nep-int New Economics Papers
on International Trade
Issue of 2021‒05‒31
fifty-nine papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Withering globalization? The Global Value Chain effects of trade decoupling By Escaith, Hubert
  2. Murky trade waters: Regional tariff commitments and non-tariff measures in Africa By Stender, Frederik; Vogel, Tim
  3. Superstar Exporters: An Empirical Investigation of Strategic Interactions in Danish Export Markets By Ciliberto, Federico; Jäkel, Ina Charlotte
  4. When Tariffs Disturb Global Supply Chains By Grossman, Gene M.; Helpman, Elhanan
  5. Multinational corporations and commercialised states: Can state aid serve as the basis for an FDI-driven growth strategy? By Woodgate, Ryan
  6. A Quantitative Analysis of Tariffs Across U.S. States By Ana Maria Santacreu; Michael Sposi; Jing Zhang
  7. ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa By Isaac K. Ofori; Simplice A. Asongu
  8. Complex Europe: Quantifying the Cost of Disintegration By Felbermayr, Gabriel; Groeschl, Jasmin; Heiland, Inga
  9. ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa By Ofori, Isaac Kwesi; Asongu, Simplice A.
  10. Growing Like China: Firm Performance and Global Production Line Position By Chor, Davin; Manova, Kalina; Yu, Zhihong
  11. THE EFFECTS OF ASEAN-CHINA FREE TRADE AGREEMENT ON BILATERAL TRADES By Wong, Colin Koh-King; Liew, Venus Khim-Sen; Arip, Mohammad Affendy
  12. The Effects of ASEAN Economic Community (AEC) Blueprint Adoption on Intra-ASEAN Trade on Manufacturing Products By Wong, Colin Koh King; Liew, Venus Khim-Sen; Arip, Mohammad Affendy
  13. TBTs, Firm Organization and Labour Structure By Barba Navaretti, Giorgio; Fontagne, Lionel; Orefice, Gianluca; Pica, Giovanni; Rosso, Anna
  14. Manufacturing exports after the lifting of economic sanctions in Myanmar By Taguchi, Hiroyuki
  15. Migration from Africa, the Middle East and European Neighbouring Countries to the EU: An Augmented Gravity Modelling Approach By Michael Landesmann; Isilda Mara
  16. Empirical Productivity Distributions and International Trade By Egger, Peter; Erhardt, Katharina; Nigai, Sergey
  17. Corporate taxes, investment and the self-financing rate. The effect of location decisions and exports By Thomas von Brasch; Ivan Frankovic; Eero Tölö
  18. Interaction between trade and environment policies with special interest politics: A Case when commodity markets are imperfect By Gaurav Bhattacharya; Meeta Keswani Mehra
  19. Potential consequences of post-Brexit trade barriers for earnings inequality in the UK By Griffith, Rachel; Levell, Peter; Norris Keiller, Agnes
  20. "Agricultural products" and "fishery products" in the GATT and WTO: A history of relevant discussions on product scope during negotiations By Pene, Cédric; Zhu, Xiaolu
  21. Is irrigation driven by the price of internationally traded agricultural products? By Catherine Laroche-Dupraz; Angela Cheptea
  22. Large-scale Multinational Shocks and International Trade: a Non-zero-sum Game By Rossella Bardazzi; Leonardo Ghezzi
  23. Does Geopolitics Have an Impact on Energy Trade? Empirical Research on Emerging Countries By Fen Li; Cunyi Yang; Zhenghui Li; Pierre Failler
  24. Education and the Evolution of Comparative Advantage By Felipe , Jesus; Jin , Hongyuan; Mehta, Aashish
  25. International Migration Responses to Natural Disasters: Evidence from Modern Europe's Deadliest Earthquake By Spitzer, Yannay; Tortorici, Gaspare; Zimran, Ariell
  26. U.S. Market Concentration and Import Competition By Mary Amiti; Sebastian Heise
  27. The Resilience of Global Value Chains during the Covid-19 pandemic: the case of Italy By Simona Giglioli; Giorgia Giovannetti; Enrico Marvasi; Arianna Vivoli
  28. Is the Export-led Growth Hypothesis Valid for India? Another Look at the Evidence By Sanu, Md Sahnewaz
  29. The Heterogeneous Effects of Trade across Occupations: A Test of the Stolper-Samuelson Theorem By Basco, Sergi; Liegey, Maxime; Mestieri, Martí; Smagghue, Gabriel
  30. Population Aging and Migration By Poutvaara, Panu
  31. Refugees’ and Irregular Migrants’ Self-selection into Europe By Aksoy, Cevat Giray
  32. On Immigration and Native Entrepreneurship By Duleep, Harriet; Jaeger, David A.; McHenry, Peter
  33. Analysis of the elements applied in the context of international business By Garcia, Germán; Rodriguez, Brisia
  34. Measuring the Regional Economic Cost of Brexit: Evidence up to 2019 By Fetzer, Thiemo; Wang, Shizhuo
  35. Exchange rate misalignments and current accounts in BRICS countries By Rikhotso, Prayer; Bonga-Bonga, Lumengo
  36. Resurgence of transition economics: Brexit as an expected example, experience and lesson By Matoshi, Ruzhdi; Mulaj, Isa
  37. From Guangzhou to Naples: French exports of plastic waste By Julien Martin; Isabelle Mejean; Inés Picard; Benoît Schmutz
  38. From Immigrants to Americans: Race and Assimilation during the Great Migration By Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco
  39. To What Extent Are Tariffs Offset By Exchange Rates? By Jeanne, Olivier; Son, Jeongwon
  40. ASEAN Development and Innovation Strategy in the Era of New Industrialisation By Masahito Ambashi
  41. Profit Shifting of Multinational Corporations Worldwide By Javier Garcia-Bernardo; Petr Jansky
  42. The Impact of United States Tax Policies on Sectoral Foreign Direct Investment to Asia By Mercer-Blackman , Valerie; Camingue-Romance, Shiela
  43. Globalization and Nationalism: Retrospect and Prospect By Obstfeld, Maurice
  44. Economic Consequences of Mass Migration: The Venezuelan Exodus in Peru By Cesar Martinelli; Cynthia Boruchowicz; Susan W. Parker
  45. The effect of the Brexit referendum result on subjective well-being* By Kavetsos, Georgios; Kawachi, Ichiro; Kyriopoulos, Ilias; Vandoros, Sotiris
  46. Global Value Chain Participation and Inclusive Growth in Sub-Saharan Africa By Camara K. Obeng; Peter Y. Mwinlaaru; Isaac K. Ofori
  47. COVID-19, Working from Home and the Potential Reverse Brain Drain By Bakalova, Irina; Berlinschi, Ruxanda; Fidrmuc, Jan; Dzyuba, Yuri
  48. The Out-of-Sample Performance of Carry Trades By Hsu, Po-Hsuan; Taylor, Mark P; Wang, Zigan
  49. Ricardo Through the Looking Glass: (Mis)adventures of Comparative Advantage in Developing Economies By Spirin, Victor
  50. Choosing Institutional over Economic Integration: Are There Growth Effects? By Campos, Nauro F.; Coricelli, Fabrizio; Moretti, Luigi
  51. Forecasting Output Growth of Advanced Economies Over Eight Centuries: The Role of Gold Market Volatility as a Proxy of Global Uncertainty By Afees A. Salisu; Rangan Gupta; Sayar Karmakar; Sonali Das
  52. Market selection in global value chains By Mundt, Philipp; Cantner, Uwe; Inoue, Hiroyasu; Savin, Ivan; Vannuccini, Simone
  53. Currency appreciation, distance to border and price changes: Evidence from Swiss retail prices By Foellmi, Reto; Jäggi, Adrian; Schnell, Fabian
  54. Populism and the First Wave of Globalization: Evidence from the 1892 US Presidential Election By Klein, Alexander; Persson, Karl Gunnar; Sharp, Paul
  55. Covid-19 across European Regions: the Role of Border Controls By Eckardt, Matthias; Kappner, Kalle; Wolf, Nikolaus
  56. Brexit: Brinkmanship and Compromise By Helios Herrera; Antonin Macé; Matias Nùnez
  57. Globalization: economic development and competitiveness By Martinez Meza, Santiago; Olivares Puente, Cindy; Reyna Balderas, Jaime; Solorio Corona, Marco
  58. Mondialisation et Compétitivité des Economies. By Espinoza, Mariela; Lopez, Alma S.; Torres, Victor H.; Zamora, Cesar E.
