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on International Trade |
| By: | Hoch, Felix; Rudsinske, Jonas |
| Abstract: | We investigate whether top managers with personal ties to a foreign country facilitate trade with that country by overcoming bilateral trade barriers that obstruct international business relationships. Using individual managers' nationality, we construct a novel database of bilateral top manager connections. We analyze the trade effects of these bilateral manager connections both on the firm and on the country level. On the country level, we provide evidence for a positive effect on both bilateral exports and imports. On the firm level, we find positive effects on destination-specific foreign sales. We show that this firm-level effect is especially pronounced for institutionally distant destinations, which we interpret as bridging the gap between institutionally dissimilar countries. Furthermore, the effect is stronger for destinations with less developed institutions indicating that manager connections help overcoming trade barriers created by low institutional quality. Moreover, we show that the strength of this effect also depends on characteristics of the individual manager. Namely, the effect differs between connections of male and female managers. Gender discriminating institutions in the destination country severely downsize the pro-trade effect of female managers' connections, which could give rise to an unintended importing of gender inequality regarding management positions. |
| Keywords: | International trade,gravity,international business,board composition,institutions,gender equality |
| JEL: | F14 F22 F23 J16 J61 K38 M16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ciwdps:42021&r= |
| By: | Kato, Hayato; Okubo, Toshihiro |
| Abstract: | When do multinationals show resilience during natural disasters? To answer this, we develop a simple model in which foreign multinationals and local firms in the host country are interacted through input-output linkages. When natural disasters seriously hit local firms and thus increase the cost of sourcing local intermediate inputs, most multinationals may leave the host country. However, they are likely to stay if they are tightly linked with local suppliers and face low trade costs of importing foreign intermediates. We further provide a number of extensions of the basic model to incorporate, for example, multinationals with heterogeneous productivity and disaster reconstruction. |
| Keywords: | Foreign direct investment (FDI); Multinational enterprises (MNEs); Input-output linkages; Supply chain disruptions; Multiple equilibria |
| JEL: | F12 F23 Q54 |
| Date: | 2021–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111187&r= |
| By: | Olivier Jeanne |
| Abstract: | This paper presents a tractable model of a global economy in which countries can use a broad range of policy instruments---the nominal interest rate, taxes on imports and exports, taxes on capital flows or foreign exchange interventions. Low demand may lead to unemployment because of downward nominal wage stickiness. Markov perfect equilibria with and without international cooperation are characterized in closed form. The welfare costs of trade and currency wars crucially depend on the state of global demand and on the policy instruments that are used by national policymakers. Countries have more incentives to deviate from free trade when global demand is low. Trade wars lower employment if they involve tariffs on imports but raise employment if they involve export subsidies. Tariff wars can lead to self-fulfilling global liquidity traps. |
| JEL: | F16 F31 F33 F38 F40 F42 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29603&r= |
| By: | Kato, Hayato; Okoshi, Hirofumi |
| Abstract: | Do low corporate taxes always favor multinational production in the course of eco- nomic integration? To investigate this, we propose a two-country model in which multi- nationals choose the locations of production plants and foreign distribution affiliates and shift profits between home plants and foreign affiliates by manipulating transfer prices in intra-firm trade. We show that when trade costs are high, plants are concentrated in the low-tax country; surprisingly, this location pattern reverses when they are low. Unlike existing models with single-plant firms, the impact of economic integration is non-monotonic: a fall in trade costs first decreases and then increases the share of plants in the high-tax country, which we empirically confirm. We also analyze tax competition and find that allowing for transfer pricing makes competition tougher. This indicates that international coordination on transfer-pricing regulation can potentially make the world better off. |
| Keywords: | Profit shifting; Multinational firms; Intra-firm trade; Trade costs; Foreign direct investment (FDI) |
| JEL: | F12 F23 H25 H26 |
| Date: | 2021–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111188&r= |
| By: | Sandkamp, Alexander; Yalcin, Erdal |
| Abstract: | This paper examines how varying antidumping methodologies applied within the World Trade Organization differ in the extent to which they reduce targeted exports. We show that antidumping duties, on average, hit Chinese exporters harder than those of other targeted countries. This difference can be traced back in part to China's non‐market economy status, which affects the way antidumping duties are calculated. Furthermore, we show that the type of imposed duty matters, as ad‐valorem duties affect exports differently compared to specific duties or duties conditional on the export price. Overall, however, antidumping duties remain effective in reducing imports independent of market economy status. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:241854&r= |
| By: | Gomez, Miguel I.; Puerto, Sergio; Zahniser, Steven; Li, Jie |
