nep-int New Economics Papers
on International Trade
Issue of 2019‒09‒02
48 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. A tentative exploration of the effects of Brexit on foreign direct investment vis-à-vis the United Kingdom By Ana de Almeida; Duncan Van Limbergen; Marco Hoeberichts; Teresa Sastre
  2. From micro to macro: Demand, supply, and heterogeneity in the trade elasticity By Maria Bas; Thierry Mayer; Mathias Thoenig
  3. The cost of Non-Europe, Revisited By Thierry Mayer; Vincent Vicard; Soledad Zignago
  4. GVCs and Trade Elasticities with Multistage Production By Johnson, Robert; Moxnes, Andreas
  5. Can the Japanese Agri-food Sectors Survive by Promoting their Exports?: A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation By Nobuhiro Hosoe; Yuko AkuneAuthor-X-Name-First: Yuko;
  6. The Implications of Brexit for UK and EU Regional Competitiveness By Mark Thissen; Frank van Oort; Philip McCann; Rauel Ortega-Argilés; Trond Husby
  7. Markets and Markup: A New Empirical Framework and Evidence on Exporters from China By Corsetti, Giancarlo; Crowley, Meredith A; Han, Lu; Song, Huasheng
  8. From theory to policy with gravitas: A solution to the mystery of the excess trade balances By Felbermayr, Gabriel; Yotov, Yoto V.
  9. Measuring the Rise of Economic Nationalism By Monica de Bolle; Jeromin Zettelmeyer
  10. The "New" Economics of Trade Agreements: From Trade Liberalization to Regulatory Convergence? By Grossman, Gene M.; McCalman, Phillip; Staiger, Robert W.
  11. Networks, Barriers, and Trade By David Baqaee; Emmanuel Farhi
  12. Invoicing Currency, Exchange Rate Pass-through and Value-Added Trade: An Emerging Country Case By Hulya Saygili
  13. Impact of Tighter Controls on Japanese Chemical Exports to Korea By Nobuhiro Hosoe; Author-X-Name-First:;
  14. Do Exchange Rates Matter in Global Value Chains? By SATO Kiyotaka; Shajuan ZHANG
  15. Import Demand Elasticities Based on Quantity Data: Theory, Evidence and Implications for the Gains from Trade By Ferguson, Shon; Smith, Aaron
  16. Bearing the cost of politics: Consumer prices and welfare in Russia By Hinz, Julian; Monastyrenko, Evgenii
  17. The effects of market integration during the first globalization: a multi-market approach By Chilosi, David; Federico, Giovanni
  18. The Margins of Trade By Jonathan Eaton; Ana Cecília Fieler
  19. Pakistan’s Agriculture Trade with South Asia By Javed, Asif
  20. The Textbook Case for Industrial Policy: Theory Meets Data By Bartelme, Dominick; Costinot, Arnaud; Donaldson, Dave; Rodriguez-Clare, Andres
  21. Free Trade Agreements and World Obesity By Michele Baggio; Alberto Chong
  22. The Effect of Trade Liberalization on Expenditure Structure of Pakistan By Ahmad, Khalil; Ali, Amjad
  23. Impact of Minimum Wages on Exporters: Evidence From a Sharp Minimum Wage Increase in Turkey By Yusuf Emre Akgunduz; Altan Aldan; Yusuf Kenan Bagir; Huzeyfe Torun
  24. The role of political instability and corruption on foreign direct investment in the MENA region By Aloui, Zouhaier
  25. FDI in the digital economy: a shift to asset-light international footprints By CASELLA, BRUNO; FORMENTI, LORENZO
  26. A Trade-Based Misallocation Index By Orhun Sevinc
  27. Where do migrants from countries ridden by environmental conflict settle? On the scale, selection and sorting of conflict-induced migration By Krieger, Tim; Renner, Laura; Schmid, Lena
  28. Establishing the baseline: estimating the fiscal contribution of multinational enterprises By CASELLA, BRUNO; BOLWIJN, RICHARD; RIGO, DAVIDE
  29. Modelling Impact of Moratorium on Electronic Transmissions using CGE: A Critique By Banga, Rashmi
  30. The Role of TTIP on Other than CO2 Air Pollutants By Qirjo, Dhimitri; Pascalau, Razvan
  31. Measuring the Impact of FDI and Private Domestic Investment on Growth-Case of South Asia By Maham Bokhari; Syed Akhtar Hussain Shah
  32. Southern (American) Hospitality: Italians in Argentina and the US during the Age of Mass Migration By Santiago Pérez
  33. Do Remittances Worsen Export Diversification? By Erik Vardanyan
  34. Does Trade Liberalization Foster Intimate Partner Violence? By Alberto Chong; Daniel Velásquez
  35. The ethics of African regional and continental integration By Kohnert, Dirk
  36. The Future of Global Financial Centres after Brexit: an EU Perspective By Calò, Silvia; Herzberg, Valerie
  37. What is the Optimal Immigration Policy? Migration, Jobs and Welfare By Joao Guerreiro; Sergio Rebelo; Pedro Teles
  38. CETA and Air Pollution By Qirjo, Dhimitri; Pascalau, Razvan; Krichevskiy, Dmitriy
  39. Economic Geography Aspects of the Panama Canal By Maurer, Stephan E; Rauch, Ferdinand
  40. What is the Optimal Immigration Policy? Migration, Jobs and Welfare By Guerreiro, Joao; Rebelo, Sérgio; Teles, Pedro
  41. The Effects of Foreign Multinationals on Workers and Firms in the United States By Bradley Setzler; Felix Tintelnot
  42. The Three Meaningful Votes: Voting on Brexit in the British House of Commons By Aidt, T.; Grey, F.; Savu, A.
  43. Foreign Direct Investment as a Determinant of Cross-Country Stock Market Comovement By Anagnostopoulos, A.; Atesagaoglu, O.; Faraglia, E.; Giannitsarou, C.
