|
on International Trade |
| By: | Paulo Bastos |
| Abstract: | This paper uses international trade data to assess the degree of exposure of Belt and Roadeconomies to China trade shocks. It finds that the growth of China’s trade following its internal transformation and accession to the WTO significantly impacted the export performance ofBelt and Road economies in the period 2000-2015. The increase in China’s imports significantlyboosted the exports of these economies. However, this effect was attenuated by increased compe-tition from China in export markets. The effects of China’s demand shocks were stronger in more upstream industries, while those of competition shocks were stronger in industries that producegoods that are closer to final use. The effects of competition shocks were also relatively stronger in countries that are relatively poorer and geographically closer to China. Building on these find-ings, the paper documents the current degree of exposure of Belt and Road economies to Chinatrade shocks. |
| Keywords: | Belt and Road Initiative; China; Trade shocks |
| JEL: | F1 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp01192020&r=all |
| By: | Fernandes,Ana Margarida; Forero,Alejandro; Maemir,Hibret Belete; Mattoo,Aaditya |
| Abstract: | Does"infant industry"preferential access durably boost export performance? This paper exploits significant trade policy changes in the United States around the turn of the 21st century to address this question. The expansion of Generalized System of Preferences (GSP) products for less developed countries in 1997 and the implementation of the African Growth and Opportunity Act (AGOA) in 2001 is used to assess whether preferential access boosts exports of eligible products in general and apparel specifically. The phase-out of the Multi-Fiber Arrangement (MFA) in 2005 is used to assess whether any expansion in apparel exports survived the erosion of preferences. To find a causal impact of these changes on exports to the United States from a given beneficiary country, the analysis uses a triple-differences regression and 26 years of newly constructed trade and tariff data at the country-product-year level (1992-2017). The analysis finds that the AGOA boosted African apparel exports, and the expansion of the GSP increased African exports of other eligible products. While the marginal impacts on African apparel exports grew sharply in the first years of AGOA, the impacts leveled off after 2005, when the end of the MFA quotas unleashed competition from Asian countries. The illusion of sustained African apparel exports is created by three late-bloomers in East Africa offsetting the boom-bust pattern in Southern Africa and the never-significant response in Central and Western Africa. Firm-level customs data for selected countries reveal that even in East Africa, the recent export growth was driven by new entrants rather than by incumbent firms whose competitiveness might have been nurtured by the big preference margins during the early AGOA period. Understanding the heterogeneous response to trade preferences remains a challenge. However, preliminary evidence suggests that preferential access per se was not sufficient but needed to be complemented by specific domestic reforms: tariff liberalization, reduced regulatory burden, enhanced connectivity, and competitive exchange rates. |
| Keywords: | International Trade and Trade Rules,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,General Manufacturing,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Commodity Risk Management,Mining&Extractive Industry (Non-Energy) |
| Date: | 2019–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8753&r=all |
| By: | Brendan Kelly; Hunter L. Clark (Research and Statistics Group) |
| Abstract: | The imposition of Section 301 tariffs on about half of China?s exports to the United States has coincided with a fall in imports from China and gains for other countries. The U.S.-China trade conflict also appears to be accelerating an ongoing shift in foreign direct investment (FDI) from China to other emerging markets, particularly in Asia. Within the region, Vietnam is often cited as a clear beneficiary of these trends, a rising economy that could displace China, to some extent, in global supply chains. In this note, we examine the data and conclude that Vietnam is indeed gaining market share, but is too small to replace China anytimesoon. |
| Keywords: | China; Trade; Vietnam |
| JEL: | F00 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:87348&r=all |
| By: | Erhan Artuc; Paulo Bastos; Bob Rijkers |
| Abstract: | This paper examines the effects of robotization on trade patterns, wages and welfare. It developsa Ricardian model with two-stage production and trade in intermediate and final goods in which robots can take over some tasks previously performed by humans in a subset of industries. An increase in robot adoption in the North reduces the cost of production and thereby impacts trade in final and intermediate goods with the South. The empirical analysis uses ordinary least squaresand instrumental-variable regressions exploiting variation in exposure to robots across countriesand sectors. Both reveal that greater robot intensity in own production leads to: (i) a rise inimports sourced from less developed countries in the same industry; and (ii) an even stronger increase in exports to those countries. Counterfactual simulations indicate that Northern roboti-zation raises domestic welfare, but initially depresses wages. However, this adverse effect is likely to be reversed by further reductions in robot prices. Northern robotization may lead to higherwages and welfare in the South. |
| Keywords: | Automation, robots, tasks, jobs, wages, trade, intermediate inputs, global valuechains, gains from trade |
| JEL: | F1 J23 J24 O3 O4 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp01182020&r=all |
