nep-int New Economics Papers
on International Trade
Issue of 2022‒09‒12
33 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Import Liberalization as Export Destruction? Evidence from the United States By Breinlich, Holger; Leromain, Elsa; Novy, Dennis; Sampson, Thomas
  2. International Trade Spillovers from Domestic COVID-19 Lockdowns By Mr. Shekhar Aiyar; Mr. Adil Mohommad; Mr. Andrea F Presbitero; Mr. Davide Malacrino
  3. Lessons from U.S.-China Trade Relations By Lorenzo Caliendo; Fernando Parro
  4. The future of global value chains and the role of the WTO By Dadush, Uri
  5. Non-Tariff Barriers in the U.S.-China Trade War By Tuo Chen; Chang-Tai Hsieh; Zheng Michael Song
  6. Trade Shocks, Labor Markets and Elections in the First Globalization By Bräuer, Richard; Hungerland, Wolf-Fabian; Kersting, Felix
  7. Does foreign direct investment spur economic growth? New empirical evidence from Sub-Saharan African countries By Odhiambo, Nicholas M
  8. The Impact of Digitalization and Trade Openness on Economic Growth: New Evidence from Richest Asian Countries By Bakari, Sayef; El Weriemmi, Malek; Mabrouki, Mohamed
  9. Has the Russian Invasion of Ukraine Reinforced Anti-Globalization Sentiment in Austria? By Gutmann, Jerg; Pitlik, Hans; Fronaschütz, Andrea
  10. German-Chinese Trade Relations: How Dependent is the German Economy on China? By Andreas Baur; Lisandra Flach
  11. Trade, Leakage, and the Design of a Carbon Tax By David A. Weisbach; Samuel Kortum; Michael Wang; Yujia Yao
  12. Migration policy and labor market integration By Kerstin Mitterbacher; Jürgen Fleiß; Stefan Palan
  13. Globotics and Macroeconomics: Globalisation and Automation of the Service Sector By Richard Baldwin
  14. The Landscape of CO2 Emissions Across Africa: A Comparative Perspective By Jaime de Melo; Jean-Marc Solleder
  15. The Stolper-Samuelson Trade Effects Trigger the Rybczynski Trade Effects Negatively By Guo, Baoping
  16. Is foreign direct investment losing clout in development By Berger, Axel; Ragoussis, Alexandros
  17. Rise and Fall of Empires in the Industrial Era: A Story of Shifting Comparative Advantages By Roberto Bonfatti; Kerem Coşar
  18. Supply chains under pressure: How can data science help? By Thierry Warin
  19. From Macro to Micro: Large Exporters Coping with Common Shocks By Jean-Charles, Carluccio, Juan Bricongne; Lionel Gérard Fontagné; Guillaume Gaulier; Sebastian Stumpner
  20. Origins of International Factor Structures By Zhengyang Jiang; Robert J. Richmond
  21. Measuring the effect of Foreign Exchange Reserves on Foreign Direct Investment in Algeria during the period 1990-2020 using the ARDL model By Bouzid Bourenane; Kamel Rezig; Zakaria Djorfi
  22. The Comparative Economics of Globalisation and Governance in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  23. The propagation of worldwide sector-specific shocks By Elvira Prades; Javier Quintana
  24. The comparative economics of globalisation and governance in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo , Nicholas M
  25. Resilient and Innovative Supply Chains: Evidence-based policy and managerial implications (Japanese) By TODO Yasuyuki
  26. The impact of the Russian-Ukrainian war on Europe’s forest-based bioeconomy By Lööf, Hans; Stephan, Andreas
  27. The Export of Medium and High-Tech Products Manufactured in Europe By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  28. Precautionary Protectionism By Sharon Traiberman; Martin Rotemberg
  29. Germany and the UK: Perspectives for deepening the bilateral dialogue on development policy By Keijzer, Niels; Friesen, Ina
  30. Exploring the Level of DRC's Dependence on China By Benjamin Mwadi Makengo; Joseph Mimbale Molanga; Jean-Marie Mbutamuntu; Patience Kamanda Londo; Théo-Macaire Kaminar Nsiy; Shi Xinzhi; Gracien Mwadi Kapita
  31. Renewable energy and portfolio volatility spillover effects of GCC oil exporting countries By Bigerna, Simona; D'Errico, Maria Chiara; Polinori, Paolo; Simshauer, Paul
  32. Working Capital Management, Financial Constraints, and Exports. Evidence from European and US Manufacturers By Jose Manuel Mansilla-Fernandez; Juliette Milgram Baleix
  33. Internationalizing Like China By Christopher Clayton; Amanda Dos Santos; Matteo Maggiori; Jesse Schreger

  1. 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
  2. By: Mr. Shekhar Aiyar; Mr. Adil Mohommad; Mr. Andrea F Presbitero; Mr. Davide Malacrino
    Abstract: While standard demand factors perform well in predicting historical trade patterns, they fail conspicuously in 2020, when pandemic-specific factors played a key role above and beyond demand. Prediction errors from a multilateral import demand model in 2020 vary systematically with the health preparedness of trade partners, suggesting that pandemic-response policies have international spillovers. Bilateral product-level data covering about 95 percent of global goods trade reveals sizable negative international spillovers to trade from supply disruptions due to domestic lockdowns. These international spillovers accounted for up to 60 percent of the observed decline in trade in the early phase of the pandemic, but their effect was shortlived, concentrated among goods produced in key global value chains, and mitigated by the availability of remote working and the size of the fiscal response to the pandemic.
