nep-int New Economics Papers
on International Trade
Issue of 2021‒04‒12
twenty-six papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The Smoot-Hawley Trade War By Kris James Mitchener; Kirsten Wandschneider; Kevin Hjortshøj O'Rourke
  2. Export Variety and Imported Intermediate Inputs: Industry-Level Evidence from Africa By Ndubuisi, Gideon; Mensah, Emmanuel; Owusu, Solomon
  3. Immigrant Workers, Firm Export Performance and Import Competition By Léa Marchal; Giulia Sabbadini
  4. The African Continental Free Trade Agreement (AfCFTA): Legal Overview By Abdessalam Jaldi
  5. Machine Learning in International Trade Research ?- Evaluating the Impact of Trade Agreements By Holger Breinlich; Valentina Corradi; Nadia Rocha; Michele Ruta; Joao M.C. Santos Silva; Tom Zylkin
  6. Interlocking Margins: The Interaction of Offshoring and Outsourcing Decisions By Jiang, Edwin
  7. Risk and Cost Sharing in Firm-to-Firm Trade By Cristina Herghelegiu; Evgenii Monastyrenko
  8. On the economic and health impact of the COVID-19 shock on Italian regions: A value chain approach By Tommaso Ferraresi; Leonardo Ghezzi; Fabio Vanni; Alessandro Caiani; Mattia Guerini; Francesco Lamperti; Severin Reissl; Giorgio Fagiolo; Mauro Napoletano; Andrea Roventini
  9. The Future of the Automotive Industry: Dangerous Challenges or New Life for a Saturated Market By Annamaria Simonazzi; Jorge Carreto Sanginés; Margherita Russo
  10. Understanding Economic Sanctions: Interdisciplinary Perspectives on Theory and Evidenc By Felbermayr, Gabriel; Morgan, T. Clifton; Syropoulos, Constantinos; Yotov, Yoto
  11. Empirical Welfare Maximization with Constraints By Liyang Sun
  12. Research Methods of Assessing Global Value Chains By Sourish Dutta
  13. The Technology and Knowledge Spillover Effects of FDI on Labour Productivity By Norhanishah Mohamad Yunus
  14. Detailed Trade Policy Simulations Using a Global General Equilibrium Model By Aguiar, Angel; Erwin Corong; Dominique van der Mensbrugghe
  15. Tax competition and phantom FDI By Giuseppe Pulina; Skerdilajda Zanaj
  16. The Economic Complexity Index (ECI) and Output Volatility: High vs Low Income Countries By Marthinus C. Breitenbach; Carolyn Chisadza; Matthew Clance
  17. Lobster seeds export to the foreign countries are detrimental to the state and fishermen. By Damajie, Dennis
  18. Four Great Asian Trade Collapses By Alan de Bromhead; Alan Fernihough; Markus Lampe; Kevin Hjortshøj O’Rourke
  19. The Economic Effects of International Sanctions: An Event Study By Jerg Gutmann; Matthias Neuenkirch; Florian Neumeier
  20. Distributional Impacts of Carbon Pricing Policies under Paris Agreement: Inter and Intra-Regional Perspectives By Chepeliev, Maksym; Israel Osorio Rodarte; Dominique van der Mensbrugghe
  21. What Leads to Intra-Industry Trade between Sri Lanka and South Asia? By Saparamadu, Thilini; Akrimi, Nesrine
  22. An Empirical Evaluation of the Effect of Covid-19 Travel Restrictions on Canadians' Cross Border Travel and Canadian Retailers By Jen Baggs; Loretta Fung; Beverly Lapham
  23. Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies By Xu, Lili; Lee, Sang-Ho
  24. Public Preferences on Immigration in Japan By Toshihiro Okubo
  25. Internationalization, Product Innovation and the moderating Role of National Diversity in the Employment Base By Schubert, Torben
  26. Economic policy uncertainty: are there regional and country correlation? By Ozili, Peterson Kitakogelu

  1. By: Kris James Mitchener; Kirsten Wandschneider; Kevin Hjortshøj O'Rourke
    Abstract: We document the outbreak of a trade war after the U.S. adopted the Smoot-Hawley tariff in June 1930. U.S. trade partners initially protested the possible implementation of the sweeping tariff legislation, with many eventually choosing to retaliate by increasing their tariffs on imports from the United States. Using a new quarterly dataset on bilateral trade for 99 countries during the interwar period, we show that U.S. exports to countries that protested fell by between 15 and 22 percent, while U.S. exports to retaliators fell by 28-33 percent. Furthermore, using a second new dataset on U.S. exports at the product-level, we find that the most important U.S. exports to retaliating markets were particularly affected, suggesting a possible mechanism whereby the U.S. was targeted despite countries’ MFN obligations. The retaliators’ welfare gains from trade fell by roughly 8-17%.
