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on International Trade |
| By: | Miroudot, Sébastien; Rigo, Davide |
| Abstract: | Using a novel database on multinational production (MP), this article investigates the impact of preferential trade agreements on foreign affiliates’ production activities. We find that trade agreements with investment provisions have a positive effect on MP. On average, signing an agreement including investment provisions is associated with increased MP up to 26% in the manufacturing sector and 34% in the services sector. Our findings suggest that investment provisions increase MP by facilitating multinationals operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains. |
| Keywords: | preferential trade agreements; multinational production; investment provisions; foreign affiliates; global value chains; 162511; OUP deal |
| JEL: | F14 F15 F23 |
| Date: | 2021–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112199&r= |
| By: | Jerónimo Carballo; Alejandro Graziano; Georg Schaur; Christian Volpe Martincus |
| Abstract: | In this paper, we estimate the trade effects of a transit system upgrading that streamlines border processing in developing countries. Our empirical approach combines transaction level export data from El Salvador with unique data that distinguishes export flows that were processed on the transit system. Our results indicate that the new transit system lowered regulatory border costs and raised exports. At the low end, our back-of-the-envelope estimate of the return to investment is US$ 3-to-1. The estimation results also suggest that existing frameworks that emphasize shipping frequency and the formation of new trade relationships are important to interpret trade facilitation policy. This evidence informs an important policy covered by the 2013 WTO Agreement of Trade Facilitation. |
| Keywords: | transit trade, border effects, shipping frequency |
| JEL: | F10 F13 F14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9353&r= |
| By: | Iván Kataryniuk (Banco de España); Javier Pérez (Banco de España); Francesca Viani (Banco de España) |
| Abstract: | The COVID-19 pandemic initially caused some international trade distortions, most of which were temporary, since international goods trade flows recovered their pre-pandemic levels by the end of 2020. Against this background, geopolitical factors are gaining traction in shaping cross-border trade, as many countries adopted initiatives geared to influencing the relocation of their international firms’ activity and the reorganisation of global value chains. These recent measures, though, can be seen as part of a larger-scale pre-pandemic process that partly called into question the WTO rules-based multilateral framework. Another process under way prior to the outbreak of the pandemic was the slowdown in international trade in goods. All these elements have spurred an active debate on the direction international trade might take and have called into question the future of globalisation. In this paper we provide a survey of the main arguments put forward in this literature and the key stylised facts needed to frame it. |
| Keywords: | globalization, trade policy |
| JEL: | F15 F40 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:2124&r= |
| By: | Davin Chor; Bingjing Li |
| Abstract: | How much has the US-China tariff war impacted economic outcomes in China? We address this question using high-frequency night lights data, together with measures of the trade exposure of fine grid locations constructed from Chinese firms' geo-coordinates. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each 1 percentage point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. We combine these with structural elasticities that relate night lights to economic outcomes, motivated by the statistical framework of Henderson et al. (2012). The negative impact of the tariff war was highly skewed across locations: While grids with negligible direct exposure to the US tariffs accounted for up to 70% of China's population, we infer that the 2.5% of the population in grids with the largest US tariff shocks saw a 2.52% (1.62%) decrease in income per capita (manufacturing employment) relative to unaffected grids. By contrast, we do not find significant effects from China's retaliatory tariffs. |
| JEL: | E01 F10 F13 F14 F16 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29349&r= |
| By: | Bräuer, Richard; Hungerland, Wolf-Fabian; Kersting, Felix |
| Abstract: | This paper studies the economic and political effects of a large trade shock in agriculture - the grain invasion from the Americas - in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today's data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation. |
| Keywords: | agriculture,elections,Germany,globalisation,import competition,labour market,migration,Prussia,trade shock |
| JEL: | F14 F16 F66 F68 N13 R12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhcom:42021&r= |
