nep-int New Economics Papers
on International Trade
Issue of 2019‒12‒23
thirty-two papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Interaction of emigration and immigration with foreign direct investment, international trade and remittances By Mihi-Ramirez, Antonio; Sobierajc, Janusz; Garcia-Rodriguez, Yolanda
  2. Strategic Production Subsidy/Tax under Mutual Endogenous Entry of Foreign Firms By Keisaku Higashida; Hiroaki Ino
  3. Measuring trade in value added with Firm-Level Data By Rudolfs Bems; Ayumu Ken Kikkawa
  4. Markups, Quality, and Trade Costs By Chen, Natalie; Juvenal, Luciana
  5. Analysis of the Effects of Chinese and Mexican Retaliatory Tariffs on Select U.S. Agricultural Commodities on U.S. and Global Markets By Amani Elobeid; Miguel Carriquiry; David Swenson; Dermot Hayes
  6. Quality Upgrading and Export Performance in the Asian Growth Miracle By Chris Papageorgiou; Fidel Perez-Sebastian; Nikola Spatafora
  7. Labor standards and social conditions in free trade zones: The case of the Manaus free trade zone By Cavalcanti Teixeira, Louisiana
  8. Learning about demand abroad from wholesalers: a B2B analysis By William Connell; Emmanuel Dhyne; Hylke Vandenbussche
  9. Managed Trade: What Could be Possible Spillover Effects of a Potential Trade Agreement Between the U.S. and China? By Eugenio M Cerutti; Shan Chen; Pragyan Deb; Albe Gjonbalaj; Swarnali A Hannan; Adil Mohommad
  10. Pre-Feasibility Study of Sarawak-West Kalimantan Cross-Border Value Chains By Lord, Montague; Chang, Susan
  11. Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe By Bruno Merlevede; Angelos Theodorakopoulos
  12. Modelling the gender inequality in Pakistan: A macroeconomic perspective By Shahbaz, Muhammad; Ahmed, Khalid; Nawaz, Kishwar; Ali, Amjad
  13. Sanctions and counter-sanctions : What did they do? By Barseghyan, Gayane
  14. Trade Models and Macroeconomics By Ray C. Fair
  15. A replication of "The role of intermediaries in facilitating trade" (Journal of International Economics, 2011) By Duan, Jianhua; Xuefeng, Qian; Das, Kuntal K.; Meriluoto, Laura; Reed, W. Robert
  16. When do firms choose global cities as foreign investment locations within countries? The roles of contextual distance, knowledge intensity, and target-country experience By Rene Belderbos; H Du; Arjen Slangen
  17. Just a little Brexit? ‘Alternative (customs) arrangements’ and the Withdrawal Agreement By Pelkmans, Jacques
  18. IO for Export(s) By Monika Mrázová; J. Peter Neary
  19. Vertically Differentiated Cournot Oligopoly: Effects of Market Expansion and Trade Liberalization on Relative Markup and Product Quality By Ngo Van Long; Zhuang Miao
  20. Growth of oil/gas sectors and non oil/gas trade: The impact on labor-force participation rates in Indonesia By Sessu, Andi; Jamali, Hisnol
  21. Exporting and productivity as part of the growth process: Causal evidence from a data-driven structural VAR By Tommaso Ciarli; Alex Coad; Alessio Moneta
  22. Global sourcing, firm size and export survival By Bandick, Roger
  23. Talents from Abroad. Foreign Managers and Productivity in the United Kingdom. By Dimitrios Exadactylos; Massimo Riccaboni; Armando Rungi
  24. An Empirical Study on Export, Import and Economic Growth in Bhutan By Khan, Shibli A.; Uddin, Gazi Salah; Alam, Md. Mahmudul
  25. Offshoring, job satisfaction and job insecurity By Budría, Santiago; Milgram Baleix, Juliette
  26. The Costs of Tax Havens: Evidence from Industry-Level Data By Petr Jansky
  27. Decomposing Multinational Corporations’ Declining Effective Tax Rates By Javier Garcia-Bernardo; Petr Jansky; Thomas Torslov
  28. Brexit : Eurosceptic Victory In British Referendum In Term Of Britain Membership Of European Union By ARISTO, Jurnal
  29. Labor Market Effects of Technology Shocks Biased toward the Traded Sector By Luisito Bertinelli; Olivier Cardi; Romain Restout
  30. Is Single Market in ASEAN Possible? By Zulfikar, Achmad
  31. Immigration in Emerging Countries: A Macroeconomic Perspective By Agustín Arias; Juan Guerra-Salas
  32. Student Globalization: how much internationalized are Brazilian MBA students? A measurement proposition By FERNANDO DE ROSA; BENTO ALVES DA COSTA FILHO; JOSE GASPAR NAYME NOVELLI

  1. By: Mihi-Ramirez, Antonio; Sobierajc, Janusz; Garcia-Rodriguez, Yolanda
