nep-int New Economics Papers
on International Trade
Issue of 2023‒02‒20
48 papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. World, European and French trade in oilseeds By Vincent Chatellier
  2. Analysis of Vulnerabilities and Impact Pathways in Korea's Industrial Supply Chain By Kim, Bawoo; Kim, Yunsoo; Kim, Kye Hwan
  3. Trading Places: Mobility Responses of Native and Foreign-Born Adults to the China Trade Shock By David Autor; David Dorn; Gordon H. Hanson
  4. Expecting Brexit By Dhingra, Swati; Sampson, Thomas
  5. The Role of Intra-National Trade in Trade Theory By Yong He; Guangzhen Sun
  6. GVC exporter performance during the COVID-19 pandemic: the role of supply bottlenecks By Lebastard, Laura; Matani, Marco; Serafini, Roberta
  7. Securing Foreign Markets: Exports, Relational Specificity and New Investment Locations By Giorgia Giovannetti; Gianluca Santoni; Giulio Vannelli
  8. Global Innovation Contests By Elias Dinopouulos; Constantinos Syropoulos; Theofanis Tsoulouhas
  9. An 'Austrian' Model of Global Value Chains By Pol Antràs
  10. Estimating the Effects of Trade Agreements: Lessons From 60 Years of Methods and Data By Larch, Mario; Yotov, Yoto
  11. The Impact of the China-U.S. Trade War on the Korean Economy By Kim, Bawoo; Kim, Jeong-Hyun
  12. Environmental TBTs and Their Effects on Major Korean Industries By Hur, Sun Kyung
  13. Trade and Regional Economic Development By Mathias Bühler
  14. Exploring European Regional Trade By Santamaria, Marta; Ventura, Jaume; Yesilbayraktar, Ugur
  15. The Effects of Preferential Rules of Origin on Korean Supply Chains By Yang, Jooyoung; Kim, Bawoo; Kim, Jeong-Hyun; Jung, Sunin
  16. Global Innovation Contests By Dinopoulos, Elias; Syropoulos, Constantinos; Tsoulouhas, Theofanis
  17. Raising Armenia’s Export Potential By Ms. Yulia Ustyugova; Klakow Akepanidtaworn; Nathalie Reyes; Lili Karapetyan
  18. Flood Events and Plant Level Trade: A Chinese Experience By Jasmin Gröschl; Alexander Sandkamp; Jasmin Katrin Gröschl
  19. Impact of International Trade under Dual Labor Markets By Zhou, Haiwen
  20. Horses for courses: measuring foreign supply chain exposure By Baldwin, Richard; Freeman, Rebecca; Theodorakopoulos, Angelos
  21. Digitalization and Cross-Border Tax Fraud: Evidence from E-Invoicing in Italy By Marwin Heinemann; Wojciech Stiller
  22. FDI and development redux: Is R&D a substitute for FDIs? By Dwumfour, Richard Adjei; Pan, Lei; Harris, Mark N.
  23. Gender-Segmented Labor Markets and Trade Shocks By Carlos G\'oes; Gladys Lopez-Acevedo; Raymond Robertson
  24. Women’s Rights and the Gender Migration Gap By Jerg Gutmann; Léa Marchal; Betül Simsek
  25. New Measurement of Export Participation in U.S. Manufacturing By Christoph Boehm; Aaron B. Flaaen; Nitya Pandalai-Nayar
  26. Integrating immigrants as a tool for broad development By Catia Batista; Jules Gazeaud; Julia Seither
  27. Theory of supply chains: a working capital approach By Se-Jik Kim; Hyun Song Shin
  28. Ethnic Remoteness Reduces the Peace Dividend from Trade Access By Klaus Desmet; Joseph F. Gomes
  29. Impact of the Ukrainian crisis on the global food security By Jean Cyrus de Gourcuff; David Makowski; Philippe Ciais; Marc Barthelemy
  30. Healthcare assimilation of immigrants By Catia Batista; Ana Beatriz Gomes
  31. The external trade of the EU-27 in agricultural and agri-food products between 2000 and 2021 By Vincent Chatellier; Thierry Pouch
  33. Social networks and mental health: the experience of Cape-Verdean migrants in Portugal By Catia Batista; Rita Neves
  34. Electronic sanitary certificates for trade in animal products: Opportunities and Challenges By Michael Ryan; Ellie Avery; Sarah Kahn
  35. Interest Rates and World Trade: An 'Austrian' Perspective By Pol Antràs
  36. Developments in Agriculture Trade in the BIMSTEC Region By Mohanty, S. K.; Gaur, Pankhuri
  37. Selecting only the best and brightest? An assessment of migration policy selectivity and its effectiveness By Glenn Rayp; Ilse Ruyssen; Samuel Standaert
  38. China's Semiconductor Strategy and its Implications for Responding to the U.S.-China Technology Conflict By Cho, Eun Kyo
  39. Promoting Innovation: The Differential Impact of R&D Subsidies By Fuad Hasanov; Reda Cherif; Christoph Grimpe; Wolfgang Sofka
  40. Measuring the Share of Imports in Final Consumption By Emmanuel Dhyne; Ayumu Ken Kikkawa; Magne Mogstad; Felix Tintelnot
  41. TFP growth, embeddedness, and Covid-19: a novel production model that allows estimating trade elasticities By Carrascal, André; Orea, Luis
  42. The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020–2022 By George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Carter B. Mix; Kim J. Ruhl
  43. Mergers, foreign competition, and jobs: Evidence from the U.S. appliance industry By Montag, Felix
  44. Nexus between Digital Infrastructure, Productivity, and International Trade Participation: Firm-level evidence from India’s Unorganized Sector MSMEs By Neha Jain; Sugandha Huria
  45. Digitalization and Exports: A case of Indian Manufacturing MSMEs By Sugandha Huria; Kriti Sharma; Neha Jain; Ashley Jose
  46. A Study of Supply Chains of Korean Firms in Vietnam Based on Business Survey Data By Kim, Dongsoo; Sakong, Mok; Shin, Yoon Sung; Han, Jung Min
  47. E-Commerce, and the Indian Retail and Manufacturing Sectors - An Empirical Analysis with a Special Focus on Organised Sector MSMEs By Nibha Bharti; Sugandha Huria; Ashley Jose; Kanika Pathania
  48. International Trade, Global Inequality and Specialization from a Political Economy Perspective By Clara Brenck; Duncan Foley

  1. By: Vincent Chatellier (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: This paper focuses on the evolution of world, European and French oilseed trade over the last twenty years (since 2000). The statistical information used comes from three complementary databases, namely BACI for international trade, Comext for European Union (EU-27) trade and French Customs for French trade. World trade in oilseeds amount to 161 billion euros in 2020 (excluding intra-EU trade), or nearly 15% of international trade in agri-food products. These are dominated by soya (51% of the total in value), in its various forms (soya beans, soya meal, soya oil), ahead of palm oil (17%), sunflower (8%) and rapeseed (8%). In 2020, the top three oilseed exporters are Brazil (19% of world exports in value), the United States (18%) and Indonesia (11%). While the first two countries export exclusively soya, the third is specialized in palm oil. China has become the world's largest importer of oilseeds (28% of the total in 2020), ahead of the EU-27 (15%), whose deficit for these products (-21.3 billion euros in 2021) is sometimes linked to its large surplus in animal production (47.5 billion euros). France also has a deficit in oilseeds (-1.83 billion euros in 2021), mainly due to its purchases of soya meal from the American continent; the latter, which is the subject of controversy because of the deforestation induced in the Amazon, has however decreased by 31% in volume between 2000 and 2021.
