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on International Trade |
| By: | César A. Hidalgo (MBS - Manchester Business School - University of Manchester [Manchester], SEAS - Harvard School of Engineering and Applied Sciences - Harvard University [Cambridge], ANITI - Artificial and Natural Intelligence Toulouse Institute, University of Toulouse, France); Bogang Jun; Aamena Alshamsi; Jian Gao; César Hidalgo |
| Abstract: | During the last two decades, two important contributions have reshaped our understanding of international trade. First, countries trade more with those with whom they share history, language, and culture, suggesting that trade is limited by information frictions. Second, countries are more likely to start exporting products that are related to their current exports, suggesting that shared capabilities and knowledge diffusion constrain export diversification. Here, we join both of these streams of literature by developing three measures of bilateral relatedness and using them to ask whether the destinations to which a country will increase its exports of a product are predicted by these forms of relatedness. The first form is product relatedness, and asks whether a country already exports many similar products to a destination. The second is importer relatedness, and asks whether the country exports the same product to the neighbors of the target destination. The third is exporter relatedness, and asks whether a country's neighbors are already exporting the same product to the destination. We use bilateral trade data from 2000 to 2015, and a variety of controls in multiple gravity specifications, to show that countries are more likely to increase their exports of a Bogang Jun |
| Keywords: | Relatedness,Knowledge diffusion,Economic complexity |
| Date: | 2019–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03058585&r=all |
| By: | Rodrigo Caldeira de Almeida Martins (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra); Jorge Cerdeira (ISCTE Business Research Unit); Miguel Fonseca (University of Porto, Faculty of Economics and Management and University of Lisbon, Centre for African and Development Studies, CESA, Lisbon School of Economies of Management); Mohamed Barrie (University of Porto, Faculty of Economics and Management) |
| Abstract: | This paper analyzes the main determinants of Foreign Direct Investment (FDI) in the member countries of Mano River Union: Côte d’Ivoire, Guinea, Liberia and Sierra Leone. We use both data at the firm level and at the country level - and employ OLS and ARDL techniques - in order to examine the differences and similarities in FDI drivers across these four countries. Our results show that international trade, investment in infrastructures and access to credit have a positive impact on FDI. While credit and trade have a similar influence across countries, the effect of investment is distinct across Mano River members, which raises political implications for policy coordination among states. We also conclude that policies aimed to boost human capital, as well as political and economic stability, are relevant, as they augment FDI inflows. |
| Keywords: | Foreign Direct Investment; FDI determinants; Mano River Union; West Africa. |
| JEL: | C10 F21 F23 O55 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:papers:2021-02&r=all |
| By: | Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | This paper proposes a decomposition for the total trade deficit of a country by using implications of a dynamic trade model. It is shown that the total trade deficit of a country can be decomposed into changes due to its effective terms of trade, its relative trade costs, and its macroeconomic developments with respect to its export partners. The implications for bilateral trade are estimated using both imports and exports data for 188 countries, and the decomposition of total trade deficit is achieved for each counry. Empirical results show evidence for heterogeneity across countries regarding the decomposition of trade deficits, suggesting alternative policy tools to rebalance trade at the country level. A cross-country investigation further suggests that relative trade costs, followed by relative macroeconomic developments, have contributed the most to the heterogeneity of trade imbalances. |
| Keywords: | Trade Deficit, Decomposition, Terms of Trade, Trade Costs |
| JEL: | F13 F14 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:2107&r=all |
| By: | Saito, Hisamitsu |
| Abstract: | Product quality is the key to the export success of firms in developing countries. This study examines whether and to what extent inward foreign direct investment (FDI) affects the product quality of local plants, focusing on the role of quality upgrading spillovers and productivity spillovers. Employing plant product-level data from Indonesian manufacturing, we find that backward FDI upgrades the product quality of exporters only, while plant productivity improves the product quality of both exporters and non-exporters. Thus, quality upgrading spillovers are effective in enhancing the competitiveness of incumbent exporters. However, they do not encourage non-exporters to export their products, for which productivity spillovers are effective instead. |
| Keywords: | Developing country; Export upgrading; Foreign direct investment; Product quality; Spillovers |
| JEL: | F23 L15 O14 |
| Date: | 2021–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106770&r=all |
