nep-int New Economics Papers
on International Trade
Issue of 2022‒07‒25
48 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Foreign direct investment and backward spillovers in the Western Balkans: the context, opportunities and barriers to the development of regional supply chains By Krasniqi, Besnik; Ahmetbasić, Jasmina; Bartlett, Will
  2. Measuring trade creation effects of free trade agreements: Evidence from wine trade in East Asia By Kimie Harada; Shuhei Nishitateno
  3. Trade and the COVID-19 Pandemic: Lessons from French Firms By Mr. Chris Papageorgiou; Mariya Brussevich; Pauline Wibaux
  4. Bilateral Trade Imbalances By Alejandro Cuñat; Robert Zymek
  5. Duration of the Membership in the World Trade Organization and Aid for Trade Flows By Gnangnon, Sèna Kimm
  6. Structural Change And Trade Openness in sub-Saharan African Countries By Kabinet Kaba; Justin Yifu; Mary-Françoise Renard
  7. Measuring Carbon Emissions of Foreign Direct Investment in Host Economies By Kenneth Egesa; Mr. Gregory M Legoff; Maria Borga; Achille Pegoue; Alberto Sanchez Rodelgo; Dmitrii Entaltsev
  8. US Dollar Dominance in Asia's Trade Invoicing By Rogelio V. Mercado, Jr.; Ryan Jacildo; Sanchita Basu Das
  9. COVID-19 impact on the international trade By Célestin Coquidé; José Lages; Leonardo Ermann; Dima L. Shepelyansky
  10. Covid-19 and international trade: Evidence from New Zealand By Nitsch, Volker
  11. Essays in international trade and industrial organization By Ludovic Panon
  12. Labor Share, Foreign Demand and Superstar Exporters By Ludovic Panon
  13. Comparing Scenarios for a European Carbon Border Adjustment Mechanism: Trade, FDI and Welfare Effects with a Focus on the Austrian Economy By Niko Korpar; Mario Larch; Roman Stöllinger
  14. Why does import competition favor republicans? Localized trade shocks and cultural backlash in the US By Ferrara, Federico
  15. The Brexit vote, inflation and UK living standards By Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas
  16. Волатильность экспортных и импортных цен Казахстана // Volatility of export and import prices in Kazakhstan By Кожамкулов Канат // Kozhamkulov Kanat; Хакимжанов Сабит // Khakimzhanov Sabit; Миллер Алия // Miller Aliya; Агамбаева Саида // Agambayeva Saida
  17. The African Continental Free Trade Area and Financial Development for Women Economic Participation in Africa By Vanessa S. Tchamyou; Juste Some; Simplice A. Asongu
  18. Local Economic and Political Effects of Trade Deals: Evidence from NAFTA By Jiwon Choi; Ilyana Kuziemko; Ebonya L. Washington; Gavin Wright
  19. Innovation, Product Sophistication and Export Market Survival: A Study of Indian Manufacturing By Subash Sasidharan; Ketan Reddy
  20. How infrastructure shapes comparative advantage By Quintana, Luis Baldomero
  21. Measuring Horizontal and Vertical Differentiation in Intra-industry Trade By Sourish Dutta
  22. Foreign direct investment, information technology and total factor productivity dynamics in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  23. Aggregation across each nation: aggregator choice and macroeconomic dynamics By Lisack, Noemie; Lloyd, Simon; Sajedi, Rana
  24. Effect of the Duty-Free Quota-Free Market access Schemes in favour of Least developed countries' Products on the Volatility of the Utilization Rate of these Schemes By Gnangnon, Sèna Kimm
  25. Rethinking Sri Lanka’s industrialisation strategy: Achievements, lost opportunities and prospects By Prema-chandra Athukorala
  26. Expansion of the Totalization Program using Simplified Agreements to Eliminate Dual Taxation By Maria J. Prados; Dongwook Kim
  27. The Impact of the Tax Cuts and Jobs Act on Foreign Investment in the United States By Mr. Alexander D Klemm; Ms. Thornton Matheson; Laura Power; Thomas Brosy
  28. What drove the profitability of colonial firms?: Labour coercion and trade preferences on the Sena Sugar Estates (1920-74) By Sam Jones; Peter Gibbon
  29. War in Ukraine and Western sanctions: How vulnerable are German firms? By Görg, Holger; Jacobs, Anna; Meuchelböck, Saskia
  30. The Data Economy: Market Size and Global Trade By Diane Coyle; Wendy Li
  31. Estimating the Impact of Missing Totalization Agreements By Ananth Seshadri; Junjie Guo
  32. Modeling and Forecasting Agricultural Commodity Support in the Developing Countries By Zhao, Jing; Miller, J. Isaac; Binfield, Julian; Thompson, Wyatt
  33. Country, culture or competition: What drives attitudes towards immigrants in Sub-Saharan Africa? By Becker, Malte; Krüger, Finja; Heidland, Tobias
  34. Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach By Dario Guarascio; Roman Stöllinger
  35. Seven Finance & Trade Lessons from COVID-19 for Future Pandemics By Ruchir Agarwal; Ms. Gita Gopinath
  36. Globalization and Factor Income Taxation By Pierre Bachas; Matthew Fisher-Post; Anders Jensen; Gabriel Zucman
  37. Globalization and Factor Income Taxation By Pierre Bachas; Matthew Fisher-Post; Anders Jensen; Gabriel Zucman
  38. Are non-primary exports the source for further economic growth in the UAE? By Kalaitzi, Athanasia; Samer, Kherfi; Al-Rousan, Sahel; Katsaiti, Marina-Selini
  39. An assessment of Italy’s energy trade balance By Claire Giordano; Enrico Tosti
  40. Grotius Among the English Merchants: Mare Liberum and Anglo-Dutch Rivalry in the Early Seventeenth Century By Carlos Eduardo Suprinyak
  41. China's CPTPP bid spurs South Korea to act on Asia-Pacific trade pacts By Jeffrey J. Schott
  42. International managerial skill and big Colombian exporting firms' performance, 2006-2014 By Merchan Alvarez, Federico Alberto
  43. Toward achieving sustainable development agenda: Nexus between Agriculture, Trade Openness, and Oil rents in Nigeria By Festus F. Adedoyin; Olawumi A. Osundina; Festus V. Bekun; Simplice A. Asongu
  44. A Comprehensive Guide to Choosing Vietnam for Offshore Company Formation By Mai, Nhat Chi
  45. Essays on economic geography, migration and transport infrastructurg By Florin L. Cucu
  46. The Current Account Income Balance: External Adjustment Channel or Vulnerability Amplifier? By Mr. Alberto Behar; Ramin Hassan
  47. Global Supply Chain Sustainability: the Role of Non-governmental Enforcement Mechanisms By Michela Limardi; Francesca Battista
  48. Competitiveness, 'Superstar' Firms and Capital Flows By Smitkova, L.

  1. By: Krasniqi, Besnik; Ahmetbasić, Jasmina; Bartlett, Will
    Abstract: This article investigates how regional supply chains support the Western Balkans' economic growth. It first identifies the role of the cefta free trade agreement in expanding the size of the local market and opening up regional trading opportunities. It recounts how the larger market and specific industrial policies have attracted foreign direct investment (FDI) to the region in recent years. It analyses how these two factors have combined to generate export-led growth in the region and have brought about substantial structural changes within these economies. The article argues that to take continued advantage of the success in trade liberalisation and fdi attraction, policymakers should pay special attention to promoting backward spillovers by promoting linkages between local small and middle sized enterprise (SME) supplier firms and the newly arrived multi national corporations embedded into global value chains. Policies should be adopted which build the capacity of local sme suppliers within regional supply chains, both in terms of labour force skills and technological upgrades. The EU's recently launched Economic and Investment Plan for the Western Balkans and the activities of the Western Balkan Six Chamber Investment Forum may support such policies.
