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on International Trade |
| By: | Swati Dhingra; Rebecca Freeman; Hanwei Huang |
| Abstract: | Deep trade agreements are widespread and have taken the world beyond tariff liberalization in goods trade. As the importance of global supply chains and the services sector increased across the world, shallow tariff reductions gave way to deeper commitments that address non-tariff barriers and behind the border barriers to trade. This paper shows that deep trade agreement commitments increase trade by 25% for trade in goods and by even more for trade in services. Taking reduced-form estimates to a quantitative model enables general equilibrium analysis of the trade and welfare impacts of deep trade agreements. We find that China, India, and the Eastern European bloc have benefited the most from trade agreements since the Uruguay Round. While a large share of the gains to Eastern Europe come from deep commitments during its accession to the EU, gains for China and India come largely from tariff reductions. Applying the framework to ex-ante analysis of the UK's departure from the deepest trade agreement in the world suggests that the potential benefits the UK may gain, post-Brexit, from future deep agreements with the EU and selected non-EU trade partners would not offset its losses from leaving the EU. Overall, deep trade agreements have contributed over 40% to the welfare gains from trade globally and even more so for advanced economies. |
| Keywords: | trade agreements, deep agreements, economic integration, provisions, non-tariff barriers |
| JEL: | F10 F13 F14 F15 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1742&r=all |
| By: | James E. Anderson; Yoto V. Yotov |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8800&r=all |
| By: | Parisa Kamali |
| Abstract: | In many countries, a sizable share of international trade is carried out by intermediaries. While large firms tend to export to foreign markets directly, smaller firms typically export via intermediaries (indirect exporting). I document a set of facts that characterize the dynamic nature of indirect exporting using firm-level data from Vietnam and develop a dynamic trade model with both direct and indirect exporting modes and customer accumulation. The model is calibrated to match the dynamic moments of the data. The calibration yields fixed costs of indirect exporting that are less than a third of those of direct exporting, the variable costs of indirect exporting are twice higher, and demand for the indirectly exported products grows more slowly. Decomposing the gains from indirect and direct exporting, I find that 18 percent of the gains from trade in Vietnam are generated by indirect exporters. Finally, I demonstrate that a dynamic model that excludes the indirect exporting channel will overstate the welfare gains associated with trade liberalization by a factor of two. |
| Keywords: | Exports;Trade facilitation;Price indexes;Tariffs;Technology;WP,fixed cost,appendix E |
| Date: | 2019–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/302&r=all |
| By: | Amara ZONGO |
| Abstract: | This paper examines the effects of restrictions in logistics, transportation, distribution, finance and other business sectors on food trade. We use a gravity model with panel data from 2014 to 2018 across 36 OECD countries, OECD indices of individual country restrictions and regulatory differences by country pair to capture the level of restrictions in these sectors. The paper concludes that importing and exporting country restrictions in logistics, finance and other business sectors have significant negative effects on food exports between OECD countries. Restrictions in the distribution sector have significant positive effects on exports. The sectors most affected are food, live animals and perishable products (milk, eggs and meat). Regulatory disparity in the logistics sector is a barrier to trade, but disparity in the transport sector has positive and significant effects on food exports. This negative impact disappears when the exporting country is closed to service providers. The deregulation or harmonization of these measures would be highly beneficial to food trade. |
| Keywords: | Food trade; Service sector; Restrictions in services; Gravity model |
| JEL: | F13 F14 K23 Q17 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2021-01&r=all |
| By: | Shahrzad Safaeimanesh (Department of Economics, Eastern Mediterranean University, North Cyprus); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus) |
| Abstract: | The facilitation of trade is a principal objective in the context of increasing regional trade integration for the achievement of sustainable development goals. The purpose of this study is to estimate the potential annual economic gain to be had from trade facilitation by the coastal countries of the Economic Community of West African States (ECOWAS). These measures would decrease border and documentary compliance time and costs of the administration of international trade. A partial equilibrium welfare economics framework is used that employs sets of export supply and import demand elasticities for each country that are derived using a general equilibrium estimation method. The annual economic welfare gains resulting from the reduction of excessive trade compliance costs for the region are estimated to between US$1.6 billion to US$2.7 billion (2019 prices). This is between 0.24% and 0.42% of the combined GDPs of these countries. The welfare gain is between 6% and 10% of the combined governments’ budgets assigned for education, and is between 33% and 58% of their budgets allocated for health. In the absence of reform, these inefficient practices waste an amount equal to between 15% and 26% of the annual net official development assistance these countries receive. |
| Keywords: | Trade facilitation, West Africa, Economic Community of West African States (ECOWAS), Regional integration, Trade Compliance Costs, Trade reform, Economic welfare gains, Sustainable Development, SDGs 2030 |
| JEL: | F13 F14 F15 D60 O12 O24 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:4569&r=all |
| By: | Kiki Verico (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)) |
| Abstract: | Indonesia and Australia had agreed to seal the deal for a bilateral economic agreement entitled Indonesia-Australia Comprehensive Economic Partnership Agreement (IA CEPA). After about ten years since both countries committed to having a bilateral agreement, IA CEPA had entered into force on July 5th, 2020. This paper has two aims. Firstly, assessing potential trade and long-run investment relations with the combination of RCA (Revealed Comparative Advantage) and CMSA (Constant Market Share Analysis) with ToT (Terms of Trade) and Net Export (NX) as the filter. Secondly, measuring the potential impacts from tariff rate elimination utilizing the GTAP (Global Trade Analysis Project) model. This paper finds that both countries have complementarity relations that Indonesia can gain to improve manufacturing productivity, and Australia can benefit from sunrise to sunset relations. This paper proves that CEPA matches their need to increase their economic benefits, revealed that they could share mutual benefits and sustainable economic relations. |
| Keywords: | bilateral country studies — trade policy — CGE GTAP — FDI analysis — Indonesia Australia |
| JEL: | D58 F14 F21 O24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lpe:wpaper:202056&r=all |
| By: | Bruno, Randolph Luca; Ferreira Campos, Nauro; Estrin, Saul |
| Abstract: | This paper explores the impact of EU membership on foreign direct investment (FDI). It analyses empirically how the effects of such deep integration differ from other forms and investigates what drives these effects. Using a structural gravity framework on annual bilateral FDI data for almost every country in the world, over 1985-2018, we find EU membership leads FDI into the host economy to be about 60% higher for investment from outside the EU, and around 50% higher for intra-EU FDI. Moreover, we find that the effect of EU membership on FDI is larger than from membership of NAFTA, EFTA, or MERCOSUR, and that the Single Market is the cornerstone of this differential impact. |
| Keywords: | deep economic integration; Foreign direct investment; European Union; structural gravity model; single market; forthcoming |
| JEL: | F3 G3 |
| Date: | 2021–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:107939&r=all |
| By: | Zhang, Qianxue (University of Warwick) |
