nep-int New Economics Papers
on International Trade
Issue of 2020‒08‒10
fifty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Economic De-integration in North America and Foreign Direct Investment from Japan By Nobuhiro Hosoe
  2. NAFTA to USMCA: What is Gained? By Mary E. Burfisher; Frederic Lambert; Troy D Matheson
  3. The cost of Brexit uncertainty: missing partners for French exporters By Julien Martin; Alejandra Martinez; Isabelle Mejean
  4. The Openness Hypothesis in the Context of Economic Development in Sub-Saharan Africa: The Moderating Role of Trade Dynamics on FDI By Simplice A. Asongu; Joseph Nnanna; Paul N. Acha-Anyi
  5. The impact of Brexit on Africa in times of the Corona Crisis By Kohnert, Dirk
  6. Unravelling Trade Integration: Local Labour Market Effects of the Brexit Vote By Javorcik, Beata; Kett, Benjamin; O'Kane, Layla; Stapleton, Katherine
  7. The Non-Equivalence of Import Tariffs and Export Taxes in Trade Wars: Ad Valorem vs Specific Trade Taxes By Azacis, Helmuts; Collie, David R.
  8. Trade Facilitation and Tariff Evasion By Cosimo Beverelli; Rohit Ticku
  9. Who's Paying for the U.S. Tariffs? A Longer-Term Perspective By Amiti, Mary; Redding, Stephen J.; Weinstein, David E.
  10. Trade Effects of SPS Measures in Regional Trade Agreements By Santeramo, Fabio
  11. Trade Liberalization and Wage Inequality: Evidence from Korea By Juyoung Cheong; SeEun Jung
  13. Markups, Quality, and Trade Costs By Chen, Natalie; Juvenal, Luciana
  14. The impact of Brexit on Africa in times of the Corona Crisis By Kohnert, Dirk
  15. Analysis of the impact of the development of transport infrastructure on foreign trade activities of enterprises By Salimova, Dina (Салимова, Дина); Ponomarev, Yuriy (Пономарев, Юрий)
  16. Human Capitalists and the Global Division of Labor By Jan Schymik
  17. The Reliance of Canadian Imports on the US is Worse Than you Think By Julien Martin; Florian Mayneris
  18. High Order Openness By Jean Imbs; Laurent L. Pauwels
  19. Foreign Ownership, Exporting and Gender Wage Gaps: Evidence from Japanese Linked Employer-Employee Data By Greaney, Theresa; Tanaka, Ayumu
  20. Services Trade Policies and Economic Integration: New Evidence for Developing Countries By Hoekman, Bernard; Shepherd, Ben
  21. Human Capitalists, Reallocation and the Global Division of Labor By Jan Schymik
  22. The Impact of Interwar Protection: Evidence from India By Vellore Arthi; Markus Lampe; Ashwin Nair; Kevin Hjortshøj O’Rourke
  23. Trade From Space: Shipping Networks and The Global Implications of Local Shocks By Heiland, Inga; Moxnes, Andreas; Ulltveit-Moe, Karen-Helene; Zi, Yuan
  24. Trade, global value chains and development: What role for national development banks? By Dünhaupt, Petra; Herr, Hansjörg
  25. Technology-induced Trade Shocks? Evidence from Broadband Expansion in France By Clément Malgouyres; Thierry Mayer; Clément Mazet-Sonilhac
  26. Innovation catalysts: how multinationals reshape the global geography of innovation By Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
  27. Global Risk Sharing through Trade in Goods and Assets: Theory and Evidence By Heiland, Inga
  28. Oil Curse By Majumderad, Monoj Kumar; Raghavan, Mala; Vespignani, Joaquin
  29. COVID-19 and Canadas’ international trade: The situation is already worse than stated in the July’s Canada’s State of Trade 2020 By Julien Martin; Florian Mayneris
  30. Synchronization of globalized economies By Edgar J. Sánchez Carrera; Vanesa Avalos-Gaytán; Yajaira Cardona Valdés
  31. Possible carbon adjustment policies: An overview By Cecilia Bellora; Lionel Fontagné
  32. Settlement Location Shapes Refugee Integration: Evidence from Post-war Germany By Braun, Sebastian T.; Dwenger, Nadja
  33. Analyzing the association between Innovation, Economic Growth, and Environment: Divulging the Importance of FDI and Trade Openness in India By Zameer, Hashim; Yasmeen, Humaira; Zafar, Muhammad Wasif; Waheed, Abdul; Sinha, Avik
  34. Value chain directionality, upgrading, and industrial policy in the Tanzanian textile and apparel sectors By Julian Boys; Antonio Andreoni
  35. The Importance of Terms of Trade Shocks: Kazakhstan By Alisher Tolepbergen
  36. Designing Strategies to Promote Investment of Family Remittances in Value Chains: A Toolkit By -
  37. The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure By Abramitzky, Ran; Ager, Philipp; Boustan, Leah; Cohen, Elior David; Hansen, Casper Worm
  38. Corporate tax revenue and foreign direct investment: Potential trade-offs and how to address them By Laudage, Sabine
  39. Conceptual Aspects of Global Value Chains By Antràs, Pol
  40. Title of Paper: Diversity, Immigration, and Redistribution By Alesina, Alberto F; Stantcheva, Stefanie
  41. How Does Globalisation Affect COVID-19 Responses? By Steve J. Bickley; Ho Fai Chan; Ahmed Skali; David Stadelmann; Benno Torgler
  42. Building malls or metros?: South Africa's exports of tradable urban services to the rest of Africa By Ivan Turok; Justin Visagie
  43. Multinationals, technology transfers and spillovers By Yunyun Wan
  44. Exchange Rates and Consumer Prices: Evidence from Brexit By Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas
  45. Emerging specific issues in mutual recognition of trade standards By Sophie Drogue; Federica Demaria; Maria Rosaria Pupo d'Andrea
  46. Can Global Uncertainty Promote International Trade? By Baley, Isaac; Veldkamp, Laura; Waugh, Michael
  47. Effect of migration on the food security of households left behind: Evidence from Ethiopia By Hamed Sambo
  48. Labour Market Shocks and the Demand for Trade Protection: Evidence from Online Surveys By Di Tella, Rafael; Rodrik, Dani
  49. Trade, Transportation and the Environment By Forslid, Rikard
  50. The impact of offshoring on innovation and productivity: Evidence from Swedish manufacturing firms By Christopher F. Baum; Hans Lööf; Andreas Stephan; Ingrid Viklund-Ros

  1. By: Nobuhiro Hosoe (National Graduate Institute for Policy Studies, Japan)
    Abstract: We investigate the impact of US steel and aluminum tariffs, and the resumption of auto tariffs under the revised North American Free Trade Agreement, on trade in North America and foreign direct investment (FDI) from Japan, from the perspective of the auto industry. The results of policy simulation analyses with a recursive dynamic computable general equilibrium model are as follows. Canada and Mexico would benefit from US steel and aluminum tariffs, being alternative trade partners with both the US and other countries. Due to the auto tariffs on intra- North America exports, Canada and Mexico would lose a large part of the windfall benefits from the US steel and aluminum tariffs. Japan’s FDI in Canada and Mexico would fall sharply. The more de-integrated North American economies become, the more Japan would regain its auto production, although at a painful cost in terms of welfare. That negative welfare impact would be neutralized by abolition of auto tariffs with the US.
