nep-int New Economics Papers
on International Trade
Issue of 2020‒03‒09
33 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Determinants of Global Value Chain Participation: Cross-country Analysis By Biswajit Banerjee; Juraj Zeman
  2. The Evolution of Mexico’s Merchandise Trade Balance By Susannah Scanlan; Thomas Klitgaard
  3. icio : Economic Analysis with Inter-Country Input-Output Tables in Stata By Belotti,Federico; Borin,Alessandro; Mancini,Michele
  4. Exporting protection : EU trade agreements, geographical indications, and gastronationalism By M. Huysmans
  5. Structural Gravity and the Gains from Trade under Imperfect Competition By Benedikt Heid; Frank Stähler
  6. Trade liberalization, input intermediaries and firm productivity: evidence from China By Defever, Fabrice; Imbruno, Michele; Kneller, Richard
  7. The evolution of services trade policy since the Great Recession By Borchert, Ingo; Magdeleine, Joscelyn; Marchetti, Juan A.; Mattoo, Aaditya
  8. Cambodian place in the International trade of Textile and Clothing: Threat and Opportunity By Nith, Kosal
  9. Latin American Growth : A Trade Perspective By De La Torre,Augusto; Ize,Alain
  10. Looking at export tariffs and export restrictions: The case of Argentina: By Piñeiro, Valeria; Elverdin, Pablo; Laborde Debucquet, David; Diaz-Bonilla, Eugenio
  11. Gains from Trade: Does Sectoral Heterogeneity Matter? By Rahul Giri; Kei-Mu Yi; Hakan Yilmazkuday
  12. Go ahead and trade: the effect of uncertainty removal in the EU's GSP scheme By Ingo Borchert; Mattia Di Ubaldo
  13. The Gravity Model and Trade in Intermediate Inputs By Theresa Greaney; Kozo Kiyota
  14. Exchange Rate Uncertainty and Cereal Exports: A Panel VAR Approach By Ronald Miranda; Leonel Muinelo-Gallo
  15. Animal Identification and Traceability in the United States: Market Impacts and Implications By Shear, Hannah E.; Pendell, Dustin L.
  16. Diagonal Cumulation and Sourcing Decisions By Bombarda,Pamela; Gamberoni,Elisa
  17. The End of China's Export Juggernaut By Harry Wheeler; Thomas Klitgaard
  18. Globotics and Development: When Manufacturing is Jobless and Services are Tradable By Richard Baldwin; Rikard Forslid
  19. Trade Integration and Growth : Evidence from Sub-Saharan Africa By Calderon,Cesar; Castillo Castro,Catalina
  20. Foreign Direct Investment Attraction in Central, Eastern and South- Eastern Europe: the Importance of Public Policy By Svilena Mihaylova
  21. The Economics of International Student and Scholar Mobility : Directions for Research By Chellaraj,Gnanaraj
  22. In what sense left behind by globalisation? Looking for a less reductionist geography of the populist surge in Europe By Gordon, Ian R.
  23. Estimating migration changes from the EU’s free movement of people principle By Hugo Rojas-Romagosa; Johannes Bollen
  24. Migration and remittances in Central America: New evidence and pathways for future research By Ambler, Kate
  25. Small African Economies in a More Uncertain Global Trade Environment : The Potential Impact of Post-AGOA Scenarios for Lesotho By Maliszewska,Maryla; Engel,Jakob; Arenas,Guillermo Carlos; Kotschwar,Barbara R
  26. Specialization in food production, global food security and sustainability By Campi, Mercedes; Dueñas, Marco; Fagiolo, Giorgio
  27. The effect of data on geographic directions of exports on the economic complexity index By Lyubimov, Ivan (Любимов, Иван); Yakubovskiy, Igor (Якубовский, Игорь)
  28. Specialization in food production, global food security and sustainability By Mercedes Campi; Marco Duenas; Giorgio Fagiolo
  29. Are routine jobs moving south? Evidence from changes in the occupational structure of employment in the USA and Mexico By Guido Matias Cortes1; Diego M. Morris
  30. When Elephants Make Peace : The Impact of the China-U.S. Trade Agreement on Developing Countries By Freund,Caroline; Maliszewska,Maryla; Mattoo,Aaditya; Ruta,Michele
  31. Impact of Trade Policy Reforms on Manufacturing Firms’ Performance in Nigeria By Folorunso Oshodi, Ayodele; Aremu Muhammed, Ismail
  32. The Upstream Tariff Simulator (UTAS) : A Tool to Assess the Impact of Tariff Reform on Input Costs and Effective Protection across Sectors By Eberhard,Andreas; Varela,Gonzalo J.; Casal,Lucia; Ganz,Federico
  33. The US-China trade deal and its impact on China's key trading partners By Chowdhry, Sonali; Felbermayr, Gabriel

  1. By: Biswajit Banerjee (Narodna banka Slovenska, Bratislava, Slovakia); Juraj Zeman (Narodna banka Slovenska, Bratislava, Slovakia)
    Abstract: This paper examines the factors that influence the five most common measures of GVC participation for the sample of countries included in the World Input Output Database (WIOD). For this sample, backward linkage is stronger than forward linkage and is the main channel for integration into GVCs. Also, a stronger backward linkage is associated with a relatively more downstream position in GVCs. Country size and openness to inward FDI are important determinants of GVC indicators. Of all the industry groupings, the influence on all the GVC indicators is strongest for high-tech manufacturing. In both manufacturing and services, the higher is the share of the high-tech categories the greater is the backward linkage and GVC participation rate, and the GVC position is relatively more downstream. The real exchange rate is positively associated with the share of domestic value added in gross exports (VAX ratio), which is a manifestation of the exchange rate elasticity of value-added exports being smaller than the exchange rate elasticity of gross exports.
