nep-int New Economics Papers
on International Trade
Issue of 2023‒01‒16
83 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Geographical Protections and Trade: Product-level Evidence from EU Agreements By David J. Kuenzel
  2. Economic Integration Agreements and Extensive Margin of Export: An Empirical Study of India By Nivedita Mullick; Areej A. Siddiqui
  3. The impact of non-tariff barriers on trade and welfare By Dhingra, Swati; Freeman, Rebecca; Huang, Hanwei
  4. A micro-macro model of foreign direct investment: knowledge-based gravity forces, self-selection and third-country effects By Kox, Henk L.M.
  5. Which Factors Influence India’s Bilateral Intra-Industry Trade? Cross-Country Empirical Estimates By Sakshi Aggarwal; Debashis Chakraborty
  6. The Impact of Policy Measures on Trade in Services in Latin America and the Caribbean By Trachtenberg, Danielle
  7. When Immigrants Meet Exporters: A Reassessment of the Immigrant Wage Gap By Léa Marchal; Guzmán Ourens; Giulia Sabbadini
  9. Globalization, Government Popularity, and the Great Skill Divide By Cevat G Aksoy; Sergei Guriev; Daniel Treisman
  10. India’s Act East Policy: RCEP Negotiations and beyond By Biswajit Nag; Debashis Chakraborty; Sakshi Aggarwal
  11. Strategic exporting in an international oligopoly By Kazuhiro Takauchi; Tomomichi Mizuno
  12. 신보호주의하에서 미국의 대외경제정책 평가와 방향(Evaluation and Direction of U.S. International Economic Policies under Neo-Protectionism) By Gusang Kang, Gusang Kang; Kim, Jonghyuk; Rim, Jeewoon; Yoon, Yeo Joon
  13. Economic Interdependence and Conflict in MENA By Gunes Asik; Mohamed Ali Marouani
  14. 인도의 통상정책 분석과 한-인도 협력 방안(Analysis on India’s Trade Policy and Its Implications for Korea-India Cooperation) By Kim, Jeong Gon; Han, Hyoungmin; Keum, Hyeyoon; Pek, Jong Hun; Lee, Sunhyung
  15. Trade in creative services: relatedness and regional specialization in the UK By Casadei, Patrizia; Vanino, Enrico; Lee, Neil
  16. On the Political Economy of Trade Agreements: A De Jure and De Facto Analysis of Institutions By Asmaa Ezzat; Chahir Zaki
  17. 미ㆍ중 갈등시대 일본의 통상 대응 전략(Japan’s New Trade Strategy Amid U.S-China) Confrontation By Kim, Gyupan; Lee, Hyong-Kun; Lee, Boram; Lee, JungEun; Kim, Seung-Hyun
  18. The Proposed India-EU Trade Agreement and UNECE 1958 Provisions: Empirical Results for Indian Automobile Sector By Debashis Chakraborty; Biswajit Nag; Ripudaman Bhardwaj
  19. Effects of the African Continental Free Trade Area on Food Security By SIMOLA Antti Mikko; BOYSEN Ole; FERRARI Emanuele; NECHIFOR VOSTINARU Victor; BOULANGER Pierre
  20. On GVC and Innovation: What Is at Stake? By Yasmine Eissa; Chahir Zaki
  21. Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China By Raphael Lafrogne-Joussier; Julien Martin; Isabelle Mejean
  22. Shooting Down Trade By Ugur Aytun; Cem Özgüzel
  23. Impact of Covid-19 on Tunisian Imports By Amal Medini; Chaima Ben Abderrahmen; Leila Baghdadi
  24. Digitalization, International Trade, and Arab Economies: External Policy Implications By Bernard Hoekman
  25. Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition By Alviarez, Vanessa; Head, Keith; Mayer, Thierry
  26. The Synergy between Governance and Trade Openness in Promoting Female Economic Inclusion in Sub-Saharan Africa By Pamela E. Ofori; Simplice A. Asongu; Vanessa S. Tchamyou; Raufhon Salahodjaev
  27. Which Factors influence Vertical Intra-Industry Trade in India? Empirical Results from Panel Data Analysis By Sakshi Aggarwal; Debashis Chakraborty
  28. Relationship Stickiness, International Trade, and Economic Uncertainty By Julien Martin; Isabelle Mejean; Mathieu Parenti
  29. A look offshore: unpacking the routes of misinvoicing in international trade By Catalin Dragomirescu-Gaina; Leandro Elia
  30. Global Value Chain Participation, Institutional Quality and Current Account Imbalances in the MENA Region By Foued Badr Gabsi; Rihab Bousnina
  31. Local containment policies and country-wide spread of Covid-19 in the United States: an epidemiological analysis By Jacek Rothert; Alexander McQuoid; Katherine Smith
  32. Responsible Sourcing? Theory and Evidence from Costa Rica By Alonso Alfaro-Urena; Benjamin Faber; Cecile Gaubert; Isabela Manelici; Jose P. Vasquez
  33. 미중 반도체 패권 경쟁과 글로벌 공급망 재편 (The US-China Battle for Semiconductor Supremacy and Reshaping of Global Supply Chain) By Jeong, Hyung-Gon; Yoon, Yeo Joon; Yeon, Wonho; Kim, Seohee; Joo, Dae Young
  34. 반덤핑조치의 국제적 확산과 조사기법 다양화의 영향 및 정책시사점(International Spread of Anti-dumping Measures and Diversification of Investigation Methodologies: Effects and Policy Implications) By Cho, Moonhee; Lee, Cheon-Kee; Kang, Minji; Chung, Minchirl
  35. Poor Substitutes? Counterfactual Methods in IO and Trade Compared By Keith Head; Thierry Mayer
  36. Estimation of carbon emissions embodied in India’s exports By Shifali Goyal; Areej A. Siddiqui
  37. A Review of the Philippines' Participation in Trade in Services Agreements By Serafica, Ramonette B.; Oren, Queen Cel A.
  38. The EU and Global Production Networks: The Length of Value Chains, Patterns and Dynamics of Industrial Ecosystems By DACHS Bernhard; NEULÄNDTNER Martina; STEHRER Robert
  39. Immigration and Work Schedules: Theory and Evidence By Timothy N. Bond; Osea Giuntella; Jakub Lonsky
  40. Chinese supply chain shocks By Khalil, Makram; Weber, Marc-Daniel
  41. The Role of Global Value Chains in Outsourcing Greenhouse Gas Emissions By Halit Yanikkaya; Abdullah Altun; Pinar Tat
  42. Immigration, Innovation, and Growth By Stephen J Terry; Thomas Chaney; Konrad B Burchardi; Lisa Tarquinio; Tarek A Hassan
  43. 외국인 기업의 남북경협 참여 활성화 방안(Policy Measures for Foreign Firms to Participate in Inter-Korean Economic Cooperation) By Choi, Jangho; Rhee, Jung-kyun; Choi, Yoojeong; Lee, Dae-eun
  44. Structural Transformation in MENA and SSA: The Role of Digitalization By Jaime de Melo; Jean-Marc Solleder
  45. 디지털 플랫폼의 활용이 중소기업의 국제화에 미치는 영향과 정책 시사점(The Internationalization of SMEs via Digital Platforms: Findings and Policy Implications) By Koo, Kyong Hyun; Kang, Gusang; Moon, Ji Young; Park, Hyeri; Na, Seung Kwon; Kim, Jegook
  46. Does export composition matter for economic growth in the United Arab Emirates? By Stylianou Kalaitzi, Athanasia; Samer, Kherfi; Alrousan, Sahel; Katsaiti, Marina-Selini
  47. Welfare Effects of Capital Controls By Andreasen, Eugenia; Bauducco, Sofía; Dardati, Evangelina
  48. Australia’s Strategic Responses to the US-China Rivalry and Implications to Korea By Choi, Ina; Lee, Sunhyung; Lee, Jaeho; Kim, So Eun
  49. Can labour market institutions mitigate the China syndrome? Evidence from regional labour markets in Europe By Jan‐luca Hennig
  50. Relationship between foreign direct investment inflows and Covid-19 pandemic in Pakistan: A monthly co-integration analysis By Serfraz, Ayesha
  51. Do human capital and governance thresholds matter for the environmental impact of fdi? The evidence from mena countries By Fatma Tasdemir; Seda Ekmen Özçelik
  52. Effect of Contract Farming in a Small Open Less-developed Economy: A General Equilibrium Analysis By -Ranajoy Bhattacharyya; Gouranga Das; Sugata Marjit
  53. Foreign Currency Working Capital Constraints for Imported Inputs and Compositional Effects in Intermediate Goods By Sámano Daniel
  54. The exchange rate elasticity of the Swiss current account By Johannes Eugster; Giovanni Donato
  55. Covid-19 Shock: Pass-Through to Consumer Prices in Tunisia By Leila Baghdadi; Inmaculada Martínez-Zarzoso; Amal Medini
  56. Understanding the Food Component of Inflation By Emanuel Kohlscheen
  57. Sanctions, Wars and MENA Trade By Khalid Sekkat
  58. European Economic impacts of cutting energy imports from Russia : A computable general equilibrium analysis By Sigit Perdana; Marc Vielle; Maxime Schenckery
  59. Export Diversification in MENA Countries and Spatial Spillovers By Marouane Alaya
  60. 글로벌 탄소중립 시대의 그린뉴딜 정책과 시사점(Green New Deal for Carbon-neutrality and Trade Policy in Korea) By Lee, Jukwan; Kim, Jong Duk; Moon, Jin-Young; Eom, Jun Hyun; Kim, Ji Hyeon; Suh, Jeongmeen
  61. 코로나19 이후 글로벌 가치사슬의 구조 변화와 정책 대응(Structural Changes in the Global Value Chain and Policy Responses after COVID-19) By Han, Hyoungmin; Yea, Sangjun; Lee, Sunhyung; Cheong, Jaewan; Yun, ChiHyun; Kim, Mi Lim
  62. Potential Effects of the EU’s Carbon Border Adjustment Mechanism on the Turkish Economy By Sevil Acar; Ahmet Atil Asici; A. Erinç Yeldan
  63. How Foreign Aid Affects Migration: Quantifying Transmission Channels By Léa Marchal; Claire Naiditch; Betül Simsek
  64. 디지털세가 다국적기업의 해외 투자에 미치는 영향(New International Tax System and its Impact on Investment of MNE) By Yea, Sangjun; Kim, Hyuk-Hwang; Park, Danbee; Choi, Hyelin
  65. 제조업 서비스화의 수출경쟁력 제고 효과 연구(The Export Effect of Servitization in Manufacturing) By Kim, Hyunsoo; Kang, Jungu; Keum, Hyeyoon; Jung, Jae Wook
  66. What Does the Literature Tell Us on The Relationship between Economic Interdependence and Conflict Management? An Overview with A Focus on the MENA Region By Katarzyna W. Sidlo
  67. The Ukraine war and its food security implications for India By SJ, Balaji; Babu, Suresh Chandra
  68. New trends in South-South migration: The economic impact of COVID-19 and immigration enforcement By Roxana Guti\'errez-Romero; Nayeli Salgado
  69. Redistribution in a Globalized World By David R. Agrawal; Dirk Foremny
  70. Corruption: A Brutal Enemy of Economic Diversification in MENA Oil Exporters By Siham Matallah
  71. It’s the End of Globalization as We Know It! Zeitgemaeße Betrachtungen zur politischen Oekonomik der Globalisierungskrise By Christian Reiner
  72. Global Energy and Climate Outlook 2022: Energy trade in a decarbonised world By KERAMIDAS Kimon; FOSSE Florian; DIAZ RINCON Andrea; DOWLING Paul; GARAFFA Rafael; ORDONEZ Jose; RUSS Peter; SCHADE Burkhard; SCHMITZ Andreas; SORIA RAMIREZ Antonio; VANDYCK Toon; WEITZEL Matthias
  73. Sanctions and Imports of Essential Goods; A Closer Look at the Equipo Anova (2021) Results By Rodriguez, Francisco
  74. Partnerships for policy transfer: How Brazil and China engage in triangular cooperation with the United Nations By Waisbich, Laura Trajber; Haug, Sebastian
  75. 러시아의 동북아 에너지 전략과 한-러 신협력 방안: 천연가스 및 수소 분야를 중심으로(Russia’s Energy Strategy in the Northeast Asian Region and New Korea-Russia Cooperation: Focusing on the Natural Gas and Hydrogen Sectors) By Park, Joungho; Kang, Boogyun; Kim, Seok Hwan; Kwon, Won Soon; Kovsh, Andrey
  76. Climate Change Around the World By Per Krusell; Tony Smith
  77. Commodity Exports, Financial Frictions and International Spillovers By Romain Houssa; Jolan Mohimont; Christopher Otrok
  78. Attitudes towards Migrants during Crisis Times By Rodríguez Chatruc, Marisol; Rozo, Sandra
  79. What if? The economic effects for Germany of a stop of energy imports from Russia By Rüdiger Bachmann; David Baqaee; Christian Bayer; Moritz Kuhn; Andreas Löschel; Benjamin Moll; Andreas Peichl; Karen Pittel; Moritz Schularick
  80. International democracy promotion in times of autocratization: From supporting to protecting democracy By Leininger, Julia
  81. State Ownership and Corporate Leverage Around the World By Ralph de Haas; Sergei Guriev; Alexander Stepanov
  82. Degrowth and the Global South? How institutionalism can complement a timely discourse on ecologically sustainable development in an unequal world By Claudius Graebner-Radkowitsch; Birte Strunk
  83. Global biodiversity scenarios: what do they tell us for Biodiversity-Related Financial Risks? By Julien CALAS; Etienne ESPAGNE; Antoine GODIN; Julie MAURIN

  1. By: David J. Kuenzel (Department of Economics, Wesleyan University)
    Abstract: Geographical protections (GP) are enhanced trademarks based on the regional origins of products. Avid proponents such as the EU argue that foreign producers should not infringe on GPs, but current WTO rules are insufficiently clear to enforce national GPs across borders. While a widely contested issue in international policy circles, the trade impact of GPs is not fully understood. In this paper, I compile a unique product-level dataset from EU agreements with 31 countries over the period 2005 to 2020 that enforce EU GPs abroad and explore their effects on trade. The analysis shows that the EU enjoys a significant boost in exports to its partner countries due to these arrangements, especially in products with higher numbers of negotiated cross-border GPs and low initial EU market shares. Whereas EU GPs do not divert trade away from third-country exporters, the evidence suggests that they lead to significant price increases, both in EU and third-country exports. Given the WTO’s current ambivalence on the issue, its members are risking the emergence of an ever-rising patchwork of GP blocs that will affect trade flows and potentially hamper cooperation on other policy initiatives.