    JEL: F13 F14 N70 N72
    Date: 2021–03
  2. By: Ndubuisi, Gideon; Mensah, Emmanuel; Owusu, Solomon
    Abstract: Imported intermediate inputs offer access to lower-priced, higher quality, and a wider variety of inputs that can increase the possibility of producing and selling more diversified products in foreign markets. In this paper, we examine this relationship using a novel manufacturing industry-level data across 26 African countries over the 1995-2016 period. We find strong evidence of a positive relationship between imported intermediate inputs and the variety of exported products. Further analyses in the study indicate that imported intermediate inputs positively affect the variety of exported products because they offer lower-priced, and higher-quality/technology embodied inputs. However, the positive effect of imported intermediate inputs on the variety of exported products depend on industry's absorptive capacity, especially when the inputs are sourced from advanced countries. We discuss the implications of our findings.
    Keywords: Export Variety; Imported Intermediate Inputs; Technology Acquisition; Africa
    JEL: F10 F12 F23 F30
    Date: 2020–07
  3. By: Léa Marchal (UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Giulia Sabbadini (Institut de hautes études internationales et du développement - Graduate Institute of International and Development Studies [Geneva, Switzerland])
    Abstract: This paper investigates whether the employment of immigrant workers affects the performance of firms in their export markets when they are facing an increase in import competition. Exploiting the surge of Chinese imports following its accession to the World Trade Organization and using a sample of French manufacturing exporters from 2002 to 2015, we find that an increase in the growth rate of Chinese imports in a market has a negative effect on both the survival probability of firms and the growth rate of sales on that market. This negative effect on firm performance is mitigated by the employment of immigrant workers.
    Keywords: Firm,Heterogeneity,Immigrant workers,Import competition,Productivity
    Date: 2021–03
  4. By: Abdessalam Jaldi
    Abstract: Regional integration in Africa is seen as a priority by many of the continent’s policymakers and economic stakeholders. With all Africa now signed up to the African Continental Free Trade Agreement (AfCFTA), the challenge now is to implement a continental market for goods and services and establish the foundations of a continental customs union. Many on the continent see the AfCFTA as an investment, economic-diversification, and job-creation blueprint that will shape the future of Africa, help meet by 2030 the targets of the Sustainable Development Goals (SDG), consolidate progress toward the African Union’s Agenda 2063, and facilitate an AU – EU free-trade area in long term. With a combined GDP of over $2.3 trillion and a population of 1.2 billion, of whom most are below the age of 30, African countries stand to gain substantially from intra-regional trade. In this article, we analyse the legal aspects of AfCFTA.
    Date: 2021–02
  5. By: Holger Breinlich (University of Surrey, CEP and CEPR); Valentina Corradi (University of Surrey); Nadia Rocha (World Bank); Michele Ruta (World Bank); Joao M.C. Santos Silva (University of Surrey); Tom Zylkin (University of Richmond)
    Abstract: Modern trade agreements contain a large number of provisions besides tariff reductions, in areas as diverse as services trade, competition policy, trade-related investment measures, or public procurement. Existing research has struggled with overfitting and severe multicollinearity problems when trying to estimate the effects of these provisions on trade flows. In this paper, we develop a new method to estimate the impact of individual provisions on trade flows that does not require ad hoc assumptions on how to aggregate individual provisions. Building on recent developments in the machine learning and variable selection literature, we propose data-driven methods for selecting the most important provisions and quantifying their impact on trade flows. We find that provisions related to antidumping, competition policy, technical barriers to trade, and trade facilitation are associated with enhancing the trade-increasing effect of trade agreements.
