nep-int New Economics Papers
on International Trade
Issue of 2021‒03‒22
thirty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Global Value Chains By Pol Antràs; Davin Chor
  2. The US–China trade war and phase one agreement By Chad P. Bown
  3. Government Policies in a Granular Global Economy By Cecile Gaubert; Oleg Itskhoki; Maximilian Vogler
  4. Trade costs, home bias and the unequal gains from trade By Dorothee Hillrichs; Gonzague Vannoorenberghe
  5. Do Non-tariff Barriers to Trade Save American Jobs and Wages? By Leonardi, Marco; Meschi, Elena
  6. The EU-Africa summit 2021 : Quo vadis, in the light of Brexit and Corona By Kohnert, Dirk
  7. Inequality, Openness, and Growth through Creative Destruction By Ulrich Schetter; Adrian Jäggi; Maik T. Schneider
  8. Quantifying the Impact of Economic Sanctions on International Trade in the Energy and Mining Sectors By Serge Shikher; Mario Larch; Constantinos Syropoulos; Yoto V. Yotov
  9. What explains excess trade persistence? A theory of habits in the supply chains By Mariarosaria Comunale; Justas Dainauskas; Povilas Lastauskas
  10. Special Economic Zones: the Chinese Ladder to Get into Neoliberal Globalization By Laura Melissa Naranjo Molano
  11. The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks By Muhammed A. Yildirim; Cem Cakmakli; Selva Demiralp; Sebnem Kalemli-Ozcan; Sevcan Yesiltas
  12. Global Value Chains and Local Business Environments: Which Factors Really Matter in Developing Countries? By Marion Dovis; Chahir Zaki
  13. Firms’ imports and quality upgrading: evidence from Chinese firms By Min Zhu; Chiara Tomasi
  14. Why Do Migrants Stay Unexpectedly? Misperceptions and Implications for Integration By Kaufmann, Marc; Machado, Joël; Verheyden, Bertrand
  15. How Do Low-Skilled Immigrants Adjust to Chinese Import Shocks? Evidence Using English Language Proficiency By Furtado, Delia; Kong, Haiyang
  16. The terrorism-finance nexus contingent on globalisation and governance dynamics in Africa By Simplice A. Asongu; Tii N. Nchofoung
  17. Who got the Brexit blues? The Effect of Brexit on Subjective Wellbeing in the UK By Powdthavee, Nattavudh; Plagnol, Anke C.; Frijters, Paul; Clark, Andrew E.
  18. Do liberal policy regimes condemn Latin America to quasi-stagnation? By Bresser-Pereira, Luiz Carlos; Feijó, Carmem; Araújo, Eliane Cristina de
  19. Globalization and Pandemics By Pol Antras; Stephen J Redding; Esteban Rossi Hansberg
  20. Immigrants and the making of America By Sequeira, Sandra; Nunn, Nathan; Qian, Nancy
  21. The Evolution of Offshore Renminbi Trading: 2016 to 2019 By Yin-Wong Cheung; Louisa Grimm; Frank Westermann
  22. Trade and Geography By Stephen J Redding
  23. Identity and Labor Market Outcomes of Immigrants By Maria Rosaria Carillo; Vincenzo Lombardo; Tiziana Venittelli
  24. Globalization, Governance and the Green Economy in Sub-Saharan Africa: Policy Thresholds By Simplice A. Asongu; Joseph Nnanna
  25. The Role of Labor Market Institutions in the Impact of Immigration on Wages and Employment By Foged, Mette; Hasager, Linea; Yasenov, Vasil
  26. The Effect of US-China Tariff Hikes: Differences in Demand Composition Matter By Ricardo M. Reyes-Heroles; Charlotte T. Singer; Eva Van Leemput
  27. On Immigration and Native Entrepreneurship By Duleep, Harriet; Jaeger, David A.; McHenry, Peter
  28. Labour security and agency within the Orange Juice Value Chain (OJVC) in Brazil By Duarte, R.; Pegler, L.J.; Galhera, K.