| Abstract: | This report explores the performance of U.S. agricultural exports to Colombia over the past decade (2009-19), giving emphasis to leading product categories that show opportunities for further export expansion. Increasing income, an expanding middle class, and dietary changes have led to greater demand for the types of agricultural products imported from the United States. These products include not only bulk commodities (such as grains, oilseeds, and meat) but also less traditional imports—such as pack-aged food, fuel ethanol, and convenience-store items. This process has been facilitated by the Colombia-U.S. Trade Promotion Agreement (TPA), allowing for substantial gains in the market share of U.S. agricultural suppliers in Colombian food consumption. The impact of the Coronavirus (COVID-19) pandemic on Colombian agricultural trade is not comprehensively addressed in this report. However, our analysis highlights the market opportunities that showed promise for Colombia’s foreign and domes-tic agricultural suppliers prior to the pandemic as a benchmark for policymaking and future research. |
| Keywords: | Agribusiness, Demand and Price Analysis, International Development, International Relations/Trade, Production Economics, Public Economics, Research Methods/ Statistical Methods |
| Date: | 2021–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdami:316795&r= |
| By: | Avishai Schiff |
| Abstract: | This paper examines the relationship between a firm’s finances and its response to trade liberalization. Using a landmark change in U.S. tariff policy vis-à-vis Chinese imports and micro level data from the U.S. Census Bureau, I find larger manufacturing job losses in better capitalized firms - those with less leverage and more cash on hand. The effects concentrate in industries where weaker balance sheets are likely to lead to collateral and other borrowing constraints, helping rule out alternative explanations. Finally, domestic manufacturing job losses are not accompanied by greater reductions in sales or aggregate employment, but better capitalized firms do exhibit reduced input costs and increased productivity. These findings point to offshoring as the predominant firm response to trade liberalization and suggest a role for financial capacity in facilitating offshoring investments. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:21-37&r= |
| By: | Kareem, Olayinka Idowu; Wieck, Christine |
| Abstract: | This study reviews the structure and flow of formal and informal agri-food trade within ECOWAS and evaluate the trade barriers, financial and quality infrastructure gaps. A mixed-method approach – qualitative and quantitative methods – is adopted which comprises an extensive literature review, analysis of available statistical data on formal and informal trade and trade barriers, a field survey, expert interviews and workshops. The intra-ECOWAS agri-food trade is still at the low level with most of the traded agri-food commodities largely without value addition and characterised by inadequate diversification of the export base. A preponderance of informal agri-food trade along both the formal and informal trade corridors are detected. Livestock, oilseeds, cottonseed, nuts, cocoa beans, cereal, cassava, fisheries, fruits and vegetables were the most traded agri-food commodities, which were not given any concession of passage or facilitated across the borders despite the perishability of the commodities. Agri-food trade flows in the ECOWAS are largely hampered by the heterogeneous trade policy measures across the Member states. This is often a barrier to trade and tend to increase trade costs and commodities prices, thereby constraining the regional trade benefits to the people while also making the trading countries uncompetitive. Women agri-food traders were often exploited and harassed by the different borders’ officials. More so, the low intra-ECOWAS trade in agricultural and food products is due to the low production capacities, which among others are due to the inadequate finance, poor quality infrastructure – soft (trained inspectors, customs procedures digitalisation, certification, etc) and hard (metrology facilities, roads, ports’ facilities, testing and inspection laboratories, etc.). Agricultural trade finance has been identified as one of the key challenges inhibiting trade in agricultural commodities in this subregion. Strategic policy options to promote agri-food trade within ECOWAS are provided. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2022–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uhgewp:316918&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/005&r= |
| By: | Berger, Axel; Liu, Wan‐Hsin |
| Abstract: | The international system for the governance of foreign investments is highly fragmented consisting mainly of bilateral agreements. With the adoption of nine guiding principles for global investment policy‐making in 2016, some observers argue that the G20 can actually serve as a launchpad for negotiations of a multilateral investment agreement. This paper provides empirical evidence on the question of whether the contents of international investment agreements (IIAs) have gradually converged to facilitate the multilateralisation of investment rules. We find that IIAs negotiated among non‐G20 countries are more similar to each other than those concluded by G20 countries in general and even more so since 2000 in particular. This result calls into question the premise that the G20 can serve as the most suitable forum to initiate multilateral negotiations on multilateral investment rules. Instead, an extended analysis using different country grouping criteria suggests that the Member States of the European Union may be a more suitable alternative in this regard. Here, the EU can jointly take a leading role in facilitating related negotiations on multilateral investment rules. |
| Keywords: | EU,G20,investment agreements,OECD,similarity |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:242003&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111123&r= |
| By: | Karen Evelyn Hauge; Snorre Kverndokk; Andreas Lange |
| Abstract: | We investigate how moral considerations, background conditions and risk can trigger resistance to implement trading institutions. We provide survey results on moral opposition to trade on several goods and services like body organs, sex services, surrogate mothers, trade with developing nations, and trade with carbon emissions. Complementary experimental evidence allows identifying reasons for opposing trade going beyond pure moral considerations. We relate the opposition to trade in experimental and field contexts to an aversion to imposing risks on others. We then vary both background conditions and the riskiness from engaging in actual trade in the experiment. We show that distributional concerns primarily drive opposition to trade. Providing less information about individual background conditions and distributing gains from trade more equally alleviates opposition to trade. |
