nep-int New Economics Papers
on International Trade
Issue of 2021‒03‒08
34 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Exploring ‘Non-Tariff Measures Black Box’: Whose Regulative NTMs on Which Products Improve the Imported Quality? By Mahdi Ghodsi
  2. Quality of Goods Imports: Which Role for Non-tariff Measures? By Payam Elhami; Mahdi Ghodsi; Robert Stehrer
  3. Africa's integration in the WTO multilateral trading system: Academic support and the role of WTO Chairs By Smeets, Maarten
  4. How Does Development Aid Impact Trade Performance and Margins? Evidence from China By Camelia Turcu; Yunzhi Zhang
  5. The Impact of Trade Facilitation on Vietnam’s Trade Flows By , AISDL
  6. Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction By BiN Ni; Hayato Kato; Yang Liu
  7. The WTO Global Trade Costs Index and its determinants By Rubínová, Stela; Sebti, Mehdi
  8. Hold the line: The evolution of telecommunications provisions in regional trade agreements By Monteiro, José-Antonio
  9. EU exports of livestock products to West Africa: An analysis of dairy and poultry trade data By Zamani, Omid; Pelikan, Janine; Schott, Johanna
  10. Assessement of competitiviness of moldovan agri-food products at the regional level By Lucasenco, Eugenia; Ceban, Alexandru
  11. Labor Market Flexibility and Inward Foreign Direct Investment:Incentive or Outcome? By Isao KAMATA
  12. COVID-19 and global value chains: A discussion of arguments on value chain organization and the role of the WTO By Bacchetta, Marc; Bekkers, Eddy; Piermartini, Roberta; Rubinova, Stela; Stolzenburg, Victor; Xu, Ankai
  13. Economic Integration and Agglomeration of Multinational Production with Transfer Pricing By Hayato Kato; Hirofumi Okoshi
  14. A Review of Literature of Global Value Chains By Dutta, Sourish
  15. Selling High-Tech Inputs to the Enemy By Yoonho Choi; E. Kwan Choi
  16. Infrastructure aid for resource trade? The crossroads of strategy and sustainable development By Handrik Kruse; Thaís Núñez Rocha; Camélia Turcu
  17. Around the world in 80 waves: Addressing the nation’s immigration crisis By Barker, John; Freijy, Brodie; Gonzales, Aaron; Herdrich, Matthew; Lambertis, Amira; Moulton, Claire; Patterson, Julia; Samuel, Christella; Amaral, Ernesto F. L.
  18. The Dynamic and Distributional Aspects of Import Tariffs By Lechthaler, Wolfgang; Mileva, Mariya
  19. Europe's migration experience and its effects on economic inequality By Martin Guzi; Martin Kahanec; Magdalena M. Ulceluse
  20. A Research Background of Global Value Chains By Dutta, Sourish
  21. Living on the edge: An anatomy of New Zealand’s most productive firms By Richard Fabling
  22. Ambiguous Protection By Klaus Gründler; Arye L. Hillman
  23. Trade Openness and Its Effect on Selected Macroeconomic Variables of Senegal from 1986 To 2018 By Ifeoma Chinelo Amakor; Leonard Tabugbo Onwuzuligbo
  24. The evolution of gender-related provisions in regional trade agreements By Monteiro, José-Antonio
  25. Escaping the middle income trap and getting economic growth: How does FDI can help the host country? By Thanh Tam Nguyen-Huu; Ngoc-Sang Pham
  26. How Cultures Converge: An Empirical Investigation of Trade and Linguistic Exchange By Arthur Blouin; Julian Dyer
  27. The Global Sanctions Data Base: An Update that Includes the Years of the Trump Presidency By Kirilakha, Aleksandra; Felbermayr, Gabriel; Syropoulos, Constantinos; Yalcin, Erdal; Yotov, Yoto
  28. The Role of Labor Market Institutions in the Impact of Immigration on Wages and Employment By Mette Foged; Linea Hasager; Vasil Yasenov
  29. Chapter 6-International economic cooperation among nations in international business By Tung, Dao Duy
  30. Technical efficiency of Vietnamese manufacturing firms: do FDI spillovers matter? By Canh Nguyen; Minh Le; Khoa Cai; Michel Simioni
  31. Trade in Information Technologies and Changes in the Demand for Occupations By Vahagn Jerbashian
  32. Trade costs in the global economy: Measurement, aggregation and decomposition By Egger, Peter; Larch, Mario; Nigai, Sergey; Yotov, Yoto
  33. Globalization - challenges for economic policy By Miklós Szanyi
  34. India's participation in global value chains and some implications for economic and social upgrading: A case study of the automobile sector By Jha, Praveen K.; Kumar, Dinesh

  1. By: Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Regulative non-tariff measures (NTMs), such as technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures, have frequently been imposed to regulate the quality of imported goods when the market fails to address some issues of concern regarding harmful products with low standards. The impact of NTMs on trade values and trade volumes has been extensively modelled and analysed in the literature, while their quality impact has usually been studied using the unit values of imports. In this paper a monopolistic competition framework is presented, in which firms choose both the quality and the price of their exports subject to the compliance costs of NTMs behind the border and a fixed cost of technological change. Using the solutions of this model including NTMs, the quality of products at the six-digit level of the harmonised system (HS) traded globally and bilaterally during the period 1996–2017 is estimated. Using these estimates, the impacts of TBTs and SPS measures on trade values, volume, unit value and quality are estimated. On average and across all global bilateral trade, TBTs restrict imports while improving quality significantly. SPS measures stimulate trade and improve the average imported quality. Then, by estimating the importer-specific impact of NTMs on traded value, quantity, unit value, quality, and quality-adjusted price for each product, the ‘NTM Black Box’ is opened and analysed. This provides evidence of whether the quality of traded goods to an importing country has been upgraded despite the trade restrictiveness of NTMs. The complete analysed data that are available in the online appendix and visualised on Tableau will provide insights to scholars, policymakers and trade-dispute settlement cases at the World Trade Organisation (WTO). wiiw
