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on International Trade |
| By: | Filippo Santi; Giorgia Giovannetti; Margherita Velucchi |
| Abstract: | We use the instruments of the social network analysis to revisit the relationship between international migration and Foreign Direct Investment (FDI) flows in the period between 2000 and 2015. Applying a multilevel mixed estimator inspired to the gravity literature, we test how and to what extent the structure of the international migrants’ network contributes to bilateral FDI flows. We find that the inclusion of network level statistics exposes a much larger degree of complexity in the relationship between international migration and investments. Testing the assumption that migrants networks act as preferential channel for information with their homeland, we find evidence that a more diverse immigrant community in investing countries could “perturb†the flow of information at bilateral level, de facto translating into lower bilateral FDI |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2021_17.rdf&r= |
| By: | Rebecca Freeman; Mario Larch; Angelos Theodorakopoulos; Yoto V. Yotov |
| Abstract: | We propose new methods to identify the full impact of country-specific characteristics on bilateral trade flows within the framework of ‘the new quantitative trade model.’ We complement theory with a simple two-stage estimating procedure, and offer a proof of concept by quantifying the impact of country-specific R&D expenditure on trade. Results suggest a positive relationship overall, but a larger impact on international (versus domestic) trade. Further, our methodology allows us to recover trade elasticity estimates without the need for price/tariff data. Bringing this to the sectoral level, we obtain estimates of the trade elasticity for manufacturing, services, and tradable versus non-tradable sectors. |
| Keywords: | structural gravity, country-specific trade costs, trade elasticity, elasticity of substitution, R&D and trade |
| JEL: | F10 F14 F16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9432&r= |
| By: | Jiri Podpiera |
| Abstract: | Distance, as a proxy for trade barriers, is found in many studies to matter even for weightless cross-border financial investments and lending, possibly due to the presence of information asymmetries. Its importance is tested in this paper using exports of all five broad categories of the U.K.’s financial and insurance services. No trade barriers are found for the bulk of the U.K.’s exports. Trade barriers are confirmed only for interest-bearing activities – being in line with available results in the literature. The positive effect of EU membership appears to be small. Notwithstanding the uncertainties, it suggests that post-Brexit disruptions of the U.K.’s export of financial and insurance services may be minor. |
| Keywords: | Export; Gravity Model; Financial Services; Insurance; Censored Regression; insurance service; A. financial services; U.K.'s export; evidence from the United Kingdom; U.K.'s export value; Exports; Trade barriers; Service exports; Global |
| Date: | 2021–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/260&r= |
| By: | Koenig, Pamina; Krautheim, Sebastian; Löhnert, Claudius; Verdier, Thierry |
| Abstract: | International NGO campaigns criticizing firms for infringements along their internationalized value chains are a salient feature of economic globalization. We argue that understanding the international patterns of NGO campaigns requires accounting for the geography of their targets' economic activities. We propose a model of global sourcing and international trade in which heterogeneous NGOs campaign against heterogeneous firms in response to infringements along their international value chains. We find that campaigns are determined by a triadic gravity equation where all three bilateral trade costs matter for NGO campaigns. Importantly, the sourcing trade costs between the supplier and the firm, which do not involve the country of the NGO, shape the patterns of NGO campaigns through their effect on the sourcing decision of firms. We use recently available data on NGO campaigns to estimate our triadic gravity equation and find strong support for this prediction. |
| Keywords: | international trade,international sourcing,gravity,NGOs,campaigns,social activism |
| JEL: | F12 F60 F63 L31 O35 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:upadvr:v8621&r= |
| By: | Filippo Bontadini; Rinaldo Evangelista; Valentina Meliciani; Maria Savona |
| Abstract: | This paper provides empirical evidence on the complex role played by technology in affecting the relationship between the participation of EU countries and industries in Global Value Chains (GVCs) and their employment structure over the period 2000-2014. The empirical analysis is based on country/industry level data for 21 EU countries on employment, trade in value added, patents and investments in intangible assets, and focusses on backward linkages within GVCs. The role of technology is analysed by taking into account both the technological intensity of offshoring industries and that of their GVC partners. We study the employment structure by looking at the shares of managers and manual workers, which reflect the “functional specialisation” of the country-sector within GVCs. We find that pre-existing asymmetries in the functional specialisation are highly persistent over time, with little sign of convergence over our observed period. Furthermore, GVC participation is not related to changes in the employment structure. However, this relationship appears to be mediated by country-industries’ initial technological performance. Technological leader industries exhibit, in fact, larger shares of employment in headquarter functions, and this functional specialisation tends to be strengthened as they increase their integration into GVCs. In contrast, country-industries that start off as technological laggards see integration into GVCs accompanied by an increase in the share of employment in fabrication functions. The technological profile of the partners is also found to play a role in the relationship between GVC integration and the functional specialisation of the offshoring country/industry, although different patterns emerge depending on the nature of the partner (manufacturing vs service). |
| Keywords: | global value chains, employment, technology, intangible assets, patents |
