|
on International Trade |
| By: | Fernandes,Ana Margarida; Lefebvre,Kevin Jean-Rene; Rocha,Nadia |
| Abstract: | This paper estimates the impacts of regulating the use of sanitary and phytosanitary and technical barriers to trade measures through preferential trade agreements on exports of firms in Chile, Colombia, and Peru along the firm size spec trum. The analysis exploits novel data from the World Bank Deep Trade Agreements database and customs covering the universe of exporting firms in each country over 1996–2015. The paper uses a firm-product gravity equation with a stringent set of fixed effects and controls for the overall depth of the preferential trade agreements and product-specific bilateral tariffs. The findings show that firms’ exports increase significantly in destination markets with preferential trade agreements, including a larger number of sanitary and phytosanitary and technical barriers to trade provisions, and the effect is stronger for smaller firms. Provisions for the harmonization of sanitary and phytosanitary regulations in preferential trade agreements also have greater benefits for the exports of smaller firms, and so do preferential trade agreements, including stronger transparency provisions for sanitary and phytosanitary and technical barriers to trade regulations. The results are robust to dropping larger exporters and highly concentrated export sectors to address endogeneity. The benefits of sanitary and phytosanitary and technical barriers to trade provisions are mainly driven by sectors with more heavily-regulated products. Entry into new product markets and increases in export quality partly explain the rising exports of smaller firms. Finally, the estimated impacts are similar regardless of the income level of the preferential trade agreement partners. |
| Keywords: | International Trade and Trade Rules,Legal Reform,Regulatory Regimes,Legal Products,Judicial System Reform,Standards and Technical Regulations,Social Policy,Trade Law,Trade and Standards,Legislation,Foreign Trade Promotion and Regulation,Trade Technology and Productivity,Health and Sanitation,Trade Policy |
| Date: | 2021–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9700&r= |
| By: | Lee,Woori; Rocha Gaffurri,Nadia Patrizia; Ruta,Michele |
| Abstract: | Trade facilitation measures that simplify, modernize, and harmonize export and import processes are particularly important in a world of global value chains where goods cross borders multiple times. At the firm level, trade facilitation commitments in preferential trade agreements can generate larger gains for firms participating in global value chains, as these firms can benefit both from efficiency enhancement at their own border (when importing inputs) and at the partner countries’ borders (when exporting). This paper uses Peruvian customs data to investigate the heterogeneous impact of trade facilitation provisions across firms, depending on their global value chain linkages. The results show that trade facilitation provisions in preferential trade agreements promote the export performance of global value chain firms, especially when they import inputs from the preferential trade agreement partner country. In the case of Peru, the main benefit of trade facilitation provisions results from efficiency enhancements at its own border, allowing global value chain firms to import inputs in a more timely and predictable manner. |
| Keywords: | International Trade and Trade Rules,Trade Facilitation,Trade Policy,ICT Applications,Industrial and Consumer Services and Products |
| Date: | 2021–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9674&r= |
| By: | Cali,Massimiliano; Montfaucon,Angella Faith Lapukeni |
| Abstract: | The empirical evidence on the impact of import competition on economic performance relies mainlyon import tariff liberalization as the source of changes to competition. This paper extends this evidence by focusing onnon-tariff measures, an increasingly important trade policy tool globally. The analysis examines the competition effectof four specific non-tariff measures on the exporting activity of the universe of Indonesian firms. The focus ison measures that do not clearly address any negative externalities of imports—the supposed objective ofnon-tariff measures—and hence appear to be protectionist in nature. The results suggest that by restricting importcompetition, these measures reduce the survival of firms in export markets as well as the intensive and extensivemargins of their exports. Non-tariff measures have a more negative effect than import tariffs in most cases and theseresults are robust to various checks. The analysis provides suggestive evidence that markups are an important channelthrough which these effects are mediated. |
| Keywords: | International Trade and Trade Rules,Business Cycles and Stabilization Policies,Construction Industry,Plastics & Rubber Industry,Pulp & Paper Industry,Textiles, Apparel & Leather Industry,General Manufacturing,Food & Beverage Industry,Common Carriers Industry,Trade and Multilateral Issues,Trade Policy,Rules of Origin |
| Date: | 2021–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9801&r= |
| By: | Fajgelbaum,Pablo David; Goldberg,Pinelopi Koujianou; Kennedy,Patrick; Khandelwal,Amit Kumar; Taglioni,Daria |
| Abstract: | This paper studies global trade responses to the US-China trade war. It estimates the tariffimpacts on product-level exports to the US, China, and rest of world. On average, countries decreased exports to Chinaand increased exports to the US and rest of world. Most countries export products that complement the US andsubstitute China, and a subset operate along downward-sloping supplies. Heterogeneity in responses,rather than specialization, drives export variation across countries. Surprisingly, global trade increased in theproducts targeted by tariffs. Thus, despite ending the trend towards tariff reductions, the trade war did not halt globaltrade growth. |
| Keywords: | International Trade and Trade Rules,Armed Conflict,Transport Services,Food Security,Energy and Mining |
| Date: | 2022–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9894&r= |
| By: | Alessandria,George; Khan,Shafaat Yar; Khederlarian,Armen; Ruhl,KimJ.; Steinberg,Joseph B. |
| Abstract: | This paper studies the growth of Chinese imports into the United States from autarky during 1950–1970 to about 15 percent of overall imports in 2008, taking advantage of the rich heterogeneity in trade policy and trade growth across products during this period. Central to the analysis is an accounting for the dynamics of trade, trade policy, and trade-policy expectations. The analysis isolates the lagged effects of past reforms and the current effects of uncertainty about future reforms. It builds a multi-industry, heterogeneous-firm model with a dynamic export participation decision to estimate a path of trade-policy expectations. The findings show that being granted Normal Trade Relations (NTR) status in 1980 was largely a surprise and that, in the early stages, this reform had a high probability of being reversed. The likelihood of reversal dropped considerably during the mid-1980s, and, despite China’s accession to the World Trade Organization (WTO) in 2001, changed little throughout the late 1990s and early 2000s. Thus, although uncertainty depressed trade substantially following the 1980 liberalization, much of the trade growth that followed China’s WTO accession was a delayed response to previous reforms rather than a response to declining uncertainty. |
| Keywords: | International Trade and Trade Rules,Rules of Origin,Trade Policy,Trade and Multilateral Issues,World Trade Organization,Trade and Services |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9741&r= |
| By: | Robertson, Raymond (Texas A&M University); Vergara Bahena, Mexico Alberto (World Bank); Lopez-Acevedo, Gladys (World Bank) |
| Abstract: | Egypt's industries heavily rely on imported goods for production. Thus, an increase in imports could have a potentially positive effect on the labor market as it means more inputs for the production of exporting goods. Alternatively, minimal backward linkages in global value chains (GVCs) could also mean that increasing imports substitute for domestic production and thus, lost employment opportunities. This paper evaluates the relationship between regional trade agreements using a gravity model and import flows to test whether rising imports impacted wages, informality, and female labor force participation using the Bartik (1991) approach. Our results suggest that imports are not to blame for disappointing labor market outcomes in Egypt. |
| Keywords: | imports, trade, labor market, informality, econometrics, bartik, Egypt |
| JEL: | F1 C1 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15626&r= |
| By: | Laget,Edith; Roch,Nadia; Varela,Gonzalo J. |
| Abstract: | Preferential trade agreements are growing in number and deepening in content by incorporatingdisciplines that go beyond market access. They increasingly encompass non-trade-related disciplines as diverse asintellectual property rights, environment laws, or labor market regulations. Moreover, because investment iscomplementary to trade, preferential trade agreements provide relevant institutional frameworks to partnercountries that wish to regulate their foreign investments. This paper studies the impact of deep trade agreements onforeign direct investment and examines three sub-questions. First, is the impact of trade agreements on foreign directinvestment heterogeneous across types of business activity Second, is this impact heterogeneous across disciplinescovered in the agreements Third, does the level of development of home and host countries matter for thisimpact The analysis exploits the World Bank’s data set on the content of preferential trade agreement and data onannouncements of bilateral greenfield investment at the activity level. The findings show that deep trade agreementsmatter for investment: every additional discipline in a preferential trade agreement increases foreign directinvestment by 1.4 percent, on average. Deep agreements do not impact foreign direct investment in natural resourcesand extractive activities and have heterogeneous effectsacross manufacturing- and services-related activities. The results also reveal that disciplines that go beyond themandate the World Trade Organization matter more for foreign direct investment. Disciplines related to investmentliberalization and protection, intellectual property rights, or migration increase foreign direct investment, whereasdisciplines on labor market regulations reduce investment. The results are mostly driven by investment betweendeveloped and developing countries. |
| Keywords: | International Trade and Trade Rules,Food & Beverage Industry,Business Cycles and Stabilization Policies,Common Carriers Industry,Construction Industry,General Manufacturing,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,Plastics & Rubber Industry,Labor Markets,Rural Labor Markets,Labor Management and Relations |
| Date: | 2021–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9829&r= |
| By: | Neri,Matteo,Orefice,Gianluca,Ruta,Michele |
| Abstract: | This paper assesses the trade impact of regional trade agreements signed by Georgia. Using information from the World Bank’s Deep Trade Agreements database and the Exporters’ Dynamics Database for Georgia for 2000–20, the paper tests the effect of regional trade agreements on the performance of Georgian exporters. The results show that the depth of regional trade agreements has a positive effect on the exports of firms, and the more so if trade agreements include legally enforceable provisions. Interestingly, the effect of regional trade agreements is not homogeneous across exporters with different characteristics. While large exporters and firms participating in global value chains benefit from deep trade agreements, small firms are negatively affected. Deep trade agreements have a positive effect on the probability of entry into the export market for large firms and firms in global value chains. |
| Keywords: | International Trade and Trade Rules,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Plastics&Rubber Industry,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Industrial and Consumer Services and Products,Transport and Trade Logistics,Competitiveness and Competition Policy,Competition Policy |
| Date: | 2021–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9768&r= |
| By: | Berg, Claudia N. (World Bank); Robertson, Raymond (Texas A&M University); Lopez-Acevedo, Gladys (World Bank) |
| Abstract: | Unlike many countries, Egypt did not experience significant labor market improvements following trade liberalization. In this paper, we build upon the earlier work of Robertson et al. (2021) to investigate why increased Egyptian exports did not directly increase employment. To illustrate the relationship between firm-level exporting and employment, we present a simplified general equilibrium model inspired by Melitz (2003) with two sectors: one able to export and one "reserve" sector. This paper tests the implications of this theory using firm-level data from the World Bank's Enterprise Surveys (ES) in 2013, 2016, and 2020. Our firm-level microanalysis demonstrates that while there is a positive employment response to export expansion, this is not occurring at a large enough scale to be felt at the macro level. To seize the benefits of trade, Egypt requires deeper business environment reforms to incentivize large export, labor-intensive sector growth and integrate its economy into global value chains. |