    Keywords: non-tariff measures, technical barriers to trade, sanitary and phytosanitary measures, quality of products, global bilateral trade
    JEL: F13 F14 L15
    Date: 2021–02
  2. By: Payam Elhami; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Eight multilateral rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) and international agreements under the World Trade Organisation (WTO) have contributed significantly to the reduction of tariffs among WTO members. However, the imposition and use of non-tariff measures (NTMs) have surged over the years, mostly for legitimate policy goals. Among these measures, technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures, in particular, allow countries to impose restrictions on the imports of low-quality products suspected of harming domestic consumers’ health, plants, animals or the global environment. Such trade policy instruments aim to force higher standards in the import market and to ensure alignment with domestic regulations. The main question therefore is whether and how regulative NTMs affect trade flows, and in particular the quality of traded goods. Following the theoretical framework proposed by Feenstra and Romalis (2014), we theoretically illustrate how NTMs affect the average quality of imported products, while also incorporating the impact on the quantity and value of imports. The framework then allows us to estimate the impact of NTMs on traded values, quantities, unit values, quality and quality-adjusted prices at the detailed HS six-digit level. The results of the various estimated variables for all countries at the detailed product level are available in a visualised format (Tableau) as well as an online data appendix, providing comprehensive insights for scholars and policy makers. Generally, the results point towards a quality-increasing impact of regulative NTMs, though this may come with lower traded quantities or values. These aspects must be weighed against the positive outcomes, i.e. the compliance with the aims of the regulations concerning health, security or environmental goals and the overall increase in quality. Imposing such measures should therefore be done in such a way that they reduce trade frictions as much as possible while recognising the legitimate motivations behind the imposition of NTMs. Further, harmonisation of standards at the multilateral level may circumvent potential frictions while supporting the overall aims of regulative NTMs.
    Keywords: non-tariff measures, technical barriers to trade, sanitary and phytosanitary measures, quality of products, global bilateral trade
    JEL: F13 F14 L15
    Date: 2021–02
  3. By: Smeets, Maarten
    Abstract: The Marrakesh Agreement establishing the WTO recognizes the need for positive efforts designed to ensure that developing countries and especially the least developed among them secure a share in the growth in international trade commensurate with the needs of their economic development.This article discusses how the WTO contributes to facilitating Africa's integration into the WTO multilateral trading system. It is argued that, while African countries are actively engaged in the work of the WTO, securing their economic and policy interests, some main challenges remain. These include the need to further diversify production, linking to the Global Value Chains and developing adequate infra-structures facilitating digital trade as a vehicle for economic growth. The WTO, in close collaboration with partner institutions, lends its support to Africa in overcoming some of these issues through various programs, all geared towards trade capacity building. It is argued that the work undertaken by WTO Chairs and academic institutions under the aegis of the WTO's Chairs Program (WCP) is of critical importance in providing the analytical underpinnings for the policy choices in support of a fuller integration in the multilateral trading system. Preparations are under way meeting all the conditions for this program to be significantly expanded and deepened in 2021 with a view of further strengthening its capacity to provide support to beneficiaries and especially LDCs, hence African countries, integrating in the multilateral trading system.
    Keywords: trade,capacity building,Africa,WTO,Global Value Chains,academic support
    JEL: F10 F13 F19 F53 F55 F63 F68
    Date: 2021
  4. By: Camelia Turcu (University of Orleans - LEO); Yunzhi Zhang (Jinan University and University of Orleans - LEO)
    Abstract: We study the impact of China’s foreign aid on exports at the product level. To do this, we use a sample of 159 countries and a trade decomposition on 1366 HS4 products over the period 2000-2014. We employ a PPML methodology in a gravity framework. We find that the return on Chinese exports of every dollar spent on foreign aid is rather small, on average, at the HS4 product level, for the whole period. Moreover, we disentangle between difierent categories of international aid and find that the aid related to infrastructure, productive capacity, and other aid categories has positive effects on trade. Our results also indicate that the Chinese foreign aid enhances, at product level, the trade in new varieties but does not help the country to export more of the already traded products. In other words, at product level, the trade extensive margins are strengthened, while the intensive margins are not. We also find that, at geographical level, aid helps China exporting more towards the countries that are already its trade partners (the geographical trade intensive margins are boosted), but does not promote trade relations with new partners (no effect on the geographical trade extensive margins).
