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on International Trade |
| By: | Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas |
| Abstract: | How does import protection affect export performance? In trade models with scale economies, import liberalization can reduce industry-level exports by cutting domestic production. We show that this export destruction mechanism reduced US export growth following the permanent normalization of trade relations with China (PNTR). But there was also an offsetting boost to exports from lower input costs. We use our empirical results to calibrate the strength of scale economies in a quantitative trade model. Counterfactual analysis implies that while PNTR increased aggregate US exports relative to GDP, exports declined in the most exposed industries because of the export destruction effect. On aggregate, the US and China both gain from PNTR, but the gains are larger for China. |
| Keywords: | Trade policy ; Import liberalization ; Comparative advantage ; Scale economies ; China shock JEL Classification: F12 ; F13 ; F15 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1413&r= |
| By: | James E. Anderson; Yoto V. Yotov |
| Abstract: | We propose a short-run theory of the extensive margins of trade, comprising the standard international extensive margin and a novel domestic extensive margin. The domestic extensive margin allows identification of globalization and specific policy effects not properly identified in previous literature. To apply our methods, we build a new dataset covering both the cross-border and domestic extensive margins for 35 countries, 1995-2014. We deploy it to quantify the extensive margins effects of globalization and European integration. We find strong positive effects of globalization and also significant but highly asymmetric effects of European integration in favor of more developed EU members. |
| Keywords: | extensive margin, domestic extensive margin, globalization, EU, gravity |
| JEL: | F13 F14 F16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9822&r= |
| By: | Hal Hill; Jayant Menon |
| Abstract: | This paper provides an analytical survey of trade policy in Indonesia and Thailand, in the context of the key findings of the WTO’s 2020 Trade Policy Reviews. These are historically dynamic economies that are integrated within the outward-looking ASEAN protocols and the China-centred East Asian trade and investment networks. Over the past decade there have been no major changes in the two countries’ trade and commercial policy settings, with Thailand maintaining its more open economic settings and Indonesia continuing its more hesitant embrace of globalization. The major drivers of domestic policy settings have therefore been global factors, including the continuing rise both of China in the regional and global economies and of the increasingly China-centred global supply chains. Both WTO reports provide comprehensive examinations of trade patterns and policies, although there is room to strengthen the analytical foundations of future reports. |
| Keywords: | Indonesia, Thailand, ASEAN, regional integration, trade policy, global supply chains. |
| JEL: | F13 N45 O24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-23&r= |
| By: | Quang Hoan Truong (Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences (VASS)); Van Chung Dong (Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences (VASS)) |
| Abstract: | Our paper investigates the spillover effects generated by foreign and domestic exporting firms on export decisions of local manufacturing firms in Viet Nam – a developing economy – over 2010–18. In the export participation, we find positive spillover effects from foreign and domestic exporting firms on domestic firms’ export participation, while negative spillover effects are detected with the backward channel. Estimation shows the positive forward spillover effects from domestic exporting firms on domestic counterparts’ export participation; on the contrary, the forward spillover effects generated by foreign direct investment exporting firms are negative. In addition, we discover the opposite spillover effects from foreign direct investment and domestic exporting firms on the probability of export exit of domestic firms, with the negative impact under the horizontal channel and the positive one under the backward channel. There are also effects of firms’ characteristics such as labour productivity, wage, firm size, and capital intensity on the export participation and export exit of domestic firms. From empirical evidence, the paper provides policy implications to strengthen linkages between foreign and domestic exporting firms with local firms in Viet Nam. |
| Keywords: | Spillover Effects; export status; foreign and domestic exporting firms; Viet Nam |
| JEL: | F15 F23 |
| Date: | 2021–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2021-43&r= |
| By: | Prema-chandra Athukorala |
| Abstract: | This paper aims to broaden our understanding of how the overall investment climate of a country conditions its potential for export-oriented industrialization through global production sharing by examining the Philippines’ experience from a comparative Southeast Asian perspective. In the early 1970s, the Philippines had promising preconditions for benefiting from the regional spread of Singapore-centered electronics production networks: deep-rooted colonial ties with US investors, geographical location, a large relatively better educated labour pool with widespread English-language proficiency, and an education system with potential for generating the required technical manpower. However, the industrialisation trajectory over the subsequent years has not lived up to the initial expectations. Manufacturing exports from the country have become increasingly reliant on low-end assembly process undertaken within export processing zones (EPZs) against the backdrop of deteriorating comparative performance within global production networks. The upshot of the analysis is that the lack-luster performance record is rooted in the dualistic incentive structure of the economy that ‘arrested’ the country’s participation in global production networks within the enclave EPZs. The EPZs, which were initially conceived as a harbinger of global integration of domestic manufacturing, eventually became ‘enclaves’ within the economy. |
