|
on International Trade |
| By: | Kox, Henk L.M.; Rojas-Romagosa, Hugo |
| Abstract: | The paper develops a new stand-alone structural gravity model for explaining bilateral FDI patterns. We employ the model to analyse the impact of preferential trade agreements (PTAs), bilateral investment treaties (BITs) and other policies on bilateral foreign direct investment (FDI). We use the UNCTAD global database on bilateral FDI stocks and flows. To control for the heterogeneous nature of PTAs, we employ two different indicators of PTA depth. We find that on average signing a PTA increases bilateral FDI stocks by around 30%. Nevertheless, we also find that ‘deeper’ or comprehensive PTAs (e.g., including provisions on investment, public procurement and intellectual property rights provisions) do not have a significantly different impact than signing regular PTAs. Belonging to the EU single market, on the other hand, has a strong impact and increases bilateral FDI by around 135%, and signing a BIT has an effect that is comparable to signing a PTA. |
| Keywords: | bilateral FDI, depth of preferential trade agreements, bilateral investment treaties, structural gravity model |
| JEL: | C33 C54 F15 F21 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102494&r=all |
| By: | Michal Paulus (Faculty of Social Sciences, Charles University, Prague, Czech Republic); Jaromir Baxa (Faculty of Social Sciences, Charles University & The Czech Academy of Sciences, Institute of Information Theory and Automation, Prague, Czech Republic); Eva Michalikova (Brno Institute of Informatics, Faculty of Business and Management,Brno University of Technology,Brno, Czech Republic) |
| Abstract: | Although the OECD Anti-Bribery Convention has been signed by dozens of countries, only some of themenforce the laws against foreign bribery. To estimate whether the enforcement deters exports, we use amicrofounded gravity model of bilateral trade flows of 132 countries. Our results imply that enforcement ofthe rules decreases the export flows to countries with a higher corruption distance significantly, particularlyin product categories characterized by differentiated goods. Moreover, the effects of the host-countrycorruption on exports of the nonenforcing countries are limited, and similar to the impact on the exports from countries that did not sign the Convention at all. Therefore, the main aim of the Convention to level the field in international trade has not been reached yet, even among the signatory countries. |
| Keywords: | Corruption, International trade, Gravity model |
| JEL: | F13 F14 F53 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2020_28&r=all |
| By: | Katharina Längle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | This paper investigates the question which aspects of offshoring harm low skilled workers using data from the WIOD for 14 manufacturing industries in 16 countries between 1995 and 2008. By considering the use of foreign production factors in domestic production, the paper shows that low skilled workers are directly and negatively affected by offshoring of low skilled tasks. Importantly, the paper determines a further indirect channel highlighting the role of growing foreign competition in domestic markets for intermediate goods. Accordingly, wage shares of low skilled workers decline when competition in domestic downstream value chains increases. Interpreting this channel in the light of the literature on defensive skill-biased innovation, the shift in wage shares away from low skilled workers might be provoked by skill intensive investments in response to tougher foreign competition in domestic markets for intermediate goods. |
| Keywords: | Global value chains,Input-Output Tables and Analysis,Organization of Production,Empirical Studies of Trade |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02899944&r=all |
| By: | Tahir, Muhammad; Hayat, Arshad |
| Abstract: | Purpose – The purpose of this paper is to explore the potential impact of trade openness on economic growth for the economy of Brunei Darussalam. Design/methodology/approach - Empirical analyses are conducted using the Autoregressive Distributed Lagged Model (ARDL) procedure and the data utilized were spanning from 1989 to 2018. Findings - The obtained results indicated a positive and statistically significant relationship between trade openness and economic growth. Similarly, the results also revealed that domestic investment and natural resources positively impacted economic growth. Further, we found that human capital has impacted economic growth both negatively and significantly, which is against our prior expectations. Moreover, in the short run, trade openness and domestic investment have lost its significance level while all other variables have maintained both their significance levels and signs of their coefficients. Practical implications – This paper has provided comprehensive evidence regarding the relationship between trade openness and economic growth for Brunei Darussalam. Therefore, the policymakers of Brunei are suggested to take practical steps to gear up to trade liberalization and hence attain higher growth. Further, favorable attention is also needed for economic diversification and encouraging domestic investment to accelerate the long-run economic growth. Originality/value - As this is a comprehensive study on the economy of Brunei Darussalam, therefore, we expect that the policymakers would find it useful while formulating and exercising suitable policies related to trade openness. |
| Keywords: | Brunei Darussalam, Trade Openness, Growth, ARDL, Natural Resources |
