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on International Trade |
| By: | Cali,Massimiliano; Ghose,Devaki; Montfaucon,Angella Faith Lapukeni; Ruta,Michele |
| Abstract: | How does trade policy affect exporters’ ability to respond to foreign demand shocks Facedwith a sudden change in the demand for their goods, exporting firms must optimally change their inputs and/orinput sources. This paper tests whether a country’s own trade policy makes such adjustments harder for firms thatrely on imported inputs. The analysis exploits new time-varying data on tariffs and non-tariff measures facedby Indonesian firms and focuses on the impact of exchange rate shocks on exports to Japan. In response to adepreciation of the yuan, which makes Chinese exports more competitive, the findings show that firms that facenon-tariff measures on their inputs see a much larger drop in their export values compared to firms that do not faceany non-tariff measures. That is not the case for import tariffs on inputs, which do not affect the export responseto the shock. This difference is consistent with the (partial) fixed costs imposed by non-tariff measures onimports in contrast to the pure variable costs of tariffs. The magnitude of this effect depends on the type ofnon-tariff measure and on firms’ characteristics, such as their participation in global value chains, size, andproduct quality. |
| Date: | 2022–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10068&r= |
| By: | Chimere O. Iheonu (University of Nigeria, Nsukka, Nigeria); Ekene ThankGod Emeka (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon); Princewill U. Okwoche (Benue State University, Makurdi, Nigeria) |
| Abstract: | This study complements existing literature by examining the short-run heterogeneous and long-run homogeneous impacts of foreign direct investment (FDI) and international trade on ecological footprints in 37 African countries for the period 1990 to 2019. Utilizing the pooled mean group estimator, our findings show considerable heterogeneity in the impact of FDI and international trade on ecological footprints in the short run. In particular, the findings revealed that while FDI increases ecological footprints in Botswana, Egypt, and Mauritania, it reduces ecological footprints in Algeria, Comoros, Gambia, and Togo. Furthermore, the findings revealed that international trade increases ecological footprints in Cameroon, Cote d'Ivoire, and Eswatini but reduces ecological footprints in Algeria, Mauritania, and Morocco. Nonetheless, the study finds that in the long run, FDI significantly reduces ecological footprints while international trade has no significant influence on the environment. The study further finds economic growth and population to be significant in propping up ecological footprints in the long run. Policy recommendations based on these findings are discussed. |
| Keywords: | Foreign Direct Investment, International Trade; Environmental Sustainability; Ecological Footprints; Pooled Mean Group |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/068&r= |
| By: | Felbermayr, Gabriel; Peterson, Sonja; Wanner, Joschka |
| Abstract: | While international trade can offer gains from specialization and access to a wider range of products, it is also closely interlinked with global environmental problems, above all, anthropogenic climate change. This survey provides a structured overview of the economic literature on the interaction between environmental outcomes, trade, environmental policy and trade policy. In this endeavor, it covers approaches reaching from descriptive data analysis based on Input-Output tables, over quantitative trade models and econometric studies to game-theoretic analyses. Addressed issues are in particular the emission content of trade and emissions along value chains, the relocation of dirty firms and environmental impacts abroad, impacts of specific trade polices (such as trade agreements or tariffs) or environmental policy (such as Border Carbon Adjustment), transportation emissions, as well as the role of firms. Across the different topics covered, the paper also tries to identify avenues for future research, with a particular focus on extending quantitative trade and environment models. |
| Keywords: | trade,trade policy,environment,climate,carbon emissions |
| JEL: | F13 F18 Q54 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2233&r= |
| By: | Rebecca Freeman; Kalina Manova; Thomas Prayer; Thomas Sampson |
| Abstract: | A dramatic fall in the value of UK imports from the European Union relative to the rest of the world occurred when the post-Brexit Trade and Cooperation Agreement came into effect. What's more, according to research by Rebecca Freeman, Kalina Manova, Thomas Prayer and Thomas Sampson, the stability in relativeexport values conceals the destruction of many smaller trading relationships. |
| Keywords: | brexit, eu, exports, trade policy, globalisation, imports, uncertainty, UK Economy |
| Date: | 2022–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:627&r= |
| By: | Gabriel Felbermayr (Austrian Institute of Economic Research); Sonja Peterson; Joschka Wanner |
