nep-int New Economics Papers
on International Trade
Issue of 2020‒02‒24
thirty-one papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Third-Country Effects of Regional Trade Agreements : A Firm-Level Analysis By Lee,Woori; Mulabdic,Alen; Ruta,Michele
  2. Shooting Oneself in the Foot? Trade War and Global Value Chains By Cecilia Bellora; Lionel Fontagné
  3. Dynamics and determinants of fragmentation trade: Asian countries in comparative and long-term perspective By C. Veeramani; Garima Dhir
  4. Is 3D Printing a Threat to Global Trade ? The Trade Effects You Didn't Hear About By Freund,Caroline; Mulabdic,Alen; Ruta,Michele
  5. Household Impacts of Tariffs : Data and Results from Agricultural Trade Protection By Artuc,Erhan; Porto,Guido; Rijkers,Bob
  6. Trade Policy to Catalyze Export Diversification : What Should Landlocked Fragile Countries Do ? The Cases of Mali, Chad, and Niger By Lopez Calix,Jose R.; Pitigala,Nihal
  7. Product-level Trade Elasticities By Lionel Fontagné; Houssein Guimbard; Gianluca Orefice
  9. Markups, Market Imperfections, and Trade Openness : Evidence from Ghana By Damoah,Kaku Attah
  10. Trade Policy and Market Power : Firm-Level Evidence By Asprilla,Alan; Berman,Nicolas; Cadot,Olivier; Jaud,Melise
  11. Negotiating agricultural trade: Options for moving forward By Glauber, Joseph W.; Parent, Marie
  12. Policy Uncertainty, Trade, and Global Value Chains : Some Facts, Many Questions By Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
  13. Economic and Distributional Impacts of Free Trade Agreements : The Case of Indonesia By Cali,Massimiliano; Maliszewska,Maryla; Olekseyuk,Zoryana; Osorio-Rodarte,Israel
  14. Refugees and Foreign Direct Investment: Quasi-Experimental Evidence from U.S. Resettlements By Mayda, Anna Maria; Parsons, Christopher; Pham, Han; Vézina, Pierre-Louis
  15. An Empirical Investigation of Trade Diversion and Global Value Chains By De Soyres,Francois Michel Marie Raphael; Maire,Julien Luc Yvon; Sublet,Guillaume
  16. A global profile of emigrants to OECD countries: Younger and more skilled migrants from more diverse countries By Rohen d’Aiglepierre; Anda David; Charlotte Levionnois; Gilles Spielvogel; Michele Tuccio; Erik Vickstrom
  17. Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains By Georg Schaur; Justin R. Pierce; Sebastian Heise; Peter K. Schott
  18. Global Effects of the Brexit Referendum: Evidence from US Corporations By Murillo Campello; Gustavo S. Cortes; Fabricio d'Almeida; Gaurav Kankanhalli
  19. Inflation Dynamics and Global Value Chains By De Soyres,Francois Michel Marie Raphael; Franco,Sebastian
  20. Productivity Growth and Value Chains in Four European Countries By Izabela Karpowicz; Nujin Suphaphiphat
  21. Refugees’ and Irregular Migrants’ Self-selection into Europe: Who Migrates Where? By Cevat Giray Aksoy; Panu Poutvaara
  22. A New Impetus for Endogenous Growth: R&D Offshoring via Virtual Labor Mobility By Nakanishi, Noritsugu; Long, Ngo Van
  23. Crisis Chronicles: The British Export Bubble of 1810 and Pegged versus Floating Exchange Rates By Donald P. Morgan; David R. Skeie; James Narron
  24. Domestic versus export-led agricultural transformation: evidence from Uganda's dairy value chain By Bjorn Van Campenhout; Bart Minten; Jo Swinnen
  25. Trade, Global Value Chains and GDP Comovemement : An Empirical Investigation By De Soyres,Francois Michel Marie Raphael; Gaillard,Alexandre Gwen Simon
  27. Korean FDI in Latin America and the Caribbean: A partner for sustainable development By Plottier, Cecilia; Park, Yuri
  28. Can the optimal tariff be zero for a growing large country? By Takumi Naito
  29. Foreign Direct Investment and Female Entrepreneurship By Fang,Sheng; Shamseldin,Heba M.M.; Xu,L. Colin
  30. Aid for Trade flows and Poverty Reduction in Recipient-Countries By Gnangnon, Sèna Kimm
  31. Export competitiveness, labour laws, and gender differences in job dynamics: Analysis of manufacturing industries across Indian States By Purna Banerjee; C. Veeramani

  1. By: Lee,Woori; Mulabdic,Alen; Ruta,Michele
    Abstract: Do regional trade agreements negatively impact non-members? This paper revisits this long-standing trade policy question using firm-level data and detailed information on the content of trade agreements. Differently from the conventional view on trade diversion, the analysis identifies a positive spillover effect of regional trade agreements: they increase the probability of export and entry of third-country firms that previously exported to one of the member countries. This spillover effect is driven by deeper trade agreements, as they make member countries more"similar"in terms of the regulatory environment. Indeed, firms exporting regulation-intensive products benefit disproportionately more from deep trade agreements in destination markets, especially if the agreement includes nondiscriminatory provisions and addresses regulatory issues.