    Keywords: Geographical Protections, Trade, EU, Non-tariff Measures
    JEL: F13 F14
    Date: 2023–01
  2. By: Nivedita Mullick (Indian Institute of Foreign Trade, New Delhi, India); Areej A. Siddiqui (Indian Institute of Foreign Trade, New Delhi, India)
    Abstract: Changes in trade costs are an intended consequence of formation & participation in Economic Integration Agreements (EIAs). This paper attempts to examine the ex-post effects (owing to the reduced trade costs) of the agreements that India has been a part of, on the extensive margin of export. Additionally, the present study examines if deeper agreements impact extensive export margin by a greater degree than shallower agreements. The time period spanning from 2012 to 2018 used for our study, together with the trading country pairs makes for a panel dataset which helps in accounting for unobserved heterogeneity. Inclusion of separate dummy for economic integration agreements of varying depth, allows for heterogeneity across EIAs and inclusion of fixed effects in our gravity model framework helps to account for the factors that would have otherwise been neglected. The results of our study show that One-way Preferential Trade Agreement, Two-way Preferential Trade Agreement & Free Trade Agreement, all have significant impact on the extensive export margin with deeper agreements (Free Trade Agreements and Two-Way Preferential Trade Agreement) having a larger impact than the shallower agreements (One-Way Preferential Trade Agreement).
    Keywords: Economic Integration Agreements, Trade Margins, Gravity Model
    JEL: F13 F14 F15
    Date: 2021
  3. By: Dhingra, Swati; Freeman, Rebecca; Huang, Hanwei
    Abstract: Deep trade agreements (DTAs) are widespread and have taken the world beyond tariff liberalization in goods trade. As the importance of global supply chains and the services sector has increased across the world, shallow tariff reductions have given way to deeper commitments that address non-tariff barriers and behind-the-border barriers to trade. This paper shows that DTA commitments undertaken since the Uruguay Round have increased trade in goods and trade in services by over half in the long term. Taking reduced-form trade elasticity estimates to a general equilibrium quantitative model, DTAs contributed over 40% to the welfare gains from trade globally and even more for advanced economies. China, India and the Eastern European bloc benefited the most from trade agreements. While most of the gains in China and India came from tariff reductions, the gains to Eastern Europe came largely from deep commitments during its accession to the EU. Applying the DTA estimates to ex ante analysis of Brexit, the losses to the UK from its departure from the deepest trade agreement in the world would not be offset by new deep trade deals with key non-EU trade partners.
    Keywords: Wiley deal
    JEL: L81 J1
    Date: 2022–11–13
  4. By: Kox, Henk L.M.
    Abstract: The paper develops a stand-alone and testable gravity model to explain international patterns of foreign direct investment (FDI). The core model is based on knowledge-based gravitational forces that are directly or indirectly linked to a country's economic mass (GDP). The micro-economic part of the model explains the bilateral extensive FDI margin, i.e. the Firms self-select into FDI if their productivity is high enough to overcome the fixed costs of setting up costs a foreign subsidiary, using its proprietary knowledge assets as crystallization kernel. Aggregated at country level, the model explains the occurrence of zero FDI flows between countries. The bilateral part of the model accounts for direct FDI friction costs. The model is generalized to a n-country world by also accounting for the relative FDI friction costs of all countries, quantified via FDI-based multilateral resistance terms. The paper derives testable predictions from the model. The model implications have high potential policy relevance.
    Keywords: foreign direct investment; firm behavior; decision model; structural gravity; zero FDI flows; policy implications
    JEL: D21 D23 F23 G32 L1 O33 O34
    Date: 2022–12–05
  5. By: Sakshi Aggarwal (Indian Institute of Foreign Trade (IIFT)); Debashis Chakraborty (Indian Institute of Foreign Trade (IIFT))
    Abstract: India has undertaken a series of industrial and trade policy reforms since 2001. Among the key industrial policies introduced, the ‘Make-in-India’ and ‘Atmanirbhar Bharat Abhiyan’ initiatives are worth mention, while various trade facilitation measures, tariff reforms, deepening participation into preferential agreements and easing of FDI norms etc. can be cited as the major trade policy related reforms. The stream of reforms helped the country to witness a rise in simultaneous export and import within same product groups over the last two decades, which is termed as intra-industry trade (IIT) in the literature. Given the rising trend in IIT level, the present paper intends to analyse the key factors that influence the aggregate bilateral IIT between India and major trading partners over 2001-19 in a panel data framework. The empirical results indicate that India’s IIT with major trade partners is positively influenced by difference in income and technology levels, product differentiation, difference in manufacturing orientation and product standards, enhanced trade facilitation, while being negatively influenced by geographical distance. Given the positive relationship between difference in technology level and product standards, it can be argued that India’s IIT with the partner countries is majorly Vertical Intra-industry Trade (VIIT) type in nature. In light of recent preferential trade initiatives of the country, it is concluded that India needs to focus on domestic efficiency enhancing measures as well as improving trade facilitation channels.
    Keywords: Intra-Industry Trade, LPI, EPI, Panel Data, India
    JEL: F13 F14
    Date: 2022
  6. By: Trachtenberg, Danielle
    Abstract: This paper uses data on policy measures affecting services operation and trade to document and estimate the impact of different types of policy measures on services exports and imports, with a focus on Latin America and the Caribbean. It finds that market-entry measures are important to both total services exports and imports in the region and bilateral trade flows with the United States, while measures relating to the operation of service providers are important for bilateral trade flows with the United States.
    Keywords: International trade;regulation;Trade in Services;trade policy
    JEL: F14 F15 F13
    Date: 2021–06
  7. By: Léa Marchal; Guzmán Ourens; Giulia Sabbadini
    Abstract: We use French employer-employee data to reassess the wage gap between native and foreign workers. We find that the wage gap varies with the export intensity of the firm and the occupation of the worker. A model with heterogeneous firms and workers shows that our findings are consistent with white-collar immigrants capturing an informational rent. The evidence supports this mechanism. First, we show that the wage gap is positively correlated with the complexity of the firm export activity. Second, we show that wages react to changes in export intensity when the export destination coincides with the origin of foreign workers.
    Keywords: export, firm, immigrants, wage inequality
    JEL: F14 F22 F16
    Date: 2022
  8. By: Kashika Arora (Research Scholar, Indian Institute of Foreign Trade, New Delhi); Areej A. Siddiqui (Assistant Professor, Indian Institute of Foreign Trade, New Delhi)
    Abstract: This paper aims at determining how technological capabilities interact with trade and global value chains (GVCs) participation to aid in the upgradation process. By constructing a panel data set and analysing through FGLS modelling, we observe trade performance of 14 developing countries from 2000 to 2018. It is found that technological capabilities determine the initial structure of local firms in trade and GVCs and they also deliberate the extent to which local firms in developing countries manage to leverage knowledge flows and move into activities of greater technological complexity in accordance with their existing comparative advantages. The results point to the critical role of national learning variables impacting countries’ performance over time measured by manufacturing value added. While emerging economies have synergistic relationships between variables explaining technological capabilities and trade and GVC performance, however, certain innate country effects have also their role to play.
    Keywords: Trade, global value chains (GVCs), technological capabilities, developing countries, panel data.
    JEL: F14 O14 O19 O31
    Date: 2021
  9. By: Cevat G Aksoy (King‘s College London, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Daniel Treisman (UCLA - University of California [Los Angeles] - UC - University of California, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research)
    Abstract: We provide the first large-scale, global evidence on the impact of the skill composition of trade on political approval. We show that political implications of trade shocks depend on the relationship between workers' skills and the characteristics of goods traded. Using Gallup World Poll surveys of a million respondents from 120 countries over 2005-2018, we show that growth in high skill intensive exports increases confidence in government among skilled individuals relative to unskilled ones. Growth in high skill intensive imports has the opposite effect. Growth in low skill intensive exports (imports) increases (decreases) confidence in government among unskilled individuals relative to skilled ones. To identify causal relationships, we construct instruments based on time-varying effects of air and sea distances on bilateral trade in goods of different skill intensity.
    Keywords: International trade, Political approval, Skill intensity of trade
    Date: 2022–01
  10. By: Biswajit Nag (Indian Institute of Foreign Trade (IIFT), New Delhi, India); Debashis Chakraborty (Indian Institute of Foreign Trade, kolkata, India); Sakshi Aggarwal (Indian Institute of Foreign Trade, New Delhi, India)
    Abstract: After the inception of World Trade Organization (WTO) in 1995, India initially focused on multilateral route for export promotion. However, after conceding defeat in a number of WTO disputes, the country was forced to open up domestic market for foreign players during late nineties. The negotiations during Doha Ministerial (2001) and Cancun Ministerial (2003) meetings of WTO did not lead to the expected level of market access for India. As a result, the country from 2003 onwards had increasingly looked for the possible export markets through preferential trade arrangements. The ‘Look East’ initiative, launched after the 1991 reforms, emerged as a major guiding motive in this regard. The series of ‘East’-centric regional trade agreements (RTAs) since 2010, participation in the Regional Comprehensive Economic Partnership (RCEP) negotiations and subsequent policy shift thorough announcement of ‘Act East’ initiative in 2014 underlined the country’s resolve in this direction. Given this wider background, the current analysis explores the drivers behind India’s recent decision to not join RCEP and the possible economic outcomes.
    Keywords: India, Regional Trade Policy, Domestic Value added in exports, RCEP, Act East Policy
    JEL: F13 F15
    Date: 2021
  11. By: Kazuhiro Takauchi (Faculty of Business and Commerce, Kansai University); Tomomichi Mizuno (Graduate School of Economics, Kobe University)
    Abstract: In this paper, we build a model in which firms choose whether to export. We show that if the fixed export cost is small and the transport cost is high, the coexistence of exporters and non- exporters can appear. We also show that trade liberalization may reduce consumer and total surpluses. Because the competition authority often cherishes consumer welfare, our finding offers an important insight into the relation between export activity and competition policy.
    Keywords: Exporting; Fixed export cost; Transport cost; Trade liberalization; Oligopoly
    JEL: F12 F13
    Date: 2022–12
    Abstract: 본 연구에서는 트럼프 행정부 임기 4년 동안 실시되었던 보호주의적 대외경제정책의 영향을 분석 및 평가하고, 2020년 11월 미국 대선으로 출범한 바이든 행정부가 추진하고 있거나 추진할 예정인 대외경제정책의 방향을 전망하고자 하였다. 전임 트럼프 대통령은 ‘미국우선주의(America First)’를 대외경제정책 기조로 내세우며 자국 통상법인 201조, 232조, 301조에 근거하여 대미 교역국을 상대로 수입제한 및 관세부과 조치를 시행하였다. 이와 같은 트럼프 행정부의 다양한 무역구제제도를 활용한 통상정책은 해당 조치의 영향을 받게 된 국가들로부터 큰 반감을 불러일으켰을 뿐만 아니라, 트럼프 행정부의 그와 같은 정책에 대한 대응으로서 각국의 대미 보복관세부과 및 WTO 제소 등의 빌미를 제공하였다. 또한 트럼프 행정부는 기존에 체결된 일부 무역협정이 미국에 불리하다는 점을 내세우며 재협상을 강력하게 추진하였을 뿐만 아니라, 양자주의에 기반한 신규 무역협상도 적극적으로 실시하였다. 특히 전자의 대표적인 예로는 취임한 지 3일 만에 발표한 환태평양경제동반자협정(TPP) 탈퇴, 북미자유무역협정(NAFTA) 재협상을 통한 미국-멕시코-캐나다협정(USMCA) 타결, 한ㆍ미 FTA 재협상을 꼽을 수 있다.(the rest omitted) This study analyzes and evaluates the impact of foreign economic policies implemented during the Trump administration's four-year tenure, and aims to predict the direction of foreign economic policies under the Biden administration launched following the 2020 presidential election. The former President Trump put “America First” as the slogan of economic policies and imposed import restrictions and tariffs on trading partners based on Sections 201, 232, and 301 of U.S. trade acts. The Trump administration's trade policies using various trade remedies not only aroused great antipathy from countries affected by those measures, but also led to retaliatory tariffs on U.S. goods and services from other countries. In addition, the Trump administration strongly promoted renegotiation, claiming that some existing trade agreements had been concluded unfavorably to the U.S., and also actively conducted new trade negotiations based on bilateralism.In this study, we conduct an empirical analysis to find out how the Trump administration's tariffs on imports had an effect on the U.S. economy. First, we examine the effects of the Trump administration's tariffs on steel and aluminum under the Section 232 remedy and tariffs on imports from China under the Section 301 on employment in the U.S.According to the empirical results, the tariffs have the effect of increasing employment through the protection of domestic industries. Moreover, looking at the effect of tariff imposition on industrial production, we find that it has the effect of reducing industrial production through both protecting domestic industries and imposing retaliatory tariffs.(the rest omitted)
    Keywords: 무역정책; 산업정책; Trade policy; industrial policy
    Date: 2022–12–30
  13. By: Gunes Asik (Tobb Economics and Technology University); Mohamed Ali Marouani (Paris 1 Pantheon-Sorbonne University and ERF)
    Abstract: Militarized conflict worldwide has been on a declining trend after World War II while trade and economic interdependence have been in-creasing rapidly. Whether trade and economic interdependence promote peace and whether conflict harms trade ties between countries are critical questions which have been studied widely in the conflict literature. A strand of this literature finds that bilateral trade reduces the probability of militarized conflict while multilateral trade increases the probability of conflict. In this research, we ask whether the relationship between trade and conflict is different for the MENA region as compared to the rest of the world. Using the dataset on Militarized Interstate Dispute between 1960 and 2014, we find that trade is not disrupted significantly after a conflict episode in the region. We find that unlike previous studies, both bilateral and multilateral trade induce conflict in the overall MENA region, however, as for oil rich countries, the increase in bilateral trade links is associated with lower probability of militarized conflict. RTAs within the region almost do not have an impact, due to their low effects on regional trade. Deeper RTAs may have had a different impact. Furthermore, countries with higher export sophistication are more likely to engage in conflict in the region. Finally we do not find a statistically significant relationship between FDI flows and conflict in general, but FDI outflows seem to be more deterrent for conflict than inflows
    Date: 2021–08–20
    Abstract: 한국과 인도의 경제교류는 한-인도 CEPA와 신남방정책을 계기로 확대되고 있지만, 두 나라의 잠재력을 감안할 때 아직 미흡하다. 본 연구는 인도의 통상정책과 대외 무역투자 관계에 대한 분석을 통해 한-인도 통상협력을 심화하는 데 기여하고자 한다. 제2장에서는 1990년대 인도의 개방화 이후를 중심으로 상품과 서비스무역 및 투자정책의 추이와 특징을 분석하였다. 제3장과 4장에서는 한국을 비롯한 인도의 주요 대상국별 무역 및 투자구조를 분석하였으며, 제5장에서는 글로벌 생산 네트워크상에서 인도의 위상을 분석하였다. 이상을 종합하여 제6장에서는 한-인도 통상협력에 대한 시사점을 제시하였다.(the rest omitted) Economic exchanges between Korea and India have been expanding since the signing of the Korea-India CEPA, which tookeffect in 2010, and the recent promotion of the New Southern Policy (NSP) by Korea, but the level of exchange still remains insufficient considering the potential of the two countries. This study aims to contribute to deepening Korea-India trade cooperation by analyzing India’s trade policy and trade investment relations. Taken overall, Chapter 2 analyzes the trends of commodity & service trade and characteristics of investment policies, centering around India’s economic liberalization since the 1990s. Chapters 3 and 4 examine India’s recent trade and investment structure with major countries including Korea, and Chapter 5 analyzes India’sstatus on the global production networks. In conclusion, Chapter 6 presents various implications for Korea-India trade cooperation. Looking at Chapter 2 in more detail, India has achieved great results in lowering tariff rates and easing investment barriers by promoting full-fledged liberalization policies since 1991. In particular, investment barriers have been significantly lowered and automatic approval is now being implemented in most areas, reflecting the remarkable improvements made in the investment environment since the inauguration of the Modi government. But at the same time, India has continued to actively utilize non-tariff barriers such as anti-dumping measures, and has been showing a trend of raising tariff barriers since 2018 with the aim of establishing its economic self-reliance. In short, India has placed its focus on developing its own production base by attracting foreign investments. And in spite of steady liberalization, India’s trade policy continues to lean towards the protection of domestic industries. According to Chapter 3, as intermediate goods account for an increasing proportion of total trade in goods, India’s status as a global production base is on the rise. In recent years, India’s major import destinations have switched from North America and Europeto China, Korea, and Southeast Asia, and in particular, trade with Korea has significantly expanded since 2000s.(the rest omitted)
    Keywords: 무역정책; 외국인직접투자; Trade Policy; Foreign Direct Investment
    Date: 2022–12–30
  15. By: Casadei, Patrizia; Vanino, Enrico; Lee, Neil
    Abstract: Creative services have become an important, but understudied, part of global trade. This paper presents new evidence on the transformation, geography and industrial relatedness of creative service exports in the UK, using the Inquiry in International Trade in Services (ITIS) database. Creative services exports have grown over the past decade, but there are pronounced patterns of geographical specialization in the export of creative and non-creative services. We develop a measure of relatedness between exports of creative and non-creative services and of manufacturing goods. We argue that creative services are economically significant because of their interrelationship with other local sectors.