| Abstract: | Global supply chains have become increasingly important in international trade over the past decade. Nevertheless, it remains di cult to quantify the role of supply-chain trade in transmitting and amplifying shocks, given the challenge of identifying and tracing the exogenous shocks across economies. This paper argues that the lockdown of Hubei province in China due to the Coronavirus (COVID-19) outbreak provides a natural experiment to study the importance of China's role in global value chains. Since the lockdown started during the Lunar New Year, Hubei's migrant workers who went home could not return to workplaces in other provinces, resulting in a massive labor supply shock. I feed the supply shock through a Ricardian model with intermediate goods and sectoral linkages to study trade and welfare e ects across several economies. While welfare in China is the most strongly a ected, the shock also has sizeable implications for the US and the UK. However, close neighbors such as South Korea and Japan gain from the shock. There are large variations regarding the sectoral contributions to the aggregate welfare changes. The model also performs well in predicting bilateral export changes. |
| Keywords: | COVID-19 ; Labor supply shock ; Global supply chains ; Sectoral linkages ; Productivity effect ; Welfare effect JEL Classification: F10 ; F11 ; F14 ; F17 ; F41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1323&r=all |
| By: | Julia Grübler; Oliver Reiter |
| Abstract: | Political debates and economic analyses often focus on single free trade agreements and their potential economic effects on participating trading partners. This study contributes to the literature by shedding light on the significance of trade agreements in the context of countries’ positions in worldwide trade agreement networks, by combining network theory with gravity trade modelling. We illustrate, both numerically and graphically, the evolution of the global web of trade agreements in general, and the network of the European Union specifically, accounting for the geographical and temporal change in the depth of agreements implemented. Gravity estimations for the period 1995-2017 distinguish the direct bilateral effects of trade agreements from indirect effects attributable to the scope of trade networks and countries’ positions therein |
| Keywords: | free trade agreements, network effects, trade policy, structural gravity model |
| JEL: | D58 F13 F14 F43 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:ecbook:2020:i:vii-004&r=all |
| By: | Peter Eppinger; Marcel Smolka |
| Abstract: | The exceptional export performance of foreign-owned firms is a well-established stylized fact, but the underlying mechanism is not yet fully understood. In this paper, we provide theory and empirical evidence demonstrating that this fact can be explained by ownership differences in access to finance. We develop a theoretical model of international trade featuring firm heterogeneity and credit market frictions in which foreign-owned firms can access foreign capital markets via their multinational parents. The model predicts a financial advantage of foreign ownership for exporting that gains importance as credit conditions deteriorate. To empirically identify this effect, we estimate a triple differences model using rich micro data from Spain that exploits the global financial crisis as an exogenous shock to credit supply. We find that foreign ownership significantly stabilized firm exports when liquidity dried out in the crisis, in particular among small and financially vulnerable firms. |
| Keywords: | firm exports, foreign ownership, multinational firms, financial frictions, financial crisis |
| JEL: | F10 F14 F23 G01 G32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8808&r=all |
| By: | Bernard Hoekman; Charles Sabel |
| Abstract: | At the end of 2017 different groups of WTO members decided to launch talks on four subjects, setting aside the WTO consensus working practice. This paper argues that these ‘joint statement initiatives’ (JSIs) should seek to establish open plurilateral agreements (OPAs) even in instances where the outcome can be incorporated into existing schedules of commitments of participating WTO members. Designing agreements as OPAs provides an institutional framework for collaboration among the responsible national authorities, transparency, mutual review, and learning, as well as alternatives to default WTO dispute settlement procedures which may not be appropriate for supporting cooperation on the matters addressed by the JSIs. In parallel, WTO members should establish enforceable multilateral principles to ensure OPAs are compatible with an open global trade regime. |
| Keywords: | Open plurilateral agreements, WTO, joint statement initiatives, trade agreements, international regulatory cooperation |
| JEL: | F02 F13 F55 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2021/01&r=all |
| By: | Gustavo Adler; Sergii Meleshchuk; Carolina Osorio Buitron |
| Abstract: | The paper explores how international integration through global value chains shapes the working of exchange rates to induce external adjustment both in the short and medium run. The analysis indicates that greater integration into international value chains reduces the exchange rate elasticity of gross trade volumes. This result holds both in the short and medium term, pointing to the rigidity of value chains. At the same time, greater value chain integration is associated with larger gross trade flows, relative to GDP, which tends to amplify the effect of exchange rate movements. Overall, combining these two results suggests that, for most countries, integration into global value chains does not materially alter the working of exchange rates and the benefits of exchange rate flexibility in facilitating external adjustment remain. |
| Keywords: | Exchange rates;Global value chains;Trade balance;Exports;Currencies;WP |
| Date: | 2019–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/300&r=all |
| By: | Chor, Davin; Manova, Kalina; Yu, Zhihong |
| Abstract: | Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with InputOutput tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed. |
| Keywords: | global value chains; production line position; upstreamness; firm heterogeneity; firm lifecycle; China |
| JEL: | F10 F23 L23 L24 L25 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108215&r=all |
| By: | Eugenio M Cerutti; Shan Chen; Pragyan Deb; Albe Gjonbalaj; Swarnali A Hannan; Adil Mohommad |
| Abstract: | The trade discussions between the U.S. and China are on-going. Not much is known about the shape and nature of a potential agreement, but it seems possible that it would include elements of managed trade. This paper attempts to examine the direct, first-round spillover effects for the rest of the world from managed trade using three approaches. The results suggest that, in the absence of a meaningful boost in China’s domestic demand and imports, bilateral purchase commitments are likely to generate substantial trade diversion effects for other countries. For example, the European Union, Japan, and Korea are likely to have significant export diversion in a potential deal that includes substantial purchases of U.S. vehicles, machinery, and electronics by China. At the same time, a deal that puts greater emphasis on commodities would put small commodity exporters at a risk. This points to the advantages of a comprehensive agreement that supports the international system and avoids managed bilateral trade arrangements. |
| Keywords: | Exports;Imports;Plurilateral trade;Commodities;Tariffs;WP,product,deal,export diversion,trade gap,export |
| Date: | 2019–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/251&r=all |
| By: | James E. Anderson; Penglong Zhang |
| Abstract: | Almost Ideal gravity associates zero trade flows with variable and fixed trade cost variation in a flexible demand system. Latent trade shares between non-partners are inferred from the Tobit estimator applied to trade among 75 countries and 25 sectors in 2006. Latent Trade Bias (LTB) is the difference between the latent trade share and the as-if-frictionless trade share. Explained LTB variance decomposition shows 52% due to variation of variable trade cost, 24% due to non-homothetic income effects, and 24% due to fixed trade cost effects. Counterfactual variable (fixed) cost reductions suggest cases of successful export promotion between non-partners. |
| JEL: | F13 F14 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28278&r=all |
| By: | Joseph Glauber; Simon Lester |