| By: | Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | In this policy brief, we study the development of trade integration, specifically the participation in global value chains, of the Western Balkan countries. Using a multi-country input-output Database, called the ‘wiiw MC IOD’, we first analyse in a descriptive way the trends in economic integration by looking at forward and backward linkages. Second, we apply a gravity model to accurately pin down the effects of trade integration. The results show that potential EU membership and the earlier Stabilisation and Association Agreements (SAAs) boost trade flows between the new trading partners. These agreements affect particularly the forward linkages and thus support economies to sell their products both directly and indirectly on global markets. This suggests that the Western Balkans should focus their efforts on achieving the maximum possible level of economic integration with the EU even before full accession, including greater access to the EU budget, joining the EU Customs Union and expanding the existing SAAs. Also, EU support for the Western Balkans amid the COVID-19 crisis should be stepped up in order to keep the countries on track for EU integration. More investment in regional infrastructure has the potential to make near-shoring from, for example, Germany and Austria more likely in a post-COVID-19 world. |
| Keywords: | Western Balkans, input-output, global value chain integration |
| JEL: | F15 R15 D57 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:48&r=all |
| By: | Bournakis, Ioannis; Papanastassiou, Marina; Papaioannou, Sotiris |
| Abstract: | We revisit the puzzle regarding the role of Multinational Enterprises (MNEs) on Total Factor Productivity (TFP) of domestic firms by drawing attention to foreign ownership structure. First, we differentiate between market share (MS) due to competition effects and knowledge agglomeration gains (AG). The former induces market pressure, due to foreign presence, and makes domestic firms to charge lower price mark-ups. Second, we investigate whether intra-industry (horizontal) and inter-industry (vertical) spillovers vary with the degree of foreign control. Using a sample of manufacturing firms from six European countries, we find that higher presence of MNEs in the domestic market makes domestic firms to charge lower mark-ups. Only majority and wholly-owned MNEs generate statistically significant horizontal spillovers. The economic size of these spillovers is low. We also detect backward spillovers from MNEs in downstream industries. However, forward spillovers from MNEs in upstream industries are negative. When we control for absorptive capacity, direct linkages with MNEs, scope of product differentiation and geographical proximity, the economic size of AG increases substantially. |
| Keywords: | MNEs, Foreign ownership, Spillovers, Market Share, Agglomeration Gains, Mark-up, Total Factor Productivity |
| JEL: | D23 D4 F14 F23 |
| Date: | 2020–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106626&r=all |
| By: | Matilde Bombardini (UBC Vancouver School of Economics); Keith Head (UBC Sauder School of Business); Maria D. Tito (Federal Reserve Board); Ruoying Wang (UBC Vancouver School of Economics) |
| Abstract: | This paper examines the relationship between a manufacturing firm's import behavior and its performance. The focus is on two aspects of imports, input variety and the dynamics of import relationships. Using identification conditions borrowed from the production function estimation literature, we show that firms importing more products from a larger set of suppliers tend to be larger, more productive, and more successful in export markets. Not only the number, but also the duration of supply relationships matter. Firms maintaining a higher share of continuous supply relationships also benefit from size and productivity effects. These results suggest that the breadth and depth of the import network are relevant factors for the performance of Canadian manufacturers, underscoring the importance of pursuing trade liberalizations with new partners and trade facilitation with established sources of suppliers. |
| Keywords: | Buyer-supplier relationships, input variety, continuous relationships. |
| JEL: | F14 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2020_2011&r=all |
| By: | Michael Funke; Adrian Wende |
| Abstract: | In light of the recent tit-for-tat trade dispute between China and the US, interest in quantifying the effects of the so-called phase one agreement has risen. To this end, the paper quantifies the impact of the asymmetric managed trade agreement using such a multi-country open-economy dynamic general equilibrium model. Besides assessing the direct implications for China and the US, trade diversion effects are also analyzed. The model-based analysis finds noticeable positive (negative) impacts of the agreement for the US (China) as well as negative spillover effects for countries not directly affected by the managed trade deal due to trade diversion. The impact of possible future trade agreements is also examined. |
| Keywords: | phase one deal, managed trade, open-economy dynamic general equilibrium model, United States, China |
| JEL: | F13 F41 F42 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8945&r=all |
| By: | Jane Korinek; Evdokia Moïsé; Jakob Tange |