    Keywords: backward spillovers; cefta; foreign direct investment; regional supply chains; Western Balkans
    JEL: F3 G3 N0
    Date: 2022–05–03
  2. By: Kimie Harada; Shuhei Nishitateno
    Abstract: East Asia has experienced an unprecedented expansion in its wine market over the past two decades. This paper examines the extent to which import tariff reductions through bilateral free trade agreements (FTAs) have contributed to an increase in wine imports to Japan, China, and South Korea. Our empirical method involves estimating an augmented version of the gravity equation by the Poisson pseudo-maximum likelihood (PPML) technique. Analyzing a panel dataset for 1990–2016 covering 27 exporters, we find that overall a 1 percentage point reduction in tariff among FTA member countries is associated with an increase in the wine import volumes by 0.042%, which is seven times higher than a similar reduction in tariff on an MFN basis. The strongest trade creation effects are founded for bottle wine. The results are robust to various specifications..
    Keywords: wine trade, FTAs, non-tariff barriers, gravity equation
    JEL: F14 F69 L66
    Date: 2021
  3. By: Mr. Chris Papageorgiou; Mariya Brussevich; Pauline Wibaux
    Abstract: This paper uses granular customs data from France to investigate propagation of the COVID-19 shock along the supply chains in 2020. It quantifies the effect of the COVID-19 shock on trade adjustment and identifies mitigating and amplifying factors contributing to French firms’ heterogeneous adjustment paths. Early in the pandemic, firms mainly responded to global lockdowns and spread of the virus by reducing trade volumes (intensive margin) as opposed to exiting from import and export markets (ex-tensive margin). However, adjustment along the extensive margin played a more important role in trade with developing countries. It is shown that the impact of lockdowns was stronger for final consumer goods and the trade recovery was predominantly demand-driven. More automated, inventory-intensive, older, and medium-sized firms were more insulated from the shock, whereas firms’ reliance on air transportation for shipping goods amplified the shock. Trade bans and promotion measures implemented by governments in response to the pandemic had little impact on aggregate trade flows.
    Keywords: COVID-19; trade; supply chains disruptions; French firms; trade recovery; trade adjustment; inventory intensity; shock propagation; medium-sized firm; trade ban; Imports; Exports; Trade balance; Trade policy; Global
    Date: 2022–05–06
  4. By: Alejandro Cuñat; Robert Zymek
    Abstract: If sectoral trade flows obey structural gravity, countries' bilateral trade imbalances are the result of macro trade imbalances, “triangular trade”, or pairwise asymmetric trade barriers. Using data for 40 major economies and the Rest of the World, we show that large and pervasive asymmetries in trade barriers are required to account for most of the observed variation in bilateral imbalances. A dynamic quantitative trade model suggests that eliminating these asymmetries would significantly reduce bilateral (but not macro) imbalances and have sizeable impacts on welfare. We provide evidence that the asymmetries we measure are in part related to the policy environment: trade inside the European Single Market appears to be subject to more bilaterally symmetric frictions. Extending the same symmetry to all parts of the global economy would give a large boost to the real incomes of several non-E.U. countries.
    Keywords: trade imbalances; trade wedges; gravity; estimating trade wedge; sectoral trade flow; trade model; trade-wedge asymmetry; trade cost; Trade balance; Plurilateral trade; Exports; Trade barriers; Imports; Global
    Date: 2022–05–13
  5. By: Gnangnon, Sèna Kimm
    Abstract: Recently, Lee et al. (2015 (The World Economy, 38, 2015 and 1462) have found that developing countries members of the World Trade Organization (WTO) received higher Aid for Trade (AfT) flows than non-WTO developing members. The present paper extends this analysis by investigating the effect of the duration of WTO membership (and not the mere membership in the WTO) on the amounts of AfT flows that accrue to recipient countries. The main argument in the analysis is that the duration of WTO membership matters more than the mere WTO membership for AfT recipient countries' degree of liberalization of trade regime and participation in international trade, the latter being a critical determinant of the AfT flows supplied by donors. The analysis has used a panel dataset of 136 countries over the period from 2002 to 2019, and the two-step generalized methods of moments estimator. It has established that countries receive higher AfT flows as their membership duration increases, and the amounts of these resource inflows increase as recipient countries further liberalize their trade regime and further participate in international trade. Additionally, the effect of the duration of WTO membership on total AfT flows depends on donor-countries' commercial self-interest in recipient countries, including the latter's economic growth performance and endowment in natural resources.
    Keywords: Duration of WTO membership,Aid for Trade,Developing Countries
    JEL: F1 O19
    Date: 2022
  6. By: Kabinet Kaba (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Justin Yifu; 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)
    Abstract: In this paper, we study the role of trade openness in the economic reallocation from the agriculture to the manufacturing sector in 34 sub-Saharan African countries between 1970-2016. The results show that the long term evolution of trade openness negatively impacts the long-run and the short-run dynamics of structural change. Moreover, this impact goes through aggregate exports not aggregate imports. By breaking down global exports, we find that commodities exports have a negative impact while manufacturing exports positively impact structural change. These results are explained by the fact that, contrary to Asian countries, African countries have failed to put trade at the service of industrialization by following the logic of comparative advantage. More precisely, they have failed to invest the revenues from commodities exports to improve the quality of infrastructure in order to remove the constraints on the relocation to labor-intensive manufacturing activities. Unlike previous studies, we address the endogeneity problem by using a dynamic ordinary least squares method after a pooled mean group method.
    Keywords: Industrialization,Structural Change,Comparative Advantage,Trade Openness,State,Africa,Infrastructure,Asia
    Date: 2022–06–01
  7. By: Kenneth Egesa; Mr. Gregory M Legoff; Maria Borga; Achille Pegoue; Alberto Sanchez Rodelgo; Dmitrii Entaltsev
    Abstract: This paper presents estimates of the carbon emissions of FDI from capital formation funded by FDI and the production of foreign-controlled firms. The carbon intensity of capital formation financed by FDI has trended down, driven by reductions in the carbon intensity of electricity generation. Carbon emissions from the operations of foreign-controlled firms are greater than those from their capital formation. High emission intensities were accompanied by high export intensities in mining, transport, and manufacturing. Home country policies to incentivize firms to meet strict emissions standards in both their domestic and foreign operations could be important to reducing emissions globally.
    Keywords: Carbon emissions; foreign direct investment; input-output tables; A. carbon emissions; carbon intensity; emission intensity; FDI flow; carbon emission intensities of MNEs; Greenhouse gas emissions; Gross fixed investment; Exports; Manufacturing; Africa; Global
    Date: 2022–05–06
  8. By: Rogelio V. Mercado, Jr. (South East Asian Central Banks (SEACEN) Research and Training Centre); Ryan Jacildo (Blank); Sanchita Basu Das (ERCI/ERCD)
    Abstract: This paper assesses the covariation between GVCs and MNCs with US dollar share in trade invoicing for Asia and Pacific economies. Using the Boz et al. (2020) dataset, the empirical analysis exploits cross-sectional heterogeneities that could explain the region's high share of exports and imports invoiced in the US dollar. The results show that Asia and Pacific economies with greater GVC participation tend to have higher share of their exports and imports invoiced in US dollars, in contrast with non-regional economies wherein economies with higher GVC have significantly lower share of exports and imports invoiced in US dollar. In addition, Asia and Pacific economies with more MNCs usually have a significantly higher share of exports invoiced in US dollar. Among other reasons, one factor could be due to less trade integration among the Asian countries considered in the paper and absence of an alternative strong regional currency. Trade exposure of these countries continue to remain significant with the US and Europe. The findings offer new empirical evidence in the context of the Asia and Pacific region as well as relevance of the presence of MNCs.