    Keywords: Trade; Spillover effects; Lockdowns; COVID-19; import demand model; pandemic-response policy; trade partner; goods trade; spillover effect; Imports; Export restrictions; Trade in goods; Exports; Global
    Date: 2022–06–17
  3. By: Lorenzo Caliendo; Fernando Parro
    Abstract: We review theoretical and empirical work on the economic effects of the United States and China trade relations during the last decades. We first discuss the origins of the China shock, its measurement, and present methods used to study its economic effects on different outcomes. We then focus on the recent U.S.-China trade war. We discuss methods used to evaluate its effects, describe its economic effects, and analyze if this increase in trade protectionism reverted the effects of the China shock. The main lessons learned in this review are: (i) the aggregate gains from U.S.-China trade created winners and losers; (ii) China's trade expansion seems not to be the main cause of the decline in U.S. manufacturing employment during the same period; and (iii) the recent trade war generated welfare losses, had small employment effects, and was ineffective in reversing the distributional effects due to the China shock.
    JEL: F1 F10 F11 F12 F13 F14 F15 F16 F19
    Date: 2022–08
  4. By: Dadush, Uri
    Abstract: Disruptions to global value chains (GVCs) - caused by conflicts, natural disasters, and accidents that close transport routes - and that affect specific regions or sectors, are not unusual. However, in recent years and amid the Covid-19 pandemic, they have become more frequent and severe. High profile, sizeable, and repeated disruptions raise pressing questions: Is the breakdown in many GVCs a temporary glitch, or a permanent phenomenon? Have GVCs become endemically more accident prone, and why? And if so, are firms going to rely less on them? If a sustained withdrawal from GVCs occurs, how will business models be reshaped, and what will be the consequences for growth and inflation? How will the global trading system be affected? In short, policymakers want to know, what is the future of GVCs? Persistent and severe GVC disruption is a recent phenomenon and hard data needed to analyze its consequences on trade and investment flows are still scarce. Given the available evidence, which is mainly conceptual and anecdotal, and the reigning uncertainty, the note suggests some pointers on how GVCs might evolve and how the WTO could respond.
    Keywords: global value chains,supply chain resilience,reshoring,WTO,globalization
    JEL: F13 F17 F52 F62
    Date: 2022
  5. By: Tuo Chen; Chang-Tai Hsieh; Zheng Michael Song
    Abstract: We use Chinese customs data to show that unofficial non-tariff barriers were responsible for 50\% of the overall reduction in Chinese imports from the U.S. during the height of the U.S.-China trade war in 2018 and 2019. We infer non-tariff barriers from the change in imports of U.S. products relative to imports from other countries of the same HS-6 product, after controlling for the change in the relative price of U.S. imports to the same product sold by other countries. These barriers were imposed on a small number of agricultural products, did not apply to state-owned importers, and were larger for products where the share of state importers in total imports of the U.S. product was large. Non-tariff barriers were responsible for more than 90\% of the welfare cost to Chinese consumers of the U.S.-China trade war. The welfare loss to China of a given reduction in imports from the U.S. from non-tariff barriers is about six times larger than an equivalent import decline due to higher tariffs. Non-tariff barriers are more costly compared to tariffs because they applied to some importers and not others, which results in misallocation, and because non-tariff barriers do not generate revenues.
    JEL: E0 F0 F13
    Date: 2022–08
  6. By: Bräuer, Richard (Halle Institute for Economic Research and VU Amsterdam); Hungerland, Wolf-Fabian (Federal Ministry of Economic Affairs and Energy, Berlin); Kersting, Felix (HU Berlin)
    Abstract: This paper studies the economic and political effects of a large trade shock in agriculture – the grain invasion from the Americas – in Prussia during the first globalization (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today’s data, we do not observe declining per capita income, health outcomes or political polarization in counties aected by foreign competition. Our results suggest that the negative and persistent eects of trade shocks we see today are not a universal feature of globalization, but depend on labor mobility. For our analysis, we digitize data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation.
    Keywords: globalization; import competition; labor market; elections; agriculture; migration; trade shock;
    JEL: F14 F16 F66 F68 N13 R12
    Date: 2021–10–17
  7. By: Odhiambo, Nicholas M
    Abstract: In this study we re-examine the relationship between foreign direct investment (FDI) and economic growth in 27 sub-Saharan African (SSA) countries during the period 1990?2019. Unlike some previous studies, we clustered SSA countries into two groups, namely low-income and middle-income countries. We also employed three panel data techniques in a stepwise fashion, namely the dynamic ordinary least squares (DOLS), the fully modified ordinary least squares (FMOLS), and heterogeneous Granger non-causality approaches. Our results show that while the positive impact of FDI on economic growth is supported by both DOLS and FMOLS techniques in low-income countries, in middle-income countries only the DOLS technique supports this finding. This shows that the impact of FDI may be sensitive to the level of income of the recipient country. Overall, the results show that FDI inflows play a larger role in stimulating economic growth in low-income SSA countries than in middle-income SSA countries. These findings are also corroborated by heterogeneous Granger non-causality results. However, these findings are not surprising, given that many low-income countries tend to be more dependent on inward FDI inflows to stimulate their economic growth than middle-income countries. Policy recommendations are discussed.