    Keywords: creative services; trade; exports; services; relatedness; T&F deal
    JEL: R11 F10 R12
    Date: 2022–10–17
  16. By: Asmaa Ezzat (Cairo University); Chahir Zaki (Cairo University)
    Abstract: This paper examines the effect of the quality of institutions on the membership in trade agreements from de jure and de facto perspectives, with a special focus on the Middle East North Africa (MENA) countries. First, for the de jure aspect, we analyze how the quality of domestic institutions in a country affects its likelihood of joining a trade agreement. Moreover, for the de facto aspect, this paper examines how the difference in quality of institutions among trading partners and enforceability degree affects the volume of trade among them. Our main findings show that the larger the difference in the quality of political institutions between a country and its trading partners, the less likely it signs a deeper trade agreement (compared to more shallow ones). Moreover, the higher the enforcement degree of the agreement, the greater the positive effect on trade flows. This result holds for the enforcement of the aspects related to the World Trade Organization provisions, and those not related to it. Yet, the larger the institutional difference among trading partners, the lower the negative effect on trade flows in deep agreements compared to shallow ones. It is also worth noting that our results hold even when we control for the selection bias related to joining a trade agreement.
    Date: 2021–12–20
    Abstract: 미국은 2017년 1월 트럼프 행정부 출범 이후 2018년 3월 대중(對中) 추가관세 부과를 시작으로 2018년 8월에는 대내(對內) 외국인투자 규제를 한층 강화한 「외국인투자위험심사현대화법(FIRRMA: Foreign Investment Risk Review Modernization Act)」 제정, 엔터티 리스트(Entity List) 등 수출규제를 다루고 있는 「수출통제개혁법(ECRA: Export Control Reform Act)」 제정, 그리고 중국산 통신기기의 정부조달 금지조치 등 본격적인 대중 디커플링 정책에 착수하였다. 2021년 1월 출범한 바이든 미국 행정부 역시 트럼프 행정부의 대중정책을 계승하고 있다. 본 연구는 미ㆍ중 경제관계가 갈등국면에 접어들었다는 인식하에, 대외경제관계 측면에서 우리나라와 유사한 입장에 놓여 있는 일본의 통상 대응 전략을 분석하여 우리 정부와 기업에 시사점을 제공하려는 목적에서 추진되었다. 미ㆍ중 갈등시대에서 일본의 통상 대응은 기존의 무역ㆍ투자 중심의 통상 대응 영역을 벗어나 리쇼어링 정책과 같은 글로벌 공급망 재편과 자국우선주의의 경제안전보장 전략으로 현저히 나타나고 있다. 국제협력 측면에서는 미국의 아태지역 내 대중 견제 전략에 대한 협력 양상으로 나타나고 있음을 감안하여, 본 연구는 일본의 통상 대응 전략에 대해 기존 연구보다 더 광범위하게 접근하였다. This research was conducted with the purpose of providing implications for the Korean government and companies amidst thegrowing US-China conflict by analyzing the trade strategies of a country that shares similar international settings with Korea: Japan. Chapter 2, “US-China Decoupling and China’s Response,” examines US-China decoupling policy, focusing on tariff imposition, export control, technology transfers, foreign investment controls, and government procurement. This study reveals that, although US-China economic relations have deteriorated to the point of partial decoupling or disengagement in high-tech sectors and other select areas of supply chains, it certainly is not up to the level of the US’s containment of the Soviet bloc in the traditional Cold War sense. Chapter 3, “Japan’s Reshaping of the Global Supply Network: Focusing on China,” attempts to verify whether the “China risk”—a notion that has been actively promoted by some in Japan since US-China frictions intensified in 2018, and escalated with the spread of COVID-19 in 2020—actually took place, and evaluates Japan’s “China+1” policy, which is the country’s hedging strategy toward China. The results reveal that although Japan’s import dependence on Chins is significantly high for some import products, this does not seem to bear any serious risk for Japan in that the said products can easily be substituted with imports from other countries.Chapter 4, “Japan’s Economic Security Strategy,” looks into Japan’s new economic security policy, focusing on Japan’s economic statecraft, reinforcing resilient supply chains and strategically important industries, and strengthening global supply chain with its “allies.”(the rest omitted)
    Keywords: 무역정책; 해외직접투자; Trade Policy; Foreign Direct Investment
    Date: 2021–12–30
  18. By: Debashis Chakraborty (Indian Institute of Foreign Trade, Kolkata, India); Biswajit Nag (Indian Institute of Foreign Trade, New Delhi, India); Ripudaman Bhardwaj (Student, Indian Institute of Foreign Trade, Kolkata, India)
    Abstract: In 2014, India adopted the ‘Act East’ Policy to enhance trade flows with the East and Southeast Asian partners. A degree of caution in the outlook has however been noticed with the pull-out from the Regional Comprehensive Economic Partnership (RCEP) negotiations in November 2019, on the ground of domestic economic considerations. In the subsequent period, India has expressed willingness to enter with trade agreements with the ‘West’, namely, the European Union (EU) and the United States of America (USA). However, these trade partnerships may not be effective in enhancing Indian exports only through tariff reforms, and the role of quality harmonization needs to be acknowledged in this context. The automobile sector is an important case in point. The United Nations Economic Commission for Europe (UNECE) World Forum for Harmonization of Vehicle Regulations Working Party 29 (WP.29) has three agreements for harmonizing technical regulations on vehicles and auto-components to facilitate road safety, namely: UNECE 1958, 1997 and 1998. India joined the UNECE 1998 agreement in April 2006. It deserves mention that EU members are party to UNECE 1958 and have requested India at times to consider joining the 1958 Agreement. India has so far refrained from joining the UNECE 1958 standard, given the reservations against certain provisions of the same. The current paper intends to analyse the potential impact of the tariff reforms on the India-EU bilateral trade flows using the WITS-SMART analytical framework. The simulation results indicate that India’s export benefits would be limited vis-à-vis the EU, arguably owing to competition from countries already conforming to the UNECE 1958 standards. The analysis concludes that India needs to closely evaluate its options, keeping in mind the growing inclination towards UNECE 1958 even among some of the existing RTA partner countries (e.g., ASEAN). Thus, the Indian policymakers need to assess all these potential challenges before coming to a decision on the practicality of joining UNECE 1958 forum.
    Keywords: Automobile safety standards, UNECE, WP29, Indian automotive sector trade, Intra-Industry Trade, EU-India FTA, WITS-SMART Simulation
    JEL: F13 F15 F17
    Date: 2021
  19. By: SIMOLA Antti Mikko (European Commission - JRC); BOYSEN Ole (European Commission - JRC); FERRARI Emanuele (European Commission - JRC); NECHIFOR VOSTINARU Victor (European Commission - JRC); BOULANGER Pierre
    Abstract: The African countries are deepening their economic integration by launching the world’s largest free trade area, the African Continental Free Trade Area (AfCFTA). This Policy Insight presents scientific evidence on the impacts of the AfCFTA on agri-food industries and food security in Africa. The AfCFTA deepens African economic integration by boosting intra-African trade throughout the continent. It potentially generates vibrant growth and transformation at scale. Output of agricultural and processed food products concentrates in African countries driven by comparative advantages, while some of the countries increase their imports. Incomes of the African households in most regions rise, although moderately, increasing average food consumption throughout the continent. Food prices increase in several regions, but are outbalanced by higher wages, ultimately resulting in increased purchasing power for food. By 2035, the AfCFTA could reduce undernourishment in Africa by 1 million people.
    Keywords: food security, Africa, African Continental Free Trade Area (AfCFTA)
    Date: 2022–10
  20. By: Yasmine Eissa (Cairo University); Chahir Zaki (Cairo University)
    Abstract: This paper empirically investigates the impact of global value chains (GVC) participation on countries’ innovation performance. Highlighting the learning effect of foreign knowledge embedded in imported intermediate goods counters the argument that GVC participation is biased towards developed countries with skilled labor abundance. We construct a GVC knowledge spilloversindex by merging data on GVC from the EORA26 dataset with R&D of the trade partner. Results show a positive and significant effect of the GVC knowledge spillovers index on innovation measured by resident patent per capita. Likewise, we show that the quality of institutions, intellectual property agreements, competition policy and trade policy constitute a pile of interfering preconditions in the nexus between GVC participation and innovation. Our results remain robust when we use an instrumental variable approach to control for the endogeneity between GVC and innovation and when we use alternative measure for our two variables of interest
    Date: 2022–09–20
  21. By: Raphael Lafrogne-Joussier (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, 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: How do firms in global value chains react to input shortages? We examine micro-level adjustments to supply chain shocks, building on the Covid-19 pandemic as a case study. French firms sourcing inputs from China just before the early lockdown in the country experienced a relative drop in imports that increases from February to April 2020. This shock on input purchases transmits to the rest of the supply chain through exposed firm's domestic and export sales. Between February and June, firms exposed to the Chinese early lockdown experienced a 5.5% drop in domestic sales and a 5% drop in exports, in relative terms with respect to comparable non-exposed firms. The drop in foreign sales is entirely attributable to a lower volume of exports driven by a temporary withdrawal from occasional markets. We then dig into the heterogeneity of the transmission across treated firms. Whereas the ex-ante geographic diversification of inputs does not seem to mitigate the impact of the shock, firms with relatively high inventories have been able to absorb the supply shock better.
    Keywords: Covid-19 pandemic,Supply chain disruptions,Transmission of shocks,Global value chains
    Date: 2022–03–22
  22. By: Ugur Aytun (Kütahya Dumlupinar University); Cem Özgüzel (OECD)
    Abstract: On 24 November 2015, Turkish military shot down a Russian fighter jet near the Syrian-Turkey border after it violated Turkish airspace for about 17 seconds. Russia retaliated by imposing an embargo on 17 agricultural HS-6 level products from Turkey that would be effective for 22 months. We exploit this natural experiment to evaluate the impact of sanctions on Turkish exports and exporters. Using restrictive customs and firm-level data in a triple difference framework, we estimate the effect of these sanctions on the exports towards Russia, for embargoed and non-embargoed products. We estimate a total trade loss of $3.25bn for Turkish exports, 65% of which stemming from non-embargoed products. We investigate the underlying mechanism through firm-level analysis. First, we find that number of firms that trade with Russia and export volumes decreased dramatically. Second, firms re-routed their exports to bordering countries to circumvent the sanctions. Finally, we find that medium and large firms managed to adjust to the crisis while small firms suffered the main effects of the embargo.
    Date: 2021–08–20
  23. By: Amal Medini (University of Tunis); Chaima Ben Abderrahmen (University of Tunis); Leila Baghdadi (University of Tunis)
    Abstract: The COVID-19 pandemic significantly disrupted trade flows between countries, thereby revealing the vulnerability of global value chains. This unexpected event sparked a public debate on devising new policies to increase the resilience of value chains. This study identifies vulnerabilities related to supply chains with a specific focus on Tunisian imports during the period 2019-20. To this end, we select three potential drivers of import vulnerability based on post-pandemic reports and discussions and assess their impact on Tunisia’s overall imports using a quantitative analysis. For each product, we consider: (1) the market concentration of Tunisia’s suppliers, (2) the intensity of imports, and (3) COVID-19 products – that we call ‘essential products’ – as a potential source of import vulnerability, the impact of which we assess separately. These factors are country-specific product characteristics. Then, we identify a model based on a first differences estimator to assess the impact of the change in vulnerable imports on the change in total imports at the country-month and country-quarter levels using import data for the period 2019-20. Finally, we use input-output linkages to assess the level of exposure of Tunisia’s local industries to vulnerable supplies from partner countries through a downstream propagation approach. This framework will help us get insights into Tunisia’s most sensitive imports and industries.
    Date: 2022–01–20
  24. By: Bernard Hoekman (European University Institute)
    Abstract: Digitalization, along with the associated servification of economies, is both a driver and reflection of structural transformation. Digital technologies offer potential opportunities for Arab countries to diversify production and (intra-regional) trade, including complementing revealed comparative advantages in travel and transport services, enhancing participation in extant manufacturing value chains, and enhancing resilience to international shocks. Harnessing digitalization opportunities is conditional on an institutional and regulatory framework that supports access to and use of digital technologies and market platforms by micro, small, and medium-sized enterprises (MSMEs). The track record of exports of nontravel/transport services of many Arab countries is very heterogenous. The high service export growth rates for some countries demonstrate the potential that exists. However, the lack of dynamism in other Arab countries, despite proximity to large markets, suggests greater focus is needed on putting in place a supportive policy environment. Growth in digital trade is conditional on satisfying regulatory standards for data protection and the provision of services and digital products. Countries in other regions are actively pursuing digital trade cooperation, complementing trade agreements that encompass service trade and investment, and engaging in discussions on e-commerce, service regulation, and MSMEs. Many Arab countries have neglected services trade liberalization and are not engaged in international discussions to define good regulatory practices for the digital economy and identify measures to facilitate and support digital trade. This lack of attention may reduce the prospect of capturing digitalization opportunities.
    Date: 2021–09–20
  25. By: Alviarez, Vanessa; Head, Keith; Mayer, Thierry
    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 counter-factual 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
    JEL: F23 F12 F61 L13 K21
    Date: 2021–06
  26. By: Pamela E. Ofori (University of Insubria, Varese, Italy); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon); Raufhon Salahodjaev (Tashkent, Uzbekistan)
    Abstract: The debate on the need for Sub-Saharan African (SSA) countries to increase female participation in the economic sector has intensified the coming into force of the African Continental Free Trade Area (AfCFTA) and good governance. This study investigates the joint effects of governance (comprising of political, economic and institutional governance) and trade openness on female economic participation in SSA. The study employs panel data of 42 countries in SSA for the period 1996-2020. The empirical strategy is the dynamic System Generalized Method of Moments (SGMM) estimation technique. The findings reveal that the single effect of trade openness on female economic participation is necessary but not sufficient. Hence, complementing trade openness with good governance further enhances female economic participation in SSA. In general, the joint effect of trade openness and good governance should be a concern for policymakers to promote female economic inclusion.