| Abstract: | The U.S. complaint about Chinese tariff-rate quotas (TRQs) on certain grain products helps illustrate several key issues in U.S. - China trade relations and the effectiveness of WTO disputes. First, do international obligations based on transparency and fairness work in relation to an authoritarian country not known for the rule of law domestically? Second, can there be a disconnect between the legal aspects of a dispute and the underlying economic interests, with a DSB ruling sometimes not leading to improved trade flows? And third, given the bilateral trade war and "phase one" trade deal between the United States and China, has the WTO been superseded in this trade relationship? This paper summarizes the facts and law of the China - TRQs dispute, and examines each of these questions in that context. |
| Keywords: | US-China trade relations, agriculture, transparency obligations, WTO dispute settlement, tariff-rate quotas |
| JEL: | F13 F51 Q17 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2020/91&r=all |
| By: | Yang, Jiao (Fudan University); Kwon, Ohyun (Drexel University); Roh, Jae-Whak (Hansung University) |
| Abstract: | This paper provides novel empirical evidence on the role of international trade in shaping the currency composition of corporate debt. We address endogeneity concerns by proposing a novel method to construct an instrumental variable for firms’ export shares using both domestic and South Korea’s trading partners’ industry-level demand shocks. Cross-sectional patterns, long difference regression, and IV regression results are all consistent with our theoretical prediction that firms with higher export shares borrow larger shares of debt in foreign currency. We validate our theory further by showing that: (1) our results are robust to dropping firms that potentially use financial hedge against exchange rate risk; (2) the effects of export shares were less pronounced during a less flexible exchange rate regime; and (3) higher shares of imported intermediate inputs in firms’ total cost tend to lower their foreign currency debt shares. Together, these findings shed light on the discussion of exchange rate policy in emerging and developing countries where foreign currency debts are pervasive. |
| Keywords: | International Trade; Currency Composition; Debt Finance; External Demand Shocks; Exchange Rate; Global Supply Chain |
| JEL: | E44 F31 F34 F36 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2021_001&r=all |
| By: | Russell Cooper; Guan Gong; Guanliang Hu; Ping Yan |
| Abstract: | This paper studies the exporting decision of Chinese manufacturing firms. The economic framework stresses the dynamic decision by both state controlled and private entities to export in a model with labor adjustment costs. In this complex environment, a simple decision rule whereby export status depends only on current productivity does not hold. Nor does this rule match data patterns. The estimated model is used to understand the factors that influence export status. The analysis highlights the economic significance of labor adjustment costs in shaping both employment and trade dynamics. |
| JEL: | E24 F14 F16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28289&r=all |
| By: | Mahir Suleymanov (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic) |
| Abstract: | This paper aims to analyze the role of FDI inflow in the Russian economy and determine the degree of impact on the economic growth rate. The empirical research captures 2000-2019 years specifying by quarterly time-series. Although, in general, it is considered that the FDI can transmit technology and development to the host country, but this paper shows that in the case of Russia, the role of FDI inflow into the country has an endogenous component, which does not exert a robust impact on the economic growth. |
| Keywords: | Foreign Direct Investment, economic growth, transition economies, Endogeneity |
| JEL: | F21 F43 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2021_01&r=all |
| By: | Franz Sinabell; Julia Grübler; Oliver Reiter |
| Abstract: | This study presents quantitative and qualitative assessments of potential consequences of the trade agreement between the EU and Mercosur countries. It is embedded in a wider Association Agreement and was made public in summer 2019. The focus is on Austria. One objective of the agreement is to liberalise trade and to improve conditions for making investments in order to create jobs and value added and to give consumers in both regions better access to a wide range of products and services. A gravity model analysis shows that average income gains per person are remarkably similar in both regions. However, the economies in Mercosur countries will benefit more than EU Member States economies in relative terms. A second objective of the agreement is to meet targets that go beyond immediate economic benefits, such as to further sustainable development, to prevent environmental deterioration, to avoid social frictions and to smooth adaptation processes. A qualitative comparison shows the advancements compared to other trade agreements and the limitations of trade agreements to address social and environmental concerns. An in depth-appraisal of the provisions for agriculture shows potential benefits and costs for consumers and farmers in both regions. |
| Keywords: | trade liberalisation, EU, MERCOSUR, gravity model, environment, agriculture |
| JEL: | F13 F15 F17 F18 Q17 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:ecbook:2020:i:vii-003&r=all |
| By: | Cristina Herghelegiu; Luca Rubini |
| Abstract: | This article reviews the Appellate Body Report in the Ukraine – Ammonium Nitrate dispute that focused on the impact of Russia’s dual pricing in the natural gas market on the ammonium nitrate market. Interpreting the WTO Anti-Dumping Agreement (‘ADA’), the Appellate Body rejected the possibility to reject input costs, which, though distorted, were duly reported in the company’s records, and to replace them with a surrogate price which, for the Ukrainian authorities, was the (adjusted) export price of Russian natural gas at the German border. In this article, a) we fully review the background of the dispute, showing the connections between natural gas and ammonium nitrate prices, and the impact on Russia’s price regulation of the domestic market on them; b) we then review the ADA and concur with the interpretation of the Appellate Body, essentially for systemic reasons; c) for completeness, we also investigate whether econometrics could accurately determine the natural gas benchmark price in Russia and conclude in the negative; d) since dual pricing gives an economic benefit to domestic ammonium nitrate producers, we finally test dual pricing under the WTO subsidy rules. The conclusion is that the current disciplines are not likely to apply to dual pricing and lead us to conclude that important distortions are currently left without regulation in the WTO. |
| Keywords: | Antidumping, discriminatory pricing, subsidies, natural gas, WTO dispute settlement |
| JEL: | F13 F51 Q34 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2020/99&r=all |
| By: | Sung-Gook Choi; Deok-Sun Lee |
| Abstract: | The distributions of trade values and relationships among countries and product categories reflect how countries select their trade partners and design export portfolios. Here we consider the exporter-importer network and the exporter-product network with directed links weighted by the logarithm of the corresponding export values each year from 1962 to 2018, and study how the weights of the outgoing links from each country are distributed. Such local logarithmic export distributions by destinations and products are found to follow approximately the Gaussian distribution across exporters and time, implying random assignment of export values on logarithmic scale. However, a non-zero skewness is identified, changing from positive to negative as exporters have more partner importers and more product categories in their portfolios. Seeking the origin, we analyze how local exports depend on the out-degree of exporter and the in-degrees of destinations/products and formulate their quantitative and measurable relation incorporating randomness, which uncovers the fundamental nature of the export strategies of individual countries. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.15487&r=all |
| By: | Rafael Dix-Carneiro; João Paulo Pessoa; Ricardo M. Reyes-Heroles; Sharon Traiberman |
