nep-int New Economics Papers
on International Trade
Issue of 2021‒05‒24
48 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Assessing the Impact of the United States-People’s Republic of China Trade Dispute Using a Multiregional Computable General Equilibrium Model By Gentile, Elisabetta; Li, Gen; Mariasingham, Mahinthan Joseph
  2. What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture? By Anderson, Kym; Valenzuela, Ernesto
  3. The impact of Brexit on Africa in times of the Corona Crisis By Kohnert, Dirk
  4. Child Labour and Global Value Chains By Olarreaga, Marcelo; Saiovici, Gady; Ugarte, Cristian
  5. Structural gravity and trade agreements: does the measurement of domestic trade matter? By Rodolfo G. Campos; Jacopo Timini; Elena Vidal
  6. ‘Learning to export’ and ‘learning to innovate’: Revisiting the relationship between innovation and exports in African ï¬ rms By Elvis Korku Avenyo; Fiona Tregenna; Kwanele Ngwadleka
  7. Wine’s belated globalization, 1845 to 2025 By Kym Anderson; Vicente Pinilla
  8. Trade club for climate: A climate approach to revive multilateralism By Bardt, Hubertus; Kolev, Galina V.
  9. The China trade shock and the gender wage gap in India: A District-level analysis By Kajari Saha
  10. Internationalization, Premiumization and Diversity of the World’s Winegrape Varieties By Kym Anderson; Signe Nelgen
  11. ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa By Isaac K. Ofori; Simplice A. Asongu
  12. Decoupling Global Value Chains By Peter Eppinger; Gabriel J. Felbermayr; Oliver Krebs; Bohdan Kukharskyy
  13. ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa By Ofori, Isaac K.; Asongu, Simplice A.
  14. The Dynamic Impact of Exporting on Firm R&D Investment By Maican, Florin; Orth, Matilda; Roberts, Mark J; Vuong, Van Anh
  15. The impact of AGOA on Export Flows from sub-Saharan Africa: A dynamic system GMM analysis By Oro; Oro Ufuo; Paul Alagidede
  16. Dominant currency dynamics: Evidence on dollar-invoicing from UK exporters By Crowley, Meredith A; Han, Lu; Son, Minkyu
  17. Designing an International Economic Order: A Research Agenda By Bowen, T. Renee; Broz, James
  18. Globalization and Pandemics By Antràs, Pol; Redding, Stephen J.; Rossi-Hansberg, Esteban
  19. Globalization and the Environment By Brian R. Copeland; Joseph S. Shapiro; M. Scott Taylor
  20. Internationalization of winegrape varieties and its implications for terroir-based cultural assets By Kym Anderson; Signe Nelgen
  21. Missing data in the structural gravity: estimation bias of preferential trade agreements due to the omission of internal trade By Marcel Vaillant; Manuel Flores; Pedro Esteban Moncarz
  22. Evading Corporate Responsibilities: Evidence from the Shipping Industry By Vuillemey, Guillaume
  23. Trade in the time of parcels By Javier López González; Silvia Sorescu
  24. The Gravitational Constant? By Jacks, David S.; O'Rourke, Kevin Hjortshøj; Taylor, Alan M.
  25. Gravity with Granularity By Breinlich, Holger; Fadinger, Harald; Nocke, Volker; Schutz, Nicolas
  26. Trade and Geography By Redding, Stephen J.
  27. Mapping commonalities in regulatory approaches to cross-border data transfers By Francesca Casalini; Javier López González; Taku Nemoto
  28. Global carbon price asymmetry By Ritz, R.
  29. How Has COVID-19 Affected the Intention to Migrate via the Backway to Europe and to a Neighboring African Country? Survey Evidence and a Salience Experiment in the Gambia By Bah, Tijan L.; Batista, Catia; Gubert, Flore; McKenzie, David
  30. De-globalization: Driven by Global Crises? By Razin, Assaf
  31. Automation, Offshoring and Employment Distribution in Western Europe By Jocelyn Maillard
  32. Informing WTO Reform: Dispute Settlement Performance, 1995-2020 By Hoekman, Bernard; Mavroidis, Petros C; Saluste, Maarja
  33. The Geopolitics of International Trade in Southeast Asia By Cosar, Kerem; Thomas, Benjamin
  34. An Efficient Long-Run Economic Growth Strategy for Estonia By Amin Sokhanvar; Glenn P. Jenkins
  35. Offshoring and Inflation By Comin, Diego; Johnson, Robert
  36. The Short-Run and Long-Run Effects of Trade Openness on Financial Development: Some Panel Evidence for Europe By Guglielmo Maria Caporale; Anamaria Sova; Robert Sova
  37. Export Survival and Foreign Financing By Laura D’Amato; Máximo Sangiácomo; Martín Tobal
  38. The Political Effects of Immigration: Culture or Economics? By Alesina, Alberto; Tabellini, Marco
  39. Global Value Chain Participation and Inclusive Growth in Sub-Saharan Africa By Camara K. Obeng; Peter Y. Mwinlaaru; Isaac K. Ofori
  40. The Indirect Fiscal Benefits of Low-Skilled Immigration By Colas, Mark; Sachs, Dominik
  41. Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation By Auer, Raphael; Burstein, Ariel Tomas; Lein, Sarah
  42. The Influence of Value-Chain Governance on Innovation Performance: A Study of Italian Suppliers By Brancati, Emanuele; Pietrobelli, Carlo; Mazzi, Caio Torres
  43. Growth, Instability and Demand Elasticity of Indian Fish Exports By KM, SIBY; P, Dr.Arunachalam
  44. Remaking China’s Global Image with the Belt and Road Initiative: Is the Jury Out? By Jianhong Qi; Kam Ki Tang; Da Yin; Yong Zhao
  45. The Toll of Tariffs: Protectionism, Education and Fertility in Late 19th Century France By Vincent Bignon; Cecilia García-Peñalosa
  46. Global Value Chain Participation and Inclusive Growth in Sub-Saharan Africa By Obeng, Camara Kwasi; Mwinlaaru, Peter Yeltulme; Ofori, Isaac Kwesi
  47. Barriers to Global Capital Allocation By Bruno Pellegrino; Enrico Spolaore; Romain Wacziarg
  48. Global Supply Chains, Value Added and Production Intensity: Case Semiconductors By Holmström, Harald; Kenney, Martin; Seppälä, Timo

  1. By: Gentile, Elisabetta (Asian Development Bank); Li, Gen (National Institute for Environmental Studies, Japan); Mariasingham, Mahinthan Joseph (Asian Development Bank)
    Abstract: Since the onset of the ongoing United States (US)–People’s Republic of China (PRC) trade dispute in 2017, stakeholders and experts alike have expressed deep concerns that the tensions would come at a cost for the countries involved and the global economy. In this paper, we endeavor to quantify this cost by using a computable general equilibrium model based on the 2017 Asian Development Bank Multi-regional Input-Output Tables. We construct three scenarios: the baseline or business-as-usual (BAU) scenario; scenario 1, based on the bilateral measures implemented as of May 2019; and scenario 2, corresponding to a full-scale tariff war where both countries impose an additional 25% tariff on all bilateral imports. We find that scenario 1 is associated with a contraction of gross domestic product (GDP) with respect to the baseline by 0.17% in the US and 0.36% in the PRC. Employment contracts by 0.24% in the US and 0.55% in the PRC. Similarly, consumption, and investment decrease by 0.14% and 0.45%, respectively in the US, and by 0.20% and 0.64% in the PRC. Scenario 2 is associated with an even larger contraction in trade flows, which leads to larger decreases in GDP, employment, consumption, and investment in both economies. We observe trade diversion to other Asian economies, with Japan, Malaysia, the Republic of Korea, and Viet Nam benefiting the most, but sectoral analysis shows that export-competing sectors to the PRC in other Asian countries stand to benefit from the ongoing trade dispute, whereas sectors that supply to the PRC stand to suffer.