    Keywords: FDI, economic growth, sub-Saharan African countries, panel data analysis
    Date: 2022–08
  8. By: Bakari, Sayef; El Weriemmi, Malek; Mabrouki, Mohamed
    Abstract: The aim of this investigation is to check the impact of digitalization and trade openness on economic growth for top ten richest Asian countries. Static Gravity Model and Generalized Method of Moments Model were estimated. We found that digitalization and trade openness have a significant positive effect on economic growth. These results prove that trade openness and digitalization is a source of economic growth for richest Asian countries. Due to the magnitude of the positive externalities attached to the trade openness and digitalization, in terms of technology transfer bias, financial capacities, economic policies, human expertise, plenty of natural resources, large markets size, and spillover effect added to the domestic capacities and the national investment, the pace of the phenomenal economic performance of the Asian economies is very well marked.
    Keywords: Digitalization, Trade Openness, Economic Growth, Richest Asian Countries.
    JEL: E22 F10 F11 F13 F14 O16 O33 O47 O53
    Date: 2022
  9. By: Gutmann, Jerg; Pitlik, Hans; Fronaschütz, Andrea
    Abstract: The Russian invasion of Ukraine has caused disruptions in international trade and highlighted the dependency of small open economies in Europe on imports, especially of energy. These events may have changed Europeans' attitude towards globalization. We study two waves of representative population surveys conducted in Austria, one right before the Russian invasion and the other two months later. Our unique dataset allows us to assess changes in the Austrian public's attitudes towards globalization and import dependency as a short-term reaction to economic turbulences and geopolitical upheaval at the onset of war in Europe. We show that two months after the invasion, anti-globalization sentiment in general has not spread, but that people have become more concerned about strategic external dependencies, especially in energy imports, suggesting that citizens' attitudes regarding globalization are differentiated.
    Keywords: Austria,crisis,conflict,globalization attitudes,war
    JEL: F13 F51 F52 N40
    Date: 2022
  10. By: Andreas Baur; Lisandra Flach
    Abstract: In recent decades, China has risen to become Germany’s most important trading partner for international trade in goods. Has Germany become too dependent from trade with China? An analysis using direct and indirect value-added linkages along the supply chain shows that China plays an important, but by no means dominant role for Germany as a supplier or destination market. However, in a survey conducted by the ifo Institute, 46% of German firms in the manufacturing sector state that they currently depend on important intermediate inputs from China. Of those, almost half of the firms are planning to reduce imports from China in the future. The most frequently mentioned reasons for reducing imports from China are the desire to decrease dependencies and increase diversification, increased freight costs and disruptions in transportation, as well as political uncertainty. An analysis at the product level shows that the German economy depends on several critical industrial goods and raw materials from China.
    Date: 2022
  11. By: David A. Weisbach; Samuel Kortum; Michael Wang; Yujia Yao
    Abstract: Climate policies vary widely across countries, with some countries imposing stringent emissions policies and others doing very little. When climate policies vary across countries, energy-intensive industries have an incentive to relocate to places with few or no emissions restrictions, an effect known as leakage. Relocated industries would continue to pollute but would be operating in a less desirable location. We consider solutions to the leakage problem in a simple setting where one region of the world imposes a climate policy and the rest of the world is passive. We solve the model analytically and also calibrate and simulate the model. Our model and analysis imply: (1) optimal climate policies tax both the supply of fossil fuels and the demand for fossil fuels; (2) on the demand side, absent administrative costs, optimal policies would tax both the use of fossil fuels in domestic production and the domestic consumption of goods created with fossil fuels, but with the tax rate on production lower due to leakage; (3) taxing only production (on the demand side), however, would be substantially simpler, and almost as effective as taxing both production and consumption, because it would avoid the need for border adjustments on imports of goods; (4) the effectiveness of the latter strategy depends on a low foreign elasticity of energy supply, which means that forming a taxing coalition to ensure a low foreign elasticity of energy supply can act as a substitute for border adjustments on goods.
    Keywords: climate change, carbon taxes, leakage, border adjustments
    JEL: F18 H23 Q54
    Date: 2022
  12. By: Kerstin Mitterbacher (Institute of Banking and Finance, University of Graz); Jürgen Fleiß (Business Analytics and Data Science-Center, University of Graz); Stefan Palan (Institute of Banking and Finance, University of Graz)
    Abstract: We experimentally study economic migrants' willingness to relocate to, and take up work in, the destination country, and, in turn, destination country citizens' willingness to allow economic migrants to relocate to and pursue formal work in their country. In doing so, we focus on economic migrants coming from less developed countries and citizens of more developed destination countries. We find clear evidence for a reciprocal relationship between the individuals in these roles. The labor market participation of economic migrants co-moves with destination countries' openness to welcoming them. However, open migration polices without the threat of facing restrictive policies reduce migrants' willingness to work. At the same time, while the existence of such a threat gets migrants to work, the actual implementation of restrictive policies has the same effects as open migration policies. We conclude that supporting economic migrants in early labor market attachment is crucial to support mutually beneficial co-existence in society.
