nep-int New Economics Papers
on International Trade
Issue of 2023‒04‒10
forty papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. The Impact of Export Controls on International Trade: Evidence from the Japan–Korea trade dispute in the semiconductor industry By MAKIOKA Ryo; ZHANG Hongyong
  2. Import Tariffs And Trade Balance In Pakistan By Muhammad Zeshan
  3. Globalization, Productivity Growth, and Labor Compensation By Dreger, Christian; Fourné, Marius; Holtemöller, Oliver
  4. Deep trade agreements: proliferation, provisions, impact By Holger Breinlich; Valentina Corradi; Nadia Rocha; Michele Ruta; João Santos Silva; Tom Zylkin
  5. U.S. Export Competitiveness in Select Crop Markets By Padilla, Samantha; Ufer, Danielle J.; Morgan, Stephen; Link, Noah
  6. Increasing Marginal Costs, Firm Heterogeneity, and the Gains from “Deep” International Trade Agreements By Bergstrand, Jeffrey H.; Cray, Stephen R.; Gervais, Antoine
  7. Negotiations on a free trade agreement between India and the EU: Ambitions, expectations, obstacles, and incentives By Hilpert, Hanns Günther; Rudloff, Bettina; Wagner, Christian
  8. Control of Emerging-Market Target, Abnormal Stock Return: Evidence in Vietnam By Quyen Van; Vy Tran
  9. Exporting and endogenous workplace amenities under monopsonistic competition By Abashishvili, Avtandil
  10. Trade Liberalization, Economic Activity, and Political Violence in the Global South: Evidence from PTAs By Amodio, Francesco; Baccini, Leonardo; Chiovelli, Giorgio; Di Maio, Michele
  11. Labor Market Effects of Global Supply Chain Disruptions By Mauricio Ulate; Jose P. Vasquez; Roman D. Zarate
  12. Financial Development and Export Concentration By Florian Unger
  13. Natives' Attitudes and Immigration Flows to Europe By Di Iasio, Valentina; Wahba, Jackline
  14. Non-tariff barriers and consumer prices: evidence from Brexit By Jan David Bakker; Nikhil Datta; Richard Davies; Josh De Lyon
  15. Growing older and growing apart? Population age structure and trade By Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky
  16. On the direct and indirect effects of ICT on SMEs export performance. Evidence from Colombian manufacturing By Andrés Mauricio Gomez-Sanchez; Juan A. Máñez Castillejo; Juan Alberto Sanchis-Llopis
  17. On the Relation between Trade and Democratization By Martin Hoppe
  18. Analysis Of Trade In Goods Agreement Between Pakistan And Turkey By Adnan Akram
  19. Geographical indications and trade: Firm-level evidence from the French cheese industry By Sabine Duvaleix-Treguer; Charlotte Emlinger; Carl Gaigné; Karine Latouche
  20. New dawn fades: Trade, labour and the Brexit exchange rate depreciation By Rui Costa; Swati Dhingra; Stephen Machin
  21. Exportweltmeister- Germany's Foreign Investment Returns in International Comparison By Franziska Hunnekes; Maximilian Konradt; Moritz Schularick; Christoph Trebesch; Julian Wingenbach
  22. The Impact of Investments on Economic Growth: Evidence from Tajikistan By Mubinzhon, Abduvaliev
  23. Correlation between upstreamness and downstreamness in random global value chains By Silvia Bartolucci; Fabio Caccioli; Francesco Caravelli; Pierpaolo Vivo
  24. The effects of market integration on pollution: an analysis of EU enlargements By Konstantin Sommer; Henri L.F. de Groot; Franc Klaassen
  25. Plurilingualism and Brain Drain: Unexpected Consequences of Access to Foreign TV By Damiano Argan and Anatole Cheyssson
  26. A Bamboo Curtain: The Grim Australian Consequences of China Conflict By Rod Tyers; Yixiao Zhou
  27. Global Sourcing and Firm Inventory during the Pandemic By ZHANG Hongyong; DOAN Thi Thanh Ha
  28. Exposición a las Importaciones: Impacto sobre el Empleo y el Salario Sectorial en Argentina By Maria Ojeda; Camila Luciana Marengo
  29. Language proficiency and homeownership: Evidence from U.S. immigrants By Luik, Marc-André; Steinhardt, Max Friedrich; Voss, Simon
  30. Is acquisition-FDI during an economic crisis detrimental for domestic innovation? By Maria Garcia-Vega; Apoorva Gupta; Richard Kneller
  31. Growth and immigration: unpicking the confusion By Alan Manning
  32. The complex regional effects of macro-institutional shocks: Evidence from EU economic integration over three decades By Mitze, Timo; Breidenbach, Philipp
  33. Consumed in China: Rebalancing China's demand and Chinese imports By Simola, Heli