    Keywords: computable general equilibrium (CGE) model; input output; Multi-regional Input-Output Tables (MRIOT)
    JEL: D57 D58 F13 F17
    Date: 2020–09–30
  2. By: Anderson, Kym; Valenzuela, Ernesto
    Abstract: This paper provides new estimates of the extent and economic effects of agricultural policies that provide domestic support or import protection to farmers in countries that compete in the global marketplace with unsubsidized farmers. Analyses earlier this century found that import market access barriers accounted for more than 90% of the global welfare cost of all assistance to farmers, with domestic support measures providing as little as 5%. Since then the share contributed by domestic support has grown greatly in some high-income and emerging economies, thanks to policy re-instrumentation. Using the latest version of the GTAP model and database of the global economy, this paper estimates the economic effects of direct farmer subsidies, and of the producer subsidy and consumer tax equivalents of farm trade policies, on farmers in three lightly assisting countries. The estimates adjusted for country size suggest the effects on agricultural exports, net farm income, and national economic welfare of such policies are far more adverse for Australia, Brazil and especially New Zealand than for the rest of the world, and that domestic supports abroad are much more important contributors to those losses now than they were at the start of this century.
    Keywords: Agricultural trade distortions; domestic supports; farm subsidies; market access; Trade Negotiations
    Date: 2020–11
  3. By: Kohnert, Dirk
    Abstract: ABSTRACT & RÉSUMÉ: Despite the Corona crisis, London is pushing ahead with the implementation of Brexit. This will have a profound impact not only on the EU but also on Africa. The British government's vision of a reinvigorated 'Global Britain' relies heavily on a reinforced cooperation with Commonwealth Sub-Saharan Africa. Already the temporary closure of manufacturing supply chains between China and the rest of the world because of the pandemic seriously affected economic activity in GB and the EU. However, African commodity exporters such as Nigeria, South Africa, and Kenya will likely bear the brunt of both the direct and indirect effects of this weaker demand. This will add up to the economic effects of the spread of Corona in Africa. Most likely the vulnerable and the poor in Africa's informal sector will have to suffer the most by both health hazards and the economic decline. RÉSUMÉ: Malgré la crise de Corona, Londres poursuit la mise en œuvre du Brexit. Cela aura un impact profond non seulement sur l'UE mais aussi sur l'Afrique. La vision du gouvernement britannique d'une «Grande-Bretagne mondiale» revigorée repose largement sur une coopération renforcée avec l'Afrique subsaharienne du Commonwealth. Déjà, la fermeture temporaire des chaînes d'approvisionnement manufacturières entre la Chine et le reste du monde en raison de la pandémie a sérieusement affecté l'activité économique en GB et dans l'UE. Cependant, les exportateurs africains de matières premières tels que le Nigeria, l'Afrique du Sud et le Kenya supporteront probablement le poids des effets directs et indirects de cette demande plus faible. Cela s'ajoutera aux effets économiques de la propagation de Corona en Afrique. Les personnes vulnérables et pauvres du secteur informel africain devront très probablement souffrir le plus des risques sanitaires et du déclin économique.
    Keywords: Corona, Brexit, Africa, GB, EU, international trade, economic recession, poverty, South Africa, Nigeria, Kenya, African Studies
    JEL: F13 F35 F54 F63 G15 I1 N17 N47 N67 O17 P16 Z13
    Date: 2020–06–17
  4. By: Olarreaga, Marcelo; Saiovici, Gady; Ugarte, Cristian
    Abstract: We explore the impact the internationalization of production is having on child labour at the sector level, using data for 26 low- and middle-income countries. We find that sectors with stronger participation in foreign markets exhibit less child labour. Similarly, sectors that participate in global value chains by providing inputs to exporting firms in third countries (forward linkages) have fewer cases of child labour. On the other hand, sectors in which a large share of exports have foreign imported inputs embedded in them (backward linkages) experience higher incidences of child labour. Unlike the existing empirical literature on trade and child labour at the aggregate (country) level, which does not control for income effects, our results, at the sector level, do control for them.
    Keywords: child labor; global value chains; Sectoral employment
    JEL: F14 F15
    Date: 2020–11
  5. By: Rodolfo G. Campos (Banco de España); Jacopo Timini (Banco de España); Elena Vidal (Banco de España)
    Abstract: Economic theory suggests including domestic trade flows when estimating structural gravity models. The inclusion of domestic trade flows helps to identify parameters that cannot be estimated with international trade flows alone. The complication is that domestic trade flows can be measured empirically in different ways. Does it matter which one is used? We compare the three most common approaches to measuring domestic trade and show that they lead to very similar estimates of the parameters that are usually estimated within a structural gravity framework.