| JEL: | F14 O4 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102504&r=all |
| By: | Li, Lei; Löschel, Andreas; Pei, Jiansuo; Sturm, Bodo; Yu, Anqi |
| Abstract: | Is trade liberalization contributing to cleaner production amongst manufacturing firms? Theoretical predictions and empirical evidences are mixed. This study utilizes China's dual trade regime and China's WTO entry in 2001 to construct a unique micro dataset on manufacturing firms for China for the period 2000-2007, and performs a difference-in-difference estimation strategy to directly examine this issue. Specifically, normal exporters that saw tariff changes during the same period form the treatment group; while processing exporters that enjoy tariff-exemptions both pre- and post-WTO entry serve as the control group. Results show that China's WTO entry contributed to a lower SO2 emission intensity for normal exporting firms. We further examine the mechanism and show that the productivity channel accounted for the observed pattern. Specifically, more efficient normal exporters saw greater decline of SO2 emission intensity than average normal exporters. This study contributes to a better understanding of the impact of trade on the environment, especially in developing countries. It also complements the literature in terms of providing China's micro evidence on the impact of trade liberalization on firm's environmental performance. |
| Keywords: | WTO,trade liberalization,dual trade regime,SO2 emission intensity,China |
| JEL: | F18 Q53 Q56 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:119&r=all |
| By: | Katharina Längle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics) |
| Abstract: | This paper investigates whether trade agreements help middle income countries to upgrade their product portfolio exported to high income countries. Combining product level trade flows from the CEPII-Baci database with information on product complexity from the Atlas of Economic Complexity and the DESTA database on trade agreements, this question is studied for a set of 135 countries between 2001 and 2013 based on a gravity framework. In this context, the development of the extensive and intensive margins for high complex products is considered as proxy for product upgrading. By exploiting the cross sectional dimension of the panel, this study finds that middle income countries export a wider product scope of complex goods if their trade relation is covered by an agreement including trade provisions related to competition, services and investments, compared to country pairs without an equivalent framework. Still, the consideration of the time dimension leads to ambiguous effect of these provisions. While positive estimation results for the intensive margin of complex goods are in line with related papers, negative effects on the extensive margin of complex goods are at odds with expectations of the mechanism between agreements and trade. |
| Keywords: | Empirical Studies of Trade,Economic Complexity,Trade Integration |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02899973&r=all |
| By: | Chung, Wanyu (University of Birmingham and CEPR); Perroni, Carlo (University of Warwick and CESifo) |
| Abstract: | We study how domestic content requirements in Free Trade Areas (FTAs) affect market power and market structure in concentrated intermediate goods markets. We show that content requirements increase oligopolistic markups beyond the level that would obtain under an equivalent import tariff, and we document patterns in Canadian export data and US producer price data that align with the model’s predictions : producers of intermediate goods charge comparatively higher prices when the associated final goods producers are more constrained by FTA origin requirements and by Most Favoured Nation (MFN) tariffs for both intermediate and final non-FTA goods. |
| Keywords: | Free Trade Areas ; Content Requirements ; Market Power JEL codes: F12 ; F13 ; F14 ; D43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1300&r=all |
| By: | Hammami, A, Malek; Beghin, John C. |
| Abstract: | We investigate the welfare and trade impacts of U.S. retaliatory tariffs from the Airbus WTO dispute on EU olive oil, using a calibrated multi-market partial-equilibrium displacement model. The model accounts for four differentiated types of retail olive oil in the U.S. market. U.S. retailer-blenders source olive oil in eight foreign markets and domestically and for two qualities of oil (virgin, other), and in two shipping container types (non-bulk, bulk). We consider two main scenarios: A 100% tariff on all EU olive oils as initially announced by the USTR, and the actual and final 25% tariff on non-bulk Spanish olive oil. The first scenario leads to significant loss of welfare for U.S. consumers of $924 million, much reduced EU olive oil exports to the United States ($354 million), and increased imports from non-EU sources ($90 million). The second scenario has much more muted effects, with mitigated welfare losses for U.S. consumers ($55 million), strong decreases of Spanish olive oil exports shipped in smaller containers, much larger exports of bulk Spanish olive oil and other olive oils. Aggregate EU exports to the United States are slightly lower given the substantial trade diversion induced by the targeted tariff. We discuss the political economy of the contrasting initial announcement and limited implemented retaliation. |
| Keywords: | International Relations/Trade |
| Date: | 2020–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nbaesp:304760&r=all |