    Keywords: economic integration; governance; female economic participation; sub-Saharan Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2023–01
  27. By: Sakshi Aggarwal (Doctoral Scholar, Indian Institute of Foreign Trade (IIFT); Debashis Chakraborty (Indian Institute of Foreign Trade, India)
    Abstract: Over the last two decades, India has witnessed a rise in its both-way trade flows, reflected in the rising Intra-Industry Trade (IIT) indices both at aggregate and sectoral levels. A major branch of the associated literature focuses on decomposition of the IIT in Vertical IIT (VIIT) and Horizontal IIT (HIIT) categories, defined in terms of quality of the products being exported and imported simultaneously. Through a data analysis of select manufacturing sectors, the current paper concludes that India’s IIT is predominantly vertical in nature, displaying an increasing trend over 2001-19. A panel data analysis on the determinants of India’s VIIT during 2001-15 indicate that increase in capital-intensity, higher skill-intensity of workforce, higher research and development orientation and decline in industrial concentration facilitates the same. In addition, the interaction terms reveal that rising sophistication in product quality also positively influence VIIT. The paper concludes that there is a need for the country to identify and promote key technology-intensive sectors to realize the ‘Make-in-India’ and ‘Atmanirbhar Bharat Abhiyan’ objectives in long run.
    Keywords: India’s Trade policy, Manufacturing sector, Vertical Intra-industry Trade, Foreign Direct Investment, Panel data analysis, Atmanirbhar Bharat Abhiyan
    JEL: F12 F13 F14
    Date: 2021
  28. By: Julien Martin (CEPR - Center for Economic Policy Research - CEPR, UQAM - Université du Québec à Montréal = University of Québec in Montréal); 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); Mathieu Parenti (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: We study how stickiness in business relationships influences the trade impact of aggregate uncertainty. We first develop a product-level index of relationship stickiness estimated from firm-to-firm trade data. The measure is grounded into a search model in which more stickiness implies longer firm-to-firm trade relationships, conditional on match quality. We then show that relationship stickiness shapes the dynamics of trade in response to uncertainty shocks. Episodes of high macroeconomic uncertainty are associated with less trade, mostly driven by a decrease in the net creation of firm-to-firm relationships. Such adjustments are significantly more pronounced among the most sticky product categories.
    Keywords: Firm-to-firm, Trade relationship, Specificity uncertainty
    Date: 2021–11–15
  29. By: Catalin Dragomirescu-Gaina; Leandro Elia
    Abstract: We study whether misinvoicing in international trade is reflected in cross-border bank accounts as reported by offshore financial centres. We show that residents hold more offshore wealth when local misinvoicing practices thrive, especially for under-invoiced exports of natural resources. These results are driven by less-developed countries, autocracies, and resource-rich countries, which typically lack institutional capacity and/or political willingness to deter capital flight and misinvoicing practices.
    Keywords: Misinvoicing, Banking, Offshore financial centres, Natural resources, International trade, Rent-seeking, Elites, Capital flight
    Date: 2022
  30. By: Foued Badr Gabsi (University of Sfax, Tunisia.); Rihab Bousnina (University of Sfax, Tunisia.)
    Abstract: This paper examines the relationship between the current account balance and participation in global value chains (GVCs) while considering institutional quality in the Middle East and North Africa (MENA) region over the period 2006-2018. We identify the key fundamentals of current account balances by estimating Bayesian Model Averaging (BMA) supplemented by the General-to-Specific (GETS) method. We find that integration into GVCs has a significant positive effect on the current account, conditional on institutional quality. These findings suggest that for MENA countries to better integrate into and benefit from GVCs, policies should target improvements in the institutional framework.Length: 35
    Date: 2022–08–20
  31. By: Jacek Rothert (United States Naval Academy; Group for Research in Applied Economics (GRAPE)); Alexander McQuoid (United States Naval Academy); Katherine Smith (United States Naval Academy)
    Abstract: Among the G7 economies gross foreign direct investment (FDI) positions are very large, averaging 100% of GDP and dwarfing the absolute values of net FDI positions in most countries. Additionally, inward and outward FDI flows exhibit robust, positive correlation over the business cycle. In the standard international business cycle (IBC) model gross FDI stocks and flows are not well defined, and only net flows matter. We extend the standard model by allowing domestic and foreign ownership of physical capital in the aggregate production function to be imperfect substitutes. We estimate that elasticity of substitution using the co-movement of gross FDI flows, and find it to be less than 2.5 – a value much smaller than the implicitly assumed infinity in the IBC literature. Our results uncover a new source of welfare gains from openness to FDI among otherwise identical, developed economies – a capital diversity channel, akin to product variety in trade models. The channel is quantitatively important – openness to FDI yields steady-state welfare gains equivalent to at least a 4-5% increase in life-time consumption.
    Keywords: FDI, risk-sharing, international financial integration, international business cycles, BKK puzzle, Feldstein-Horioka puzzle
    JEL: R15 H77 I19
    Date: 2022
  32. By: Alonso Alfaro-Urena; Benjamin Faber; Cecile Gaubert; Isabela Manelici; Jose P. Vasquez
    Abstract: Multinational enterprises (MNEs) increasingly impose “Responsible Sourcing” (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just “hot air” or do they impact exposed suppliers and their workers? What is the welfare incidence of RS in sourcing countries? To answer these questions, we develop a quantitative general equilibrium (GE) model of RS and combine it with a unique new database. In the theory, we show that the welfare implications of RS are ambiguous, depending on an interplay between what is akin to an export tax (+) and a labor market distortion (-). Empirically, we combine the near-universe of RS rollouts by MNE subsidiaries in Costa Rica since 2009 with firm-to-firm transactions and matched employer- employee microdata. We find that RS rollouts lead to significant reductions in firm sales and employment at exposed suppliers, an increase in their salaries to initially low-wage workers and a reduction in their low-wage employment share. We then use the estimated effects and the microdata to calibrate the model and quantify GE counterfactuals. We find that while MNE RS policies have led to significant gains among the roughly one third of low-wage workers employed at exposed suppliers ex ante, the majority of low-wage workers lose due to adverse indirect effects on their wages and the domestic price index.
    Keywords: multinationals, responsible sourcing, FDI, labor standards
    Date: 2022
  33. By: Jeong, Hyung-Gon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Yoon, Yeo Joon (Pusan National University); Yeon, Wonho (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Seohee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Joo, Dae Young (The Korea Institute for Industrial Economics and Trade)
    Abstract: 최근 반도체 패권을 강화하고자 하는 미국의 대중정책은 반도체 산업의 글로벌 공급망 재편을 유발시키고 있으며, 이는 우리 경제에도 큰 영향을 미칠 것으로 예상된다. 이에 본 연구에서는 미중 양국의 반도체 산업 육성정책을 살펴보고, 우리 반도체 산업의 공급망 구조와 리스크를 자세히 분석하여 대응방안을 모색한다. Realization of digital transformation(DX) and the Fourth Industrial Revolution(4IR) has led the development of new technologies in areas such as AI, big data, metaverse, autonomous vehicles, digital currency, and blockchain. While these sectors are expected to continue to grow, major countries including the United States and China are fiercely competing to secure a global supply chain for the semiconductor industry. The global division of production in the semiconductor industry has been built on freetrade and has driven corporate innovation and technology development. However, the trend of techno-nationalism and efforts by each nation to construct value chains within own their territories are expected to have an adverse effect on the global semiconductor industry. The ever-deepening hegemony competition between the U.S. and China in the semiconductor sector could have a profound impact not only on the Korean economy but also on restructuring of the global semiconductor supply chain. This study analyzes the supply chain structure and risks of the Korean semiconductor industry, along with U.S. andChinese polices to foster the semiconductor industry, going on to explore corresponding countermeasures. The first chapter details the research methodology used in the study and how it differs from previous studies, followed by theacademic and policy contributions of our study. An analysis of the current state of the global semiconductor industry and risks in the semiconductor supply chain of the United States follows in the second chapter. Division of labor by value chains has progressed significantly in the global semiconductorindustry. Countries are specialized in various manufacturing stages (chipless → fabless → foundry → ATP → delivery) and the GVC hasbeen established according to each country’s strength. The United States and Europe specialize in product technology while Korea and Taiwan are strong in process technology and China, Taiwan, Vietnam and Malaysia have comparative advantages in ATP. The global value chain has been arranged based on these advantages and driven production efficiency for decades.(the rest omitted)
    Keywords: 경제전망; 무역장벽; Economic prospects; trade barriers
    Date: 2021–12–30
    Abstract: 코로나19가 장기화됨에 따라 보호무역주의 확산 우려가 커지고 있다. 특히 반덤핑조치는 다른 보호무역조치에 비해 상대적으로 발동이 수월할 뿐만 아니라 그 효과가 직접적이어서 우리 경제에 큰 영향을 미칠 수 있다. 이에 본 연구에서는 반덤핑조치의 확산 동향과 함께 반덤핑조치가 교역에 미치는 영향을 살펴보았다. 아울러 반덤핑 조사 방식이 다양화ㆍ강화되고 있다는 점에 주목하여, 반덤핑 조사기법 중 한국산 제품에 대해 빈번히 적용되고 있는 특별한 시장상황(PMS)과 불리한 가용정보(AFA)를 중심으로 법ㆍ제도 적용 사례와 조사당국 논리를 분석하였다. As global economic growth has lost momentum due to the COVID-19, concerns about the spread of protectionism are growing. In particular, anti-dumping (AD) measures are more likely to expand in the future in that they are relatively easy to take and have a direct effect on trade compared to other protectionist trade policies.Accordingly, this study examines the spread of AD measures and the effects of AD measures on trade. We also pay attention to the fact that AD investigation methodologies are being diversified. Global AD measures decreased in the 2000s, but have been on the rise since the global financial crisis in 2009. AD measures are mainly taken in the metal, chemical, plastic and rubber industries. In many cases, developed countries are taking AD measures against developing countries, while AD measures within developed or developing countries are increasing in recent years. AD measures against Korea are also mainly taken in the metal, chemical, plastic and rubber industries. In an empirical analysis using data from 2010 to 2019 for 120 countries around the world, we find that AD measures have anegative effect on trade. Furthermore, AD measures have a negative effect on trade in empirical analyses conducted by splitting all product datasets by industry or production stage. Next, it is found that AD measures taken against Korea have a negative effect on Korean exports for the chemical, rubber, plastics industry as well as metal industry. Finally, we also analyze whether the trade diversion and trade refraction effects of AD measures occurred in the above two industries, focusing on cases where the United States conductedinvestigations against Korea. The results of our empirical analysis indicate that the trade diversion effect does not occur in the chemical, rubber, and plastic industries, but is found to occur in the metal industry. The trade refraction effect occurs in the chemical, rubber, and plastic industries, but not in the metal industry. (the rest omitted)
    Keywords: 반덤핑제도; 무역정책; Anti-Dumping System; Trade Policy
    Date: 2021–12–30
  35. By: Keith Head (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: Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the dataset of Berry et al. (1995), who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, leading to reasonably accurate counterfactual predictions. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing oversimplified substitution patterns. We do so by extending the commonly used methods of Exact Hat Algebra and tariff elasticity estimation to take into account oligopoly.
    Keywords: Constant Elasticity of Substitution, Industrial Organization, Oligopoly, Trade, Tariffs, Counterfactual analysis
    Date: 2022–12–07
  36. By: Shifali Goyal (Indian Institute of Foreign Trade, New Delhi, India); Areej A. Siddiqui (Indian Institute of Foreign Trade, New Delhi, India)
    Abstract: This study tries to estimate the carbon emissions embodied in India’s exports to five of its major trading partners, i.e., USA, UAE, Hong Kong, China and Bangladesh, for the year 2015.In order to quantify the same, Bilateral Trade Input-Output (BTIO) model is being used. The study found huge emission embodiment in India’s exports, and also calculated the emission intensity of the goods exported. Once the calculation of emissions embodied in exports is done, the paper further highlights that carbon emissions embodied in India’s exports is not determined by just the quantum of the goods exported, but composition of goods traded and emission intensity of the traded goods also have a substantial impact over emission embodiment. Hence, the study suggests to shift India’s energy consumption patterns from carbon intensive ones to the cleaner and renewable ones, and to reduce its emission intensity
    Keywords: Carbon emissions, Bilateral Trade, Input-Output Analysis, Bilateral Trade Input-Output Model (BTIO)
    JEL: C67 F18 F64 Q56
    Date: 2021
  37. By: Serafica, Ramonette B.; Oren, Queen Cel A.
    Abstract: This paper reviews the participation of the Philippines in services trade agreements at the multilateral, regional, and bilateral levels. It also discusses the government’s institutional arrangements for services trade negotiations. To harness the benefits of free trade agreements and increase market opportunities for the country, the government should judiciously exercise policy space in binding commitments, involve various stakeholders early in the services negotiation cycle, clarify and delineate roles of relevant agencies, and capacitate the private sector, particularly micro, small, and medium enterprises, to engage in trade in services more actively. To strengthen the governance structure of trade negotiations in services, lead coordination must be consolidated in one agency instead of the current setup, where the role is split between two agencies depending on the trade partner and the scope of the agreement.
    Keywords: services;trade;FTAs;free trade agreement
    Date: 2022
  38. By: DACHS Bernhard; NEULÄNDTNER Martina; STEHRER Robert
    Abstract: This study investigates the evolution of global value chains (GVCs) and the strategic position of the EU27 in these GVCs and production networks. The analysis is based on input-output data from the FIGARO database that covers 2010-2019. An in-depth coverage is provided for four sectors (food, pharma, electronics, and vehicles) and three industrial ecosystems (energy intensive industries, mobility-transport-automotive, aerospace & defence). In terms of the main results, the overall share of foreign sourcing is quite stable over this period, and the length of GVCs remains roughly the same, so there is no sign of large-scale backshoring. The most important geographical shifts are the gains of China as a supplier in the value chains of EU27 and US. Europe’s strategic capacities, as measured by social network analysis indicators, are in mobility/automotive/transport, energy-intensive industries, and electronics and are towards the US and China. Strategic dependencies exist mainly towards China in electronics and energy-intensive industries. The analysis clearly shows the mutually dependent character of these relationships between the US, China, and the EU27.
    Keywords: Global Value Chains, Input-Output, Strategic Dependency, Network Analysis
    Date: 2022–10
  39. By: Timothy N. Bond; Osea Giuntella; Jakub Lonsky
    Abstract: We develop a theoretical framework to analyze the effects of immigration on native job amenities, focusing on work schedules. Immigrants have a comparative advantage in production at, and lower disamenity cost for nighttime work, which leads them to disproportionately choose nighttime employment. Because day and night tasks are imperfect substitutes, the relative price of day tasks increases as their supply becomes relatively more scarce. We provide empirical support for our theory. Native workers in local labor markets that experienced higher rates of immigration are more likely to work day shifts and receive a lower compensating differential for nighttime work.