| Abstract: | Closing gender gaps makes good economic sense. Advancing the aim of women’s economic empowerment will require policy action across a wide range of areas, including increasing their participation in international trade. Although trade policies are not de jure discriminatory, they impact women and men differently due to dissimilar initial conditions. Mapping the channels and interactions between trade and gender for women as workers, consumers, and business owners shows that: (i) trade impacts women workers differently to men in part because they are employed in different sectors — in OECD countries, more often in services; (ii) trade lowers prices for consumers, which particularly increases the purchasing power of more vulnerable groups, where women are disproportionately represented; and (iii) higher trade costs impede smaller businesses’ access to international markets more than large firms, which impacts women who tend to own and lead smaller businesses. A framework is proposed for analysing the impacts of trade and trade policies on women that policy makers can use in order to ensure that trade and trade policies in their country support women’s economic empowerment. |
| Keywords: | Gender equality, Gender impact analysis, Preferential Trade Agreements, Trade facilitation, Women entrepreneurs |
| JEL: | F13 F66 J16 |
| Date: | 2021–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:246-en&r=all |
| By: | Giuntella, Osea (University of Pittsburgh); Rotunno, Lorenzo (Aix-Marseille University); Stella, Luca (Catholic University Milan) |
| Abstract: | Using longitudinal data from the German Socio-Economic Panel, we analyze the effects of exposure to trade on the fertility and marital behavior of German workers. We find that individuals working in sectors that were more affected by import competition from Eastern Europe and suffered worse labor market outcomes were less likely to have children. In contrast, workers in sectors that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated and married men, and reflect changes in the likelihood of having any child (extensive margin). While among workers exposed to import competition there is evidence of some fertility postponement, we find a significant reduction of completed fertility. There is instead little evidence of any significant effect on marital behavior. |
| Keywords: | international trade, labor market outcomes, fertility, marriage |
| JEL: | F14 F16 J13 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14224&r=all |
| By: | Holger Breinlich; Harald Fadinger; Volker Nocke; Nicolas Schutz |
| Abstract: | We evaluate the consequences of oligopolistic behavior for the estimation of gravity equations for trade flows. With oligopolistic competition, firm-level gravity equations based on a standard CES demand framework need to be augmented by markup terms that are functions of firms' market shares. At the aggregate level, the additional term takes the form of the exporting country's market share in the destination country multiplied by an exporter-destination-specific Herfindahl-Hirschman index. For both cases, we show how to construct appropriate correction terms that can be used to avoid problems of omitted variable bias. We illustrate the quantitative importance of our results for combined French and Chinese firm-level export data as well as for a sample of product-level imports by European countries. Our results show that correcting for oligopoly bias can lead to substantial changes in the coefficients on standard gravity regressors such as distance or the impact of currency unions. |
| Keywords: | gravity equation, oligopoly, CES demand, aggregative game |
| JEL: | F12 F14 L13 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1752&r=all |
| By: | Mariani, Fabio (Université catholique de Louvain); Mercier, Marion (Université Paris-Dauphine) |
| Abstract: | Contrary to popular perception, empirical evidence suggests that immigrants do not necessarily commit more crimes than natives, in spite of having lower legitimate earning opportunities. To make sense of this, we propose a novel theoretical framework based on a predator/prey model of crime, where endogenous migration decisions and career choices (between licit and illicit activities) are jointly determined. In this setting, we show that the involvement of migrants in crime crucially depends on self-selection into migration, as well as on productivity and institutional quality in the host economy. In particular, immigrants may display a lower crime rate than natives even if they are less productive on the honest labor market – and this result can still hold if career choices are revised after migration. We also find that stricter immigration policies could induce an adverse selection of migrants, and eventually attract more foreign-born criminals. Finally, a dynamic extension of our model can account for the higher crime rates of second-generation immigrants, and highlights the critical role of immigration and assimilation for the long-run evolution of crime and institutions in host countries. |
| Keywords: | migration, crime |
| JEL: | F22 K42 O17 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14215&r=all |
| By: | Heitor S. Pellegrina; Sebastian Sotelo |
| Abstract: | Exploiting a large migration of farmers to the West of Brazil between 1950 and 2010, we study how migration shapes aggregate and regional comparative advantage. We document that farmers emigrating from regions with high employment in an activity are more likely to work in that activity and have higher income than other migrants doing so. We incorporate this heterogeneity into a quantitative model and find that, by reshaping comparative advantage, declines in migration costs contributed substantially to Brazil's rise as a leading commodity exporter. Opportunities to migrate, moreover, account for a substantial share of the gains from trade. |
| JEL: | F10 F16 Q17 R23 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28421&r=all |
| By: | Lucia Corno (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Eliana La Ferrara; Alessandra Voena |