  44. Good for the Environment, Good for Business: Foreign Acquisitions and Energy Intensity By Brucal, Arlan; Javorcik, Beata; Love, Inessa
  45. What are the Price Effects of Trade? Evidence from the U.S. and Implications for Quantitative Trade Models By Jaravel, Xavier; Sager, Erick
  46. Technology Gaps, Trade and Income By Sampson, Thomas
  47. International migration and remittances in Nepal Revisiting some "facts", and role of economic diplomacy By Paras Kharel
  48. Innovation spillover, licensing, and ex-post privatization in international duopoly By Liu, Yi; Tan, Yu; Fang, Yu

  1. By: Ana de Almeida; Duncan Van Limbergen; Marco Hoeberichts; Teresa Sastre
    Abstract: European Union (EU) integration has boosted inward foreign direct investment (FDI) into the United Kingdom (UK). Within the EU, the UK has a relatively significant stock of inward FDI, having reached 61\% of its Gross Domestic Product (GDP) in 2017 and risen strongly since 2005. The exit of the UK from the EU and the Single Market will probably result in reduced FDI amongst both investment destinations. The aim of this study is to look at data developments to assess whether the Brexit June 2016 referendum outcome and its aftermath have had an impact on UK-related FDI activity. Although FDI flows are notably volatile and biased by periodic non-systematic outliers, and despite some caveats on data sources and availability of time series data, we find preliminary evidence of a post-referendum slowdown in gross FDI flows between the UK and the EU, notably involving the big EU economies and Ireland. Regarding a very favored form of FDI, greenfield FDI, we document a post-referendum fall in announced projects and capital expenditures into the UK by both other EU countries and one of its most important non-EU partners, the United States. A different approach is also used to analyze the Brexit effect on FDI activity based on estimating the effect of two successive stages in the European integration process - EU membership and the euro area launch - and considering Brexit effects as the reversal of the UK integration into the EU. By using a fixed-effect gravity model to estimate the effects of these integration processes on bilateral FDI activity with the UK, the empirical results suggest that, on the one hand, this country played a role as a gateway for a set of international investor countries outside the euro area to enter European markets and, on the other, it acted as a hub that reallocated these inflows and those coming from euro countries across the euro area itself. Thus the disconnection of the UK from the EU may have further implications for FDI than just reverting the effect of EU membership. Larger trade barriers and lower integration between the UK and the euro area countries’ markets will likely have a negative impact on FDI activity in the UK and might have, in the short run, a negative effect as well in the euro area.
    Date: 2019
  2. By: Maria Bas (Centre d'Etudes Prospectives et d'Informations Internationales); Thierry Mayer (Département d'économie); Mathias Thoenig (Centre Universitaire d'Informatique (Université de Genève))
    Abstract: Models of heterogeneous firms with selection into export market participation generically exhibit aggregate trade elasticities that vary across country-pairs. Only when heterogeneity is assumed Pareto-distributed do all elasticities collapse into a unique elasticity, estimable with a gravity equation. This paper provides a theory-consistent methodology for quantifying country-pair specific aggregate elasticities when moving away from Pareto, i.e. when gravity does not hold. Combining two firm-level customs datasets for which we observe French and Chinese individual sales on the same destination market over the 2000–2006 period, we are able to estimate all the components of the bilateral aggregate elasticity: i) the demand-side parameter that governs the intensive margin and ii) the supply side parameters that drive the extensive margin. These components are then used to calculate theoretical predictions of bilateral aggregate elasticities over the whole set of destinations, and how those elasticities decompose into different margins. Our predictions fit well with econometric estimates, supporting our view that micro-data is a key element in the quantification of aggregate trade elasticities.
    Keywords: Trade elasticity; Firm-level data; Heterogeneity; Gravity; Pareto; Log-normal
    JEL: F1
    Date: 2017–09
  3. By: Thierry Mayer (Département d'économie); Vincent Vicard; Soledad Zignago (Centre d'Etudes Prospectives et d'Informations Internationales)
    Abstract: In this paper we quantify the "Cost of Non-Europe", i.e. the trade-related welfare gains each country member has reaped from the European Union. Thirty years after the terminology of Non-Europe was used to give estimates of the gains from further integration, we use modern versions of the gravity model to estimate the trade creation implied by the EU, and apply those to counterfactual exercises where for instance the EU returns to a "normal'', shallow-type regional agreement, or reverts to WTO rules. Those scenarios are envisioned with or without the exit of the United Kingdom from the EU (Brexit) happening, which points to interesting cross-country differences and potential cascade effects in doing and undoing of trade agreements.
    Keywords: Trade Integration; Gravity; European Union
    JEL: F1
    Date: 2018–04
  4. By: Johnson, Robert; Moxnes, Andreas
    Abstract: We build a quantitative model of trade with multistage manufacturing value chains, which features iceberg trade costs and technology differences across both goods and production stages. We estimate technology and trade costs via the simulated method of moments, matching bilateral shipments of final goods and inputs. Applying the model, we investigate how comparative advantage and trade costs shape the structure of global value chains and trade flows. As the level of trade costs falls, we show that the elasticity of bilateral trade to trade costs increases, due to the endogenous reorganization of value chains (increased export platform production). Surprisingly, however, the elasticity of world trade to trade costs is not magnified by multistage production.
    Date: 2019–06
  5. By: Nobuhiro Hosoe (National Graduate Institute for Policy Studies,Tokyo, Japan); Yuko AkuneAuthor-X-Name-First: Yuko (Nihon University);
    Abstract: Manufacturing industries have attracted research attention regarding roles of firm heterogeneity and product differentiation in the gnew new trade theory. h Agricultural sectors also produce new goods by product differentiation through breeding, food processing, quality-upgrading, and branding. In reaction to the recent globalization, the Japanese government has sought strategies to promote its domestic agri-food sectors by means of product differentiation and export promotion. This computable general equilibrium study examines the relevance of these policies by simulating hypothetical trade liberalization in agriculture and/or food. We show that agricultural trade liberalization would not increase Japan fs agricultural exports but would increase food exports; and that food trade liberalization would promote food exports. Both types of liberalization would increase domestic production in agri-food sectors through agri-food linkages and variety effects. This finding affords evidence of the relevance of product differentiation strategy through food processing and exportation, but not of agricultural export promotion strategy.
    Date: 2018–12
  6. By: Mark Thissen (Netherlands Environmental Assessment Agency (PBL)); Frank van Oort (Erasmus University Rotterdam); Philip McCann (Sheffield University); Rauel Ortega-Argilés (University of Birmingham); Trond Husby (Netherlands Environmental Assessment Agency (PBL))
    Abstract: Any form of Brexit will impact heterogeneously in terms of sectors and regions on the competitiveness of firms in both the UK and Europe. The ongoing uncertainty about the conditions under which the UK will be leaving the EU, creates difficulties in structurally estimating these impacts. Using uniquely-detailed interregional trade data on goods and services for the EU, we apply a novel methodology that disentangles region-sector sensitivities (elasticities) of firms’ competitiveness to (non)tariff barriers from the implications of different post-Brexit UK-EU trade scenarios. This enables us to derive the impact of Brexit on the competitiveness of firms along with the degree of uncertainty that surrounds these impacts, independently from the scenarios. Our analysis demonstrates that the adverse international competitiveness shocks on UK firms are much larger than those on the rest of the EU due to the dependency of the UK on the EU via global value chains. The competitiveness shocks mean that within the UK, Brexit is likely to increase both interregional inequalities and also intra-regional inequalities. In contrast interregional inequalities across Europe may actually fall, depending on the nature of the post-Brexit UK-EU trading arrangements.
