|
on International Trade |
| By: | Julien Martin (UQAM - Université du Québec à Montréal = University of Québec in Montréal); Alejandra Martinez (University of Warwick [Coventry]); Isabelle Mejean (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique) |
| Abstract: | More than three years after the unexpected Brexit vote of June 2016, there is still no exit agreement between the United Kingdom and the European Union. Although the conditions of Brexit and the corresponding economic consequences are still unknown, the referendum has already had a real economic impact. The long discussion surrounding Brexit can be seen as a long-lasting uncertainty shock, whiach has affected firms' investment decisions. In this note we use highly detailed customs data before and after the vote to measure the impact of Brexit on French firms' exports to the UK. We find that the referendum had no effect on average on the value of exports but depressed export growth in sectors such as transportation or chemical industries which are more upstream in value chains. The number of new trade relationships involving French exporters and British importers has significantly declined after the Brexit vote, in comparison with other destinations. This is consistent with the uncertainty shock reducing French firms' investment in their customer base, which is likely to penalize French exporters in the future. These results are suggestive evidence that uncertainty has a real cost and that any decision of delaying the Brexit further should compare the benefit of reaching a better deal with the economic cost induced by uncertainty. It is also important that the next EU-UK trade agreement should guarantee the stability and predictability of the trade policy that European exporters will have to face. |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02515757&r=all |
| By: | Poupakis,Stavros |
| Abstract: | This study examines whether foreign direct investment inflows facilitate upgrading of export quality in host countries. The analysis focuses on the Russian Federation and uses customs data merged with firm-level information from Orbis. The results show a positive relationship between the quality of products exported by domestic firms and the presence of foreign affiliates in the upstream (input-supplying) industries. This relationship is present irrespective of export destination or foreign direct investment origin. The results are robust to using different proxies to measure product quality. |
| Date: | 2020–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9201&r=all |
| By: | Bekkers, Eddy; Schroeter, Sofia |
| Abstract: | This paper provides an economic analysis of the trade conflict between the US and China, providing an overview of the tariff increases, a discussion of the background of the trade conflict, and an analysis of the economic effects of the trade conflict, based both on empirics (ex post analysis) and on simulations (ex ante analysis). Bilateral tariffs have increased on average to 17% between the US and China, and the Phase One Agreement signed in January 2020 between the two countries only leads to minor reductions in the tariffs to 16%. The trade conflict has led to a sizeable reduction in trade between the US and China in 2019 and is accompanied by considerable trade diversion to imports from other regions, leading to a reorganization of value chains in (East) Asia. The simulation analysis shows that the direct effects of the tariff increases on the global economy are limited (0.1% reduction in global GDP). The impact of the Phase One Agreement on the global economy is even smaller, although the US is projected to turn real income losses into real income gains because of the Chinese commitments to buy additional US goods. The biggest impact of the trade conflict is provoked by rising uncertainty about trade policy and the paper provides a framework to analyze the uncertainty effects. |
| Keywords: | Trade conflict,Economic simulations,Trade effects of tariffs |
| JEL: | F12 F13 F14 F17 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd202004&r=all |
| By: | Alexander Knobel; Andrey Lipin; Andrey Malokostov; David G. Tarr; Natalia Turdyeva |
| Abstract: | We assess deep integration in the Eurasian Economic Union (EAEU) through the reduction of time in trade costs, the reduction of non-tariff barriers in goods and the liberalization of barriers against foreign suppliers of services. We develop an innovative multi-region model of trade and FDI for preferential trade analysis where we incorporate Dixit-Stiglitz endogenous productivity effects from trade and FDI liberalization. This model produces important differences compared with a perfect competition model. We build on numerous surveys and econometric estimates of the trade and FDI barriers in our focus countries that we helped develop. We show that if the EAEU effectively implements its objectives for trade cost reduction, it would lead to significant welfare gains of between 0.8 to 4.8 percent of consumption, depending on the country. If these deep integration measures are extended to third countries, either by a wider liberalization effort or by spillovers, then the estimated welfare gains increase between 2.5 and 4.5 times for Belarus, Kazakhstan and the Russian Federation. Using the neoclassical model of labor migration, we estimate that the right to legally work in the Russian Federation is approximately of equal value to Armenia as the combined aspects of the reduction of trade costs, including FDI liberalization. Our estimates show that all the spillovers are beneficial to all the EAEU countries. Among the various reforms under consideration, we identify which reform is most important for each EAEU member country; and we identify whether the European Union, China or the United States is the most important external region for each member country if the reforms are extended to third countries. |
| Keywords: | Eurasian Economic Union; deep integration; foreign direct investment; services liberalization; preferential trade agreements; endogenous productivity effects. |
| JEL: | F12 F14 F15 F17 F55 O52 O53 C63 C68 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps41&r=all |
| By: | Mirdala, Rajmund; Semančíková, Jozefína; Ruščáková, Anna |
