nep-int New Economics Papers
on International Trade
Issue of 2022‒02‒07
23 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. US trade policy and the US dollar By Khalil, Makram; Strobel, Felix
  2. Optimal Tariffs with Firm Heterogeneity, Variable Markups, and FDI By Ziran Ding
  3. The impact of international trade on manufacturing employment in Australia: Evidence from the China shock By Aaron Blanco; Jeff Borland; Michael Coelli; James Maccarrone
  4. Where has the rum gone? The impact of maritime piracy on trade and transport By Sandkamp, Alexander; Stamer, Vincent; Yang, Shuyao
  5. Firm-to-Firm Trade: Imports, Exports, and the Labor Market By Jonathan Eaton; Samuel Kortum; Francis Kramarz
  6. International Trade and Innovation By Ufuk Akcigit; Marc Melitz
  7. Heterogeneous Internal Trade Cost and Its Implications in Trade By Zheng, Han
  8. A Measurement of Aggregate Trade Restrictions and their Economic Effects By Davide Furceri; Mrs. Swarnali A Hannan; Julia Estefania-Flores; Mr. Jonathan David Ostry; Mr. Andrew K. Rose
  9. The importance of global value chains and regional capabilities for the economic complexity of EU-regions By Colozza, Federico; Boschma, Ron; Morrison, Andrea; Pietrobelli, Carlo
  10. The French (Trade) Revolution of 1860: Intra-Industry Trade and Smooth Adjustment By Stéphane Bécuwe; Bertrand Blancheton; Christopher Meissner
  11. Trade linkages and supply chains of Personal Protective Equipment (PPE) and vaccines in ASEAN during the COVID-19 pandemic. By Bruno Jetin
  12. Gravity and trade in video on demand services By Annette Broocks; Zuzanna Studnicka
  13. Global Innovation and Knowledge Diffusion By Nelson Lind; Natalia Ramondo
  14. Trade, Misallocation, and Capital Market Integration By Laszlo Tetenyi
  15. Information, Intermediaries, and International Migration By Samuel Bazzi; Lisa Cameron; Simone Schaner; Firman Witoelar
  16. Currency Carry Trade by Trucks: The Curious Case of China's Massive Imports from Itself By Xuepeng Liu; Heiwai Tang; Zhi Wang; Shang-Jin Wei
  17. Board Gender Quotas and Outward Foreign Direct Investment: Evidence from France By Koray Aktas; Valeria Gattai; Piergiovanna Natale
  18. The dragon down under: The regional labour market impact of growth in Chinese imports to Australia By Michael Coelli; James Maccarrone; Jeff Borland
  19. Trade Persistence and Trader Identity - Evidence from the Demise of the Hanseatic League By Max Marczinek; Stephan Maurer; Ferdinand Rauch
  20. The economic and environment benefits from international co-ordination on carbon pricing: a review of economic modelling studies By Thube, Sneha; Peterson, Sonja; Nachtigall, Daniel; Ellis, Jane
  21. Redistribution et immigration en Europe By Michel Forsé; Maxime Parodi
  22. Why Do Exporters Pay Higher Wages? Empirical Evidence from Israeli Companies By Shay Tsur
  23. International student mobility and academic performance: Does timing matter? By Granja, Cintia Denise; Visentin, Fabiana

  1. By: Khalil, Makram; Strobel, Felix
    Abstract: We investigate the extent to which the effect of the 2018/2019 US import tariff hikes on US (post-tariff) import prices was offset by the concurrent appreciation of the US dollar and trace the source of the appreciation back to US trade policy itself. The dollar response to trade policy uncertainty (TPU) is key to assessing the overall impact of trade policies. Within a SVAR framework, identified TPU shocks account for a sizable fraction of the USD appreciation - against a broad currency basket, but also against the Chinese yuan. To rationalize the SVAR evidence, we build an open economy NK model featuring financial frictions, which accounts for uncertainty regarding future trade policy. In the model, an increase in TPU raises the relative demand for safer US assets, triggering an appreciation of the US dollar. Moreover, in assessing the offsetting effects from the exchange rate,we use detailed product data on unit values of manufacturing imports and document that Chinese exporters react to an USD appreciation by markedly lowering their US dollar-denominated export prices. This holds in particular for intermediate goods producers, which had been the main target of US trade policy in 2018 and 2019. Overall, we find that offsetting effects on the newly imposed tariffs were substantial.
