nep-int New Economics Papers
on International Trade
Issue of 2022‒01‒17
43 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The US-China Trade War and Global Reallocations By Pablo Fajgelbaum; Pinelopi K. Goldberg; Patrick J. Kennedy; Amit Khandelwal; Daria Taglioni
  2. EU-China Trade and intra-EU Trade: Substitute or Complementary? By Huiyao Chen; Changyuan Luo; Mary-Françoise Renard; Shiyi Sun
  3. Complexity and Productive Structure in Latin America: A Network Analysis of Trade Patterns By Calzada, BCO; Spinola, Danilo
  4. International Development Lending and Global Value Chains in Africa By Amendolagine, Vito
  5. The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture By Morgan, Stephen; Arita, Shawn; Beckman, Jayson; Ahsan, Saquib; Russell, Dylan; Jarrell, Philip; Kenner, Bart
  6. The relationship between foreign direct investment and economic growth in SADC region from 2000 to 2019: An econometric view By Hlongwane, Nyiko Worship; Mmutle, Tumelo Donald; Daw, Olebogeng David
  7. The effect of corruption on foreign direct investment in natural resources: A Latin American case study By Manuel David Cruz; Ashish Kumar Sedai
  8. The role of value added across economic sectors in modulating the effects of FDI on TFP and economic growth dynamics By Simplice A. Asongu; Christelle Meniago; Raufhon Salahodjaev
  9. On the Origins of the Multinational Premium By José Fillat; Stefania Garetto
  10. Direct Investments and Current Account Balance: A Sectoral Overview By Kazim Azim Ozdemir; Ahmet Adnan Eken; Didem Yazici
  11. Export boosting policies and firm behaviour: Review of empirical evidence around the world By Stjepan Srhoj; Vanja Vitezic; Joachim Wagner
  12. How corruption mitigates the effect of FDI on economic growth? By Yahyaoui, Ismahen
  13. China: Developing Country and World Trade Giant By Uri Dadush
  14. Effects of Infrastructures on Environmental Quality Contingent on Trade Openness and Governance Dynamics in Africa By Tii N. Nchofoung; Simplice A. Asongu
  15. Trade shocks and labour market Resilience in Sub-Saharan Africa: Does the franc zone Response Differently? By Tii N. Nchofoung
  16. Repackaging FDI for Inclusive Growth: Nullifying Effects and Policy Relevant Thresholds of Governance By Ofori, Isaac K.; Asongu, Simplice A.
  17. Value-added Tax Reform and Services Exports: Evidence from China By Zhang, Yan; Bai, Zhuoran; Findaly, Christopher
  18. Terms of Trade, Trade Openness and Government Spending in Nigeria By Obiakor, Rowland; Okwu, Andy; Akpa, Emeka
  19. Labor-share dynamics -The role of import competition By Paulie, Charlotte
  20. Repackaging FDI for Inclusive Growth: Nullifying Effects and Policy Relevant Thresholds of Governance By Isaac K. Ofori; Simplice A. Asongu
  21. ICT for Sustainable Development: Global Comparative Evidence of Globalisation Thresholds By Tii N. Nchofoung; Simplice A. Asongu
  22. Endogenous Spatial Production Networks: Quantitative Implications for Trade & Productivity By Piyush Panigrahi
  23. Bridging Africa’s Income Inequality Gap: How Relevant Is China’s Outward FDI to Africa? By Ofori, Isaac K.; Dossou, Toyo A. M.; Asongu, Simplice A.; Armah, Mark. K.
  24. The Transmission Mechanisms of International Business Cycles: Output Spillovers through Trade and Financial Linkages By Falk Bräuning; Viacheslav Sheremirov
  25. Seafood Supply and Demand Disruptions: The Covid-19 Pandemic and Shrimp By Schmitz, Andrew; Nguyen, Ly
  26. Towards Efforts to Enhance Tax Revenue Mobilisation in Africa: Exploring Synergies between Industrialisation and ICTs By Isaac K. Ofori; Pamela E. Ofori; Simplice A. Asongu
  27. African migrants plight in India: Afrophobia impedes India's race for Africa's resources and markets By Kohnert, Dirk
  28. The relationships between renewable energy, net energy imports, arms exports, and military expenditures in the USA By Ben Youssef, Slim
  29. Determinants of Advancement in Information Communication Technologies and its Prospect under the role of Aggregate and Disaggregate Globalization By Audi, Marc; Ali, Amjad; Al-Masri, Razan
  30. Several Modes of Digitalization of Value Chains and Implications for Entrepreneurship: The Case of the Apparel Industry By Tri VuPhu; Keun Lee; Donghyun Park
  31. Role of FDI in Decomposing of Scale and Technique Effects on China’s Energy Consumption By Shahbaz, Muhammad; Sinha, Avik; Ahmad, Shabbir; Jiao, Zhilun; Wang, Zhaohua
  32. Immigrating into a Recession: Evidence from Family Migrants to the U.S. By Toman Barsbai; Andreas Steinmayr; Christoph Winter
  33. Migrants looking for opportunities - On destination size and spatial aggregation in the gravity equation for migration By Persyn, Damiaan
  34. The Valuation Effects of Trade By Omar Barbiero
  35. Extended Supply-Use Tables By Dutta, Sourish
  36. Challenging Pax Americana: The Commercial Imperative in Chinese Arms Exports to Africa - A Case Study of Uganda and Kenya By Munyi, Elijah
  37. Specialize or diversify? And in What? Trade composition, quality of specialization and persistent growth By Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito
  38. Testing the Triple Deficit Hypothesis for Sub-Saharan Africa: Implications for the African Continental Free Trade Area By Samson N. Okafor; Chukwunonso Ekesiobi; Ogonna Ifebi; Stephen K. Dimnwobi; Simplice A. Asongu
  39. Effects of Emigration on Gender Norms in Countries of Origin By Leonid V. Azarnert; Slava Yakubenko
  40. The EU’s Carbon Border Tax is Likely to do More Harm than Good By Uri Dadush
  41. The Republic of South Africa and the African Continental Free Trade Area: Opportunities and Challenges in a Post-COVID-19 Environment By Isabelle Tsakok
  42. From Immigrant Entrepreneurship to Plurinational Firms: Evidence from Italy By Arrighetti, Alessandro; Gnarini, Daniela; Lasagni, Andrea; Semenza, Renata
  43. The case for a Carbon Border Adjustment: Where do economists stand? By Alienor Cameron; Marc Baudry

  1. By: Pablo Fajgelbaum; Pinelopi K. Goldberg; Patrick J. Kennedy; Amit Khandelwal; Daria Taglioni
    Abstract: We study global trade responses to the US-China trade war. We estimate the tariff impacts on product-level exports to the US, China, and rest of world. On average, countries decreased exports to China and increased exports to the US and rest of world. Most countries export products that complement the US and substitute China, and a subset operate along downward-sloping supplies. Heterogeneity in responses, rather than specialization, drives export variation across countries. Surprisingly, global trade increased in the products targeted by tariffs. Thus, despite ending the trend towards tariff reductions, the trade war did not halt global trade growth.