  34. Global Inequality in the Current Era By Susana Nudelsman
  35. Supporting mobile migrant labour: The role of the trade union movement By Cremers, Jan
  36. Evolución de la integración económica de América Latina: una perspectiva comparada de las dos últimas décadas By Pedro Esteban Moncarz; Manuel Flores; Sebastian Villano; Marcel Vaillant
  37. Reduced Impact and Implications of KRW Exchange Rates on Exports By Lee, Sora; Kang, Sungwoo
  38. Green Hydrogen Cost-Potentials for Global Trade By David Franzmann; Heidi Heinrichs; Felix Lippkau; Thushara Addanki; Christoph Winkler; Patrick Buchenberg; Thomas Hamacher; Markus Blesl; Jochen Lin{\ss}en; Detlef Stolten
  39. Partial Ownership, Financial Constraint, and FDI By ITO Tadashi; Michael RYAN; TANAKA Ayumu
  40. Priming Attitudes Towards Immigrants: Implications for Migration Research and Survey Design By Patrick Dylong; Paul Setzepfand; Silke Uebelmesser

  1. By: MAKIOKA Ryo; ZHANG Hongyong
    Abstract: In July 2019, the Japanese government announced export controls to South Korea of three chemical inputs essential in semiconductor production. The paper investigates the short- to middle-run effect of these Japan–Korea export controls on trade patterns (i.e., Japanese export and production and Korean import, export, and production) along the global value chain of the semiconductor industry. The results show that the export controls caused a large decline in Japanese exports to South Korea of one of the three restricted inputs, hydrogen fluoride, but not in the other two restricted inputs, photoresist and fluorinated polyimide. Second, the restrictions increased Japanese exports of hydrogen fluoride to the U.S., and thus did not cause a decrease in the Japanese production of semiconductor-related products. Third, South Korea reallocated input sourcing from Japan to economies such as Belgium, the U.S., and Taiwan. Fourth, South Korea increased the export of semiconductor manufacturing equipment to China, possibly because of its semiconductor production relocation to China. Fifth, Korean firms' domestic production and Japanese affiliates' local production in South Korea increased after the export controls. These results suggest a potential role of export controls in sourcing patterns and production relocation in the semiconductor industry.
    Date: 2023–03
  2. By: Muhammad Zeshan (Pakistan Institute of Development Economics)
    Abstract: Stagnant export products scale up the trade deficit in Pakistan (Nasir, 2020). To add new export items to the existing export portfolio, local industry needs cheaper domestic and imported intermediate inputs. However, these inputs are expensive in Pakistan due to high import tariff rates. It is believed that lower tariffs will not only provide cheaper intermediate inputs to domestic firms and final products to end users but will also boost trade.
    Date: 2022
  3. By: Dreger, Christian (DIW Berlin); Fourné, Marius (IWH Halle); Holtemöller, Oliver (IWH Halle)
    Abstract: We analyse how changes in international trade integration affect productivity and the functional income distribution. To account for endogeneity, we construct a leave-out measure for international trade integration for country-industry pairs using international input-output tables. First, we corroborate on the country-industry level that international trade integration increases productivity. Second, we show that international trade integration is associated with higher labour shares in advanced countries but with lower labour shares in manufacturing industries in emerging markets. Finally, we briefly discuss the implications of our results for a possible throwback in international trade integration due to experiences from recent crises.
    Keywords: global value chains, income distribution, globalization, labor share, productivity
    JEL: F4 F6 J3
    Date: 2023–03
  4. By: Holger Breinlich; Valentina Corradi; Nadia Rocha; Michele Ruta; João Santos Silva; Tom Zylkin
    Abstract: Modern trade agreements between countries contain a host of provisions beyond simple tariff reductions on traded products. Research by Holger Breinlich, Valentina Corradi, Nadia Rocha, Michele Ruta, João Santos Silva and Thomas Zylkin finds that those related to technical barriers to trade, antidumping, trade facilitation, subsidies and competition policy have the most positive effects in boosting trade.