  29. L’emigrazione dei ricercatori italiani By Nascia, Leopoldo; Pianta, Mario
  30. Immigration and Voting Patterns in the European Union: Evidence from Five Case Studies and Cross-Country Analysis By Grumstrup, Ethan; Sorensen, Todd A.; Misiuna, Jan; Pachocka, Marta

  1. By: Pol Antràs; Davin Chor
    Abstract: This paper surveys the recent body of work in economics on the importance of global value chains (GVCs) in shaping international trade flows and multinational activity. On the empirical front, we begin reviewing several variants of the "macro approach" to measuring the relevance of global production sharing in the world economy, and we also offer a critical evaluation of the country- and industry-level datasets (or World Input Output Tables) that have been used to date. We next discuss the advantages and disadvantages of a burgeoning alternative "micro approach" that has instead employed firm-level datasets to document the ways in which firms have sliced up their value chains across countries. On the theoretical front, we propose an analogous dissection of the literature. First, we review a vast body of work developing country- and industry-level quantitative frameworks that are easily calibrated with World Input Output Tables, and that open the door for counterfactual exercises with minimal demands on estimation. Second, we overview micro-level frameworks that have treated firms rather than countries or industries as the relevant unit of analysis, and that have unveiled a number of distinctive mechanisms by which GVCs shape the determinants and consequences of international trade flows in ways distinct from traditional models of international trade. We close this survey with a discussion of a still infant literature on the desirability and effects of trade policy in a world of GVCs.
    JEL: F1 F2 F4 F6
    Date: 2021–03
  2. By: Chad P. Bown
    Abstract: The Trump administration changed US trade policy toward China in ways that will take years for researchers to sort out. This paper makes four specific contributions to that research agenda. First, it carefully marks the timing, definitions, and scale of the products subject to the tariff changes affecting US-China trade from January 20, 2017 through January 20, 2021. One result is that each country increased its average duty on imports from the other to rates of roughly 20 percent, with the new tariffs and counter-tariffs covering more than 50 percent of bilateral trade. Second, the paper highlights two additional channels through which bilateral tariffs changed during this period: product exclusions from tariffs and trade remedy policies of antidumping and countervailing duties. These two channels have received less research attention. Third, it explores why China fell more than 40 percent short of meeting the goods purchase commitments set out for 2020, the first year of the phase one agreement. Finally, the paper considers additional trade policy actions—involving forced labor, export controls for reasons of national security or human rights, and reclassification of trade with Hong Kong—likely to affect US-China trade beyond the Trump administration.
    Keywords: US-China trade policy, tariffs, trade war timeline, phase one agreement, antidumping, countervailing duties, product exclusions, export controls
    JEL: F13
  3. By: Cecile Gaubert; Oleg Itskhoki; Maximilian Vogler
    Abstract: We use the granular model of international trade developed in Gaubert and Itskhoki (2020) to study the rationale and implications of three types of government interventions typically targeted at large individual firms -- antitrust, trade and industrial policies. We find that in antitrust regulation, governments face an incentive to be overly lenient in accepting mergers of large domestic firms, which acts akin to beggar-thy-neighbor trade policy in sectors with strong comparative advantage. In trade policy, targeting large individual foreign exporters rather than entire sectors is desirable from the point of view of a national government. Doing so minimizes the pass-through of import tariffs into domestic consumer prices, placing a greater portion of the burden on foreign producers. Finally, we show that subsidizing `national champions' is generally suboptimal in closed economies as it leads to an excessive build-up of market power, but it may become unilaterally welfare improving in open economies. We contrast unilaterally optimal policies with the coordinated global optimal policy and emphasize the need for international policy cooperation in these domains.