| Abstract: | We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multi-country, multi-sector model of trade with two key ingredients: (a) Consumption-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances; (b) labor market frictions across and within sectors, leading to unemployment dynamics and sluggish transitions to shocks. We use the estimated model to study the behavior of labor markets in response to globalization shocks, including shocks to technology, trade costs, and inter-temporal preferences (savings gluts). We find that modeling trade imbalances changes both qualitatively and quantitatively the short- and long-run implications of globalization shocks for labor reallocation and unemployment dynamics. In a series of empirical applications, we study the labor market effects of shocks accrued to the global economy, their implications for the gains from trade, and we revisit the “China Shock” through the lens of our model. We show that the US enjoys a 2.2% gain in response to globalization shocks. These gains would have been 73% larger in the absence of the global savings glut, but they would have been 40% smaller in a balanced-trade world. |
| JEL: | F1 F16 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28315&r=all |
| By: | Kalaitzake, Manolis |
| Abstract: | The fate of British finance following the Brexit referendum revolves around the "resilience or relocation" debate: will the City of London continue to thrive as the world's leading financial centre or will the bulk of its activity move to rival hubs after departure from EU trading arrangements? Despite extensive commentary, there remains no systematic analysis of this question since the Leave vote. This paper addresses that lacuna by evaluating the empirical evidence concerning jobs, investments, and share of key trading markets (between June 2016 and May 2020). Contrary to widely held expectations, the evidence suggests that the City has been remarkably resilient. Brexit has had no significant impact on jobs and London has consolidated its position as the chief location for financial FDI, FinTech funding, and attracting new firms. Most unexpectedly, the City has increased its dominance in major infrastructure markets such as (euro-denominated) clearing, derivatives, and foreign exchange - although it has lost out in the handling of European repurchase agreements. Based upon this evidence, the paper argues that the UK's negotiating position is stronger than typically recognised, and outlines the competitive ramifications for both the UK and EU financial sector. |
| Keywords: | Brexit,City of London,European Union,financial services,resilience or relocation,United Kingdom,Europäische Union,Finanzdienstleistungen,Großbritannien,Resilienz,Standortverlagerung |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:2014&r=all |
| By: | Chad P. Bown; Paola Conconi; Aksel Erbahar; Lorenzo Trimarchi |
| Abstract: | During the last decades, the United States has applied increasingly high trade protection against China. We combine detailed information on US antidumping (AD) duties — the most widely used trade barrier — with US input-output data to study the effects of trade protection along supply chains. To deal with endogeneity concerns, we propose a new instrument for AD protection, which combines exogenous variation in the political importance of industries with their historical experience in AD proceedings. We find that tariffs have large negative effects on downstream industries, decreasing employment, wages, sales, and investment. Our baseline estimates for 1988-2016 indicate that, due to AD protection against China, around 1.8 million US jobs were lost in downstream industries, with no significant job gains in protected sectors. When we extend the analysis to measures introduced under President Trump, we find that around 500,000 jobs were lost during the first two years of his term. We also provide evidence of the mechanisms behind the negative effects of protection along supply chains: AD duties decrease imports and raise production costs for downstream industries. |
| Keywords: | trade protection, supply chains, input-output linkages |
| JEL: | F13 D57 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8812&r=all |
| By: | Welvaert, Mieke (New Zealand Institute of Economic Research); Torshizian, Eliya (New Zealand Institute of Economic Research); Maralani, Milad (New Zealand Institute of Economic Research) |
| Abstract: | Modelling by NZIER suggests that New Zealand medium term exposure to US withdrawal from World Trade Organisation (WTO) is surprisingly limited. We modelled five different scenarios of global and New Zealand responses to the US imposing tariff rates last seen in the great depression. While impact is negative for both the US and China in all scenarios, the change in New Zealand GDP is less than 1%. |
| Keywords: | cge modelling; trade; WTO |
| JEL: | C68 F10 |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nzierw:2020_002&r=all |
| By: | Balazs Zelity (Department of Economics, Wesleyan University) |
| Abstract: | Foreign direct investment can increase productivity and wages. However, it is also often accompanied by primary income deficits as foreign-owned firms repatriate their profits. The welfare effects of FDI are thus ambiguous. A particularly illustrative example of this phenomenon are the Visegr´ad 4 (V4) countries (Czech Republic, Hungary, Poland, Slovakia). This paper investigates whether FDI can be beneficial in the presence of profit repatriation using a general equilibrium model calibrated to the V4 economies. Counterfactual simulations suggest that the benefits of FDI outweigh the costs for these countries. On average, a 1% increase in the number of foreign firms is associated with a 0.17% increase in welfare. However, incentivising foreign firms to reinvest more of their profits domestically is, ceteris paribus, welfare-improving. A 10-percentage-point increase in the profit repatriation rate is associated with a 1.06% welfare gain on average. |
| Keywords: | foreign direct investment, primary income flows, profit repatriation |
| JEL: | F21 F23 F36 F40 E60 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2021-001&r=all |
| By: | Simplice A. Asongu (CEREDEC, Bangui, CAR); Thales P. Yapatake Kossele (CEREDEC, Bangui, CAR); Joseph Nnanna (Abuja, Nigeria) |
| Abstract: | This study examines linkages between political stability and trade openness dynamics in a panel of 44 countries in SSA from 1996 to 2016. The empirical evidence is based on the generalized method of moments. From the findings, the negative relationship between political stability and merchandise trade is not significant while the negative relationship between political stability and trade openness (exports plus imports) is significant. Hence, the findings do not validate the tested hypothesis that political stability/no violence increases trade in the sub-region. The perspective that some forms of political stability can slow down and prevent international trade is consistent with Oslon in Rise and Decline of Nations (RADON) and recent contributions to the economic development literature which have shown that not all forms of political stability are development friendly because much depends on the extent to which stability translates into, inter alia, good governance. The principal policy implication is that standards of political governance need to be boosted in order to improve the anticipated effects of political stability on trade, especially in the light of the ambitious African Continental Free Trade Area (AfCFTA). Other policy implications are discussed. |
| Keywords: | Political Stability; Trade; Sub-Saharan Africa |
| JEL: | F52 K42 O17 O55 P16 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:21/005&r=all |
| By: | Antoine Goujard; Pierre Guérin |
| Abstract: | The rapid internationalisation of the Polish economy has helped develop competitive export-led manufacturing and services sectors fostering robust growth and productivity performance. However, the benefits of this development have been unequal. Many small and medium-sized enterprises (SMEs), some regions and social groups have lagged behind. Poland’s integration into world trade has largely focussed on downstream activities of value chains and relatively labour-intensive products that incorporate little domestic value added. The coronavirus (COVID-19) crisis has put additional pressures on SMEs. A broad range of well-coordinated policies is required to boost SMEs’ internationalisation and their productivity, while easing labour reallocation during the ongoing recovery. Providing stronger support for training programmes in smaller firms and within small firms’ networks would help them upgrade the skills of their workforce, notably for their managers, and ease new technology adoption and internationalisation. Streamlining regulations on start-ups and limiting regulatory and tax barriers to firm expansion would raise firm entry and growth. Strengthening post-insolvency second chance policies for honest entrepreneurs would ease resource reallocation and the adaptation of SMEs to an uncertain and rapidly changing international environment. Improving transport and digital infrastructure would lower trade costs and raise productivity. Ensuring that innovation policies adapt to smaller firms would boost their innovativeness and ease their integration in national and international value chains. |
