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on International Trade |
| By: | Crowley,Meredith A; Han,Lu; Prayer,Thomas |
| Abstract: | Do preferential trade agreements (PTAs) lead to greater market integration, more intense competition and less market power for firms? This paper integrates the detailed data on 257 preferential trade agreements from the World Bank's Deep Trade Agreements (DTA) database with administrative customs datasets of product-level exports by firms from thirteen developing and emerging countries to estimate the responsiveness of firm-level exports, export prices, and destination-specific markups to trade and domestic policy commitments enshrined in deep trade agreements. The findings suggest that both the direct and indirect effects of deep trade agreement provisions on export sales are quantitatively significant. Perhaps more interestingly, the finding of a suggestive evidence of a pro-competitive effect of PTAs. |
| Keywords: | International Trade and Trade Rules,Trade Policy,Rules of Origin,Trade and Multilateral Issues,Trade and Services,Industrial and Consumer Services and Products |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9600&r=int |
| By: | Mercer-Blackman,Valerie Anne; Xiang,Wei; Khan,Fahad |
| Abstract: | Does a global value chain framework provide additional insights into the question of whether foreign direct investment is beneficial to host countries? The literature has found mixed results on whether foreign direct investment provides positive spillovers over and above mere financing. But the studies have focused on one country, or studies with an international focus tend to abstract from intersectoral linkages. By examining this question in the context of global value chains, this paper provides a much better understanding of the association as well as general validity. It harmonizes three major panel data sets: 1) the Multi-Regional Input-Output table for international input-output linkages, 2) the FDI Markets reports for greenfield foreign direct investment, and 3) the World Bank Enterprise Surveys for firm performance measures. The paper produces a rich panel data set from 2011 to 2017. The findings show that foreign direct investment has a positive effect on labor productivity in sectors and firms within those sectors. Moreover, global value chain participation plays a key role in shaping the foreign direct investment effects. Sectors with lower global value chain participation benefit more from foreign direct investment: doubling the foreign direct investment in those sectors results in an 8 percent productivity gain. The positive effect seems to be due to the increased competition created by foreign direct investment. Foreign direct investment spillovers also take place through domestic and foreign backward linkages, which means that foreign direct investment also has positive inter-sector and cross-border spillovers. |
| Keywords: | International Trade and Trade Rules,Common Carriers Industry,Food&Beverage Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Labor Markets,Mining&Extractive Industry (Non-Energy) |
| Date: | 2021–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9645&r=int |
| By: | Baccini,Leonardo; Fiorini,Matteo; Hoekman,Bernard M.; Altomonte,Carlo; Colantone,Italo |
| Abstract: | How does trade affect the design of preferential trade agreements (PTAs)? What is the role of global value chains (GVCs)? The authors answer these questions by empirically investigating the causal impact of gross and value-added trade on the depth of PTAs. To solve the critical issue of endogeneity of trade flows for trade policy, the identification strategy exploits a recent transportation shock: the sharp increase in the maximum size of container ships, which has more than tripled between 1995 and 2007. The key variation in our instrument hinges on the fact that only deep-water ports can accommodate new larger ships. The strategy is flexible enough to generate excludable instruments for different value-added components of exports. This allows us to assess how the design (depth) of PTAs is affected not only by gross exports but more specifically by GVC-trade as captured by indicators of trade in domestic and foreign value added. The authors find that trade occurring through GVCs increases the probability of forming deep PTAs, i.e., agreements that include provisions that go beyond the coverage of the WTO. These GVC-trade effects are larger than those of gross exports, which include flows that are unrelated to GVCs. The results indicate that GVCs are one important driver of deep preferential liberalization. |
| Keywords: | International Trade and Trade Rules,Ports&Waterways,Rules of Origin,Trade Policy,Trade and Multilateral Issues,Industrial and Consumer Services and Products |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9598&r=int |
| By: | Mulabdic,Alen; Yasar,Pinar |
| Abstract: | This paper presents a framework to study countries’ export potentials. It uses a gravity model to develop measures of export and trade policy potentials at the aggregate, bilateral, and industry levels. The methodology is applied to the case of Turkey. The analysis finds that Turkey was moderately under-exporting over 2010-17. The United States, China, and Japan are important untapped destination markets, accounting for US$29 billion (16-17 percent of total exports) of missing exports. Industry-level results suggest that Turkey has high export potential in the electronics and chemical industries. |
| Keywords: | International Trade and Trade Rules,Trade and Services,Food Security,Health and Sanitation |
| Date: | 2021–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9557&r=int |
| By: | Khan,Shafaat Yar; Khederlarian,Armen |
| Abstract: | Firms anticipate upcoming tariff changes by shifting their purchases to periods with lower costs. This paper shows that such anticipatory dynamics overstate the trade elasticity. Standard identification of the trade response to trade cost changes uses tariff variation from free trade agreements and assumes that trade flows equal their consumption. However, free trade agreements eliminate tariffs gradually through announced phaseouts. This allows firms to delay their purchases until tariff cuts are effective, while consuming their inventories. Indeed, during the North American Free Trade Agreement’s staged tariff reductions, imports experienced sizable anticipatory slumps followed by libseralization bumps. To study the behavior of consumed imports, a measure is constructed that uses inventory-to-sales ratios to smooth the trade flows. Its application to the data yields that the annual trade-flow elasticity is 56 percent larger than the trade-consumption response and that the ratio of the long- to short-run elasticity increases from 2.3 with trade flows to 3.4 with consumed imports. The measure is validated through Monte Carlo simulations of an (s,S) ordering model that reproduces the observed trade pattern. |
| Keywords: | International Trade and Trade Rules,Trade and Services,Rules of Origin,Trade and Multilateral Issues,Trade Policy |
| Date: | 2021–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9646&r=int |
| By: | Naoto JINJI; Mitsuo INADA |
| Abstract: | This study proposes an empirical strategy to identify the impact of policy uncertainty (PU) at the host economy-sector level on foreign direct investment (FDI) by exploiting the plausibly exogenous exemptions from certain obligations such as national treatment (NT) and the most favored nation (MFN) in international investment agreements (IIAs). To this end, the study evaluates how the activities of Japanese multinational enterprises (MNEs) and their foreign affiliates are affected by Japan’s 22 IIAs, including bilateral investment treaties and economic partnership agreements with investment provisions, over 1995–2016 at the microdata level. Our empirical strategy relies on differences in the PU changes that MNEs and their foreign affiliates face after an IIA enters into force, depending on whether the relevant sectors are exempted from NT and MFN in the IIA. We find that the PU regarding the MFN has a stronger effect on FDI than the PU regarding NT. In particular, the former PU discourages the establishment of new foreign affiliates and also reduces the capital investment by an affiliate. However, PU does not necessarily induce the exit of affiliates from the market. |
| Keywords: | policy uncertainty; international investment agreements; negative lists; foreign direct investment. |
| JEL: | F15 F21 F23 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-21-010&r=int |
| By: | Gustavo de Souza; Haishi Li |
| Abstract: | Can anti-dumping tariffs increase employment? We compile data on all antidumping (AD) investigations in Brazil matching it to firm-level administrative employment information. Using difference-in-differences, we find that an AD tariff decreases imports and increases employment in the protected sector. Moreover, downstream firms decrease employment, while upstream ones are not affected. To quantify the aggregate effect of these tariffs, we build a model with international trade, input-output linkages, and labor force participation. We show that the Brazilian AD policy increased employment by 0.06%, but decreased welfare by 2.4%. Using tariffs, the government can increase employment by as much as 2.8%. |
| Keywords: | Employment; Tariffs; Anti-Dumping; International Trade |
| JEL: | F13 F16 |
| Date: | 2022–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:94915&r=int |
| By: | Morgan, Stephen; Arita, Shawn; Beckman, Jayson; Ahsan, Saquib; Russell, Dylan; Jarrell, Philip; Kenner, Bart |
| Abstract: | In 2018, the United States imposed Section 232 tariffs on steel and aluminum imports from major trading partners and separately Section 301 tariffs on a broad range of imports from China. In response to these actions, six trading partners—Canada, China, the European Union, India, Mexico, and Turkey—responded with retaliatory tariffs on a range of U.S. agricultural exports, including agricultural and food products. The agricultural products targeted for retaliation were valued at $30.4 billion in 2017, with individual product lines experiencing tariff increases ranging from 2 to 140 percent. This report provides a detailed look at the impact of retaliatory tariffs by State and commodity and estimates the direct export losses associated with the trade conflict. |
| Keywords: | International Relations/Trade |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:327180&r=int |
| By: | Hu, Arthur; Hu, Xingwei; Tong, Hui |
