nep-int New Economics Papers
on International Trade
Issue of 2019‒12‒16
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Tariff passthrough at the border and at the store: evidence from US trade policy By Cavallo, Alberto; Gopinath, Gita; Neiman, Brent; Tang, Jenny
  2. Export Decision under Risk By José de Sousa; Anne-Célia Disdier; Carl Gaigné
  3. Foreign Direct Investment and Knowledge Diffusion in Poor Locations By Girum Abebe; Margaret McMillan; Michel Serafinelli
  4. Trade Liberalization Policies and Renewable Energy Transition in Low and Middle-Income Countries? An Instrumental Variable Approach By Murshed, Muntasir
  5. China as a WTO developing member, is it a problem? By Hu, Weinian
  6. The WTO’s Existential Crisis: How to Salvage Its Ability to Settle Trade Disputes By Jeffrey J. Schott; Euijin Jung
  7. Trade Policy with Intermediate Inputs Trade By Qasim, Ahmed Waqar; Itaya, Jun-ichi
  8. Digital and sustainable trade facilitation in Latin America and the Caribbean: Regional Report 2019 By -
  9. Technical Memorandum for Project 0871 "Measuring the Impact of Trade on the U.S. Economy" By J. Bradford Jensen
  10. Modelling International Migration Flows by Integrating Multiple Data Sources By Del Fava, Emanuele; Wiśniowsk, Arkadiusz; Zagheni, Emilio
  11. Trade, Emissions, and Regulatory (Non-)Compliance: Implications of Firm Heterogeneity By Juin-Jen Chang; Yi-Ling Cheng; Shin-Kun Peng
  12. Refugees' and Irregular Migrants' Self-Selection into Europe: Who Migrates Where? By Aksoy, Cevat Giray; Poutvaara, Panu
  13. The United States' Fraught Competitive Position in the World Wheat Market By John M. Crespi; Chen-Ti Chen
  14. Working Conditions, Transparency, and Compliance in Global Value Chains: Evidence from Better Work Jordan By Robertson, Raymond
  15. The mental health consequences of globalisation By Antonia Lopez Villavicencio; Maria Cervini
  16. Open database for the paper "Participation in global value chains and varieties of development patterns" By Bruno Carballa Smichowski; Cédric Durand; Steven Knauss
  17. Migration Networks and Location Decisions: Evidence from U.S. Mass Migration By Stuart, Bryan; Taylor, Evan J.
  18. United States- Latin America and the Caribbean Trade Developments 2019 By -
  19. Assessing the Fiscal Impact of Trade Liberalization in Laos: A General Equilibrium Approach By Sithanonxay SUVANNAPHAKDY; Toshihisa TOYODA
  20. From Boycott to Buycott: Is Activism from the North Good for the South? By Patrice CASSAGNARD; Tendai ESPINOSA
  21. Proceedings: 3rd International Conference on Food and Agricultural Economics: TRADE DIVERSION AMONG COSTA RICA AND ITS MAIN PORK MEAT PARTNERS By Lizano, Victor; Vega, Mercedes
  22. Trade and Welfare in General Equilibrium : A Discrete-time Infinite Horizon Case By Kubota, Hajime
  23. The Impact of Mass Migration of Syrians on the Turkish Labor Market By Ege Aksu; Refik Erzan; Murat Güray Kırdar
  25. Can Clean Technology Exports Affect CO2 Emissions for Partners? Evidence from China. By Shaker, Saber Adly
  26. Effects of Minimum Wage on Import and Innovation: Theory and Evidence from China By Chu, Angus C.; Furukawa, Yuichi; Kou, Zonglai; Liu, Xueyue
  27. Bank Ownership and Margins of Trade By Pavel Chakraborty
  28. How Settlement Locations and Local Networks Influence Immigrant Political Integration By Bernt Bratsberg; Jeremy Ferwerda; Henning Finseraas; Andreas Kotsadam
  29. Measuring distortions in international markets: The semiconductor value chain By OECD
  30. The Role of Immigrants in the ‘Take-Offs’ of Eastern European ‘Manchesters.’ A Comparative Case Studies of Three Cities: Lodz, Tampere, and Ivanovo By Kamil Kowalski; Rafal Matera; Mariusz E. Sokolowicz

  1. By: Cavallo, Alberto (Harvard University); Gopinath, Gita (International Monetary Fund); Neiman, Brent (University of Chicago); Tang, Jenny (Federal Reserve Bank of Boston)
    Abstract: We use micro data collected at the border and at retailers to characterize the effects brought by recent changes in US trade policy — particularly the tariffs placed on imports from China — on importers, consumers, and exporters. We start by documenting that the tariffs were almost fully passed through to the total prices paid by importers, suggesting that the tariffs’ incidence has fallen largely on the United States. Since we estimate the response of prices to exchange rates to be far more muted, the recent depreciation of the Chinese renminbi is unlikely to alter this conclusion. Next, using product-level data from several large multinational retailers, we demonstrate that the impact of the tariffs on retail prices is more mixed. Some affected product categories have seen sharp price increases, but the difference between affected and unaffected products is generally quite modest, suggesting that retail margins have fallen. These retailers’ imports increased after the initial announcement of possible tariffs, but before their full implementation, so the intermediate passthrough of tariffs to their prices may not persist. Finally, in contrast to the case of foreign exporters facing US tariffs, we show that US exporters lowered their prices on goods subjected to foreign retaliatory tariffs compared to exports of non-targeted goods.