| Keywords: | exports, trade, employment, labor market, econometrics, Egypt |
| JEL: | F1 C1 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15627&r= |
| By: | Arenas,Guillermo Carlos; Majune,Socrates Kraido; Montfaucon,Angella Faith Lapukeni |
| Abstract: | The Philippines was among the most infected countries in East Asia at the onset of the COVID-19outbreak. This study analyzes how international trade on various margins was affected by the country’s own lockdownpolicies and those of trading partners. Using a monthly series of product-by-country data for the period fromJanuary 2019 to December 2020 and an event study design, the paper shows that domestic lockdown measures did not affectinternational trade but external lockdowns affected both ex- ports and imports. The introduction of lockdown measures bytrading partners affected imports more than exports, leading to 7 and 56 percent monthly average drops in export andimport values, respectively. Restrictions on internal movements and international travel controls in partnercountries were responsible for the drop in exports. The slump in imports was because of workplace closure,stay-at-home requirements, restrictions on internal movement, and international travel controls by tradingpartners of the Philip- pines. Intermediate goods were the key driver of the drop in imports following foreignlockdowns, reflecting supply disruptions in backward global value chain participation. At the same time, exports ofintermediate goods were more resilient to the lockdown policies. Finally, both exports and imports were moreaffected at the extensive margin than the intensive margin, as lockdown measures hindered interactions among people, inturn reducing the potential of businesses to create new relationships and launch new products in foreign markets.Overall, diversified and geographically dispersed suppliers can help countries adjust better to future disruptions. |
| Keywords: | International Trade and Trade Rules,Transport Services,Trade and Services,Construction Industry |
| Date: | 2022–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9911&r= |
| By: | Andres, Pia |
| Abstract: | Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2012, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 4,632 firms in 14 EU countries over the period 1999- 2018. I show that firms which were exposed to higher import competition innovated more. Further, I find that during the years following the trade war, firms with a higher existing stock of innovation became less innovative. The results imply that competition from China constituted a positive push for more innovation among European solar innovators, calling into question the rationale behind the trade war. |
| Keywords: | China; EU; green inovation; international trade; renewable energy; solar PV |
| JEL: | L81 |
| Date: | 2022–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:116943&r= |
| By: | Borin, Alessandro; Conteduca, Francesco Paolo; Mancini, Michele |
| Abstract: | In response to the invasion of Ukraine, the EU and most other advanced economies imposed extensive sanctions on Russia, intending to harm its production capabilities and hinder its economic activities by restricting its access to international trade and financial markets. Using the synthetic control method, this paper finds that the war and following sanctions reduced aggregate exports to Russia by half between March-July, with the effects being stronger for sanctioning countries (-56%) than for non-sanctioning ones (-32%). The war has disproportionately affected exports to Russia in automotive and electronics. |
| Keywords: | Synthetic Control,Russia,Sanctions,International trade,War |
| JEL: | F51 C54 F13 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:265325&r= |
| By: | Julia, Brynn Jonsson R. |
| Abstract: | This study assesses the diversity and inclusivity of Philippine export activities to the European Union (EU) amid the country’s status as a beneficiary of the Generalised Scheme of Preferences Plus (GSP+), a trade agreement that removes EU tariffs in exchange for the compliance of developing countries with international conventions. It used official statistics, documents, open-ended questionnaires, and email correspondence with key informants from the government to analyze the economic incentives that the country gains from the GSP+. It suggests that while some sectors benefited from the GSP+, the scheme’s impacts on Philippine exports to the EU are limited. |
| Keywords: | Trade;Philippine exports;GSP+;European Union |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pidspjd2022-2b&r= |
| By: | Maskus,Keith E.; Ridley,William Clifton |
| Abstract: | This paper uses the World Bank database on deep trade agreements to demonstrate the rapid increase in preferential trade agreements with standards of intellectual property protection that are enforceable and elevated beyond the minimums required in the World Trade Organization Trade-Related Aspects of Intellectual Property Rights Agreement. These accords are referred to as intellectual property–related preferential trade agreements. The paper sets out a treatment-control econometric approach, in which treated agreements are defined by various characteristics and the control group is other preferential trade agreements. This approach is used to study whether membership in intellectual property–related preferential trade agreements affects a country’s trade with nonmember countries. For this purpose, the paper defines a set of industries that intensively use intellectual property rights (the high-intellectual property group) and a set of industries that do not (the low-intellectual property group). There is evidence that countries in these agreements with the United States, the European Union, or the European Free Trade Association experience significant increases in third-country aggregated exports of biopharmaceuticals at all levels of income, while exports of low-intellectual property goods are relatively diminished, compared with the control preferential trade agreements. This result is reinforced using detailed bilateral sectoral trade and holds also for exports of medical devices from higher-income economies. Because these industries are the target of many elevated standards in intellectual property–related preferential trade agreements, the result suggests that these policies affect trade volumes. Further exploratory analysis suggests that these impacts are associated with higher local sales of affiliates of multinational firms, using US data. These are viewed as preliminary findings that point to the need for further analysis. |
| Keywords: | International Trade and Trade Rules,Information Technology,Intellectual Property Rights,Legal Products,Common Property Resource Development,Social Policy,Regulatory Regimes,Legal Reform,Real&Intellectual Property Law,Legislation,Judicial System Reform,Information Security&Privacy,Pharmaceuticals Industry,Pharmaceuticals&Pharmacoeconomics |
| Date: | 2021–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9659&r= |
| By: | Robertson,Raymond; Vergara Bahena,Mexico Alberto; Kokas,Deeksha; Lopez-Acevedo,Gladys C. |
| Abstract: | Since the early 1990s, some developing countries have experienced a coincidence of rising exports—especially those related to global value chains—and improved labor market outcomes. During 2000–10, rising trade was associated with falling poverty and inequality in many developing countries. However, the Arab Republic of Egypt was not one of these countries, although it signed several trade agreements. The lack of trade-related improvements in labor market outcomes—including poverty, inequality, average wage levels, informality, and female labor force participation—could be explained by at least two possibilities. First, it is possible that trade agreements did not produce the same increase in trade for Egypt as for other countries. Second, it is possible that exports do not generate the same kinds of changes in labor market outcomes as experienced in other countries. After presenting the trends in key labor market outcomes over 2000–19, this paper evaluates both hypotheses. Using a gravity model approach, the results suggest that the changes in Egypt’s exports following trade agreements are above internationally estimated averages. Second, the results from a Bartik approach find no significant relationship between rising exports and wages, informality, or female labor force participation. Additional analysis shows that Egypt’s average wage levels are among the highest among countries that export the same goods exported by Egypt, possibly suggesting that Egypt has a relatively weak comparative advantage in currently exported goods, and thus might need to rethink its export basket. |
| Date: | 2021–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9668&r= |
| By: | Freund,Caroline; Mattoo,Aaditya; Mulabdic,Alen; Ruta,Michele |
| Abstract: | To understand the longer term consequences of natural disasters for global value chains, this paper examines trade in the automobile and electronic sectors after the 2011 earthquake in Japan. Contrary to widespread expectations, the analysis shows that the shock did not lead to reshoring, nearshoring, or diversification; and trade in intermediate products was disrupted less than trade in final goods. Imports did shift to new suppliers, especially where dependence on Japan was greater. But production relocated to developing countries rather than to other top exporters. Despite important differences, the observed pattern of switching may be relevant to disasters like the COVID-19 pandemic. |
| Keywords: | Natural Disasters,International Trade and Trade Rules,Industrial and Consumer Services and Products,Transport and Trade Logistics |
| Date: | 2021–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9719&r= |
| By: | Manghnani,Ruchita; Meyer,Birgit Elisabeth; Saez,Juan Sebastian; Van Der Marel,Erik Leendert |
| Abstract: | This paper investigates the relationship between the use of service inputs andintegration in global value chains. Using macro and detailed firm-level data (for 1990–2017), the study documents theextent of India’s integration into global value chains. Older, larger, and more productive firms and firms with ahigher leverage ratio are more likely to be deeply integrated into global value chains. Firms in theinformation technology services and electronics industry are more deeply integrated into global value chains, comparedwith textiles. Services are the engine for many global value chain industries as they help coordinate the differentstages of production across geographical locations. The findings suggest that both the intensity of service usage aswell as the composition or type of service used are important. Firms using service inputs, particularly complexservices and information technology and information technology–enabling services intensively are typically moredeeply integrated into global value chains. |
| Keywords: | Common Carriers Industry,Food & Beverage Industry,Business Cycles and Stabilization Policies,Pulp & Paper Industry,Plastics & Rubber Industry,Construction Industry,General Manufacturing,Textiles, Apparel & Leather Industry,International Trade and Trade Rules,Industrial and Consumer Services and Products,Transport and Trade Logistics,Transport Services |
| Date: | 2021–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9813&r= |
| By: | Liu,Yan-000529044 |
| Abstract: | This paper examines the effect of foreign direct investment on local structural transformationand human capital accumulation in China, exploiting variations in foreign direct investment inflows acrossmanufacturing sub-sectors caused by China’s foreign direct investment deregulation and initial sectoral compositionpatterns across China’s cities and provinces. Using a panel of city-level data from 1990 to 2005, the paper shows thatmanufacturing foreign direct investment inflows greatly accelerated city-level structural transformation and humancapital accumulation. By expanding access to the globalmarket, foreign direct investment created a huge pull factor that drew excess labor away from farms into factories andservices. Foreign direct investment has promoted high school and university enrollment by paying a higher wage premiumfor skilled workers and pushing up the skill premium. The positive effect on structural transformation is largelydriven by export-oriented foreign direct investment, while market-seeking foreign direct investment has a much largereffect on college enrollment. High-skill foreign direct investment has a larger effect on college enrollment thanlow-skill foreign direct investment. |
| Keywords: | Food & Beverage Industry,Plastics & Rubber Industry,Business Cycles and Stabilization Policies,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,Common Carriers Industry,Construction Industry,General Manufacturing,International Trade and Trade Rules,Investment and Investment Climate,Skills Development and Labor Force Training,Food Security |
| Date: | 2022–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9952&r= |
| By: | Liu,Yan-000529044; Wang,Xuan |