| JEL: | F14 F15 O33 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9438&r= |
| By: | Chen, Natalie (University of Warwick, CESifo and CEPR.); Novy, Dennis (University of Warwick, CEP/LSE, CESifo and CEPR) |
| Abstract: | How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to popular trade cost variables such as currency unions, trade agreements, and WTO membership. While we estimate that these variables are associated with increased bilateral trade on average, we find substantial heterogeneity. Consistent with the predictions of our framework, trade cost e¤ects are strong for ‘thin’ bilateral relationships characterised by small import shares, and weak or even zero for ‘thick’ relationships. |
| Keywords: | Currency Unions; Euro; Gravity; Heterogeneity; RTA; Trade Costs; Trade Elasticity; Translog; WTO. JEL Classification: F14, F15, F33 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:595&r= |
| By: | Frank van Tongeren; Christine Arriola; Annabelle Mourougane; Sebastian Benz |
| Abstract: | This paper assesses the medium term impact of the United Kingdom leaving the EU Single Market under the terms of the EU-UK Trade and Cooperation Agreement (TCA) reached at the end of 2020 using the OECD METRO CGE model. The analysis does not include any transitional costs to fully implementing the new trade agreement, nor does it take into account stress on the economy as a result of COVID-19. Lastly, only the implications on services trade from regulatory restrictions on the free movement of people have been incorporated in the analysis while the wider labour market impacts of cross-border movement of people are left aside. Results from the simulation show that real GDP losses in the European Union, in the worst case scenario are expected to be around 0.6% in the medium term, but would vary markedly across countries. Ireland would experience the largest losses, while countries with loose trade links with the United Kingdom would barely be affected. The decline in trade is not uniform among sectors. European Union member states are expected to import less professional services such as financial services and insurance, communication, and other business services. UK exports are estimated to fall by about 6.3% and imports by 8.1% in the medium term. The overall medium-term loss in real GDP could amount to 4.4%. |
| Keywords: | Brexit, free-trade agreement, general-equilibrium model |
| JEL: | C68 F15 F47 |
| Date: | 2021–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1698-en&r= |
| By: | Francisco Requena (Universitat de València, Valencia, Spain); Guadalupe Serrano (Universitat de València, Valencia, Spain); Raúl Mínguez (Chamber of Commerce of Spain & Universidad Nebrija, Madrid, Spain) |
| Abstract: | Using the universe of Spanish first-time exporters selling manufactured products over the period 1997-2018, we show that import experience is associated with higher survival rates in the export markets, and conditioning on survival, a higher growth rate of their exports. In both cases, the highest impact is obtained when firms start simultanouely exporting and importing. Import experience improves general knowledge about foreign markets but it is not market-specific. Post-entry success in terms of survival and persistent growth rises if new exporters are large importers and if they buy intermediate inputs from competitive foreign suppliers. |
| Keywords: | First-time exporters, import experience, export survival, export growth |
| JEL: | F23 F14 L25 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2114&r= |
| By: | Ferguson, Shon (Swedish University of Agricultural Sciences (SLU)) |
| Abstract: | This paper evaluates the impact of conventional cage bans for laying hens in the EU on exports of poultry-keeping equipment. Using detailed data on international trade in poultry-keeping equipment combined with an event study regression approach yields several new findings. The results suggest that the cage bans were associated with an increase in intra-EU trade, and also an increase in exports of poultry equipment from EU member states to non-EU countries where conventional cages are still permitted. The results suggest that some banned cages were likely exported to countries outside the EU to be used in egg production. |
| Keywords: | International trade; Policy leakage; Animal welfare |
| JEL: | F13 F15 Q17 |
| Date: | 2021–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1422&r= |
| By: | Antti Simola (European Commission - JRC); Ole Boysen (European Commission - JRC); Emanuele Ferrari (European Commission - JRC); Victor Nechifor (European Commission - JRC); Pierre Boulanger (European Commission - JRC) |
| Abstract: | The African Continental Free Trade Area (AfCFTA) agreement, which entered into force at the beginning of 2021, aims to boost intra-African trade and to accelerate economic development on the continent. This report complements previous continental economy-wide assessments of the impacts of the AfCFTA by providing a more comprehensive description of the trade agreement’s effects on food systems and food security. The report employs a global, multiregional model to determine the trade creation and diversion effects of four liberalisation scenarios defined by various policy objectives. The main findings show that the trade agreement will be a positive contributor both to economic growth through higher value added production and to trade diversification. Food consumption across the continent will also increase. A coordinated liberalisation approach to promote trade in agri-food products will further boost food security outcomes. Nevertheless, food prices will increase slightly in most regions, showing the need for further consideration of food affordability aspects in lower-income groups. Results also highlight the importance of non-tariff measures and the capacity of the AfCFTA to reduce the non-tariff costs of intra-African trade. |
| Keywords: | Africa, trade agreement, CGE, food security |
| JEL: | C68 F15 Q17 Q18 N57 O55 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126054&r= |
| By: | Shawn Arita; Jason Grant; Sharon S. Sydow; Jayson Beckman |