    Keywords: Trade policy uncertainty,safe-asset currency,two-country model with financial frictions,exchange rate pass-through to import prices,tariffs
    JEL: F31 F13 F14 F41 E31
    Date: 2021
  2. By: Ziran Ding (Bank of Lithuania, Kaunas University of Technology)
    Abstract: Variable markups and multinational production have gathered considerable attention in the trade literature because of their empirical prevalence and welfare implications. This paper studies the welfare implication of tariffs and optimal tariffs in an environment that features firm heterogeneity, variable markups, and FDI. I find: (i) Tariffs endogenously affect firm entry level, producing different comparative statics in the short run versus long-run. (ii) Variable markups generate multiple externalities in this economy, causing market outcome to differ from the socially optimum outcome systematically. Permitting tariff-jumping FDI can lower the domestic cutoff levels and reduce the misallocation in the economy. (iii) Free trade is not always socially optimal. If the domestic marginal cost cutoff is sufficiently high, a positive tariff can be welfare-improving since it encourages firm entry. The Nash equilibrium tariff level will also be higher than the socially optimal tariff. (iv) The interaction of variable markup and FDI generates novel welfare implications that are absent if consumers possess CES preference.
    Keywords: Optimal tariff, Firm heterogeneity, Misallocation, Variable markups, FDI
    JEL: F12 F13 F23 F60 R13
    Date: 2021–12–31
  3. By: Aaron Blanco (Department of Economics, The University of Melbourne); Jeff Borland (Department of Economics, The University of Melbourne); Michael Coelli (Department of Economics, The University of Melbourne); James Maccarrone (Department of Economics University of Oxford)
    Abstract: We examine how the rapid growth in imports of manufactured goods from China affected industry-level employment in Australia from 1991 to 2006. Our analysis incorporates both the direct effect from increased import competition, and indirect spill-over effects from inputoutput linkages. We estimate that growth in imports from China caused a loss in total manufacturing employment of between 89,900 and 209,800 workers – accounting for 8.5 to 19.8 per cent of manufacturing employment in 1991. Such an effect seems best described as sizable, but not one that by itself spelled the end of manufacturing industry in Australia. The largest impacts from growth in Chinese imports are found for manufacturing industries most exposed to import competition; and for the sub-period from 2001 to 2006.
    Keywords: employment, manufacturing, trade, China;
    JEL: J23 F16
    Date: 2020–04
  4. By: Sandkamp, Alexander; Stamer, Vincent; Yang, Shuyao
    Abstract: Despite a general agreement that piracy poses a significant threat to maritime shipping, empirical evidence regarding its economic consequences remains scarce. This paper combines firm-level Chinese customs data and ship position data with information on pirate attacks to investigate how exporting firms and cargo ships respond to maritime piracy. It finds that overall exports along affected shipping routes fall following an increase in pirate activity. In addition, piracy induces firms to switch from ocean to air shipping, while remaining ocean shipments become larger. At the ship-level, the paper provides evidence for re-routing, as container ships avoid regions prone to pirate attacks.
    Keywords: Trade,Transport,China,Piracy,Container Shipping
    JEL: F14 F19 N70 R41
    Date: 2021
  5. By: Jonathan Eaton (Pennsylvania State University); Samuel Kortum (Yale University); Francis Kramarz (CREST(ENSAE), Institut Polytechnique de Paris)
    Abstract: Customs data reveal heterogeneity and granularity of relationships among buyers and sellers. A key insight is how more exports to a destination break down into more firms selling there and more buyers per exporter. We develop a quantitative general equilibrium model of firm-to-firm matching that builds on this insight to separate the roles of iceberg costs and matching frictions in gravity. In the cross section, we find matching frictions as important as iceberg costs in impeding trade, and more sensitive to distance. Because domestic and imported intermediates compete directly with labor in performing production tasks, our model also fits the heterogeneity of labor shares across French producers. Applying the framework to the 2004 expansion of the European Union, reduced iceberg costs and reduced matching frictions contributed equally to the increase in French exports to the new members. While workers benefited overall, those competing most directly with imports gained less, even losing in some countries entering the EU.