    Keywords: international trade invoicing, dominant currency paradigm, GVCs, and MNCs
    JEL: F14 F31 F41
    Date: 2022–07
  9. By: Célestin Coquidé (UTINAM - Univers, Transport, Interfaces, Nanostructures, Atmosphère et environnement, Molécules (UMR 6213) - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); José Lages (UTINAM - Univers, Transport, Interfaces, Nanostructures, Atmosphère et environnement, Molécules (UMR 6213) - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Leonardo Ermann (CNEA - Comisión Nacional de Energía Atómica [ARGENTINA]); Dima L. Shepelyansky (LPT - Laboratoire de Physique Théorique - IRSAMC - Institut de Recherche sur les Systèmes Atomiques et Moléculaires Complexes - UT3 - Université Toulouse III - Paul Sabatier - Université Fédérale Toulouse Midi-Pyrénées - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using the United Nations Comtrade database, we perform the Google matrix analysis of the multiproduct World Trade Network (WTN) for the years 2018-2020 comprising the emergence of the COVID-19 as a global pandemic. The applied algorithms -- the PageRank, the CheiRank and the reduced Google matrix -- take into account the multiplicity of the WTN links providing new insights on the international trade comparing to the usual import-export analysis. These algorithms establish new rankings and trade balances of countries and products considering every countries on equal grounds, independently of their wealth, and every products on the basis of their relative exchanged volumes. In comparison with the pre-COVID-19 period, significant changes in these metrics occur for the year 2020 highlighting a major rewiring of the international trade flows induced by the COVID-19 pandemic crisis. We define a new PageRank-CheiRank product trade balance, either export or import oriented, which is significantly perturbed by the pandemic.
    Date: 2022–02–24
  10. By: Nitsch, Volker
    Abstract: The impact of the Covid-19 pandemic on international trade varies along several dimensions, including the type of product, the size of firm and over time. In this note, I provide evidence of systematic variation in the trade response to the pandemic along another, previously unexplored dimension, the mode of transportation. Analyzing daily data from New Zealand, I find that the value of seaborne exports and imports increases relative to shipments by air during pandemic lockdowns. While this finding is consistent with many explanations, including the sensitivity of trade to external finance, it generally provides support for the importance of frictions on the supply side.
    Keywords: coronavirus,pandemic,lockdown,restriction,shipments
    JEL: F14 I18
    Date: 2022
  11. By: Ludovic Panon (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This dissertation is a collection of three essays in the fields of international trade and industrial organization. The first two chapters study the macroeconomic implications of firm heterogeneity. In the first chapter, I use data on the universe of French manufacturing exporters from 1994-2001 to study the relationship between international trade and the manufacturing labor share. In particular, I investigate how and to what extent changes in demand conditions on foreign markets impact the labor share. This chapter aims to shed light on whether international trade may affect the labor share through channels other than changes in import exposure. In the second chapter, which is joint work with Flavien Moreau, we study the cost of distortions to competition on aggregate productivity. To do so, we have assembled a database on the identity of colluding firms that have been fined by the French competition regulator. We document novel stylized facts on cartels and anticompetitive firms. We use a static macroeconomic model to study the economic cost of cartels and help answer the following questions: is it large? If so, why does it differ from what Arnold Harberger obtained in his 1954 paper? Finally, the last chapter co-authored with Florin Cucu studies the link between asylum policies and foreign policy concerns using panel data on asylum applications in the European Union from 1999 to 2017. We then study what this relationship implies for international trade flows in a gravity regression framework.
    Abstract: Cette thèse est un recueil de trois essais dans les domaines du commerce international et de l'organisation industrielle. Les deux premiers chapitres étudient les implications macroéconomiques de l'hétérogénéité des entreprises. Dans le premier, j'utilise des données sur l'univers des firmes exportatrices françaises de produits manufacturés de 1994 à 2001 pour étudier la relation entre le commerce international et la part du travail dans le secteur manufacturier. En particulier, j'étudie comment et dans quelle mesure des changements de demande sur les marchés étrangers ont un impact sur la part du travail. Le deuxième chapitre, fruit d'un travail conjoint avec Flavien Moreau, étudie le coût des distorsions de concurrence sur la productivité agrégée. Pour ce faire, nous avons constitué une base de données sur l'identité des entreprises qui pratiquent l'entente et qui ont été sanctionnées par l'Autorité de la concurrence. Nous documentons de nouveaux faits stylisés sur les cartels et les entreprises anticoncurrentielles. Nous utilisons un modèle macroéconomique statique pour étudier le coût économique des cartels : est-il important ? Si oui, pourquoi diffère-t-il de ce qu'Arnold Harberger a révélé dans son article de 1954 ? Le troisième chapitre, co-écrit avec Florin Cucu, étudie le lien entre les politiques d'asile et la politique étrangère en utilisant des données de panel sur les demandes d'asile dans l'Union européenne de 1999 à 2017. Nous étudions ensuite les conséquences de cette relation sur les flux commerciaux internationaux dans un modèle de régression gravitaire.
    Keywords: International trade,Labor share,Cartels,Refugees,Commerce international,Part du travail,Ententes,Réfugiés
    Date: 2020–06–25
  12. By: Ludovic Panon (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper proposes a new determinant of labor share changes. Using micro-data on the universe of French manufacturing exporters over 1995-2007, I show that a measure of export demand growth exogenous to firm- level outcomes drives down the manufacturing labor share through two effects. First, foreign demand shocks allow low-labor share, highly internationalized "superstar" exporters to grow disproportionately more. Second, foreign demand growth decreases the labor share of exporters and this effect is stronger for larger exporters. Both effects explain 12% of the labor share decline over 1995-2000 and led to a 1.2 percentage point drop over 2000-2007. A simple model of endogenous competition with heterogeneous firms rationalizes the findings. A market size increase allows exporters to expand, which decreases their share of fixed labor cost in value-added, and increases competition on international markets. Fiercer competition favors superstar exporters, further decreasing their labor share through the fixed cost channel. Overall, these findings provide direct causal evidence of a "winner take most" phenomenon induced by trade globalization.
    Date: 2020–12–01
  13. By: Niko Korpar (The Vienna Institute for International Economic Studies, wiiw); Mario Larch; Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: As the European carbon border adjustment (CBA) mechanism is high up on the European Commission’s agenda and soon to be implemented, it is important to understand the economic and environmental implications of alternative designs of such a mechanism. To this end and with a view to informing the decision-making process, this study analyses and compares a series of alternative scenarios, which differ along several dimensions of a potential CBA mechanism. Two main scenarios are defined the first one is labelled ‘future ETS price scenario', which assumes a carbon price of EUR 44 and a continuation of the current practice of free allowances; the other is labelled ‘IMF carbon tax scenario’ and assumes a carbon price of EUR 67, which is taken from a recent publication by the IMF, and that free allowances in the industries by the CBA mechanism are abandoned. The scenario analyses rely on the multi-sector quantitative trade model by Larch and Wanner (2017) for trade and on the quantitative FDI model by Anderson et al. (2019). Overall, we find relatively small effects on EU exports, GDP and CO2 emissions. These small quantitative changes at the aggregate, however, mask larger changes at the sectoral level. As expected, the CBA mechanism is more effective when designed in a comprehensive manner, including export rebates in addition to carbon border taxes. The greater economic and environmental effectiveness of such a comprehensive design must be weighed against a heightened legal risk and fiercer opposition by developing countries which perceive the CBA mechanism as ‘green protectionism’ in disguise.