| Abstract: | Global agricultural trade, which increased at the end of 2020, has been described as “resilient” to the impacts of the COVID-19 coronavirus pandemic; however, the size and channels of its quantitative impacts are not clear. Using a reduced-form, gravity-based econometric model for monthly trade, we estimate the effects of COVID-19 incidence rates, policy restrictions imposed by governments to curb the outbreak, and the de facto reduction in human mobility/lockdown effect on global agricultural trade through the end of 2020. We find that while agricultural trade remained quite stable through the pandemic, the sector as a whole did not go unscathed. First, we estimate that COVID-19 reduced agricultural trade by the approximate range of 5 to 10 percent at the aggregate sector level; a quantified impact two to three times smaller in magnitude than our estimated impact on trade occurring in the non-agricultural sector. Second, we find sharp differences across individual commodities. In particular, we find that non-food items (hides and skins, ethanol, cotton, and other commodities), meat products including seafood, and higher value agri-food products were most severely impacted by the pandemic; however, the COVID- 19 trade effect for the majority of food and bulk agricultural commodity sectors were found to be insignificant, or in a few cases, positive. Finally, we also examine the effects across low vs high income countries, the changing dynamics of the pandemic’s effect on trade flows, and the effects along the extensive product margins of trade. |
| JEL: | F13 F14 Q17 Q18 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29551&r= |
| By: | Julian di Giovanni; Ruth Cesar Heymann |
| Abstract: | The economic recovery from the COVID-19 pandemic has been uneven across countries and sectors. While U.S. imports have rebounded to surpass their level before the collapse in 2020, U.S. exports remain far below their pre-pandemic level. This asymmetry in part reflects the different sectoral compositions of imports and exports. U.S. imports are driven by goods trade, while exports rely more heavily on services trade. A key component of services exports is foreign travel to the United States, which has dried up due to the suspension of nonessential travel imposed in March 2020. However, U.S. exports may now be at a turning point given the reopening of U.S. borders to all vaccinated travelers on November 8. We analyze the trajectory of U.S. services and how the lifting of the travel ban might contribute to the rebound of U.S. services exports. |
| Keywords: | U.S. exports; service trade; tourism and business travel |
| JEL: | F0 |
| Date: | 2022–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:93590&r= |
| By: | Zamani, Omid; Chibanda, Craig; Pelikan, Janine |
| Abstract: | Due to the Avian Influenza outbreak in Europe and Russia, Ghana has imposed an import ban on affected countries. This paper analyses the potential effects of this partial ban on Ghanaian chicken producers and agricultural trade. Due to the growing support for a total ban on poultry imports by various value chain actors, we also analyse the impact of a complete ban on Ghana's poultry imports. We apply an integrated method covering General Equilibrium and typical farm analysis. Our findings show that the partial ban has a lower effect on trade and the whole economy compared with the total ban. Nevertheless, the effect of a total ban on domestic producers is more significant. Moreover, a total import ban increases production mainly for the large-scale integrated farms in Ghana. |
| Keywords: | International Relations/Trade, Production Economics |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi21:316719&r= |
| By: | Kannen, Peter; Semrau, Finn Ole; Steglich, Frauke |
| Abstract: | Improvements of firms' environmental performance crucially determine the speed of a country's green economic transformation. In this paper, we investigate whether firms with foreign ownership are more likely to adopt 'green' management practices, which determine the capability to monitor and improve a firm's impact on the environment. By using multi-country firm-level data, we show that foreign ownership increases the likelihood of implementing green management practices. Considering country heterogeneity, we reveal that only firms based in more developed economies and in countries with better environmental performance benefit from foreign direct investment, while this is not the case for firms based in less developed economies or countries with weak environmental performance. In addition, we find that the effect is more robust for manufacturing sector firms than for service sector firms. Overall, our results suggest that foreign ownership can contribute towards a country's green economic transformation. |
| Keywords: | Foreign direct investment,Green/environmental management,Green economic transformation,Emerging markets |
| JEL: | F21 F64 M10 Q56 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2200&r= |
| By: | Alejandro Ayuso-Díaz (CUNEF Universidad, Madrid, Spain) |
| Abstract: | This paper tries to contribute to the literature dealing with the history of regional integration in East and Southeast Asia, reconciling the arguments defending that those territories are natural trading partners, those supporting that Western Empires enabled integration, and the ones claiming that it was the Japanese Empire which expanded regional trade. With this purpose, we reconstruct the region’s bilateral imports before the establishment of Free Trade Areas. This work is pioneering in the econometric analysis of the main drivers of the commercial integration of East and Southeast Asia during the high colonial era (1840-1938). Our results show that countries' specific economic and cultural characteristics made them natural trading partners. However, intra-Asian trade acceleration during the late 19th and early 20th Centuries was possible by the British free trade imperialism and the planned industrialization of the Japanese empire. |
| Keywords: | natural traing partners, informal empire, transit trade, regional integration |
| JEL: | B17 B27 C12 F15 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:2110&r= |