| Abstract: | The embrace of globalization and protectionism among economies has ebbed and flowed over the past few decades. These fluctuations call for quantitative analytics to help countries improve their trade policies. Changing attitudes about globalization also imply that the best trade policies may vary over time and be country-specific. We argue that the imports and exports of all economies constitute a counterbalanced network where conflict and cooperation are two sides of the same coin. Quantitative competitiveness is then formulated for each country using a network counterbalance equilibrium. A country could improve its relative strength in the network by embracing globalization, protectionism, trade collaboration, or conflict. This paper presents the necessary conditions for globalization and trade wars, evaluates their side effects, derives national bargaining powers, identifies appropriate targets for conflict or collaboration, and recommends fair resolutions for trade conflicts. Data and events from the past twenty years support these conditions. |
| Keywords: | globalization, trade war, counterbalance equilibrium, national competitiveness, bargaining power, authority distribution |
| JEL: | C71 C78 F11 F13 F15 O24 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114871&r=int |
| By: | Aziz, Nusrate; Aziz, Ahmed; Mahar, Gerry |
| Abstract: | This study estimates international and interprovincial migrants' impact on interprovincial trade using panel data from 1981- 2016 for Canadian provinces. Estimated results show that migration plays a significant role in determining Canadian interprovincial trade. Although the stock of interprovincial migrants is smaller than the stock of immigrants in Canadian provinces, the earlier plays a consistently positive and significant role in interprovincial trade, but the latter is not consistently significant across estimators. Trade openness, population-weighted distance, and language proximity are also significant factors of interprovincial trade creation. Our results are robust to different estimation methods, model specifications, and alternative measures of migrants' stock in Canadian provinces. |
| Keywords: | interprovincial migration,immigration,interprovincial trade,gravity model,IV approach |
| JEL: | C33 C36 F16 F22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:341r&r=int |
| By: | Alessandria,George; Khan,Shafaat Yar; Khederlarian,Armen |
| Abstract: | This paper studies the effects on international trade from the annual tariff uncertainty about China’s Most Favored Nation (MFN) status renewal in the United States prior to joining the World Trade Organization. The paper makes four main findings. First, in monthly data trade increases significantly in anticipation of uncertain future increases in tariffs and falls upon renewal. Second, the probability of a tariff increase was perceived to be relatively small, with an average annual probability of non-renewal of about 4.5 percent. Third, what matters more is the expected future tariff rather than the uncertainty around it. These effects are identified using within-year variation in the risk of trade policy changes around the renewal vote and trade flows. An (s,S) inventory model generates this behavior and that variation in the strength of the stockpiling in advance of the vote is increasing in the storability of goods. Fourth, the costs associated with within-year trade policy induced stockpiling reduce entrants’ incentive to operate in a market with tariff uncertainty. The results explain why trade may hold up in advance of a prospective policy change, such as Brexit or the US-China escalating tariff war of 2018-19, but may fall sharply even if expected tariff increases do not materialize. |
| Keywords: | International Trade and Trade Rules,Rules of Origin,Trade and Multilateral Issues,Trade and Services,Trade Policy |
| Date: | 2021–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9551&r=int |
| By: | Prusa,Thomas J.; Zhu,Min |
| Abstract: | This paper examines the impact of preferential trade agreements on the duration of antidumping protection. It employs a two-step selection model where the first step accounts for the impact of preferential trade agreement membership on the original antidumping determination, and the second step estimates the impact of preferential trade agreement membership on the duration of duties. Several key findings emerge from the analysis. Most importantly, the duration of antidumping protection is significantly shorter for preferential trade agreement members, compared with targeted countries that are not preferential trade agreement members. The estimates imply that preferential trade agreement membership is associated with a 30 percent reduction in the duration of protection. Second, the impact on duration depends, in part, on whether the preferential trade agreement has rules specifically related to antidumping. On average, over all users and targeted countries, the impact on duration is about twice as large for preferential trade agreements with rules, compared with those with- out rules (and both have shorter duration than non-preferential trade agreement members). Third, the duration of antidumping measures has increased markedly over time, primarily due to cases in the right tail of the distribution. This is consistent with the widespread belief that the Uruguay Round's sunset review provisions did not produce the result that many World Trade Organization members sought, but it also reflects the growing fraction of cases targeting China. Although the rising fraction of cases against China partly explains why duration has increased, it does not explain the finding with respect to the impact of preferential trade agreements and duration. |
| Keywords: | International Trade and Trade Rules,Crime and Society,Human Rights,Rules of Origin,Trade Policy,Trade and Multilateral Issues |
| Date: | 2021–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9638&r=int |
| By: | Tullao, Tereso Jr. S.; Rivera, John Paolo R. |
| Abstract: | The Regional Comprehensive Economic Partnership (RCEP) is a forward-looking trade agreement between member economies of the Association of Southeast Asian Nations (ASEAN) and its free trade agreement (FTA) partners (AFPs) namely Australia, China, Japan, Korea, and New Zealand (i.e., non-ASEAN signatory economies). It presents an opportunity for participating economies to consolidate rules given overlapping sets of FTAs. Because of stalemates that developed between economies in World Trade Organization negotiations, more regional trading agreements (RTAs) have emerged. As RTAs define trade rules and commitments for all its signatories that are geared towards encouraging free movement of goods and services among member economies, it can deepen economic linkages. The RCEP is an alternative avenue for trade liberalization at the regional level, and a challenger to the Trans-Pacific Partnership in terms of coverage and degree of liberalization. Through RCEP, new opportunities for trade and investment may be harnessed. As a result, the enhanced partnership can contribute to human resource and infrastructure development—which are key to the economic growth and development of the Philippines. Hence, we investigate how the RCEP can deepen the contributions of trade in services in the Philippine economy through the commitments made and limitations imposed. We reviewed and assessed the specific commitments of AFPs joining the RCEP in terms of trade in services, particularly on market access and national treatment. We compared these commitments, evaluated their relevance to the needs of the Philippines, and determined the benefits that the Philippines can reap from RCEP. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ASEAN; Regional Comprehensive Economic Partnership; free trade agreements; market access; national treatment; trade in services |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2022-02&r=int |
| By: | Semrau, Finn Ole |
| Abstract: | Industries that occupy upstream positions in global value chains (GVCs) - being positioned closer to the raw product - produce proportionately more CO2-intensive. However, firms are heterogeneous, even in narrowly defined industries. In this paper, I empirically investigate whether the relationship between upstreamness and CO2 emissions, measured in absolute and relative terms, holds within industries at the firm level. Using granular data of Indian manufacturing firms and controlling for established drivers of clean production, I reveal that firms producing products closer to final consumption produce less CO2-intensive. I corroborate the finding by using a 2-SLS instrumental variable approach. Interestingly, I find that exposure to importing countries with stringent environmental policies attenuates the link between upstreamness and dirty production. The latter finding suggests the imperative of technology upgrading for dirty upstream producers aiming to remain competitive in international markets. |
| Keywords: | Environment and trade,environment and development,CO2 intensity,global value chains,sustainable development |
| JEL: | F14 F18 O13 Q56 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc22:264178&r=int |
| By: | Evenett,Simon J.; Fiorini,Matteo; Fritz,Johannes; Hoekman,Bernard M.; Lukaszuk,Piotr; Rocha,Nadia; Ruta,Michele; Santi,Filippo; Shingal,Anirudh |
| Abstract: | This paper presents new high-frequency data on trade policy changes targeting medical and food products since the beginning of the COVID-19 pandemic, documenting how countries used trade policy instruments in response to the health crisis on a week-by-week basis. The data set reveals a rapid increase in trade policy activism in February and March 2020 in tandem with the rise in COVID-19 cases, but also uncovers extensive heterogeneity across countries in their use of trade policy and the types of measures used. Some countries acted to restrict exports and facilitate imports, others targeted only one of these margins, and many did not use trade policy at all. The observed heterogeneity suggests numerous research questions on the drivers of trade policy responses to COVID-19, the effects of these measures on trade and prices of critical products, and the role of trade agreements in influencing trade activism. |
| Keywords: | International Trade and Trade Rules,Rules of Origin,Trade Policy,Trade and Multilateral Issues,Health and Sanitation |
| Date: | 2020–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9498&r=int |
| By: | Zheng, Han; Hongtao, Li |
| Abstract: | This paper offers a variant of the Ricardian model able to structurally interpret the estimate of country-specific variable—transportation infrastructure. Guided by this new theoretical framework, this paper shows that transportation infrastructure enhances international trade more than internal trade. Further quantitative analysis suggests 10% increase in transportation infrastructure induces 3.9% increase in real income and more than 95% of the gains concentrate on the infrastructure improving country. This paper also suggests that transportation infrastructure improvement increases real income mostly through internal trade cost reduction. All the above results suggest that better infrastructure leads to sizable gains providing additional empirical support to policies aiming to improve transportation infrastructure. |