| Keywords: | trade, morality, fairness, distribution, experiment |
| JEL: | C90 D63 I14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9456&r= |
| By: | Gnangnon, Sèna Kimm |
| Abstract: | The effect of the betterment of enforced intellectual property rights (IPRs) provisions on services export concentration has been investigated. The analysis has used a panel dataset of 103 countries (both developed and developing countries) over the period of 1985-2014. It has revealed that countries with low levels of enforced IPRs tend to concentrate their services exports on few items, while countries with a high degree of enforced IPRs experience a greater level of services export diversification. Furthermore, the betterment of IPRs protection influences positively services export diversification, and the magnitude of this positive effect is higher for advanced countries compared to relatively less advanced economies. These results are particularly relevant for developing countries, including the least-developed countries that have both weakly enforced IPRs and high levels of services export concentration. |
| Keywords: | Intellectual property rights,Services export concentration |
| JEL: | E31 F13 O34 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:248717&r= |
| By: | Joseph Mimbale (UNIKIN - University of Kinshasa); Jean-Marie Mbutamuntu (UNIKIN - University of Kinshasa) |
| Abstract: | This paper proposes to explain why African youth can be both an "opportunity" (asset) and a "risk" (problem) in the implementation of the African Continental Free Trade Area (AfCFTA). The paper begins by defining the theoretical framework of the analysis. It then presents the demographic trends in Africa to illustrate the place of African youth in the paradigmatic renewal of the continent. From these trends, it makes two fundamental arguments justifying the interest of relying on African youth in order to capitalize on the gains of the AfCFTA. Finally, this paper considers that relying on youth for effective implementation of the AfCFTA is of undeniable importance for two reasons: (1) Because youth are a catalyst for the future progress of the continent. (2) Because youth can be a liability if nothing is done to address unemployment; boost quality job creation; change the youth training paradigm; and promote STEM (Science, Technology, Engineering and Math). |
| Keywords: | African Youth,African Continental Free Trade Area,regional economic integration,Intra-trade |
| Date: | 2021–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03453463&r= |
| By: | Giammetti, Raffaele; Papi, Luca; Teobaldelli, Desiree; Ticchi, Davide |
| Abstract: | This paper investigates the effects of a retreat from global economic integration on the European regional production network for the period 2000-2010. We find that production has become increasingly fragmented, although the degree of heterogeneity across regions is substantial. This heterogeneity is also present in the direct and indirect effects of three different deglobalisation scenarios that we simulate. Our results show that deglobalisation generates winners and losers. Specifically, two groups of regions emerge; regions that would benefit from a return to a less integrated world, and regions that would instead gain from a strengthening of the European production network. |
| Keywords: | Reshoring, Global Value Chains, production networks, input-output, regional fragmentation, supply chains interruption. |
| JEL: | D57 F16 F62 F66 |
| Date: | 2021–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111135&r= |
| By: | Ernest Miguelez (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Valentina Di Iasio |
| Abstract: | Abstract This study investigates whether high-skilled migration in a sample of OECD countries fosters technological diversification in the migrants' countries of origin. We focus on migrant inventors and study their role as vectors of knowledge remittances. Further, we particularly analyze whether migrants spark related or unrelated diversification back home. To account for the uneven distribution of knowledge and migrants within the host countries, we break down the analysis at the metropolitan area level. Our results suggest that migrant inventors have a positive effect on the home countries' technological diversification, particularly for developing countries and technologies with less related activities around—thus fostering unrelated diversification. |
| Date: | 2021–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03505186&r= |
| By: | Deng, Liuchun (Yale-NUS College); Krishna, Pravin (Johns Hopkins University); Senses, Mine Zeynep (Johns Hopkins University); Stegmaier, Jens (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | In this paper, we empirically assess the causal relationship between trade and individual income risk and study the role that human capital plays in this relationship using a rich, worker-level, longitudinal data set from Germany spanning from 1976 to 2012. Our estimates suggest substantial heterogeneity in labor income risk across workers in different entry cohorts, over workers' life cycles, and across workers with different levels of industry- and occupation- specific human capital. Accounting for entry-cohort effects and age effects, our findings suggest that within-industry changes in imports and exports (per worker) are strongly and causally related to income risk: Imports increase risk and exports decrease risk, and they do so in an economically significant manner. Importantly, we find there to be a complex interplay between human capital and the causal linkage between trade and risk: On average, individuals with higher levels of industry- or occupation-specific human capital experience lower income risk. However, a given increase in net import exposure in an industry increases risk for workers with higher levels of industry tenure more than it does for workers with lower levels of industry tenure. High levels of industry-specific human capital can therefore be costly, from a risk perspective, for workers in highly trade-exposed industries. We find no evidence of such an interaction between risk, industry trade exposure, and occupation-specific human capital. |