| By: | Cecilia Bellora (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Jean-Christophe Bureau (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Basak Bayramoglu (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Estelle Gozlan (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sébastien Jean (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | International trade has a direct impact on EU biodiversity, imported invasive species and pathogens, being an example. Trade also impacts global biodiversity, for instance through the ‘virtual' water, land, and deforestation contained in EU imports. Economic theory shows that trade with countries that fail to protect a renewable resource can be detrimental for all. Protecting global biodiversity calls for a variety of instruments, at the EU border as well as in the provisions of preferential agreements. The EU already includes biodiversity-re lated non-trade provisions in trade agreements, but these provisions are not legally binding and hardly effective. This is partly explained by the complexity of the issues posed by biodiversity: since there is no simple synthetic indicator, policy instruments are difficult to enforce. However, an effort to specify measurable and verifiable commitments is needed; more binding mechanisms, along with transparent and automatic sanctions in case of non-compliance should be considered. |
| Keywords: | International trade,Biodiversity |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02887592&r=all |
| By: | Laura D'Amato; Máximo Sangiácomo; Martin Tobal |
| Abstract: | Exporting is a finance-intensive activity. But credit markets are frequently underdeveloped and domestic financing tends to be scarce in developing countries, for which a strong export sector is crucial for economic development. Thus, this paper investigates whether foreign financing provides better financing conditions than domestic financing and/or otherwise unavailable external finance, thus increasing export survival rates in a developing country. To that end, it assembles a unique dataset, rarely available for other countries, containing information on foreign credit obtained by Argentine exporters. Based on the empirical models conventionally used in the export survival literature - specifically the probit random effects and the clog-log setups - we provide evidence of a positive link between foreign financing and export survival. This finding is confirmed using an instrumental variable approach. |
| Keywords: | international trade, credit, foreign financing, export survival |
| JEL: | F10 F13 G20 G28 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:877&r=all |
| By: | Hercules Haralambides (Dalian Maritime University); Olaf Merk (International Transport Forum) |
| Abstract: | This paper analyses the potential impacts on global trade initiated by the Belt and Road Initiative. The Initiative is examined as a collection of planned transport-corridor developments and discusses their impact on maritime trade flows. |
| Date: | 2020–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2020/02-en&r=all |
| By: | Yuanhong, Hu |
| Abstract: | This paper calculates the trade facilitation index and manufacturing export sophistication of Russia and Central and Eastern European countries from 2003 to 2017, and examines the impact of trade facilitation and R&D innovation on manufacturing export sophistication. The study found that the export sophistication of labor-intensive industries continues to decrease, the export sophistication of capital and technology-intensive industries continues to increase, while the export sophistication of traditional resource-based heavy industries is stable. In addition, trade facilitation and R&D innovation have significantly contributed to the export sophistication of Russia, Central and Eastern European countries, especially the manufacturing industry after the 2009 financial crisis. For Central European and European Union member states, the impact of trade facilitation and R&D innovation on export sophistication is significantly greater than that of Eastern European and non-EU member states. The promotion of heavy, heterogeneous, medium and high-tech industries is obviously stronger than that of light, homogeneous and low-tech industries. In addition, the moderating role of trade dependence cannot be ignored. Trade facilitation and R&D innovation have a significant non-linear impact on export sophistication. |
| Keywords: | Trade Facilitation,Export Sophistication,R&D Innovation,Manufacturing,Russia,Central and Eastern Europe |
| JEL: | F14 F41 F43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:222927&r=all |
| By: | Feras A. Batarseh; Munisamy Gopinath; Anderson Monken |
| Abstract: | International trade policies remain in the spotlight given the recent rethink on the benefits of globalization by major economies. Since trade critically affects employment, production, prices and wages, understanding and predicting future patterns of trade is a high-priority for decision making within and across countries. While traditional economic models aim to be reliable predictors, we consider the possibility that Artificial Intelligence (AI) techniques allow for better predictions and associations to inform policy decisions. Moreover, we outline contextual AI methods to decipher trade patterns affected by outlier events such as trade wars and pandemics. Open-government data are essential to providing the fuel to the algorithms that can forecast, recommend, and classify policies. Data collected for this study describe international trade transactions and commonly associated economic factors. Models deployed include Association Rules for grouping commodity pairs; and ARIMA, GBoosting, XGBoosting, and LightGBM for predicting future trade patterns. Models and their results are introduced and evaluated for prediction and association quality with example policy implications. |