| Abstract: | While international trade can offer gains from specialisation and access to a wider range of products, it is also closely interlinked with global environmental problems, above all, anthropogenic climate change. This survey provides a structured overview of the economic literature on the interaction between environmental outcomes, trade, environmental policy and trade policy. In this endeavour, it covers approaches reaching from descriptive data analysis based on Input-Output tables, over quantitative trade models and econometric studies to game-theoretic analyses. Addressed issues are in particular the emission content of trade and emissions along value chains, the relocation of dirty firms and environmental impacts abroad, impacts of specific trade polices (such as trade agreements or tariffs) or environmental policy (such as Border Carbon Adjustment), transportation emissions, as well as the role of firms. Across the different topics covered, the paper also tries to identify avenues for future research, with a particular focus on extending quantitative trade and environment models. |
| Date: | 2022–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2022:i:649&r= |
| By: | Pol Antràs; Evgenii Fadeev; Teresa C. Fort; Felix Tintelnot |
| Abstract: | Multinational firms (MNEs) accounted for 42 percent of US manufacturing employment, 87 percent of US imports, and 84 of US exports in 2007. Despite their disproportionate share of global trade, MNEs’ input sourcing and final-good production decisions are often studied separately. Using newly merged data on firms’ trade and FDI activity by country, we show that US MNEs are more likely to import not only from the countries in which they have affiliates, but also from other countries within their affiliates’ region. We rationalize these patterns in a unified framework in which firms jointly determine the countries in which to produce final goods, and the countries from which to source inputs. The model generates a new source of scale economies that arises because a firm incurs a country specific fixed cost that allows all its assembly plants to source inputs from that country. This shared fixed cost across plants creates interdependencies between firms’ assembly and sourcing locations, and leads to non-monotonic responses in third markets to bilateral trade cost changes. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-36&r= |
| By: | Kee,Hiau Looi; Nicita,Alessandro |
| Abstract: | Similar to tariffs, non-tariff measures may induce trade fraud when they are restrictive.This paper examines whether discrepancies observed in the official trade statistics of importing and exportingcountries are partly due to trade fraud from evading border non-tariff measures. To capture the restrictiveness ofnon-tariff measures, the paper estimates the ad valorem equivalent with importer-exporter-product variations. Itpresents a theoretical model and empirical evidence showing that discrepancies increase with ad valorem equivalents,consistent with the trade fraud due to traders intentionally mis-declaring countries of origin or misclassifying productsin order to evade border non-tariff measures. The results are driven by homogeneous products and the trade betweendeveloped and developing countries. |
| Date: | 2022–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10112&r= |
| By: | ITO Koji |
| Abstract: | Immediately after Russia launched its invasion of Ukraine on February 24, 2022, the G7, the EU, and others imposed economic sanctions, including trade measures, against Russia. This paper used the OECD "Inter Country Input-Output Table" (ICIO) to analyze the impact of the trade sanctions against Russia on the production activities of each country. If sanctions and countermeasures reduce trade between OECD member countries and Russia by 20%, Russian production will fall by 4.76%, mainly in the mining and petroleum and coal product manufacturing industries. This figure is close to the rate of decline in Russia's GDP during the chaotic period of the late 1990s, meaning that it will have a certain impact. However, based on the actual trade trends after the sanction, we analyzed the case where only OECD countries cut their exports to Russia. In this case, even if exports decreased by 20%, Russia's production value would only decrease by 0.02%. Based on the analysis in this paper, the trade sanctions seem to be largely ineffective in the current situation where Europe, Japan and other countries are accepting imports from Russia. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:22027&r= |
| By: | Köthke, Margret; Weimar, Holger |
| Abstract: | This working paper provides a detailed overview of the trade in wood-based or wood-containing products1 in the EU27 in 2020 and distinguishes products already under the scope of the EUTR and the proposed regulation of the European Commission on deforestation-free value chains, from products not in the scope of those two regulations. The study considers overall 769 products (according to the 8-digit product codes of the Combined Nomenclature) from the entire list of goods for international trade statistics, provided that some wood content can be assumed. Of these products, 348 are already in the scope of the EUTR. The remaining 421 products are considered, to assess their relevance in EU27 wood-based products trade. Therefore, trade values and quantities for each product are taken from EUROSTAT foreign trade data bases. To compare the wood content related to each product, trade quantities were converted into trade volumes of cubic meters of roundwood equivalents (RWE m³). The roundwood equivalent indicates how much raw wood is required to produce the respective wood-based product. Converting the trade volumes into this physical reference value also enables a raw material-related comparison of the traded products. The working paper presents three different trade flows, which all fall within the scope of the proposed new regulation for deforestation-free products: a) Imports of wood-based products from third countries into the EU27, b) exports to third countries from the EU27, and c) intra trade within the EU27 internal market (between EU Member States). Further, detailed information on data compilation, data gaps and uncertainties and conversion factors applied are given within this working paper. |