| Keywords: | imports, exports, income risk, human capital, Germany |
| JEL: | F14 F16 D52 E21 J24 J62 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14953&r= |
| By: | Konstantin Kucheryavyy; Gary Lyn; Andrés Rodríguez-Clare |
| Abstract: | In this paper we characterize the set of equilibria in a generalized version of the canonical two-region economic geography model that nests the class of models in Allen and Arkolakis (2014) as well as Krugman (1991). We show that the set of (regular) equilibria corresponds to the set of zeros of a function V(x), where x is the relative price of manufacturing goods produced in the two regions (adjusted by the trade elasticity). Using this approach, we provide sufficient conditions for uniqueness of equilibria that — in contrast to the well-know result in Allen and Arkolakis (2014) — allow for positive agglomeration externalities even in the absence of congestion effects, and highlight the key role played by three additional parameters: the trade elasticity, which regulates the strength of the dispersion force associated with the decline in the terms of trade caused by migration into a region; trade costs, which weaken this dispersion force by limiting trade across regions; and the importance of the agricultural sector, which pushes against agglomeration forces in manufacturing. We also discuss how asymmetries between the two regions tend to push against multiplicity. |
| JEL: | F10 F20 R0 R13 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29592&r= |
| By: | Erten, Bilge (Northeastern University); Keskin, Pinar (Wellesley College) |
| Abstract: | We study the impact of trade-induced changes in labor market conditions on violence within the household. We exploit the local labor demand shocks generated by Cambodia’s WTO accession to assess how changes in the employment of women relative to men affected the risk of intimate partner violence. We document that men indistricts facing larger tariff reductions experienced a significant decline in paid employment, whereas women in harder-hit districts increased their entry into the laborforce. These changes in employment patterns triggered backlash effects by increasing intimate partner violence, without changes in marriage, fertility, psychological distress, or household consumption. |
| Keywords: | trade, intimate partner violence, employment, marriage, fertility, consumption, Cambodia |
| JEL: | F16 O15 J12 J16 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14918&r= |
| By: | Lauren Cohen; Bo Li |
| Abstract: | This paper documents novel evidence on the influence of political incentives in the regulatory enforcement of foreign bribery. Using exogenous variation in the timing and geographic location of U.S. Congressional elections, we find that the probability of a Foreign Corrupt Practices Act (FCPA) enforcement action against foreign firms located in the Senator’s jurisdiction increases significantly pre-election, spiking 23%, with zero equivalent move for equivalently global (but domestic-headquartered) firms in the Senator’s jurisdiction. Using hand-collected case-level data from the U.S. SEC and DOJ, we also observe larger discretion in regions where foreign firms are larger global competitors of in-state firms, operate in locally important industries, and when Senators serve as the Chairman of the Senate Judiciary Committee (which oversees the DOJ). Anti-bribery enforcement has electoral implications, leading to spikes in media coverage of the FCPA enforcement coupled with greater vote shares for the Senator. Moreover, the cases pushed through against these foreign firms just prior to elections appear to be weaker cases. The enforcements result in real effects, as in response to strategic timing in enforcement, firms reallocate business segments and sales. |
| JEL: | F13 F14 F36 F53 F55 F65 G28 G38 K22 K33 K42 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29624&r= |
| By: | Hsu, Wen-Tai; Lu, Lin; Picard, Pierre M. (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative relationship between the number and quantity of products consumed by an income group and the earnings of other income groups. It also highlights the negative effect of mean-preserving spread of income on aggregate productivity through the softening of firms’ selection. This effect is however mitigated in the presence of international trade. In a quantitative analysis, it is shown that a too large mean-preserving spread of income may harm the rich as it raises firms’ markups on her purchases. This is contrary to the general belief that income inequality benefits the rich. |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021029&r= |
| By: | Bazzi, Samuel (University of California, San Diego); Cameron, Lisa A. (University of Melbourne); Schaner, Simone G. (University of Southern California); Witoelar, Firman (Australian National University) |
| Abstract: | Job seekers often face substantial information frictions related to potential job quality. This is especially true in international labor markets, where intermediaries match prospective migrants with employers abroad. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration choices and outcomes. Information reduces the migration rate, lowering use of low-quality intermediaries. However, workers who migrate receive better pre-departure preparation and have higher-quality job experiences abroad, despite no change in occupation or destination. Information does not change intentions to migrate or beliefs about the return to migration or intermediary quality. Nor does selection explain the improved outcomes for workers who choose to migrate with the information. Together, our findings are consistent with an increase in the option value of search: with better ability to differentiate offer quality, workers become choosier and ultimately have better migration experiences. This offers a new perspective on the importance of information and matching frictions in global labor markets. |
| Keywords: | international migration, information, middlemen, quality disclosure, search |
| JEL: | F22 O15 D83 L15 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14945&r= |
| By: | Marcel Adenauer |