    JEL: D43 F12 F13 L40 L52
    Date: 2021–03
  4. By: Dorothee Hillrichs (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Gonzague Vannoorenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In a recent paper, Fajgelbaum and Khandelwal (2016) develop a methodology to quantify the distributional consequences of trade. Their approach relies on aggregate expenditure data and on a non-homothetic gravity equation based on an Almost Ideal Demand System (AIDS). In this setup, we show that the structural parameters governing the welfare gains are highly sensitive to the determinants of spending on domestic goods. We extend their model by allowing for a home bias in tastes or, alternatively, for more complex trade costs. While Fajgelbaum and Khandelwal (2016) find that trade typically decreases the relative price of the goods consumed by poor households, we show that the pro-poor bias of trade becomes weaker or can even turn slightly pro-rich for most countries depending on the specification.
    Keywords: International trade, welfare, non-homothetic preferences, home bias
    JEL: F10 F14 F61 D63
    Date: 2021–03–03
  5. By: Leonardi, Marco (University of Milan); Meschi, Elena (Università Ca’ Foscari di Venezia)
    Abstract: Before the recent rebound due to the US–China trade war, tariffs on international trade were being progressively reduced over the last decades and advanced countries increasingly relied on non-tariff measures (NTMs) to protect their industries from foreign competition. In this paper, we exploit a novel database on NTMs to test their role in shaping the labour market effects of exposure to Chinese import competition over the 2000–2015 period. We relate changes in manufacturing employment to the share of employed workers protected by NTMs across US local labour markets and we instrument NTMs using the industry share of employment in swing states during presidential elections. Our results indicate that NTMs mitigate the negative employment effect of exposure to Chinese imports and have a positive effect on manufacturing wages (especially for the unskilled).
    Keywords: import competition, non-tariff barriers, labour market, Chinese imports
    JEL: E24 J23 J31
    Date: 2021–03
  6. By: Kohnert, Dirk
    Abstract: Every three years, the AU-EU summit reunites African and EU leaders to outline the future direction of cooperation. The 6th summit had been to reaffirm and renew the partnership between the two blocks already in October 2020, but it was pushed back to the first quarter of 2021 or even later due to COVID-19 crisis. Besides, Brussels had to deal with its own post-Brexit situation and its repercussions on EU-Africa relations, excluding the UK. African states, for their part, wanted to renegotiate the EU-Africa partnership and to balance it with new promising Post-Brexit visions of the British premier Johnson about increased economic ties with the African Angloshere. China and other global players compete with the EU and its member states in the new scramble for African resources. Given that Africa is increasingly courted by other partners it could be inclined to successively limit its relations with the EU and see it as a mere provider of aid and security against Islamic terrorism. This trend was reinforced by the fact that the new EU-Africa strategy still hasn't been approved by EU member states. And a timely replacement of the Cotonou Agreement, which expires in November 2021, is open to question.
    Keywords: Corona, Brexit, Africa, UK, EU, international trade, economic recession, poverty, violence,
    JEL: F13 F35 F45 F63 G15 I1 I18 N17 N47 N67 O17 P16 Z13
    Date: 2021–03–04
  7. By: Ulrich Schetter (Center for International Development at Harvard University); Adrian Jäggi; Maik T. Schneider
    Abstract: We examine how inequality and openness interact in shaping the long-run growth prospects of developing countries. To this end, we develop a Schumpeterian growth model with heterogeneous households and non-homothetic preferences for quality. We show that inequality affects growth very differently in an open economy as opposed to a closed economy: If the economy is close to the technological frontier, the positive demand effect of inequality on growth found in closed-economy models may be amplified by international competition. In countries with a larger distance to the technology frontier, however, rich households satisfy their demand for high quality via importing, and the effect of inequality on growth is smaller than in a closed economy and may even be negative. We show that this theoretical prediction holds up in the data, both when considering growth in export quality at the industry level and when considering growth in GDP per capita.