| Keywords: | Gravity model, Transportation infrastructure, Internal trade cost |
| JEL: | F10 F14 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-124&r=int |
| By: | Borchert,Ingo; Di Ubaldo,Mattia |
| Abstract: | The majority of services trade is currently transacted under the terms of preferential trade agreements (PTAs) with increasingly ambitious provisions on crossborder trade and investment in services. This paper exploits novel and detailed information on the architecture and depth of services PTAs (the World Bank Deep Trade Agreements 2.0 database) to study which provisions, or policy configurations, characterise an effective agreement. The richness of policy information is crucial for being able to identify those aspects that matter most, namely an agreement's structure, its rules of origin for firms and natural persons, and provisions that ensure accountability. Ambitious provisions in these areas are associated with 15-65 percent higher bilateral trade, driven by regulation-intensive services. Services PTAs also lead to an increase in services value added sourced from PTA partners, through provisions that facilitate the exchange of capital and people. This finding sheds light on how services PTAs can affect the configuration of value chain trade. |
| Keywords: | International Trade and Trade Rules,Trade and Services,Business Cycles and Stabilization Policies,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,General Manufacturing,Trade and Multilateral Issues,Rules of Origin,Trade Policy,Export Competitiveness |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9608&r=int |
| By: | Espitia Rueda,Alvaro Raul; Ruta,Michele; Rocha,Nadia; Winkler,Deborah Elisabeth; Mattoo,Aaditya |
| Abstract: | This paper studies the trade effects of Covid-19 using monthly disaggregated trade data for 28 countries and multiple trading partners from the beginning of the pandemic to June 2020. Regression results based on a sector-level gravity model show that the negative trade effects induced by Covid-19 shocks varied widely across sectors. Sectors more amenable to remote work contracted less throughout the pandemic. Importantly, participation in global value chains increased traders’ vulnerability to shocks suffered by trading partners, but it also reduced their vulnerability to domestic shocks. |
| Keywords: | International Trade and Trade Rules,Transport Services,Industrial and Consumer Services and Products,Transport and Trade Logistics |
| Date: | 2021–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9508&r=int |
| By: | Beckman, Jayson; Gale, Fred; Morgan, Stephen; Sabala, Ethan; Ufer, Danielle; Valcu-Lisman, Adriana; Zeng, Wendy; Arita, Shawn |
| Abstract: | China is one of the top importers of agricultural products, but it has nontariff measures that prevent its imports from growing even larger. Economic theory suggests that a country would import products when foreign prices are lower than domestic prices, decreasing domestic prices and narrowing the “wedge” between domestic and international prices. In this report, the authors examine China’s import market potential using a price wedge approach—the difference between domestic and imported prices—for commodities that are imported by China. The report estimates the impact of removing these barriers for the four highest wedges using a global economic model. Domestic prices in China exceeded foreign prices (using the United States as an example) by large margins for the four commodities we considered, as follows: beef (58 percent), corn (64 percent), pork (213 percent), and wheat (42 percent). Estimates reveal that removing these price wedges could lead to more imports into China. Benefits would be widespread, increasing sales for producers in the United States and other exporting countries and yielding lower food prices for China’s consumers. |
| Keywords: | International Relations/Trade |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:327174&r=int |
| By: | Clémence Lenoir (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Julien Martin (UQAM - Université du Québec à Montréal = University of Québec in Montréal, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Isabelle Mejean (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR) |
| Abstract: | This paper studies how frictions in the acquisition of new customers distort the allocation of activities across heterogeneous producers. We add bilateral search frictions in a Ricardian model of trade and use French firm-to-firm trade data to estimate search frictions faced by French exporters in foreign markets. Estimated coefficients display a strong degree of heterogeneity across countries and products, that correlates with various proxies for information frictions. A counterfactual reduction in the level of search frictions improves the efficiency of the selection process and increases the average productivity of exports, because the least productive exporters are pushed out of the market, whereas exports increase at the top of the productivity distribution. |
| Keywords: | Firm-to-firm trade,Search frictions,Ricardian trade model,Structural estimation |
| Date: | 2022–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpspec:hal-03812813&r=int |
| By: | Ferrantino,Michael Joseph; Maliszewska,Maryla; Taran,Svitlana |
| Abstract: | This paper assesses and compares the economic impacts of four actual and potential free trade agreements in the Asia-Pacific Region: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the original Trans Pacific Partnership, the Regional Comprehensive Economic Partnership, and the Free Trade Area of the Asia-Pacific. Free trade areas with a larger scale and wider membership are expected to produce higher aggregate gains in increased gross domestic product and trade flows. U.S. withdrawal from the original Trans-Pacific Partnership reduced estimated gross domestic product gains for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership countries by about half. For countries belonging to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and also negotiating the Regional Comprehensive Economic Partnership, the potential gains from an agreement with China and the Republic of Korea are substantial, but not as large as if the United States were to rejoin the original Trans-Pacific Partnership. On a sectoral basis, significant structural shifts are observed for food processing, wearing apparel, textiles, and transport equipment. |
| Keywords: | International Trade and Trade Rules,Transport Services,Food Security,Construction Industry,Trade and Multilateral Issues,Trade Policy,Rules of Origin |
| Date: | 2020–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9496&r=int |
| By: | Bouët, Antoine; Laborde Debucquet, David; Traoré, Fousseini |
| Abstract: | MIRAGRODEP with endogenous tariffs is a recursive dynamic multi-region, multi-sector Computable General Equilibrium (CGE) model based on MIRAGRODEP which in turn is based on MIRAGE (Modelling International Relations Under Applied General Equilibrium). It constitutes an extension of the MIRAGRODEP model that allows the user to perform analysis involving endogenous tariffs such as designing optimal common external tariffs (CET) in customs unions. The model is particularly suitable for trade policy analysis that require designing optimal levels of tariffs for regional trade agreements. |
| Keywords: | AFRICA, AFRICA SOUTH OF SAHARA, CENTRAL AFRICA, EAST AFRICA, NORTH AFRICA, SOUTHERN AFRICA, WEST AFRICA, tariffs, trade, trade policies, computable general equilibrium models,common external tariffs (CET), modelling international relations under applied general equilibrium (MIRAGE ) |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:agrotn:tn-27&r=int |
| By: | Artuc,Erhan; Bastos,Paulo S. R.; Lee,Eunhee |
| Abstract: | This paper examines the welfare effects of international trade on workers in a new dynamic general equilibrium discrete choice model of labor mobility, where the workers’ choice set of jobs is endogenous. The analysis exploits differential exposure of sectors and regions to destination-specific demand shocks to estimate the impacts of exports on wages, employment, and labor mobility, using employer-employee panel data for Brazil. It then employs the same empirical strategy to estimate structural parameters and the different components of changes in model-implied worker welfare. Counterfactual simulations show that the endogenous number of job options significantly magnifies the welfare effects of trade shocks. |
| Keywords: | Rural Labor Markets,International Trade and Trade Rules,Labor Markets,Trade and Multilateral Issues |
| Date: | 2021–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9628&r=int |
| By: | Fontagne,Lionel; Rocha,Nadia; Ruta,Michele; Santoni,Gianluca |
| Abstract: | This paper explores the economic impacts of preferential trade agreements, focusing on the provisions they contain, beyond phasing out tariffs. Clustering 278 preferential trade agreements based on 906 provisions grouped into 18 policy areas, three clusters are obtained for which a trade elasticity to preferential trade agreement is estimated using structural gravity. A series of full general equilibrium counterfactual situations for endowment economies is simulated, revealing the economic impacts of deepening existing trade agreements and signing new ones—that is, the intensive and extensive margins of preferential trade agreements. The paper illustrates the method with a general deepening of existing preferential trade agreements worldwide. Focusing on the examples of the Latin America and the Caribbean and East Asia and Pacific regions, the paper shows that deepening preferential trade agreements leads to higher trade and welfare effects than signing new ones. |
| Keywords: | International Trade and Trade Rules,Trade Policy,Competition Policy,Competitiveness and Competition Policy,Health and Sanitation,Trade and Services |
| Date: | 2021–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9630&r=int |
| By: | Lefebvre,Kevin Jean-Rene; Rocha,Nadia; Ruta,Michele |
| Abstract: | Regional trade agreements increasingly include provisions that regulate state-owned enterprises. This paper combines new information on the content of “deep” regional trade agreements and data on Chinese firm-level exports during 2000-11 to analyze the spillover effect of rules on state-owned enterprises on the intensive and extensive margins of Chinese state-owned enterprises’ trade. Rather than containing state capitalism, regional trade agreements regulating state-owned enterprises signed by Chinese trading partners with third countries increase exports and entry of Chinese state-owned enterprises as they gain a competitive edge in regulated markets. This spillover effect is robust to several extensions and is even stronger for agreements that include rules on subsidies and competition policy. This finding points to the need for commonly agreed multilateral rules to regulate state owned enterprises. |