    Abstract: Cette communication présente l'évolution, sur une vingtaine d'années (depuis 2000), des échanges mondiaux, européens et français d'oléagineux. Les informations statistiques utilisées sont issues de trois bases de données complémentaires, à savoir BACI pour les échanges internationaux, Comext pour ceux de l'Union européenne (UE-27) et les douanes françaises pour ceux de la France. Les échanges mondiaux d'oléagineux représentent un montant de 161 milliards d'euros en 2020 (hors commerce intra-UE), soit près de 15% du commerce international des produits agroalimentaires. Ceux-ci sont dominés par le soja (51% du total en valeur), sous ses différentes formes (graines, tourteaux et huile), devant l'huile de palme (17%), le tournesol (8%) et le colza (8%). En 2020, les trois premiers exportateurs d'oléagineux sont le Brésil (19% des exportations mondiales en valeur), les Etats-Unis (18%) et l'Indonésie (11%). Si les deux premiers pays exportent exclusivement du soja, le troisième est spécialisé en huile de palme. La Chine est devenue le premier importateur mondial d'oléagineux (28% du total en 2020) devant l'UE-27 (15%), dont le déficit pour ces produits (-21, 3 milliards d'euros en 2021) est parfois mis en relation avec son fort excédent en productions animales (47, 5 milliards d'euros). La France est également déficitaire en oléagineux (-1, 83 milliard d'euros en 2021), en raison surtout de ses achats de tourteaux de soja sur le continent américain ; ces derniers, qui font l'objet de controverses en raison de la déforestation induite en Amazonie, ont cependant baissé de 31% en volume entre 2000 et 2021.
    Keywords: Oilseeds, Soybeans, Vegetable oils, International trade, EU trade, Oléagineux, Soja, Huiles végétales, Commerce international, Echanges de l’UE
    Date: 2022–12–07
  2. By: Kim, Bawoo (Korea Institute for Industrial Economics and Trade); Kim, Yunsoo (Korea Institute for Industrial Economics and Trade); Kim, Kye Hwan (Korea Institute for Industrial Economics and Trade)
    Abstract: China's recent export regulations have exposed weaknesses in Korea's industrial supply chain. China's restrictions on the export of raw materials, such as urea and chemical fertilizers, have shed light on problems in Korea's supply chain. Key countries have been attempting to diagnose weaknesses in their supply chains using various approaches. A high dependency on exports and trade imbalances are broadly recognized as indicators of supply chain weakness. The current study builds on that same foundation to define vulnerabilities among imports from China. In this study, urea and other goods with vulnerability issues were categorized as "products of interest" or "vulnerable products." This report diagnoses weaknesses in Korea's supply chain with regards to China, identifying products of interest and vulnerability using trade statistics.
    Keywords: Korea; China; trade; supply chains; economic security; national security; trade conflict; international political economy; strategic diversification; strategic cooperation; trade policy; international trade; export dependency; industrial policy
    JEL: F10 F13 F14 F18 F21 F29 F50 F52
    Date: 2021–11–18
  3. By: David Autor; David Dorn; Gordon H. Hanson
    Abstract: Previous research finds that the greater geographic mobility of foreign than native-born workers following economic shocks helps to facilitate local labor market adjustment to shifting regional economic conditions. We examine the role that immigration may have played in enabling U.S. commuting zones to respond to manufacturing job loss caused by import competition from China. Although population headcounts of the foreign-born fell by more than those of the native-born in regions exposed to the China trade shock, the overall contribution of immigration to labor market adjustment in this episode was small. Because most U.S. immigrants arrived in the country after manufacturing regions were already mature, few took up jobs in industries that would later see increased import penetration from China. The foreign-born share of the working-age population in regions with high trade exposure was only three-fifths that in regions with low exposure. Immigration thus appears more likely to aid adjustment to cyclical shocks, in which job loss occurs in regions that had recent booms in hiring, rather than facilitating adjustment to secular regional decline, in which hiring booms occurred in the more distant past.
    JEL: E24 F14 F16 J23 J31 L60 O47 R12 R23
    Date: 2023–01
  4. By: Dhingra, Swati; Sampson, Thomas
    Abstract: The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the EU, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.
    Keywords: Brexit; UK economy; import prices; consumer prices; ES/V004514/1; ES/V007270/1
    JEL: J1 L81
    Date: 2022–01–25
  5. By: Yong He (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Guangzhen Sun (UMac - University of Macau)
    Abstract: This paper explores the implications arising from the heterogeneous firm model for a theory of trade in which intranational trade is an intrinsic part, and international trade is its extension. Due to market competition, intranational trade dynamically leads to an increase in productivity heterogeneity across firms, which strengthens market selection and makes allocation more efficient. It also strengthens comparative advantage, and thus stimulates international trade
    Keywords: Intra-National and International Trade, Heterogeneous Firm Model, Market Selection, Comparative Advantage
    Date: 2022
  6. By: Lebastard, Laura; Matani, Marco; Serafini, Roberta
    Abstract: This paper provides an analysis of the impact of the COVID-19 pandemic on exporting firms, fo-cusing on the role of supply bottlenecks. Based on monthly transaction-level data for the universe of French exporters over the period January 2020-December 2021, we find that participation in global value chains increased firms’ vulnerability to the COVID-19 shock, in terms of both export perfor-mance and probability of survival in the export market, the negative impact of supply disruptions being higher for relatively more downstream firms. At the same time, the results suggest that export-ing firms benefited from sourcing of core inputs from different countries, supporting the hypothesis that diversification in global value chains fosters supply-chain resilience. JEL Classification: D22, F14, F61
    Keywords: Diversification, Global Value Chains, Pandemic, Shock Transmission, Upstreamness
    Date: 2023–01
  7. By: Giorgia Giovannetti; Gianluca Santoni; Giulio Vannelli
    Abstract: In this article we examine how the need to secure profit streams from exports has affected the location choice of new foreign investments by French manufacturing firms. Motivated by the observation that most firms entering a new foreign country do not establish a production unit there or decrease their exports, we develop a simple theoretical framework to guide our analysis and provide empirical evidence to support this “market securing” mechanism. Our results confirm that companies tend to locate new investments in countries that account for a larger share of their past exports; allowing for better monitoring of the foreign market, the investment prevents the disruption of the relationship, whose impact on profits would be more detrimental in the case of more important foreign partners. A 10 percent increase in bilateral exports increases the probability of investing by 3.4 percent. Consistent with our mechanism, given the same volume of exports, firms prefer countries that purchase goods with higher relational specificity as finding new buyers for these goods would imply higher costs if the relationship was broken.Exporting at least one good with relational specificity above the 75th percentile increases the probability of investing by 2.2 times compared to exporting more generic goods (below the 50th percentile).