| Abstract: | International grain prices experienced a sharp increase during the 2020/2021 marketing season, most likely due to the unprecedented increase of imported grains by China. What would be the possible impact on international grain markets if China remains a strong grain importer? The scenario developed to explore the impact of such a development shows that further increases in Chinese grain imports over the medium term could result in a 4% to 25% increase in agriculture commodity prices compared to what was projected in the OECD-FAO Agricultural Outlook 2021-2030. |
| Keywords: | African Swine Fever, Cereal trade, Commodity markets, Food price inflation, Food security |
| JEL: | C61 F17 Q11 Q17 |
| Date: | 2022–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:172-en&r= |
| By: | Erik Canton; Federica Colasanti; Jorge Durán; Maria Garrone; Alexandr Hobza; Wouter Simons; Anneleen Vandeplas |
| Abstract: | The COVID-19 pandemic has triggered the largest and most abrupt contraction in economic activity in recent European history. This brief discusses the sectoral impact of the pandemic. Partly as a result of the nature of the containment measures, contact-intensive services have suffered disproportionally. Abrupt demand shifts and disruptions in global value chains have also affected sectors differently. The prospects for a quick and strong recovery are good but differ across sectors, calling in some cases for a reallocation of resources within and possibly across sectors. The pandemic will also accelerate existing trends such as digitalisation, the green transition, and changes in global value chains. Appropriate policy responses are needed to ensure these transitions are sustainable and inclusive. |
| Keywords: | COVID-19 crisis, Sectoral impact, Digitalisation, Green transition, Global value chains, Canton, Colasanti, Durán, Garrone, Hobza, Simons, Vandeplas. |
| JEL: | O47 I15 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecobri:069&r= |
| By: | Ketevani Kapanadze |
| Abstract: | This paper studies two major stages of European integration, the expansion of the European Union (EU) in 2004 and the Schengen Area in 2008, and their impacts on economic performance in subregions of Central and Eastern European (CEE) countries. Using European regional data at the NUTS3 level and disaggregated synthetic control method, I construct counterfactuals for sub-regions of CEE countries. This approach allows me to assess regional treatment effects (RTEs) and to study the heterogeneous effects of European integration. I find that the benefits of EU and Schengen memberships to annual GDP per capita are approximately 10% less in border regions, relative to interior areas. The results expose regional economic disparities, as border regions lose relative to interior regions since European integration. Furthermore, integration facilitators in border regions such as fewer geographical barriers, more service employment, and positive attitudes toward the EU did not reduce economic disparities. The results show that the gap persists, regardless of some complementarities. Thus, the main implication of this paper is that sub-regions of CEE countries are far from being fully converged, and that European integration instead seems to have spurred sub-regional divergence. |
| Keywords: | CEE countries; European integration; RTEs; borders; dissagregated synthetic controls; |
| JEL: | F15 F16 F20 R12 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp716&r= |
| By: | Sandi, Eleni (University of Warwick) |
| Abstract: | This paper aims to estimate the impact of natural disasters on exports in the Caribbean countries using a panel fixed effects regression. The paper’s main contribution lies in identifying the manufacturing industries that are disproportionately affected by natural disasters in the given region. It finds that an additional natural disaster in the Caribbean leads to a significant short-run decrease in total exports, whilst mineral, chemical, paper, textile and metal industries suffer the most. Using alternative disaster measures reveals that deaths have the largest impact on exports, emphasising the Caribbean’s high vulnerability to natural shocks. Interestingly, a dynamic model reveals a long-term negative effect on exports that strengthens over time. The main results remain robust to a variety of alternative model specifications. Total disaster effects seem to be driven by disasters in Haiti, although further research on country heterogeneity is recommended. Taken together, these findings are especially alarming in the context of climate change and global warming, as natural disasters are expected to increase in intensity and frequency. Drawing on these results, the policy implication is decreasing the Caribbean’s vulnerability by tackling the moral hazard problem of unconditional donor aid. |
| Keywords: | Natural Disaster ; Climate Change ; Exports ; Industry-level JEL Classification: Q54 ; F14 ; O10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wrkesp:03&r= |
| By: | Javier Ortega (Kingston University [London]); Gregory Verdugo (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po) |
| Abstract: | We study the impact of local immigration inflows on natives' wages using a large French administrative panel from 1976-2007. We show that local immigration inflows are followed by reallocations of blue-collar natives across commuting zones. Because these reallocations vary with the initial occupation and blue-collar location movers have wages below the blue-collar average, controlling for changes in local composition is crucial to assess how wages adjust to immigration. Immigration temporarily lowers the wages of blue-collar workers, with unskilled workers experiencing larger losses. Location movers lose more than stayers in terms of daily wages but move to locations with cheaper housing. |
| Keywords: | Immigration,Wages,Employment,France |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03471940&r= |
| By: | Simone Bertoli (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Frédéric Docquier (LISER - Luxembourg Institute of Socio-Economic Research); Hillel Rapoport (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ilse Ruyssen |