    Keywords: Economic de-integration; foreign direct investment; auto industry; computable general equilibrium analysis
    Date: 2020–07
  2. By: Mary E. Burfisher; Frederic Lambert; Troy D Matheson
    Abstract: The United States – Mexico – Canada Agreement (USMCA) was signed on November 30, 2018 and aims to replace and modernize the North-American Free Trade Agreement (NAFTA). This paper uses a global, multisector, computable-general-equilibrium model to provide an analytical assessment of five key provisions in the new agreement, including tighter rules of origin in the automotive, textiles and apparel sectors, more liberalized agricultural trade, and other trade facilitation measures. The results show that together these provisions would adversely affect trade in the automotive, textiles and apparel sectors, while generating modest aggregate gains in terms of welfare, mostly driven by improved goods market access, with a negligible effect on real GDP. The welfare benefits from USMCA would be greatly enhanced with the elimination of U.S. tariffs on steel and aluminum imports from Canada and Mexico and the elimination of the Canadian and Mexican import surtaxes imposed after the U.S. tariffs were put in place.
    Keywords: Economic integration;Trade policy;Patterns of trade;Merchandise trade;Bilateral trade;NAFTA,USMCA,LVC,RVC,U.S. tariff,welfare gain,tariff
    Date: 2019–03–26
  3. 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
  4. By: Simplice A. Asongu (Yaounde, Cameroonj); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria); Paul N. Acha-Anyi (Walter Sisulu University, South Africa)
    Abstract: This study investigates the simultaneous openness hypothesis by assessing the importance of trade openness in modulating the effect of foreign direct investment (FDI) on economic dynamics of gross domestic product (GDP) growth, real GDP and GDP per capita. The focus of the study is on 25 countries in Sub-Saharan Africa over the period spanning from 1980 to 2014. First, trade imports modulate FDI to induce net positive effects on GDP growth and GDP per capita. Second, trade exports moderate FDI to generate overall positive impacts on GDP growth, real GDP and GDP per capita. Implications of the study are discussed, inter alia: (i) both FDI and trade infrastructures are necessary for FDI-focused measures to engender positive economic development outcomes in host communities and countries. (ii) Macroeconomic conditions that are relevant for promoting economic development are necessary for the interactions between trade openness and FDI to generate favorable outcomes in terms of GDP growth, real GDP and GDP per capita.
    Keywords: Economic Output; Foreign Investment; Sub-Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2020–01
  5. By: Kohnert, Dirk
    Abstract: ABSTRACT & RÉSUMÉ: Despite the Corona crisis, London is pushing ahead with the implementation of Brexit. This will have a profound impact not only on the EU but also on Africa. The British government's vision of a reinvigorated 'Global Britain' relies heavily on a reinforced cooperation with Commonwealth Sub-Saharan Africa. Already the temporary closure of manufacturing supply chains between China and the rest of the world because of the pandemic seriously affected economic activity in GB and the EU. However, African commodity exporters such as Nigeria, South Africa, and Kenya will likely bear the brunt of both the direct and indirect effects of this weaker demand. This will add up to the economic effects of the spread of Corona in Africa. Most likely the vulnerable and the poor in Africa's informal sector will have to suffer the most by both health hazards and the economic decline. RÉSUMÉ: Malgré la crise de Corona, Londres poursuit la mise en œuvre du Brexit. Cela aura un impact profond non seulement sur l'UE mais aussi sur l'Afrique. La vision du gouvernement britannique d'une «Grande-Bretagne mondiale» revigorée repose largement sur une coopération renforcée avec l'Afrique subsaharienne du Commonwealth. Déjà, la fermeture temporaire des chaînes d'approvisionnement manufacturières entre la Chine et le reste du monde en raison de la pandémie a sérieusement affecté l'activité économique en GB et dans l'UE. Cependant, les exportateurs africains de matières premières tels que le Nigeria, l'Afrique du Sud et le Kenya supporteront probablement le poids des effets directs et indirects de cette demande plus faible. Cela s'ajoutera aux effets économiques de la propagation de Corona en Afrique. Les personnes vulnérables et pauvres du secteur informel africain devront très probablement souffrir le plus des risques sanitaires et du déclin économique.
    Keywords: Corona, Brexit, Africa, GB, EU, international trade, economic recession, poverty, South Africa, Nigeria, Kenya, African Studies
    JEL: F13 F35 F54 F63 G15 I1 N17 N47 N67 O17 P16 Z13
    Date: 2020–06–17
  6. By: Javorcik, Beata; Kett, Benjamin; O'Kane, Layla; Stapleton, Katherine
    Abstract: This paper uses high frequency data on the near universe of online job adverts in the UK to study the impact of the trade policy uncertainty caused by the Brexit referendum on labour demand between January 2015 and September 2019. It develops measures of regional exposure to the threat of potential most-favoured-nation (MFN) tariffs if the UK were to leave the EU without a trade deal. It shows that regions relatively more exposed to the tariff threat differentially reduced online hiring in the period after the referendum and this effect was distinct from the impact of the exchange rate depreciation, uncertainty surrounding future immigration policy and the financial services sector. Both skilled and unskilled job adverts were affected, with unskilled job adverts experiencing a slightly greater relative decline. Based on newspaper coverage and Google searches, the paper develops two novel time-varying measures of Brexit-specific trade policy uncertainty and shows that the relative decline in job adverts was concentrated in months with greater uncertainty about future trade arrangements with the EU. The study concludes that the threat of unravelling global integration has an important impact on labour markets.