    Keywords: Carbon border taxes, carbon tariffs, carbon leakage, climate change
    JEL: F13 F14 F17 F18 Q56
    Date: 2022–07
  14. By: Ferrara, Federico
    Abstract: Evidence that local exposure to Chinese import competition favors right-wing parties has often been attributed to the success of economic nationalism. We test an alternative account. Trade shocks catalyze cultural backlash, which drives support for conservative candidates, as they compete electorally by targeting out-groups. We assess this hypothesis in the 2008–2016 US presidential elections. Using individual-level survey data, we provide evidence that Chinese import shocks drive negative attitudes towards minorities and positive feelings towards in-groups. Opinions about free trade and redistribution are not affected. Results indicate that this rightward shift is primarily driven by non-Hispanic white and male respondents. These findings point to the role played by trade-induced cultural backlash in shaping political outcomes in the US.
    Keywords: T&F deal
    JEL: L81
    Date: 2022–04–27
  15. By: Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas
    Abstract: This paper studies how voting to leave the European Union affected living standards in the United Kingdom. Using heterogeneity in exposure to import costs across product groups, we analyze how the depreciation of sterling caused by the referendum affected consumer prices. We find the Brexit depreciation led to higher inflation in product groups with greater import shares in consumer expenditure. Our results are consistent with complete pass-through of the cost of imports to consumer prices and imply aggregate exchange rate pass-through of 0:29. We estimate the Brexit depreciation increased consumer prices by 2:9 percent, costing the average household £870 per year.
    Keywords: Brexit; economic disintegration; import costs; inflation; trade policy
    JEL: N0 L81
    Date: 2021–09–03
  16. By: Кожамкулов Канат // Kozhamkulov Kanat (National Bank of Kazakhstan); Хакимжанов Сабит // Khakimzhanov Sabit (National Bank of Kazakhstan); Миллер Алия // Miller Aliya; Агамбаева Саида // Agambayeva Saida (National Bank of Kazakhstan)
    Abstract: В рамках данного исследования проведен анализ факторов, влияющих на волатильность экспортных и импортных цен в Республике Казахстан, приводящих к дестабилизации внешнеторговых потоков товарами. Была разработана методология построения индексов экспортных и импортных цен. Динамика стоимости внешнеторгового потока разложена на составляющие: индексы цен и индексы физических объемов поставок. Индекс физических объемов поставок и пересчет индекса стоимостных объемов из доллара США в тенге позволили построить индекс внешнеторговых цен в тенге для сопоставления с индексом потребительских цен (ИПЦ). В конечном итоге, реализован аналитический инструментарий по индексам внешнеторговых цен с оперативным администрированием, не требующим финансовых затрат. Данный инструментарий позволяет оценить тренды внешнеторговых цен. // Within the framework of this study, the analysis of factors affecting the volatility of export and import prices in Kazakhstan, leading to the destabilization of foreign trade flows of goods, was carried out. A methodology for constructing export and import price indices was developed. The dynamics of the value of the foreign trade flow is decomposed into components: price indices and indices of physical volumes of supplies. The index of physical volumes of supplies and the recalculation of the index of value volumes from the US dollar to tenge allowed us to build the index foreign trade prices in tenge for comparison with the consumer price index (CPI). As a result, analytical tools for foreign trade price indices with operational administration that does not require financial costs have been implemented. This tool allows to evaluate the trends of foreign trade prices.
    Keywords: волатильность экспортных и импортных цен, индексы внешнеторговых цен, обменный курс, факторный анализ, условия торговли, обработанные товары, потребительские товары, инфляция, volatility of export and import prices, indices of foreign trade prices, exchange rate, factor analysis, terms of trade, processed goods, consumer goods, inflation
    JEL: C43 E31 F10
    Date: 2022
  17. By: Vanessa S. Tchamyou (Yaounde, Cameroon); Juste Some (Université Norbert Zongo, Koudougou, Burkina Faso); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: The study has contributed to the extant literature on the relevance of the African Continental Free Trade Agreement (AfCFTA) by assessing how financial development dynamics can moderate the incidence of African trade integration on female labour force participation. The focus is on 47 African countries for the period 1995 to 2019 and the empirical evidence is based on Fixed Effects regressions. The findings show that financial development moderates African trade integration to engender an overall positive effect on female labour force participation. Moreover, financial depth proxied by liquid liabilities should reach a threshold of approximately 15.47 (% of GDP) in order to completely dampen an initial negative incidence of intra-African trade integration on female labor force participation. It follows that financial development becomes a necessary and sufficient condition to moderate intra-African trade integration in order to positively affect female labor force participation only when the established threshold of financial depth is attained. Other policy implications are discussed.
    Keywords: Trade; Financial development; Inclusion; Gender; Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2022–01
  18. By: Jiwon Choi (Princeton University); Ilyana Kuziemko (Princeton University); Ebonya L. Washington (Yale University); Gavin Wright (Stanford University)
    Abstract: Why have white, less educated voters left the Democratic Party over the past few decades? Scholars have proposed ethnocentrism, social issues and deindustrialization as potential answers. We highlight the role played by the 1994 North American Free Trade Agreement (NAFTA). In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to NAFTA suffered large and persistent employment losses relative to other counties. These losses begin in the mid-1990s and are only modestly offset by transfer programs. While exposed counties historically voted Democratic, in the mid-1990s they turn away from the party of the president (Bill Clinton) who ushered in the agreement and by 2000 vote majority Republican in House elections. Employing a variety of micro-data sources, including 1992-1994 respondent-level panel data, we show that protectionist views predict movement toward the GOP in the years that NAFTA is debated and implemented. This shift among protectionist respondents is larger for whites (especially men and those without a college degree) and those with conservative social views, suggesting an interactive effect whereby racial identity and social issue positions mediate reactions to economic policies.
    Keywords: NAFTA, trade, politics
    JEL: D72 F16 H5 J2
    Date: 2021–11
  19. By: Subash Sasidharan (Indian Institute of Technology Madras); Ketan Reddy (Indian Institute of Technology Madras)
    Abstract: The present study investigates the role of innovation on global market survival of Indian manufacturing firms. Specifically, the study examines whether research and development (R&D) investment enables firms to survive longer in export markets and global value chain markets. To achieve this objective, we source information on firms trading behaviour and R&D investments from the CMIE-Prowess database for the period 2001–18. Using a complementary log-log model, we find that firms investing in R&D experience a lower probability of exiting international markets. In addition, multiple sub-sample analysis indicates that importance of R&D becomes even more prominent for small and medium-sized firms. Based on the empirical findings, the study proposed policy suggestions for India.
    Keywords: Global Value Chains; Research and Development; Survival analysis
    JEL: F14 F15 O32 L6
    Date: 2021–12–17
  20. By: Quintana, Luis Baldomero
    Abstract: This paper provides evidence that domestic trade costs are a source of comparative advantage. First, I build an international trade and internal geography model with transportation features and input-output linkages. Then, I simulate how a large road project, Ruta del Sol, impacts the comparative advantage of Colombia. This road improves access to global markets for heterogeneous regions. My results show that the project shifts the comparative advantage of Colombia towards manufacturing. Industry linkages reinforce this effect. Hence, I confirm that a country’s comparative advantage is shaped by domestic trade costs, in addition to classical determinants like endowments, technology, and institutions. Lastly, my results suggest that road infrastructure is key for the structural transformation of developing nations.
    Keywords: Ciudades, Desarrollo urbano, Economía, Infraestructura, Investigación socioeconómica, Movilidad urbana, Sector público, Transporte,
    Date: 2022
  21. By: Sourish Dutta (Centre for Development Studies, Trivandrum - Centre for Development Studies, Trivandrum)
    Abstract: The development of research studies concerning the emergence of intra-industry trade is fruitful interaction between theoretical explanations and empirical methods to measure this phenomenon. The foundation of indicators to measure the intensity of intra-industry trading caused the rise of theoretical models explaining the determinants of these trade flows. It also contributed to the debate on the need to distinguish, in empirical analyses, intra-industry trade in horizontal differentiation from that in vertical differentiation.