    Keywords: Brexit, competitiveness, impact analysis, international trade, regional economics, IO analysis
    JEL: P25 R13
    Date: 2019–08–21
  7. By: Corsetti, Giancarlo; Crowley, Meredith A; Han, Lu; Song, Huasheng
    Abstract: Firms that dominate global trade export to multiple countries and frequently change their foreign destinations. We develop an estimator of the destination-specific markup elasticity to the exchange rate that controls for endogenous market selection. To proxy for firms' power in local markets, we introduce a new classification of products based on Chinese linguistics that distinguishes between highly and less differentiated goods. Using Chinese customs data, we show that controlling for selectivity unveils significant pricing-to-market for highly differentiated goods. Measured in the importer's currency, the prices of highly differentiated goods are more stable than those of less differentiated products.
    Keywords: China; differentiated goods; Exchange Rates; markup elasticity; pricing-to-market; product classification; Trade Elasticity
    JEL: F14 F31 F41
    Date: 2019–08
  8. By: Felbermayr, Gabriel; Yotov, Yoto V.
    Abstract: Bilateral trade balances often play an important role in the international trade policy debate. Academic economists understand that they are misleading indicators of competitiveness and of the gains from trade. However, they also recognize their political relevance, calling for accurate statistical measurement and for more scholarly work. Disturbingly, Davis and Weinstein (2002) argue that the canonical gravity model of trade fails when confronted with bilateral trade balances data, dubbing this "The Mystery of the Excess Trade Balances". Capitalizing on the latest developments in the theoretical and empirical gravity literature, we demonstrate that the workhorse international trade model actually performs well in explaining bilateral trade balances. Moreover, in our data, only 11 to 13% of the variance in bilateral balances is due to asymmetric bilateral trade costs, belying beliefs that bilateral imbalances are driven by 'unfair' manipulation of terms-of-trade. We also perform several general equilibrium experiments within the same structural gravity framework to show that free trade agreements tend to exacerbate bilateral imbalances and that macroeconomic rebalancing leads to adjustment with all trade partners.
    Keywords: Trade Imbalances,Structural Gravity Estimation
    JEL: F1 F13 F14
    Date: 2019
  9. By: Monica de Bolle (Peterson Institute for International Economics); Jeromin Zettelmeyer (Peterson Institute for International Economics)
    Abstract: Since the mid-2000s, the platforms of major political parties in both advanced and emerging-market economies have increasingly emphasized policies that stress national sovereignty, reject multilateralism, and seek to advance national interests through measures that come at the expense of foreign interests. This paper documents this shift by evaluating the policy platforms of the largest political parties (about 55 in total) in the Group of Twenty (G-20) countries with regard to trade policy, foreign direct investment (FDI), immigration, and multilateral organizations. Preference shifts with respect to industrial policy, competition policy, and macroeconomic populism are also examined. In advanced economies, the biggest shifts were toward restrictions on immigration and trade and toward macroeconomic populism. In emerging-market economies, the largest preference shifts were toward industrial policies favoring specific sectors, macroeconomic populism, and industrial concentration. Trade protectionism and skepticism toward multilateral organizations and agreements have increased in both advanced and emerging-market economies. As of 2018, economic policy preferences in emerging-market economies were more nationalist and less liberal than in advanced countries, but the gap has narrowed. Right-wing parties tend to be more nationalist than left-wing parties in the areas of immigration restrictions, FDI restrictions, and antimultilateralism, but there is no significant difference with respect to trade protectionism.
    Keywords: nationalism, populism, capitalism, trade policy, industrial policy, protectionism
    JEL: F5 F1 F2
    Date: 2019–08
  10. By: Grossman, Gene M.; McCalman, Phillip; Staiger, Robert W.
    Abstract: What incentives do governments have to negotiate "new trade agreements," i.e., agreements that constrain not only governments' choices of tariffs, but also their domestic regulatory policies? We focus on horizontal product standards, i.e., those that impose requirements along a horizontal dimension of product differentiation. We introduce differences in ideal products across countries and consider cases in which product choices do not and do confer externalities on other national consumers. In addition to characterizing the features of the optimal new trade agreement in each environment, we ask whether detailed negotiations about regulatory rules are needed for global efficiency or whether an "old trade agreement" augmented by some "policed decentralization" of regulatory procedures can achieve the same outcomes.
    Keywords: firm delocation; harmonization; international trade agreements; regulation
    JEL: F13 F15
    Date: 2019–08
  11. By: David Baqaee; Emmanuel Farhi
    Abstract: We study a non-parametric class of neoclassical trade models with global production networks. We characterize their properties in terms of sufficient statistics useful for growth and welfare accounting as well as for counterfactuals. We establish a formal duality between open and closed economies and use it to analytically quantify the gains from trade. Accounting for nonlinear (non-Cobb- Douglas) production networks with realistic complementarities in production significantly raises the gains from trade relative to estimates in the literature. We use our general comparative statics results to show how models that abstract away from intermediates, no matter how well calibrated, are incapable of simultaneously predicting the costs of tariff and non-tariff barriers to trade. Given trade volumes and elasticities, accounting for intermediates doubles the losses from tariffs. Better quantitative accuracy demands the use of more complicated, oftentimes computational, models. This paper seeks to help bridge the gap between computation and theory.
    JEL: F1 F11 F13
    Date: 2019–07
  12. By: Hulya Saygili
    Abstract: We explore the role of invoicing currency and global production integration on exchange rate pass-through to import and export prices, using 3-digit product level data classified by end-use and 2-digit sector level data displaying varying integration to global value-added trade from an emerging country, Turkey. The results show that, overall, rates of exchange rate pass-through to export prices are higher than those to import prices. The rare of pass-through is significantly higher for local currency-priced goods. The pass-through to the US dollar and euro-priced goods depends on the type of products traded and value-added trade. For consumption and capital goods, pass-through rates are significant and relatively high when they are priced in the US dollars. For intermediate goods the pass-through to euro-priced goods are higher than those to the US dollar-priced goods. In addition, sectors displaying a low or high association with global value chains tend to have a higher exchange rate pass-through than those placing in the middle range and the rate is slightly higher for sectors having lower global linkage.