    Keywords: Brexit; Hiring; Labour Demand; online job adverts; trade policy; trade uncertainty
    Date: 2019–12
  7. By: Azacis, Helmuts (Cardiff Business School); Collie, David R. (Cardiff Business School)
    Abstract: Using perfectly competitive, general equilibrium models of international trade, specific import tariffs, specific export taxes, and ad valorem trade taxes are compared in a trade war. A trade war is modelled as a NE in trade policies, where each country can choose to use ad valorem trade taxes (import tariffs or export taxes, which are equivalent), or specific import tariffs, or specific export taxes. In the two-country case, where there is a negative terms of trade externality a specific export tax dominates a specific import tariff or ad valorem trade taxes. Hence, the Lerner Symmetry Theorem does not hold for specific trade taxes in a trade war. This result continues to hold when the model is extended to the case of many countries assuming that there is a negative terms of trade externality. In a trade policy game where two countries export the same good so there is a positive terms of trade externality in the trade policy game between these two countries, the results are reversed with a specific import tariff dominating a specific export tax or ad valorem trade taxes. Hence, again the Lerner Symmetry Theorem does not hold for specific trade taxes in a trade war.
    Keywords: Ad Valorem Trade Tax; Specific Trade Tax; Perfect Competition; General Equilibrium; NE in Trade Taxes; Lerner Symmetry Theorem.
    JEL: F11 F13 C72 D51 H21
    Date: 2020–07
  8. By: Cosimo Beverelli (Economic Research and Statistics Division, World Trade Organization; Robert Schuman Centre for Advanced Studies, European University Institute); Rohit Ticku (Institute for the Study of Religion, Economics and Society, Chapman University)
    Abstract: This paper investigates the extent to which trade facilitation measures included in the WTO Trade Facilitation Agreement affect tariff evasion. In a dataset covering 121 countries and the whole set of HS6 product categories in 2012, 2015, and 2017, the paper shows that trade facilitation measures that improve legal certainty for traders moderate tariff evasion. Holding tariff rate constant at its mean, one standard deviation improvement in trade facilitation measures related to legal certainty reduces tariff evasion, as measured by missing imports in trade statistics, by almost 12%. In a counterfactual with full trade liberalization, countries with higher scores on facilitation measures related to legal certainty experience larger reductions in tariff evasion than countries with lower scores on these measures, even for similar initial tariff rates. We investigate potential channels and show that improving legal certainty is effective in reducing tariff evasion due to under-reporting of import prices and under-reporting of import quantities, as well as in countries with weakest control of corruption.
    Keywords: Tariff; International Trade Agreements; WTO; Tariff Evasion
    JEL: F13 F14 H26
    Date: 2020
  9. By: Amiti, Mary; Redding, Stephen J.; Weinstein, David E.
    Abstract: Using data from 2018, a number of studies have found that recent U.S tariffs have been passed on entirely to U.S. importers and consumers. These results are surprising given that trade theory has long stressed that tariffs applied by a large country should drive down foreign prices. Using another year of data including significant escalations in the trade war, we find that U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers. We show that the response of import values to the tariffs increases in absolute magnitude over time, consistent with the idea that it takes time for firms to reorganize supply chains. We find heterogeneity in the responses of some sectors, such as steel, where tariffs have caused foreign exporters to drop their prices substantially, enabling them to export relatively more than in sectors where tariff passthrough was complete.
    Keywords: Passthrough; tariffs; Trade War
    JEL: F13 F14 F68
    Date: 2019–12
  10. By: Santeramo, Fabio
    Abstract: Trade negotiations in the agri-food sector have resulted in an exponential increase of sanitary and phytosanitary (SPS) measures and a growing diffusion of regional trade agreements (RTAs). The combined trade effects of SPS measures and RTAs are difficult to ascertain: SPS measures may be either catalysts for or barriers to trade; RTAs also have a dual effect on trade, sometime favouring intra-bloc trade (i.e. among the signatories of the RTA), other times enhancing extra-bloc trade (i.e. among signatories and non-signatories of the RTA). Moreover, RTAs increasingly contain specific SPS commitments whose trade effects may vary according to the depth of the provisions. The joint effect of SPS measures and RTAs on trade is therefore an open empirical question. After assessing the general effects of SPS measures on agri-food trade, this study examines potential differences in SPS-specific effects between nonsignatories and signatories of RTAs. The study also explores whether the trade effects of SPS measures change when trading partners establish an RTA. Lastly, the study evaluates the extent to which RTAs go beyond WTO trade liberalization requirements. The results reveal that benefits to signatories of RTAs tend to be reduced by SPS measures that affect indiscriminately all trading partners and are not tailor made for a specific trade relationship. Overall, both SPS measures and RTAs are catalysts for trade. More importantly, if trading partners implement both types of policy interventions in a staggered fashion, the effects of one policy reinforces the impact of the other. RTAs potentially offer more versatile frameworks for negotiating SPS commitments that facilitate trade, creating conditions for signatory countries to satisfy each other’s requirements on adequate levels of safety, thus boosting trade. To conclude, SPS measures and RTAs tend to facilitate market access, the former by setting standards to ensure an adequate level of safety, the latter by setting a more versatile framework for negotiations related to SPS measures. Although the trade potential offered to RTA signatories seems obstructed by nondiscriminatory (multilateral) SPS measures, the entry into force of a trade agreement can help signatories meet stringent standards, further facilitating market access. This is allowed, in particular, by the provision of concrete commitments with respect to SPS measures within RTAs, the most promising of which are mutual recognition of standards and the institution of joint SPS committees to implement technical cooperation between signatories on SPS issues. Moving towards these solutions would stimulate trade among countries.
    Keywords: International Relations/Trade
    Date: 2020–07–01
  11. By: Juyoung Cheong (Kyung Hee University); SeEun Jung (Inha University)
    Abstract: This paper investigates the heterogeneous income distribution effects of trade liberalization using Korean survey data from years of 2000 to 2015. Following the Stolper-Samuelson theorem most of previous research studying the effects of trade liberalization on wage differences focus on workers' characteristics (e.g., skilled or unskilled) while heterogeneity within the same worker group has not been yet substantially investigated. To fill this gap, this paper provides empirical evidence of wage inequality across firms within the same group of workers caused by trade liberalization, potentially implied in the new-new trade models with firm heterogeneity. Employing a difference-in-differences (DID) specification, we find that the wages of unskilled workers in Korea have increased since its FTAs with more advanced countries, such as members of EU and the US, came into effect, while the effects on the wages of skilled workers are negative but not statistically significant. We also show that wage effects are heterogeneous across firms within unskilled and skilled worker groups, while the positive effects are statistically significant and largest for unskilled workers in medium-large sized firms. These findings are in line with both traditional and new-new trade models.