    JEL: F14 F15 F17
    Date: 2021–03
  6. By: Jiang, Edwin
    Abstract: I develop a multi-country general equilibrium model on global sourcing which considers individual firm's decisions on outsourcing as well as offshoring. These decisions are closely connected as more extensive offshoring provides incentives for further integration of inputs. The firm-level decisions aggregate to produce gravity style equations of trade flows between countries, and intra-firm transactions.
    Date: 2021–02
  7. By: Cristina Herghelegiu (ECARES, Université Libre de Bruxelles, B); Evgenii Monastyrenko (Department of Economics and Management, Université du Luxembourg)
    Abstract: Firms are exposed to important risks and costs when trading across borders. Based on a set of standardized rules known as Incoterms, firms decide ex ante how to delimit their responsibilities throughout the shipping process to reduce the inherent contractual frictions. This paper investigates how sellers and buyers share risks and costs in international trade transactions depending on the characteristics of the exchanged product. We rely on a highly detailed dataset involving all Russian exporters and their foreign customers during 2012-2015. Our results suggest that buyers are more likely to bear responsibilities for goods that are (a) more distant from final use and (b) less tailored to their specific needs. These results are reinforced for products that constitute important inputs for buyers but reversed when there is a positive difference between the buyer and the seller size.
    Keywords: Risks, Costs, Incoterms, Firms Exports.
    JEL: F14 D22 D23 L11
    Date: 2020
  8. By: Tommaso Ferraresi; Leonardo Ghezzi; Fabio Vanni; Alessandro Caiani; Mattia Guerini; Francesco Lamperti; Severin Reissl; Giorgio Fagiolo; Mauro Napoletano; Andrea Roventini
    Abstract: In this work, we evaluate the exposure of Italian regions to the risk associated with the spread of COVID-19 through a two-step value chain approach. First, we estimate the degree of participation of Italian regions in a plurality of value chains linked to consumption, investment and exports. We distinguish between value chains aimed at satisfying essential needs and supply chains activated by needs characterized by a lower level of necessity in line with the restriction measures implemented by the Italian government. Second, we investigate the different levels of contagion risk associated with each value chain and the possibility of reducing it through remote working. An exercise on policy measures implemented by the Italian government during Fall 2020 completes the paper. We find that regions are affected differently by lockdown policies because of their high heterogeneity in the degree of embeddedness within different value chains and because their sectoral contributions to each of them. As a result, Italian regions are associated with very diverse potentials for mitigating contagion risk via remote working practices. Finally, we find evidence that economic and contagion risks positively correlate in non essential value chains, while they are negatively associated in the production of medium-necessity and essential goods and services. In turn, strong lockdowns induce substantially different trade-offs across regions, depending on how regions participate to value chains.
    Keywords: COVID-19 lockdown; value chains; input-output models; contagion risk; remote working.
    Date: 2021–04–06
  9. By: Annamaria Simonazzi (Fondazione Roma Sapienza, Università di Roma, Italy,); Jorge Carreto Sanginés (Universidad Nacional Autónoma de México); Margherita Russo (Università di Modena e Reggio Emilia, Italy)
    Abstract: The automotive industry is undergoing a radical transformation. New social, technological, environmental and geopolitical challenges are redefining the characteristics of a saturated market, opening new scenarios while offering opportunities for the entry of new players. These challenges are bound to trigger reorganization of the global value chain between old and new suppliers and car makers and their suppliers, affecting the distribution of employ-ment, the regionalization of production and the dynamic evolution of the comparative ad-vantage of nations. In this paper we address the issue of the reorganization of global value chains in the face of these challenges. The analysis will compare the relative position of core and peripheries in the North-American and European macro-regions, focusing on Mexico, which represents a sig-nificant case study for analysis of the impact of the digital transformation on the domestic value chain in an “integrated periphery”, and of trade agreements on the location policies of big multinationals. The dependency of the Mexican automotive industry on the strategic deci-sions of global players is considered a factor of great vulnerability, especially in a context of rapid change in the patterns of consumption, technologies and international trade agreements. For Mexico, as for European producers in the integrated and semi-peripheries, the main chal-lenge in the near future will be posed by the radical transformation the industry is going through in electrical and autonomous-driving vehicles, which sees regions and players outside the traditional automotive clusters in the lead. The transformations taking place are bound to change the global structure of automotive production. The rise of new competitors from the emerging economies and would-be entrants from other sectors, competing in mastering the new digital and software technologies, threatens the established structure of the industry. The pandemic has led to a spectacular acceleration in the process of change, while heightening uncertainty about future developments. This is why the governments of leading countries are joining in the race, wielding carrots and sticks in support of their industries and in the en-deavor to encourage risk-taking and investment in research and innovation, step up e-vehicle production while providing for the necessary infrastructures, and guarantee their companies a place in the new industry.