| Keywords: | Global production sharing, global manufacturing value chain (GMVC), foreign direct investment (FDI), free trade zones (FTZs), the Philippines, industrialization. |
| JEL: | F13 F21 F23 O14 O53 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-22&r= |
| By: | Crowley, M. A.; Han, L.; Prayer, T.; |
| Abstract: | How does trade policy affect competition? Using the universe of product exports by firms from eleven low and middle-income countries, we document that tariff reductions under trade agreements have strong procompetitive effects - they encourage entry and reduce the (tariff exclusive) price-cost markups of exporters. This finding, that markups fall with tariff cuts, contradicts a core prediction of standard oligopolistic competition models of trade. We extend a classic international pricing model of oligopolistic competition to include multiple countries and a rich preference structure. Our preference structure allows for fierce competition among firms from the same country and less intense competition among firms from different countries. We show a firm's optimal markup after a tariff cut can rise or fall depending on the parameters of the preference structure and tariff-induced reallocation of market share among firms and across countries. |
| Keywords: | competition policy, firm level data, markup elasticity, trade agreements, trade elasticity, variable markups |
| JEL: | F13 F14 F15 |
| Date: | 2022–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2216&r= |
| By: | Veljko Fotak; William Megginson; Yi-Da Tsai |
| Abstract: | UForeign infrastructure investments tend to increase cross-border economic activity between investor and recipient countries. We question whether such an increase comes at the expense of trade with third-party countries (a “zero-sum hypothesis”), or whether the infrastructure investment leads to an increase in overall trade (a “lifting all boats hypothesis”). Our investigation is within the context of the Chinese Belt and Road Initiative (BRI). In a sample spanning 2013 to 2018 and covering 1,135 BRI projects in 110 countries, we find strong evidence in support of the zero-sum hypothesis. The increase in cross-border economic activity (imports, exports, and M&A flows) with China is accompanied by a decrease in activity with third party countries. Further, we show that, following BRI investments, BRI countries trade more with other countries that are politically aligned with China, but less with countries that have recently been visited by the Dalai Lama. Overall, our evidence points to both a “zero-sum” nature of the impact of infrastructure on cross-border trade, and to the existence of a BRI “network” that favors countries that are politically aligned with China. |
| Keywords: | Trade, cross-border M&As, infrastructure, Belt and Road |
| JEL: | F14 F36 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp22184&r= |
| By: | Gros, Daniel |
| Abstract: | Europe has set itself the aim of reducing its dependency on Russian gas imports. This paper provides an economic analysis of a tariff on imports of natural gas into the EU which would help achieve this goal. The starting point is Gazprom’s monopoly on exports of gas from Russia and pricing power on the European market. Standard trade theory implies that a tariff on Russian gas imports would be beneficial for Europe even on purely economic grounds because it would lower the demand curve Gazprom faces and induce it to lower prices. The standard linear model used here takes into account the availability of Liquified natural gas (LNG) supplies and confirms the general rule that it pays to levy a tariff on imports from a foreign monopoly. It yields the following numerical results: - Only one half of the tariff would result in higher prices for European consumers and the tariff revenue would be more than sufficient to compensate them for this loss. - The tariff, which maximises Europe’s welfare, would be close to one third of the price at which Europe would stop importing from Russia. This would cut Gazprom’s net revenues by approximately half. - If the tariff is used as a sanctions weapon to reduce revenues for Russia, the tariff should be higher (around 60 %) and would cut Gazprom’s revenues to one fourth of the free trade level. The overall conclusion is thus that an EU import tariff on Russian gas would have a major impact on Russia’s earning from gas exports and would certainly improve the European terms of trade. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:36006&r= |
| By: | Kym Anderson |