| Keywords: | Agricultural Finance, Production Economics |
| Date: | 2022–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:jhimwp:327293&r= |
| By: | Jan David Bakker; Nikhil Datta; Josh De Lyon; Luisa Opitz; Dilan Yang |
| Abstract: | Some products imported to the UK from the European Union have been more affected by the post-Brexit trading rules than others. Jan David Bakker, Nikhil Datta, Josh De Lyon, Luisa Opitz and Dilan Yang find that leaving the single market and customs union has led to a 6% rise in food prices in the UK. |
| Keywords: | UK Economy, Brexit, supply chains, trade, prices, imports, uk, eu |
| Date: | 2022–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:628&r= |
| By: | Roberto Bonfatti; Kerem Cosar |
| 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. |
| Keywords: | International trade, empires, comparative advantage, optimal country size.File-URL: https://www.nottingham.ac.uk/gep/documents/papers/2022/2022-09.pdf |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2022-09&r= |
| By: | Alen Mulabdic (World Bank Group); Lorenzo Rotunno (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper estimates trade barriers in government procurement, a market that accounts for 12 percent of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has decreased over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions on transparency and procedural requirements are particularly instrumental in increasing cross-border government procurement. |
| Keywords: | Government procurement,Trade agreements,Gravity equation |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03777993&r= |
| By: | Nesma Ali; Joel Stiebale |
| Abstract: | This paper uses a rich panel data set of Indian manufacturers to analyze the effects of foreign direct investment (FDI) on domestic firms. Detailed product-level information on prices and quantities allows us to estimate physical productivity and marginal costs. In line with the previous literature, we find little evidence for horizontal spillovers based on commonly used measures of revenue productivity. In contrast, we measure sizable efficiency gains using measures that are not affected by pricing heterogeneity. Our results indicate that domestic firms can benefit from the ability of multinational subsidiaries to produce high-quality products at relatively low costs. |
| Keywords: | Foreign Direct Investment, Spillovers, Productivity, Marginal Costs, Prices, Markups, Multi-Product Firms |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2022-10&r= |
| By: | Lynda Sanderson; Garrick Wright-McNaughton; Naomitsu Yashiro |
| Abstract: | This paper explores the relationship between adoption of ultra-fast broadband (UFB) and the export propensity of New Zealand firms. Previous literature have shown that the Internet facilitates exports by reducing search costs and informational frictions in establishing trade relationships. However, the role of faster Internet that enables the use of more recent, advanced, data-intensive digital technologies has not been well explored. This paper shows empirically that adoption of fibre broadband is associated with a higher propensity to enter exporting by New Zealand firms, suggesting that faster Internet has an additional role over traditional Internet in facilitating exporting. The paper also shows that firms that were already using the Internet more intensively prior to adopting fibre experience a stronger increase in export propensity following fibre adoption than those with less intensive Internet use, and that the positive relationship between fibre uptake and exporting is primarily observed among services firms. Instrumental variable analysis to assess the causal relationship between fibre uptake and exporting suggests that the higher export entry among fibre users is driven by self-selection of firms with higher export propensity into fibre uptake. |
| Keywords: | Digital capabilities, Export, High-speed Internet |
| JEL: | F14 O33 H54 |
| Date: | 2022–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1730-en&r= |
| By: | Ambec, Stefan |
| Abstract: | This report uses an economic lens to analyze the Carbon Border Adjustment Mechanism (CBAM) which is currently under discussion at the European Union (EU). The CBAM, which is set to replace free allowances for specific ETS sectors after a transition period, aims to address carbon leakage and preserve the competitiveness of industries participating in the EU ETS. Although the two policy instruments share the same goals, their economic impacts differ. On the one hand, free allowances level the playing field both within the EU and on international markets by reducing the cost of the EU ETS for firms. European firms have an incentive to reduce their carbon emissions even if they obtain a certain part of their allowances for free. On the other hand, the CBAM levels the playing field only within the EU unless it is complemented with export rebates (such as benchmark-free allowances on exported production). However, the CBAM incentivizes not only European firms but also