    Keywords: automotive industry, global production networks, integrated peripheries, Mexico, decarboni-zation, digital transformation
    JEL: L62 F23 F63 O33 O38
    Date: 2020–11–24
  10. By: Felbermayr, Gabriel (Kiel Institute, Kiel University); Morgan, T. Clifton (Rice University); Syropoulos, Constantinos (School of Economics); Yotov, Yoto (School of Economics)
    Abstract: We review a number of developments and trends in the literature on economic sanctions. We discuss salient contributions to the theoretical literature, data collection, and empirical work on the impact, effectiveness and success of sanctions in Economics and Political Science. Our interdisciplinary perspective highlights the existence of a stark contrast in the ways the two disciplines view and analyze sanctions. Taking advantage of this perspective, we identify potential directions for future work. Most importantly, we argue that moving toward a better understanding of the causes and consequences of economic sanctions requires a much tighter integration of concepts from Political Science and Economics and a more extensive interdisciplinary collaboration
    Keywords: Economic Sanctions; Embargoes; Sanction Theories; Sanction Data
    JEL: F13 F14 F51
    Date: 2021–03–24
  11. By: Liyang Sun
    Abstract: When designing eligibility criteria for welfare programs, policymakers naturally want to target the individuals who will benefit the most. This paper proposes two new econometric approaches to selecting an optimal eligibility criterion when individuals' costs to the program are unknown and need to be estimated. One is designed to achieve the highest benefit possible while satisfying a budget constraint with high probability. The other is designed to optimally trade off the benefit and the cost from violating the budget constraint. The setting I consider extends the previous literature on Empirical Welfare Maximization by allowing for uncertainty in estimating the budget needed to implement the criterion, in addition to its benefit. Consequently, my approaches improve the existing approach as they can be applied to settings with imperfect take-up or varying program needs. I illustrate my approaches empirically by deriving an optimal budget-constrained Medicaid expansion in the US.
    Date: 2021–03
  12. By: Sourish Dutta
    Abstract: The global production (as a system of creating values) is eventually forming a vast web of value chains that explains the transitional structures of global trade and development of the world economy. It is truly a new wave of globalisation, and we can term it as the global value chains (GVCs), creating the nexus among firms, workers and consumers around the globe. The emergence of this new scenario is asking how an economy's businesses, producers and employees are connecting to the global economy and capturing the gains out of it regarding different dimensions of economic development. Indeed, this GVC approach is very crucial for understanding the organisation of the global industries (including firms) through analysing the statics and dynamics of different economic players involved in this complex global production network. Its widespread notion deals with various global issues (including regional value chains also) from the top down to the bottom up, founding a scope for policy analysis.
    Date: 2021–02
  13. By: Norhanishah Mohamad Yunus (School of Distance Education, Universiti Sains Malaysia, Malaysia Author-2-Name: Noraida Abdul Wahob Author-2-Workplace-Name: Unit Peneraju Agenda Bumiputera, Prime Minister's Department,47810, Petaling Jaya, Selangor, Malaysia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The purpose of this study is to investigate both "technology" and "knowledge" effects of foreign direct investment (FDI) on labour productivity in the medium-high manufacturing industries' classification in Malaysia. Methodology/Technique - This study employs a Seemingly Unrelated Regression (SUR) estimator. Findings - The results conclude that diffusion of knowledge, which increases labour productivity, is greater via "learning effects" as compared to the investor countries' capital investments in the medium-high manufacturing industries. Novelty - This study expands the body of knowledge about the benefits of FDI spillovers on labour productivity according to specific investor countries, however, are rarely researched particularly in developing countries and at the industry level. Type of Paper - Empirical.