| Keywords: | AI; International trade; Boosting; Prediction; Data mining; Imports and exports; Outlier events |
| JEL: | F13 F17 C55 C80 |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1296&r=all |
| By: | Valerie C. Valerio (University of Florida) |
| Abstract: | This paper uses network analysis to map and characterise live animal trade in West Africa. Building on a database of 42 251 animal movements collected by the Permanent Inter-State Committee for Drought Control in the Sahel (CILSS) from 2013-17, it describes the structure of regional livestock trade at the network, trade community and market levels. Despite yearly fluctuations in the volumes and spatial patterns of trade, the paper shows that regional livestock trade operates on well-established trade corridors as animals flow in specific directions. The study also confirms that livestock trade is structured around several national and cross-border groups of markets that exchange more animals than expected by chance. Close to two-thirds of all animals are shipped internationally, indicating that regional animal trade in the Economic Community of West African States (ECOWAS) is remarkably cross-border. Finally, the paper finds that the hub markets that concentrate the most shipments also handle more animals and trade with more markets. Additionally, peripheral markets have more defined roles as primarily origins or destinations of animal shipments than markets in the core of the network. Of the nine key markets identified, three are close to borders, highlighting the importance of Nigeria as a livestock consumption destination for regional livestock production. |
| JEL: | F1 F14 F4 Q1 Q17 Q18 R12 |
| Date: | 2020–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:swacaa:29-en&r=all |
| By: | Brown, Mark; Dar-Brodeur, Afshan; Tweedle, Jesse |
| Abstract: | While the presence of provincial border effects—the relative weakness of inter-provincial trade compared to intra-provincial trade—is well established, it remains unclear what underlies them. Parsing out the sources of the border effect is important, because it provides policy makers with much more information on where to direct their efforts. This paper takes a step in this direction by asking whether part of the border effect can be attributed to how multi-unit firms organize their production within and across provincial borders. Networks of operating units controlled by the same enterprise lower the cost of trade by shipping goods between units as value is added through the production chain or via the use of common upstream and downstream supply chains. Higher costs of operating these networks in multiple provinces may act as a barrier to firm networks. By combining measures of regional trade and firm networks over a nine-year period (2004 to 2012), the study tests these propositions. |
| Keywords: | Economic regions, Domestic trade, Domestic shipping |
| Date: | 2019–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2019009e&r=all |
| By: | Wolfgang Keller; Carol H. Shiue |
| Abstract: | The First Opium War (1840-42) was a watershed in the history of China. In its aftermath Britain and other countries forced open new ports to foreign trade through international treaties. Chinese institutions of trade were abolished and re-organized under Western management, Western legal institutions were introduced in China in form of courts and legal practices, and foreigners in China were tried according to the laws of their country of origin (extraterritoriality). To better understand the implications of these changes during the Treaty Port Era (1842-1943), we begin by discussing the attitudes towards foreign trade before 1840 for both China and the West. Drawing on information from the foreign-led Chinese Maritime Customs organization, we provide a synopsis of China’s foreign trade and investment both in terms of patterns and volumes. The paper highlights the link between foreign and domestic trade as well as the important role of new, previously not traded goods for welfare. Employing several outcome measures, we show that Western influence generated significant benefits to China’s economy, and the results suggest that the geographic scope of these benefits reached into areas far beyond the treaty ports. |
| JEL: | F1 F2 N15 O1 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27558&r=all |
| By: | Matthew Higgins; Thomas Klitgaard |
| Abstract: | It may be hard to remember given the pandemic, but trade tensions between the United States and China eased in January 2020 with the inking of the Phase One agreement. Under the deal, China committed to a massive increase in its purchases of U.S. goods and services, with targets set for various types of products. At the time of the pact, the U.S. economy was operating near full capacity, and any increase in U.S. exports stemming from the pact would likely have resulted in only a small boost to growth. The environment is now starkly different, with the U.S. economy operating far below potential. While the promised increase in Chinese purchases seems unlikely to be achieved, any appreciable increase in exports from the agreement is now more likely to deliver a meaningful boost to the economy. |
