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on International Trade |
| By: | George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg |
| Abstract: | We study the growth of Chinese imports into the United States from autarky during 1950-1970 to about 15 percent of overall imports in 2008, taking advantage of the rich heterogeneity in trade policy and trade growth across products during this period. Central to our analysis is an accounting for the dynamics of trade, trade policy, and trade-policy expectations. We isolate the lagged effects of past reforms and the current effects of uncertainty about future reforms. We build a multi-industry, heterogeneous-firm model with a dynamic export participation decision to estimate a path of trade-policy expectations. We find that being granted Normal Trade Relations (NTR) status in 1980 was largely a surprise and that, in the early stages, this reform had a high probability of being reversed. The likelihood of reversal dropped considerably during the mid 1980s, and, despite China's accession to the World Trade Organization (WTO) in 2001, changed little throughout the late 1990s and early 2000s. Thus, although uncertainty depressed trade substantially following the 1980 liberalization, much of the trade growth that followed China's WTO accession was a delayed response to previous reforms rather than a response to declining uncertainty. |
| JEL: | F1 F14 F62 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29122&r= |
| By: | Berthou Antoine,; Mayer Thierry,; Mésonnier Jean-Stéphane. |
| Abstract: | In this paper, we show that exporters react more strongly to a cut in tariffs by a distant country when their banks have already been specializing in funding exports to this country. To make our case, we build upon a theoretical model where an informational advantage provided by the exporter's bank results in a lower distribution cost in the destination country. We test the implications of this model for French exporters using the 2011 free trade agreement between the European Union and South-Korea as a quasi-natural experiment. We measure a bank's specialization in Korea using granular information on bank-firm credit lines and firm-level exports in the years preceding the agreement. We assess how customers of different banks react to this trade liberalization episode using detailed information on the bilateral tariff cuts and disaggregated data on French export flows at the firm-product level. We find robust evidence that the specialized lenders help exporters to respond more strongly to changes in tariffs. The effect is strong for all firms along the extensive margin, but only for less productive exporters along the intensive margin. |
| Keywords: | Trade Elasticities, Bank Specialization, Trade Liberalization. |
| JEL: | F14 G21 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:814&r= |
| By: | Dünhaupt, Petra; Herr, Hansjörg |
| Abstract: | In the last decades in particular, national governments as well as development agencies and international organizations have increasingly turned to participation in global value chains (GVCs) as a development strategy. However, whether the positive development effects of integration are large enough to warrant trade liberalization cannot be answered in a straightforward manner. In this article, we show how development recommendations by international institutions and Western governments have changed since World War II and now ultimately recommend integration into GVCs. Deregulation and liberalization of international trade and capital flows have fueled two opposing trends, which also affect GVCs: on the one hand, there is increasing concentration at the corporate level. On the other hand, globalization has resulted in more countries participating in international trade including via industrial production. Both developments have led to multinationals being able to expand their rent-seeking opportunities while also reducing production costs, especially for simple manufactured goods. Today, it is no longer sufficient for a country to industrialize in order to catch up with the rest of the world, as the prices for industrial goods and quality of productions have fallen tremendously in some cases, at least in comparison to developed countries. Integration into GVCs seems to provide only minimal macroeconomic benefits beyond the positive effects for individual companies and sectors. Industrial policy therefore seems indispensable for catch-up development. |
| Keywords: | Global Value Chains,economic development,industrial policy,export market share concentration,import price development |
| JEL: | B27 F13 F63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1652021&r= |
| By: | Glenn Jenkins (Queen's University); Shahrzad Safaeimanesh (Eastern Mediteranean University) |