    JEL: F
    Date: 2020
  5. By: , AISDL
    Abstract: In a globalized economy, countries actively participate in Free Trade Agreements (FTAs) to bring their advantageous products to the global market through cross-border transport to satisfy customers. Trade Facilitation (TF) has become key to address the difficulties faced by traders in cross-border transport. In the trend of global TF, Vietnam has always been committed to implement TF measures by simplify customs procedures and improving customs clearance efficiency at the border crossing in order to help traders reduce their trading costs. This paper mainly considers the impact of TF measures on Vietnam‘s trade flow under the effect of FTAs. Using the gravity model extended with quantitative measures of customs environment, regulatory environment, and service infrastructure, this paper estimates the impact of TF on bilateral trade flows with Vietnam. The results show that port and customs effects have positive impacts on Vietnam's trade flows. The results also show that these impacts are consistent despite the existence of FTAs. The implementation of TF measures always requires coordination of countries to produce the best results. Indeed, the increase in trade flows between countries will bring economic benefits. And when the reforms of TF are strictly implemented, reducing trade costs will increase trade volume. In a nutshell, TF has gradually become one of the important factors of economic growth.
    Date: 2020–06–23
  6. By: BiN Ni (Faculty of Economics, Hosei University, Machida, Tokyo, Japan.); Hayato Kato (Graduate School of Economics, Osaka University); Yang Liu (Research Institute of Economy, Trade and Industry (RIETI))
    Abstract: This study uses unique division-level data of Japanese firms to examine how foreign direct investment (FDI) affects domestic employment. Contrary to most previous studies focusing on the effect on net employment growth, we decompose it into gross job creation and gross job destruction. We find that FDI destination plays an important role: FDI to Asia increases job creation, while FDI to Europe or North America decreases it. A frictional search-and-matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on job creation and destruction by job type, which are also empirically confirmed.
    Keywords: Outward FDI, firm-establishment-division-level data, multinational enterprises(MNEs), large-firm search model, high/low-skilled jobs
    JEL: F23 J21 J23
    Date: 2021–01
  7. By: Rubínová, Stela; Sebti, Mehdi
    Abstract: This study provides a decomposition of the WTO Global Trade Costs Index into five policy-relevant components: transport and travel costs; information and transaction costs; ICT connectedness; trade policy and regulatorydifferences; and governance quality. The WTO Global Trade CostsIndex is based on a new methodology by Egger et al. (2021) that delivers directional trade cost estimates and sector-specific elasticities whichare crucialforinferring tradecostsfromtradeflows data. Theresulting measure of trade costs includes all factors that burden foreign sales more than domestic ones. In this study, we run a sectoral regression analysis to determine what drives trade costs variation across partners and use the resultstodecompose the variation in trade costsin eachsector. We show that transport and travel costs play the most important role in overall trade costs both for goods and services. Tradepolicy and regulatorydifferences are the second major component of trade costs in most sectors, accounting for at least 14%. The importance of this component is particularly striking for trade among lower-income economies. Moreover, our results alsoshow that trade policy in services sectors matters for trade costs in goods, and vice versa. Finally, we find that access to information and communication technology is especially important for tradecostsin services where its importance hasincreasedover time, highlighting the role that digitaldelivery plays in this sector.
    Keywords: Trade costs,gravity model,non-tariff barriers,trade integration,trade elasticity
    JEL: F10 F14 F15
    Date: 2021
  8. By: Monteiro, José-Antonio
    Abstract: Based on the first comprehensive mapping of telecommunications provisions telecommunications in regional trade agreements (RTAs), this paper shows that telecommunications provisions in RTAs have evolved and expanded significantly over the years. While some provisions focus on information and communications technologies (ICT) infrastructure, policy and investment, other provisions address telecommunications services as well as standards and conformity assessment procedures of ICT equipment. The most detailed and comprehensive telecommunications provisions are found in stand-alone chapters, sections or annexes on telecommunications services. A network analysis further reveals that telecommunications provisions remain highly heterogenous. Only a limited number of, mostly advanced economies, tend to negotiate very detailed and comprehensive provisions on telecommunications in their respective RTAs. While many telecommunications provisions found in RTAs draw on existing WTO rules, including the Annex on Telecommunications to the General Agreement on Trade in Services (GATS), some GATS provisions, the Reference Paper on Regulatory Principles on Basic Telecommunications and the Agreement on Technical Barriers to Trade, an increasing number of RTAs incorporate explicit provisions that expand existing WTO disciplines and address new regulatory topics related to telecommunications services, such as international roaming, net neutrality, and stolen or lost mobile terminal equipment.
