nep-int New Economics Papers
on International Trade
Issue of 2020‒01‒27
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Rising Import Tariffs, Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism By Kyle Handley; Fariha Kamal; Ryan Monarch
  2. The US-Japan trade deal: Narrow scope, wider implications By Chowdhry, Sonali; Felbermayr, Gabriel; Okubo, Toshihiro
  3. The employment effects of trade policy reform in Myanmar By Ayoki, Milton
  4. On the Simultaneous Openness Hypothesis: FDI, Trade and TFP Dynamics in Sub-Saharan Africa By Simplice A. Asongu; Joseph Nnanna; Paul N. Acha-Anyi
  5. Migration and the Location of MNEs Activities. Evidence from Italian Provinces By Luigi Benfratello; Davide Castellani; Anna D’Ambrosio
  6. The impact of trade agreements on world export prices By Flach, Lisandra; Gräf, Fabian
  7. Cross-retaliation and International Dispute Settlement By Richard Chisik; Chuyi Fang;
  8. Firm heterogeneity, misallocation, and trade By John Chung
  9. Imported inputs and export performance: Evidence from Chilean manufacturing industries By Zaclicever, Dayna
  10. International Migration in Asia and the Pacific: Determinants and Role of Economic Integration By Kikkawa-Takenaka, Aiko; Gaspar, Raymond; Park, Cyn-Young
  11. The impact of US tariffs against China on US imports: Evidence for trade diversion? By Meinen, Philipp; Schulte, Patrick; Cigna, Simone; Steinhoff, Nils
  12. The rise of coffee in the Brazilian southeast: tariffs and foreign market potential, 1827-40 By Christopher David Absell
  13. Aid for Trade and Services Export Diversification in Recipient-Countries By Gnangnon, Sena Kimm
  14. The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide VAT Rebate Reform in China By Jie Bai; Jiahua Liu
  15. The Gravity Model and Trade in Intermediate Inputs By Theresa M. Greaney; Kozo Kiyota
  16. A network analysis approach to vertical trade linkages: the case of Latin America and Asia By Zaclicever, Dayna
  17. Fear and Loathing on the Campaign Trail: Did Immigration Cause Brexit? By Max Viskanic
  18. Tracing value-added and double counting in sales of foreign affiliates and domestic-owned companies By Miroudot, Sébastien; ye, ming
  19. Infrastructure and Foreign Direct Investment in Kenya: A Time Series Analysis 1980-2015 By Victor, Kidake
  20. Estimation of Firm-Level Productivity in the Presence of Exports: Evidence from China's Manufacturing By Malikov, Emir; Zhao, Shunan; Kumbhakar, Subal C.
  21. A New Index of Globalization: Measuring Impacts of Integration on Economic Growth and Income Inequality By Huh , Hyeon-Seung; Park, Cyn-Young
  22. Investigating firms' involvement in corporate social irresponsibility: Are family owned MNEs better corporate citizens? By Federica Nieri; Luciano Ciravegna
  23. Labor Migrants as Political Leverage: Migration Interdependence and Coercion in the Mediterranean By Tsourapas, Gerasimos
  24. A New Approach for Quantifying the Costs of Utilizing Regional Trade Agreements By Naoto JINJI; Kazunobu HAYAKAWA; Nuttawut LAKSANAPANYAKUL; Toshiyuki MATSUURA; Taiyo YOSHIMI
  25. Latin America’s faltering manufacturing competitiveness: what role for intermediate services? By Avendano, Rolando; Bontadini, Filippo; Mulder, Nanno; Zaclicever, Dayna
  26. On Globalization and the Concentration of Talent By Ulrich Schetter; Oriol Tejada
  27. European Integration of Georgia and Financial-Economic Condition: Achievements and Challenges By Abuselidze, George
  28. International Trade Commission Exclusion Orders for the Infringement of Standard-Essential Patents By Sidak, Gregory; Library, Cornell
  29. Regional Integration, International Tourism Demand and Renewable Energy Transition: Evidence from selected South Asia Economies By Murshed, Muntasir;
  30. Exports Since the International Financial Crisis By Pedro Miguel Avelino Bação; António Portugal Duarte; Diogo Viveiros

  1. By: Kyle Handley; Fariha Kamal; Ryan Monarch
    Abstract: We examine the impacts of the 2018-2019 U.S. import tariff increases on U.S. export growth through the lens of supply chain linkages. Using 2016 confidential firm-trade linked data, we document the implied incidence and scope of new import tariffs. Firms that eventually faced tariff increases on their imports accounted for 84% of all exports and represented 65% of manufacturing employment. For all affected firms, the implied cost is $900 per worker in new duties. To estimate the effect on U.S. export growth, we construct product-level measures of import tariff exposure of U.S. exports from the underlying firm micro data. More exposed products experienced 2 percentage point lower growth relative to products with no exposure. The decline in exports is equivalent to an ad valorem tariff on U.S. exports of almost 2% for the typical product and almost 4% for products with higher than average exposure.