| Abstract: | Trade facilitation is important for the South African Customs Union (SACU) countries because the expansion of international trade is a priority to enhance their economic growth. Unfortunately, the high trade compliance costs facing importers and exporters operating in SACU are in conflict with this objective. This article aims to quantify the annual economic welfare gains that the member countries of SACU could realise from reforms that would reduce the documentary and border compliance time and costs. We use a partial equilibrium welfare economics framework of up-to-date sets of general equilibrium estimates of the import demand and the export supply elasticity in a country. The impact on the volume of trade flow and economic welfare is quantified to reduce documentary and border compliance time and trade compliance costs. The economic welfare changes from reducing the documentary and border compliance time and costs for imports and exports would be between US$2.2 billion and US$3.7 billion (2018 prices), or between 0.54% and 0.90% of GDP of the SACU countries. The economic welfare gains from reducing the excess administrative costs in imports and exports of SACU members would be between US$2.2 billion and US$3.7 billion (2018 prices), or between 0.54% and 0.90% of the GDP of the SACU. The most important reforms needed to realise these cost savings, including a single window administrative structure. In this case, both customs, health, welfare, and controls, as well as the payment of all duties, taxes, and licenses are handled by a single administrative office. Failure to move fast regarding such changes would have a negative impact on the well-being of SACU members. |
| Keywords: | trade facilitation, Southern Africa Customs Union (SACU), South Africa, trade compliance costs, trade reform, economic welfare gains |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1462&r= |
| By: | Minford, Patrick (Cardiff Business School); Xu, Yongdeng (Cardiff Business School); Dong, Xue (Zhejiang University of Finance and Economics) |
| Abstract: | We carry out an indirect inference test of two versions of a computable general equilibrium (CGE) model of world trade. One of these, the ‘classical’ model, is well-known as the Heckscher-Ohlin-Samuelson model of world trade, in which countries trade homogeneous products in world markets and produce according to their comparative advantage as determined by their resource endowments. The other, the ‘gravity’ model, assumes products are differentiated by geographical origin, so that trade is determined largely by demand and relative prices differing according to distance; trade in turn affects productivity through technology transfer. These two CGE models of world trade behave in very different ways and predict quite different effects for trade policy, underlining the importance of discovering which best fits the facts of international trade. Our findings here are that the classical model fits these facts fairly well in general, while the gravity model is largely strongly rejected by them. |
| Keywords: | Bootstrap, indirect inference, gravity model, classical trade model, trade |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2021/20&r= |
| By: | Masahiko Tsutsumi (Institute of Economic Research Center for Intergenerational Studies, Hitotsubashi University); Masahito Ambashi (Waseda University, Economic Research Institute for ASEAN and East Asia (ERIA)); Asuna Okubo (Deloitte Tohmatsu Consulting LLC) |
| Abstract: | This paper aims at evaluating the economic impacts of the various Indonesian free trade agreement (FTA) strategies in enhancing export-led growth. The potential impact of abolishing tariffs on three key sectors or commodities – (i) oil seeds, vegetable oils, and fats (VegOil); (ii) fishery and processed foods (FisheryPFD); and (iii) textile and apparel products (TextWapp) – with three trading partners – the European Union (EU28), members of the Gulf Cooperation Council (GCC), and India – is calculated using a computable general equilibrium model. To explore the long-term influence, we also take into account capital deepening and technological spillovers induced by trade. We derive the following implications from the exercise. First, amongst the three key sectors or commodities, TextWapp generates the largest spillover effects in the economy, as it uses more intermediary inputs. By contrast, although Indonesia has a comparative advantage in VegOil, that sector does not create large spillover effects in the economy. Second, amongst the three trading partners, it would be best to liberalise trade barriers further with the EU28 and India since India would bring gains to Indonesia by correcting a large price distortion in VegOil, while the EU28 would do so through TextWapp as well as VegOil. Since the initial trade volume of the GCC with Indonesia is not large, we might underestimate gains from trade with that region. Finally, the economic merits of abolishing tariffs are generated primarily through improvement of resource allocation in the affected countries. Improved resource allocation generates additional income, which increases imports. Without these income effects, Indonesia can only increase its exports via substitution effects. |
| Keywords: | Indonesia, tariff, trade policy, computable general equilibrium model |
| JEL: | F13 F17 F51 O24 |