    Keywords: international trade, structural gravity model, domestic trade, trade agreements
    JEL: F13 F14 F15 F62
  6. By: Elvis Korku Avenyo; Fiona Tregenna; Kwanele Ngwadleka
    Abstract: This paper examines the relationship between innovation and export performance for African ï¬ rms. We use Tobit simultaneous equation full information maximum likelihood (FIML) model with selection on a crosssectional dataset from the World Bank’s Enterprise Surveys for 28 African economies. The paper provides new evidence of a two-way positive relationship between innovation and export performance in African ï¬ rms: innovation is important for both the ability to export (export propensity) and for export intensity, while exporting also increases the likelihood of innovating. These effects are driven mainly by direct exports and apply to both product and process innovation. We argue that these results point to a two-way relationship in which innovation enables ï¬ rms to ‘learn to export’, while ï¬ rms also ‘learn to innovate’ through exporting. A higher share of foreign ownership in ï¬ rms, as well as ï¬ rms having an internationally recognised quality certiï¬ cation strengthen the positive effects in both directions.
    Keywords: exports, export performance, Innovation, Learning, Firms, Africa
    JEL: D22 F14 L25 O12 O32 O55
    Date: 2021–05
  7. By: Kym Anderson (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia); Vicente Pinilla (Universidad de Zaragoza, Spain)
    Abstract: The latest wave of globalization has seen the share of global wine production crossing national borders treble, to more than 40. Prior to the 1980s, wine was confined mostly to southern Europe with very little trade outside that region. Why was wine globalization so belated? Why did it take so long for wine exports to take off even in the New World regions of European settlement? This article addresses these questions and also seeks to explain the bilateral patterns of wine trade. It concludes by speculating briefly on how wine markets might develop in the foreseeable future.
    Keywords: Growth in wine trade, Late emergence of New World wine exporters, Changes in beverage tastes, Premiumization of wine consumption, Beverage market projections
    JEL: F14 F17 L66 Q11 Q17
    Date: 2021–01
  8. By: Bardt, Hubertus; Kolev, Galina V.
    Abstract: The adoption of the Paris Agreement in December 2015 calls for concerted efforts by the international community to restrain the increase in global average temperature to well below 2êC. Trade policy has the potential to contribute substantially to curbing climate change. However, the global trade system is suffering the deepest crisis in the history of the World Trade Organization (WTO). To revive multilateralism, it is crucial to pursue a positive approach based on the commitment to a common target like climate protection and reinforced by the urgency of that target. A Trade Club for Climate (TCC) or a Sector/Industry Climate Club (SICC) are alternative ways to address both the climate crisis and the crisis of the global trading system at the same time. They should be exclusive, appealing and based on the experience of the GATT and WTO negotiations. Starting the negotiations with a smaller number of countries to achieve a large progress is more feasible than involving all current WTO member states right from the beginning. The TCC could draw on the potential of trade policy to contribute to climate protection and should be an attempt to liberalise trade with environmental and climate goods and services. A SICC could focus on the main producing countries of specific industries, which would make negotiations about minimum levels of carbon prices more feasible. The discussion on the trade-climate nexus shows that there are several measures that can be taken to make trade policy work for climate. Eliminating tariffs and reducing non-tariff barriers on goods for climate protection, product labelling, green procurement and carbon border adjustment are only a few of them. The change of political power in the USA, the recent trade policy review in the EU and the increasing commitment of many other countries worldwide show that there cannot be a better time to initiate a TCC or SICCs for specific industries and launch negotiations.
    JEL: F13 F18 Q54
    Date: 2021
  9. By: Kajari Saha (Indira Gandhi Institute of Development Research)
    Abstract: This study provides new evidence on the debate surrounding international trade and the gender wage gap in a developing country context. It asks whether increased competition from trade has any causal effect on the district-level gender wage gap in India. Changes in competition from trade are measured using changes in imports from China, owing to the dramatic rise in Chinese imports into India in recent years. An instrumental variable (IV) based estimation strategy is used following Autor, Dorn, and anson (2016), to delineate causality. Results indicate a positive and statistically significant impact of an increase in Chinese imports on the gender wage gap over time. In addition to the economy-wide ample of workers, this effect holds true for the sub-samples of casual laborers and rural sector workers where the majority of women workers in India are concentrated. Unlike previous studies using industry-level data, the district-level focus of this study allows us to capture micro-level effects, as well as the net effects of trade in the surrounding district.
    Keywords: International trade, Gender wage gap, Competition, Imports, China, District
    JEL: F16 D63 J16 J31
    Date: 2021–04
  10. By: Kym Anderson (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia); Signe Nelgen (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Hochschule Geisenheim University, Geisenheim, Germany)
    Abstract: This article reveals the extent to which national mixes of winegrape varieties (in terms of vineyard bearing area) have become more ‘internationalized’ and of arguably higher quality since wine globalization accelerated from the 1990s, and what that means for diversity of consumer choice. It does so using an updated global database involving 700+ wine regions that account for 99% of the world’s winegrape vineyard area and 1,700+ DNA-distinct prime winegrape varieties and 1350+ synonyms, for 2000, 2010 and 2016. It shows that vignerons’ winegrape varietal choices are narrowing in the various wine-producing countries of the world by converging on the major ‘international’ varieties, especially French ones. This is not inconsistent with the fact that wine consumers are enjoying an ever-wider choice range, thanks to far greater international trade in wine associated with the current wave of globalization. Nor is it inconsistent with strengthening vigneron interest in ‘alternative’ and native varieties. The data also suggest the quality of the current global mix of varieties has been rising well above the average quality of the most-planted varieties as of 1990 or 2000.
    Keywords: Index of similarity between national and global varietal mixes, index of internationalization of prime varieties, quality of winegrape varieties
    Date: 2021–03
  11. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This study examines the joint effects of ICT diffusion (composed of access, usage and skills), and foreign direct investment (FDI) on inclusive growth in sub-Saharan Africa (SSA). The study draws on data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project for the period 1980–2019 for the analysis. The study provides evidence robust to several specifications from ordinary least squares and dynamic system GMM estimation techniques to show that: (1) FDI and ICT diffusion and corresponding components (ICT access, usage, skills) induce inclusive growth in SSA; (2) compared to its direct effect, FDI is remarkable in fostering shared growth in SSA in the presence of greater ICT diffusion, and (3) compared to ICT access and usage, ICT skills are more effective in driving inclusive growth in SSA. Overall FDI modulates ICT dynamics to engender positive synergy effects on inclusive growth. Policy recommendations are provided in line with the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the projected rise in FDI in SSA from 2022.
    Keywords: FDI; ICT Access; ICT Diffusion; ICT Skills; ICT Usage; Inclusive Growth; sub- Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2021–05
  12. By: Peter Eppinger; Gabriel J. Felbermayr; Oliver Krebs; Bohdan Kukharskyy
    Abstract: Recent disruptions to global value chains (GVCs) have raised an important question: Can decoupling from GVCs increase a country’s welfare by reducing its exposure to foreign supply shocks? We use a quantitative trade model to simulate GVCs decoupling, defined as increased barriers to global input trade. After decoupling, the repercussions of foreign supply shocks are reduced on average, but some countries experience magnified effects. Across various scenarios, welfare losses from decoupling far exceed any benefits from lower shock exposure. In the U.S., a repatriation of GVCs would reduce national welfare by 2.2% but barely change U.S. exposure to foreign shocks.