| Abstract: | We investigate the historical origins of female genital cutting (FGC), a harmful practice widespread across Africa. We test the hypothesis .substantiated by historical sources.that FGC was connected to the Red Sea slave trade route, where women were sold as concubines in the Middle East and in.bulation was used to ensure chastity. We hypothesize that differential exposure of ethnic groups to the Red Sea route determined di¤erential adoption of the practice. Combining individual level data from 28 African countries with novel historical data on slaves.shipments by country, ethnic group and trade routes from 1400 to 1900. We find that women belonging to ethnic groups whose ancestors were exposed to the Red Sea route are more likely to be infibulated or circumcised today and are more in favor of continuing the practice. The estimated effects are very similar when slave exports are instrumented by distance to the North-Eastern African coast. Finally, the effect is smaller for ethnic groups that historicaly freely permitted premarital sex - a proxy for low demand for chastity. |
| Keywords: | Female Genital Cutting, Slave Trade. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def099&r=all |
| By: | Vincent Leyaro |
| Abstract: | By measuring the effects of forming and joining a regional integration bloc using an augmented structural gravity model, this paper finds that the East African Community (EAC) and EAC Customs Union have significantly enhanced Tanzanian trade into EAC markets. Kenya has continued to be the main trading partner for Tanzania in the EAC markets, and from 2015 onwards the trade deficit with Kenya changed into a surplus, signalling improvement in the balance of trade. Tanzania has also maintained a significant trade balance surplus with the other EAC Partner States. |
| Keywords: | East African Community, Customs union, Single Customs Territory, Gravity model, Tanzania |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-55&r=all |
| By: | Patrick Blagrave; Claudia Godbout; Justin-Damien Guénette; René Lalonde; Nikita Perevalov |
| Abstract: | We present the structure and features of the International Model for Projecting Activity (IMPACT), a global semi-structural model used to conduct projections and policy analysis at the Bank of Canada. Major blocks of the model are developed based on the rational error correction framework of Kozicki and Tinsley (1999), which allows the model to strike a balance between theoretical structure and empirical performance. IMPACT divides the world economy into six regions: United States, the euro area, Japan, China, oil-importing emerging-market economies and oil-exporting rest of the world. The model features a rich set of cross-border trade and financial linkages that have been shown in the literature to be crucial to explaining global co-movements in business cycles. It is also globally consistent in the sense that both net foreign assets and net exports must be equal to zero at the global level. These cross-region linkages and the global stock-flow consistency allow IMPACT to generate a rigorous and more complete picture of the evolution of the global economy to better inform policy. |
| Keywords: | Business fluctuations and cycles; Econometric and statistical methods; Economic models; International topics |
| JEL: | C68 E37 F47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocatr:116&r=all |
| By: | Joyce, Joseph |
| Abstract: | Income generated by foreign direct investments (FDI) has grown since the 1990s, and now represents a substantial portion of many countries’ current accounts. Some of these flows are routed through Special Purpose Entities in financial centers that multinational firms use to minimize their tax liabilities. We use IMF and OECD data to ascertain which countries receive FDI-generated income, and find that a few advanced economies are the recipients of the largest shares. We also distinguish between FDI equity income and FDI interest income arising from intra-firm lending. We investigate the impact of these flows on income distribution within the recipient countries. FDI equity income contributes to the income share of the top 1% of households in advanced economies. FDI interest income, on the other hand, has no impact in these economies. FDI equity income also contributes to the income share of the top 1% in financial centers, but interest income is inversely linked to their income share. FDI income, therefore, increases inequality both among and within countries. |
| Keywords: | FDI income, multinational firms, inequality |
| JEL: | F21 F23 |
| Date: | 2021–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106448&r=all |
| By: | Rafael Dix-Carneiro; Joao Paulo Pessoa; Ricardo 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. |
| Keywords: | global trade imbalances, labor market disruption |
| JEL: | F16 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1754&r=all |
| 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: | D74, G28, F65, P37, C52 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:21/016&r=all |
| By: | Trofimov, Ivan D. |
| Abstract: | The previous research tended to examine the effects of the real exchange rate changes on the agricultural trade balance and specifically the J-curve effect (deterioration of the trade balance followed by its improvement) in the developed economies and rarely in the developing ones. In this paper we address this omission and consider the J-curve hypothesis in four South East Asian economies (Indonesia, Malaysia, Philippines and Thailand) over the 1980-2017 period. We employ the linear autoregressive distributed lags (ARDL) model that captures the dynamic relationships between the variables, and additionally use the non-linear ARDL model that considers the asymmetric effects of the real exchange rate changes. The estimated models were diagnostically sound and the variables were found to be cointegrated. However, with the exceptions of Malaysia, the short- and long-run relationships did not attest to the presence of J-curve effect. The trade flows were affected asymmetrically in Malaysia and the Philippines, suggesting the appropriateness of non-linear ARDL in these countries. |