    JEL: F10 F12 F14
    Date: 2021–12
  2. By: Huiyao Chen (The Wharton School - University of Pennsylvania [Philadelphia]); Changyuan Luo; Mary-Françoise Renard (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Shiyi Sun
    Abstract: This paper examines how EU-China trade affected intra-EU trade. The estimation shows that when a country's share of trade with China increased, its share of trade with EU partners declined. This suggests that stronger trade links with China resulted in weaker trade links among EU countries. Furthermore, the "disintegration" effect of the export to China was stronger than that of import from China, meaning that the influence of China as an export destination was greater than that of China as a source of import. An extended analysis shows that the disintegration effect was most strongly felt in trade links among EU core countries, less strongly felt in trade links between EU core and periphery countries, and least strongly felt in trade links among EU periphery countries. In comparison, we find that EU import from the US and India significantly weakened and strengthened intra-EU trade respectively. Estimation results using product level data demonstrate that the effects depend on the types of products we are concerned with. Whether using gross value or value added, the conclusions remain valid.
    Keywords: complementary,substitute,intra-EU trade,EU-China trade
    Date: 2021
  3. By: Calzada, BCO; Spinola, Danilo
    Abstract: While plenty of existing literature focuses on Latin America’s trade relations with key partners, i.e. the US and China, and on its insertion into global value chains, intra-regional trade networks remain understudied. In this paper, we contribute to the understanding of the latter by looking at trade patterns in the region, focusing on how balanced and unbalanced trade occurs among Latin American countries and selected trade partners. We first develop an Index of Modern Balanced Trade (IMBT) that identifies balanced trade relations based on the share of complex goods that is exported and imported among two countries using data from the Observatory of Economic Complexity (Hausmann & Hidalgo, 2014). Based on the IMBT, we then build two types of networks (Balanced and Unbalanced Trade Networks) in three different years that represent specific moments in Latin American economic history. We find that, as expected, most Latin American countries’ relations with partners outside the region remain largely unbalanced. However, our results also show that the Balanced Trade Network within the region has steadily expanded.
    Keywords: Latin America; Trade Integration; Network Analysis; Economic Complexity.
    Date: 2022–01–10
  4. By: Amendolagine, Vito
    Abstract: As the world becomes more and more integrated, participating in global production fragmentation by connecting to global value chains (GVCs) can provide a "golden" opportunity for developing countries to access international markets and boost economies. Vito Amendolagine analyses the extent to which international development lending can support African countries in trading intermediate goods with foreign partners with the goal of further specializing in high value-added activities within cross-national production networks. Based on his research, it appears that Chinese lending increases the involvement of borrowing countries in the international trade of intermediate goods, while World Bank loans contribute to move African countries toward higher valued added activities along international production chains.
    Date: 2021
  5. By: Morgan, Stephen; Arita, Shawn; Beckman, Jayson; Ahsan, Saquib; Russell, Dylan; Jarrell, Philip; Kenner, Bart
    Abstract: In 2018, the United States imposed Section 232 tariffs on steel and aluminum imports from major trading partners and separately Section 301 tariffs on a broad range of imports from China. In response to these actions, six trading partners—Canada, China, the European Union, India, Mexico, and Turkey—responded with retaliatory tariffs on a range of U.S. exports, including agricultural and food products. The agricultural products targeted for retaliation were valued at $30.4 billion in 2017, with individual product lines experiencing tariff increases ranging from 2 to 140 percent. This report provides a detailed look at the impact of retaliatory tariffs on farmers at the State level by estimating the direct export losses associated with the trade conflict. Using the product-line econometric estimates from Grant et al. (2021) and the USDA, Economic Research Service’s State Exports, Cash Receipts Estimates, this report comprehensively assesses the direct effect of retaliatory tariffs on U.S. agricultural exports to these retaliating trading partners across States and commodities. From mid-2018 to the end of 2019, this study estimates that retaliatory tariffs caused a reduction of more than $27 billion (or annualized losses of $13.2 billion) in U.S. agricultural exports, with the largest decline in export losses occurring for exports to China. At the commodity level, soybeans accounted for the predominant share of total trade loss, making up nearly 71 percent ($9.4 billion of annualized losses) of the total, followed by sorghum (over 6 percent or $854 million in annualized losses), and pork (nearly 5 percent or $646 million in annualized losses). At the State level, losses were largely concentrated in the Midwest with Iowa ($1.46 billion in annualized losses), Illinois ($1.41 billion in annualized losses), and Kansas ($955 million in annualized losses), accounting for approximately 11, 11, and 7 percent, respectively, of the total losses. For soybeans, most of the trade lost by the United States was gained by Brazil. In 2020, U.S. agricultural exports to China significantly rebounded following the signing of the U.S.-China Phase One Economic and Trade Agreement (Phase One Agreement) and a separate retaliatory tariff waiver program; however, 1 year after the deal, U.S. market share still remained below pre-retaliatory tariff levels.