| Keywords: | Digitalisation, Global Value Chains (GVCs), Poland, Productivity, SMEs |
| JEL: | F1 F2 F6 L1 O3 |
| Date: | 2021–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1654-en&r=all |
| By: | Redding, Stephen; Antras, Pol; Rossi-Hansberg, Esteban |
| Abstract: | We develop a model of human interaction to analyze the relationship between globalization and pandemics. Our framework provides joint microfoundations for the gravity equation for international trade and the Susceptible-Infected-Recovered (SIR) model of disease dynamics. We show that there are cross-country epidemiological externalities, such that whether a global pandemic breaks out depends critically on the disease environment in the country with the highest rates of domestic infection. A deepening of global integration can either increase or decrease the range of parameters for which a pandemic occurs, and can generate multiple waves of infection when a single wave would otherwise occur in the closed economy. If agents do not internalize the threat of infection, larger deaths in a more unhealthy country raise its relative wage, thus generating a form of general equilibrium social distancing. Once agents internalize the threat of infection, the more unhealthy country typically experiences a reduction in its relative wage through individual-level social distancing. Incorporating these individual-level responses is central to generating large reductions in the ratio of trade to output and implies that the pandemic has substantial effects on aggregate welfare, through both deaths and reduced gains from trade. |
| Keywords: | globalization; pandemics; gravity equation; SIR model; Covid-19; coronavirus |
| JEL: | F23 F15 I00 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108234&r=all |
| By: | Marlene Amstad; Leonardo Gambacorta; Chao He; Dora Xia |
| Abstract: | Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets. We find the TSI to contribute around 10% of model capacity to explain the stock price variability from January 2018 to June 2019 in countries that are more exposed to the China-US value chain. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%). No equity market benefits from the China-US trade war, and Asian markets tend to be more negatively affected. In particular, we find that sectors most affected by tariffs such as information technology related ones are particularly sensitive to the tone in trade tension. |
| Keywords: | stock returns, trade, sentiment, big data, neural network, machine learning |
| JEL: | F13 F14 G15 D80 C45 C55 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:917&r=all |
| By: | Stefania Quaini (Fondazione Eni Enrico Mattei); Sebastiano Saccani (Fondazione Eni Enrico Mattei); Sergio Vergalli (Fondazione Eni and University of Brescia); Luigi Assom; Marco Beria; Alessandro Codello (Instituto de Fisica, Faculdad de Ingenieria, Universidad de la Republica); Maurizio Monaco; Riccardo Sabatini |
| Abstract: | We analyze the United Nations commodities trade database (UN comtrade), comprised of international commodities exchanges in volume and price with monthly resolution. We introduce a trade impact index to quantify the impact, in terms of distance travelled, of importing a specific food raw commodity in a specific period of the year and in a specific country of the world. This index captures the seasonal exchange of raw commodities in an insightful and concise manner. |
| Keywords: | Trade, Food Commodities, Resource Access and Availability, Index, Fingerprint, Data Mining |
| JEL: | F18 Q17 C8 C43 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2020.15&r=all |
| By: | Christine McDaniel; Edwin Vermulst |
| Abstract: | This paper presents a legal-economic analysis of the World Trade Organization’s Article 22.6 arbitration report on the dispute over certain United States’ antidumping methodologies. The Arbitrator sought to quantify the damages suffered by China from US non-compliance with an earlier ruling. The case covered 25 antidumping duty determinations for which at least one of three methodologies (weighted average-to-transaction; single rate presumption; and zeroing) was incorrectly applied. Damage calculations rely heavily on how the counterfactual is defined—what would have been the duty had it not been for the inconsistent measures? The Arbitrator deemed a zero-duty counterfactual to be appropriate, but the justifications were in our view weak and illustrate the danger of an Arbitrator essentially performing re-litigation of violations that may or may not have occurred in the administrative investigations. We conclude that the Arbitrators may have gone above and beyond their mandate in this determination. |
| Keywords: | Antidumping, WTO dispute settlement, compliance, arbitration, retaliation |
| JEL: | F13 F51 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2020/98&r=all |
| By: | Frank Pisch |
| Abstract: | Frank Pisch analyses 'just-in-time' production networks to assess the prospects for world trade after Covid-19 |
| Keywords: | covid-19,supply chains |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:584&r=all |
| By: | Spray, J. |
| Abstract: | I develop a model of firm-to-firm search and matching to show that the impact of falling trade costs on firm sourcing decisions and consumer welfare depends on the relative size of search externalities in domestic and international markets. These externalities can be positive if firms share information about potential matches, or negative if the market is congested. Using unique firm-to-firm transaction-level data from Uganda, I show empirical evidence consistent with positive externalities in international markets and negative externalities in domestic markets. I then build a dynamic quantitative version for the model and show that, in Uganda, a 25% reduction in trade costs led to a 5.2% increase in consumer welfare, 15% of which was due to search externalities. |
| Keywords: | Firm-to-Firm Trade, VAT Data, Search-and-Matching, Importing |
| JEL: | F14 F15 O19 |
| Date: | 2101–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2108&r=all |
| By: | Georgiadis, Georgios; Gräb, Johannes; Khalil, Makram |
| Abstract: | This paper draws a causal link between the rise of global value chain participation (GVCP) and the decline of exchange rate pass-through (ERPT) to import prices over the last decades. We first illustrate in a structural two-country model how greater GVCP can reduce ERPT to import prices. In the model, the sensitivity of an economy's home-currency production costs to exchange rate changes rises as it exhibits greater GVCP by importing a larger share of its intermediate inputs. The increased sensitivity of the economy's home-currency production costs to exchange rate changes translates into a higher sensitivity of its home-currency export prices. The latter implies a reduction of the sensitivity of the economy's foreign-currency export prices - i.e. its trading partner's home-currency import prices - to exchange rate changes. Hence, an increase in the economy's GVCP implies a fall in its trading partner's ERPT to import prices. We then estimate instrumental variable regressions using adopted trade agreements as instruments for economies' GVCP in a cross-country panel dataset for the time period from 1995 to 2014. Consistent with the mechanism spelled out in the theoretical model, we find that ERPT to export prices has been higher in economies which exhibit greater GVCP, and that ERPT to import prices has been lower in economies whose trading partners exhibit greater GVCP. |
| Keywords: | global value chain participation,exchange rate pass-through |
| JEL: | F32 F41 F62 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:672020&r=all |
| By: | Joxhe, Majlinda; Scaramozzino, Pasquale; Zanaj, Skerdilajda |