    Date: 2022–01–16
  6. By: Ufuk Akcigit; Marc Melitz
    Abstract: This chapter was prepared for the Handbook of International Economics (Vol. 5) edited by Gita Gopinath, Elhanan Helpman, and Kenneth Rogoff. We provide a review of the recent literature -- both theoretical and empirical -- analyzing the multi-dimensional connections between globalization and innovation. We develop a model that features many of those mechanisms that connect trade and innovation. It features the joint selection of firms into innovation and international market participation (in our model, we restrict that participation to exports). Our model also highlights how exposure to international markets affects the incentives for innovation.
    JEL: F12 O31 O4
    Date: 2021–12
  7. By: Zheng, Han
    Abstract: Contrary to the convenient assumption, this paper shows that internal trade cost is heterogeneous across countries. This heterogeneous internal trade cost contaminates the importer fixed effect in a ratio type gravity estimation making exporter fixed effect a better measure of country’s competitiveness. Further quantification analysis shows that R&D data can approximate country level technology parameter quite well after netting out the effect from internal trade cost and the model with internal trade cost can match real income data very well. The model with internal trade cost is not only consistent with price data but also outperforms other alternatives in fitting R&D data. This paper offers a novel answer to the question why small countries export less than large ones. That is small countries trade more with themselves because of lower internal trade costs they have.
    Keywords: Heterogeneous internal trade cost, Domestic trade friction, Ratio type gravity estimation
    JEL: F10 F14 F17
    Date: 2022–01
  8. By: Davide Furceri; Mrs. Swarnali A Hannan; Julia Estefania-Flores; Mr. Jonathan David Ostry; Mr. Andrew K. Rose
    Abstract: We develop a new Measure of Aggregate Trade Restrictions (MATR) using data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions. MATR is an empirical measure of how restrictive official government policy is towards the international flow of goods and services. MATR is simple, ad hoc, plausible, quantitative, easily updated, based solely on policy-relevant measures of trade policy, and covers an unbalanced sample of up to 157 countries annually between 1949 and 2019. MATR is strongly correlated with, but more comprehensive than, existing measures of openness and trade policy existing measures. We use MATR to show that trade restrictions are harmful for the economy and lead to significant contractions in output.
    Keywords: Empricial, data, protection, tariffs, non-tariff barriers, policy, annual, panel.
    Date: 2022–01–07
  9. By: Colozza, Federico (University of Roma Tre); Boschma, Ron (Department of Human Geography and Planning, Utrecht University, and UiS Business School, University of Stavanger); Morrison, Andrea (Department of Political and Social Sciences, University of Pavia, Department of Human Geography and Planning, Utrecht University, and ICRIOS, Bocconi University); Pietrobelli, Carlo (UNU-MERIT, Maastricht University, and University of Roma Tre)
    Abstract: This paper combines various literatures on Global Value Chains (GVC), Economic Complexity and Evolutionary Economic Geography. The objective is to assess the role of regional capabilities and GVC participation in fostering economic complexity in 236 NUTS2-regions in Europe. Our results suggest there is no such thing as a common path of economic upgrading across EU regions. Regions with high economic complexity tend to keep their advantageous positions, as they are capable of benefitting from both regional capabilities (as proxied by a high relatedness between local activities) and external linkages in terms of GVC participation. Conversely, low-complex regions do not benefit from GVC participation, unless their regional capabilities (in terms of relatedness density) are also stronger.
    Keywords: Economic Complexity, Evolutionary Economic Geography, Global Value Chains, Relatedness, Economic Upgrading, EU regions
    JEL: B52 F23 O19 O33 R10
    Date: 2021–12–17
  10. By: Stéphane Bécuwe (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS - Centre National de la Recherche Scientifique - UB - Université de Bordeaux); Bertrand Blancheton; Christopher Meissner
    Abstract: The Cobden-Chevalier treaty of 1860 eliminated French import prohibitions and lowered tariffs between France and Great Britain. The policy change was largely unexpected and unusually free from direct lobbying. A series of commercial treaties with other nations followed. Post-1860, we find a significant rise in French intra-industry trade. Sectors that liberalized more experienced higher two-way trade. Our findings are consistent with the idea that trade liberalization led to "smooth adjustment" that avoided costly inter-sectoral re-allocations of factors.