| Abstract: | The history of agricultural trade stretches back more than ten millennia, but it became more inter-continental from the 17th century and much denser in the 19th century following the repeal of Britain’s protective Corn Laws in 1846 and major declines in international trade costs. Trade was chaotic in the period bookended by the two world wars, but trade policy anarchy gave way to greater certainty after the General Agreement on Tariffs and Trade (GATT) was signed in 1947. This paper seeks to identify the forces that shaped that history, and to re-examine the case for continued openness to trade in farm products. It does so in the wake of uneven economic growth and structural transformation and as agri-food systems respond to increased market and policy uncertainties this century – and to growing pressures for agricultural production to become more sustainable and for its food outputs to be more nutritious. The paper points to better policy options than trade measures for achieving most national objectives – options that can simultaneously benefit the rest of the world. Areas for further economic research also are provided in the final section. |
| Keywords: | Trade barriers; trade costs; trade specialization, agricultural comparative advantage. |
| JEL: | F13 F15 Q17 Q18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-26&r= |
| By: | Julian di Giovanni; Sebnem Kalemli-Ozcan; Alvaro Silva; Muhammed A. Yildirim |
| Abstract: | We study the impact of the COVID-19 pandemic on euro area inflation and how it compares to the experiences of other countries, such as the United States, over the two-year period 2020-21. Our model-based calibration exercises deliver four key results: (1) compositional effects, or the switch from services to goods consumption, are amplified through global input-output linkages, affecting both trade and inflation; (2) inflation can be higher under sector-specific labor shortages relative to a scenario with no such supply shocks; (3) foreign shocks and global supply chain bottlenecks played an outsized role relative to domestic aggregate demand shocks in explaining euro area inflation over 2020–21; and (4) international trade did not respond to changes in GDP as strongly as it did during the 2008–09 crisis despite strong demand for goods. These lower trade elasticities in part reflect supply chain bottlenecks. These four results imply that policies aimed at stimulating aggregate demand would not have produced as high an inflation as the one observed in the data without the negative sectoral supply shocks. |
| Keywords: | inflation; international trade; supply chains; spillovers |
| JEL: | E2 E3 E6 F1 F4 |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:94463&r= |
| By: | Andree Surianta; Arianto A. Patunru |
| Abstract: | As the Global Value Chains (GVC) struggle to restructure around COVID-19 transport restrictions and its economic fallout, Indonesia faces an uphill battle to restart its economy and stave off ballooning unemployment. With stagnant economic growth now turning into recession, President Joko “Jokowi” Widodo pushes for the biggest regulatory reform in recent history through the Omnibus Law on Job Creation. Many have hoped that the amendment to thousands of articles in old laws will finally remove barriers to foreign direct investment; however, this legislation seems to have morphed from one seeking to bolster inward investment into one extending massive support to micro and small enterprises. In a rudimentary nod to the GVC model, the law urges supply chain partnerships between small businesses and large corporations. However, an overreaching implementing regulation may turn this partnership push into a new investment barrier for large multinationals, undermining the goal of deeper integration into the global production networks. |
| Keywords: | Indonesia, COVID-19, global value chain, foreign direct investment |
| JEL: | O14 O19 O53 F23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-17&r= |
| By: | Shuhei Nishitateno; Hayato Umetani |
| Abstract: | This paper estimates the Aid-for-Trade (AfT)-export elasticity from the donor perspective, using panel data for covering 45 donor countries and 140 recipients over the 2002–2019, focusing on the top-five donor countries: Japan, Germany, France, US, and UK. The method involves estimating a gravity equation with the Poisson pseudo-maximum likelihood (PPML) technique. We find that the mean AfT-export elasticity for the 45 donor countries is zero, but the elasticity for Japan is positive and large. In particular, the findings suggest that Japanese AfT generates net export expansion from the receipient countries, in contrast to Aft from the other top donors that expands net imports from these countries. We further examined the potential mechanism behind the export creation effect of the Japanese AfT using unique contract data on wouldwide infrastructure-related projects in which Japanese AfT is heavily concentrated. The results suggest that the Japanese infrastructure-related AfT works as an informal tying arrangement that closely link aid to donor exports. The focus of Japanese AfT on economic infrastructure offers a model to achieve mutual benefits for both donor and recipient countries. |
| Keywords: | Aid-for-Trade; Gravity equation; Poisson pseudo-maximum likelihood estimator; Japan; Donor export |
| JEL: | F35 F14 O11 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2022-07&r= |
| By: | Rafael Dix-Carneiro; Sharon Traiberman |
| Abstract: | We investigate the role of trade imbalances for the distributional consequences of globalization. We do so through the lens of a quantitative, general equilibrium, multi-country, multi-sector model of trade with four key ingredients: (a) workers with different levels of skills are organized into separate representative households; (b) endogenous trade imbalances arise from households' consumption and saving decisions; (c) production exhibits capital-skill complementarity; (d) labor market frictions across sectors and non-employment. We conduct a series of counterfactual experiments that illustrate the quantitative importance of both trade imbalances and capital-skill complementarity for the dynamics of the skill premium. We show that modelling trade imbalances can lead to stark differences between short- and long-run consequences of globalization shocks for the skill premium. |