| Abstract: | Empirical analyses around the relationship between extreme weather events and migration typically face the choice between an in-depth focus on a specific setting with micro data, and a focus on a large set of countries and time periods. The former produce evidence that can be of limited external validity, while the latter is limited to data that are very coarse (across both time and space). We use individual-level data on migration intentions from various waves of the Gallup World Polls, for which we have precise information on the place and date of the interview, to combine the advantages of these two approaches. |
| Abstract: | Les analyses empiriques de la relation entre les événements météorologiques extrêmes et la migration sont généralement confrontées au choix entre une analyse approfondie, focalisée sur un espace géographique restreint, à partir de données micro, et une focalisation plus large sur un ensemble de pays et de périodes. La première option produit des résultats dont la validité externe est limitée, tandis que la seconde se limite souvent à une analyse de données très grossières (à la fois dans le temps et dans l'espace). Dans cet article, nous utilisons des données individuelles sur les intentions migratoires issues de différentes vagues des Gallup World Polls, pour lesquelles nous disposons d'informations précises sur le lieu et la date de l'entretien, afin de combiner les avantages de ces deux approches. |
| Keywords: | Weather shocks,Individual-level data,Migration intentions,International migration,Western africa |
| Date: | 2021–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03469991&r= |
| By: | Michael Clemens |
| Abstract: | Immigration policy can have important net fiscal effects that vary by immigrants’ skill level. But mainstream methods to estimate these effects are problematic. Methods based on cash-flow accounting offer precision at the cost of bias; methods based on general equilibrium modeling address bias with limited precision and transparency. A simple adjustment greatly reduces bias in the most influential and precise estimates: conservatively accounting for capital taxes paid by the employers of immigrant labor. The adjustment is required by firms’ profit-maximizing behavior, unconnected to general equilibrium effects. Adjusted estimates of the positive net fiscal impact of average recent U.S. immigrants rise by a factor of 3.2, with a much shallower education gradient. They are positive even for an average recent immigrant with less than high school education, whose presence causes a present-value subsidy of at least $128,000 to all other taxpayers collectively. |
| Keywords: | immigration, fiscal, budget, budgetary, tax revenue, benefits, taxes, deficit, surplus, gain, contribution, welfare, social security |
| JEL: | F22 H68 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9464&r= |
| By: | Kyle Handley; Fariha Kamal; Wei Ouyang |
| Abstract: | The first experimental product from the U.S. Census Bureau's Business Dynamics Statistics (BDS) program -- BDS-Goods Traders -- provides annual, public-use measures of business dynamics by four mutually exclusive goods-trading classifications: exporter only, importer only, exporter and importer, and non-trader. The BDS-Goods Traders offers a comprehensive view of employment growth at firms associated with goods trading activities in the United States from 1992-2019. We highlight three patterns. First, employment is skewed towards goods traders in several ways. Only 6% of all U.S. firms are goods traders but they account for half of total employment. Moreover, 80% of large firms and 70% of older firms are goods traders. Second, exporter-importer firms represent 70% of manufacturing employment and over half of employment in services-producing industries (management, retail, transportation, utilities, and wholesale). Third, goods-traders exhibit higher net job creation rates than non-traders controlling for firm size, age, and sector. Goods traders contribution to total job creation grows over time, rising to more than half after 2008. |
| Keywords: | exporters, importers, job creation, job destruction, entry, exit |
| JEL: | F10 F14 F23 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:21-38&r= |
| By: | Funke, Michael (Institute for Economic and Business History Research) |
| Abstract: | The study highlights the importance of business associations in institutional development in a political economy. Utilizing Streeck & Schmitter’s concept of two logics of collective action, in which interest group action is explained by internal relations (logic of membership) as well as external relations (logic of influence), the paper analyzes the Swedish Advertisers’ Association role in the institutional development of Swedish export advertising during 1955-1972. Using qualitative analysis of associational material to trace institutional development, the paper demonstrates that thanks to the logic of membership, expressed in bottom-up member engagement, the association’s leadership together with members established new institutional resources and services for export advertising during the second half of the 1950s. Among the initiatives were educational efforts, knowledge-exchange forums, national trademarks, and registries with information of foreign ad markets. As the competitiveness of Swedish exports was of national interest, the services attracted external actors, as the government, state agencies and other business associations. Here the logic of influence, conveyed in increasing contacts between the association’s leadership and external representatives, embedded its institutions in a wider network of stakeholders in export promotion. This process was facilitated by the post-war dominance of corporatism, which emphasized cooperation between collective actors. The contributions of the association grew in size and importance until the formation of the Swedish Export Council in 1972, that redrew the institutional landscape of export promotion by forming a more centralized form of cooperation between the government and the export business community. |
| Keywords: | Advertising; business association; business interest organization; corporatism; economic history; export promotion; marketing history; Sweden; post-war; |
| JEL: | M31 M38 N74 |
| Date: | 2022–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:haechi:2022_001&r= |
| By: | Ernest Liu; Song Ma |