  59. Economic development, competitiveness and globalization in modern times By Santillán, Irma; Narro, Stephanie

  1. By: Escaith, Hubert
    Abstract: The paper analyses the interindustry spillover effects of bilateral trade conflicts using the example of the 2018-2019 China-USA bilateral trade war. Empirical results are produced using a new heuristic method based on hypothetical extraction and substitution in an International Input-Output model. This model tracts a series of direct and indirect sectoral effects and provides an intuitive and computationally tractable way of mapping the potential gains and losses affecting other trade partners. It sheds light on some intricate inter-industry implications that are not obvious when considering traditional trade models. A large share of the negative impacts may be felt by third countries through two separate trade channels. Firstly, because the production of a final product in one country relies on importing intermediate goods from other trade partners, who may be negatively impacted by the trade destruction effects of the trade embargo. Secondly, because trade embargoes lead to trade substitution in order to fill the gaps left by embargoed products, and to trade deflection. Deflection occurs when the trade belligerents redeploy their unsold exports towards third countries, increasing competition for market shares. This situation is an additional threat for the Multilateral Trade Governance as large-scale trade deflection may induce a cascade of Tit-for-Tat protectionist measures, in a situation where the COVID-19 pandemics has fanned the industrial nationalism, trade protectionism and geo-political tensions which were already perceptible since the global crisis of 2008-2009.
    Keywords: international trade; trade war; Input-Output analysis; multilateralism
    JEL: C63 C67 D57 F02 F13 F60
    Date: 2021–05–24
  2. By: Stender, Frederik; Vogel, Tim
    Abstract: In several African regions, economic integration has successfully reduced tariff protection by freezing the opportunity to raise applied tariffs against fellow integration partners above those promised. In this paper, we examine whether the regional tariff commitments on the continent have come at the expense of adverse side-effects on the prevalence of other - nontariff - trade barriers. More specifically, regional tariff commitments have not only amplified applied tariff overhangs - the difference between Most Favoured Nation (MFN) bound tariffs and effectively applied tariffs - for African members of the World Trade Organization (WTO), but have also sharply reduced their tariff policy space within Africa, thus leaving regulatory policies such as sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) as two of the few legitimate options to level the playing field with market competitors. Comparing the effects of applied tariff overhangs towards all vis-à-vis African trading partners on SPS and TBT notifications of 35 African WTO members between 2001 and 2017, we find no overall relationship between tariff overhangs and import regulation in our preferred model setting. By contrast, larger tariff overhangs specific to intra-African trade relations have a significant share in increasing the probability of SPS measures and TBT. Our findings have important implications for future Pan-African integration under the recently launched African Continental Free Trade Area (AfCFTA) in that success in fostering continental economic integration does not exclusively depend on the realisation of tariff liberalisation, but at the same time on a mindful coordination with non-tariff provisions.
    Keywords: Economic integration,import regulation,non-tariff measures,tariff liberalisation,tariff overhang,trade policy substitution
    Date: 2021
  3. By: Ciliberto, Federico; Jäkel, Ina Charlotte
    Abstract: In many countries, exports are highly concentrated among a few "superstar" firms. We estimate the export decisions of superstar firms as the result of a complete information, simultaneous, discrete choice, static entry game. We employ a dataset on the universe of Danish trade transactions by firm, product and destination. We also obtain detailed information on applied, preferential tariff protection from the MAcMap-HS6 database. We find evidence of strong negative competitive effects of entry: in the absence of strategic competitive effects, firms would be 53.2 percentage points more likely to export to a given market. Next, we run two counterfactual exercises. We show that failing to account for the strategic interaction among superstar exporters leads to: (i) overstating the probability that firms would start exporting to a market following tariff elimination by a factor of two; and, (ii) overstating the probability that firms would stop exporting to a market if tariffs were imposed by a factor of more than five.
    Keywords: export participation; multiple equilibria; Strategic interaction; trade policy
    JEL: F12 F14 L13
    Date: 2020–08
  4. By: Grossman, Gene M.; Helpman, Elhanan
    Abstract: We study unanticipated tariffs on imports of intermediate goods in a setting with firm-to-firm supply relationships. Firms that produce differentiated products conduct costly searches for potential input suppliers and negotiate bilateral prices with those that pass a reservation level of match productivity. Global supply chains are formed in anticipation of free trade. Once they are in place, the home government surprises with an input tariff. This can lead to renegotiation with initial suppliers or new search for replacements. We identify circumstances in which renegotiation generates improvement or deterioration in the terms of trade. The welfare implications of a tariff are ambiguous in this second-best setting, but plausible parameter values suggest a welfare loss that rises rapidly at high tariff rates.
    Keywords: Global supply chains; global value chains; imported intermediate goods; Input tariffs
    JEL: F12 F13
    Date: 2020–08
  5. By: Woodgate, Ryan
    Abstract: In recent decades, governments around the world have increasingly used various forms of state aid to try to attract and retain the business activity of foreign-owned multinational corporations. Yet, in most cases, this "commercialisation of state sovereignty" (Palan, 2002) has failed to catalyse foreign investment and economic growth as intended. This paper seeks to understand the general failure of such commercialised state strategies, while also explaining how demand and income growth in some notable exceptions can be understood. To this end, a simple demand-led model is presented that suggests that foreign-targeted state aid may lead to beggarthy-neighbour, FDI-driven growth in one economy if certain conditions are met, such as there being sufficiently little policy competition from other countries. It is shown that the exceptional cases tend to be the early movers, i.e. those few economies and special economic zones that engaged in the commercialisation of state sovereignty before the widespread competitive emulation that followed. This paper argues that state aid for the attraction of foreign multinationals is unlikely to be an effective growth strategy in the current environment of intense state competition and that international coordination on corporation tax and other forms of state aid is desirable.
    Keywords: policy competition,foreign direct investment,tax havens,export platforms
    JEL: E12 F23 F62 H26 H71
    Date: 2021
  6. By: Ana Maria Santacreu; Michael Sposi; Jing Zhang
    Abstract: We develop a quantitative framework to assess the cross-state implications of a U.S. trade policy change: a unilateral increase in the import tariff from 2% to 25% across all goods-producing sectors. Although the U.S. gains overall from the tariff increase, we find the impact differs starkly across locations. Changes in real consumption (welfare) range from as high as 3.8% in Wyoming to –0:3% in Florida, depending mainly on how exposed states are to differentially-impacted sectors. As a result, the "preferred" tariff rate varies greatly across states. Foreign retaliation in trade policy substantially reduces the welfare gains across states, while perpetuating the cross-state variation in those gains. The presence of internal trade frictions amplifies the welfare impacts of changes in trade policy.
    Keywords: International trade; Interstate trade; Welfare gains from trade
    JEL: F11 F62
    Date: 2021–05–21
  7. 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
  8. By: Felbermayr, Gabriel; Groeschl, Jasmin; Heiland, Inga
    Abstract: We propose novel estimates of the economic consequences of undoing European Integration. Using a quantitative general equilibrium trade model for 43 countries and 50 goods and services sectors, we disentangle and decompose two important layers of complexity: First, European integration is governed by various, partly overlapping arrangements â?? the customs union, the single market, the common currency union, the Schengen Area, free trade agreements â?? and fiscal transfers, all of which affect trade costs, terms-of-trade, and gains from trade differently. Second, more than any other geography, decades of integration have led to dense cross-border input-output (IO) networks, which would endogenously readjust. We find disintegration to trigger statistically significant welfare losses of up to 21% of the 2014 baseline, but with a strong degree of heterogeneity across EU insiders. The welfare effects from undoing the Single Market dominate quantitatively, but the losses from dissolving the Schengen area or the Eurozone are substantial for many countries as well. Compared to a model variant without IO-linkages, the more complex model predicts statistically significant smaller losses from disintegration in the manufacturing sector but larger aggregate ones, a lesson that may carry over to other integration agreements.