| Abstract: | This paper studies the impact of foreign direct investment on domestic firms’ innovation in China. It provides causal evidence by exploiting China’s foreign direct investment deregulation in 2002 and employs a difference-in-difference estimation strategy. Using a matched firm-patent data set from 1998 to 2007, the results show that the quantity and quality of domestic firms’ innovation benefit from foreign direct investment. Moreover, the paper emphasizes the importance of knowledge spillover from foreign direct investment in similar technology domains. The analysis examines the role of horizontal foreign direct investment and foreign direct investment in technologically close industries—industries that share similar technology domains. The findings show that foreign direct investment in technologically close industries generates much bigger positive spillovers than horizontal foreign direct investment. The paper also shows that knowledge spillover from foreign direct investment in similar technology domains is not driven by input-out linkages. Moreover, the spillover effect is stronger in cities with higher human capital stock and firms with higher absorptive capacity. |
| Keywords: | General Manufacturing,Textiles, Apparel&Leather Industry,Business Cycles and Stabilization Policies,Pulp&Paper Industry,Construction Industry,Plastics&Rubber Industry,Common Carriers Industry,Food&Beverage Industry,Intellectual Property Rights,Legal Products,Common Property Resource Development,Social Policy,Regulatory Regimes,Legal Reform,Judicial System Reform,Legislation,Real&Intellectual Property Law,Trade Law,Foreign Trade Promotion and Regulation,Investment and Investment Climate,International Trade and Trade Rules |
| Date: | 2021–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9672&r= |
| By: | Larch,Mario,Tan,Shawn Weiming,Yotov,Yoto Valentinov |
| Abstract: | This paper proposes a simple and flexible econometric approach to quantify ex-ante the “deep” impact of trade liberalization and the “hard” effects of protection with the empirical structural gravity model. Specifically, the paper argues that the difference between the estimates of border indicator variables for affected and non-affected countries can be used as a comprehensive measure of the change in bilateral trade costs in response to a hypothetical policy change. To demonstrate the effectiveness of these methods, the paper focus on the integration between the countries from the Central European Free Trade Agreement (CEFTA) and the European Union (EU), which is an important policy application that has not been studied before due to lack of data. This analysis overcomes this challenge by utilizing a new dataset on trade and production that covers all EU countries and all CEFTA members (except for Kosovo). The partial equilibrium estimates that we obtain confirm the validity of our methods, while the corresponding general equilibrium effects point to significant and heterogeneous potential gains for the CEFTA countries from joining the EU. The proposed methods can also be extended to ex-post analysis and are readily applicable to other applications, for example, “hard” Brexit. |
| Keywords: | International Trade and Trade Rules,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,General Manufacturing,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Mining&Extractive Industry (Non-Energy),Food Security |
| Date: | 2021–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9791&r= |
| By: | Reasner,Mason Scott,Tan,Shawn Weiming |
| Abstract: | This paper uses merged customs and administrative data from Serbian firms to quantify the impact of neighboring firms’ importing experience on the decision to start sourcing inputs from new markets. The analysis finds that firms are more likely to start importing from a new market if neighboring firms in the same industry and location have experience importing from that market and if those firms are increasing their imports over time. Further, the results support a distinction between imports and exports for the decision to enter foreign markets; unlike exports, import sourcing choices are not independent across countries. The analysis finds that imports across origins are substitutes, not complements. The paper also investigates origin-country and firm heterogeneity. The results indicate that the impact of neighboring firms’ importing experience is greater for source countries in the European Union market and for firms that are high productivity, foreign owned, and previous importers. Together, these findings suggest that a firm’s spatial connections are an important contributor to its access to global markets as sources for inputs. |
| Keywords: | International Trade and Trade Rules,Business in Development,Trade and Services,Financial Sector Policy,Transport Services |
| Date: | 2021–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9790&r= |
| By: | Manghnani,Ruchita; Meyer,Birgit Elisabeth; Saez,Juan Sebastian; Van Der Marel,Erik Leendert |
| Abstract: | This paper explores the relationship between the use of service inputs, participation in globalvalue chains, and firm productivity. Services play the role of both an intermediate input in production and acoordinator. Using a detailed Indian firm-level data set from 1990–2017, the paper estimates the productivity premiumassociated with varying depths of global value chain integration and different intensities and types of servicesused in the production. The study finds that firms in global value chains have a productivity premium between 13 and 22percent relative to domestic firms, with some variation based on the depth of global value chain integration and thesector to which the firm belongs. Both the type of service inputs used (composition of services) and the origin ofservices (whether sourced domestically or from abroad) matter for firm performance. While higher aggregate serviceinput use (as captured by the share of expenditure on service inputs) is not necessarily associated with anincrease in productivity, increased use of complex services and information technology services is associated withhigher productivity. The use of imported services is associated with higher productivity. Moreover, firms thatare more deeply integrated in global value chains benefit more from importing services. |
| Keywords: | Food & Beverage Industry,Construction Industry,Plastics & Rubber Industry,Business Cycles and Stabilization Policies,Common Carriers Industry,General Manufacturing,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,International Trade and Trade Rules,Industrial and Consumer Services and Products,Transport and Trade Logistics,Financial Sector Policy |
| Date: | 2021–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9814&r= |
| By: | Cali,Massimiliano; Le Moglie,Marco; Presidente,Giorgio |
| Abstract: | This paper studies how productivity and markups respond to non-tariff measures. The analysis uses a novel time-varying data set on all non-tariff measures applied to imported products by Indonesia. Price and quantity information is used to disentangle the impact of non-tariff measures on plants’ technical efficiency and markups. The findings show that on average, non-tariff measures generate fewer distortions than import tariffs do. However, while specific non-tariff measures increase the quality of the products on which they are applied, others act as barriers to trade similar to import tariffs. These results suggest that to gauge their impacts and guide policy making, non-tariff measures should not be bundled together in empirical analyses. |
| Keywords: | International Trade and Trade Rules,Business Cycles and Stabilization Policies,Construction Industry,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,General Manufacturing,Food&Beverage Industry,Common Carriers Industry,Trade and Multilateral Issues,Trade Policy,Rules of Origin |
| Date: | 2021–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9654&r= |
| By: | Kazuhiro Takauchi (Faculty of Business and Commerce, Kansai University / Research Fellow, Graduate School of Economics, Kobe University); Tomomichi Mizuno (Graduate School of Economics, Kobe University) |
| Abstract: | We consider an optimal tariff policy with the coexistence of less efficient non-exporting and efficient exporting firms. Using a two-way oligopoly trade model with a firm's quadratic cost, we show that the optimal tariff rate is U-shaped with respect to the efficiency of non-exporting firms. This implies that under tariff competition, if relative production efficiency increases, both possibilities appear, that is, trade liberalization or protectionism can progress. We also show that the profit of the non-exporting firm can be greater than that of the exporting firm when the production efficiency of the non-exporting firm is sufficiently high. |
| Keywords: | Optimal tariff; non-exporting firm; Quadratic cost |
| JEL: | F12 F13 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:2214&r= |
| By: | Giammario Impullitti; Syed Kazmi |
| Abstract: | Economic theory suggests that the markup is a key measure of market power and that its relationship with trade is rich and complex. Trade liberalisation can reduce markups via a decline in the residual domestic demand but also increase it via several channels. Trade-induced increases in competition leads to more concentrated markets via entry and exit, putting upward pressure on markups. Market shares reallocation toward larger, more powerful firms, increase the aggregate markup. We use a large episode of trade liberalisation in Spain to test this rich set of transmission mechanisms linking trade and markups. The overall effect of reductions in Spanish import tariffs on firm-level and aggregate markups is pro-competitive but we find evidence of offsetting effects via the other channels. In particular, we show that firms with high intangible investment experience a weaker reduction in markups. Sup-porting the theoretical insight that the feedback effect via concentration is stronger with higher barriers to entry. Increases in markups are also produced by reallocations effects but the results are weaker, suggesting that the link between trade and markups is mostly driven by changes at the intensive margin. |
| Keywords: | international trade, markups, oligopoly |
| Date: | 2022–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1866&r= |
| By: | Maur,Jean-Christophe; Nedeljkovic,Milan; Von Uexkull,Jan Erik |
| Abstract: | This paper proposes a novel empirical methodology to reveal factors associated with foreign directinvestment decisions and export success at the industry level. Faced with large amounts of policy and economicindicators, as well as significant product and sectoral diversity, the motivation of this research is twofold.First, it selects among the vast number of indicators and potential factors relevant to investment and trade outcomesa manageable subset of variables that can usefully guide the understanding of investment and trade outcomes. Second, itprovides robust estimates of how these variables affect the probability at the margin of investment and trade outcomesat the sector level. Finally, the paper uses these estimates to produce new metrics (“scores”) of trade and investmentclimate performance at the country and sectoral levels. |
| Keywords: | International Trade and Trade Rules,Investment and Investment Climate,Financial Sector Policy,Business Environment,Trade Policy |
| Date: | 2022–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9901&r= |
| By: | Yue Li; Kuo,Ryan Chia; Pinzon Latorre,Mauricio Alejandro; Albertson,Mark Peter |
| Abstract: | To date, the impact of foreign direct investment on market power and consumer welfare indeveloping countries has been relatively understudied. Utilizing a firm survey dataset from Vietnam, this paperfirst calculates firm-level markups for manufacturing firms and then analyzes the impact of foreign direct investmentand foreign ownership on firm markups. Overall, the findings show that increases in the presence of foreign firms in agiven industry are associated with decreases in markups in that industry, despite foreign firms individually charginghigher markups on average than their domestic competitors. The findings further show that while the markups of bothforeign- and domestic-owned private firms tend to decrease with greater foreign direct investment, state-ownedenterprises may be relatively insulated from foreign direct investment driven competitive pressures. These results arerobust to the inclusion or exclusion of potential outliers and the potential non-random selection of firms acquired byforeign investors. |
| Date: | 2022–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9998&r= |
| By: | Borin,Alessandro; Mancini,Michele; Taglioni,Daria |
| Abstract: | How exposed are countries and sectors to GVC risks GVC participation matters for answering thisquestion. Standard approaches either overstate the degree of backward integration or underestimate the involvement ofsome industries, especially services, in Global Value Chain (GVC) activity. To correct these biases, this paper proposesa novel comprehensive method to measure GVC participation using Inter-Country Input-Output (ICIO) linkages in bothtrade and output and shows that these improvements in methodology matter from a macroeconomic perspective. GVCintegration, as measured by the indicators, decreases the exposure to domestic shocks and increases that to globalshocks. The paper also finds that exposure to shocks is complex: in most countries and sectors, output issimultaneously exposed to supply and demand shocks. This two-sided exposure suggests that disruptions may not beeasily managed by unilateral policy attempts at forcing a reorganization of buyers-seller relationships. |