    Keywords: Income inequality, wages, firm heterogeneity, trade liberalization
    JEL: F13 F14 F16
    Date: 2020–08
  12. By: Baptiste Souillard
    Abstract: This paper examines the effect of import competition on corporate tax avoidance. I exploit the rapid surge of China’s exports as a competition shock and balance sheets and income statements to measure tax avoidance of US-headquartered publicly listed manufacturing firms. The baseline results reveal that a 1 percentage point increase in the penetration ratio of US imports from China entails, on average, a 0.20 percentage point decrease in the effective tax rate. They are supported by a series of sensitivity tests and robust to using the US conferral of the Permanent Normal Trade Relations status on China in late 2000 as a quasi-natural experiment. Furthermore, the results are entirely driven by multinational firms. In response to the China shock, these firms invested in intangible assets, and these intangibles allowed them to shift more profits towards low-tax countries. These findings shed light on the determinants of corporate tax avoidance. More generally, they help understand the decline in the average effective tax rate of US publicly listed firms and the recent backlash against large firms and globalization.
    Keywords: Corporate tax avoidance; multinational firms; import competition; intangibles; profit shifting
    JEL: F14 F60 H25 H26 L60
    Date: 2020–07
  13. By: Chen, Natalie; Juvenal, Luciana
    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.
    Keywords: distance; export unit values; Heterogeneity; Markups; Quality; Tariff; Trade Costs; Wine
    JEL: F12 F14 F31
    Date: 2019–12
  14. By: Kohnert, Dirk
    Abstract: Although Britain has been so far the hardest hit among the EU member states by the corona pandemic, Johnson persists to leave the EU at the end of 2020, whatever the cost. Presumably, the pandemic will have a by far bigger impact on the UK African trade than a no-deal Brexit. In Sub-Saharan Africa, South Africa had been arguably the hardest hit country both by Brexit and Corona. However, the poor, mainly working in the informal sector, were more concerned about the economic impact of the pandemic than the disease itself. In Nigeria, many people envisaged Corona as a plague of the rich and the elite. President Buhari shared the hubris of many British that they are less vulnerable to the pandemic and could continue with high-flying Post-Brexit plans. Ghana counts among those countries in Sub-Sahara Africa which has been most severely hit by the corona pandemic. But unlike South Africa and Nigeria, the direct effects of the pandemic on the downturn of its economy are not as significant as in other African states. In Kenya the number of corona-death had been much lower than for the SARS pandemic of 2003, but the transmission of the COVID-19 virus had been significantly greater. Nevertheless, many Kenyan’s saw the Brexit as a disguised blessing because they pined their hope on massive FDI by UK investors. In any case, it is clear beyond doubt that those who are to suffer most by the combined effects of the corona-pandemic and Brexit in Africa (and presumably world-wide) are the poor and vulnerable.
    Keywords: Corona, Brexit, Africa, GB, EU, international trade, economic recession, poverty, South Africa, Nigeria, Kenya, Ghana, African Studies
    JEL: F13 F35 F54 F63 G15 I1 N17 N47 N67 O17 P16 Z13
    Date: 2020–06–17
  15. By: Salimova, Dina (Салимова, Дина) (The Russian Presidential Academy of National Economy and Public Administration); Ponomarev, Yuriy (Пономарев, Юрий) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The positive effects of transport infrastructure development in the country can be seen in the increase of factor productivity, as well as economic and regional growth. A separate channel of influence of improved infrastructure on the economy is the intensification of foreign trade activities of enterprises by reducing the costs of inclusion in national and international value chains. The Decree of the President of the Russian Federation No. 204 dated May 7, 2018, singles out the improvement of the transport infrastructure as one of the priority areas of the country's social and economic development. Thus, the study of the impact of infrastructural changes on the foreign trade activities of Russian firms is of particular relevance. This study allows us to assess how the development of in-country transport infrastructure affects regional access to markets. Based on the assessment of the empirical model presented in this paper, we can conclude that a more developed infrastructure of the regions has a positive impact on the value of export flows, and no significant differentiation in the change in regional exports due to the impact of infrastructure improvement in the regions in the period of 2012-2016 was found.
    Date: 2020–04
  16. By: Jan Schymik
    Abstract: Many corporate top earners are compensated with equity claims on firms’ profits. This paper investigates the consequences of trade-induced economic reallocation on the compensation structure of top earners. I introduce managerial equity ownership into a model of heterogeneous firms to show that reallocation of economic activity towards large, import intensive firms raises the prevalence of equity ownership within these firms. Calibrating the model suggests that equity ownership responds more elastically to globalization than labor incomes such that focusing on the income skill premium fundamentally underestimates the returns to globalization for top earners. I then combine data on equity ownership and income streams for British and U.S. top managers with international I-O tables and firm level data to study this relation empirically. Using a shift-share instrumentation strategy, I find that improved access to global input markets raises the value of equity ownership for managers of large and importing firms altering the compensation structure towards lower labor income shares. This suggests that intra-industry reallocation can raise top inequality and the prevalence of capital incomes for top earners.
    Keywords: Top Inequality, Offshoring, Equity Ownership
    JEL: F14 F16 J33 L22
    Date: 2020–01
  17. By: Julien Martin; Florian Mayneris
    Abstract: The reliance of the Canadian economy on its trade with the US has long been discussed (Beaulieu and Song, 2015), and the debate was recently revived by the corona-crisis and the renegotiation of NAFTA. A key statistics often used to gauge this dependency is that more than half of Canadian imports originate from the US. We argue here that Canada's reliance on the US is even greater than what is usually thought. By examining data recording the value of Canadian imports by product, production country, exporting country and transport mode, we show that the US is not only the main supplier of Canada, but also a critical logistical hub for Canadian imports that are not produced in the US. Half of the goods imported from non-US suppliers enter Canada through the US-Canada border. In total, about 80% of Canadian imports are tied to the US, either because the goods are produced there, or because the goods cross the US to enter Canada.