    Date: 2022–08–16
  13. By: Richard Baldwin
    Abstract: Globalisation affects the functioning of the macroeconomy. The macroeconomy’s functioning, in turn, conditions the conduct and impact of monetary policy. This is why globalisation matters for central banks. It is also why central bankers should pay attention to the evolution of globalisation. And evolve it has. This paper argues that the future of trade is trade in services – especially trade in intermediate services. Barriers are radically higher and falling radically faster for services versus goods, and, unlike farm and factory goods, there is no capacity constraint when it comes to the export of intermediate services from emerging markets. Undertaking the macroeconomic analysis for services trade that was done in the 2000s for goods trade, however, will require a substantial upgrading of the data available.
    JEL: E31 F41 F62
    Date: 2022–08
  14. By: Jaime de Melo (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, UNIGE - Université de Genève); Jean-Marc Solleder (UNIGE - Université de Genève)
    Abstract: Expansion of Global Value Chains (GVCs) is a mixed blessing for the environment. Effects of growth and emissions from transport associated with international trade have negative effects; but greater flows of knowledge and associated spillovers, and adoption of environmentally innovative products have positive effects. This paper provides evidence on carbon dioxide (CO2) emissions for 51 African and 132 other countries for 163 products over the period 1995-2015. The resulting landscape is summarized in four patterns. Patterns identified for the Africa region differ from those identified for other regions but are closely related to a synthetic aggregate comparator constructed on the basis of three characteristics (per capita income, share of manufacturing in GDP, and distance to trading partners).
    Keywords: Africa,decarbonization,emission intensity
    Date: 2022–07–26
  15. By: Guo, Baoping
    Abstract: Most literature talks about trade effects of price changes on outputs in international economics as that a price increase of a good will lead to an expansion of the output of that good and a reduction in the output of the other good (see Bhagwati, Panagariya, and Srinivasan, 1998, p. 62). It only tells the story from the supply side. It is not in line with the fundamental economic principle, the law of demand, that says that there is an inverse (or negative) relationship between the price of a good (or service) and the quantity demanded. This study investigates it again based on the price-trade equilibrium from integrated world equilibrium (IWE). The paper shows that the overall result of supply and demand by the equilibrium is that a price increase of a good leads to a reduction in the output of that good and an increase in the output of another good. It is just a process of the Stolper-Samuelson trade effects negatively triggering the Rybczynski trade effects. The study proves the law of demand analytically.
    Keywords: Factor price equalization; Heckscher-Ohlin Model; Equilibrium price; Trade Effects; General Trade Equilibrium
    JEL: F1 F15
    Date: 2021–01
  16. By: Berger, Axel; Ragoussis, Alexandros
    Abstract: Over the last decade, only a single projection of foreign direct investment (FDI) flows by the United Nations influential "World Investment Report" has proposed a negative outlook in the medium term. Based partly on surveys of business executives, these forecasts reflect expectations of investment growth which, however, have repeatedly failed to materialise. In fact, FDI flows to developing countries have remained stagnant over the past decade. Such wishful thinking is nurtured by a long series of positive narratives and facts about foreign investment. FDI has been one of the pillars of international development efforts for over 70 years. Its promise has not been limited to critical finance, but extends to longer term competitiveness through access to better technology, managerial know-how and, above all, prosperity through more and better paid jobs in the formal sector. From the old prescriptions of the so-called Washington Consensus to the hopeful Addis Ababa Action Agenda, the dominant development narrative has therefore favoured a rather indiscriminate pursuit of investment volume. This brief calls for rethinking of narratives and policies that help to improve the impact of FDI, based on secular trends that challenge our expectations. Four such trends stand out: First, while other sources of finance for development have grown considerably over the last decades, foreign investment has not followed the trend. Second, the kind of investment that is associated with stronger gains and longer term commitment in host economies - greenfield FDI - has also been in consistent decline as a share of total investment, while mergers and acquisitions and project finance have gained in importance. Third, the top 100 multinational enterprises (MNEs), accounting for nearly a quarter of global FDI stock, rely less on employment today than they used to in order to grow their foreign presence. Job creation, knowledge transfer and spillovers are therefore less likely to materialise through the presence of mega-firms and their corresponding investment at scale. Fourth, the growth of Chinese outward FDI within a strategic expansionary political agenda stands to change rules and attitudes towards foreign investment moving forwards. We argue that, collectively, these trends invite a renewed conversation around the kind of foreign investment we want and expectations of this source of finance for development. These facts obscure neither the broad benefits of FDI to developing countries, nor the value proposition of FDI attraction. Rather, they raise questions about expectations, priorities and the alignment of investment policy with the realities experienced across developing countries. To that end, we propose four priorities that stand to make a difference in the current context. We call for policy-makers to: 1) Place additional emphasis on retention of investment and linkages with the domestic economy. 2) Try new approaches for FDI attraction that focus on improving domestic investment facilitation frameworks. 3) Be selective as to investment sources and activities in order to mitigate political risks and align inward investment better with sustainable development. 4) Add evidence to improve our understanding of investment and inform decision-making. Overall, it is critical to engage in a serious multi-stakeholder conversation around expectations, actors and solutions that respond to the investment reality of today.