| Keywords: | International Trade and Trade Rules,Industrial and Consumer Services and Products,Transport and Trade Logistics,Legal Products,Legal Reform,Social Policy,Legislation,Foreign Trade Promotion and Regulation,Trade Law,Judicial System Reform,Regulatory Regimes,Textiles, Apparel & Leather Industry,Food & Beverage Industry,General Manufacturing,Construction Industry,Common Carriers Industry,Pulp & Paper Industry,Business Cycles and Stabilization Policies,Plastics & Rubber Industry |
| Date: | 2021–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9785&r= |
| By: | Ricardo Hausmann (Center for International Development at Harvard University); Ulrich Schetter (Center for International Development at Harvard University); Muhammed A. Yildirim (Center for International Development at Harvard University) |
| Abstract: | We analyze the effects of bans on exports at the level of 5000 products and show how our results can inform economic sanctions against Russia after its invasion of Ukraine. We begin with characterizing export restrictions imposed by the EU and the US until mid-May 2022. We then propose a theoretically-grounded criterion for targeting export bans at the 6-digit HS level. Our results show that the cost to Russia are highly convex in the market share of the sanctioning parties, i.e., there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia, we find that sanctions imposed by the EU and the US are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. Quantitative evaluations of the export bans show (i) that they are very effective with the costs to Russia typically being by a factor of ∼100 larger than the costs to the sanctioners. (ii) Improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 60% with little to no extra cost to the sanctioners. (iii) There is scope for increasing the cost to Russia further by expanding the set of sanctioned products. |
| Keywords: | Export Ban, Input-Output Linkages, Quantitative Trade Model, Russia, Sanctions, Ukraine |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:417&r= |
| By: | Mensah,Justice Tei; Traore,Nouhoum-000531164 |
| Abstract: | Does ambient infrastructural quality affect foreign direct investment (FDI) in developingcountries This paper investigates how the arrival of high-speed internet in Africa triggered FDI into the bankingand technology services sectors. It also explores the role of complementary infrastructure, such as access to reliableelectricity, in amplifying the impact of internet connectivity on investment. The identification strategyexploits plausibly exogenous variations in access to high-speed internet induced by the staggered arrival ofsubmarine fiber-optic internet cables and the subsequent rollout of terrestrial fiber cable networks across locationson the continent. Findings from the paper show that access to high-speed internet induces FDI into the banking andtechnology sectors. However, the impact pertains mainly to countries with access to reliable electricity, thushighlighting the role of complementarities in the impact of infrastructure. |
| Keywords: | Energy Policies & Economics,Telecommunications Infrastructure,Financial Sector Policy,International Trade and Trade Rules,Investment and Investment Climate |
| Date: | 2022–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9946&r= |
| By: | DeStefano,Timothy; Timmis,Jonathan David |
| Abstract: | Robots are rapidly becoming a key part of manufacturing in developed and emerging economies. This paper examines a new channel for how automation can affect international trade: quality upgrading. Automation can reduce production errors, particularly of repetitive processes, leading to higher quality products. The effects of robot use on export quality are estimated, by combining cross-country and cross-industry data on industrial robots with detailed Harmonized System 10-digit trade data. Robot diffusion in (preexisting) foreign customers is used as an instrumental variable to predict robot adoption in the home country-industry. The findings show that robot diffusion leads to increases in the quality of exported products. Quality improvements are predominantly driven by the upgrading of developing country exports; and within countries, quality improvements are driven by upgrading of (initially) lower-quality exports of developed and developing countries. The paper also finds some differences in the type of robots—sophisticated or more basic—associated with quality gains in developing and developed economies. |
| Keywords: | International Trade and Trade Rules,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,General Manufacturing,Industrial and Consumer Services and Products,Transport and Trade Logistics,Labor Markets |
| Date: | 2021–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9678&r= |
| By: | Bastos,Paulo S. R.; Santos Villagran,Nicolas Eduardo |
| Abstract: | This paper uses municipal-level data from South Africa for the period 1996–2011 to estimate the medium to long-run effects of trade liberalization on local labor markets. It finds that local labor markets that were more exposed to tariff cuts tended to experience slower growth in employment and income per capita than less exposed regions. The longer-term effects of trade liberalization on regional earnings are stronger than the medium-term effects, and tend to be more pronounced among municipalities that included the former homelands. |
| Keywords: | International Trade and Trade Rules,Rural Labor Markets,Labor Markets,Educational Sciences,Trade and Multilateral Issues,Mining&Extractive Industry (Non-Energy) |
| Date: | 2021–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9686&r= |
| By: | Chepeliev,Maksym; Maliszewska,Maryla; Osorio-Rodarte,Israel; Seara E Pereira,Maria Filipa; Van Der Mensbrugghe,Dominique |
| Abstract: | The resilience of global value chains has been put to the test by the COVID-19 pandemic, extremeweather events, and trade tensions spurred by growing economic nationalism and protectionism. Shocks in productionand trade can be transmitted from one country to another by global value chains, although they can also help to lessenthe blow of a domestic shock, such as a lockdown, and drive economic recovery. What shocks to global value chains shouldbe anticipated in the coming years Is it possible to design policies that can enhance resilience to trade shocks indeveloping countries without endangering growth This paper explores simulations from the ENVISAGE global computablegeneral equilibrium model to enhance understanding of the potential longer-term impacts of COVID-19 and the policyresponses it engenders in developing countries. The paperassesses the likely impacts of measures designed to reshore production and reduce reliance on imports. It also evaluatesother key factors shaping the global economy, including stylized scenarios to capture the essential elements ofpolicies to achieve carbon emission reductions that will have an impact on trade. |
| Keywords: | International Trade and Trade Rules,Transport Services,Inequality,Climate Change Mitigation and Green House Gases |
| Date: | 2022–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9955&r= |
| By: | Lukaszuk, Piotr; Torun, David |
| Abstract: | International trade research relies heavily on data reported at the product level. Regular classification updates of the “Harmonized System” lead to intertemporal inconsistencies affecting up to 44% of world goods trade. Existing methods to standardize product vintages either drop numerous products over time or bulk updated codes into large synthetic categories. We largely overcome these issues by developing an algorithm that exploits the persistence of trade data to convert trade flows between vintages. Our conversion estimates are robust to year and sample choices. Provided a clear correspondence and persistent data, the algorithm can be applied to other classifications. |
| Keywords: | international trade data; product classification; classification updates; Harmonized System (HS); concordance |
| JEL: | F1 C81 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2022:12&r= |
| By: | Estrades Pineyrua,Carmen; Maliszewska,Maryla; Osorio-Rodarte,Israel; Seara E Pereira,Maria Filipa |
| Abstract: | This paper applies a top-down, macro-micro modeling framework that links a computablegeneral equilibrium model with the survey-based global income distribution dynamics model to assess the economicand distributional effects of the implementation of theRegional Comprehensive Economic Partnership (RCEP). Reductions of tariffs and non-tariff measures,implementation of a rule of origin, together with productivity gains stemming from trade cost reductions canstrengthen regional trade and value chains among Regional Comprehensive Economic Partnership members. The results ofthe analysis indicate that in an already deeply integrated region, tariff liberalization alone brings little benefit,with estimated real income gains of 0.21 percent relative to the baseline (without the RCEP) in 2035. With liberal rulesof origin, the gains in real income could double to 0.49 percent. The biggest benefits accrue when the productivitygains are considered, increasing real income by as much as 2.5 percent for the trade bloc. In this scenario, tradeamong RCEP members increases by 12.3 percent in 2035 relative to the baseline. The RCEP also has the potential tolift 27 million additional people to middle-class status by 2035. It will also boost wages, with faster gains in sectorsthat employ larger shares of women. The aggregate effects mask large variety of outcomes across countries, withVietnam expected to register the highest trade and income gains. Implementation of the RCEP help partially mitigatethe negative economic impacts of COVID-19 in the East Asia and the Pacific region. |
| Keywords: | International Trade and Trade Rules,Transport Services,Trade and Multilateral Issues,Rules of Origin,Trade Policy,Business Cycles and Stabilization Policies,Construction Industry,Common Carriers Industry,Food & Beverage Industry,General Manufacturing,Plastics & Rubber Industry,Pulp & Paper Industry,Textiles, Apparel & Leather Industry,Inequality |
| Date: | 2022–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9939&r= |
| By: | Kassa,Woubet,Sawadogo,Pegdewende Nestor |
| Abstract: | This study aims to draw key lessons for the African Continental Free Trade Area using evidence from within the region. Although drawing lessons from the rest of the world is essential, given the unique features of economies in the Africa region, the most relevant lessons can be drawn from the experiences of regional economic communities in the continent. The study draws on the eight regional economic communities that have been recognized by the African Union as pillars on which the continent will rely to implement the African Continental Free Trade Area. The study evaluates the trade creation and trade diversion impacts of each of the eight RECs and examines their performance with the goal of drawing lessons and identifying challenges for the success of the African Continental Free Trade Area. Despite significant heterogeneities, there is more trade creation than trade diversion and a generally positive impact on trade within the regional economic communities. Two regional economic communities in particular—the East African Community and the Southern African Development Community—outperform all the other regional economic communities in terms of boosting intra–regional economic community trade. This is mainly associated with the high level of investment in trade facilitation, the level of synergy between national and regional goals, the density of economic activity, and the advancement in the quantity and quality of regional infrastructure. There are also many challenges that policy makers should address to realize the objectives of the African Continental Free Trade Area and transform the continent. Learning from the regional economic communities is central. But, given the scope of the African Continental Free Trade Area, there is also a need to examine the transition from regional economic communities to the African Continental Free Trade Area, which is expected to be a sticky transition. |
| Keywords: | International Trade and Trade Rules,Marketing,Private Sector Development Law,Private Sector Economics,Urban Solid Waste Management,Trade and Multilateral Issues,Transport Services |
| Date: | 2021–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9761&r= |
| By: | Bachas,Pierre Jean; Fisher-Post,Matthew; Jensen,Anders; Zucman,Gabriel |