| Abstract: | We study the optimal allocation of R&D resources in an endogenous growth model with an innovation network, through which one sector’s past innovations may benefit other sectors’ future innovations. First, we provide closed-form sufficient statistics for the optimal path of R&D resource allocation, and we show that planners valuing long-term growth should allocate more R&D toward key sectors that are upstream in the innovation network. Second, we extend to an open-economy setting and illustrate an incentive for countries to free-ride on fundamental technologies: an economy more reliant on foreign knowledge spillovers has less incentive to direct resources toward innovation-upstream sectors, leading to cross-country differences in unilaterally optimal R&D allocations across sectors. Third, we build the global innovation network based on over 30 million global patents and establish its empirical importance for knowledge spillovers. Fourth, we apply the model to evaluate R&D allocations across countries and time. Adopting optimal R&D allocations can generate substantial welfare improvements across the globe. For the United States, R&D misallocation accounts for about 0.68 percentage points of missing annual growth since the 2000s. |
| JEL: | F43 O33 O38 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29607&r= |
| By: | Shiri Mermelstein; Hilde Stevens |
| Abstract: | Governed through the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) since 1995, the current medical R&D system requires significant trade-offs between innovation and high monopoly prices for patented drugs that restrict patient access to medicines. Since its implementation, few amendments have been made to the original TRIPS agreement to allow low- and middle-income countries (LMICs) to facilitate access by generic manufacturers through flexible provisions, such as compulsory licensing and parallel import. Although a useful policy tool in theory, the routine use of TRIPS flexibilities in LMICs in the procurement of new essential medicines (EMs) is regarded as a ‘last resort’ due to strong political response in high-income countries (HICs) and new trade agreements’ restrictions. In this context, access-oriented biomedical Public-Private Partnerships (PPPs) have emerged. More recently, leading multilateral health organizations have recommended different types of intellectual property (IP) interventions, voluntary biomedical patent pools, as strategies to reduce prices and increase the diffusion of novel EMs in LMICs. Nevertheless, the recent Ebola and COVID-19 outbreaks highlight growing concerns regarding the use of TRIPS flexibilities and the limited success of voluntary mechanisms in promoting access to medicines in the Global South amidst health crises. This review aims at describing the state-of-the-art empirical research on IP-related options and voluntary mechanisms applied by emerging PPPs to guarantee timely and affordable access to EM in LMICs and reflect on both models as access paradigms. Some suggestions are put forward for future research paths on the basis of these analyses and in response to contemporary debates on waiving key IP rights on COVID-19 therapies, diagnostics, and vaccines. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/337220&r= |
| By: | Per Pettersson-Lidbom |
| Abstract: | In this comment, I revisit the question raised in Karadja and Prawitz (2019) concerning a causal relationship between mass emigration and long-run political outcomes. I discuss a number of potential problems with their instrumental variable analysis. First, there are at least three reasons why their instrument violates the exclusion restriction: (i) failing to control for internal migration, (ii) insufficient control for confounders correlated with their instrument, and (iii) emigration measured with a nonclassical measurement error. Second, I also discuss two problems with the statistical inference, both of which indicate that the instrument does not fulfill the relevance condition, i.e., the instrument is not sufficiently correlated with the endogenous variable emigration. Correcting for any of these problems reveals that there is no relationship between emigration and political outcomes. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.04880&r= |
| By: | SOTO EMBODAS Iria (European Commission - JRC); DI BARTOLO Fabiola (European Commission - JRC); KAMMENOU Maria; SCALIA Rosalinda; CHARELS Diana; SANCHEZ FERNANDEZ Berta (European Commission - JRC); BARREIRO HURLE Jesus (European Commission - JRC) |
| Abstract: | This technical report assesses the policy and economic impact of the provision of the specific import measures included in the New Plant Health Regulation [Regulation (EU) 2016/2031.To this end a survey of different EU stakeholders was carried out i.e. Certification CAs, NPPOs, operators, MS-level and EU-wide associations, and non-EU NPPOs. The survey was answered by 103 respondents from 60 different countries.Results show the stakeholders’ views on the specific import requirements for regulated non-quarantine pests and the requests for prior notification from non-EU countries when planning to export specific commodities to the EU, and the provisions for adopting measures in case of newly identified risks. In addition, it reports information on costs and benefits of the change in fees charged by NPPOs to operators and the number of inspections carried out. This report is one of four reports drafted for the preparation of the report to the European Parliament and to the Council according to the legislative obligation of the Commission laid down in Article 50 of the Plant Health Regulation (EC 2016/2031). |
| Keywords: | Cost benefit analysis, Plant Health, EU Regulation, Import procedures, phytosanitary measures |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126792&r= |
| By: | Arogundade, Sodiq; Bila, Santos; Jan Derkacz, Arkadiusz |