    Keywords: Global supply chains; tariffs; trade war; U.S. exports
    JEL: F1 F13 F14 F23 H2
    Date: 2020–01
  2. By: Chowdhry, Sonali; Felbermayr, Gabriel; Okubo, Toshihiro
    Abstract: The authors analyze whether the US-Japan Trade Agreement is consistent with GATT Article XXIV that carves out an exception to the WTO's "Most-Favored Nation" (MFN) principle. They conclude that the agreement is unlikely to meet the "substantially all the trade" criterion of GATT Article XXIV since the scope of tariff liberalization is very narrow. The US and Japan have agreed to liberalize just 3.4% and 10% of tariff lines with positive MFN duties, respectively. Key sectors for US exports to Japan such as machinery and instruments are not liberalized under the agreement. Though the market access offered to specific US agri-food products is similar to Japan's commitments under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Japan has not "rolled over" the entire CPTPP schedule for the US. Tariff concessions are asymmetric and indicate the relative disadvantage with which Japan entered into bilateral negotiations with the US. Overall, the market access gained by Japan from this deal is highly circumscribed in comparison to the recently implemented EU-Japan Economic Partnership Agreement.
    Keywords: International Trade,US-Japan Relationship,Trade Deal,Tariffs,GATT,Internationaler Handel,Beziehungen USA und Japan,Handelsabkommen,Zölle
    Date: 2019
  3. By: Ayoki, Milton
    Abstract: This paper investigates employment responses to trade liberalisation in a developing economy, Myanmar. Using data from the 2014 Census and the 2017, labour force survey and previous surveys contained in Myanmar Statistical Yearbook, 2017, we find that trade liberalization did not affect the relative size of industry sectors in terms of employment. The OLS results finds support for the theoretical predictions of differential responses to trade reforms between sectors. Conversely, while empirical support is found for tariff reduction in influencing sector level employment, the tariff predictors are weaker overall than the sector productivity and competitiveness (in export market) predictors—implying that trade policy reforms need to be correctly tailored to raising productivity of labour force and sector competitiveness if their impact on employment is to be effectively realised.
    Keywords: ASEAN, employment, international trade, trade policy, revealed comparative advantage, Asia Pacific, Myanmar
    JEL: E24 F13 F14
    Date: 2020–01–12
  4. By: Simplice A. Asongu (Yaoundé/Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria); Paul N. Acha-Anyi (Walter Sisulu University, South Africa)
    Abstract: This study assesses the simultaneous openness hypothesis that trade modulates foreign direct investment (FDI) to induce positive net effects on total factor productivity (TFP) dynamics. Twenty-five countries in Sub-Saharan Africa and data for the period 1980 to 2014 are used. The empirical evidence is based on the Generalised Method of Moments. First, trade imports modulate FDI to overwhelmingly induce positive net effects on TFP, real TFP growth, welfare TFP and real welfare TFP. Second, with exceptions on TFP and welfare TFP where net effects are both positive and negative, trade exports modulate FDI to overwhelmingly induce positive net effects on real TFP growth and welfare real TFP. In summary, the tested hypothesis is valid for the most part. Policy implications are discussed.