    Keywords: Agricultural Finance, Crop Production/Industries, Demand and Price Analysis, Financial Economics, International Relations/Trade, Political Economy
    Date: 2022–01–11
  6. By: Hlongwane, Nyiko Worship; Mmutle, Tumelo Donald; Daw, Olebogeng David
    Abstract: This study investigates the relationship between foreign direct investment and economic growth in SADC region from 2000 to 2019. The study utilises panel data spanning from 2000 to 2019 sourced from the World Bank. The study employs a panel ARDL and panel Error Correction Model to analyse the relationship between foreign direct investment and economic growth in SADC region. The statistical results revealed a positive statistically significant short run relationship and negative statistically significant long run relationship between foreign direct investment and economic growth.
    Keywords: Foreign Direct Investment (FDI), Economic Growth, Error Correction Model, SADC, Panel ARDL model
    JEL: C01 C22 E41 F15 F43 R11
    Date: 2021–12–08
  7. By: Manuel David Cruz; Ashish Kumar Sedai
    Abstract: This study looks at the relationship between corruption and foreign direct investment (FDI) in natural resources using a panel of 20 Latin American countries from 1995-2019. We find that lower levels of corruption have a positive and significant impact on resource FDI supporting the grabbing hand hypothesis. A one-point increase in the Corruption Perception Index (CPI) is associated with an increase between 52-57 million dollars across models with varying controls. Results also show a nonlinear relationship between CPI and resource FDI, suggesting that when a country becomes less corrupt and improves its economic, social and political performance, it usually attracts more resource FDI. The analysis is robust to alternate measures of corruption (CPI, ICRG, and WGI) and different specifications of the dynamic panel model. Finally, the study highlights significant precautions and pre-conditions required to increase economic development when attracting natural resource-based FDI.
    Keywords: Foreign direct investment, corruption, natural resources, grabbing hand, Latin America
    JEL: F23 F21 E02
    Date: 2021–12
  8. By: Simplice A. Asongu (Yaounde, Cameroon); Christelle Meniago (Sol Plaatje University, South Africa); Raufhon Salahodjaev (Tashkent, Uzbekistan)
    Abstract: This study investigates: (i) the effect of foreign direct investment (FDI) on total factor productivity (TFP) and economic growth dynamics, and (ii) the relevance of value added from three economic sectors in modulating the established effect of FDI on TFP and economic growth dynamics. The geographical and temporal scopes are respectively 25 Sub-Saharan African countries and the period 1980–2014. The empirical evidence is based on non-interactive and interactive Generalised Method of Moments. The following main findings are established. First, FDI has a positive effect on GDP growth, GDP per capita and welfare real TFP. Second, the effect of FDI is negative on real GDP and TFP, while the impact is insignificant on real TFP growth and welfare TFP. Third, values added to the three economic sectors largely modulate FDI to produce negative net effects on TFP and growth dynamics. Policy implications are discussed with particular emphasis on the need to complement added value across various economic sectors in order to leverage on the benefits of FDI in TFP and economic growth. To the best of knowledge, this is the first study to assess how value added from various economic sectors affect the relevance of FDI on macroeconomic outcomes.
    Keywords: Economic output, total factor productivity, foreign investment, agricultural sector, manufacturing sector, service sector, sub-Saharan Africa
    JEL: E23 F21 F30 F43 O55
    Date: 2021–01
  9. By: José Fillat; Stefania Garetto
    Abstract: How do foreign direct investment (FDI) dynamics relate to the risk premium of a firm? To answer this question, we compare the stock returns of US firms with different FDI and mergers and acquisitions (M&A) exposure to study the evolution of stock returns as firms expand into foreign markets. We document three empirical regularities. First, there are cross-sectional risk premia associated with both multinational activity and mergers and acquisitions. Second, firm-level stock returns decline when a firm undertakes M&A activity and with merger deepening. Third, future multinational acquirers already have higher stock returns compared with domestic non-acquirers prior to entering foreign markets, indicating that cross-sectional returns differentials are driven by selection based on common unobserved firm characteristics. We find that CEOs play a role in explaining the relationship between firms’ risk premia and foreign expansion. To rationalize these facts, we develop a dynamic model in which management attitudes shape the relationship between firm characteristics, selection into FDI, and risk premia.
    Keywords: multinational firms; mergers and acquisitions; stock returns; management
    JEL: F12 F23 F36
    Date: 2021–10–01
  10. By: Kazim Azim Ozdemir; Ahmet Adnan Eken; Didem Yazici
    Abstract: In this study, the relationship between Turkey’s sectoral foreign direct investment (FDI) and the current account balance (CAB) is analyzed. Using the local projection (LP) method developed by Jorda (2005), the dynamic effects of FDI inflows on the current account balance are analyzed quarterly and cumulatively. A negative relationship is observed between total FDI and CAB. This dynamic impact is also confirmed for the industrial sectors and the service sectors as a whole. As for the sub-sectors, FDI in eight sub-sectors positively contributes to the CAB in the long term. FDI in all other sub-sectors has a cumulative negative impact on CAB.
    Keywords: Foreign direct investment, Current account balance, Local projection
    JEL: F21 F43 C32
    Date: 2021
  11. By: Stjepan Srhoj (Department of Economics and Business, University of Dubrovnik, Lapadska obala 7, 20000 Dubrovnik, Republic of Croatia); Vanja Vitezic (Faculty of Tourism and Hospitality Management, University of Rijeka, Opatija, Croatia); Joachim Wagner (Leuphana University of Lüneburg)
    Abstract: How effective are direct government policies for boosting exports? We answer this question with a structured overview of 34 studies covering 26 countries around the world, and in doing so, we provide nine findings. We show export boosting policies are heterogenenous by design and include export promotion policies, public grants for exporters, public export guarantee schemes, subsidised export loans, and randomised foreign market access programmes. Our review provides insights into policy effectiveness with respect to extensive and intensive export margins as well as firms' production function inputs and its outputs. Heterogeneity of effects across firm characteristics is emphasised and the discussion is enriched with new evidence on spillover effects from export boosting policies. Finally, we provide back-of-the-envelope calculations of aggregate macroeconomic effects and give recommendations for policymakers. Our findings show export boosting policies are relevant and proven-to-be-effective policy instruments.
