nep-int New Economics Papers
on International Trade
Issue of 2021‒01‒11
forty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  2. Pound for Pound Export Diversification By Anderson, James; Yoto, Yoto
  3. Labor Share, Foreign Demand and Superstar Exporters By Ludovic Panon
  4. The Role of Imported Inputs in Firms’ Productivity and Exports By Deasy D.P. Pane; Arianto A. Patunru
  5. Protectionism and Economic Growth: Causal Evidence from the First Era of Globalization By Niklas Potrafke; Fabian Ruthardt; Kaspar Wüthrich; Fabian Ruthardt
  6. Natural Barriers and Policy Barriers By Yang Jiao; Shang-Jin Wei
  7. Foreign Direct Investment and Corruption in Egypt: A Cointegration Analysis By Eman Moustafa
  8. Trade Shocks and Firms Hiring Decisions: By He, Chuan; Mau, Karsten; Xu, Mingzhi
  9. Cyprus; Selected Issues By International Monetary Fund
  10. Can global trade of medical supplies solve the COVID-19 puzzle? By Shaker, Saber
  11. The Impacts of Openness and Global Value Chains on The Performance of Turkish Sectors By Halit Yanikkaya; Abdullah Altun; Pinar Tat
  12. Optimal Inward Foreign Direct Investment Share within an International M&A Setting By Paul J.J. Welfens
  13. When does trade reduce poverty? Revisiting the evidence for East Asia By Jayant Menon; Anna Cassandra Melendez
  14. Globalization and Female Empowerment: Evidence from Myanmar By Molina, Teresa; Tanaka, Mari
  15. Product Complexity, Exports, and Exchange Rates: Evidence from the Japanese Chemical Industry By Willem THORBECKE; Nimesh SALIKE; CHEN Chen
  16. Immigration By Jonathan Wadsworth
  17. Regional developmentalism in West Africa: The case for commodity-based industrialisation through regional cooperation in the cocoa-chocolate sector By Jonathan Bashi Rudahindwa; Sophie van Huellen
  18. The Dynamics of Foreign Direct Investment and Exchange Rates: An Interconnection Approach in ASEAN By Syarifuddin, Ferry
  19. The International Spillover of U.S. Monetary Policy via Global Production Linkages By Julian di Giovanni
  20. Divided We Fall: International Health and Trade Coordination During a Pandemic By Viral V. Acharya; Zhengyang Jiang; Robert J. Richmond; Ernst-Ludwig von Thadden
  21. Specialization of Russia in international trade: development in the changing international environment By Andrey Pushkarev; Natalia Davidson; Oleg Mariev; Nikita Luft
  22. Colombia; Selected Issues By International Monetary Fund
  23. Globalization and Empire: Market integration and international trade between Canada, the United States and Britain, 1750-1870 By Maja Uhre Pedersen; Vincent Geloso; Paul Sharp
  24. No longer “the economy stupid”: how muddled economics contributed to a chaotic Brexit By Begg, Iain
  25. Government measures and economic activity during the COVID-19 outbreak: some preliminary short-term evidence from Europe By Giammanco, Maria Daniela; Gitto, Lara
  26. Optimal Road Network and the Gains from Intranational Trade By Dias, Lucas; Haddad, Eduardo; Maggi, Andrés
  27. Wildlife Trade Policy and the Decline of Wildlife By Benedikt Heid; Laura Márquez-Ramos
  28. Flagged and tagged by ITSCI: the potential and risks of non-state supply chain regulation By Postma, Hester; Geenen, Sara
  29. Productive integration, economic recession and employment in Europe: an assessment based on vertically integrated sectors By Davide Villani; Marta Fana
  30. Common Trade Exposure and Business Cycle Comovement By ; Carter Mix
  31. International Sourcing in Portuguese Companies Evidence from Portuguese Micro Data By Ana Martins; Guida Nogueira; Eva Pereira
  32. [WTO Case Review Series No.35] Korea – Import Bans, and Testing and Certification Requirements for Radionuclides (WT/DS495): Issues under the SPS Agreement regarding certain trade regulations by Korea on Japanese food products based on radioactive contamination concerns (Japanese) By SO Hongbum
  33. Geo-blocking: Geo-blocking regulation: an assessment of its impact on the EU Digital Single Market By ALAVERAS Georgios; DUCH BROWN Nestor; MARTENS Bertin
  34. Inter-Industry Spillovers in Labor Productivity and Global Value Chain Impacts: Evidence from Turkey By Mohamedou Nasser Dine
  35. Functional Distribution of Income as a Determinant of Importing Behavior: An Empirical Analysis By Vinicius Curti Cicero; Gilberto Tadeu Lima
  36. Understanding the Effects of Granting Work Permits to Undocumented Immigrants By Joan Monràs; Javier Vázquez-Grenno; Ferran Elias
  37. Эмпирическая оценка влияния инвестиций на экономический рост в Казахстане // An empirical assessment of the impact of investment on economic growth in Kazakhstan By Самат Мөлдір
  38. Asymmetric Information and Global Market Failure: Evidence and Policy Implications from Covid-19 By Pazhanisamy, R.
  39. Arab Exports and Creditworthiness Are there Real Needs for Specialized Export Credit Institutions? By Riadh Ben Jelili
  40. Globalization, Environmental Damage and the Corona Pandemic – Lessons from the Crisis for Economic, Environmental and Social Policy (German Version) By Blum, Bianca; Neumärker, Bernhard

  1. By: Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study examines the potential effects of China’s “One-Belt One-Road” initiative (OBOR) on trade flows and global value chain connections. The empirical analysis is based on the augmented gravity model of international trade, which comprises 186 reporters and 199 partners in the period 2000-2018. We also estimate the gravity model for involvement in global value chains (domestic and foreign value added in exports and the value contributed by a partner to a reporter’s exports). OBOR proves to be positively correlated with international trade and global value chains (GVC), while some of the corridors seem to be more beneficial than others (e.g. China-Pakistan, China-Mongolia-Russian Federation, and Bangladesh-China-India-Myanmar).