    Keywords: World Trade Organization,Regional Trade Agreements,Telecommunications,Digitaleconomy,Network Analysis
    JEL: F13 F15
    Date: 2021
  9. By: Zamani, Omid; Pelikan, Janine; Schott, Johanna
    Abstract: The present report provides the results of the first work package of the IMMPEX project which aims to investigate the impact of German and European livestock product exports on agri-food sectors in selected African countries. Based on various criteria like trade statistics and a literature review, we identified the poultry and dairy sectors in Senegal and Ghana for further analysis in the course of the project. In this report, we provide an overview of the poultry and dairy product trade flows from Germany, the EU, and from the rest of the world to West Africa. We also show how imports, domestic production, and consumption of poultry and dairy products have developed over time. Our analysis reveals an upward trend of dairy and poultry products imports in both countries. Apart from the 28 EU countries, Brazil and the US are the main exporters of poultry to Ghana. However, the share of the EU increased since 2011. Senegal’s domestic production has considerably expanded under the import ban on uncooked poultry meat in 2006. Nevertheless, compared with poultry production growth rates in Ghana, Senegal still has lower growth rates. With regard to dairy, intra-African trade plays an important role in this sector, however, there is evidence that intra-African trade flows might be related to re-exports. The EU and New Zealand are the main competitors in the dairy markets of Ghana and Senegal.
    Keywords: Agribusiness, International Relations/Trade
    Date: 2021–03–05
  10. By: Lucasenco, Eugenia; Ceban, Alexandru
    Abstract: The paper aims to assess the competitiveness of Moldovan agri-food products at the regional level, with an emphasis on neighbouring countries. Taking into account the latest trends in export of agri-food products, it is becoming necessary to analyze what are the most competitive Moldovan products on the regional EU market. In order to carry out the proposed assessment, the Revealed Comparative Advantage index has been used. This index helps calculating the relative advantage or disadvantage of a specific country in a certain class of goods as evidenced by trade flows. As a result, products with a significant comparative advantage have been identified, meaning the existence of the competitive potential at the regional level. At the same time, several proposals have been formulated in order to increase the competitiveness’ level of selected Moldovan agri-food products.
    Keywords: trade, Revealed Comparative Advantage index (RCA), Republic of Moldova, agri-food products.
    JEL: Q17
    Date: 2020–11–19
  11. By: Isao KAMATA
    Abstract: Are inward FDI and its increase related to the domestic labor market conditions in the host economy? This is still an open question, as literature to date has provided mixed evidence. This paper empirically addresses this question by testing the debated relationship in both possible “causal” directions—i.e., testing (i) whether the host’s labor market flexibility—or strictness—leads an increase in inward FDI and (ii) whether it follows inward FDI, using publicly accessible macro-level data. The first set of estimation shows that a host country with relaxed employment protection tends to attract more inward FDI, which is consistent with the findings in some recent studies. The analysis also indicates that this relationship should chiefly be the case in the “traditional” OECD members but may not apply to other countries. On the other hand, the second set of estimation indicates that increased inward FDI could result in loosened employment protection. This impact may not be immediately apparent but could be more significant in a longer time horizon.
    Keywords: Foreign direct investment, Labor market flexibility, Labor conditions,Employment protection
    JEL: F16 F21 F66 J80
  12. By: Bacchetta, Marc; Bekkers, Eddy; Piermartini, Roberta; Rubinova, Stela; Stolzenburg, Victor; Xu, Ankai
    Abstract: Since the outbreak of the COVID-19 pandemic there has been a discussion among researchers and policy makers about changes to global value chains, both about expected changes and changes that should be promoted by government policies. In this paper we conduct an in-depth analysis of the reasons for changes in global value chains as a result of COVID-19 both from a positive angle, analysing expected changes in the behaviour of firms, and from a normative angle, assessing the different arguments for policy interventions by governments. After this analysis international cooperation of trade policies and the role of WTO in crises like the COVID -19 pandemic is explored. The analysis generates three main conclusions. First, the COVID-19 pandemic could contribute to diversification of sources of supply whose extent will vary by sector depending on the costs of value chain reorganization. The pandemic, by contrast, is not likely to contribute much to re-shoring, the return of manufacturing activities to industrialized countries, which is more likely to be driven by pre-existing trends such as rising factor costs in emerging countries, increasing uncertainty about trade policy, and robotization and automation of production. Second, the pandemic has led to increased attention to the provision of essential goods in situations of crisis and our analysis concludes that to achieve this objective, global cooperation should be preferred to national policies such as domestic production and export restrictions. Third, the largest risk for the global economy in the aftermath of the pandemic is a move away from open, non-discriminatory trade policies, which would jeopardize the large benefits of open trade regimes in the current global economy characterized by scale economies, innovation spillovers, and a global division of labour.