| Keywords: | International Trade and Trade Rules,Trade Policy,Competitiveness and Competition Policy,Competition Policy,Public Sector Administrative&Civil Service Reform,State Owned Enterprise Reform,Energy Privatization,Democratic Government,Economics and Finance of PublicInstitution Development,Privatization,De Facto Governments,Public Sector Administrative and Civil Service Reform |
| Date: | 2021–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9637&r=int |
| By: | Gustavo de Souza; Naiyuan Hu; Haishi Li; Yuan Mei |
| Abstract: | Trade sanctions are a common instrument of diplomatic retaliation. To guide current and future policy, we ask: What is the most cost-efficient way to impose trade sanctions against Russia? To answer this question, we build a quantitative model of international trade with input-output connections. Sanctioning countries simultaneously choose import tariffs to maximize their income and to minimize Russia’s income, with different weights placed on these objectives. We find, first, that for countries with a small willingness to pay for sanctions against Russia, the most cost-efficient sanction is a uniform, about 20% tariff against all Russian products. Second, if countries are willing to pay at least US$0.7 for each US$1 drop in Russian welfare, an embargo on Russia’s mining and energy products - with tariffs above 50% on other products - is the most cost-efficient policy. Finally, if countries target politically relevant sectors, an embargo against Russia’s mining and energy sector is the cost-efficient policy even when there is a small willingness to pay for sanctions. |
| Keywords: | trade sanctions; Tariff; tariff competition |
| JEL: | F13 O24 |
| Date: | 2022–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:94958&r=int |
| By: | Lucatello, Simone |
| Abstract: | Under the current global environmental governance and trade regimes, several initiatives, such as the new United States-Mexico-Canada Agreement, the European Union's European Green Deal, and regional free trade agreements the European Union has implemented with strategic partners like Mexico, are prompting a vibrant discussion on how trade agreements can be used as a potential mechanism to create enforceable cross-border commitments to tackle climate change. However, to cut greenhouse gas emissions within a few decades, a decisive departure from current trends in emission and trade policies is required by all countries, both developed and developing. As a result, politicians, scholars and experts around the world have looked to trade agreements as a possible tool for reaching global climate commitments, either related to or independent from the Paris Agreement. But how well do these agreements suit this purpose? Carbon-intensive products worldwide increased when tariff reductions were implemented, resulting in destructive practices for many countries, particularly those in the Global South. For countries such as Mexico, the nexus between trade and climate change is not easy to address: the country is trapped between its ambitions to play a role in global trade platforms as an industrial manufacturer and agricultural exporter and its desire to be recognized as a global actor in climate change policy and actions within the global community. Despite recent changes in climate and environmental politics under the administration of President Andrés Manuel López Obrador (2018-2024), Mexico is a middle-income country with a long-standing tradition as climate champion and environmental leader in the Global South and needs to make clear where it stands under the new global environmental and ecological transition scenario imposed by the climate crisis and trade-related issues. The "entanglement" of global trade treaties and commitments under the current climate crisis, represents a major shift for Mexico. Caught between the new US-Mexico-Canada Agreement, the EU-Mexico Trade Agreement and the possible impacts of the European Green Deal, Mexico needs to define its role in trade and environmental terms alongside giant partners such as the United States and the European Union, while defending its role as a regional power. If the European Green Deal takes off as an international driver for deepening climate and sustainable development goals with European Union strategic partners, it remains to be seen how Mexico will respond to the challenge. In this paper we address the possible implications for Mexico under each of these instruments. We look at the interplay between them, explore the linkages and possible conflictual pathways, and "disentangle" the schemes in which trade and climate change are interconnected. Mexico may be trapped in a "catch-22" situation. Environmental provisions embedded in trade treaties provide critical benefits to the country, but this often comes at the expense of "unacceptable" environmental enforcement measures that can put at risk national development plans, especially at a time when the environment and climate change issues are not at the top of the current administration's political agenda. |
| Keywords: | European Union,Mexico,United States,trade agreements,climate change |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:112022&r=int |
| By: | Khan,Shafaat Yar; Khederlarian, Armen |
| Abstract: | Sourcing internationally entails additional costs due to larger per inventory holdings. When firms switch toward foreign sources, these unobserved costs increase. This paper revisits the effect of trade liberalization on firms’ productivity taking into account the inventory premium of importing and input cost heterogeneity. Through model simulations, the paper shows that in the presence of inventory holding costs, their omission in revenue-based productivity measures leads to a systematic overestimation of the elasticity of productivity to input tariffs. Controlling for the firm’s import intensity and inventory usage in the estimation of productivity corrects for the bias. The paper studies the relevance of this potential bias during India’s trade liberalization in the early 1990s. First, it documents that inventory holdings of intermediate goods increased significantly with import intensity and input tariffs. Second, it extends a standard productivity estimation procedure with a control function of the various firm-level input costs. The mismeasurement channel accounts for around 35 percent of the estimated productivity gains. Consistent with the gradual adjustment to the tariff reductions, the bias in the response of firm-level productivity is backloaded. |
| Keywords: | International Trade and Trade Rules,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Business Cycles and Stabilization Policies,Plastics&Rubber Industry,Pulp&Paper Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Trade and Services,Trade and Multilateral Issues,Armed Conflict |
| Date: | 2021–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9564&r=int |
| By: | Naoto JINJI; Xingyuan ZHANG; Shoji HARUNA |
| Abstract: | We examine whether regional trade agreements (RTAs) facilitate international research collaboration. First, using a two-country model of a continuum of oligopolitic industries with process research and development (R&D) investment and spillovers, we analyze whether trade liberalization through a trade agreement with deep economic integration increases the number of firms that engage in research collaboration. We then empirically investigate the effects of deep RTAs by employing data on patents with multiple inventors from different countries at the United States Patent and Trademark Office (USPTO) for 114 countries/regions over the period 1990–2011. We interpret co-inventions by inventors residing in different countries as evidence of international research collaboration. We use dummy variables and indexes to measure the extent of economic integration by RTAs. We find that deeper integration is associated with more active international co-inventions. We check the robustness of our findings by employing various specifications and addressing endogeneity issues. |
| Keywords: | Research collaboration; international co-invention; regional trade agreement; deep integration. |
| JEL: | L13 O31 O33 F15 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-22-001&r=int |
| By: | Gale, Fred; Davis, Eric |
| Abstract: | China is the world’s largest textile manufacturer and cotton consumer, but changes in China’s economy are reshaping the geography of its cotton-textile sector. Nearly all of China’s cotton is produced in the country’s Xinjiang Region, while textile manufacturers, the main consumers of cotton, are concentrated in coastal and central regions where cotton production has fallen dramatically. These geographic changes are a factor influencing global trade in cotton and textiles. While China’s imports of cotton are projected to gradually increase over the next decade, China’s dominant position in the cotton market appears to be weakening, with U.S. cotton exports shifting to other Asian countries. |
| Keywords: | International Relations/Trade |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:327176&r=int |
| By: | Broner,Fernando; Didier Brandao,Tatiana; Schmukler,Sergio L.; von Peter,Goetz |
| Abstract: | Using country-to-country data, this paper documents a set of novel stylized facts about the rise of the South in global finance. The paper assembles comprehensive bilateral data on cross-border bank loans and deposits, portfolio investment in debt and equity, foreign direct investment, and international reserves. The main finding is that global financial integration with and especially within the South (countries outside the G7 and Western Europe) has grown faster than within the North. By 2018, the South accounted for 24 to 40 percent of international loans and deposits, portfolio investment, and foreign direct investment, an increase of roughly 10 percentage points since 2001. The growing importance of the South is reflected in the intensive and extensive margins, with fast growth in the number of bilateral links. Although China weighs heavily in these trends, international investment in the rest of the South has increased to a similar extent. |
| Keywords: | Financial Sector Policy,Investment and Investment Climate,International Trade and Trade Rules,Macroeconomic Management |
| Date: | 2020–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9501&r=int |
| By: | Breinlich,Holger; Corradi,Valentina; Rocha,Nadia; Ruta,Michele; Santos Silva,J.M.C.; Zylkin,Tom |
| Abstract: | Modern trade agreements contain a large number of provisions besides tariff reductions, inareas as diverse as services trade, competition policy, trade-related investment measures, or public procurement.Existing research has struggled with overfitting and severe multicollinearity problems when trying to estimate theeffects of these provisions on trade flows. This paper builds on recent developments in the machine learning andvariable selection literature to propose novel data-driven methods for selecting the most important provisions andquantifying their impact on trade flows. The proposed methods have the advantage of not requiring ad hocassumptions on how to aggregate individual provisions and offer improved selection accuracy over the standard lasso.The analysis finds that provisions related to technical barriers to trade, antidumping, trade facilitation,subsidies, and competition policy are associated with enhancing the trade-increasing effect of trade agreements. |