| Abstract: | This paper compares the net fiscal position (NFP) of immigrants versus natives using data from the European Survey on Living Conditions (EU-SILC) for the period 2007-2015. By employing a quantile regression approach, we find that European and non-European migrants have a different fiscal position from natives only on the extreme tails of the NFP distribution. Non-EU migrants contribute more than natives in the top quantile of the NFP, whereas they are more fiscally depend in the bottom quantile. We also examine the relationship between our calculated migrants' fiscal position and the fiscal perception of European citizens versus migrants as measured in European Social Survey (ESS) data. The negative perception in some European countries may be entirely driven by the fiscal position of migrants in the lowest quantile. Our results highlight the critical need to better understand the fiscal contribution of migrants in the destination countries for a fair and constructive migration policy |
| Keywords: | fiscal position,immigration,quantile regression,European countries |
| JEL: | H53 I30 F22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:758&r=all |
| By: | Joannes Mongardini; Aneta Radzikowski |
| Abstract: | Global smartphone sales may have peaked. After reaching nearly 1.5 billion units in 2016, global smartphone sales have since declined, contributing negatively to world trade in 2019 and suggesting that the global market may now be saturated. This paper develops a simple model to forecast smartphone sales, which shows that sales are likely to decline further. As tech companies shift to embedded services (cloud computing, content subscriptions, and financial services), the impact on global trade may also be shifting in favor of services exports mostly from advanced economies. |
| Keywords: | Mobile internet;Service exports;Stocks;Financial services;Exports;WP,iPhone,Apple,iPhone sale,trade |
| Date: | 2020–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/070&r=all |
| By: | Salomon, Katja |
| Abstract: | A test of social explanations of immigrant resentment - contact, threatened responses, grievances, social disintegration, political persuasion, socialization contexts - across 30 European countries between the years 2002-2016 (N=308.430) provides the background for a comprehensive discussion of how these mechanisms interact and connect to migration patterns. Most susceptible to resentment are those (1) lacking opportunities or (2) easy to persuade. (1) Socioeconomic status, place of residency, grievances, social disintegration, immigrant presence, birth cohort interact to provide/inhibit opportunities for social, economic participation (for natives and migrants) leading to less/greater resentment. (2) Threatened responses are concerns over potential consequences of certain kinds of immigration and are linked to individual characteristics that increase exposure and susceptibility to party cueing, policy signaling and media bias. At the contextual-level, these processes are self-mitigating: Affluent, high-immigration countries more easily sustain tolerance for the same reasons they attract immigrants (opportunities) but are more prone to threatened responses since these are provoked by immigration characteristics overrepresented in affluent countries. While this dynamic is reversed in less advantaged countries, it is also vulnerable to disruption explaining higher resentment in certain countries. Self-mitigating shapes resentment in urban areas as well, but urbanization disrupts regional dynamics, leaving rural Europe especially susceptible to resentment. |
| Keywords: | immigration attitudes,contact,threat,deprivation,disorder,party cues,geopolitical threat |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbpre:p2020002&r=all |
| By: | Orozco, Roberto Carlos; Torres González, Luis Daniel |
| Abstract: | El proceso de integración comercial entre Centroamérica y México ha permitido la creación de cadenas regionales de valor entre sectores y países, así como la densificación del entramado productivo regional. En este contexto, han surgido redes de intercambio comercial entre los países que tienen una estructura de conexiones compleja. El objetivo principal del presente trabajo es aplicar el análisis de redes sociales al estudio de las relaciones comerciales intrarregionales y extrarregionales entre los países centroamericanos, México y la República Dominicana, con el fin de identificar los sectores económicos claves en el comercio intrarregional y los clústeres productivos presentes en la subregión. |
| Keywords: | COMERCIO INTRARREGIONAL, ESTRUCTURA DEL COMERCIO, INTEGRACION ECONOMICA, VALOR, ANALISIS DE INSUMO-PRODUCTO, REDES SOCIALES, INTRAREGIONAL TRADE, TRADE STRUCTURE, ECONOMIC INTEGRATION, VALUE, INPUT-OUTPUT ANALYSIS, SOCIAL MEDIA |
| Date: | 2021–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:46617&r=all |
| By: | Josh De Lyon; Swati Dhingra |
| Abstract: | Josh De Lyon and Swati Dhingra show that the UK sectors suffering less during lockdown are those most exposed to damage from leaving the European Union. |
| Keywords: | covid-19,brexit |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:580&r=all |
| By: | Christian H Ebeke; Jan-Martin Frie; Louise Rabier |
| Abstract: | The services sector is increasingly important for the euro area economy, but productivity growth in the sector has stalled over the past two decades. Remaining barriers to cross-border trade in services within the EU Single Market contribute to this weak performance. Our empirical analysis suggests that slow progress in tackling these barriers is associated with political economy factors such as weak government support in parliaments, low government efficiency and high markups. To remove the cross-border restrictions on services trade, we suggest combining incentives such as financial support, technical assistance and improved communication on barriers with more effective enforcement. |
| Keywords: | Services sector;Trade in services;Legal support in revenue administration;Productivity;Trade liberalization;WP,government |
| Date: | 2019–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/269&r=all |
| By: | Paul Decker; Howard Fluhr (eds.) |
| Abstract: | As immigration reform remains in gridlock, a new report from a nonpartisan think tank whose membership is comprised of top-level business executives calls on policymakers to enact various changes to bolster America’s workforce and economic might. |
| Keywords: | immigration reform, workforce, global talent, competitiveness, innovation, prosperity |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:73f001ede0f04a0d82019e7d6b686688&r=all |
| By: | Aslanidis, Nektarios; Martínez Ibáñez, Oscar; Tadei, Federico |
| Abstract: | Despite the essential role that international trade has historically played for resource-rich African economies, growth possibilities have been hindered by considerable trade barriers. Yet, in the large literature on commodity market integration, Africa is a blank spot and little is known about the origins of high trade costs in the African export markets. In this article, we contribute to fill this gap by analyzing West African trade costs from the mid-nineteenth century to the eve of World War II. We construct estimates of international trade costs by applying a flexible threshold model to a representative sample of West African export prices and European import prices. Our results show that trade costs for West Africa experienced a substantial reduction from the 1840s to 1880, similar to the one we observe in other areas of the world. After the 1880s, however, they declined in the rest of the world, but not in West Africa. Consequently, since the late nineteenthcentury, trade for West Africa became relatively more expensive than for other world regions and Africa became relatively less integrated into the global economy. Our findings shed new light on the debate about the origins of African underdevelopment by emphasizing the role of increased trade costs and limited access to global markets. Keywords: Market Integration; West Africa; Commodity Trade; Trade Costs; Threshold Autoregressions. JEL classification: F1; N7; O43 |
| Keywords: | Àfrica de l'Oest--Condicions econòmiques--S. XIX-XX, Integració econòmica, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/417678&r=all |
| By: | Luca Pieroni; Melcior Rossello Roig; Luca Salmasi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore) |