    Keywords: quantitative trade model, input-output linkages, global value chains, Covid-19, supply chain contagion, shock transmission
    JEL: F11 F12 F14 F17 F62
    Date: 2021
  13. By: Ofori, Isaac K.; Asongu, Simplice A.
    Abstract: This study examines the joint effects of ICT diffusion (composed of access, usage and skills), and foreign direct investment (FDI) on inclusive growth in sub-Saharan Africa (SSA). The study draws on data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project for the period 1980–2019 for the analysis. The study provides evidence robust to several specifications from ordinary least squares and dynamic system GMM estimation techniques to show that: (1) FDI and ICT diffusion and corresponding components (ICT access, usage, skills) induce inclusive growth in SSA; (2) compared to its direct effect, FDI is remarkable in fostering shared growth in SSA in the presence of greater ICT diffusion, and (3) compared to ICT access and usage, ICT skills are more effective in driving inclusive growth in SSA. Overall FDI modulates ICT dynamics to engender positive synergy effects on inclusive growth. Policy recommendations are provided in line with the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the projected rise in FDI in SSA from 2022.
    Keywords: FDI,ICT Access,ICT Diffusion,ICT Skills,ICT Usage,Inclusive Growth,sub-Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2021
  14. By: Maican, Florin; Orth, Matilda; Roberts, Mark J; Vuong, Van Anh
    Abstract: This article estimates a dynamic structural model of firm R&D investment in twelve Swedish manufacturing industries and uses it to measure rates of return to R&D and to simulate the impact of trade restrictions on the investment incentives. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. Export market profits are a substantial source of the expected return to R&D. Counterfactual simulations show that trade restrictions lower both the expected return to R&D and R&D investment level, thus reducing an important source of the dynamic gains from trade. A 20 percent tariff on Swedish exports reduces the expected benefits of R&D by an average of 32.2 percent and lowers the amount of R&D spending by 13.9 percent in the high-tech industries. The corresponding reductions in the low-tech industries are 30.4 and 8.9 percent, respectively. R&D adjustments in response to export tariffs mainly occur on the intensive, rather than the extensive, margin.
    Keywords: export; Innovation; productivity; R&D; Trade
    JEL: F13 L13 L6 O3
    Date: 2020–10
  15. By: Oro; Oro Ufuo; Paul Alagidede
    Abstract: This study seeks to understand the relationship between the United States imports from sub-Saharan Africa (SSA) and the overall exports from SSA between 1996 and 2018. It examines the drivers of that relationship drawing from the existing theories of international trade. The study found that the bilateral economic size of the US and SSA, the economic similarity index and relative factor endowment differences correlate positively with exports from SSA. Our results align with Linder’s hypothesis, gravity model on trade and H-O-S theory of international trade. We recommend policy reforms.
    Keywords: AGOA, exports, Sub-Saharan Africa
    JEL: F1 F13 F13
    Date: 2020–10
  16. By: Crowley, Meredith A; Han, Lu; Son, Minkyu
    Abstract: How do the choices of individual firms contribute to the dominance of a currency in global trade? Using export transactions data from the UK over 2010-2016, we document strong evidence of two mechanisms that promote the use of a dominant currency: (1) prior experience: the probability that a firm invoices its exports to a new market in a dominant currency is increasing in the number of years the firm has used the dominant currency in its existing markets; (2) strategic complementarity: a firm is more likely to invoice its exports in the currency chosen by the majority of its competitors in a foreign destination market in order to stabilize its residual demand in that market.
    Keywords: Exchange rate; firm-level trade; invoicing currency; Vehicle currency
    JEL: F14 F31 F41
    Date: 2020–11
  17. By: Bowen, T. Renee; Broz, James
    Abstract: The institutions that have sustained global economic cooperation for the past 75 years are under threat. Despite admonitions that global peace and prosperity are at risk, policymakers in important countries ignored the rules of the multilateral order in recent times and moved down the path of unilateralism and economic nationalism. What role can social scientists play in redesigning the international economic order? We offer a research agenda for contributing to the reform and improvement of global institutions. The research agenda is guided by three themes: threats, solutions, and leadership. Threats refer to the deep causes of the crisis in global institutions, not the symptoms or expressions of those problems. Solutions refers to institutional reforms required to address deep threats to the global order. Leadership addresses the challenge of coordinating efforts to supply international institutions, which can be thought of as global public goods. We demonstrate the value of this research agenda by applying it to the World Trade Organization.
    Keywords: institutions; International trade policy; political economy; WTO Reform
    JEL: A11 F02 F13 F51 F52 F53 F55 F6 H1 H4 K12 K33
    Date: 2020–10
  18. By: Antràs, Pol; Redding, Stephen J.; Rossi-Hansberg, Esteban
    Abstract: We develop a model of human interaction to analyze the relationship between globalization and pandemics. Our framework provides joint microfoundations for the gravity equation for international trade and the Susceptible-Infected-Recovered (SIR) model of disease dynamics. We show that there are cross-country epidemiological externalities, such that whether a global pandemic breaks out depends critically on the disease environment in the country with the highest rates of domestic infection. A deepening of global integration can either increase or decrease the range of parameters for which a pandemic occurs, and can generate multiple waves of infection when a single wave would otherwise occur in the closed economy. If agents do not internalize the threat of infection, larger deaths in a more unhealthy country raise its relative wage, thus generating a form of general equilibrium social distancing. Once agents internalize the threat of infection, the more unhealthy country typically experiences a reduction in its relative wage through individual-level social distancing. Incorporating these individual-level responses is central to generating large reductions in the ratio of trade to output and implies that the pandemic has substantial effects on aggregate welfare, through both deaths and reduced gains from trade.
    Keywords: Globalization; Gravity Equation; Pandemics; SIR model
    JEL: F15 F23 I10
    Date: 2020–09
  19. By: Brian R. Copeland; Joseph S. Shapiro; M. Scott Taylor
    Abstract: How should international economic policy address climate change? Does trade cause deforestation and endangered species depletion? How does globalization affect air and water pollution? Do trade and investment create a race to the bottom in environmental policy? How important are environmental impacts of transporting goods? We review theory and empirical work linking international trade and the environment with a focus on recent work and methods. We discuss the literature linking trade to local and global pollutants, the impact of emissions from transportation, the effect of trade on the sustainability of renewable resources, and the interaction between trade and climate policy. To shape our review, we present nine new stylized facts that, together with our review of past work, highlight questions for future research.