    Keywords: trade policy; tariffs; exchange rate passthrough
    JEL: F01 F13 F14 F4
    Date: 2019–11–01
  2. By: José de Sousa (Université Paris-Saclay); Anne-Célia Disdier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Carl Gaigné (INRA Rennes - INRA Rennes - INRA - Institut National de la Recherche Agronomique, University of Laval)
    Abstract: We show that economic uncertainty in foreign markets affects firms' economic decisions, particularly those of the most productive firms. Using export data at both the industry and firm levels, we uncover two empirical regularities. First, demand uncertainty in foreign markets affects export entry/exit decisions (extensive margin) and export sales (intensive margin). If all destination countries exhibited the lowest volatility observed across destinations, then total French exports would rise by approximately 18% (an increase primarily driven by the extensive margin). Second, the most productive exporters are more affected by a higher industry-wide expenditure volatility than are the least productive exporters. The 25% most productive firms export, on average, 27% more in value than the 25% least productive firms in less volatile markets, while this difference decreases to 12% in the most volatile markets.
    Keywords: firm exports,demand uncertainty,expenditure volatility,skewness
    Date: 2019–10
  3. By: Girum Abebe (EDRI, Ethiopia); Margaret McMillan (Tufts); Michel Serafinelli (University of Essex)
    Abstract: We use a plant level survey to identify interactions between domestic plants and foreign direct investment (FDI) in Ethiopia’s manufacturing sector. Almost one third of Ethiopian plants report being linked to FDI through labor sharing, forward and backward linkages and competition in input and output markets. Domestic plant managers report that through these linkages with FDI, they learn about production processes, managerial and organizational practices and exporting. We quantify the spillovers from FDI at the local level by comparing changes in total factor productivity (TFP) among domestic plants in districts where a large greenfield foreign plant produced and districts where FDI in the same industry and around the same time was licensed but not yet operational. Over the four years starting with the year of the FDI opening, the TFP of domestic plants is 11 percent higher in treated districts, employment in these domestic plants increases and new domestic plants open.
    Keywords: Foreign Direct Investment, productivity, localized knowledge spillovers, plant-to-plant labor mobility.
    JEL: F21 R10 D24
    Date: 2019–10
  4. By: Murshed, Muntasir
    Abstract: A transition from the traditional dependence on use of non-renewable energy to the relatively environment-friendly renewable energy resources has been a key national agenda of governments across the globe. Keeping the environmental degradation and sustainable supply of energy into cognisance, it is pertinent to address the factors that possibly facilitate the renewable energy transitions worldwide. Against this backdrop, this paper aims to empirically analyse the compatibility of national trade liberalization policies with regards to promoting greater use of renewable energy across 71 low, lower-middle and upper-middle countries from South Asia, East Asia, Pacific, Central Asia, Latin America, Caribbean islands and Sub-Saharan Africa. Annual panel data between 2000 and 2017 is incorporated into the regression analyses using the Instrumental Variable Two-Stage Least Squares (IV-2SLS) and the Instrumental Variable Random Effects Generalized Least Squares (IV-RE-GLS) panel data estimators. The results indicate that greater openness to trade stimulates renewable energy consumption and also enhances the intensities of energy usage within the low and upper-middle income economies only. However, despite these upward pressures, trade openness does not guarantee higher shares of renewable energy use in the total energy consumption within these nations. Thus, the alignment of the trade liberalization policies in these countries with respect to attainment of the renewable energy transition can broadly be questioned. Furthermore, the results also indicate that trade liberalization within the lower middle-income countries is useful only in terms of enhancing the access to clean fuels and technology for cooking. The results, in a nutshell, imply that the impacts of trade liberalization on facilitation of renewable energy transition are large offset by other factors that trigger greater use of the non-renewable energy resources in these countries.