| By: | Isaac K. Ofori (University of Insubria, Varese, Italy); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study examines whether the remarkable inflow of resources in the form of foreign direct investment (FDI) to SSA contributes to inclusive growth in the region. The study further investigates whether SSA’s institutional fabric modulates the effect of FDI on inclusive growth in SSA. To this end, we draw data on 42 SSA countries for the period 1990 – 2020 for the analysis. The evidence, which are based on the GMM estimator shows that: (1) though FDI fosters inclusive growth in SSA, the effect is weak, and (2) the weak inclusive growth inducing-effects of FDI are weakened or nullified completely by SSA’ fragile governance quality. Nonetheless, the optimism, which we provide by way of threshold analysis shows that channelling resources into the development of these governance dynamics yield positive net effects from the short-term through to the long-term. Notably, the results show that the short-term to long-term FDI-induced inclusive growth gains of developing frameworks and structures for fighting corruption while addressing fragilities in regulatory quality and government effectiveness are outstanding. A few policy recommendations are discussed in the end. |
| Keywords: | AfCFTA; Africa; Economic Integration; FDI; Governance; Inclusive Growth |
| JEL: | F6 F15 O43 O55 R58 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/003&r= |
| By: | Teemu Makkonen; Timo Mitze |
| Abstract: | We address the question how sensitive international knowledge flows respond to geo-political conflicts taking the politico-economic tensions between EU-Russia since the Ukraine crisis 2014 as case study. We base our econometric analysis on comprehensive data covering more than 500 million scientific publications and 8 million international co-publications between 1995 and 2018. Our findings indicate that the imposition of EU sanctions and Russian counter-sanctions from 2014 onwards has significant negative effects on bilateral international scientific co-publication rates between EU countries and Russia. Depending on the chosen control group and sectors considered, effect size ranges from 15% to 70%. Effects are also observed to grow over time. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.00564&r= |
| By: | Dutta, Sourish |
| Abstract: | The statistical challenges of globalization are profound. We cannot rely solely on national statistics to understand how economies work and how to create industrial policies focusing on competitiveness. It is necessary to see the whole. National statistics build pictures based on relationships between producers and consumers and the rest of the world. But these relationships, especially those with the rest of the world, have become increasingly more complex. There is an increasing need to consider global production within a global accounting framework. This implies a departure from the traditional role of international organizations as compilers of internationally comparable national statistics to bring together the national tables to create a global table (UN, 2019). |
| Keywords: | Global Value Chains,Global Production Network,International Trade,Supply-Use Tables |
| JEL: | F00 F01 F02 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:248278&r= |
| By: | Daudin, Guillaume; Héricourt, Jérôme; Patureau, Lise |
| Abstract: | International transport costs do have an additive part. How large is it? Does it matter? This paper provides new answers to these questions. Using information contained in the US imports flows from 1974 to 2019, we develop an empirical model that disentangles the ad-valorem and the additive components of international transport costs. The per-unit component of transport costs represents a sizeable share of total transport costs, between 30% and 45% depending on the year and the transport mode considered. We then investigate the important consequences of additive costs, under two different perspectives. First, modelling varying additive costs modifies the decomposition of transport costs time trend between the reduction in “pure†transport costs and trade composition effects, the latter playing a minor role. Second, we revisit the welfare gains of the transport cost reduction in presence of additive costs. In this regard, we shed light on the welfare variations induced by the international trade acceleration and the “hyper-globalization†, as well as the key role of additive transport costs in determining those welfare variations. Neglecting the additive component substantially underestimates the welfare gains of the transport cost decrease. |
| Keywords: | Transport costs estimates, non-linear econometrics, period 1974-2019, additive costs, trade composition effects, gains from trade |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2203&r= |
| By: | Ricardo Hausmann (Center for International Development at Harvard University); Sebastian Bustos (Center for International Development at Harvard University) |
| Abstract: | One of the consequences of COVID-19 is the recognition that many tasks can be done from home. But anything that can be done remotely, can be done from abroad. Given large salary differences between white-collar workers across countries, it would make sense for value chains to try to exploit them. This opens an opportunity for Colombia to further promote its integration into the world global value chains and access new markets. This paper explores the possibility of exporting teleworkable services from Colombia. The goal is to provide useful information to guide strategic interventions to speed up the development of such service industries in Colombia. We first introduce a definition of teleworkable jobs and describe its occupations and industries along different dimensions. We show that there are many teleworkable jobs in the US, representing a significant share of industry costs. Then, we show that many industries intensive in teleworkable jobs are currently traded across borders. To quantify Colombia’s advantage providing teleworkable services, we study the cost structure of industries and quantify the potential savings in overall costs if the tasks were performed by Colombians. Given Colombia’s current presence and the density around teleworkable industries we can calculate a proxy of the latent advantage in teleworkable services. We propose an index that summarize these dimensions and rank the potential gains from including telework from Colombia in an industry. We end with a set of policy recommendations to move this agenda forward. |
| Keywords: | COVID-19, Colombia |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:401&r= |
| By: | Beerli, Andreas; Indergand, Ronald; Kunz, Johannes S. |