| Keywords: | China U.S. trade agreement; phase one; pandemic; COVID-19; exports; WTO; diversion creation; commodities |
| JEL: | F0 |
| Date: | 2020–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:88513&r=all |
| By: | Teti Feodora |
| Abstract: | This paper presents a new global tariff database covering tariffs at the six-digit product level for 197 importing countries and their trading partners for 30 years, namely 1988 to 2017. I deal simultaneously with the two major issues, missing data and misreporting, almost doubling the number of available tariffs from 2.9 to 5.7 billion. The improvement in the data is particularly relevant for developing countries. With this new dataset at hand I document numerous new facts about tariffs around the world improving our understanding of how countries set tariffs substantially. |
| Keywords: | Tariffs, MFN, preferences |
| JEL: | F13 F14 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_334&r=all |
| By: | Beghin, John C.; Schweizer, Heidi |
| Abstract: | This article tracks the recent evolution of salient trade costs in agricultural and food markets. We review ways to measure costs and conditions for policy prescriptions to reduce them when feasible. We pay attention to transportation costs, border measures, and standard-like nontariff measures. By pointing out limitations in current approaches and recent developments, we hope to improve our understanding of their effects. We suggest promising directions for further research and investigation of agricultural trade costs, including on the emerging debate on gene-editing and trade, transportation costs, and mainstreaming recent approaches in disentangling effects of trade costs on supply, demand, trade, prices, and welfare. |
| Keywords: | International Relations/Trade |
| Date: | 2020–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nbaesp:304761&r=all |
| By: | Banie Naser Outchiri (Université de Sherbrooke); Jie He (Université de Sherbrooke) |
| Abstract: | Based on a highly disaggregated database (1033 products, 181 partners) that we have built in physical terms, we investigate the drivers of China’s environmental trade cost (measured by CO2 emissions) from 1995 to 2014. To do this, we first used the “material balance” method to estimate China’s environmental trade cost. Then, we applied a new procedure to identify the drivers of China’s environmental trade cost that contributes to a better understanding of the trade’s role in environmental issues. Finally, we employed additive index decomposition analysis to estimate the contribution of each driver and their statistical accuracy. The results show that China faces a significant environmental cost as a result of its trade integration. Over the period, China’s environmental trade cost first was constant and relatively low from 1995 to 2001, then increased sharply from 2001 to 2008 before falling in 2009 and restarting unstable growth between 2010 and 2014. The decomposition results show that the increase in China’s environmental trade cost is explained by the fact that China’s technical catch-up is no longer able to offset the foreign demand effect and the product mix effect of exports. This is mainly due to the sharp increase in foreign demand for Chinese products and the fact that China’s export structure is becoming dirty mainly due to China-North trade patterns. There are some evidences that dirty production has slowly shifted from rich countries (especially North) to China, and clean production has moved in the opposite way. This has become more important after China’s entry into the World Trade Organization (WTO) in 2001, more specifically since 2004. Therefore, our results are better explained by the pollution haven hypothesis. |
| Keywords: | Carbon intensity, Emissions embodied in trade, Product level physical database, Material balance method, Index decomposition analysis. |
| JEL: | F18 O13 Q56 Q54 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:20-07&r=all |
| By: | Yuanhong, Hu |
| Abstract: | Based on data from 19 major countries from 2000-2017, this paper examines the impact of economic policy uncertainty on the export technological sophistication of manufacturing industries. The research shows that in the sample period, the export technological sophistication of manufacturing industries varies among countries, with China and India slowly increasing, Germany and Japan still at a high level, and Canada and Greece in a downward trend. From the empirical results, the expected mechanism of economic policy uncertainty forces the domestic manufacturing industries industry to accelerate R&D innovation by restraining the "technological spillover" effect of imported intermediate goods and the "financing dependence" effect of domestic credit investment, thus promoting the increase of the export technological sophistication in various countries. For countries with high economic growth rate, high degree of development and high degree of economic freedom, the positive impact of economic policy uncertainty on the export technological sophistication of manufacturing industries is more significant. From the perspective of economic policy uncertainty, the paper examines its impact on the export technological sophistication of manufacturing industries with important policy implications. Strengthening bilateral and multilateral consultations among governments and accelerating R&D innovation of domestic enterprises are effective measures to enhance export competitiveness at present. |
| Keywords: | Economic Policy Uncertainty,Export Technological Sophistication,R&D Innovation,Manufacturing Industry,Reflection Method |