    Keywords: Intra-Industry Trade,Horizontal Differentiation,Vertical Differentiation
    Date: 2022–05–31
  22. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: Compared to other regions of the world, the potential for information technology penetration in sub-Saharan Africa (SSA) is very high. Unfortunately, productivity levels in the region are also very low. This study investigates the importance of information technology in influencing the effect of foreign direct investment (FDI) on total factor productivity (TFP) dynamics. The focus is on 25 countries in SSA. Information technology is measured with mobile phone penetration and internet penetration, while the engaged TFP productivity dynamics are TFP, real TFP, welfare TFP, and real welfare TFP. The empirical evidence is based on the Generalised Method of Moments. The findings show that, with the exception of regressions pertaining to real TFP growth for which the estimations do not pass post-estimation diagnostic tests, it is apparent that information technology (i.e. mobile phone penetration and internet penetration) modulate FDI to positively influence TFP dynamics (i.e. TFP, welfare TFP, and welfare real TFP). Policy and theoretical implications are discussed.
    Keywords: Productivity; Foreign Investment; Information Technology; Sub-Saharan Africa
    Date: 2022–02
  23. By: Lisack, Noemie (Banque de France); Lloyd, Simon (Bank of England); Sajedi, Rana (Bank of England)
    Abstract: We study the implications of trade aggregation in an infinite-horizon economy with multiple countries. Specifically, we ask whether there is a role for alternatives to the Armington aggregator in the workhorse open-economy macroeconomics model. We show analytically that the first-order dynamics of the model are entirely captured by a few sufficient statistics, so that the precise choice of functional form for the trade aggregator is irrelevant. This irrelevance result has the following implications. For given steady-state trade elasticities and expenditure shares, any aggregator that is homogeneous of degree one is equivalent to the Armington aggregator at first order. Similarly, aggregators that are homogeneous of arbitrary degree are equivalent to a simple generalisation of the Armington aggregator, for given steady-state trade elasticities and expenditure shares. In models with more than two countries, alternative aggregators can play a role by allowing for steady-state differences in bilateral trade elasticities across different country pairs, which the Armington aggregator rules out.
    Keywords: International trade; open-economy macroeconomics; Armington aggregator; elasticity of trade.
    JEL: F00 F10 F41
    Date: 2022–05–20
  24. By: Gnangnon, Sèna Kimm
    Abstract: Members of the World Trade Organization (WTO) accord a special attention to the integration of the least developed countries (LDCs) into the global trading system. A major Decision in favour of LDCs adopted by WTO Trade Ministers was the one concerning the Duty-Free-Quota-Free (DFQF) market access for products originating in LDCs. The Decision requests that developed-country Members, and developing-country Members in a position to do so, to provide DFQF market access for at least 97% of products originating from LDCs. The present paper investigates whether the DFQF market access schemes offered by the Quadrilateral (i.e., Canada, the European Union, Japan and the United States) to LDCs have helped reduce the volatility of the utilization rates of these generous preferences. The theoretical hypothesis tested is that the minimum target of '97%' and the unlimited duration of the schemes (as long as beneficiaries do not lose the LDC status) have increased the market access predictability as well as the potential benefits of the schemes for LDCs' trading firms, and could hence result in a lower volatility of LDCs' utilization of these schemes. To perform the analysis, we compare LDCs' performance in terms of the volatility of the utilization rate of the DFQF market access schemes with the performance of other designated LICs by the International Monetary Fund, that did not the benefits of the DFQF schemes, and whose products enjoyed less generous preferential treatment. The comparison of the performance of these two groups was made over the period from 2014 to 2019 versus the period from 2004 to 2013. Results have lent credence to the theoretical hypothesis by revealing that the DFQF market access initiative has genuinely been instrumental in reducing the volatility of the utilization rate of these generous preferences schemes in LDCs. The policy implications of the analysis are discussed.
    Keywords: DFQF market access,Volatility of the utilization of DFQF market access schemes,Least developed countries,Difference-in-Difference approach
    JEL: F13 F14
    Date: 2022
  25. By: Prema-chandra Athukorala
    Abstract: The purpose of this paper is to contribute to the contemporary policy debate in Sri Lanka on industrialization strategy by analysing policy regime shifts and their outcome in terms of export performance, growth and employment during the post-independence era. The analysis is guided by the received body of knowledge relating to the challenges faced by a small economy that takes world prices as given and is unable to affect world demand and supply in designing national industrialisation strategy in this era of economic globalization. The findings demonstrates that the backlash against liberalization reforms in the contemporary Sri Lankan policy debate is largely based on ideological predilections rather factual analysis. The comparative analysis of Sri Lanka’s industrialization experience during the state-led import-substitution era and that of the post-reform era (in particular during the first two decades) makes a strong case for reconsidering the merit of the emerging emphasis on combining import substitution with export orientation with a sector specific focus. Selective policies to promote import substitution essentially impose a ‘tax’ on export producers.
    Keywords: industrialization, trade policy, foreign direct investment, economic globalisation
    JEL: O14 O24 O25 O53
    Date: 2021
  26. By: Maria J. Prados (University of Southern California); Dongwook Kim (University of Southern California)
    Abstract: The United States has signed 30 bilateral social security agreements. Some of its partner countries, such as the U.K. or Germany, have signed international agreements to eliminate double taxation for nationals working temporarily abroad with more than 50 other countries. This project analyzes the potential macroeconomic impact of expanding the countries with international social security treaties by enacting new social security totalization agreements that are simpler than the standard totalization agreements enacted so far. The focus of this project is to simulate the effect on international flows of capital of eliminating double social security taxation through enacting limited treaties with additional countries beyond the current U.S. partners. For this, we extend a theoretical model of foreign direct investment to incorporate social security international agreements with several countries. We model limited totalization agreements that only eliminate double taxation. We use the model to forecast the effects of new, more flexible totalization agreements.
    Date: 2021–09
  27. By: Mr. Alexander D Klemm; Ms. Thornton Matheson; Laura Power; Thomas Brosy
    Abstract: The 2017 Tax Cuts and Jobs Act (TCJA) sharply reduced effective corporate income tax rates on equity-financed US investment. This paper examines the reform’s impact on US inbound foreign direct investment (FDI) and investment in property, plant and equipment (PPE) by foreign-owned US companies. We first model effective marginal and average tax rates (EMTRs and EATRs) by country, industry, and method of finance, and then use those tax rates to calculate the tax semi-elasticities of inbound FDI and PPE investment. We find that both PPE investment and FDI financed with retained earnings responded positively to the TCJA reform, but FDI financed with new equity or debt did not. In country-level PPE regressions, inclusion of macroeconomic controls renders tax rate coefficients insignificant, suggesting that the increase in PPE investment after TCJA was driven by general economic growth. In regressions of FDI financed with retained earnings, however, tax coefficients were robust to inclusion of macroeconomic controls. As the literature predicts, EATRs have a greater impact on cross-border investment than EMTRs. Country-by-industry regressions showed a larger effect of taxes on PPE investment than aggregate country-level regressions, but industry-level tax rates appear to have no effect on earnings retention.
    Keywords: TCJA; Inbound Investment; Effective Tax Rates; PPE investment; investment in property, plant and equipment; PPE Investment; inbound foreign direct investment; tax coefficient; Effective tax rate; Foreign direct investment; Marginal effective tax rate; Average effective tax rate; Corporate income tax; Global
    Date: 2022–05–06
  28. By: Sam Jones; Peter Gibbon
    Abstract: The magnitude of returns to colonial-era investments in Africa has been addressed in an extensive literature, as have the nature and legacies of extractive colonial institutions. However, the link between these institutions and the profitability of firms remains unclear. We reconstruct the annual financial records of Sena Sugar Estates in Portuguese East Africa (today's Mozambique) over the period 1920-74 to probe the contributions of forced labour and preferential trade arrangements to the performance of the firm.