    Date: 2022
  17. By: Roberto Bonfatti; Kerem Coşar
    Abstract: The last two centuries witnessed the rise and fall of empires. We construct a model which rationalises this in terms of the changing trade gains from empires. In the model, empires are arrangements that reduce trade cost between an industrial metropole and the agricultural periphery. During early industrialisation, the value of such bilateral trade increases, and so does the value of empires. As industrialisation diffuses, and as manufactures become more differentiated, trade becomes more multilateral and intra-industry, reducing the value of empires. Our results are consistent with long-term changes in income distribution and trade patterns, and with previous historical arguments.
    JEL: F10 F50 N7
    Date: 2022–07
  18. By: Thierry Warin
    Abstract: The world has changed and companies are facing a perfect storm, with catastrophic risks that have a very low probability of occurrence, but for which the consequences are enormous. The war in Ukraine is impacting global supply chains already constrained by the COVID-19 pandemic. Ukraine is responsible for about 70% of the world's neon and Russia controls 44% of the world's supply of palladium, both of which are essential inputs in semiconductor production. Semiconductors are themselves essential to the manufacture of cars, smartphones or even medical equipment. With Taiwan producing nearly two-thirds of the world's semiconductors, China's move to reunify with the island of Taiwan raises significant concerns. In this complex geopolitical context, some companies are considering reshoring or nearshoring, i.e. the repatriation of specific activities within national ou regional borders. Is this the right solution or not? In this short text, Thierry Warin, Fellow CIRANO and responsible of the CIRANO Pole on Data Science for Trade and Intermodal Transportationfor argues that the solutions to recent complex supply problems must themselves be complex. We need to use the tools we have access to today: massive data, computing power and new methods of analysis. The global trade system must adapt to a new technological paradigm, that of artificial intelligence and data science. The alternative of using the same mental patterns as in the past and proposing binary solutions is no longer acceptable today. There is no more time to lose. Le monde a changé et les entreprises sont confrontées à une tempête parfaite, avec des risques catastrophiques dont la probabilité d'occurrence est minime, mais pour lesquels les conséquences sont énormes. La guerre en Ukraine a un impact sur les chaînes d'approvisionnement mondiales déjà limitées par la pandémie de COVID-19. L’Ukraine est responsable d’environ 70 % du néon sur la planète et la Russie contrôle 44 % des approvisionnements mondiaux en palladium, deux intrants indispensables dans la production des semi-conducteurs. Les semi-conducteurs sont eux-mêmes indispensables à la fabrication de voitures, de téléphones intelligents ou même d’équipements médicaux. Avec Taïwan qui produit près des deux tiers des semi-conducteurs du monde, la velléité de la Chine de procéder à la réunification avec l’île de Taïwan soulève d’importantes inquiétudes. Dans ce contexte géopolitique complexe, certaines entreprises envisagent le rapatriement de certaines activités à l’intérieur des frontières nationales — le reshoring — ou régionales — le nearshoring. Est-ce, oui ou non, la bonne solution ? Dans ce court texte, Thierry Warin, Fellow CIRANO et responsable du Pôle CIRANO en science des données pour les échanges commerciaux et le transport intermodal, soutient que les solutions aux problèmes complexes d'approvisionnement récents doivent elles-mêmes être complexes. Nous devons utiliser les outils auxquels nous avons accès aujourd'hui : les données massives, la puissance de calcul et les nouvelles méthodes d'analyse. Le commerce mondial doit s'adapter à un nouveau paradigme technologique, celui de l'intelligence artificielle et de la science des données. L'alternative qui serait d'utiliser les mêmes schémas mentaux que par le passé et de proposer des solutions binaires n'est plus acceptable aujourd'hui. Il n'y a plus de temps à perdre.
    Keywords: Supply chains,data science,relocation,international trade,global value chains, Chaînes logistiques,Science des données,Relocalisation,Commerce international,Chaînes de valeur mondiales
    Date: 2022–08–08
  19. By: Jean-Charles, Carluccio, Juan Bricongne; Lionel Gérard Fontagné; Guillaume Gaulier; Sebastian Stumpner
    Abstract: Since Gabaix (2011), the role of changes in the performance of some very large firms in shaping aggregate outcomes has been intensively studied in the economic literature. Changes in the performance of a few large firms can arise due to idiosyncratic shocks or idiosyncratic reactions to common shocks. This paper provides direct evidence for the second channel using data on the universe of French firm-level exports and imports over 1993-2020. Granularity matters for the micro-dynamics of aggregate French exports over the long run : the granular residual explains 42% of the variance in aggregate export growth during the period. Moreover, it co-moves with the macro shocks : the largest firms do better than average in good times and worse in bad times. Studying firm-level performance during the Great Financial Crisis and the Pandemic reveals that top exporters contributed to the export collapses disproportionably more than their pre-crisis share of exports, even within finely defined markets. We investigate the reasons for such over-reaction of the top exporters using the Pandemic as a natural experiment. We find that a higher elasticity to demand shocks explains the larger reaction of top exporters to the Pandemic, with GVC exposure having weak explanatory power. Our findings have macro implications, as they help understand the macro reaction to foreign shocks, and micro implications, since they can inform micro models of exports.