    Keywords: Foreign Direct Investment; Labour Productivity; Technology Spillovers; Knowledge Spillovers
    JEL: E60 J24
    Date: 2021–03–31
  14. By: Aguiar, Angel; Erwin Corong; Dominique van der Mensbrugghe
    Abstract: For the majority of studies using global general equilibrium models, the sectoral detail pro-vided by the GTAP Data Base would be sufficient. However, analyses aimed at supportingtrade negotiations or detailed trade policy regulations often require modeling at the tariff lineor Harmonized System (HS) level. We bridge this gap by providing an automated data andmodel workflow that allows GTAP-based analyses at the HS level. In this paper, we illustrateand explain the use of this workflow by first carrying out a data procedure where we re-defineGTAP sectors related to the auto industry—though the workflow is flexible enough to re-defineor disaggregate any GTAP sector into its HS associated components. Then, we use an extendedstandard GTAP version 7 (GTAP-HS) model to carry out explicit modeling of the additionalHS-level detail. Both data and model workflow that accompany this paper are available assupplementary materials. This new framework facilitates simulations of trade policy at the HSlevel, thereby allowing researchers to capture more nuances on the trade side. This is especiallyimportant when tariffs are highly differentiated across the HS components, which is the casefor the automotive sector—tariffs may be relatively low on auto parts (intermediate goods), buthigher on assembled vehicles (final goods)
    Date: 2021
  15. By: Giuseppe Pulina (Department of Economics and Management, Université du Luxembourg); Skerdilajda Zanaj (Department of Economics and Management, Université du Luxembourg)
    Abstract: Offshore financial centers are almost never the final destination of the foreign direct investments (FDIs) they receive. A large portion of these investments are phantom FDIs, which ultimately ow to third countries or return back to the source country in a process called round-tripping. This paper develops a model in which onshore countries compete internationally with tax instruments to attract capital from abroad, in the presence of an offshore financial center that encourages phantom FDI. We show that the presence of offshore financial centers is beneficial to technologically advanced countries, whereas it is detrimental to others. Finally, we use this framework to analyze the effectiveness of Controlled Foreign Company (CFC) rules against profit shifting recently implemented in Europe and the associated loss of tax base.
    Keywords: International tax competition; Offshore financial centers; Round-tripping; Profit shifting; Phantom FDI.
    JEL: F21 H26 H25 F23
    Date: 2021
  16. By: Marthinus C. Breitenbach (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: In this study we explore whether more complex economies are better shielded against exogenous shocks. We contribute to the empirical literature on determinants of output volatility by introducing a relatively new index on productive capabilities of export goods, the Economic Complexity Index (ECI), developed by Hausmann et al. (2014). The ECI measures the productive capabilities of countries by explaining the knowledge accumulated in a population based on the goods they produce and export and to which countries they export. As such, not only does this measure capture diversification but also the technology embedded in the products. Using panel data analysis for a cross section of countries from 1984 to 2016, we find variations in the effects of ECI on output volatility between high and low income countries. For high income countries, increases in ECI reduce output volatility in the short to medium term (under 3 years), whereas we observe a longer delay in output volatility moderation for low income countries. The findings suggest that low income countries have less diversified and less complex export goods which leave them open to external shocks and reduce their ability to adjust quickly to the shocks. Furthermore, disaggregation by regions reveals that economic complexity in Asia is relatively more effective at reducing output volatility than in Africa. The difference between the two regions could be due to Africa’s primary production and exports being in relatively homogenous goods with no differentiation and subject to the volatility of world markets.