    Keywords: export promotion policies; guarantees; grants; loans; impact evaluation; review
    JEL: F13 F14 L15 L25
    Date: 2020–11
  12. By: Yahyaoui, Ismahen
    Abstract: Unlike previous studies in the Foreign Direct Investment-economic growth literature, this study uses the panel vector autoregressive (PVAR) model to examine the role of corruption in inhibiting the effect of Foreign Direct Investment on the African economic growth. Furthermore, we use the impulse response function tool to better understand the reaction of economic growth, after shock on Foreign Direct Investment and the interaction between Foreign Direct Investment and Corruption. Using data over the period 1996–2016, this research results show that the Foreign Direct Investment promotes the African economic growth. While corruption mitigates this effect. Therefore, the implications of this paper are that public policies should aim to minimize the level of corruption in order to ameliorate the attractiveness of FDI and ensure its efficient utilization in order to give strength to the level of economic growth.
    Keywords: corruption, FDI, economic growth
    JEL: A1
    Date: 2021–12–22
  13. By: Uri Dadush
    Abstract: China remains a developing country but is also a dominant force in world trade. This duality is the source of acute tensions in trade relations, and has culminated in a trade war between China and the United States. China is accused of taking advantage of trade rules that are too lenient: lack of reciprocity in market access, insufficient protection of intellectual property, and widespread and opaque subsidization. Responding to these criticisms, China is making progress on market access and intellectual property protection, but its progress in addressing subsidization appears to have stalled. There needs to be more awareness in China of the repercussions of its policies on world trade, and more recognition in the West of China’s constraints and limitations as a developing country.
    Date: 2021–05
  14. By: Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: The objective of this study is to evaluate: (i) the effects of infrastructures on CO2 emission and (ii) how trade openness and governance contribute to mitigating these effects. The results from the system GMM methodology for 36 African countries between the 2003-2019 period show that infrastructural development exacerbates CO2 emission in Africa. This result is robust across different types of infrastructural development indexes. When the indirect effect regressions are carried out by interacting governance and trade openness with the different infrastructural development variables, the following results are obtained. Firstly, infrastructural development interacts with governance producing a positive net effect, up to a governance threshold estimate of 0.532 when the positive net effect is nullified. Secondly, infrastructures interact with trade openness producing a negative net effect up to a trade openness threshold of 78.066914 (% of GDP) when the negative net effect is nullified. Positive and negative synergy effects are also apparent. Practical policy implications are discussed based on the results obtained.
    Keywords: Infrastructures, CO2, trade openness, governance, Africa, System GMM
    JEL: N67 N77 C23 Q56
    Date: 2021–01
  15. By: Tii N. Nchofoung (University of Dschang, Cameroon)
    Abstract: The objective of this paper is to evaluate the impact of commodity terms of trade (CTOT) shocks on the labour market resilience of Sub-Saharan Africa (SSA) countries, comparing the franc zone countries on one hand, from the non-franc zone countries on the other hand. The results from the PVAR estimation indicate a positive impact of commodity terms of trade shocks on labour market resilience in SSA countries, a result that was replicated in both the franc zone and the non-franc zone countries. When robustness was checked through the PSTR, this positive relationship was established to be non-linear. The policy implications of the study invite the policy makers to diversify their economies to limit their heavy reliance of their economies on commodities.
    Keywords: commodity terms of trade; resilience; franc zone; PVAR; PSTR
    JEL: F16 F14 C23
    Date: 2022–01
  16. By: Ofori, Isaac K.; Asongu, Simplice A.
    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: Africa,Economic Integration,FDI,Governance,Inclusive Growth
    JEL: F6 F15 O43 O55 R58
    Date: 2022
  17. By: Zhang, Yan; Bai, Zhuoran; Findaly, Christopher
    Abstract: In 2012, a sales tax was replaced in China by a value-added tax (VAT). The effect of this change on services exports is evaluated in this paper. VAT reform was introduced across provinces and service sectors at different times, so we can identify the impacts of VAT reform on firms’ export behavior by utilizing a difference-in-difference-in-difference (DDD) estimation methodology. We find that VAT reform significantly increases service exports, in both intensive and extensive margins. The export enhancing effects are larger for non-state-owned enterprises, and for firms of larger scale and higher productivity levels. VAT reform alleviates tax magnification and double taxation, and effectively promotes the competitiveness of China’s services exports.
    Keywords: VAT, Service exports, Export tax rebate
    JEL: F14 H25 L80
    Date: 2021–12
  18. By: Obiakor, Rowland; Okwu, Andy; Akpa, Emeka
    Abstract: In this study, we estimated the short-run and long-run effect of terms of trade, trade openness and government spending in Nigeria from 1981 to 2019. Data for this study was sourced from the World Bank’s World Development Indicators (WDI), Central Bank of Nigeria’s (CBN) Statistical Bulletin, and FRED Economic Data. Using the ARDL estimation method, the study found that terms of trade do not significantly determine government spending in both the short-run and long-run. The short-run effect of trade openness on government was not significant, but its long-run effect was negative and statistically significant, confirming the efficiency hypothesis in the relationship between trade openness and government spending.