    Keywords: One-belt one-road, China, gravity trade models, global value chains
    JEL: F13 F14 C23
    Date: 2020–12
  2. By: Anderson, James (Boston College; NBED); Yoto, Yoto (Drexel University)
    Abstract: We propose a short-run model of the extensive margin of trade and deploy it to distinguish and quantify domestic and cross-border margins. Our empirical focus is on the domestic extensive margin of trade (domestic distribution of a product) and its importance for quantifying policy and globalization effects on the international extensive margin of trade. We build a dataset that combines data on the domestic extensive margin and the standard international extensive margin. It reveals significant and intuitive variation in the domestic extensive margin across countries and over time. We quantify the extensive margin effects of European Union (EU) integration, 2008-2018, and demonstrate that these effects cannot be identified without the domestic extensive margin. We find strong and highly heterogeneous effects, both across countries and directionally.
    Keywords: Extensive Margin; Domestic Extensive Margin; Globalization; Gravity
    JEL: F13 F14 F16
    Date: 2020–12–20
  3. By: Ludovic Panon (Département d'économie)
    Abstract: This paper proposes a new determinant of labor share changes. Using micro-data on the universe of French manufacturing exporters over 1995-2007, I show that a measure of export demand growth exogenous to firm- level outcomes drives down the manufacturing labor share through two effects. First, foreign demand shocks allow low-labor share, highly internationalized “superstar” exporters to grow disproportionately more. Second, foreign demand growth decreases the labor share of exporters and this effect is stronger for larger exporters. Both effects explain 12% of the labor share decline over 1995-2000 and led to a 1.2 percentage point drop over 2000-2007. A simple model of endogenous competition with heterogeneous firms rationalizes the findings. A market size increase allows exporters to expand, which decreases their share of fixed labor cost in value-added, and increases competition on international markets. Fiercer competition favors superstar exporters, further decreasing their labor share through the fixed cost channel. Overall, these findings provide direct causal evidence of a “winner take most” phenomenon induced by trade globalization.
    Date: 2020–12
  4. By: Deasy D.P. Pane; Arianto A. Patunru
    Abstract: The rise of economic protectionism worldwide has come with re-emergence of mercantilist policies whereby governments push for exports while restricting imports. Against this populist approach, we show that importing inputs can raise productivity and export. Using firm-level data matched with very detailed customs data of Indonesia’s exports and imports during 2008–12, we apply instrumental variable strategy with import tariffs and import weighted real exchange rates as instruments for import of intermediate inputs. We find causality from imported inputs to productivity increase and export growth. Higher access to input varieties has a larger impact than an increase in import volume on export, implying that the main benefits of importing may come from access to broader alternatives of inputs. Furthermore, the impact is also larger when imports originate from developed countries, suggestive of a positive effect of technology and product quality.
    Keywords: imported intermediate inputs, export performance, total factor productivity
    JEL: D22 D24 F13 F14 F31
    Date: 2020
  5. By: Niklas Potrafke; Fabian Ruthardt; Kaspar Wüthrich; Fabian Ruthardt
    Abstract: We investigate how protectionist policies influence economic growth. Our empirical strategy exploits an extraordinary tax scandal that gave rise to an unexpected change of government in Sweden. A free-trade majority in parliament was overturned by a protectionist majority in 1887. We employ the synthetic control method to select control countries against which economic growth in Sweden can be compared. We do not find evidence suggesting that protectionist policies influenced economic growth and examine channels why. Tariffs increased government revenue. However, the results do not suggest that the protectionist government stimulated the economy in the short-run by increasing government expenditure.
    Keywords: protectionism, economic growth, first era of globalization, synthetic control method, causal inference
    JEL: C33 D72 F10 F13 N10 O11
    Date: 2020
  6. By: Yang Jiao; Shang-Jin Wei
    Abstract: This paper investigates whether "natural" trade barriers of a country due to geography and other factors outside the country's control stimulate more or less policy barriers such as tariffs. Our theory predicts that the politician's relative weight on private benefits over social welfare in a "protection-for-sale" setup depends on these "natural" features. The key mechanism is that a society's willingness to invest in improving institutions that constrain rent-seeking behavior is influenced by the natural barriers. Two types of empirical evidence support the theoretical predictions. First, "natural" barriers beget policy barriers - countries with more "natural" barriers tend to have higher tariffs and more NTBs. Second, liberalization begets liberalization - in response to unilateral trade reforms in China in the early 2000s, those other countries that benefit more from the Chinese liberalization also undertake more liberalization of their own.
    JEL: F1 O24
    Date: 2020–12
  7. By: Eman Moustafa (General Authority for Investment and Free Zones)
    Abstract: This paper uses a time series analysis to estimate the impact of corruption on FDI in Egypt during the period 1970-2019 and to address some of the drawbacks of the empirical literature. Unit root and cointegration tests are used to ensure stationarity and long run relationship among variables of interest. The results show a significant positive relationship between FDI and corruption in Egypt. Since corruption is not found to hinder FDI inflows, treating corruption should be based on sound legal procedures that infringe neither on the freedom of FDI nor on the degree of openness of the economy, which are the real stimulants of FDI in Egypt
    Date: 2020–12–20
  8. By: He, Chuan; Mau, Karsten (RS: GSBE other - not theme-related research, Macro, International & Labour Economics); Xu, Mingzhi
    Abstract: This paper studies the hiring behavior of firms exposed to the recent China-US trade war. Our analysis leverages information from a Chinese online job board and a firm-level measure of tariff exposure obtained from customs transactions data. Firms that are more exposed to US tariffs on Chinese goods responded by posting fewer job vacancies and offering lower wages. The latter is partly balanced out by increased non-wage compensation. We also find a negative relationship between US-tariff exposure and the educational background required in firms’ job ads. China’s retaliatory tariffs against the US does not appear to have a statistically significant systematic impact on hiring. The paper also reports heterogeneous adjustment patterns across firms of different size, ownership and product mix. Overall, the trade war reveals to have negative impact on firms and job-seekers in China.