    Keywords: renewable energy, non-renewable energy, renewable energy transition, instrumental variable
    JEL: F1
    Date: 2019
  5. By: Hu, Weinian
    Abstract: The developing member status is an area identified for WTO reform by the US, the EU and the Trilateral Trade Ministerial Cooperation. The grievance is that some of the world’s top trading nations that declared themselves as developing members are taking advantage of the 155 special and deferential treatment provisions embedded to date across the range of WTO agreements, resorting to weaker commitments, undermining the functioning of the multilateral trading system and impeding the negotiation of future agreements. The developing member status per se is not a problem in relation to China’s commitments undertaken at its WTO accession, neither following accession as far as the three agreements that China participated in are concerned. China relinquished most special and differential treatment provisions at its accession, and many of its commitments are WTO-plus in nature. Within this remit, the problem lies in China’s lack of faithful compliance with certain accession commitments, such as notification and transparency. However, China’s developing member status could be a problem for the ongoing fisheries subsidies negotiations, especially given its world-leading fishing capacity. This presumption could also be true for other negotiations, for example those regarding the joint initiative on the trade-related aspects of e-commerce. China’s persistent claim of developing member status at the WTO may be understood as a result of political positioning, too, because championing “South-South cooperation” is a strategic priority for China’s diplomacy.
    Date: 2019–11
  6. By: Jeffrey J. Schott (Peterson Institute for International Economics); Euijin Jung (Peterson Institute for International Economics)
    Abstract: US refusal to allow the appointment of new judges (or members) to the World Trade Organization’s Appellate Body—a key component of its renowned dispute settlement system—has pushed the organization into an existential crisis. The Appellate Body no longer has the requisite number of members to hear new cases on appeal. The terms of two of the three remaining members have expired, leaving the WTO without an appeal function. US officials charge that certain Appellate Body decisions on WTO dispute panel rulings have expanded WTO obligations and constrained WTO rights—what trade lawyers call “judicial overreach”—and so they have blocked the appointment of new Appellate Body members until other WTO countries address US complaints. Schott and Jung analyze the WTO cases brought against the United States and find that the problem of judicial overreach seems to surface primarily in a subset of US losses in antidumping and countervailing duty (AD/CVD) cases that target specific methods of calculating dumping margins. They warn that disabling the whole appellate system is a disproportionate response to the specific problem. It will weaken enforcement of WTO obligations and undermine prospects for negotiations to update the WTO rulebook, thus corroding the rules-based trading system, one that has been modeled on US law and practice. A better approach would be to exempt AD/CVD cases from appellate review (while still subjecting them to dispute panel rulings). This targeted change in the WTO Appellate Body process, coupled with procedural reforms already advanced in proposals that have been widely supported by WTO members, could mitigate US concerns and allow the Appellate Body to be repopulated.
    Date: 2019–12
  7. By: Qasim, Ahmed Waqar; Itaya, Jun-ichi
    Abstract: The paper aims to characterize the tariff policy for final goods as well as for intermediate inputs in the model of heterogeneous firms. We developed a theoretical model to show how the tariff on final goods and intermediate inputs affect the welfare, productivity, and the entry of firms in a country. We formulate the tariff level selection choice available to the policymaker with respect to four policy experiments. These policy experiments include; unilateral tariff selection, cooperative tariff selection, non-cooperative tariff selection, and political tariff selection. Our results show that at the Stackelberg equilibrium, which results from the unilateral tariff selection, the policy level selected by the leader is higher compared to the rest of the experiments. While, in the case of cooperation, free trade will be the equilibrium outcome. Since, the welfare gains of one country come at the cost of others, therefore, zero tariffs are the optimal strategy for both countries. At Nash equilibrium, which results of non-cooperative tariff policy selection, both countries select policy level simultaneously and applied positive tariff rates for both intermediate inputs and final goods. Lastly, at political equilibrium, which results after considering lobby by the heterogeneous firms, the policy level selection diverges from benchmark unilateral level. To illustrate our tariff policy formulations quantitively, we use the US import data to estimate the policy levels. These estimates are then compared the factual tariff rates to evaluate the degree of political interference of lobbying firms in the policy level selection.