| Keywords: | J-curve; agriculture; non-linear ARDL; cointegration |
| JEL: | C22 F14 Q17 |
| Date: | 2020–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106701&r=all |
| By: | OECD |
| Abstract: | Countries are increasingly using digital technologies within their Sanitary and Phytosanitary (SPS) systems and the disruptions caused by the COVID-19 pandemic are accelerating this evolution. While countries are increasing their use of digital tools, digital technologies still have significant potential to create efficiencies in SPS systems and enhance agro-food trade. Quantitative analysis using structural gravity model estimates show that digital technologies such as SPS electronic certificates have positive effects on trade volumes, notably for plant-based, vegetables and processed food products. Despite these gains, significant challenges remain in expanding the use of digital technologies in agro-food trade, including mixed capacities to adopt these technologies. Successful expansion of the use of digital technologies requires careful planning and long-term investments, as well as sharing expertise and building trust in these tools. Targeted financial assistance and capacity building can provide support to countries currently lacking the capabilities to adopt these tools. |
| Keywords: | Agriculture and food standards, COVID-19, Digitilisation, Gravity estimation, Market access |
| JEL: | F13 F66 J16 |
| Date: | 2021–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:152-en&r=all |
| By: | Andrei, Liviu Catalin; Andrei, Dalina |
| Abstract: | Our ever surviving obsession running our undertaking from its start – i.e. previously to the basic study, published in 2019 and 2020 – like a ‘red thread’ is that one single scientific truth about foreign direct investments (FDI) vis-à-vis plenty of theories, models and empirical studies in which these – actually, what is here called international directly invested capital – are seen so differently acting in different countries and regions of the world. So, first, this must be about the whole world at once. Then, it simply must be about a number of countries/ entities for which all capital entries (FDI) equal all capital issues (directly investments abroad/DIA) and so the FDI stock balances of these countries make the null sum. Then, our previous and basic paper was for a comprehensive picture drawn about our world through the amounts of directly invested capital flows in work between nations. We found the uneven capitals distribution throughout the world – i.e. obvious and the most obvious at the first sight --, accompanied by a curious trend of FDI and opposite DIA equalizing on each world country. So, about half of the world total amount of capital developed by just four-five countries and regions, then, a top-17 of countries and regions with the overwhelming capital majority on both FDI(entries) and DIA(issues). We also found the flows’ developing dynamic that looks somehow different than the basic ‘static’ image – e.g. hierarchy of the same top entities changes. Then, there was a by regions description of the world of capital flowing between nations – and we’ll be a bit back to in this text below – deepening the primary view on the tops of countries-regions – i.e. not too much structural difference between the total world and each of regions. The annexes of that previous paper brought some specific concepts in – i.e. new in the field, not yet to be found in specific dictionaries --, the common features of individual country’s evolving through joining this international capital part, classification of 215 world countries according to their contribution to international directly invested capital – i.e. classifications for FDI, DIA, FDI stock balances and dynamics of FDI and DIA, all these for all countries -- and finally there were a few words for each country in context. In this paper below it will be staying on international flows of capital among countries and on regions, as previously, but more deeply on flows identifying and classifying, here basing on our first, primary and ever basic model(theory) assumptions: ‘capital is world belonging, then distributes among countries’ . It will be here below to find exactly where the same capital comes from, how many sources are there to talk about for a world picture imagined this way. All these below that are text, model and empiric analysis will carry with them a new theory about foreign direct investments in the field. |
| Keywords: | foreign direct investments (FDI), direct investments abroad (DIA), FDI stocks balance, Cooperation capital (Ccp) |
| JEL: | F0 F2 F21 |
| Date: | 2021–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106661&r=all |
| By: | Céline de Quatrebarbes (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Bertrand Laporte (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Stéphane Calipel (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | As happened in West Africa in 2008, in an imported inflation context, it is common for the governments to take short-term tax action to protect the poor: VAT or trade tariffs exemptions. As part of the tax-tariff transition, the comparison between Trade tariffs and VAT has already been the subject of much works. The introduction of VAT, as a tax on final consumption, is supposed to be optimal, due to its economically neutral aspect for production decisions. However, some authors show that in developing countries, a large informal sector affects this result. In this paper, we use a CGE model and a micro-simulation model to compare the effects of VAT and Trade tariffs exemptions to combat rising agricultural food prices. |