    JEL: F18 H23 Q27
    Date: 2021–05
  20. By: Kym Anderson (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia); Signe Nelgen (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Hochschule Geisenheim University, Geisenheim, Germany)
    Abstract: Winegrape varieties in the world’s vineyards have become more internationalized since wine globalization accelerated from the 1990s. Simultaneously, economic growth and greater openness to trade have altered beverage consumption cultures in those countries, and in nonwine- producing countries. This chapter draws out the implications of these developments for terroir-based cultural assets in the countries of origin of each winegrape variety, and in the sometimes dispersed countries planting them. It exploits two recently revised, expanded and updated global databases. One covers wine production, consumption and trade; and the other describes winegrape bearing areas by variety and region covering 99% of the world’s winegrape vineyard area and more than 1,700 DNA-distinct winegrape varieties for 2000 and 2016. This latter database reveals that vignerons’ varietal choices are narrowing in the wineproducing countries of the world, converging on the major French varieties. This is despite a strengthening interest by vignerons in ‘alternative’ and native varieties, the latter linked historically to terroir-based cultural assets. Meanwhile, wine consumers are enjoying everwider choice, thanks to much-increased international trade in wine. Data also suggest the quality of the current global mix of varieties has been rising well above that of a generation ago.
    Date: 2021–04
  21. By: Marcel Vaillant (Universidad de la República); Manuel Flores (Universidad de la República); Pedro Esteban Moncarz (Universidad Nacional de Córdoba. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro de Investigaciones en Ciencias Económicas, CIECS-UNC, CONICET. Red Nacional de Investigadores en Economía (RedNIE))
    Abstract: In the last decade, there has been an intense development in trade models aiming to explain the determinants of bilateral trade. A seminal theoretical and methodological contribution is Anderson and van Wincoop (2003), who introduced the concept of multilateral resistance and structural gravity. However, there is still an important gap between the theoretical developments of the structural gravity model and its empirical applications. Two main issues come from the presence of zeros in bilateral trade and missing data for internal trade flows (own production oriented to the own market). The presence of zero trade flows has been considered in Santos Silva and Tenreyro (2006) and Helpman, Melitz and Rubinstein (2008). The consequences of omitting internal transactions have not been much studied, even when its relevance may be greater due to a significant heterogeneity across countries’ openness. The objective of the paper is to analyze and characterize the consequences from omitting internal trade in the estimation of trade proximities (inverse trade costs) and on the values of multilateral resistances, which in turn will affect the comparative statics effects derived from different trade policy measures.
    Keywords: Structural gravity Zero trade Missing data
    JEL: F10 F17
    Date: 2020–03
  22. By: Vuillemey, Guillaume
    Abstract: I show that the maritime shipping industry - handling above 80% of global trade flows - has evolved over the past decades to systematically evade "corporate responsibilities," i.e., compliance with regulatory standards and potential tort liabilities. Shipping firms increasingly dissociated legal and ultimate ownership, fragmented assets in one-ship subsidiaries, used flags of convenience, and evaded end-of-life responsibilities with "last-voyage flags." Microeconomic tests confirm that responsibility evasion, amidst global competition, is a dominant motive behind these patterns. These findings have implications for our understanding of corporate social responsibility, of extended forms of liability, and of the "dark side" of globalization.
    Keywords: Corporate social responsibility; flags of convenience; Globalization; limited liability; shipping; subsidiary
    Date: 2020–09
  23. By: Javier López González; Silvia Sorescu
    Abstract: Today, more parcels are crossing international borders than ever before. While this has given rise to new opportunities, not least for individuals and SMEs who are now more directly engaged in trade, it is also raising new challenges. This paper explores this complex and evolving environment, identifying the types of goods that are traded as parcels and the different actors along the parcels supply chain, as well as the policies to help ensure that parcels get to where they are needed. Empirical analysis shows that progress on digital connectivity and trade facilitation measures, such as increased transparency or automating border processes, are likely to have a greater trade-enhancing impact on parcel trade than on “traditional” trade. In contrast, greater differences in regulations across countries in transportation, courier or logistics services are associated with lower trade in parcels. Overall, enabling benefits from trade in parcels and facing forthcoming challenges requires a comprehensive policy approach across a number of areas and throughout the parcel supply chain.
    Keywords: COVID-19, E-commerce, Gravity estimation, Services, SMEs, Trade facilitation
    JEL: C54 F13 F68 L10
    Date: 2021–05–25
  24. By: Jacks, David S.; O'Rourke, Kevin Hjortshøj; Taylor, Alan M.
    Abstract: We introduce a new dataset on British exports at the bilateral, commodity-level from 1700 to 1899. We then pit two primary determinants of bilateral trade against one another: the trade-diminishing effects of distance versus the trade-enhancing effects of the British Empire. We find that gravity exerted its pull as early as 1700, but the distance effect then attenuated and had almost vanished by 1800. Meanwhile the empire effect peaked sometime in the late 18th century before significantly declining in value. It was only after 1950 that distance would once again exert the same influence that it has today.
    Keywords: distance; Empire; Gravity
    JEL: F1 N7
    Date: 2020–09
  25. By: Breinlich, Holger; Fadinger, Harald; Nocke, Volker; Schutz, Nicolas
    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: Aggregative Game; CES Demand; Gravity Equation; oligopoly
    JEL: F12 F14 L13
    Date: 2020–10
  26. By: Redding, Stephen J.
    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.
    Keywords: Geography; Local Labor Markets; Trade
    JEL: F1 J4 R1 R4
    Date: 2020–09
  27. By: Francesca Casalini; Javier López González; Taku Nemoto
    Abstract: Data flows across border underpin today’s digitalised and globally interconnected world, but have also given rise to a range of concerns, including about privacy protection, intellectual property protection, regulatory reach, competition, and industrial policy. This has led to the emergence of a patchwork of rules governing cross-border data flows, complicating both the enforcement of public policy goals and increasing the costs for firms of all sizes of operating on a global scale. In practice, countries are using a range of mechanisms and instruments to enable cross-border data transfers with “trust”, including unilateral mechanisms, plurilateral arrangements, and trade agreements. This paper identifies the commonalities, complementarities and elements of convergence in these different instruments for moving data across borders, with the aim of supporting international dialogue and co-operation on more predictable and transparent combinations of data flows and “trust”.