    Keywords: Terms of trade, Trade openness, ARDL
    JEL: F10 F14
    Date: 2021–09
  19. By: Paulie, Charlotte (Uppsala University,)
    Abstract: Does increasing product-market competition from foreign firms affect domestic labor shares? By combining detailed Swedish firm-level data with an instrumental variable design, I show that an increase in import penetration caused by increased global competition results in a decrease in domestic industry-level labor shares. The decrease comes both from a reallocation of firms’ market shares and a fall in labor shares at the firm level. The analysis shows that the negative effect of competition on firm-level labor shares is driven by an increase in productivity that is not met by a corresponding increase in compensation to labor. I use these findings to calibrate a heterogeneous-firm model where domestic and foreign firms compete on the domestic product market. The calibrated model predicts that an increase in foreign competition corresponding to a one standard deviation increase in import penetration results in a 1.12 percentage point increase in welfare.
    Keywords: Labor Share; Competition; International Trade; Welfare.
    JEL: E25 F10 L11
    Date: 2021–10–15
  20. 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
  21. By: Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: The objectives of this paper are to investigate the effect of ICT on sustainable development and the mechanisms through which the effect is modulated. The methodology involves the: (i) Fixed Effects estimator to control for individual heterogeneity, (ii) Driscoll and Kraay estimator to control for cross-section dependence between panels, (iii) the Mean Group estimator to take into account the averages between panel groups, (iv) the system GMM to correct for unobserved heterogeneity and simultaneity bias and (v) the instrumental variable Fixed Effects Tobit to take in to account the limited range in our dependent variable. The results show that ICT has a positive and significant effect on sustainable development. Whereas overall net effects are positive, the findings are contingent on the choice of the ICT measurement, the geographical location of the economy and the income group category. The study recommends policy makers to take into account ICT and the advantages it offers in the elaboration of measures for the sustainable development agenda
    Keywords: ICT; Sustainable development; panel data; trade openness; foreign direct investments
    JEL: C52 O38 O40 O55 P37
    Date: 2021–01
  22. By: Piyush Panigrahi (University of California, Berkeley)
    Abstract: Larger Indian firms selling inputs to other firms tend to have more customers, tend to be used more intensively by their customers, and tend to have larger customers. Motivated by these regularities, I propose a novel empirical model of trade featuring endogenous formation of input-output linkages between spatially distant firms. The empirical model consists of (a) a theoretical framework that accommodates first order features of firm-to-firm network data, (b) a maximum likelihood framework for structural estimation that is uninhibited by the scale of data, and (c) a procedure for counterfactual analysis that speaks to the effects of micro- and macro- shocks to the spatial network economy. In the model, firms with low production costs end up larger because they find more customers, are used more intensively by their customers and in turn their customers lower production costs and end up larger themselves. In the model, differences in production costs across firms arise not just from differences in productivity but also from ï¬ nding the most cost-effective suppliers of intermediate inputs. Firms with low production costs end up larger because they ï¬ nd more customers, are used more intensively by their customers and in turn their customers lower production costs and end up larger themselves. The model is estimated using novel micro-data on firm-to-firm sales between Indian firms. The estimated model implies that a 10% decline in inter-state border frictions in India leads to welfare gains ranging between 1% and 8% across districts. Moreover, over half of the variation in changes in firms’ sales to other firms can be explained by endogenous changes in the network structure.
    Keywords: Network formation, Production networks, Firm-to-firm networks, International trade, Economic geography, Spatial economics
    JEL: F11 F12 D24 C67 C68 L11 O11 O12 R12 R15
    Date: 2021–11
  23. By: Ofori, Isaac K.; Dossou, Toyo A. M.; Asongu, Simplice A.; Armah, Mark. K.
    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. Policy recommendations are provided in the end.
    Keywords: Africa,Agenda 2063,China,Corruption,China,FDI,Income Inequality
    JEL: F6 F15 O43 O55 R58
    Date: 2021
  24. By: Falk Bräuning; Viacheslav Sheremirov
    Abstract: We study the transmission channels through which shocks affect the global economy and the cross-country comovement of real economic activity. For this purpose, we collect detailed data on international trade and financial linkages as well as domestic macro and financial variables for a large set of countries. We document significant international output comovement following U.S. monetary shocks, and find that openness to international trade matters more than financial openness in explaining cross-country spillovers. In particular, output in countries with a high share of exports and imports responds to U.S. monetary shocks significantly more than output in countries with a low share, whereas we do not find material heterogeneity depending on international investment positions or financial flows in the balance of payments. We further document strong network amplification associated with the patterns of bilateral trade flows, as indirect spillovers account for nearly half of the total effect. Studies that do not account for direct bilateral linkages between national economies — and the indirect linkages through the network they form – may thus present an incomplete view of international business cycles.
    Keywords: financial linkages; international spillovers; monetary shocks; trade networks
    JEL: E52 F42 F44 G15
    Date: 2021–10–01
  25. By: Schmitz, Andrew; Nguyen, Ly
    Abstract: We develop a theoretical trade model based on classical welfare economics and apply it empirically to both importers and exporters of shrimp, the most traded seafood, to determine the effects of the Covid-19 pandemic on the excess supply and excess demand of shrimp industry. We consider two time periods and compare these to the base period before the pandemic. Period 1 (March–June 2020): there is a net economic loss globally of $194 million due to lockdowns. Period 2 (July 2020–June 2021): there is a net welfare gain globally of $885 million due to increased shrimp demand. Overall, the global net economic gain was $692 million. For the United States alone, shrimp consumers gained $470 million while shrimp producers gained $24 million, which is relatively consistent with the net quasi-consumer gain of $475 million due to the Covid-19 pandemic.