    Keywords: Export;FDI;Relational Specificity
    JEL: F14 F23 F61
    Date: 2023–02
  8. By: Elias Dinopouulos; Constantinos Syropoulos; Theofanis Tsoulouhas
    Abstract: This paper develops a two-country, dynamic general equilibrium model with innovation contests to study the impact of globalization on the skill premium and fully-endogenous growth. Higher quality products are endogenously discovered through stochastic and sequential global innovation contests in which challengers devote resources to R&D to discover new products while technology leaders undertake rent-protection activities (RPAs) to prolong the expected duration of their temporary monopoly power by hindering the R&D effort of challengers. The model generates intra-sectoral trade, multinationals, and international outsourcing of investment services. Globalization, captured by a move from autarky to the integrated-world equilibrium, leads to convergence of wages and growth rates. Globalization and long-run growth are either substitutes or complements depending on a country’s relative skill abundance and the ranking of skill intensities between RPAs and R&D services. Trade openness between two countries that possess identical relative skill endowments but differ in size does not affect either country’s long-run growth.
    Keywords: innovation contests, economic growth, scale effects, R&D, rent-protection activities, barriers to innovation, wage premium
    JEL: F10 F30 F40
    Date: 2023
  9. By: Pol Antràs
    Abstract: I develop a stylized model of multi-stage production in which the time length of each stage is endogenously determined. Letting the production process mature for a longer period of time increases labor productivity, but it comes at the cost of higher working capital needs for firms. Under autarky, countries with lower interest rates feature longer production processes, higher labor productivity, and higher wages. In a free trade equilibrium, countries with lower interest rates specialize in relatively ‘time intensive’ stages in global value chains (GVCs). Yet, if free trade brings about interest rate equalization, wages are also equalized and the pattern of trade is instead shaped by capital intensity and capital abundance, regardless of the time intensity of the various stages. Reductions in trade costs lead to patterns of specialization associated with higher amounts of vertical specialization in world trade. A worldwide decline in interest rates similarly fosters an increase in the share of GVC trade in world trade. The framework also sheds light on the role of trade credit and trade finance in shaping international specialization.
    JEL: F1 F2 F4 F6
    Date: 2023–01
  10. By: Larch, Mario (University of Bayreuth); Yotov, Yoto (School of Economics Drexel University)
    Abstract: Starting with Tinbergen (1962), quantifying the effects of regional trade agreements (RTAs) on international trade flows has always been among the most popular topics in the trade literature. Perhaps not surprisingly, to estimate the effects of RTAs, most researchers and policy analysts have relied on the workhorse model of trade—the gravity equation. Over the past 60 years, there have been many important developments in the RTA literature, both in terms of better methods to quantify their effects, and also in terms of more and higher quality data. The objective of this paper is to trace the evolution of the methods and data developments in the RTA literature, from Tinbergen’s very first exploration until today, and to critically evaluate their significance for our ability to measure the impact of RTAs (and other policies) on international trade.
    Keywords: Regional Trade Agreements; Gravity Equation; Estimation; Methods; Data
    JEL: F10 F14 F16
    Date: 2023–01–16
  11. By: Kim, Bawoo (Korea Institute for Industrial Economics and Trade); Kim, Jeong-Hyun (Korea Institute for Industrial Economics and Trade)
    Abstract: This article aims to examine the trade war so far and the impact of additional U.S. tariffs on the Korean economy. The reason we do not consider Chinese tariffs is because their impact is limited. This chapter also discusses the background and progress of the trade war thus far. The U.S.-China trade war was initiated by the administration of U.S. president Donald Trump, but it owes its existence to a specific set of economic circumstances. President Trump has often used the phrase “America First” from the very beginning of his first presidential election campaign. He has argued that many trade partners have hurt the United States through trade, and has been especially critical of trade deficits. He repeatedly heaped scorn on trade agreements exacerbating the merchandise trade deficit and had pledged to rectify the situation as a presidential candidate. External economic policies implemented since Trump took office are realizing his promises. Those policies differ but share one commonality: they protect jobs and intellectual property rights in the United States.
    Keywords: manufacturing; employment; manufacturing employment; intellectual property; tariffs
    JEL: F13 F18
    Date: 2023–01–08
  12. By: Hur, Sun Kyung (Korea Institute for Industrial Economics and Trade)
    Abstract: The impact of environmental protection and climate change policies on trade is increasing. This trend is international, and carries important implications for Korean manufacturing, which is highly dependent on trade. There exists a a pressing need to preemptively identify the impact of environmental TBT in major countries on the exports of Korean manufacturing industries in order to strengthen the competitiveness of domestic industries and prepare countermeasures. Against this backdrop, this paper analyzes the impact of environmental TBT on Korea’s exports through empirical analysis and identifies implications for policy.
    Keywords: technical barriers to trade; TBT; FTA; free trade agreements; trade; protectionism; trade protectionism; free trade; Korea; trade policy; competition policy; environmental policy
    JEL: F18
    Date: 2022–08–01
  13. By: Mathias Bühler (LMU)
    Abstract: A central argument for trade liberalization is that when the `gains from trade' are shared, countries see large gains in economic development. In this paper, I empirically evaluate this argument and assess the impact of elite capture on regional development. Africa provides a unique study ground because the arbitrary placement of country borders during the colonial period partitioned hundreds of ethnic groups across borders. This partitioning is a source of variation in population heterogeneity and cross-country connectedness that is independent of economic considerations. Thus, African borders provide both a credible instrument for bilateral trade flows and enable the assignment of trade flows ---and their impacts--- to individuals. I find that while ethnic networks increase trade flows, increased trade activity decreases subnational economic development when measured by satellite data or individual wealth. I show that this counter-intuitive result comes from elite groups capturing the gains from trade, with detrimental impacts on trust and democratic progress in society.