    JEL: D22 F13 F14 J23
    Date: 2021–01–05
  9. By: International Monetary Fund
    Abstract: This Selected Issues paper assesses Cyprus’s export competitiveness and understands factors that could explain export developments, particularly in the services sector. Although Cyprus has been able to leverage its strategic location to diversity its markets for goods exports, as a small island economy, opportunities for diversifying its products mix is more limited. Services exports have performed better in the post-crisis period buoyed by the recovery in Europe and the impact of technological advances on global Information and Communication Technologies-enabled trade. Policies to support greater market diversification, enhance competition and efficiency and strengthen technological adoption would help exports growth. Studies have established the relationship between price and cost competitiveness with trade performance. Cyprus has performed reasonably well with strong service exports over the past few years, aided by improvements in cost competitiveness and a recovery in the European export markets. Policymakers should exploit opportunities brought by the digital transformation while addressing the accompanied risks.
    Keywords: Service exports;Exports;Banking;Export performance;Imports;ISCR,CR,export,bank,Cyprus,Cypriot bank
    Date: 2019–12–09
  10. By: Shaker, Saber
    Abstract: The main aim of this study to determine the explanatory variables of the Chinese exports of COVID-19 medical supplies to its 89 major trading partners in the first half of the year 2020. In addition, it explores the puzzle of the COVID-19 pandemic outbreak from an economic perspective. We used the Ordinary-least-square (OLS) regression under a cross-sectional data framework to construct the quantitative analysis. The main findings are: First, the number of old population and the number of COVID-19 confirmed cases in the trading partner have been drivers of Chinese exports of COVID-19 medical supplies. Second, tariff barriers levied on the trading partner significantly impedes the Chinese exports of COVID-19 medical supplies to its trade partners, especially from middle-income countries. In future work, the analysis of this type of trade through the supply-side factors could be investigated. Also, some other variables such as non-tariff measures could be utilized. The study encourages literature for empirically analyzing the trade of medical supplies, in general, under econometric modeling. The results are illustrated based on consistent quantitative evidence.
    Keywords: COVID-19, Medical supplies, Trade, China, Cross-sectional data
    JEL: F14 F40 F49 I15 O19
    Date: 2020–12
  11. By: Halit Yanikkaya (Gebze Technical University, Turkey); Abdullah Altun (Gebze Technical University, Turkey); Pinar Tat (Gebze Technical University)
    Abstract: Regarding the dynamics of contemporary world economy, success in a domestic economy cannot be achieved without effective integration policies for goods/services and capital flows. In order to evaluate this proposition, we utilize a large number of openness measures for two periods:1995-2009 and 2005-2014. For the earlier data set, we find that export and export of domestic value added increase total factor productivity growth. These variables are also positively associated with value added growth. Tariff rates which Turkey faces are negatively related to value added growth, which means decreasing competitiveness of Turkish goods and services in the international market. Forward GVC participation leads to increase in value added growth. For export growth, tariff rates faced significantly reduce the growth rate of both export and domestic value added export. For the later data set, all covariates other than tariff rates lose their significances. However, tariff rates Turkey imposes are positively related to both total factor productivity and value added growth. The negative effect of faced tariff rates is also persistent in export growth. Overall, designing and implementing trade policies to effectively integrate into the global value chains is an important task for Turkey.
    Date: 2020–12–20
  12. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Cumulated inward foreign direct investment has two major macroeconomic effects: (i) on the one hand, there is a positive international technology transfer effect on real GDP (ii) on the other hand, real national income is reduced by profit remittances to the source country. This naturally leads to the question of an optimal FDI share in the total capital stock, namely for maximizing real national income. The analysis presented herein derives new results for the rather simple case of asymmetric inward foreign direct investment and the setting of international mergers & acquisitions. Moreover, an enhanced neoclassical growth model also shows new results for the golden age - the approach assumes that the output elasticity can change and that the FDI inward intensity will affect the output elasticity of capital; empirical evidence for OECD countries is presented. From this transparent analytical framework, clear results for optimal inward FDI are obtained and the implications are indeed relevant in a modern macroeconomic research perspective which includes FDI analysis in open economies. There are crucial economic policy implications for policy makers as well international organizations; the approach also can be integrated into DSGE models.
    Keywords: FDI, technology transfer, optimal economic policy, economic welfare analysis, Schumpeter
    JEL: E6 F15 F21 F23 F41
    Date: 2020–11
  13. By: Jayant Menon; Anna Cassandra Melendez
    Abstract: East Asia’s openness to trade is often credited as one of the main drivers behind the region’s impressive gains in economic growth and poverty reduction. In this paper, we examine the literature to determine whether there is a sound theoretical and empirical basis for this presumed relationship between trade and poverty reduction. Like many other studies on this topic, we find that the linkages are not automatic; the impact of trade on poverty is highly context-specific, and many factors come into play. Complementary policies are necessary to maximise trade’s potential impact on poverty reduction. We also explore the role of Aid-forTrade in addressing specific trade-related capacity constraints which prevent developing countries from maximising the benefits from trade.