    Keywords: Productivity; Foreign Investment; Sub-Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2020–01
  5. By: Luigi Benfratello (Politecnico di Torino and CSEF); Davide Castellani (Henley Business School, University of Reading); Anna D’Ambrosio (Politecnico di Torino)
    Abstract: This paper investigates the link between migration and inward FDI in narrow geographies. Our results, based on 1,147 greenfield investment projects made by 895 MNEs into Italian provinces (NUTS3) over the 2003-2015 period, confirm a positive effect of the stock of immigrants on FDI, but no robust effects of emigrants. However, beyond this average effect lies significant heterogeneity. By unraveling this heterogeneity, we shed light on the potential mechanisms underlying this relation. Our results are consistent with an important role of demand and information channels, but not with an effect through the labour market. On the one hand, immigrants are not a factor that attracts more labour-intensive investments. On the other hand, the effect of immigrants is stronger when information and, to a lesser extent, market demand are more important. Overall, our paper bears significant implications for local development policy that partially contrast with the current public discourse on immigration.
    Keywords: Foreign Direct Investment, Migration, Location Choice, Information Effect, Demand Effect, Conditional Logit, Mixed Logit
    JEL: F22 F21 R30
    Date: 2019–12
  6. By: Flach, Lisandra; Gräf, Fabian
    Abstract: This paper uncovers new stylized facts on the relation between economic integration and world trade prices. Using free on board export price data for the universe of manufacturing products, we show that a country's membership in the WTO (World Trade Organization) or in a PTA (Preferential Trade Agreement) is associated with an increase in export prices of differentiated goods. For the WTO, this effect is captured by the countries that were subject to rigorous WTO accession procedures. We also exploit the importance of the depth of a PTA and of its different provisions. Whereas the effect of the depth per se is not significant, individual provisions evoke distinct effects on prices. In particular, we find that PTAs with provisions on investments are associated with higher export prices. The results are consistent with theoretical models that relate competition to the innovation behavior of firms.
    Date: 2020
  7. By: Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada); Chuyi Fang (Department of Economics and Finance, Sydney Institute of Language and Commerce, Shanghai University, Shanghai, 201800, China);
    Abstract: Although politicians and the popular press often express the desire to link retaliation in trade agreements to non-trade issues, the WTO discourages and usually disallows cross-retaliation even among its own agreements. In this paper we analyze the WTO's reticence to embrace cross-retaliation. We take a dynamic mechanism design approach and compare two different mechanisms in a two-country two-sector tariff-setting political-economy model with incomplete information. In a same-sector retaliation mechanism, a safeguard action (which is an allowable temporary violation of the international trade agreement) is punished by an equivalent suspension of concessions in the sector where the initial deviation takes place. In a linked, or cross-sector, retaliation mechanism, retaliatory actions are taken in another sector or agreement. We also consider asymmetries in the suspension of concessions whereby the probability of retaliation is less than unity. We then endogenize this probability and derive its optimal level separately for same- and cross-sector retaliation. Finally we consider the long-run viability of this self-enforcing trade agreement. We show that whether retaliation is certain, probabilistic and the same for both same- and cross-sector agreements, or probabilistic and separately optimal for each type of agreement, the best negotiated import tariffs under a cross-sector mechanism generate greater welfare than those under a same-sector retaliation mechanism.
    Date: 2020–01
  8. By: John Chung
    Abstract: While the standard trade models explain observed firm heterogeneity with variance in firms' innate productivity, discriminatory policies and political connections in China may also affect the firm size and generate resource misallocation across firms. In this paper, I show that the productivity heterogeneity alone has difficulty explaining the observed firm-level patterns in Chinese manufacturing sector. I document that larger firms exhibit lower average revenue productivity, revenue productivity variance is high conditional on firm size, and larger exporters exhibit lower export intensity. Introducing firm-level misallocation can help reconcile these facts and doing so matters for estimating the gains from trade. The misallocation model predicts the size of gains from trade that is 45% lower than the standard model predicts when both models are calibrated with the same Chinese manufacturing data. The result suggests that accounting for firm level heterogeneity in the dimensions other than productivity is important when estimating the gains from trade.
    Keywords: international trade, gains from trade, misallocation
    JEL: F12 F14 F62 O17 O19
    Date: 2020–01
  9. By: Zaclicever, Dayna
    Abstract: This document examines Chilean manufacturing industries’ backward participation in international production networks, evaluating the relationship between the use of foreign intermediate inputs and export performance (in terms of products and destination countries). The analysis is based on an original dataset that allows addressing within-industry heterogeneity across size classes.