| Abstract: | Current account imbalances and their sustainability in the European Union member countries has been examined in the recent empirical literature since the establishment of the Euro Area. Deeper trade integration within the European Union is generally beneficial. However, international frag-mentation of production resulting from emergence of global value chains deepens external imbalances due to persisting differences in macroeconom-ic performance among member countries. The main objective of the paper is to examine effects of price and non-price determinants of exports and imports in 21 European Union member coun-tries. We have estimated the determinants of export and import demand functions in the 21 European Union member countries. Our results indicate the high role of imports in aggregate export functions, while aggregate functions indicated a high contribution of domestic demand to the imports dynamics. Disaggregated analysis revealed the importance of intermediates in the external trade within and outside the European Union from territorial and commodity aspects. |
| Keywords: | current account, external balance, export, import, global value chains |
| JEL: | F13 F41 H62 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99535&r=all |
| By: | Ayman El Dahrawy Sánchez-Albornoz (CEMFI); Jacopo Timini (Banco de España) |
| Abstract: | This study analyses the process of economic integration in Latin America. Making use of a structural gravity model, this paper provides an ex-post assessment of the effect of the trade agreements (TAs) signed by Latin American countries on international trade. We account for the last wave of TAs proliferation and estimate treaty level effects. On average, TAs had a positive effect on Latin American trade. This holds true for both intra-Latin American agreements and agreements between Latin American countries and the rest of the world. However, we unveil that these average estimates cover a substantial degree of heterogeneity across TAs. Additionally, we quantify ex-ante general equilibrium effects on the trade volumes and welfare of Latin American countries under different scenarios of deeper integration. |
| Keywords: | international trade, trade agreements, Latin America, welfare effects |
| JEL: | F13 F14 F15 O54 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2009&r=all |
| By: | MAKIOKA Ryo |
| Abstract: | The paper analyzes the effects of attending trade fairs on exports, foreign direct investments (FDI), and service outsourcing, using Japanese firm-level data on both performances and trade-fair participation. To solve self-selection problem, I utilize a difference-in-differences matching estimation approach with unique firm characteristics, as well as a linear estimation approach with paired fixed-effects. The results show that there are positive effects of attending trade-fairs on exporting status. Additionally, the positive results are mainly associated with attending trade fairs in geographically and culturally farther markets such as Europe or the U.S., but not from attending the nearest markets, such as Asian countries or China. Furthermore, attending a trade fair induces firms to outsource their market research activity. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20007&r=all |
| By: | Stender, Frederik; Berger, Axel; Brandi, Clara; Schwab, Jakob |
| Abstract: | This study provides early ex-post empirical evidence on the effects of provisionally applied Economic Partnership Agreements (EPAs) on two-way trade flows between the European Union (EU) and the African, Caribbean and Pacific Group of States (ACP). Employing the gravity model of trade, we do not find a general EPA effect on total exports from ACP countries to the EU nor on total exports from the EU to ACP countries. We do, however, find heterogeneous effects when focusing on specific agreements and economic sectors. While the agreement between the EU and the Caribbean Forum (CARIFORUM), which concluded several years ahead of the other EPAs in 2008, if anything, reduced imports from the EU overall, the provisional application of the other EPAs seems to have at least partly led to increased imports from the EU to some partner countries. More specifically, the estimation results suggest an increase in the total imports from the EU only in the Southern Africa Development Community (SADC) EPA partner countries. On the sectoral level, by comparison, we find increases in the EU's agricultural exports to SADC, Eastern and Southern Africa (ESA) and the Pacific. Lastly, in the area of manufactures trade, we find decreases of exports of the ESA and SADC countries to the EU, but increases in imports from the EU into SADC countries. While this early assessment of the EPA effects merits attention given the importance of monitoring future implications of these agreements, it is still too early for a final verdict on the EPAs' effects and future research is needed to investigate the mid- and long-term consequences of these agreements. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:72020&r=all |
| By: | Miao, Zhuang; Li, Yifan; Duan, Sisong |
| Abstract: | In this paper, we investigate the relation between the export patterns and the income inequality of the destination countries using the Chinese firm-level data. Our empirical analysis finds two main results: (i) export price decreases in the income inequality of the destination countries; while (ii) the exporting firm number and export value will increase in the inequality level. With a conventionally theoretical framework, we discuss the potential influencing mechanism. A higher income inequality leads to higher share of poor consumers in a country, which will lower the quality threshold for Chinese exporters. In this case, the firms with less competitive and producing low quality products are able to enter this market. As a result, we observe that in response to a higher income inequality, more firms enter the market while the exporting price decreases in this market. |
| Keywords: | Income Inequality; Trade Patterns; Chinese Firm-level Data |
| JEL: | F12 F14 L11 |
| Date: | 2020–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99441&r=all |
| By: | Alessandro Sforza; Marina Steininger |