foreign firms to reduce their carbon emissions when exporting to the EU. Furthermore, unlike free allowances, the CBAM is more consistent with the polluter-pays principle. The CBAM calls for product-based pricing of embedded carbon emissions equivalent to the manufacturing plant-based pricing of the EU ETS. The shift of the pricing base requires choices to be made on the economic sectors to target, the scope of emissions, the adjustments to be made for firmspecific carbon intensity and to country-specific carbon pricing. The pros and cons of those choices are discussed. The CBAM will generate substantial revenues which can be used to foster and smooth out decarbonization. The CBAM differs substantially from the Climate Club that has been proposed by the Nobel Prize winner, William Nordhaus, for extending carbon pricing worldwide. Yet, by allowing importers to pay only the carbon price difference between the CBAM jurisdiction and the manufacturing country, the CBAM also incentivizes countries to implement their own carbon price. |
| Date: | 2022–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127382&r= |
| By: | Richard Baldwin; Rebecca Freeman; Angelos Theodorakopoulos |
| Abstract: | Perceptions of global supply chains (GSCs) have shifted in recent years from a positive to a more cautious view. Standard GSC measures have mostly not adapted to this change as they focus on participation in, rather than exposure to, foreign supply chains. This paper presents the tools necessary to track foreign GSC exposure, and introduces a systematic shocks approach to GSC indicator design. We use this to develop indicators that gauge the impact of a variety of foreign shocks. We argue that different indicators are appropriate to different questions and show that they can provide qualitatively different answers to the same foreign exposure question. |
| JEL: | D57 F13 F14 F15 F60 R15 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30525&r= |
| By: | Djolaud, Guy |
| Abstract: | How are local firms affected by the entry of products that are of low quality and relatively cheaper? China’s exports rose vigorously in the last three decades making it one of the most important trading partners in the world. Most studies argue that China exports low quality varieties of goods produced locally in advanced economies, so that these exports are for most accessible at lower prices. This paper provides theoretical and empirical investigation on the differential impact of the import penetration of low quality products on the market power of local firms with different level of quality. In our theoretical framework, the market hit by international competition is segmented in two groups of firms, those of Low quality and those of High quality. The model also features differential demand elasticity for firms of different size through CREMR preferences. Our theoretical implications suggest that the impact on markup resulting from the import penetration of low quality goods is stronger and negative on local firms producing low quality. This prediction is substantiated by the empirical test we conduct on US Compustat data through a diff-in diff estimation with China accession to WTO as break point. Additional empirical investigation suggests that as they face the competition led by products of low quality, local firms of low quality invest more in innovation to upgrade their level of quality, with convergence to a target. As of local firms of high quality, our results indicate that they invest more in advertising to further signal their relative superiority, with no specific pattern in the way they update their quality input. Overall, our findings suggest that the entry of China in WTO has intensified the competition vertically with firms investing either on advertising or in R&D for signalling or differentiation purposes. |
| Keywords: | Import Penetration, Firm Quality Status, Markups, Vertical Competition. |
| JEL: | F14 F61 L25 |
| Date: | 2022–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114611&r= |
| By: | Arndt, Channing; Diao, Xinshen; Dorosh, Paul A.; Pauw, Karl; Thurlow, James |
| Abstract: | Global food, fuel, and fertilizer prices have risen rapidly in recent months, driven in large part by the fallout from the ongoing war in Ukraine and the sanctions imposed on Russia. Other factors, such as export bans, have also contributed to rising prices. Palm oil and wheat prices increased by 56 and 100 percent in real terms, respectively, between June 2021 and April 2022, with most of the increase occurring since February (Figure 1). Wide variation exists across products, with real maize prices increasing by only 11 percent and rice prices declining by 13 percent. The price of crude oil and natural gas has also risen substantially, while the weighted average price of fertilizer has doubled. With these changes in global prices, many developing countries and their development partners are concerned about the implications for economic stability, food security, and poverty. |
| Keywords: | PHILIPPINES, SOUTH EAST ASIA, ASIA, Ukraine, poverty, food security, armed conflicts, crises, prices, shock, agrifood systems, equality, diet, commodities, fertilizers |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:gccbrf:20&r= |
| By: | Hintermann, Beat (University of Basel); Ludwig, Markus (University of Basel) |