    Abstract: This paper studies the international mobility of capital and labour. Using a Mixed Linear Model (MMA) the authors analyse the interaction of emigration and immigration with foreign direct investment, exports and imports, and international remittances. The sample comprises 112 countries with which Spain has closely interconnected migratory, commercial and investment exchanges, and they focus both on the period prior to the great recession, 1998-2007, and on the subsequent period, 2008-2016. The results show that a greater number of immigrants in Spain boost foreign direct investment (FDI), remittances sent and received and Spanish imports andexports to the immigrants' countries of origin. In contrast to what was often stated in the classicalapproaches, this relationship is maintained in the long term and also has effects on emigration. Thus, an inverse relationship of emigration from Spain with the FDI and remittances sent is confirmed. With the economic downturn, the FDI declines and the number of migrants from Spainand remittances received began to increase. In a sense, FDI and migration could also be seen as a kind of risk aversion strategy. In fact, when looking at the behaviour of these variables together across a wide sample of countries and years, it is observed that immigration and emigration act as two sides of the same coin. The results lead the authors to recommend those strategies and policiesthat serve to take advantage of and promote the interaction of mobility factors, since it allows diversifying risks of companies and workers and finding new commercial and investment opportunities.
    Keywords: emigration,immigration,foreign direct investment,exports,imports,remittances,linear mixed model
    JEL: F10 F21 F22 F24
    Date: 2019
  2. By: Keisaku Higashida (School of Economics, Kwansei Gakuin University); Hiroaki Ino (School of Economics, Kwansei Gakuin University)
    Abstract: Considering a subsidy/tax on domestic production, this study examines the tax competition between two symmetric countries in the presence of the mutual endogenous entry of foreign ï¬ rms into each country’s market through exports and foreign direct investment (FDI). In the absence of FDI, we ï¬ nd that whether the equilibrium tax rate is positive or negative is determined by the export intensity of domestic ï¬ rms and thus the tax rate is always negative (i.e., a subsidy) in the symmetric interior case. However, in the presence of FDI, the necessary and sufficient condition for the sign of the equilibrium tax rate is weighted toward FDI (but still characterized by an observable indicator); hence, the tax rate can plausibly be positive (i.e., a tax). We also show that from the perspective of global welfare, the equilibrium tax rate is excessively low (high) if and only if it is a subsidy (tax).
    Keywords: Cournot competition, strategic trade policy, free trade agreement, rapid foreign penetration, protectionism, countervailing duty, emission tax
    JEL: F12 F13 F15
    Date: 2019–12
  3. By: Rudolfs Bems (International Monetary Fund); Ayumu Ken Kikkawa (Sauder School of Business, University of British Columbia)
    Abstract: Global Value Chains have proliferated economic policy debates. Yet a key concept – trade in value added –is likely mismeasured because of sectoral aggregation bias stemming from reliance on inputoutput tables. This paper uses comprehensive firm-level data on both domestic and international transactions to study this bias. We find that sectoral aggregation leads to overstated trade in value added and, correspondingly, understated import content of gross exports. The economic magnitude of the estimated bias varies from moderate to large – at 2-5 p.p. of gross exports for Belgium and 17 p.p. for China. We study how the interplay between within-sector heterogeneities in firm import and export intensities and firm size determine the magnitude of the sectoral aggregation bias.
    Keywords: Global Value Chains, Input-Output tables, Aggregation Bias
    JEL: E01 F14 L14
    Date: 2019–11
  4. By: Chen, Natalie (University of Warwick and CAGE, Department of Economics); Juvenal, Luciana (International Monetary Fund)
    Abstract: We investigate theoretically and empirically how exporters adjust their markups across destinations depending on bilateral distance, tariffs, and the quality of their exports. Under the assumption that trade costs are both ad valorem and per unit, our model predicts that markups rise with distance and fall with tariffs, but these effects are heterogeneous and are smaller in magnitude for higher quality exports. We find strong support for the predictions of the model using a unique data set of Argentinean firm-level wine exports combined with experts wine ratings as a measure of quality.
    Keywords: Distance ; export unit values ; heterogeneity ; markups ; quality; tariffs ; trade costs ; wine.