| By: | Shandre Thangavelu; Shujiro Urata (Economic Research Institute for ASEAN and East Asia (ERIA)); Dionisius A Narjoko (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | This policy brief highlights the impact of the Regional Comprehensive Economic Partnership (RCEP) agreement on ASEAN and ASEAN least developed countries (LDCs) in the post-pandemic recovery. RCEP has key elements that will be crucial for the post-pandemic recovery and regional transformation, such as (a) a single rule-of-origin framework for the 15 member countries, which could have an accelerating and enhancing impact on global value chains in the region; (b) the key element of the China–Japan–Republic of Korea effect, where the RCEP agreement sets the first free trade arrangement for trade and investment for these countries; (c) key elements for digital transformation and services liberalisation in key services trade in e-commerce, financial, professional, and telecommunication services; and (d) ASEAN centrality, which is critical for the post-pandemic recovery and structural transformation of the region in terms of sustainable and inclusive growth. |
| Date: | 2021–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2021-01&r= |
| By: | Crescenzi, Riccardo; Di Cataldo, Marco; Giua, Mara |
| Abstract: | Can active investment promotion efforts attract FDI towards areas and sectors that would not otherwise be targeted? This paper leverages an ad hoc survey on national and sub-national Investment Promotion Agencies (IPAs) in Europe and applies state-of-the-art policy evaluation methods to estimate the impact of IPAs on FDI attraction. The results show that FDI responds to IPAs even in advanced economies. Sub-national IPAs, operating in closer proximity to investors’ operations, attract FDI in particular towards less developed areas where market and institutional failures are stronger. IPAs influence FDI over and above other policies targeting the general economic improvement of the host economies. Impacts are concentrated in knowledge-intensive sectors where collaborative systemic conditions are more relevant. IPAs work best for less experienced companies - ‘occasional’ investors - more likely to suffer from institutional failures. Finally, IPAs are equally effective in attracting companies from both outside and inside the EU Single Market even if the latter are less likely to suffer from regulatory or information asymmetries. Overall, this evidence sheds new light on the role of sub-national IPAs as local ‘institutional plumbers’ in support of foreign investors and their operations. |
| Keywords: | foreign direct investment; investment promotion; multinationals; institutions; European Union; 639633-MASSIVE-ERC-2014-STG; Internal OA fund |
| JEL: | F21 F23 O24 R58 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:110728&r= |
| By: | Enrico Alessandri (Department of Economics, Society & Politics, Università di Urbino Carlo Bo - Green-University L.Bocconi, Milan) |
| Abstract: | This paper examines the trade and innovation specialization patterns in the Latin American mining sector, in terms of exports of mining products, of its exports of mining equipment, and of its production of mining technologies (i.e. innovation). Results suggest that Latin American countries are specialised in the extraction and export of mining products (i.e. minerals), and de-specialised in the production of mining equipment and of mining technology, while they heavily rely on imports of equipment and technology. We also find that the mining innovation taking place in Latin America is of relatively low quality. Considering that innovation in the mining sector is supplier-dominated, the weak technological specialisation of Latin American countries in the mining sector reflects mainly the low innovation capacity of local suppliers to mining companies, in comparison to the global average. |
| Keywords: | Mining innovation; Mining production; Specialization patterns; Patent quality indicators; Local METS (suppliers); Patents; Trade data; Inward FDI; Latin America |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:21_03&r= |
| By: | Camatte, Hadrien; Daudin, Guillaume; Faubert, Violaine; Lalliard, Antoine; Rifflart, Christine |
| Abstract: | We analyse the elasticity of the household consumption expenditure (HCE) deflator to the exchange rate, using world input-output tables (WIOT) from 1995 to 2019. In line with the existing literature, we find a modest output-weighted elasticity of around 0.1. This elasticity is stable over time but heterogeneous across countries, ranging from 0.05 to 0.22. Such heterogeneity mainly reflects differences in foreign product content of consumption and intermediate products. Direct effects through imported consumption and intermediate products entering domestic production explain most of the transmission of an exchange rate appreciation to domestic prices. By contrast, indirect effects linked to participation in global value chains play a limited role. Our results are robust to using four different WIOT datasets. As WIOT are data-demanding and available with a lag of several years, we extrapolate a reliable estimate of the HCE deflator elasticity from 2015 onwards using trade data and GDP statistics. JEL Classification: C67, E31, F42, F62 |
| Keywords: | cost-push inflation, global value chains, input-output linkages, spillovers |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20212610&r= |