| Abstract: | The economic effects of a pandemic crucially depend on the extend to which countries are connected in global production networks. In this paper we incorporate production barriers induced by COVID-19 shock into a Ricardian model with sectoral linkages, trade in intermediate goods and sectoral heterogeneity in production. We use our model to quantify the welfare effect of the disruption in production that started in China and then quickly spread across the world. We find that the COVID-19 shock has a considerable impact on most economies in the world, especially when a share of the labor force is quarantined. Moreover, we show that global production linkages have a clear role in magnifying the effect of the production shock. Finally, the economic effects of the COVID-19 shock are heterogeneous across sectors, regions and countries, depending on the geographic distribution of industries in each region and country and their degree of integration in the global production network. |
| Keywords: | COVID-19 shock, globalization, production barrier, sectoral interrelations, computational general equilibrium |
| JEL: | F10 F11 F14 F60 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8184&r=all |
| By: | INADA Mitsuo; JINJI Naoto |
| Abstract: | This study proposes an empirical strategy to identify the impact of policy uncertainty (PU) at the sector level on foreign direct investment (FDI) by exploiting plausibly exogenous exemptions from certain obligations such as national treatment and most favored nation treatment in International Investment Agreements (IIAs). To this end, the study evaluates at the micro-data level how activities of Japanese multinational enterprises (MNEs) and their foreign affiliates are affected by Japan's forming 22 IIAs, including both Bilateral Investment Treaties (BITs) and Economic Partnership Agreements (EPAs) with investment provisions, during the period 1995-2016.Our empirical strategy relies on differences in the changes of PU that MNEs and their foreign affiliates face after an IIA entered into force, depending on whether their sectors are exempted from certain obligations in the IIA or not.We find evidence that PU actually matters for FDI. In particular, we find that signing an IIA stimulates FDI, which is measured by capital investment by foreign affiliates, through a reduction in PU, although the impact depends on the content of the IIA. We also find that an IIA may affect MNEs' FDI to the partner economy in their global FDI strategy. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20022&r=all |
| By: | Gerald Gracius Y. Pascua (Department of Economics, Ateneo de Manila University) |
| Abstract: | In the midst of the Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) global pandemic, rice exporter Viet Nam is mulling suspension of their rice exports. Should the Philippines, as one of the world’s biggest rice importers, worry about its rice stock? If one will consider the dynamics of rice trade in the region, the country should not fear as much about supply yet. A more significant concern in the foreseeable future; however, will be the resulting increase of prices in the global market as demand picks up. In the extreme case that Viet Nam halts its exports for the rest of the year and the Philippines imports an additional 0.3 MMT as proposed by the Department of Agriculture, the market shocks may contribute to an estimated 43 percent increase in the price of milled rice this year. The Philippines has to consider further diversifying its import sources by tapping other rice exporters in the region in order to emerge with a stronger trade position after this pandemic. |
| Keywords: | export restriction, trade diversification, international trade, rice, SARS-CoV-2, ASEAN |
| JEL: | F13 F15 Q17 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:agy:dpaper:202004&r=all |
| By: | Willem THORBECKE; Nimesh SALIKE; CHEN Chen |
| Abstract: | Tariffs, currency wars, and protectionism pose risks for Chinese firms. In theory, tariffs and exchange rates exert equivalent effects on export volumes. In practice, tariffs deter trade more than appreciations. This paper estimates exchange rate elasticities for China's four-digit export categories, and uses these to infer lower bounds for the impact of tariffs on exports. The results indicate the China's flagship industries such as electronics and machinery are exposed to exchange rate appreciations and tariffs. The paper then considers how China can promote freer trade to mitigate risks and reduce uncertainty. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20011&r=all |
| By: | Martínez-Zarzoso, Inmaculada; Voicu, Anca M.; Vidovic, Martina |
| Abstract: | This paper focuses on the 2004 enlargement of the European Union to the East and treats it as a natural experiment to investigate two issues: first, whether there has been a trade creation effect in final and intermediate goods and second, to what extent this effect has been more pronounced for final or for intermediate goods. Using difference-in-differences analysis, we find that the effect of the 2004 EU enlargement has been positive for both intermediate and final goods trade, and it is in general greater for final goods. Using a generalized gravity model of trade that controls for the multilateral resistance and bilateral time-invariant factors, we estimate an increase in bilateral trade of 28% for final goods and 24% for intermediates. However, the effects are heterogeneous by sub-sector and indicate that the main trade gains were for non-durable consumer goods and food and beverages primary and processed products. |
| Keywords: | difference-in-differences,CEECs,EU accession,production networks |
| JEL: | F14 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:390&r=all |
| By: | MATSUURA Toshiyuki; ITO Banri; TOMIURA Eiichi |
| Abstract: | This paper examines the impact of input-output linkages on intra-firm trade based on affiliate-level data of Japanese multinationals (MNEs). We find that MNE parents tend to trade relatively more with their affiliates in vertically linked sectors if they trade goods with low contractibility, especially with affiliates located in East Asia, which is the major developing-country destination for Japanese MNEs. This result indicates that input-output linkage is a significant determinant of intra-firm trade when the trade is affected by contractual frictions. We also confirm that intra-firm trade is observed only in a limited fraction of affiliates. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20026&r=all |
| By: | Ferliana, Nikita |
| Abstract: | International Trade of Rattan Industry in Indonesia: Global Value Chain, Absolute and Comparative Advantage |
| Date: | 2020–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:qjt4w&r=all |
| By: | Smith, S. Aaron; Menard, Jamey; English, Burton C. |