    Date: 2023–02–02
  14. By: Santamaria, Marta (University of Warwick.); Ventura, Jaume (CREI, Universitat Pompeu Fabra and Barcelona School of Economics.); Yesilbayraktar, Ugur (Universitat Pompeu Fabra and Barcelona School of Economics)
    Abstract: We use the new dataset of trade flows across 269 European regions in 24 countries constructed in Santamaría et al. (2020) to systematically explore for the first time trade patterns within and across country borders. We focus on the differences between home trade, country trade and foreign trade. We document the following facts : (i) European regional trade has a strong home and country bias, (ii) geographic distance and national borders are important determinants of regional trade, but cannot explain the strong regional home bias and (iii) the home bias is heterogeneous across regions and seems to be driven by political regional borders.
    Date: 2023
  15. By: Yang, Jooyoung (Korea Institute for Industrial Economics and Trade); Kim, Bawoo (Korea Institute for Industrial Economics and Trade); Kim, Jeong-Hyun (Korea Institute for Industrial Economics and Trade); Jung, Sunin (Korea Institute for Industrial Economics and Trade)
    Abstract: This study analyzes how Korea’s regional supply chain have been affected by the rules of origin of major FTAs to which Korea is a signatory party. When new rules of origin are introduced following the conclusion of an FTA, Korean final goods producers have two options. Option one: they can modify the production process by changing the source country to meet the rules of origin stipulations and enjoy preferential tariff benefits agreed to by FTA signatories Option two: they can give up preferential tariff benefits and source their inputs from the most efficient provider. In other words, depending on the preferential tariff benefits stipulated by an FTA and the magnitude of costs incurred, final goods producers decide whether to change the source country of their intermediate inputs. In order to analyze if Korean final goods producers have changed sourcing decisions due to FTA stipulations, this study focuses on the rules of origin major FTAs to which Korea is a signatory party, the Korea-US FTA, the Korea-EU FTA, and the Korea-China FTA. We quantify the level of restrictions imposed by the rules of origin outlined by each FTA on intermediate inputs and empirically analyze changes in imports in intermediate goods from the United States, EU, and China and those from the other countries to explore how the rules of origin imposed on final goods affects domestic producers’ sourcing decisions.
    Keywords: preferential rules of origin; FTAs; free trade agreements; supply chain; Korea; rules of origin
    JEL: F13 F18
    Date: 2021–10–01
  16. By: Dinopoulos, Elias (Department of Economics University of Florida); Syropoulos, Constantinos (School of Economics Drexel University); Tsoulouhas, Theofanis (Department of Economics and Business Management University of California, Merced)
    Abstract: This paper develops a two-country, dynamic, general-equilibrium model with innovation contests to study the impact of globalization on the skill premium and fully endogenous growth. Higher quality products are endogenously discovered through stochastic and sequential global innovation contests in which challengers devote resources to R&D to discover new products while technology leaders undertake rent-protection activities (RPAs) to prolong the expected duration of their temporary monopoly power by hindering the R&D effort of challengers. The model generates intra-sectoral trade, multinationals, and international outsourcing of investment services. Globalization, captured by a move from autarky to the integrated-world equilibrium, leads to convergence of wages and growth rates. Globalization and long-run growth are either substitutes or complements depending on a country’s relative skill abundance and the ranking of skill intensities between RPAs and R&D services. Trade openness between two countries that possess identical relative skill endowments but differ in size does not affect either country’s long-run growth.
    Keywords: Innovation contests; economic growth; scale effects; R&D; rent-protection activities; barriers to innovation; wage premium
    JEL: F10 F30 F40
    Date: 2023–01–12
  17. By: Ms. Yulia Ustyugova; Klakow Akepanidtaworn; Nathalie Reyes; Lili Karapetyan
    Abstract: Raising Armenia’s long-term growth prospects is critical to meet the pressing need for jobs, achieve higher living standards, and arrest emigration. Armenia’s long-term growth prospects have weakened since the global COVID-19 crisis, while recent global and regional the geopolitical developments added new shocks. This paper argues that there is a need to boost the potential of the tradable sector by focusing on products with higher complexity to sustainably increase Armenia’s growth rate. It provides an overview of Armenia’s export performance, analyzes factors and policy valuables that affect export outcomes in terms of volumes and composition, and draws policy implications.
    Keywords: Empirical Studies of Trade; Trade Policy; Armenia trade agreements; Armenia's export potential; policy valuables; export Complexity; unit root; Exports; Export performance; Service exports; Trade agreements; Real effective exchange rates; Global; Europe
    Date: 2022–10–28
  18. By: Jasmin Gröschl; Alexander Sandkamp; Jasmin Katrin Gröschl
    Abstract: We quantify the impact of large flooding events on the plant-level trade of manufacturing firms in China. Constructing a panel data set of more than 685, 000 geolocated plants and provincial city and county measures of flooding events derived from precise geolocated monthly flood areas, we show that the impact on production facilities can be considerable, although relatively short-lived. While the number of exporting plants remains below its pre-flood level for at least 12 months, the effect on the distribution of exporter market scope, on the average exporter scale or the sales distribution of plants vanish within a year. Privately owned plants are hit harder than state-owned enterprises, as they continuously produce fewer products, while their export value recovers. Producing products covered by the Chinese Communist’s Party five-year plan tends to insulate firms against the negative effects of floods
    Keywords: China, trade, firm heterogeneity, natural disasters
    JEL: F14 F18 Q54
    Date: 2023
  19. By: Zhou, Haiwen
    Abstract: A country’s unemployment rate can be affected by technology choice and the opening of international trade. This general equilibrium model examines the impact of international trade with the presence of dual labor markets in which manufacturing firms engage in oligopolistic competition and choose technologies with different marginal and fixed costs to maximize profits. In a closed economy, it is shown that an increase in labor market efficiency or a population increase induces manufacturing firms to adopt more advanced technologies and the wage rate in the manufacturing sector increases. With the existence of a continuum of technologies, technology choice is not a source of firm heterogeneity. The opening of international trade leads to an increase in the wage rate in the manufacturing sector and the price of the agricultural good. When countries are identical, international trade always increases national welfare.
    Keywords: International trade, dual labor markets, oligopoly, technology choice, increasing returns
    JEL: E24 F12 F16 F66 J64
    Date: 2023–01–29
  20. By: Baldwin, Richard (The Graduate Institute of International and Development Studies (IHEID)); Freeman, Rebecca (Bank of England); Theodorakopoulos, Angelos (Aston Business School)
    Abstract: Perceptions of global supply chains (GSCs) have shifted in recent years from a positive to a more cautious view. Standard GSC measures have mostly not adapted to this change as they focus on participation in, rather than exposure to, foreign supply chains. This paper presents the tools necessary to track foreign GSC exposure, and introduces a systematic shocks approach to GSC indicator design. We use this to develop indicators that gauge the impact of a variety of foreign shocks. We argue that different indicators are appropriate to different questions and show that they can provide qualitatively different answers to the same foreign exposure question.