| By: | Rasoulinezhad, Ehsan (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Sarker, Tapan (Asian Development Bank Institute) |
| Abstract: | East Asia has remained the biggest market for liquefied natural gas (LNG) in 2018. The Russian Federation has a clear vision to develop its East Asia LNG projects to provide a bigger share of Asian LNG imports. We model Russian Federation–East Asia LNG trade patterns via the gravity trade theory, which is shown to fit well with energy trade patterns. Our findings reveal that a 1% increase in population growth in the People’s Republic of China, Japan, and the Republic of Korea increases Russian Federation LNG exports by nearly 3.43%, and economic growth by 6.16%, while any increase in geographic distance decelerates LNG exports to the selected East Asian economies by nearly 7.3%. This means that the close proximity of the Russian Federation to East Asia is an advantage for its LNG exports. Furthermore, the West’s sanctions against the Russian Federation are a positive influencing factor on the latter’s LNG export volume to East Asia. We recommend some policies such as construction of a gas trading hub in Asia, increasing regional pricing power, and energy import diversification and shorter distances between the Russian Federation (exporter) and East Asia (importer) to improve energy security in this region. |
| Keywords: | gravity trade modeling; LNG trade; energy security; Russian Federation; East Asia |
| JEL: | F14 Q37 R11 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0965&r=all |
| By: | Zhang, Huaqi; Chen, Kevin |
| Abstract: | This paper aims to provide a better understanding of Myanmar’s agricultural export performance against its competitors in different regions and determine the policy actions for improving Myanmar’s export performance. The normalized revealed comparative advantage (NRCA) index is computed to compare the agricultural competitiveness between Myanmar and its competitors from 2007 to 2016. The results show that: 1) Myanmar’s agricultural export sector enjoys comparative advantage in the global market, but it is not competitive when compared with its major competitors; 2) Myanmar reveals a high level of NRCAs in black gram & pigeon peas, natural rubber, sesame seeds, rice, and frozen fish, while it has low NRCAs in crustaceans and dried fruits; and reveals no comparative advantage in bananas, fish fillets, maize, nuts, and watermelon in certain years. Three major policy implications are drawn, including diversifying Myanmar’s export portfolio, strengthening export promotion and development, and attracting foreign direct investment to upgrade the cross-border value chain. |
| Keywords: | MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, agriculture, trade, agricultural trade, exports, performance, agricultural export, competitiveness, revealed comparative advantage, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1823&r=all |
| By: | Fofana, Ismael; Odjo, Sunday P.; Traore, Fousseini |
| Abstract: | The evidence on the impact of trade liberalization on gender inequalities is not fully established yet, nor is the impact of gender inequalities on trade policy outcomes. Sociocultural norms, legal barriers, and socioeconomic disadvantages are the main gender-based discrimination that affect the distribution of trade benefits between men and women. This study applied to Niger assesses the distributional effects of trade reforms between men and women and sheds light on the impact of gender-based barriers on the outcome of trade reforms. The Common External Tariff (CET) of the Economic Community of West African States has guided Niger’s trade policy since its implementation in 2015. Thus, the study essentially assesses the impact of the CET reform on gender inequalities in Niger. Focusing on employment levels and earnings, the study finds an increased gender gap under the CET implementation, although the custom union reform leads to positive outcomes for both men and women compared to the baseline. Moreover, gender inequalities result in misallocation of resources in the economy and lead to a loss in economic opportunity for Niger. Thus, closing the gender gap in access to productive resources is likely to generate positive outcomes for Niger. |
| Keywords: | NIGER, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, gender, trade, trade liberalization, trade policies, gender equality, reforms, tariffs, impact assessment, employment, income distribution, income, modelling, common external tariff, CET, Economic Community of West African States, ECOWAS, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1885&r=all |
| By: | Sven Blank (Deutsche Bundesbank); Mathias Hoffmann (Deutsche Bundesbank); Moritz A. Roth (Banco de España) |
| Abstract: | The vast macroeconomic literature trying to explain the widely observed equity home bias disregards internationally active firms. In a DSGE model that features the endogenous choice of firms to become internationally active through either exports or foreign direct investment (FDI), we find that the optimal equity holdings of agents are biased towards domestic firms. Our finding indicates that international diversification is not as bad as empirical measures of the equity home bias suggest. |
| Keywords: | country portfolios, multinational firms, international diversification, international trade, foreign direct investment |
| JEL: | F12 F21 F23 F41 G11 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2008&r=all |
| By: | Kabir,Mahfuz; Singh,Surendar; Ferrantino,Michael Joseph |