| By: | Mahmoud M. Sabra (Associate Prof. of Applied Economics, Al Azhar University Gaza, Palestine Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - This article aims to detect empirically, the nexus relationship between exports and government size in seven middle-income MENA countries, namely, Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine, and Tunisia, from 2000 to 2019. Methodology/Technique - This article employs two econometric techniques, simultaneous equations using OLS, and recent Dynamic Panel Data system analysis. Findings - Article results show a significant and robust negative association between exports and government size that indicates the need for government adoption of a series of policies for exports promotion strategies and likewise, openness can increase both variables. Growth and FDI increase exports and decrease government size, while ODA decreases exports and increases government size with Inflation-decreasing exports. Novelty - This article shines a light on the expanded government size capable of hindering growth and exports through the adoption of unfavourable policies to support the private sector, growth, and exports. Ultimately, this determines whether government policies are favourable or not. Type of Paper - Empirical" |
| Keywords: | Exports, Government size, MENA, GMM DPD system |
| JEL: | F14 H11 C33 |
| Date: | 2021–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:jber209&r= |
| By: | Milsom, L.; Roland, I. |
| Abstract: | Exposure to Chinese import competition led to significant manufacturing job losses in the United States. Local labor markets, however, differ significantly in how they fared with respect to manufacturing employment. An important question is whether labor market institutions have an impact on the dynamic response of manufacturing employment to rising import penetration. We contribute to this debate by showing that minimum wages amplified the negative effect of Chinese import penetration on manufacturing employment in US local labor markets between 2000 and 2007. We develop a rigorous double-edged identification strategy. First, we construct shift-share instrumental variables to address the endogeneity of import penetration. Second, we use a border identification strategy to distinguish the effects of minimum wage policies from the effects of other local labor market characteristics that are unrelated to policy. Specifically, we rely on comparing commuting zones that are contiguous to each other but located in different states with different minimum wage policies. The approach essentially considers what happens to the response of manufacturing employment to import penetration when one crosses a policy border. |
| Keywords: | Import penetration, labor market institutions, minimum wages, manufacturing employment |
| JEL: | E24 F14 F16 J23 L60 R12 |
| Date: | 2021–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2170&r= |
| By: | Park, Innwon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Park, Soonchan (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | We analyze the value-added creation effect of GVC participation by applying a standard fixed effects regression model analysis with economy-wide country-industry data. We use OECD Inter-country Input-Output Tables covering 64 countries (21 APEC members and 43 non-APEC members) and 35 industries (1 Agriculture, forestry and fishing, 3 Mining, 16 Manufacturing, and 15 Service) between 2005 and 2015. We find that APEC member economies’ participation in GVC activities is not distinct from non-APEC member economies but the causal relationship between GVC participation and created domestic value-added is much stronger in APEC member economies. More specifically, from the qualitative evaluation on statistical data, we find that backward linkage has been stronger than forward linkage and both have been recently decreasing. The APEC industries’ upstream positions in production line have been slightly more distinguished than non-APEC industries. From the econometric regres-sion analysis, we find that forward participation in GVCs is more desirable than backward participation in terms of creating domestic value-added. We also find that the industry position in middle stages of production line in contrast to ear-lier and later stages creates higher domestic value-added per output unit. This implies that the firm-specific conventional U-shaped “Smile Curve Hypothesis” is not applicable at the economy-wide country-industry level, especially in APEC member economies. This finding supports that manufacturing industries are still a major driving force for less developed APEC member economies to move up the development ladder. Considering that gains from GVC participa-tion are diversified across industries and upgrading country-industry positions in GVCs is competitive among the interconnected countries, we strongly rec-ommend for APEC member economies to construct effective domestic value chains and coordinate with other members during their process of upgrading GVC participation. |
| Keywords: | GVC participation; GVC position; value-added creation; smile curve; APEC |
| JEL: | C23 |
| Date: | 2020–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepas:2020_001&r= |