    JEL: F12 F14 F31
  5. By: Amani Elobeid (EEUU. Department of Economics, Iowa State University); Miguel Carriquiry (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); David Swenson (EEUU. Department of Economics, Iowa State University); Dermot Hayes (EEUU.Department of Economics, Iowa State University)
    Abstract: This study examines the impact of retaliatory tariffs imposed on U.S. pork, soybeans, corn and wheat by China and on U.S. pork by Mexico on select U.S. agricultural commodities. Results show a decline in U.S. exports by 32% for pork and corn, 15% for soybeans, and 1.5% for wheat relative to the baseline. Domestic pork prices fall by 12% while crop prices decrease by between 8% and 12%. In the long run, the decline in U.S. production leads to 60,000 fewer jobs and $3.1 billion less labor income. The economy experiences a loss of almost $12 billion in national output.
    Keywords: agricultural markets, retaliatory tariffs, trade war China-U.S.A
    JEL: F14 F17 Q17 Q18
    Date: 2019–11
  6. By: Chris Papageorgiou; Fidel Perez-Sebastian; Nikola Spatafora
    Abstract: We explore the contribution of product-quality upgrading to the export performance of six fast-growing Asian economies: China, India, Indonesia, Malaysia, South Korea, and Thailand. We focus on measuring the impact of quality upgrading on the changes in these countries’ sectoral export shares during 1970–2010. We build a multisector Ricardian trade model which allows for changes in product quality, and calibrate it to generate predictions about export volumes. Unlike previous literature, our approach allows estimation without employing domestic production data. Our results point to quality upgrading being a key driver of export shares.
    Date: 2019–11–27
  7. By: Cavalcanti Teixeira, Louisiana
    Abstract: The creation of the Manaus Free Trade Zone had a development purpose in the Brazilian political, economic and social scenario between 1960 and 1970. This industrial pole was an important device in achieving the desired development, populating a region considered deserted and exposed to external threats at that time. It has guaranteed the improvement on labor standards and social conditions in the Manaus' district and has become the main driving force behind regional employment, higher salaries and growth over the past decades. Using the residuals and the stochastic frontier techniques to estimate the labor and social performances of the Manaus Free Trade Zone, the analysis confirms that the implementation of the special economic zone collaborated to labor and social efficiency in the area - compared to other important industrial Brazilian municipalities - due to the rigid checks conducted by SUFRAMA and the strict respect of labor standards applied in the MFTZ. Nevertheless, economic linkages in the region are still weak and positive spillovers from Manaus to its surroundings were probably inexistent.
    Keywords: free trade zone,Manaus,employment,labor standards,social progress
    JEL: F12 F13 F14
    Date: 2019
  8. By: William Connell (University of KU Leuven); Emmanuel Dhyne (Economics and Research Department, NBB); Hylke Vandenbussche (University of KU Leuven)
    Abstract: This paper uses Business to Business (B2B) transaction level data. It shows that manufacturing firms that initially export via a wholesaler are much more likely to become direct exporters to the same destination in subsequent periods. Theoretically, we rationalise this finding by demonstrating how a connection to a wholesaler reduces uncertainty about the foreign demand. In the data we isolate the channel for demand learning from productivity spillovers. Non-exporting manufacturing firms, previously serving a foreign destination through an exporting wholesaler, have a much higher probability of becoming direct exporters to the same export market in subsequent periods. A connection to an exporting wholesaler results in a probability of exporting to the same destination that is six times higher than a comparable firm without any exposure to the foreign destination.
    Keywords: wholesalers, indirect exports, learning
    JEL: F14 L14
    Date: 2019–11
  9. By: Eugenio M Cerutti; Shan Chen; Pragyan Deb; Albe Gjonbalaj; Swarnali A Hannan; Adil Mohommad
    Abstract: The trade discussions between the U.S. and China are on-going. Not much is known about the shape and nature of a potential agreement, but it seems possible that it would include elements of managed trade. This paper attempts to examine the direct, first-round spillover effects for the rest of the world from managed trade using three approaches. The results suggest that, in the absence of a meaningful boost in China’s domestic demand and imports, bilateral purchase commitments are likely to generate substantial trade diversion effects for other countries. For example, the European Union, Japan, and Korea are likely to have significant export diversion in a potential deal that includes substantial purchases of U.S. vehicles, machinery, and electronics by China. At the same time, a deal that puts greater emphasis on commodities would put small commodity exporters at a risk. This points to the advantages of a comprehensive agreement that supports the international system and avoids managed bilateral trade arrangements.