| Abstract: | There are significant value chain linkages between India and Bangladesh, particularly in the textile and apparel sector. India specializes in the upstream segment, supplying such intermediate inputs as silk, cotton, yarn, and fabrics to Bangladesh. Bangladesh specializes in the downstream final apparel segment, exporting worldwide as well as to India. Tariffs and nontariff barriers in both countries inhibit the growth of value chain linkages. In addition, subsidies and other industrial policies in India distort incentives away from the natural pattern of specialization. The results of a new survey of textile and clothing firms in both countries corroborate these findings. Reforms in trade policy (including rules of origin), trade facilitation, trade-related standards, and institutions could help both countries better take advantage of value chain linkages. |
| Keywords: | International Trade and Trade Rules,Common Carriers Industry,Food&Beverage Industry,Textiles, Apparel&Leather Industry,Business Cycles and Stabilization Policies,Construction Industry,Plastics&Rubber Industry,General Manufacturing,Pulp&Paper Industry,Rules of Origin,Trade Policy,Trade and Multilateral Issues,Export Competitiveness |
| Date: | 2019–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8731&r=all |
| By: | Ajmani, Manmeet; Joshi, Pramod Kumar; Roy, Devesh; Renjini, V. R. |
| Abstract: | In this paper, we address the question of the agricultural market integration of Cambodia within the Association of Southeast Asian Nations (ASEAN), and its other top trading partners. Focusing on agricultural trade, we use two indicators, namely, “Trade Potential†and “Competition Indices,†to assess the nature and extent of the integration. More specifically, we identify the exports of Cambodia with high export potential and comparatively low competition in export markets. Higher trade potential with lower competition (value or volume) indicates an opportunity of higher returns for agricultural producers. In the case of Cambodia, “maize,†and “starches†are identified as high-potential exports with lower intra-ASEAN competition. There is also scope for regional cooperation in traditional exports such as “rice,†“manioc (cassava),†“molasses,†and “pepper†between Cambodia and other Southeast Asian countries for which both the export potential and intra-ASEAN competition are high. Finally, to demonstrate the upward movement in the value chain, possibly due to quality upgradation, we present the dynamics of the unit values of Cambodia’s agricultural exports. |
| Keywords: | CAMBODIA, SOUTH EAST ASIA, ASIA, ASEAN, trade, economic competition, integration, diversification, market integration, competition indice, trade potential, unit value, agricultural exports, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1845&r=all |
| By: | Artuc,Erhan; Christiaensen,Luc; Winkler,Hernan Jorge |
| Abstract: | Following a couple of decades of offshoring, the fear today is of reshoring. Using administrative data on Mexican exports by municipality, sector and destination from 2004 to 2014, this paper investigates how local labor markets in Mexico that are more exposed to automation in the U.S. through trade fared in exports and employment outcomes. The results show that an increase of one robot per thousand workers in the U.S. -- about twice the increase observed between 2004-2014 -- lowers growth in exports per worker from Mexico to the U.S. by 6.7 percent. Higher exposure to U.S. automation did not affect wage employment, nor manufacturing wage employment overall. Yet, the latter is the result of two counteracting forces. Exposure to U.S. automation reduced manufacturing wage employment in areas where occupations were initially more susceptible to being automated; but exposure increased manufacturing wage employment in other areas. Finally, the analysis also finds negative impacts of exposure to local automation on local labor market outcomes. |
| Keywords: | International Trade and Trade Rules,Labor Markets,Food&Beverage Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Plastics&Rubber Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Rural Labor Markets,Wages, Compensation&Benefits |
| Date: | 2019–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8741&r=all |
| By: | Bouët, Antoine; Metivier, Jeanne; Parent, Marie |
| Abstract: | The World Trade Organization’s Dispute Settlement Procedure has been described as the “crown jewel†of the multilateral trading system, having been highly effective in settling a large number of disputes-without it, the results might have been much worse. Any WTO member can file a complaint against a trade practice of another member that it believes to be in violation of WTO agreements. The Dispute Settlement body then makes a ruling on the dispute. Finally, if the respondent is found guilty by the Dispute Settlement body, the respondent may either bring its practices into compliance or face authorized retaliatory trade measures by the complainant. But is the Dispute Settlement Procedure fair to developing countries, or is there some bias in favor of powerful countries? If potential retaliatory measures by a WTO member are unthreatening to a potential offender, then does the potential offender ignore rules? Do other factors, such as political power, bias which members benefit from the Dispute Settlement Procedure? One approach to investigate potential bias looks at the final outcomes of disputes, asking: do developed countries tend to ignore the Dispute Settlement body’s recommendations when facing complaints from developing countries? Investigations with this approach have found some empirical evidence of bias against developing countries, but samples of disputes are small. Another approach to investigate bias looks at Dispute Settlement body rulings, asking: does the WTO’s panel of experts tend to rule against developing countries? An investigation found that threat of retaliatory measures and asymmetric power did not bias rulings, but that countries with better legal capacity - usually more developed countries - were more likely to win disputes. We take a different approach, looking at which members file complaints to ask: given that members may not even file complaints if they expect to lose, do developing countries avoid filing complaints because they lack power? |