    Keywords: Trade, Globalisation
    Date: 2023–02–21
  5. By: Padilla, Samantha; Ufer, Danielle J.; Morgan, Stephen; Link, Noah
    Abstract: The United States has historically been one of the largest exporters of agricultural crops in terms of volume and value. In recent decades, increased competition from countries, such as Argentina and Brazil, have threatened the current U.S. standing in the global arena. The purpose of this study is to examine export competitiveness—in terms of value—of the top five crop commodity groups exported: corn, soybean products, cotton, wheat products, and tree nuts. These commodities are widely produced in the United States and, in 2021, represented 38 percent of total U.S. agricultural exports. The first section of the report broadly discusses U.S. competitiveness, current trade agreements, and world events that impacted global markets. The report notes that not having signed new free trade agreements (FTA) from mid-2012 to 2020 has limited the U.S. presence in emerging economies such as those in Africa. The second section focuses on a commodity-specific analysis using export shares and trade indices for each of the five crop groups. Using data from the Trade Data Monitor (TDM) and the Production, Supply and Distribution (PSD) database of USDA, Foreign Agricultural Service (FAS), this report identifies major competitors and trends in U.S. exports over the last 20 years. Within each commodity section, there is a detailed overview of the U.S. export position, a list of the top five competitors in that commodity, export-to-production ratios over time, and a history of significant changes within each market, such as the entry of a new competitor or reductions in exports to a particular country.
    Keywords: Agribusiness, Crop Production/Industries, Financial Economics, International Relations/Trade, Political Economy
    Date: 2023–03–21
  6. By: Bergstrand, Jeffrey H.; Cray, Stephen R.; Gervais, Antoine
    Abstract: Two parameters are central to several modern quantitative models of bilateral international trade flows: the elasticity of substitution in consumption (σ) and the inverse index of heterogeneity of firms’ productivities (θ). However, structural parameter estimation applications using the seminal Feenstra econometric methodology typically focus on estimates of only σ and a bilateral export supply elasticity – which we will term γ. Separately, modern trade agreements are increasingly “deep, ” meaning they reduce fixed trade costs alongside variable trade costs (such as tariffs). Although Melitz models of international trade recognize both trade costs theoretically, very little is known quantitatively about their relative impacts on trade and welfare. In this paper, we offer three contributions. First, in the spirit of Arkolakis (2010), we extend the canonical Melitz model of trade to allow for increasing marginal market-penetration costs, alongside fixed marketing costs, to show theoretically the importance of accounting for increasing marginal costs (via γ) – in the presence of firm heterogeneity – in understanding the relative impacts on trade, extensive margins, intensive margins, and welfare of reducing fixed trade costs and variable trade costs. Second, we provide a microeconomic foundation for estimating all three parameters using the Feenstra econometric methodology alongside a gravity equation. Third, we demonstrate the importance of increasing marginal costs using two counterfactual exercises. One illustrative quantitative implication for U.S. trade policy is that, under (empirically rejected) constant marginal costs, fixed trade costs would have to be reduced by 57 percent for a welfare-equivalent reduction in variable trade costs of 3 percent; by contrast, under (empirically supported) increasing marginal costs, fixed trade costs would have to be reduced by only 14 percent.
    Keywords: International trade, deep trade agreements, Melitz models, increasing marginal costs, gravity equations
    JEL: F1
    Date: 2022–10–17
  7. By: Hilpert, Hanns Günther; Rudloff, Bettina; Wagner, Christian
    Abstract: In summer 2022, the European Union (EU) and India resumed negotiations on a free trade agreement to strengthen their strategic partnership. In addition, both sides are negotiating an investment protection agreement and an agreement on the protection of geographical indications. In this way, the EU wants to diversify its relations with the Indo-Pacific states and underscore India's prominent position. Through cooperation with the EU, India aims to advance its economic and technological modernisation, which is indispensable if the country is to play a greater international role. Unlike the negotiations that failed in 2013, the current negotiations are paradoxically both simpler and more complicated. They are simpler because the EU and India are now more aligned on geopolitical issues than ever, especially with regard to China. But they are also more complicated because the success of the negotiations still depends on difficult concessions on both sides. A repeat failure is not an option, however, for either India or the EU in terms of the future of their strategic partnership.