    Date: 2019–11–15
  10. By: Lord, Montague; Chang, Susan
    Abstract: This pre-feasibility study on Sarawak-West Kalimantan cross-border value chains covers six topics: (1) It analyzes existing trade patterns and competitive advantages of Sarawak and West Kalimantan, as well as government objectives in promoting cross-border commercial activities. (2) It proposes a border economic area spread over a wide geographic area that covers a network of interrelated activities and provides a fully integrated approach to the border economic area design and implementation. (3) It identifies potential cross-border value chains that can serve as high-profile projects for the border economic area. (4) It determines the preference orderings of project features by key stakeholders such as government and development partners, commercial entities, and the local population. (5) It estimates the net monetary returns for the project portfolio, a cost-effectiveness analysis of the stand-alone capacity-building projects, ranks stakeholders’ non-monetary preferences, and incorporates the the preference ranking order into the project portfolio’s net monetary returns. (6) It provides an overall program appraisal for the set of projects, and, based on pre-feasibility results, it lays out a plan for implementation of the border area development program.
    Keywords: Global value chains; Sarawak; West Kalimantan; border areas; cross-border value chains; minimizing distance
    JEL: F1 F14 L6 L8
    Date: 2019–11
  11. By: Bruno Merlevede; Angelos Theodorakopoulos
    Abstract: This paper analyses whether indirect effects of internationalisation occur through the domestic supply chain. We investigate productivity effects for a given firm resulting from the import or export of intermediate inputs by domestic upstream and downstream industries. Using a rich sample of manufacturing firms in 19 EU countries, we find evidence that domestic access to intermediate inputs that are also destined to foreign countries is associated with higher levels of revenue productivity. Further, our results highlight two common, but important, misspecification biases: ignoring the dynamic nature of productivity and estimating a value-added instead of a gross-output production function.
    Keywords: offshoring, inshoring, supply chain, total factor productivity, trade, learning
    Date: 2018–09–01
  12. By: Shahbaz, Muhammad; Ahmed, Khalid; Nawaz, Kishwar; Ali, Amjad
    Abstract: The paper takes up the case of gender build inequality and its potential repercussions on economic growth of Pakistan. Using cointegration and causality analysis, we explore the relationship between gender inequality and its macroeconomic determinants i.e. economic growth, financial development, trade openness and foreign direct investment. For the this purpose, we have applied the Bayer-Hanck combined cointegration approach to test the long-run relationship and Granger causality for causal links amid the variables on the most recent and extended time period data (1972-2013). The cointegration test results validate the long-run association among the underlying variables. We found economic growth and financial development ignite gender driven disparity. Whereas, trade openness and foreign direct investment found to reduce gender gap. The positive bidirectional causal link between economic growth and gender inequality portrays unhealthy socio-economic environment to reduce gender inequality in the country. The feedback effect exists between financial development and gender inequality.
    Keywords: Financial Development, Trade Openness, Gender Inequality, Pakistan
    JEL: E1
    Date: 2019–12–02
  13. By: Barseghyan, Gayane
    Abstract: Taking the multilateral sanctions program launched against Russia in 2014 as a case study, this paper investigates the economic effects of sanctions and counter-sanctions on a target economy. A synthetic control method for comparative case studies is employed to construct counterfactuals. The estimation results demonstrate that in Russia following sanctions and counter-sanctions real GDP per capita, FDI net in flows and income inequality fell, while the ban on agricultural and food imports introduced by Russia boosted the domestic agricultural sector, resulting in higher agricultural productivity and farm worker incomes. Various placebo studies confirm the significance of obtained estimates. Results are robust to random donor samples.
    JEL: C33 F51 O50
    Date: 2019–12–09
  14. By: Ray C. Fair (Cowles Foundation, Yale University)
    Abstract: This paper discusses some macro links that are missing from trade models. A multicountry macroeconometric model is used to analyze the effects on the United States of increased import competition from China, an experiment that is common in the recent trade literature. In the macro story a fall in Chinese export prices is stimulative. Domestic prices fall, which increases real wage rates and real wealth, which increases household expenditures. In addition, the Fed may lower the interest rate because of the lower prices, which is stimulative. Trade models do not have these channels, and they likely overestimate the negative effects or underestimate the positive effects on total output and employment from increased Chinese import competition. They lack some important aggregate demand channels, which are not likely second order.