| Keywords: | computable general equilibrium model,imperfect competition,indirect taxes,poverty,Niger |
| Date: | 2021–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03164636&r=all |
| By: | Nicola Cortinovis; Zhiling Wang; Hengky Kurniawan |
| Abstract: | In this paper, we explore how spillovers from multinational enterprises (MNEs) spread and impact domestic firms through different channels and at various spatial scales. Taking a firm-level approach, we test whether industrial relatedness mediates spillover effects from MNEs over and above horizontal and vertical linkages traditionally identified by the literature. Thanks to fine- grained geographical information, we further investigate the spatial reach of the spillovers and how they are associated with domestic firms’ characteristics such as absorptive capacity and technological sophistication. Our hypotheses are tested on a panel data set of Indonesian manufacturing firms census between 2002 to 2009. We find that domestic firms have higher total factor productivity when being exposed to a higher share of output from multinational firms in related industries, on top of the widely acknowledged horizontal and vertical MNE spillovers. We also show that MNE spillovers are sensitive to distance, with relatedness-mediated ones being detected between 30 and 60 km from the municipality of the MNE. Regarding heterogeneity, large firms benefit from productivity-enhancing relatedness spillovers at a wider spatial distance (up to 90km), and firms in less-advanced industries benefit from relatedness mediated effects as much as those in more advanced industries. |
| Keywords: | Multinational enterprises, spillovers, industrial relatedness, spatial effects. |
| JEL: | D24 F23 O33 R10 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2111&r=all |
| By: | Manuel Aepli; Andreas Kuhn |
| Abstract: | In this paper, we study whether Swiss employers substitute between training apprentices and hiring cross-border workers. Because both training apprentices and hiring skilled workers are costly for firms, we hypothesize that (easier) access to cross-border workers will lead some employers to substitute away from training their own workers. We account for potential endogeneity issues by instrumenting a firm's share of cross-border workers using a firm's distance to the national border and therefore its possibility to fall back on cross-border workers to satisfy its labor demand. We find that both OLS and 2SLS estimates are negative across a wide range of alternative specifications, suggesting that firms substitute between training and hiring workers when the supply of skilled workers is higher. Our preferred 2SLS estimate implies that the increase in firms' share of cross-border workers within our observation period, from 1995 to 2008, led to about 3,500 fewer apprenticeship positions (equal to about 2% of the total number of apprentice positions). |
| Keywords: | immigration, cross-border workers, firm behaviour, labor demand, substitution effects, apprenticeship training |
| JEL: | D22 J23 J61 M53 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0179&r=all |
| By: | Anderson Roselló, Ray; Villarreal Zan, Ricardo |
| Abstract: | This research aims to estimate the economic impact produced by the 2016 Red Tide phenomena on the ocean derived product export sector of the Los Lagos Region in southern Chile. For this purpose, a time series approach is employed using export data in terms of value and volume. Results suggest that the catastrophe had severe consequences over exported volume. Nevertheless, no significant results are found regarding exported net value. |
| Keywords: | Red Tide, Climate Change, Time-Series Analysis |
| JEL: | C22 Q21 Q22 Q54 |
| Date: | 2020–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106764&r=all |
| By: | Massimiliano Coda Zabetta (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Christian Mauricio Chacua Delgado (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Francesco Lissoni (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Ernest Miguelez (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); J. Raffo (WIPO - World Intellectual Property Organization); Deyun Yin (HIT - Harbin Institute of Technology, WIPO - World Intellectual Property Organization) |
| Abstract: | In this chapter we look at the global network of innovative agglomerations, with a focus on their degree of internationalization and on the actors behind it – particularly high-skilled migrants. Using worldwide patent and publication geo-localized data, we identify all Global Hotspots of Innovation (GIHs) and Niche Clusters (NCs) worldwide, and study their success as a function of their international connections. In particular, we compare organizational ones, such as international collaborations orchestrated by multinational firms' collaborations, to personal ones, which may derive from migration to/from the GIHs and NCs. We find a strong role of the latter, always comparable and sometimes larger than the former. |
| Keywords: | patents,publications,agglomeration,internationalization,migration |
| Date: | 2021–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03162708&r=all |