    Keywords: Global value chains, VAX ratio, Backward linkage, Forward linkage, GVC participation rate, GVC position index
    JEL: F02 F14 F23
    Date: 2020–01
  2. By: Susannah Scanlan (Research and Statistics Group); Thomas Klitgaard
    Abstract: Mexico runs a trade surplus with the United States owing to oil exports and cross-border supply chains, with imported U.S. components assembled in Mexico and then exported back to the United States. At the same time, Mexico runs a large trade deficit with Asia, the result of a surge of imports from that region over the past two decades. From Mexico?s perspective, this growing deficit with Asia has worked to offset an increasing trade surplus with the United States. More recently, the country?s merchandise balance suffered a substantial deterioration with the collapse of petroleum prices in late 2014. The balance has subsequently staged a modest recovery, as Mexico?s demand for Asian goods in 2016 cooled while the surplus with the United States (excluding petroleum trade) continues to trend higher. These developments have helped Mexico reduce its need to borrow more from the world to make up for lost petroleum export revenues.
    Keywords: Mexico trade imbalances Nafta WTO China United States imports exports supply chains
    JEL: F00
  3. By: Belotti,Federico; Borin,Alessandro; Mancini,Michele
    Abstract: Several new statistical tools and analytical frameworks have been developed recently to measure countries'and sectors'involvement in global value chains. Such wealth of methodologies reflects that different empirical questions call for distinct accounting methods, along with different levels of aggregation of trade flows. This paper is a companion to the conceptual framework presented in Borin and Mancini (2019). The paper describes a new Stata module, icio, that allows the user to construct the most appropriate measure for given empirical questions on trade in value-added and participation in global value chains of countries and sectors. By exploiting inter-country input-output tables, icio provides decompositions of aggregate, bilateral, and sectoral exports and imports according to the source and destination of their value-added content. As different measures are suited to address distinct economic questions, icio is designed to be flexible also in this respect.
    Date: 2020–02–19
  4. By: M. Huysmans
    Abstract: A key objective of EU trade policy is to obtain wider protection for its regional specialty foods, known as Geographical Indications (GIs). While the WTO imposes a minimum level of protection, the EU has successfully considered additional protection for its GIs a red line in recent trade agreements. In the EU, trade agreements are negotiated by the Commission but require member state approval. Both Greece and Italy have threatened not to ratify CETA over insufficient GI protection, so GIs clearly matter. This article provides and analyzes new data on GI protection in 11 recent EU trade agreements. It finds that EU trade agreements are more likely to protect GIs with higher sales values and from countries in the South of Europe, where GIs are highly salient because of gastronationalism. These findings illustrate how economic considerations and political mechanisms shape and enable EU policy exports
    Keywords: Trade agreements, Geographical Indications, Intellectual Property, TRIPS, European Union
    Date: 2019–12
  5. By: Benedikt Heid; Frank Stähler
    Abstract: We extend structural gravity models of bilateral trade flows to oligopolistic competition. We show that conventional gravity estimates do not only reflect trade costs but also market power. Our simple estimation procedure generalizes the standard gravity model and disentangles exogenous trade frictions and endogenous market power distortions. We use our estimated model to counterfactually increase trade costs by abolishing the European Single Market. We find that domestic firms’ markups in EU member countries increase by 2 to 6 percent. Importantly, welfare effects of trade liberalization are much more pronounced due to the change in competition among domestic and foreign firms.
    Keywords: trade, structural gravity, imperfect competition, market power
    JEL: F10 F12
    Date: 2020
  6. By: Defever, Fabrice; Imbruno, Michele; Kneller, Richard
    Abstract: We investigate theoretically and empirically the role of wholesalers in mediating the productivity effects of trade liberalization. Intermediaries provide indirect access to foreign produced inputs. The productivity effects of input tariff cuts on firms that do not directly import therefore depends on the extent that wholesalers are a feature of input supply within an industry. Using firm level data from China, we document that wholesalers play no such role for direct importers. However, other firms experience productivity gains from reducing input tariffs if trade intermediation of foreign inputs within their sector is high. They suffer efficiency losses otherwise.