    Keywords: Exchange rate pass-through, Currency of invoicing, Imported input, Value-added trade
    JEL: F1 F3 F4
    Date: 2019
  13. By: Nobuhiro Hosoe (National Graduate Institute for Policy Studies,Tokyo, Japan); Author-X-Name-First:;
    Abstract: The Japanese Ministry of Economy, Trade and Industry announced recently that they will terminate preferential treatment in the licensing of specific chemical products for export to South Korea. This announcement evoked concern that the impact on Korean semiconductor and electronics industries, which rely heavily on imports from Japan, might cause a serious supply shortage in the global semiconductor market. To assess the economic impact of tighter export controls, this study simulates: (a) imposition of an export tax on chemical products; and (b) a productivity decline in the electronics sector in Korea, using a world trade computable general equilibrium model. The results of these simulations indicate that such a productivity decline would cause only slight harm to the Japanese and world economies, aside from the electronics sector in Korea, and that an export tax would significantly distort trade patterns and undermine the welfare of Japan and Korea in a similar magnitude. However, welfare loss normalized for GDP size would be far smaller in Japan than in Korea.
    Date: 2019–08
  14. By: SATO Kiyotaka; Shajuan ZHANG
    Abstract: We empirically investigate whether global value chains (GVCs) can affect export responsiveness to real exchange rate volatility by constructing two measures of GVC participation at bilateral and sectoral levels from OECD Inter-Country Input-Output (ICIO) Tables. The 2016 edition covers 63 countries and 16 manufacturing sectors between 1995 and 2011. A panel estimation shows that the negative effect of exchange rate volatility on exports is significantly mitigated by GVC participation, which is supported by various robustness checks. Moreover, if regional value chains were better-developed and deepened, exchange rate fluctuations among regional countries would have less negative influence on regional trade.
    Date: 2019–08
  15. By: Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Smith, Aaron (Department of Agricultural and Resource Economics,)
    Abstract: Correct estimates of import demand elasticities are essential for measuring the gains from trade and predicting the impact of trade policies. We show that estimates of import demand elasticities hinge critically on whether they are derived using trade quantities or trade values, and this difference is due to properties of the estimators. Using partial identification methods, we show theoretically that the upper bound on the set of plausible estimates is lower when using traded quantities, compared to the standard approach using trade values. Our theoretical predictions are confirmed using detailed product-level data on U.S. imports for the years 1993‒2006. Our proposed method using traded quantities leads to smaller point estimates of the import demand elasticities for many goods and imply larger gains from trade compared to estimates based on trade values.
    Keywords: Model selection; Partial identication; Trade elasticity; Armington
    JEL: F10 F12 F14
    Date: 2019–08–05
  16. By: Hinz, Julian; Monastyrenko, Evgenii
    Abstract: In August 2014, the Russian Federation implemented an embargo on select food and agricultural imports from Western countries in response to the economic sanctions. The measure was designed to harm producers in United States, European Union, Norway, Ukraine, along other Western countries. In this study we quantify the effect of the embargo for welfare and consumer prices in Russia. We first provide evidence for the direct effect on consumer prices with a difference-in-differences approach with a highly detailed monthly dataset of consumer prices in Russia between 2011-2016. The results suggest that the embargo caused consumer prices of embargoed goods to rise in the short run by 8.9% - 12.6%. Regions of Russia with previously above-average levels of food imports from sanctioned countries experienced a stronger impact. In the medium run the effect reduces to 1.2% - 6.3%. The results also indicate that the policy shock has been transmitted to non-embargoed sectors by means of domestic inputoutput production linkages. We then use a Ricardian model of trade with domestic sectoral linkages, trade in intermediate goods and sectoral heterogeneity in production to perform counterfactual simulations, isolate the direct and indirect price effects, and compute welfare measures for a situation without embargo. Our simulations suggest that the self-imposed embargo caused a decline in Russian welfare by 1.88% and an increase in the overall price index by 0.19%.
    Keywords: Trade policy,Embargo,Consumer prices,Sectoral linkages
    JEL: F10 F13 F14 F51
    Date: 2019
  17. By: Chilosi, David; Federico, Giovanni
    Abstract: This paper measures the effects of international market integration on world trade and welfare during the first globalization (1815-1913). The analysis is carried out with a multi-market partial equilibrium model, which takes into account the interactions between route-specific changes in trade costs. We consider world trade in the two principal traded commodities, cotton and wheat. The collapse in trade costs accounted for 60% of the increase in trade in cotton and 40% of the increase in trade of wheat. Both producers and consumers gained, but welfare gains were inversely related to the size of the country and positively to the level of openness to trade. We infer that welfare gains from international market integration were equivalent to substantial shares of economic growth in the 'long 19th century'.
    Keywords: Globalization; market integration; Trade; welfare gains
    Date: 2019–06
  18. By: Jonathan Eaton; Ana Cecília Fieler
    Abstract: We introduce quality differentiation and an extensive margin of products into a standard quantitative, general equilibrium model of international trade. Both the quality and the quantity of a product play a role in its contribution both to consumption and to production. The framework allows bilateral trade to vary at the extensive and intensive margins and the intensive margin of trade to vary at the quantity and unit-value margins. We estimate the parameters of the model using bilateral data on trade flows and on unit values in trade. The model captures (i) the well-documented increasing relation between unit values and both importer and exporter per capita income and (ii) how the extensive margin rises with importer and exporter size. But, unlike other contributions to the literature confronting these margins in international trade, our framework delivers a standard gravity formulation for trade flows and standard measures of the gains from trade apply.
    JEL: F11 F14
    Date: 2019–07
  19. By: Javed, Asif
    Abstract: Agriculture sector has major contributor towards GDP of Pakistan and also absorbs the extensive portion of labor force. It is observed from the examination of trade data from 2010 to 2017 that integration within South Asia is limited merely with Afghanistan and India while trade with Maldives and Nepal shows negligible figures. Agriculture exports can be increased by developing value chains and trade ties with countries towards which Pakistan has limited export volume. Further, to expand the agriculture exports Pakistan must also focus on export of animals and food products. Overall agriculture growth can be achieved by making public investment in basic inputs including water and seeds through which productivity can be increased.