| JEL: | F14 F41 F43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:222931&r=all |
| By: | Juan Esteban Carranza (Banco de la República de Colombia); Camila Casas (Banco de la República de Colombia); Alejandra Ximena González-Ramírez (Banco de la República de Colombia) |
| Abstract: | This paper documents the adjustment of international trade for the Colombian manufacturing sector following the 2014-2105 depreciation of the peso. We combine detailed information on trade with firm-level balance sheet and credit data, and we analyze the response of exports and imports at the macro-, firm-, and product-level to the exchange rate shock. The evidence indicates that export and import prices are sticky in dollars, and therefore the depreciation triggered a relatively rapid contractionary response from imports, whereas the response from exports was slower and weaker. Our micro-level analyses of the combined data suggest that the muted response of exports is associated with exporting firms’ reliance on imported imports, and with their preexisting higher debt, as predicted by the literature on balance sheet effects. **** RESUMEN: En este documento describimos el ajuste del comercio internacional del sector manufacturero colombiano a la depreciación del peso de 2014-2015. Combinamos información detallada de comercio exterior con datos de balances y créditos comerciales a nivel de firma, y analizamos la respuesta de las exportaciones y las importaciones al choque cambiario a niveles macro, de firma y de producto. Encontramos que los precios de las exportaciones y las importaciones son rígidos en dólares, y por lo tanto la depreciación generó una contracción rápida de las importaciones mientras que la respuesta de las exportaciones fue menor y más lenta. El análisis de los microdatos sugiere que la respuesta débil de las exportaciones está asociada con el uso de insumos importados por parte de las firmas exportadoras, y con la existencia previa de mayores niveles de endeudamiento. |
| Keywords: | Exchange Rate, Exports, Imports, Manufacturing Sector Tasa de cambio, Exportaciones, Importaciones, Sector manufacturero |
| JEL: | F1 F4 L1 L6 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1125&r=all |
| By: | James H. Cassing; Ngo Van Long |
| Abstract: | We study how the opportunity to trade in trash might influence the equilibrium outcome when the tax on the externality is determined by a political economy process. In our model, individuals have heterogeneous preferences for environmental quality, and there is a leakage when funds are transferred from the pressure groups to the politicians. When hard-core environmentalists and capitalists are organized interest groups while moderate environmentalists are not organized, we find that the politically chosen tax on the externality is below the optimal Pigouvian level. The opportunity to export waste in unlimited quantities, but at a price, is not the environmentalists' panacea and does not eliminate political social tension and suboptimal results. Nous étudions comment l'opportunité d'exporter des déchets pourrait influencer le résultat de l'équilibre lorsque la taxe sur l'externalité est déterminée par un processus d'économie politique. Dans notre modèle, les individus ont des préférences hétérogènes pour la qualité de l'environnement, et il y a une fuite lorsque les fonds sont transférés des groupes de pression aux politiciens. Lorsque les environnementalistes et les capitalistes purs et durs sont des groupes d'intérêts organisés alors que les environnementalistes modérés ne sont pas organisés, nous constatons que la taxe politiquement choisie sur l'externalité est inférieure au niveau pigouvien optimal. La possibilité d'exporter des déchets en quantités illimitées, mais à un prix, n'est pas la panacée des écologistes et n'élimine pas les tensions politiques sociales et les résultats sous-optimaux. |
| Keywords: | Trade in Trash,Interest Groups,Externalities,Environmental Lobby,Political Economy,Trade and Environment, Commerce des déchets,Groupes d'intérêt,Externalité,Lobby environnemental,Économie politique,Commerce et environnement |
| JEL: | F18 D72 |
| Date: | 2020–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2020s-44&r=all |
| By: | Fung, Loretta; Grekou, Douwere; Liu, Huju |
| Abstract: | Canada has a relatively large foreign-born population, and the country’s economic prosperity depends on international trade. This paper examines how these two characteristics are linked. Specifically, it investigates the effect of immigrant business ownership on international trade in Canada. Understanding the impact of immigrants on international trade is particularly important for Canada, as it is a small open economy with a relatively large immigrant population. This paper empirically investigates the effect of immigrant business ownership on international trade in Canada using a newly developed firm-level database with detailed business ownership and trade information. The new data make it possible to better distinguish between the effect immigrants have on reducing information costs and on product demand, and to assess the impact of immigrant business ownership on the extensive and intensive margins of international trade. |
| Keywords: | International trade, Immigrants, Business ownership |
| Date: | 2019–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2019014e&r=all |
| By: | Jesus Fernandez-Huertas Moraga (UAM - Universidad Autonoma de Madrid); Simone Bertoli (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Lucas Guichard |