    Keywords: COVID-19,global value chains,provision of essential goods,export restrictions
    JEL: F1
    Date: 2021
  13. By: Hayato Kato (Corresponding author. Graduate School of Economics Osaka); Hirofumi Okoshi (Munich Graduate School of Economics, University of Munich, Seminar for Economic Policy, Akademiestr. 1/II, D-80799 Munich, Germany; Faculty of Economics, Okayama University, 3-1-1 Tsushima, Kita-ku, Okayama,)
    Abstract: Do low corporate taxes always favor multinational production in the course of economic integration? We propose a two-country model in which multinationals choose the locations of production plants and foreign distribution affiliates and shift profits between home plants and foreign affiliates by manipulating transfer prices in intra-firm trade. We show that when trade costs are high, plants are concentrated in the low-tax country, but surprisingly this location pattern reverses when they are low. Unlike existing models with single-plant firms, the impact of economic integration is non-monotonic, which we empirically confirm: a fall in trade costs first decreases and then increases the share of plants in the high-tax country. We also analyze tax competition and find that allowing for transfer pricing makes competition tougher, indicating a possibility of international coordination on transfer-pricing regulation making the world better off.
    Keywords: Profit shifting; Multinational firms; Intra-firm trade; Trade costs; Foreign direct investment (FDI)
    JEL: F12 F23 H25 H26
    Date: 2021–01
  14. By: Dutta, Sourish
    Abstract: The phenomenon of global value chains (GVCs) indicates a division of labour type production structure in which tasks and business functions are distributed among several companies, globally, or regionally (Grossman and Rossi-Hansberg 2008). The critical features of GVCs are therefore the international dimension of the production process and the "contractualisation" of buyer and seller relationships, often across international borders (Antras 2016). As a result, these international production networks are highly complex regarding geography, technology, and the different types of firms involved (from large retailers and highly large-scale mechanised manufacturers to small home-based production). Sometimes it may be impossible even to identify all the countries that are involved or the extent of their involvement (Gereffi and FernandezStark 2016). However, the recent development of OECD-WTO’s Trade-in Value Added (TiVA) data represents a fundamental step forward in understanding GVC trade. Grossman & RossiHansberg (2008, 2012) rightly point out that the different tasks, rather than sectors, define the specialisation of countries in the value chains.
    Date: 2021–02–15
  15. By: Yoonho Choi; E. Kwan Choi
    Abstract: Trade wars are being waged by the United States and Japan. Exports of high-tech inputs (e.g., fluorinated polyimides in semiconductor devices) are now curbed by these countries. Manufacturing high-quality outputs require the use of high-tech inputs. Exports of high-tech inputs may not only increase the Northern innovator’s profit in the short run but also may create permanent rivals in the downstream market in developing countries. This paper investigates whether it is profitable for a Northern innovator to export high-tech inputs to foreign competitors who would compete in the downstream market. If wage disparity exists between the two countries when products are differentiated, selling the high-tech input to foreign competitors may be mutually beneficial for both the innovator and the foreign rivals in the South. When the finished products are homogeneous, selling only the high-tech input to a sufficiently large number of Southern firms, and exiting from the finished product market, may increase the innovator’s profit. Highlights: • It may be mutually profitable for the Northern innovator and Southern rivals to export and import the high-tech input in the homogeneous model. • When the final products are perfect substitutes, there is no incentive for the Northern innovator to sell the high-tech input to two Southern rivals. • It may be profitable for the Northern firm to stop producing the finished product, and to sell only the high-tech input to a sufficiently large number of Southern rivals.
    Keywords: high-tech input, export control, high-quality product
    JEL: F10 L10
    Date: 2021
  16. By: Handrik Kruse (Univ. Orléans, CNRS, LEO and Labex Voltaire, FRE 2014); Thaís Núñez Rocha (Univ. Orléans, CNRS, LEO and Labex Voltaire, FRE 2014); Camélia Turcu (Univ. Orléans, CNRS, LEO and Labex Voltaire, FRE 2014)
    Abstract: In this paper, we investigate the claim that rich countries use development aid to ensure access to natural resources. We provide a theoretical model that suggests that even an altruistic donor may be inclined to allocate a higher share of their aid expenditure on infrastructure and other trade promoting measures if they rely on the recipient’s resource exports for their own production. We use a panel dataset from 2001 to 2011. Our results suggest that bilateral resource trade on average positively affects the number of infrastructure projects and the average size of projects. The effect seems to be driven mostly by fuels and road infrastructure projects. While the effect of resources is weaker for landlocked countries, we find that the transport capacity of the recipient’s fleet of bulk carriers —used in the maritime transport of many resources— reinforces the effect of resources on infrastructure aid. Finally, we find a decreasing influence of resources over time.
    Keywords: Foreign Aid, Resource exports, Political Economy, Trade costs, Infrastructure
    JEL: F
    Date: 2020
  17. By: Barker, John; Freijy, Brodie; Gonzales, Aaron; Herdrich, Matthew; Lambertis, Amira; Moulton, Claire; Patterson, Julia; Samuel, Christella; Amaral, Ernesto F. L. (Texas A&M University)
    Abstract: Immigration has a paramount effect on the size, distribution, composition, and cultural aspects of the United States. Policymakers implemented several programs, such as the Bracero program, the 1986 Immigration Reform and Control Act (IRCA), and have increased border security to address migration issues. While these programs were merely short term solutions, we focused on possibilities that can address this issue in a long-term and comprehensive setting. The MIGRANT (Migrant Integration Generating Reform And New Trends) policy focuses on the objective to integrate undocumented immigrants into American society.