| Date: | 2021–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2019-16&r= |
| By: | Hossain, Ekram; Dechun, HUANG; ZHANG, Changzheng; Neequaye, Ebenezer Nickson; Van, Vu Thi; Ali, Mohammad |
| Abstract: | This paper aims to examine export, import and trade intensity, export specialization index, Herfindahl-Hirschman index for bilateral concentration and diversification indices to analyze the specializations, structure and trends of deficit in bilateral trade between Bangladesh and China from 1995 to 2018 and policy recommendations in this regard. The results reveal that the gap of export and import intensity between Bangladesh and China is widening rapidly perennial. The export specialization indices expose very significant outcomes where among the analyzed 16 sectors; 6 sectors exhibit high specialization, 3 sectors demonstrate medium, 3 sectors exhibit low and the rest of the 4 sectors disclose no specialization for Bangladesh’s export to China. The findings of the Herfindahl-Hirschman Index (HHI) reveal that from 1995 to 2010 the export of Bangladesh to China concentrated within few sectors but from the year 2011 to 2018 the export has been reclassifying steadily into diversification. The overall analysis of the indices suggests the necessity to be improved of the level of intra-industry trade between China and Bangladesh. Moreover, emphasis should be given to the sectors having a high specialization that endure the capacity to narrow the trade deficit. Furthermore, the export baskets of Bangladesh to China require to be diversified. Hereafter, various measures and implications are also suggested in the policy recommendation for further improvement. |
| Date: | 2021–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:7j9vh&r= |
| By: | Itakura, Ken; Lee, Hiro |
| Abstract: | Before the Trans-Pacific Partnership (TPP) entered into force, the United States withdrew from the trade accord. Eleven other TPP signatories decided to revive the agreement, which led to the implementation of the Comprehensive and Progressive Agreement for TPP (CPTPP). The objectives of this paper are to estimate economic welfare effects under alternative scenarios of TPP/CPTPP, to evaluate the extent of losses to the US from its withdrawal from TPP and expected gains from rejoining the Trans-Pacific trade accord, and to examine whether the US economy would have to undergo extensive sectoral adjustments from its participation. We employ a dynamic computable general equilibrium (CGE) model to examine these issues. The results suggest that the US loses an opportunity to gain 0.4 percent in its economic welfare by withdrawing from TPP, but it would be able to recover most of its projected welfare gains by reengaging with CPTPP. Since sectoral output adjustments in the US are small, its adjustment costs from participation in CPTPP would be limited. In addition, there exist political incentives for the US to become a member of this trade accord. |
| Keywords: | TPP, CPTPP, US, GTAP, CGE model |
| JEL: | F13 F14 F15 F17 |
| Date: | 2021–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109133&r= |
| By: | Leyla D. Karakas; Nam Seok Kim; Devashish Mitra |
| Abstract: | Using six waves of the Swedish National Election Studies (SNES) survey data, we investigate the determinants of attitudes towards globalization barriers (trade and immigration) and how important these attitudes are in how people vote. In line with the existing results in the literature, we find that more educated and richer voters support freer trade and more immigration. We also find that conservative voters in Sweden are more likely to prefer freer trade but higher immigration barriers. Once various economic and demographic determinants of globalization barrier preferences along with voters’ ideologies on a liberal-conservative spectrum are controlled for in the analysis of voting behavior, trade barrier preferences lose their statistical significance while attitudes towards immigration barriers remain significant. This suggests that immigration attitudes affect voting behavior through channels involving identity-driven factors that are different from the channels through which more traditional electoral issues, such as trade barriers, work. Focusing on the anti-globalization Swedish Democrats, we confirm that voters with a greater preference for barriers to immigration were more likely to switch their votes to this party from the 2014 to the 2018 election. |
| Keywords: | globalization, trade, immigration, elections, voting, survey data, Sweden |
| JEL: | D72 F16 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9236&r= |
| By: | Paul Lavery; José María Serena Garralda; Marina-Eliza Spaliara |
| Abstract: | This paper examines the impact of private equity buyouts on the export activity of target firms. We exploit data on UK firms over the 2004-2017 period, and use difference-in-differences estimations on matched target versus non-target firms. Following private equity buyouts, non-exporting firms are more likely to begin exporting, and target firms are likewise more likely to increase their value of exports and their export intensity. Evidence from split-sample analysis further suggests that these patterns are consistent with private equity investors relaxing financial constraints and inducing productivity improvements. |