| JEL: | F1 F16 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30188&r= |
| By: | Arlan Brucal (University of Exeter Business School, Exeter); Shilpita Mathews (London School of Economics and Political Science, London) |
| Abstract: | By combining plant-level data from the Indonesian Manufacturing Survey and localised disaster data from the Emergency Events Database for the period 1990–2015, we were able to exploit both temporal and spatial variation to investigate the global market entry, survival, and exit of plants in the aftermath of a major flood event at the kabupaten (regency) level. Results from the combined propensity score matching and difference-in-difference approach suggest no strong evidence of instantaneous and persistent detrimental effects of initial experience of flooding on overall and female employment, but with delayed effect on output and output per worker. Plants that are connected and foreign-owned experienced a persistent decline in output per worker relative to their domestic counterparts in the aftermath of a flooding event. On average, flooding was not found to have a significant impact on plant entry. The results highlight that international trade has unintended consequences for firm resilience to flooding. Trade-offs and complementarities between globalisation and other SDGs, such as gender equality and poverty reduction, are discussed. |
| Keywords: | Development; Flooding; Globalisation; Indonesia; Resilience; Sustainable development; Trade |
| JEL: | F18 F23 Q56 O19 |
| Date: | 2021–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2021-44&r= |
| By: | Robert Stehrer; Bernhard Dachs |
| Abstract: | In view of the importance of the export economy for Austria this study examines the role and characteristics of Austrian exporting firms compared with non-exporting firms. Specifically, it assesses how the share of exporting firms has developed in recent years, whether exports have become more important for firms over time and to what extent exporters have an advantage over other firms (export premium). The results show that about two third of the Austrian manufacturing firms are engaged in exporting activities and indicate that – in line with existing literature - exporting firms are larger, more productive, generate higher surpluses, invest more, and spend more on environmental protection than non-exporters. Further, the results highlight that only a small number of firms account for a large share of Austrian manufacturing exports. Finally, the results point towards a mutual positive relationship between export behaviour, productivity, and R&D expenditures. |
| Keywords: | export premium, firm-level analysis, productivity and exporting |
| JEL: | D22 F14 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:ecbook:2022:i:viii-002&r= |
| By: | Raimondi, Valentina; Curzi, Daniele; Lucarno, Riccardo; Olper, Alessandro |
| Abstract: | Agri-food system is one of the economic sectors most at risk from climate change, but it is also a significant contributor to it, with greenhouse gas emissions (GHG) from the food supply chain equal to one-third of the global anthropogenic total in 2018 (Tubiello et al. 2021). Specifically, crop and livestock production within the farm gate contributes more than 50% of the methane (CH4) and 75% of the nitrous oxide (N2O) emissions from human activity globally (FAO, 2020). This paper relies on the recent work of Shapiro (2021) that firstly analysed the nexus between pollution embodied in traded goods, against the actual structure of trade policy (tariffs or non-tariff measures-NTMs). In our contribution we focus on agricultural and food products, considering three main pollutants (CO2, CH4, N2O), with the aims of answering the following research question: are actual trade policies a tax or a subsidy to total CO2 (equivalent) emissions embedded in agri-food imported goods? Main findings suggest that for all the three pollutants investigated a negative implicit carbon tax is applied, i.e. on average countries applied an implicit subsidy on more pollutant imported goods. This estimated implicit subsidy to CO2 emissions imported in agri-food products tend to be higher when also the ad-valorem equivalent of non-tariff measures (NTMs) is accounted for. By investigating the country-group heterogeneity in the applied tax or subsidy to imported CO2, results show that the larger implicit subsidy is applied by the trade policy structure of European Union countries. Specifically, Western and Northern European countries have among the largest negative environmental biases in trade policy, while more polluting countries, like China, India, Russia, Brazil and Mexico, tend to apply smaller (implicit) subsidies. |
| Keywords: | International Relations/Trade, Environmental Economics and Policy, Agricultural and Food Policy |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc22:321217&r= |
| By: | Fabien Candau (TREE - Transitions Energétiques et Environnementales - UPPA - Université de Pau et des Pays de l'Adour - CNRS - Centre National de la Recherche Scientifique); Charles Regnacq (BRGM - Bureau de Recherches Géologiques et Minières (BRGM)); Julie Schlick (RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay) |