    Keywords: International Trade and Trade Rules,Energy and Mining,Trade Policy,Adaptation to Climate Change,Trade and Multilateral Issues
    Date: 2019–11–20
  2. By: Cecilia Bellora (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Since the beginning of 2018, the US administration has announced and implemented several measures limiting US trade, in particular with China. This has fueled retaliation and has escalated in high trade tensions at the global level. We address in this paper the effects of the current trade tensions on trade, sectoral value added and welfare, in General Equilibrium under imperfect competition. We rely on a set-up differentiating demand of goods according to their use, for final or intermediate consumption. This authorizes tracing the impact of protection, along the value chains, on prices, value added and factor income. Additional tariffs from official lists are averaged at the 6 digit level of the Harmonized System (HS6), before being aggregated at the sector level with a reference group weighted method. Negotiated quantities in Voluntary Export Restraints are also taken into account at the product level. Beyond the direct toll of sanctions, US exports to the world post a 7.5% decrease as a result of reduced competitiveness led by vertical linkages along the value chains. Because of the measures in place as of August 2019, three quarters of the sectors decrease their value added in the US, suggesting that with this tariff war the US are shooting themselves in the foot. The quantification of job destructions and creations in the different sectors is consistent with effects channeling through prices and demand along the value chains detrimental to downstream industries.
    Keywords: Trade War,Global Value Chains
    Date: 2019–12–30
  3. By: C. Veeramani (Indira Gandhi Institute of Development Research); Garima Dhir (Indira Gandhi Institute of Development Research)
    Abstract: This paper analyses the dynamics and determinants of fragmentation trade in major Asian countries in comparative and long term (1962-2018) perspective. Based on the available literature, we identify certain product categories, referred to as "network products" (NP), where trade flows based on international fragmentation of production processes are most prevalent. Our analysis shows that Asian countries entered the market for NP exports in a sequential manner. The pattern of entry, rise, survival, and relative decline of countries in this market is consistent with the "wild-geese flying pattern". The first Asian country to enter the export market for NP was Japan - the lead goose - followed by a number of East and Southeast Asian countries. The export market participation of these countries, over the years, depicts a clear "inverted V" pattern. At this point in time, Japan, Hong Kong, Malaysia and Korea are on the declining part of the inverted V-curve while China seems to have reached the inflection point. Thailand and Vietnam are on the rising part of the curve while Philippines seem to be experiencing a premature descent. India and Indonesia are the only two major Asian countries that have not yet taken off, though some indication of a beginning of the growth process can be seen, particularly in India. A major concern among policy makers is whether participation in fragmentation based trade implies that low wage countries would perpetually stuck at the lower end of the production processes. Our analysis suggests that this concern is unwarranted. Econometric results suggest that stringent rules of origin requirements limit the positive impact of free trade agreements (FTAs) on NP exports Importers of NP, in particular, may find it difficult to satisfy the rules of origin clause as production process in these industries are spread across nations. Finally, our results show that a low level of service link costs and a liberal FDI regime are critical for countries to boost fragmentation based exports.