    Date: 2021–02–13
  18. By: Lechthaler, Wolfgang; Mileva, Mariya
    Abstract: We use a dynamic trade model with two sectors and two types of workers to analyze the optimal setting of income-generating tariffs. We study dynamic and distributional aspects focusing on the time horizon of policymakers and workers. The level of tariffs preferred by workers depends on the sector where they are employed as well as their skill class, with the relative weight of both aspects determined by the time horizon of the workers. Unskilled workers in the unskilled-intensive sector are the ones most in favor of protectionism and might even benefit from a trade war.
    Date: 2021
  19. By: Martin Guzi; Martin Kahanec; Magdalena M. Ulceluse
    Abstract: This chapter provides the historical context for the past half-century in Europe focusing specifically on the link between migration and economic development and inequality. The literature review suggests that there are several channels through which migration affects economic inequality between countries in one or the other direction. The net effects are an open empirical question and are likely to depend on the economic, demographic and institutional and policy contexts; sources, types and selectivity of migration, as well as responses of the receiving societies as well as migrants themselves. We undertake an empirical analysis and find that immigration has contributed to reducing inequality within the 25 EU countries over the 2003-2017 period. As the EU attracted relatively highly qualified immigrants throughout this period, our results are consistent with the ameliorating effect of skilled migration on within-country inequality, as predicted by theory.
    Keywords: immigration, inequality, labour mobility, income distribution, EU enlargement
    JEL: D31 D60 O15
    Date: 2021–03–05
  20. By: Dutta, Sourish
    Abstract: Purpose of this background note is to present some relevant research issues about India’s GVC, such as degree of India’s GVC linkages, by sector, by industry (preliminary analysis by GVC measures as well as in-depth econometric analysis), consequences of GVCs for economic prosperity i.e. industrial or economic upgrading (including trade-oriented upgrading and adaptation), the impact of GVCs on social upgrading, such as reflection on labour market dynamics (because social upgrading is not immediately associated with industrial or economics upgrading).
    Date: 2021–02–15
  21. By: Richard Fabling (Independent Researcher)
    Abstract: Theory and international evidence suggest that firms at the New Zealand productivity frontier may be especially important for the diffusion of knowledge from the global productivity frontier, acting as a conduit for new technologies and ideas to flow into the domestic economy. We identify the NZ productivity frontier in a novel way that is robust to some sources of measurement error, and to criticism that the frontier label is dependent on arbitrary assumptions. We show that economic activity is concentrated in the upper deciles of the productivity distribution, and that frontier firms are disproportionately important to aggregate output, even relative to firms just outside the frontier. Compared to laggard firms, frontier firms: employ a more skilled workforce concentrated in major Urban Areas (particularly Auckland); have superior human resource management practices; are more export intensive; are more likely to have up-to-date technology (including UFB use); and to be in markets with no competitors.
    Keywords: Multifactor productivity; productivity frontier; productivity growth; management practices; innovation; exporting; foreign direct investment; competition
    JEL: D20 L20 M21 O31
    Date: 2021–03
  22. By: Klaus Gründler; Arye L. Hillman
    Abstract: Import regulations are globally the most prevalent form of intervention in international trade. The regulations should, under rules of the WTO, protect consumers and the environment but can be used to protect producers. We investigate the ambiguity of intent. We set out a model that when applied empirically suggests, as a benchmark estimate, equal divide between social benefit and producer protection. Inefficiency and distributional effects are consistent with producerprotecting trade policy. Country diversity in use of regulations supplements our estimates in suggesting producer-protecting intent. We look at how WTO procedures have allowed producer protection in the guise of social benefit.
    Keywords: protectionism, World Trade Organization, regulation, non-tariff barriers, public safety, environmental protection
    JEL: F13 F14 L15 L51
    Date: 2021
  23. By: Ifeoma Chinelo Amakor (NAU-UNIZIK - Nnamdi Azikiwe University); Leonard Tabugbo Onwuzuligbo (NAU-UNIZIK - Nnamdi Azikiwe University)
    Abstract: This study evaluated the effect of Trade openness on Senegalese National Savings, Gross Fixed Capital Formations and Gross Domestic Product from 1986 to 2019, using time series data. Doornik-Hansen Test of Normality was used to test for normal distribution among the variables and the stationarity test was carried out using ADF Test and PP Test. The models were subjected to residual and stability tests of LM, heteroskedasticity serial correlation and Ramsey Reset Specification test. The long run and short run relationship among the selected variables were carried out using bond test and ARDL respectively, while the formulated hypotheses were tested using Pairwise Granger Causality Test. The result revealed that Trade openness has no effect on the variables under study. That means that export capacity of Senegal did not increase her economic performance. For the country of Senegal to benefit from trade liberalization, there is need for reform in her trade and fiscal policy.