    Keywords: Agriculture, Food products, Livestock, South Asia, Value chains, Exports
    JEL: O13 O20 O53
    Date: 2019
  20. By: Bartelme, Dominick; Costinot, Arnaud; Donaldson, Dave; Rodriguez-Clare, Andres
    Abstract: The textbook case for industrial policy is well understood. If some sectors are subject to external economies of scale, whereas others are not, a government should subsidize the first group of sectors at the expense of the second. The empirical relevance of this argument, however, remains unclear. In this paper we develop a strategy to estimate sector-level economies of scale and evaluate the gains from such policy interventions in an open economy. Our benchmark results point towards significant and heterogeneous economies of scale across manufacturing sectors, but only modest gains from industrial policy, below 1% of GDP on average. Though these gains can be larger in some of the alternative environments that we consider, they are always smaller than the gains from optimal trade policy.
    JEL: F10 F11 F12 F13 F14 F17
    Date: 2019–08
  21. By: Michele Baggio (Department of Economics, University of Connecticut, USA); Alberto Chong (Department of Economics, Georgia State University, USA)
    Abstract: We study the causal link between trade openness via free trade agreements and obesity rates. We apply a difference-in-differences approach and exploit the year a country entered a free trade agreement with the United States during the period 1990 to 2016. We find statistically and economically significant results and show that our findings are robust to placebo tests, the use of synthetic control methods, and mechanically maximizing the sample. Additionally, we show that when using event studies the equal trends assumption holds.
    Date: 2019–08
  22. By: Ahmad, Khalil; Ali, Amjad
    Abstract: Demand side public policy plays a risk reducing role for imperfect sectors of the developing economies through public investment during liberalization. Public sector investment, composition and structure play an important role to determine the comparative advantage for the productive sector. This study explores the effect of trade liberalization and trade tax revenue on the expenditure structure of Pakistan during 1975-2016. Autoregressive Distributed Lag approach has been used for examining the long run co-integration among the expenditure structure and trade liberalization and Vector Error-Correction model is used for short run dynamics of the concerned variables. The empirical result shows that trade tax revenue has a positive impact on the expenditure structure in the long run but not in the short run. Trade liberalization, budget deficits and defense expenditure have negative associations with expenditure structure.
    Keywords: Average Tariff rate, Trade Tax Revenue, Expenditure Structure
    JEL: F10 F13 H71
    Date: 2019
  23. By: Yusuf Emre Akgunduz; Altan Aldan; Yusuf Kenan Bagir; Huzeyfe Torun
    Abstract: The minimum wages in Turkey rose by nearly 30% in January 2016. We investigate the impact of the increase in minimum wages on export value and prices of firms. We use administrative employee-employer matched firm and transaction level customs data for the analysis. We calculate the potential exposure of each firm to the minimum wage increase according to their 2015 employment records and estimate the effects using a difference-in-differences approach. The results show that there is no significant effect on export prices suggesting that Turkish exporters are price-takers in international trade and producer costs have little effect on export prices in the short run. The impact on export amount is varying across firms depending on the firm size.
    Keywords: Minimum wages, Labor costs, Exports
    JEL: J23 J38 F14
    Date: 2019
  24. By: Aloui, Zouhaier
    Abstract: The interest of this paper is to show the influence of political instability and corruption on foreign direct investment and its different effects among MENA countries. Political instability and corruption are highlighted as a risk factor for the foreign investor who generates several costs for economic activity and remains a major determinant of FDI. The combination of political instability and corruption contributes to the revolution in these countries such as Tunisia, Egypt, Libya and weak economic integrations in general explain the low attractiveness of MENA countries for foreign investors. It is widely argued that good governance is an important factor of FDI. With the exception of studies of corruption, however, empirical research on the link between governance and FDI is limited, particularly in the context of MENA countries. Corruption and political instability are the governance indicators that seem to have the greatest impact on foreign direct investment (FDI). An increase in FDI has the greatest effect on development in politically stable regimes. Studies of corruption and its relation to foreign direct investment (FDI) have yielded mixed results; some have found that corruption discourages FDI, but others have found the opposite. The study covers the MENA region for the period 1996-2016. Using the panel data technique and the results obtained indicate a negative relationship between political instability and foreign direct investment and between corruption and FDI.
    Keywords: political instability, corruption, foreign direct investment, MENA countries.
    JEL: F21 K23 K42
    Date: 2019–08–26
    Abstract: The digital economy is becoming an ever more important part of the world economy. It is revolutionizing the way we do business, and it has important implications for foreign direct investment (FDI). However, little systematic analysis has been done to investigate the investment patterns of digital multinational enterprises (MNEs). This study, conducted in the context of UNCTAD’s World Investment Report 2017 (WIR17), is an attempt to fill some of the gap in knowledge and to provide an impetus for future research. It proposes a new interpretative framework for the digital economy, builds an extensive sample of digital and ICT MNEs, and profiles their international operations. Its main findings are that MNEs in highly digitalized industries have a “lighter” FDI footprint than traditional MNEs; they tend to concentrate their operations in a few highly developed countries and their investment patterns are shaped by fiscal and financial motives more than those of traditional MNEs. As digital technologies and business models tend to disseminate across the broader economy, this may suggest the onset of a new era of international production and MNE internationalization paths. This paper sheds light on the methodology underpinning the analysis in WIR17 to ensure full replicability and to prepare the ground for further work in the area. It also builds further on the discussion in WIR17, proposing broader implications for international business and new avenues for future research.
    Keywords: FDI, digital economy, multinational enterprises, ICT
    JEL: F21 F23
    Date: 2018–04–30
  26. By: Orhun Sevinc
    Abstract: This paper, based on a model of trade in the presence of sectoral distortions, develops a one dimensional sectoral misallocation index. It estimates the index using product-level bilateral trade data at the sector-country-year level since 1962. The geographical distribution of the misallocation index suggests substantial within-region differences across countries and across time. Notably, a large and historical allocative efficiency gap exists across the West and the East of Europe, while the latter shows a remarkable progress in catching up. On the other hand, the substantial gap between the North and South America is highly persistent. The paper then investigates the negative association of misallocation to economic performance through multivariate regression analysis. The index of misallocation inversely and robustly predicts cross-country productivity differences, contains valuable information on top of factors of production, and outperforms measures of diversification, product sophistication, and openness when time invariant country characteristics are accounted for.