    Keywords: firm heterogeneity; trade liberalization; intermediate inputs; productivity; intermediaries; China
    JEL: F12 F13
    Date: 2019–12
  7. By: Borchert, Ingo; Magdeleine, Joscelyn; Marchetti, Juan A.; Mattoo, Aaditya
    Abstract: Are changes in services markets provoking reform, restrictions, or inertia? To address this question, we draw upon a new World Bank-WTO Services Trade Policy Database (STPD) to analyse the services trade policies of 68 economies in 23 subsectors across five broad areas - financial services, telecommunications, distribution, transportation and professional services, respectively. Policy measures are quantified into a Services Trade Restrictions Index (STRI) following a novel, consistent and transparent framework. Building on these innovations, the paper identifies patterns of services trade policies across sectors and economies, as well as secular trends over the past decade. Higher income economies are still more open on average than developing economies, but the chronology of reform differs markedly across sectors. In telecommunications and finance, we see convergence towards greater openness driven by liberalization in the previously more restrictive developing economies. In the hitherto universally protected transport and professional services, we see policy divergence as some higher income economies pioneer reform. But while explicit restrictions are being lowered in most services sectors - in contrast to recent developments in goods trade policy - we also see greater recourse to regulatory scrutiny, especially in higher income economies. These measures could reflect legitimate prudential or security concerns, but they could also reflect recourse to less transparent forms of protection.
    Keywords: services trade policy,investment,STRI,trade restrictions,quantification
    JEL: F13 F14 F23 L80 O24
    Date: 2020
  8. By: Nith, Kosal
    Abstract: This paper analyzes the threat and opportunity of textiles and clothing industry in Cambodia by employing SWOT analysis, quantitative method of revealed comparative and competitive advantage. The findings reveal that Cambodia has both comparative and competitive advantage of garment industry comparing to another Asian garment exporting countries-namely India, Pakistan, Thailand, and Vietnam, except Bangladesh. Whereas the Cambodian textile industry experiences both comparative and competitive disadvantage as it obtains the lowest score among counties in this study. Our analysis shows that the Cambodian T&S sector faces the risk of EBA, negative impact on the US-China trade war. Vietnam’s readiness, along with good trade policy between India and Bangladesh, is also has a negative impact on Cambodia. Cambodia must consider long-term and medium-term strategies to expand competitiveness for T&S exports. Nevertheless, the term of trade could obtain positive growth since the price of garment and textile products experiences an increasing trend.
    Keywords: Textiles and Clothing, Everything but Arms, Revealed Comparative Advantage, Revealed Competitive Advantages, Trade Policy.
    JEL: F18 F21 F53 L16 L52
    Date: 2019–05–18
  9. By: De La Torre,Augusto; Ize,Alain
    Abstract: This paper reviews the determinants of Latin America's uneven growth based on an accounting decomposition that breaks down countries'growth (relative to the world) into three trade-related channels: (i) an export pull measuring the traction exerted by the country's exports, (ii) an external leverage measuring the impact of the country's use of external resources, and (iii) a domestic response measuring the impact of the country's imports on its domestic income. This decomposition brings to light three regional growth dynamics: the first is centered on commodities and South America, the second on manufactures and Mexico, and the third on services and Central America. The evidence points toward the need for a trade-oriented growth agenda that puts a premium on raising exports and making countries more attractive to people, not just capital. The latter in turn adds urgency to healing the region?s social fractures and dealing with its institutional weaknesses.
    Date: 2019–06–03
  10. By: Piñeiro, Valeria; Elverdin, Pablo; Laborde Debucquet, David; Diaz-Bonilla, Eugenio
    Abstract: Export taxes have been used in many countries. The 2007–2008 food price crisis shed light on export policies’ dangerous consequences for food security during periods of price spikes. Some countries, and Argentina in particular, implemented export taxes for almost all tariff lines in those years. During the past 15 years, several papers have been written on the impact of export duties and other barriers to exports in Argentina. The area of analysis (poverty, employment, public revenues, and so on) and the methodology have varied in each case. However, most of the literature is based on partial equilibrium frameworks or does not consider dynamic effects for projections of the most important economic variables (such as gross domestic product, or GDP; exports; agricultural production; and employment). Additionally, most of those studies were done in the first decade of the new millennium, when food prices and the evolution of trade and global growth were different from their current context. In December 2015, the new Argentine government repealed taxes on exports of agro-industrial goods, except for soybeans (and their by-products), on which an initial reduction of 5 percentage points was established. Likewise, the government also eliminated the quantitative restrictions that existed for some products until that moment. Based on these changes in legislation, this study aims to analyze the impact of changes in export duties and export restrictions on Argentina’s economy, measuring their impact on different economic variables. The scenario also includes the elimination of other nontariff barriers to export. The paper finds that export taxes and restrictions in Argentina do affect world prices and the country’s terms of trade, and that their removal leads to declines in the world prices of the products involved (negatively affecting producers of similar products in other countries but benefiting consumers). Second, the removal of export taxes and restrictions leads to some increases in GDP and welfare in Argentina, but with a variety of effects on productive sectors: those benefiting from the policy reduction increase, but the rest tend to contract. Third, the reduction in export taxes increases the government’s deficit and negatively affects investment, through a crowding-out effect. To avoid the latter effect, another simulation considers the level of a compensatory increase in the consumption tax. Fourth—and contrary to the idea that the elimination of the export tax differential in the oilseeds value chain would lead to a decline in the production of the processed products (such as soybean oil)—the simulations show that when the elimination of the differential is combined with an overall reduction of export taxes, both primary and processed products of the same item expand. In September 2018, in the midst of financial needs, the Argentine government once again imposed export duties on all goods and services. However, given the scope of this work, the implications of that action were not included in this paper and will be included in a new version of it.