    Keywords: European Trade Integration; General Equilibrium; quantitative trade models; structural gravity
    JEL: F13 F14 F17
    Date: 2020–08
  9. By: Ofori, Isaac Kwesi; 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: 2021–05–13
  10. By: Chor, Davin; Manova, Kalina; Yu, Zhihong
    Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.
    Keywords: China; Firm Heterogeneity; firm lifecycle; global value chains; Production line position; Upstreamness
    JEL: F10 F14 F23 L23 L24 L25
    Date: 2020–08
  11. By: Wong, Colin Koh-King; Liew, Venus Khim-Sen; Arip, Mohammad Affendy
    Abstract: This article adopts the augmented versions of Gravity Model to examine the effects of the signing of ASEAN-China Free Trade Agreement (ACFTA) on the bilateral aggregate trades. Specifically, ACFTA dummy variables are incorporated in the basic model is to estimate the direction and magnitude of the ACFTA effects. A total of 79 trading partners of ASEAN member countries plus China were examined in this article. The study finds that the Gross Domestic Product, population, natural endowment, distance and common language are the main determining factors of the bilateral trade for ASEAN member countries and its trading partners. Estimated results from this Augmented Gravity Model showed that ACFTA have increased the bilateral aggregate trades not only between intra-bloc member countries, but also between intra-bloc and extra-bloc countries. With this positive finding, ASEAN and China could consider to expand their free trade area to a broader regional perspective, to enhance economic growth and to reduce regional inequality.
    Keywords: ASEAN–China Free Trade Area (ACFTA), Gravity Model, Total aggregate trades
    JEL: F43 F62
    Date: 2021–01–01
  12. By: Wong, Colin Koh King; Liew, Venus Khim-Sen; Arip, Mohammad Affendy
    Abstract: This paper seeks to explore the effects of ASEAN Economic Community (AEC) Blueprint adoption since 20 November 2007 on the bilateral manufacturing trade between the ASEAN member countries and their trading partners. Ten ASEAN member countries and their 39 trading partners are considered in this study. A panel with model with AEC dummy variables is estimated on a set of panel data over the sample period of 1995 to 2014. Overall, it is found that AEC has created substantial trade creation effects for the exports of tobacco & manufactured tobacco substitutes, and limestone materials for manufacture of lime. On the other hand, there are substantial trade diversion effects for the exports of the fur-skins & artificial fur manufactures, manufactures of plaiting material & basketwork, miscellaneous manufactured articles, as well as the machines & apparatus.
    Keywords: ASEAN Economic Community (AEC), ASEAN, Intra-Trade, Manufacturing Products
    JEL: F4
    Date: 2021
  13. By: Barba Navaretti, Giorgio; Fontagne, Lionel; Orefice, Gianluca; Pica, Giovanni; Rosso, Anna
    Abstract: This paper investigates the effects on firms' occupational structure of shocks induced by the intro- duction of Technical Barriers to Trade (TBTs) in importing countries. We rely on the Specific Trade Concern (STC) data released by the WTO to identify trade-restrictive TBT measures, combined with matched employer-employee data for the population of French exporters over the period 1995- 2010, and with information on the list of product-destinations served by each French exporter. Con- trolling for time-invariant firm/occupation effects and for time-varying sector/occupation shocks, IV estimates show that exporters respond to increased complexity associated with restrictive TBTs at destination by raising the share of managers at the expense of blue collars, white collars and professionals. This evidence is consistent with the growing literature exploring how frms organize their workforce composition in presence of exogenous (foreign) shocks; and it is also related to the well-beaten literature on the labour market effects of trade.
    Keywords: labor demand; Non-Tariff Measures; skill composition; Trade Barriers
    Date: 2020–08
  14. By: Taguchi, Hiroyuki
    Abstract: This paper aims to evaluate Myanmar’s exports of manufacturing products by using a gravity trade model for emerging ASEAN economies. The main focus of this study is whether Myanmar’s manufacturing exports have recovered towards the gravity-trade-standard of the other emerging ASEAN countries for the post-sanction period of 2013-2018. The main findings from the gravity trade model estimation are summarized as follows. First, the Myanmar’s manufacturing exports for the post-sanction period have been still significantly below the level of the gravity-trade-standard. Second, the downward deviation from the standard could be explained by the two Myanmar-specific factors, i.e., the low institutional quality and the Dutch Disease effect in the Myanmar’s exports to western countries, but not fully in those to Asian countries. The additional factor for the deviation against Asian countries might come from Myanmar’s sluggish participation in the international production networks.
    Keywords: Myanmar’s manufacturing exports, lifting economic sanctions, gravity trade model, in-sample and out-of-sample estimations, institutional quality, Dutch Disease, international production networks
    JEL: F14 O53
    Date: 2021–05
  15. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The South-North migration corridor, i.e. migration flows to the EU from Africa, the Middle East and EU neighbouring countries in the East, have overtaken the East-West migration corridor, i.e. migration flows from Central and East European countries to the EU15 and the European Free Trade Association (EFTA). This is likely to dominate migration flows into the EU+EFTA over the coming decades. This paper applies a gravity modelling approach to analyse patterns and drivers of the South-North migration corridor over the period 1995-2020 and explores bilateral mobility patterns from 75 sending countries in Africa, the Middle East and other EU neighbours to the EU28 and EFTA countries. The study finds that income gaps, diverging demographic trends, institutional and governance features and persisting political instability, but also higher climate risks in the neighbouring regions of the EU, are fuelling migration flows along the South-North corridor and will most likely continue to do so.
    Keywords: Migration, Africa, Middle East, Eastern EU partnership countries, migration to EU, demographic developments, refugees, migration policies, gravity modelling, climate risks
    JEL: F22 J11 J61 O15
    Date: 2021–05
  16. By: Egger, Peter; Erhardt, Katharina; Nigai, Sergey
    Abstract: We use firm-level data for 15 countries and 13 manufacturing sectors to estimate firm-level productivity parameters and to establish representative country-sector-specific empirical productivity distributions. We use these distributions against the backdrop of multi-sector versions of the models of Eaton and Kortum (2002) and Melitz (2003) to quantify the role of technology in shaping international trade flows. We find that, on average, absolute advantage measured as productivity differences across countries within sectors explains 15% and 21% of the total variation in bilateral trade shares in the models of Eaton and Kortum (2002) and Melitz (2003), respectively. In contrast, on average, comparative advantage measured as productivity differences across sectors within countries explains 39% and 47% of the variation in trade flows in these two models. We also demonstrate that empirical productivity distributions entail quantitatively important micro-to-macro implications for marginal responses of trade flows to changes in trade costs, for gravity-type estimation of trade models, and for comparative statics isomorphism between the customarily parameterized models of international trade. We confirm the predictions of the two aforementioned models under empirical productivity distributions in the data.
    Keywords: Empirical trade analysis; Productivity distributions; Quantitative trade analysis; technology
    JEL: F1 F10 F12
    Date: 2020–08
  17. By: Thomas von Brasch (Statistics Norway); Ivan Frankovic; Eero Tölö
    Abstract: In this paper, we study how lower corporate tax rates impact investment by including two novel channels into a DSGE model used for fiscal policy analysis in Norway. We capture both how foreign firms relocate and invest in the country when corporate taxes are reduced and how the inflow of FDI increase exports which spills over to domestic firms who then increase their investment further. We find that a one percentage point reduction in the corporate tax rate increases investment by 0.6%, most of which can be attributed to the FDI-export link. The corporate tax cut becomes self-financed when the FDI-export link is included, but only if other countries do not follow suit and also lower their corporate tax rates. When using the model to analyze the tax reform in Norway from 2014 to 2019, we find overall positive effects on investment and employment.