| Abstract: | An important goal of immigration policy is to facilitate the entry of foreignborn workers whose skills are in short supply in national labor markets. In recent decades, information and communication technology [ICT] has fueled the demand for highly educated workers at the expense of lower educated groups. Exploiting the fact that different regions in Switzerland have been differentially exposed to ICT due to their pre-ICT industrial composition, we present evidence suggesting that more exposed regions experienced stronger ICT adoption, accompanied by considerably stronger growth in relative employment and wage-premia for college-educated workers. Following this change in the landscape of relative economic opportunities, we find robust evidence that these regions experienced a much stronger in ux of highly educated immigrants in absolute terms as well as relative to lower educated groups. Our results suggest that immigrants' location decisions respond strongly to these long-run, technology-driven changes in their economic opportunities. |
| Keywords: | immigrant sorting,international migration,skill-biased technical change,information and communication technology,skill supply |
| JEL: | F22 J61 J24 J31 J23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:998&r= |
| By: | Vera Z. Eichenauer; Michael Dorsc; Feicheng Wang |
| Abstract: | In an increasing number of sectors, concerns are rising that foreign firm participation may pose risks to public order. Many developed countries have adopted or extended their invest- ment screening mechanisms to control inward foreign direct investment in strategically impor- tant sectors over the last years. This policy brief documents the development of investment screening in OECD and EU countries and provides the first discussion from an economic per- spective. We review existing and propose new explanations for the adoption of investment screening. Our exploratory quantitative analysis suggests that countries with higher levels of technological development and with a stricter regulatory environment for foreign investment are more likely to introduce investment screening. Contrary to the popular wisdom, we do not find evidence that higher Chinese inward investments are associated with the implementation of investment screening. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:econpr:_34&r= |
| By: | Elsby, Michael W. L. (University of Edinburgh); Smith, Jennifer C. (University of Warwick, CAGE, Migration Advisory Committee); Wadsworth, Jonathan (Royal Holloway University of London, Centre for Economic Performance at the LSE, CReAM at UCL and IZA Bonn) |
| Abstract: | This paper examines the role of population flows on labour market dynamics across immigrant and native-born populations in the United Kingdom. Population flows are large, and cyclical, driven first by the maturation of baby boom cohorts in the 1980s, and latterly by immigration in the 2000s. New measures of labour market flows by migrant status uncover both the flow origins of disparities in the levels and cyclicalities of immigrant and native labour market outcomes, as well as their more recent convergence. A novel dynamic accounting framework reveals that population flows have played a nontrivial role in the volatility of labour markets among both the UK-born and, especially, immigrants. |
| Keywords: | Immigration, worker flows, labour market dynamics JEL Classification: E24, J6 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:593&r= |
| By: | Ummuhabeeba Chaliyan; Mini P. Thomas |
| Abstract: | This study investigates whether a uni-directional or bi-directional causal relationship exists between financial development and international trade for Indian economy, during the time period from 1980 to 2019. Three measures of financial development created by IMF, namely, financial institutional development index, financial market development index and a composite index of financial development is utilized for the empirical analysis. Johansen cointegration, vector error correction model and vector auto regressive model are estimated to examine the long run relationship and short run dynamics among the variables of interest. The econometric results indicate that there is indeed a long run association between the composite index of financial development and trade openness. Cointegration is also found to exist between trade openness and index of financial market development. However, there is no evidence of cointegration between financial institutional development and trade openness. Granger causality test results indicate the presence of uni-directional causality running from composite index of financial development to trade openness. Financial market development is also found to Granger cause trade openness. Empirical evidence thus underlines the importance of formulating policies which recognize the role of well-developed financial markets in promoting international trade. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.01749&r= |
| By: | Osbat, Chiara; Sun, Yiqiao; Wagner, Martin |
| Abstract: | We study exchange rate pass-through (ERPT), i.e., the impact of exchange rate movements on inflation, focusing on euro area import prices at a sectorally disaggregated level. Our estimation strategy is based on VAR-X models, thus incorporating both endogenous and exogenous explanatory variables. The impulse response functions not only allow to study the extent but also the dynamics of ERPT. We find that ERPT is heterogeneous in terms of magnitude across sectors. We further investigate what industry-specific characteristics affect the heterogeneity of ERPT. Across various model specifications including import penetration, market integration, competition and value chain integration, we find that higher market concentration and higher backward integration in global value chains decrease pass-through, in line with previous findings in the literature. JEL Classification: C50, F30, F40 |
| Keywords: | euro area, exchange rates, import prices, pass-through, sectoral disaggregation |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20212634&r= |
| By: | Jorge Carrera; Gabriel Montes-Rojas; Fernando Toledo |