    Keywords: east Asia, trade, poverty, aid for trade
    JEL: C12 C51 D31 D63
    Date: 2020
  14. By: Molina, Teresa (University of Hawaii at Manoa); Tanaka, Mari (Hitotsubashi University)
    Abstract: This paper examines whether globalization promotes female empowerment by improving the jobs available to women. Previous work has documented that exporting causally improved working conditions at predominantly female garment factories in Myanmar. In this study, restricting to garment factory neighborhoods, we find that women living near exporting factories are significantly more likely to be working, have lower tolerance of domestic violence, and are less likely to be victims of domestic violence. Using distance to the international airport as an instrument for proximity to an exporting factory, we find similar results: higher employment rates, lower tolerance of domestic violence, and a decrease in the experience of physical violence.
    Keywords: female empowerment, domestic violence, globalization, trade, Myanmar
    JEL: J12 F66
    Date: 2020–12
  15. By: Willem THORBECKE; Nimesh SALIKE; CHEN Chen
    Abstract: We investigate how exchange rates affect the Japanese chemical industry. Focusing on exports in a single industry from a single country reduces the influence of other factors that could cloud inference. We find that stock returns of firms linked to commoditized industries decrease when the yen appreciates. Also, since more complex products are less substitutable in international trade, we investigate whether they have lower price elasticities. We measure complexity using Hausmann and Hidalgo's (2009) product complexity index. We find that price elasticities are lower for more complex goods. These results suggest that exporting sophisticated products could reduce export and profit volatility arising from exchange rate swings.
    Date: 2020–11
  16. By: Jonathan Wadsworth
    Abstract: Immigration remains a highly contentious issue and its purported effects on the labour market and the wider economy are still highly contested. The discussion below is intended as an overview of what we know and what we do not know about immigration to the UK and its economic effects, and the possible direction of future migration policy. Economists have long understood that immigration is influenced by individual assessments of the costs and benefits of a move to another country. Individuals can decide to move and indeed leave or migrate elsewhere if economic and/or political conditions shift in favour of migration to other countries. The number of immigrants in the UK is a reflection of a series of economic and political events that have made the UK relatively more or less attractive to migrants over time. Equally, the attractiveness of the UK to migrants from outside the UK is influenced by relative economic circumstances but also by the relative costs of entry embodied in the visa and entry system.
    Date: 2019–11
  17. By: Jonathan Bashi Rudahindwa (Université Protestante au Congo, Kinshasa, Democratic Republic of Congo; School of Law, SOAS University of London); Sophie van Huellen (Department of Economics, SOAS University of London)
    Abstract: Regional integration occupies a prominent place in the economic policies of most Sub-Saharan African countries. However, despite different waves of initiatives across the African continent, the majority of African regional schemes have not managed to achieve their ambitious goal of promoting sustainable development through trade integration in Africa. In light of this observation, using the West African cocoa-chocolate sector as a case study, we propose the regional developmentalism paradigm as an alternative approach to regionalism in Africa, placing a particular emphasis on the use of regional and sub-regional approaches to development. Instead of full-fledged trade liberalisation and indiscriminate economic integration, the regional developmentalism paradigm advocates for state-led trade facilitation, regulatory convergence and capacity-building through the adoption of policies directed at strategic sectors. We evaluate the potential of the regional developmentalism paradigm to promote economic ttransformation and commodity-based industrialisation against the shortcomings of the current regional integration approach embodied in the institutional framework of ECOWAS.
    Keywords: West Africa; regional integration; development; developmental state; industrialisation; cocoa; ECOWAS
    JEL: F02 F13 K33 O13 O24
    Date: 2020–12
  18. By: Syarifuddin, Ferry
    Abstract: This paper examines the direct and spillover effects of the exchange rate on foreign direct investment (FDI) inflows based on a panel of ASEAN countries for the period 2001 to 2018. We utilize the spatial econometric approach to accommodate the nature of spatial dependence among ASEAN countries. Our results suggest that the effect of the exchange rate depends on the source-region of FDI, implying the existence of spatial heterogeneity in ASEAN’s FDI. We also show that FDI inflows in ASEAN is not only influenced by the exchange rate of the country itself but also by those of the neighboring countries.
    Keywords: Foreign Direct Investment, Exchange Rates, Macroeconomics, Spatial Models
    JEL: F21
    Date: 2020–12–01
  19. By: Julian di Giovanni
    Abstract: The recent era of globalization has witnessed growing cross-country trade integration as firms’ production chains have spread across the world, and with stock market returns becoming more correlated across countries. While research has predominantly focused on how financial integration impacts the propagation of shocks across international financial markets, trade also influences these cross-border spillovers. In particular, one important aspect, highlighted by the recent work of di Giovanni and Hale (2020), is how the global production network influences the transmission of U.S. monetary policy to world stock markets.
    Keywords: global production network; asset prices; monetary policy shocks
    JEL: F0 G1
    Date: 2021–01–06
  20. By: Viral V. Acharya; Zhengyang Jiang; Robert J. Richmond; Ernst-Ludwig von Thadden
    Abstract: We analyze the role of international trade and health coordination in times of a pandemic by building a two-economy, two-good trade model integrated into a micro-founded SIR model of infection dynamics. Uncoordinated governments with national mandates can adopt (i) containment policies to suppress infection spread domestically, and (ii) (import) tariffs to prevent infection coming from abroad. The efficient, i.e., coordinated, risk-sharing arrangement dynamically adjusts both policy instruments to share infection and economic risks internationally. However, in Nash equilibrium, uncoordinated trade policies robustly feature inefficiently high tariffs that peak with the pandemic in the foreign economy. This distorts terms of trade dynamics and magnifies the welfare costs of tariff wars during a pandemic due to lower levels of consumption and production as well as smaller gains via diversification of infection curves across economies.