    Keywords: Corporate profit tax; Foreign direct investment; Exports; Imports; User cost of capital; Depreciation; Tax reform
    JEL: E62 H21 H25 H32
    Date: 2021–05
  18. By: Gaurav Bhattacharya (Jawaharlal Nehru University); Meeta Keswani Mehra (Jawaharlal Nehru University)
    Abstract: In the ambit of politics of special interest groups, this paper addresses the linkages between trade and environmental policies in imperfect commodity markets. A duopoly market is characterised by two-way trade in differentiated products that are polluting in nature. Firms in each country act as Cournot competitors in the international market and have direct stakes in both trade and environmental policies set by the incumbent government. Results suggest that in comparison to the baseline scenario where the incumbent is purely benevolent, the political equilibrium is characterised by higher import tariffs and lower pollution taxes. The voting support from political action groups (here firms) induces the incumbent to choose policies that favour them in general. However, the degree of product differentiation tends to bring down the divergence in policy outcomes under the two scenarios. Interdependencies between trade and environmental policies are also affected by the existence of producer lobbies. Unlike in case of the social optimum, the incumbent faces a trade-off between considerations for campaign funds from lobbies and the welfare motive for the population in general. Our study shows that environmental polices act as strategic substitutes, and trade policies may or may not be strategic substitutes. We find that complementarities in trade policies (a tariff war) arise only when incumbent governments are less corrupt. This outcome is attributed to the interdependencies between trade and environmental policies. For a less corrupt policy maker, the loss in campaign funds is outweighed by the net gains from environmental regulations, viz. improved environmental quality, gain/loss in consumer and producer surplus, pollution tax revenue, and tariff revenue. Therefore, the likelihood of trade wars would be lower if politicians are more corrupt.
  19. By: Griffith, Rachel; Levell, Peter; Norris Keiller, Agnes
    Abstract: We examine the distributional consequences of post-Brexit trade barriers on wages in the UK. We quantify changes in trade costs across industries accounting for input-output links across domestic industries and global value chains. We allow for demand substitution by firms and consumers and worker reallocation across industries. We document the impact at the individual and household level. Blue-collar workers are the most exposed to negative consequences of higher trade costs, because they are more likely to be employed in industries that face increases in trade costs, and are less likely to have good alternative employment opportunities available in their local labour markets. Overall new trade costs have a regressive impact with lower-paid workers facing higher exposure than higher-paid workers once we account for the exposure of other household members.
    Keywords: income distribution; inequality; Trade
    JEL: D33 D57 F61 F66 J20
    Date: 2020–08
  20. By: Pene, Cédric; Zhu, Xiaolu
    Abstract: The WTO Agreement on Agriculture applies to those "agricultural products" as defined in its Annex 1. This definition expressly excludes "fish and fish products" from the scope of application of the Agreement. In light of this exclusion, the paper is intended to provide a historical account of the relationship between agricultural products and fishery products in the context of the negotiations leading to and during the GATT period up to the conclusion of the Uruguay Round, and some of its implications for WTO negotiations. The paper reviews documents emanating from past trade negotiations, including minutes and reports of meetings, Members' submissions, draft and final texts from negotiations, as well as background notes by the GATT and WTO Secretariats. The review suggests that the differentiation between agricultural and fishery products dates back to the early days of trade negotiations in the last century, even though the line between them was not consistently drawn in negotiations. Over time, the answer to the question of whether fish and fish products should be separate from agricultural products appears to have evolved with the context in which the question arose, in view of the issues at stake. In addition, the types of measures on which negotiations were focused could also help to explain, to an extent, the separation of fish and fishery products from agricultural products at the end of the Uruguay Round.
    Keywords: agricultural products,fish and fish products (fishery products),protective measures,tariffs,natural resources,GATT negotiations,WTO negotiations
    JEL: F13 F18 N50 Q17
    Date: 2021
  21. By: Catherine Laroche-Dupraz (SMART - Structures et Marché Agricoles, Ressources et Territoires - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Angela Cheptea (SMART - Structures et Marché Agricoles, Ressources et Territoires - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: A recent trend of literature investigates how international trade compensates or accentuates the differences in countries' endowments in water resources and whether trade regulation should be used to improve the use of water resources at the global level. We develop a simple model establishing a positive link between the demand for irrigation water of agricultural producers and the international price of irrigated crops. Unlike previous works that focus on the cost and scarcity of water resources, we emphasize the role of international trade in the allocation of water resources in agriculture. We test our model empirically using data on 243 irrigated crops exported by 183 countries, and find that countries' irrigation behavior is strongly linked to the global price of crops. The export price effect is stronger when countries are net exporters of irrigated crops and weaker for cereals that constitute a pillar of most countries' domestic food security.
    Keywords: Agri-food products,International trade,Virtual water,Water resources,Irrigation
    Date: 2021–01–08
  22. By: Rossella Bardazzi; Leonardo Ghezzi
    Abstract: International trade contributed to improving living standards but has also become one of the major channels for spreading country-specific shocks on a global scale. Analyzing the economic growth path of a modern nation, it’s important to consider the potential external demand not as an exogenous variable but as an endogenous component in order to investigate its role in the event of a global shock. The aim of this paper is to enrich the literature on empirical trade models introducing an input-output approach that (i) considering cumulative and non-linear dynamics, (ii) taking into account the shock effect on relative prices and on IO linkages, and (iii) treating explicitly the time dimension in the simulation, allows to overcome some shortcomings of previous contributions. Our model shows that a change in the price level on international markets due to a large shock affects the global demand producing an asymmetric non-zero-sum game.
    Keywords: international trade, input-output modeling, new quantitative trade models, industry linkages
    JEL: C67 D57 F14 F17
    Date: 2021
  23. By: Fen Li; Cunyi Yang; Zhenghui Li; Pierre Failler
    Abstract: The energy trade is an important pillar of each country's development, making up for the imbalance in the production and consumption of fossil fuels. Geopolitical risks affect the energy trade of various countries to a certain extent, but the causes of geopolitical risks are complex, and energy trade also involves many aspects, so the impact of geopolitics on energy trade is also complex. Based on the monthly data from 2000 to 2020 of 17 emerging economies, this paper employs the fixed-effect model and the regression-discontinuity (RD) model to verify the negative impact of geopolitics on energy trade first and then analyze the mechanism and heterogeneity of the impact. The following conclusions are drawn: First, geopolitics has a significant negative impact on the import and export of the energy trade, and the inhibition on the export is greater than that on the import. Second, the impact mechanism of geopolitics on the energy trade is reflected in the lagging effect and mediating effect on the imports and exports; that is, the negative impact of geopolitics on energy trade continued to be significant 10 months later. Coal and crude oil prices, as mediating variables, decreased to reduce the imports and exports, whereas natural gas prices showed an increase. Third, the impact of geopolitics on energy trade is heterogeneous in terms of national attribute characteristics and geo-event types.
    Date: 2021–05
  24. By: Felipe , Jesus (Asian Development Bank); Jin , Hongyuan (University of California-Santa Barbara); Mehta, Aashish (University of California-Santa Barbara)
    Abstract: We provide the first evidence that low- and middle-income countries with high education levels were more successful in developing comparative advantage in products unrelated to those they already export. In contrast, controlling for the relatedness of target products to these countries’ exports, education appears unimportant for developing comparative advantage in products that are intrinsically complex or education intensive. These results are supported by analysis of the evolution of comparative advantage in 1,240 products from 49 low- and middle-income countries between 1995 and 2015. They are robust to corrections for measurement and specification errors, for institutional, infrastructure, and foreign direct investment-related factors, for regional specialization patterns, and for each economy’s degree of industrial dynamism prior to 1995. These results suggest that the key role of education when seeking to shift from peripheral to core products is to help a country cope with unfamiliar challenges, and so overcome path dependence.
    Keywords: comparative advantage; core; diversification; education; exports; path dependence; periphery; relatedness
    JEL: I25 O11 O14
    Date: 2021–03–24
  25. By: Spitzer, Yannay; Tortorici, Gaspare; Zimran, Ariell
    Abstract: The Messina-Reggio Calabria Earthquake (1908) was the deadliest earthquake and arguably the most devastating natural disaster in modern European history. It occurred when overseas mass emigration from southern Italy was at its peak and international borders were open, making emigration a widespread phenomenon and a readily available option for disaster relief. We use this singular event and its unique and important context to study the effects of natural disasters on international migration. Using commune-level data on damage and annual emigration, we find that, despite massive destruction, there is no evidence that the earthquake had, on average, a large impact on emigration or its composition. There were, however, heterogeneous and offsetting responses to the shock, with a more positive effect on emigration in districts where agricultural day laborers comprised a larger share of the labor force, suggesting that attachment to the land was an impediment to reacting to the disaster through migration. Nonetheless, relative to the effects of ordinary shocks, such as a recession in the destination, this momentous event had a small impact on emigration rates. These findings contribute to literatures on climate- and disaster-driven migration and on the Age of Mass Migration.