| Keywords: | International Trade and Trade Rules,De Facto Governments,Economics and Finance of Public Institution Development,State Owned Enterprise Reform,Public Sector Administrative and Civil Service Reform,Public Sector Administrative & Civil Service Reform,Democratic Government,Competition Policy,Competitiveness and Competition Policy,Trade Facilitation,Health and Sanitation |
| Date: | 2021–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9629&r=int |
| By: | Gibogwe, Vincent; Nigo, Ayine R.S.; Kufuor, Karen |
| Abstract: | Tanzania has continued to experience an unprecedented increase in foreign direct investment (FDI) inflows for the past three decades. Using a vector error correction model (VECM) on data on Tanzania for the 1980–2020 period, we find the bi-causality between economic growth and FDI net inflows in the short and long run. The results imply that in Tanzania, FDI is associated with an increase in income; at the same time, economic growth leads to FDI eventually and stirs movements in FDI. We advocate for developing the local productive capacity and providing incentives to foreign firms so that they may provide positive spillovers to other sectors. |
| Keywords: | foreign direct investment, economic growth, absorptive capacity, human capital, market liberalization |
| JEL: | O11 O43 O47 O55 |
| Date: | 2022–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115028&r=int |
| By: | Bouët, Antoine; Laborde Debucquet, David; Robichaud, Veronique; Traore, Fousseini; Tokgoz, Simla |
| Abstract: | MIRAGRODEP is a recursive-dynamic, multi-region, multi-sector computable general equilibrium model, devoted to trade and agricultural policy analysis. It is developed for AGRODEP and draws upon the MIRAGE model built by CEPII. It incorporates specific features such as foreign direct investment and runs with a tariff aggregation module that allows the user to capture the exclusion effects at a detailed level and the variance of tariffs. The model also includes a submodule allowing to test different closures for the public sector as well as the inefficiency of the tax collection system. MIRAGRODEP 2.0 includes an improved demand system. Social Accounting Matrix (SAM) and trade data in MIRAGRODEP are based on the GTAP database. Additional sources such as MacMap are used for protection data. This technical note presents an expanded documentation, with instructions on how to run the model and an illustrative application. |
| Keywords: | Computable General Equilibrium (CGE) model, mathematical models, trade policies, agricultural policies, tariffs, public sector, Social Accounting Matrices (SAM), foreign direct investment |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:agrotn:tn-26&r=int |
| By: | Bouët, Antoine; Laborde Debucquet, David; Traore, Fousseini |
| Abstract: | Robust indicators are essential for tracking the progress made in regional trade integration. Although the bias of traditional indexes such as the share of intra-regional trade in total trade have been known for a long time, they continue to be used by various analysts and international organizations. In this technical note, based on the recent literature, we present new robust trade integration indicators that allow analysts to make dynamic and cross region comparisons without ambiguity. These new indicators shed new light in regional integration, particularly in Africa where the level of integration is not as low as one might think. |
| Keywords: | AFRICA, AFRICA SOUTH OF SAHARA, CENTRAL AFRICA, EAST AFRICA, NORTH AFRICA, SOUTHERN AFRICA, WEST AFRICA, indicators, trade, robust trade integration indicators, indexes |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:agrotn:tn-25&r=int |
| By: | Ferracane,Martina Francesca; Van Der Marel,Erik Leendert |
| Abstract: | While regulations on personal data diverge widely between countries, it is nonetheless possible to identify three main models based on their distinctive features: one model based on open transfers and processing of data, a second model based on conditional transfers and processing, and third a model based on limited transfers and processing. These three data models have become a reference for many other countries when defining their rules on the cross-border transfer and domestic processing of personal data. The study reviews their main characteristics and systematically identifies for 116 countries worldwide to which model they adhere for the two components of data regulation (i.e. cross-border transfers and domestic processing of data). In a second step, using gravity analysis, the study estimates whether countries sharing the same data model exhibit higher or lower digital services trade compared to countries with different regulatory data models. The results show that sharing the open data model for cross-border data transfers is positively associated with trade in digital services, while sharing the conditional model for domestic data processing is also positively correlated with trade in digital services. Country-pairs sharing the limited model, instead, exhibit a double whammy: they show negative trade correlations throughout the two components of data regulation. Robustness checks control for restrictions in digital services, the quality of digital infrastructure, as well as for the use of alternative data sources. |
| Keywords: | International Trade and Trade Rules,Information Security&Privacy,Export Competitiveness,ICT Legal and Regulatory Framework,ICT Policy and Strategies,ICT Applications |
| Date: | 2021–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9596&r=int |
| By: | Grover,Arti Goswami; Lall,Somik V. |
| Abstract: | This paper examines whether a country’s participation in global value chains supports spatial convergence in the domestic economy. In theory, production disintegration through “unbundling†makes industrial development less lumpy, providing opportunities for smaller cities to plug and play in niche spaces while not having to fight the agglomeration economies offered by large metropolitan areas. Using data on the size distribution of cities within countries and the Organisation for Economic Co-operation and Development’s Trade in Value Added database, the paper finds that integration in global value chains is strongly associated with greater concentration in large urban agglomerations, not less. A unit standard deviation increase in domestic value added in exports of intermediate products is associated with a decline of 0.1 standard deviation in the Zipf coefficient, an index measuring spatial dispersion. Spatial concentration is strongest for global value chains involving knowledge-intensive business services and high-technology manufacturing. |
| Date: | 2021–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9619&r=int |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A.; Mark Anthony A. |
| Abstract: | The Japan-Philippines Economic Partnership Agreement (JPEPA), the first bilateral FTA that the Philippines entered into, aims to facilitate and promote free transborder flow of goods, services, capital, and people between the two countries. This paper explores the use of synthetic control method to understand the effects of JPEPA on Philippine exports. The results reveal that the Philippines benefited from the JPEPA as determined by the difference in the actual exports and the counterfactual exports. |
| Keywords: | JPEPA;Japan-Philippines Economic Partnership Agreement; Free Trade Agreement; transborder flow of goods; Philippine exports |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2021_vol__45_no__1b&r=int |
| By: | Kuhn, Lena; Jamali Jaghdani, Tinoush; Prehn, Sören; Sun, Zhanli; Glauben, Thomas |
| Abstract: | International agricultural trade is key to improving global food security. It ensures access to more diversified foods (e.g. Krivonos and Kuhn 2019 ), acts as a safety net against local production shortfalls (Glauben et al. 2022) and helps make use of regional climatic or resource-related production advantages. While local production and short supply chains can reduce transport costs, they do not necessarily equate to resilient food systems or lower carbon footprints (Stein and Santini 2022). Currently, though, international agricultural trade is facing supply chain disruptions and rising world market prices resulting from the ongoing Covid-19 pandemic, increasing global food demand and extreme weather events. Both are threatening already strained food security, in particular in import-dependent, low-income regions. Geopolitical risks, such as the China- US trade war and Russia's invasion of Ukraine, are further rattling the food market. As the world's largest consumer of agricultural goods, China's trade strategies influence world markets, with ripple-down effects for consumers around the world, particularly in the Global South. This policy brief aims at shedding light on China's current market actions, and the likely short- and mid-term developments and their impacts. We argue for moderation in response to short-term shocks. Excessive mobility and trade restrictions as well as extreme stockpiling should be avoided. These harm the trade system's overall capacity to resist further and more serious global challenges related to population growth and climate change. |
| Keywords: | Food Security and Poverty, International Development, International Relations/Trade |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamopb:327325&r=int |
| By: | Abman,Ryan Michael; Lundberg,Clark Christopher; Ruta,Michele |
| Abstract: | Trade liberalization can spur environmental degradation. Concerns over these adverse impacts have led to a debate over the need for environmental provisions in regional trade agreements (RTAs), however the effectiveness of such provisions is unknown. This paper provides new causal evidence that environmental provisions are effective in limiting deforestation following the entry into force of RTAs. It exploits high-resolution, satellite-derived estimates of deforestation and identify the content of RTAs using a new dataset with detailed information on individual provisions. Accounting for the potential endogeneity of environmental provisions in RTAs, the paper finds that the inclusion of specific provisions aimed at protecting forests and/or biodiversity entirely offsets the net increases in forest loss observed in similar RTAs without such provisions. The inclusion of these provisions limits agricultural land expansion, but does not completely offset increases in total agricultural production. The effects are concentrated in tropical, developing countries with greater biodiversity. |