| Abstract: | We estimate the impact of immigration on the upsurge of populism in Italy. Our data considers electoral results at municipality level of the Senate of the Italian Republic and the Chamber of Deputies over the period 2006-2018. Findings in our research point toward a positive impact of the share of migrants on the rise of right-wing populist parties. According to our estimates the size of the average increase of the share of immigrants between our first and last electoral years (3.33 percentage points) corresponds to an increase of 2.08 percentage points for the Centre-right coalition. Lega is the party that capitalizes the most out of the anti-immigration. The size of the effect for Lega raises to 6.41 percentage points. We explore the heterogenous e ect of how the antiimmigration rhetoric is the main mechanism that exacerbates out of fear and insecurity the gap between Lega and its most direct rivals. Our paper o ers a fresh view by looking at plausible mechanisms behind our results by inspecting the European Social Survey. |
| Keywords: | Immigration, Populism, Italy, Instrumental Variables. |
| JEL: | P16 D72 J15 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def098&r=all |
| By: | Andreas Reinstaller; Klaus S. Friesenbichler |
| Abstract: | Die Studie präsentiert eine langfristige Analyse der österreichischen Warenexporte seit 2000. Nach einer stark expansiven Phase zwischen 2000 und 2008 verlor demnach Österreichs Exportwirtschaft seit der Finanzmarkt- und Wirtschaftskrise 2008/09 Marktanteile und Alleinstellungsmerkmale im Welthandel. Die Wettbewerbsintensität nahm zu, und österreichische Exporteure konzentrieren sich zunehmend auf den Export von Waren, für die sie über hohe Spezialisierungsvorteile verfügen. Aufgrund dieser Beobachtung werden Herausforderungen für die Außenwirtschaftspolitik und wirtschaftspolitische Ansatzpunkte im Kontext der Außenwirtschaftsstrategie identifiziert und diskutiert. |
| Keywords: | Covid-19, Export, Import, Wettbewerbsfähigkeit, Industriepolitik, Standortpolitik, Diversifizierung |
| JEL: | F13 D04 E61 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:ecbook:2020:i:vii-005&r=all |
| By: | Renee Luthra (University of Essex); Lucinda Platt (London School of Economics) |
| Abstract: | It is assumed that not only will more highly educated migrants do better in the receiving country labour market, but also that those who are relatively more educated compared to their compatriots, that is who are ‘selected’, will bring additional forms of human and social capital associated with economic success. Given the lack of information on these traits in most datasets, this assumption has not yet been comprehensively tested. Combining information on usually unobserved labour market relevant skills and characteristics with measures of educational selection and labour market outcomes of the foreign born in the UK, we do not find that educational selection is systematically associated with better cognitive or non-cognitive skills, health or social network composition. For more elite migration streams, educational selectivity is negatively associated with skills. As a result, higher selection does not translate into better labour market outcomes net of education. We argue that while higher bars to migration may increase the absolute skill level of migrants, it may also exclude those with (usually unobserved) favourable labour market characteristics who lack social and financial capital, reinforcing transnational class reproduction rather than selecting for the brightest and the best. |
| Keywords: | selectivity, immigration, migrant heterogeneity, labour market, employment wages, gender |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2103&r=all |
| By: | Advani, Arun; König, Felix; Pessina, Lorenzo; Dyson, Andrew |
| Abstract: | In this paper we study the contribution of migrants to the rise in UK top incomes. Using administrative data on the universe of UK taxpayers we show migrants are over-represented at the top of the income distribution, with mi-grants twice as prevalent in the top 0.1% as anywhere in the bottom 97%. These high incomes are predominantly from labour, rather than capital, and migrants are concentrated in only a handful of industries, predominantly finance. Almost all (85%) of the growth in the UK top 1% income share over the past 20 years can be attributed to migration. |
| JEL: | H20 J30 J60 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108220&r=all |
| By: | Vasil I. Yasenov (Stanford University, Immigration Policy Lab) |
| Abstract: | A large body of literature estimates the relative wage impacts of immigration on low- and high-skill natives, but it is unclear how these effects map onto changes of the wage distribution. I document the movement of foreign-born workers in the U.S. wage distribution, showing that, since 1980, they have become increasingly overrepresented in the bottom. Downgrading of education and experience obtained abroad partially drives this pattern. I then undertake two empirical approaches to deepen our understanding of the way foreign-born workers shape the wage structure. First, I estimate a standard theoretical model featuring constant elasticity of substitution technology and skill types stratified across wage deciles. Second, I estimate reduced-form quantile treatment effects by constructing a ceteris paribus counterfactual wage distribution with lower immigration levels. Both analyses uncover a similar monotone pattern: a one percentage point increase in the share of foreign-born leads to a 0.2–0.3 (0.2–0.4) percent wage decrease (increase) in the bottom (top) decile and asserts no significant pressure in the middle. When analyzing the drivers of this pattern, I find suggestive evidence for a novel mechanism through which local labor markets absorb foreign-born workers: occupational differentiation of immigrants relative to natives. |
| Keywords: | immigration, local labor markets, wage structure, counterfactual distribution, quantile treatment effects |
| JEL: | C21 J15 J21 J31 R23 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:20-320&r=all |
| By: | Redding, Stephen |
| Abstract: | This paper reviews recent research on geography and trade. One of the key empirical findings over the last decade has been the role of geography in shaping the distributional consequences of trade. One of the major theoretical advances has been the development of quantitative spatial models that incorporate both exogenous first-nature geography (natural endowments) and endogenous secondnature geography (the location choices of economic agents relative to one another) as determinants of the distribution of economic activity across space. These models are sufficiently rich to capture firstorder features of the data, such as gravity equations for flows of goods and people. Yet they remain sufficiently tractable as to permit an analytical characterization of the properties of the general equilibrium and facilitate counterfactuals for realistic policy interventions. We distinguish between models of regions or systems of cities (where goods trade and migration take center stage) and models of the internal structure of cities (where commuting becomes relevant). We review some of key empirical predictions of both sets of theories and show that they have been remarkably successful in rationalizing the empirical findings from reduced-form research. Looking ahead, the combination of recent theoretical advances and novel geo-coded data on economic interactions at a fine spatial scale promises many interesting avenues for further research, including discriminating between alternative mechanisms for agglomeration, understanding the implications of new technologies for the organization of work, and assessing the causes, consequences and potential policy implications of spatial sorting. |
| JEL: | F10 J40 R10 R40 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108235&r=all |
| By: | Sergii Meleshchuk; Yannick Timmer |
| Abstract: | In this paper we demonstrate the importance of distinguishing capital goods tariffs from other tariffs. Using exposure to a quasi-natural experiment induced by a trade reform in Colombia, we find that firms that have been more exposed to a reduction in intermediate and consumption input or output tariffs do not significantly increase their investment rates. However, firms’ investment rate increase strongly in response to a reduction in capital goods input tariffs. Firms do not substitute capital with labor, but instead also increase employment, especially for production workers. Reduction in other tariff rates do not increase investment and employment. Our results suggest that a reduction in the relative price of capital goods can significantly boost investment and employment and does not seem to lead to a decline in the labor share. |
| Keywords: | Tariffs;Imports;Trade facilitation;Employment;Manufacturing;WP,investment rate,input tariff,capital goods tariff |
| Date: | 2020–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/061&r=all |
