globalization on regional development by analysing interaction between the Globalization Index (GI) and the Global Competitiveness Index (GCI). Quantitative and qualitative analysis, i.e. literature analysis, comparative analysis and correlation analysis performed for this study reflect that competitiveness under global economic conditions is determined by the development stage of each region – competitiveness of a less developed region is more dependent on production factors, while competitiveness of a higher developed region is based on innovation. The correlation analysis reveals that the impact of globalization is stronger for those EU countries, which are in the efficiency-driven stage of development thank for those, which are in the innovation-driven stage. The results of this research could be useful for economic policy makers to determine the role of institutions, policy instruments and factors, which are necessary for attaining higher productivity, efficiency and profitability better withstand forces of competition on global and regional markets.
    Keywords: Latvia,regional development,competitiveness,globalisation,impact,the EU
    Date: 2019–03–30
  25. By: Jochmans, K.,; Verardi, V.
    Abstract: We introduce the commands twexp and twgravity that implement the estimators developed in Jochmans (2017) for exponential regression models with two-way fixed effects. twexp is applicable to generic n x m panel data. twgravity is written for the special case where the data is a cross-section on dyadic interactions between n agents. A prime example of the latter is cross-sectional bilateral trade data, where the model of interest is a gravity equation with importer and exporter effects. Both twexp and twgravity can deal with data where n and m are large, that is, the case of many fixed effects. They make use of Mata and are very fast to execute.
    Keywords: exponential regression, gravity model, panel data, two-way fixed effects
    JEL: C33 C87
    Date: 2019–04–26
  26. By: Eliasson, Kent (Swedish Agency for Growth Policy Analysis); Hansson, Pär (Örebro University School of Business); Lindvert, Markus (Swedish Agency for Growth Policy Analysis)
    Abstract: The employment in Sweden has become more concentrated to the larger cities in Sweden (Stockholm, Göteborg and Malmö). This paper investigates whether Swedish multinational enterprises (MNEs) have contributed to that development. We examine the association between offshoring within Swedish MNEs and changes their parent employment at regional level (in local labor market regions, LA-regions). The relation may vary depending on: (i) the characteristics of the region (large city, regional center or other region) or (ii) the type of labor (skilled or less-skilled) or the type of job (routine or non-routine) in the parent. Our results reveal large spatial heterogeneities in the relationships between MNE offshoring and onshore employment in various regions. The results suggest that MNE offshoring might be a factor contributing to diverging onshore employment among Swedish regions; increased (unchanged) employment in larger cities and unchanged (decreased) employment in regional centers and other regions. Moreover, MNE offshoring seems to contribute to increased localization of skilled activities and non-routine tasks to larger cities. We use enterprise data on employment in the parents and the affiliates overseas in Swedish controlled enterprise groups with affiliates abroad (Swedish MNEs). Parent employment data are available for different regions in Sweden, skilled and less-skilled labor, as well as for various occupations.
    Keywords: multinational enterprises (MNEs); offshoring; local labor markets; skilled and lessskilled employment; routine and non-routine and jobs
    JEL: F14 F16 F23 J23 J24
    Date: 2019–05–09
  27. By: Malakhov, Vladimir (Малахов, Владимир) (The Russian Presidential Academy of National Economy and Public Administration); Letnyakov, Denis (Летняков, Денис) (The Russian Presidential Academy of National Economy and Public Administration); Simon, Mark (Симон, Марк) (The Russian Presidential Academy of National Economy and Public Administration); Motin, Alexander (Мотин, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: At present, Russia is already involved in the regime of international legal regulation of labor mobility, implementing the construction project of the Eurasian Economic Union. However, in the medium term, the issue of our country's participation in the development of a supranational, global migration management strategy is becoming increasingly topical. The paper analyzes a) the main international and regional migration management regimes (both labor and forced) and the role of key institutions for each of these regimes; b) the nature and dynamics of the main world migration flows, and the place of Russia as a country of immigration, emigration and transit; c) management efforts undertaken by Russia in the context of national, regional and international regulation of migration flows and management tools at the disposal of the Russian state; d) administrative forms of regulation of labor mobility in Russia in connection with the processes of economic integration within the EAEU.
    Keywords: international migrations, migration regimes, labor mobility, international cooperation, international institutions, Russian migration policy.
    Date: 2019–04
  28. By: Pierre Baudry (GSRL - Groupe Sociétés, Religions, Laïcités - EPHE - École pratique des hautes études - CNRS - Centre National de la Recherche Scientifique, Université de Tours, PSL - PSL Research University)
    Abstract: Abstract: Mercantilism is certainly one of the oldest concepts of political economy. However, its use to describe pre-liberal and pre-industrial Western capitalism has been highly disputed due to the apparent vagueness of its definition. This paper tackles this issue by developing a historical vision of mercantilism, which rests on a heuristic ideal-type. My goal is to developed mercantilism as a complementary concept to Kindelberger's of Hegemonic Stability Theory. The pro-free-trade ‘benevolent hegemon' goes hand in hand with mercantilist states, which need a high level of good export and capital import. The question is then to understand two forms of mercantilism: I call the first one ‘early capitalism', which is typical for developing countries, while ‘late mercantilism' is to be found among aging and developed countries, which maintain a mercantilist policy. Empirically, I focus on Germany's economy since 1945 to illustrate and test this conceptual distinction. I intend to show that West Germany has been an ‘early mercantilist' power and benefited from the much-needed help by the USA after WWII, while it appears more and more as ‘late mercantilist' power since the 2000s. This empirical case shall help illustrate my general framework and shed light on the structural reasons for the disputes over trade between Berlin and Washington under Donald Trump.
    Keywords: Keywords: Mercantilism,Hegemonic stability theory,free trade,Kindelberger,Merkel,Trump,USA,Germany,capitalism
    Date: 2019–04–27
  29. By: Asongu, Simplice; Efobi, Uchenna; Tanankem, Belmondo; Osabuohien, Evans
    Abstract: This study assesses the relationship between globalisation and the economic participation of women (EPW) in 47 Sub-Saharan African countries for the period 1990-2013. EPW is measured with the female labour force participation and employment rates. The empirical evidence is based on Panel-corrected Standard Errors and Fixed Effects regressions. The findings show that the positive effect of the overall globalisation index on EPW is dampened by its political component and driven by its economic and social components, with a higher positive magnitude from the former or economic globalisation. For the most part, the findings are robust to the control for several structural and institutional characteristics. An extended analysis by unbundling globalisation shows that the positive incidence of social globalisation is driven by information flow (compared to personal contact and cultural proximity) while the positive effect of economic globalisation is driven by actual flows (relative to restrictions). Policy implications are discussed with some emphasis on how to elevate women’s social status and potentially reduce their victimisation to male dominance.
    Keywords: Globalisation; female; gender; inequality; inclusive development; labour force participation; Africa
    JEL: D60 E60 F40 F59 O55
    Date: 2019–01

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