    Keywords: creative destruction, distance to frontier, dual economy, growth, inequality, infant industry protection, non-homothetic preferences, trade openness
    JEL: D30 F43 O15 O30 O40
    Date: 2021–02
  8. By: Serge Shikher; Mario Larch; Constantinos Syropoulos; Yoto V. Yotov
    Abstract: Capitalizing on the latest developments in the gravity literature, we utilize two new datasets on sanctions and trade to study the impact of economic sanctions on international trade in the mining sector, which includes oil and natural gas. We demonstrate that the gravity equation is well suited to model bilateral trade in mining and find that sanctions have been effective in impeding mining trade. Our analysis reveals that complete trade sanctions have reduced bilateral mining trade by about 44 percent on average. We also document the presence of significant heterogeneity in the effects of sanctions on mining trade across mining industries and across sanction episodes/cases, depending on the sanctioning and sanctioned countries, the type of sanctions used, and the direction of trade flows. We take a close look at the impact of recent sanctions on Iran and Russia.
    Keywords: structural gravity, sanctions, mining, oil, trade effects
    JEL: F10 F13 F14 F50 F51 H50 N40
    Date: 2021
  9. By: Mariarosaria Comunale; Justas Dainauskas; Povilas Lastauskas
    Abstract: International trade flows are volatile, imbalanced, and fragmented across off-shored supply chains. Yet, not much is known about the mechanism through which trade flows adjust in response to shocks over time. This paper derives a dynamic gravity equation from a theory of habits in the supply chains that generates autocorrelated bilateral trade flows that are heterogeneous across different country pairs. We estimate our version of the dynamic gravity equation for 39 countries over the period of 1950-2014 and find that the transmission of local and global trade shocks is fundamentally different. We show that the trade persistence coefficient falls from 0.91 to 0.35 when we depart from the existing empirical gravity models that draw inference from the pooled coefficient estimates without controlling for the variation in the unobservable global factors. Thus, our approach escapes the excess trade persistence puzzle and adds to the explanation of the sharp decline and the rapid recovery of the global trade flows during the “Great Trade Collapse” of 2008-09. In addition to the traditional variables in the gravity equation, we also show that a cross-country habit asymmetry creates bilateral and multilateral trade imbalances, which are an important determinant of bilateral trade flows both theoretically and empirically.
    Keywords: Dynamic Gravity Equation, Habits, Trade Persistence, Trade Imbalance, Global Shocks, Parameter Heterogeneity
    JEL: C23 F14 F41 F62
    Date: 2021–01
  10. By: Laura Melissa Naranjo Molano
    Abstract: This paper explored how the neoliberalism influenced the formulation, adoption, and implementation of the Special Economic Zones (SEZs) in China. In grappling with this question, a significant link was found: globalization. This process was driven by openness and liberalization, premises that neoliberalism revived in the global political sphere in the last decades of the 20th century. Then, to get into the world economy, China abandoned the protectionist ladder to take an additional one: formulate and adopt SEZs. These zones allowed China to have free trade policies without internal market liberalization. Furthermore, the implementation of SEZs as cities generated direct access to the neoliberal model of globalization.
    Keywords: special economic zone, globalization, neoliberalism, China
    JEL: B27 F13 F68 O24
    Date: 2021–03–06
  11. By: Muhammed A. Yildirim (Center for International Development at Harvard University); Cem Cakmakli; Selva Demiralp; Sebnem Kalemli-Ozcan; Sevcan Yesiltas
    Abstract: COVID-19 pandemic had a devastating effect on both lives and livelihoods in 2020. The arrival of effective vaccines can be a major game-changer. However, vaccines are in short supply as of early 2021 and most of them are reserved for the advanced economies. We show that the global GDP loss of not inoculating all the countries, relative to a counterfactual of global vaccinations, is higher than the cost of manufacturing and distributing vaccines globally. We use an economic-epidemiological framework that combines a SIR model with international production and trade networks. Based on this framework, we estimate the costs for 65 countries and 35 sectors. Our estimates suggest that up to 49 percent of the global economic costs of the pandemic in 2021 are borne by the advanced economies even if they achieve universal vaccination in their own countries.