    Date: 2021–09
  11. By: Bruno Jetin (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique, Universiti Brunei Darussalam)
    Abstract: The purpose of this paper is precisely to check whether the region played a significant role in the supply of PPE and vaccines during 2020, the first full year of the pandemic for which data is available. Our concept of the region is two-fold. First, we will focus on ASEAN to verify to what extent it could satisfy its needs of medical products and vaccines. ASEAN is then compared with the wider Asian region. ASEAN has signed with China, Japan and South Korea a set of trade and political agreements which establishes privileged relationships. These three partner countries have expertise and capabilities in the production of medical goods. However, among the three, China plays a specific role. It is the second-largest economy in the world and the largest global producer of some critical medical goods. It has signed with ASEAN a free trade agreement in 2002, which progressively eliminated tariffs on goods between the two parties. Their connectivity has also improved. The paper's ambition is a modest contribution to the role of regions in the COVID-19 pandemic that we have more comprehensively analysed in another paper on the policy response of ASEAN and the EU (Jetin, 2021). Here, the objectives are the following: in the next section, we want to check if Asia , as a broad region, is the leading provider of medical goods to ASEAN. We also look at the specific contribution of China, the rest of Asia, and ASEAN in the supply of medical goods to ASEAN. In the latter case, we want to assess the capacity of ASEAN to be self-sufficient. Finally, we look at the rest of the world, primarily the European Union (EU) and the USA, to see in which case they provide medical goods.
    Keywords: COVID-19,Region,ASEAN,Asia,Protective Personal Equipment,Vaccines,medical goods,Global Value Chains,Dependency
    Date: 2021–10–16
  12. By: Annette Broocks (European Commission - JRC); Zuzanna Studnicka (School of Economics, University College Dublin)
    Abstract: Over the last decade, watching videos online has become one of the primary uses of the internet, with streaming services accounting for more than 60% of global internet traffic. In this paper we use a novel data set on Netflix, the largest streaming platform worldwide, to estimate the patterns of catalogue availability (extensive margin) and number of clicks per title (intensive margin) across twenty countries. This data set also gives us a unique opportunity to estimate the importance of quality in viewing patterns. Our results show evidence of the gravity framework explaining both margins of Netflix watching. In addition, we find that there is a strong preference for domestic content, better-rated titles, and Netflix Original productions. These findings suggest that as Netflix produces more content, this will interact with its streaming dominance to provide a significant advantage in reaching viewers and promoting specific content.
    Keywords: Netflix; subscription video on demand; gravity equation; services trade
    JEL: F10 L82 Z10
    Date: 2021–12
  13. By: Nelson Lind; Natalia Ramondo
    Abstract: We develop a Ricardian model of trade in which countries innovate ideas that diffuse across the globe. In this model, the forces of innovation and diffusion combine to shape trade substitution patterns. Innovation makes a country technologically distinct, reducing their substitutability with other countries, while diffusion between countries generates technological similarity and increases head-to-head competition. In the special case of an innovation-only model where countries do not share ideas, productivities are independent across space, and the demand system is CES. As a consequence, departures from CES expenditure reveal diffusion patterns. Our theoretical results provide a mapping between the dynamics of observable trade flows and the dynamics of innovation and knowledge diffusion.
    JEL: F1 O3
    Date: 2022–01
  14. By: Laszlo Tetenyi
    Abstract: Developing countries typically integrate into the world economy by first opening up to trade and then later, if at all, by integrating their capital markets. I study the effects of postponing the opening of capital markets in a standard trade model with financial frictions and firm dynamics. As trade barriers fall, the model predicts that capital misallocation declines in the aggregate, but increases among exporters. Allowing capital inflows helps all firms but it also magnifies the losses from misallocation. In the quantitative experiment calibrated to the Hungarian integration episode of the 90s, the benefit of cheaper capital dominates the adverse effect of growing capital misallocation on productivity, leading to higher output, consumption, and welfare than under closed capital markets. Moreover, Hungary could have gained an extra 1 % in welfare, on top of the overall gain of 7 %, by immediately allowing capital inflows after the reduction in trade barriers.
    JEL: F15
    Date: 2021
  15. By: Samuel Bazzi (UC San Diego, NBER, and CEPR); Lisa Cameron (Melbourne Institute: Applied Economic & Social Research, the University of Melbourne); Simone Schaner (University of Southern California, NBER); Firman Witoelar (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 randomised 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
  16. By: Xuepeng Liu; Heiwai Tang; Zhi Wang; Shang-Jin Wei
    Abstract: With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong’s governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.”