    JEL: F60 J31 J6
    Date: 2022–12
  40. By: Khalil, Makram; Weber, Marc-Daniel
    Abstract: In structural vector autoregressive models of United States and euro area manufacturing, we use sign restrictions to identify shocks that alter the frictions to Chinese supply chain trade. We find a quantitatively significant role of such shocks for the decline of US manufacturing output at the height of the Sino-American trade tensions in 2019. At the beginning of the Covid-19 pandemic in early 2020, the results pointed towards large spillovers from the shutdown in China to manufacturing in the US and the euro area. Moreover, for the recovery in late 2020 and 2021, favourable Chinese supply chain shocks related to the shift of preferences towards goods with a large China valued-added content played a relevant role. Interestingly, the impact of Chinese supply chain shocks is not limited to manufacturing sectors that are highly exposed to China. Furthermore, negative Chinese supply chain shocks cause upward price pressure across the whole manufacturing industry.
    Keywords: Cross-border supply-chain disruptions,trade frictions,China,trade tensions,Covid-19 recession,US and euro area manufacturing
    JEL: E32 F41 F62
    Date: 2022
  41. By: Halit Yanikkaya (Gebze Technical University); Abdullah Altun (Gebze Technical University); Pinar Tat (Gebze Technical University)
    Abstract: This paper tracks the greenhouse gas (GHG) emissions embedded in global value chains (GVCs) in 186 countries for the period 1990-2015. It then looks at the determinants of the emissions considering both country- and sector-level variables in a gravity-like framework. Our graphical visualization displays that, as expected, developed countries appear to be both major GHG emission producers and outsourcers in the highly fragmented world. Indeed, the trade activities of China, the US, Germany, Japan, and Russia contribute 40 percent of total global emissions. Moreover, while higher capital stock is attributable to higher GHG emissions embedded in GVCs, our empirical results reveal that sectors’ renewable energy consumption can be seen as an emission-decreasing factor. While higher income and financial development levels seem to decrease air quality, regional or global integration in trade agreements seems to be consistent with the current increasing efforts and concerns regarding environmental issues. Given the current trajectory and the findings of this paper, negotiating environmental policies across nations, an adaptation of greener production technologies in the production process, and cost-sharing plans between governments and producers should be carefully considered to decrease environmental degradation and sustain natural resources.
    Date: 2022–08–20
  42. By: Stephen J Terry (BU - Boston University [Boston], NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Thomas Chaney (USC - University of Southern California, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Konrad B Burchardi (Stockholm University); Lisa Tarquinio (UWO - University of Western Ontario); Tarek A Hassan (BU - Boston University [Boston], NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: We show a causal impact of immigration on innovation and growth in US counties. To identify the causal impact of immigration, we use 130 years of detailed data on migrations from foreign countries to US counties to isolate quasi-random variation in the ancestry composition of US counties; interacting this plausibly exogenous variation in ancestry composition with the recent inflows of migrants from different origins, we predict the total number of migrants flowing into each US county in recent decades. We show immigration has a positive causal impact on innovation, measured as patenting of local firms, and on economic growth, measured as real income growth for native workers. We interpret those results through the lens of a quantitative model of endogenous growth and migrations. A structural estimation of this model targeting the well identified causal impact of migration on innovation suggests the large inflow of foreign migrants into the US since 1965 may have contributed to an additional 8% growth in innovation and 5% growth in wages.
    Keywords: Migrations, Innovation, Patents, Endogenous growth, Dynamism
    Date: 2022–11–24
    Abstract: 이 연구는 외국인 기업이 남북경협에 참여한다면 어떤 문제가 발생할 것인가에 대한 물음에서 시작되었다. 외국인 기업의 남북경협 참여는 남북관계가 개선되어 경협이 재개될 경우 잠재적으로 부상할 수 있는 주제이다. 그동안 외국인 기업의 남북경협 참여 문제는 주로 개성공단 국제화에 대한 논의를 중심으로 이루어졌다. 외국인 기업의 개성공단 진출 문제는 2005~16년 간헐적으로 검토되었으나 실질적인 성과로 이어지지 못했다. This research stemmed from an inquiry into what issues would surfaceif foreign firms engaged in inter-Korean economic cooperation, recognizing this as a topic that could potentially emerge if inter-Korearelations improve and economic cooperation resumes. So far, the issueof foreign firms participating in inter-Korean economic cooperationhas been focused on internationalizing the Kaesong IndustrialComplex. Although the issue of foreign firms entering into Kaesong wasintermittently reviewed from 2005 to 2016, it did not lead to tangibleresults. The objective of this research was to examine the various conditionsfor foreign firms to participate in inter-Korean economic cooperationand propose stimulation measures. For this, we (1) analyzed thetheoretical background and the political/industrial incentives forforeign firm participation in inter-Korean cooperation, (2) investigatedcentral and local government policies towards North Korea and casestudies of foreign firms which had participated in inter-Koreaneconomic cooperation, (3) examined how other countries utilized foreign firms during economic integration, and (4) reviewed institutionaland non-institutional measures to promote the participation of foreignfirms in inter-Korean economic cooperation. In addition, we alsoreviewed foreign firm participation in multiple inter-Korean economiccooperation projects. Our research defined foreign firm activity ininter-Korean economic cooperation as firms partaking in projectsimplemented in North Korea via South Korea. To begin with, in Chapter 2, we review the need for foreign firms’participation in inter-Korean economic cooperation from a theoreticalbackground and political/industrial demand. On the theoretical side, we examined the theories of a peace economy and capitalist peace, and reviewed the debate of foreign investment on economic growth. In addition, we also reviewed the political/industrial demand, such aseconomic incentives for inter-Korean cooperation projects, as well asexploring new methods, financing funds for North Korea’s developmentwhile sharing the benefits with the international community, and sectorsthat foreign firms can advance into when participating in inter-Koreaneconomic cooperation.(the rest omitted)
    Keywords: 북한경제; 외국인직접투자; Labor economy; foreign direct investment
    Date: 2021–12–30
  44. By: Jaime de Melo (University of Geneva, FERDI and CEPR); Jean-Marc Solleder (University of Geneva)
    Abstract: The paper focuses on two challenges of digitalization for structural transformation in MENA and SSA, one particularly relevant for SSA countries, the other for MENA countries. For SSA on the way to account for half of the growth in the global labor force over the first half of the 21st century, the most pressing challenge is that automation presents a threat for employment. Digital technologies (digitech) could rob SSA from its demographic dividend enabled by rising wages in China. For MENA countries where manufacturing has largely failed to take off, the digital transformation where ‘value creation shifts from capital to knowledge’ presents an opportunity for structural transformation. Successful digitalization would then allow MENA countries to achieve a service-sector led high-productivity growth structural transformation. For countries in both regions, improving digital skills to close the growing digital gap will be necessary. Digitalization is only starting across developing countries and is barely visible in the data and estimates reported in this paper. The paper covers evidence on three aspects of digitalization. First, disparities in digitalization across countries in both regions may be increasing in a digital world increasingly data-driven. New technologies entering the exports of firms participating in GVCs present a threat for low-income countries through two channels. First, the new technologies are biased towards skills and other capabilities, reducing the comparative advantage of unskilled labor-abundant countries, like those in SSA. Second, this bias makes it harder for low-income countries to offset their technological disadvantage with their labor-cost advantage. Next, the paper documents the weak performance of services in SSA and MENA, a sector that has become the engine of structural transformation. SSA and MENA stand out for having registered the slowest average labor productivity growth in services across regions over 1995-2018. Great differences in the state of national data infrastructures are observed across both regions, a signal that many countries are not ready for cross-border e-commerce, an essential ingredient of the digital transformation. It reports on firm-level evidence establishing causality between exports of software-intensive services exports and the quality of data infrastructure. Third the paper shows that trade costs have remained higher and participation in supply chain trade lower than in most other regions. New econometric estimates suggest that an increase in telecom subscriptions is associated with a direct elasticity of GVC participation of 0.4 and an indirect effect of 0.25 through a reduction in trade costs. In sum, ‘this time may be different’ because the labor displacement effects of automation may not be accompanied by reinstatement effects observed during past episodes of widespread technological change when jobs were created to implement the new technologies. The complementarity between humans and machines observed in previous spells of technical progress may be threatened by the continued growth in automation and robots. MENA and SSA countries should also prepare for regulation of cross-border e-commerce by, among others, weighing the costs and benefits of data localization measures that can provide consumer protection and give an advantage to local firms. For African countries engaged in the AfCFTA, negotiations on protocol for e-commerce in phase III provides a unique opportunity for African countries to collectively establish common positions in e-commerce that would help guide their structural transformation.
    Date: 2022–05–20
    Abstract: 디지털 플랫폼의 발전과 함께 글로벌 전자상거래 시장이 빠르게 성장하고 있다. 디지털 플랫폼을 활용한 국제화는 전통적인 방식에 비해 해외시장 진입 비용을 크게 낮추었는데, 이는 자본이나 인력 면에서 상대적으로 열세에 놓여 있는 중소기업에 새로운 기회를 제공할 것으로 기대된다. The global e-commerce market has been rapidly expanding due to the development of digital platforms. When compared to traditional methods, internationalization via digital platforms has significantly reduced the cost of entering overseas markets, which is expected to open up new opportunities for small- and medium-sized enterprises (SMEs) with limited capital or manpower. However, few studies have been conducted on domestic SMEs internationalization via digital platforms. Furthermore, little is known about the effects of relevant policies on SMEs’ use of digital platforms and internationalization. Aiming to fill this research gap, this study collects data on Korean SMEs’ online exports (i.e., exports via e-commerce), the most representative type of SMEs’ internationalization through digital platforms, establishes stylized facts, and investigates the effects of Korean SMEs’ online export support policies. Based on the findings, we also provide policy implications. In Chapter 2, we first conduct a survey on domestic SMEs’ online exports using a sample representing domestic SMEs registered as official e-commerce firms as of June 2021. Based on survey results, we document basic descriptive statistics on SMEs’ online exports behavior and investigate their main issues and policy demands. Chapter 3 outlines Korea’s online export support policies for SMEs and explores the effects of five major online export assistance programs on SMEs’ online exports. For the estimation of the effects, we combined the survey data from Chapter 2 with information on the firms participating in the programs, which are provided by the Ministry of SMEs and Startups and Korea Enterprise Data (KED). (the rest omitted)
    Keywords: 전자상거래; 무역정책; E -commerce; trade policy
    Date: 2021–12–30
  46. By: Stylianou Kalaitzi, Athanasia; Samer, Kherfi; Alrousan, Sahel; Katsaiti, Marina-Selini
    Abstract: This paper examines the export diversification process and the causality between disaggregated manufactured exports and economic growth in the United Arab Emirates (UAE). The study develops a model whereby domestic investments, gross domestic product, as well as disaggregated manufactured exports and imports of goods and services, are considered. The results show that chemicals and related products cause short-run economic growth, while a bi-directional causality exists between machinery and transport equipment exports and economic growth both in the short and long run. Therefore, the shift to machinery and transport equipment exports contributes to long-run, sustainable economic growth in the UAE.
    JEL: L81 N0
    Date: 2022–11–01
  47. By: Andreasen, Eugenia; Bauducco, Sofía; Dardati, Evangelina
    Abstract: This paper studies the effect of capital controls on misallocation and welfare in an economy with financial constraints. We build a general equilibrium model with heterogeneous firms, financial constraints and international trade and calibrate it to the Chilean economy. Since high-productivity and exporting firms need to borrow more to reach their optimal scale, capital controls that tax international borrowing hit them harder. As a result, misallocation increases relatively more for this group of firms, and for young firms that are still trying to reach their optimal scale. In terms of welfare, the model predicts a sizable aggregate loss of 2.39 percent when capital controls are introduced, with welfare decreasing twice as much for high-productivity firms. We empirically corroborate the main insights in terms of misallocation obtained from the model using Chilean manufacturing firm data from 1990 to 2007.
    Keywords: International trade;Financial Frictions;welfare;Capital controls;Misallocation
    JEL: F41 O47 F12
    Date: 2021–06
  48. By: Choi, Ina (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Sunhyung (Montclair State University); Lee, Jaeho (Center for Area Studies); Kim, So Eun (Center for Area Studies)
    Abstract: As in other Asia-Pacific countries, boosting trade with China has provided a growth engine for Australia's economy. Australia shared concerns over security threats posed by China’s military expansion, but up until the mid-2010s hard balancing against China did not seem to be an option for Australia. Australia’s recent moves against China, however, signal that Canberra has reset its China policy, with an overhaul of its national security and defense strategy. The shift of Australia’s China policy is an interesting case to explore how the regional order is likely to evolve in the growing US-China competition. Assessing Australia’s recent foreign policy is also relevant to Korea, both in terms of navigating Korea’s relations with the US and China and enhancing strategic ties between Australia and Korea. Against this backdrop, this study unravels Australia’s strategic responses to the changing regional order and draw implications for Korea's foreign policy.
    Keywords: Australia; Australia-China trade disputes; Australia-ROK partnership
    Date: 2022–08–01
  49. By: Jan‐luca Hennig (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates how labour market regulations alter the adverse impact of rising import competition from China in European local labour markets between 1997 and 2006. The paper constructs measures of regional exposure to Chinese imports based on previous literature and on regional labour market frictions exploiting involuntary labour reallocations. Taking into account the endogeneity of import competition and its interaction with labour market regulations, the paper finds that regions more exposed to the rise of China have suffered from a reduction in manufacturing employment shares. This shock grows larger with regional labour market frictions; hence, it exacerbates the impact of trade shock on employment. Moreover, the paper finds that employment in public services, and not in construction or private services sector, absorbed the negative shock to the manufacturing sector. The unemployment rate, the labour force participation rate and wages in all sectors are unresponsive to import competition from China.
    Keywords: empirical trade, employment structure, labour reallocation, regional labour markets
    Date: 2022–05–05
  50. By: Serfraz, Ayesha
    Abstract: The global COVID-19 pandemic brought many challenges for the world including the downfall in foreign direct investment inflows (FDI). Although there are many other factors which cause a decline in FDI inflows in Pakistan but present study mainly focuses on COVID-19 pandemic as this resulted in closures of borders causing a sharp decline in FDI inflows. For this purpose, this study uses monthly data of Pakistan, starting from January 2020 (start of COVID-19 in Pakistan) till May 2022 (time period in which study has been conducted) to empirically analyze the relationship between FDI inflows and COVID-19. The results of ADF test statistic show that data is integrated of order (1). Johansen Co-integration approach is used to determine the relationship. Taking FDI inflows as a dependent variable and COVID-19 cases as an independent variable, the results suggest a linear co-integration relationship between these two variables with FDI inflows having a negative sign indicating a negative relationship between FDI inflows and COVID-19 cases. This study is innovative in the sense that it concentrates on finding a proper empirical relationship between FDI inflows and COVID-19 and does not focus only in analyzing existing figures. Empirical results suggest that Pakistan must devise such policies that can be implemented immediately in such unforeseen conditions as more and new variants are coming to surface. The availability of data puts a limitation on application of empirical technique since COVID-19 started in 2020 in Pakistan and the pandemic is still not over. In coming years, a time series analysis would be possible to carry a long run investigation. The co-integration technique is the most useful at the moment as it not only mentions the relationship between the variables during pandemic but also makes a future forecast.