    Keywords: Trade models, Macroeconomics
    JEL: F1 F4
    Date: 2019–12
  15. By: Duan, Jianhua; Xuefeng, Qian; Das, Kuntal K.; Meriluoto, Laura; Reed, W. Robert
    Abstract: This study replicates Ahn, Khandelwal, and Wei's (AKW 's) (2011) model of intermediary trade. The authors' study produces two main results. First, the authors are able to reproduce empirical evidence for AKW's three main predictions for Chinese exports. This is impressive because much of the data for their replication are independently sourced. However, when they subject AKW's model to additional tests, they find that the evidence is not robust. Using more recently available data to test AKW's first prediction, the authors estimate coefficients that are wrong-signed and significant. When they re-analyze the evidence supporting AKW's second and third predictions, they find that the full sample results mask significant heterogeneity across Chinese regions. In many cases, key coefficients are insignificant. In a few cases, they are wrong-signed and significant. Finally, using multiple versions of a key variable measuring the number of required import documents by country, they discover that the results are not robust across versions.
    Keywords: intermediaries,exports,productivity,heterogeneous firms,China
    JEL: F1
    Date: 2019
  16. By: Rene Belderbos; H Du; Arjen Slangen
    Abstract: Foreign investors generally need to overcome a liability of foreignness stemming from contextual distance between their home country and the target country. We argue that they can limit that liability more easily by investing in a global city rather than elsewhere in the target country. Accordingly, we hypothesize that the contextual distance to a target country has a positive effect on a firm’s propensity to invest in a global city in that country. We also predict that this effect is stronger for investments in knowledge-intensive activities and weaker for investors with more target-country experience in general and target-country experience in global cities in particular. Our hypotheses receive considerable support in an analysis of 11,748 foreign greenfield investments by 1,025 manufacturing and service firms during 2008-2012. Our findings suggest that global cities are superior subnational locations for gathering contextual knowledge about target countries and limiting the liability of foreignness.
    Keywords: contextual distance, global cities, knowledge-intensive activities, liability of foreignness, location decisions, target-country experience, contextual distance, global cities, knowledge-intensive activities, liability of foreignness, location decisions, target-country experience
    Date: 2019–09–11
  17. By: Pelkmans, Jacques
    Abstract: With the five-week closure of the UK Parliament, the highly entertaining sessions of the House of Commons have been adjourned. Could this artificial breathing space provide a realistic opportunity to deliver the now infamous ‘alternative customs arrangements’, making the backstop unnecessary? And without the backstop, could the Withdrawal Agreement be ratified soon, opening at long last the way to genuine negotiations about the treaty on the future relations between the UK and the EU-27? This Policy Insight examines the implications of current options for the Irish border and assesses the recent proposal by Jonathan Faull et al. in light of considerations of ‘mutual trust’ and compatibility with EU law.
    Date: 2019–09
  18. By: Monika Mrázová; J. Peter Neary
    Abstract: We provide an overview and synthesis of recent work on models of monopolistic competition with heterogeneous firms in international trade, paying particular attention to competition effects, pass-through, selection effects, and linking distributions of firm characteristics and outcomes. A recurring theme is that CES preferences are extremely convenient for deriving analytic results, but also extremely restrictive in their theoretical and empirical implications. We introduce the class of “constant-response demand functions” to describe some related families of demand functions that provide a unifying principle for much recent work that explores alternatives to CES demands.
    Keywords: heterogeneous firms, pass-through, quantifying effects of globalization, super- and sub-convexity, supermodularity
    JEL: F12 L11 F23
    Date: 2019
  19. By: Ngo Van Long; Zhuang Miao
    Abstract: We model an oligopoly where firms are allowed to freely enter and exit the market and choose the quality level of their products by incurring different set-up costs. Using this framework, we study the mix of firms in the long-run Cournot-Nash equilibrium under different cost structures and the effects of market size on market outcomes. Specifically, we consider two alternative specifications of cost structure. In the first specification, quality upgrading requires a large increment in the set-up cost or R&D investment. Under this cost structure, we show that in the Nash equilibrium, each firm specializes in a single quality level, and an increase in the market size leads to (i) an increase in the fraction of firms that specialize in the high quality product, (ii) an increase in the market share of the high quality product, and (iii) a reduction in firms' markups and in markup dispersion. Under the second type of cost structure where quality upgrading only requires higher marginal cost, we find that all firms will produce both types of product, and the value share of the high-quality product increases as the market expands, but in quantity terms, the market share of the high quality product does not change. Finally, we find that trade liberalization has broadly similar effects to that of a market expansion, but the supply of the high-quality product from the smaller economy may decrease.