    Keywords: Trade, Misallocation, Comparative advantage
    JEL: F10 F14 O10
    Date: 2019
  27. By: Krieger, Tim; Renner, Laura; Schmid, Lena
    Abstract: Environmentally induced conflicts can trigger migration. This paper analyzes the location decisions of migrants, i.e., the "sorting" of migrants into alternative destinations. We argue that this sorting depends on a variety of factors. The selection of migrants affects preferences over where to settle and depends on the underlying type of environmentally induced conflict. In addition to (transport-related) migration costs, migration governance shapes the sorting pattern of migrants. Immigration policies in destination countries impose further costs to migration or even prevent settlement. At the same time, national immigration policies depend on the "supply" of migrants that are expected to arrive, as well as on other countries' policies regarding immigration. In addition, coordination failure of destination countries may feed back to the sorting decisions of migrants. The chapter discusses sorting not only from a theoretically but also empirical perspective, thereby highlighting both existing studies on sorting and the empirical challenges to analyzing sorting behavior in the context of migration that is induced by environmental conflict.
    Keywords: environmental and climate change,conflict,migration,emigration,selection,sorting,migration governance,theory,empirics
    JEL: D74 F22 J61 Q54
    Date: 2019
    Abstract: ax revenues from multinational enterprises (MNEs) are an important source of public finance in developing economies. The research and policy debate so far have mostly focused on the “missing” part, i.e. the government revenues lost due to the tax avoidance practices of MNEs (Bolwijn et al., 2018). In this study, we take a different, but complementary, approach, looking at the taxes and other revenues actually paid by foreign affiliates of MNEs to developing-country governments. We present two alternative methodologies to estimate foreign affiliates’ fiscal contribution – the contribution method and the foreign direct investment (FDI) income method – and show that they lead to the same order of magnitude. The findings allow us to set a baseline for an informed discussion on tax avoidance by MNEs.
    Keywords: multinational enterprise, fiscal contribution, BEPS, domestic revenues, developing countries
    JEL: F2 F21 F23
    Date: 2018–11–20
  29. By: Banga, Rashmi
    Abstract: The paper presents a detailed critique of estimating economic impact of moratorium on custom duties on electronic transmissions using CGE modelling, which has been undertaken by the European Centre for International Political Economy (ECIPE). Electronic transmissions are ‘on-line’ deliveries of digitizable products like music CDs, films, e-books, software and printed material. Since 1998, moratorium on custom duties on electronic transmissions has been renewed every two years in the WTO. ECIPE paper estimates the economic impact of removal of the moratorium. Using GTAP model, the analysis applies arbitrary tariffs on four broad services sectors and presents the results as economic impact of removal of the moratorium. This is misleading for the policymakers. The model does not have product-level data or dis-aggregated services data in order to identify electronic transmissions. Applying tariffs on broad services sectors also challenges the commitments taken by the developing countries in the GATS.
    Keywords: Moratorium, Electronic Transmissions, ET Moratorium, CGE, GTAP, Economic Impact of ET Moratorium
    JEL: D58 F13 F14 F17
    Date: 2019–08–19
  30. By: Qirjo, Dhimitri; Pascalau, Razvan
    Abstract: We empirically investigate the impacts of the implementation of the Transatlantic Trade and Investment Partnership (TTIP) on per capita emissions of eight air pollutants and municipal waste. We employ the same explanatory variables and apply the same empirical strategy and methodologies as in (Qirjo and Pascalau, 2019). We provide robust evidence suggesting that the implementation of TTIP could be beneficial to the environment because it may help reduce per capita emissions of NO2 and HFCs/PFCs/SF6 in a typical TTIP member. This result is based on the statistically significant evidence showing that, on average, the pollution haven motive based on national per capita income variations is dominated by the Factor Endowment Argument based on the classical Heckscher-Ohlin trade theory and the pollution haven motive originating from an inverse measurement of national population density differences. However, we also report generally statistically significant evidence implying that the implementation of TTIP could denigrate the environment because it may help increase per capita emissions of SO2, SOx, NOx, SF6, and NH3.
    Keywords: Free Trade, Environmental Economics, TTIP.
    JEL: F18 F53
    Date: 2019–08–19
  31. By: Maham Bokhari (Ministry of Planning, Development, & Reform, Islamabad); Syed Akhtar Hussain Shah (Ministry of Planning, Development, & Reform, Islamabad)
    Abstract: This paper examines the impact of private domestic investment (PDI) on growth in comparison with the Foreign Direct Investment (FDI). It aims to conduct a cross country analysis of South Asia from 1975 to 2017. Trade Openness, Inflation, Government Expenditure, Human Capital, Exchange Rate are control variables of interest for the investment model used in this research. The countries tested are Bangladesh, India, Pakistan and Sri Lanka. Fixed Effects and Random Effects method is employed to test the panel data of the four South Asian countries. The results show that in case of South Asia on the whole, there is a positive and significant impact of PDI on growth. To further analyse the subject and put forward a potential policy for the region, the regression is decomposed into sectoral Private Domestic Investment: Primary, Secondary and Services. PDI affects the growth of South Asia, only when it is invested in the manufacturing or the primary sector.
    Keywords: FDI (Foreign Direct Investment), PDI (Private Domestic Investment), Trade Openness
    Date: 2019
  32. By: Santiago Pérez
    Abstract: I study the selection and economic outcomes of Italians in Argentina and the US, the two largest destinations during the age of mass migration. Prior cross-sectional work finds that Italians had faster assimilation in Argentina, but it is inconclusive on whether this was due to differences in selection or host-country conditions. I assemble data following Italians from passenger lists to censuses, enabling me to compare migrants with similar pre-migration characteristics. Italians had better economic outcomes in Argentina, and this advantage was unlikely to be due to selection. Migration path dependence can rationalize these differences in an era of open borders.
    JEL: J15 J61 N30 N31 N36
    Date: 2019–07
  33. By: Erik Vardanyan (Economic Research Department, Central Bank of Armenia)
    Abstract: The paper explores the impact of workers’ remittances on the level of export diversification. The hypothesis is that significant inflow of remittances causes overvaluation of real exchange rate, which in turn deteriorates diversity of export. The theoretical base is in line with the Dutch disease phenomenon. The paper uses annual cross-national panel data over 2000-2016 period and System GMM methodology. The evidence suggests that indeed large inflow of remittances is associated with less diversified export. The economic intuition behind is that remittance-caused real exchange rate appreciation unevenly suppresses export of goods: some goods “suffer†more than others do. In terms of the number of product-names, a percentage point increase in remittances to GDP sent home “reduces†variety of export by approximately five active lines. There are other interesting findings as well. An improvement of government effectiveness facilitates overall export diversification; terms of trade improvement and rise of real exchange rate volatility mostly increase export concentration rather than alter number of exported product-names.