    Keywords: Fragmentation, Exports, Free trade agreements, Asia
    JEL: F13 F14 F15
    Date: 2019–12
  4. By: Freund,Caroline; Mulabdic,Alen; Ruta,Michele
    Abstract: In the mid-2000s, the production of hearing aids shifted almost entirely to 3D printing. Using difference-in-differences and synthetic control methods, this paper examines the effects of this shift on trade flows. The analysis finds that trade increased roughly 60 percent following the introduction of 3D printing. Revealed comparative advantage was reinforced, with exports growing most rapidly for middle- and high-income countries. The analysis also finds that developing countries increased their imports of hearing aids as a result of the innovation, benefitting consumers. As a robustness check, the paper examines 35 products that are partially 3D printed and finds positive and significant effects on trade. The results counter widespread views that 3D printing will shorten supply chains and reduce trade.
    Date: 2019–09–25
  5. By: Artuc,Erhan; Porto,Guido; Rijkers,Bob
    Abstract: How do trade reforms impact households in different parts of the income distribution? This paper presents a new database, the Household Impacts of Tariffs data set, which contains harmonized household survey and tariff data for 54 low- and lower-middle income countries. The data cover highly disaggregated information on household budget and income shares for 53 agricultural products, wage labor income, nonfarm enterprise sales and transfers, as well as spending on manufacturing and services. Using a stylized model of the first-order impacts of import tariffs on household real income, this paper quantifies the welfare implications of agricultural trade protection. On average, unilateral elimination of agricultural tariffs would increase household incomes by 2.50 percentage points. Import tariffs have highly heterogeneous effects across countries and within countries across households, consumers, and income earners; the average standard deviation of the gains from trade within a country is 1.01 percentage points.
    Keywords: International Trade and Trade Rules,Labor&Employment Law,Food Security,Common Carriers Industry,Food&Beverage Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Construction Industry,General Manufacturing,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Trade and Multilateral Issues
    Date: 2019–12–03
  6. By: Lopez Calix,Jose R.; Pitigala,Nihal
    Abstract: The landlocked and fragile countries Mali, Niger, and Chad have suffered, to varying degrees, from Dutch Disease, with high export concentration in natural resource commodities and in a few foreign markets, and little development of their non-resource economies. The three countries'ability to create a sustainable path to economic growth and poverty reduction is inextricably linked to their connectivity with external markets, in the region and beyond. Thus, Mali, Niger, and Chad are first challenged by their geography -- their landlocked nature creates a barrier to market access beyond their immediate neighbors, while their vast and thinly populated lands serve to isolate the most vulnerable communities from external and internal markets. Adding to these geographic disadvantages, the incentive environment -- defined by high and variable customs common external tariff regimes resulting from multiple overlapping regional trade arrangements -- places a wedge between domestic and international prices that provides a disincentive to exports in favor of non-tradable and domestic-oriented sectors. By bringing greater coherence and convergence between the many common external tariff regimes in operation and the rationalization of their structures, and improving connectivity within and between markets, Mali, Niger, and Chad can better promote the reallocation of resources toward tradable goods and services, putting the countries on a path toward greater economic inclusion and sustainable growth.
    Keywords: International Trade and Trade Rules,Export Competitiveness,Transport Services,Food Security,Trade and Multilateral Issues
    Date: 2019–10–08
  7. By: Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Houssein Guimbard (Centre d'Etudes Prospectives et d'Informations Internationales); Gianluca Orefice (Centre d'Etudes Prospectives et d'Informations Internationales)
    Abstract: Trade elasticity is a crucial parameter in evaluating the welfare impacts of trade liberalization. We estimate trade elasticities at the product level (6-digit of the Harmonized System comprising more than 5,000 product categories) by exploiting the variation in bilateral applied tariffs for each product category for the universe of available country pairs. This is done by constructing a panel of bilateral applied tariffs and bilateral trade covering the period 2001 to 2016. We address potential endogeneity issues as well as heteroskedasticity and selection bias due to zero flows. The obtained trade elasticities are centered around -5. We finally highlight the differences in the gains from trade arising from considering heterogeneous rather than average trade elasticities. All product level elasticities are made publicly available for sake of scrutiny and use by other researchers
    Keywords: Welfare Gain,Trade Elasticity,International Trade,Tariffs
    Date: 2019–12–20
  8. By: Sabina Szymczak (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This article examines the overall effect of global value chains (GVCs) on labour market outcomes, namely wages and labour demand. The analysis exploits the World Input-Output Database (WIOD, 2016 release) covering 43 countries and 54 sectors from 2000 to 2014. GVC involvement is measured by the recently developed GVC participation indexes (based on both backward and forward linkages) and relative GVC position (Wang et al., 2017a, 2017b). The estimates employ the three-least-squares method. The results indicate that GVC position is negatively correlated both with wages and with employment, while the effect of GVC participation as such depends on whether backward or forward linkages are considered. We find some heterogeneity between countries (middle- versus high-income) and sectors (manufacturing versus services). Importantly, the labour market effect of involvement in GVCs is different from the channel of traditional trade in which the production process does not cross national borders. The R codes for calculation of input-output measures of GVC are provided.