    Keywords: European Union (EU), India, negotiations on a free trade agreement, strategic partnership
    Date: 2023
  8. By: Quyen Van; Vy Tran
    Abstract: Joining with the upward trend of Global Foreign direct investment and FDI in emerging economies and emerging Asian economies, FDI to Vietnam, especially M&As have increased significantly in both numbers and value of deals from 1995 to 2015...
    Date: 2023–02
  9. By: Abashishvili, Avtandil
    Abstract: This paper introduces endogenous workplace quality choice into an international trade model with a monopsonistically competitive labour market, in which firms compete for potential employees by offering them a combination of monetary and non-monetary benefits. To attract the workers required to produce for the foreign market in addition to the domestic market, exporting firms have to offer more attractive compensation to their employees than comparable non-exporting firms, which is why they are not only paying higher wages but also offering better workplace amenities. The gains from trade, therefore, not only materialise in terms of a higher purchasing power but also in terms of a higher average workplace quality. Welfare metrics, which exclusively focus on real income gains, might underestimate the gains from globalisation.
    Keywords: Monopsonistic competition, workplace quality, wages, exporting, gains from trade
    JEL: F12 F16 F23
    Date: 2023
  10. By: Amodio, Francesco (McGill University); Baccini, Leonardo (McGill University); Chiovelli, Giorgio (Universidad de Montevideo); Di Maio, Michele (Sapienza University of Rome)
    Abstract: This paper investigates the impact of agricultural trade liberalization on economic activity and political violence in emerging countries. We use data on all Preferential Trade Agreements (PTAs) signed between 25 low- and middle-income countries and their high-income trade partners between 1995 and 2013. We exploit the implied reduction in agricultural tariffs over time combined with variation within countries in their suitability to produce liberalized crops to find that economic activity increases differentially in affected areas. We also find strong positive effects on political violence, and present evidence consistent with both producer- and consumer-side mechanisms: violence increases in more urbanized areas that are suitable to produce less labor-intensive crops as well as crops that are consumed locally. Our estimates imply that economic activity and political violence would have been around 2% and 7% lower, respectively, across countries in our sample had the PTAs not been signed.
    Keywords: political violence, trade, agriculture, preferential trade agreement
    JEL: D22 D24 F51 N45 O12
    Date: 2023–03
  11. By: Mauricio Ulate; Jose P. Vasquez; Roman D. Zarate
    Abstract: We examine the labor market consequences of recent global supply chain disruptions induced by COVID-19. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the pandemic and analyze its effects on labor market outcomes using a quantitative trade model with downward nominal wage rigidities. Even omitting any health-related impacts of the pandemic, the increase in trade costs leads to a temporary but prolonged decline in U.S. labor force participation. However, there is a temporary increase in manufacturing employment as the United States is a net importer of manufactured goods, which become costlier to obtain from abroad. By contrast, service and agricultural employment experience temporary declines. Nominal frictions lead to temporary unemployment when the shock dissipates, but this depends on the degree of monetary accommodation. Overall, the shock results in a 0.14% welfare loss for the United States. The impact on labor force participation and welfare across countries varies depending on the initial degree of openness and sectoral deficits.
    Keywords: supply chain disruptions, trade costs, downward nominal wage rigidity
    JEL: F10 F11 F16 F40 F66
    Date: 2023
  12. By: Florian Unger
    Abstract: This paper analyzes the impact of financial development on export concentration. I incorporate credit constraints into a trade model with heterogeneous exporters and endogenous quality choice. The model predicts that financial development increases innovation activity and export shares of larger firms. In contrast, a model variant in which exporters have to finance production costs instead of investments suggests a negative impact of financial development on export concentration as smaller firms benefit more from relaxing credit constraints. These opposing predictions are tested using export data for 70 countries over the period 1997-2014 and exploiting variation in external finance dependence across sectors. I find strong support for the predictions of the investment model that higher financial development increases export concentration among top firms, especially in sectors with high external finance dependence and large scope for quality differentiation. This effect is also present within firms: financial development induces exporters to skew their sales towards the top performing products. I finally show in a counterfactual analysis that financial frictions are quantitatively important to explain the variation in the skewness of exports across countries and sectors.