| Keywords: | private equity buyouts, exporting, financial constraints, transactions |
| JEL: | G34 G32 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:961&r= |
| By: | Askandarou Diallo,; Jacolin Luc,; Isabelle Rabaud. |
| Abstract: | This paper investigates the relationship between FDI and private investment in Sub-Saharan Africa (SSA), using a sample of 40 countries over 1980-2017. To disentangle short term from long-term dynamics, our empirical analysis is based on Pooled Mean Group (PMG), Mean Group (MG) and Dynamic Full Effects (DFE) models. We find that FDI has little effect on private investment in the short run but significant crowding-in effects in the long-run: a one percentage point increase of the share of FDI in GDP leads to a 0.29% rise in private investment, in the long run. Our results also show that FDI interacts with public domestic investment to boost these positive effects. Finally, we show that the impact of FDI on domestic private investment is stronger in non-natural resource exporting diversified countries as opposed to non-diversified commodity exporters. |
| Keywords: | Financial Development, Domestic Investment, FDI, Crowding-in/Crowding-out Effects. |
| JEL: | G11 O11 O16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:816&r= |
| By: | Crescenzi, Riccardo; Ganau, Roberto; Storper, Michael |
| Abstract: | Rising political skepticism on the benefits of global economic integration has increased public scrutiny of the foreign activities of domestic firms in virtually all advanced economies. Decisions to invest in new activities abroad are seen by some commentators as potentially detrimental to domestic employment. We contribute to this debate by scrutinizing the relationship between outward ‘greenfield’ Foreign Direct Investments (FDI) and local employment levels. The analysis, at the scale of USA Economic Areas, finds a generally positive link between outward investment and local employment, but with an important range of differences across regions and sectors. Less developed regions benefit the most from the positive returns of outward FDI, and, particularly, from outward FDI if it is undertaken by firms in high-tech manufacturing and services industries. But there is a downside, in the form of increasing intra-regional inequalities between high-skilled and low-skilled workers in these areas. |
| Keywords: | internationalization; outward FDI; employment; economic areas; USA; The research leading to these results has received funding from the European Research Council under the European Union Horizon 2020 Programme H2020/2014-2020 (Grant Agreement n 639633-MASSIVE-ERC-2014-STG); OUP deal |
| JEL: | R14 J01 |
| Date: | 2021–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:109864&r= |
| By: | Sugata Marjit; Biswajit Mandal |
| Abstract: | In this paper we revisit the influential theory of monopolistic competition and optimum product variety as developed by Dixit and Stiglitz (1977) with applications in international trade by Krugman (1979,1980), by modeling fixed and variable costs of production in terms of underlying use of skilled and unskilled labor in a single good model. This is different from earlier work on multi sector variant of Krugman cum Heckscher-Ohlin-Samuelson model such as Helpman (1981) and others. In our structure factor endowment and factor intensities determine both number of varieties and output per variety in a closed economy mimicking the features of Heckscher-Ohlin-Samuelson model. Differences in factor endowments across countries determine the pattern of trade between varieties and output per variety, which is indeterminate in a standard single good Dixit-Stiglitz-Krugman model. Later we reflect on wage inequality and unemployment providing some interesting results. |
| Keywords: | monopolistic competition, trade, wage inequality, unemployment |
| JEL: | D43 F10 J31 F24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9256&r= |
| By: | Melise Jaud; Madina Kukenova; Martin Strieborny |
| Abstract: | This paper examines the transmission process from finance to the real economy in the context of product-level export survival. We find that conditional on the specific financial needs of exported products, banks and stock markets play distinctive roles in helping exporters survive in foreign markets. Stock markets rather than banks help exporters who lack easily collateralizable tangible assets. Active rather than large stock markets facilitate exports of products requiring high levels of working capital. And the trade credit can act as a substitute only for bank financing and only in the presence of well-established export links. |
| Keywords: | finance and export survival, transmission from finance to real economy, banks versus stock markets |
| JEL: | F14 G10 G21 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2021_14&r= |
| By: | Marcelo Randolfo da Costa Januário (LCA Consultores); Mauro Sayar Ferreira (UFMG) |