    Keywords: global value chains, input-output, employment, wages
    JEL: F14 F16 J31 J21
    Date: 2019–11
  9. By: Damoah,Kaku Attah
    Abstract: This paper investigates the impact of Ghana's World Trade Organization (WTO) accession on firm-level product and labor market imperfections. The paper exploits a rich dataset of firm-level information to estimate both markups and the degree of monopsony power enjoyed by manufacturing firms. The results indicate that price-cost margins declined while the degree of monopsony power increased in the wake of WTO accession. These diverging dynamics suggest that firms compress real wages to offset loss of market power in the product market due to increased international competition. This gives rise to an increase in the market imperfection gap, which gradually erodes the pro-competitive gains from trade. The paper contributes to the literature by identifying channels through which allocative inefficiencies and misallocation can persist even after trade liberalization.
    Keywords: International Trade and Trade Rules,Rural Labor Markets,Labor Markets,Common Carriers Industry,Food&Beverage Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,General Manufacturing,Trade Policy,Trade and Multilateral Issues,Rules of Origin
    Date: 2019–12–11
  10. By: Asprilla,Alan; Berman,Nicolas; Cadot,Olivier; Jaud,Melise
    Abstract: This paper identifies the effect of trade policy on market power through new data and a new identification strategy. It uses a large data set containing export values and quantities by product and destination for all exporting firms in 12 developing and emerging countries over several years, merged with destination-product-specific information on tariffs and non-tariff barriers. Market power is identified by observing how exporting firms price discriminate across markets in reaction to variations in bilateral exchange rates. Pricing-to-market is prevalent in all regions of the sample, even among small firms, although it is increasing in firm size, in accordance with theory. More importantly, the effect of non-tariff measures is not isomorphic to that of tariffs: the observed pricing-to-market behavior suggests that, although tariffs reduce the market power of foreign firms through classic rent-shifting effects, non-tariff measures alter market structure and reinforce the market power of non-exiting firms, domestic and foreign ones alike.
    Date: 2019–10–29
  11. By: Glauber, Joseph W.; Parent, Marie
    Abstract: Open trade is increasingly important as countries prepare to face the coming challenges in food demand and production. The rules-based system established under the World Trade Organization (WTO) has facilitated the growth of agricultural trade, creating global welfare gains. But today negotiated settlements on tougher issues, such as domestic support, have become more difficult to obtain. The authors offer a set of seven options for modest reforms that could build confidence for moving the agricultural trade agenda forward in these challenging times.
    Keywords: trade; agricultural trade; supply chain; export control; export subsidies; WTO; global agricultural trade; World Trade Organization (WTO)
    Date: 2019
  12. By: Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
    Abstract: This paper attempts to quantify the impact of economic policy uncertainty on overall trade and trade linked to global value chains. Using new data on policy uncertainty for 18 countries and 24 years, it finds a statistically significant negative impact of policy uncertainty on overall trade growth. A 1 percent increase in uncertainty is associated with a 0.02 percentage point reduction in the growth of goods and services trade, implying that the increase in policy uncertainty since mid-2018 may have caused a 1 percentage point decline in world trade growth. The paper also finds that the impact of policy uncertainty on trade linked to global value chains is similar to overall trade. This is likely to be the result of two opposing forces: global value chains are more dependent on relation-specific investments that are sensitive to policy uncertainty, but these investments also make trade patterns sticky. More research and better data are needed to disentangle these different effects empirically.