    Keywords: Demand and Price Analysis, International Relations/Trade
    Date: 2022–01
  26. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Pamela E. Ofori (University of Insubria, Varese, Italy); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Motivated by the momentous rise in ICT diffusion, the implementation of the African Continental Free Trade Area agreement, and the expected rebound of foreign direct investment inflow to Africa from 2022, this study examines the joint effects of industrialisation and ICT diffusion on resource mobilisation in Africa. To this end, we use data on 42 African countries for the period 1996 – 2020 for the analysis. First, we provide evidence robust to several specifications from the dynamic system GMM to show that although unconditionally both industrialisation and ICT diffusion enhance (i) goods and services tax (GST), and (ii) profits, corporate and income tax (PCIT) mobilisation efforts in Africa, the effects of the former are rather remarkable in the presence of the latter. Particularly, the results show that, while ICTs amplify the effect of industrialisation on GST, only ICT usage and ICT skills matter for PCIT. Second, the study unveils ICT thresholds for complementary policies. Accordingly, industrialisation and ICTs are necessary and sufficient conditions for tax revenue mobilisation only below some ICT thresholds. Above these ICT thresholds, complementary policies are needed to maintain the overall positive incidence on tax revenue mobilisation. Policy recommendations are provided in the end.
    Keywords: AfCFTA; Africa; ICT access; ICT diffusion; Industrialisation; Tax; Revenue
    JEL: C33 F6 H2 H71 O33 O55
    Date: 2021–09
  27. By: Kohnert, Dirk
    Abstract: Africa and India share a long history of trade, investment and slavery. The Portuguese alone brought up to 80,000 slaves from Mozambique to India since the 16th century. Unlike slaves in other parts of the world, African slaves, soldiers, and traders had a strong military and cultural influence on India's culture and society. Some of the slaves even held privileged positions. Today India competes with other global players, especially China, for African resources and markets. Growing racism and Afrophobia towards African migrants, however, could hamper the ambitions of the New-Delhi government. India's social networks and political leaders are increasingly looking for scapegoats and “strangers” to blame for their failures due to religious, racist and linguistic prejudice. Racism and Afrophobia did not appear first under Modi's administration, but they have become more daunting and contagious. The famous Indian writer and political activist, Arundhati Roy, rated Indian racism towards black people as almost worse than white peoples‟ racism. For example, Africans, who were often summarily disqualified as „Nigerians‟, were generally accused of being drug dealers and even suspected of „cannibalism‟. Yet, Indian authorities at all political levels did not effectively counter this. On the contrary, they not infrequently encouraged these prejudices. Modi, for example, compared breakaway Indian regions to „Somalia‟.
    Keywords: India, Africa, international migration, xenophobia, Afrophobia, racism, violence, Afro-Indian relations, informal sector, illegal migration, forced migration, slave-trade, minorities, remittances
    JEL: E26 F62 F66 N35 N95 Z13
    Date: 2021–12–14
  28. By: Ben Youssef, Slim
    Abstract: We evaluate the relationships between renewable energy consumption, net energy imports, military expenditures, arms exports, gross domestic product, and carbon dioxide emissions by using annual data about the USA during the period 1980-2016. The autoregressive distributed lag approach and the vector error correction model are used. Long-run unidirectional causalities are running from all considered variables to net energy imports and arms exports. We show that arms exports have a positive long-run effect on both renewable energy consumption and on net energy imports. Military expenditures have a positive long-term effect on renewable energy consumption, but they have a negative long-term effect on net energy imports. We recommend that the United States should prefer to export sophisticated weapons to its allies rather than intervene directly and militarily in the event it should secure its supply of imported fossil fuels; we also recommend increasing the R&D budget of the US Department of Defense allocated to innovations in renewable energies.
    Keywords: Renewable energy; net energy imports; arms exports; military expenditures; autoregressive distributed lag; USA.
    JEL: C32 H56 O51 Q42
    Date: 2020–11–01
  29. By: Audi, Marc; Ali, Amjad; Al-Masri, Razan
    Abstract: This article has examined the impact of aggregate and disaggregate globalization on the advancement of information and communication technologies (ICT) in the case of 87 developed and developing countries for 2000-2019. Panel least square and pairwise Dumitrescu-Hurlin panel causality tests have been used for empirical analysis. We have divided our empirical analysis into six models, i.e. aggregate globalization model for whole sample countries, disaggregate globalization model for whole sample countries, aggregate globalization model for developed countries, disaggregate globalization model for developed countries, aggregate globalization model for developing countries, and disaggregate globalization model for developing countries. Our estimated outcomes of the aggregate globalization model for the whole sample countries and developing countries show that globalization has a positive and significant impact on the advancement of information and communication technology. Our outcomes show that economic globalization, social globalization, political globalization, and availability of physical capital have a positive and significant impact on the advancement of ICT in developing countries. In the case of developed countries, aggregate globalization, political globalization, and social globalization reduce the advancement of ICT, whereas the availability of physical capital and economic globalization are raising the advancement of ICT. The results of the causality test show that all the variables have a causal relationship with each other except some variables of developed countries in the disaggregate globalization model. Our outcomes recommend that developing countries should promote aggregate and disaggregate globalization to achieve the desired level of ICT.
    Keywords: ICT, Globalization, Economic Globalization, Social Globalization, Political Globalization
    JEL: F5 F6
    Date: 2021
  30. By: Tri VuPhu; Keun Lee; Donghyun Park
    Abstract: In this paper, we examine how digitalization affects global value chain. By using empirical evidence at firm level, the paper analyzes the process of the value chain digitalization in the apparel industry. We find that the digitalization of value chains usually originates in downstream stages where platforms emerge and disrupt traditional retailers. Traditional distributional channels such as department stores and mass merchandise stores are replaced by online marketplaces and E-commerce platforms. This type of value chain digitalization, or E-commerce, may be called platform digitalization. In this mode, manufacturers still own design and make production decisions, but the products are digitally distributed through E-commerce platforms, thus bypassing traditional methods of distribution such as department stores and mass merchandise stores. In other words, the value chain is flattened, allowing customers to purchase apparel products at their homes with a few clicks. This transformation of GVC digitalization may have opposite implications for the SMEs and startup manufacturers. On the positive side, the platforms lower customer acquisition cost and results in a higher level of labor productivity. On the negative side, firms have to pay a significant amount of platform provider fees to platform owners. Further, there could be asymmetric impacts on SMEs/startups and old/incumbent firms since the latter face a trade-off between revenue/customer growth and profitability. Alternatively, a full range mode of digitalization is also possible and observed. This mode involves the rise of platform owners who are also brand managers and designers. Here platforms are trying to go beyond the primary role of a two-sided marketplace to penetrate deeper into higher value-added stages of designs and/or brands. The consequent emergence of new hybrid firms has sizable economic consequences.