| Abstract: | We evaluate the presence of the J-curve and the Marshall-Lerner condition after recognizing that terms of trade respond endogenously to global demand and supply shocks, which we identify from a structural VAR estimated with Bayesian techniques for the Brazilian economy, a small open economy with a strong commodity sector. The J-curve is not observed for total trade, capital goods, or consumption goods, but it is verified for fuel, which Brazil exports and imports. The Marshall-Lerner condition is mostly verified, but the volume exported tends not to behave as expected considering its relation to terms of trade, since global income effect plays a major role for determining the quantum exported. The volume imported reacts as expected based on its relation to terms of trade and domestic GDP, with the last appearing to play the most prominent role. The expansion in the exported volume of capital and consumption goods following an improvement in terms of trade runs against the presence of the Dutch disease, at least in the business cycle frequency. |
| Keywords: | J-curve; Marshall-Lerner condition; terms of trade; global shocks; SVAR |
| JEL: | F14 F41 F62 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td635&r= |
| By: | Melise Jaud; Madina Kukenova; Martin Strieborny |
| Abstract: | We find that foreign investors facilitate efficiency-enhancing structural change in the recipient countries. After countries liberalize their stock markets and allow foreign investors to acquire equity stakes in domestic firms, products that do not correspond to the liberalizing countries' comparative advantage disappear disproportionately faster from their export portfolios. At the same time, the overall long-term export performance of the liberalizing countries improves. Domestic stock market development does not play the same disciplining role in forcing termination of inefficient exports, suggesting a unique role for foreign investors in improving resource allocation in the real economy. |
| Keywords: | financial liberalization and structural change, disciplining role of foreign investors, export dynamics |
| JEL: | G15 F65 O16 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2021_15&r= |
| By: | Van Reenen, John; Bloom, Nicholas; Draca, Mirko |
| Abstract: | In Bloom, Draca and Van Reenen (2016, “BDVR”) we have a set of nine results on the impact of Chinese trade. The first three showed that Chinese trade increased technical change in European firms measured by patents, productivity and IT adoption. The last six showed that Chinese trade led to reallocation towards more technologically advanced firms: those with more patents, higher productivity and IT adoption had faster growth and lower exit rates. Campbell and Mau (2020, “CM”) argue that the effects of Chinese imports on patenting are sensitive to specification changes. This paper focuses on CM’s critique of our count data models – we discuss other aspects of CM in a longer response. |
| Keywords: | OUP deal |
| JEL: | L81 |
| Date: | 2021–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108890&r= |
| By: | Faber, Marius (University of Basel); Sarto, Andrés (NYU Stern); Tabellini, Marco (Harvard Business School) |
| Abstract: | Migration has long been considered one of the key mechanisms through which labor markets adjust to economic shocks. In this paper, we analyze the migration response of American workers to two of the most important shocks that hit US manufacturing since the late 1990s – Chinese import competition and the introduction of industrial robots. Exploiting plausibly exogenous variation in exposure across US local labor markets over time, we show that robots caused a sizable reduction in population size, while Chinese imports did not. We rationalize these results in two steps. First, we provide evidence that negative employment spillovers outside manufacturing, caused by robots but not by Chinese imports, are an important mechanism for the different migration responses triggered by the two shocks. Next, we present a model where workers are geographically mobile and compete with either machines or foreign labor in the completion of tasks. The model highlights that two key dimensions along which the shocks differ – the cost savings they provide and the degree of complementarity between directly and indirectly exposed industries – can explain their disparate employment effects outside manufacturing and, in turn, the differential migration response. |
| Keywords: | migration, employment, technology, trade |
| JEL: | J21 J23 J61 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14623&r= |
| By: | Ahmed, Osama; Glauben, Thomas; Heigermoser, Maximilian; Prehn, Sören |