    JEL: L1 L2 F15
    Date: 2019–12–13
  20. By: Sessu, Andi; Jamali, Hisnol
    Abstract: Export trade balance, oil and non-oil imports, Indonesia is in an active state or economy to prosper, while the results of multiple regression analysis showed that the export of non oil/gas, non oil/gas import, oil and gas imports and economic growth positive effect on the labor force participation rate, which means every increased four variables also increased labor force participation rate, while oil and gas exports have negative effect means that any increased export of oil and gas resulting in a decline in labor force participation rates and significant effect of all the variables of the labor force participation rate in Indonesia. Multiple correlation coefficients obtained r = 0.998 shows the effect of variable export of non oil/gas, non oil/gas import, export of oil and gas, oil and gas imports, economic growth together very strong and the coefficient of determination together the five variables can be R = 0.996 shows the percentage contribution of influence together of 99% means that only 0.01% contribution of other variables influence the level of labor force participation in Indonesia. It can be concluded that the development of oil and gas trade and non-oil and gas in Indonesia still need cooperation between individual communities, private sector, civil society and government in an effort to increase trade in Indonesia, because it is very big influence on the labor force participation rate that could lower the unemployment rate and can automatically reducing poverty, because unemployment and poverty in Indonesia is still high when compared with some other countries in the world
    Date: 2018–01–03
  21. By: Tommaso Ciarli; Alex Coad; Alessio Moneta
    Abstract: This paper introduces a little known category of estimators - Linear Non-Gaussian vector autoregression models that are acyclic or cyclic - imported from the machine learning literature, to revisit a well-known debate. Does exporting increase firm productivity? Or is it only more productive firms that remain in the export market? We focus on a relatively well-studied country (Chile) and on already-exporting firms (i.e. the intensive margin of exporting). We explicitly look at the co-evolution of productivity and growth, and attempt to ascertain both contemporaneous and lagged causal relationships. Our findings suggest that exporting does not have any causal influence on the other variables. Instead, export seems to be determined by other dimensions of firm growth. With respect to learning by exporting (LBE), we find no evidence that export growth causes productivity growth within the period and very little evidence that exporting growth has a causal effect on subsequent TFP growth.
    Keywords: Productivity; Exporting; Learning-by-exporting; Causality; Structural VAR; Independent Component Analysis.
    Date: 2019–12–20
  22. By: Bandick, Roger
    Abstract: This paper investigates how firm size and global sourcing affect the export surviving probabilities. By using data on export and import transactions disaggregated by destination/origin for the entire Danish manufacturing firms between the periods 1995-2006, the author is able to classify the firms into different size categories and to observe whether they continue or cease to export. Moreover, he is able to define whether the firms source intermediate inputs from high- or low-wage counties. The results, after controlling for the endogeneity of the international sourcing decision by using IV and matching approach, indicate that firm size is positively correlated with the likelihood of continuing to export. Moreover, for small and medium size firms, global sourcing seems also to increase the probability of staying in the export market but only if they source from high- wage countries. However, sourcing inputs from abroad, no matter if it is from high- or low-wage countries, do not seem to significantly affect the export surviving probabilities for larger firms.
    Keywords: global sourcing,firm size,export,IV,matching,cloglog
    JEL: F16 F23 J24 L25
    Date: 2019
  23. By: Dimitrios Exadactylos (IMT School for advanced studies); Massimo Riccaboni (IMT School for advanced studies); Armando Rungi (IMT School for advanced studies)
    Abstract: In this paper, we test the contribution of foreign management on firms competitiveness. We use a novel dataset on the careers of 165,084 managers employed by 13,106 companies in the United Kingdom in the period 2009-2017. We find that a domestic manufacturing firm becomes on average between 9% and 12% more productive after hiring at least one foreign manager. Interestingly, productivity gains by domestic firms after recruiting foreign managers are similar in magnitude to gains after foreign acquisitions as from previous literature. Eventually, we do not find significant gains by foreign-owned firms hiring foreign managers. Our identification strategy combines difference-in-difference and matching techniques to challenge reverse causality. We proxy firms competitiveness either by total factor productivity or by technical efficiency derived from stochastic frontier analyses. Eventually, we argue that limits to the circulation of talents, as for example in case of a Brexit event, may hamper the allocation of labor productive resources.
    Keywords: managers; productivity; job mobility; spillovers; multinational enterprises; migration
    JEL: F22 F23 L23 L25 J61 M11
    Date: 2019–12
  24. By: Khan, Shibli A.; Uddin, Gazi Salah; Alam, Md. Mahmudul (Universiti Utara Malaysia)
    Abstract: This paper focuses on the casual relationship between export, import and Gross Domestic Product (GDP) for Bhutan using annual data from 1980 to 2005. The Granger causality test and Co-integration Models are employed taking care of stochastic properties of the variables. The co-integration analysis suggests that there is a long-run equilibrium relationship. The results of Granger causality test shows that there is a causal relationship between the examined variables. The causal nexus is unidirectional from export to import and GDP, and GDP to import only. Here export led growth is empirically proven in Bhutan.