| Abstract: | This article analyzes how climate change inuences the capabilities to export agricultural goods and the specialization of nations (e.g., comparative advantages) by altering farmers' capability to use available water. Our main contribution is methodological since we present the rst attempt to link precisely the micro-determinants of production to the macro-determinants governing the specialization of countries. We use a rich set of data both locally (at the crop level analyzing thousand elds that cover the Earth's surface) and at the global level (analyzing bilaterally the international trade of nations). At the local level, we estimate the elasticity of production to the thermal and hydrologic conditions (including blue and green water as well as groundwater storage) along with xed eects (at country-product and at the crop level) to control for omitted variables. At the global level, we use the predicted value of these elasticities to compute an indicator of the water capability to export agricultural goods, which is then used in a trade gravity equation to control for trade costs that also shape the specialization of countries. From these estimates, we nally build an indicator of comparative advantage in agricultural goods and analyze how these relative advantages are aected by climate change in 2050. We present unexpected results at rst sight, that are however in line with the Ricardian theory, such as cases where a deterioration of the local conditions to produce a good does not prevent an improvement in the comparative advantage to produce it (representing 32.51% of cases in our simulation), or the reverse, when the improvement of the local conditions happens simultaneously with a deterioration of the comparative advantages (representing 18.16% of cases in our simulation). |
| Date: | 2022–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03671521&r= |
| By: | Hyojung Kang (Economics Department and International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | Sub-Saharan Africa(SSA)’s labor market has long struggled—data from the past two decades show that vulnerable employment consists of more than two thirds of employment, and, closely related, that 60-80% of employment comes from the informal sector. Industry-wise, the highest share of employment is in agriculture while the least is in manufacturing, and this trend is not expected to change, since most of the new jobs created in the past two decades have been in agriculture. With the expectation of the working-age population in the region to experience a net increase of 20 million per year over the next two decades, the need for sustained employment creation becomes more critical. And much of the hope for a solution has been placed on the role of foreign direct investment (FDI). This paper looks at the effect of manufacturing FDI on manufacturing employment in Sub-Saharan African countries, by using annual data for 16 manufacturing industry sectors in 15 SSA countries from 2003 to 2018. We find that manufacturing FDI has a positive effect on manufacturing employment at the industry sector level, which include indirect employment effects through potential spillover effects. We also look at how the effect of manufacturing FDI on manufacturing employment differs by groups of industry sectors. The results show that the effect of manufacturing FDI on employment creation varies by industry sector groups; automotive related industries create the most, followed by business machines/electronics related industries, and lastly metals/minerals related industries. The result reflects both direct and indirect employment effects via spillovers and forward and backward linkages. The paper implies that SSA countries would improve their labor market by attracting manufacturing FDI, which should also contribute to their industrial diversification/structural transformation. |
| Keywords: | economic development, labor, manufacturing, Africa |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper2205&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:22/040&r= |
| By: | Kym Anderson; Sundar Ponnusamy |
| Abstract: | An understanding of how and why economies structurally transform away from agriculture as they grow is crucial for developing sensible farm and food policies. Typically, analysts who study this and related structural change issues focus on sectoral shares of gross domestic product (GDP) and employment. This paper draws on trade theory to focus as well on exports. It also notes that the trade costs of some products are too high at early stages of development to make international trade profitable, so a nontradables sector is recognized. The general equilibrium model presented in the theory section provides hypotheses about structural change in differently endowed economies as they grow. Those hypotheses are tested econometrically with a new annual endowments dataset covering 1995 to 2018 for more than 130 countries, a period when trade restrictions were at their lowest for at least a century. The results are consistent with long run de-agriculturalization in terms of sectoral shares of GDP and employment in the course of national economic growth. But a decline in agriculture’s share of exports in every country is not inevitable. Moreover, policies can be designed to support growth-enhancing and welfare-improving structural transformation without harming agricultural exporters and distorting world trade in farm products. |
| Keywords: | patterns of structural change, de-agriculturalization, comparative advantage, farm productivity growth |
| JEL: | F11 F43 F63 N50 O14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2022-04&r= |
| By: | Küblböck, Karin; Tröster, Bernhard; Eigner, Michael |