| Abstract: | Agricultural producers face numerous production and price uncertainties. International trade disruptions can exacerbate issues for producers. In 2018, as a result of escalating trade tensions between the U.S. and China, both countries imposed tariffs on various imports. China’s tariffs have largely focused on U.S. agricultural commodities and products, specifically soybeans, creating an uncertain marketing environment that affects soybean producers’ income expectations for 2018. Due to tariffs on soybeans, the Trump administration announced payments to producers through the Market Facilitation Program (MFP) (Best, Smith and Muhammad, 2018). Soybean MFP payments are designed to partially offset decreases in soybean producer income as a result of the Chinese tariffs. This article estimates the economic impact of decreased soybean prices, due to tariffs, and soybean MFP payments on 2018 soybean producer income and regional economies in Tennessee. |
| Keywords: | Crop Production/Industries, International Relations/Trade, Marketing, Risk and Uncertainty |
| Date: | 2018–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:utaeer:302952&r=all |
| By: | Giancarlo Corsetti; Meredith Crowley; Lu Han |
| Abstract: | Using administrative data on export transactions, we show that UK firms invoice in multiple currencies — even when shipping the same product to the same destination — and switch invoicing currencies over time. We then provide microeconometric evidence that the currency in which a cross-border sale is invoiced predicts systematic differences in exchange rate pass-through and destination-specific markup adjustment, at the granular level of firm-productdestination and time. Based on an event study around the 2016 Brexit depreciation and econometric analysis of a longer period (2010-2017), we examine the export price elasticity to the exchange rate measured in sterling to find that this is low for transactions invoiced in producer currency and comparably high for sales invoiced either in a vehicle or in the destination market currency. However, our analysis of markup elasticities reveals that firms price-to-market only when they invoice sales in the destination market currency. Altogether, our findings imply that currency movements may cause significant short-run deviations from the law of one price not only across but also within borders; these are systematically linked to the firm’s choice of invoicing currencies. Dynamically, we find that the stark differences in price changes across invoicing currencies that emerged in the aftermath of the Brexit depreciation atrophied within six quarters, as all prices came to align broadly with the weaker pound. These findings enrich our understanding of the ‘international price system’ underpinning the international transmission of shocks (Gopinath (2015)), with crucial implications for open macro modelling and policy design. |
| Keywords: | exchange rates, pass through, law of one price, markup elasticity, vehicle currency, dominant currency, firm level data |
| JEL: | F31 F41 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:liv:livedp:202007&r=all |
| By: | Hoedoafia, Mabel Akosua |
| Abstract: | The private sector is deemed as an engine of growth. As such, many developing countries including Ghana have sought to develop the private sector to propel the growth of their economies. This notwithstanding, much has not been done to examine the effects of such efforts on the productivity of firms in relation to trade reforms in the context of the private sector. This paper contributes to the trade literature by examining how tariffs affect the productivity of manufacturing firms in Ghana’s private sector using firm-level data from 1991 to 2001. In the first step, productivity is estimated via the Levisohn-Petrin approach in order to correct for the well-known simultaneity and selection biases. In the second step, the effect of tariffs on the derived productivity is analysed. The findings suggest that lower tariffs are associated with a decline in the productivity of Ghanaian private firms in the manufacturing sector. |
| Keywords: | tariffs, productivity, trade liberalization, private sector, manufacturing |
| JEL: | D24 F10 F13 F14 F61 L25 |
| Date: | 2020–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99568&r=all |
| By: | Muhammad, Andrew; Smith, S. Aaron; MacDonald, Stephen |
| Abstract: | In this report, we discuss the implications of the U.S.-China trade war on the U.S. cotton sector. We further discuss developments in global cotton markets over the last decade, such as the increase in global yarn trade and China’s demand for primary processing by foreign countries. It appears that global trends over the last decade might have lessened the impact of China’s retaliatory tariffs on the U.S. cotton sector. However, recent data suggest that the U.S. cotton sector has still been disadvantaged relative to other cotton-exporting countries. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2019–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:utaeer:302736&r=all |
| By: | Uri Dadush; Marta Domínguez-Jiménez; Tianlang Gao |
| Abstract: | China and the European Union have an extensive and growing economic relationship. The relationship is problematic because of the distortions caused by China’s state capitalist system and the diversity of interests within the EU’s incomplete federation. More can be done to capture the untapped trade and investment opportunities that exist between the parties. China’s size and dynamism, and its recent shift from an export-led to a domestic demand-led growth model,... |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:33353&r=all |
| By: | NI Bin; KATO Hayato; LIU Yang |