    Date: 2019–10–25
  13. By: Cali,Massimiliano; Maliszewska,Maryla; Olekseyuk,Zoryana; Osorio-Rodarte,Israel
    Abstract: As preferential trade agreements are growing in number and depth, assessment of their economic impacts has become more important to inform policy-makers facing a multitude of potential preferential trade agreements. This paper provides novel ex ante estimates of the impacts of two key preferential trade agreements currently negotiated by Indonesia, the largest economy in Southeast Asia. The paper then compares these estimates with those of other preferential trade agreements that Indonesia may negotiate in the future. To that end it, combines a dynamic, multi-country computable general equilibrium model and a microsimulation tool linking the macroeconomic results to household-level welfare. The results suggest that, among the preferential trade agreements considered, the European Union?Indonesia Comprehensive Economic Partnership Agreement (EU-CEPA) is expected to yield the largest gains for Indonesia in income, output, and exports. This result is due to a combination of large expected reductions in trade barriers and a high share of international trade between the partners. These macro effects translate into the highest expected income growth relative to the other preferential trade agreements at every point of the income distribution. However, the gains for the EU-CEPA are proportionately larger for richer households, unlike the other agreements considered. The regressive gains are mainly due to the increase in skill wage premia spurred by the additional demand for skill-intensive sectors, especially services.
    Date: 2019–09–24
  14. By: Mayda, Anna Maria (Georgetown University); Parsons, Christopher (University of Western Australia); Pham, Han (University of Western Australia); Vézina, Pierre-Louis (King's College London)
    Abstract: We exploit the designs of two separate U.S. refugee dispersal policies to provide causal evidence that refugees foster outward FDI to their countries of origin. Drawing upon aggregated individual-level refugee and project-level FDI data, we first leverage the quasi-random distribution of refugees "without U.S. ties" after the enactment of the 1980 Refugee Act, to show that outward FDI to refugees' countries of origin grew more from those U.S. commuting zones that hosted greater numbers of refugees after 1990. Secondly, we exploit the specificities of the Indochina Migration and Refugee Assistance Act, which resulted in a quasi-experimental dispersal of Vietnamese refugees in 1975, to provide causal evidence that Vietnamese refugees fostered FDI to their home region, while national domestic reforms in Vietnam amplified the positive FDI-creating effects of the overseas Vietnamese diaspora. Overall, our results highlight a new mechanism through which refugees foster development to their origin countries.
    Keywords: refugees, networks, foreign direct investment
    JEL: F21 F22 F23
    Date: 2019–12
  15. By: De Soyres,Francois Michel Marie Raphael; Maire,Julien Luc Yvon; Sublet,Guillaume
    Abstract: This paper uses data on directional trade flows and Regional Trade Agreements (RTA) to i) estimate the effects of RTA on trade flows and ii) assess the importance of Global Value Chains for these effects. Based on a Difference-in- Difference identification strategy, we find that RTAs are associated with: (1) an increase in trade within the region, (2) a decrease in inflows to the region, and (3) an increase in outflows from the region. The first two findings can be understood as trade creation and trade diversion due to a shift in demand associated with the lower trade barriers within the region and Rules of Origin as an implicit trade barrier for imports from the rest of the world. Global Value Chains are most relevant to understand the third finding on the increase in outflows from the region. The key determinant of the increase in outflows is the importance of the Regional Value Chains for imports of intermediates by members of the region.
    Date: 2019–12–18
  16. By: Rohen d’Aiglepierre; Anda David; Charlotte Levionnois (OECD); Gilles Spielvogel (OECD); Michele Tuccio (OECD); Erik Vickstrom (OECD)
    Abstract: This paper presents new findings on the main characteristics of immigrants living in OECD countries by country of origin, drawing from the updated Database on Immigrants in OECD Countries (DIOC) 2015/16. It describes migrant populations by country of destination and country of origin in 2015/16, as well as the dynamics of international migration to OECD countries since 2000/01. It also presents evidence on overall emigration rates and emigration rates of the highly educated at the regional and country levels. Finally, the paper looks at age patterns in immigrant populations.