    Keywords: COVID-19; Sectoral Infection Dynamics; Globalization; International I-O Linkages
    JEL: E61 F00 C51
    Date: 2021–01
  12. By: Marion Dovis (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Chahir Zaki (Faculty of Economics and Political Science, Cairo University, Economic Research Forum - Economic Research Forum)
    Abstract: This study assesses the effect of an economy's business environment on the ability of firms to be part of a global value chain (GVC). With the use of a comprehensive firm-level dataset from the World Bank Enterprise Survey—and with a special focus on the countries of the Middle East and North Africa and East Asia and Pacific regions—the contribution of the paper is threefold: First, it provides a range of measures of the characteristics of firms that would identify a firm as likely to be integrated into a GVC. Second, it examines the association between an array of business environment variables—infrastructure; access to finance; fiscal policy; enforcement of contracts; ease of obtaining permits; extent of the informal sector; trade procedures; and firm and investor security—and the likelihood of a firm's being integrated into a GVC. Third, we examine these effects separately for small and large firms and for sectors with high and low tariffs. Our main findings show that, in general, the number of days that are required to pay taxes, the number of procedures that are necessary to register property, and the time to export and to import have a significantly negative association with the likelihood of a firm's integration into a GVC. More heterogeneity is observed at the regional level, at the firm size level, and for sectors with high versus low tariffs.
    Keywords: global value chains,firms,business environment
    Date: 2020–09
  13. By: Min Zhu; Chiara Tomasi
    Abstract: Using transaction-level data for the Chinese manufacturing sector, this paper provides a comprehensive analysis of the causal e↵ect that firms’ imports have on quality upgrading. We implement an empirical strategy that delivers quality estimates at the firm-product-destination level. Exploiting this measure and accounting for the endogeneity of imported inputs, this paper shows that sourcing from abroad boosts export quality. Moreover, the analysis indicates that quality improvements are particularly strong when firms purchase inputs from high-income countries. Taken together, these results provide direct evidence that quality upgrading is an important mechanism through which imports favor firms’ export performance.
    Date: 2021
  14. By: Kaufmann, Marc (Central European University); Machado, Joël (LISER); Verheyden, Bertrand (LISER (CEPS/INSTEAD))
    Abstract: Empirical evidence suggests that a large proportion of immigrants who initially intended to stay temporarily in the destination country end up staying permanently, which may lead to suboptimal integration. We study systematic causes of unexpected staying that originate in migrant misperceptions. Our framework contains uncertainty about long-term wages, endogenous integration and savings in the short term, and return migration in the long term. We identify necessary and sufficient conditions on misperceptions that lead migrants to overestimate their probability of return migration, independently of their characteristics. We show that these conditions involve pessimism about the destination country, either in terms of short-term utility, of long-term utility, or of wage prospects. We then highlight specific behavioural biases that give rise to such forms of pessimism. Using the German Socio-Economic Panel, we find that relatively higher pessimism at arrival about future utility and wages is associated with migrants staying unexpectedly ex post.
    Keywords: migrant integration, return intentions, unexpected staying, misperceptions, pessimism, GSOEP
    JEL: F22 D91 J61
    Date: 2021–03
  15. By: Furtado, Delia (University of Connecticut); Kong, Haiyang (Beijing Normal University)
    Abstract: This paper examines the link between trade-induced changes in local labor market opportunities and English language fluency rates among low-skilled immigrants in the United States. Many of the production-based manufacturing jobs lost in recent years due to Chinese import competition did not require strong English-speaking skills while many of the jobs in expanding industries, mostly in the service sector, did. Consistent with responses to these changing labor market opportunities, we find that a $1,000 increase in import exposure per worker in a local area led to an increase in the share of low-skilled immigrants speaking English very well in that area by about half a percentage point. As evidence that at least part of this is a result of actual improvements in English language speaking abilities, we show that low-skilled immigrants in trade-impacted areas became especially likely to be enrolled in school compared to similarly low-skilled natives. However, while we find little support for selective domestic migration in response to trade shocks, we present evidence suggesting that new immigrants arriving from abroad choose where to settle based either on their English fluency or their ability to learn English. Regardless of whether low-skilled immigrants respond to trade shocks via actual improvements in English fluency or migration choices, our results suggest that immigrants help to equilibrate labor markets, an implication we find evidence for in the data.