    Keywords: ARGENTINA, LATIN AMERICA, SOUTH AMERICA, export control, export policies, trade barriers, trade policies, trade, agricultural trade, trade liberalization, food prices, prices, WTO, export taxes,
    Date: 2019
  11. By: Rahul Giri; Kei-Mu Yi; Hakan Yilmazkuday
    Abstract: This paper assesses the quantitative importance of including sectoral heterogeneity in computing the gains from trade. Our framework draws from Caliendo and Parro (2015) and has sectoral heterogeneity along five dimensions, including the elasticity of trade to trade costs. We estimate the sectoral trade elasticity with the Simonovska and Waugh (2014) simulated method of moments estimator and micro price data. Our estimates range from 2.97 to 8.94. Our benchmark model is calibrated to 21 OECD countries and 20 sectors. We remove one or two sources of sectoral heterogeneity at a time, and compare the gains from trade to the benchmark model. We also compare an aggregate model with a single elasticity to the benchmark model. Our main result from these counterfactual exercises is that sectoral heterogeneity does not always lead to an increase in the gains from trade, which is consistent with the theory.
    JEL: F1
    Date: 2020–02
  12. By: Ingo Borchert (Department of Economics, University of Sussex, Falmer, United Kingdom); Mattia Di Ubaldo (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: We estimate the trade effect of removing uncertainty about future trading conditions in the context of the 2014 reform of the Generalized System of Preferences (GSP) of the European Union (EU). EU GSP members receive non-reciprocal trade preferences (NRTPs), but only as long as they are not too competitive; i.e. they will graduate in case their share of EU GSP imports in a sector exceeds a certain threshold. However, the 2014 reform removed the threat of these competitivenessrelated graduations for a members of the GSP+, a sub-scheme of the main programme. We and that the reform increased EU imports from GSP+ countries by about 7% on average whilst tariffs stayed the same. This trade impact is driven by the country-sector pairs most exposed to NRTPs uncertainty prereform. The effect is robust to taking into account other aspects of the reform, such as the reduction in GSP membership and changes in tariff margins, respectively.
    Keywords: GSP, trade preferences, trade policy uncertainty
    JEL: F13 F14
    Date: 2020–02
  13. By: Theresa Greaney (Department of Economics, University of Hawai'i); Kozo Kiyota (Keio Economic Observatory, Keio University)
    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: 2020–01–21
  14. By: Ronald Miranda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Leonel Muinelo-Gallo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This paper investigates empirically the effect of exchange rate uncertainty on cereal export flows for a broad sample of countries during the period 2010/01 – 2016/12. To do this, we first estimate the exchange rate volatility using the moving standard deviation of the real effective exchange rate (REER), and then, we estimate the cereal export demand by using a panel data model with autoregressive vectors (P-VAR). This strategy of analysis is applying over different groups of countries, which are obtained by cluster analysis based on the level of REER volatility and the level of cereal export volume. In general, the empirical results suggested a significative negative effect of exchange rate uncertainty on cereal exports in countries characterized by high and persistent REER volatility or high volume of cereal exports (i.e. with market power).
    Keywords: Exchange rate uncertainty, Cereal exports, Panel data, Vector Autoregressive, Cluster analysis
    JEL: C33 F31 F41
    Date: 2019–12
  15. By: Shear, Hannah E.; Pendell, Dustin L.
    Abstract: Livestock traceability has increasingly become a focus for the USDA, the National Cattlemen’s Beef Association, high-volume beef-exporting states, and other beef industry stakeholders. The focus on traceability within the United States began after several international animal disease outbreaks and continues to be of importance with African Swine Flu spreading across Asia. Mitigating adverse future disease outbreaks, as well as maintaining export markets through a positive international perception of U.S. beef has become a top priority. Implementing a national disease traceability program would enable the industry to track and reduce the potential losses due to an outbreak. However, such a system comes at a large cost, mainly to cow-calf producers. This study utilizes an equilibrium displacement model (EDM) to determine the impacts of a beef cattle disease traceability system in the United States. Utilizing the EDM allows us to provide a comparison of how the various beef sectors would need to respond to offset the costs of a national disease traceability program.