| By: | Fritz Breuss |
| Abstract: | Many studies with different methods (CGE models, DSGE models, structural gravity equations) have recently evaluated EU's Single Market. The problem with all these studies is that they use complex models with data sets which are not replicable. The aim of this paper is to develop a simple EU model which uses readily accessible data, and which is replicable in EViews. First the 10 equations macro model is used to evaluate Austria's EU membership since 1995. Then the same prototype model is applied to make a comparison of the integration effects of a selected number of EU Member States. Our simple EU model covers the essential economic effects of EU integration of EU's Single Market, the introduction of the Euro, and the following EU enlargements: increase in intra-EU trade, price reduction because of more competition, the impact of the net budget position vis à vis the EU budget, and lastly that on growth. |
| Keywords: | European Integration, Model Simulations, Country Studies |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2021:i:638&r= |
| By: | Ludwick, Eugene |
| Keywords: | International Relations/Trade |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ctrf31:314682&r= |
| By: | Julieta Bengochea Soria (Max Planck Institute for Demographic Research, Rostock, Germany); Emanuele Del Fava (Max Planck Institute for Demographic Research, Rostock, Germany); Victoria Prieto Rosas (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Although the scarcity of accurate and accessible data on international migration flows typically prevents a full understanding of migratory patterns, this might not be the case for Latin America, where high-quality census data on migrant flows is publicly available through the project International Migration in Latina America (IMILA). However, such data has mostly been used for research at the regional level because of the fragmented nature of their availability and the lack of English documentation. To tackle this issue, we consolidated data from the IMILA collection to provide a harmonized dataset with five-year flows by country of birth, sex, and age group, for 19 countries of destination and five census waves. Moreover, comparing IMILA to other two available data sources on flows to Latin America, we showed that IMILA provides a more accurate assessment of migration flows from North America and Europe, enables a better quantification of minor migration flows, and enhances the visibility of female migration. |
| Keywords: | Argentina, Bolivia, Brazil, Chile, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, Mexico, Paraguay, Uruguay, census data, data collection, data comparability, international migration, migration flow |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-019&r= |
| By: | Suh, Jeongmeen (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | In this paper, I suggest that text mining analysis of regional trade agreements (RTAs) can be a suitable methodology to develop a tangible measure of convergence between RTAs. By utilizing well-established text similarity concepts in related literatures, I attempt to investigate how much RTAs in APEC are converging in terms of how much similar RTA texts are. Furthermore, which areas of RTA converge more or less will be examined. The main results of the study are as follows. The RTAs signed by APEC members are gradually converging over time, and they converged (in terms of 5-gram Jaccard similarity) at an annual average of 8% for all RTAs (both inter- and intra-regional) while 9.7% for intra-regional RTAs only. The areas that converged the most are service and transparency chapters, which show 2.2 times and 1.6 times higher level of convergence than the average, respectively. The objective and intuitive indicators of regional norm convergence are expected to provide a common understanding for setting goals and strategies for regional economic integration in the future. |
| Keywords: | APEC; Regional trade agreements; Text-as-data analysis |
| JEL: | F13 |
| Date: | 2020–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepas:2020_002&r= |
| By: | Mercy Musakwa; Nicholas M Odhiambo (University of South Africa) |
| Abstract: | This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure. |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:afa:wpaper:aeri0221&r= |
| By: | Philip Adams |
| Abstract: | A carbon tariff is a tax on foreign imports levied based on greenhouse-gas content. Such tariffs are designed to level the playing field for domestic import-competing industries whose costs have risen due to a domestic CO2-price. It is argued that carbon tariffs are necessary to avoid "carbon leakage" -- local production shutting down and moving to countries without strong climate policies. The question addressed in this paper, is what effect might carbon tariffs have on the Australian economy. Using the Victoria University Regional Model (VURM), we evaluate the potential effects arising from carbon tariffs imposed in three regions: the EU, the G7 countries plus Korea, and China. The tariff rates are calculated with carbon prices of: $US70 (= 60 euro) for the EU, and $US39 for the other two regions. Key findings are as follows. 