| Abstract: | Acquiring information about destinations can be costly for migrants. We model information frictions in the rational inattention framework and obtain a closed-form expression for a migration gravity equation that we bring to the data. The model predicts that flows from countries with a higher cost of information or stronger priors are less responsive to variations in economic conditions in the various destinations, as migrants rationally get less information before deciding where to move. The economet-ric analysis reveals systematic heterogeneity in the pro-cyclical behavior of migration flows across origins that is consistent with the existence of information frictions. |
| Keywords: | international migration,D83,information,rational inattention,gravity equation JEL codes: F22,D81 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02902862&r=all |
| By: | SaidkarimovaSaodatSaidkamalovna |
| Abstract: | At the current time, the trends of investment are rapidly increasing as a result of the ongoing globalization of world economy, the widespread trade relations, the relative liberalization of tax policies and regimes in the countries. The experience of developed countries confirms that the active investment policy occupies a central place in their economic growth. Therefore, the full socio-economic development of our country requires to be fully reflected in its investment policy. Key Words: “Megapolis Education”Uzbekistan, Tashkent. Policy |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2020-34-05&r=all |
| By: | Adejumo, Akintoye; Asongu, Simplice |
| Abstract: | Globally, investments in physical and human capital have been identified to foster real economic growth and development in any economy. Investments, which could be domestic or foreign, have been established in the literature as either complements or substitutes in varying scenarios. While domestic investments bring about endogenous growth processes, foreign investment, though may be exogenous to growth, has been identified to bring about productivity and ecological spillovers. In view of these competing–conflicting perspectives, this chapter examines the differential impacts of domestic and foreign investments on green growth in Nigeria during the period 1970-2017. The empirical evidence is based on Auto-regressive Distributed Lag (ARDL) and Granger causality estimates. Also, the study articulates the prospects for growth sustainability via domestic or foreign investments in Nigeria. The results show that domestic investment increases CO2 emissions in the short run while foreign investment decreases CO2 emissions in the long run. When the dataset is decomposed into three sub-samples in the light of cycles of investments within the trend analysis, findings of the third sub-sample (i.e. 2001-2017) reveal that both types of investments decrease CO2 emissions in the long run while only domestic investment has a negative effect on CO2 emissions in the short run. This study therefore concludes that as short-run distortions even out in the long-run, FDI and domestic investments has prospects for sustainable development in Nigeria through green growth. |
| Keywords: | Investments; Productivity; Sustainability; Growth |
| JEL: | E23 F21 F30 O16 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101924&r=all |
| By: | Shigeto KITANO (Research Institute for Economics and Business Administration, Kobe University) |
| Abstract: | This note examines how recent volatile fluctuations of world commodity prices due to the COVID-19 shock affect Asian commodity exporting economies. Our analysis shows that a drop in world commodity prices has a significant negative impact on output, consumption, and investment of sample countries. However, the impact on trade balance is positive in some countries and negative in others. The difference between these two groups is attributable to whether world commodity prices affect each country's interest rate spreads. |
| Keywords: | Commodity prices; Asian emerging economies; Financial frictions; SVAR; Interest rate spreads; Commodity exporting economies; Trade balances; COVID-19 shock |
| JEL: | E32 E37 E44 F32 F36 F41 F44 F62 O16 Q43 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2020-24&r=all |
| By: | Dilan Tas; Merima Kastrat |
| Abstract: | Germany is one of the several countries in Europe that have opened its borders to immigrants for many years. The admission of immigrants into Germany has contributed to the country being the second largest immigration destination in the world, and this has resulted in both negative and positive outcomes for the natives. In this essay, the effect of immigration on natives’ hourly wages and employment was examined, by using microdata for Germany. Native workers’ educational level attainments and 16 different regions in Germany were taken into account to obtain regional variation. Cross-sectional data was used for the years 2005, 2009 and 2015 in order to measure the effect of the share of immigrants on natives’hourly wages and employment. The findings showed that the share of immigrants, had a positive effect on natives’ wages and employment in 2005 and 2009. In 2015, however, a negative relationship was found, with the share of immigrants impacting negatively on natives’ wages but not on employment. Thus, the study highlights the importance of immigrants on natives’ hourly wages and employment. |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:770&r=all |
| By: | Gaétan de Rassenfosse (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology) |