    Keywords: Age of Mass Migration; Italy; migration; Natural Disasters; Refugees; US Immigration
    JEL: F22 J61 N3 O15 Q54
    Date: 2020–07
  26. By: Mary Amiti; Sebastian Heise
    Abstract: A rapidly growing literature has shown that market concentration among domestic firms has increased in the United States over the last three decades. Using confidential census data for the manufacturing sector, we show that typical measures of concentration, once adjusted for sales by foreign exporters, actually stayed constant between 1992 and 2012. We reconcile these findings by linking part of the increase in domestic concentration to import competition. Although concentration among U.S.-based firms rose, the growth of foreign firms, mostly at the bottom of the sales distribution, counteracted this increase. We find that higher import competition caused a decline in the market shares of the top twenty U.S. firms.
    Keywords: market concentration; markups; import competition; international trade
    JEL: F14 F60 L11
    Date: 2021–05–01
  27. By: Simona Giglioli; Giorgia Giovannetti; Enrico Marvasi; Arianna Vivoli
    Abstract: This paper shows that, contrary to what could be expected on the basis of past crises, during the current Covid-19 pandemic, Global Value Chains (GVCs) may have sheltered countries and firms, contributing to their resilience. Using the newly released Asian Development Bank input-output table for 2019, we provide some evidence showing that countries more integrated into international production suffered lower GDP losses. Position along the GVCs and timing affect the result: “upstream†inputs supplying countries were more “protected†, but the sheltering effect took time to materialize. It is in the second wave of the Covid-19 pandemic (after the summer) that high GVC participation countries performed better and experienced a more pronounced rebound relative to less integrated countries. Similar results hold also at the firm level. Exploiting Italian firms’ World Bank Enterprise Surveys for 2019, 2020 (June) and 2020 (December), we show that the reduction in sales is lower for internationalized firms and for more complex modes of internationalization. Consistently with the macro-level evidence, the results about the impacts on firms are further reinforced in the second wave. These findings suggest that the Covid-19 shock, despite having hit the world economy harder than the Great Financial Crisis, might impact less the globalization patterns, as international firms seem to be more resilient than their domestic counterparts.
    Keywords: global value chains, Covid-19, Italy, GVC position.
    JEL: F14 F23 F60
    Date: 2021
  28. By: Sanu, Md Sahnewaz
    Abstract: The previous studies on the export-led growth hypothesis in India have yielded mixed and inconclusive results. This study explores the dynamic relationship between real exports and real economic growth for India in a multivariate framework by including ‘terms of trade’ as an additional variable for the period 1980-2017. Unlike most of the previous studies, this study employs the ARDL bounds testing approach and Toda-Yamamoto version of modified Granger causality test to examine this linkage. The results of the bound tests indicate that there is a stable long-run relationship between the variables when economic growth proxied by GDP growth is the dependent variable. Further, the results of the modified Granger causality test suggest that there is unidirectional causal flow from exports to economic growth and from terms of trade to economic growth without any feedback. The study, therefore, provides further evidence that growth in exports stimulate economic growth in India while there is no evidence of growth-driven export.
    Keywords: Export-led growth; terms of trade; ARDL bounds test, Toda-Yamamoto; causality; GDP; India
    JEL: C32 C51 F13 F14 F43 F63 O19
    Date: 2019–07–03
  29. By: Basco, Sergi; Liegey, Maxime; Mestieri, Martí; Smagghue, Gabriel
    Abstract: This paper develops and implements a novel test of the Stolper-Samuelson theorem. We use nationally-representative matched employer-employee panel data from 1997 through 2015 to study the effect of the rise in China's exports on French worker earnings. Our version of the Stolper-Samuelson theorem states that there is a negative correlation between occupation exposure to Chinese competition and change in worker earnings. First, we document substantial heterogeneity in trade adjustment across occupations. Then, consistent with the Stolper-Samuelson prediction, we show that workers initially employed in occupations more intensively used in hard-hit industries experience larger declines in earnings. We also show that workers tend to move out of hard-hit industries, but they tend to remain in their initial occupation
    Keywords: inequality; Stolper-Samuelson
    JEL: F11 F14 F16
    Date: 2020–08
  30. By: Poutvaara, Panu (University of Munich)
    Abstract: International migration flows largely reflect demographic patterns and economic opportunities. Migration flows increase in expected income and other pull factors in potential destinations, and in push factors in the origin, like high unemployment, low wages, and high population growth. Migration flows decrease in the geographic and cultural distance between the potential origin and destination, and in other migration costs. To the extent that migrants are employed, immigration can alleviate challenges arising from population aging. For origin countries, the effects of migration may go either way, depending on whether increased incentives to invest in education are sufficient to compensate the loss of skilled workers. Throughout the 20th century, Northern America and Australia and New Zealand attracted highest immigration flows. Latin America was consistently a continent of emigration. Europe went through a major reversal from a continent of emigration until 1950s to a continent of immigration. In the 21st century, crucial questions for demographic and migration research are how fertility rate and emigration rate are going to develop in Africa. Even modest increases in emigration from Africa would generate major increases in immigration pressure in the rest of the world, mostly in Europe. Other major questions on the future research agenda are the effects of the climate change and rapid improvements in information technology.
    Keywords: international migration, population aging, demographic trends, fertility, immigrant workers
    JEL: F22 O15 J11 J13 J61
    Date: 2021–05
  31. By: Aksoy, Cevat Giray
    Abstract: We provide the first large-scale evidence on self-selection of refugees and irregular migrants who arrived in Europe in 2015 or 2016. Our analysis uses unique datasets from the International Organization for Migration and Gallup World Polls. We find that refugees are positively self-selected with respect to human capital, as are female irregular migrants. Male irregular migrants are negatively self-selected. These patterns hold whether analyzing individually stated main reason to emigrate, country-level conflict intensity, or sub-regional conflict intensity. Several additional analyses show that our results are unlikely to be driven by omitted variable bias or liquidity constraints. We offer a theoretical framework to explain these patterns, by extending the Roy-Borjas model to include risks related to staying in an unsafe country of origin, risks related to migration, and gender specific returns to human capital.
    Date: 2021–05–18
  32. By: Duleep, Harriet; Jaeger, David A.; McHenry, Peter
    Abstract: We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more exible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.
    Keywords: immigration,innovation,entrepreneurship,human capital
    JEL: J15 J24 J39 J61 L26
    Date: 2021
  33. By: Garcia, Germán; Rodriguez, Brisia
    Abstract: This article shows the relationship that can exist between globalization, competitiveness, economic development, business alliances and foreign trade. The approach will begin with a broad description on each topic until reaching the full identification of the relationship between these variables. The objective of this article is not only intended to highlight the definition on each of the topics, but the importance of each one. Invites you to explore the influence of the factors that intervene on each one and the strategies they take to achieve an economic condition that guarantees success and stability
    Keywords: Globalization, competitiveness, economic development, business alliances, foreign trade
    JEL: F6 M2
    Date: 2021–04
  34. By: Fetzer, Thiemo; Wang, Shizhuo
    Abstract: Following the UK's vote to Leave the European Union, the UK's recorded record levels of employment. This led many pundits to claim that the downbeat forecasts for the UK's economy following the Brexit vote was simply capturing that these forecasts were biased and part of "project fear.'' This paper studies the cost of the Brexit-vote to date across UK regions finding significant evidence that suggests that the economic costs of the Brexit-vote are sizable and far from evenly distributed across the UK. Among 382 districts, at least 168 districts appear to be Brexit-vote losers, having lost, on average 8.54 percentage points of output in 2018 compared to their respective synthetic controls. The results suggest that the economic losses in region- and district-level output due to the Brexit-vote are: a) increasing in a districts propensity to have supported Leave in 2016; b) concentrated in districts with notable employment or gross-value added activity in manufacturing; c) concentrated in districts with a resident population with relatively low levels of human capital. The Brexit-vote induced economic divergence across regions is already exacerbating regional economic inequalities that became so apparent in the 2016 EU referendum vote patterns. Further, there is some evidence suggesting that the regional economic impact of COVID19 may exacerbate the regional economic impact of the Brexit-vote to date.