    Keywords: immigrants, language fluency, import competition, immigrant assimilation
    JEL: J15 J61 J24 F16
    Date: 2021–02
  16. By: Simplice A. Asongu (Yaounde, Cameroon); Tii N. Nchofoung (Ministry of Trade, Yaoundé, Cameroon)
    Abstract: This study empirically verifies the effect of terrorism on financial development and how globalisation and governance modulate the incidence of terrorism on financial development in Africa. Two terrorism indicators are adopted for this study, namely, the: number of terrorism incidences and number of terrorism deaths. The methodology involves the pooled data technique running from 1996-2018 for 34 African countries. The results from the POLS, Driscoll-Kraay and the Newey-West standard error corrections show that terrorism is detrimental to financial development. From the interactive regressions, three major tendencies are apparent. First, terrorism dynamics consistently have an unconditional negative effect on financial development. Second, the globalization and government dynamics modulate the terrorism dynamics to broadly induce a negative net effect on financial development. Third, policy thresholds at which the modulating variables reverse the net effect on financial development from negative to positive are: (i) 71.61572 trade (% of GDP) and 13.97872 FDI (% of GDP) for the incidence of terror and (ii) 1.16201 trade (% of GDP) for terror deaths. The computed thresholds make economic sense and worthwhile in terms of policy implications because they are within statistical range. The result is robust to alternative measures of terrorism and financial development. Policy implications are discussed.
    Keywords: terrorism, financial development, globalisation, governance, Pooled data
    JEL: D74 G28 F65 P37 C52
    Date: 2021–03
  17. By: Powdthavee, Nattavudh; Plagnol, Anke C.; Frijters, Paul; Clark, Andrew E.
    Abstract: We use the 2015–16 waves of the UK Household Longitudinal Study (Understanding Society) to look at subjective wellbeing around the time of the June 2016 EU membership Referendum in the UK (Brexit). We employ measures of both evaluative and affective wellbeing, namely life satisfaction and mental distress, respectively. We find that those reporting lower life satisfaction in 2015 were more likely to express a preference for leaving the EU in 2016, while mental distress was less predictive of pro-Brexit attitudes. Post-Referendum, those with Leave preferences enjoyed an increase in life satisfaction but there was no change in average life satisfaction in the overall sample. In contrast, the average level of mental distress increased in the sample post- Referendum, with no significant difference between those preferring to remain in or to leave the EU. We test the robustness of our results by considering a number of potential caveats, such as sample selection, unobserved individual fixed effects and the interval between interviews. Overall, our results suggest that levels of subjective wellbeing may be both a cause and a result of the 2016 Brexit vote.
    JEL: N0
    Date: 2019–07–01
  18. By: Bresser-Pereira, Luiz Carlos; Feijó, Carmem; Araújo, Eliane Cristina de
    Abstract: Police regimes are incompatible with economic growth because liberal economists don’t see industrialization as a condition for economic development; because they pressed for trade liberalization, ignoring that the import tariffs were a way of neutralizing the Dutch disease; beause they don’t see that the growth with foreign indebtedness policy as well as the use of the exchange rate as an anchor to control inflation harm growth because the required capital inflows to finance the respective current account deficits appreciate the national currency, and, so, stimulate consumption while discourages investment; because the austerity programs that they defend are rather a way of defending the interests of rentiers and financiers than a sound macroeconomic policy.