    Keywords: Mozambique, Sugarcane, Forced labour, Trade preferences, Colonialism, Profitability
    Date: 2022
  29. By: Görg, Holger; Jacobs, Anna; Meuchelböck, Saskia
    Abstract: Russia's invasion of Ukraine has led to a sudden reassessment of political and economic relations with Russia, including financial and trade relations. This policy brief analyzes a new firm-level dataset for Germany to examine the involvement of German firms in the Russian and Ukrainian markets. We analyse the impact of the annexation of Crimea and related sanctions in 2014 and identify the degree and shape of vulnerability of German trade with respect to these two markets on the firm level. The firm-level data reveals that Russia and Ukraine have become less important as trading partners at both the extensive margin and the intensive margin. So far, recovery effects have been observed merely for German-Ukrainian trade. Within the group of firms trading with Russia and Ukraine, we see a clear heterogeneity, which in turn is reflected in individual vulnerability towards the affected markets.
    Keywords: Russia,Ukraine,Sanctions,War,Vulnerability,International Trade,Firms,Russland,Ukraine,Sanktionen,Krieg,Verwundbarkeit,Internationaler Handel,Unternehmen
    Date: 2022
  30. By: Diane Coyle; Wendy Li
    Abstract: Data is a key digital economy input and its use is growing rapidly. Large online platforms using data at massive scale operate globally. The data gap between them and the incumbents they disrupt, a barrier to entry in the markets they dominate, affects not only firms but also aggregate innovation, investment and trade. Valuing data is problematic, yet this information is crucial for informed policy decisions on infrastructure and human capital as well as business investment decisions. In this paper we demonstrate a novel sectoral methodology for estimating the economic value of markets for data. Our conservative estimate of the market size for data in the global hospitality industry was US $43.2 billion in 2018, and it has been doubling its size every three years. Our method can provide industry-level and country-level information on data markets. The scale of data flows affects the international division of labor in the digital economy, with important policy implications. With many jurisdictions introducing different data protection and trade regimes, affecting the data gap and data access by market participants, we present a trade typology of countries and discuss their ability to benefit from data value creation.
    Keywords: data, digital, innovation, trade
    JEL: F1 F2 O3
    Date: 2021–08
  31. By: Ananth Seshadri (University of Wisconsin-Madison); Junjie Guo (University of Wisconsin-Madison)
    Abstract: The number of international social security agreements (totalization agreements) signed by the United States is significantly smaller than the number signed by other countries such as Canada and the U.K. This paper estimates the impact of the missing totalization agreements \f1\emdash the agreements that other countries such as Mexico and Turkey have signed with Canada but not the U.S. We find suggestive evidence that international social security agreements increase labor mobility. Using a difference-in-differences framework, we estimate that, on average, the social security agreements between Canada and countries that have no social security agreement with the U.S. reduced Canadian (relative to U.S.) exports to and increased Canadian imports from those countries. Moreover, we find the impact on exports increases over time and is concentrated among the agreements enacted either before 1995 or after 2010 with countries that have a low real GDP per capita, a low exports-to-GDP ratio, and a medium imports-to-GDP ratio, while the impact on imports is concentrated in the first three years following the social security agreements with middle-sized countries at the upper end of the distribution of real GDP per capita.
    Date: 2021–09
  32. By: Zhao, Jing; Miller, J. Isaac; Binfield, Julian; Thompson, Wyatt
    Abstract: We use econometric models to study the links between the evolution of agricultural support for six agricultural commodities and economic development as measured by real income per capita. Each commodity has a panel dataset with around 30-50 countries including developed, developing and less developed countries over 1961-2011. We investigate more complicated nonlinear relationships between income and support as measured by Nominal Rates of Assistance (NRAs) than previously examined and employ fixed effects to capture heterogeneity across countries. We find that a significant relationship exists between income measures and measures of border protection, but that the link between income and domestic support is generally weaker. Using these estimates and projections of macroeconomic variables, projections of future agricultural commodity support are generated for Brazil, Russia, India, and China. The projections of economic measures of support are then be compared to the commitments made by these countries to the World Trade Organization (WTO). There is a clear distinction between actual policies in place, aggregate estimates of them (such as NRAs), and WTO notifications. We do not forecast WTO notification data but compare in a general way long-run trends in development and associated support to these countries’ multilateral commitments. We use the projections derived from the empirical models to discuss the drivers of agricultural support, how these might have implications for WTO notifications, and how these effects relate to WTO commitments.
    Keywords: Agricultural and Food Policy, International Development, International Relations/Trade
    Date: 2022–06
  33. By: Becker, Malte; Krüger, Finja; Heidland, Tobias
    Abstract: Sub-Saharan Africa is becoming an increasingly important destination for international migration. The region hosts immigrants from other African countries and from other parts of the world, such as China. Given high poverty levels and weak social security systems in Sub-Saharan Africa, host populations might fear increasing competition for resources and labor, potentially resulting in negative attitudes towards immigrants. We provide the first systematic study of attitudes towards immigrants in Sub-Saharan African countries that uses a causal framework. Using a survey experiment in Uganda and Senegal, we study both attitudes towards immigrants in general and towards specific immigrant groups. In particular, we focus on Chinese immigrants, whose increasing presence in Africa is seen by many as the most important contemporary geopolitical shift involving the continent. We find that attitudes towards immigrants are mainly driven by sociotropic cultural and sociotropic economic concerns. Furthermore, immigrants from China are perceived less positively and economically more threatening than immigrants in general.
    Keywords: attitudes towards immigration,China in Africa,migration,experiment,conjoint
    JEL: F22 O15 O55
    Date: 2022
  34. By: Dario Guarascio; Roman Stöllinger
    Abstract: This paper revisits the Heckscher-Ohlin-Vanek (HOV) theorem and investigates its fit for digital tasks and ICT capital, which both represent endowment factors that are expected to shape the digital transformation. We use a theory-consistent methodology for calculating the measured net factor content of trade (Trefler and Zhu, 2010) and apply it to a unique dataset on digital and non-digital tasks performed in detailed occupations, as well as recent data on ICT capital stocks. Equipped with these data we provide new evidence on the factor-based trade patterns for 25 EU countries and use it to test the HOV theorem. Overall, the performance of the sign test and the rank test is good if not impressive. In 83% of the cases countries are net exporters of those factors with which they are abundantly endowed, with a higher score achieved for digital tasks than for ICT capital. We conclude that the fit of the HOV theorem for highly relevant endowments of the digital era is as good as that of traditional endowment factors
    Keywords: Heckscher-Ohlin-Vanek theorem; factor content of trade; comparative advantages; digital tasks; ICT capital
    JEL: F11 F14 D57
    Date: 2022–06
  35. By: Ruchir Agarwal; Ms. Gita Gopinath
    Abstract: Pandemics and epidemics pose risks to lives, societies, and economies, and their frequency is expected to increase as rising trade and increased human interaction with animals leads to the emergence of new diseases. The COVID-19 pandemic teaches us that we can and must be better prepared, with scope for much greater global coordination to address the financing, supply-chain, and trade barriers that amplified the pandemic’s economic costs and contributed to the emergence of new variants. This paper draws seven early lessons from the COVID-19 pandemic that could inform future policy priorities and help shape a better global response to future crises.