    Keywords: granularity, exports, Covid crisis
    JEL: F14
    Date: 2022
  20. By: Zhengyang Jiang; Robert J. Richmond
    Abstract: We show that exchange rate correlations tend to be explained by the global trade network while consumption correlations tend to be explained by productivity correlations. Sharing common trade linkages with other countries increases exchange rate correlations beyond bilateral linkages. We explain these findings using a model of the global trade network with market segmentation. Interdependent global production generates international comovements, while market segmentation disconnects the drivers of exchange rate correlations from the drivers of consumption correlations. Moreover, we show that the trade network generates common factors found in exchange rates. Our findings offer a trade-based account of the origins of international comovements and shed light on important frictions in international markets.
    JEL: F31 G15
    Date: 2022–08
  21. By: Bouzid Bourenane (Algiers3 University Algeria); Kamel Rezig (Blida2 University Lounici Ali); Zakaria Djorfi (TIPAZA UNIVERSITY CENTER DZA - Partenaires IRSTEA - IRSTEA - Institut national de recherche en sciences et technologies pour l'environnement et l'agriculture)
    Abstract: This paper aims to examine the impact of foreign exchange reserves on foreign direct investment in Algeria during the period 1990-2020 by applying the Auto-Regressive Distributed Lag model (ARDL). The model showed that the current variables are co-integrated. Also, the results indicate that foreign exchange reserves have a positive impact on foreign direct investment in the long term only, at a rate of 44%.
    Keywords: Foreign exchange reserves,foreign direct investment,ARDL Model,Algeria JEL Classification Codes : F31,F21,C51,O55
    Date: 2022–06–04
  22. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study investigates the effect of globalisation on governance in 40 Sub-Saharan African countries for the period 2000-2019, with particular emphasis on income levels (low income versus middle income), legal origins (English common law versus French civil law), landlockedness (landlocked versus unlandlocked), resource wealth (oil-rich versus oil-poor) and political stability (stable versus unstable). The empirical evidence is based on Fixed Effects in order to control for the unobserved heterogeneity. Political, economic, social, and general globalisation variables are used, while three bundled governance indicators are also employed to assess five main hypotheses. From baseline findings, while all globalization dynamics negatively affect political governance, only political and social globalisation have a negative incidence on economic governance. Social and general globalisation dynamics positively affect institutional governance. The hypotheses that higher income, English common law, unlandlocked, oil poor, and politically-stable countries are associated with higher levels of globalisation-driven governance, are valid, invalid, and partially valid contingent on the globalisation and governance dynamics.
    Keywords: Africa; Governance; Globalization; Panel; Fixed Effects
    JEL: F30 O10 O55
    Date: 2022–01
  23. By: Elvira Prades (Banco de España); Javier Quintana (Banco de España)
    Abstract: This paper analyses the aggregate impact of industry-specific shocks and their propagation through global production networks. We focus on the case in which a common shock affects simultaneously the same industry across different countries. Thus, our analysis can be a useful tool for several policy-relevant scenarios, such as changes in environmental regulations or the implementation of new technologies. For that purpose, we highlight the importance of departing from standard linear models that assume unitary elasticities of substitution. We combine a theoretical framework of production networks with arbitrary elasticities of substitution (Baqaee & Farhi, 2019) and we make use of World Input-Output Database to account for international linkages. This setting illustrates how, in the presence of production input complementarities, the interaction between simultaneous shocks has significant non-linear effects on sectoral composition and aggregate output. The aggregate impact of negative (positive) shocks gets significantly amplified (mitigated) when they affect simultaneously industries with strong production linkages. Our results show that ignoring production complementarities leads to vastly underestimating the aggregate consequences of regulatory or technological shocks in industries like chemicals or vehicle manufacturing. In contrast, simultaneous shocks to services industries are well accounted for by standard measures.
    Keywords: input-output tables, networks, shock propagation
    JEL: F14 F15
    Date: 2022–03
  24. By: Asongu, Simplice A; Odhiambo , Nicholas M
    Abstract: This study investigates the effect of globalisation on governance in 40 Sub-Saharan African countries for the period 2000-2019, with particular emphasis on income levels (low income versus middle income), legal origins (English common law versus French civil law), landlockedness (landlocked versus unlandlocked), resource wealth (oil-rich versus oil-poor) and political stability (stable versus unstable). The empirical evidence is based on Fixed Effects in order to control for the unobserved heterogeneity. Political, economic, social, and general globalisation variables are used, while three bundled governance indicators are also employed to assess five main hypotheses. From baseline findings, while all globalization dynamics negatively affect political governance, only political and social globalisation have a negative incidence on economic governance. Social and general globalisation dynamics positively affect institutional governance. The hypotheses that higher income, English common law, unlandlocked, oil poor, and politically-stable countries are associated with higher levels of globalisation-driven governance, are valid, invalid, and partially valid contingent on the globalisation and governance dynamics.