    Keywords: Data free flows with trust, Data-flows, Digital economy, Interoperability, Privacy, Trade policy
    JEL: O3 F13
    Date: 2021–05–18
  28. By: Ritz, R.
    Abstract: This paper studies a social planner who chooses countries' carbon prices so as to maximize global welfare. Product markets are characterized by firm heterogeneity, market power, and international trade. Because of the market-power distortion, the planner's optimal policy is second-best. The main insight is that optimal carbon prices may be highly asymmetric: zero in some countries and above the social cost of carbon in countries with relatively dirty production. This result obtains even though a uniform global carbon price is always successful at reducing countries' emissions. Competition policy that mitigates market power may enable stronger and more balanced climate action.
    Keywords: Carbon leakage, carbon pricing, imperfect competition, international trade, second best
    JEL: H23 L11 Q54
    Date: 2021–05–17
  29. By: Bah, Tijan L. (University of Navarra); Batista, Catia (Nova School of Business and Economics); Gubert, Flore (IRD, DIAL, Paris-Dauphine); McKenzie, David (World Bank)
    Abstract: The COVID-19 pandemic has resulted in border closures in many countries and a sharp reduction in overall international mobility. However, this disruption of legal pathways to migration has raised concerns that potential migrants may turn to irregular migration routes as a substitute. We examine how the pandemic has changed intentions to migrate from The Gambia, the country with the highest pre-pandemic per-capita irregular migration rates in Africa. We use a large-scale panel survey conducted in 2019 and 2020 to compare changes in intentions to migrate to Europe and to neighboring Senegal. We find the pandemic has reduced the intention to migrate to both destinations, with approximately one-third of young males expressing less intention to migrate. The largest reductions in migration intentions are for individuals who were unsure of their intent pre-pandemic, and for poorer individuals who are no longer able to afford the costs of migrating at a time when these costs have increased and their remittance income has fallen. We also introduce the methodology of priming experiments to the study of migration intentions, by randomly varying the salience of the COVID-19 pandemic before eliciting intentions to migrate. We find no impact of this added salience, which appears to be because knowledge of the virus, while imperfect, was already enough to inform migration decisions. Nevertheless, despite these decreases in intentions, the overall desire to migrate the backway to Europe remains high, highlighting the need for legal migration pathways to support migrants and divert them from the risks of backway migration.
    Keywords: migration intentions, COVID-19 pandemic, priming and salience experiments, backway migration, The Gambia
    JEL: F22 O15 J61 C93
    Date: 2021–04
  30. By: Razin, Assaf
    Abstract: International trade increased rapidly after 1990, fueled by the growth of a complex network of global value chains Trade globalization reversed course since the Global Financial Crisis. The new trend is expected to endure after the Global Pandemic Crisis. There are no indication of lessening trend of financial globalization, which, except for short term reversal during the Global Financial Crisis.
    Date: 2020–10
  31. By: Jocelyn Maillard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon)
    Abstract: This paper investigates the effects of automation and offshoring on the dynamics of the occupational distribution of employment with a focus on Western Europe between 2000 and 2016. I use a general equilibrium model with three regions, three types of workers, ICT capital, trade in final goods and endogenous offshoring. Fed with exogenous measures of ICT-capital prices and trade costs, the model replicates key features of the data. It matches the observed dynamics of offshoring to Eastern Europe and Asian countries. It also reproduces accurately the observed polarization of the labor market: abstract and manual labor increase while routine labor falls. A counterfactual experiment reveals that automation is the main driver of polarization. Since it is also the only factor that drives individuals to become abstract (highskill) workers, it is welfare enhancing. The effects of falling trade costs on labor polarization are smaller, but imply welfare gains.
    Keywords: Automation,offshoring,labor-market polarization,European employment distribution
    Date: 2021–05–06
  32. By: Hoekman, Bernard; Mavroidis, Petros C; Saluste, Maarja
    Abstract: This paper presents salient facts on the performance of WTO dispute settlement, using an updated dataset on cases adjudicated between 1992 and mid 2020. The dataset provides a comprehensive compilation of information on WTO disputes, including complainants, respondents and third parties; the substantive matters tabled; the WTO provisions invoked; the claims that are accepted or rejected by adjudicating bodies; the time involved to complete the consultation, panel and appeal (Appellate Body) stages; and the identity of panelists and how they were appointed. We highlight elements of the operation of the system that are salient to WTO reform discussions, while drawing attention to the richness of the dataset by highlighting stylized facts in the hope others will use the data to investigate specific research questions and hypotheses.
    Keywords: Appellate Body; Conflict resolution; panels; Trade disputes; WTO
    JEL: F13 F51 K40
    Date: 2020–11
  33. By: Cosar, Kerem; Thomas, Benjamin
    Abstract: Motivated by the historically tense geopolitical situation in Southeast Asia, we simulate the potential closure of key maritime waterways in the region to predict the impact on trade and welfare. We generate initial (unobstructed) and counterfactual (rerouted) least-cost maritime paths between trading countries, and use the distances of these routes in a workhorse model of international trade to estimate welfare effects. We find heterogeneous and economically significant reductions in real GDP, and show the magnitude of welfare loss is directly correlated with military spending as a proportion of GDP, suggesting nations may be responding to economic security threats posed by such potential conflicts.
    Keywords: international trade; Military Spending; quantitative trade models
    JEL: F14 F5
    Date: 2020–10
  34. By: Amin Sokhanvar (Graduate School of Economics and Management, Ural Federal University, Yekaterinburg, Russia); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Ontario K7L)
    Abstract: International tourism and FDI inflows have generated detectable beneficial impacts on the economy of Estonia in the last decades. However, recently, poor international market conditions mostly caused by the trade war and COVID-19 pandemic have been a potential threat to these two factors. Besides, the poor performance of investments in recent years is behind the stagnation of productivity in Estonia. This study examines the dynamics of the effects of these factors on the rate of economic growth in Estonia and provides policy implications in line with sustained recovery. A Nonlinear ARDL technique is employed in this study to investigate the long-run effects of FDI and the degree of tourism specialization on economic growth rate. Our findings indicate that the economic growth rate of Estonia in the long-run has been positively affected by both the rate of FDI inflows and international tourism. This is the first study that employs a non-linear approach to investigate the dynamics of long-run effects of FDI and tourism specialization on the rate of economic growth in Estonia and provides policy implications in line with optimal growth strategy considering the economic structure, the current level of productivity, and available potentials in this economy.