    Keywords: COVID-19; pandemic; Finance & Trade; trade lesson; financing framework; economic cost; timing of financing; IMF pandemic proposal; Health care; Trade finance; Global
    Date: 2022–05–20
  36. By: Pierre Bachas (The World Bank - The World Bank - The World Bank); Matthew Fisher-Post (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Anders Jensen (Harvard Kennedy School - Harvard Kennedy School, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Gabriel Zucman (University of California [Berkeley] - University of California, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research)
    Abstract: How has globalization affected the relative taxation of labor and capital, and why? To address this question we build and analyze a new database of effective macroeconomic tax rates covering 150 countries since 1965, constructed by combining national accounts data with government revenue statistics. We obtain four main findings: (1) The effective tax rates on labor and capital converged globally since the 1960s, due to a 10 percentage-point increase in labor taxation and a 5 percentage-point decline in capital taxation. (2) The decline in capital taxation is concentrated in high-income countries. By contrast, capital taxation increased in developing countries since the 1990s, albeit from a low base.(3) Consistently across a variety of research designs, we find that the rise in capital taxation in developing countries can be explained by a tax-capacity effect of international trade: Trade openness leads to a concentration of economic activity in formal corporate structures, where capital taxes are easier to impose. (4) At the same time, international economic integration reduces statutory tax rates, due to increased tax competition. In highincome countries, this negative tax competition effect of trade has dominated, while in developing countries the positive tax-capacity effect of international trade appears to have prevailed.
    Date: 2022–04
  37. By: Pierre Bachas (The World Bank - The World Bank - The World Bank); Matthew Fisher-Post (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Anders Jensen (Harvard Kennedy School - Harvard Kennedy School, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Gabriel Zucman (University of California [Berkeley] - University of California, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research)
    Abstract: How has globalization affected the relative taxation of labor and capital, and why? To address this question we build and analyze a new database of effective macroeconomic tax rates covering 150 countries since 1965, constructed by combining national accounts data with government revenue statistics. We obtain four main findings: (1) The effective tax rates on labor and capital converged globally since the 1960s, due to a 10 percentage-point increase in labor taxation and a 5 percentage-point decline in capital taxation. (2) The decline in capital taxation is concentrated in high-income countries. By contrast, capital taxation increased in developing countries since the 1990s, albeit from a low base.(3) Consistently across a variety of research designs, we find that the rise in capital taxation in developing countries can be explained by a tax-capacity effect of international trade: Trade openness leads to a concentration of economic activity in formal corporate structures, where capital taxes are easier to impose. (4) At the same time, international economic integration reduces statutory tax rates, due to increased tax competition. In highincome countries, this negative tax competition effect of trade has dominated, while in developing countries the positive tax-capacity effect of international trade appears to have prevailed.
    Date: 2022–04
  38. By: Kalaitzi, Athanasia; Samer, Kherfi; Al-Rousan, Sahel; Katsaiti, Marina-Selini
    Abstract: This paper investigates whether non-primary exports directly or indirectly cause economic growth in the United Arab Emirates (UAE). This study performs the Johansen test to examine the presence of co-integration between the variables in an augmented production function. The Granger causality test is performed to investigate the short-run causality between non-primary exports and economic growth, while the long-run causality is investigated by employing the Toda and Yamamoto procedure. The empirical analysis indicates that the variables are co-integrated, and that short-run causality runs from non-primary exports to economic growth; results exhibit no evidence of direct causality from non-primary exports to economic growth in the long-run.
    Keywords: economic growth; non-primary exports; Granger causality; UAE; Emirates Foundation - LSE Academic Collaboration with Arab Universities; CUP deal
    JEL: L81 N0 J1
    Date: 2022–05–27
  39. By: Claire Giordano (Bank of Italy); Enrico Tosti (Bank of Italy)
    Abstract: As the global economy faces a new, sharp energy shock amplified by the war in Ukraine, this study analyses developments in Italy’s energy trade balance, both in the long run and from a comparative perspective, in order to appraise any noteworthy changes in the country’s external dependence. Using data from 1970 to 2021, the analysis shows that the country’s energy deficit peaked at almost 6 per cent of GDP in 1981 after the second oil shock at the end of the 1970s. In 2021, it amounted to 2.4 per cent of GDP, double that of the previous year; this value, which is relatively low from a historical perspective, is slightly higher than that of the other main euro-area countries. The geographical concentration of Italy’s energy imports, though declining over the past two decades, remains high, especially for natural gas. The 2021 deterioration in Italy’s cyclically-adjusted current account surplus is more than fully explained by the rise in energy import prices.
    Keywords: energy trade balance, energy import prices, current account balance, cyclically-adjusted current account
    JEL: F00 F18 O13
    Date: 2022–06
  40. By: Carlos Eduardo Suprinyak (The American University of Paris)
    Abstract: Hugo Grotius was a widely read and influential figure in seventeenth-century England. Whereas later generations portrayed him as a forefather to modern theories of natural and international law, the publication of Mare Liberum (1609) offered a grounded argument for free trade against the restrictions imposed by the Spanish and Portuguese colonial empires. But Grotius's notion of free trade, of course, was far removed from the later ideal of Richard Cobden. His model of commercial organization was firmly anchored on the chartered mercantile company, and he served as a spokesperson for the Dutch East India Company (VOC) during the Anglo-Dutch Conferences of 1613 and 1615, which sought to appease growing tensions among Dutch and English trading interests in Asia. As the diplomatic and economic relations between England and the Dutch Republic progressively deteriorated during the early decades of the seventeenth century, Grotius's rendition of the law of nations came increasingly to be regarded as a rationalization of Dutch dominance over long-distance trade routes. English commentators, who wished to emulate Dutch success but feared aggression and subordination, had to fashion a different framework of international politics to sustain their vision of an emerging English maritime empire. Tracing the uses of Mare Liberum in the mercantile literature of early Stuart England, the paper will study how this foundational work of modern international thought shaped the political economic discourse of English merchants, as well as their supporters and adversaries in the political arena. Changing attitudes toward Grotius's arguments will help us identify the origins of certain ideas about empire that later came to the fore by the time of the Navigation Acts and the Anglo-Dutch wars. We will thus explore how Grotius's version of the law of nations -- before it was retrospectively converted into a cornerstone of liberal internationalism -- was entangled in concrete disputes between rival imperial projects.
    Keywords: Hugo Grotius,Mare Liberum,free trade,British Empire,fisheries
    Date: 2022–06–15
  41. By: Jeffrey J. Schott (Peterson Institute for International Economics)
    Abstract: China’s sudden application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in September 2021 has broad implications for South Korea’s economic relations with China, Japan, and the United States. In the past, Korea frequently debated but invariably postponed deciding whether to participate in negotiations on the CPTPP, despite the substantial benefits to be gained from doing so. However, China’s application has prompted Korean officials to get off the fence and apply as well. As China moves to deepen its ties to regional partners, Korea needs to follow suit, complementing the ongoing implementation of the Regional Comprehensive Economic Partnership (RCEP) with expedited negotiations to join the CPTPP and participation in the US-led Indo-Pacific Economic Framework for Prosperity (IPEF). Korean participation in the RCEP, CPTPP, and IPEF is desirable and mutually reinforcing and should allow Korea to sustain its strong commercial interests in both the US and Chinese markets.
    Date: 2022–06
  42. By: Merchan Alvarez, Federico Alberto
    Abstract: This paper presents a novel methodology to measure international managerial skill, which has not been directly measured in the specialized management quality surveys. The international managerial quality variable captures the manager's organizational capital contribution to improve production efficiency of exported products that compete in the international market by price, and to upgrade quality capacity of the exported products that compete by quality. Using a sample of the biggest private Colombian exporting firms, the short-term econometric analysis indicates that: i) international managerial quality has a positive and robust effect on total exported value via intensive margin, ii) the exported value elasticity relative to international managerial quality is higher but not statistically different than exported value elasticity relative to exogenous international demand shocks, and iii) better managers in the international market learn by exporting.