| Keywords: | World Trade Organization (WTO), trade, international agreements, trade policies, Dispute Settlement Procedure, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:prnote:mtidpnmay_133523&r=all |
| By: | Benedikt Heid (School of Economics, University of Adelaide and CESifo); Wenxi Lu (Department of Economics and Trade, School of Management, Harbin Institute of Technology) |
| Abstract: | Genetic distance between countries’ populations has been shown to proxy cross-country differences in cultures and preferences. In a panel of 176 countries from 1970 to 2014, we find that higher genetic distance between two countries decreases their probability of having a trade agreement, even when controlling for geographic distance and other controls. The impact of cultural differences proxied by genetic distance is persistent over time and economically significant: while increasing the geographic distance between two countries by 1% decreases the probability of a regional trade agreement by 1.6%, increasing their genetic distance by 1% decreases the probability by 0.9% |
| Keywords: | trade agreements; trade policy; genetic distance; cultural difference |
| JEL: | F13 F14 F15 Z10 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2020-04&r=all |
| By: | NEIFAR, MALIKA |
| Abstract: | Employment to production intensity is used as indicator for employment. The aim of this paper is to provide new estimates of employment-output elasticities and assess the effect of structural and macroeocnomic policies and demographic indicators on the employment-intensity of growth. Having a sample of 44 countries taken from AMEE (Africa and Middel East Erea; 20 francophone et 24 anglophone countries) over the priod 2000-2017, we propose linear and non linear specifications to assess the role of considered variables. Linear models results in majority do not confirm previous empirical results except that of Trade openness saying it contributes to explain cross-country variations in employment elasticities which tend to be higher in more open economies for Francophone countries. While for Anglophone countries, elasticities are effected only by 15 to 24 years old participant in active population (Tx1524). With non linear specifications (Quadratic, Cubic, and/or Augmented Cubic), Structural Policy variables (Labor market policy, Lmp, and Product market policy, Pmp) have increasing effect on elasticities. Structural reforms have to be complemented by macroeconomic stability policies (less GDP volatility) to maximize the effect of structural policies on employment responsiveness. In addition, macroeconomic policies aimed at promoting Foreign direct investment (FDI) have significant and positive impact on employment elasticities. |
| Keywords: | Employment to product elasticity, Linear model, Cubic model, Quadratic model, Cross section, Africa and Middel East Erea (AMEE). |
| JEL: | E2 E24 J21 |
| Date: | 2020–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98961&r=all |
| By: | Yoshino, Naoyuki (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Otsuka, Miyu (Asian Development Bank Institute) |
| Abstract: | The middle-income trap is a serious problem in developing Asia and Pacific economies. Middle-income trap is the situation in which a country’s growth slows after reaching middle-income levels and the transition to high-income levels becomes unattainable. International remittances of immigrants to their country of origin is one of the most important elements contributing to the development of middle-income countries. By using a data set consisting of 12 Asia and Pacific middle-income countries—most of which are well-known migrant-sending countries—and by employing a panel data analysis technique, we tried to find the determinants of international remittance. Results show that per capita gross domestic product growth in origin countries and wage growth rate in destination countries are positively correlated with remittance inflows in middle-income countries, respectively. On the other hand, net foreign direct investment (FDI) inflows are negatively correlated with remittance inflows. This can be interpreted as the paradigm shift of acquiring foreign capital in middle-income countries from remittances in earlier stages of development to more FDI when the country prepares the requirements for absorbing the foreign capital with an economic growth. Moreover, real effective exchange rate, the level of education, trade openness, and political stability are positively associated with remittance inflows. |
| Keywords: | remittance; middle-income trap; poverty; developing Asia and the Pacific |
| JEL: | I31 I32 I38 |
| Date: | 2019–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0964&r=all |
| By: | Natalie Chen; Luciana Juvenal |
| Abstract: | We investigate theoretically and empirically how exporters adjust their markups across destinations depending on bilateral distance, tariffs, and the quality of their exports. Under the assumption that trade costs are both ad valorem and per unit, our model predicts that markups rise with distance and fall with tariffs, but these effects are heterogeneous and are smaller in magnitude for higher quality exports. We find strong support for the predictions of the model using a unique data set of Argentinean firm-level wine exports combined with experts wine ratings as a measure of quality. |
| Date: | 2020–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:20/36&r=all |
| By: | M. Okimoto (University of Shizuoka) |