    Keywords: Food Consumption/Nutrition/Food Safety, International Relations/Trade, Livestock Production/Industries
    Date: 2020–02
  16. By: Bombarda,Pamela; Gamberoni,Elisa
    Abstract: Products must fulfill predetermined rules of origin to be exported under the preferential access granted by a free trade area member. In turn, rules of cumulation establish which countries'inputs qualify when computing the extent of origin of a product. Recent literature shows that restrictive rules of origin affect sourcing decision by reducing imports of intermediate goods from third countries relative to free trade area partners. This paper uses the introduction of the Pan-European Cumulation System in 1997 to explore the effects of rules of cumulation on trade in intermediate goods. The system provided the European Union Free Trade Area's peripheral partners (''spokes'') the possibility of cumulating stages of production from more countries to qualify for preferential access to the European Union market. Therefore, the system might have altered the organization of production in European Union centric value chains. The paper estimates a triple difference-in-differences specification and exploits different control groups. The results show that the effects of rules of cumulation on trade in intermediates are larger, with the stricter rules of origin applied to the related final good. When switching from bilateral to diagonal cumulation, the analysis finds a reduction in spokes'imports of intermediates from the rest of the world relative to those from spoke, reinforcing value chain connections within the cumulation zone. The analysis also finds a reduction in spokes'imports from the European Union 15 relative to the rest of the world and the Spokes. The findings suggest that the Pan-European Cumulation System allowed a reassessment of sourcing decisions: thanks to the possibility to cumulate, peripheral countries re-organized global value chain links.
    Keywords: International Trade and Trade Rules,Transport Services,Industrial and Consumer Services and Products,Vocational&Technical Education,Common Property Resource Development,Social Policy,Legal Products,Judicial System Reform,Legislation,Legal Reform,Regulatory Regimes
    Date: 2019–06–12
  17. By: Harry Wheeler (Research and Statistics Group); Thomas Klitgaard
    Abstract: China has been an exporting juggernaut for decades. In the United States, this has meant a dramatic increase in China?s share of imports and a ballooning bilateral trade deficit. Gaining sales in the United States at the expense of other countries, Chinese goods rose from only 2 percent of U.S. non-oil imports in 1990 to 8 percent in 2000 and 17 percent in 2010. But these steady gains in U.S. import share have stopped in recent years, with China even losing ground to other countries in some categories of goods. One explanation for this shift is that Chinese firms now have to directly compete against manufacturers in high-skill developed countries while also fending off competition from lower-wage countries, such as Vietnam. This inability to make additional gains at the expense of other countries means that exports don?t contribute as much to China?s overall growth as they used to.
    Keywords: china United States imports market share processing penetration
    JEL: F00
  18. By: Richard Baldwin; Rikard Forslid
    Abstract: Globalization and robotics (globotics) are transforming the world economy at an explosive pace. While much of the literature has focused on rich nations, the changes are quite likely to affect developing nations in important ways. The premise of the paper - which should be regarded as a thought-piece - is based on an extreme thought experiment. What does development look like when digitech has rendered manufacturing jobless and many services freely traded? Our conclusion is that the service-led development path may become the norm rather than the exception; think India, not China. Since success in the service sector is based on quite different factors than success in manufacturing, development strategies and mindsets may have to change. This is an optimistic conclusion since it suggests that developing nations can directly export the source of their comparative advantage - low-cost labor - without having first to make goods with that labor.
    JEL: F6 F63 O1
    Date: 2020–02
  19. By: Calderon,Cesar; Castillo Castro,Catalina
    Abstract: This paper examines the growth effects of different dimensions of international trade integration -- notably, volume, diversification, and natural resource dependence -- in Sub-Saharan Africa. First, the paper documents the recent trends in these foreign trade dimensions for the region and the traditional sources of growth. Second, it empirically estimates the impact of trade integration on growth per worker and the sources of growth; that is, growth of capital per worker and total factor productivity growth. To accomplish this task, the analysis uses a sample of non-overlapping five-year period observations for 173 countries from 1975 to 2014. The econometric evidence shows that increased trade openness, greater export production diversification, and reduced export dependence from natural resources will have a positive causal impact on economic growth. These effects will be mainly transmitted through faster capital accumulation or enhanced total factor productivity growth. Finally, the paper finds that, despite the progress exhibited in trade openness and diversification over the past decade, there are still potential benefits that can be accrued if countries were to deepen their integration to world trade.