| Abstract: | We study the diffusion of shocks in the global financial cycle and global liquidity conditions to emerging and developing economies. We show that the classification according to their external trade patterns (as commodities' net exporters or net importers) allows to evaluate the relative importance of international monetary spillovers and their impact on the domestic financial cycle volatility -i.e., the coefficient of variation of financial spreads and risks. Given the relative importance of commodity trade in the economic structure of these countries, our study reveals that the sign and size of the trade balance of commodity goods are key parameters to rationalize the impact of global financial and liquidity conditions. Hence, the sign and volume of commodity external trade will define the effect on countries' financial spreads. We implement a two-equation dynamic panel data model for 33 countries during 1999:Q1-2020:Q4 that identifies the effect of global conditions on the countries' commodities terms of trade and financial spreads, first in a direct way, and then by a feedback mechanism by which the terms of trade have an asymmetric additional influence on spreads. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.04218&r= |
| By: | Alfonso Expósito ((University of Málaga, Spain) ORCID number: 0000-0002-9248-4879); Amparo Sanchis-Llopis ((University of Valencia and ERICES, Spain) ORCID number: 0000-0002-0872-7859); Juan A. Sanchis-Llopis ((University of Valencia and ERICES, Spain) ORCID number: 0000-0001-9664-4668) |
| Abstract: | Using a sample of 1,405 Spanish businesses, this paper explores the role of manager gender in SMEs’ decisions to get involved in exporting and importing activities. We borrow insights from international entrepreneurship theories and feminist theories to set testable hypotheses regarding how managerial gender and entrepreneurial orientation (proactiveness, risk-taking and innovativeness) may influence SMEs export and import propensities. Using a bivariate probit model and controlling for other managerial and business characteristics, results indicate that there are not significant differences in exporting propensities between male- and female-led businesses. However, female-led SMEs show a lower importing propensity, as compared to male-led counterparts. In addition, the three dimensions of entrepreneurial orientation (proactiveness, risk-taking and innovativeness) are important drivers for participating in overseas markets, and do not depend upon the manager gender. The role of managers gender in SMEs importing activities has not been investigated so far, and this is the main contribution of our research. |
| Keywords: | Manager gender; entrepreneurial orientation; small and medium-enterprises; exporting and importing; bivariate probit model. |
| JEL: | C35 J16 F14 M21 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2115&r= |
| By: | Delzeit, Ruth; Heimann, Tobias; Schünemann, Franziska; Söder, Mareike |
| Abstract: | The latest Renewable Energy Directive (RED II) by the European Union (EU) provides an updated framework for the use of renewable energy in the EU transport sector until 2030. We employ the computable general equilibrium (CGE) model DART-BIO for a scenario-based policy analysis and evaluate different possible futures of biofuel use under four specifications of the RED II. Our results show that conventional biofuels will not become cost competitive to oil-based fuels. Moreover, we demonstrate the impact of the RED II specifications on the global production of food and feed crops. A further focus of this paper lies on the palm oil phase-out as feedstock for biofuels in the EU, to halt deforestation and land-use change in tropical countries. We find that this phase-out has a relatively small impact on global palm fruit production. Moreover, this study shows that the regulation has the potential to act as a technical barrier to trade, discriminating palm oil producing countries in favour of European rapeseed producers. |
| Keywords: | Computable General Equilibrium (CGE),EU Renewable Energy Directive (RED II),Biofuels,Land Use,Land Use Change,High iLUC-Risk,Palm Oil Biodiesel,Palm Oil Phase-Out |
| JEL: | C68 D58 F18 O13 Q16 Q17 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2203&r= |
| By: | Aubry, Amandine; Héricourt, Jérôme; Marchal, Léa; Nedoncelle, Clément |
| Abstract: | Does immigration affect wages? No decisive answer has been provided until now. We propose an up-to-date meta-analysis of the literature investigating this question, based on 2,146 estimates from 64 studies published between 1972 and 2019. We find that, on average, the literature reports a negative and close to zero effect of immigration on native wages. This result holds for both low/medium-skilled and high-skilled native individuals. This average effect, however, hides a large heterogeneity across studies. Variation across estimates can be explained by the presence of structural heterogeneity such as the country of analysis or the use of micro-level data, as well as to heterogeneity in research designs such as the use of difference-in-differences. Finally, we estimate a significant and negative effect of publishing in leading academic journals and propose a discussion on the potential publication bias in the literature. |
| Keywords: | Immigration, Labor Market, Meta-Analysis, Wage |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2202&r= |
| By: | M. Delogu; D. Paolini; G. Atzeni; LG Deidda |
| Abstract: | We analyze the effects of migration allowing for endogenous labor supply in a standard two-region model with monopolistically competitive producers and love for variety. We find that the welfare effects of migration depend on firms' market power in the final good markets. If market power is sufficiently high, migration of low-skill individuals positively affects the welfare of native high skill individuals in the destination region, while low skill individuals are unaffected. Natives of the origin region are always better off, irrespective of their skills. Differently, if market power is sufficiently low, low skill migration makes both high and low individuals native of the destination region better off. |
| Keywords: | Welfare Analysis;Monopolistic Competition;migration;Labor Supply |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:202111&r= |
| By: | Flora Haberkorn; Anderson Monken; Eva Van Leemput; Henry L. Young |
| Abstract: | After collapsing in the second half of 2020, global demand for goods, as reflected in global trade, has been exceptionally strong and now well exceeds pre-pandemic levels. The sharp bounceback reflects several factors, including an unprecedented amount of global stimulus and the drawdown of excess savings (especially for high-income households). |