| Abstract: | How has globalization affected the relative taxation of labor and capital, and why To addressthis question, this paper builds and analyzes a new database of effective macroeconomic tax rates covering 150 countriessince 1965, constructed by combining national accounts data with government revenue statistics. Four main findings areobtained. (1) The effective tax rates on labor and capital have converged globally since the 1960s, due to a 10percentage-point increase in labor taxation and a 5 percentage-point decline in capital taxation. (2) Thedecline in capital taxation is concentrated in high-income countries. By contrast, capital taxation has increased indeveloping countries since the 1990s, albeit from a low base. (3) Consistently across a variety of research designs,the findings show that the rise in capital taxation in developing countries can be explained by a tax capacityeffect of international trade: trade openness leads to a concentration of economic activity in formal corporatestructures, where capital taxes are easier to impose. (4) At the same time, international economic integration reducesstatutory tax rates, due to increased tax competition. In high-income countries, this negative tax competition effectof trade has dominated, while in developing countries, the positive tax-capacity effect of international trade appearsto have prevailed. |
| Date: | 2022–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9973&r= |
| By: | Kabinet Kaba (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Justin Yifu (Peking University [Beijing]); Mary-Françoise Renard (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | Dans notre article paru dans World Economy, nous étudions les déterminants de l'industrialisation de l'Afrique subsaharienne. L'originalité de notre étude est de s'appuyer sur une comparaison des politiques industrielles et commerciales africaines avec les politiques asiatiques. |
| Keywords: | Industrialisation,Afrique subsaharienne,Commerce international,Ouverture commerciale |
| Date: | 2022–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03680326&r= |
| By: | Zuzanna Zarach (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland) |
| Abstract: | This paper models export diversification in the context of an abundance of natural resources by decomposing the relative Theil index. On a sample of 160 countries from 1996 to 2018 we document that 74% of the high export concentration typical of the initial stage of development is driven by the limited variety of products other than natural resources. Later, the component representing export reallocation between resources and non-resource products gains importance, and eventually, together with intra-resource heterogeneity, explains the entire amount of export diversification at high income levels. Our estimates show that natural resource abundance (in particular of fossil fuels) impedes overall diversification, limiting the variety of non-resource exports and hampering restructuring towards technologically advanced exports. However, once size and productivity differences across countries are taken into account, the effect of resource abundance on export diversification is weak. |
| Keywords: | natural resources, export diversification, Theil, decomposition |
| JEL: | F14 O13 Q3 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:70&r= |
| By: | Bas,Maria; Fernandes,Ana Margarida; Paunov,Caroline |
| Abstract: | This paper examines which product supply-side characteristics affect the resilience of tradedproducts to the COVID-19 pandemic. Relying on monthly product-level exports by all countries to the United States,Japan, and 27 European Union countries from January 2018 to December 2020, the paper estimates adifference-in-differences specification for the impact of COVID-19 incidence (deaths per capita) mediated by productcharacteristics, accounting for when exports reach their destination by relying on product transportation lags.Higher reliance on foreign inputs, China as an input supplier, and unskilled labor and a lower degree ofcomplexity negatively affected exports as a result of COVID-19. |
| Date: | 2022–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9975&r= |
| By: | Timilsina,Govinda R.; Deluque Curiel,Ilka Fabiana; Chattopadhyay,Debabrata |
| Abstract: | Regional or cross-border trade of electricity would be beneficial for all trading partners for multiple reasons. However, cross-border electricity trade in Latin America is limited, and the potential benefits have been forfeited. This study estimates the potential savings on electricity supply costs if 20 Latin American countries allowed unrestricted trade of electricity between the borders without expanding their current electricity generation capacity. Two hypothetical electricity trade scenarios—unconstrained trade of electricity between the countries within the Andean, Central, and Mercosur subregions and full regional trade involving all 20 countries are simulated using a power system model. The study shows that the volume of cross-border electricity trade would increase by 13 and 29 percent under the subregional and regional scenarios, respectively. The region would gain US$1.5 billion annually under the subregional scenario and almost US$2 billion under the full regional scenario. More than half of this gain would be realized by the Andean subregion under both scenarios. These are short-term benefits without expanding the current electricity generation capacities. In the future, when countries add more generation capacity to meet their increasing demand, the potential benefits of electricity trade would be higher. A further study is needed to measure the increased benefits in the long run. |
| Keywords: | International Trade and Trade Rules,Energy Policies&Economics,Energy and Environment,Energy Demand,Energy and Mining,Oil Refining&Gas Industry,Power&Energy Conversion |
| Date: | 2021–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9692&r= |
| By: | Artuc,Erhan; Depetris Chauvin,Nicolas M.; Porto,Guido; Rijkers,Bob |
| Abstract: | How do tariffs impact gender inequality? Using harmonized household survey and tariff data from 54 low- and middle-income countries, this paper shows that protectionism has an anti-female bias. On average, tariffs repress the real incomes of female headed households by 0.6 percentage points relative to that of male headed ones. Female headed households bear the brunt of tariffs because they derive a smaller share of their income from and spend a larger share of their budget on agricultural products, which are usually subject to high tariffs in developing countries. Consistent with this explanation, the anti-female bias is stronger in countries where female-headed households are underrepresented in agricultural production, are more reliant on remittances, and spend a larger share of their budgets on food than male-headed ones. |
| Keywords: | Gender and Economic Policy,Gender and Poverty,Gender and Economics,Economics and Gender,International Trade and Trade Rules,Gender and Development,Trade and Multilateral Issues,Rules of Origin,Trade Policy |
| Date: | 2021–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9750&r= |
| By: | Lebrand,Mathilde Sylvie Maria |
| Abstract: | This paper estimates the welfare gains from upgrading several major regional corridors inWest Africa. It uses a quantitative economic geography framework with trade within and across countries andmobility of people within countries to assess the economic impacts of the reduction in trade costs from road and borderinfrastructure investments. The findings show that the upgrade of Dakar-Lagos regional road corridor brings sizableeconomic benefits relative to investment costs, with a benefit-cost ratio estimated around 3. The economic benefitsof road corridor upgrades are doubled and more widely spread when combined with measures to reduce current massive borderdelays. The benefits are negligible for Nigeria, but large for small fragile states (Guinea-Bissau, Liberia, and SierraLeone). The gains are highest for corridors connecting large economies, and smaller and more fragile countries gainproportionally more from accessing larger markets. Finally, regional investments, including border time reductionpolicies, will reduce spatial inequality in the whole region but might increase inequality in some countries. |
| Keywords: | International Trade and Trade Rules,Transport Services,Inequality,Ports & Waterways |
| Date: | 2021–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9855&r= |
| By: | Elmallakh,Nelly Youssef Louis William,Wahba,Jackline |
| Abstract: | This paper examines the impact of the legal status of overseas migrants on their wages upon return to the home country. Using unique data from the Arab Republic of Egypt, which allows distinguishing between return migrants according to whether their international migration was documented or undocumented, the paper examines the impact of illegal status on wages upon return. Relying on a conditional mixed process model, which takes into account the selection into emigration, return, and the legal status of temporary migration, the analysis finds that, upon return, undocumented migrants experience a wage penalty compared with documented migrants, as well as relative to non-migrants. The results are the first to show the impact of undocumented migration on the migrant upon return to the country of origin. |
| Keywords: | Labor Markets,Rural Labor Markets,Armed Conflict,Trade and Services,Educational Sciences,Migration and Development |
| Date: | 2021–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9753&r= |
| By: | Gala, Paulo; Rodrigues Júnior, Luiz Antonio; Castro, Lavinia Barros de; Carvalho, Andre Roncaglia de |
| Abstract: | This paper applies complex networks techniques to the study of world trade, with a focus on imperfect competition and development literature. The analysis uses a database of 4657 HS products and 183 countries to measure world market concentration by companies’ country of origin from 2007 to 2017. The empirical findings corroborate some of structuralist and development economists’ claims, namely: countries with high-income per capita focus on producing and exporting manufactured and complex goods in more concentrated markets, whereas countries with low-income per capita specialize in producing and exporting non-complex commodities in less concentrated markets |
| Date: | 2022–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:559&r= |
| By: | Furceri,Davide; Hannan,Swarnali A.; Ostry,Jonathan D.; ROSE,ANDREW K. |
| Abstract: | What does the macroeconomy look like in the aftermath of tariff changes This paper estimatesimpulse response functions from local projections using a panel of annual data that spans 151 countries over1963–2014. Tariff increases are associated with persistent, economically and statistically significant, declines indomestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciationand insignificant changes to the trade balance. Output and productivity impacts are magnified when tariffs rise duringexpansions and when they are imposed by more advanced or smaller (as opposed to developing or larger) economies;effects are asymmetric, being larger when tariffs go up than when they fall. While firmly establishing causality is always a challenge, the results are robust to a large numberof perturbations to the baseline methodology, and hold using both macroeconomic and industry-level data. |
| Keywords: | International Trade and Trade Rules,Macroeconomic Management,Employment and Unemployment,Inflation,Trade Policy |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9854&r= |
| By: | Artuc,Erhan,Brambilla,Irene,Porto,Guido |
| Abstract: | This paper explores how different investment frictions affect the patterns of responses of labor markets to tariff cuts. To investigate these patterns, this paper formulates a multi-sector dynamic model featuring capital and labor adjustment costs that is fitted to Argentine data. Counterfactual simulations of a tariff decline in the textile sector are used to show that capital adjustment can create long-run responses of real wages that are larger than the short-run responses. This happens as textile firms disinvest during the transition. This paper also shows that the reduction of tariffs on capital inputs boosts investment and real wages across sectors. This paper assesses the nature of capital adjustment costs, including fixed, convex, and irreversibility costs in determining these patterns of labor market responses to trade reforms. |
| Keywords: | International Trade and Trade Rules,Rural Labor Markets,Trade and Multilateral Issues,Labor Markets |
| Date: | 2021–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9775&r= |
| By: | Mariam Camarero (University Jaume I and INTECO, Department of Economics, Campus de Riu Sec, E-12080 Castellón, Spain.); Silviano Sergi Moliner (University Jaume I and INTECO, Department of Economics, Campus de Riu Sec, E-12080 Castellón, Spain.); Salvador Cecilio Tamarit (University of València and INTECO, Department of Applied Economics II, Av. dels Tarongers, s/n Eastern Department Building E-46022 Valencia, Spain.) |
| Abstract: | This paper analyzes the potential determinants of the US stock of outward FDI (OFDI). As our research question is whether the introduction of the euro has changed the pattern of US OFDI, we consider a large group of host countries from different continents, zooming in on the European case, where we analyze different country groupings for the European Union and the Euro Area. With this aim, we estimate a gravity equation using the Pseudo Poisson Maximum Likelihood (PPML) estimator. Furthermore, we use the Bayesian Modelling Averaging (BMA) analysis results in Camarero et al. (2021) as a benchmark for the initial specification. We find that US OFDI is explained by horizontal and vertical FDI motives in all country groups. As for the euro effect, we show that the single currency has prominently promoted US OFDI to the EA members with effects ranging between 10% and 20%. However, while in the core Euro Area, the euro has favored both HFDI and intra-industry VFDI strategies, in the periphery has mainly stimulated pure VFDI. |