    Keywords: International Trade and Trade Rules,Global Environment,Energy and Natural Resources,Coastal and Marine Resources,Trade and Services,Economic Theory&Research,Economic Growth,Industrial Economics
    Date: 2019–05–20
  20. By: Svilena Mihaylova (University of Economics Ð Varna, Bulgaria)
    Abstract: The paper enhances the discussion about the determinants of foreign direct investment (FDI) in Central, Eastern and South-Eastern European countries and the ability of public policy to influence their FDI attractiveness. Based on data for 15 countries in 2013 and 2017, we build a composite index, which allows us to rank countries in terms of their overall FDI attractiveness, as well as its most important dimensions, such as institutional framework, infrastructure endowment, labour force quality and cost competitiveness. In addition to allowing comparison between economies across these dimensions, the results reveal areas in which some countries need improvement so that they can attract more FDI.
    Keywords: foreign direct investment, FDI, public policy, economic comparison, composite index.
    JEL: F21 H11 O57 C43
    Date: 2019–11
  21. By: Chellaraj,Gnanaraj
    Abstract: International trade in higher education services in the form of international student mobility has increased sharply since the 1960s and especially from Eastern Europe and Central Asia since the fall of the Soviet Union. Many international students, especially those with graduate degrees, stay on in the host country after graduation. Although their impact on labor markets has been investigated by economists, geographers, and regional scientists in recent years, most studies on international students focus on education and spatial issues, with very little economic analysis. Furthermore, the application of a trade in services framework to international student mobility is virtually nonexistent. Four areas of research have emerged that need further investigation, particularly for the Europe and Central Asia region. First is the research gap on host and source country pull and push factors affecting the demand and supply of international students. Second, there is little or no understanding of the impact of foreign direct investment in higher education services, both through the establishment of branch campuses as well as direct investment by multinationals in universities. Third, there is virtually no study on the impact of international student and scholar mobility on global collaborative patents. Fourth, there are very few field experiments in international student ormigration research. These issues need to be understood for the development of appropriate policies in industrialized, emerging and developing economies, on the global mobility of students as well as establishment of branch campuses abroad.
    Date: 2019–05–07
  22. By: Gordon, Ian R.
    Abstract: Brexit, the wider populist surge in Europe and Trumpism all seem to involve interesting geographies that have been taken as clues to the worrying puzzle facing a political/academic establishment about what’s driving the surge and how might it be abated. One major theme has been that of the places left behind economically by an opening up to competition from cheap (migrant or overseas) labour – counterpointed by the idea that specific types of people have been left behind culturally. This paper attempts a less reductive approach, starting with examination of oddities in the Brexit geography and then investigating how populist support across European regions is influenced by the interaction of economic/demographic change with varying cosmopolitan/localist influences
    Keywords: populist politics; spatial divisions of Labour; Brexit; European regions
    JEL: J24 P16 R23
    Date: 2018–03–10
  23. By: Hugo Rojas-Romagosa (CPB Netherlands Bureau for Economic Policy Analysis); Johannes Bollen (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: We estimate the impact of the free movement of people (FMP) principle on bilateral intra-EU migration stocks using a gravity model. Employing a combination of the World Bank and the UN’s global migration databases, with observations between 1960 and 2015, allows us to analyse the impact of the FMP for most EU member states. We find that implementing the FMP by an EU member state increased, on average, its stock of intra-EU migrants by 28%.
    JEL: F22 J61 R23
    Date: 2018–10
  24. By: Ambler, Kate
    Abstract: Emigration from the countries of Central America has evolved since the 1960s from small numbers of largely intra-regional emigrants to substantial numbers of people, emigrating in large part to the United States. For example, in 1960, 69 percent of emigrants from El Salvador resided in Honduras and only 12 percent lived in the United States. By 2000, 88 percent of Salvadoran emigrants in the world lived in the United States.
    Keywords: CENTRAL AMERICA, LATIN AMERICA, migration, emigration, migrants, remittances,
    Date: 2019
  25. By: Maliszewska,Maryla; Engel,Jakob; Arenas,Guillermo Carlos; Kotschwar,Barbara R
    Abstract: This paper provides a forward-looking view of trade and its relevance for Lesotho?s medium- and long-term development. It does this through computable general equilibrium analysis of potential impacts based on specific trade-related scenarios. The scenarios include the potential loss of American Growth and Opportunities Act preferences and preference erosion against competitors through, for example, a United States?Vietnam Free Trade Area. An immediate loss of American Growth and Opportunities Act preferences would have a significant economic impact that far exceeds that of a potential future United States?Vietnam Free Trade Area. If these preferences were suspended in 2018, Lesotho would face a loss of 1 percent in income by 2020, relative to the baseline, and exports of textiles and apparel would drop by 16 percent. The computable general equilibrium simulations stress the need to strengthen efforts to support structural transformation leading to diversification of export products and markets, improving backward and forward linkages, and lowering trade costs. The simulations also indicate that trade facilitation measures leading to an average decrease in trade costs of 2 percent per year would eliminate the negative consequences of the loss of American Growth and Opportunities Act preferences in terms of the loss of income. The changing external environment is likely to offer new opportunities to Lesotho's export industries in the medium term, including through regional integration under the Continental Free Trade Area.