    Keywords: International Tourism; FDI; Rate of Return on Investment; Productivity; Economic
    JEL: O11 O49 E22 E27 Z32
    Date: 2021–11–05
  35. By: Comin, Diego; Johnson, Robert
    Abstract: Did trade integration suppress inflation in the United States? We say no, in contradiction to the conventional wisdom. Our answer leverages two basic facts about the rise of trade: offshoring accounts for a large share of it, and it was a long-lasting, phased-in shock. Incorporating these features into a New Keynesian model, we show trade integration was inflationary. This result continues to hold when we extend the model to account for US trade deficits, the pro-competitive effects of trade on domestic markups, and cross-sector heterogeneity in trade integration in a multisector model. Further, using the multisector model, we demonstrate that neither cross-sector evidence on trade and prices, nor aggregate time series price level decompositions are informative about the impact of trade on inflation.
    Date: 2020–10
  36. By: Guglielmo Maria Caporale; Anamaria Sova; Robert Sova
    Abstract: This paper analyses the short- and long-run effects of trade openness on financial development in a panel including data on 35 European countries over the period 2001-2019. For this purpose, it uses the PMG (pooled mean group) estimator for dynamic panels developed by Pesaran et al. (1999). The results differ depending on the income, governance and financial development level of the countries considered. In particular, it appears that in the middle-income countries trade openness tends to strengthen financial development in the long run but to have an adverse effect in the short run. By contrast, in the case of high-income countries with better institutions and a higher level of financial development, there is a positive and significant impact in the short run. Some policy implications of these findings are drawn.
    Keywords: trade openness, financial development, panel data, PMG estimator, Europe
    JEL: E61 F13 F15 C25
    Date: 2021
  37. By: Laura D’Amato (Universidad de Buenos Aires - IIEP); Máximo Sangiácomo (BCRA y UNDLP); Martín Tobal (Banco de México)
    Abstract: Exporting is a finance-intensive activity. But credit markets are frequently underdeveloped and domestic financing tends to be scarce in developing countries, for which a strong export sector is crucial for economic development. Thus, this paper investigates whether foreign financing provides better financing conditions than domestic financing and/or otherwise unavailable external finance, thus increasing export survival rates in a developing country. To that end, it assembles a unique dataset, rarely available for other countries, containing information on foreign credit obtained by Argentine exporters. Based on the empirical models conventionally used in the export survival literature—specifically the probit random effects and the clog-log setups—we provide evidence of a positive link between foreign financing and export survival. This finding is confirmed using an instrumental variable approach.
    Keywords: International trade Credit foreign Financing export survival
    JEL: F10 F13 G20 G28
    Date: 2020–08
  38. By: Alesina, Alberto (Harvard University); Tabellini, Marco (Harvard Business School)
    Abstract: We review the growing literature on the political effects of immigration. After a brief summary of the economics of immigration, we turn to the main focus of the paper: how immigrants influence electoral outcomes in receiving countries, and why. We start from the "standard" view that immigration triggers political backlash and raises support for nativist, anti-immigrant political parties. We present evidence from a variety of studies that the causes of natives' political discontent are unlikely to have (solely) economic roots, but are instead more tightly linked to cultural and social concerns. Next, we discuss works that paint a more nuanced picture of the effects of immigration, which, in some cases, can move natives' preferences in a more liberal direction. We also consider the factors that can explain a seemingly puzzling empirical regularity: the anti-immigration rhetoric has become a banner of right wing parties. We conclude by outlining what, to us, are promising avenues for future research.
    Keywords: immigration, diversity, culture, politics
    JEL: D72 J11 J15 J61 Z1
    Date: 2021–05
  39. By: Camara K. Obeng (University of Cape Coast, Ghana); Peter Y. Mwinlaaru (University of Cape Coast, Ghana); Isaac K. Ofori (University of Insubria, Varese, Italy.)
    Abstract: Global value chain (GVC) participation has been identified as one of the means by which developing countries can attain inclusive growth yet little attention has been paid to it in sub-Saharan Africa (SSA). Motivated by the dearth of studies on SSA, we investigate the effect of GVC participation on inclusive growth for 19 SSA countries for the period 1991 to 2017, using the system GMM estimator. The results show that GVC participation drives inclusive growth through employment creation. We find that though SSA’s foreign value addition is less than its domestic value addition, the former’s impact on inclusive growth is higher than that of the latter. We recommend that policymakers support downstream industries to acquire technologies while incentivizing and attracting upstream industries into their countries.
    Keywords: Global Value Chain, Inclusive Growth, Domestic Value Added, Foreign Value Added, Sub-Saharan Africa
    JEL: F14 F15 F43 F6 O4 Q55
    Date: 2021–01
  40. By: Colas, Mark; Sachs, Dominik
    Abstract: Low-skilled immigrants indirectly affect public finances through their effect on native wages & labor supply. We operationalize this general-equilibrium effect in the workhorse labor market model with heterogeneous workers and intensive and extensive labor supply margins. We derive a closed-form expression for this effect in terms of estimable statistics. We extend the analysis to various alternative specifications of the labor market and production that have been emphasized in the immigration literature. Empirical quantifications for the U.S. reveal that the indirect fiscal benefit of one low-skilled immigrant lies between $770 and $2,100 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.
    Keywords: Fiscal Impact; General Equilibrium; Immigration
    JEL: H20 J31 J62 J68
    Date: 2020–09
  41. By: Auer, Raphael; Burstein, Ariel Tomas; Lein, Sarah
    Abstract: We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported non-durable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes by currency of invoicing carries over to consumer prices and allocations, impacting retail prices of imports and competing domestic goods, as well as import expenditures. We provide measures of the sensitivity of retail import prices to border prices and the sensitivity of import shares to relative prices, which is higher when using retail prices than border prices.
    Keywords: exchange rate pass-through; Expenditure Switching; invoicing currency; large exchange rate shock; nominal rigidities; Optimal price-setting
    JEL: F12 F31 F41 L11
    Date: 2020–10
  42. By: Brancati, Emanuele (Sapienza University of Rome); Pietrobelli, Carlo (University of Rome 3); Mazzi, Caio Torres (UNU-MERIT)
    Abstract: This paper explores how value-chain governance affects the innovation performance of suppliers of intermediate products. We take advantage of a unique dataset of Italian firms to identify governance regimes along suppliers’ technological capabilities and the level of explicit coordination in the value chain. Our results indicate that ‘modular’ value-chain governance is more conducive to innovation for suppliers, especially when these firms have medium capability levels. Conversely, market-based governance modes appear to strongly reduce the innovativeness of suppliers with low capability. These patterns are also reflected in export performances and sales of innovative products. Our results go partially against other findings in the GVC literature, whereby relational value chains are seen to provide the most favorable environment to learn and innovate. Interestingly, the highest levels of technological capabilities consistently reduce the correlation between supplying intermediates and innovation performance, which indicates that technology-gap is an important mediator of learning within value chains.