| Abstract: | Firms create new jobs while removing old jobs to achieve optimal performance. During the process, overseas foreign direct investment can play an important role. On the one hand, foreign expansion can reduce the funds available to be spent domestically, which leaves less room for domestic employment. On the other hand, activities of FDI can contribute to more technical progress and higher productivity, which help to create more new jobs or alleviate the destruction of existing jobs. This study uses a unique dataset of Japanese firms' overseas activities to examine the individual effects of outward FDI on domestic job creation (JC) and job destruction (JD) respectively. The results indicate that FDI into Asian countries is associated with an increase in JC while FDI to European and North American countries leads to a decrease in JC; JD decreases regardless of FDI destination. We further show that the reallocation patterns are closely related to different purposes of FDI, namely vertical and horizontal ones, varying across industries and destinations. We then rationalize the findings by applying a search-and-matching model which illustrates the mechanism explaining why vertical and horizontal FDI have different impact on domestic JC and JD. The findings provide evidence that going abroad does not necessarily lead to increasing unemployment at home. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20008&r=all |
| By: | Elie Gerschel (IPP - Institut des politiques publiques, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Alejandra Martinez (IPP - Institut des politiques publiques); Isabelle Mejean (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, IPP - Institut des politiques publiques) |
| Abstract: | Before spreading globally, the Covid-19 epidemic was concentrated in the Hubei province. To contain the spread of the virus, the Chinese government has imposed quarantine measures and travel restrictions, entailing the slowdown of economic activity. We study the propagation of this geographically concentrated productivity slowdown to the global economy, through global value chains. Reliance on Chinese inputs has dramatically increased since the early 2000s. As a consequence, most countries are exposed to the Chinese productivity slowdown, both directly through their imports of Chinese inputs and indirectly, through other inputs themselves produced with some Chinese value added. This note aims at quantifying the total exposure of France compared to other countries. First, we compute the share of Chinese value added in French production. Then, we use data at the country and sector levels to quantify the impact of travel restrictions on French GDP. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02515364&r=all |
| By: | ITO Tadashi; TANAKA Ayumu |
| Abstract: | The standard firm heterogeneity model of FDI considers the case of whole ownership of foreign affiliates. However, there exist many partially-owned foreign affiliates. This paper builds a model based on Helpman et al. (2004) to allow various ownership structures and posits some testable hypotheses on the relationship between productivity and ownership shares/structures. The empirical part corroborates these hypotheses, showing that high productivity firms have higher ownership share in their affiliates and lower productivity firms tend to opt for joint-ventures with wholesalers and/or local/3rd country partners. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20017&r=all |
| By: | Emara, Noha; El Said, Aya |
| Abstract: | Using dynamic panel System GMM for 24 EMs over the period 1990-2014, we analyze how changes in sovereign ratings affect FDI inflows to EMs. The study also estimates the contagion effect of a ratings change among any of the BRICS countries on three regions, Europe, the Middle East, and Africa (EMEA) and Latin America and Asia. Third, we estimate the impact of a ratings change on FDI inflows in the presence of two types of crises, the 2007-2009 global financial crisis as well as country-specific crises. The results suggest that sovereign ratings have a statistically significant impact on the flow of FDI to EMs and that the BRICS countries as a bloc exert a statistically significant contagion impact on the FDI inflows into the three regions examined. We also find that the impact of a sovereign ratings change on FDI inflows increases in crisis times, both country-specific, as well as the global financial crisis. |
| Keywords: | Sovereign Rating; Capital Flows; System GMM; Foreign Direct Investment; Emerging Markets |
| JEL: | N20 O16 O43 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94504&r=all |
| By: | Emara, Noha; El Said, Ayah |
| Abstract: | Using dynamic panel System GMM for 24 EMs over the period 1990-2018, we analyze how changes in sovereign ratings affect FDI inflows to EMs. The study also estimates the contagion effect of a ratings change among any of the BRICS countries on three regions, Europe, the Middle East, and Africa (EMEA) and Latin America and Asia. Third, we estimate the impact of a ratings change on FDI inflows in the presence of two types of crises, the 2007-2009 global financial crisis as well as country-specific crises. The results suggest that sovereign ratings have a statistically significant impact on the flow of FDI to EMs and that the BRICS countries as a bloc exert a statistically significant contagion impact on the FDI inflows into the three regions examined. We also find that the impact of sovereign ratings change on FDI inflows increases in crisis times, both country-specific, as well as the global financial crisis. |
| Keywords: | Sovereign Rating; Capital Flows; System GMM; Foreign Direct Investment; Emerging Markets |
| JEL: | N2 O16 O43 |
| Date: | 2019–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99254&r=all |
| By: | Davide Castellani (Henley Business School, University of Reading, UK); Giovanni Marin (Department of Economics, Society, Politics, University of Urbino, Italy; SEEDS); Sandro Montresor (Gran Sasso Science Institute, Italy); Antonello Zanfei (Department of Economics, Society, Politics, University of Urbino, Italy) |
| Abstract: | The paper builds on (eco-)innovation geography and international business studies to investigate the effects of MNEs on regional specialisation in green technologies. Combining the OECD-REGPAT and the fDi Markets datasets with respect to 1,050 European NUTS3 regions over the period 2003-2014, we find that MNEs can positively impact on regions’ specialisation in environmental technologies, when their Foreign Direct Investments (FDIs) occur in industries with a green technological footprint. The effect of green FDIs is further reinforced if they involve R&D activities. We also find that the relatedness of environmental technologies to pre-existing regional specialisations exerts a negative moderating effect on the role of green R&D FDIs in shaping patterns of specialisation. In particular, green R&D FDIs have a larger effect in regions whose prior knowledge base is highly unrelated to environmental technologies. This result is consistent with the idea that MNEs inject the host region with external knowledge, which makes the development of green-technologies less place-dependent. |