    Keywords: Africa; Governance; Globalization; Panel; Fixed Effects
    Date: 2022–08
  25. By: TODO Yasuyuki
    Abstract: The aims of this paper are threefold. First, we discuss how resilient and innovative supply chains and knowledge networks can be constructed, mostly based on papers from current and previous projects at RIETI. The role of geographic diversity across countries in partners of supply chains and knowledge networks is particularly emphasized. Second, we provide an overview of the recent policies affecting global supply chains and trends in supply chains of major countries from the viewpoint of diversity. It is particularly observed that the reliance on China in imports of intermediate products to many countries in Asia has increased substantially. Although the reliance of Japan on China recently declined to some extent, it is still high compared with that of the United States and European countries. Finally, policy and managerial suggestions are provided based on the academic evidence outlined in the first section and the current observations from the second section. It is suggested that Japan should lower the reliance on China in supply chains and diversify supply chains internationally to countries without national security concerns (i.e., “friendshoring†) to increase resilience, and should expand knowledge networks among such countries to foster innovation.
    Date: 2022–08
  26. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stephan, Andreas (Linnaeus University)
    Abstract: The Russian-Ukrainian war increases the stress on forests. International sanctions hit exports from Russia and Belarus, while the conflict severely affects production in Ukraine. The three countries accounted for a quarter of the worldwide timber trade in 2021, and Russia was the world’s largest exporter of softwood. The war increases the European Union’s (EU’s) dependency on its own forest resources. This brings forward the challenge to achieve a balance between forests as carbon sink, habitat for biodiversity conservation, and functional ecosystems on the one hand, and on the other hand, the growing demand for wood-based materials harvested from forests and rising demand for renewable energy. Our study provides insights into this trade-off with regard to the climate goals, where EU’s forest-based bioeconomy may play a major role.
    Keywords: Bioeconomy; biodiversity; climate-change; forest management; sustainability
    JEL: F18 H70 L73 Q54 Q57
    Date: 2022–08–22
  27. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: In this article we analyze the determinants and the export trend of European countries of medium and high technology products. The data were analyzed using various econometric models, namely WLS, Pooled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects. The results show that exports of medium and high-tech products are positively associated, among other variables, with the value of “Average Annual GDP Growth”, “Total Entrepreneurial Activity” and “Sales Impacts”, and negatively associated with, among other variables, “Human Resources”, “Government and Procurement of Advanced Technology Products” and “Buyer Sophistication”. A cluster analysis was realized with the k-Means algorithm optimized with the Silhouette coefficient. The result showed the presence of only two clusters. Since this result was considered poorly representative of the industrial complexity of the European Union countries, a further analysis was carried out with the Elbow method. The result showed the presence of 6 clusters with the dominance of Germany and the economies connected to the German economy. In addition, a network analysis was carried out using the distance to Manhattan. Four complex network structures and two simplified network structures were detected. A comparison was then made between 10 machine learning algorithms for predicting the value of exports of medium and high-tech products. The result shows that the best performing algorithm is the SGD. An analysis with Augmented Data-AD was implemented with a comparison between 10 machine learning algorithms for prediction and the result shows that the Linear Regression algorithm is the best predictor. The prediction with the Augmented Data-AD allows to reduce the MAE by about 0.0022131 compared to the prediction with the Original Data-OD.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation
    JEL: O30 O31 O32 O33 O34
    Date: 2022–08–16
  28. By: Sharon Traiberman; Martin Rotemberg
    Abstract: We develop a dynamic extension of Dornbusch et al. (1977) with “rustiness”: the home country has relatively higher unit costs tomorrow for goods it is not producing today. We solve for optimal tariff policy when there is a potential for a crisis: an increase in demand for goods produced abroad. Optimally, the home planner never protects goods where comparative advantage is sufficiently low, not even the goods directly affected by the crises. However, for marginally competitive goods, the optimal policy trades off comparative advantage and demand. The extent of industrial policy is non-monotonic in both the size of the demand shock and in its variance.
    JEL: F13 O25
    Date: 2022–07
  29. By: Keijzer, Niels; Friesen, Ina
    Abstract: Germany and the United Kingdom of Great Britain and Northern Ireland (UK) are the second- and fourth-largest providers of official development assistance (ODA) worldwide and are key actors in driving international policy discussions on global development in the Organisation for Economic Co-operation and Development (OECD), the G7, the G20 and other key groupings and platforms. The development policies of both countries witnessed important convergence and detailed cooperation during the first decade of this millennium - a period when Western countries understood development cooperation as a source of considerable soft power, which was demonstrated in rising budgets and like-minded policy directions. The austerity policies that followed the global economic and financial crisis, and the UK's decision to leave the European Union (EU) in 2016, have challenged the bilateral relationship in the development policy area between Germany and the UK. The UK's departure from the EU has reduced the number of joint interactions and corresponding opportunities for identifying cooperation initiatives. Halfway through the period envisaged for the completion of the 2030 Agenda, both countries are adjusting their development policies, seeking to determine their future European roles and global development ambitions, but they remain key partners in global development. Both the UK and Germany have recently revised or are in the process of preparing development policy strategies as part of their integrated foreign policies - a reflection process which in recent months has been challenged to adjust to the implications of the war in Ukraine. The case remains strong for regular exchanges and cooperation on development policy between both countries, including by intensifying dialogues and resuming formal secondments between the FCDO and the German Federal Ministry for Economic Cooperation and Development (BMZ). Two areas in particular offer good prospects. First of all, the UK and Germany should closely work together to deliver on the current G7 Presidency agenda - including the key focus on infrastructure investment, as initiated during last year's UK Presidency. Other key opportunities for cooperation include gender and climate action, as well as the provision of global public goods. Secondly, Germany and the UK should seek to engage in and harness the role of the OECD as a provider of key standards for international development policy and as an important forum for peer learning. As key providers of global development finance, the legitimacy of its reporting system is essential to both countries' influence and contribution to global development.