    Keywords: remittances, export diversification, export concentration, export variety, real exchange rate, System GMM
    JEL: F14 F24 F31
    Date: 2019–08
  34. By: Alberto Chong (Department of Economics, Georgia State University, USA); Daniel Velásquez (Department of Economics, University of Michigan, USA)
    Abstract: By exploiting an unexpected policy change in the form of drastic tariffs reduction across several industries in Peru during the 2000s we are able to causally show that in districts where industries’ employment are predominantly male, trade liberalization produced an increase in physical intimate partner violence of 36 percentage points with respect to control districts in our preferred specification. We find no such difference in districts where industries’ employment is predominantly female. These findings are original and consistent with several hypotheses in the social sciences. Our results are robust to falsification and placebo tests, sensitivity to initial conditions, conflation of past and current shocks, selective migration, permutation tests and input-tariffs considerations. Finally, we find considerable heterogeneity, as education and the age of first marriage appear to be key variables that correlate with our findings.
    Date: 2019–08
  35. By: Kohnert, Dirk
    Abstract: The decision of African leaders on the creation of an African Continental Free Trade Area (AfCFTA) in 2018 was not merely a political decision with economic implications. It has significant and complex ethical dimensions too. This, not only concerning a possible trade-off between economic growth and well-being, employment, remittances, corruption, the depletion of natural resources and related ecological and gender problems. AfCFTA will also impact harmfully on growing xenophobia, nationalism and populism, the likely outcome of growing capital and labour mobility.
    Keywords: AfCFTA, regional integration, ethics, Sub-Saharan Africa, international trade, development aid, post-colonialism, SADC, ECOWAS, CEMAC, CMA, ZLECA
    JEL: F13 F15 F22 F35 F52 F54 N17 N37 N97 O2 O55 Z1
    Date: 2019–08–14
  36. By: Calò, Silvia (Central Bank of Ireland); Herzberg, Valerie (Central Bank of Ireland)
    Abstract: This note presents a set of possible directions for the future of London and other financial centres in Europe after Brexit. It does so by building scenarios framed by the current landscape of financial services in the EU. We find that given the sizeable gap between London and other financial centres in Europe and London’s international orientation London is likely to remain a very large global financial centre even in more adverse scenarios. According to our analysis, the impact of fundamental factors on London could be very small due to the 'premium' it enjoys, not captured by size or productivity. Yet, the premium could be eroded and it may be sensitive to 1) a possible realignment of perceptions, and 2) abrupt changes in regulation and centrality due to new trading arrangements, disruption in global value chains, and institutional reshaping and associated uncertainty.
    Date: 2019–08
  37. By: Joao Guerreiro; Sergio Rebelo; Pedro Teles
    Abstract: We study the immigration policy that maximizes the welfare of the native population in an economy where the government designs an optimal redistributive welfare system and supplies public goods. We show that when immigrants can be excluded from the welfare system, free immigration is optimal. It is also optimal to use the tax system to encourage the immigration of high-skill workers and discourage that of low-skill workers. When immigrants and natives must be treated alike, it is optimal to ban low-skill immigration and have free immigration for high-skill workers. However, high-skill workers may choose not to immigrate when there are heavy taxes levied on all high-skill workers, natives and immigrants alike. We use a calibrated version of the model to study how the optimal immigration policy responds to changes in the skill premia in the U.S. and abroad.
    JEL: F22 H21
    Date: 2019–08
  38. By: Qirjo, Dhimitri; Pascalau, Razvan; Krichevskiy, Dmitriy
    Abstract: The study empirically investigates and shows that on average, the implementation of the Comprehensive Economic and Trade Agreement (CETA) may contribute to the fight against global warming. This study finds that on average, a one percent increase of a percentage point in the bilateral volume of trade as a portion of GDP between Canada and a typical EU member could help reduce annual per capita emissions of GHGs in an average CETA member by about .57 percent. The results also show that the presence of CETA may decrease annual per capita emissions of GHGs in almost all CETA members. There is no statistically significant evidence suggesting an increase of GHGs per capita emissions in any CETA member, regardless of the model or statistical method employed in the paper. These results stand because of the combinations of the factor endowment hypothesis (FEH), the pollution haven hypothesis based on population density variations (PHH2), and the pollution haven hypothesis based on national income differences (PHH1) between each EU member and Canada.
    Keywords: Free Trade, Environmental Economics, CETA.
    JEL: F18 F53
    Date: 2019–08–17
  39. By: Maurer, Stephan E; Rauch, Ferdinand
    Abstract: This paper studies how the opening of the Panama Canal in 1914 changed market access and influenced the economic geography of the United States. We compute shipment distances with and without the canal from each US county to each other US county and to key international ports and compute the resulting change in market access. We relate this change to population changes in 20-year intervals from 1880 to 2000. We find that a 1 percent increase in market access led to a total increase of population by around 6 percent. We compute similar elasticities for wages, land values and immigration from out of state. When we decompose the effect by industry, we find that tradable (manufacturing) industries react faster than non-tradable (services), with a fairly similar aggregate effect.
    JEL: F1 N72 O1 R1
    Date: 2019–06
  40. By: Guerreiro, Joao; Rebelo, Sérgio; Teles, Pedro
    Abstract: We study the immigration policy that maximizes the welfare of the native population in an economy where the government designs an optimal redistributive welfare system and supplies public goods. We show that when immigrants can be excluded from the welfare system, free immigration is optimal. It is also optimal to use the tax system to encourage the immigration of high-skill workers and discourage that of low-skill workers. When immigrants and natives must be treated alike, it is optimal to ban low-skill immigration and have free immigration for high-skill workers. However, high-skill workers may choose not to immigrate when there are heavy taxes levied on all high-skill workers, natives and immi- grants alike. We use a calibrated version of the model to study how the optimal immigration policy responds to changes in the skill premia in the U.S. and abroad.