    Keywords: international trade, superstar firms, export concentration, external finance, credit constraints, financial development, innovation
    JEL: F12 F14 G32 L11
    Date: 2023
  13. By: Di Iasio, Valentina (University of Southampton); Wahba, Jackline (University of Southampton)
    Abstract: This paper examines the effects of natives' anti-immigration attitudes on migration flows to EU countries. We use panel data for migration to the EU between 1995-2018. We address the potential endogeneity between public attitudes and migration flows using instrumental variable techniques. We also control for the dependence between the attractiveness of alternative EU destinations. Our findings suggest that there is a negative causal relationship between anti-immigration attitudes and migration inflows to the EU from both EU and non-EU countries; i.e. natives' hostility discourages immigration. However, the elasticity of immigration to public attitudes is higher than the elasticity of immigration to economic factors for EU migrants.
    Keywords: EU migration, public attitudes, migration drivers
    JEL: J61 F22
    Date: 2023–02
  14. By: Jan David Bakker; Nikhil Datta; Richard Davies; Josh De Lyon
    Abstract: Non-Tariff Barriers (NTBs) are the main policy impediment to international trade, yet little is known about their pass-through to prices. This paper exploits the Brexit trade policy shock to quantify how NTBs affect consumer prices and welfare. The increase in NTBs raised prices by 6%, implying a pass-through of 50-80%. Based on a standard welfare framework, we show households lost £5.84bn, domestic producers gained £4.78bn, and £1.06bn was lost through deadweight loss. Due to differences in food expenditure shares, households in the lowest decile experience a 52% higher increase in the cost of living than households in the top decile.
    Keywords: Brexit, policy, shocks, wellbeing, welfare, cost of living, non-tariff barriers
    Date: 2022–12–01
  15. By: Joseph Kopecky Author-1-Name-First: Joseph Author-1-Name-Last: Kopecky (Trinity College Dublin)
    Abstract: This paper explores the empirical relationship between population age structure and bilateral trade. I include age structure in both log and PPML formulations of the gravity equation of trade. I study relative age effects, using differences in the demographic structure of each country-pair. In line with existing literature and the recent discussions about the macroeconomic implications of aging, I find that having a relatively larger share of population in working age increases bilateral exports. This effect is robust to various estimation models, as well as to changes in the method of specifying the demographic controls. Old-age shares appear to have a weaker, negative, impact on this trade relationship, though these results differ between log specifications of the gravity equation and PPML estimates. Estimating instead the balance of trade between trading partners produces similar results, with positive effects of age structure peaking later in working life. Global populations are poised to undergo a massive transition. Trade a crucial way that the demographic deficits of one country may be offset by the dividends of another as comparative advantages shift along with the size and strength of their underlying workforce. My work is among the first to quantify the effect of relative age structure between two countries and their bilateral trade flows. Focusing for the on aggregate flows, relative age shares, and PPML estimates of the trade relationship, this paper provides the most comprehensive picture to date on how age structure affects trade.
    Keywords: Trade, Demographicchange, aging, gravityequation, populationaging
    JEL: J11 F10 F16
    Date: 2023–01
  16. By: Andrés Mauricio Gomez-Sanchez (Universidad del Cauca, Colombia.); Juan A. Máñez Castillejo (Universidad de Valencia and ERICES, Valencia, España.); Juan Alberto Sanchis-Llopis (Universidad de Valencia and ERICES, Valencia, España.)
    Abstract: The objective of this document is to explore the effect of ICT on the performance of Colombian manufacturing SMEs in export markets. To our knowledge, this is the first piece of evidence that explores this issue for an emerging economy. In doing so, we include some cutting-edge novelties such as persistence in export intensity; cross effect from imports to exports, and the role of initial conditions problem. We replicate the Tobit II-Heckman model procedure by using a dynamic Generalized Linear Model (GLM) because the export intensity is a proportion and include the inverse Mills ratio to deal with the selection problem. We merge three databases namely The Annual Manufacturing Survey (EAM); the Innovation and Technological Development Survey (EDIT) and the Annual ICT Manufacturing Survey (EAM-TIC); published by the National Administrative Department of Statistics (DANE) in six waves since 2013 to 2018. In general, our main results suggest that the impacts of information technologies on export intensity are always positive, regardless of the ICT analysed. Other results show persistence in exports, cross effects and self-selection in export markets, among others.