    Date: 2021–02
  19. By: Pol Antras (Harvard University and CEPR and NBER); Stephen J Redding (Princeton University and CEPR and NBER); Esteban Rossi Hansberg (Princeton University and CEPR and NBER)
    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: COVID-19
    JEL: F60 I18
    Date: 2020–09
  20. By: Sequeira, Sandra; Nunn, Nathan; Qian, Nancy
    Abstract: We study the effects of European immigration to the U.S. during the Age of Mass Migration (1850–1920) on economic prosperity. Exploiting cross-county variation in immigration that arises from the interaction of fluctuations in aggregate immigrant flows and of the gradual expansion of the railway network, we find that counties with more historical immigration have higher income, less poverty, less unemployment, higher rates of urbanization, and greater educational attainment today. The long-run effects seem to capture the persistence of short-run benefits, including greater industrialization, increased agricultural productivity, and more innovation.
    Keywords: Economic development; Historical persistence; Immigration
    JEL: B52 F22 O10 O40
    Date: 2020–01
  21. By: Yin-Wong Cheung (City University of Hong Kong); Louisa Grimm (Osnabrück University); Frank Westermann (Osnabrück University)
    Abstract: We study the evolution of offshore renminbi trading between 2016 and 2019. The geographical pattern of changes in offshore renminbi trading during this period is different from the one between 2013 and 2016. The pattern of changes in the 2016-2019 period, in addition to the previously reported convergence to the geographical trading pattern of all currencies, is affected by (geopolitical) disputes and trade intensity. Further, China-specific RQFII investment quota arrangements and offshore market’s equity market capitalization and level of financial development play a role in shaping the offshore RMB trading pattern.
    Keywords: FX Turnover; Geographical Trading Pattern; Renminbi Internationalization; Dispute; Trade Intensity
    JEL: C24 F31 F33 G15 G18
    Date: 2020–12–07
  22. By: Stephen J Redding (Princeton University)
    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 second-nature 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 first-order 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 F12 R12
    Date: 2020–09
  23. By: Maria Rosaria Carillo; Vincenzo Lombardo; Tiziana Venittelli
    Abstract: This paper explores the relationship between social identity and labor market outcomes of immigrants. Using survey data from Italy, we provide robust evidence that immigrants with stronger feelings of belonging to the societies of both the host and home country have higher employment rates, while those who exclusively identify with the host country culture do not have a net occupational advantage. Analysis of the potential mechanisms suggests that, although simultaneous identification with host and home country groups can be costly, the positive effect of multiple social identities is especially triggered by the enlarged information transmission and in-group favoritism that identification with, and membership of, extended communities ensure.
    Keywords: Migration; Integration; Ethnic identity; Acculturation; Culture; Labor market.
    Date: 2021–03–17
  24. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria)
    Abstract: This study assesses how globalization modulates the effect of governance on CO2 emissions in sub-Saharan African countries. The empirical evidence is based on Generalized Method of Moments. The minimum level (or negative threshold) of FDI required for it to interact with political stability and contribute towards the green economy is 45% of GDP, while 90% of GDP is the maximum level (or positive threshold) required for trade to complement “voice & accountability†in mitigating CO2 emissions. 76 % of GDP and 80 % of GDP are respectively negative trade thresholds for government effectiveness and economic governance. The corresponding negative trade thresholds for the rule of law, corruption-control and institutional governance are respectively, 230% of GDP, 63.5% of GDP and 106.5% of GDP. Actionable openness policy thresholds are provided to inform policy makers on how governance interacts with globalization to promote the green economy.
    Keywords: CO2 emissions; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2021–01
  25. By: Foged, Mette (University of Copenhagen); Hasager, Linea (University of Copenhagen); Yasenov, Vasil (Stanford University)
    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
  26. By: Ricardo M. Reyes-Heroles; Charlotte T. Singer; Eva Van Leemput
    Abstract: In this note, we estimate the economic effects of the increases in tariffs between China and the USA since the beginning of 2018, taking into account the investment channel. As of the bilateral Phase One agreement in early 2020, the United States has raised tariffs on about $335 billion of Chinese goods and China has raised tariffs on about $120 billion of US goods.