    Keywords: Immigration; optimal taxation; redistribution; Welfare state
    JEL: F22 H21
    Date: 2019–08
  41. By: Bradley Setzler; Felix Tintelnot
    Abstract: Governments go to great lengths to attract foreign multinational enterprises because these enterprises are thought to raise the wages paid to their employees (direct effects) and to improve outcomes at incumbent local firms (indirect effects). We construct the first U.S. employer-employee dataset with foreign ownership information from tax records to measure these direct and indirect effects. We find the average direct effect of a foreign multinational firm on its U.S. workers is a 7 percent increase in wages. This premium is larger for higher skilled workers and for the employees of firms from high GDP per capita countries. We leverage the past spatial clustering of foreign-owned firms by country of ownership to identify the indirect effects. An expansion in the foreign multinational share of commuting zone employment substantially increases the employment, value added, and—for higher earning workers—wages at local domestic-owned firms. Per job created by a foreign multinational, our estimates suggest annual gains of 16,000 USD to the aggregate wages of local incumbents, of which about two-thirds is due to indirect effects. We compare our findings to the value of subsidy deals received by foreign multinationals.
    JEL: F23 J3 R1
    Date: 2019–08
  42. By: Aidt, T.; Grey, F.; Savu, A.
    Abstract: Why do politicians rebel and vote against the party line when high stakes bills come to the floor of the legislature? We leverage the three so-called Meaningful Votes that took place in the British House of Commons between January and March 2019 on the Withdrawal Agreement that the Conservative government had reached with the European Union to address this question. The Withdrawal Agreement was decisively defeated three times and a major revolt amongst Conservative backbench Members of Parliament (MPs) was instrumental in this. We find that three factors influenced their rebellion calculus: the MP’s own preference, constituency preferences and career concerns. Somewhat paradoxically, the rebellion within the Conservative Party came from MPs who had supported Leave in the 2016 Brexit referendum and from MPs elected in Leave leaning constituencies.
    Keywords: BREXIT, roll call votes, rebellions, party discipline, party coherence, House of Commons
    JEL: D72
    Date: 2019–08–19
  43. By: Anagnostopoulos, A.; Atesagaoglu, O.; Faraglia, E.; Giannitsarou, C.
    Abstract: We develop a theoretical framework in order to investigate the link between two recent trends: (i) the rise in cross-country stock market correlations over the past three decades, and (ii) the increase in global foreign direct investment (FDI) positions over the same period. Our objective is twofold: first, we investigate empirically the channel through which the rise in global stock market correlations is associated with the observed increase in global FDI. Second, we develop a two-country stochastic asset pricing model with multinational firms that allows us to quantify the extent to which the recent rise in global FDI can account for the observed increase in cross-country stock market comovement. Calibrating three versions of the model (financial autarky, incomplete markets and complete markets) to the US and the rest-of-the-world, we find that a permanent increase in FDI positions, as observed from mid 1990s to mid 2000s, leads to substantial increase in cross-country stock market comovements. Increases in FDI alone can account for approximately one third of the observed increase in stock market correlations. We also discuss the role of portfolio diversification and, more generally, asset market integration.
    Keywords: stock market comovements, foreign direct investment, business cycle synchronisation, multinational firms, asset pricing
    JEL: G15 F21 F23 G12 F44
    Date: 2019–07–22
  44. By: Brucal, Arlan; Javorcik, Beata; Love, Inessa
    Abstract: The link between foreign ownership and environmental performance remains a controversial issue. This paper contributes to our understanding of this subject by analyzing the impact of foreign acquisitions on plant-level energy intensity. The analysis applies a difference-in-differences approach combined with propensity score matching to the data from the Indonesian Manufacturing Census for the period 1983-2001 (or 1983-2008 in robustness checks). It covers 210 acquisition cases where an acquired plant is observed two years before and at least three years after an ownership change and for which a carefully selected control plant exists. The results suggest that while foreign ownership increases the overall energy usage due to expansion of output, it decreases the plant's energy intensity. Specifically, acquired plants reduce energy intensity by about 30% two years after acquisition, relative to the control plants. In contrast, foreign divestments tend to increase energy intensity. At the aggregate level, entry of foreign-owned plants is associated with industry-wide reduction in energy intensity.
    Keywords: energy intensity; FDI; Foreign acquisition; foreign divestment; Indonesia
    JEL: F21 Q56
    Date: 2019–06
  45. By: Jaravel, Xavier; Sager, Erick
    Abstract: This paper fi nds that U.S. consumer prices fell substantially due to increased trade with China. With comprehensive price micro-data and two complementary identi cation strategies, we estimate that a 1pp increase in import penetration from China causes a 1.91% decline in consumer prices. This price response is driven by declining markups for domestically-produced goods, and is one order of magnitude larger than in standard trade models that abstract from strategic price-setting. The estimates imply that trade with China increased U.S. consumer surplus by about $400,000 per displaced job, and that product categories catering to low-income consumers experienced larger price declines.
    Keywords: Markups; prices; Trade
    JEL: F10 F13 F14
    Date: 2019–08
  46. By: Sampson, Thomas
    Abstract: This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD.
    Keywords: International wage inequality; Ricardian comparative advantage; Technology gaps; Technology investment; Trade
    JEL: F11 F43 O14 O41
    Date: 2019–06
  47. By: Paras Kharel (South Asia Watch on Trade, Economics and Environment)
    Abstract: This paper presents cases where numbers and facts used in the discourse on international outmigration and remittances in Nepal mislead, identifies data gaps, and highlights avenues through which the nation’s foreign affairs apparatus can contribute to maximizing the net benefits of international outmigration and remittances.
    Keywords: International migration, remittances, data gaps, employment, foreign policy, savings
    JEL: F22 F24 F50 O15 D14
    Date: 2019–07
  48. By: Liu, Yi; Tan, Yu; Fang, Yu
    Abstract: This paper studies the impact of innovation spillover and licensing on optimal ex-post privatization policies by involving an exogenous R&D activity in a partial-equilibrium international duopoly setting. By assuming a domestic public firm is relatively inefficient compared to its foreign private rival, we characterize and discuss optimal privatization policies under both foreign private and domestic public innovation. The theoretical results suggest that foreign private (domestic public) innovation, including both spillover and licensing, reduces (increases) the optimal degree of ex-post privatization. In addition, innovation spillover and licensing have the same impact direction on privatization policies. The numerical evidence supports these theoretical findings.
    Keywords: Spillover, Licensing, Ex-post Privatization, International Duopoly
    JEL: F13 H4 L13 L24 L33
    Date: 2019–08–09

This nep-int issue is ©2019 by Luca Salvatici. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.