| Abstract: | This paper examines the export promotion of processed foods by a regional economy and regional vitalisation policy. We employ Bertrand models that contain a major home producer and a home producer in a local area. In our model, growth in the profit of one producer does not result in an increase in the profit of the other, despite strategic complements. We show that the profit of the producer in the local area decreases because of the deterioration of a location condition, and its profit increases through the reinforcement of the administrative guidance. Furthermore, when the inefficiency of the location worsens, the local government should optimally decrease the level of administrative guidance. Hence, the local government should strategically eliminate this inefficiency to maintain a sufficient effect of administrative guidance. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2003.04307&r=all |
| By: | Campi, Mercedes; Dueñas, Marco; Barigozzi, Matteo; Fagiolo, Giorgio |
| Abstract: | In this paper, we analyze whether the recent global process of strengthening and harmonization of intellectual property rights (IPRs) affects decisions of cross-border mergers and acquisitions (M&As). We investigate if IPRs have a differential effect across sectors of different technology content and for countries of different development level. Also, we study how imitation abilities of target countries interact with the tightening of IPRs. Using data for the post-TRIPS period (1995-2010), we estimate an extended gravity model to study the bilateral number of M&As, including a measure of the strength of IPRs systems on target countries and a set of control variables usually considered as determinants of M&As. The estimation results verify the gravity structure for M&As and show that IPRs -and enforcement- influence decisions of cross-border M&As in all sectors regardless of their technological content. However, IPRs are more important in countries with high imitation abilities and in sectors of high-technology content. Furthermore, a strengthening of IPRs leads to a larger increase of M&As in developing countries than in developed countries. These results call the attention on the possible implications for least developed economies and challenge the adequacy of a globally harmonized IPRs systems. |
| Keywords: | intellectual property rights; mergers and acquisitions; gravity model; technological intensity; imitation; international comparison |
| JEL: | G34 O13 O14 O34 |
| Date: | 2018–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:90203&r=all |
| By: | Hideo Konishi (Boston College); Minoru Nakada (Nagoya University); Akihisa Shibata (Kyoto University) |
| Abstract: | In this paper, we investigate the effects of a free trade agreement (FTA) with environmental standards between Northern and Southern countries, with explicit considerations for transferring clean technology and enforcing reduced emissions. Southern producers benefit greatly from having unimpeded access to a Northern market, but they are reluctant to use new high-cost, clean technology provided by the North. Thus, environmentally conscious Northern countries should design an FTA where Southern countries are provided with sufficient membership benefits but must follow tighter enforcement requirements. Since including too many Southern countries dilutes the benefits of FTA membership, it is in the best interest of the North to limit the number of Southern memberships while strictly enforcing emissions reduction. This may result in unequal treatment among the Southern countries. We provide a quantitative evaluation of FTA policies using a numerical example. |
| Keywords: | Free trade agreements; Environmental standards |
| JEL: | Q56 F53 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:1026&r=all |
| By: | Sinha,Rishabh |
| Abstract: | Using panel data on input-output intensities and expenditure prices from 28 countries, this paper finds the elasticity of substitution across sectoral inputs to be less than one in each of the three broad sectors of the economy. Intermediates are most complementary in the production of services while it is easiest to substitute across intermediates in the production of agricultural goods. Differences in relative prices alone account for a non-trivial fraction of the cross-country variation in sectoral linkages. Abstracting from the price channel that allows for substitution across inputs in response to changes in relative prices delivers biased aggregate implications of changes in productivity and distortions. |
| Keywords: | Construction Industry,Common Carriers Industry,Food&Beverage Industry,General Manufacturing,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Food Security,Transport Services,International Trade and Trade Rules,Mining&Extractive Industry (Non-Energy) |
| Date: | 2019–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8770&r=all |
| By: | Zhen Huo; Andrei A. Levchenko; Nitya Pandalai-Nayar |
| Abstract: | This paper develops estimates of TFP growth adjusted for movements in unobserved factor utilization for a panel of 29 countries and up to 37 years. When factor utilization changes are unobserved, the commonly used Solow residual mismeasures actual changes in TFP. We use a general equilibrium dynamic multi-country multi-sector model featuring variable factor utilization to derive a production function estimating equation that corrects for unobserved factor usage. We compare the properties of utilization-adjusted TFP series to the standard Solow residual, and discuss the implications for international business cycle comovement generated by technology shocks. Unlike the Solow residual, utilization-adjusted TFP is virtually uncorrelated across countries, and as a result its direct contribution to GDP comovement is negligible. A general equilibrium model calibrated to the observed levels of international trade cannot generate much comovement through propagation of these TFP shocks. |
| JEL: | F41 F44 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26803&r=all |
| By: | Brian K. Kovak; Rebecca Lessem |