    Keywords: output volatility, export diversification, economic complexity, panel data, high vs low income countries, fixed effects model, ECI
    JEL: E32 F10 C23 O57
    Date: 2021–03
  17. By: Damajie, Dennis
    Abstract: This paper explain explicitly about lobster seeds export to the foreign countries are detrimental to the states and fishermen
    Date: 2021–04–02
  18. By: Alan de Bromhead; Alan Fernihough; Markus Lampe; Kevin Hjortshøj O’Rourke (Division of Social Science)
    Abstract: This paper introduces a new dataset of commodity-specific, bilateral import data for four large Asian economies in the interwar period: China, the Dutch East Indies, India, and Japan. It uses these data to describe the interwar trade collapses in the economies concerned. These resembled the post-2008 Great Trade Collapse in some respects but not in others: they occurred along the intensive margin, imports of cars were particularly badly affected, and imports of durable goods fell by more than those of non-durables, except in China and India which were rapidly industrializing. On the other hand the import declines were geographically imbalanced, while prices were more important than quantities in driving the overall collapse.
    Date: 2021–04
  19. By: Jerg Gutmann; Matthias Neuenkirch; Florian Neumeier
    Abstract: Although international sanctions are a widely used instrument of coercion, their economic effects are still not fully understood. This study uses a novel dataset and an event study approach to evaluate the economic consequences of international sanctions, thereby accounting for pre-treatment dynamics in countries subject to sanctions. Our analysis focuses on the effects of sanctions on GDP growths as well as various transmission channels through which sanctions affect economic activity. We document a significant negative effect of international sanctions on GDP growth and its components (consumption, investment, and government expenditures) as well as on trade and foreign direct investment. Additional panel difference-in-differences estimations reveal that this detrimental effect is driven by financial sanctions and US unilateral sanctions.
    Keywords: Economic growth, event study, international sanctions, transmission channels
    JEL: F43 F51 F52 F53 O43 O47
    Date: 2021
  20. By: Chepeliev, Maksym; Israel Osorio Rodarte; Dominique van der Mensbrugghe
    Abstract: While bringing multiple benefits for the environment, achievement of the stringent global greenhouse gas emissions reduction target, like the one outlined in the Paris Climate Agreement, is associated with significant implementation costs and could impact different dimensions of human well-being, including welfare, poverty and distributional aspects. In this paper, we analyze the poverty and distributional impacts of different carbon pricing mechanisms consistent with reaching the Paris Agreement targets. We link a global recursive dynamic computable general equilibrium model ENVISAGE with the GIDD microsimulation model and explore three levels of mitigation effort and five carbon pricing options (trade coalitions). Results suggest that while there is a higher incidence of poverty in all scenarios, mainly driven by lower economic growth, Nationally Determined Contribution (NDC) policies result in progressive income distribution at the global level. Such progressivity is caused not only by lower relative prices of food versus non-food commodities, but also by a general decline in skill wage premia.
    Date: 2021
  21. By: Saparamadu, Thilini; Akrimi, Nesrine
    Abstract: This study ascertains the determinants of Intra-Industry Trade (IIT) with particular reference to IIT between Sri Lanka and its major trading partners in South Asia; namely; India, Pakistan and Bangladesh. The study uses secondary data published in World Development Indicators, Penn World Table from 1992 to 2017. The level of IIT is calculated by using data gathered from Comtrade Data Base. Using panel data regression, the study adopts Random Effect model to analyze the regression results. The study concludes that economies of scale measured by difference of value added in the net output of the manufacturing sector and market size measured by average gross domestic product exert a significant influence on the level of IIT in the South Asian region. Differences of per capita Gross National Income (GNI - difference in income level) and tariff rate (the proxy for trade barriers) poses a negative influence on the level of IIT. The policymakers should be concerned about the possibility to increase IIT in the South Asian region. Based on the findings of the study, the present research offers policy recommendations to promote IIT within the region.
    Date: 2021–04–04
  22. By: Jen Baggs (University of Victoria); Loretta Fung (National Tsing Hua University); Beverly Lapham
    Abstract: This paper estimates the impact on Canadian retailers' revenues of significantly decreased international travel by Canadians in response to the Covid-19 related travel restrictions imposed on the US-Canada border. We use detailed data from 1991 to 2020 on Canadians' travel to the United States to estimate the monthly fraction of a community's residents who cross the border for 237 communities within 150 kilometers of the border. We estimate the model of cross-border travel from Baggs, Fung and Lapham (2018) and use those estimates to establish community-level counterfactual crossing rates had the pandemic not occurred. We then combine those rates with actual crossing rates to estimate the revenue losses that small Canadian retailers' avoided due to the near cessation of cross-border travel by Canadians as a result of the pandemic. Our results suggest that, on average, the border closure prevented a 1.7% decrease in revenues for a small Canadian retailer located within 150 kilometers of the border. However, we document considerable variation in the magnitude of this decrease across communities and retail sectors, with estimates ranging from approximately 0% to 234%. Specifically, retailers that are located in less affluent communities near sizeable US shopping opportunities and that are in sub-sectors that cater to travelers experienced the largest foregone revenue losses due to border closures in 2020.