    Keywords: intermediate inputs, heterogeneous firms, trade policy, lobbying firms,
    Date: 2019–10
  8. By: -
    Abstract: The Latin American and Caribbean region faces considerable challenges in terms of reducing the non-tariff costs and the time associated with foreign trade operations. The Global Survey on Digital and Sustainable Trade Facilitation 2019, a joint initiative of the five United Nations regional commissions, seeks to gauge how far countries have advanced with regard to the baseline provided by the previous versions of the Survey in 2015 and 2017. This report summarizes the results of the Global Survey 2019 for the 18 participating countries from Latin America and the Caribbean, which account for 93% of the region’s merchandise exports and imports in 2018. It thus provides an indication of their progress in implementing the World Trade Organization’s Trade Facilitation Agreement, which entered into force in February 2017.
    Date: 2019–11–29
  9. By: J. Bradford Jensen
    Abstract: An increasingly important issue is the size and scope of trade in services. Official statistics report that services account for roughly one-third of U.S. exports in gross terms and recent papers constructing value-added trade statistics suggest that services account for more than half of U.S. exports on a value-added basis. A difficulty with measuring the services sector in general and trade in the services sector in particular is that service activities and delivery technologies are evolving rapidly. It remains an open question as to whether the U.S. statistical system broadly and the Census Bureau in particular are doing an effective job measuring trade in services. For example, the Census Bureau does collect export information from some service sectors, but not all. Project 0871 “Measuring the Impact of Trade on the U.S. Economy” developed methodology to produce estimates of trade costs for nearly every 6-digit NAICS code in scope for the Economic Census. The paper is currently in the peer review process, so the estimates are not considered final. This memorandum will use the current estimates for purposes of discussion, on the assumption that the current estimates will be close to the final estimates.
    Date: 2018–11
  10. By: Del Fava, Emanuele (Max Planck Institute for Demographic Research); Wiśniowsk, Arkadiusz; Zagheni, Emilio
    Abstract: Migration has become a significant source of population change at the global level, with broad societal implications. Although understanding the drivers of migration is critical to enacting effective policies, theoretical advances in the study of migration processes have been limited by the lack of data on flows of migrants, or by the fragmented nature of these flows. In this paper, we build on existing Bayesian modeling strategies to develop a statistical framework for integrating different types of data on migration flows. We offer estimates, as well as associated measures of uncertainty, for immigration, emigration, and net migration flows among 31 European countries, by combining administrative and household survey data from 2002 to 2015. Substantively, we document the historical impact of the EU enlargement and the free movement of workers in Europe on migration flows. Methodologically, our approach improves on the Integrated Modeling of European Migration (IMEM) framework by providing a robust statistical framework for evaluating recent migration trends that is flexible enough to be further extended to incorporate new data sources, like social media.
    Date: 2019–11–13
  11. By: Juin-Jen Chang (Institute of Economics, Academia Sinica, Taipei, Taiwan); Yi-Ling Cheng (National Sun Yat-sen University); Shin-Kun Peng (Institute of Economics, Academia Sinica, Taipei, Taiwan)
    Abstract: This paper provides the implications of firm heterogeneity for the global environment and trade liberalization in a trade model with endogenous markups and regulatory non-compliance. We show that firms with heterogeneous productivities respond differently to a uniform environmental regulation (emission taxation), which changes the market competition structure within a country and across countries, and disentangles the interaction effects of environmental regulations and trade liberalization. In autarky, raising emission tax generates an average productivity gain and favors efficient firms in the sense that they can expand output but may produce more emissions via non-compliance to escape the regulation and maintain competitiveness. In a symmetric two-country open economy, trade liberalization can break the trade-off between output and environment, not only increasing worldwide output but also decreasing global pollution emissions. Under asymmetric environmental regulations, a unilateral increase in the emission tax decreases average productivity in this country if openness to trade is substantially high, which contrasts with the e§ect under autarky. Our welfare analysis shows a U-shaped relationship between the optimal emission tax and openness to trade regardless of whether under tax harmonization or tax competition. Trade liberalization unambiguously decreases global pollution emissions under tax harmonization but it may increase global pollution emissions under tax competition.