    JEL: F14 F3 G15
    Date: 2022–01
  17. By: Koray Aktas; Valeria Gattai; Piergiovanna Natale
    Abstract: We show that board gender quota laws reduce the propensity of French firms to undertake outward foreign direct investment. For this, we use Orbis data for the period 2007–2015 and a difference-in-difference approach. The exogenous increase in the share of women directors decreases the share of foreign subsidiaries by 7 percentage points when the share of women directors is at its highest. The share of foreign subsidiaries is affected by the decrease in the probability of having a foreign subsidiary, which indicates disinvestment. Accordingly, the estimated effects on the number and cost of employees are negative, with no impact on firm performance.
    Keywords: Board diversity, Gender quota, Outward foreign direct investment (OFDI), Europe, Women directors.
    JEL: G30 F23 J16
    Date: 2021–12
  18. By: Michael Coelli (Department of Economics, The University of Melbourne); James Maccarrone (Department of Economics, the University of Melbourne); Jeff Borland (Department of Economics, The University of Melbourne)
    Abstract: Imports of manufactured goods from China to Australia grew more than eleven-fold in real US dollar terms between 1991 and 2006. This study uses differences in industry structure between regions to identify the impact of that growth on labour market outcomes in Australia. Overall, the growth in Chinese imports is estimated to have reduced the ratio of manufacturing employment to population by 1.6 percentage points, and manufacturing employment by 221,000 workers. Adjustment to this impact on local manufacturing employment appears to have occurred through labour mobility between regions, but also increased rates of unemployment and non-participation. Growth in manufacturing imports from other Asian countries during this period, by contrast, is found to have had little impact on manufacturing employment in Australia – with the main explanation for the difference being that Chinese imports were weighted more to manufacturing sectors experiencing slower growth in domestic consumption (absorption) and with high labour-intensity. The study concludes by interpreting the estimated impacts of Chinese imports on Australia against estimates for other countries.
    Keywords: Manufacturing employment, trade shocks, labour market adjustment, import exposure
    JEL: J21 J23 J61 F16 F66
    Date: 2021–07
  19. By: Max Marczinek (University of Oxford); Stephan Maurer (University of Konstanz and CEP); Ferdinand Rauch (University of Oxford, CEP and CEPR)
    Abstract: How do trade networks persist following disruptions of political networks? We study different types of persistence following the decline of the Hanseatic League using a panel of 21,590 city-level trade flows over 190 years, covering 1,425 cities. We use the Sound Toll data, a dataset collected by the Danish crown until 1857 that registered every ship entering or leaving the Baltic Sea, forming one of the most granular and extensive trade data sets. We measure trade flows by counting the number of ships sailing on a particular route in a given year and estimate gravity equations using PPML and an appropriate set of fixed effects. Bilateral gravity estimation results show that trade among former Hansa cities only shows persistence after its dissolution in 1669 for about 30 years, but this persistence is not robust across different regression specifications. However, when we incorporate the flag under which a ship is sailing and consider trilateral trade (where an observation is a combination of origin, destination, and flag), we find that trade persistently exceeds the gravity benchmark: Hansa cities continued to trade more with each other, but only on ships that were owned in another former Hansa city and thus sailed under a Hansa flag. Similar effects are found for trade among former Hansa cities and their trading posts abroad, yet again only conditional on the ship sailing under a former Hanseatic flag. Trade flows among the same pair of origin and destination cities, but under a different flag, do not show this persistence. Our main result shows that the identity of traders persists longer and more strongly than other forms of trading relationships we can measure. Apart from these new quantitative and qualitative insights on the persistence of trade flows, our paper is also of historic interest, as it provides new and detailed information on the speed of decline of trade amongst members of the Hanseatic League.