    Keywords: DIOC, Emigration rates, Immigrant stocks, International migration
    JEL: F22 J61 O15
    Date: 2020–02–20
  17. By: Georg Schaur; Justin R. Pierce; Sebastian Heise; Peter K. Schott (Yale University; Federal Reserve Bank of Kansas City; London School of Economics (LSE); National Bureau of Economic Research)
    Abstract: Global trade policy uncertainty has increased significantly, largely because of a changing tariff regime between the United States and China. In this blog post, we argue that trade policy can have a significant effect on firms? organization of supply chains. When the probability of a trade war rises, firms become less likely to form long-term, just-in-time relationships with foreign suppliers, which may lead to higher costs and welfare losses for consumers. Our research shows that even in the absence of actual tariff changes, an increased likelihood of a trade war can significantly distort U.S. imports.
    Keywords: Procurement; Trade War; Uncertainty; Supply Chain
    JEL: F00
  18. By: Murillo Campello; Gustavo S. Cortes; Fabricio d'Almeida; Gaurav Kankanhalli
    Abstract: We show that the 2016 Brexit Referendum led American corporations to cut jobs and investment within US borders. Using establishment-level data, we document that these effects were modulated by the degree of reversibility of capital and labor. American job losses were particularly pronounced in industries with less skilled and more unionized workers. UK-exposed firms with less redeployable capital and high input-offshoring dependence cut investment the most. Data on the near-universe of US establishments also point to measurable, negative effects on establishment turnover (openings and closings). Our results demonstrate how foreign-born political uncertainty is transmitted across international borders, shaping domestic capital formation and labor allocation.
    JEL: F23 G15 G31
    Date: 2020–01
  19. By: De Soyres,Francois Michel Marie Raphael; Franco,Sebastian
    Abstract: The global economy has witnessed a decline in inflation and an increase in inflation synchronization since the early 1980s. This paper investigates the relationship between inflation synchronization and trade integration, and documents the strong link between inflation co-movement and Global Value Chain (GVC) participation. Using 35 years and both gross and value-added trade flows, evidence shows that an increase in production linkages, as proxied by trade in intermediate inputs, is strongly associated with higher inflation correlation. Moreover, backward GVC participation is associated with an increase in bilateral inflation co-movement while forward participation is linked with a higher correlation between domestic and worldwide inflation. The paper also finds evidence of the effect of trade integration in decreasing inflation levels.
    Date: 2019–12–18
  20. By: Izabela Karpowicz; Nujin Suphaphiphat
    Abstract: Advanced economies have been witnessing a pronounced slowdown of productivity growth since the global financial crisis that is accompanied in recent years by a withdrawal from trade integration processes. We study the determinants of productivity slowdown over the past two decades in four closely integrated European countries, Austria, Denmark, Germany and the Netherlands, based on firm-level data. Participation in global value chains appears to have affected productivity positively, including through its effect on TFP when facilitated by higher investment in intangible assets, a proxy for firm innovation. Other contributors to productivity growth in firms are workforce aging, access to finance, and skills mismatches.
    Date: 2020–01–31
  21. By: Cevat Giray Aksoy; Panu Poutvaara
    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: 2020
  22. By: Nakanishi, Noritsugu; Long, Ngo Van
    Abstract: We develop a simple North-South model of quality ladders to show that the virtual mobility of labor across time zones, facilitated by the advance in communication technology, can raise the endogenous growth rate of the world economy. The unique balanced growth rate is increasing in the endowments of skilled labor in both countries and decreasing in the rate of impatience. Moreover, we find that partial R&D offshoring to the South has initially a negative effect on the level of skilled wages in the North, but this is compensated for by its positive effect on the growth rate in both North and South.