    Keywords: global value chains, export, suppliers, innovation, technological capabilities
    JEL: F14 O30
    Date: 2021–04
  43. By: KM, SIBY; P, Dr.Arunachalam
    Abstract: The fisheries sector plays a catalyst role in the Indian economy by making significant contributions to the national income, exports, food, nutritional security, and employment generation. The present study estimates Compound Annual Growth Rates (CAGR), Coefficient of Variation (CV), and Cuddy Della Valle (CDV) to analyze the growth and instability trends in the production and export of fish from India. The study also makes use of double log multiple regression analysis to estimate the demand elasticity of the US market for Indian shrimp, which is a major constituent in the Indian fishery export basket.
    Keywords: Fisheries Sector, Growth trends, Instability and demand elasticity
    JEL: F14 F18
    Date: 2020–03–09
  44. By: Jianhong Qi (School of Economics, Shandong University, Jinan, 250100, China); Kam Ki Tang (School of Economics, University of Queensland, Brisbane, Australia); Da Yin (School of Economics, Renmin University of China, Beijing,100872, China); Yong Zhao (Institute of China’s Economic Reform and Development, Renmin University of China, Beijing,100872, China)
    Abstract: In this paper, we investigate how foreign economic policy may affect a country’s global image or soft power. Our empirical work focuses on China’s Belt and Road Initiative (BRI), one of the most ambitious international economic policies in modern times, that covers more than 70 countries across the globe. We find evidence that international opinions on China are diverse but not polarized. We also find that the BRI has curried favor for China in the related countries. On average, the BRI increases net public approval rating of the Chinese leadership in these countries by more than 15 percentage points. Interestingly, the BRI arouses approving foreign opinions more than quietens disapproving voices. Finally, countries that have stronger trade, foreign direct investment or political ties with China do not necessarily respond to the BRI more favorably, while those contracting more infrastructure projects with Chinese firms do.
    Keywords: Global image, Public approval, Belt and Road Initiative, China
    JEL: F02 F42 R11
    Date: 2020–08–25
  45. By: Vincent Bignon (DGSEI DPEM - Banque de France, Direction générale des Statistiques, des Études et de l'International , CEPR - Center for Economic Policy Research - CEPR); Cecilia García-Peñalosa (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, CEPR - Center for Economic Policy Research - CEPR, CESifo - Center for Economic Studies and Ifo for Economic Research - CESifo Group Munich)
    Abstract: This paper examines a novel negative impact of trade tariffs and the costs they induce by documenting how protectionism reversed the long-term improvements in education and the fertility transition that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, was a major protectionist shock that shifted relative prices in favor of agriculture and away from industry. In a context in which the latter was more intensive in skills than agriculture, the tariff reduced the relative return to education, which in turn affected parents' decisions about the quantity and quality of children. We use regional differences in the importance of cereal production in the local economy to estimate the impact of the tariff. Our findings indicate that the tariff reduced enrolment in primary education and increased birth rates and fertility. The magnitude of these effects was substantial, with the tariff offsetting the increasing trend in enrolment rates and the decreasing one in birth rates by a decade.
    Keywords: education,fertility,protectionism,France
    Date: 2021–04–22
  46. By: Obeng, Camara Kwasi; Mwinlaaru, Peter Yeltulme; Ofori, Isaac Kwesi
    Abstract: Global value chain (GVC) participation has been identified as one of the means by which developing countries can attain inclusive growth yet little attention has been paid to it in sub-Saharan Africa (SSA). Motivated by the dearth of studies on SSA, we investigate the effect of GVC participation on inclusive growth for 19 SSA countries for the period 1991 to 2017, using the system GMM estimator. The results show that GVC participation drives inclusive growth through employment creation. We find that though SSA’s foreign value addition is less than its domestic value addition, the former’s impact on inclusive growth is higher than that of the latter. We recommend that policymakers support downstream industries to acquire technologies while incentivizing and attracting upstream industries into their countries.
    Keywords: Global Value Chain,Inclusive Growth,Domestic Value Added,Foreign Value Added,Sub-Saharan Africa
    JEL: F19 F62 O00 O14 Q01
    Date: 2021
  47. By: Bruno Pellegrino; Enrico Spolaore; Romain Wacziarg
    Abstract: We quantify the impact of barriers to international investment, using a novel multi-country dynamic general equilibrium model with heterogeneous investors and imperfect capital mobility. Our model yields a gravity equation for bilateral foreign asset positions. We estimate this gravity equation using recently developed foreign investment data that have been restated to account for offshore investment and financing vehicles. We show that a parsimonious implementation of the model with four barriers (geographic distance, cultural distance, foreign investment taxation, and political risk) accounts for a large share of the observed variation in bilateral foreign investment positions. Our model predicts (out of sample) a significant home bias, higher rates of return on capital in emerging markets, as well as “upstream” capital flows. In our benchmark calibration, we estimate that the capital misallocation induced by these barriers reduces World GDP by 7%, compared to a situation without barriers. We also find that barriers to global capital allocation contribute significantly to cross-country inequality: the standard deviation of log capital per employee is 80% higher than it would be in a world without barriers to international investment, while the dispersion in output per employee is 42% higher.
    Keywords: capital allocation, capital flows, foreign investment, culture, geography, gravity, international macroeconomics, international finance, misallocation, open economy
    JEL: E22 E44 F20 F30 F40 G15 O40
    Date: 2021
  48. By: Holmström, Harald; Kenney, Martin; Seppälä, Timo
    Abstract: Abstract Semiconductor chips and their production are foundational for future innovation, future developments of digitalization, and economic prosperity. However, the role of production when discussing who is creating and capturing value across different industrial supply chains has often been underestimated. In this report, we analyze the distribution of the value added in the semiconductor supply chain. Value added analysis is insufficient on its own to understand the importance of production; therefore, we also examine the share of operating profits that has been reinvested in the growth of tangible and intangible assets. Based on value added and reinvesting cycle analysis, we discuss production intensity, and we draw conclusion regarding how important production is for different supply chains and industries.
    Keywords: Semiconductor industry, Value chain, Value added, Value creation, Manufacturing, Tangible assets
    JEL: L16 L22 L23 L63
    Date: 2021–05–11

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