    JEL: F1 F4 H87 I1
    Date: 2020–12
  21. By: Andrey Pushkarev (Ural Federal University, Ekaterinburg); Natalia Davidson (Ural Federal University, Ekaterinburg); Oleg Mariev (Ural Federal University, Ekaterinburg); Nikita Luft (Ural Federal University, Ekaterinburg)
    Abstract: International economic relations are important for the countries? economic growth, especially in the modern world of global value chains and rapid technological development. Russia is known for its comparative advantage in natural resources and for its intentions to diversify the economy. Indeed, specialization in natural resources is not associated with sustainable economic growth. We analyze Russia?s specialization in trade over the period 2009-2018 including the year 2014 when economic and financial sanctions were introduced. We follow the dynamics of Russia?s comparative advantages in different categories of goods in trade with all world countries, BRICS countries and Eurasian Economic Union over these years. Our aim is to shed more light on the current specialization of Russia in order to understand the possibilities of diversifying the economy. We analyze short term consequences of difficulties in international relations that Russia faces, and provide an insight into the long run development of trade. We conclude that Russia currently has a prevailing comparative advantage in material-intensive industries and needs to develop innovations in order to diversify its economy and obtain a comparative advantage in the other categories of goods, including high-tech sector. The results can be useful for development of economic policy.
    Keywords: Comparative advantage, Balassa index, Lafay index, specialization, international trade, export, Russian regions
    JEL: F14 F50 F43
  22. By: International Monetary Fund
    Abstract: This Selected Issues paper focuses on Venezuelan migration and the labor market. Over 2 million migrants have crossed the border from Venezuela and continue to join Colombia’s labor market—which remains weak overall with rising unemployment and falling participation. There is so far little evidence of displacement effects on account of immigration, however, as the Colombian informal sector has capably absorbed most of the migrant inflow. A more granular view of Colombia’s local labor markets does not show weaker employment outcomes in those that have received the most migrants. However, with many of these workers being highly skilled and attached to the informal sector, evidence of labor misallocation highlights the need to continue integration policies. The government is conducting efforts to accelerate the validation of Venezuelan degrees for easing the integration of professional migrants and high-school educated migrants who wish to continue their university studies in Colombia.
    Keywords: Exports;Depreciation;Labor markets;Migration;Labor force participation;ISCR,CR,Colombian peso,trading partner
    Date: 2020–04–17
  23. By: Maja Uhre Pedersen (University of Southern Denmark); Vincent Geloso (King's University College); Paul Sharp (University of Southern Denmark)
    Abstract: Previous work has demonstrated the potential for wheat market integration between the US and the UK before the ‘first era of globalization’ in the second half of the nineteenth century. It was however frequently interrupted by policy and ‘exogenous’ events such as war. This paper adds Canada to this story by looking at trade and price data, as well as contemporary debates. We find that she faced similar barriers to the US, and that membership of the British Empire was therefore not a great benefit. We also describe the limitations she faced accessing the US market, in particular after American independence. Transportation costs do not appear to be the main barrier to the emergence of a globalized economy before around 1850.
    Keywords: British Empire, Canada, globalization, market integration, United Kingdom, United States, wheat
    JEL: N51 N53 N71 N73
    Date: 2020–12
  24. By: Begg, Iain
    Abstract: The Faustian bargain at the heart of Brexit can be portrayed as a trade-off between enhanced control and economic benefits. Most commentators expect the UK economy to take some sort of hit from leaving the UK, but in the words of one prominent ‘leave’ supporter, it would be a ‘price worth paying’, to regain control over decision-making.2 For convinced Brexiteers, a UK unshackled from the EU will rapidly transform itself to be able to take advantage of opportunities in emerging markets and other dynamic parts of the global economy, while ‘remainers’ see distancing the UK from its largest market as an egregious act of self-harm. Both sides have been culpable of misleading statements. Similar dissembling occurred in relation to the public finances. The article explores how competing, poorly understood and often incoherent interpretations of economic propositions fed into Brexit, leading to misguided policy decisions and confusion in the debates around how to reset the UK’s economic relationship with the EU.
    Keywords: 350 million for NHS; Brexit policy failures; economics of Brexit; no deal Brexit; UK trade
    JEL: N0
    Date: 2019–12–13
  25. By: Giammanco, Maria Daniela; Gitto, Lara
    Abstract: The COronaVIrus Disease 19 (COVID-19) outbreak has resulted in a major worldwide economic depression. Governmental reactions to face the COVID-19 pandemic threat are varied and characterised by diverse intensity. Restrictive measure have been taken to control the pandemic, although the same actions have determined economic fallouts that need to be faced by additional measures of social welfare support. The question concerning the type and the intensity of the governmental actions is still an open issue in the public debate. The present contribution is aimed at offering evidence on the impact of anti-COVID government actions on the volume of trade. Using monthly Eurostat data on 29 European countries, it investigates the relationship between the turnover of volume of sales (the percentage change on previous period) and the adoption of governmental measures. Explanatory variables employed encompass the government response to COVID-19 pandemic as measured by the Oxford University team led by the Blavatnik School of Government, namely, a government response index, a stringency index, a containment and health index and an economic support index. Among control variables used, there is an indicator of consumer confidence. It has been estimated a generalised least squares model, controlling for heteroskedasticity across panels and autocorrelation. The results outlined a positive relationship between consumer confidence and the percentage change of the index of deflated turnover of retail sale of food, beverages and tobacco; a negative relation between restrictive governmental measures; a negative relation between consumer confidence and the percentage change of the index of deflated turnover of retail sale via mail order houses or Internet. Instead, it emerged a positive relation between governmental measures aimed at stringency and the percentage change on previous period of the index of deflated turnover of retail sale via internet. The positive impact on internet retail outlines the growing importance of this channel for trade.