| By: | Vanessa Alviarez (UBC Sauder School of Business); Keith Head (UBC Sauder School of Business); Thierry Mayer (Sciences Po) |
| Abstract: | We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4–7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU. |
| Keywords: | Multinationals, oligopoly, markups, concentration, firm effects, brands, frictions, mergers and acquisitions, competition policy. |
| JEL: | F12 F23 F61 K21 L13 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2020_2009&r=all |
| By: | Sandeep Yadav (Indian Institute of Management Kozhikode); Rajesh Srivinas Upadhyayula (Indian Institute of Management Kozhikode) |
| Abstract: | The literature on the importance of time in the internationalization process of entrepreneurial firms has pulled the attention of international business researchers in the last two decades. The phenomenon of internationalization speed as a time-based dimension is studied both in the context of young entrepreneurial firms and large multinationals. Yet, the theoretical foundations and synthesis of empirical literature remain absent, thus call for a critical assessment and review of the literature. We examine 67 articles in 34 scholarly journals from 2000 to the current period. We use an inductive approach and qualitative content analysis for a comprehensive and critical assessment of literature. First, we define the concept of internationalization speed and highlighted its multidimensionality. We provide a synthesis of literature based on antecedents and outcomes of internationalization speed to identify ambiguity in the empirical literature. Further, we discuss the issues of conceptualization and operationalization of speed along with methodological issues in the empirical literature. Finally, we provide future research agendas based on the gaps in the theoretical literature. |
| Keywords: | Rapid internationalization; early internationalization; international new ventures; born-global firms; SME exporters; speed |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iik:wpaper:403&r=all |
| By: | Harriet Duleep (William & Mary, IZA, and GLO); David A. Jaeger (University of St. Andrews, CReAM, IZA, and CEPR); Peter McHenry (William & Mary and GLO) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2108&r=all |
| By: | Laure Dikmen (IAE - Institut d'Administration des Entreprises); Foued Cheriet (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 - IRD - Institut de Recherche 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 article aims to highlight the multidimensional character of asymmetry through four determinants: differential of partners' size, number of foreign partners, ownership structure and cultural distance; it also analyses the effects of asymmetry on IJV performance. Based on a quantitative study of 123 International Joint Ventures in Turkey, results show that Joint venture performance is not significantly linked to size, number of foreign partners and ownership structure. Only cultural distance has a positive and significant effect on Joint Venture performance. |
| Abstract: | Ce travail a pour objectif de rendre compte de la multidimensionnalité de l'asymétrie entre les partenaires à travers l'examen de 4 déterminants: les différences de taille, le nombre de partenaires étrangers, la structure du capital, et la distance culturelle. En second lieu, l'analyse a concerné les effets de ces déterminants de l'asymétrie sur la performance des coentreprises internationales. Le travail empirique est basé sur l'analyse de 123 joint ventures internationales en Turquie. Les résultats montrent que la performance n'est pas affectée par le déséquilibre de la structure capitalistique, le différentiel de taille ou le nombre de partenaires. Il y a seulement un effet positif de la distance culturelle, suggérant une conception constructive des alliances internationales. |
| Keywords: | M16,L25,L24,Turquie. JEL: F23,asymmetry,effects,international joint venture,performance,turkey,Asymmetry,Effects,International Joint Venture,Performance,Turkey Asymétrie,effets,coentreprises internationales |
| Date: | 2021–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03166842&r=all |
| By: | Sandeep Yadav (Indian Institute of Management Kozhikode); Rajesh Srivinas Upadhyayula (Indian Institute of Management Kozhikode) |
| Abstract: | This study examines, whether emerging market firms use global linkages as a substitute to the location in geographical clusters to promote the speed of foreign market entry. Drawing from economic geography, we find a slower speed of foreign market entry by firms located outside geographical clusters in the home country as compared to firms inside clusters. This relationship is further moderated by the firm's cognitive proximity in the foreign markets (measured as a firm’s extent of informal global linkages). Cognitive proximity increases the transfer of tacit knowledge and weakens the negative impact of firm cluster absence on the speed of foreign entry. We test the proposed hypotheses using the cox proportional hazard model based on a longitudinal sample of 747 Indian firms in the information technology industry (IT) from 2000 to 2019. |
| Keywords: | Emerging markets; emerging market firm; theory of EMNE; clusters; cognitive proximity |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iik:wpaper:404&r=all |
| By: | Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Petros Sekeris (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School) |