    Keywords: Imports,COVID-19,NAFTA,Economic Activity,Relationship Stickiness,
    Date: 2020–06–29
  18. By: Jean Imbs; Laurent L. Pauwels (Division of Social Science)
    Abstract: We propose a new measure of high order trade, labeled HOT, based on the fraction of a sector's downstream uses that cross a border. Because it decomposes gross output, HOT evaluates a sector's exposure to foreign shocks abstracting altogether from observed direct trade, which we exploit to construct instruments for openness. For the same reason, we can evaluate HOT with precision for activities where measured direct trade is essentially zero, like some services. We compute HOT and its instruments for 50 sectors in 43 countries using recently released data on international input-output linkages. We compare its properties with conventional measures that all rely on observed direct trade. HOT correlates positively with conventional trade measures across countries, much less across sectors as many more are open according to our measure. HOT correlates significantly with sector productivity, growth, and synchronization; none of the conventional measures do. Once instrumented, we show high order openness causes productivity and synchronization, but not growth. JEL Codes: E32, F44
    Date: 2020–06
  19. By: Greaney, Theresa; Tanaka, Ayumu
    Abstract: We explore potential relationships between international economic activities and gender wage gaps (GWGs) using linked employer-employee data for Japan. We find evidence that exporting and multinational activities are associated with reduced GWGs. Domestic-owned firms that neither export nor invest abroad (i.e., domestic-only firms) report the largest GWG, followed by Japanese-owned multinational enterprises (JMNE), then by locally-owned exporters that do not invest abroad and finally by foreign-owned multinational enterprises (FMNE). We separate FMNE by mode of entry and confirm that FMNE established by greenfield investment deviate more than FMNE established by merger and acquisition from domestic-only firms in terms of wages. Greenfield-born FMNE are associated with the smallest GWG and largest gender-neutral wage premium among the firm types. The estimated GWG among Greenfield-born FMNE is almost 12 percentage-points lower than the 26.8 percent prevailing at domestic-only firms.
    Keywords: gender wage gap, wage premium, exporters, multinational enterprises
    JEL: F14 F16 J31
    Date: 2020–06–19
  20. By: Hoekman, Bernard; Shepherd, Ben
    Abstract: This paper provides the first quantitative evidence on the restrictiveness of services policies in 2016 for a sample of developing countries, based on recently released regulatory data collected by the World Bank and WTO. We use machine learning to recreate to a high degree of accuracy the OECD's Services Trade Restrictiveness Index (STRI), which takes account of nonlinearities and dependencies across measures. We use the resulting estimates to extend the OECD STRI approach to 23 additional countries, producing what we term a Services Policy Index (SPI). Converting the SPI to ad valorem equivalent terms shows that services policies are typically much more restrictive than tariffs on imports of goods, in particular in professional services and telecommunications. Developing countries tend to have higher services trade restrictions, but less so than has been found in research using data for the late 2000s. We show that the SPI has strong explanatory power for bilateral trade in services at the sectoral level, as well as for aggregate goods and services trade.
    Keywords: international trade; Machine Learning; restrictiveness indicators; services policies; Trade in Services
    JEL: F13 F15 O24
    Date: 2019–12
  21. By: Jan Schymik
    Abstract: The rise of top inequality in the United States and many other countries in recent decades is well documented but its causes remain controversial. Using data on equity ownership and income streams of corporate top earners in the U.S. and the U.K., this paper assesses the role of reallocation towards \superstar rms" for top earners. If economic activity is reallocated toward the largest rms in the economy, this a ects equity prices, top earners' marginal product and their incentives. Exploiting the global rise of trade in intermediate inputs as a source for economic reallocation, I assess three predictions of this hypothesis: (i) equity prices increase more for superstar rms, (ii) the value of equity ownership and labor incomes of top earners in superstar rms increase, (iii) equity ownership responds more elastically than labor incomes which changes the compensation structure of top earners. The results suggest that focusing on the income skill premium fundamentally underestimates the returns to globalization for top earners. Furthermore, the reallocation-channel rationalizes the prevalence of capital incomes vis-a-vis labor incomes for top earners.
    Keywords: Top Inequality, O shoring, Equity Ownership
    JEL: F14 F16 J33 L22
    Date: 2020–07
  22. By: Vellore Arthi; Markus Lampe; Ashwin Nair; Kevin Hjortshøj O’Rourke (Division of Social Science)
    Abstract: Research on the quantitative impact of interwar protection on trade flows remains scarce, and much of it has concluded that the impact was surprisingly small. In this paper we ask: Did Indian interwar protection hurt UK manufacturers, by raising tariffs on manufactured imports? Or did it favour UK interests, by discriminating against “foreign” (i.e. non-British) producers? We answer this question by quantifying the impact of trade policy on the value and composition of Indian imports, using novel disaggregated data on both trade policies and imports for 114 commodity categories coming from 42 countries. Indian trade elasticities were generally larger than those in the United Kingdom at the same time. We find that even though Indian protection lowered total imports, it substantially boosted imports from the UK. Trade policy had a big impact on trade flows.
    Date: 2020–05
  23. By: Heiland, Inga; Moxnes, Andreas; Ulltveit-Moe, Karen-Helene; Zi, Yuan
    Abstract: This paper examines the structure of the shipping network and its implications on global trade and welfare. Using novel data on the movements of container ships, we calculate optimal travel routes. We then estimate the impact of a shock to the network on global trade by means of a natural experiment: the 2016 Panama Canal expansion. Trade between country pairs using the canal increased by 9-10% after the expansion. While the building costs were borne by Panama alone, a model-based quantification shows that the welfare gains were shared by many countries, due to the network structure of shipping.
    Keywords: Shipping networks; Trade
    JEL: F14
    Date: 2019–12
  24. By: Dünhaupt, Petra; Herr, Hansjörg
    Abstract: The catching-up of countries in the Global South to productivity levels and living standards of the Global North is the exception. There are two main economic explanations for this. First, developing countries are pushed to low-tech-labor-intensive productions and tasks in global value chains. This offers some advantages, for example easier industrialisation, but also prevents upgrading. Foreign direct investment only partially helps to overcome this problem. Second, low trust in national currencies in the Global South leads to distorted financial markets which do not provide sufficient credit for investment. As part of needed industrial policy, national development banks can play a key role in triggering the economic catching-up of the Global South. They can alleviate distortions in the financial system and at the same time support the transformation of the economy towards higher productivity and ecological transformation. The German development bank KfW can serve as a useful example of an effective development bank.
    Keywords: Trade Theory,Economic Development,Global Value Chains,Industrial Policy,Financial Systems,Dollarisation,Development Banks
    JEL: E44 F10 F63
    Date: 2020
  25. By: Clément Malgouyres (IPP - Institut des politiques publiques, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Thierry Mayer (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France, CEPR - Center for Economic Policy Research - CEPR); Clément Mazet-Sonilhac (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, Centre de recherche de la Banque de France - Banque de France)
    Abstract: In this paper, we document the presence of "technology-induced" trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the "sub-extensive" margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.