    Keywords: ICT, Exports, Sunk costs, Cross effects, Empirical Studies of Trade, Emerging economies, Empirical Analysis
    JEL: L16 L96 F14 O33 C23 D22 D24
    Date: 2023–04
  17. By: Martin Hoppe
    Abstract: Whether trade can achieve societal change is a contested topic and difficult to investigate. This round-up aims at summarizing recent empirical research on this topic while focusing on democracy and democratization as an important part of societal change. No robust results for change arising from trade can be found, but there exists an inverse causality, i.e., democratization leading to more trade. Further, reciprocal causality between democratic consolidation and trade agreements is found, meaning an influence of democratic instability on free trade agreements and vice versa.
    Date: 2023
  18. By: Adnan Akram (Pakistan Institute of Development Economics)
    Abstract: A Framework Agreement Establishing a Free Trade Area between Pakistan and Turkiye was signed on March 22, 2016, in Islamabad, and it included a trading in goods agreement, or preferential trade arrangement, that Pakistan and Turkiye would sign on August 12, 2022. Accordingly, Turkiye grants Pakistan privileged access to 261 tariff lines that are of interest to its market, and she has received the same treatment for 130 tariff lines that are of interest to her.
    Date: 2022
  19. By: Sabine Duvaleix-Treguer (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - INSTITUT AGRO Agrocampus Ouest - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Charlotte Emlinger (Virginia Tech [Blacksburg], CEPII - Centre d'études prospectives et d'informations internationales); Carl Gaigné (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - INSTITUT AGRO Agrocampus Ouest - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Karine Latouche (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - INSTITUT AGRO Agrocampus Ouest - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: The protection of geographical indications is now an important feature of trade agreements. In this paper, we examine whether geographical indications are valued by foreign consumers and whether they have implications for trade at firm level. We use firm-product level data from French Customs and a unique dataset of firms and products concerned by Protected Designations of Origin (PDO) in the cheese and butter sector. Our estimations show that PDO varieties are perceived by consumers as varieties of higher quality than non-PDO varieties and that the prices of PDO varieties are 11.5% higher than those of non-PDO. Firms producing PDO varieties do not export higher volumes, but benefit from a better access to European markets and to countries with a similar policy about geographical indications. The inclusion of some GI varieties in trade agreements may thus constitute an opportunity for PDO producers to increase their market access.
    Keywords: Geographical indications, PDO cheeses, Export performance, Product quality, Trade margins
    Date: 2021–07
  20. By: Rui Costa; Swati Dhingra; Stephen Machin
    Abstract: This paper studies consequences of the very large exchange rate depreciation occurring in June 2016 due to the UK electorate unexpectedly voting to leave the European Union. As news of a leave vote came in, the value of sterling plummeted, recording the biggest one day depreciation of any of the world's four major currencies since the collapse of Bretton Woods. The prospect of Brexit really happening generated sizable differences in how much sterling depreciated against different currencies. Coupled with pre-referendum cross-country trade patterns, this generated variations in exchange rate depreciations facing businesses in different industries. The paper first considers revenue and cost channels operating through trade price responses, offering evidence of a cost shock from the price of intermediate imports rising by more in higher depreciation industries, but with no revenue offset from exports. Workers were impacted by the increased cost pressures facing businesses, not in terms of job loss but through relative real wage declines and stagnation for workers employed in industries facing larger depreciations.
    Keywords: Brexit, exchange rate depreciation, trade prices, labour outcomes
    Date: 2022–12–07
  21. By: Franziska Hunnekes; Maximilian Konradt (IHEID, Graduate Institute of International and Development Studies, Geneva); Moritz Schularick; Christoph Trebesch; Julian Wingenbach
    Abstract: In the past decade, Germany has been the world champion in exporting capital ("Exportweltmeister"). No other country invested larger amounts of savings outside its borders. However, we find that Germany plays in the third division when it comes to investment performance. To show this, we construct a comprehensive new database on the returns on foreign investment for 13 advanced economies back to the 1970s. The data reveal that Germany's annual returns on foreign assets were 2 to 5 percentage points lower than those of comparable countries. Germany ranks last among the G7 countries and earns significantly lower foreign returns within asset classes, especially for equity and foreign direct investments. These aggregate results are confirmed with micro data on equity returns by 50, 000 mutual funds worldwide. German funds perform worse across all sectors and destination countries of investment. They also seem to do a worse job in timing the market.