| Abstract: | Income growth, changing consumer preferences and technological progress are having a transformative effect on global food trade and, in particular, wheat markets. This is evidenced by two main developments: First, the growing demand for wheat in Asia and Africa is increasingly being met by the European Union (EU) and the Black Sea Region (BSR), which have replaced the United States (US) as the major players on the global wheat market. Second, and as a consequence, the Euronext futures market, which reflects the supply and demand fundamentals in the EU and the BSR, is becoming more important for international wheat price discovery. In light of these two changes, the EU and the BSR must take more responsibility for ensuring global food security and combating hunger and malnutrition. To achieve this, greater international cooperation is required, in particular between the big Western and Eastern economic powers. Unrestricted international trade is vital to ensure sufficient supply of food worldwide, while escalating economic sanctions and countersanctions endanger food security, especially in importdependent regions. Public debate on trade and economic sanctions must therefore be more objective and better take into account both regional and global needs. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamopb:41e&r= |
| By: | Killian Foubert; Ilse Ruyssen (-) |
| Abstract: | Terrorism is a global phenomenon with devastating consequences for the individuals involved and society in general. The adverse impacts of terrorist attacks may act as a driver for migration, both within and across borders. Yet, empirical evidence on the causal impact of terrorism on migration is scarce. The contribution of our paper is twofold. First, we construct various indicators of terrorist activity at a fine level of spatial and temporal granularity, which allow to fairly accurately identify individuals' exposure to terrorist threat. Second, we use these geo- localized indicators to empirically analyse the role played by terrorist attacks in shaping intentions to migrate either internally or internationally. Specifically, we use a multilevel approach combining these indicators with individual survey data on migration intentions in and from 133 countries, spanning the period 2007-2015. Our results indicate that terrorist attacks spur both internal and international migration intentions, though the effect is stronger for the latter. International migration intentions are, however, not necessarily responsive to the frequency of terrorist attacks, but rather to the intensity of these attacks, measured as the number of fatalities and wounded. In addition, the impact on migration intentions is heterogeneous, varying with both individual and country characteristics |
| Keywords: | Migration intentions, Terrorism, International migration |
| JEL: | F22 O15 D74 C23 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:21/1021&r= |
| By: | Erick Rangel González; Luis Fernando López Ornelas |
| Abstract: | Foreign Direct Investment (FDI) is often identified as a driver of economic growth, although there is no consensus on this topic in the international empirical evidence regarding its effect on labor productivity. This document analyzes the effects of Foreign Direct Investment on labor productivity in the manufacturing sector in Mexico during the 2007-2015 period by using panel data and federative entities as unit of analysis. The estimates are calculated by the generalized method of moments, which allows to consider for possible endogeneity problems. The results indicate a positive and statistically significant effect of FDI as a proportion of manufacturing GDP on the growth rate of labor productivity when the latter is estimated with the Manufacturing Labor Productivity Index published by INEGI. Similar results are found if growth in labor productivity is estimated by using manufacturing GDP per worker, although the latter have less statistical power in some specifications. |
| JEL: | J01 J24 Q29 R11 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2021-12&r= |
| By: | Sebastian Galiani; José Manuel Paz y Miño; Gustavo Torrens |
| Abstract: | We develop a simple (incumbent versus entrant) strategic deterrence model to study the economic and geopolitical interactions underlying international trade-related infrastructure projects such as the Panama Canal. We study the incentives for global geopolitical players to support allied satellite countries where these projects are or could potentially be built. We show that even if no effective competitor emerges, the appearance of a geopolitical challenger capable of credibly supporting the entrant has a pro-competition economic effect which benefits consumers all over the world. |
| JEL: | H0 L1 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29026&r= |
| By: | Drinkwater, Stephen (University of Roehampton); Jennings, Colin (King's College London) |
| Abstract: | In this paper we examine three forms of regret in relation to the UK’s hugely significant referendum on EU membership that was held in June 2016. These are, (i) whether leave voters at the referendum subsequently regretted their choice (in the light of the result), (ii) whether non-voters regretted their decisions not to vote (remain) and (iii) whether individuals were more likely to indicate that it is everyone’s duty to vote following the referendum. We find evidence in favour of all three types of regret. In particular, leave voters and non-voters were significantly more likely to indicate that they would vote remain given their chance to do so again and there was a significant increase in the probability of an individual stating that it was everyone’s duty to vote in a general election in 2017 compared to 2015. |