| Abstract: | This briefing paper provides an overview of t he global iron and steel sector. It describes the properties of iron ore and delineates the geographical distribution of deposits and trade flows. Further, it explains pricing mechanisms and addresses environmental impacts. Iron and steel are key materials for industrial production, with iron being used 20 times more than all other metals combined. While extraction of iron ore has almost tripled over the past twenty years, the iron and steel sector remains highly concentrated, with most iron ore extraction taking place in just a few countries, in particular in Australia and Brazil, which account for over half of all iron ore extraction. Indeed, more than two-thirds of the iron ore export market is controlled by only four companies. In terms of global steel production, China accounts for more than half of the market share. Iron ore is also mined in Austria, and significant quantities are imported for steel production, although there is a lack of transparency; Austria is the only country in the EU not to publish statistical data on its iron ore imports since 2018. Globally, iron and steel represent the larges t sector in terms of energy demands, CO 2 emissions and air pollution and are among the world's major water consumers. Prices of iron ore are highly volatile, which has major consequences for exporting and importing countries and makes planning for CO2 phase-out difficult. |
| Keywords: | iron ore,steel,trade flows,price volatility,China,Austria |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:oefseb:33&r= |
| By: | van Berkum, Siemen |
| Abstract: | Developing competitive and inclusive food value chains requires domestic macroeconomic policies to improve the agricultural sector’s business environment and create outside opportunities, and sector-specific targeted measures to promote smallholder participation in competitive value chains by reducing market access costs. Key elements of an agricultural development strategy are: infrastructure investment to reduce transaction costs; improving smallholder access to markets; and promoting their participation in food value chains through empowering and increasing their capacity to comply with food quality and safety requirements. Encouraging innovation and adoption of technologies in all segments of the value chain is crucial for upgrading and diversifying agricultural output. This in turn leads to greater income generation, jobs outside of agriculture, and increased export opportunities. Export diversification strengthens countries’ resilience to trade shocks and reduces vulnerability to the rising costs of food imports. |
| Keywords: | Food Security and Poverty, International Relations/Trade, Political Economy |
| Date: | 2022–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:unadrs:321997&r= |
| By: | Yousen Jin (School of Economics and Management, Nanjing University of Science and Technology); Helian Xu (School of Business Administration, Zhongnan University of Economics and Law); Haitao Mao (School of Business Administration, Zhongnan University of Economics and Law) |
| Abstract: | This paper studies the effect of rising housing prices on the quality of export products. It employs a model of endogenous quality choice to show that rising housing prices can exert both positive and negative effects on export quality. We test the model’s predictions by using Chinese firm-level data matched with customs and city-level data from 2000 to 2013. Results show that rising housing prices significantly reduce the quality of export products: the negative effect of speculative investment is found to outweigh the positive effect of easing of financing constraints. High-productivity firms and industries with a greater scope for quality differentiation are more affected by the rising housing prices. Furthermore, government controls on home purchasing help reduce the negative effect of rising housing prices on the quality of export products. |
| Keywords: | Housing prices, quality of export products, home purchase restriction policy |
| JEL: | F10 R31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:22-08&r= |
| By: | Kym Anderson |
| Abstract: | Providing affordable access to enough healthy and safe food for an ever-more-affluent and growing world population has become more challenging in the face of climate change, rising income inequality and a more uncertain global trade environment. Agriculture is expected to contribute more, but is under pressure in both high-income and developing countries to do so more sustainably and inclusively. This paper reviews the roles of food policy in this changing setting. It begins by revisiting the case for keeping food markets open to international trade, investment and technology transfer, and concludes that openness is even more important, especially for developing countries, as the climate becomes warmer and more volatile. It then summarizes trade-related food policy developments globally in the 50 years prior to the global financial crisis, and in the price-spike periods since then. The current situation is calling for more action – including from agriculture – to mitigate climate change and biodiversity loss. The scope for re-purposing food policies to better meet these demands is then assessed. It proposes some alternatives to current measures that could better achieve national societal objectives while simultaneously benefitting the rest of the world in terms of easing natural resource and environmental stresses and reducing national and global poverty, food and nutrition insecurity, and inequalities in income, wealth and health. The review concludes by noting areas where further research could facilitate such transformations in food policy. |
| Keywords: | Uncertain international trade environment; Virtues of liberal food trade; Re- purposing food policies. |
| JEL: | F13 F18 Q17 Q18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-25&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03693211&r= |