    Date: 2019–12–30
  10. By: Kikkawa-Takenaka, Aiko (Asian Development Bank); Gaspar, Raymond (Asian Development Bank); Park, Cyn-Young (Asian Development Bank)
    Abstract: International migration is an essential element of economic integration. Yet, the intraregional movement of people and labor in Asia and the Pacific has stagnated in recent years even as the flow of goods, services, and investment have steadily risen. This paper examines key factors driving the movement of people from and within the region using bilateral international migrant stock data. Our analysis shows that commonly known determinants such as income differences; population size; and political, geographical, and cultural proximities between the migrant source and destination countries are associated with greater movement, along with the growing share of older population in destination economies and the similarities in the level of educational attainment. The paper also finds that cross-border migration is affected, in varied directions, by the degree of economic integration between the source and destination economies, especially through bilateral trade and value chain links. The offshoring of production—and hence jobs and other economic opportunities—to migrant source countries suppresses outmigration, but the expected rise in the source country income will eventually promote migration by relaxing financial constraints.
    Keywords: international migration; labor mobility; regional economic integration
    JEL: F22 O15
    Date: 2019–10–15
  11. By: Meinen, Philipp; Schulte, Patrick; Cigna, Simone; Steinhoff, Nils
    Abstract: In this paper we provide evidence on the existence of short-run trade diversion effects as a consequence of tariff shocks. We exploit sudden policy changes in the context of the trade dispute between the US and China. Based on a data set covering monthly product-level information on US imports from 30 countries for the period January 2016 until May 2019, we employ a difference-in-differences estimation framework. Doing so, we (1) can confirm previous findings showing a strong negative direct effect of US tariffs on US imports from China, but (2) do not find evidence for significant short-run trade diversion effects towards third countries. This latter finding holds for product and country subgroups as well as for a variety of robustness checks.
    Keywords: tariffs,US imports,trade diversion,product-level data,difference-in-differences
    JEL: F13 F14
    Date: 2019
  12. By: Christopher David Absell (Departamento de Ciencias Sociales, Universidad Carlos III de Madrid)
    Abstract: During the period spanning independence in 1822 to mid-century, Brazil’s southeast shifted from specialising in the export of cane sugar to coffee. This paper explores the mechanism underlying this shift by exploiting a wealth of new monthly data on the Brazilian and international coffee and cane sugar markets during the period 1827-40. I argue that the timing of the coffee boom was driven by a rapid increase in foreign market potential associated with the abolition of the tariff on coffee in the United States. I estimate that American tariff reform served to increase coffee exports and African slave imports by around one-fifth. American firms, with indirect links to the slave trade, rapidly became major players in the export market in Rio de Janeiro, while non-American firms, traditionally specialised in Continental European destinations, turned their sights on the American market.
    Keywords: Coffee, Brazil, slavery, tariffs, market potential
    JEL: N56 N76
    Date: 2020–01
  13. By: Gnangnon, Sena Kimm
    Abstract: This article examines the effect of Aid for Trade (AfT) flows on services export diversification in recipient-countries. The empirical analysis has relied on a sample of 100 recipient-countries (of which 31 Least developed countries – LDCs) over the period 2002-2014 and used the two-step system Generalized Methods of Moments (GMM) approach. It shows that total AfT flows always exert a positive effect on services export diversification over the full sample, with the magnitude of this positive effect being higher for less advanced countries such as LDCs than for relatively advanced economies. This finding also applies to the effect of the cumulated AfT flows on services export diversification. However, we find that the components of total AfT flows - namely AfT for services sectors and AfT for non-services sectors - exert a higher positive effect on services diversification in less advanced countries, notably LDCs than in relatively advanced countries. Specifically, for countries whose real per capita income exceed a certain level, these two types of capital inflows are associated with greater services export concentration. These findings have important policy implications for developing countries and notably the poorest countries among them.
    Keywords: Aid for Trade,Services Export Diversification
    JEL: F1 F14 F35
    Date: 2020
  14. By: Jie Bai (Center for International Development at Harvard University); Jiahua Liu
    Abstract: It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model’s predictions, we find that rising local protectionism leads to a reduction in interprovincial trade, more “inward-looking” sourcing behavior of local intermediaries, and a reduction in manufacturing exports. Analysis using micro firm-level data further shows that private companies with greater baseline reliance on export intermediaries are more adversely affected.