    Keywords: : Firm heterogeneity, environmental regulation, trade liberalization, pollution haven e§ect, environmental tax harmonization and competition
    JEL: F12 F18 Q56 R13
    Date: 2019–11
  12. By: Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Poutvaara, Panu (University of Munich)
    Abstract: We analyze self-selection of refugees and irregular migrants and test our theory in the context of the European refugee crisis. Using unique datasets from the International Organization for Migration and Gallup World Polls, we provide the first large-scale evidence on reasons to emigrate, and the self-selection and sorting of refugees and irregular migrants. Refugees and female irregular migrants are positively self-selected with respect to human capital, while male irregular migrants are negatively self-selected. These patterns are similar when analyzing individually stated main reason to emigrate, country-level conflict intensity, and sub-regional conflict intensity. Migrants respond to economic incentives and border policies.
    Keywords: international migration, refugees, irregular migrants, self-selection, human capital, gender differences in migration
    JEL: F22 J15 J16 J24 O15
    Date: 2019–11
  13. By: John M. Crespi (Center for Agricultural and Rural Development (CARD)); Chen-Ti Chen
    Abstract: Recently, Crespi and Chen (2019) reported on the comparative advantage of the United States relative to its major export competitors in the markets for beef, pork, corn, and soybeans. This policy brief provides the same exposition for the world wheat markets. (For details on the analysis, readers are referred to Crespi and Chen 2019). Crespi and Chen (2019) showed that increasing total U.S. export values for the four commodities of their study masked an underlying slippage in comparative advantage and, because of this, 2018 was "a bad time to start a trade war."
    Date: 2019–12
  14. By: Robertson, Raymond (Texas A&M University)
    Abstract: This paper estimates how compliance with national labor law and international labor standards within Jordan's garment exporting factories changed after the implementation of a transparency program that made compliance assessments publicly available. The estimation employs data from Better Work Jordan that cover all garment-exporting factories over the 2008-2018 period. Using a difference-in-difference approach that is often applied to control for endogeneity, this paper finds that compliance improved following the implementation of transparency. Compliance increased in a group of 28 critical compliance areas that represent fundamental worker rights relative to relevant comparison groups. The results are robust to a number of additional controls, definitions of the transparency period, and estimation approaches.
    Keywords: global value chains, working conditions, transparency
    JEL: J8 J5 J3
    Date: 2019–11
  15. By: Antonia Lopez Villavicencio; Maria Cervini
    Abstract: Micro evidence for employed workers has led to the claim that globalisation, i.e. higher trade exposure, has far-reaching implications for mental health problems in some advanced countries. Evidence for other aspects of globalisation at the cross-country level is scarce. Using information on depression and anxiety, combined with proxies for different dimensions of globalisation, we undertake a detail analysis in a large sample of countries. We go beyond the simple impact of globalisation in observable labor market outcomes and show that more globalized counties experience higher mental distress than less globalized countries. In particular, we show that even though trade globalisation reduces mental health disorders at the country-level, the positive influence of social globalisation prevails over the economic dimension. Hence, our results complement documented consequences of globalisation on mental health outcomes by showing that factors involving cross-border movement of cultures and openness of media play a major role.
    Keywords: Mental Health, globalisation, anxiety, depression
    JEL: F60 I1 C33
    Date: 2019
  16. By: Bruno Carballa Smichowski (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Cédric Durand (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Steven Knauss (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: These supporting documents are for the paper "Participation in global value chains and varieties of development patterns."
    Date: 2019–05–30
  17. By: Stuart, Bryan (George Washington University); Taylor, Evan J. (University of Chicago)
    Abstract: This paper studies how birth town migration networks affected long-run location decisions during historical U.S. migration episodes. We develop a new method to estimate the strength of migration networks for each receiving and sending location. Our estimates imply that when one randomly chosen African American moved from a Southern birth town to a destination county, then 1.9 additional black migrants made the same move on average. For white migrants from the Great Plains, the average is only 0.4. Networks were particularly important in connecting black migrants with attractive employment opportunities and played a larger role in less costly moves.