    Date: 2019–02–23
  25. By: Budría, Santiago; Milgram Baleix, Juliette
    Abstract: This paper investigates the effects of offshoring on individual job satisfaction and perceived risk of job loss. The authors merge microdata from the German Socio-economic Panel dataset (SOEP) with indicators of insertion in global value chains at the industry level for the period 2000-2013. They test two hypotheses. First, they investigate whether workers in industries with higher offshoring intensity report lower job satisfaction and/or are more prone to be unsecure at their jobs. Second, they test whether these effects differ among four categories of collars. Their findings indicate that offshoring is associated with lower job satisfaction. Specifically, the reference individual would need a compensation of about 0.25% of her labour income to experience a 1% increase in offshoring intensity in order to maintain her job satisfaction constant. The results are also indicative of some heterogeneity in the offshoring effect, with high skilled white-collar worker being mostly unaffected by offshoring and low skilled blue-collar workers showing the largest negative effects. Moreover, the authors find that offshoring is not significantly related with job insecurity, a result that applies to all workers' categories.
    Keywords: job satisfaction,job insecurity,offshoring,Germany
    JEL: I31 F6
    Date: 2019
  26. By: Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic)
    Abstract: Multinational enterprises make use of tax havens to avoid paying corporate income taxes and this costs hundreds billion USD in lost government revenue worldwide according to an increasing number of recent studies. None of those studies assigns these costs to industries. I aim to shed more light on this gap by using some of the best available industry-level US data to determine to what extent the location of the MNEs’ profit is aligned with the location of their economic activities. My first finding is that the most important tax havens for US multinational enterprises are the Netherlands, Ireland and Luxembourg (all EU member states). Second, I systematically identify the specific industries in specific tax havens responsible for the costs, which should be useful information for tax authorities aiming to reduce tax avoidance. Finally, I argue that the current data are not detailed enough to provide a reliable industry breakdown of the costs, but the prospect of combining input-output tables with forthcoming country-by-country data seems more promising.
    Keywords: Multinational enterprises; foreign direct investment; tax havens; industry-level data
    JEL: F21 F23 H25 H26 H87
    Date: 2019–12
  27. By: Javier Garcia-Bernardo (University of Amsterdam, Faculty of Social and Behavioural Sciences, Spui 21, 1012 WX Amsterdam, The Netherlands); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic); Thomas Torslov (Faculty of Social Sciences, Oster Farimagsgade 5, DK-1353 Copenhagen K, Denmark)
    Abstract: We develop a new methodology to decompose the observed decline in multinational corporations’ (MNCs’) effective tax rates into profit shifting to tax havens and several other components. We apply this methodology to the best available data for MNCs headquartered in the US – from the Bureau of Economic Analysis – and in the EU – from Orbis – and we arrive at three main findings. First, we estimate that between 2005 and 2015 increased profit shifting directly explains only 30% and 5% of the 7 and 9 percentage point declines in effective tax rates for US and EU MNCs, respectively. At the same time, we note that profit shifting might explain more of the decline indirectly, through its effects on domestic taxation, i.e. taxation of MNCs in their home country; this is responsible for more than 50% of the overall decline in effective tax rates for both US and EU MNCs. Second, we find that US MNCs have primarily benefited from domestic tax base reductions, most of which can be explained by sectoral changes, while the statutory rate remained constant. Third, we show that EU MNCs have mainly benefited from falling domestic statutory rates and we observe similar patterns across EU home countries, host countries and sectors. Overall, while we confirm that profit shifting is increasing in scale, we also highlight that it may have even more prominent indirect effects.
    Keywords: Effective tax rates, multinational corporations, foreign direct investment, profit shifting
    JEL: F21 F23 H25 H26
    Date: 2019–12
  28. By: ARISTO, Jurnal
    Abstract: On June 23, 2016, eurosceptic group won a British referendum on Britain's motion of leaving the European Union. This paper will explore the factors related to the victory of eurosceptic group in the historic referendum. This paper uses theory of voting behaviour and strategy of campaign to answer the research of this paper. Eurosceptic group victory in this referendum couldn’t be separated from eurosceptic's success in influencing the mindset of Britishsociety as the voter in this referendum. By using the concept of the campaign strategy, the writer will examine various forms of brexit campaign strategy that used to influence voters behaviour.