    Keywords: Covid-19, Border Policies, Cross Border Shopping, International Price Differences
    JEL: F1
    Date: 2021–04
  23. By: Xu, Lili; Lee, Sang-Ho
    Abstract: We consider a multinational global firm that adopts corporate social responsibility (CSR) in two countries and examine international privatization policies with the strategic transmission of CSR. We find that the strategic level of CSR crucially depends on the percentage of the global firm’s shares held in each country. We show that single privatization increases (decreases) CSR when the share is small (large), while dual privatization always leads to the highest CSR. We also show that domestic welfare under global standard of CSR, which is set to improve global welfare, is higher (lower) than that under the global firm’s strategic CSR when the share is small (large). Finally, we show that dual nationalization is a unique equilibrium in an international privatization choice game, irrespective of imposing the global standard of CSR, which causes global welfare loss.
    Keywords: global firm; strategic CSR; global standards of CSR; international privatization policy
    JEL: D43 L13 L33
    Date: 2021–01
  24. By: Toshihiro Okubo (Faculity of Economics, Keio University)
    Abstract: This paper examines the factors affecting Japanese attitudes toward immigration. Using individual-level survey data, we investigate the impact of both economic/socioeconomic (cognitive) and noneconomic (or noncognitive) factors, the latter including behavioral bias, communication skills, social stance and subjective well-being. The results indicate that individualsthat are male, richer, more educated, younger and from smaller families tend to agree with immigration. More importantly, noneconomic factors also matter, with those that have lower time preference, better English language skills and overseas experience tending to be more positive to the perception of immigration. In addition, individuals trusting neighborhoods rather than the government, that make donations to society and that keep in good health tend to be more positive toward immigration.
    Keywords: Immigration, Non-cognitive factors, Household Survey, Japan
    JEL: F16 F22
    Date: 2021–03–28
  25. By: Schubert, Torben (CIRCLE, Lund University)
    Abstract: The effects of establishing foreign-based subsidiaries on firm performance have long been debated, where empirical evidence hints at gains in terms of costs reductions, productivity or growth. Yet, little is known about the effects on innovative capabilities at the home base. Using a matched-employer-employee panel dataset of the Swedish Community Innovation Surveys (CIS) between 2008 and 2014, we estimate whether the employee share at subsidiaries abroad affects product innovation performance at home. Our results show the effects are positive on average. However, there is also evidence of detrimental effects of having employees abroad on innovation. In particular, for excessive shares of employees at foreign location, we provide evidence of an inverted u-shape between the probability to introduce product innovations and the share of foreign employment. Moreover, we show that the benefits of foreign employment are larger for firms with a more nationally diverse workforce at the home base. Our results are robust to a wide variety of robustness checks.
    Keywords: Internationalization; Innovation; Diversity
    JEL: M14 M16 O32
    Date: 2021–03–30
  26. By: Ozili, Peterson Kitakogelu
    Abstract: This study examines the correlation of economic policy uncertainty (EPU) across countries and regions. Using correlation analysis, the findings reveal that some countries have a positive EPU correlation while other countries have a negative EPU correlation. The economic policy uncertainty index is positively correlated and jointly significant for EU member-countries. There is evidence of cross-regional positive correlation. Also, the EPU correlations are significant for Europe, non-EU countries and the region of the Americas during the global financial crisis, which suggest that financial crises are a contributory factor that drives the correlation of economic policy uncertainty in certain regions.
    Keywords: economic policy uncertainty, European Union, uncertainty, economic policy, financial crisis, correlation, Asia, Europe, EPU index.
    JEL: E5 E52 K00
    Date: 2021

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