    Keywords: Digitalization; Digital Platform; E-commerce; Platform Provider Fee; Value Chain; Upgrading; Apparel;
    JEL: F23 O33
    Date: 2022–01
  31. By: Shahbaz, Muhammad; Sinha, Avik; Ahmad, Shabbir; Jiao, Zhilun; Wang, Zhaohua
    Abstract: This study contributes to the literature of energy economics by divulging the nature of scale and technique effects on energy consumption, considering foreign direct investment (FDI) as one of considerable factors of energy demand. The Chinese provincial data over the period of 2000–2018 are used for empirical analysis. In doing so, we have applied the Westerlund and Edgerton (2008) cointegration test using cross-sectional dependence and structural breaks, and bootstrapped quantile regression to decompose scale and technique effects. The empirical results show the presence of cointegrating association among the model parameters, in the presence of cross-sectional dependence and structural breaks. The quantile regression results indicate that the scale effect exerted by FDI is negative at lower quantiles of energy consumption, and positive at upper quantiles. Moreover, scale and technique effects exerted by FDI are positive and negative, respectively, at lower quantiles of energy consumption, and negative and positive, respectively, at higher quantiles. The results of this study are expected to help in designing the energy policies in China, keeping the quantum of energy consumption at various provinces in mind, and, thereby, ensuring the sustainability in energy consumption.
    Keywords: Income Effect, Scale effect, Energy Consumption, Quantile Regression, China
    JEL: Q4 Q5
    Date: 2021
  32. By: Toman Barsbai; Andreas Steinmayr; Christoph Winter
    Abstract: We analyze how economic conditions at the time of arrival affect the economic integration of family-sponsored migrants in the U.S. Our identification strategy exploits long waiting times for family-sponsored immigration visas that decouple the migration decision from economic conditions at the time of arrival. A one pp higher unemployment rate at arrival decreases annual wage income by four percent in the short run and two percent in the longer run. The loss in wage income is the result of substantial occupational downgrading, lower hourly wages, and a reduction in working hours. Family migrants who immigrate into a recession draw on migrant and family networks to mitigate the negative labor market effects. As a result, they take up occupations with higher concentrations of fellow countrypeople. They are also more likely to reside with family members, potentially reducing their geographical mobility.
    Keywords: Immigrant integration, family reunification, migrant networks, labor market, business cycle
    JEL: E32 F22 J31 J61
    Date: 2022–01
  33. By: Persyn, Damiaan
    Abstract: I consider a RUM model for migration where destination countries or regions are viewed as collections of ‘opportunities’ which are the fundamental units of choice for migrants. The best opportunity for a prospective migrant is more likely to be found in a destination that has many and diverse opportunities. Recent contributions in economics studying migration rather consider entire regions or countries as the fundamental, atomistic, units of choice. The key role of the size of destinations and the diversity within them is therefore often not fully recognised, which may lead to biased inference. I argue that the coefficient on size equals 1 in the ideal RUM model. This is also required for the gravity model for migration to have some intuitive properties: only then migration flows scale proportionally when aggregating destinations, and there is zero net migration between otherwise similar regions of different size. Models omitting size or using a coefficient on size different from 1 violate these properties. Imposing proportional scaling also has implications for how different sets of opportunities should be combined. The approach is showcased in a study of internal migration and urbanisation in Ethiopia.
    Keywords: migration, regional economics, spatial modelling, gravity equations, discrete choice
    JEL: C25 F2 R23
    Date: 2021–12–11
  34. By: Omar Barbiero
    Abstract: This paper estimates the cash flow and real effects of currency mismatches generated by foreign-priced operations of French manufacturers. The value of transactions invoiced in foreign currencies is twice as sensitive to exchange rates as the value of transactions invoiced in the domestic currency. I aggregate foreign-priced operations to the firm level to build a shift-share measure of invoice currency mismatch. This measure outperforms any trade-weighted effective exchange rate index in explaining cash flows of trading firms. Large firms absorb valuation shocks in their balance sheet, and small exporters partially hedge their dollar-priced exports with dollar-priced imports. Only investment and payroll of small domestic-oriented firms are sensitive to invoice currency valuations. These results show how trade value sensitivities to currency fluctuations can coexist with the evidence of disconnect between exchange rates and real macroeconomic fundamentals.
    Keywords: exchange rate sensitivity; currency mismatch; dollar-priced trade
    JEL: F30 F31 F32 F34 F36 F40 F41 F42
    Date: 2021–09–01
  35. 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.
    Keywords: Global Value Chains, Global Production Network, Supply-Use Tables, Input-Output Tables
    JEL: F0 F1 F2
    Date: 2021–07
  36. By: Munyi, Elijah
    Abstract: The past decade has seen a rise in the global share of Chinese defense sales – in this publication, Elijah N. Munyi looks at the implications for the African continent. Munyi examines the motivations for some African states' growing preference for Chinese arms with a particular focus on case studies conducted in Uganda and Kenya. Read on to find out how Prof. Munyi delves into the nuance behind the preferences for military procurement.
    Date: 2020
  37. By: Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito
    Abstract: This paper, using a long-term, product-level cross-country dataset, analyzes the trade-growth nexus by introducing two novel indicators able to capture demand and supply attributes of countries' quality of specialization. The Keynesian efficiency index measures demand attractiveness of the export baskets, estimating product-level demand elasticities and weighting them by diversification; the Schumpeterian efficiency index tracks the export basket' technological dynamism proxied by product-level patent intensities. These two dimensions of quality of specialization are effective in explaining the rate and volatility of growth and the duration of growth episodes, identified as periods longer than 8 years of 2% average growth and, even more, of exceptional growth episodes (>=5%). Our results, robust to a wide range of control variables, suggest that specialization per se' is detrimental for growth resilience while countries with a diversified export structure, specialised either in demand-elastic and technological-dynamic productions are likely to experience longer growth episodes.