    Keywords: management practices,quality vs price competition,firm's performance,intensive margin,exporting,learning by exporting
    JEL: F16 F10 M11 M12 L25
    Date: 2022
  43. By: Festus F. Adedoyin (Bournemouth University, United Kingdom); Olawumi A. Osundina (Babcock University, Ogun State, Nigeria.); Festus V. Bekun (Istanbul Gelisim University, Istanbul, Turkey); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Over the years, agriculture has been considered as a panacea for long-term economic growth as believed by the physiocracy school of thought. Aligning this with the United Nations’ Sustainable Development Goals (specifically UN-SDG-2 which highlights zero hunger), the present study empirically complements existing studies by exploring the interactions between agriculture, trade openness and oil rents using annual time frequency series data from 1981-2017. A series of analysis is conducted. First, a battery of non-stationarity and stationarity unit root tests are performed; these range from the traditional Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) techniques to the relatively recent Zivot Andrews (ZA) unit root test which accounts for a single structural break to ascertain stationarity properties in the variables under review. Subsequently, the recent Bayer and Hanck (2013) test in conjunction with the Johansen co-integration test were used for the co-integration analysis. Furthermore, to detect the direction of causality, the Toda-Yamamoto Granger Causality test alongside the impulse response function technique shows insightful outcomes. From the empirical results, co-integration is apparent and a long-run equilibrium relationship is traced between the outlined variables over the investigated period. The causality results and impulse response analysis highlight the existence of one-way causality links running from agriculture to trade and from trade to oil rents. These are revealing given the dwindling oil market prices. More insights are elucidated in the conclusion section accordingly.
    Keywords: Agriculture, sustainability; Bayer-Hanck cointegration; Nigeria
    JEL: Q10 O13 C32 C33
    Date: 2022–01
  44. By: Mai, Nhat Chi
    Abstract: In the succeeding sections, uncover why Vietnam is a top choice for foreign direct investment and how to have an efficient company formation in the country.
    Date: 2022–05–15
  45. By: Florin L. Cucu (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This thesis studies the determinants of spatial variation and persistence of economic activity. The first chapter assesses the impact of the construction of the Interstate Highway System on the skill composition of metropolitan areas in the USA. Reduced-form estimates indicate that each additional highway caused an increase in the share of college-educated residents of 0.6 percentage points. Using a quantitative spatial model, the chapter also measures the welfare effects associated with a hypothetical removal of the interstate network. The effects are large for all skill groups. Graduates would nonetheless experience bigger losses in terms of welfare as they are more likely to relocate and incur the higher migration costs.The second chapter documents high persistence of regional development in England and Wales over the last 800 years. Using data on the establishment of medieval markets, the study highlights a strong correlation between commercial activity and agricultural productivity in the late Middle Ages. Places with successful medieval markets remain better developed nowadays. The evidence suggests that path dependence is the most likely explanation for the persistence of development over many centuries. The third chapter studies the relationship between asylum policies and international tensions. The main hypothesis is that European Union member states are more likely to admit refugees from states perceived as rivals rather than partners. Data on asylum applications from 1999 to 2017 bear this out. This result can rationalize a negative and robust correlation between asylum recognition rates and EU imports from the rest of the world.
    Abstract: Cette thèse étudie les déterminants de la variation spatiale et de la persistance de l'activité économique. Le premier chapitre évalue l'impact du Système d'Autoroutes Inter-États sur la composition des zones métropolitaines aux États-Unis. Les estimations indiquent que chaque autoroute a entraîné une augmentation de 0,6 point de pourcentage de la part des résidents hautement qualifiés d'une ville. En utilisant un modèle spatial quantitatif, le chapitre mesure également les effets sur le bien-être associés à une suppression hypothétique des autoroutes. Les effets sont significatifs pour toutes les catégories de travailleurs. Les pertes sont néanmoins plus importantes pour les travailleurs qualifiés, vu qu'ils sont plus mobiles et paient les coûts de migration plus souvent.Le deuxième chapitre montre une forte persistance du développement en Angleterre et au Pays de Galles au cours des 800 dernières années. En utilisant des données sur l'établissement des marchés médiévaux, l'étude met en évidence une forte corrélation entre l'activité commerciale et la productivité agricole au Moyen Âge. Les régions avec des marchés prospères sont mieux développées aujourd'hui. Les résultats suggèrent que la dépendance au sentier en est l'explication la plus probable. Le troisième chapitre étudie la relation entre les politiques d'asile et les tensions internationales. L'hypothèse est que les pays de l'Union européenne acceptent davantage de réfugiés provenant d'États perçus comme des rivaux. Des données sur les demandes d'asile de 1999 à 2017 le confirment. Cela pourrait expliquer une corrélation négative entre les politiques d'asile et les importations de l'UE.
    Keywords: Transport infrastructure,Migration,Persistence,Refugees,Infrastructure routière,Persistance,Réfugiés
    Date: 2020–06–22
  46. By: Mr. Alberto Behar; Ramin Hassan
    Abstract: In terms of size, the net income balance (IB) is comparable to the trade balance (TB) for many countries. Yet the role of the IB in mitigating external vulnerabilities or complicating external adjustment remains underexplored. This paper studies the role of the IB in stabilizing or destabilizing the current account over the cycle and in crises. Our results show that, due to a negative correlation with the TB, the IB significantly dampens the time series volatility of the current account for most countries. However, the IB generally does not improve during crisis episodes, so current account adjustment occurs entirely through improvements in the TB. The paper also estimates IB semi-elasticities with respect to the exchange rate (ER). Semi-elasticities are small for most countries, so the IB is generally not a significant channel through which the ER stabilizes the current account, and trade-based semi-elasticities are, with some important exceptions, good proxies for current account semi-elasticities used in external sector assessments.
    Keywords: Income balance; Exchange rate elasticity; Global imbalances; Crisis; Sudden stop; Fixed-effects counterfactual estimators; B. estimation methodology; D. estimation procedure; current account adjustment; Income; Current account; Exchange rates; Credit; Global
    Date: 2022–05–27
  47. By: Michela Limardi (RIME-Lab - Recherche Interdisciplinaire en Management et Économie Lab - ULR 7396 - UA - Université d'Artois - Université de Lille, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Francesca Battista (Virginia Tech - College of Liberal Arts and Human Sciences)
    Abstract: Non-governmental organizations (NGOs) exert pressure on multinational enterprises (MNE) to force the application of social and environmental standards for subcontractors in developing countries. Non-governmental regulation relies on voluntary standards defined by the NGOs,or by the MNE themselves. This leads to an uncertainty and social regulation. In this respect, external pressure from NGOs constitutes a reputational risk for the company. MNEs, in turn, try to manage those risks by increasingly monitoring the environmental and social impact of their global suppliers. Two forms of non-governmental enforcement currently prevail: warning (i.e.disclosing information of a violation to the company) versus immediate punishment (i.e. penalizing a company without disclosing information). A theoretical model is developed to determine whether disclosing (or not) information to the MNE about reputational risk is more effective. The results demonstrate that MNEs with a low reputation (or a high degree of out-sourcing) will have a higher incentive to conduct inspections of its global suppliers in a warning regime. Conversely, when MNE visibility is high, disclosing information in advance does not provide additional incentives.
    Date: 2022–06–17
  48. By: Smitkova, L.
    Abstract: In this paper, I study financial liberalization between economies that differ in their overall competitiveness. I first show that if firms compete oligopolistically, then competitiveness - relatively low aggregate unit costs of production - is a feature of an economy with fatter tailed productivity distribution and relatively more very large - 'superstar' - firms. Embedding this setup in a two-country model with heterogeneous agents and non-homothetic saving behaviour, I show that if home is more competitive, then: (1) it enjoys a higher aggregate profit rate than foreign; (2) its autarkic interest rate is lower than that in foreign; (3) should the two economies undergo financial liberalization, the capital will be flowing from home to foreign; (4) if one of the sectors is non-tradable, the capital inflows push up the wages in foreign, leading to further losses of competitiveness and to current account overshooting. I calibrate the quantitative version of the model to 8 European economies on the eve of the global financial crisis. I show that the competitiveness gap can explain 27% of variation in the current account imbalances incurred in the period. I conclude by discussing policies for rebalancing.
    Date: 2022–06–24

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