| Keywords: | green regional specialisation; MNEs; FDIs; environmental innovation |
| JEL: | O31 O33 R11 R58 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0620&r=all |
| By: | Mohammad Reza Farzanegan (Philipps-University Marburg); Mehdi Feizi (Ferdowsi University of Mashhad); Hassan F. Gholipour (Swinburne University of Technology) |
| Abstract: | The purpose of this study is to examine the relationship between globalization, Coronavirus Disease 2019 (COVID-19) cases, and associated deaths in more than 100 countries. Our ordinary least squares multivariate regressions show that countries with higher levels of socio-economic globalization are exposed more to COVID-19 outbreak. Nevertheless, globalization cannot explain cross-country differences in COVID-19 confirmed deaths. The fatalities of coronavirus are mostly explained by cross-country variation in health infrastructures (e.g., share of out of pocket spending on health per capita and the number of hospital beds) and demographic structure (e.g., share of population beyond 65 years old in total population) of countries. Our least squares results are robust to controlling outliers and regional dummies. This finding provides the first empirical insight on the robust determinants of COVID-19 outbreak and its human costs across countries. |
| Keywords: | COVID-19; globalization; public health |
| JEL: | I12 I18 I15 F63 F68 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202018&r=all |
| By: | Zsolt Darvas |
| Abstract: | Our analysis of public opinion in EU countries shows that support for globalisation, free trade and immigration, is on the rise. EU public opinion on these issues does not differ greatly from the rest of the world. Our panel-model estimates for EU countries from 2009 to 2019 find a strong association between the unemployment rate and the prevailing view on whether globalisation is an opportunity for economic growth. A regression... |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:34524&r=all |
| By: | Alicia García-Herrero; Jianwei Xu |
| Abstract: | This paper was prepared for the seminar ‘Trade relations between the EU, China and Russia’, co-organised by the delegation of the European Union to Russia and Bruegel with the support of the EU Russia Expert Network on Foreign Policy (EUREN). The seminar was funded by the European Union. The content of this paper is the sole responsibility of the author and does not represent the official position of the European... |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:33317&r=all |
| By: | Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The global economy is currently experiencing a new wave of technological change involving new technologies, especially in the realm of artificial intelligence and robotics, but not limited to it. One key concern in this context is the consequences of these new technologies on the labour market. This paper provides a comprehensive analysis of the direct and indirect effects of the rise of industrial robots and productivity via international value chains on various industrial indicators, including employment and real value added. The paper thereby adds to the existing empirical work on the relationship between technological change, employment and industrial growth by adding data on industrial robots while controlling for other technological advancements measured by total factor productivity (TFP). The results indicate that the overall impact of the installation of new robots did not statistically affect the growth of industrial employment during the period 2000–2014 significantly, while the overall impact on the real value added growth of industries in the world was positive and significant. The methodology also allows for a differentiation between the impact of robots across various industries and countries based on two different perspectives of source and destination industries across global value chains. Disclaimer This is a background paper for the UNIDO Industrial Development Report 2020. Industrializing in the digital age. |
| Keywords: | Robotisation, digitalisation, global value chains, total factor productivity, industrial growth, employment, value added |
| JEL: | D57 J21 L16 O14 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:177&r=all |
| By: | NAKAMURA Tsuyoshi; OHASHI Hiroshi |
| Abstract: | This paper empirically examines the role of imports in the assessment of domestic mergers. It constructs and estimates a structural model of demand and supply to describe Japan's copper tube, taking an explicit account of cross-border transactions. Obtained simulation results show that the merger would have raised domestic price significantly, implying that import pressure was not as significant as was considered at the time of the merger. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20013&r=all |
| By: | Maliszewska,Maryla; Mattoo,Aaditya; Van Der Mensbrugghe,Dominique |
| Abstract: | The virus that triggered a localized shock in China is now delivering a significant global shock. This study simulates the potential impact of COVID-19 on gross domestic product and trade, using a standard global computable general equilibrium model. It models the shock as underutilization of labor and capital, an increase in international trade costs, a drop in travel services, and a redirection of demand away from activities that require proximity between people. A baseline global pandemic scenario sees gross domestic product fall by 2 percent below the benchmark for the world, 2.5 percent for developing countries, and 1.8 percent for industrial countries. The declines are nearly 4 percent below the benchmark for the world, in an amplified pandemic scenario in which containment is assumed to take longer and which now seems more likely. The biggest negative shock is recorded in the output of domestic services affected by the pandemic, as well as in traded tourist services. Since the model does not capture fully the social isolation induced independent contraction in demand and the decline in investor confidence, the eventual economic impact may be different. This exercise is illustrative, because it is still too early to make an informed assessment of the full impact of the pandemic. But it does convey the likely extent of impending global economic pain, especially for developing countries and their potential need for assistance. |