    Keywords: Brexit; Economic impact; evaluation; Trade Barriers
    JEL: D7 F6 H2 H3 H5 P16
    Date: 2020–07
  35. By: Rikhotso, Prayer; Bonga-Bonga, Lumengo
    Abstract: This paper assesses the impact of misalignment on the current accounts of BRICS countries using the empirical approaches that address the issue of model uncertainty and asymmetry. The results of the empirical analysis empirical confirm that the relationship between misalignment and current account is asymmetric in that overvaluation of BRICS currencies deteriorate the current account and undervaluation does improve it. Moreover, the results of the empirical analysis advocate the use of real effective exchange rate as an effective macroeconomic policy instrument to enhance relative export competitiveness in BRICS. Further studies in this area should examine the impact of marginal propensity to import and how each country’s propensity to import affects the current balance given episodes of overvaluation and undervaluation.
    Keywords: currency misalignment, current account, feasible generalised least square
    JEL: C11 C5 C51 F14 F32
    Date: 2021–05–12
  36. By: Matoshi, Ruzhdi; Mulaj, Isa
    Abstract: Transition economics was and still is a topic mostly associated with the post-communist countries in Central and Eastern Europe (CEE). The cause of its emergence as a theory was not purely economic – the spearhead was politics – leading to the collapse of the Eastern Block, to be followed by the disintegration of three federal states: Soviet Union, Yugoslavia, and Czechoslovakia, with many civil wars and ethnic conflicts. The experience proved a relaxation to the Western liberal developed democracies as it strengthened the belief of their superior model which the transition economies want to embrace. First of all, the transition provided a new opportunity for interaction between European East and West. On the eve of its 30th anniversary, with more than half of these countries experiencing “the end of transition” and joining the European Union (EU) while the rest considered not yet meeting the “standards”, another transition is on the way, and this one not going into but coming out from the EU, Brexit respectively. Just like in former communist countries, it too, originated from politics, namely the results of 23.06.2016 referendum results that decided for the withdrawal of the United Kingdom (UK) from the EU, a move that is about to force considerable changes in the economy, already labelled as “transition.” Although an intensive phase of research and debate is underway, the aim of this paper is to explore the implications of Brexit in terms of its international economics and contribute to a more general theory of transition economics which so far has been reserved for, and as a reference to, post-communist countries in CEE.
    Keywords: CEE, transformation, transition economics, Brexit, EU, general theory
    JEL: F15 N44 O33 P16 P27 P33
    Date: 2020–10–30
  37. By: Julien Martin (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, UQAM - Université du Québec à Montréal = University of Québec in Montréal); Isabelle Mejean (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Inés Picard (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Benoît Schmutz (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this note, we use China's ban of plastic waste imports in 2017 as a natural experiment of a sudden drop in the world demand for plastic waste. We study how French exporters have adjusted, both in terms of quantities exported, destinations, and prices. After the ban, exports to other Asian countries increased sharply, but this redirection appears to be short-lived, unlike redirection towards other EU countries. In addition, there is suggestive evidence of a polarization of the quality of plastic waste exports between destinations. In light of our findings, we discuss the possible impact of new European regulations that will drastically reduce European exports of plastic waste.
    Date: 2021–04
  38. By: Fouka, Vasiliki (Stanford University); Mazumder, Soumyajit (Harvard University); Tabellini, Marco (Harvard Business School)
    Abstract: How does the arrival of a new minority group affect the social acceptance and outcomes of existing minorities? We study this question in the context of the First Great Migration. Between 1915 and 1930, 1.5 million African Americans moved from the US South to Northern urban centers, which were home to millions of European immigrants arrived in previous decades. We formalize and empirically test the hypothesis that the inflows of Black Americans changed perceptions of outgroup distance among native-born whites, reducing the barriers to the social integration of European immigrants. Predicting Black in-migration with a version of the shift-share instrument, we find that immigrants living in areas that received more Black migrants experienced higher assimilation along a range of outcomes, such as naturalization rates and intermarriages with native-born spouses. Evidence from the historical press and patterns of heterogeneity across immigrant nationalities provide additional support to the role of shifting perceptions of the white majority.
    Keywords: immigration, assimilation, Great Migration, race, group identity
    JEL: J11 J15 N32
    Date: 2021–05
  39. By: Jeanne, Olivier; Son, Jeongwon
    Abstract: In theory, we should expect tariffs to be partially offset by a currency appreciation in the tariff-imposing country or by a depreciation in the country on which the tariff is imposed. We find, based on a calibrated model, that the tariffs imposed by the US in 2018-19 should not have had a large impact on the dollar but may have significantly depreciated the renminbi. This prediction is consistent with a high-frequency event analysis looking at the impact of tariff-related news on the dollar and the renminbi. We find that tariffs explained at most one fifth of the dollar effective appreciation but around two thirds of the renminbi effective depreciation observed in 2018-19.
    Keywords: Dollar; Exchange Rates; Renminbi; tariffs
    JEL: F31 F41
    Date: 2020–08
  40. By: Masahito Ambashi (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: Foreign direct investment (FDI) and trade will continue to play an important role in the assimilation of the latest technologies within the Association of Southeast Asian Nations (ASEAN) Member States (AMS). However, it is also necessary for ASEAN firms to enhance their own innovation capabilities to create new business opportunities. Fostering this innovation requires developing human resources by not only equipping workers with appropriate knowledge and the skills needed by the manufacturing industry, but also nurturing ‘technology entrepreneurs’ who can innovate using the latest information and communication technology. While AMS can accelerate technology adoption by strengthening networks, particularly with developed countries, they also need to create unique ‘product innovation’ of goods and services in addition to cost-reducing ‘process innovation.’ With respect to national innovation systems, AMS can use ‘leapfrogging’ (skipping development stages) and ‘feedback’ (introducing advanced technologies into old industries) development strategies based on the Fourth Industrial Revolution (4IR) and establish an ‘innovation niche’ that is competitive, attractive, and unique to the rest of the world. This policy brief presents goals, analyses, and policy recommendations on human resource development, technology adoption, and innovation to achieve quality growth in the era of new industrialisation.
    Date: 2020–07–16
  41. By: Javier Garcia-Bernardo (Tax Justice Network, CORPTAX, Charles University in Prague); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: We exploit the new multinational corporations´ country-by-country reporting data with unparalleled country coverage to study profit shifting to tax havens. We show that a logarithmic function is preferable to linear and quadratic ones for modelling the extremely non-linear relationship between profits and tax rates. Using this methodology, we reveal that multinational corporations shifted US$1 trillion of profits in 2016 and that those headquartered in the United States and China did so most aggressively. We establish that the Cayman Islands is the largest tax haven, whereas countries with lower incomes tend to lose more tax revenue relative to total tax revenues.
    Keywords: multinational corporation, corporate taxation, profit shifting, effective tax rate, country-by-country reporting, global development
    JEL: F23 H25 H26 H32
    Date: 2021–05
  42. By: Mercer-Blackman , Valerie (World Bank); Camingue-Romance, Shiela (Asian Development Bank)
    Abstract: How sensitive is inward foreign direct investment (FDI) from the United States (US) to developing Asia to corporate tax rates? This is a relevant question given the sweeping US tax bill effective in 2018, which provided incentives for US corporations abroad to repatriate profits. Using panel data at the country and sector level, we find that the effects are quite different across sectors, and that controlling for other factors such as market size, costs, openness, and the business environment, the corporate income tax rate differential is generally not statistically significant, including for global value chain-related FDI to developing Asia. It does have a small effect on service sectors such as financial intermediation and business services where sunk costs are small.