    Keywords: Global supply chains; global value chains; foreign exposure; globalisation
    JEL: D57 F13 F14 F15 F60 R15
    Date: 2022–09–30
  21. By: Marwin Heinemann; Wojciech Stiller
    Abstract: The digitalization of transaction processes through tools such as electronic invoicing (e-invoicing) aims to improve tax compliance and reduce administrative costs. Another important aspect of digitalization is its potential to reduce tax evasion. We analyze the impact of the widely introduced e-invoicing in Italy on cross-border value-added tax fraud. As a proxy for this tax fraud, we make use of the discrepancy in trade data that is double-reported in both the importing and exporting country (trade gap). We calculate trade gaps based on product flows on the most detailed level between Italy and the remaining countries of the European Union. Our results suggest a significant decline in cross-border fraud in response to the introduction of mandatory e-invoicing, providing an important rationale for the application of this measure by other countries. Furthermore, we estimate that e-invoicing decreased the Italian revenue loss by €0.6 billion to €1 billion in 2019. This is in line with the statements of the Italian Ministry of Finance, which are probably based mainly on the revenue development. In this context, we underpin the suitability of the trade gap as an approach for the study of anti-fraud measures and provide a more accurate estimate of cross-border fraud. In addition, our study suggests that fraudsters shift their activities to similar products and drive honest traders out of the market.
    Keywords: e-invoicing, digitalization, international trade, VAT fraud, trade gap
    JEL: F14 H21 H26 K34 K40
    Date: 2023
  22. By: Dwumfour, Richard Adjei; Pan, Lei; Harris, Mark N.
    Abstract: Using a sample of 130 countries over the period 2004-2019, we revisit the development impact of foreign direct investment (FDI), but this time examine the role of research and development (R&D) in this framework. We use bilateral investment treaties (BITs) as a novel instrument for FDI. We find that compared to FDI, expenditure on R&D has a more pronounced impact on development outcomes – through increasing growth and human development while reducing poverty and inequality. We also find that countries that spend more on R&D are less dependent on FDI for development. Thus, R&D and FDI are substitutes in the development process with the results showing varying FDI and R&D thresholds at which the substitution takes place. We however find the vanishing effect of FDI on development. It turns out that R&D complements FDI only when FDI reaches its threshold and begins to hurt development – at this stage there is sufficient R&D expenditure which possibly suggest sufficient adaptive capacity.
    Keywords: FDI; R&D; Economic growth; Poverty; Income inequality
    JEL: F43 O40
    Date: 2023–01–24
  23. By: Carlos G\'oes; Gladys Lopez-Acevedo; Raymond Robertson
    Abstract: This paper focuses on how gender segmentation in labor markets shapes the local effects of international trade. We first develop a theoretical framework that embeds trade and gender-segmented labor markets to show that foreign demand shocks may either increase or decrease the female-to-male employment ratio. The key theoretical result shows formally that the effects of trade on gender-segmented labor markets depend crucially on (a) the sectors that face the foreign demand shock; and (b) the domestic relevance of the foreign countries in which the demand shocks originate from. If the foreign demand shock from a relevant market happens in a female-intensive (male-intensive) sector, the model predicts that the female-to-male employment ratio should increase (decrease). We then use plausibly exogenous variation in the exposure of Tunisian local labor markets to foreign demand shocks and show that the empirical results are consistent with the theoretical prediction. In Tunisia, a country with a high degree of gender segmentation in labor markets, foreign-demand shocks have been relatively larger in male-intensive sectors. This induced a decrease in the female-to-male employment ratio, with households likely substituting female for male labor supply.
    Date: 2023–01
  24. By: Jerg Gutmann; Léa Marchal; Betül Simsek
    Abstract: This is the first global study of how institutionally entrenched gender discrimination affects the gender migration gap (GMG) using data on 158 origin and 37 destination countries over the period 1961-2019. We estimate a gravity equation derived from a random utility maximization model of migration that accounts for migrants’ gender. Instrumental variable estimates indicate that increasing gender equality in economic or political rights generally deepens the GMG, i.e., it reduces female emigration relative to that of men. In line with our theoretical model, this average effect is driven by higher-income countries. In contrast, increased gender equality in rights reduces the GMG in lower-income countries by facilitating female emigration.
    Keywords: discrimination, gender equality, individual rights, migration, RUM model
    JEL: F22 J16 J71 K38 O15 P48
    Date: 2023
  25. By: Christoph Boehm; Aaron B. Flaaen; Nitya Pandalai-Nayar
    Abstract: We measure export participation rates in the U.S. manufacturing sector using a new administrative dataset and compare them to participation rates constructed from the commonly used Census of Manufacturers (CM). Both at the establishment and firm level export participation rates are near 40 percent in the administrative data, almost twice as high as in the CM. The discrepancy appears to result predominantly from under-counting of small exporters in the CM. Our findings call for reconsidering the conventional wisdom that around 20 percent of manufacturing firms export.
    JEL: F0 F1 F14
    Date: 2023–01
  26. By: Catia Batista; Jules Gazeaud; Julia Seither
    Abstract: International migration can contribute importantly to sustainable economic growth. The effects of migration for both origin and host countries, however, depend on immigrant integration. We experimentally evaluate the impact of information and migrants’ aspirations on immigrant integration using a field experiment among Cape Verdean immigrants in Portugal. The interventions promote integration outcomes such as migration status regularization and better quality employment of migrants. They furthermore affect those left behind. While the impact on material remittances is muted, targeting migrant integration barriers improves democratic processes and attitudes over gender equity in origin countries. In addition, providing immigrants with better information sources about integration processes affects migration intentions and expectations of prospective migrants.
    Keywords: Irregular migration, Integration, Remittances, Field experiment
    JEL: O12 O15 F22
    Date: 2022
  27. By: Se-Jik Kim; Hyun Song Shin
    Abstract: This paper presents a "time-to-build" theory of supply chains which implies a key role for the financing of working capital as a determinant of supply chain length. We apply our theory to offshoring and trade, where firms strike a balance between the productivity gain due to offshoring against the greater financial cost due to longer supply chains. In equilibrium, the ratio of trade to GDP, inventories and productivity are procyclical and closely track financial conditions.