    Keywords: R&D offshoring, Virtual labor mobility, Time zone difference, Endogenous growth, North-South trade
    JEL: F43 O41
    Date: 2020–02
  23. By: Donald P. Morgan; David R. Skeie; James Narron (Executive Office)
    Abstract: In the early 1800s, Napoleon?s plan to defeat Britain was to destroy its ability to trade. The plan, however, was initially foiled. After Britain helped the Portuguese government flee Napoleon in 1807, the Portuguese returned the favor by opening Brazil to British exports?a move that caused trade to boom. In addition, Britain was able to circumvent Napoleon?s continental blockade by means of a North Sea route through the Baltics, which provided continental Europe with a conduit for commodities from the Americas. But when Britain?s trade via the North Sea was interrupted in 1810, the boom ended in crisis. In this edition of Crisis Chronicles, we explore the British Export Bubble of 1810 and ask whether pegged or floating exchange rates are better for an economy.
    Keywords: floating exchange rates; exports; fixed exchange rates
    JEL: F00 G1 N2
  24. By: Bjorn Van Campenhout; Bart Minten; Jo Swinnen
    Abstract: Driven by increased demand from both local and export markets and fa- cilitated by far-reaching liberalization and privatization policies, the dairy sub-sector in Uganda has undergone significant changes in the last decade. With a comparative advantage in milk production, the southwest of Uganda has started to attract considerable Foreign Direct Investment(FDI) in processing capacity, mainly targeting the export market. As a result, processing capacity increased five-fold and dairy became Uganda’s third most important export product, coming from negligible amounts a decade earlier. In this study, we use observational data collected at different nodes within the value chain to compare the structure of the chain and the roles and economic activities of different actors between export-led value chains and value chains that cater for the local market. Doing so allows us to identify the technological and institutional innovations that both result from the emergence of export-led dairy value chains and at the same time drive further upgrading. Our analysis underscores the importance of milk collection centers, which often take the form of farmer cooperatives, in providing many of the support services that enable other actors in the value chain to produce sufficient milk, and maintain milk sanitation levels necessary for an export sector to emerge.
    Date: 2019
  25. By: De Soyres,Francois Michel Marie Raphael; Gaillard,Alexandre Gwen Simon
    Abstract: This paper provides up-to-date characterization of the association between trade and GDP comovement -- also called the trade comovement slope -- for 150 countries from 1962 to 2011. The paper shows that trade is significantly linked to more GDP correlation, either directly through bilateral trade, or indirectly when two countries trade with similar partners. This trade network effect is strong for countries in all income groups and provides an additional channel through which GDP fluctuations propagate through trade linkages. It also shows that countries of all income groups become more synchronized with high income countries when the content of their trade is more tilted towards inputs as opposed to final goods. Related to this point, the paper also uncovers a strong link between the stickiness of trade relationships and the extent to which countries experience synchronized GDP comovement. The results are robust to a wide range of different measures, to the inclusion of many fixed effects, changes in the sectoral composition of GDP, financial controls capturing crosscountry investments as well as bilateral financial claims.
    Date: 2019–12–18
  26. By: Alaya Marouane (Sfax University)
    Abstract: In this paper we study the determinant of FDI in MENA countries by focusing on the geographical interferences within the region. The econometric results from alternative tests on a panel of 13 MENA for the period 1990-2015 show a negative spatial interdependence in MENA region in term of inbound FDI. The results go with the theory predictions and match well with the pure vertical nature of FDI prevailing in the region. Length:34
    Date: 2019–10–20
  27. By: Plottier, Cecilia; Park, Yuri
    Abstract: This study analyzes foreign direct investment (FDI) outflows from the Republic of Korea to Latin America and the Caribbean in the last two decades to identify how Korean companies are investing in the region and which lessons can be learned from this relationship. The study relies on the analysis of investment flows, greenfield projects, and mergers and acquisitions as well as on interviews with entrepreneurs and authorities and a survey conducted on a small sample of suppliers of the automotive industry in Mexico. The Republic of Korea is a valuable economic partner for countries in Latin America and the Caribbean, because the countries in the region can learn from Republic of Korea’s past and present. Furthermore, there are future opportunities that arise from this relationship given the high technological profile and environmental standards of Korean companies.