| By: | Alexis Catanzaro (Labex Entreprendre - UM - Université de Montpellier, COACTIS - COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne]); Christine Teyssier (COACTIS - COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne]) |
| Abstract: | The purpose of the study is to analyze the effectiveness of public policies on the international performance of the small-and medium-sized enterprises (SMEs). Specifically, we investigate the effect of public export promotion programs (EPPs) on two types of organizational capabilities, i.e., export capabilities which have been already used in previous modelization and international risk management practices as an original variable intended to better explain the effectiveness of public policies on the SME's international performance. We use a quantitative methodology based on a structural equation modeling approach applied to a sample of 147 internationalized French SMEs that used EPPs. Our results add value to theoretical and empirical knowledge on the effectiveness of public support programs on the international performance of SMEs, since we demonstrate an indirect effect between EPPs and international performance, through export capabilities and risk management practices. We also show that by strengthening the risk management practices, EPPs stimulate the SME in implementing foreign direct investment strategies. |
| Keywords: | France,Structural equation models,Risk management practices,Organizational capabilities,International performance,Export promotion programs,SMEs |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03034452&r=all |
| By: | Douglas L. Campbell (New Economic School); Aleksandr Chentsov (New Economic School) |
| Abstract: | As several European countries debate entering, or exiting, the euro, a key policy question is how much currency unions (CUs) affect trade. Despite the longstanding academic debate on the topic, even recent research has continued to find that CUs exert a large effect on trade. We find, by contrast, that the sizeable recent estimated impact of CUs on trade is driven by other major geopolitical events and is also sensitive to dynamic controls. Overall, we estimate that the impact of CUs on trade is typically indistinct from zero, depending on the specification and controls, but with fairly large standard errors. |
| Keywords: | Euro, Currency Union Effect, Gravity Estimation |
| JEL: | F15 F33 F54 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abo:neswpt:w0281&r=all |
| By: | Delzeit, Ruth; Beach, Robert; Bibas, Ruben; Britz, Wolfgang; Chateau, Jean; Freund, Florian; Lefevre, Julien; Schuenemann, Franziska; Sulser, Timothy; Valin, Hugo; van Ruijven, Bas; Weitzel, Matthias; Willenbockel, Dirk; Wojtowicz, Krzysztof |
| Abstract: | When modeling medium and long-term challenges we need a reference path of economic development (the so-called baseline). Because sectoral models often offer a more fundamental understanding of future developments for specific sectors, many CGE modeling teams have adopted approaches for linking their models to sectoral models to generate baselines. Linked models include agricultural sector, energy sector, biophysical and macroeconomic models. We systematically compare and discuss approaches of linking CGE models to sectoral models for the baseline calibration procedure and discuss challenges and best practices. We identify different types of linking approaches which we divide into a) one-way, and b) twoway linking. These two types of linking approaches are then analyzed with respect to the degree of consistency of the linkage, information exchanged, as well as compromises in aggregations and definitions. Based on our assessment, we discuss challenges and conclude with suggestions for best practices and research recommendations. |
| Keywords: | Computable general equilibrium models,Model linking baseline scenario,Partial equilibrium model |
| JEL: | C68 D58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:228648&r=all |
| By: | Giacomo De Luca; Thilo R. Huning; Paulo Santos Monteiro |
| Abstract: | We investigate the impact of social media on the 2016 referendum on the United Kingdom membership of the European Union. We leverage 18 million geo-located Twitter messages originating from the UK in the weeks before the referendum. Using electoral wards as unit of observation, we explore how exogenous variation in Twitter exposure affected the vote share in favor of leaving the EU. Our estimates suggest that in electoral wards less exposed to Twitter the percentage who voted to leave the EU was greater. This is confirmed across several specifications and approaches, including two very different IV identification strategies to address the non-randomness of Twitter usage. To interpret our findings, we propose a model of how bounded rational voters learn in social media networks vulnerable to fake news, and we validate the theoretical framework by estimating how Remain and Leave tweets propagated differently on Twitter in the two months leading to the EU referendum. |
| Keywords: | Fake News, Social Networks, Social Media, Brexit |
| JEL: | D72 D83 L82 L86 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:21/01&r=all |
| By: | Camatte Hadrien; Faubert Violaine; Lalliard Antoine; Daudin Guillaume; Rifflart Christine |
| Abstract: | Following the 2008 financial crisis, inflation rates in advanced economies have been at odds with the prediction of a standard Phillips curve. This puzzle has triggered a debate on the global determinants of domestic prices. We contribute to this debate by investigating the impact of exchange rate shocks on consumer prices from 1995 to 2018. We focus on cost-push inflation through global value chains, using three sectoral world input-output datasets. Depending on countries, the absolute value of the elasticity of the household consumption expenditure (HCE hereafter) deflator to the exchange rate ranges from 0.05 to 0.35, confirming the importance of global value chains in channelling external shocks to domestic inflation. Using data from WIOD on a sample of 43 countries, we find that the mean output-weighted elasticity of the HCE deflator to the exchange rate increased in absolute value from 0.075 in 2000 to 0.094 in 2008. After peaking in 2008, it declined to 0.088 in 2014. World Input-Output tables (WIOT hereafter) are released with a lag of several years and the latest WIOT dates back to 2015. To fill this gap, we approximate the impact of an exchange rate shock on the HCE deflator from 2016 onwards using up-to-date GDP and trade data. Our extrapolations suggest that the decline in the elasticity of the HCE deflator continued until 2016, before reversing in 2017 and 2018. Our findings are robust to using three different datasets. |
| Keywords: | Inflation, global value chains, Phillips curve, input output tables, international trade, pass through |
| JEL: | D57 E31 F14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:797&r=all |
| By: | Frohmann, Alicia; Mulder, Nanno; Olmos, Ximena |
| Abstract: | En esta publicación se revisan conceptos, herramientas y prácticas relacionadas con la manera en que el comercio internacional puede aumentar su contribución al logro de los Objetivos de Desarrollo Sostenible (ODS). Se presentan algunas buenas prácticas de políticas públicas e iniciativas privadas que potencian el aporte del comercio a los ODS. A través del comercio, es posible vincular la producción y el consumo sostenibles. Los intercambios de bienes y servicios entre los países no están al margen del equilibrio entre lo económico, lo social y lo ambiental, sino que tienen el potencial de mitigar los aspectos menos sostenibles de esta tríada e impulsar aquellos que fortalecen dicha sostenibilidad. |
| Keywords: | COMERCIO INTERNACIONAL, ASPECTOS AMBIENTALES, DESARROLLO SOSTENIBLE, PEQUEÑAS EMPRESAS, EMPRESAS MEDIANAS, CARBONO, ASPECTOS SOCIALES, EMPLEO, IGUALDAD DE GENERO, POLITICA COMERCIAL, DESARROLLO SOCIAL, CERTIFICACION (MEDIO AMBIENTAL), ASOCIACIONES DE PRODUCTORES, ESTUDIOS DE CASOS, PROMOCION DE LAS EXPORTACIONES, COOPERACION INTERNACIONAL, COMERCIO AGRICOLA, CAFE, COOPERACION REGIONAL, LIBRE COMERCIO, CONVENIOS COMERCIALES, INTERNATIONAL TRADE, ENVIRONMENTAL ASPECTS, SUSTAINABLE DEVELOPMENT, SMALL ENTERPRISES, MEDIUM ENTERPRISES, CARBON, SOCIAL ASPECTS, EMPLOYMENT, GENDER EQUALITY, TRADE POLICY, SOCIAL DEVELOPMENT, CERTIFICATION (ENVIRONMENT), PRODUCERS ASSOCIATIONS, CASE STUDIES, EXPORT PROMOTION, INTERNATIONAL COOPERATION, AGRICULTURAL TRADE, COFFEE, REGIONAL COOPERATION, FREE TRADE, TRADE AGREEMENTS |
| Date: | 2021–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:46604&r=all |