| Keywords: | EU referendum, Brexit, voting, regret, non-voters |
| JEL: | D70 D72 F60 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14589&r= |
| By: | Arye Hillman; Ngo Van Long |
| Abstract: | Immigration policies in western democracies have often been contrary to the policies predicted by the mainstream theory of international economics. In particular, political parties that, according to economic theory, should adopt policies beneficial for lower-income voter-constituencies, have not protected workers from labor-market competition or from a fiscal burden of financing welfare-dependent immigrants. We explain the contradiction by accounting for immigrants as future voters. We identify a political principal-agent problem based on ego-rents from political office. Our theory predicts voter defection from worker-supported political-establishment parties to new-entrant anti-immigration political candidates and parties. We give a hearing to alternative interpretations of the evidence. Les politiques d'immigration dans les démocraties occidentales ont souvent été contraires aux politiques prédites par la théorie dominante de l'économie internationale. En particulier, les partis politiques qui, selon la théorie économique, devraient adopter des politiques favorables aux électeurs à faible revenu, n'ont pas protégé les travailleurs de la concurrence sur le marché du travail ou du fardeau fiscal du financement des immigrés dépendants de l'aide sociale. Nous expliquons la contradiction en considérant les immigrés comme futurs électeurs. Nous identifions un problème politique principal-agent basé sur les rentes de l'ego des fonctions politiques. Notre théorie prédit la défection des électeurs des partis soutenus par les travailleurs vers les nouveaux candidats et partis politiques anti-immigration. Nous donnons une audience aux interprétations alternatives. |
| Keywords: | International migration,labor-market adjustment,immigrant welfare dependency,immigration amnesties,political entry barriers,multiculturalism,ethics of migration,exceptionalism, Migration internationale,ajustement du marché du travail,dépendance à l'aide sociale des immigrés,amnisties de l'immigration,barrières politiques à l'entrée,multiculturalisme,éthique de la migration,exceptionnalisme |
| JEL: | F22 F66 H53 P16 |
| Date: | 2021–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-24&r= |
| By: | Adimora, Katia |
| Abstract: | This article deploys descriptive case study to explore Mexican immigration to the US in the first 100 days of Joe Biden’s presidency. Firstly, the expanding voting size of Latino/Mexican community in the US is being recognised, and consequently, its influence on shaping immigration laws. Secondly, the immigration documents are being analysed to study their implications for Mexican immigration. In some cases, the contrast between Trump’s and Biden’s immigration circumstances are being highlighted. Even though immigration changes have been introduced formally, most of their practical applications are yet to be seen. |
| Date: | 2021–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:7tn8v&r= |
| By: | Lukas Boer; Lukas Menkhoff; Malte Rieth |
| Abstract: | We study the multifaceted effects and persistence of trade policy shocks on financial markets in a structural vector autoregression. The model is identified via event day heteroskedasticity. We find that restrictive US trade policy shocks affect US and international stock prices heterogeneously, but generally negatively, increasing market uncertainty, lowering interest rates, and leading to an appreciation of the US-Dollar. The effects are significant for several weeks or quarters. Regarding shock types, we reveal a dominating trade policy uncertainty shock and a weaker level shock. Chinese trade policy shocks against the US further hurt US stocks. |
| Keywords: | Trade policy shock; structural VAR; stock prices; exchange rates; interest rates; heteroskedasticity |
| JEL: | C32 F13 F51 G10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1956&r= |
| By: | Ibrahim A. Adekunle (Babcock University, Nigeria); Abayomi T. Onanuga (Olabisi Onabanjo University, Ago-Iwoye, Nigeria); Ibrahim A. Odusanya (Olabisi Onabanjo University, Ogun State, Nigeria) |
| Abstract: | In this study, we examine the benefits of financial integrations in four of Africa regional trade blocs: COMESA, ECCAS, CEN-SAD and ECOWAS. We regress de-jure and de-facto indices of financial integration on growth outcome using the dynamic system generalised method of moment and pooled mean group estimation procedure. Findings revealed that total foreign asset and liabilities and foreign liabilities as a percentage of GDP are inversely related to growth outcomes in COMESA. In CEN-SAD, we found that foreign liabilities as a percentage of GDP hurts growth. In ECCAS, growth-financial integration relationship showed that foreign liabilities as a percentage of GDP inhibit real per capita GDP in the long run. In ECOWAS, foreign liabilities as a percentage of GDP is inversely related to real per capita GDP in the long run. Policy implications of our findings were discussed. |