    Keywords: Trade openness,Gross Fixed Capital Formation,National Savings
    Date: 2019–07
  24. By: Monteiro, José-Antonio
    Abstract: Regional Trade agreements (RTAs) are sometimes considered as laboratories in which new types of provisions are negotiated to address recent trade-related issues. Although the inclusion of gender-related provisions in RTAs is not a recent phenomenon, only a limited but increasing number of RTAs refer explicitly to gender-related issues. These gender-related provisions are highly heterogeneous and differ in terms of location in the RTA, language, scope and commitments. Some of the most detailed gender-related provisions are found in stand-alone chapters on gender. Cooperation provisions on gender-related issues, including labour, health and social policy, remain the most common type of gender-related provisions found in RTAs. The remaining types of genderrelated provisions, included in a relatively limited number of RTAs, cover different issues, including upholding domestic gender-policies, implementing international gender-related agreements and instruments, and establishing institutional arrangements to oversee the implementation of the gender-related provisions and resolve issues through consultations. The first Global Trade and Gender Arrangement (GTGA), negotiated by Canada, Chile and New Zealand in 2020, builds on many of the gender-related provisions found in RTAs but sets out also new types of gender-related provisions, such as the principle not to weak or reduce the protection provided in gender equality laws and regulations to promote trade or investment.
    Keywords: Regional Trade Agreements,Gender,Women,Equality,Inclusiveness
    JEL: F13 F15
    Date: 2021
  25. By: Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie); Ngoc-Sang Pham (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)
    Abstract: The paper investigates the country receiving FDI's optimal strategy in an optimal growth context. First, if the multinational enterprise has high productivity or the entry cost is high, no domestic firm enters the new industry. Still, the host economy's investment stock converges to a higher steady state than that of the closed economy. Second, if the old sector is strong enough and the domestic firm's productivity is high, the foreign firm will be dominated, even eliminated by the domestic one. Third, we show that if the host country invests in R&D, its economy may grow without bounds. In this case, FDI helps the host country only at the first stages of its development process. We present empirical evidence that supports our theoretical findings.
    Keywords: fixed cost,R&D,Optimal growth,FDI,MNE
    Date: 2021–02–16
  26. By: Arthur Blouin; Julian Dyer
    Abstract: This paper empirically investigates whether potential gains from trade influence cultural convergence. We develop a model of linguistic convergence where individuals adopt another language to facilitate trade with that group, and diffuse elements of the language throughout their own culture. The model maps to a dataset of linguistic adoption, featuring nearly all words in all languages. We construct a society-pair measure of language adoption that we show is related to welfare gains from agricultural trade. In particular, we show empirically that (1) improved trade-partner quality can cause cultural convergence; (2) adoption is inverse-U shaped in the quantity of trade-partners; (3) economic leverage determines the direction of convergence. We also provide evidence that the language adoption we identify is cultural rather than purely functional by showing that religious and social organization word-types (amongst others) are heavily adopted.
    Keywords: Language Evolution; Linguistic Distance; Linguistic Exchange; Loanwords; Trade Incentives
    JEL: O11 O12 O13
    Date: 2021–02–25
  27. By: Kirilakha, Aleksandra (School of Economics); Felbermayr, Gabriel (Kiel Institute & Kiel University); Syropoulos, Constantinos (School of Economics); Yalcin, Erdal (Konstanz University of Applied Science); Yotov, Yoto (School of Economics)
    Abstract: We introduce and discuss 383 previously unrecorded sanction cases among which 77 emerged during 2016-2019, a period that coincides with the Trump presidency. These newly considered cases are included in the updated Global Sanctions Data Base (GSDB) of Felbermayr et al. (2020), thus raising the total of sanction cases recorded there to 1105. Our descriptive analysis reveals that a number of sanctions were lifted in 2016. However, in 2017 we witnessed a substantial increase in the deployment of new – primarily ‘smart’ (i.e., financial and travel) – sanctions of which more than half were imposed by the United States. Moreover, we observed a significant rise in the number of sanctions aiming to ‘change’ the policies of sanctioned states and to fight ‘terrorism’. Almost all sanctions initiated by the Trump administration are still in place, so assessment of their success remains open.
    Keywords: Sanctions; the GSDB; Trump Administration
    JEL: F13 F14 F51
    Date: 2021–02–19
  28. By: Mette Foged (University of Copenhagen, CReAM and IZA); Linea Hasager (University of Copenhagen); Vasil Yasenov (Immigration Policy Lab, Stanford University, and IZA)
    Abstract: We study the role of institutions in affecting the labor market impacts of immigration using a cross-country meta-analysis approach. To accomplish this, we gather information on 1,030 previously estimated wage effects and 432 employment effects of immigration from 61 academic studies covering 18 developed countries. The mean and median impact on the relative wage of directly exposed native workers are negative and significantly different from the small positive mean and median impact on the average wage level. This pattern is reversed for employment effects where the magnitudes are smaller. We combine this database with country-level data on labor market institutions from the OECD. The results suggest that institutions may shield native workers from distributional (relative) wage consequences of immigration but exacerbate the impacts on average wages in the economy. We do not detect a significant and robust association for the employment effects of foreign workers.