    Keywords: corporate tax; FDI; fiscal policy; foreign investment; Tax and Jobs Act; sectors
    JEL: F21 H25 H30
    Date: 2020–12–21
  43. By: Obstfeld, Maurice
    Abstract: Recent events have highlighted areas of conflict between economic integration with the outside world and the demands of domestic electorates. Historically, the tradeoffs have always become sharper in periods of crisis, such as the present. After reviewing the U-shaped progress of globalization since the nineteenth century, this essay reconsiders John Maynard Keynes's views on "national self-sufficiency" in the early 1930s. I argue that the postwar Bretton Woods system he helped to create evolved from those views as a balanced middle ground between market forces and governments' desires for domestic economic stability. The gradual erosion of that balance in favor of the market has helped produce discontent over globalization and more nationalism in politics. Enhanced multilateral cooperation in key areas offers the hope of supporting globalization while better meeting voters' aspirations. Despite daunting political obstacles to global cooperation these days, collective action challenges in areas like climate, cybersecurity, and health â?? alongside economic policy â?? are only becoming more pressing over time.
    Keywords: deglobalization; Globalization; multilateralism; Nationalism; populism
    JEL: F52 F53 F60 N20 N40
    Date: 2020–07
  44. By: Cesar Martinelli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Cynthia Boruchowicz (University of Maryland); Susan W. Parker (University of Maryland, Center for Research and Teaching in Economics (CIDE))
    Abstract: We study the effects of mass migration from Venezuela on Peruvian labor markets. In 4239–423:, about :92,222 Venezuelans migrated to Peru; about :6% settled in the Lima metropolitan area, where the percentage of Venezuelans in the working age population went from nil to over 32%. Migrants were more educated in average than the local labor force, and did nor face large cultural barriers. We propose a simple assignment model of the labor market, which suggests that migration will lead to a reallocation of local workers toward lower skill jobs. Using synthetic control methods, and comparing Lima with a group of other Peruvian cities, we find evidence of adjustment in occupational structure in the direction predicted by the model. Overall, market adjustment to a large shock in labor supply was strikingly smooth.
    Date: 2021–05
  45. By: Kavetsos, Georgios; Kawachi, Ichiro; Kyriopoulos, Ilias; Vandoros, Sotiris
    Abstract: We study the effect of the Brexit referendum result on subjective well-being in the United Kingdom. Using a quasi-experimental design, we find that the referendum’s outcome led to an overall decrease in subjective well-being in the United Kingdom compared to a control group. The effect is driven by individuals who hold an overall positive image of the European Union and shows little signs of adaptation during the Brexit transition period. Economic expectations are potential mechanisms of this effect.
    Keywords: Brexit; election; happiness; referendum; subjective well-being
    JEL: D72 I30 I31 I38
    Date: 2021–04–01
  46. By: Camara K. Obeng (University of Cape Coast, Ghana); Peter Y. Mwinlaaru (University of Cape Coast, 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
  47. By: Bakalova, Irina; Berlinschi, Ruxanda; Fidrmuc, Jan; Dzyuba, Yuri
    Abstract: The COVID-19 pandemic has led to a substantial increase in the prevalence of working from home among white-collar occupations. This can have important implications for the future of the workplace and quality of life. We discuss an additional implication, which we label reverse brain drain: the possibility that white-collar migrant workers return to live in their countries of origin while continuing to work for employers in their countries of destination. We estimate the potential size of this reverse flow using data from the European Labor Force Survey. Our estimates suggest that the UK, France, Switzerland and Germany each have around half a million skilled migrants who could perform their jobs from their home countries. Most of them originate from the other EU member states: both old and new. We discuss the potential economic, social and political implications of such reverse brain drain.
    Keywords: Covid-19,working from home,return migration,brain drain
    Date: 2021
  48. By: Hsu, Po-Hsuan; Taylor, Mark P; Wang, Zigan
    Abstract: We carry out a large-scale investigation of the out-of-sample profitability of in-sample profitable carry trade strategies, using foreign exchange data for 48 countries spanning a period from 1983 to 2015 and employing reality check and stepwise tests to correct for data-snooping bias (the factor of luck in model selection). Carry trade strategies chosen as profitable in one period are generally not profitable in an ensuing out-of-sample sample period, especially after correcting for data-snooping, and even after allowing for learning and stop-loss strategies. Any evidence of consistency in carry trade profitability that is found is concentrated in a relatively brief historical period, 2001-2005. We further investigate particular currency pairs that may drive the out-of-sample profitability during this period, and find their performance to be unstable in general. Our findings thus highlight the instability and the factor of luck in generating profits from carry trades.
    Keywords: carry trade; Data-snooping bias; foreign exchange
    JEL: C53 F31 G15
    Date: 2020–07
  49. By: Spirin, Victor
    Abstract: Suppose two countries, A and B, manufacture aircraft components – engines and tires. Suppose country A has a comparative advantage in engine manufacturing, perhaps for a simple reason of being situated closer to a source of titanium which is used in fan blade manufacturing. And suppose that country B has comparative advantage in tires, perhaps because of being geographically closer to an oil resource. According to the Ricardian theory, country A should specialize in engines and country B should focus solely on tires. But suppose that a set of engines costs ten million dollars, while a set of tires, including all replacement tires needed over the service life on an aircraft, costs less than one hundred thousand. Will country B benefit from this Ricardian specialization? We aim to provide the simplest possible two-country two-commodity model with the smallest possible set of assumptions, that shows that the specialization does not always benefit all trade participants. Instead, one of the participants may get a disproportionate benefit from trade at the expense of the other.
    Keywords: Comparative Advantage, Developing Economies
    JEL: F6 F62 F63
    Date: 2021–05–17
  50. By: Campos, Nauro F.; Coricelli, Fabrizio; Moretti, Luigi
    Abstract: This paper studies the effects on productivity of integration deepening. Our identification strategy uses the 1995 European Union (EU) enlargement when all four candidate countries joined the European Economic Area (economic integration) but only one (Norway) chose not to join the EU (institutional integration). Using synthetic control methods on sectoral and regional data, we find that had Norway chosen institutional instead of only economic integration in 1995, the average Norwegian region would have experienced a yearly average productivity growth increase of about half a percentage point. We also find these losses are larger for industry than for other sectors.
    Keywords: economic integration; European Union; Institutional integration
    JEL: C33 F15 F55 O43 O52
    Date: 2020–07
  51. By: Afees A. Salisu (Centre for Econometric & Allied Research, University of Ibadan, Ibadan, Nigeria); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield, 0028, South Africa); Sayar Karmakar (Department of Statistics, University of Florida, 230 Newell Drive, Gainesville, FL 32601, USA); Sonali Das (Department of Business Management, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: In this paper we develop a proxy for global uncertainty based on the volatility of gold market over the annual period of 1311 to 2019, and then use this proxy metric to forecast historical growthrates for eight advance economies namely, France, Germany, Holland, Italy, Japan, Spain, the United Kingdom (UK), and the United States (US). We find that for the within-sample period, uncertainty negatively impacts output growth, but more importantly, over the out-of-sample period, gold market volatility produces statistically significant forecasting gains. Our findings are robust to an alternative measure of uncertainty based on the volatility of the changes in long-term sovereign real-rates over 1315 to 2019. These historical results have important implications for investors and policymakers in the current context in which high frequency gold price data is available.
    Keywords: Historical output growth, advance economies, gold market volatility, forecasting
    JEL: C22 C53 E32 Q02
    Date: 2021–05
  52. By: Mundt, Philipp; Cantner, Uwe; Inoue, Hiroyasu; Savin, Ivan; Vannuccini, Simone
    Abstract: The idea that market selection promotes survival and expansion of the 'fittest' producersis a key principle underlying theories of competition. Yet, despite its intuitive appeal, thehypothesis that companies with superior productivity also exhibit higher growth lacks em-pirical support. One reason for this is that companies are not 'islands' that produce goodsand services in isolation but depend on their suppliers in value chains, implying that exces-sive growth can also originate in the superior productive performance of these value-chainpartners. Neglecting these dependencies in empirical tests of the selection hypothesis leadsto measurement errors and may impair the identification of competition for the market.In this paper, we use data from the World Input-Output Database to capture these globalvalue-chain relationships in an empirical test for market selection, studying competitionbetween country-sectors for a global market share in different economic activities. Com-pared to the conventional view that focuses on individual productivities, our value-chainperspective on the productivity-growth nexus provides stronger empirical support for mar-ket selection. This suggests that the scope of selection reaches beyond the level of individualproducers and requires a systemic analysis of production networks. Our findings contributeto a better understanding of the determinants of selection in competitive environments andalso represent a novel application of global value-chain data.