    Date: 2022
  30. By: Benjamin Mwadi Makengo (Central China Normal University [Wuhan, China], UNIKIN - University of Kinshasa); Joseph Mimbale Molanga; Jean-Marie Mbutamuntu (UNIKIN - University of Kinshasa); Patience Kamanda Londo; Théo-Macaire Kaminar Nsiy; Shi Xinzhi; Gracien Mwadi Kapita
    Abstract: This paper briefly deciphers the level of DRC's dependence on China. It considers it from the point of view of trade volume, the construction of economic and social infrastructures, the promotion of social mobility and the transfer of skills, and solidarity in the fight against COVID-19. Finally, this article proposes a reading grid which, from the outset, refutes any fixed opinion and any definitive point of viewby apprehending the concept of DRC's dependence on China from three (3) logical angles: a means of circumventing Western dependence (1); which consequently places DRC in a "complex dilemma" (2), and exposes it to illconsidered risks, especially in times of crisis (3). Hence the need for DRC to anticipate not only to avoid collisions between its main strategic partners, but above all to reduce its economic and even structural dependence on them [both "conservative" and "progressive"] by diversifying its economy and its partners.
    Keywords: DRC's Political Economy,China-DRC Relations,DRC's Dependence
    Date: 2022–05–09
  31. By: Bigerna, Simona; D'Errico, Maria Chiara; Polinori, Paolo; Simshauer, Paul
    Abstract: Over time, Gulf Cooperation Council (GCC) countries have accumulated large oil portfolio revenues. But the world economy is seeking to reduce greenhouse gas emissions and in turn, its reliance on fossil fuel resources through ongoing investments in renewable energy resources. In this article, we construct oil portfolios for four of the GCC countries (viz. Kuwait, Saudi Arabia, United Arab Emirates, Oman) and focus on their top five importing counterparties. Portfolio returns (quantity and price) have been derived between 2008-2018 with volatility spillovers computed via Diebold and Yilmaz’s dynamic spillover index approach. The spillover analysis shows a consistent reallocation effect amongst spillover directions together with their generalized increases. The structural rigidity of oil demand was confirmed with ‘quantity’ Total Volatility Spillovers being lower than ‘price’ Total Volatility Spillovers. Analysis of net contributors for both kinds of volatility found China to be a “net transferer” in quantity spillovers, and India seemingly absorbing quantity and price shocks. We find economic policy uncertainty and rising renewable market shares significantly affects volatility spillovers in oil export portfolios. Although some degree of heterogeneity exists, greater deployment of renewables in importing nations reduces adverse impacts of oil market fluctuations. This result and broader ‘net-zero’ policy commitments means rising renewable market shares are predictable. For GCC countries, two consequential long run risks arise, viz. loss of revenues and stranded oil reserves, which has its own policy implications.
    Keywords: Gulf Cooperation Council countries; oil exports; total volatility spillovers; renewables; volatility determinants, energy security
    JEL: C32 C58 G32 O53 Q41
    Date: 2022–08–11
  32. By: Jose Manuel Mansilla-Fernandez (Universidad Publica de Navarra); Juliette Milgram Baleix (Universidad de Granada, Departamento de Teoría e Historia Económica)
    Abstract: This paper investigates the effect of firms’ working capital management, measured by the cash conversion cycle (CCC) on exports, on both the intensive and extensive margins. By using Heckman’s two-stage model for the treatment of sample selection bias, we find that the longer the CCC, the lower firms’ likelihood of exporting and the lower the volume of their exports. This phenomenon is economically more relevant for financially constrained firms than for unconstrained firms. The results are robust to the propensity score matching, the transition sample and the placebo analyses. Finally, these results can be extrapolated in the context of the Covid-19 crisis because of the decline in trading conditions and firms’ shortage of liquidity.
    Keywords: Cash conversion cycle, Covid-19 crisis, exports, financial constraints, working capital management
    JEL: G01 G21 G32 H63
    Date: 2022–08–15
  33. By: Christopher Clayton; Amanda Dos Santos; Matteo Maggiori; Jesse Schreger
    Abstract: We empirically characterize how China is internationalizing the Renminbi by selectively opening up its domestic bond market to foreign investors and propose a dynamic reputation model to explain this internationalization strategy. The Chinese government deliberately controlled the entry of foreign investors into its market, first allowing in relatively stable long-term investors like central banks before allowing in flightier investors like mutual funds. Our framework explains these patterns as the result of a government strategy to build its reputation as an international currency issuer while attempting to reduce the cost of potential capital flight as it tries to gain credibility. The dynamics of reputation make Chinese debt a substitute for emerging market risky debt in the early stages of internationalization and more of a substitute for developed market safe debt in the later stages. We use our framework to explore how countries compete to become a reserve currency provider. Competition worsens the incentives to build up reputation by reducing the benefits of having a higher reputation. The framework is tractable and can make sense of both new entrants like China and established players like the United States.
    JEL: E0 F2 F3
    Date: 2022–08

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