    Keywords: immigration, wages, employment, labor market institutions, meta-analysis
    JEL: D02 J08 J15 J31 J61
    Date: 2021–03
  29. By: Tung, Dao Duy (Tay Do University)
    Abstract: Lecture notes, quizzes, a summary content of the book International business: The challenges of globalization
    Date: 2021–02–22
  30. By: Canh Nguyen (VNU-HCM - Vietnam National University - Ho Chi Minh City); Minh Le (Banking University of Hochiminh city); Khoa Cai (Industrial University); Michel Simioni (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper investigates the spillover effect (backward, forward, and horizontal linkage) of foreign direct investment (FDI) firms on the technical efficiency of local firms. This research extends the literature by employing meta-frontier framework analysis which is superior to single stochastic analysis because each industry has a different combination of inputs (or dissimilar production technology). Using a large data set (178,700 firm-year observations), this paper finds evidence on the negative impact of the horizontal and forward linkages on the meta-technical inefficiency for the data set as a whole as well as in three economic regions, in private owned firms, and capital and labor-intensive sectors in Vietnam.
    Keywords: Forward and horizontal linkage,Vietnam.,Foreign direct investment,Backward,Meta translog inefficiency,Meta-frontier framework
    Date: 2021–02–01
  31. By: Vahagn Jerbashian
    Abstract: I use data from the World Input-Output Database and show that trade in information technologies (IT) has a significant contribution to the growth in foreign intermediate goods in the 2001-2014 period. China has strongly contributed to the rise in trade in IT and has become one of the major foreign suppliers of IT. I merge these data with the EU KLEMS database and EU Labour Force Survey and obtain a dataset of 12 European countries and 2001-2007 period. I show that IT imports from China are associated with lower IT prices in European countries. The fall in IT prices has increased the demand for high wage occupations and reduced the demand for medium wage occupations. Nearly 25 percent of the variation in the demand for occupations can be attributed to the trade with China.
    Keywords: trade, information technologies, China, demand for occupations
    JEL: F16 J23 J24 O33 L63
    Date: 2021
  32. By: Egger, Peter; Larch, Mario; Nigai, Sergey; Yotov, Yoto
    Abstract: Proper measurement and aggregation of trade costs is of paramount importance for sound academic and policy analysis of the determinants - particularly those of policy - of economic outcomes. The international trade profession has witnessed significant new developments, both on the theoretical and on the empirical side, concerning the measurement and decomposition of such costs into variable and fixed costs on the one hand and into partial and general equilibrium effects on the other hand. The objectives and main contributions of this project are to offer guidance for proper measurement, aggregation, and decomposition of trade costs into fixed vs. variable and partial vs. general equilibrium costs across two broad dimensions, one including overall trade costs vs. policy measures vs. transportation costs vs. natural trade barriers vs. uncertainty and another one including geography vs. product vs. household income level vs. agent.
    Keywords: Trade costs,Structural gravity,Multi-sector and multi-country models,Heterogeneous firms,Panel data,Measurement,Aggregation,Decomposition
    JEL: C23 C31 F1
    Date: 2021
  33. By: Miklós Szanyi (Institute of World Economics, Centre for Economic and Regional Studies)
    Abstract: Economic systems work in specific technological environment that determine not only the production process (the real economy), but also markets, business models, consumption patterns (the way of life) and also the institutional background of the economy. These parts of the system must evolve in a balanced way. The regulation and control over economic processes (economic policy) must also comply. The process of globalization has set up new technological and business conditions since the 1970s and 80s. New challenges have emerged for economic policy. This paper analyzes very briefly four major challenges and the initial yet still not adequate policy responses to them. The four areas are financialization, digitalization, active structural policy options and sustainable development. The main message is that the world still lacks adequate policy responses to the challenges. This fact is the more worrisome since the new technological paradigm, the cyberbusiness and industry 4.0 is evolving with considerable speed.
    Keywords: economic policy, globalization, financialization, digitalization developmental state, sustainable development, economic patriotism
    JEL: F13 F23 F36 F42 F68 K22 K34 O25
    Date: 2019–11
  34. By: Jha, Praveen K.; Kumar, Dinesh
    Abstract: This paper maps the integration of India's automobile sector in the context of the structural transformation of contemporary capitalism, in particular with reference to what is variously described as Global Commodity Chains, Global Value Chains, Global Supply Chains etc. It explores the multiple dimensions of economic and social upgrading within the Indian auto sector as a consequence of its deepening participation in these 'chains'. The paper is divided into six sections. Section 1 provides a brief introduction; Section 2 gives a brief profile of the Indian automobile sector and also discusses briefly its major constituents, namely, original equipment manufacturers (henceforth OEM) and auto component segment, and their geographical distributions; Section 3 provides an overview of the data and methodology; Section 4 analyses India's GVCs participation, using a couple of indicators, and examines some aspects of economic and social upgrading in both the organised and unorganised sectors; Section 5 flags a few recent policies and plans adopted by India's central government in this industry; Section 6 concludes the chapter with a recap of major findings.
    Keywords: Global Value Chains,Automobile Sector,Employment,Wages,Neoliberal Policy
    JEL: F66 L62
    Date: 2021

This nep-int issue is ©2021 by Luca Salvatici. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.