    Date: 2021–03–04
  27. By: Duleep, Harriet (College of William and Mary); Jaeger, David A. (University of St. Andrews); McHenry, Peter (College of William and Mary)
    Abstract: We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more exible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.
    Keywords: immigration, innovation, entrepreneurship, human capital
    JEL: J15 J24 J39 J61 L26
    Date: 2021–03
  28. By: Duarte, R.; Pegler, L.J.; Galhera, K.
    Abstract: Current literature is unclear about how highly governed (i.e. more coordinated/ integrated) value chains may influence the level and chance of improvement in workers’ conditions (e.g. levels of security and voice). This research evaluates and considers labour outcomes (i.e. levels of security and voice) within the Brazilian Orange Juice Value Chain (OJVC). The OJVC in São Paulo, Brazil, is an “old”, vertically coordinated chain that delivers, via three large firms - Cutrale, Citrosuco and Louis Dreyfus Commodities (LDC) - a vast proportion of the world’s orange juice. The methodology used in this research applies indicators of security to various workers (on farms; at factories; for local/regional transporters and in the port) as well as a model of identity to the different unions operating across this chain. A typology and rank of orange chain workers are made based on findings in terms of these indicators. This paper centres on the concept of labour agency as a means to understanding the impacts of value chain inclusion on labour security and voice. The mapping of worker’s levels of security shows labour outcomes as both difficult and varied in form and cause but also that crucial (final) transport workers have considerably better chances for upgrading their conditions. Labour outcomes are also related to unions, which may have space to embark on new local strategies and alliances, if they so choose. Looking at labour identity through identity analysis also shows the problems unions and workers have balancing local level specifics of representation with their “need” to forge global alliances, particularly within chains. Finally, the paper illustrates the value of grounding studies of labour security and agency at the intersection of (highly political and hierarchical) vertical chains and horizontal, local processes of labour control, as suggested by Global Production Network protagonists.
    Keywords: oranges, GVCs, Brazil, labour, unions, multinationals, logistics
    Date: 2021–03–15
  29. By: Nascia, Leopoldo; Pianta, Mario
    Abstract: Mobility and migration of researchers in Europe have gained relevance in recent decades. For several years Italy has been recording a growing migration of researchers abroad, which can be estimated at 14,000 people between 2008 and 2019. Various data sources are used here to document the phenomenon and investigate patterns, characteristics and determinants.
    Keywords: Migrations, Researchers, Italy
    JEL: J0
    Date: 2020
  30. By: Grumstrup, Ethan (University of Nevada, Reno); Sorensen, Todd A. (University of Nevada, Reno); Misiuna, Jan (Warsaw School of Economics); Pachocka, Marta (Warsaw School of Economics)
    Abstract: Tempers flared in Europe in response to the 2015 European Refugee Crisis prompting some countries to totally close their borders to asylum seekers. This was seen to have fueled anti-immigrant sentiment, which grew in Europe along with the support for far-right political parties that had previously languished. This sparked a flurry of research into the relationship between immigration and far-right voting, which has found mixed and nuanced evidence of immigration increasing far-right support in some cases, while decreasing support in others. Studies by Mendez and Cutillas (2014); Mayda, Peri, and Steingress (2016); Vertier and Viskanic (2018); and Georgiadou, Lamprini, and Costas (2018) found that the presence of immigrants decreased votes for right parties, while others by Otto and Steinhardt (2014); Dustmann, Vasiljeva, and Damm (2016); Halla, Wagner, and Zweimuller (2017); Brunner and Kuhn (2018); and Edo et. al. (2019) found that immigration increased votes for right parties. To provide more evidence to this unsettled debate in the empirical literature, we use data from over 400 European parties to systematically select cases of individual countries. We augment this with a cross-country quantitative study. Our analysis finds little evidence that immigrant populations are related to changes in voting for the right. Our finding gives evidence that factors other than immigration are the true cause of rises in right voting.
    Keywords: European Union, immigration, voting
    JEL: J15 F22
    Date: 2021–03

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