| Abstract: | In this article we uncover a positive effect of both export booms and busts on firm-level corruption. Our theory underlines the central role played by human capital in the underlying mechanism. In low human capital settings, export-related revenues are highly elastic to incremental gains of export shares, thence pushing firms to intensify corruption with export busts so as to avoid a radical drop in their revenues. In high human capital settings, export booms lead to more corruption as an increment of export share achieved through bribery concerns a large export market. We corroborate these findings with an extensive database of some 45,000 firms from 72 developing and transition economies, surveyed over 2006-2017. Besides confirming that export booms and busts corrupt and highlighting the mediating role of human capital, we also highlight the corruption-deterrent effect institutions during export market expansion and contraction. |
| Keywords: | Corruption,Bribery,Export shocks,Human capital |
| Date: | 2021–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03164648&r=all |
| By: | Bellemare, Charles (Université Laval); Kyui, Natalia (Bank of Canada); Lacroix, Guy (Université Laval) |
| Abstract: | We show that survey and administrative data-based estimates of a panel data model of earnings, employment, and outmigration yield very different qualitative and quantitative predictions. Survey-based estimates substantially overpredict outmigration, in particular for lower performing immigrants. Consequently, employment and earnings of immigrants who remain in the country are overpredicted relative to model predictions from administrative data. Importantly, estimates from both data sources find opposite self-selection mechanisms into outmigration. Differences hold despite using the same cohort, survey period, and observable characteristics. Differences in predictions are driven by difficulties of properly separating non-random sample attrition from selective outmigration in survey data. |
| Keywords: | sample attrition, outmigration, measurement errors, employment and earnings |
| JEL: | C33 J31 J15 J61 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14217&r=all |
| By: | Juan Luis Vega (coord.) (Banco de España) |
| Abstract: | Almost three years on since the Brexit referendum and two since the intense negotiations between the parties began, the failure by the British Parliament to ratify the November 2018 agreement between the UK Government and the other EU governments has led to a situation of great complexity. With only a few days remaining until the deadline for withdrawal, no consensus plan has emerged yet. Without an alternative plan, a no-deal exit is – excepting postponement – the current default option. This Occasional Paper takes stock of the current situation and outlook for Brexit (i.e. the process of UK withdrawal from the EU) by drawing together a number of studies produced at the Banco de España in connection with the regular monitoring of the process and its potential effects on the Spanish economy. After noting where the current negotiations stand, the paper reviews UK economic developments since the surprise result of the referendum was announced in June 2016. It further lays out the medium-term outlook for the British economy, which hinges crucially on both the type of future trade relationship to be agreed between both areas and the degree of disruption caused by the withdrawal process. As regards Spain, the paper analyses several issues related to its trade and financial exposures to the UK and also provides estimates of the potential effects of Brexit on the Spanish economy under various hypothetical scenarios using the MTBE (i.e. the quarterly macroeconometric model of the Spanish Economy regularly used at the Banco de España for forecasting and policy analysis). Finally, mention is made of the contingency measures adopted, within their respective remits, by the European Commission and the Spanish Government, in the event of an abrupt no-deal exit. |
| Keywords: | Brexit, United Kingdom, Spai |
| JEL: | E69 F15 F47 F59 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:1905e&r=all |
| By: | Koutchogna Kokou Edem ASSOGBAVI |
| Abstract: | Since the Global Financial Crisis (GFC), the large current account surpluses in some countries have become an important topic of discussion in international fora. In this paper, we empir-ically assess the factors that could potentially explain the persistence of global imbalances in selected advanced and emerging countries. We adopt a panel-regression approach on a sample covering 56 countries, allowing us to assess the medium-term determinants of current accounts. First, we perform benchmark estimations and break down our estimations between pre- and post- GFC samples using two different approaches. Second, we specify more comprehensive models in order to better understand current account dynamics. Our results show that the GFC did not imply any structural break in the determination of current accounts. Moreover, financial development, openness, and institutional variables appear as the main factors impacting cur-rent account dynamics through the effects that they have on investment and saving behaviors. Finally, we use our estimates to predict the equilibrium current accounts and compute the con-tribution of underlying factors. Despite some uncertainty around the estimates, our models are able to explain most of the observed current account configuration, showing only some excess surplus compared to equilibrium in the case of China and more recently Germany. In the case of the U.S., however, larger uncertainty ranges prevent us from precisely estimating equilibrium current account levels. |
| Keywords: | current accounts; financial development; financial crisis; capital flows |
| JEL: | F21 F32 F41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2021-06&r=all |