| Abstract: | We examine the pattern of allowance trades in the European Union Emissions Trading System (EU ETS) using highly disaggregated trading data and identify a significant and robust home market bias. Our results point to informational transactions costs that increase when trading across national borders. The existing trade pattern in goods and services explains two thirds of the home bias, with the remainder due to other causes. Our finding suggests that firms make use of existing trade networks to overcome search costs in bilateral allowance trade. Since the home bias differs across firms, it follows that marginal abatement costs are not equalized across market participants of the EU ETS. |
| Keywords: | Emission permit market, EU ETS, transactions costs, gravity model, home bias |
| JEL: | F14 F18 Q52 Q54 Q58 |
| Date: | 2022–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2022/07&r= |
| By: | Sam Z. Njinyah (Manchester Metropolitan University, UK); Sally Jones (Manchester Metropolitan University, UK); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | The performance of small and medium size enterprises (SMEs) is an important determinant of economic development, especially in developing countries like Cameroon. However, due to financial constraints, SMEs in Cameroon do face significant challenges to exporting, which affect their export performance. Many SMEs develop relationships with financial institutions to benefit from loans to overcome export barriers. However, there is no evidence as to whether such benefits help them overcome the limitations of their financial constraints to improve their export performance. Using data from the World Bank Enterprise Survey 2016 in Cameroon, we examine the moderation effect of loans as a benefit of networks on the relationship between financial constraints and export performance for SMEs in Cameroon using regression analysis. Our results show that financial constraints negatively affect export performance. The moderation effect was significant but negative which means the benefit of network (loans) was not enough to offset the negative effect of financial constraints on export performance. Studies on export barriers and export performance for SMEs in Cameroon are scarce and our research provides some policy and managerial implications to help SME exporting in Cameroon. |
| Keywords: | Export barriers, Lack of finance, Network, Export performance, and Cameroon |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/073&r= |
| By: | Stjepan Srhoj; Alex Coad; Janette Walde |
| Abstract: | Export boosting is a policy agenda in developed and developing countries. Previous work has found that a small number of Superstars contribute disproportionally to the economy’s overall exports. Differently from Superstars, this study is the first to define high growth exporters (HGXs), provide their economic importance and depict their micro-level anatomy. By tracking HGXs in Croatia for over a quarter of a century, 44 out of 100 Superstars in 2019 were previously HGXs. Industry-wise, HGXs are concentrated in manufacturing, information and communication technology, transportation and storage sectors. HGXs are located in higher export active regions, neighboring advanced markets. HGXs represent only 0.5% of all firms and 18% of high growth firms (HGFs) in the economy, but are responsible for about 25% of new exports, and 5% of new jobs. During their growth episode, HGXs hire more employees from technology intensive industries with previous experience in exporting. They often hire on a single year work contract, and more frequently send new employees to work abroad. HGXs have the highest number of new products, and the concentration of HGXs’ main export products decreases over time, thus, the growth is driven by multiple products and the simultaneous increase in the number of new export markets. HGXs export to closer markets than Superstars, but to more distant markets than other HGFs and exporters who tend to be more active in less developed markets. HGXs tend to increase their presence in the EU Single Market, introduce new products and substantially increase their unit price. |
| Keywords: | exporting, firms, high growth firms, high growth exporters |
| JEL: | F2 D22 L1 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2022-15&r= |
| By: | Beckman, Jayson; Ivanic, Maros; Jelliffe, Jeremy L; Baquedano, Felix G; Scott, Sara G |
| Abstract: | The European Commission has proposed strategies that would impose restrictions on EU agriculture through targeted reductions in the use of land, antimicrobials, fertilizers, and pesticides. We perform a range of policy simulations to examine the economic implications of several of the proposed targets, finding reduction in global agriculture production, higher prices, less trade, and more global food insecurity. |
| Keywords: | Food Security and Poverty, International Development |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uerseb:327231&r= |
| By: | Daniel Cassidy (University of Galway); Nick Hanley (University of Glasgow) |