| Abstract: | We examine how increasing the number of visas available to potential migrants would affect unauthorized immigration from Mexico to the U.S. Current U.S. policy bans people who are deported from receiving legal status for a period of time. This policy aims to serve as an additional deterrent to unauthorized immigration, but may be ineffective given that most potential Mexican migrants have an extremely low probability of ever being able to legally move to the U.S. We develop a dynamic discrete location choice model, which we estimate using data from the Mexican Migration Project, and consider various counterfactual policies that vary the intensity of enforcement and access to work visas. We find that legal entry bans for deported individuals are ineffective at current rates of legal immigration, but that increased legalization rates would amplify the deterrent effects of deportation. We also show that a temporary work visa program would yield similar deterrent effects as an increase in permanent legalization without resulting in very large increases in the total stock of migrants residing in the U.S. These findings have important implications for structuring future immigration reforms. |
| JEL: | F22 J61 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26790&r=all |
| By: | Mehdi Abbas (Pacte, Laboratoire de sciences sociales - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Catherine Locatelli (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | Les interdépendances entre l'UE et ses fournisseurs extérieurs en matière de gaz naturel au premier rang desquels la Russie posent la question de la confrontation de préférences contradictoires des acteurs impliqués dans l'échange. Elles interrogent également l'impact transformatif de l'interdépendance lié à des processus d'hybridation entre acteurs asymétriques. L'article montre que la norme concurrentielle agit comme levier d'une hybridation des régulations à la fois du secteur gazier russe et de la politique énergétique de l'UE. Ainsi, le conflit de préférences UE-Russie naît de tentative européenne d'exportation de sa régulation concurrentielle au secteur gazier russe. Si celle-ci s'avère être un échec, l'importance du marché européen conduit toutefois à une adaptation du modèle russe de gouvernance gazière. Mais celle-ci implique en retour une transformation du modèle européen. |
| Keywords: | Russie,Union Européenne,Echanges gaz naturel |
| Date: | 2019–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02472141&r=all |
| By: | Anusha Chari |
| Abstract: | This paper documents a set of stylized facts about recent trends in cross-border M&A (CBMA) activity around the world. The facts focus on key features of CBMA such as (i) the magnitude; (ii) how it varies across industries and locations; (iii) how it compares to levels of greenfield FDI over time; (iv) horizontal (market access) versus vertical (integrating supply chains) transactions; (v) the mode of financing; (vi) diversifying transactions versus those in the same industry; (vii) patterns of control acquisition; and (viii) strategic versus financially motivated transactions. The paper also examines whether the nature of cross-border M&A activity differs across developed and emerging markets. Next, it considers the incentives for firms to buy firms in other countries and to sell divisions to foreign buyers and examines the evidence about post-acquisition outcomes. The paper concludes with a discussion of policy challenges that confront governments as they weigh the balance of national security concerns against a desire to increase foreign investment in their economies. |
| JEL: | F2 F23 F3 G34 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26843&r=all |
| By: | John Gilbert; Onur A. Koska (University of Canterbury); Reza Oladi |
| Abstract: | We scrutinize international trade arising from oligopolistic rivalry (reciprocal dumping) in a model where the goods are horizontally differentiated and where otherwise symmetric firms located in different regions adopt asymmetric strategies – one competing in prices and the other competing in quantities. Uni-directional and intra-industry trade appear endogenously in our framework. We show that as trade costs decline the equilibrium outcome will transition from autarky through a region of uni-directional trade, before intra-industry trade ultimately arises. In the uni-directional trade region, potential market entry by the rival has an impact on firm behavior even though the rival is not exporting. The gains from trade are asymmetric in general, due to firms' asymmetric strategies, and sufficient product differentiation is required for trade to welfare dominate autarky especially with one of the trade partners adopting aggressive strategic behavior even when trade is costless. |
| Keywords: | Intra-industry trade, product differentiation, gains from trade, asymmetric strategies |
| JEL: | F01 |
| Date: | 2020–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:20/06&r=all |
| By: | Pace, Kathryn; Bouët, Antoine; Glauber, Joseph W. |
| Abstract: | As ICBT appears to be so large and is heavily linked to food security, economic development, and women’s empowerment, it is important to obtain accurate measurements of this type of trade. More accurate data can improve the statistical measurements of balance of payments and external accounts, improving global trade measurement and modeling, and facilitate the development of more accurate domestic food balance sheets. Overall, measurement of ICBT in Africa can provide a more accurate picture of other aspects related to informal trade, including information on informal labor markets and movement patterns of staple foods during periods of crises. Each of these provides the opportunity for better policymaking using reliable and accurate data. |
| Keywords: | EAST AFRICA, MIDDLE EAST, NORTH AFRICA, SOUTHERN AFRICA, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, trade, informal economy, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:prnote:mtidpnseptember192019&r=all |