    Keywords: COVID-19, Co-integration analysis, Unit root test, EViews, FDI inflows, Pakistan
    Date: 2022
  51. By: Fatma Tasdemir (Sinop University); Seda Ekmen Özçelik (Ankara Yildirim Beyazit University)
    Abstract: This paper investigates whether the impact of foreign direct investment (FDI) on CO2 emissions may change depending on the data-driven estimated threshold levels for the country characteristics (CC) including human capital and governance in a panel of 13 Middle East and North Africa (MENA) economies over the 1996-2019 period. Our results strongly suggest that endogenously estimated CC thresholds matter for the environmental impact of FDI inflows. The pollution haven hypothesis which maintains that FDI inflows lead to pollution, appears to be valid for economies with weak CC. On the other hand, the pollution halo argument suggesting FDI lowers the emissions appears to be hold in countries with strong CC. The empirical findings in this study suggest that policies aiming to improve human capital and governance may be expected not only to increase the economic benefits of FDI in terms of growth but also mitigate the negative environmental impacts of FDI in the MENA region.
    Date: 2022–11–20
  52. By: -Ranajoy Bhattacharyya (Indian Institute of Foreign Trade (IIFT), Kolkata, India.); Gouranga Das (Hanyang University, Seoul, South Korea); Sugata Marjit (Indian Institute of Foreign Trade, Kolkata, India)
    Abstract: : In this paper, we analyse the entry of a cash crop producing foreign Contract Farming (CF) subsector within the agricultural sector of a country. Entry requires a cash crop price that is substantially above the price of the food crop already being produced within the country. CF (a) increases GDP; (b) may make income distribution more skewed; (c) reduces domestic production of food and hence, (d) increases food import and hence food insecurity. Thus, CF might imply a trade-off between food insecurity, inequality and growth. We employ a variant of 3×3 mixed Specific Factor-Heckscher Ohlin general equilibrium model of production and trade where introduction of a new policy may lead to the emergence of a new sector resulting in finite changes where we show the possibilities of sectoral diversification with combinations of contract farming vis-à-vis traditional agriculture under some plausible conditions. However, either zero CF and extremely high CF are suboptimal and hence, CF cannot be substitute of non-CF agricultural sector producing Food crops. Our results seem to be consistent when compared to some empirically robust conclusions found in the literature and some secondary data available in the FAO website.
    Keywords: Contract Farming, Food crops, Cash-crops, Food Insufficiency, Finite Change, General Equilibrium.
    JEL: F11 F16 F60 J43 O13 Q17
    Date: 2021
  53. By: Sámano Daniel
    Abstract: I develop an asymmetric two-country incomplete markets model in which economies trade final consumption goods and inputs. The purchases of imported inputs from the firms of one of the economies (the emerging) to the firms of the other economy (the advanced) are subject to a foreign currency working capital constraint. Domestic firms are assumed to finance their working capital by borrowing from the domestic household in local currency. Through numerical simulations, I show that in this environment domestic productivity shocks have compositional effects through the cost of the working capital. In particular, after a domestic positive productivity shock terms of trade rise and the working capital cost exhibits a sudden increase followed by a prolonged temporary decrease. This leads to inputs recomposition in the domestic economy in response to working capital cost adjustments.
    Keywords: Working capital;Foreign currency;Imported inputs
    JEL: C68 F15 F41
    Date: 2022–12
  54. By: Johannes Eugster; Giovanni Donato
    Abstract: This paper investigates the effects of Switzerland's real effective exchange rate (REER) on its current account. Using dynamic empirical methods, we focus on exchange rate movements that are unrelated to real and monetary developments, i.e., those more likely to be driven by the Swiss franc's safe-haven proprieties or unexpected exchange rate policy decisions. The paper's key result is that the Swiss headline current account has been largely inelastic to the exchange rate at the business cycle frequency. Three factors explain this somewhat counterintuitive result. A) A negative but short-lived effect on the trade balance is partly offset by a positive effect on net investment income. B) Large and often volatile net exports of nonmonetary gold blur the aggregate reaction. C) Improved terms-of-trade largely offset the negative effect on the (real) goods trade balance, as import prices tend to fall by more than export prices. The limited sensitivity of the current account, however, does not mean that the Swiss economy is insensitive to the exchange rate. Our results confirm that consumer prices, as well as corporate profits in particularly exposed sectors, decline significantly following an appreciation. These results suggest that an appreciation of the Swiss franc likely doesn't reduce Switzerland's current account quickly but rather tightens monetary conditions, reduces GDP, and hampers prospects in the longer term.
    Keywords: Exchange rate, current account, pass-through
    JEL: E31 F31 F32 F41
    Date: 2022
  55. By: Leila Baghdadi (University of Tunis); Inmaculada Martínez-Zarzoso; Amal Medini
    Abstract: In this paper, we evaluate the pass-through of the COVID-19 shock on international prices and trade policy to consumer prices in Tunisia. Specifically, we evaluate the extent to which changes in import unit values, tariffs, non-tariff measures, and new export restrictions imposed by Tunisia’s partner countries during COVID-19 are transmitted into consumer prices in Tunisia. Using monthly data from January 2018 to December 2020, a pass-through equation is estimated using sectoral panel data at the retail-product level, and we apply linear panel data techniques that account for unobserved heterogeneity in the dimensions of the panel. We augment the empirical specification with factors related to the current macroeconomic environment derived from the COVID-19 outbreak and persistence. The results provide important insights for Tunisian policymakers.
    Date: 2022–02–20
  56. By: Emanuel Kohlscheen
    Abstract: This article presents evidence based on a panel of 35 countries over the past 30 years that the Phillips curve relation holds for food inflation. That is, broader economic overheating does push up the food component of the CPI in a systematic way. Further, general inflation expectations from professional forecasters clearly impact food price inflation. The analysis also quantifies the extent to which higher food production and imports, or lower food exports, reduce food inflation. Importantly, the link between domestic and global food prices is typically weak, with pass throughs within a year ranging from 0.07 to 0.16, after exchange rate variations are taken into account.
    Keywords: crop, expectations, energy, food export, food prices, food import, food production, forecast, inflation, output gap, Phillips curve
    JEL: E30 E31 E32 E50 F14 Q00
    Date: 2022–12
  57. By: Khalid Sekkat (University of Brussels)
    Abstract: The paper investigates to what extent the intra-MENA political tensions adversely affect intraregional trade (IRT). While traditional economic and political science literature focus on trade and wars, the paper considers other expressions of political tensions. In addition to inter-state wars, countries impose sanctions on financial collaboration, military collaboration, travel freedom, commercial relationships and diplomatic arrangements. The sanctions can be combined and simultaneous is order to achieve the highest impact. The analysis applies the gravity approach and the Pseudo-Poisson Maximum Likelihood estimator (PPML) to bilateral trade between the 18 MENA countries and 128 of their partners over the period 1971-2014. The results are that only commercial sanctions and inter-state wars are significant. They are negative meaning that they harm IRT.
    Date: 2021–08–20
  58. By: Sigit Perdana (EPFL - Ecole Polytechnique Fédérale de Lausanne); Marc Vielle (EPFL - Ecole Polytechnique Fédérale de Lausanne); Maxime Schenckery (IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles)
    Abstract: The recent economic sanctions against Russia can jeopardise the sustainability of the European Union's (EU) energy supply. Despite the EU's strong commitment to stringent abatement targets, fossil fuels still play a significant role in the EU energy policy. Furthermore, high dependency on Russian energy supplies underlines the vulnerability of the EU energy security. Using a global computable general equilibrium model, we prove that the current EU embargo on coal and oil imported from Russia will have adverse supply effects, substantially increasing energy prices and welfare costs for the EU resident. Although it reduces emissions, extending the embargo to include natural gas doubles this welfare cost. The use of coal is likely to increase, especially with respect to EU electricity generation, given the current constraints of additional import capacities from non-Russian producers. The impact on Russia once the EU extends the sanctions to natural gas is less substantial than on the EU. Russian welfare cost will increase less than 50%, indicating that extending the current restriction to boycott Russian gas is a costly policy option.
    Keywords: European union,Russia,Computable general equilibrium model,Fit for 55 package,Imports ban
    Date: 2022–11
  59. By: Marouane Alaya (Portland State University)
    Abstract: In this paper we study the export diversification neighboring effects in 15 MENA countries for the period spanning from 2000 to 2019. The determinants of MENA export diversification and local potential spillovers are explored via a bundle of spatial econometric tools. The estimation results show the existence of feedback loops between neighboring countries in favor of export concentration. However, this could be mitigated by several economic factors that are under the control of MENA countries.
    Date: 2022–11–20
    Abstract: 그린뉴딜은 탄소중립 달성을 위한 환경정책이자 경제성장을 위한 재정정책이다. 이에 대하여 통상정책적 시각과 접근이 필요한 이유는 그린뉴딜이 추구하는 탄소중립과 경제성장이 다자체제와 국제무역시스템에 밀접하게 연결되어 있기 때문이다. 기후변화는 국경을 넘는 글로벌한 이슈이다. 어느 한 지역이나 국가의 노력으로 달성할 수 있는 온실가스 저감 수준에는 한계가 있을 수밖에 없다. 또한 탄소중립 달성을 위해서는 국제경제와 생산 네트워크에 대한 이해가 필수적이다. 생산공급망이 전 세계로 확대되고 가치사슬이 복잡하게 연결된 세계 경제구조 속에서 무역을 고려하지 않고서 성공적인 탄소중립을 이뤄내기는 쉽지 않기 때문이다. 따라서 탄소중립을 목표로 하는 그린뉴딜은 이러한 맥락에서 통상정책 차원에서도 고려될 필요가 있다. 본 연구에서는 탄소중립을 위한 그린뉴딜 정책과 관련하여 통상정책 차원의 시사점을 제공하고자 하였다. This research defines the Green New Deal, as a fiscal policy having both environmental and economic growth as its main objectives. A trade policy perspective and approach has been applied while reviewing the carbon-neutral policy as both carbon-neutrality and economic growth pursued by the Green New Deal are closely linked to the multilateral system and the international trade system. Climate change is a global issue that transcends national borders. There are inevitably limits to the level of greenhouse gas reduction that can be achieved through the efforts of any one region or country. Carbon-neutrality also requires an understanding of the international economy and production networks. Production supply chains are expanding all over the world and value chains are intricately connected. The Green New Deal needs to be considered in terms of trade policy. Therefore, this study tries to provide implications in terms of trade policy in relation to the Green New Deal policy for carbon-neutrality. Chapter 2 introduces carbon-neutral policies that major countries are adopting and compares them with past Green New Deal policies. The latter were introduced in the context of economic stimulus and eco-friendliness during the 2008 global financial crisis. In addition, we compare Korea’s current Green New Deal with its 2008-version called the low-carbon green growth policy to examine the similarities and differences. Although major countries used different names such as ‘Green Deal’ or ‘Green New Deal’ to implement policies for greenhouse gas reduction and economic growth, they were not sufficient in reducing greenhouse gas emissions. Past and current policies generally put more emphasis on short-term employment growth andeconomic stimulus. Korea’s Green New Deal also had limitations while considering carbon-neutrality as a policy goal until the government announced the Green New Deal 2.0 in July 2021.(the rest omitted)
    Keywords: 무역정책; 환경정책; Trade policy; environmental policy
    Date: 2021–12–30
    Abstract: 2019년 12월 시작된 코로나바이러스(이하 코로나19)는 전 세계인의 삶과 경제를 변화시키고 있다. 일반적인 경제적 충격과 달리 코로나19는 글로벌 차원에서 사람 간의 접촉을 통해 확산되고, 바이러스의 다양한 생물학적 변이로 인하여 충격의 기간이 장기화되는 중이다. 코로나19의 확산은 감염병에 의한 생물학적 리스크를 증대시켰고, 인적ㆍ물적 자원의 이동이 제한되는 등 위기관리 측면에서 새로운 글로벌 공급망 충격 요인으로 작용하고 있다. 일례로 2020년 초 세계의 공장인 중국에서의 코로나19 확산은 중국 내 생산 중단과 함께 이와 연계된 다수 국가의 생산에 영향을 주었고, 2021년에는 코로나19의 지속으로 인한 디지털 수요 증가에 반도체 공급이 따라가지 못하여 다수 국가에서 생산이 지연되고 있다. 이러한 사례들을 살펴보았을 때 코로나19의 글로벌 생산 네트워크에 대한 영향은 실질적이며, 이에 대한 정책 대응이 요구된다.(the rest omitted) The coronavirus pandemic (COVID-19), which broke out in December 2019, is changing the lives of people and economies around the world. Unlike typical economic shocks, COVID-19 spreads globally through human-to-human contact and because of its diversity of biological variation, the impact of the pandemic is being prolonged. The spread of COVID-19 is acting as a new shock factor upon global value chains (GVCs) in terms of crisis management, as it has increased the biological risk caused by infectious diseases and limited the movement of human and physical resources. More specifically, in early 2020, because of the spread of COVID-19 in China, so called the world’s factory, production shutdowns were unavoidable and this disrupted production in a number of associated countries. Then in 2021, as unexpected digital demand spiked due to the continuation of COVID-19, the supply of semiconductors has encountered difficulties keeping up with the demand and production has been delayed in many countries. Considering these cases, the impact of COVID-19 on GVCs is substantial and proper policy responses arerequired. Meanwhile, it is highly difficult to directly identify the impact of COVID-19 on GVC structures. This is due to the significant difficulties involved when examining the impact of COVID-19 on GVCs, as it is continuously changing and intertwining with various factors such as policy uncertainty before COVID-19, changes in production and demand and digitalization of production. Also, the impact of COVID-19 is likely to be combined with pre-existing factors which have induced changes in GVC structure. Therefore,in this study, we comprehensively look at the direction of the ongoing GVC changes after COVID-19 based on the literature and quantitative data, and derive government support policies and tasks. The summary of findings is as follows.(the rest omitted)
    Keywords: 무역구조; 무역정책; Trade Structure; Trade Policy
    Date: 2022–12–30
  62. By: Sevil Acar (Bogaziçi University Hisar Campus Sariyer Istanbu); Ahmet Atil Asici (Istanbul Technical University); A. Erinç Yeldan (Kadir Has University)
    Abstract: In December 2019, the European Union (EU) announced the European Green Deal (EGD) to create a climate-neutral continent by 2050. Accordingly, the EU Emission Trading System (ETS) will be revised to maintain economic growth against possible losses in competitiveness, leading to “carbon leakage.” The Carbon Border Adjustment (CBA) is one of the mechanisms proposed to tackle the carbon leakage problem; it is an import fee levied by the carbon-taxing region (in this case, the EU) on goods manufactured in non-carbon-taxing countries (in this case, Turkey). The purpose of this paper is to provide a first-order estimate of the potential sectoral impacts of the CBA on the Turkish economy by employing input-output methodology. Our results suggest that the CBA may bring a carbon bill of EUR 1.1-1.8 billion to Turkish exporters in the EU market. The revision of the Intended Nationally Determined Contributions (INDC) target and the ratification of the Paris Climate Agreement at the parliament are two steps that can be taken immediately. Speeding up the ongoing preparatory process of instituting an Emission Trading System (ETS) in Turkey (preferably linked to the ETS), will help minimize economic losses.