    Keywords: Trade barriers
    Date: 2019–12
  15. By: Theresa M. Greaney (University of Hawaii at Manoa); Kozo Kiyota (Keio Economic Observatory, Keio University; Department of Economics, University of Hawai‘i; and Research Institute of Economy, Trade and Industry (RIETI))
    Abstract: Is the gravity model as applicable to trade in intermediate inputs as it is to trade in final goods? One of the contributions of this paper is that we explicitly account for the dual nature of products that can be used as either intermediate inputs or final goods. We find that the structural gravity model performs extremely well for describing bilateral trade in final goods and in intermediate inputs. Moreover, this continues to hold even when we focus on a subset of countries in which intermediate inputs trade accounts for a growing share of trade, namely ‘Factory Asia’. However, the gravity model may perform poorly due to model misspecification (i.e., exclusion of intranational trade) and/or sample selection, even after the model considers the dual nature of products. We demonstrate that the poor performance of the gravity model is not attributable to the large trade flow of intermediate inputs, which supports the continued use of the model as these trade flows continue to grow in importance worldwide.
    Keywords: Structural gravity model, Intermediate inputs, Intranational trade, Factory Asia
    JEL: F14
    Date: 2020–01
  16. By: Zaclicever, Dayna
    Abstract: This document adopts a network analysis approach to examine the vertical trade relations between Latin America and Asia, showing the potential of these techniques for providing new insights into the patterns and dynamics of countries’ GVC linkages. Particularly, network-based measures are used to assess how important countries are as users and suppliers of foreign intermediate inputs in each network, at both the aggregate and sector level. In addition, clustering techniques are applied to identify groups of supplier countries.
    Date: 2020–01–08
  17. By: Max Viskanic (Sciences Po)
    Abstract: Can large immigration inflows impact electoral outcomes and specifically, what impact did immigration have on the vote in favour of leaving the European Union (Brexit) in the United Kingdom? In particular, I focus on how the increase in Polish immigration, the major group of immigrants post 2004, affected votes in favour of leaving the EU. I find a percentage point increase in Polish immigration to the UK to have caused an increase in votes in favour of Brexit of about 2.72-3.12 percentage points, depending on the specification. To obtain exogenous variation in Polish immigration, I collect data from the archives that reveals the location of Polish War Resettlement Camps after Word War II, which location is plausibly exogenous to current political outcomes. Discussing potential mechanisms, I examine public opinion data in the British Election Study 2015 and find evidence of adversity towards immigration to be a root cause. Other considerations such as the National Health Service (NHS), incumbency and the general trust in politicians as well as the political institutions seem not to play a role.
    Keywords: Political Economy; Voting; Migration; Brexit; EU; UK
    Date: 2020–01
  18. By: Miroudot, Sébastien; ye, ming
    Abstract: In this paper, we propose a new accounting framework for the decomposition of value-added into domestic, foreign and double counting terms in domestic sales. In this framework, we show where the value-added double counting is derived from and give an explicit expression of domestic and foreign double counting terms based on the Inter-Country Input-Output (ICIO) tables’ Ghosh insight. We can distinguish domestic sales from exports and trace the value added and double counting in sales of foreign affiliates and domestic-owned enterprises. Based on this framework, we then calculate the value-added by foreign-owned and domestic-owned firms in exports and in domestic sales by using an Inter-Country Input-Output table split according to ownership. Preliminary results suggest that there is much more double counting in sales of foreign affiliates than in exports and that more value-added is created through exports than through sales of foreign affiliates in world GDP.