    Keywords: migration networks, location decisions, social interactions, Great Migration
    JEL: J61 N32 O15 R23 Z13
    Date: 2019–10
  18. By: -
    Abstract: This report presents a description of trade flows between the U.S. and Latin American and the Caribbean. The region has been one of the fastest-growing regional trading partners for the United States, with Mexico becoming its number one trading partner in March 2019. The document also contains a summary of the main findings of the United States International Trade Commission on the potential economic effects of the USMCA on the U.S. economy, highlights of developments in the trade relationship between the United States and China, and measures that inhibit the free flow of trade. In addition, this year’s report includes an overview of U.S. financing for development and financial assistance.
    Date: 2019–12–05
  19. By: Sithanonxay SUVANNAPHAKDY (Laos-Australia Development Learning Facility); Toshihisa TOYODA (Center for Social Systems Innovation and GSICS, Kobe University)
    Abstract: Trade liberalization entails the transition from trade taxes to domestic taxes. Certain structural characteristics such as narrow tax base and significant proportion of subsistence sectors, however, constrain such transition and hence reducing public revenues in developing countries. This paper contributes to this debate by assessing the impact of trade liberalisation on domestic tax revenue in Laos. We find that Laos has been able to recover revenue loss from tariff reduction through the introduction of value-added tax (VAT). VAT generated LAK 5,510 billion or 30% of tax revenue in 2017, which was about twice higher than the ratio of tariff revenue to tax revenue in 2000. Our simulation results of tariff liberalization using a computable general equilibrium (CGE) model also reveals that further reduction in tariff rate will be associated with lower indirect tax rate. In particular, the 20% tariff reduction will increase private consumption by 1.14%, but will decrease the effective indirect tax rate from 6.2% to 5.2% and reduce tax revenue by 11%. The worsening tax revenue loss reflects the non-optimal indirect tax rate, which needs to be reduced by 11%. The key policy implication is that any policy designed for raising tax revenue should aim at improving tax collection system and broadening tax base rather raising indirect tax rate.
    Keywords: Trade liberalization, Fiscal impacts, Domestic tax revenue, Laos, CGE model
    Date: 2019–09
  20. By: Patrice CASSAGNARD; Tendai ESPINOSA
    Abstract: This article develops an original theoretical exploration of the potential e?ect of northern activism on working conditions and welfare in the South using a Bertrand-type duopoly model with endogenous prices, wages and qualities. We assume that all consumers derive the same utility from one (“northern”) good but are heterogeneous with regards to the other (“southern”) good. This asymmetry captures in a stylized fashion the consensus among northern consumers on the labor conditions prevailing in the North and their ambivalence concerning labor practices in the South. A greater consumer’s social consciousness can be seen as a punishment (boycott) for the southern socially unsound goods or a reward (buycott) for more virtuous practices in the North. We show that an activism through a buycott strategy or a boycott strategy leads to opposite e?ects on prices, wages and on the scope of quality di?erenciation, a buycott being better than a boycott for southern wage, southern quality and southern welfare.
    Keywords: Activism, Boycott, Buycott, Union duopoly, North-South trade, Social consciousness, Wage bargaining, Quality, Welfar
    JEL: D11 D21 D43 F11 F13 F16 J51 L11 L13 M14
    Date: 2019–12
  21. By: Lizano, Victor; Vega, Mercedes
    Abstract: This paper examines the effect of the free trade agreements signed by Costa Rica on pork trade creation and trade diversion. Pork imports to Costa Rica are explained by three main partners which are: Canada, Chile and USA, which were included in the analysis. In order to analyze the effects of FTAs on trade flows between our selected countries, especially between Chile and Costa Rica, we constructed an import demand function for Costa Rica with monthly data from 2000 to 2017. The import demand function includes pork meat price, the Costa Rican Openness index against Chile, Costa Rican GDP, population and the exchange rate. We introduced a novel methodology to determine the openness index (OI), two dimensions were considered in order to measure the degree of openness of Costa Rica against each of the three main partners. The first dimension refers to tariff level and the second one to quota level. Results indicate that Costa Rican pork imports from Chile have being increasing, thus, trade creation can be identified as a possible effect of the FTA. On the other hand, we find that as Costa Rica reduces its tariffs to the Chilean market, pork quantity imported from the USA and Canada decreases, especially from the latter. Overall, the results indicate that FTAs have been creating trade, but in the case of the Costa Rica-Chile FTA it also has been diverting trade from Canada.