1. Carbon tariffs have little effect on employment in the long-run. However, the negative impact on Australia's terms of trade arising from reductions in world demand increases the real cost of capital, leading to small reductions in capital and hence real GDP. 2. Less real GDP means less real Gross National Income (GNI), a measure of economic welfare).The contractions in real GNI, though small are a little larger than in real GDP because a lower terms of trade means less purchasing power from a given level of real income. 3. Only two industries are projected to experience output and employment losses in each of the three scenarios: Coal mining and the closely related Mining services for whom the coal industry is a major customer. Indeed, the effects on coal production dominate most of the industry outcomes and are key to explaining what happens at the state level. As shown in Table 6, output and employment in those states where coal is over-represented, NSW and QLD, fall. Output and employment in states where coal is much less important rise, reflecting the positive impacts of real devaluation on non-tariffed products. We conclude that at the national level, the carbon tariffs examined are unlikely to have a significant impact. They will, however, have noticeable impacts at the industrial and state levels. Those impacts -- due, in the main, to a reduction in output and employment in the coal sector - will occur in any case for Australia to shift towards a zero emissions economy. The concern is not that these reductions happen, but that they happen in a way which is outside of Australia's control. This loss of sovereignty over what happens to our coal industry might result in non-optimal adjustment with adverse impacts on welfare, regions and workers directly affected. |
| Keywords: | Carbon tariffs, Zero greenhouse emissions, Coal |
| JEL: | C68 Q54 Q58 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-322&r= |
| By: | Bomin Jiang; Daniel E. Rigobon; Roberto Rigobon |
| Abstract: | Covid-19 highlighted the weaknesses in the supply chain. Many have argued that a more resilient or robust supply chain is needed. But what does a robust supply chain mean? And how do firms’ decisions change when taken that approach? This paper studies a very stylized model of a supply chain, where we study how the decision of a multinational corporation changes in the presence of uncertainty. The two standard theories of supply chain are Just-in-time and Just-in-case. Just-in-time argues in favor of pursuing efficiency, while Just-in-case studies how such decision changes when the firm faces idiosyncratic risk. We find that a robust supply chain is very different specially in the presence of systemic shocks. In this case, firms need to concentrate on the worst-case. This strategy implies a supply chain where the allocation of resources and capabilities does not correspond to the standard theories studied in economics, but follow a heuristic behavioral rule called “probability matching”. It has been found in nature and in experimental research that subjects appeal to probability matching when seeking survival. We find that a robust supply chain will reproduce this behavioral outcome. In fact, a multinational optimizing under uncertainty, follows a probability matching which leads to an allocation that is suboptimal from the individual producer point of view, but rules out the possibility of supply disruptions. |
| JEL: | E7 F02 F12 F13 L15 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29345&r= |
| By: | Yasuyuki Todo; Keita Oikawa (Economic Research Institute for ASEAN and East Asia (ERIA)); Masahito Ambashi (Economic Research Institute for ASEAN and East Asia (ERIA)); Fukunari Kimura (Economic Research Institute for ASEAN and East Asia (ERIA)); Shujiro Urata (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Using a unique firm-level data set from the Association of Southeast Asian Nations (ASEAN) and India collected from November 2020 to February 2021, this paper examines how the robustness and resilience of supply chain links – i.e. maintaining links and substituting another for a disrupted partner, respectively – were determined when firms faced economic shocks due to the spread of the coronavirus disease (COVID-19). Focusing on the role of the characteristics of firms’ supply chains, we find that homophily, i.e. the tendency to form a group with similar agents, was often associated with the robustness of supply chain links, most likely because of the strength of homophilous ties. In particular, when a foreign-owned firm had a supply chain link with a firm located in the same country as its home country, the link was quite robust. We also find that the geographic diversity of customers and suppliers creates resilience of supply chains. When the demand or supply from a partner of a firm was disrupted because of COVID-19, the firm likely mitigated the damage from the disruption through substitution of partners if its supply chains were well diversified across countries. In addition, larger or younger firms tended to be resilient and robust. The robustness and resilience of supply chains are found to have led to higher performance. |
| Keywords: | COVID-19; Robustness of supply chains; Resilience of supply chains; Homophily; Asia |