| Date: | 2020–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9211&r=all |
| By: | Gianluca Orefice; Giovanni Peri |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8174&r=all |
| By: | Leonardo Cadamuro; Francesco Papadia |
| Abstract: | To evaluate the process of European market integration – or market Europeanisation – over the last few decades, we assess intra-European trade and intra-European capital flows. Useful comments were received from Emmanuel Mourlon-Druol, Guntram Wolff, Zsolt Darvas, Simone Tagliapietra, Grégory Claeys, Enrico Bergamini and Maria Demertzis. Our results show that, measured by our proxies, policy Europeanisation has developed more rapidly than market Europeanisation, measured on the basis of both trade... |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:33963&r=all |
| By: | Shimaa Elkony; Hilary Ingham; Robert Read |
| Abstract: | This paper investigates the domestic productivity and spillover effects of foreign technology and embodied R&D on Egyptian manufacturing industries, 2003 to 2009. It also analyses the heterogeneous sectoral effects of technology transfer by focusing specifically on the productivity effects on highly internationalised and technology intensive industries. These are expected to have greater absorptive capacity with respect to foreign technology and therefore greater productivity effects because of their greater exposure to foreign competition and greater technological capacity respectively. The study is the first to analyse the efficiency effects of foreign technology by classifying industries in this manner. The study finds that foreign technology and embodied R&D have positive and significant industry-specific effects on domestic productivity and TFP in technology intensive industries but these are weaker in internationally-oriented industries. The findings suggest that only the technological intensive industries in Egypt have sufficient absorptive capacity to assimilate foreign technology effectively. The paper’s findings highlight the key role of foreign technology in domestic productivity growth, subject to the absorptive capacity of the domestic labour force, and the need for improved policies to promote the domestic benefits of technology transfer through the accumulation of local technological competences. |
| Keywords: | Foreign Technology, International R&D, Industrial Productivity, Trade |
| JEL: | D24 L60 O30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:293574925&r=all |
| By: | Ramadhanty, Shafitri Arindya |
| Abstract: | This article provides a perspective of the Indonesian rattan industry in terms of comparative advantage and the Global Value Chain. |
| Date: | 2020–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:8e9h5&r=all |
| By: | Marta Domínguez-Jiménez; Niclas Poitiers |
| Abstract: | This Policy Contribution is a version of a paper prepared for ‘Russian economy at the crossroads- how to boost long-term growth?’, a seminar co-organised by the Delegation of the European Union to Russia and Bruegel, with the support of the EU Russia Expert Network on Foreign Policy. The seminar was funded by the European Union. The content of this paper does not represent the official position of the European Union.... |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:34768&r=all |
| By: | Freistein, Katja; Gadinger, Frank; Unrau, Christine |
| Abstract: | In this paper, we ask how exactly right-wing populists make anti-globalization appealing. We follow the growing interest in the ambivalent features of populist language and performances by suggesting a methodological framework around narratives, metaphors, and emotions. We argue that right-wing populists skillfully present abstract phenomena of globalization and translate them to individual experiences of 'ordinary people'. Metaphors play a crucial role in populist storytelling as they make sense of a complex reality through imagery. They mobilize collective emotions and reach a wider audience through a high degree of linguistic adaptability and normative ambiguity. We demonstrate these narrative operations using two recent cases of 'successful' right-wing populist, anti-globalization storytelling, which build on strong metaphors. One is the metaphor of the 'House', used by former Italian Deputy Prime Minister and Interior Minister Matteo Salvini, and the other is U.S. President Donald Trump's metaphor of 'The Wall'. We argue that these metaphors are used to create an inside/outside distinction that externalizes threats which are possibly internal (e.g. drug consumption) to a polity (e.g. external drug abuse or organized crime) but can be blamed on globalization through the use of metaphors. What is more, metaphors can be utilized to construct a crisis, which in turn makes it possible for populists to adopt the savior-role of an energetic hero, who alone is able to resolve the supposed crisis. |
| Keywords: | Metaphors,Populist Storytelling,Narrative Analysis,(Anti-)Globalization,Migration |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:khkgcr:24&r=all |
| By: | Anabel González; Nicolas Véron |
| Abstract: | The authors prepared the text of this Working Paper in their personal capacities as a study under a contract with the Greens/EFA Group in the European Parliament. China’s rapid rise and unique economic system, and the United States’ increasingly disruptive trade policy, threaten the global rules-based trade and economic system. The European Union has so far been comparatively spared from the US-China trade war, but must nevertheless safeguard its critical... |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:32427&r=all |
| By: | G. Basevi; F. Delbono; V. Denicolo |
| Abstract: | We analyze games between two countries that use the tariff as a threat to induce each other to follow monetary policies equivalent to those that would obtain under a cooperative game. The analysis shows that under certain assumptions concerning the shares of tariff revenues that the countries spend on imports, the punishment structure, and the discount factors, the outcome of the games converges to a monetary policies. It is suggested that the model could be applaied to current relations between the US, Germany and Japan. |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:40&r=all |
| By: | Chi, Do Quynh |