    Date: 2020–01–28
  28. By: Takumi Naito
    Abstract: Can the optimal tariff be zero for a growing large country? To pursue the possibility, we extend the Rivera-Batiz--Romer lab-equipment model of endogenous technological change to include asymmetric countries, import tariffs, and either homogeneous or heterogeneous firms. Each country's domestic revenue share is a sufficient statistic for its long-run growth rate, but it is not for its long-run welfare. A unilateral tariff reduction by either country always increases the balanced growth rate. A zero tariff is locally optimal for a country under a mild condition, which is automatically satisfied at a symmetric balanced growth path with the zero tariff.
    Date: 2020–01
  29. By: Fang,Sheng; Shamseldin,Heba M.M.; Xu,L. Colin
    Abstract: Using World Bank Enterprise Survey data around the world, this paper examines how foreign direct investment is associated with female entrepreneurship (that is, a firm being managed and at least partly owned by women), along with other factors such as business environment and female empowerment, and their interactions with foreign direct investment. Female entrepreneurship rises with foreign direct investment inflow, lower entry barriers for women, women's better access to finance, higher female labor force participation, and women's better education. The positive association of foreign direct investment inflow and female entrepreneurship is stronger for firms in the service sectors and small firms. The horizontal competition effects of intra-industry foreign direct investment for female entrepreneurship are reduced when women face lower entry barriers for starting a business and have a higher labor force participation rate, and the effects do not depend on women's access to finance or their level of education.
    Date: 2019–12–16
  30. By: Gnangnon, Sèna Kimm
    Abstract: The effectiveness of Aid for Trade (AfT) interventions, including with respect to recipient-countries' trade performance has now been well explored in the literature. However, in spite of the voluminous literature on the poverty effect of the total official development aid, the effect of AfT flows on poverty has received little attention on the empirical front. The current article aims to contribute to the policy debate on this matter by investigating the effect of AfT flows on poverty in recipient-countries. In particular, the analysis explores whether this effect translates through countries' level of export product concentration, as the latter can influence income inequality, and hence the transformation of economic growth into poverty reduction in recipient-countries. The empirical analysis, based on 100 AfT recipient-countries has shown that AfT interventions are associated with poverty reduction in countries that diversify their export products, including towards manufacturing products. Additionally, AfT flows dampen the positive poverty effect of income inequality, and lead to greater poverty reduction in countries with a great extent of fiscal redistribution. Finally, the analysis has shown that AfT interventions mitigate the positive poverty effect of import product concentration, and are associated with poverty reduction in countries that either diversify their import products or export products. These results have important policy implications.
    Keywords: Aid for Trade,Poverty,Export product diversification,Manufacturing exports
    Date: 2020
  31. By: Purna Banerjee (Madras School of Economics); C. Veeramani (Indira Gandhi Institute of Development Research)
    Abstract: Increased participation of women in productive employment is a prerequisite for achieving gender equality and other sustainable development goals. Yet, female labour force participation in India, a country home to about 17 of the world's women, is abysmally low. Against this background, using plant level data, we obtain gender-wise estimates of job dynamics - job creation, destruction and reallocation - across 32 Indian states and Union Territories and 58 formal manufacturing industries for 1998-99 to 2014-15. This paper departs from earlier studies by focusing on measures of job dynamics, as opposed to static net employment measures, and on the demand side determinants of employment outcomes. We analyse whether industry-level changes in export competitiveness, mediated through exchange rate fluctuations, explain the variation in job dynamics for each gender group. We also examine whether this relationship is conditional on state level variation in labour market conditions. Our estimates suggest that, even as net job creation rate is quite low, the labour market has experienced significant labour turnover for both gender groups, particularly in states with relatively flexible labour laws. Dynamic panel data regression analysis provides evidence for an asymmetric impact of exchange rate in that while depreciation (appreciation) is found to increase (reduce) gross job creation rates, exchange rate changes do not exert any effect on gross job destruction rates. Improvement in export competitiveness positively influences gross and net job creation in states with flexible labour market but not in states with rigid labour markets. The results indicate that when faced with labour market rigidities female workers face greater job reallocation compared to male workers. Our results remain unchanged even if we control for the use of contractual workers that provide some de facto labour market flexibility to producers.
    Keywords: Gross job flows, real exchange rate, competitiveness, gender
    JEL: F16 F41 J16
    Date: 2019–12

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