    Keywords: global value chains, offshoring, trade finance
    JEL: F23 F36 G15 G21 L23
    Date: 2023–01
  28. By: Klaus Desmet; Joseph F. Gomes
    Abstract: This paper shows that ethnically remote locations do not reap the full peace dividend from increased market access. Exploiting the staggered implementation of the US-initiated Africa Growth and Opportunity Act (AGOA) and using high-resolution data on ethnic composition and violent conflict for sub-Saharan Africa, our analysis finds that in the wake of improved trade access conflict declines less in locations that are ethnically remote from the rest of the country. We hypothesize that ethnic remoteness acts as a barrier that hampers participation in the global economy. Consistent with this hypothesis, satellite-based luminosity data show that the income gains from improved trade access are smaller in ethnically remote locations, and survey data indicate that ethnically more distant individuals do not benefit from the same positive income shocks when exposed to increased market access. These results underscore the importance of ethnic barriers when analyzing which locations and groups might be left behind by globalization.
    JEL: D74 F13 F6 O12 O55 R11 Z1
    Date: 2023–01
  29. By: Jean Cyrus de Gourcuff; David Makowski; Philippe Ciais; Marc Barthelemy
    Abstract: Using global wheat trade data and a network model for shock propagation, we study the impact of the Ukrainian crisis on food security. Depending on the level of reduction in Ukrainian wheat exports, the number of additional individuals falling under the minimum dietary energy requirement varies from 1 to 9 millions, and reaches about 4.8 millions for a $50\%$ reduction in exports. In the most affected countries, supply reductions are mainly related to indirect trade restrictions.
    Date: 2023–01
  30. By: Catia Batista; Ana Beatriz Gomes
    Abstract: Full access to healthcare is an important driver of immigrant integration. Existing literature shows that there are multiple de facto barriers for migrants to access healthcare even when they are legally entitled to them. This paper examines how time since arrival impacts immigrants’ access to healthcare, a novel research question adding to the existing literature on migrant assimilation. We use survey data collected from about 800 Cape Verdean immigrants in the Lisbon Metropolitan Area. The findings show that immigrants do assimilate in terms of access to healthcare. These results are robust when controlling for sample selection.
    Keywords: Migration, Integration, Assimilation, Healthcare, Cape Verde, Portugal
    JEL: O15 F22 J61 I15
    Date: 2022
  31. By: Vincent Chatellier (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Thierry Pouch (URCA - Université de Reims Champagne-Ardenne)
    Abstract: World trade in agricultural and agri-food products has been growing steadily for several decades under the influence of increasing food demand, particularly in Asia and Africa, and an unequal territorial distribution of agronomic and productive potential. With a trade balance in agricultural and agri-food products of 46 billion euros in 2021, which has improved compared to the period before the Covid-19 health crisis, the European Union (EU-27) has become a major player in this trade. Using information from two databases (Baci and Comext), this article presents an analysis of the main trade dynamics observed in this sector over a 20-year period (2000 to 2021).
    Abstract: Le commerce mondial des produits agricoles et agroalimentaires connait un développement soutenu depuis plusieurs décennies sous l'influence d'une demande alimentaire en croissance, notamment en Asie et en Afrique, et d'une répartition territoriale inégale des potentiels agronomiques et productifs. Avec un solde commercial en produits agricoles et agroalimentaires de 46 milliards d'euros en 2021, de surcroît en amélioration par rapport à la période antérieure à la crise sanitaire de la Covid-19, l'Union européenne (UE-27) est devenue un acteur majeur de ce commerce. En utilisant les informations issues de deux bases de données (Baci et Comext), cet article présente une analyse des principales dynamiques commerciales observées dans ce secteur sur une période de 20 ans (2000 à 2021).
    Keywords: Agri-food trade, Competitiveness, European Union, France, Commerce agroalimentaire, Compétitivité, Union européenne
    Date: 2022–12–15
  32. By: Gilles Paché (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon)
    Abstract: The concept of friend-shoring, which appeared in April 2022, could contribute to a profound transformation of international trade and, more surprisingly, prevent the environmental crisis from continuing. Friend-shoring, a contraction of "friends" and "offshoring", suggests developing partnerships with close friend countries, stopping the relocation of industrial activities to the other side of the planet based solely on the criterion of low labour costs. The key idea is to build regional value chains, which could ultimately be much more sustainable. The objective of this short communication is to highlight the conditions of appearance of the friend-shoring concept and its main economic and environmental issues in a value chain perspective, and then to insist on the limits of its implementation. Given the current absence of friend-shoring experiments, the chosen methodology relies on a speculative approach based on the exploration of scientific knowledge about regional supply chains.
    Keywords: Friend-shoring, Geopolitics, Offshoring, Regional value chains, Speculative approach, Sustainability
    Date: 2022–12
  33. By: Catia Batista; Rita Neves
    Abstract: Immigrant integration is an inherently stressful process that implies psychological challenges. To moderate the impact of the post-migration stressors, social support may play an important role. Using survey data on recently arrived Cape-Verdean migrants in the Lisbon Metropolitan Area, we analyse the role of both destination and home social networks on migrants’ mental health. We find that destination networks significantly reduce overall anxiety and female migrants’ emotional distress. However, larger home networks lead to an increase in overall anxiety and are associated with poorer mental health indicators for female migrants, who may be subject to larger pressure to send financial remittances back home. However, home networks have a positive effect in reducing male migrants’ emotional distress.
    Keywords: International migration, Immigration, Mental health, Social networks, Gender, Cape-Verde, Portugal
    Date: 2022
  34. By: Michael Ryan; Ellie Avery; Sarah Kahn
    Abstract: Electronic exchange of sanitary and phytosanitary certificates can facilitate trade in animal and plant products. The electronic exchange of certificates can benefit both exporting and importing countries through enhanced efficiency gains, improved transparency, and traceability, as well as improved risk management along the food chain. However, the policy levers associated with e-sanitary certification systems are complex and include trade policies, as well as regulatory policies, investment policies, and public health and animal health policies. Countries face substantial challenges in the adoption of electronic sanitary certification systems including the costs associated with building the infrastructure, providing training, and updating existing regulatory systems. This paper reviews the uptake of e-sanitary certification systems and discusses the potential benefits and costs of adoption of these systems. Effective co-operation and collaboration between the public and private sectors are critical to the adoption and maintenance of sustainable e-sanitary certification systems.
    Keywords: Agriculture, Digitalisation, Food standards, SPS, Trade facilitation
    JEL: F13 F66 J16 J21 J24 Q10 Q18
    Date: 2023–02–02
  35. By: Pol Antràs
    Abstract: This paper develops a framework to study the interplay between world trade and interest rates. The model incorporates an explicit notion of time and of production length, along the lines of the ‘Austrian’ tradition of Böhm-Bawerk (1889). Changes in the interest rate affect production lengths, labor productivity, and the financial costs of exporting. I decompose the response of the volume of world trade to changes in the interest rate into four components: (i) a labor productivity effect, (ii) a propensity to consume out of labor income effect, (iii) a temporal dimension of variable trade costs effect, and (iv) a selection into exporting effect.