| By: | John Gilbert; Onur A. Koska (University of Canterbury); Reza Oladi |
| Abstract: | In a duopoly trade model with both horizontal and vertical product differentiation, we examine the endogenous choice of quantities and prices as strategic variables. We show that strategic asymmetry (such that a potential exporter commits to a quantity contract, while a local rival commits to a price contract) can be an equilibrium outcome when the relative product quality of the foreign variety is sufficiently high and trade costs are sufficiently low. A lower degree of horizontal product differentiation can make strategic asymmetry more likely. By endogenizing the quality choice, we also establish the conditions under which product quality choice gives rise to strategic asymmetry. |
| Keywords: | International trade; product quality; horizontal product differentiation; Cournot- Bertrand-Nash equilibrium |
| JEL: | D43 F12 |
| Date: | 2020–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:20/05&r=all |
| By: | Losos,Elizabeth Claire; Pfaff,Alexander; Olander,Lydia Pauline; Mason,Sara; Morgan,Seth |
| Abstract: | The Belt and Road Initiative, due to its diverse and extensive infrastructure investments, poses a wide range of environmental risks. Some projects have easily identifiable and measurable impacts, such as energy projects'greenhouse gas emissions. Others, such as transportation infrastructure, due to their vast geographic reach, generate more complex and potentially more extensive environmental risks. The proposed Belt and Road Initiative rail and road investments have stimulated concerns because of the history of significant negative environmental impacts from large-scale transportation projects across the globe. This paper studies environmental risks -- direct and indirect -- from Belt and Road Initiative transportation projects and the mitigation strategies and policies to address them. The paper concludes with a recommendation on how to take advantage of the scale of the Belt and Road Initiative to address these concerns in a way not typically available to stand-alone projects. In short, this scale motivates and permits early integrated development and conservation planning. |
| Date: | 2019–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8718&r=all |
| By: | Xiao, Bowen; Guo, Xiaodan; Fan, Ying; Voigt, Sebastian; Cui, Lianbiao |
| Abstract: | In light of increased economic integration and global warming, addressing critical issues such as the role of multilateral climate policies and the strategic interaction of countries in climate negotiations becomes paramount. We thus established for this paper an open economy environmental dynamic stochastic general equilibrium model with heterogeneous production sectors, bilateral climate policies, asymmetric economies, and asymmetric stochastic shocks, using China and the EU as case studies in order to analyze the interaction and linking of international carbon markets under dynamic international economic cycles. This led us to some major conclusions. First, with various methods we verified that, due to deadweight loss, the efficiency of the separate carbon market is lower than that of the joint carbon market. Second, the intensity of the spillover effects depends partly on different climate policies. This means that, in terms of supply-side shocks, the EU's economy in a joint carbon market is more sensitive because its cross-border spillover effects are enhanced, while demand-side shocks have a stronger impact on the EU's economy under a separate carbon market. Third, the Ramsey policy rule revealed that both China's and the EU's emission quotas should be adjusted pro-cyclically under separate carbon markets. The cross-border spillover effects of the joint carbon market, however can change the pro-cyclical characteristics of foreign (EU's) optimal quotas. |
| Keywords: | International economic cycle,Carbon market,China,the European Union (EU),Dynamic Stochastic General Equilibrium (DSGE) |
| JEL: | E32 F41 Q53 Q56 Q58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20011&r=all |
| By: | Gianluca Orefice (University of Paris-Dauphine, CEPII and CESifo); Giovanni Peri (University of California, Davis and NBER) |
| Abstract: | The process of matching between firms and workers is an important mechanism in determining the distribution of wages. In a labor market characterised by large dispersion of workers' productivity and worker-firm complementarity, high quality firms have strong incentives to screen for the quality of workers. This process will increase the positive quality association of firm-worker matches known as positive assortative matching (PAM). Immigration in a local labor market, by increasing the variance of workers abilities, may drive stronger PAM between firms and workers. Using French matched employer-employee (DADS) data over the period 1995-2005 we document that positive supply-driven changes of immigrant workers in a district increased the strength of PAM. We then show that this association is consistent with causality, is quantitatively significant, and is associated with higher average productivity and firm profits, but also with higher wage dispersion. We also show that the increased degree of positive assortative matching is mainly reached by high-productive firms "losing" lower quality workers and "attracting" higher quality workers. |
| Keywords: | Matching, Workers, Firms, Immigration, Productivity. |
| JEL: | F16 J20 J61 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt202002&r=all |
| By: | Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hateld 0028, South Africa); Peter Wanke (COPPEAD Graduate Business School, Federal University of Rio de Janeiro, Rua Paschoal Lemme, 355, Rio de Janeiro CEP 21949-900, Brazil) |