| Keywords: | Financial Integration; Economic Growth; system GMM; Pooled Mean Group; Regional Trade Bloc; Africa |
| JEL: | F36 F43 O47 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:21/052&r= |
| By: | Giancarlo Corsetti; Anna Lipínska; Giovanni Lombardo |
| Abstract: | Crises and tail events have asymmetric effects across borders, raising the value of arrangements improving insurance of macroeconomic risk. Using a two-country DSGE model, we provide an analytical and quantitative analysis of the channels through which countries gain from sharing (tail) risk. Riskier countries gain in smoother consumption but lose in relative wealth and average consumption. Safer countries benefit from higher wealth and better average terms of trade. Calibrated using the empirical distribution of moments of GDP-growth across countries, the model suggests significant quantitative effects. We offer an algorithm for the correct solution of the equilibrium using DSGE models under complete markets, at higher order of approximation. |
| Keywords: | international risk sharing, asymmetry, fat tails, welfare |
| JEL: | F15 F41 G15 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:958&r= |
| By: | Indana, Zulfa; Mulyani, Endang |
| Abstract: | The purpose of this study is to explain the effect of labor on economic growth, the effect of exports on economic growth, the effect of government expenditure on economic growth, the effect of labor, exports, and government expenditure on economic growth. The variables used in this study are labor, exports, and government expenditure. The method used in this research is quantitative method. The type of data used in this study is secondary data in the form of times series data from 1990-2020 which is sourced from Badan Pusat Statistik (BPS). The results showed that (1) labor has a positive and significant effect on economic growth, (2) Exports has positive and significant effect on economic growth (3) Government expenditure has positive and significant on economic growth (4) Labor, exports, and government expenditure together affect on economic growth 96.1%. |
| Date: | 2021–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:u5fkj&r= |
| By: | Christoph Albert; Albrecht Glitz; Joan Llull |
| Abstract: | In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant inflows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants’ English language profficiency. |
| Keywords: | immigrant assimilation, labor market competition, cohort sizes, imperfect substitution, general and specific skills |
| JEL: | J21 J22 J31 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9231&r= |
| By: | Cogliano, Jonathan F.; Veneziani, Roberto; Yoshihara, Naoki |
| Abstract: | This paper develops a theoretical and computational framework to analyse imperialistic international relations and the dynamics of international exploitation. A new measure of unequal exchange across borders - an exploitation intensity index - is proposed which can be used to characterise the structure of imperialistic international relations in the current global economy. It is shown that wealthy nations are net lenders and exploiters, whereas endowment-poor countries are net borrowers and suer from exploitation. Capital ows transfer surplus from countries in the core of the global economy to those in the periphery. However, while international credit markets and wealth inequalities are sucient to generate unequal exchange, they are proved to be insucient for it to persist. Various possible factors are considered, including technical change and varying social norms, that may explain the persistence of international inequalities. |
| Keywords: | International exploitation, imperialism, capital movements, technical change |
| JEL: | B51 D63 C63 F21 F54 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:726&r= |
| By: | Rabah Arezki; Ana Margarida Fernandes; Federico Merchán; Ha Nguyen; Tristan Reed |
| Abstract: | This paper explores the effect of natural resource dependence on market concentration of imports. Using a new panel database for importing firms in developing and emerging market economies, the paper shows that higher natural resource dependence is associated with larger market concentration of imports and with higher tariffs. The effect on the concentration of imports is found to be more pronounced for exporters of ‘point-based’ resources, imports of primary and consumption goods than for capital goods and is associated with higher domestic prices and lower consumption expenditure. Results suggest a novel channel for the resource curse stemming from the “monopolization” of imports. |
| Keywords: | imports, market concentration, natural resources, resource curse |
| JEL: | D20 F10 L10 O10 Q00 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9254&r= |