| Abstract: | Governments have strong incentives to allow their inventors to free ride on foreign technologies. They can achieve this result by discriminating against foreigners in the patent system--by refusing to grant foreigners a patent for their inventions. International patent law treaties forbid this practice, which may lower the global innovation incentives and may hurt international trade. Using data on half a million inventions submitted to the Chinese patent office, we find robust evidence of anti-foreign bias in the issuance of patents in 'strategic' technology areas. Foreigners are about 50 percent more likely to be refused a strategic patent than locals. |
| Keywords: | industrial policy, national treatment principle, patent, technology protectionism, TRIPS |
| JEL: | O34 K11 F52 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iip:wpaper:11&r=all |
| By: | Alessandro Barattieri; Matteo Cacciatore |
| Abstract: | Using monthly data on temporary trade barriers (TTBs), we estimate the dynamic employment effects of protectionism through vertical production linkages. First, exploiting procedural details of TTBs and high-frequency data, we identify movements in protectionism exogenous to economic fundamentals. We then use input-output tables to construct measures of protectionism affecting downstream producers. Finally, we estimate panel local projections using the identified trade-policy shocks. Protectionism has small and insignificant beneficial effects in protected industries. In contrast, the effects in downstream industries are negative, sizable, and significant. The employment decline follows an increase in intermediate-inputs and final goods prices. |
| JEL: | F13 F14 F62 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27630&r=all |
| By: | Onifade, Stephen; Ay, Ahmet; Asongu, Simplice; Bekun, Festus |
| Abstract: | The recent exacerbation of unemployment crisis in Nigeria stands to be a serious threat to both socio-economic stability and progress of the country just as the report from the nation’s bureau of statistics shows that at least over 8.5 million people had no gainful employment at all as at the last quarter of the year 2017. It is on the above premise, that the present study explores the link between trade and unemployment for the case of Nigeria with the intention of exploring how the unemployment crisis has been impacted within the dynamics of the country’s trade performance. The empirical evidence shows that the nation’s terms of trade were insignificant to unemployment rate while trade openness and domestic investment, on the other hand, have significant opposing impacts on unemployment in Nigeria over the period of the study. Further breakdowns from the empirical analysis also revealed that the Philips curves proposition is valid within the Nigerian economic context while the evidences for the validity of Okun’s law only exist in the short-run scenario. Based on the empirical results, we recommend that concerted effort should be geared toward stimulating domestic investment by providing adequate financial and infrastructural facilities that will promote ease of doing business while utmost precautions are taken to ensure that unemployment crisis is not exacerbated when combating inflation in the economy in the wake of dynamic trade relations. |
| Keywords: | Nigeria; Unemployment; Trade; Phillips Curves; Okun’s law |
| JEL: | E23 E30 F21 O16 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101925&r=all |
| By: | Olivier Jeanne; Jeongwon Son |
| Abstract: | In theory, we should expect tariffs to be partially offset by a currency appreciation in the tariff-imposing country or by a depreciation in the country on which the tariff is imposed. We find, based on a calibrated model, that the tariffs imposed by the US in 2018-19 should not have had a large impact on the dollar but may have significantly depreciated the renminbi. This prediction is consistent with a high-frequency event analysis looking at the impact of tariff-related news on the dollar and the renminbi. We find that tariffs explained at most one fifth of the dollar effective appreciation but around two thirds of the renminbi effective depreciation observed in 2018-19. |
| JEL: | F31 F41 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27654&r=all |
| By: | Regine Pleninger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jan-Egbert Sturm (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | We examine the effect of economic globalisation on income redistribution and hypothesise that it depends on ethnic fractionalisation. In highly fractionalised countries, powerful ethnicities are able to extract globalisation-induced benefits, whereas their governments face substantial political obstacles when redistributing income between ethnic groups. Using the newly constructed KOF Globalisation Index, we find supportive evidence for the interactive effect of ethnic fractionalisation and de jure financial globalisation on redistribution. In particular, the total effect of de jure financial globalisation on redistribution is negative in highly fractionalised countries. Governments in these countries are apparently not only reluctant to offset potential consequences stemming from de jure financial globalisation, but they even reduce redistribution to lower levels. |
| Keywords: | Income redistribution; Globalisation; Ethnic fractionalisation.; Income redistribution, Globalisation, Ethnic fractionalisation |
| JEL: | D31 D63 F15 O11 O15 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:19-465&r=all |