    Date: 2019–06
  26. By: Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
    Abstract: We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters.
    Keywords: innovation; regions; Foreign Direct Investment; patenting; cluster emergence
    JEL: O32 O33 R11 R12
    Date: 2020–07
  27. By: Heiland, Inga
    Abstract: Exporting not only provides firms with profit opportunities, but can also provide for risk diversification if demand is imperfectly correlated across countries. This paper shows that the correlation pattern of demand shocks across countries constitutes a hitherto unexplored source of comparative advantage that shapes trade flows and persists even if financial markets are complete. With exporters making market- specific choices under uncertainty, countries whose shocks are riskier, in the sense that they contribute more to aggregate volatility, are less attractive destinations for both investment and exports. A gravity-type regression lends support to the hypothesis that, conditional on trade costs and market size, exporters sell smaller quantities in riskier destinations. I develop a general equilibrium trade model, with risk-averse investors and complete asset markets, which rationalizes this novel fact. A counterfactual experiment shows that risk-based comparative advantage accounts for 4.6% of global trade. Country-level exports would grow by -13% to +10% if all diversification opportunities were eliminated, entailing welfare losses in the range of .4% to 16%.
    Keywords: Global Risk Sharing; international trade; structural gravity
    JEL: F15 F36 F44 G11
    Date: 2019–12
  28. By: Majumderad, Monoj Kumar; Raghavan, Mala; Vespignani, Joaquin
    Abstract: An important economic paradox in the economic literature is that countries with abundant natural resources are poor in terms of real gross domestic product per capita. This paradox, known as the ‘resource curse’, is contrary to the conventional intuition that natural resources help to improve economic growth and prosperity. Using panel data for 95 countries, this study revisits the resource curse paradox in terms of oil resources abundance for the period 1980–2017. In addition, the study examines the role of trade openness in influencing the relationship between oil abundance and economic growth. The study finds trade openness is a possible avenue to reduce the resource curse, in our sample, trade openness reduces oil curse by around 25%. Trade openness allows countries to obtain competitive prices for their resources in the international market and access advanced technologies to extract resources more efficiently. Therefore, natural resource–rich economies can reduce the resource curse by increasing exposure to international trade.
    Keywords: Oil Course, Economic Growth, Trade Openness
    JEL: E0 E00 E4 E42 Q4
    Date: 2020
  29. By: Julien Martin; Florian Mayneris
    Abstract: In its Canada’s State of Trade 2020 published on July 22nd 2020, Global Affairs Canada states that “for the first quarter of 2020, the overall impacts of COVID-19 on Canadian trade were few, with 2 exceptions: exports to China and South Korea dropped 14% and 26%, respectively”. This is true, but unfortunately already outdated. The most recent figures based on customs data on the international merchandise trade of Canada with its main partners is now available for April and May 2020, and the trade situation is alarming, especially with our main partner, the United-States.
    Date: 2020–07–31
  30. By: Edgar J. Sánchez Carrera (Department of Economics, Society & Politics, Universit? di Urbino Carlo Bo - Researh Fellow at the ResearchCenter in Applied Mathematics, Universidad Aut´onoma de Coahuila, Mexico); Vanesa Avalos-Gaytán (ResearchCenter in Applied Mathematics, Universidad Aut´onoma de Coahuila, Mexico); Yajaira Cardona Valdés (ResearchCenter in Applied Mathematics, Universidad Aut´onoma de Coahuila, Mexico)
    Abstract: Does the synchronization of globalized-oscillating economies matter for macroeconomic outcomes? If so, how oscillating economies are synchornized and conform stable networks. In this paper we apply phase oscillator models such as Kuramoto’s model to understand synchronization phenomena in networks of countries. Our aim is to study a network of interacting phase oscillating economies, and an adaptation mechanism for the coupling that promotes the connection strengths between those elements that are dynamically correlated. Under these circumstances, the dynamical organization of the oscillators/economies shapes the topology of the graph in such a way that modularity and assortativity features emerge spontaneously and simultaneously. Our results show the conformation of the network and the global and local synchronization measures for the 42 oscillating economies during the period from 1960 to 2018, using Trade (% of GDP) data. Moreover, we obtain the measure of local assortativity in the formation of those economies that more or less interact or are connected. We conclude that the Kuramoto model with networks is a useful tool to study economics synchronization.
    Keywords: Business Cycles, Complex Systems, Economics of Globalization, Network Topology, Synchronization, Trade Integration.
    JEL: D85 F14 F15 F41 F44
    Date: 2019
  31. By: Cecilia Bellora (CEPII - Centre d'études prospectives et d'informations internationales); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: The new European Commission has announced policies to reduce greenhouse gas emissions drastically. Reaching an ambitious target for a global good – the climate – would require a common price for carbon worldwide. This however clashes with the free-riding problem. Furthermore, unilateral policies are not efficient since they lead to carbon leakages and distort competitiveness. To tackle these issues, the European Union can rely on different policies. Firstly, a carbon pricing of imports can combined with an export rebate to constitute a ‘complete CBA' (Carbon Border Adjustment) solution. Alternatively, a simple tariff at the border can compensate for differences in carbon prices between domestic and imported products. A consumption-based carbon taxation can al so be contemplated. Last, a uniform tariff on imports from countries not imposing (equivalent) carbon policies may help solving the free-riding problem.
    Keywords: Carbon Border Adjustment,Climate Change,International Trade,Tariffs
    Date: 2020–04–14
  32. By: Braun, Sebastian T.; Dwenger, Nadja
    Abstract: Following one of the largest displacements in human history, almost eight million forced migrants arrived in West Germany after WWII. We study empirically how the settlement location of migrants affected their economic, social and political integration in West Germany. We first document large differences in integration outcomes across West German counties. We then show that high inflows of migrants and a large agrarian base hampered integration. Religious differences between migrants and natives had no effect on economic integration. Yet, they decreased intermarriage rates and strengthened anti-migrant parties. Based on our estimates, we simulate the regional distribution of migrants that maximizes their labor force participation. Inner-German migration in the 1950s brought the actual distribution closer to its optimum.