    Keywords: Structural Change; International Trade; Growth Episodes.
    Date: 2022–01–04
  38. By: Samson N. Okafor (Central Bank of Nigeria, Abuja, Nigeria); Chukwunonso Ekesiobi (Chukwuemeka Odumegwu Ojukwu University, Nigeria); Ogonna Ifebi (Chukwuemeka Odumegwu Ojukwu University, Nigeria); Stephen K. Dimnwobi (NnamdiAzikiwe University, Awka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Aware of the nature of deficits in the current account, fiscal account, and the financial account balances of the countries in the Sub-Saharan Africa (SSA) region, this inquiry assessed the relationship between these deficits and the implication of such relationship for the African Continental Free Trade Area (AfCFTA). To do this, the study adopted panel data analysis techniques using the Pooled Mean Group-Autoregressive Distributed Lag (PMG-ARDL) specifications to test for the Triple Deficit Hypothesis (TDH) in the region. The findings of the study revealed the presence of the TDH in SSA where bidirectional causality exists between current account balance and budget balance, and between saving gap and current account balance, with a unidirectional causality running from budget balance to saving gap. The adoption of sound fiscal, monetary, and trade interventions in the region constitutes the major policy recommendations.
    Keywords: Triple Deficit Hypothesis; Sub-Saharan Africa; African Continental Free Trade Area
    Date: 2021–01
  39. By: Leonid V. Azarnert; Slava Yakubenko
    Abstract: This paper studies the effect of emigration on gender norms in countries of migrants’ origin. We use an instrumental variable strategy that allows us to estimate a causal effect of emigration on gender inequality. Our findings suggest that emigration to countries with low (high) levels of gender inequality is associated with promotion of more (less) progressive gender norms. These effects are observed for a wide range of indicators and are robust to inclusion of a set of control variables. Moreover, countries with high levels of gender inequality benefit from this process disproportionately more. Based on the provided evidence we argue that this effect is channelled through “cultural remittances”.
    Keywords: migration, gender, cultural remittances
    JEL: F22 F63 J16
    Date: 2021
  40. By: Uri Dadush
    Abstract: The EU's proposed carbon border tax is well intentioned. It is motivated by climate concerns, not by protectionism. However, the tax is based on the false premise of carbon leakage, and its implementation is rife with practical difficulties. Moreover, the tax, as proposed, departs from the Paris agreement principle of differentiated responsibilities, and will be challenged by developing countries. The United States is not ready to adopt carbon taxes, either. The WTO, already in a fragile state, may be dealt another body blow by the proposed tax. Better alternatives are available.
    Date: 2021–06
  41. By: Isabelle Tsakok
    Abstract: South Africa’s economy is in crisis. Like much of the world, it has been battered by the COVID-19 pandemic when its economy has already been weakened by years of low growth, high unemployment and rising inequality after the global financial crisis of 2007-08. At this difficult juncture, the Africa Continental Free Trade Area (AfCFTA) offers it the opportunity of becoming a continental growth pole, not just a regional growth pole which it is already. This opportunity could not have come at a better time. Europe had been battered by the devastations of the Second World War when its visionary leaders decided to establish the EU: to unify in peace for the prosperity of all in Europe. They chose to integrate their markets in a Common Market. Indonesia and Malaysia were involved in an undeclared war when their leaders decided to resolve their conflict peacefully. Together with the Philippines, Thailand, and Singapore, they formed the ASEAN to integrate their markets and their peoples.1 The leaders decided to rise above the divisiveness of nationalism to build a better life for their people. Their experiences clearly show that crisis can be turned into opportunity by integrating regional markets. South Africa too can use the opportunity of the AfCFTA as an starting point on a path of higher and more inclusive growth. What actions should South Africa prioritize? The successful and not-so-successful experiences with regional market integration in the EU, ASEAN and MERCOSUR can offer valuable insights.
    Date: 2021–11
  42. By: Arrighetti, Alessandro; Gnarini, Daniela; Lasagni, Andrea; Semenza, Renata
    Abstract: The article contributes to the current debate on the relationship between migration and entrepreneurship, highlighting the evolution of processes and practices, from the traditional monoethnic firm towards new models, we defined as “plurinational”. It refers precisely to the cases, widespread in the evolving cosmopolitan society, where both entrepreneurs and workers belong to different nationalities. The article outlines the findings of a qualitative research study, based on interviews with a series of entrepreneurs of plurinational firms in Italy. Firstly, we found that plurinational firms originate from “weak ties” (through acquaintances and previous work experiences) rather than “strong ties” (through family and co-ethnic community networks). Secondly, far for being univocal models, we found a variety of plurinational entrepreneurships which derives from different scales of priority assigned by ownership or management to plurinationalism as “opportunity” or plurinationalism as “value”.
    Keywords: immigrant entrepreneurship,plurinationalism,migration,break-out strategies,organizational diversity,Italy
    Date: 2021
  43. By: Alienor Cameron; Marc Baudry
    Abstract: On 14 July 2021, the European Commission formally adopted a proposal for a Carbon Border Adjustment Mechanism to mitigate the risk of carbon leakage caused by its increasingly ambitious environmental policies. There is a gap between the ways in which this issue is discussed in political spheres and the evidence provided by economic literature on it. The aim of this paper is to bridge this gap by presenting the context and policy debate surrounding carbon leakage and CBAs in the EU, reviewing the state of the economic literature on this topic, and discussing further research that is necessary to answer remaining policy concerns and unresolved research questions.
    Keywords: climate policy, carbon border adjustment, carbon leakage
    JEL: H23 L51 O33 Q58
    Date: 2022

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