    Keywords: International Relations/Trade
    Date: 2019–04
  22. By: Kubota, Hajime
    Abstract: This paper extends the results on trade and welfare obtained in Ohyama(1972) in the case of a traditional world economy with a finite number of goods to the one of a world economy over a discrete-time infinite horizon with l1 , the space of all bounded sequences, as the underlying commodity space. The case with l1 is a typical special case of economies with infinite number of goods. In this paper, it is shown that the main results ottained in Ohyama(1972) still hold in the world economy over a discrete- time infinite horizon by following the method used in Ohyama(1972). It turns out that Ohyama(1972)'s method is, indeed, very general in a sense that it also applies to more general cases including economies with infinitely many goods.
    Date: 2019–11
  23. By: Ege Aksu (The Graduate Center, CUNY); Refik Erzan (Department of Economics Bogazici University); Murat Güray Kırdar (Department of Economics Bogazici University)
    Abstract: We estimate the effects of the arrival of 2.5 million Syrian migrants in Turkey by the end of 2015 on the labor market outcomes of natives, using a difference-in-differences IV methodology. We show that relaxing the common-trend assumption of this methodology—unlike recent papers in the same setting—makes a substantial difference in several key outcomes. Despite the massive size of the migrant influx, no adverse effects on the average wages of men or women or on total employment of men are observed. For women, however, total employment falls—which results mainly from the elimination of part-time jobs. While the migrant influx has adverse effects on competing native workers in the informal sector, it has favorable effects on complementary workers in the formal sector. We estimate about one-to-one replacement in employment for native men in the informal sector, whereas both wage employment and wages of men in the formal sector increase. Increases in prices in the product market and in capital flow to the treatm nt regions contribute to the rise in labor demand in the formal sector.
    Keywords: Labor Force and Employment, Wages, Immigrant Workers, Formal and Informal Sectors, Syrian Refugees, Turkey, Difference-in-differences, Instrumental Variables
    JEL: J21 J31 J61 C26
    Date: 2019–10
  24. By: Giulia Bettin (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); Isabella Giorgetti (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); Stefano Staffolani (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche)
    Abstract: We analyse how the availability of immigrant workers in the elderly care sector affects the labour force participation of Italian females aged between 45 and 65. We estimate a selection bias correction model and exploit an IV strategy based on the role of migration networks in determining the geographical distribution of immigrants over time. Our main findings show that the local availability of foreign–born caregivers has a positive impact on the number of hours worked by Italian women, especially those with high–educational levels and living in the Northern regions. The effect on participation rates are instead positive and significant only for low–educated women and for women living in Central Italy.
    Keywords: Keywords: immigration, female labour supply, elderly care services
    JEL: F22 J22 J61 C26
    Date: 2019–12
  25. By: Shaker, Saber Adly
    Abstract: This paper uses a panel vector error correction model (panel VECM) to examine the impact of Chinese exports of clean technology-intensive goods on carbon dioxide (CO2) emissions in China’s partners between 2001 and 2013. The results suggest that Chinese exports of clean technology-intensive goods play a crucial role in reducing CO2 emissions in the short run but not in the long term. Finally, Carbon dioxide emissions CO2 considered an item of demand factors which affects the production of clean technology-intensive goods in the long run only.
    Keywords: Clean technology; CO2 emissions; Panel VECM
    JEL: F18 F64 O3
    Date: 2019–10–26
  26. By: Chu, Angus C.; Furukawa, Yuichi; Kou, Zonglai; Liu, Xueyue
    Abstract: This study explores the heterogeneous effects of minimum wage on innovation of different types of firms. Using firm-level data in China, we find that a higher minimum wage is associated with more innovation by importing firms but less innovation by non-importing firms. To interpret these empirical findings, we develop an open-economy R&D-based growth model and find that a higher minimum wage reduces innovation of firms that use domestic inputs but increases innovation of firms that import foreign inputs. Intuitively, when a higher minimum wage reduces employment, importing firms respond by importing more inputs, which have technology spillovers and enhance their innovation.