| Keywords: | International Trade and Trade Rules,Environmental Disasters&Degradation,Global Environment Facility,Biodiversity,Trade Policy |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9601&r=int |
| By: | Herrera Dappe,Matias; Lebrand,Mathilde Sylvie Maria; Van Patten,Diana |
| Abstract: | This paper studies the effects of removing transport and trade barriers between Bangladesh and India on aggregate real income and the distribution of population and real income within both countries. The paper uses a spatial general equilibrium model calibrated to these two economies, along with road network travel time calculated using GPS data, to measure changes in economic outcomes given changes in trade costs across regions. The paper focuses on the Motor Vehicles Agreement between Bangladesh, Bhutan, India, and Nepal and full transport and trade integration between Bangladesh and India. The counterfactual exercises show that decreasing transport and trade barriers between Bangladesh and India can lead to up to a 7.6 percent increase in national real income for India and a 16.6 percent increase for Bangladesh. |
| Keywords: | International Trade and Trade Rules,Transport Services,Urban Housing and Land Settlements,Urban Housing,Municipal Management and Reform,Urban Governance and Management,Trade and Multilateral Issues |
| Date: | 2021–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9592&r=int |
| By: | Montfaucon,Angella Faith Lapukeni |
| Abstract: | The response of import prices to exchange rates can be used to predict the effect of changes in trade policy. The hypothesis of symmetric pass-through of tariffs and exchange rates asserts that the effect of tariffs and exchange rates on prices are identical. This paper examines whether the symmetry hypothesis holds in the context of invoicing currency, by investigating the role of the euro and the U.S dollar currencies. The paper uses transaction-level data of Malawian imports from the European Union (EU) over a 12-year period, separating imports from the Economic and Monetary Union (EMU) members and non-members and across sectors. The findings show that the dollar has the highest invoicing share, and the pass-through rate of exchange rate and tariff shocks on to Malawian consumers is high. Symmetry holds when bilateral exchange rates are used, but when the invoicing currency is considered there are deviations from symmetry. This result implies that to predict the effects of trade policy based on import prices' responses to the exchange rate, bilateral exchange rates are not suitable for capturing exchange rate and tariff pass-through. The variations in the results across EMU and non-EMU, currencies, and industries demonstrates that that empirical evidence is needed in each case to understand the extent of pass-through, which is crucial for import-dependent developing countries such as Malawi. |
| Keywords: | International Trade and Trade Rules,Transport Services,Trade Policy,Rules of Origin,Trade and Multilateral Issues,Trade and Services |
| Date: | 2021–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9577&r=int |
| By: | Leefmans,Naomi; Oomes,Nienke; Rojas Romagosa,Hugo Alexander; Vervliet,Tobias; Berthiaume,Nicolas |
| Abstract: | This paper tests the migration transition hypothesis that emigration flows first increase and later decrease with a country’s economic development. Using a migration version of the gravity model, this hypothesis is tested on a global panel data set comprising 180 origin and destination countries and a 50-year timeframe (1970-2020). This is the most extensive panel data set used so far to test the migration transition hypothesis. The results confirm the existence of an inverted U-shaped relationship between development and emigration within a cross-country panel setting. Nevertheless, the migration hump cannot be interpreted as a causal relationship: for a given low-income country, an increase in economic development is not found to lead to higher emigration. For a subsample of 44 countries that have transitioned from low-income to middle-income status, emigration has rather declined with economic development. The migration transition hypothesis is therefore unfounded. Instead, the migration hump appears to be driven by an underlying cross-sectional pattern that cannot be fully controlled: middle-income countries tend to exhibit higher emigration rates than low- or high-income countries. The findings of this paper have important policy implications: development programs can simultaneously promote economic development and reduce emigration. |
| Keywords: | Migration and Development,International Trade and Trade Rules,Social Cohesion,Natural Disasters |
| Date: | 2021–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9518&r=int |
| By: | Vanessa Alviarez (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia); Keith Head (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia); Thierry Mayer (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We assess the consequences for consumers in 76 countries of multinational acquisitions in beer and spirits. Outcomes depend on how changes in ownership affect markups versus efficiency. We find that owner fixed effects contribute very little to the performance of brands. On average, foreign ownership tends to raise costs and lower appeal. Using the estimated model, we simulate the consequences of counterfactual national merger regulation. The US beer price index would have been 4–7% higher without divestitures. Up to 30% savings could have been obtained in Latin America by emulating the pro-competition policies of the US and EU. |
| Keywords: | multinationals,oligopoly,markups,concentration,firm effects,brands,frictions,mergers and acquisitions,competition policy |
| Date: | 2021–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpspec:hal-03389199&r=int |
| By: | Maliszewska,Maryla; Osorio-Rodarte,Israel; Nichanametla Ramasubbaiah,Rakesh Gupta |
| Abstract: | A macro-micro simulation framework that links a computable general equilibrium model with the survey-based global income distribution dynamics model can be used to assess the economic and distributional effects of macroeconomic shocks and policies. The methodology is used to assess the economic and subnational labor market impacts of a series of stylized trade policy options for the Sri Lankan economy over a 10-year time period. The analysis focuses on the impact of unilateral para-tariff liberalization, free-trade agreements with China or India, and a full-reform scenario. The simulation results show that more ambitious trade reform can result in larger gains in gross domestic product, poverty reduction, and exports, particularly in sectors employing a higher proportion of women. In the absence of additional policies, growth is not equally distributed. In all the scenarios in which the Sri Lankan economy grows, the distribution of gains is regressive. Increasing labor demand for skilled workers translates into a larger skilled wage premium -- by as much as 1.1 percent with respect to the baseline. Implementation of full trade reform accelerates the concentration of economic activity in the western regions of Colombo, Gampaha, and Kalutara. Net employment gains in the western regions would increase from 111,000 to 136,000 in the full reform scenario by 2028 and with respect to baseline conditions. |
| Keywords: | International Trade and Trade Rules,Food Security,Food&Beverage Industry,Plastics&Rubber Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Labor Markets,Gender and Development |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9478&r=int |
| By: | Owoundi Fouda,Ferdinand; Avom,Desire; Kuete,Flora Yselle |
| Abstract: | This paper evaluates the role of economic integration and democracy in rationalizing differences in real exchange rate misalignments across exchange rate regimes in Africa. To this end, the paper derives competing indexes of misalignment using modern cointegration techniques while accounting for cross-sectional dependence. The findings indicate that fixed regimes per se are not prone to more misalignments, as institutional quality and economic links with foreign partners critically matter in explaining the observed discrepancies. Furthermore, when distinguishing between African and international partners in investment agreements, the extent of misalignment differs according to the level of democracy, as democratic countries can afford intermediate regimes, while for weak democracies, fixed regimes are required to curb disequilibria. Finally, membership in a regional economic community significantly reduces the magnitude of misalignments. The results imply that the quality of institutions, more than the type of the exchange rate regime, is called into question and should be the focus of efforts ahead of successful implementation of the African Continental Free Trade Area. |
| Keywords: | International Trade and Trade Rules,Trade and Multilateral Issues,Macro-Fiscal Policy,Public Finance Decentralization and Poverty Reduction,Economic Adjustment and Lending,Public Sector Economics,Investment and Investment Climate,Macroeconomic Management |
| Date: | 2021–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9548&r=int |
| By: | Robertson,Raymond |
| Abstract: | Deepening preferential trade agreements extend coverage to social issues, including labor clauses. While there is a long history of debate over the intent of labor clauses, less is known about the impact of labor clauses. Recent studies show that labor clauses improve working conditions, but the impact on trade flows is still debated. Existing studies do not include a full set of fixed effects (to control for endogeneity and unobserved confounding factors), other dimensions of deep agreements that could be correlated with labor clauses (tariffs and other “deep†clauses), and pseudo-Poisson maximum likelihood estimation. This paper combines all three with additional robustness checks. While the estimated effect of trade agreements is positive overall, the estimated marginal relationship between labor clauses and trade volume is generally negative but varies with the type of clauses. Freedom of Association, Forced and Child Labor, and International Labor Standards are consistently associated with higher trade flows. Clauses that are more likely to eliminate illicit trade, including clauses related to discrimination, protection of working conditions, and third-party monitoring exhibit a negative marginal relationship with trade flows. |
| Keywords: | International Trade and Trade Rules,Work&Working Conditions,Trade and Services,Legislation,Legal Products,Labor Law,Social Policy,Regulatory Regimes,Legal Reform,Labor&Employment Law,Judicial System Reform,Child Labor Law,Labor Standards,Labor Markets,Rural Labor Markets,Child Labor |
| Date: | 2021–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9599&r=int |