    Date: 2018–01–12
  29. By: Luisito Bertinelli; Olivier Cardi; Romain Restout
    Abstract: Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the sectoral composition effects of technology shocks biased toward the traded sector. Using a panel of seventeen OECD countries over the period 1970-2013, our VAR evidence reveals that a permanent increase in traded relative to non-traded TFP lowers the traded hours worked share by shifting labor toward the non-traded sector, and has an expansionary effect on the labor income share in both sectors. Our quantitative analysis shows that the open economy version of the neoclassical model can reproduce the reallocation and redistributive effects we document empirically once we allow for technological change biased toward labor together with additional specific elements. Calibrating the model to country-specific data, the model can account for the cross-country dispersion in the reallocation and redistributive effects we document empirically once we let factor-biased technological change vary across sectors and between countries. Finally, we document evidence which supports our hypothesis of factor-biased technological change as we find empirically that countries where capital-intensive industries contribute more to the increase in traded TFP are those where capital relative to labor efficiency increases.
    Keywords: Sectoral technology shocks, factor-augmenting efficiency, Open economy, Labor reallocation across sectors, CES production function, Labor income share
    JEL: E22 F11 F41 F43
    Date: 2019
  30. By: Zulfikar, Achmad
    Abstract: This essay was made to commemorate the 50 years Anniversary of ASEAN and try to predict the ASEAN prospects for the next 50 years. This paper reviews the journey of ASEAN which in 2015 has started the era of ASEAN Economic Community which is one of its goals to create a single market and production base. This essay also examines the results of the study which can illustrate the conditions of migrant workers in ASEAN and comparative study with the conditions in the EU. This essay recommends strengthening the position of the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers as a umbrella policy in ASEAN and strengthening the role of the ASEAN Commission on Migrant Workers as an institution that are tasked with promoting the rights of migrant workers in the region. --- Esai ini dibuat dalam rangka memperingati 50 tahun ASEAN dan mencoba untuk melihat prospek ASEAN 50 tahun ke depan. Tulisan ini mengulas mengenai perjalanan ASEAN yang pada tahun 2015 lalu telah memulai era Masyarakat Ekonomi ASEAN yang salah satu tujuannya untuk membuat pasar tunggal dan basis produksi. Tulisan ini juga mengkaji hasil-hasil kajian yang dapat menjadi gambaran kondisi pekerja migran di ASEAN dan melakukan komparasi dengan kondisi di Uni Eropa. Tulisan ini merekomendasikan untuk penguatan posisi Deklarasi ASEAN untuk Perlindungan dan Promosi terhadap Hak-Hak Pekerja Migran sebagai payung kebijakan di ASEAN dan penguatan peran Komisi ASEAN untuk Pekerja Migran sebagai institusi yang bertugas untuk mempromosikan hak-hak pekerja migrant di kawasan.
    Date: 2017–12–06
  31. By: Agustín Arias; Juan Guerra-Salas
    Abstract: Roughly one third of migrants worldwide reside in developing countries, yet most papers on the macroeconomiceffects of immigration focus on advanced economies. We investigate the medium- and long-term effects of immigration in an emerging country, considering a salient feature of this type of economies: the importance of labor informality. We build an overlapping generations model featuring 24 cohorts, an informal sector, and households with heterogeneous skill levels, among other features, that help us match key demographic and economic characteristics of Chile, an emerging country that has recently experienced an important immigration wave. An immigration wave increases the supply of labor, creating downward pressure on wages in the formal sector. Workers respond by reallocating labor effort to the informal sector, which allows them to mitigate the decline in consumption per worker triggered by lower formal-sector wages. Our model, thus, constitutes a framework for the quantitative analysis of immigration in emerging countries.
    Date: 2019–11
    Abstract: The supply and demand for MBA courses have grown over time worldwide. The most diversified programs are available at business schools. The opportunity for exchange experiences and establish international network has stood out among the students? priorities. This paper seeks to build a research model that would permit the assessment of Brazilian MBA students about the internationalization of their career and academic life as a consequence or due to an MBA Course. Global mindset driven to an internationalized behavior can be expressed by the conversion among experiences abroad and internationalization at home tied with global global skills. A model with multidimensional factors is proposed after a comprehensive examination of the literature. This model is composed by four constructs: internationalization at home, experience abroad, global skills and global mindset. Although literature presents the above constructs isolated or partially combined, none of them bring a model integrating all of them or considering higher education in a holistic approach. The study developed by McCormick & Stephen (2016) was used as a basis for the present model construction, which improves this lack of integration approach. This research model would permit the identification of the main factors that explain the likelihood to be an internationalized MBA student.
    Keywords: MBA, internationalization, career, business school, global mindset, global skills
    JEL: I23
    Date: 2019–10

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