| Abstract: | The textile and garment industry in Vietnam has achieved fast expansion in terms of production capacity and export value in all three areas of fibre, textile and clothing manufacturing since the early 2000s. However, the growth of the industry has been mainly attributed to the increase of labour and capital rather than economic upgrading. Most of the garment companies in Vietnam are still participating at the lowest value-added sections of global value chains. This report finds little progress in product, functional and sectoral upgrading at the production level. The reasons for the stagnation in economic upgrading originate both in the international buyers' policy to limit technology transfer to protect their business advantage and the lack of an effective industrial policy by the Vietnamese government. Social upgrading has been achieved mostly in the larger, export-oriented firms that are under the scrutiny of international buyers, while the SMEs and household businesses have been plagued with forced overtime, wildcat strikes, and low wages. |
| Keywords: | economic upgrading,social upgrading,global value chains,industrial policy,labour rights,garment industry |
| JEL: | F16 F23 L16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1372020&r=all |
| By: | Devictor,Xavier; Do,Quy-Toan; Levchenko,Andrei A. |
| Abstract: | This paper analyzes the spatial distribution of refugees over 1987-2017 and establishes several stylized facts about refugees today compared with past decades. (i) Refugees today travel longer distances. (ii) Refugees today are less likely to seek protection in a neighboring country. (iii) Refugees today are less geographically concentrated. And (iv) refugees today are more likely to reside in a high-income OECD country. The findings bring new evidence to the debate on refugee burden-sharing. |
| Date: | 2020–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9206&r=all |
| By: | Gräbner, Claudius; Tamesberger, Dennis; Heimberger, Philipp; Kapelari, Timo; Kapeller, Jakob |
| Abstract: | By studying the factors underlying differences in trade performance across European economies, this paper derives six different "trade models" for 22 EU-countries and explores their developmental and distributional implications. We first introduce a typology of trade models by clustering countries based on four key dimensions of trade performance: endowments, technological specialization, labour market characteristics and regulatory requirements. The resulting clusters comprise countries that base their export success on similar trade models. Our results indicate the existence of six different trade models: the "primary goods model" (Latvia, Estonia), the "finance model" (Luxembourg), the "flexible labour market model" (UK), the "periphery model" (Greece, Portugal, Spain, Italy, France), the "industrial workbench model" (Slovenia, Slovakia, Poland, Hungary, Czech Republic), and the "high-tech model" (Sweden, Denmark, Netherlands, Belgium, Ireland, Finland, Germany and Austria). Subsequently, we comparatively analyse the economic development and trends in inequality across these trade models. We observe a shrinking wage share and increasing personal income inequality in most of the trade models. The "high-tech model" is an exceptional case, being characterised by a relatively stable economic development and an institutional setting that managed to counteract rising inequality. |
| Keywords: | Trade policy,cluster analysis,European Union,trade models |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifsowp:3&r=all |
| By: | Francisco Manuel Parejo Moruno (Universidad de Extremadura, çrea de H» e Instituciones Econ—micas, Spain); AmŽlia Branco (GHES/ISEG-Universidade de Lisboa, Portugal); JosŽ Francisco Rangel Preciado (Universidad de Extremadura, çrea de H» e Instituciones Econ—micas, Spain); Esteban Cruz Hidalgo (Universidad de Extremadura, çrea de H» e Instituciones Econ—micas, Spain) |
| Abstract: | The central decades of the twentieth century constituted a radical change in the global hegemony of the cork business, ending the Spanish leadership and starting a period of Portuguese cork hegemony that continues today. In this article, customs policy measures followed by the Iberian dictatorships are analyzed and their effects are also assessed in terms of development of cork manufacturing and productive and commercial specialization of Spain and Portugal in the cork business. It is concluded that the differential nature of these measures in both countries, the greater relevance of the business in Portugal, and consequently the greater attention received by the Estado Novo, and also the greater Portuguese success in customs matters, contributed to the achievement of the Portuguese leadership in the cork manufacturing business. |
| Keywords: | Cork, Cork industry, New State, Francoism, Custom Policy |
| JEL: | N0 N4 N8 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:2004&r=all |
| By: | Saptorshee Kanto Chakraborty (University of Ferrara, Italy); Massimiliano Mazzanti (University of Ferrara; SEEDS, Italy) |
| Abstract: | Carbon taxation has been suggested among the market based policies to tackle climate change since the early 90’s, often associated to ecological tax reforms rationales. Before the advent of emission trading in the EU, some countries introduced forms of carbon taxation, which is still used to deal with non EU ETS sectors. Due to this historical evolution of environmental policies over the last decades, in presence of a ‘federal system’ that assigns to EU countries the governance of energy and fiscal issues, an heterogeneous set of country driven carbon/energy policy settings is present, which can determine effects on growth and trade. We investigate the possible existence of asymmetries among the European Carbon area countries reaction to the policy adoption responsible to combat climate change via carbon usage reduction. |
| Keywords: | carbon taxation, spillovers, trade |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0420&r=all |
| By: | Ben McWilliams; Georg Zachmann |
| Abstract: | The European Green Deal has set a target of reducing European Union carbon emissions by about 40 per cent over the next ten years. Reaching this target is likely to involve a significant increase in carbon prices. Theoretically, higher carbon prices can lead to carbon leakage, or the relocation of industrial activity and its accompanying emissions out of economies with high carbon prices and into economies with low carbon prices.... |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:35218&r=all |