    Keywords: Forced Migration; Post-War Germany; Regional Integration
    JEL: J15 J61 N34
    Date: 2019–12
  33. By: Zameer, Hashim; Yasmeen, Humaira; Zafar, Muhammad Wasif; Waheed, Abdul; Sinha, Avik
    Abstract: The objective of this paper is to explore the nexus of innovation-environment and economic growth in the context of the Indian economy. To achieve the study objective, we explored the role of technological innovation, FDI, trade openness, energy use and economic growth toward carbon emissions. Using the data of 1985-2017, the study employed ARDL bound testing and VECM methods to capture the effects of technological innovation, trade openness, FDI, energy use and economic growth on CO2 emissions. Empirical estimation has confirmed the existence of long-run cointegration. Similarly, in the long-run, it is found that trade openness, energy use and economic growth positively reinforce CO2 emissions. In contrast, technological innovation and FDI negatively reinforce CO2 emissions in the long-run. Further, VECM indicate that the relationship among innovation, trade openness, and energy use is bidirectional in the long-run. Whereas, unidirectional relation has been found that is coming from GDP to carbon emissions, FDI, innovation, trade, and energy use. In the short-run, unidirectional link found which is coming from FDI, innovation, and energy use to carbon emission. However, the association between emissions and trade openness is bidirectional. The conclusions put-forward policy implications that innovation is a way to reduce environmental degradation.
    Keywords: Innovation; trade; CO2 emissions; growth; environment
    JEL: Q5 Q53
    Date: 2020
  34. By: Julian Boys; Antonio Andreoni
    Abstract: With recent changes in the global economy, policy makers are increasingly turning from global value chains to regional and national value chains as drivers of structural transformation in the global South. This paper examines economic and social upgrading in the Tanzanian textile and apparel sectors, with a particular focus on how outcomes vary across value chains, i.e. with value chain directionality.
    Keywords: value chain directionality, textiles, apparel, Industrial policy, rents, Tanzania
    Date: 2020
  35. By: Alisher Tolepbergen (NAC Analytica, Nazarbayev University)
    Abstract: The conventional wisdom assumes that terms of trade shocks are the main drivers of business cycle dynamics in emerging exporting economies. This paper studies the effect of terms of trade shocks on key macroeconomic variables for the Kazakhstani economy. Empirical SVAR model estimates suggest that the terms of trade shocks account for 12 % of output variation for the economy. Further, three sectoral DSGE model with estimated structural parameters predict the modest importance of the terms of trade shocks for small open economy.
    Keywords: Terms of Trade; DSGE; SVAR; Kazakhstan
    JEL: B22 C32 C61 E17 E32 F41
    Date: 2019–12
  36. By: -
    Abstract: The purpose of this toolkit is to summarize the steps and activities used in the analysis and formulation of public policies to foster investment of family remittances in value chains, underpinned by greater financial inclusion, with the aim of facilitating their replication in other countries and other chains.
    Date: 2020–07–24
  37. By: Abramitzky, Ran; Ager, Philipp; Boustan, Leah; Cohen, Elior David; Hansen, Casper Worm
    Abstract: In the 1920s, the United States substantially reduced immigrant entry by imposing country-specific quotas. We compare local labor markets with more or less exposure to the national quotas due to differences in initial immigrant settlement. A puzzle emerges: the earnings of existing US-born workers decline after the border closure, despite the loss of immigrant labor supply. We find that more skilled US-born workers - along with unrestricted immigrants from Mexico and Canada - move into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discourage entry from unrestricted workers.
    Keywords: Immigration Restrictions; labor mobility; Local Labor Markets
    JEL: J61 J70 N32
    Date: 2019–12
  38. By: Laudage, Sabine
    Abstract: Corporate tax revenue and Foreign Direct Investment (FDI) are two key development finance sources according to the Addis Ababa Action Agenda for Financing for Development. These sources are important for developing countries to finance public goods and mobilize private investment for sustainable development. However, certain tax policies can have ambiguous effects on corporate tax revenue and FDI and challenge the joint mobilization of the two sources. Against this background, the paper discusses potential trade-offs faced by developing countries, when mobilizing corporate tax revenue and FDI jointly, and provides solutions how to address these trade-offs. A first trade-off exists between corporate tax incentives aimed at attracting FDI and the objective of increasing corporate tax revenue. A second trade-off results from the fact that policies that aim to protect corporate tax bases from erosion caused by tax avoidance and profit shifting may disincentivize FDI. The trade-offs can be addressed by reforms of the international tax system, while good national non-tax investment conditions are indispensable. The Inclusive Framework on BEPS has worked out reform proposals on a minimum corporate tax rate and on taxing the digital economy adequately which are currently discussed by its members. Many developing countries now actively participate in these discussions on future international tax rules. To avoid harmful trade-offs, countries need to consider the costs amd benefits of new tax rules and policies on both, their tax revenues and FDI attraction.
    Keywords: corporate tax revenue,FDI,financing for development,tax incentives,BEPS,multinational firms
    Date: 2020
  39. By: Antràs, Pol
    Abstract: I offer an overview of some key conceptual aspects associated with the rise of global value chains (GVCs). I outline a series of alternative interpretations and definitions of what the rise of GVCs entails, and I trace the implications of these alternative conceptualizations for the measurement of the phenomenon, as well as for elucidating the key determinants and implications of GVC participation, both at the country level and at the firm level. In the process, I offer some speculative thoughts about the future of GVCs in light of the advent of an array of new technologies.
    JEL: D5 F1 F2 F4 F6
    Date: 2019–12
  40. By: Alesina, Alberto F; Stantcheva, Stefanie
    Abstract: This paper provides a simple conceptual framework that captures how different perceptions, attitudes, and biases about immigrants or minorities can shape preferences for redistribution and reviews the empirical evidence on the effects of increasing racial diversity and immigration on support for redistribution.
    Keywords: diversity; Immigration; inequality; race; redistribution; social preferences
    JEL: H21 J15 P16
    Date: 2019–12
  41. By: Steve J. Bickley; Ho Fai Chan; Ahmed Skali; David Stadelmann; Benno Torgler
    Abstract: This paper examines the effects of globalisation on the pace of governments implementing international travel restrictions during the recent coronavirus pandemic. We find that more globalised countries experienced a longer delay in implementing international travel restriction policies with respect to the date of the first confirmed COVID-19 case. We also find that informational (a subcomponent of social globalisation) and political globalisation have the strongest effects on the observed delays in implementing international travel restriction policies in more globalised countries. Lastly, we do not find evidence that more globalised countries are more likely to adopt a more restrictive international travel policy as the first response to the pandemic. These findings highlight the dynamic relationship between globalisation and protectionism when governments respond to significant global events such as a public health crisis.