    Keywords: COVID-19; European countries; Governmental measures; turnover of volume of sales; internet retail.
    JEL: E65 F01
    Date: 2020–12–30
  26. By: Dias, Lucas (Departamento de Economia, Universidade de São Paulo); Haddad, Eduardo (Departamento de Economia, Universidade de São Paulo); Maggi, Andrés (Harvard University)
    Abstract: This paper assesses the efficiency of the Brazilian road network using data on road speeds and distances and a spatial general equilibrium model with costly trade. We find that Brazil would gain 0.31% of welfare if better organize its road network for intranational trade and that the most populated regions are relatively oversupplied of transport infrastructure compared with the remote and poor areas. We further find long lasting effects of the highways’ project designed to integrate Brasília with the rest of the country in the 1960s. Regions connected by the so-called Radial Highways are currently oversupplied of transport infrastructure.
    Keywords: Optimal Road Network; Intranational Trade
    JEL: F10 O18 R40
    Date: 2021–01–06
  27. By: Benedikt Heid; Laura Márquez-Ramos
    Abstract: The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is the international agreement that regulates international trade in wildlife to prevent its decline. Little is known about the effectiveness of its trade restrictions and bans. Combining the largest available panel database on wildlife population sizes of vertebrates with the history of species’ inclusion into CITES, we find that populations increase by 20% after their species’ inclusion into CITES. This effect is driven by populations in countries with thorough enforcement. Outright trade bans increase wildlife, but restrictions that incentivize sustainable use have more immediate positive effects.
    Keywords: CITES, endangered species, wildlife decline, wildlife trade policy
    JEL: F18 Q27 Q56
    Date: 2020
  28. By: Postma, Hester; Geenen, Sara
    Abstract: In response to growing international concerns over mineral extraction and trade contributing to human rights violations and conflict financing, recent US (Dodd-Frank) and EU legislations have focused on transparency and due diligence in mineral supply chains. This means that in theory, mineral buying companies higher up in the supply chain should continuously monitor their suppliers and stop buying from them they identify risks. But does this work? What happens when risks are identified? How can private actors be held to account? We have studied ITSCI certification in Rwanda and found several flaws when due diligence is put into practice.
    Keywords: Rwanda; supply chains; ITSCI; International Tin Supply Chain Initiative
    Date: 2020–12
  29. By: Davide Villani; Marta Fana (European Commission - JRC)
    Abstract: The Covid-19 crisis has revamped the discussion about the redefinition of GVC. This paper contributes to the debate, analysing the productive relationships between European countries in four key manufacturing activities. In particular, the paper addresses two objectives. First, it maps the degree of productive integration in Europe, focusing on the generation of employment in the production of exported intermediate inputs and final goods. Second, it provides a preliminary assessment of the potential impact on employment that the current economic crisis will have on some manufacturing activities across Europe. The analysis is realised employing the concept of vertically integrated labour (Pasinetti, 1973) which allows to account for the employment directly and indirectly involved in the production of final goods. The estimations are derived from Multi-Regional Input-Output tables to map the supply chain and to differentiate between the employment involved in the production of exported intermediate inputs and final goods. The results show that most of the employment involved in the production of final output of the activities studied in the paper is linked to international trade. Although Europe shows a high degree of productive links, there are important differences in the modality of insertion in the productive structure of European countries. Moreover, the impact on the level of employment due to the current economic crisis can be significant, affecting more than 1.3 million of people in Europe. These results are relevant to policy makers, who should consider carefully the high degree of linkages of the European economies when designing measure of support to the economy as domestic uncoordinated policies may have a reduced impact given the existing productive structure.
    Keywords: Vertically integrated labour, Covid-19, Global value chains, Productive integration
    Date: 2020–11
  30. By: ; Carter Mix
    Abstract: A large empirical literature has shown that countries that trade more with each other have more correlated business cycles. We show that previous estimates of this relationship are biased upward because they ignore common trade exposure to other countries. When we account for common trade exposure to foreign business cycles, we find that (1) the effect of bilateral trade on business cycle comovement falls by roughly 25 percent and (2) common exposure is a significant driver of business cycle comovement. A standard international real business cycle model is qualitatively consistent with these facts but fails to reproduce their magnitudes. Past studies have used models that allow for productivity shock transmission through trade to strengthen the relationship between trade and comovement. We find that productivity shock transmission increases business cycle comovement largely because of a country-pair's common trade exposure to other countries rather than because of bilateral trade. When we allow for stronger transmission between small open economies than other country-pairs, comovement increases both from bilateral trade and common exposure, similar to the data.
    Keywords: Trade; Business cycles; Open economy macroeconomics
    JEL: E32 F10 F41 F44
    Date: 2020–12–29
  31. By: Ana Martins (Research Office of the Portuguese Ministry of the Economy and Digital Transition); Guida Nogueira (Research Office of the Portuguese Ministry of the Economy and Digital Transition); Eva Pereira (Research Office of the Portuguese Ministry of the Economy and Digital Transition)
    Abstract: Outsourcing is one of the main drivers behind economic globalization, especially international outsourcing. In general terms it refers to the process of moving stages of production to external providers, either domestic (usually labelled as domestic outsourcing) or international (commonly labelled as offshoring or simply outsourcing). Over time, technological advances in transportation and ICT developments, led to a substantial rise in this phenomenon, growing in extent and nature, from simple to more complex tasks related to both manufactures and services supply. International outsourcing is usually expected to reduce production costs and to increase efficiency, however it has received substantial attention from policy makers for its potential negative consequences on the labour market. This paper combines Portuguese firm-level data from the International Sourcing surveys and longitudinal administrative business record data, to explore the impacts of the sourcing status on a variety of firms’ performance measures specially focusing on employment, competitiveness and productivity. The results suggest that international sourcing has an ambiguous effect on firm level total employment, but a positive effect on both the subset of workers that receive a salary (a proxy to employees) and on R&D jobs, coupled with an increasing effect on firm level total labour costs. Alongside these results, our findings also show that offshoring has a positive causal effect on both firm-level export intensity and trade balance, however the efficiency gains hypothesis was not confirmed. In fact, the results show that newly offshoring firms experienced lower labour productivity growth with a negative effect on both capital stock and capital per person employed.