| By: | Jacobs, Alec; Youngman, Tom |
| Abstract: | Ruminant livestock produce more than half of the UK’s agricultural greenhouse gas emissions, leading the Climate Change Committee to call for diets to move away from meat and dairy. We run simulations in Defra’s partial equilibrium model of the UK’s agricultural economy to evaluate how diet change might affect UK herd sizes and associated greenhouse gas emissions. We also simulate carbon tax and tariff policy scenarios to compare how diet shifts would interact with a widely advocated policy measure. We find unilateral diet change in the UK alone more likely to provoke a decrease in imports (and potentially an increase in exports) than bring about a significant reduction in UK ruminant herds and associated UK territorial greenhouse gas emissions. Conversely, our simulations find a large carbon tax imposed on domestic farmers alone reducing territorial emissions significantly, but only by leading to higher imports (and associated emissions) from overseas as UK consumption remains inelastic. Our modelling indicates that meeting the UK’s agricultural greenhouse gas mitigation goals requires holistic action on the consumption and production side of the economy, with the UK facing unintended consequences in its agri-food trade balance if its climate ambition is not in harmony with its trade policy. |
| Keywords: | Environmental Economics and Policy, Livestock Production/Industries, International Relations/Trade |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc22:321207&r= |
| By: | Ram Mohan, M.P.; Gupta, Aditya |
| Abstract: | In the contemporary marketplace, trade marks are not mere monikers of origin. While often regarded as commercial symbols, trade marks sometimes become part of the commonplace vocabulary and are indelibly linked to expressing ideas and thoughts. In recent years, the dichotomy of expansive protection offered through the trade mark law and use of marks as part of expressive vocabulary has become increasingly controversial. One such trade mark which has amassed immense communicative strength is Mattel Incs Barbie. The mark has assumed an enduring prominence in contemporary language and has assumed the status of a cultural icon. The present study examines the regulation of expressive secondary uses of trade marks by employing Barbie as a case study. Comparatively analysing the treatment of the Barbie mark in India, the USA, and Canada, the authors underline an imperative need to adopt a legislative framework to protect the expressive and artistic secondary use of popular trade marks. |
| Date: | 2022–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:14680&r= |
| By: | Dario Guarascio; Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw) |
| 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: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:217&r= |
| By: | Sulistiyo K. Ardiyono; Arianto A. Patunru |
| Abstract: | Export-oriented manufacturing generally create jobs. But a few recent studies on Indonesian manufacturing based on input-output tables reported a declining power of this sector in creating jobs. Using firm-level data to examine manufacturing employment during the global financial crisis (GFC), we find that a 10% increase in the degree of export orientation rises the manufacturing employment by about 1% on average, depending on the firm’s capital intensity. The low sensitivity to foreign demand shock and the economy’s low exposure to the global market explain the mild effect of the Global Financial Crises (GFC) on the Indonesian economy. An examination of the inter-related adjustments of labour, capital, and intermediate input confirms that the changes in employment are not independent of the adjustments of other factor inputs such as capital and material inputs. The results are robust when external and internal instruments are used in instrumental variable (IV) and GMM estimations, respectively. |
| Keywords: | GFC, manufacturing sector, employment, foreign demand shock |
| JEL: | F16 J23 D22 L60 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2022-05&r= |
| By: | Shamsuddin, Mrittika (Dalhousie University); Acosta, Pablo A. (World Bank); Schwengber, Rovane Battaglin (World Bank); Fix, Jedediah (UNHCR); Pirani, Nikolas (UNHCR) |
| Abstract: | As more and more Venezuelans leave their country, fleeing the economic and social crisis, the number of Venezuelans in Brazil has risen steadily since 2016, constituting about 18.6 percent of Brazil's 1.4 million refugee and migrant population as of October 2020. Past research finds that the impacts of forced displacement on the labor market outcomes of host community are mixed and tend to depend on country characteristics. This paper extends the previous literature by exploring the economic impact of Venezuelan influx on Roraima, the state bordering the República Bolivariana de Venezuela at the north and the main gateway of the Venezuelan refugees and migrants entering Brazil, and focusing on the formal sector employment of the host community. Using survey and administrative data and regression discontinuity frameworks, this paper finds that in the short-run, the Venezuelan influx led to an overall increase in unemployment and a decrease in informal sector employment, specially among the female workers in Roraima. Focusing on the host community, the findings suggest that Venezuelan influx led to increase in formal sector employment among the Brazilians, while the effect on both overall and native wages are heterogenous, suggesting distribution impacts and need for gender targeted policies. |
| Keywords: | labor market impacts, Venezuelan refugees and migrants, host community, forced displacement |