| Abstract: | Empirical evidence from the literature suggest that autonomous expenditure multipliers are crucial in modern economic development. This study answers two main questions. What is the South African fiscal, export and investment multipliers? Is obtaining the impact of autonomous expenditure on gross value-added growth rate possible? In achieving this, we use the principle of aggregate demand and data from different sources such as Stats SA, South African Reserve Bank, WDI as well as OECD data from 1992 to 2019. The results suggest that autonomous expenditure multipliers exert a positive effect on the change in gross value added. These multipliers are however driven by several factors. First, the import intensity level - the import intensities of each autonomous expenditure reduce their significance. This means that the leakage of aggregate demand in the form of expenditure on the purchase of imported goods increases. Secondly, the value of the fiscal, investment and export multipliers is determined by the propensity for total private consumption. The value of the propensity for total private consumption depends on the household income taxes and the propensity to save. An increase in these two ratios decreases the value of the propensity to private consumption. This indicates that the leakage of aggregate demand is driven by a decline in total private consumption in the economy, and this may be caused by an increase in savings and/or an increase in the average household income tax. |
| Keywords: | Fiscal multiplier, export multiplier, investment multiplier, GVA, South Africa |
| JEL: | E0 E2 F0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111115&r= |
| By: | SOTO EMBODAS Iria (European Commission - JRC); DI BARTOLO Fabiola (European Commission - JRC); KAMMENOU Maria; SCALIA Rosalinda; MUNAUT Françoise; SANCHEZ FERNANDEZ Berta (European Commission - JRC); BARREIRO HURLE Jesus (European Commission - JRC) |
| Abstract: | This technical report assesses the policy of the import prohibitions included in the New Plant Health Regulation [Regulation (EU) 2016/2031], and their economic impact. For this purpose, a survey of various EU stakeholders i.e. Certification CAs, NPPOs, operators, MS-level and EU-wide associations, and non-EU NPPOs was carried out. The survey was answered by 92 respondents from 52 different countries.The results show the views of the stakeholders on the cost and benefits as well as the performance of provisions regarding imports from non-EU countries. In particular, it focuses on the implementation of the High risk plants, plant products, and other objects as well as the provisions for quarantine pests and plants, plant products and other objects used for official testing, scientific, and educational purposes, varietal selection and breeding, and quarantine stations. It also includes an analysis of publicly available data regarding trade and interceptions to estimate the impact that the changes in legislation have had on imports of plants and plant products. This report is one of four reports prepared for the preparation of the report to the European Parliament and to the Council according to the legislative obligation of the European Commission laid down in Article 50 of the Plant Health Regulation (EC 2016/2031). |
| Keywords: | Import prohibitions, Cost benefit analysis, Plant Health, EU Regulation |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126791&r= |
| By: | Ahn, Jae-Wan; Rhodes, M. Taylor |
| Abstract: | Identifying adulterants in imported foods and refusing contaminated shipments help minimize the risk of foodborne illness from foreign products and are essential to keep U.S. consumers safe. This report uses import refusal data from the Food and Drug Administration (FDA) from 2002 to 2019 to explore import refusals based on contamination with pathogens and toxins. The report examines trends in total, annually, by industry, and by country. The analysis helps identify which pathogen/toxin is the most common in refused imports, which industries are the most frequently refused in total and by pathogen/toxin type, which countries are the most frequently refused in total and by pathogen/toxin type, and what changes occurred over time. From 2002 to 2019, Salmonella violations accounted for nearly 79.8 percent of all pathogen/toxin violations, followed by Listeria at 11 percent. By food industry group, most pathogen/toxin violations occurred in fishery and seafood products (44.1 percent), followed by spices, flavors, and salts (26.3 percent). Shipments from India, Mexico, and Vietnam accounted for 22.9 percent, 14.9 percent, and 8.6 percent of import refusals due to pathogen/toxin violations, respectively. This report has a limited understanding of which factors affect the refusals because the dataset does not have the volume of shipments inspected, and the FDA inspected only a small percent of the shipment, not randomly, based on the previous history. |
| Keywords: | Agricultural and Food Policy, Financial Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Public Economics, Research Methods/ Statistical Methods |
| Date: | 2021–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdami:316794&r= |
| By: | SOTO EMBODAS Iria (European Commission - JRC); DI BARTOLO Fabiola (European Commission - JRC); KAMMENOU Maria; SCALIA Rosalinda; SANCHEZ FERNANDEZ Berta (European Commission - JRC); BARREIRO HURLE Jesus (European Commission - JRC) |
| Abstract: | This technical report assesses the policy and economic impact of the provision of the Official Control Regulation (OCR) relating to imports into the Union territory. To this end a survey was held of different EU stakeholders i.e. custom authorities, NPPOs, operators, MS-level and EU-wide associations, and non-EU NPPOs. The survey was answered by 65 respondents from 21 different EU countries. This report includes an analysis of changes to the OCR Regulation carried out by DG SANTE and a cost-benefit analysis thereof, carried out by JRC. Results show the stakeholders’ views on the cost and benefits as well as the performance of the changes introduced to plant health provisions of the Official Controls Regulation. In particular it focuses on how the changes have affected the number of border control posts and control points, the impact of the requirements related to controls on wood packaging material, inspections for goods in transit and post-import inspections for pests in dormant stage. It also reviews how the TRACES NT system supports the implementation of the Regulation and how the provisions for E-commerce and passenger luggage are being put in place. This report is one of four reports drafted for the preparation of the report to the European Parliament and to the Council according to the legislative obligation of the European Commission laid down in Article 50 of the Plant Health Regulation (EC 2016/2031). |
| Keywords: | Official Controls Regulation, Cost benefit analysis, Plant Health, EU Regulation, Import measures |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc126790&r= |