    Keywords: Outsourcing, international sourcing, offshoring, internationalization, productivity, employment and firm productivity, Propensity score matching
    JEL: F23 L24 F61 D24 J24 F16
    Date: 2020–12
  32. By: SO Hongbum
    Abstract: This case (DS495) is the first WTO case in which the consistency of SPS measures imposed to manage and control certain contaminants, namely radionuclides, was challenged. A variety of technical and scientific issues including the general nature of radioactive contamination, the specific character of the accident in question, and the relationship between radionuclides and health risks in general, were discussed and analyzed by the WTO Panel and Appellate Body for the first time. When the Fukushima Dai-ichi Nuclear Power Plant accident occurred on March 11 2011, Korea introduced and applied a series of import bans and additional testing and certification requirements for radionuclides on certain Japanese food products in response to domestic concerns about food safety. Japan brought the case before the WTO's Dispute Settlement Body arguing that Korea's measures are inconsistent, particularly with Article 2.3, 5.6, 7, 8, as well as Annex B and C of the SPS Agreement. While the Panel found that Korea's measures are inconsistently adopted and maintained with most of those provisions, the Appellate Body reversed most of the Panel's findings. As a result, Korea's measures on certain Japanese food products were not ruled out and are still maintained. This article highlights the main legal issues raised in this case, such as the decision of the ALOP (Appropriate Level of Protection) in the interpretation and application of Article 5.6; the meaning of "territory" in the interpretation and application of Article 2.3; and the applicability of Article 5.7.
    Date: 2020–11
  33. By: ALAVERAS Georgios; DUCH BROWN Nestor (European Commission – JRC); MARTENS Bertin (European Commission – JRC)
    Abstract: In February 2018 the EU adopted the Geo-Blocking Regulation that prohibits any attempts to restrict consumer access to e-commerce websites on the basis of their nationality or country of residence. This paper seeks to evaluate the impact of that policy on cross-border e-commerce. We use page view data for about 10k e-commerce websites over the period February 2018 to October 2019, approximately 10 months before and after the entry into force of the regulation in December 2018. We classify the data in cross-border country pair traffic between countries of origin of visitors and countries of establishment of websites. Despite the fact that there may still be a significant amount of delivery restrictions in cross-border trade, we conjecture that any variation in traffic to e-commerce websites will correlate with variations in monetised e-commerce, even if modest. We find that the regulation increased real cross-border e-commerce activity inside the EU from 9.2% to 13%, depending on model specifications. It increased cross-border trade between EU consumers and e-commerce sites anywhere in the world by 11.2% to 11.9%. Applying different criteria for the definition of purely domestic websites slightly weakens the results for intra-EU cross-border trade and gives it a further boost for worldwide cross-border trade.
    Keywords: geo-blocking
    Date: 2020–11
  34. By: Mohamedou Nasser Dine (Osaka University)
    Abstract: Based on the world input-output database 2016 (WIOD), this study examines the impact of the global value chain (GVCs), via the backward and forward linkages, on labor productivity. Using a spatial econometric approach, it pays particular attention to the spillover effects in productivity across industries through input-output relations. It is shown that a stochastic shock in productivity in one sector significantly transcends and boosts productivity in other sectors through input-output dependencies. Moreover, productivity significantly declines with backward linkages within their sectors. However, productivity increases with forward linkages both within own sectors and across sectors through input-output relations. A sectoral analysis of the GVCs' effects on productivity reveals that manufacturing backward linkages is negatively associated with productivity not only within own sectors but also across manufacturing sectors, whereas productivity in service sectors rises with forward linkages within and across service sectors. This study shows that ignoring the spillovers effects across sectors causes the estimates to be biased
    Date: 2020–12–20
  35. By: Vinicius Curti Cicero; Gilberto Tadeu Lima
    Abstract: We examine the impact of the functional distribution of income on the demand for imports in developed and developing countries. Drawing upon a motivating accounting structure suggesting a potentially causal effect of the functional distribution of income in an extended version of a standard import function, we find evidence that a fall in the wage share has a statistically significant positive (negative) impact on the volume of imports in developing (developed) countries and the entire sample of countries. Therefore, the neglect of such income distribution effects in import demand functions represents the omission of both an empirically relevant variable and a further theoretically significant channel through which the functional distribution of income affects output growth. A key implication is that the impact of the functional distribution of the social product on the demand for imports has to be considered in growth empirics based on either a binding balanceof-payments constraint in the Kaldor-Thirlwall tradition or a demand-led regime approach or a competitive real exchange rate.