| Abstract: | The Act of Union (1707) unified England and Scotland politically and economically, formally establishing the United Kingdom of Great Britain, and a customs union throughout the island of Britain. In this paper, we examine the impact of union on British market integration using wheat prices from a sample of English and Scottish markets. We estimate a coefficient of variation and a dynamic factor model to examine the evolution of price convergence and market efficiency across English and Scottish markets from the 1640s to the mid-eighteenth century. Our results suggest that union strongly influenced price convergence but had little impact on market efficiency. There was an immediate sharp increase in the level of price convergence across British markets following the union, suggesting that the elimination of tariffs and other trade frictions was a strong driver of price convergence. To formally test the impact of union on price convergence, we estimate border effects which show the impact of the pre-union border on price gaps between English and Scottish markets. The results suggest that the customs union strongly influenced price convergence, lowering the average price gap by 16%, and implying a pre-union border width of 160-162km. |
| Keywords: | Customs Union, Market Integration, Prices |
| JEL: | F15 N13 P45 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0228&r= |
| By: | Mariam Camarero (University Jaume I); Sergi Moliner (University Jaume I); Cecilio Tamarit (University of Valencia) |
| Abstract: | This paper analyzes the long-run determinants of US outward FDI stock, focusing mainly on the Euro Area (EA) for the period 1985-2019. We consider a sample of 54 developed and emerging host countries representing over 70% of the total US outward FDI stock. We aim to capture different determinants by country groups zooming in on the European Union (EU). We implement a Dynamic Common Correlated Effects Pooled Mean Group (DCCEPMG) estimator for this aim. Our econometric approach is especially suited for analyzing integrated economic areas as it allows us to deal with cross-section dependence (CSD), non-stationarity, structural breaks, and slope homogeneity usually present in large panel data. Our main results suggest that horizontal (HFDI) and vertical (VFDI) strategies coexist for all country groups. However, as we move towards more homogeneous groups, the results show greater importance of VFDI. Additionally, we find that some variables have a common long-run effect on USOFDI, especially for smaller and more homogeneous groups. |
| Keywords: | BMA, DCCEPMG, long-run, structural breaks, economic integration |
| JEL: | F |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2022.08&r= |
| By: | Bernard Caillaud (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); Ariane Lambert-Mogiliansky (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) |
| Abstract: | In this paper we investigate the Investor-State Dispute Resolution Settlement (ISDS) framework, which governs dispute resolution between foreign investors and host states in many bilateral and multilateral trade agreements. We show that ISDS delivers fair justice in a one-shot setting. In a repeated-interaction setting however, it is prone to collusion to the benefit of all parties except the host states. Three factors are determinant: First, the investors are the sole parties able to file cases; Second, arbitrators' earning prospects depend on the investors' filing cases; And finally, treaties leave substantial discretion to arbitration courts in their interpretation of treaties' provisions. We give conditions for pro-business collusion between investors and arbitrators to develop and we show how it makes it profitable for foreign investors to file high-stake claims against states in response to new environmental, social or health regulations. Further, we address regulatory chill and show how the fear of ISDS attacks can hold back welfare improving regulation in the host country. Finally, we extend the model to show how regulatory chill affect policy-making in other countries in which the investor operates with similar activities. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03763380&r= |
| By: | Mandeep Singh Rai |
| Abstract: | The subject of international institutions and power politics continues to occupy a central position in the field of International Relations and to the world politics. It revolves around key questions on how rising states, regional powers and small states leverage international institutions for achieving social, political, economic gains for themselves. Taking into account one of the rising powers China and the role of international institutions in the contemporary international politics, this paper aims to demonstrate, how in pursuit of power politics, various states (Small, Regional and Great powers) utilise international institutions by making them adapt to the new power realities critical to world politics. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.10498&r= |
| By: | Ahn,Jaebin; Choi,Jaerim; Chung,Sunghoon |
| Abstract: | An unprecedented regime change following the 2017 presidential impeachment led to adramatic shift to more rigid labor market policies in the Republic of Korea, represented by consecutive double-digithikes in the minimum wage in the next two years. Using a firm-level data set with detailed information about foreignaffiliates for 2013~19, this paper assesses the employment consequences of stricter labor market regulations. Theempirical evidence uncovers a relatively unexplored mechanism through which domestic labor market rigidity canpotentially reduce domestic employment as multinational firms with flexible internal networks reallocate tasksacross borders. |
| Date: | 2022–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:10114&r= |
| By: | Georg Zachmann; Guntram B. Wolff; Agata Łoskot-Strachota; Simone Tagliapietra; Axel Ockenfels; Ricardo Hausmann; Ulrich Schetter |
| Abstract: | The most efficient way for Europe to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexib |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:48117&r= |