    Keywords: competition,country-sector dynamics,input-output analysis,replicator dynamics,productivity decomposition
    JEL: C67 D22 L14 L16 L20
    Date: 2021
  53. By: Foellmi, Reto; Jäggi, Adrian; Schnell, Fabian
    Abstract: How does the exchange rate affect the way that firms adjust their prices? We use quarterly firm and product price data, underlying the Swiss sectoral consumer price index. The data allows us to trace the pricing decisions of the identified firm over time and as a function of the distance to the border distance. The appreciation of the Swiss franc results in an increase in the probability of both positive and negative price changes. When a firm is more closely located to the border, the probability of a negative price change is higher. On the intensive margin, we document that an appreciation of the Swiss Franc leads to price reductions, and that this effect is stronger the closer a firm is located to the nearest border. However, for firms located far away from the border, an appreciation of the Swiss Franc leads to no price reductions or even increases. We rationalise this by the relative strengths of income and substitution effects. The substitution effect dominates for firms close to the border, while the income effect dominates for firms located further away from the border.
    Keywords: Distance to Border; Exchange rate; Price Setting Behavior of Firms
    JEL: E30 E31
    Date: 2020–07
  54. By: Klein, Alexander; Persson, Karl Gunnar; Sharp, Paul
    Abstract: The reasons for the famous agrarian unrest in the United States between 1870 and 1900 remain debated. We argue that they are, at least in part, consistent with a simple economic explanation. Falling transportation costs allowed for the extension of the frontier, where farmers received the world price minus the transaction costs involved in getting their produce to market. Many perceived these costs to be unfairly large, owing to the perceived market power of rail firms and the discriminatory practices of middlemen, with farmers closer to the frontier most affected. Consistent with this, we find that the protest, as measured by vote shares for the Populists in the 1892 Presidential elections, is negatively related to wheat prices, transportation costs, and rail network density.
    Keywords: agriculture; Globalization; Grain Invasion; populism; United States
    JEL: F6 N51 N71
    Date: 2020–07
  55. By: Eckardt, Matthias; Kappner, Kalle; Wolf, Nikolaus
    Abstract: Attempts to constrain the spread of Covid-19 included the temporal reintroduction of travel restrictions and border controls within the Schengen area. While such restrictions clearly involve costs, their benefits have been disputed. We use a new set of daily regional data of confirmed Covid-19 cases from the respective statistical agencies of 18 Western European countries. Our data starts with calendar week 10 (starting 2nd March 2020) and extends to calendar week 17 (ending 26th April 2020), which allows us to test for treatment effects of border controls. We use Poisson models with fixed effects and controls for the stringency of national measures, as well as a Bayesian spatio-temporal specification using an integrated nested Laplace approximation (INLA) to take unobserved spatio-temporal heterogeneity into account. Both approaches suggest that border controls had a significant effect to limit the pandemic.
    Keywords: Border effects; COVID-19; INLA
    JEL: C33 I18 R23
    Date: 2020–08
  56. By: Helios Herrera (University of Warwick [Coventry], CEPII - Centre d'études prospectives et d'informations internationales); Antonin Macé (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Matias Nùnez (CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz], IP Paris - Institut Polytechnique de Paris, GENES - Groupe des Ecoles Nationales d'Economie et Statistique - Institut national de la statistique et des études économiques (INSEE))
    Abstract: We study how door die threats ending negotiations affect gridlock and welfare in the ratification of deals/treaties between opposing parties. Failure to agree in any period, as usual, implies a status-quo disagreement payoff and a continuation of the negotiation: a renegotiated amended agreement to be ratified next period. However, under brinkmanship, agreement failure in any period may precipitate instead a "hard" outcome, worse than the status-quo and than any feasible agreement. Such brinkmanship threats improve the scope for agreement, but also entail costs as we show. With symmetric parties only more extreme brinkmanship is beneficial: when an agreement is unlikely to begin with mild brinkmanship only reduces welfare by increasing the equilibrium chance of a hard outcome. If a party is advantaged it typically benefits even from mild threats, as the expected agreement shifts in its favor, while only extreme brinkmanship threats can benefit the disadvantaged party.
    Keywords: Hard Brexit,Gridlock,Government Shutdown,Collective Search
    Date: 2021–05
  57. By: Martinez Meza, Santiago; Olivares Puente, Cindy; Reyna Balderas, Jaime; Solorio Corona, Marco
    Abstract: From a theoretical point of view, competitiveness is raised more in terms of increase and mechanisms for obtaining it are not specified, as well as, it is continuously limited to productivity, foreign investment, training, among others. Moreover, in the last 20 years in Tamaulipas, a system of successful municipalities such as those of the border strip, the capital of the state and the southern metropolitan area has been consolidated. The relationship between the agglomeration and the NGE is good for productivity, that is, economic activity works better in this way, than when they are scattered and fragmented. Mexico’s manufacturing sector generates about 20% of GDP. Mexico as one of the countries with major investment and especially more by the United States thanks to NAFTA, that is not enough to grow and develop as there are bureaucratic problems, crime, corruption control and level of education.
    Keywords: Globalization, competitiveness, development.
    JEL: A1 E0
    Date: 2021–05–21
  58. By: Espinoza, Mariela; Lopez, Alma S.; Torres, Victor H.; Zamora, Cesar E.
    Abstract: Abstract- The objective of the study is to analyze and conclude on the different topics that involve the relationship between globalization in companies and the competitiveness reach they generate, and it is also analysed by, state of art as this is to make use of research and opinions already analyzed along with personal opinion that is shared and a new more detailed research on the issues would be reached on a new outcome, which could defined in the discovery of the importance in the administration of companies or the reasons for the internationalization, which are defined in the conclusion of the issues that are financial globalization, be said as the opening mass markets or the reasons companies have for seeking internationalization, or the factors lead them to choose to form economic blocs or agglomerations.
    Keywords: Keywords— Globalization, Enterprises, Competitiveness, Economic crowds, Markets.
    JEL: F6
    Date: 2021–05–20
  59. By: Santillán, Irma; Narro, Stephanie
    Abstract: The study and analysis of various topics is presented, with the appropriate and formal structure of competitiveness indices in order to measure the elaboration of the Graduate School of Public Administration and Public Policy of the Monterrey Institute of Technology and Higher Studies. So that the international ones, these indices are characterized by using relevant information according to the topics to be investigated, also eight studies have been published in the last 18 years, on the other hand there is another analysis of national competitiveness that is presented annually by the company regional consultant which provides information to make decisions through its systemic competitiveness index of the federal entities. Thus, alliances between micro-enterprises increase certain elements such as skills, purchasing power and experience; on the other hand, costs in shared purchases are reduced which generate significant savings in the acquisition of inputs and disparities in regional development in Tamaulipas, Mexico, however, it promotes perspectives on globalization that equate it to the process of economic internationalization, not However, from a functional perspective, Scholte and Dicken maintain that globalization gives rise to processes that are qualitatively different from internationalization. Mexico promotes university social service as a strategy of continuous improvement through experience. It has also developed a series of studies on this situation, one of the most important is that of persons with disabilities in Mexico, a census vision, in which it presents specific characteristics and current statistics of this condition, according to data from 2007, Mexico is located in the category of high human development, very close of countries like Uruguay and Chile and staying above Latin American countries like Brazil and Peru. The international organization for standardization mentions that in the reference framework introduced in the iso 14001 standard, there are clauses that increase some benefits to current and new users, supporting them to understand more fully the importance of a system approach.
    Keywords: Acquisition, organization, indices, economics, statistics, focus.
    JEL: A1
    Date: 2020–05–19

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