    Keywords: innovation; minimum wage; imports; knowledge spillovers
    JEL: E24 F43 O31
    Date: 2019–11
  27. By: Pavel Chakraborty
    Abstract: Does a bank's ownership matter for a firm's performance (to which it is connected)? Especially, in the event of a crisis? I study this question through the effect of 2008-09 crisis to provide evidence on a new channel which matters significantly for a firm's export performance - bank ownership. In particular, I find: (a) firms connected to private and/or foreign banks earn around 7.7- 39% less in terms of their export earnings during the crisis as compared to firms' having banking relationships with public-sector banks. This happened as the public-sector banks were differentially treated by the Central Bank of India during the crisis due to a clause in the Indian Banking Act of 1969; (b) effect is concentrated only on the intensive margin of trade; (c) drop in exports is driven by firms' client to big domestic-private banks and banks of US origin; (d) firms not connected to public-sector banks also laid-o¤ workers (both managers and non-managers), employed less capital and imported less raw materials. In addition, I also find that firms with lower average product of capital (than the median) received about 50% more loans from the public-sector sources, suggesting a significant reinforcement of inefficiency in the Indian economy due to misallocation of credit.
    Keywords: Bank Ownership, 2008-09 Financial Crisis, Public-sector Banks, Private and/or Foreign Banks, Exports
    JEL: F14 F41 G21 G28
    Date: 2019
  28. By: Bernt Bratsberg (Frisch Centre for Economic Research); Jeremy Ferwerda (Dartmouth College); Henning Finseraas (Institute for Social Research); Andreas Kotsadam (Frisch Centre for Economic Research)
    Abstract: To what extent do early experiences in the host country shape the political integration of immigrants? We argue that the initial neighborhoods immigrants settle in establish patterns of behavior that influence subsequent political participation. Using Norwegian administrative register data, we leverage quasi-exogenous variation in the placement of refugees to assess the consequences of assignment to particular neighborhoods. We find that the di erence in turnout between refugees initially placed in 20th and 80th percentile neighborhoods is 12.6 percentage points, which represents 47 percent of the participation gap between refugees and residents. To assess the mechanism, we draw on individual level data on all neighbors present at the time of each refugees' arrival, and evaluate the relative impact of neighborhood characteristics and available social networks. Our findings suggest that while neighborhood socioeconomic factors play a limited role, early exposure to politically engaged neighbors and peer cohort increases immigrants' turnout over the long run.
    Keywords: Voter turnout, minorities, immigration, social networks, Western Europe
    Date: 2019–11
  29. By: OECD
    Abstract: This report builds on the OECD’s longstanding work measuring government support in agriculture, fossil fuels, fisheries, and more recently in the aluminium value chain in order to estimate producer support and related market distortions in the semiconductor value chain. Results for 21 large firms operating across the semiconductor value chain indicate that total government support has exceeded USD 50 billion over the period 2014-18. Government support provided in the form of below-market debt and equity appears to be particularly large in the context of the semiconductor industry and concentrated in one jurisdiction. Other types of support identified include support for R&D and investment incentives, which benefitted all firms studied in this report. The report also discusses the implications that these findings have for trade rules, and in particular for subsidy disciplines in a context of growing government involvement in semiconductor production and poor transparency of support measures.
    Keywords: government support, market distortions, R&D policy, semiconductors, subsidies, trade
    JEL: F23 G32 H25 H81 L33 L63
    Date: 2019–12–12
  30. By: Kamil Kowalski (University of Lodz); Rafal Matera (University of Lodz); Mariusz E. Sokolowicz (University of Lodz)
    Abstract: In this paper, we try to identify the institutional offers for emigrants and evaluate the role of immigrants at the time of the industrial revolution in the nineteenth century history of three cities where the dynamic growth and the ‘take-offs’ depended largely on newcomers. In all cases, the industry was the main factor that led to the ‘take-off’ in terms of the number of inhabitants and also the creation of the bourgeoisie as a socio-economic class. In our paper we reveal key institutional and geographical factors that accelerated the unprecedent waves of immigrants (with different strengths in different cities) to these Eastern European ‘Manchesters’ and made their role central to urban economic development. Their activity was the result of advantageous institutional circumstances connected with changes in the borders, the appearance of governments, and new local management being strictly related to changes in customs policy or extraordinary international situations.
    Keywords: J15, J61, K37, N23
    Date: 2019–12–12

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