| JEL: | J21 J31 J61 F22 F15 O15 R23 H20 H50 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15384&r= |
| By: | Abdelaaziz Ait Ali; Uri Dadush; Fatima Ezzahra Mengoub; Isabelle Tsakok |
| Abstract: | Following on the heels of the COVID-19 pandemic and severe drought in North Africa, the Russian invasion of Ukraine – large exporters of food and, in the case of Russia, energy— may inflict increased hunger on the food insecure in Morocco – despite mitigating measures by the government. Morocco is so far successfully shielding its large poor and vulnerable population by subsidizing essential commodities. With memories of the violent protests during the 2007/08 food and fuel crisis still fresh, government support is necessary to maintain social stability. Such support measures are costly even in a typical year. In 2022, the legacy of the pandemic, a combination of drought, soaring cereal and oil prices, global inflation, and economic slowdown will test the 'government's ability to keep fiscal deficits within sustainable bounds. Looking to the longer term, the high costs of government subsidies highlight the need for a sustainable strategy to deal with food security. Morocco's New Development Model (April 2021) promises to progress towards this goal by re-orienting public investment and creating incentives to improve efficiency and resilience in rain-fed agriculture and add value throughout the agri-food sector, not just in irrigated agriculture. The food and fuel crises triggered by the war raise the stakes for reforming the agri-food system throughout Africa, not only in Morocco. The African Continental Free Trade Agreement (AfCFTA) presents a unique opportunity to develop a vast and reliable regional market including food that is less exposed to the vagaries of the political, security, and economic environment outside the region. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb34-22&r= |
| By: | Ohyun Kwon; Constantinos Syropoulos; Yoto V. Yotov |
| Abstract: | Direct measures of the economic impact of sanctions are contaminated by the endogeneity that arises when other events in target countries (e.g., civil or interstate conflicts, political independence, etc.) instigate the imposition of sanctions. To address this issue, we propose a novel instrument, sender’s aggressiveness, captured by the number of sanctions imposed in a given year. After establishing the validity of this instrument, we quantify the impact of sanctions on growth in sanctioned states and show that, on average, an additional sanction decreases contemporaneous real GDP per capita in target states by 0.39 percent. We also substantiate the presence of a significant (in magnitude) downward bias in the corresponding OLS estimates and demonstrate that the effects of sanctions on growth vary widely depending on the types of sanctions considered, their purported objectives, measures of their success, and the duration of their effects. |
| Keywords: | real GDP per capita growth, trade sanctions, smart sanctions, long-run effects |
| JEL: | F43 F51 F63 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9818&r= |
| By: | Sulistiyo K. Ardiyono; Arianto A. Patunru |
| Abstract: | There has been much debate on how to design employment protection regulations that balance the need to attract FDI on the one hand and to protect workers’rights on the other hand.This study explores this ‘dilemma’, using a multi-country dataset for2003to 2015and treating hiring and firing regulation and the other explanatory variables as endogenous.The findings indicate that flexible hiring and firing regulations (HFRs) is essential for FDI promotion in the early stages of economic development of a country; but the impact of labour market flexibility on FDI gradually decreases and eventually turns statistically insignificant with economic advancement. In other words, a flexible HFRs are more important for developing countries, but such flexibility does not have to be sustained in a ‘race to the bottom’ manner: once a country reaches higher income levels, it has more room to focus on labour standards to protect workers without compromising on the attractiveness of the country for FDI. |
| Keywords: | FDI, industrial policy, labour market flexibility, economic development. |
| JEL: | F21 J58 O24 O25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-18&r= |
| By: | Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio |
| Abstract: | In the following article, the value of the "Knowledge Intensive Services Exports in Europe" in 36 European countries is estimated. The data were analyzed through a set of econometric models or: Poled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects, WLS. The results show that “Knowledge Intensive Services Exports” is negatively associated, among others, with "Buyer Sophistication", "Government Procurement of Advanced Technology Products", and positively associated with the following variables i.e. "Innovation Index", "Sales Impacts" and "Total Entrepreneurial Activity". Then a clusterization with k-Means algorithm was made with the Elbow method. The results show the presence of 3 clusters. A network analysis was later built and 4 complex network structures and three structures with simplified networks were detected. To predict the future trend of the variable, a comparison was made with eight different machine learning algorithms. The results show that prediction with Augmented Data-AD is more efficient than prediction with Original Data-AD with a reduction of the mean of statistical errors equal to 55,94%. |
| Keywords: | Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation. |
| JEL: | O3 O30 O31 O32 O33 O34 |
| Date: | 2022–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113348&r= |