    Date: 2021–10–20
  63. By: Léa Marchal (UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Claire Naiditch (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Betül Simsek (University of Hamburg)
    Abstract: This is the first global study that quantifies the transmission channels through which foreign aid impacts migration to donor countries. We estimate a gravity model derived from a RUM model, using OECD data between 2011 and 2019 and an instrumentation strategy. Our identification takes advantage of data on multilateral aid provided by multilateral agencies which is non-donor specific. We find evidence that aid donated by a country increases migration to that country through an information channel. If that channel were the only one at play, a 1% increase in bilateral aid would induce a 0.17% increase in migration. In addition, a 1% increase in multilateral aid reduces migration from the less poor origin countries by 0.05% via a development channel.
    Keywords: Aid, Gravity, Migration
    Date: 2022–11
    Abstract: 디지털 경제에서 발생하는 다국적기업의 조세회피 문제에 대응하기 위한 목적으로 OECD와 G20은 140여 개 국가가 참여하는 다자논의기구를 통해 현행 국제조세체제를 변화시키는 두 가지 큰 틀의 개혁안을 도출하였다. 본 연구는 ‘필라 1’과 ‘필라 2’로 일컬어지는 두 가지 개혁안이 실현되는 경우를 가정하여, 이러한 변화가 국내외에 본사를 둔 다국적기업의 글로벌 투자에 미치는 영향을 다양한 경제학적 분석 방법론을 통해 살펴보았다. 또한 이를 바탕으로 우리나라의 외국인직접투자 정책과 해외직접투자 정책에 대한 시사점을 도출하고자 하였다. As digitalization of the economy accelerates, tax avoidance by multinational enterprises (MNEs) becomes a more serious and sophisticated issue to address. The issue can be attributed to several characteristics of firms in the digital economy, these being: discrepancy between the permanent establishment where the corporate income tax is levied and the location where substantial business activity is performed, high reliance on intangible assets in production that are movable across jurisdictions, and the intricacy of applying transfer pricing rules to new business activities. Due to these features, MNEs have been able to easily shift earned income from a country with high corporate income tax (CIT) rates to one with low CIT rates and lessen their tax burdens by taking advantage of extant principles of the international tax system and bilateral tax treaties between countries. In order to tackle the base erosion and profit shifting (BEPS) issue of MNEs under the digital economy, the OECD and G20 launched aninclusive framework (IF) joined by 141 countries and has conducted discussions on a new international tax system. As a result, in October 2021, two major revisions on the current international tax system – the Two-Pillar solution on BEPS – were agreed upon by 139 IF membercountries, including G20 members, to take effect in 2023. The IF’s final agreement on the Pillar 1 and Pillar 2 is as follows. Pillar 1’s scope is limited to a group of MNEs whose annual revenues exceed 20 billion euros with above 10% profitability. This allows market countries to levy a portion of MNEs’ profits net of the 10% of the revenues, in proportion to each country’s size of revenues sources. The tax base alloted to eligible countries is called “Amount A.” Pillar 2 intends to impose global minimum CIT rates above 15%, under which MNEs’ affiliates are obliged to pay top-up taxes up to 15% if affiliates in other jurisdictions pay low taxes that amount to the effective CIT rates in short of 15%. Pillar 2 applies to a group of MNEs whose annual revenues exceed 750 million euros. The introduction of this newinternational tax system will clearly have a major impact on MNEs’ investment and value chain decision. (the rest omitted)
    Keywords: 조세; 해외직접투자; Tax; foreign direct investment
    Date: 2021–12–30
    Abstract: 본 연구는 제조업 서비스화의 여러 양태 중 제조업 내 최종재로서의 서비스 생산 및 판매의 증가에 주목하여 국내 제조기업의 서비스 매출 현황을 파악하고 이러한 제조업 서비스화가 기업의 성과 및 수출에 미치는 영향을 분석하였다. 분석 결과를 바탕으로 우리나라 제조기업의 서비스화를 효과적으로 지원하기 위한 정책 시사점을 논의하였다. This study examines the status and characteristics of Korea’s servitization of manufacturing and its impact on corporate performance and exports. In particular, we focus on the phenomenon that manufacturingcompanies produce more services as final goods and provide them to the market with products. The main results derived from this study are summarized as follows. First, the proportion of service sales in the total sales of manufacturing companies increased significantly, albeit gradually between 2012 and 2019. Service sales, which stood at 4.5% of the total sales of manufacturing companies in 2012, surged to 15.9% in 2017, and then decreased to 6.9% in 2019. Also when the rate of servitization, which is the proportion of service sales out of total sales for each individual company, was calculated and examined by distribution, it was found that the distribution of the servitization rate increased at the most positive level in 2019 compared to 2012. However, it was found that manymanufacturing companies had no service-related sales at all. Manufacturing companies with less than 50 employees are not included in the survey object of the “Survey of Business Activities”, which is the key database of this study. Since small businesses with less than 50 employees showed a high servitization rate according to the previous studies, the distribution of the servitization rate may actually be more skewed toward zero than in reality. We checked how servitization has progressed by industry by calculating the proportion of companies selling services. In general, the trend toward servitization in labor-intensive manufacturing such as food and beverage manufacturing, textile and clothing manufacturing, and wood/printing industry has decreased, while the trend toward servitization in capitalintensive manufacturing such as petrochemicals, electricity/ electronics and machinery manufacturing is higher in 2019 than in 2012. Thetransportation industry, including automobile, ship, railroad, aircraft and its parts industries, did not change significantly during the analysis period, and in particular, the distribution of servitization was found to be significantly lower than that of other industries.(the rest omitted)
    Keywords: 산업정책; 무역정책; industrial policy; trade policy
    Date: 2021–12–30
  66. By: Katarzyna W. Sidlo (Center for Social and Economic Research)
    Abstract: The present paper provides the conceptual framework for the analysis of relationship between economic interdependence and conflict prevention, management, and solving. It starts by providing an overview of arguments of two main schools of thought that have been in debate over relationship between the two variables: the liberals, arguing for the pacifying effects of economic interdependence, and the realists, according to whom as interdependence between countries increases, so does the threat to their autonomy and national security, and thus likelihood of a conflict. It subsequently explores research focused on the question of conditionality of the relationship between the economic interdependence (usually operationalized in terms of trade exchange) and conflict: the impact of the type of political regime, (a)symmetry of relationship between economic partners, multilateralism, and trade agreements on the strength (and indeed outcome) on the interdependence-peace nexus. Further, analytical papers focused specifically on the countries in the Middle East and North Africa are reviewed. Finally, the paper examines specific aspects of the MENA region, focusing on factors flagged in the literature investigated as having a potential impact on the strength (or otherwise) of the pacifying effect of the economic interdependence. It concludes with summary of the findings from the literature review conducted, highlighting new variables such as potential trade wars or the ongoing Covid-19 pandemic, that might have to be taken into consideration in future research
    Date: 2021–08–20
  67. By: SJ, Balaji; Babu, Suresh Chandra
    Abstract: Russia’s war on Ukraine shows no signs of subsidence. Its economic and societal adversities have already been felt worldwide but keep evolving, with food and energy being the most affected. Low-income, food-deficit nations importing from these two countries – many of which are in Northern Africa and Western and Central Asia – face critical challenges. The South Asian region, which has grappled with surging commodity prices and supply constraints even before the war, is likely to witness further inflation with rising food and oil prices. India is home to around 18% of the world’s population and accounts for 74% of the South Asian population. It is predicted to be the fastest-growing big economy this year. The country’s central bank (RBI) predicts that GDP will grow by 7.5% in FY 2022-23 (RBI, 2022), while many international organizations forecast growth between 6.4% and 8.2% (ADB, 2022; IMF, 2022; United Nations, 2022; World Bank, 2022). Still, in the wake of the ill effects of COVID-19, the country’s dependence on imports such as oil, fertilizers, and edible oils, and given surging domestic food and nonfood inflation in recent months, raises concerns about economic stability and possible interventions that might curtail fragility. The country consumes around 5 million barrels of crude oil daily but imports over 89% of its requirement from overseas. Crude oil prices have increased by 27% in just four months since the start of the war (February- June 2022). Edible oils have similarly increased, with palm and soybean oil prices rising by around 14% and 18%, respectively. The price of sunflower seed oil has increased by 42%, of which 86% originates from Ukraine and Russia. Fertilizer import dependency from the conflict regions is also sizeable. Russia was the 5th largest supplier of fertilizers to India in 2021-22, and Ukraine and Belarus were the 9th and 10th largest suppliers. The rise in prices of both finished fertilizers and fertilizer inputs has prompted the Government to double the fertilizer subsidy budgeted earlier this year. This policy brief investigates India's susceptibility to the war's disruptions and higher prices for commodities where import dependence is high. It then discusses potential income, food, and nutritional impacts on farmers, the poor, and the vulnerable. It also evaluates the Government’s policy measures such as subsidization, social safety nets, and trade diversification to reduce the impact of the war. Finally, it explores the market opportunities the conflict has created and the required structural reforms that would equip the country to handle such shocks in the future
    Keywords: AFRICA, AFRICA SOUTH OF SAHARA, CENTRAL AFRICA, EAST AFRICA, NORTH AFRICA, SOUTHERN AFRICA, WEST AFRICA, food security, war, agriculture, agricultural sector, agricultural products, fertilizers, oil and gas industries, shock,
    Date: 2022
  68. By: Roxana Guti\'errez-Romero; Nayeli Salgado
    Abstract: This paper evaluates the impact of the pandemic and enforcement at the US and Mexican borders on the emigration of Guatemalans during 2017-2020. During this period, the number of crossings from Guatemala fell by 10%, according to the Survey of Migration to the Southern Border of Mexico. Yet, there was a rise of nearly 30% in the number of emigration crossings of male adults travelling with their children. This new trend was partly driven by the recent reduction in the number of children deported from the US. For a one-point reduction in the number of children deported from the US to Guatemalan municipalities, there was an increase of nearly 14 in the number of crossings made by adult males leaving from Guatemala for Mexico; and nearly 0.5 additional crossings made by male adults travelling with their children. However, the surge of emigrants travelling with their children was also driven by the acute economic shock that Guatemala experienced during the pandemic. During this period, air pollution in the analysed Guatemalan municipalities fell by 4%, night light per capita fell by 15%, and homicide rates fell by 40%. Unlike in previous years, emigrants are fleeing poverty rather than violence. Our findings suggest that a reduction in violence alone will not be sufficient to reduce emigration flows from Central America, but that economic recovery is needed.
    Date: 2022–12
  69. By: David R. Agrawal; Dirk Foremny
    Abstract: Due to technological change, the opening of borders, and increased economic integration, the financial costs of relocating businesses and factors of production, moving residences, changing jobs, and transporting goods and services across borders pose new challenges for countries and subnational governments seeking to implement redistributive policies. This increasing mobility across borders implies that redistributive policies may amplify interjurisdictional fiscal externalities. In this article, we selectively review the literature relating to redistributive policy in an open economy setting. We then consider some of the implications of globalization for policy design, both within federal systems and across countries. Although globalization poses new challenges for fiscal systems, it does not necessarily imply that redistributive policy becomes untenable and possibly enhances the need for redistribution.
    Keywords: globalization, redistributive policy, mobility
    JEL: H20 H70 F60
    Date: 2022
  70. By: Siham Matallah (University of Oran 2)
    Abstract: This paper aims, on the one hand, to investigate the impact of corruption on economic diversification in 11 oil-abundant Middle East and North Africa (MENA) countries and three successful diversifiers (Canada, Norway, and Malaysia) over the period 1996-2019. This is done using the Arellano-Bond difference Generalized Method of Moments (GMM) estimator that is effective in addressing the endogeneity problem. On the other hand, the paper aims to reveal how much the level of economic diversification will increase if MENA oil exporters have control of corruption scores similar to a successful diversifier like Canada. The main findings indicate that higher control of corruption leads to more diversification while higher oil rents lead to poor diversification in oil-exporting MENA countries. The joint impact of control of corruption and oil rents is effective in boosting economic diversification in MENA oil exporters. The results also reveal that the rate of improvement in diversification brought on by replacing MENA oil exporters’ control of corruption scores with those of Canada is 0.53 percent. Closing the control of corruption gap determines how quickly MENA oil exporters can promote economic diversification. Furthermore, non-Gulf Cooperation Council (GCC) countries need to exert much more effort compared to GCC countries in order to catch up with Canada’s control of corruption level. Most non-GCC countries must first address the serious problem of instability, since the more unstable the environment, the harder it is to control and handle corruption. Length: 30
    Date: 2021–10–20
  71. By: Christian Reiner (Research Office, Lauder Business School, Austria)
    Abstract: The Great Recession in 2008/09, COVID-19 pandemic, the war in Ukraine and the proliferation of protectionist policies have resulted not only in a stagnation, but in a retreat of globalisation. This paper identifies four factors in order to understand the ultimate causes of the current crisis of globalisation: distributional effects, Rodrik's trilemma, the absence of a hegemon and the rejection of the logic of hyperglobalisation in the global South. Whether the future will be more or less globalised depends, beside political power, on the ambivalent effects and interplay of digitization and climate change.
    Keywords: Globalisation; political economy; Rodrik's trilemma; democracy; distribution
    Date: 2022–09
  72. By: KERAMIDAS Kimon; FOSSE Florian (European Commission - JRC); DIAZ RINCON Andrea (European Commission - JRC); DOWLING Paul (European Commission - JRC); GARAFFA Rafael (European Commission - JRC); ORDONEZ Jose (European Commission - JRC); RUSS Peter (European Commission - JRC); SCHADE Burkhard (European Commission - JRC); SCHMITZ Andreas (European Commission - JRC); SORIA RAMIREZ Antonio (European Commission - JRC); VANDYCK Toon (European Commission - JRC); WEITZEL Matthias (European Commission - JRC)
    Abstract: This edition of the Global Energy and Climate Outlook (GECO 2022) presents an updated view on the implications of energy and climate policies around the world. Current climate policy pledges and targets imply a rapid decline in greenhouse gas emissions, but there remains both an implementation gap in adopting policies aligned with countries’ mid-term Nationally Determined Contributions and Long-Term Strategies, and a collective ambition gap in reducing emissions to reach the Paris Agreement targets of limit global warming to well below 2°C and pursue efforts to 1.5°C. This report provides insight into the structural evolution of energy trade in a decarbonising world in the coming decades. With a greater share of energy produced domestically, the decarbonisation effort results increased energy self-sufficiency. We examine the role of hydrogen specifically: the share of hydrogen and of derived fuels in total global final energy consumption remain low by 2050 (7% and 5%, respectively). International hydrogen trade is limited (6-11% of hydrogen demand), with most trade taking place via pipeline from neighbouring regions. The trade of hydrogen-derived liquid fuels is more pronounced (up to 25% of these fuels' demand) and takes place over longer distances by ship. Embodied energy trade remains an important element in a decarbonised global economy, while shifting away from embodied fossil fuels towards embodied low-carbon electricity.