| By: | Guasti, Alessandro; Koenig-Archibugi, Mathias |
| Abstract: | The possibility that economic competition puts working and employment conditions under pressure is a frequently voiced concern in debates on international trade. We provide an empirical assessment of the argument that competition for world markets has generated a race to the bottom in labor standards. Spatial econometrics is used to identify interdependence in labor practices among trade competitors. We present a strategy for measuring export competition between countries that fulfills several criteria: It reflects actual competition between firms offering similar products, rather than export similarity in relation to a few very broad product categories; it captures not only what competitor countries export but also how much; it takes into account that states are exposed to export competition to different degrees; and it focuses on the downward pressure stemming from a deterioration of labor rights protections among close competitors. To address endogeneity, we implement a two-stage least-squares (2SLS) instrumental variable approach and a difference two-stage generalized method of moments (GMM) approach. We find no evidence that export competition has triggered a race to the bottom in two samples covering most states in the world over nearly three decades. The finding is robust to a variety of alternative specifications. |
| Keywords: | British Academy/Leverhulme research grant. The BA grant scheme was financially supported by the UK Department for Business; Energy and Industrial Strategy |
| JEL: | R14 J01 |
| Date: | 2022–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113752&r=int |
| By: | Bossavie,Laurent Loic Yves; Garrote Sanchez,Daniel; Makovec,Mattia; Ozden,Caglar |
| Abstract: | This paper assesses the impact of immigration to Western Europe on the exposure of native-born workers to economic and health risks created by the COVID-19 pandemic. Using various measures of occupational risks, it first shows that immigrant workers, especially those coming from lower-income member countries of the European Union or from outside the European Union, are more exposed to the negative income shocks relative to the natives. The paper then examines whether immigration has an impact on the exposure of natives to COVID-19-related risks in Western Europe. A Bartik-type shift share instrument is used to control for potential unobservable factors that would lead migrants to self-select into more vulnerable occupations across regions and bias the results. The results of the instrumental variable estimates indicate that the presence of immigrant workers had a causal impact in reducing the exposure of natives to COVID-19-related economic and health risks in European regions. Estimated effects are stronger for high-skilled native workers than for low-skilled natives and for women relative to men. The paper does not find any significant effect of immigration on wages and employment, which indicates that the effects are mostly driven by a reallocation from less safe jobs to safer jobs. |
| Keywords: | Labor Markets,Indigenous Peoples Law,Indigenous Peoples,Indigenous Communities,Health Care Services Industry,Human Migrations&Resettlements,International Migration,Migration and Development |
| Date: | 2020–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9500&r=int |
| By: | Manzano, George N.; Bautista, Mark Edison |
| Abstract: | This study examines the survivability of Philippine micro, small, and medium enterprises’ (MSMEs) exports to select countries within the frameworks of the Asia-Pacific Economic Cooperation Boracay Action Agenda to Globalize MSMEs and the Association of Southeast Asian Nations Strategic Action Plan for SME Development. It documents the survival rate and duration of Philippine exported goods and shows that most export relationships of the Philippines are brief. It also finds that MSMEs, on average, account for a more significant number of the Philippines’ export relations than large establishments. |
| Keywords: | MSMEs; export;micro; small; and medium enterprises; survival analysis; Asia-Pacific Economic Cooperation Boracay Action Agenda to Globalize MSMEs; Association of Southeast Asian Nations Strategic Action Plan for SME Development |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2021_vol__45_no__1c&r=int |
| By: | Evenett,Simon J.; Hoekman,Bernard M.; Rocha,Nadia; Ruta,Michele |
| Abstract: | In the first two months of 2021, the production of COVID-19 vaccines has suffered setbacks delaying the implementation of national inoculation strategies. These delays have revealed the concentration of vaccine manufacture in a small club of producer nations, which in turn has implications for the degree to which cross-border value chains can deter more aggressive forms of Vaccine Nationalism, such as export curbs. This paper documents the existence of this club, taking account of not just the production of final vaccines but also the ingredients of and items needed to manufacture and distribute COVID-19 vaccines. During 2017–19, vaccine producing nations sourced 88 percent of their key vaccine ingredients from other vaccine producing trading partners. Combined with the growing number of mutations of COVID-19 and the realization that this coronavirus is likely to become a permanent endemic global health threat, this finding calls for a rethink of the policy calculus towards ramping up the production and distribution of COVID-19 vaccines, its ingredients, and the various items needed to deliver them. The more approved vaccines that are safely produced, the smaller will be the temptation to succumb to zero-sum Vaccine Nationalism. |
| Keywords: | Early Child and Children's Health,Public Health Promotion,Immunizations,Reproductive Health,Disease Control&Prevention,International Trade and Trade Rules,Health Care Services Industry |
| Date: | 2021–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9565&r=int |
| By: | Clemens, Michael A. (Center for Global Development) |
| Abstract: | Immigration policy can have important net fiscal effects that vary by immigrants' skill level. But mainstream methods to estimate these effects are problematic. Methods based on cashflow accounting offer precision at the cost of bias; methods based on general equilibrium modeling address bias with limited precision and transparency. A simple adjustment greatly reduces bias in the most influential and precise estimates: conservatively accounting for capital taxes paid by the employers of immigrant labor. The adjustment is required by firms' profit-maximizing behavior, unconnected to general equilibrium effects. Adjusted estimates of the positive net fiscal impact of average recent U.S. immigrants rise by a factor of 3.2, with a much shallower education gradient. They are positive even for an average recent immigrant with less than high school education, whose presence causes a present-value subsidy of at least $128,000 to all other taxpayers collectively. |
| Keywords: | immigration, fiscal, tax, revenue, budget, deficit, surplus, capital, cost, benefit, dividend, subsidy, burden, social security, welfare, outlays, balance, foreign, skill, government, public |
| JEL: | F22 H68 J61 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15592&r=int |
| By: | Kässi, Otto |
| Abstract: | Abstract I use novel high-quality survey data on firms’ international sourcing activities combined with firm-level financial and linked employer–employee data to study the effect of services offshoring on wages and employment. To overcome the endogeneity related to reverse causality and omitted variables, I use microsynth, a variation of the synthetic control method specially developed for high-dimensional microdata. I find that offshoring firms pay higher wages for both high-skilled and low-skilled workers, and employ fewer FTE workers compared with a synthetic control, but these effects take several years to appear. |
| Keywords: | Service offshoring, Offshoring |
| JEL: | F14 C33 J31 |
| Date: | 2022–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:rif:wpaper:97&r=int |
| By: | Riillo, Cesare Fabio Antonio; Peroni, Chiara |
| Abstract: | This paper investigates the empirical link between migrations and entrepreneurship in European countries, for the first time drawing from a large sample of individuals sourced from the cross-country GEM survey. Specifically, the paper studies the impact of individuals' immigration status on entrepreneurial outcomes at all stages of the entrepreneurial process: interest in starting a new business, effectively starting, running a new business and managing an established company. The analysis uses a sequential probit model with sample selection to capture the dependence between entrepreneurial stages. It also distinguishes between different typologies of entrepreneurs (necessity and opportunity-driven, European and non-European; recent and long-standing immigrants). Additionally, it implements heteroscedasticity based instruments to address potential endogeneity issues. The study finds evidence that immigration has a positive effect on entrepreneurship. Immigrants are more willing to engage in entrepreneurship. Among those who started a new business, however, immigrants have lower chances than natives to succeed in the following stages of entrepreneurship. |
| Keywords: | Entrepreneurship; Immigration; Sequential Logit; Probit; sample selection; GEM. |
| JEL: | C25 D0 F22 J15 J6 J61 O15 |
| Date: | 2022–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114580&r=int |
| By: | Bouzid,Bechir Naier; Toumi,Sofiene |
| Abstract: | This paper explores the relationship between key economic and institutional attributes of Tunisian governorates and their ability to attract foreign direct investment inflows. A dynamic generalized method of moments and spatial autoregressive approaches are used to estimate a model of regional foreign direct investment over the recent period. The results provide evidence of regional interdependence of foreign direct investment that appears to be highly clustered along the coastal areas. An increase/decrease of foreign direct investment inflows to a given region creates an incentive/disincentive for other foreign direct investment inflows to the same regions as well as nearby ones. These agglomeration forces are relatively strong in Tunisia in the presence of vertical foreign direct investment. Further, the results indicate that a relatively developed market size, an increase of regional development areas, as well as robust governance practices and infrastructure are positive determinants of regional foreign direct investment inflows. Finally, the paper shows that although some of the determinants exhibit spillover effects on nearby regions, the direct effect on the region represents the bulk of the influence over foreign direct investment inflows. |
| Keywords: | Financial Economics,Finance and Development,Foreign Direct Investment,Transport Services,Employment and Unemployment,Investment and Investment Climate |