| Abstract: | Tourism growth is on the rise in Africa, and yet limited empirical evidence exists that explores the factors that drive this important contributor of economic growth on the continent. Previous literature focusses mainly on developed countries. This study weighs in on the recent debate on African tourism by providing evidence on the role that economic uncertainties have on tourist arrivals. Using panel data from 1996 to 2017, we find that economic uncertainties reduce tourist arrivals in Africa in comparison to other global regions, such as Europe and Latin America. Further disaggregation by African regions reveals that economic uncertainties in the north, south and west regions drive these adverse results. These regions have been the hardest hit by political instability and social unrest during the period under review, which may have acted as a deterrent to tourists. |
| Keywords: | panel data, uncertainty, tourism, Africa |
| JEL: | C23 Z32 O55 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202019&r=all |
| By: | Jonas Hjort; Xuan Li; Heather Sarsons |
| Abstract: | Many employers link wages at the firm’s establishments outside of the home region to the level at headquarters. Multinationals that anchor-to-the headquarters also transmit wage changes arising from shocks to minimum wages and exchange rates in the home country/state to their foreign establishments. Such multinationals fire more low-skill workers and hire fewer new workers abroad after a permanent (minimum wage-induced) foreign establishment wage increase originating in shocks to headquarter wages, but not after a temporary (exchange rate-induced) one. We show this using data on 1,060 multinationals’ establishments across the world and in employee-level data on the same employers’ establishments in Brazil. |
| JEL: | F23 J01 J3 J31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26788&r=all |
| By: | Olivera Kostoska; Viktor Stojkoski; Ljupco Kocarev |
| Abstract: | The expansion of global production networks has raised many important questions about the interdependence among countries and how future changes in the world economy are likely to affect the countries' positioning in global value chains. We are approaching the structure and lengths of value chains from a completely different perspective than has been available so far. By assigning a random endogenous variable to a network linkage representing the number of intermediate sales/purchases before absorption (final use or value added), the discrete-time absorbing Markov chains proposed here shed new light on the world input/output networks. The variance of this variable can help assess the risk when shaping the chain length and optimize the level of production. Contrary to what might be expected simply on the basis of comparative advantage, the results reveal that both the input and output chains exhibit the same quasi-stationary product distribution. Put differently, the expected proportion of time spent in a state before absorption is invariant to changes of the network type. Finally, the several global metrics proposed here, including the probability distribution of global value added/final output, provide guidance for policy makers when estimating the resilience of world trading system and forecasting the macroeconomic developments. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2003.05204&r=all |
| By: | Cullen S. Hendrix (Peterson Institute for International Economics) |
| Abstract: | The Trump administration’s Africa strategy is rooted in three misconceptions about China’s African footprint—and a fourth about US-Africa economic relations—that are either factually incorrect or overstated in terms of the broader strategic challenges they pose to US interests: (1) Chinese engagement in Africa crowds out opportunities for trade and investment with and from the United States; (2) Chinese engagement in Africa is resource-seeking—to the detriment of US interests; (3) Chinese engagement in Africa is designed to foster debt-based coercive diplomacy; and (4) US-Africa economic linkages are all one-way and concessionary (i.e., aid-based). Hendrix finds little evidence to suggest Chinese trade and investment ties crowd out US trade and investment opportunities. China’s resource-seeking bent is evident in investment patterns, but it is more a function of Africa’s having comparatively large, undercapitalized resource endowments than China’s attempt to corner commodity markets. Chinese infrastructural development—particularly large projects associated with the Belt and Road Initiative—may result in increased African indebtedness to the Chinese, but there is little reason to think debt per se will vastly expand Chinese military capacity in the region. And finally, US-Africa economic relations are much less one-sided and concessionary (i.e., aid-based) than conventional wisdom suggests. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb20-03&r=all |
| By: | Laborde,David; Lakatos,Csilla; Martin,William J. |
| Abstract: | In the event of large swings in world food prices, countries often intervene to dampen the impact of international food price spikes on domestic prices and to lessen the burden of adjustment on vulnerable population groups. While individual countries can succeed at insulating their domestic markets from short-term fluctuations in global food prices, the collective intervention of many countries may exacerbate the volatility of world prices. Insulating policies introduced during the 2010-11 food price spike may have accounted for 40 percent of the increase in the world price of wheat and one-quarter of the increase in the world price of maize. Combined with government policy responses, the 2010-11 food price spike tipped 8.3 million people (nearly 1 percent of the world's poor) into poverty. |
| Keywords: | Inequality,International Trade and Trade Rules,Food Security,Macroeconomic Management,Nutrition |
| Date: | 2019–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8724&r=all |