    Date: 2019–05–22
  26. By: Campi, Mercedes; Dueñas, Marco; Fagiolo, Giorgio
    Abstract: Understanding specialization patterns of countries in food production can provide relevant insights for the evaluation and design of policies seeking to achieve food security and sustainability, which are key to reach several Sustainable Development Goals (SDGs). In this paper, we use production data from FAO for the period 1993 to 2013 to build bipartite networks of food products and food producing countries. We use methods from complex systems analysis to rank countries according to their capabilities or competitiveness and products according to their sophistication or need of capabilities. Competitiveness is quantified by the fitness of countries, which measures the quality and how diversified are their food production baskets. We observe two well-defined communities of food producing countries, one clustering countries with relatively developed agricultural systems, and theother one grouping only developing countries. We use network statistics on food production and specialization patterns, and we perform an econometric analysis to study whether and how specialization patterns affect food supply, food security, and sustainability of food systems. We show that concentrating agricultural production decreases food supply, food security, and sustainability of food systems. The competitiveness or fitness of countries as well as the coherence of diversification patterns, both increase per capita food supply and food security (SDGs: Targets 2.1 and 2.2) but might have a negative effect on sustainability (SDGs: Target 2.4). This reflects the trade-off between achieving food security while simultaneously improving sustainability, which needs to be considered when developing or implementing policies seeking to reach SDGs. Given that the position of countries in food trade dynamics also affects their decisions in food production specialization, the analysis opens the ground for trade policy considerations (SDGs: Target 2.b).
    Keywords: Specialization; Food supply; Food security; Sustainability; Complex networks; Bipartite networks
    JEL: Q01 Q18 F63
    Date: 2020–02
  27. By: Lyubimov, Ivan (Любимов, Иван) (The Russian Presidential Academy of National Economy and Public Administration); Yakubovskiy, Igor (Якубовский, Игорь) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In this study, we develop a new approach to redefine the economic complexity index (see Hausmann et al., 2011 for the original method). ECI is a relative measure, which evaluates the progress in the structural transformation of a particular economy. While constructing the new index, we not only take into account how complex two economic structures are, which is reflected in the composition of their export baskets, but also how productive are these structures, which is mirrored in the geographical structures of their exports. Countries which have more complex economic structures, export more complex products, while more productive economies export their products to a large variety of markets, including rich economies. We find that some economies, which the traditional approach, by ignoring the fact that most of their exports go to the not-so-rich markets of their geographical neighbors, overestimates by providing a too high position in the ranking, take significantly lower position after the new approach is applied. This result is more consistent with these economies’ recent years growth rates.
    Keywords: economic complexity, structural transformation, productivity, export geography
    Date: 2020–01
  28. By: Mercedes Campi; Marco Duenas; Giorgio Fagiolo
    Abstract: Understanding specialization patterns of countries in food production can provide relevant insights for the evaluation and design of policies seeking to achieve food security and sustainability, which are key to reach several Sustainable Development Goals (SDGs). In this paper, we use production data from FAO for the period 1993 to 2013 to build bipartite networks of food products and food producing countries. We use methods from complex systems analysis to rank countries according to their capabilities or competitiveness and products according to their sophistication or need of capabilities. Competitiveness is quantified by the fitness of countries, which measures the quality and how diversified are their food production baskets. We observe two well-defined communities of food producing countries, one clustering countries with relatively developed agricultural systems, and the other one grouping only developing countries. We use network statistics on food production and specialization patterns and we perform an econometric analysis to study whether and how specialization patterns affect food supply, food security, and sustainability of food systems. We show that concentrating agricultural production decreases food supply, food security, and sustainability of food systems. The competitiveness or fitness of countries as well as the coherence of diversification patterns, both increase per capita food supply and food security, but might have a negative effect on sustainability. This reflects the trade-off between achieving food security while simultaneously improving sustainability, which needs to be considered when developing or implementing policies seeking to reach SDGs. Given that the position of countries in food trade dynamics also affects their decisions in food production specialization, the analysis opens the ground for trade policy considerations.
    Keywords: Specialization; Food supply; Food security; Sustainability; Complex networks; Bipartite networks.