    JEL: F1 F10 F12 F65
    Date: 2023–01
  36. By: Mohanty, S. K.; Gaur, Pankhuri
    Abstract: BIMSTEC has been one of the topmost economic growth hotspots of the world, reigning almost over the past three decades. The region has displayed growth resilience and has circumvented the pressure of the prolonged global recession which has concluded its 15th year in a row. The growth profile of the region was almost uninterrupted irrespective of the shift in the global trade regimes.
    Keywords: Agribusiness
    Date: 2022–01–01
  37. By: Glenn Rayp; Ilse Ruyssen; Samuel Standaert (-)
    Abstract: This paper introduces a new set of comprehensive and cross-country-comparable indexes of migration policy selectivity. Crucially, these reflect the multidimensional nature of the differential treatment of migrants. We use these indexes to study the evolution of migration policy selectivity and estimate how they affect migration flows. Combining all publicly available and relevant data since WWII, we build three composite indexes that identify selectivity in terms of skills, economic resources and nationality. First, we use these to characterise migration policies in 42 countries between 1990 and 2014. Second, we analyse the effectiveness of migration policy selectivity by estimating its impact on migration flows. Each of the three dimensions of selectivity is found to affect the size and structure of migration flows significantly.
    Keywords: Migration Policy, International Migration, Selectivity, Effectiveness
    JEL: F22 C43 P16 C32
    Date: 2023–01
  38. By: Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade)
    Abstract: Semiconductors are at the heart of the U.S.-China technology hegemony competition under the administration of U.S. president Joe Biden. Conflicts between the U.S. and China over the semiconductor supply chain are intensifying as Biden signed an executive order on February 24, 2021, ordering the government to investigate the supply chains for semiconductors, batteries, rare earths, and biopharmaceuticals. The U.S. enacted the Export Control Reform Act (ECRA) and the Foreign Investment Risk Review Modernization Act (FIRRMA) as parts of a larger omnibus bill, the National Defense Authority Act (NDAA) of 2018, and has been working to keep China’s semiconductor technology innovation in check through restrictions on Chinese firms such as Huawei and SMIC export controls. In addition, the Biden government’s review of the semiconductor supply chain is currently being led by the The Department’s Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, and the U.S. is expected to focus its efforts on building a hightech and supply chain alliance in the future. China’s semiconductor industry faced a major ordeal as the Trump and Biden administrations imposed sanction after sanction. In what form will China’s technological independence strategy proceed? How should Korea respond to the U.S.-China semiconductor competition? With this question in mind, this study aims to examine the U.S. semiconductor supply chain reorganization strategy and China’s response strategy corresponding thereto. In addition, it determines an appropriate response strategy for Korea by anticipating the form the competition between the U.S. and China may take, how semiconductor supply chains may reorganize, and by exploring the possibility of China’s technological independence in the future.
    Keywords: semiconductors; chips; semiconductor industry; chipmaking; US; China; US-China conflict; supply chains; Korea; Export Control Act; supply chain management
    JEL: F02 O53
    Date: 2022–01–01
  39. By: Fuad Hasanov; Reda Cherif; Christoph Grimpe; Wolfgang Sofka
    Abstract: We investigate the effect of R&D subsidies on firms’ innovation by ownership, industry, and firm size using German firm-level data. The impact of R&D subsidies is heterogeneous across industries for multinational corporations (MNCs) and domestic firms while it does not differ substantially by firm size. Domestic firms have a larger response in R&D spending in low-tech manufacturing, knowledge-intensive services, and technological services while the response of domestic and foreign MNCs is broadly similar and is greater in medium-tech and high-tech manufacturing. Foreign MNC subsidiaries’ response in terms of patents is greater than that of domestic MNCs in most industries.
    Keywords: Innovation; patents; research and development; R&D; subsidies; multinationals; investment; technology policy; R&D subsidy; high-tech manufacturing; subsidiaries' response; low-tech manufacturing; R&D spending; Transnational corporations; Manufacturing; Services sector; Government subsidies; Investment policy; Global
    Date: 2022–09–23
  40. By: Emmanuel Dhyne; Ayumu Ken Kikkawa; Magne Mogstad; Felix Tintelnot
    Abstract: We use Belgian data on domestic firm-to-firm transactions and ask how the measurement of the share of imports in final consumption is affected when one uses data recorded at higher levels of aggregation. We find that aggregating detailed firm-to-firm transaction data to the firm level and imposing homogeneity assumptions in the composition of firms’ input and output do not substantially affect the measurement of the share of imports in final consumption. However, using the national IO tables alone may understate the share of imports in final consumption and, thereby, the gains from trade.
    JEL: F1
    Date: 2023–01
  41. By: Carrascal, André; Orea, Luis
    Abstract: The main contribution of this paper is the proposal of a new method to estimate trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our empirical model, inspired by the theoretical framework introduced by Caliendo et al (2018) to study the propagation of productivity shocks, also permits assessing whether their central equation aimed at understanding the sources of productivity change, is supported by the data. Furthermore, using econometric techniques, our paper examines trade-related productivity effects that have rarely been examined in the literature on productivity growth decomposition. The proposed model provides a common analytical framework for an empirical examination of several issues that both traditionally and more recently have attracted the interest of many academics and policy/makers, namely TFP growth, embeddedness, and Covid-19. We use the World Input-Output Database (WIOD) for the period 2000-2014 to compute most of the relevant variables employed in these applications.
    Date: 2022
  42. By: George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Carter B. Mix; Kim J. Ruhl
    Abstract: We study the aggregate effects of supply-chain disruptions in the post-pandemic period in a heterogeneous-firm, general equilibrium model with input-output linkages and a rich set of supply chain frictions: uncertain shipping delays, fixed order costs, and storage costs. Firms optimally hold inventories that depend on the source of supply, domestic or imported. Increases in shipping times are contractionary, raise prices, and increase stockouts, particularly for goods intensive in delayed inputs. These effects are larger when inventories are already at low levels. We fit the model to the U.S. and global economies from 2020–2022 and estimate large aggregate effects of supply disruptions. Our model predicts that the boost in output from reducing delays will be smaller than the contraction from the waning effects of stimulus.
    JEL: E0 F1 F4
    Date: 2023–01
  43. By: Montag, Felix
    Abstract: Policy choices often entail trade-offs between workers and consumers. I assess how foreign competition changes the consumer welfare and domestic employment effects of a merger. I construct a model accounting for demand responses, endogenous product portfolios, and employment. I apply this model to the acquisition of Maytag by Whirlpool in the household appliance industry. I compare the observed acquisition to one with a foreign buyer. While a Whirlpool acquisition decreased consumer welfare by $250 million, it led to 1, 300 fewer domestic jobs lost. Jobs need to be worth above $220, 000 annually for domestic employment effects to offset consumer harm.