| Date: | 2021–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2021-12-03-2&r= |
| By: | Isaac K., Ofori; Marcel A. T., Dossou; Simplice A., Asongu; Mark K., Armah |
| Abstract: | In line with the SDG 10 and Aspiration 1 of Africa’s Agenda 2063, this study examines whether: (i) the remarkable inflow of Chinese FDI to Africa matters for bridging the continent’s marked income inequality gap, (ii) Africa’s institutional fabric is effective in propelling Chinese FDI towards the equalisation of incomes in Africa, and (iii) there exist relevant threshold levels required for the various governance dynamics to cause Chinese FDI to equalise incomes in Africa. Our results, which are based on the dynamic GMM estimator for the period 1996 – 2020, reveal that though: (1) Chinese FDI contributes to equitable income distribution in Africa, the effect is weak, and (2) Africa’s institutional fabric matters for propelling Chinese FDI towards the equalisation of incomes across the continent, governance mechanisms for ensuring political stability, low corruption, and voice and accountability are keys. Finally, critical masses required for these three key governance dynamics to propel Chinese FDI to reduce income inequality are 0.8, 0.5 and 0.1, respectively. These critical masses are thresholds at which governance is a necessary but no longer a sufficient condition to complement Chinese FDI in order to mitigate income inequality. Hence, at the attendant thresholds, complementary policies are worthwhile. Policy recommendations are provided in the end. |
| Keywords: | Africa; Agenda 2063; China; Corruption; Governance; FDI; Income Inequality |
| JEL: | F2 F6 O15 O43 O55 R58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111236&r= |
| By: | Paul H. Jung; Jean-Claude Thill; Luis Armando Galvis-Aponte |
| Abstract: | We investigate the effect of domestic armed violence brought about by political instability on the geography of distance frictions in freight mobility and the resulting differential access of regions to global markets. The Colombian transportation system has been found to be impeded by deficiencies in landside transport infrastructure and institutions, and by fragmented political environments. The micro-level analysis of U.S.-bounded export shipping records corroborates that export freight shipping from inland regions is re-routed to avoid exposures to domestic armed violence despite greatly extended landside and maritime shipping distances. We exploit the trajectories of freight shipping from Colombian regions and spatial patterns of violent armed conflicts to see how unstable geopolitical environments are detrimental to freight shipping mobility and market openness. The discrete choice model shows that the shipping flow is greatly curbed by the extended re-routing due to domestic armed violence and that inland regions have restricted access to the global market. The perception of risk and re-routing behavior is found heterogeneous across shipments and conditional to shipment characteristics, such as commodity type, freight value and shipper sizes. The results highlight that political stability must be accommodated for improved freight mobility and export-oriented economic development in the global South. **** RESUMEN: En este documento se investiga el efecto de la violencia armada doméstica provocada por la inestabilidad política sobre las fricciones de la distancia en la movilidad de carga. Además, el efecto de esas fricciones sobre el acceso diferencial de las regiones a los mercados globales. Se concluye que el sistema de transporte colombiano se ve obstaculizado por deficiencias en la infraestructura e instituciones de transporte terrestre y por entornos políticos fragmentados. El análisis a nivel micro de los registros de exportaciones hacia Estados Unidos corrobora que el envío de carga de exportación desde las regiones del interior se redirige para evitar exposiciones a la violencia armada doméstica a pesar de las amplias distancias de envío marítimo y terrestre existentes. Aprovechamos las trayectorias del transporte de carga desde las regiones colombianas y los patrones espaciales de los conflictos armados violentos para ver cómo los entornos geopolíticos inestables son perjudiciales para la movilidad del transporte de carga y la apertura del mercado. A través de un modelo de elección discreta se muestra que el flujo de envío se ve frenado por el desvío debido a la violencia armada doméstica y que las regiones del interior tienen acceso restringido al mercado global. La percepción de riesgo y comportamiento de redireccionamiento se considera heterogénea entre los envíos y está condicionada a las características del envío, como el tipo de mercancía, el tamaño y el valor del flete. Los resultados resaltan que el conseguir la estabilidad política puede ayudar a mejorar la movilidad de carga y el desarrollo económico orientado a la exportación en el Sur global. |
| Keywords: | violence, trade, discrete choice model, Colombia, violencia, comercio internacional, modelos de elección discreta, Colombia |
| JEL: | F14 R10 C25 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:region:303&r= |
| By: | Paul H. Jung; Jean-Claude Thill; Luis Armando Galvis-Aponte |
| Abstract: | We investigate the effect of domestic armed violence brought about by political instability on the geography of distance frictions in freight mobility and the resulting differential access of regions to global markets. The Colombian transportation system has been found to be impeded by deficiencies in landside transport infrastructure and institutions, and by fragmented political environments. The micro-level analysis of U.S.