| Date: | 2020–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9484&r=int |
| By: | BIANCARDI Daniele (European Commission - JRC); GREGORI Wildmer (European Commission - JRC); MARTINEZ CILLERO Maria (European Commission - JRC); NARDO Michela (European Commission - JRC) |
| Abstract: | This note presents the latest trends in the investment behaviour of multinational enterprises focusing on non-EU (foreign) investors . It looks at merger and acquisition (M&A) deals and other equity investments of at least 10% of capital of the target company in the EU, as well as at greenfield projects. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc130267&r=int |
| By: | Afanador,Juan Pablo; Davis,Richard Mark; Pedraza Morales,Alvaro Enrique |
| Abstract: | For pension funds, international assets represent an opportunity to improve their returns while possibly reducing risks. Nonetheless, pension funds in many developing countries face regulations that limit the choice of international investments. This paper proposes a new methodology to estimate the gains from international diversification in which the optimal asset allocation of pension funds is constrained by financial frictions. The empirical strategy is applied to the aggregate holdings of pension funds in a large group of countries to calculate the gains from increasing the current level of exposure to international securities. The methodology should give policy makers the opportunity to identify jurisdictions where pension funds could benefit the most from expanding their foreign holdings. |
| Keywords: | Social Funds and Pensions,Capital Markets and Capital Flows,Capital Flows,Non Bank Financial Institutions,International Trade and Trade Rules,Financial Sector Policy,Adolescent Health |
| Date: | 2021–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9635&r=int |
| By: | Wright, Taylor |
| Abstract: | A common approach to identifying the causal impact of immigration on outcomes involves using a "shift-share" or Bartik instrument exploiting country-specific immigration in ows (shifts) and location specific prior shares for the same countries. New econometric findings suggest this instrumental variables approach uses identifying variation not from the shifts, as previously believed, but rather from the shares and suggest a battery of checks to explore the sensitivity of estimates. In this note, I first replicate Hunt and Gauthier-Loiselle (2010) which estimates the effects of immigration on innovation via patenting, and second deploy these new checks from the econometric literature on shift-share instruments. I find that the results of Hunt and Gauthier-Loiselle (2010) (skilled immigration increases innovation and has positive spillovers on the innovation of others) replicate and hold up well to these new tests. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:i4rdps:4&r=int |
| By: | Satoshi Nakano; Kazuhiko Nishimura |
| Abstract: | By fully taking the distinct tariff regimes levied on imported meat into account, we estimate substitution elasticities of Japan's two-stage import aggregation functions for beef, chicken and pork. While the regression analysis crucially depends on the price the consumers face, post-tariff price of imported meat depends not only on ad-valorem duties but also on tariff rate quotas and gate price system regimes. The effective rate of tariff is consequently evaluated by utilizing monthly transactions data. In remediating the potential endogeneity problems, we apply exchange rates which we believe to be independent of the demand shocks for imported meat. The panel nature of the data allows to retrieve the first-stage aggregates via time dummy variables, free of demand shocks, to be used as part of the explanatory variable and as an instrument in the second-stage regression. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.05358&r=int |
| By: | Kalin, Salla; Kauppinen, Ilpo; Kotakorpi, Kaisa; Pirttilä, Jukka |
| Abstract: | While evidence on the impact of taxation on the international migration of certain special groups of workers has expanded, evidence on the links between taxes and migration of the general population is extremely limited. We aim to fll this gap by estimating the impact of taxation on the migration decisions of the entire working population in a high-tax source country, Finland. We fnd that the average domestic elasticity of migration with respect to the domestic tax rate is very small (around 0.001). This holds for various occupational and income groups of interest. We also provide a frst empirical implementation of the theoretical results of Lehmann et al. (2014), who show that if a fully nonlinear income tax schedule at the top is used, the key suÿcient statistic for the optimal tax is a semi-elasticity of migration. Our estimates indicate that the migration responses increase for top earners, but remain very small, at least up to the top per mille of income earners. |
| Keywords: | taxation, emigration, Social security, taxation and inequality, Labour markets and education, J61, H31, fi=Verotus|sv=Beskattning|en=Taxation|, |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:150&r=int |
| By: | Hubert BONIN |
| Abstract: | Whilst being enrooted in public “common goods”, French utilities, either State-controlled or private, became more and more committed to strategies of developing abroad their portfolio of engineering and managing skills. They followed the past of economic imperialism along geopolitics in emerging countries (Russia, Ottoman Empire, Latin America), then also throughout the colonial empire; such offensives were embodied by the adventure of the Suez Canal. From the 1980s, the reconstruction of the worldwide connections opened doors to geoeconomics, that is the will to resist competition and to conquer market shares abroad thanks to the valuation of capital of competence and trust. Every public, privatised or already quoted companies took part to the run for concessions and the deliveries of engineering and managing services (waste, water, postal, railway, bus, energy utilities). This contributed to the competitiveness of French economy and economic patriotism. |
| Keywords: | Internationalised public services, Concessions abroad, Suez Canal, globalised business models, colonial equipment |
| JEL: | F15 F23 L94 L92 L95 L97 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2022-18&r=int |
| By: | Sebastien Desbureaux (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Frederic Mortier (UPR Forêts et Sociétés - Forêts et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Esha Zaveri (World Bank Group); Michelle van Vliet (Utrecht University [Utrecht]); Jason Russ (World Bank Group); Sophie Aude (World Bank Group); Richard Damania (World Bank Group) |
| Abstract: | Clean water is key for sustainable development. However, large gaps in monitoring data limit our understanding of global hotspots of water quality and their evolution over time. We demonstrate the value added of a data-driven approach to provide accurate high-frequency estimates of surface water quality worldwide over the period 1992-2010. We assess water quality for six indicators (temperature, dissolved oxygen, pH, salinity, nitrate-nitrite, phosphorus) relevant for the Sustainable Development Goals (SDG). The performance of our modelling approach compares well to, or exceeds, the performance of recently published process-based models. The model's outputs indicate that poor water quality is a global problem that impacts low-, middle-and high-income countries but with different pollutants. When countries become richer, water pollution does not disappear but evolves. |
| Date: | 2022–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03764434&r=int |
| By: | Okello,,Jimmy Apaa; Canagarajah,Roy S.; Brownbridge,Martin |
| Abstract: | Twelve of the 29 transition economies in Europe and Central Asia are high remittance recipients, with average remittance receipts equivalent to 5 percent or more of their gross domestic product in the 2010s. The paper examines the evolution, during the 2000s and 2010s, of real unit labor costs, denominated in local currency and U.S. dollars, of the transition economies. Local currency and U.S. dollar real unit labor costs rose much faster between 2003 and 2015-17 in the high remittance recipient economies than in the other transition economies, although there was considerable variance between the countries in the high remittance recipient group. Among the high remittance recipients, approximately half of the increase in real unit labor costs denominated in U.S. dollars can be attributed to increases in local currency real unit labor costs and half to appreciation of their real exchange rates. Fixed effects and cross-country econometric estimates suggest that remittances had a positive and significant impact on the changes in domestic currency real unit labor costs in the transition economies. |
| Keywords: | Rural Labor Markets,International Trade and Trade Rules,Migration and Development,Labor Markets |
| Date: | 2021–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9513&r=int |
| By: | Markowsky, Eva; Wolf, Fridolin; Schäfer, Marie |
| Abstract: | We compare the earnings of monolingual and competent bilingual immigrants in Germany. A joint discussion of language skills as human capital or social capital and theories of ethnic marginalisation leads us to expect heterogeneous returns to bilingualism. To track this potential divergence, we differentiate effects by gender, language group, immigrant density in respond- ents' areas of residence, and communication intensity of their occupations. Doing so reveals sizeable differences in the returns to bilingualism. We find positive effects for the largest immigrant community in Germany, the Turkish population, while other language groups do not seem to benefit from retaining their heritage language. Individuals with a Turkish migration background have higher earnings when proficient in their heritage language and German. We discuss how the size of the immigrant community and the bilingualism premium might be related and pursue two alternative explanations: Specialised labour demand due to the wide dissemination of the Turkish-speaking population in Germany and ethnic social networks that are open only to those with proficiency in the heritage language. Our data indicate that both are important but operate in gender-specific ways. Turkish bilingual men experience an earnings premium only in occupations with high communication intensity, while there is no statistical relationship for women. The social capital channel is also much more potent for men, while bilingual German-Turkish women do not seem to profit from heritage-language networks for labour market success to the same degree. We discuss differences by gender in activating social capital and cultural influences as drivers of this gap. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:uhhwps:68&r=int |