    JEL: F61 L13 L40
    Date: 2023
  44. By: Neha Jain (Indian Institute of Foreign Trade (IIFT), New Delhi); Sugandha Huria (Indian Institute of Foreign Trade (IIFT), New Delhi)
    Abstract: The study investigates whether access to digital ways of conducting a business can enhance the productivity of the unorganized sector MSMEs in India, and hence, foster their participation in international trade. The analysis is conducted using the National Sample Survey’s (NSS) 73rd round on unincorporated non-agricultural Indian enterprises for the year 2015-16, covering approximately 2, 90, 000 firms, and performing separate analysis for both manufacturing and services firms. The key findings are: First, access to ICT infrastructure has a positive impact on firm-level productivity while controlling for firm-level characteristics. Second, the quantile regression analysis confirms the robust impact of digital assets across different levels of productivity. Third, the Probit Regression Model highlights the combined positive and significant impact of digital infrastructure and productivity on the international trade participation of an unorganized sector MSME. These findings can serve as a motivation for accelerating ‘bottom-up approach’ in the policy efforts towards better productivity and digital transformation of these firms, particularly for manufacturing MSMEs.
    Keywords: Digitalization, Productivity, MSMEs, Exports
    JEL: D24 F61 J24 L86 L81 O33
    Date: 2022
  45. By: Sugandha Huria (Indian Institute of Foreign Trade (IIFT), New Delhi); Kriti Sharma (Indian Institute of Foreign Trade (IIFT), New Delhi); Neha Jain (Indian Institute of Foreign Trade (IIFT), New Delhi); Ashley Jose (Indian Institute of Foreign Trade (IIFT), New Delhi)
    Abstract: Does digitalization promote the export of Indian manufacturing Micro, Small, and Medium Enterprises? We empirically address this under-researched area by using the Centre for Monitoring Indian Economy’s Prowess database consisting of around 800 manufacturing MSMEs for the period 1990-2019. The summary of the findings based on the robust econometric techniques such as the System Generalized Method of Moments and Dynamic Probit Regression Model, and employing three alternative definitions of digitalization, reveals that a higher level of digitalization of an Indian manufacturing MSME increases its exports intensity. Also, a digitalized manufacturing MSME firm is more likely to enter the export market, vis-à-vis a nondigitalized one. In fact, the likelihood further increases if digitalization is complemented with technical knowledge. The findings advocate an urgent need for manufacturing MSMEs to go for digitalization to sustain and strengthen their contribution to the Indian economy, specifically in the post-covid era.
    Keywords: Digitalization, India, MSMEs, Exports, Servicification, firm-level analysis
    JEL: D24 F61 L86 L81 O33
    Date: 2022
  46. By: Kim, Dongsoo (Korea Institute for Industrial Economics and Trade); Sakong, Mok (Korea Institute for Industrial Economics and Trade); Shin, Yoon Sung (Korea Institute for Industrial Economics and Trade); Han, Jung Min (Korea Institute for Industrial Economics and Trade)
    Abstract: The purpose of this study is to determine the business conditions of Korean companies in Vietnam. For this, a business survey was conducted from September to October 2021 by the Korean Institute for Industrial Economics and Trade (KIET) and the Korean Chamber of Commerce (KORCHAM) in Vietnam. The scale of Korean direct investment in Vietnam, as well as Korea-Vietnam trade, has increased rapidly since diplomatic relations between the new countries were established in 1992. Thus, it is necessary to gather basic statistics on Korean enterprises in Vietnam in the mid- to long-term. This survey on the business environment and actual conditions of Korean enterprises shall be regularly conducted to establish basic facts and future changes in the business environment. The behavior of Korean companies shall also be studied. KIET organized a survey on the business environment and actual conditions of Korean enterprises in Vietnam; the Hanoi office of KORCHAM oversaw the implementation of the survey as co-organizer. KIET planned and conducted the survey together with KORCHAM in Vietnam.
    Keywords: supply chains; business conditions; business environment; Vietnam; Korea; FDI
    JEL: L10 M16 M21
    Date: 2022–01–01
  47. By: Nibha Bharti (Indian Institute of Foreign Trade (IIFT), New Delhi); Sugandha Huria (Indian Institute of Foreign Trade (IIFT), New Delhi); Ashley Jose (Indian Institute of Foreign Trade (IIFT), New Delhi); Kanika Pathania (Indian Institute of Foreign Trade (IIFT), New Delhi)
    Abstract: The sudden boom in the e-commerce sector (due to its key players) has been questioned in several economies in the world, particularly so in India. The country’s Traders associations have complained that the sector has been growing at the expense of the offline retail sector, primarily the MSMEs. In this context, this study is one of the first attempts to analytically evaluate the significance of booming online retail on India’s production economy (including both manufacturing and retail segments). The results indicate while e-commerce has assumed a significant role in positively impacting the sales of the overall retail and manufacturing sector of the country (on average) during the period 1992-2020, the same does not hold true for its MSMEs. The impact on MSMEs has been positive, though not significant – indicating the untapped potential of the MSMEs to take advantage of the growing online commerce. Similar results hold true for the overall retail and MSME retail when it comes to their GVC intensity. The findings advocate re-considering the country’s e-commerce policy, which is still in its draft stage presently.
    Keywords: E-commerce, India, Retail Sector, Manufacturing Sector, MSMEs
    JEL: F14 F23 L86 D22
    Date: 2022
  48. By: Clara Brenck (Department of Economics, New School for Social Research, USA); Duncan Foley (Department of Economics, New School for Social Research, USA)
    Abstract: In this paper we discuss possible explanations for persistent global inequalities from a political economy perspective. Different from what Smith and Marx assume in the long period method – that both capital and labor are fully mobile – we assume that labor is not mobile across regions. The lack of labor mobility is an important abstract problem to theorize about capitalist development in a globalized context. Including such assumption in the dual problem of consumption-growth and wage-profit rate, the model sheds light on some channels in which uneven development and specialization may occur: different wages and equalized profit rates can be achieved by different labor qualities or different access to technologies. If labor qualities are different, wage differences would represent only the difference in labor productivity and effective wages would be equalized, without any specialization. If technologies are different, on the other hand, specialization may occur, and trade is thus established. The lack of technological mobility can occur due to increasing returns to scale, product differentiation and different socioeconomic characteristics of countries.
    Keywords: Long period method, labor mobility, global inequality, technological differences, specialization, trade
    JEL: D30 E11 F12
    Date: 2023–02

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