| Keywords: | FDI determinants; US; European Union; BMA; PPML |
| JEL: | F21 F23 C11 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2209&r= |
| By: | Graf Von Luckner,Clemens Mathis Henrik,Reinhart,Carmen M.,Rogoff,Kenneth S. |
| Abstract: | This paper employs high frequency transactions data on the world’s oldest and most extensive centralized peer-to-peer Bitcoin market, which enables trade in the currencies of more than 135 countries. It presents an algorithm that allows, with high probability, the detection of “crypto vehicle transactions” in which crypto currency is used to move capital across borders or facilitate domestic transactions. In contrast to previous work which has used “on-chain” data, this paper’s approach enables one to investigate parts of the vastly larger pool of “off-chain” transactions. Finding that, as a conservative lower bound, over 7 percent of the 45 million trades on the exchange we explore represent crypto vehicle transactions in which Bitcoin is used to make payments in fiat currency. Roughly 20 percent of these represent international capital flight/flows/remittances. Although this work cannot be used to put a price on cryptocurrencies, it provides the first systematic quantitative evidence that the transactional use of cryptocurrencies constitutes a fundamental component of their value, at least under the current regulatory regime. |
| Keywords: | International Trade and Trade Rules,Investment and Investment Climate,Law Enforcement Systems |
| Date: | 2021–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9794&r= |
| By: | Emanuel Ornelas; John L. Turner |
| Abstract: | We study the welfare impact of rules of origin in free trade agreements where final-good producers source customized inputs from suppliers within the trading bloc. We employ a property-rights framework that features hold-up problems in suppliers' decisions to invest, and where underinvestment is more severe for higher productivity firms. A rule of origin offers preferred market access for final goods if a sufficiently high fraction of inputs used in the production process is sourced within the trading bloc. Such a rule alters behavior for only a subset of suppliers, as some (very-high-productivity) suppliers comply with the rule in an unconstrained way and some (very-low-productivity) suppliers choose not to comply. For those suppliers it does affect, the rule increases investment, but it also induces excessive sourcing (for given investment) within the trading bloc. From a social standpoint, it is best to have a rule that affects high-productivity suppliers. The reason is that the marginal net welfare gain from tightening the rule increases with productivity. Therefore, when industry productivity is high, a strict rule of origin is socially desirable; in contrast, when industry productivity is low, no rule of origin is likely to help. Regardless of the case, a sufficiently strict rule can (weakly) ensure welfare gains. |
| Keywords: | hold-up problem, sourcing, incomplete contracts. regionalism |
| Date: | 2022–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1867&r= |
| By: | Sebastian Benz (OECD); Alexander Jaax (OECD); Yoto V. Yotov (Drexel University) |
| Abstract: | Services have become significantly more tradable in the first two decades of the 21st century. This paper documents that trade costs for financial services, communication services and business services fell by between 30% and 60% between 2000 and 2019. Information and communication technology and growth of air traffic have acted as key drivers of this development. While there is some variation across sectors, the analysis suggests that these two determinants jointly account for a quarter to half of the aggregate decline in trade costs for services during this 20-year period. Furthermore, services provisions in regional trade agreements (RTAs) can explain between 3% and 14% of the reduction in trade costs for communications services and financial and insurance services. These findings demonstrate the importance of whole-of-government strategies to promote services trade competitiveness, inter alia market access, regulatory reform, as well as investment in physical and digital infrastructure and adoption of new technologies. |
| Keywords: | Digital trade, Digitalisation, Services trade, Trade costs, Trade liberalisation, Trade policy |
| JEL: | F13 F14 F15 O33 F68 |
| Date: | 2022–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:264-en&r= |
| By: | Fabrizio Leone |
| Abstract: | This paper shows that multinational enterprises (MNEs) spur the adoption of industrial robots. First, I document a positive and robust correlation between multinational production and robot adoption using a new cross-country industry-level panel. Second, using detailed data about Spanish manufacturing, I combine a difference-in-differences approach with a propensity score reweighing estimator and provide evidence that firms switching from domestic to foreign ownership become about 10% more likely to employ robots. The ability of expanding into foreign markets via the parental network is the key driver of the adoption choice. An empirical model of firm investment reveals that MNEs generate significant industry-level productivity gains but decreases the labor share by boosting robot adoption. However, the first effect is one order of magnitude larger than the second. These results provide new evidence about the efficiency versus equity trade-off that policymakers face when attracting MNEs. |
| Keywords: | foreign ownership, industrial robots, total factor productivity, factor-biased productivity, labor share |
| Date: | 2022–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1854&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:exs:wpaper:22/073&r= |
| By: | Timm, Lisa Marie (University of Amsterdam); Giuliodori, Massimo (University of Amsterdam); Muller, Paul (Vrije Universiteit Amsterdam) |
| Abstract: | This paper examines to what extent an income tax exemption affects international mobility and wages of skilled immigrants. We study a preferential tax scheme for foreigners in the Netherlands, which introduced an income threshold for eligibility in 2012 and covers a large share of the migrant income distribution. By using detailed administrative data in a difference-in-differences setup, we find that the number of migrants in the income range closely above the threshold more than doubles, whereas there is little empirical support for a decrease of migration below the threshold. Our results indicate that these effects are driven mainly by additional migration, while wage bargaining responses are fairly limited. We conclude that the preferential tax scheme is highly effective in attracting more skilled migrants. |
| Keywords: | international migration, income tax benefits, wage bargaining, bunching |
| JEL: | F22 J61 H24 H31 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15582&r= |
| By: | Roger Martini |
| Abstract: | This paper examines how fisheries policies affect domestic versus foreign fishing efforts. In line with previous work, the paper finds that policies directly affecting fishing costs (e.g. fuel or input subsidies) are more likely to lead to overfishing than those based on income or fixed assets such as vessels. This new work, based on a disaggregated global model where regional fishers operate interdependently, shows that fuel tax concessions (FTCs) tend to encourage more fishing effort in domestic fisheries and less in foreign ones because the fisher must take on fuel at a domestic port to take advantage of the policy. |
| Keywords: | Fisheries policy, Fisheries subsidies, Fisheries trade, Fishing capacity, Overfishing |
| JEL: | H23 H53 Q22 Q57 Q28 |
| Date: | 2022–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:188-en&r= |
| By: | Strand,Jon |
| Abstract: | Border carbon adjustments imply that high-income countries set taxes on energy-intensive imports that are proportional to the carbon content of these imports, to match their own carbon taxes. This paper considers the impacts of such a policy on exporter countries, many of which have no or very low carbon taxes today. The paper first studies a policy whereby the importer allows the exporter’s border tax to be reduced by its own comprehensive carbon tax (“tax rebating”). The analysis finds that the exporter is then incentivized to set its own comprehensive carbon tax at the same rate as the border tax, up to a maximal rate. When the border tax is higher, the exporter instead reduces its carbon tax. Border tax revenues of the high-income country can be returned to incentivize higher carbon taxes in the exporting countries (“carbon crediting”). When tax rebating is not allowed but tax revenues are fully returned, even higher exporter carbon taxes can then be incentivized, possibly exceeding $60 per ton of carbon dioxide in the numerical examples. Border taxation can give rise to export diversion away from border tax-setting countries, which reduces the scope for incentivizing the exporter’s carbon tax. The paper also studies how taxes on oil extraction by oil exporters can be incentivized by oil importing countries, by increasing their oil import prices above world market rates, or more efficiently through support to investments in exporters’ renewable energy capacity. |
| Keywords: | Climate Change Mitigation and Green House Gases,Public Sector Economics,Public Finance Decentralization and Poverty Reduction,Economic Adjustment and Lending,Taxation&Subsidies,Macro-Fiscal Policy,Energy and Environment,Energy and Mining,Energy Demand,Oil&Gas |
| Date: | 2021–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9698&r= |
| By: | Gabel, Lina |
| Abstract: | There is a wide array of literature on the particular manifestation of mercantilism in Sweden during the “Age of Liberty” and there is an even wider selection of literature on the success of the Swedish iron industry. However, there is very little literature on the combination of the two, and it suffers from issues with lack of adequate data. Therefore, this paper aims to fill that gap by studying the impact of the Swedish Commodity Act of 1724, the largest piece of Swedish mercantile legislation and an adaptation of the British Navigation Acts, on Sweden’s leading industry - iron - and its exports to its largest foreign market in England. This investigation of the relationship between mercantilism and Swedish iron trade is based on the Sound Toll Registers, one of the most detailed sources on maritime trade history. The time series regression results indicate that the implementation of the commodity act successfully increased the total tonnage of iron shipped from Sweden to England. |
| JEL: | N73 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:116938&r= |
| By: | Bah,Tijan L; Batista,Catia; Gubert,Flore; Mckenzie,David J. |
| Abstract: | The COVID-19 pandemic has resulted in border closures in many countries and a sharp reduction in overall international mobility. However, this disruption of legal pathways to migration has raised concerns that potential migrants may turn to irregular migration routes as a substitute. This paper examines how the pandemic has changed intentions to migrate from The Gambia, the country with the highest pre-pandemic per-capita irregular migration rates in Africa. A large-scale panel survey conducted in 2019 and 2020 is used to compare changes in intentions to migrate to Europe and to neighboring Senegal. The data show that the pandemic has reduced the intention to migrate to both destinations, with approximately one-third of young males expressing less intention to migrate. The largest reductions in migration intentions are for individuals who were unsure of their intent pre-pandemic, and for poorer individuals who are no longer able to afford the costs of migrating at a time when these costs have increased and their remittance income has fallen. This paper also introduces the methodology of priming experiments to the study of migration intentions, by randomly varying the salience of the COVID-19 pandemic before eliciting intentions to migrate. There is no impact of this added salience, which appears to be because knowledge of the virus, while imperfect, was already enough to inform migration decisions. Nevertheless, despite these decreases in intentions, the overall desire to migrate the backway to Europe remains high, highlighting the need for legal migration pathways to support migrants and divert them from the risks of backway migration. |
| Keywords: | Health Care Services Industry,Social Cohesion,Labor Markets,Financial Sector Policy |
| Date: | 2021–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9658&r= |
| By: | Gatti, Nicolò (USI Università della Svizzera Italiana); Mazzonna, Fabrizio (USI Università della Svizzera Italiana); Parchet, Raphaël (USI Università della Svizzera Italiana); Pica, Giovanni (USI Università della Svizzera Italiana) |
| Abstract: | This paper investigates the impact of opening the labor market to qualified immigrants who hold fully equivalent diplomas with respect to natives and speak the same mother tongue. Leveraging the 2002 opening of the Swiss labor market to qualified workers from the European Union, we show that the policy change led to a large inflow of young immigrants with the same linguistic background as natives. This, in turn, produced heterogeneous effects on natives wages and employment. While incumbent workers experienced a wage gain and a decrease in the likelihood of becoming inactive, the opposite happened for young natives entering the labor market after the policy change. This is likely the result of different patterns of complementarity/substitutability between same-language immigrants and natives with different levels of labor market experience. |