-bounded export shipping records corroborates that export freight shipping from inland regions is re-routed to avoid exposures to domestic armed violence despite greatly extended landside and maritime shipping distances. We exploit the trajectories of freight shipping from Colombian regions and spatial patterns of violent armed conflicts to see how unstable geopolitical environments are detrimental to freight shipping mobility and market openness. The discrete choice model shows that the shipping flow is greatly curbed by the extended re-routing due to domestic armed violence and that inland regions have restricted access to the global market. The perception of risk and re-routing behavior is found heterogeneous across shipments and conditional to shipment characteristics, such as commodity type, freight value and shipper sizes. The results highlight that political stability must be accommodated for improved freight mobility and export-oriented economic development in the global South. **** RESUMEN: En este documento se investiga el efecto de la violencia armada doméstica provocada por la inestabilidad política sobre las fricciones de la distancia en la movilidad de carga. Además, el efecto de esas fricciones sobre el acceso diferencial de las regiones a los mercados globales. Se concluye que el sistema de transporte colombiano se ve obstaculizado por deficiencias en la infraestructura e instituciones de transporte terrestre y por entornos políticos fragmentados. El análisis a nivel micro de los registros de exportaciones hacia Estados Unidos corrobora que el envío de carga de exportación desde las regiones del interior se redirige para evitar exposiciones a la violencia armada doméstica a pesar de las amplias distancias de envío marítimo y terrestre existentes. Aprovechamos las trayectorias del transporte de carga desde las regiones colombianas y los patrones espaciales de los conflictos armados violentos para ver cómo los entornos geopolíticos inestables son perjudiciales para la movilidad del transporte de carga y la apertura del mercado. A través de un modelo de elección discreta se muestra que el flujo de envío se ve frenado por el desvío debido a la violencia armada doméstica y que las regiones del interior tienen acceso restringido al mercado global. La percepción de riesgo y comportamiento de redireccionamiento se considera heterogénea entre los envíos y está condicionada a las características del envío, como el tipo de mercancía, el tamaño y el valor del flete. Los resultados resaltan que el conseguir la estabilidad política puede ayudar a mejorar la movilidad de carga y el desarrollo económico orientado a la exportación en el Sur global. |
| Keywords: | violence, trade, discrete choice model, Colombia, violencia, comercio internacional, modelos de elección discreta, Colombia |
| JEL: | F14 R10 C25 |
| Date: | 2021–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000102:019925&r= |
| By: | Gianluca Benigno; Julian di Giovanni; Jan J. J. Groen; Adam I. Noble |
| Abstract: | Supply chain disruptions have become a major challenge for the global economy since the start of the COVID-19 pandemic. Factory shutdowns (particularly in Asia) and widespread lockdowns and mobility restrictions have resulted in disruptions across logistics networks, increases in shipping costs, and longer delivery times. Several measures have been used to gauge these disruptions, although those measures tend to focus on selected dimensions of global supply chains. In this post, we propose a new gauge, the Global Supply Chain Pressure Index (GSCPI), which integrates a number of commonly used metrics with an aim to provide a more comprehensive summary of potential disruptions affecting global supply chains. |
| Keywords: | supply chain disruption; inflation; pandemic; COVID-19; global shocks |
| JEL: | F0 |
| Date: | 2022–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:93594&r= |
| By: | Kabinet Kaba (CERDI, University Clermont Auvergne); Mahamat Moustapha (Paris Dauphine University-PSL) |
| Abstract: | Sub-Saharan African firms face enormous obstacles to their development. The main constraints to business performance identified are poor access to finance and a weak domestic market. In this paper, we examine how international remittances affect firms’ performance. Specifically, we investigate the role of remittances on capital accumulation, sales, and employment in 34,010 f irms operating in 42 Sub-Saharan African countries between 2006 and 2020. Using a fixed-effect instrumental variable approach to control for the endogeneity of remittances, we find that international remittances positively affect the share of capital held by nationals in manufacturing firms. Moreover, international remittances positively affect sales in non-manufacturing firms, while a negative effect on the sales of manufacturing firms is observed. Regarding the effect of remittances on employment, we find a positive impact on both manufacturing and non-manufacturing f irms. Heterogeneity tests suggest that the effect of remittances on firms’ performance is larger in less financially developed and non-resource-rich countries. As for the negative impact of remittances on sales in manufacturing firms, the results show that it is entirely due to small firms. Finally, using remittances per capita instead of remittances relative to GDP, similar result are found. |
| Keywords: | Remittances, Firm Performance, Entrepreneurship, Saving and Capital Investment, Firm Employment, Africa |
| JEL: | F24 L25 L26 M51 O16 O55 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt202107&r= |
| By: | Laurence J. Kotlikoff; Felix Kubler; Andrey Polbin; Simon Scheidegger |
| Abstract: | Climate change will impact current and future generations in different regions very differently. This paper develops a large-scale, annually calibrated, multi-region, overlapping generations model of climate change to study its heterogeneous effects across space and time. We model the relationship between carbon emissions and the global average temperature based on the latest climate science. Predicated average global temperature is used to determine, via pattern-scaling, region-specific temperatures and damages. Our main focus is determining the carbon policy that delivers present and future mankind the highest uniform percentage welfare gains – arguably the policy with the highest chance of global adoption. Damages from climate change are positive for all regions apart from Russia and Canada, with India and South Asia Pacific suffering the most. The optimal policy is implemented via a time-varying global carbon tax plus region-and generation-specific net transfers. Uniform welfare improving carbon policy can materially limit global emissions, dramatically shorten the use of fossil fuels, and raise the welfare of all current and future agents by over four percent. Unfortunately, the pursuit of carbon policy by individual regions, even large ones, makes only a limited difference. However, coalitions of regions, particularly ones including China, can materially limit carbon emissions. |
| Keywords: | none |
| JEL: | H23 O44 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:21.15&r= |