    Date: 2020–02–25
  29. By: Guido Matias Cortes1; Diego M. Morris
    Abstract: The decline of employment in middle-wage, routine task intensive jobs has been well documented for the USA. Increased offshoring towards lower-income countries such as Mexico has been proposed as a potential driver of this dec$
    Keywords: educational expenditures, gender bias, household, human capital; employment structure, routine employment, trade, offshoring, Mexico
    Date: 2020
  30. By: Freund,Caroline; Maliszewska,Maryla; Mattoo,Aaditya; Ruta,Michele
    Abstract: Should the China-U.S. trade agreement prompt relief because it averts a damaging trade war or concern because selective preferential access for the United States to China's markets breaks multilateral rules against discrimination? The answer depends on how China implements the agreement. Simulations from a computable general equilibrium model suggest that the United States and China would be better off under this"managed trade"agreement than if the trade war had escalated. However, compared with the policy status quo, the deal will make everyone worse off except the United States and its input-supplying neighbor, Mexico. Real incomes in the rest of world would decline by 0.16 percent and in China by 0.38 percent because of trade diversion. China can reverse those losses if, instead of granting the United States privileged entry, it opens its market for all trading partners. Global income would be 0.6 percent higher than under the managed trade scenario, and China's income would be nearly 0.5 percent higher. By creating a stronger incentive for China to open its markets to all, an exercise in bilateral mercantilism has the potential to become an instrument for multilateral liberalization.
    Date: 2020–03–03
  31. By: Folorunso Oshodi, Ayodele (University of Ilorin, Kwara, Nigeria); Aremu Muhammed, Ismail (University of Lagos, Lagos, Nigeria)
    Abstract: The pivotal role of the manufacturing sector in guaranteeing a relatively sustainable growth and generating employment has made both public and private actors take interest in factors that might influence manufacturing performance; trade policy reforms inclusive. Consequently, policy makers and the government has taken steps to influence manufacturing performance through trade policy reforms, in form of tariff reduction. The paper examined the impact of trade policy reforms on manufacturing firms’ performance in Nigeria. Panel data were collected for 57 quoted firms in Nigeria across 15 manufacturing industries. The fixed and random effects models were examined, while the Hausman specification test judged the random effects model to be the most appropriate. Chow break-point test also suggested the existence of structural break, and hence, the break was controlled for. The findings reveals that tariff has significant negative impact on manufacturing firms value added (performance) in Nigeria. The negative impact of tariff is however, much obvious in the printing and publishing and aluminium industries/ sub-sectors. We therefore, recommend that selective imposition of tariff on different products at different time should be implemented in conjunction with sector-specific reforms for enhanced manufacturing performance in Nigeria.
    Keywords: manufacturing; trade policy; economic growth; industrialisation
    Date: 2020–02–26
  32. By: Eberhard,Andreas; Varela,Gonzalo J.; Casal,Lucia; Ganz,Federico
    Abstract: Increased international production fragmentation implies that firms at home rely on imported intermediates for production. In this context, tariff policy design needs to consider the impact downstream of changes in tariffs upstream. Policy makers embarking on tariff reforms need to answer questions such as: what is the impact of tariff changes on production costs downstream? What are the key input tariffs that could be reduced to lower production costs in priority sectors considering sectors'backward linkages? Or how will a tariff rationalization plan that focuses on tariff reductions in raw materials and intermediates affect effective protection across sectors? This paper presents the Upstream Tariff Simulator, a simple Microsoft Excel?based tool designed to help policy makers answer these questions, by combining information on tariffs and input-output structures and allowing alternative sectoral aggregations, and alternative market structures for input markets. It provides the underlying conceptual framework and a range of examples that show the insights that the tool can provide to policy makers when analyzing the impact of tariff reforms.
    Date: 2020–02–20
  33. By: Chowdhry, Sonali; Felbermayr, Gabriel
    Abstract: Das Wirtschafts- und Handelsabkommen (ETA) zwischen den USA und China trat am 14. Februar 2020 in Kraft und eröffnete eine neue Phase in der schon langandauenden handels- und geopolitischen Rivalität zwischen beiden Ländern. Das ETA enthält spezifische Ziele für die Erhöhung der chinesischen Importe von US-Gütern und -Dienstleistungen in Höhe von 200 Mrd. US-Dollar für die Jahre 2020 und 2021. Die Autoren zeigen, dass diese Abnahmeverpflichtungen erhebliche Handelsumlenkungseffekte und Marktanteilsverschiebungen für Chinas wichtigste Handelspartner zur Folge haben können. Im Verarbeitenden Gewerbe dürfte Deutschland von den größten Handelsumlenkungseffekten in einer Reihe von Branchen wie Fahrzeuge (-1,28 Mrd. US-Dollar), Flugzeuge (-1,59 Mrd. US-Dollar) und Industriemaschinen (-0,72 Mrd. US-Dollar) betroffen sein. Ebenso werden Entwicklungsländer die Auswirkungen des ETA spüren, wenn China seine Importe auf US-Lieferanten umleitet. Alleine Brasilien könnte im Jahr 2021 infolge des ETA einen Rückgang der Sojabohnenexporte nach China um 4,95 Mrd. US-Dollar erleiden.
    Keywords: US-China trade relations,trade diversion,multilateralism,Beziehungen USA-China,Handelsumlenkung,Multilateralismus
    Date: 2020

This nep-int issue is ©2020 by Luca Salvatici. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.