| Keywords: | worker substitutability, wage effects, qualified immigration, experience |
| JEL: | F22 J08 J31 J61 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15631&r= |
| By: | Mariam Camarero (University Jaume I and INTECO, Department of Economics, Campus de Riu Sec, E-12080 Castellón, Spain.); Silviano Sergi Moliner (University Jaume I and INTECO, Department of Economics, Campus de Riu Sec, E-12080 Castellón, Spain.); Salvador Cecilio Tamarit (University of València and INTECO, Department of Applied Economics II, Av. dels Tarongers, s/n Eastern Department Building E-46022 Valencia, Spain.) |
| 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 US OFDI, especially for smaller and more homogeneous groups. |
| Keywords: | BMA, DCCEPMG, long-run, structural breaks, economic integration |
| JEL: | F21 F23 R39 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2210&r= |
| By: | Akmoldoev, Kiyalbek |
| Abstract: | Due to the geographical location of the Central Asian countries and Kyrgyzstan, which do not have direct access to the sea, there is a dependence on the transport route via Kazakhstan, Russia, and Belarus to trade goods with the European market. The Chinese BRI project would offer an alternative for Central Asian countries to connect economically with European, Middle Eastern and West Asian countries. However, turning away from Russia and toward China holds potential for conflict. Therefore, the main objective of this article is to analyze the BRI projects in Central Asia and predict how realistic it is to implement them without the "permission" of the Russian Federation. In doing so, it takes a closer look at the strategic interest for China in Central Asia and how the BRI project in Kyrgyzstan is performing. The SWOT analysis points to a win-win situation, which, however, comes with a warning to be cautious. Particular attention should be paid to financial dependence on China, which could be due to a debt trap. |
| Keywords: | Belt and Road Initiative,Kyrgyzstan,Geopolitics,Debt-Trap,Silk Road Route |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:opodis:20225&r= |
| By: | Moritz Laber; Peter Klimek; Martin Bruckner; Liuhuaying Yang; Stefan Thurner |
| Abstract: | The war in Ukraine highlighted the vulnerability of the global food supply system. Due to dependencies in the global food-production network, the local loss of one crop can lead to shortages in other countries and affect other products made from it. Previous studies treat products in isolation and do not account for product conversion during production. Here, we reveal the losses of 125 food products after a localized shock to agricultural production in 192 countries using a multilayer network model of trade (direct) and conversion of food products (indirect), thereby quantifying $10^8$ shock transmissions. We find that a complete agricultural production loss in Ukraine has highly heterogeneous impacts on other countries, causing relative losses of 89% in sunflower oil and 85% in maize via direct effects, and up to 25% in poultry meat via indirect impacts. Our model offers a general framework to assess systemic risks in the food system |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.01846&r= |
| By: | Olatunji A. Shobande (University of Aberdeen, UK); Lawrence Ogbeifun (University of Mississippi, USA); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study explored whether globalisation and technology are harmful to health for a global panel dataset of 52 countries for the period of 1990–2019. The study focused on four continents: Africa, the Americas, Asia/Oceania, and Europe. We used four advanced econometric methodologies, which include the standard panel fixed effect (FE), Arellano-Bover/Blundell-Bond dynamic panel analysis, Hausman-Taylor specification, and Two-Stage Least Squares (FE-2SLS)/Lewbel-2SLS approach. Our empirical evidence highlights the significance of globalisation and technology in promoting global health. Our findings are not only of interest because it suggests that globalisation has varied impact on global health indicators, but they indicate that technology is useful in tracking, monitoring, and promoting global health. In addition, our empirical evidence indicates that a truly health-centered process of globalisation and technological innovation can only be realised by ensuring that the interests of countries and vulnerable populations to health risks are adequately considered in international decision-making regarding global economic integration. We suggest that achieving the aspiration of global health will entail the use of globalisation and information technology to extend human activities and provide equal access to global health. |
| Keywords: | globalisation; technology; global health |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/070&r= |
| By: | Justin R. Pierce; Peter K. Schott; Cristina Tello-Trillo |
| Abstract: | We use matched employer-employee data to examine outcomes among workers initially employed within and outside manufacturing after trade liberalization with China. We find that exposure to this shock operates predominantly through workers' counties (versus industries), that larger own industry and downstream exposure typically reduce relative earnings, and that greater upstream exposure often raises them. The latter is particularly important outside manufacturing: while we find substantial and persistent predicted declines in relative earnings among manufacturing workers, those outside manufacturing are generally predicted to experience relative earnings gains. Investigation of employment reactions indicates they account for a small share of the earnings effect. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-42&r= |
| By: | Bossavie,Laurent Loic Yves; Gorlach,Joseph-Simon; Ozden,Caglar; Wang,He |
| Abstract: | In the presence of credit constraints, temporary migration abroad provides an effective strategy for workers to accumulate savings to finance self-employment when they return home. This paper provides direct evidence of this link and its effects on workers’ employment trajectories by using a new, large-scale survey of temporary migrants from Bangladesh. It constructs and estimates a dynamic model that establishes connections between asset accumulation and credit constraints, and, thus, between workers’ migration and self-employment decisions. Interlinked impacts also emerge from simulations of three key policy interventions that target migration costs or domestic credit constraints for entrepreneurship. Lowering migration costs increases emigration, reduces the age at which workers depart, and reduces the duration of their time abroad, which together lead to higher savings and domestic self-employment. Reducing the interest rate for entrepreneurial loans reduces migration and savings levels, undercutting the positive effects on business creation at home. Correcting workers’ inflated perceptions about overseas earnings potential reduces emigration rates and durations, triggering a decrease of both repatriated savings and self-employment in Bangladesh. The findings, which have implications for migrant-sending countries, highlight the need for policies to take into account the linkages between migration and self-employment decisions. |
| Keywords: | Employment and Unemployment,Migration and Development,Trade and Services,Private Sector Development Law,Private Sector Economics,Marketing,Labor Markets |
| Date: | 2021–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9740&r= |
| By: | Ghose,Devaki |
| Abstract: | How do trade shocks affect welfare and inequality when human capital is endogenous? Using an external information technology demand shock and detailed internal migration data from India, this paper first documents that both information technology employment and engineering enrollment responded to the rise in information technology exports. Information technology employment responded more when nearby regions had a higher share of college-age population. The paper then develops a quantitative spatial equilibrium model featuring two new channels: higher education choice and differential costs of migrating for college and work. The framework is used to quantify the aggregate and distributional effects of the information technology boom and perform counterfactuals. Without endogenous education, the estimated aggregate welfare gain from the export shock would have been about a third as large and regional inequality twice as large. Reducing barriers to mobility for education, such as reducing in-state quotas for students at higher education institutes, would substantially reduce inequality in the gains from the information technology boom across districts. |
| Keywords: | Educational Sciences,International Trade and Trade Rules,Labor Markets,Employment and Unemployment |
| Date: | 2021–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9738&r= |
| By: | Bastos,Paulo S. R.; Lovo,Stefania; Varela,Gonzalo J.; Hagemejer,Jan |
| Abstract: | This paper examines if and how deeper economic integration with high-income nations impactsindustrial performance. It exploits Poland’s accession to the European Union in 2004 as a source of variation in thedegree of market integration with Germany. Using data on Polish manufacturing firms over 1995–2013, the paper findsthat EU accession was followed by significant within-firm growth in output and productivity, notably in industries inwhich Germany was more specialized at the moment of accession. Increased flows of German investment to thesesectors played an important role in shaping these effects. |
| Date: | 2022–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9988&r= |
| By: | Francesco Manaresi; Alessandro Palma; Luca Salvatici; Vincenzo Scrutinio |
| Abstract: | We study the effects of a subsidy program designed to boost small and medium enterprises' export capabilities through a Temporary Export Manager (TEM), hired for at least 6 months to provide consulting on how to reach foreign markets. Firms applied online for the subsidy and vouchers to hire TEMs were allocated on a first-come, first-served basis. We use a difference-in-differences design to compare the performances of firms that nearly got the subsidy with those that barely did not. Eligible firms experienced a large increase in revenues, return on equity, profits and value added per employee, accompanied by a significant growth in export in extra-EU markets four years after receiving the subsidy. The gains were larger for the least productive and smaller firms and effects were heterogeneous across TEM providers. TEMs were also effective in stimulating 'good' labor demand: besides intensifying exports, firms increased their workforce by nearly 13%, mainly in full-time and permanent employees. Results of a survey conducted on TEM providers confirm our econometric results and revealed that the benefits of voucher extended beyond the initial subsidized service. |
| Keywords: | SMEs, export subsidy, labor demand, natural experiment, click-day |
| Date: | 2022–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1871&r= |
| By: | Bossavie,Laurent Loic Yves; Ozden,Caglar |
| Abstract: | Temporary migration is widespread globally. While the literature has traditionally focused onthe impacts of permanent migration on destination countries, evidence on the effects of temporary migration on origincountries has grown over the past decade. This paper highlights that the economic development impacts, especiallyon low- and middle-income origin countries are complex, dynamic, context-specific and multi-channeled. The paperidentifies five main pathways: (i) labor supply, (ii) human capital, (iii) financial capital and entrepreneurship, (iv)aggregate welfare and poverty, and (v) institutions and social norms. Several factors shape these pathways and theireventual impacts. These include initial economic conditions at home, the scale and double selectivity of emigration andreturn migration, and employment and human capital accumulation opportunities experienced by migrants whilethey are overseas, among others. Meaningful policy interventions to increase the development impacts oftemporary migration require proper analysis, which, in turn, depends on high quality data on workers’ employmenttrajectories. This is currently the biggest research challenge to overcome to study the development impacts oftemporary migration. |
| Date: | 2022–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9996&r= |
| By: | Fabrizio Leone; Rocco Macchiavello; Tristan Reed |
| Abstract: | Prices for several intermediate inputs, including cement, are higher in developing economies - particularly in Africa. Combining data from the International Comparison Program with a global directory of cement plants we estimate an industry equilibrium model to distinguish between drivers of international price dispersion: demand, costs, conduct, and entry. Developing economies feature both higher marginal costs and higher markups. African markets are not characterized by higher barriers to entry and, if anything, feature relatively more competitive conduct. The small size of many national markets, however, limits entry and competition and explains most of the higher markups. Policy implications are discussed. |