| JEL: | F14 F23 L14 |
| Date: | 2021–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2021-40&r= |
| By: | Jean-Charles Bricongne; Samuel Delpeuch; Margarita Lopez Forero |
| Abstract: | Based on French firm-level data over around 15 years we evaluate the contribution of the micro-level profit shifting –through tax haven foreign direct investments to the aggregate productivity slowdown measured in France. We show that firm measured productivity in France declines over the immediate years following the establishment in a tax haven, with an average estimated drop by 3.5% in labor apparent productivity. We argue that this productivity decline, following a presence in a tax haven, is most likely explained by multinationals’ tax optimization, where domestic productivity is underestimated as profits are not recorded anymore in the home country. The fall in productivity is especially strong for firms that are intensive in intangible capital and is equivalent to 4.1% (versus 2.7% for low intangible intensive firms), reflecting the fact that these types of assets are more easily shifted across countries and facilitate tax planning. Our results additionally suggest that the mismeasurement has strong dynamic effects, as the decline becomes more important the longer the firm remains in a tax haven. Finally, given these firms’ weight in the economy, our results imply an 8% loss at the aggregate in terms of the level of the labor productivity throughout the whole sample period, which is equivalent to an annual loss of 9.7% in terms of the aggregate annual labor productivity growth. |
| Keywords: | Tax Havens, Profit shifting FDI, Productivity slowdown, Productivity mismeasurement, Intangible capital |
| JEL: | D33 F23 H26 H87 O47 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:835&r= |
| By: | Emmanuel Chavez (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); Cristobal Dominguez (Comision Nacional Bancaria y de Valores) |
| Abstract: | This research studies the effects of a value added tax (VAT) reform at Mexico's international frontiers. The reform raised the VAT rate from 11 to 16 percent at localities close to the international borders. We use the traditional "static" difference-in-differences methodology as well as dynamic difference-in-differences. The treatment group is composed of municipalities in the area where the VAT increased, and the control group is composed of municipalities close to the treatment group. We nd that the VAT hike had a positive effect on prices of around half the size of the full pass-through conter-factual. In addition, the reform had a negative effect on workers' wages and no effect on employment. The negative e ect on workers' real incomes is not smoothed out with credits. We nd evidence of a negative effect on consumption at Mexico's northern border due to the reform. However, we nd no evidence of an increase in shopping at the United States side of the border. |
| Keywords: | Worker purchasing power,Value Added Tax,Taxation,Border Crossing |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03364026&r= |
| By: | François Fulconis (LBNC - Laboratoire Biens, Normes, Contrats - AU - Avignon Université, CRET-LOG - Centre de Recherche sur le Transport et la Logistique - AMU - Aix Marseille Université, AU - Avignon Université); Raphael Lissillour (IPAG Business School) |
| Abstract: | Classification societies play a major role in maritime safety and the regulation of the international shipping market. They have a dual mission, namely the classification and certification of ships. Paradoxically, the academic literature on the strategic behaviour of classification societies remains very limited. More often than not, the scope of prior research has been limited to the definition of their missions in the shipping ecosystem with an emphasis on their changing legitimacy as maritime accidents occur. Consequently, this paper aims at providing a better understanding of the specific role of classification societies in maritime safety and within the interorganisational dynamics of international shipping. The study is based on a conceptual framework provided by the behaviourist approach and applied to the inter-organisational dynamics of supply chains. This approach enables in-depth analysis of actors' strategic behaviours by focusing on four dimensions: power, leadership, conflict and cooperation. The main results highlight the increasingly central and paradoxical role of classification societies. This role encompasses, on the national level, classification and certification processes, and, on the supranational level, the creation of new rules and regulations. The study highlights the importance of their ability to master the official framework and institutional vocabulary, which enable them to strengthen their power and leadership in the shipping market. This capacity helps them to limit conflicts between actors and to encourage certain cooperative behaviours based on relationships of dependence and interorganisational interdependence. |
| Keywords: | Behaviourism,Classification societies,International shipping,Maritime safety |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03364884&r= |