    Keywords: inter-country input-output, value-added decomposition, global value chains, foreign affiliates
    JEL: E01 E16 F23 L14
    Date: 2018–03–14
  19. By: Victor, Kidake
    Abstract: Provision of infrastructure is one of the key roles of governments and is mostly associated with the level of economic growth and development of the respective country. However, with the limitation in budgetary resources, infrastructure development cannot be achieved through budgetary allocations alone without some other external financing sources. However, Multinational Corporation considers the domestic characteristics of the host countries before making investment decisions. Such characteristics include infrastructural development, ease of doing business, economic growth rate, and real effective exchange rate. This paper sought to empirically analyze the long-run and short-run associations between infrastructural and FDI stocks in Kenya. The study used the principal component analysis (PCA) to generate infrastructure component. It is generated from the three main measure of infrastructure which includes electricity generation in kilowatts, Mobile cellular subscription (per 100 people), and the total expenditure on transport infrastructure (Road, air, water, and Rail). The study used annual Time series data for the period 1980- 2015, which will be obtained from the World Bank database and the Kenya Bureau of Statistics(KNBS) publications. The study results indicated that FDI and infrastructural development are related in the long run. Further, the study indicated that FDI affected the infrastructure in the short run significantly. Infrastructural development had a positive significant effect on the FDI in the short run. Granger causality results indicated a unidirectional causality running from FDI to infrastructural development. From the study findings, this study proposed measures to be put in place to facilitate infrastructure development with aim of attracting FDI inflows, and on the other hand, the study proposed policies to be put in place to increase FDI inflows with main aim of facilitating infrastructure development in Kenya.
    Keywords: FDI Infrastructure
    JEL: F4 O1
    Date: 2018–12–05
  20. By: Malikov, Emir; Zhao, Shunan; Kumbhakar, Subal C.
    Abstract: Motivated by the longstanding interest of economists in understanding the nexus between firm productivity and export behavior, this paper develops a novel structural framework for control-function-based nonparametric identification of the gross production function and latent firm productivity in the presence of endogenous export opportunities that is robust to recent unidentification critiques of proxy estimators. We provide a workable identification strategy, whereby the firm's degree of export orientation provides the needed (excluded) relevant independent exogenous variation in endogenous freely varying inputs, thus allowing us to identify the production function. We estimate our fully nonparametric IV model using the Landweber-Fridman regularization with the unknown functions approximated via artificial neural network sieves with a sigmoid activation function which are known for their superior performance relative to other popular sieve approximators, including the polynomial series favored in the literature. Using our methodology, we obtain robust productivity estimates for manufacturing firms from twenty eight industries in China during the 1999-2006 period to take a close look at China's exporter productivity puzzle, whereby exporters are found to exhibit lower productivity levels than non-exports.
    Keywords: ANN sieves, control function, export, nonparametric, productivity, proxy, regularized estimation, TFP
    JEL: D22 D24 F10 L10 L60
    Date: 2020
  21. By: Huh , Hyeon-Seung (Yonsei University); Park, Cyn-Young (Asian Development Bank)
    Abstract: The purpose of this study is twofold. The first is to develop a new composite index of globalization based on data on 158 economies over the period 2006–2014. The second intention is to use the new index to evaluate empirically the possible effects of globalization on economic growth and income inequality. The index comprises 25 indicators that represent the key socioeconomic components of global integration. Principal component analysis is used to weight each component and construct an aggregate measure. Unlike previous composite indexes, this study separates the contributions of intraregional and extraregional integration in the construction of the globalization index. The results show that although globalization promotes economic growth, it may worsen income inequality. High-income countries benefit most in that the positive effect of globalization on economic growth is strongest among them than on other income groups, and they experience a less pronounced widening of income inequality. Between the two drivers of global economic integration, intraregional integration is far more important than extraregional integration. The analysis also finds extraregional integration to be mainly responsible for the rise in income inequality that has accompanied globalization.
    Keywords: composite index; economic globalization; economic growth; extraregional integration; income inequality; intraregional integration
    JEL: F10 F40 I30 O10 O50
    Date: 2019–07–19
  22. By: Federica Nieri; Luciano Ciravegna
    Abstract: This paper aims at investigating how multiple antecedents of multinational enterprises (MNEs) involvement in Corporate Social Irresponsibility (CSIR) act in unison and create complex situations that are difficult to capture with a linear logic. To this end, we use fuzzy set qualitative comparative analysis (fsQCA) and find five configurations of antecedents leading to high levels of CSIR occurrence: (1) The resource-constrained MNE - a highly internationalized MNE, operating in high corruption host markets, facing low performance volatility, with low slack resources, which does not adopt Corporate Social Responsibility (CSR) policies; (2) The disinterested MNE – a lowly internationalized MNE, operating in low corruption host markets, facing low performance volatility, with high slack resources, which does not adopt CSR policies; (3) The calculated family MNE - a lowly internationalized family MNE, operating in high corruption host markets, facing high performance volatility, with high slack resources, which does not adopt CSR policies; (4) The resource-constrained family MNE - a lowly internationalized family MNE, operating in high corruption host markets, facing high performance volatility, with low slack resources, which adopts CSR policies; (5) The overreacting, decoupling family MNE – a lowly internationalized family MNE, operating in low corruption host markets, facing high performance volatility, with high slack resources, which adopts CSR policies.