    Keywords: Global Energy system, Climate Change, Green House Gas emissions, Nationally determined contributions (NDCs), Long term strategies (LTS), trade, embodied emissions, hydrogen, synthetic fuels, e-fuels
    Date: 2022–12
  73. By: Rodriguez, Francisco
    Abstract: We revisit the results of Equipo Anova (2021), who claim to find evidence of an improvement in Venezuelan imports of food and medicines associated with the adoption of U.S. financial sanctions towards Venezuela in 2017. We show that their results are consequence of data coding errors and questionable methodological choices, including the use an unreasonable functional form that implies a counterfactual of negative imports in the absence of sanctions, the omission of data accounting for four-fifths of the country’s food imports at the time of sanctions and incorrect application of regression discontinuity methods. Once these errors are corrected, the evidence of a significant improvement in the level and rate of change in imports of essentials disappears.
    Keywords: Venezuela, Sanctions, Imports, Economic Growth
    JEL: F51 O54
    Date: 2022–12–09
  74. By: Waisbich, Laura Trajber; Haug, Sebastian
    Abstract: This paper offers a comparative analysis of Brazilian and Chinese partnerships with the United Nations (UN) as a mechanism and channel for policy transfer. In international policy travel flows, China and Brazil currently hold privileged places as hubs from which development-related policies travel and through which they circulate. Both countries have invested in systematising their development experience and transferring development policies within their regions and beyond - often through triangular cooperation, i.e. South-South cooperation supported by third actors such as UN entities. So far, however, this variegated engagement has remained under the radar of scholarly attention. To address this gap, we examine 35 policy transfer partnerships - 17 for Brazil and 18 for China - forged with different parts of the UN system over the last two decades. In order to offer a first systematic account of partnership trajectories, we provide an overview of partnership types (namely projects, programmes and policy centres) and transfer dimensions (including the policies themselves, transfer agents and transfer arrangements). Our comparative mapping presents an evolving landscape: while Brazil was first in institutionalising robust policy transfer partnerships with numerous UN entities and then slowed down, China started more cautiously but has significantly expanded its collaboration with the UN system since 2015. The partnerships analysed cover a substantial range of sectors, with a particular focus - for both Brazil and China - on agricultural policies. While Brazilian partnerships with the UN primarily engage with linkages between agriculture and social protection, however, China-UN partnerships focus more on productivity and market linkages. As the first comprehensive mapping and comparative analysis of Brazilian and Chinese policy transfer partnerships with the UN, this paper contributes to a better understanding of (triangular) cooperation schemes between international organisations and their member states, as well as debates about how policies deemed as successful travel around the globe.
    Keywords: Brazil, China, United Nations, South-South cooperation, triangular cooperation, policy transfer, knowledge, partnerships, development cooperation projects
    Date: 2022
  75. By: Park, Joungho (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Boogyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Seok Hwan (Hankuk University of Foreign Studies); Kwon, Won Soon (Hankuk University of Foreign Studies); Kovsh, Andrey (Saint Petersburg State University)
    Abstract: 본 연구는 천연가스와 수소 분야를 중심으로 한국과 러시아 간의 새로운 에너지 협력방안을 모색하는 데 핵심 목표를 두고 있다. 특히 지구촌 차원에서 본격화되고 있는 기후변화와 탈탄소화 등 국제 에너지 환경 변화를 반영한 새로운 에너지 협력 방향과 과제를 제시하고자 했다. This study explores new directions for energy cooperation between Korea and Russia, focusing on the areas of natural gas and hydrogen. In particular, we derive new directions and tasks for energy cooperation between the two countries, reflecting changes in the international energy environment, such as climate change and decarbonization, which are in full swing at the global level. In Chapter 2, this paper examines the geopolitics of energy coming into the 21st century and Russia’s new energy strategy. First, while tracing changes in energy geopolitics and hegemony in the 21st century, we analyzed changing factors that directly or indirectly affect the new hegemony structure, such as technological development, the growth of alternative energy markets, and climate change issues. Then, we reviewed the main contents and points of Russia’s Energy Strategy to 2035 and hydrogen energy development plan, identifying the direction of Russia’s energy strategy toward Northeast Asia.In Chapter 3, this study conducts an in-depth analysis of the energy cooperation strategies of China and Japan, major Northeast Asian countries, with Russia. In particular, we comprehensively reviewed the progress, major achievements and characteristics of China and Japan’s cooperation with Russia in the natural gas sector. In addition, this study draws policy implications for Korea based on a careful review of energy policy directions for Russia pursued by China and Japan, which have recently declared carbon neutrality.Chapter 4 comprehensively evaluates Korea’s energy strategy andKorea-Russia energy cooperation. Korea’s energy cooperation with Russia has been an area of great interest since the early days of diplomatic relations between Korea and Russia. However, looking at the overall situation so far, energy cooperation between the two countries has had nearly no remarkable achievements other than the Korea Gas Corporation introducing natural gas from Sakhalin. Cooperation between the two countries in the field of gas remains at the level of commercial relations based on purchases and sales. In this regard, we proposed a plan for Korea-Russia cooperation that reflects changes in the new energy market.(the rest omitted)
    Keywords: 경제협력; 에너지산업; economic cooperation; energy industry
    Date: 2021–12–30
  76. By: Per Krusell (Cowles Foundation, Yale University); Tony Smith (Cowles Foundation, Yale University)
    Abstract: The economic effects of climate change vary across both time and space. To study these effects, this paper builds a global economy-climate model featuring a high degree of geographic resolution. Carbon emissions from the use of energy in production increase the Earth's (average) temperature and local, or regional, temperatures respond more or less sensitively to this increase. Each of the approximately 19,000 regions makes optimal consumption-savings and energy-use decisions as its climate (or regional temperature) and, consequently, its productivity change over time. The relationship between regional temperature and regional productivity has an inverted U-shape, calibrated so that the high- resolution model replicates estimates of aggregate global damages from global warming. At the global level, then, the high-resolution model nests standard one-region economy-climate models, while at the same time it features realistic spatial variation in climate and economic activity. The central result is that the effects of climate change vary dramatically across space---with many regions gaining while others lose---and the global average effects, while negative, are dwarfed quantitatively by the differences across space. A tax on carbon increases average (global) welfare, but there is a large disparity of views on it across regions, with both winners and losers. Climate change also leads to large increases in global inequality, across both regions and countries. These findings vary little as capital markets range from closed (autarky) to open (free capital mobility).
    Keywords: climate change, carbon taxes, regional economies
    JEL: H23 Q54 R13
    Date: 2022–07
  77. By: Romain Houssa; Jolan Mohimont; Christopher Otrok
    Abstract: This paper offers a solution to the international co-movement puzzle found in open-economy macroeconomic models. We develop a small open-economy (SOE) dynamic stochastic general equilibrium (DSGE) model describing three endogenous channels that capture spillovers from the world to a commodity exporter: a world commodity price channel, a domestic commodity supply channel and a financial channel. We estimate our model with Bayesian methods on two commodity-exporting SOEs, namely Canada and South Africa. In addition to explaining international business cycle synchronization, the new model attributes an important fraction of business cycle fluctuations to foreign shocks in the SOEs.
    Keywords: international spillovers; commodities; financial frictions; small open economy; DSGE; Bayesian; monetary policy
    JEL: E3 E43 E52 C51 C33
    Date: 2022–12–17
  78. By: Rodríguez Chatruc, Marisol; Rozo, Sandra
    Abstract: How are natives attitudes towards migrants shaped by economic crises? Natives could show more compassion towards migrants as everyone faces a common threat. Alternatively, natives prejudice could rise as competition for scarce economic opportunities increases. We conduct an online survey to 3,400 Colombian citizens and randomly prime half of them to think about the economic consequences of COVID-19, before eliciting their altruism and attitudes towards Venezuelan migrants. We find that natives attitudes towards migrants are substantially more negative in the treatment relative to the control group. Individuals ages 18 to 25 years, however, respond to the treatment by showing more altruism.
    Keywords: Migration;COVID-19;Priming;Altruism;COVID-19;COVID-19;COVID-19;COVID-19;attitudes
    JEL: D72 O15 R23 F20
    Date: 2021–06
  79. By: Rüdiger Bachmann (UND - University of Notre Dame [Indiana]); David Baqaee (UCLA - University of California [Los Angeles] - UC - University of California); Christian Bayer (University of Bonn); Moritz Kuhn (University of Bonn, ECONtribute - ECONtribute: Markets & public policy); Andreas Löschel (RUB - Ruhr University Bochum); Benjamin Moll (LSE - London School of Economics and Political Science); Andreas Peichl (LMU - Ludwig-Maximilians University [Munich]); Karen Pittel (LMU - Ludwig-Maximilians University [Munich]); Moritz Schularick (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, University of Bonn, ECONtribute - ECONtribute: Markets & public policy)
    Abstract: This article discusses the economic effects of a potential cut-off of the German economy from Russian energy imports. We show that the effects are likely to be substantial but manageable. In the short run, a stop of Russian energy imports would lead to a GDP decline in range between 0.5% and 3% (cf. the GDP decline in 2020 during the pandemic was 4.5%). (i) In the case of an import stop, imports of oil and coal from Russia can be substituted from other countries, but the situation in the gas market is more challenging. An increase in gas imports from other countries, substitution of gas used for electricity production by coal or nuclear as well as refilling of storage facilities over the summer can only reduce the shortfall to about 30% of gas consumption or 8% of German energy consumption over the next 12 months. (ii) How would the German economy cope with such a shortfall of gas deliveries? The economic effects crucially depend on substitution and reallocation of energy inputs across sectors. To quantify these effects, we use a state-of the-art multi-sectoral open economy model following Baqaae and Farhi (2021) that accounts for elasticities of substitution and reallocation between different intermediate inputs. In a second step, we turn to a simplified model that helps us derive plausible bounds for the economic effects using observed elasticities for energy inputs. In the Baqaae-Farhi model, the output costs of a Russian import stop remain firmly below 1% of Gross Domestic Product (GDP), or between 80 and 120 Euros per German citizen per year. In a more pessimistic scenario where it proves very difficult to substitute Russian gas in the short-run outside the electricity sector, the economic costs would rise to about 2-2.5% of GDP, or about 1000 Euros per German citizen over 1 year. This comes potentially on top of a large increase in energy prices for household and industry even without a shortfall of gas deliveries. Of course the effects are more detrimental in energy intensive sectors. (iii) Data from the Income and Consumption Survey (EVS) show variation in the expenditure share on energy across the income distribution. However, the distributional consequences of an increase in energy prices appear manageable. A targeted policy towards low-income households without reducing the incentives for households to save energy would be a cost effective way of ensuring a fair burden-sharing across households. It is important to maintain strong incentives for households to reduce gas usage. (iv) Economic policy should aim at strategically increasing incentives to substitute and save fossil energies as soon as possible. In case that an active embargo is politically desired, it should start as soon as possible so that economic agents can use the summer period for adjustment. To reduce dependence on imported energy, it is advisable for the government to commit to elevated fossil energy prices, in particular for natural gas, for an extended period to create incentives for households and industry to adjust quickly.
    Date: 2022–03
  80. By: Leininger, Julia
    Abstract: The worldwide wave of autocratization is doing away with many of the democratic achievements made since 1989. Scholarship on international democracy promotion is yet to theorise how democracy can be protected from autocratization. Such a theory must account for different democratic and autocratic trajectories as well as integrate theoretical approaches from international relations and comparative politics in the study of democracy promotion. However, such a combined perspective is still missing. One reason for this is that the field lacks a clear concept of "protection" and does not yet systematically integrate evidence from democratization research. This paper addresses this research gap. It is the first attempt to develop a concept theory of democracy promotion, which includes support and protection of democracy. Coupling this with a depiction of six phases of regime change, this paper makes a second contribution: based on the proposed conceptual and theoretical integration, it generates a series of testable anchor points for further empirical analysis on what strategies are most likely to be effective during the various phases of regime change.
    Keywords: democracy promotion, democratization, autocratization, concept-formation
    Date: 2022
  81. By: Ralph de Haas (CEPR - Center for Economic Policy Research - CEPR); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Alexander Stepanov
    Abstract: Does state ownership hinder or help rms access credit? We use data on almost 4 million rms in 89 countries to study the relationship between state ownership and corporate leverage. Controlling for country-sector-year xed eects and conventional rm-level determinants of leverage, we show that state ownership is robustly and negatively related to corporate leverage. This relationship holds across most of the rm-size distributionwith the important exception of the largest companiesand is stronger in countries with weak political and legal institutions. A panel data analysis of privatized rms and a comparison of privatized with matched control rms yield similar qualitative and quantitative eects of state ownership on leverage.
    Keywords: State ownership privatization corporate debt state banks, State ownership, privatization, corporate debt, state banks
    Date: 2022–05–10
  82. By: Claudius Graebner-Radkowitsch (Institute for Socio-Economics, University of Duisburg-Essen, Germany; Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria; ZOE Institute for future-fit Economies, Bonn, Germany; International lnstitute of Management and Economic Education, Europa-Universitaet Flennsburg, Germany); Birte Strunk
    Abstract: The goal of this paper is twofold: first, it assesses the current state of collaboration between institutionalist economics and the academic degrowth discourse on the topic of global inequalities. Since a systematic literature review of the current degrowth discourse shows that the level of such collaboration is limited, the second goal of the paper is to outline avenues through which institutionalist scholars could contribute to the current academic degrowth discourse. These include the provision of theories of institutional change, a methodological reflection of selected formal models, and substantive insights on the co-evolution of institutions and technological change.
    Keywords: degrowth; institutions; development; core-periphery relations; structuralism; dependency; planetary boundaries
    Date: 2022–12
  83. By: Julien CALAS; Etienne ESPAGNE; Antoine GODIN; Julie MAURIN
    Abstract: The risks associated with biodiversity loss could have severe socio-economic and financial consequences, at least as large as those imposed by climate change, in addition to interacting with them. Because of the potential threat, they pose to financial stability, Biodiversity-Related Financial Risks (BRFRs) have recently captured the attention of the financial community. As with climate risks, central banks and financial authorities might have to conduct biodiversity risk stress tests and adjust their daily operations and regulatory tools to this new normal.However, unless appropriate biodiversity scenarios are found to build a forward-looking assessment of the consequences of physical and transition shocks on industries and sectors, meaningful inclusion of Nature-Related Financial Risks (NRFRs) cannot see the light of day. This paper aims to review and compare existing quantitative biodiversity scenarios and models on a global scale that could help fulfill this role. It also offers an assessment of the path forward for research to developing scenarios for BRFRs at each step of the process: from building narratives, quantifying the impacts and dependencies, assessing the uncertainty range on the results all the way from the ecosystem to the economic and financial asset. The paper has several key findings. First, global and quantitative physical risk scenarios are almost absent; this is why it concentrates on transition scenarios of biodiversity. Second, most ecological transition scenarios are built in accordance with the Convention on Biological Diversity (CBD) goals, even if future land allocation varies across studies. Third, Shared Socio-economic Pathways (SSPs) do not assess the biophysical consequences of their economic growth hypothesis. Fourth, the paper highlights the need for central banks and supervisors to take into account the uncertainties inherent in both integrated models and biodiversity indicators. For the latter, the uncertainty results from measuring only a tiny fraction of global biodiversity. Finally, the study offers recommendations for central banks and financial authorities to improve their scenario selection in the shorter-term.
    JEL: Q
    Date: 2022–12–07

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