    Keywords: Functional distribution of income; import demand; aggregate demand regimes; balance-of-payments-constrained growth
    JEL: E25 F14 F43
    Date: 2020–12–31
  36. By: Joan Monràs; Javier Vázquez-Grenno; Ferran Elias
    Abstract: This paper studies the legalization of 600,000 non-EU immigrants by the unexpectedly elected Spanish government following the terrorist attacks of 2004. By comparing non-EU to EU immigrants we first estimate that the policy did not lead to magnet effects. We then show that the policy change increased labor market opportunities for immigrants by allowing them to enter sectors of the economy with fewer informal employment. We rely on cross-province comparisons to document that payroll-tax revenues increased by around 4,000 euros per legalized immigrant, and the heterogeneous effect of the policy on various groups of workers. We provide a theoretical framework based on monopsonistic competition to guide our empirical work and interpret our findings.
    Keywords: immigration, undocumented immigrants, public policy evaluation
    JEL: F22 J31 J42 J J61 R11
    Date: 2020–12
  37. By: Самат Мөлдір (National Bank of Kazakhstan)
    Abstract: Целью данной работы является оценка вклада внутренних и иностранных инвестиций в экономический рост страны, а также анализ взаимного влияния иностранных и внутренних инвестиций друг на друга. Для такой оценки использовался широко используемый в мире метод VAR, а именно панельная векторная авторегрессия, которая позволяет объединить данные по отраслям экономики с временным рядом. // The purpose of this work is to assess the contribution of domestic and foreign investment to the country's economic growth, as well as to analyze the mutual influence of foreign and domestic investment on each other. For such an assessment, the VAR method, widely used in the world, was used, namely, panel vector autoregression, which allows combining data on sectors of the economy with a time series.
    Keywords: foreign direct investment, investment in fixed assets, elasticity, vector autoregression model, impulse responses, прямые иностранные инвестиции, инвестиции в основной капитал, эластичность, модель векторной авторегрессии, импульсные отклики
    JEL: C22 C33 C51 E22
    Date: 2019
  38. By: Pazhanisamy, R.
    Abstract: The present pandemic covid-19 has changed the world in all the dimension of the human life. It has also changed the views of all discipline from individual attitude towards his health to the international trade. The life during the lockdown is an unforgettable experience to almost all in the world by creating defences in every walk of life for the survival. The time taken by the researched and scientist across the globe to invent the vaccine and its issues related to the general acceptability claimed the lives of many millions across the continents and still in the questions of how long will it take us in this journey. Everything is a product in economics. When there is global demand for the vaccine for the virus, how global market failed to provide it on time. This compels to make an enquiry into how the world market failed to react with appropriate vaccine invention and what theories are working in background for the present situation and how long will the world would be like this. What economic theories can be applied to make a solution under what constraints? There are very few attempts are only available on the interlink ages of this global market failure and the causes, policy remedies both at the gross root as well as at the macro level. In this context this paper is attempted to probe into this issue and fill the gap in research. Using the graphical approach first we have used the asymmetric information model for the accuses of market failure and then probed it towards the information's asymmetries and discover the combined impact on the Covid 19 policy response.
    Keywords: Market Failure,Coordination Failure,Asymmetric Information,Covid-19 and Global Market Failure,Policy Implication from Covid-19
    JEL: D82 E30 E32 I38 J22 P11
    Date: 2020
  39. By: Riadh Ben Jelili (The Arab Investment and Export Credit Guarantee Corporation “DHAMAN”)
    Abstract: The scarcity of affordable and opportune trade financing schemes, including export credit guarantee programs, has been part of the cause to the fairly modest trade growth recorded during the last five years. In view of that, it is important further investigating this matter to better understand the nexuses between financing/risk mitigation and trade performance. The existing literature on the effect of export credit insurance programs on export promotion are mainly focused on European countries. On the other hand, very little is known about the influence of export credit guarantees on exports in the Arab region, where the structure of export industries and key trading partners differ significantly from other regions. The purpose of this paper is to bridge this gap in the literature by investigating empirically the significance of the relationship between exports and credit-worthiness of importing countries, using data on Arab merchandise export values. Corroborating evidence for this type of rapport would provide scientific backing to the practicality of specialized export financial institutions to financing exports, mitigating credit risk, and preventing trade finance markets in Arab countries from drying up. A dynamic panel approach is adopted in this paper and the empirical results, based on a balanced panel of 107 Arab partner countries (importer countries) observed between 1997 and 2017, provide a strong and robust validation of the valuable role export credit insurance and guarantee programs can play in promoting merchandise exports in the Arab region
    Date: 2020–12–20
  40. By: Blum, Bianca; Neumärker, Bernhard
    Abstract: Die schnell wachsende Corona Pandemie im Jahr 2020 hat die Welt weitgehend in eine wirtschaftliche Stagnation gebracht. Die Auswirkungen des fast unterbrochenen Flugverkehrs, der stillgelegten Industrie und des wirtschaftlichen Lockdowns auf die Umwelt, insbesondere auf die Luftqualität, sind enorm; aber auch auf die wirtschaftlichen und sozialen Folgen der Krise. Dieser Stillstand scheint wirtschaftlich und sozial kaum nachhaltig zu sein. Wir sollten uns jedoch jetzt fragen, was wir aus der Situation lernen können, um die Globalisierung in Frage zu stellen, zukünftige vergleichbare Krisensituationen besser abzufangen und den Schritt zu einer nachhaltigeren Entwicklung auf ökologischer, wirtschaftlicher und sozialer Basis zu gehen. Das Arbeitspapier identifiziert dabei die Bereiche des Externalitätenmanagements zur Verbesserung der Umweltqualität, Digitalisierung und Netzerweiterung sowie des Grundeinkommens als zentrale Konzepte, die in und nach der Krise angegangen werden müssen. Konkrete Konzepte werden am Ende des Papiers vorgeschlagen und diskutiert.
    Keywords: corona crisis management,basic income,environmental politics,pandemics,globalization,public policy
    JEL: H12 H23 H53
    Date: 2020

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