| Keywords: | International price dispersion, market power, market size, markup, cement, Africa |
| Date: | 2022–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1862&r= |
| By: | Cao, Jin; Dinger, Valeriya; Juelsrud, Ragnar E.; Liaudinskas, Karolis |
| Abstract: | In this paper, we examine how a trade conflict’s impact on the real economy can be amplified by financial intermediaries. After the Norwegian Nobel Peace Prize Committee awarded the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo, China in practice banned imports of Norwegian salmon. The ban was an unexpected trade shock to the Norwegian salmon industry. Using bank balance sheet and credit register data, we trace how this trade shock affected the lending behavior of banks highly exposed to the salmon industry when the shock occurred. We find that, in the years following the trade shock, highly exposed banks cut back lending to non-salmon firms and households by 3-6 percent more than other banks. Furthermore, we find that the reduction in lending was not driven by the erosion of bank capital, but rather by the shift in expectations about the performance of loans to salmon producers, which drove highly exposed banks to increase their loan loss provisions and reduce risk-taking. |
| JEL: | F14 G21 |
| Date: | 2022–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2022_008&r= |
| By: | Margaryan, Atom S.; Terzyan, Haroutyun T.; Grigoryan, Emil A. |
| Abstract: | One of the pillars of the Belt and Road Initiative is the deepening of cooperation between member countries, especially in the field of science and innovation. But, is there any historical evidence of the concept of the Great Silk Road as a region of technology transfer, first? Secondly, what are the priorities and development directions of the initiative in the mentioned context? Third, what development guidelines should be set for the participating countries (Washington, Beijing, etc.). And finally, is there really a connection between infrastructure development and innovation activity? To answer the last question, a correlation and econometric analysis has been performed, the results of which indicate positive effects. |
| Keywords: | The Great Silk Road,Belt and Road Initiative,Innovation,Patent Activity,TechnologyTransfer |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:opodis:20226&r= |
| By: | Bickenbach, Frank; Liu, Wan-Hsin |
| Abstract: | The number of foreigners living in China is very low in international comparison and has further declined recently. While the strict COVID-19-related travel restrictions played a major role in this decline, there are indications that the decline started in part before the pandemic and may well continue once the pandemic-related restrictions are lifted. Against this background, this article discusses the economic challenges that the reduction in the number of foreigners is causing for Western multinationals operating in China and to the Chinese economy more generally. The consequences could spill over to the world economy and reinforce economic and technological decoupling tendencies between China and the West. |
| JEL: | J61 F23 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:265111&r= |
| By: | Quimba, Francis Mark A.; Rosellon, Maureen Ane D.; Carlos, Jean Clarisse T. |
| Abstract: | To develop a cohesive, economically integrated, socially responsible, people-oriented, people-centered, and rules-based region, the Association of Southeast Asian Nations (ASEAN) Community was established in November 2015. It is composed of three pillars: the ASEAN Economic Community (AEC), the ASEAN Socio-Cultural Community, and the ASEAN Political-Security Community. Each pillar corresponds to a blueprint and is a part of the general master plan ASEAN Community Vision 2025 with the theme ''ASEAN 2025: Forging Ahead Together''. This study focuses on the AEC Blueprint 2025 and its characteristics and elements. More than five years since its establishment, there is a need to assess the performance of the Philippines in the AEC key result areas. By comparing the baseline with the most recent data, this study found that the Philippines is in the middle of the pack (ranking from 4th to 6th) among ASEAN countries. In terms of AEC vision and goals, the country’s performance suggests that it is generally on track and progressing in the right direction. |
| Keywords: | ASEAN Economic Community; AEC; AEC Blueprint; ASEAN 2025 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:rpseri:rps_2022-01&r= |
| By: | Constantinescu,Ileana Cristina; Fernandes,Ana Margarida; Grover,Arti Goswami; Poupakis,Stavros; Reyes Ortega,Santiago |
| Abstract: | This paper analyzes the initial impact and recovery of globally engaged firms from theCOVID-19 crisis. It uses rich survey data of nearly 65,000 firm-year observations in 45 countries spanning three wavesof data collection. The findings are organized in a series of stylized facts, which suggest that although the pandemichad an immediate adverse impact on most firms, the globally engaged ones are recovering faster, possibly due to theirhigher capabilities. Among globally engaged firms, those directly involved with international markets show betterrecovery than the ones that were indirectly involved. These results mask wide variation by firm traits, sectoralattributes, and country characteristics. At the core of the recovery of globally engaged firms is their heightenedresponse to the crisis by finding novel ways to adapt supply chains even in the presence of lockdowns and uncertainty.These firms swiftly digitalized, introduced new products and changed their markets and sources of inputs. Over and abovetheir capabilities, global engagement cushions firms against shocks. Policymakers could therefore facilitate globallinkages by providing information on potential markets and products, by making production flexible in terms offacilitating remote work, reducing the rigidity of contracts; and incentivizing financial institutions to issueinstruments that reduce uncertainty risk. |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9991&r= |
| By: | Umut Unal (Research Institute for Labour and Social Affairs (RILSA)); Bernd Hayo (Marburg University); Isil Erol (Oezyegin University) |
| Abstract: | This study provides evidence of the causal impact of immigration on German house prices, flat prices, and flat rents using an extensive dataset covering 382 administrative districts over the period 2004−2020. Employing a panel-data approach and a manually constructed shift-share instrument, we show that international migration has a significantly positive short-term effect on German flat prices and rents. House prices are not significantly affected. We estimate that an increase in international migration of 1% of the initial district population causes a hike in flat prices of up to 3% as well as a hike in flat rents of about 1%. The increase in flat prices is more than twice as high as this at the lower end of the market, whereas the flat rental market demonstrates a more linear response. We also discover that immigration’s impact on flat prices and rents does not significantly differ across rural and urban areas within the country. |
| Keywords: | Immigration; Housing prices; Rents; Instrumental variable; IV quantile regression; German housing market |
| JEL: | J61 R23 R31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202238&r= |
| By: | Esther Arenas-Arroyo; Bernhard Schmidpeter (Johannes Kepler Universtiy Linz) |
| Abstract: | We study the spillover effects of immigration enforcement policies on children’s human capital. Exploiting the temporal and geographic variation in the enactment of immigration enforcement policies, we find that English language skills of US-born children with at least one undocumented parent are negatively affected by the introduction of these policies. Changes in parental investment behavior cause this reduction in children’s English skills. Parents are less likely to enroll their children in formal non-mandatory preschool, substituting formal non-mandatory preschool education with parental time at home. Parents also reduce time spent on leisure and socializing, providing children with fewer opportunities to interact and lean from others. Ultimately, these developments reduce children’s long-term educational success. Exposure to immigration enforcement during early childhood lowers the likelihood of high school completion. We also find negative, though imprecise, effects on college enrollment. |
| Keywords: | Immigration policies, children’s human capital, children’s language skills, parental investment |
| JEL: | K37 J13 J15 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2022-13&r= |
| By: | Carvalho, Daniel; Schmitz, Martin |
| Abstract: | We study euro area investors' portfolio adjustment since the Brexit referendum in terms of securities issued in the UK or denominated in pound sterling, in the context of heightened policy uncertainty surrounding the exit process of the UK from the EU. Our sector-level analysis "looks-through" holdings of investment fund shares to gauge euro area sectors' full exposures to debt securities and listed shares. Our key finding is the absence of a negative "Brexit-effect" for euro area investors, which would have rendered UK-issued and pound-denominated securities generally less attractive. Instead, we observe that euro area investors increased their absolute and relative exposures to UK-issued and pound-denominated debt securities since the Brexit referendum. The analysis also reveals an increase in the euro area's exposure to listed shares issued by UK non-financial corporations, while the exposures to shares issued by UK banks declined. These findings should be seen against the backdrop of low yields on euro area debt securities and a strong recovery in UK share prices since the Brexit referendum, which appear to have largely outweighed the uncertainties associated with Brexit. JEL Classification: F30, F41, G15 |
| Keywords: | bilateral portfolio holdings, cross-border investment, investment funds, sovereign debt |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222734&r= |
| By: | Ragoussis,Alexandros; Timmis,Jonathan David |
| Abstract: | This paper presents new evidence on the growth of digital technology in response to the COVID-19pandemic. It uses the largest and most comprehensive database available to analyze website birth dynamics and theuptake of website technologies. The database comprises 150 million active websites and 27,000 technologies. Thefindings show that, over 2020, there was rapid adoption of both e-commerce and online payments across all countries,with greatest rates of adoption in countries that had lower initial levels of technology use. The timing of COVID-19lockdowns strongly predicts increased use of these technologies, accounting for about a third of the overallincrease in e-commerce or online payments usage over 2020. More importantly the shock appears to have resulted in ashift in trend more so than a shift in level, suggesting that COVID-19 may have transformed the trajectory of onlinemarket growth. |
| Keywords: | Information Technology,International Trade and Trade Rules |
| Date: | 2022–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9951&r= |
| By: | Kebede,Hundanol Atnafu |
| Abstract: | International commodity price shocks may have large impacts on producers in developing countries.In this paper, a unique household panel data from Ethiopia is utilize to show that a decrease in international coffeeprice has strong pass-through to the consumption of households that rely on coffee production as a main sourceof livelihood. It also results in decreases in on-farm labor supply (particularly male labor supply) and inducesreallocation of labor towards non-coffee fields, but has negligible effect on off-farm labor supply. The decline inconsumption has significant consequences on child malnutrition: children born in coffee-producing householdsduring low coffee price periods have lower weight-to-age and weight-to-height z-scores than their peers born innon-coffee households. |
| Keywords: | Labor Markets,Health Care Services Industry,Nutrition,International Trade and Trade Rules |
| Date: | 2021–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9839&r= |
| By: | Lokshin,Michael M.; Ravallion,Martin |
| Abstract: | The paper simulates a double-sided competitive market in temporary work permits between the U.S. and Mexico. Eligible working-age Americans would have the option of renting out their implicit work permits while Mexican workers have remunerative new opportunities. With plausible allowances for migration costs, the market can support a self-financed and self-targeted basic income for Americans and lower their poverty rate. With sufficiently high tax rates on work permits, the scheme can be managed to avoid a large increase in the count of total migrants compared to now. The likely change in the skill composition of migrants would raise U.S. GDP. |
| Keywords: | Inequality,Labor Markets,Human Migrations&Resettlements,Migration and Development,International Migration,Financial Sector Policy,Social Protections&Assistance |
| Date: | 2021–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9708&r= |