    Keywords: Hanseatic League, Hansa, Gravity
    JEL: F14 N73 N93
    Date: 2022–01–26
  20. By: Thube, Sneha; Peterson, Sonja; Nachtigall, Daniel; Ellis, Jane
    Abstract: This paper reviews quantitative estimates of the economic and environmental benefits from different forms of international co-ordination on carbon pricing based on economic modelling studies. Forms of international co-ordination include: harmonising carbon prices (e.g. through linking carbon markets), extending the coverage of pricing schemes, phasing out fossil fuel subsidies, developing international sectoral agreements, and establishing co-ordination mechanisms to mitigate carbon leakage. All forms of international co-operation on carbon pricing could deliver benefits, both economic (e.g. lower mitigation costs) and environmental (e.g. reducing greenhouse gas (GHG) emissions and carbon leakage). There is scope to considerably increase the coverage of carbon pricing, since until 2021 only around 40% of energy-related CO2 emissions in 44 OECD and G20 countries face a carbon price. There is also significant scope to improve international co-ordination on carbon pricing: moving from unilateral carbon prices to a globally harmonized carbon price to reach the 1st round of NDC targets for 2030 can reduce global mitigation cost on average by two thirds or $229 billion. Benefits tend to be higher with broader participation of countries, broader coverage of emissions and sectors and, more ambitious policy goals. Extending carbon pricing to non-CO2 GHG could reduce global mitigation costs by up to 48%. Absolute cost savings from harmonized carbon prices increase by almost 70% in 2030 for reductions in line with the 2 °C target. Most, but not all, countries gain economic benefits from international co-operation, and these benefits vary significantly across countries and regions. Complementary measures outside co-operation on carbon pricing (e.g. technology transfers) could potentially ensure that co-operation provides economic benefits for all countries.
    Keywords: climate change mitigation,harmonizing carbon pricing,fossil fuel subsidy reforms,border carbon adjustment,greenhouse gas mitigation,sectoral agreements,climate-economy-modelling
    Date: 2021
  21. By: Michel Forsé; Maxime Parodi (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: Entre ouverture à l'immigration et progrès de la redistribution, serions-nous face à un dilemme qui obligerait à choisir l'une ou l'autre de ces options ? En examinant les données de l'European Social Survey, et en comparant les situations de dix pays européens, il apparaît qu'immigration et protection sociale ne s'opposent pas aux yeux des opinions publiques. Ce sont souvent les sociétés les mieux protégées socialement qui sont les plus ouvertes. Et ceci n'est pas dû à ce qu'on appelle un welfare magnet. Ce rapport positif entre ouverture et protection est lié notamment au sentiment de confiance envers les autres qui joue un rôle important pour l'articulation de ces deux dimensions.
    Keywords: redistribution,immigration,État-providence,solidarité,hospitalité,inégalités,confiance,passager clandestin,Europe
    Date: 2020–11–01
  22. By: Shay Tsur (Bank of Israel)
    Abstract: This study examines the extent to which the positive correlation between employment in an exporting company and wages reflects a causal relationship. In order to identify this relationship, I use several methods on the basis of three different datasets: controlling for observable and unobservable individual characteristics by means of a datafile that tracks workers over a number of years; controlling for observable and unobservable characteristics of individuals and companies by means of a datafile that tracks companies; and controlling for individualsâ skills by means of cross-sectional data from an international skills survey (PIAAC). I find that while each percentage point in an industryâs export rate is correlated with a 1-percent increase in wages, the causal relationship, which is similar across all of the methods, is much weaker and lies between zero and 0.2 percent. Finally, I find that the simple correlation between the export rate and wages in Israel is unusually large relative to other countries in the PIAAC sample, while the causal relationship is similar to the premium in other countries, although it is in the upper part of the distribution.
    Date: 2021–05
  23. By: Granja, Cintia Denise (UNU-MERIT, Maastricht University, and Institute of Geosciences, University of Campinas); Visentin, Fabiana (UNU-MERIT, Maastricht University)
    Abstract: In this study, we examine the impact of exchange programs’ timing on students’ academic performance, focusing on the moment in which students travel and the length of the period spent abroad. To provide causal evidence, we exploit unique data of more than 10,000 students from a well-known and internationalized Brazilian university from 2010 to 2020. By combining Propensity Score Matching with Difference in Differences techniques, we find that international mobility impacts groups of students differently. Students who travel closer to the end of their undergraduate courses benefit the most from the mobility experience (an increase of 0.06 points on final standardized grades), while negative effects (-0.05 points) are found for those who travel at the beginning of their university program. Our results also show that, while student mobility impacts positively and significantly students who participate in programs lasting from one semester to one year (0.08 points), negative effects are associated with shorter periods abroad (-0.1 points).
    Keywords: Tertiary education, international student mobility, academic performance, grades, student achievement, propensity score matching, difference in differences
    JEL: I23 I26 J24 O15 O34
    Date: 2021–12–14

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