    Keywords: Corporate Social Irresponsibility (CSIR); Family firms; Multinationals; Corporate Social Responsibility (CSR); Performance volatility; Qualitative Comparative Analysis (QCA)
    JEL: F23 M14 K40
    Date: 2019–12–01
  23. By: Tsourapas, Gerasimos (University of Birmingham)
    Abstract: How do states attempt to use their position as destinations for labor migration to influence sending states, and under what conditions do they succeed? I argue that economically driven cross-border mobility generates reciprocal political economy effects on sending and host states. That is, it produces migration interdependence. Host states may leverage their position against a sending state by either deploying strategies of restriction—curbing remittances, strengthening immigration controls, or both—or displacement—forcefully expelling citizens of the sending state. These strategies’ success depends on whether the sending state is vulnerable to the political economy costs incurred by host states’ strategy, namely if it is unable to absorb them domestically and cannot procure the support of alternative host states. I also contend that displacement strategies involve higher costs than restriction efforts and are therefore more likely to succeed. I demonstrate my claims through a least-likely, two-case study design of Libyan and Jordanian coercive migration diplomacy against Egypt in the aftermath of the Arab Spring. I examine how two weaker Arab states leveraged their position against Egypt, a stronger state but one vulnerable to migration interdependence, through the restriction and displacement of Egyptian migrants.
    Date: 2018–04–25
  24. By: Naoto JINJI; Kazunobu HAYAKAWA; Nuttawut LAKSANAPANYAKUL; Toshiyuki MATSUURA; Taiyo YOSHIMI
    Abstract: This study proposes a new approach for quantifying two kinds of costs related to the utilization of regional trade agreements (RTAs). The first, which we call the “procurement adjustment cost,” represents the cost involved in meeting rules of origin through the adjustment of procurement sources. The second is the additional fixed costs required to utilize RTAs, including document preparation costs for the certification of origin. The proposed approach makes it possible to compute these two costs separately using product-level data. It is built on a model of international trade where heterogeneous exporters decide which tariff scheme to use. Applying our approach to Thailand’s imports from China, our estimates suggest that procurement adjustment costs to comply with RTA rules of origin at the median are equivalent to 4% of per-unit production costs. In addition, RTA utilization requires an additional 27% of fixed costs. Furthermore, simulation analysis shows that a reduction of the additional fixed costs by half would raise the RTA utilization rate by 13 percentage points, while the complete elimination of procurement adjustment costs would raise the RTA utilization rate by 32 percentage points.
    Keywords: Regional trade agreement; Preference utilization; Cost estimation
    JEL: F15 F53
    Date: 2020–01
  25. By: Avendano, Rolando; Bontadini, Filippo; Mulder, Nanno; Zaclicever, Dayna
    Abstract: This document contributes to the scarce empirical literature on the role of services as a source of manufacturing competitiveness in developing economies, providing evidence on the Latin American region. We use the 2018 release of the Organisation for Economic Co-operation and Development (OECD)’s Trade in Value Added (TiVA) database to assess the servicification of manufacturing exports in seven Latin American countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Peru) between 2005 and 2015, in comparison with ten Asian emerging economies (eight ASEAN countries (Brunei Darussalam, Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam), China and India).