    Keywords: Coronavirus; SARS-CoV-2; Travel Restriction; Border Closure; Health Screening; Policy Analysis
    JEL: F50 F60 F68
    Date: 2020–07
  42. By: Ivan Turok; Justin Visagie
    Abstract: Service industries are increasingly important in international trade and offer additional paths to economic development. There are many opportunities to expand trade in services between South Africa and other African countries. Improvements in urban planning, design, and governance are vital to create more productive and liveable cities. South Africa has many capabilities to support urbanization in Africa. However, South African companies have been relatively unsuccessful at exporting this expertise, and more successful at exporting retail, financial, and telecoms services.
    Keywords: Africa, International trade, South Africa, tradable urban services, urban infrastructure, Urbanization
    Date: 2020
  43. By: Yunyun Wan (Graduate School of Economics, Kobe University)
    Abstract: In this paper we investigate whether multinational firms transfer the state-of-the-art technology to subsidiaries in the presence of unintended technology spillovers. It is found that the transfer is more likely when multinationals face (i) higher spillover rates, (ii) fewer local competitors, and (iii) more multinational competitors. "Forced technology transfer" to local competitors, as observed in China, harms multinationals while benefiting the host country. With endogenous entry of a local firm, however, there are cases in which forced technology transfer harms the host country.
    Date: 2020–07
  44. By: Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas
    Abstract: This paper studies how the depreciation of sterling following the Brexit referendum affected consumer prices in the United Kingdom. Our identification strategy uses input-output linkages to account for heterogeneity in exposure to import costs across product groups. We show that, after the referendum, inflation increased by more for product groups with higher import shares in consumer expenditure. This effect is driven by both direct consumption of imported goods and the use of imported inputs in domestic production. Our results are consistent with complete pass-through of import costs to consumer prices and imply an aggregate exchange rate pass-through of 0.29. We estimate the Brexit vote increased consumer prices by 2.9 percent, costing the average household £870 per year. The increase in the cost of living is evenly shared across the income distribution, but differs substantially across regions.
    Keywords: Brexit; exchange rate pass-through; import costs; inflation
    JEL: E31 F15 F31
    Date: 2019–12
  45. By: Sophie Drogue (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques); Federica Demaria (CREA - Consiglio per la Ricerca in Agricoltura e l’analisi dell’economia agraria); Maria Rosaria Pupo d'Andrea (CREA - Consiglio per la Ricerca in Agricoltura e l’analisi dell’economia agraria)
    Date: 2018–06–14
  46. By: Baley, Isaac; Veldkamp, Laura; Waugh, Michael
    Abstract: Common wisdom holds that uncertainty impedes trade|yet we show that uncertainty can fuel more trade in a simple general equilibrium trade model with information frictions. In equilibrium, increases in uncertainty increase both the mean and variance in returns to exporting. This implies that trade can increase or decrease with uncertainty, depending on preferences. Under general conditions on preferences, we characterize the importance of these forces using a sufficient statistics approach. Higher uncertainty leads to increases in trade because agents receive improved terms of trade, particularly in states of nature in which consumption is most valuable. Trade creates value, in part, by offering a mechanism for risk sharing, and risk sharing is most effective when both parties are uninformed.
    Keywords: Trade; uncertainty
    Date: 2019–12
  47. By: Hamed Sambo (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - USPC - Université Sorbonne Paris Cité - UP13 - Université Paris 13)
    Abstract: In most countries, migration is a common phenomenon that can have both positive and negative effects on the living conditions of households in the locality of origin. This paper offers new evidence concerning the effect of migration on the food security of households left behind. The evidence is provided for Ethiopia, a country where internal migration is more predominant, and where food insecurity is still acute. The analysis is based on the 2013/2014 and 2015/2016 Ethiopian Socioeconomic Surveys (ESS), which are both nationally representative. In order to address the self-selection bias of migration, the estimation strategy used relies on the Heckman two-stage estimate and several robustness tests. The result indicates that migration negatively affects household per capita calorie intake while it leads to an improvement of their dietary diversity. However, the overall result is more inclined towards a negative effect of migration on the food security of migrant households in Ethiopia. Policies aimed at improving food security in Ethiopia should therefore consider those households among the priority targets.
    Keywords: Migration,Food security,Households,Ethiopia
    Date: 2020–06–26
  48. By: Di Tella, Rafael; Rodrik, Dani
    Abstract: We study preferences for government action in response to layoffs resulting from different types of labour-market shocks. We consider: technological change, a demand shift, bad management, and three kinds of international outsourcing. Support for government intervention rises sharply in response to shocks and is heavily biased towards trade protection. Trade shocks generate more demand for protectionism, and among trade shocks, outsourcing to a developing country elicits greater demand for protectionism. The 'bad management' shock is the only scenario that induces a desired increase in compensatory transfers. Trump supporters are more protectionist than Clinton supporters, but preferences seem easy to manipulate: Clinton supporters primed with trade shocks are as protectionist as baseline Trump voters. Highlighting labour abuses in the exporting country increases the demand for trade protection by Clinton supporters but not Trump supporters.
    Date: 2019–12
  49. By: Forslid, Rikard
    Abstract: This paper analyzes the environmental impact of emissions related to trade and trans- portation. It is shown that transportation may in principle lower global emissions if the production sector is dirtier than the transport sector. The measure of a sector's dirtiness is related to the emissions taxes and the abatement efficiency within that sector. It is shown that a firm's abatement efficiency can be calculated from the emission-to-cost ratio times the emissions tax. Using Swedish data to rank 5-digit industries in terms of their dirtiness reveals that several production sectors have a higher dirtiness index than transportation does.
    Keywords: Emissions; Trade; Transportation
    Date: 2019–12
  50. By: Christopher F. Baum (Boston College; DIW Berlin; CESIS, KTH Royal Institute of Technology); Hans Lööf (CESIS, KTH Royal Institute of Technology); Andreas Stephan (Jönköping International Business School; DIW Berlin); Ingrid Viklund-Ros (CESIS, KTH Royal Institute of Technology)
    Abstract: We examine the impact of offshoring on patenting and total factor productivity as a measure on technical change using a panel of 7,000 mainly small Swedish manufacturing firms over the period 2001-2014. We apply the United Nations Broad Economic Categories (BEC) system to identify offshoring-related intermediate imports. The empirical analysis shows that a positive link between offshoring and innovation exists. However, the effects are much weaker and less significant when self-selection and reverse causality from innovation to offshoring are considered.
    Keywords: offshoring, patent, trademark, innovation, productivity, panel data
    JEL: C23 F23 O47 O33 O52
    Date: 2020–07–31

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