    Date: 2020–01–08
  26. By: Ulrich Schetter (Center for International Development at Harvard University); Oriol Tejada
    Abstract: We analyze how globalization affects the allocation of talent across competing teams in large matching markets. Assuming a reduced form of globalization as a convex transformation of payoffs, we show that for every economy where positive assortative matching is an equilibrium without globalization, it is also an equilibrium with globalization. Moreover, for some economies positive assortative matching is an equilibrium with globalization but not without. The result that globalization promotes the concentration of talent holds under very minimal restrictions on how individual skills translate into team skills and on how team skills translate into competition outcomes. Our analysis covers many interesting special cases, including simple extensions of Rosen (1981) and Melitz (2003) with competing teams.
    Keywords: competing teams, globalization, inequality, matching
    JEL: C78 D3 D4 F61 F66
    Date: 2019–12
  27. By: Abuselidze, George
    Abstract: The work deals with the peculiarities of Georgia-EU relations; Current and future opportunities that the European Union and European integration offers to Georgia have been studied; The study uses statistical data, international organizations research and data from political documents. The possible difficulties that Georgia can create in the economic integration process are analyzed. The author's opinions about the existing problems and the ways of their overcoming are expressed and proved with arguments. Finally, based on the results obtained from the research, the author's recommendations are established.
    Keywords: European integration; Deep and comprehensive trade agreement; Foreign Direct Investment; Money transfers; Foreign trade turnover
    JEL: F21 F36 F6 F62 F63 F65 F68
    Date: 2019–02–01
  28. By: Sidak, Gregory; Library, Cornell
    Abstract: In the United States, a patent holder can pursue several remedies against a patent infringer. Section 284 of the Patent Act provides that, upon a finding of infringement, “the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty . . . .” In addition, § 283 provides that a court “may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent.” Section 337 of the Tariff Act of 1930 also allows a patent holder to petition the U.S. International Trade Commission (ITC)—a federal agency that investigates matters of international trade and advises on international trade policy— to issue an exclusion order against an infringer, a remedy that denies the importation and sale in the United States of products that infringe a valid and enforceable U.S. patent.3 In a case of patent infringement, a patent holder may thus seek damages for the infringement, an injunction, and an exclusion order.
    Date: 2018–03–18
  29. By: Murshed, Muntasir;
    Abstract: The aim of this paper is to explore the international tourism demand-renewable energy consumption-intra-regional trade nexus across seven South Asian economies. The Emirmahmutoglu–Kose and Dumitrescu–Hurlin causality test results reveal unidirectional causalities stemming from tourist influx and intra-regional trade to renewable energy consumption. Moreover, bidirectional causality is found between tourism demand and regional trade. Thus, these results are anticipated to generate key policy implications.
    Keywords: tourism demand, renewable energy transition
    JEL: Q20 Q42
    Date: 2019
  30. By: Pedro Miguel Avelino Bação (Centre for Business and Economics CeBER, GEMF and Faculty of Economics, University of Coimbra); António Portugal Duarte (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra); Diogo Viveiros (Bank of Portugal)
    Abstract: The aim of this paper is to analyze the performance of several models for forecasting exports. We collected data on Portugal’s real exports of goods and on the variables suggested by models based on the assumption of perfect competition and of monopolistic competition. We estimated Vector Autoregressive (VAR) models with those variables and compared the performance of the forecasts produced by those models with the forecasts obtained from simpler, univariate models, namely ARIMA models and Holt’s linear trend model. We consider four alternative frameworks in which the forecasts might be produced. These scenarios correspond to “static forecasts”, “recursive forecasts”, “dynamic forecasts” and “dynamic forecasts with known exogenous variables”. We also consider the computation of recursive forecasts including dummies related to the international financial crisis. The best model (according to the root mean squared error of the forecasts in the period since the start of the international financial crisis) depends on the scenario considered for the computation of the forecasts. The theory-based models do not produce forecasts that are clearly better than the forecasts produced by the simpler univariate models. In addition, the impact of the international financial crisis appears to be better represented by a temporary shock than by a permanent shock (with a constant effect). The results cast doubts on the relevance of traditional measures of competitiveness for the evolution of exports. As a consequence of the above, it is not clear that discussions of competitiveness that put the emphasis on costs, namely on wages, or on the exchange rate provide useful guides to policy.
    Keywords: Competitiveness, exchange rate, exports, forecasting, productivity, wages.
    JEL: D24 F11 F14 F17 F31
    Date: 2020–01

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