    Keywords: International Capital Flows; Foreign Assets; Investment Returns
    JEL: F21 F30 F31 F36 G15
    Date: 2023–03–13
  22. By: Mubinzhon, Abduvaliev
    Abstract: The aim of this paper is to assess the effect of foreign direct investment on economic growth in Tajikistan. Using annual time series data for 2005 to 2021, the study reveals a relationship between foreign direct investment and per capita GDP growth in Tajikistan. Based on the analysis of the Vector Error Correction Model (VECM), it has been found that these variables have a long-term relationship. The residuals of the regressions showed no auto-correlation in the post-estimation diagnostic tests performed to determine the validity of the VECM model. Furthermore, our findings suggest that improving the institutional quality of the country complements the improvement of the investment climate and results in significant increases in foreign direct investment inflows.
    Keywords: foreign direct investments, economic growth, Tajikistan
    JEL: F21
    Date: 2023–03–10
  23. By: Silvia Bartolucci; Fabio Caccioli; Francesco Caravelli; Pierpaolo Vivo
    Abstract: This paper is concerned with upstreamness and downstreamness of industries and countries in global value chains. Upstreamness and downstreamness measure respectively the average distance of an industrial sector from final consumption and from primary inputs, and they are computed from based on the most used global Input-Output tables databases, e.g., the World Input-Output Database (WIOD). Recently, Antr\`as and Chor reported a puzzling and counter-intuitive finding in data from the period 1995-2011, namely that (at country level) upstreamness appears to be positively correlated with downstreamness, with a correlation slope close to $+1$. This effect is stable over time and across countries, and it has been confirmed and validated by later analyses. We analyze a simple model of random Input/Output tables, and we show that, under minimal and realistic structural assumptions, there is a positive correlation between upstreamness and downstreamness of the same industrial sector, with correlation slope equal to $+1$. This effect is robust against changes in the randomness of the entries of the I/O table and different aggregation protocols. Our results suggest that the empirically observed puzzling correlation may rather be a necessary consequence of the few structural constraints (positive entries, and sub-stochasticity) that Input/Output tables and their surrogates must meet.
    Date: 2023–03
  24. By: Konstantin Sommer (University of Amsterdam); Henri L.F. de Groot (Vrije Universiteit Amsterdam); Franc Klaassen (University of Amsterdam)
    Abstract: We study the effects of market integration on manufacturing emission intensities of CO2, SOx, and NOx. For this, we analyze the 2004 and 2007 EU enlargements in a sectoral panel with data on almost all EU member states from 1995 to 2015. We pay close attention to relevant channels of trade, regulation, and efficiency. Overall, the enlargements have resulted in a reduction of emission intensities in new member states: new regulations, which accession countries needed to adopt, have lowered pollution intensities strongly; induced improvements in productivity have further reduced them; and trade integration into the EU has had insignificant effects on emission intensities. We also do not find evidence of within-EU pollution haven effects and thus of leakage from old to new member states. For old members, trade integration, if anything, increased emission intensities, but productivity improvements have also contributed to cleaner manufacturing sectors here.
    Keywords: Market Integration, EU Enlargement, Carbon Leakage, Pollution Havens, Emission Intensity
    JEL: F15 F64 Q56
    Date: 2022–06–15
  25. By: Damiano Argan and Anatole Cheyssson
    Abstract: We study how foreign language proficiency affects brain drain by exploiting the exposure of parts of Albania to Italian television in the second half of the twentieth century. At that time, Albania was isolated from the rest of the world, with controlled internal migration and prohibited international migration. As the Italian TV transmitter accidentally reached Albania, Albanians’ exposure to the signal was as good as random conditional on geographical variables. We find that exposure to Italian TV led to a considerable increase in Italian proficiency rates. It also strongly increased the probability of emigration of highly skilled individuals, but did not affect other skill groups. We rule out other channels through which TV might affect migration and interpret our findings as the effect of foreign language proficiency on brain drain.
    Keywords: Migration; Media; International Migration; Language.
    JEL: O15 L82 F22 Z13
    Date: 2023
  26. By: Rod Tyers (Business School, University of Western Australia and Centre for Applied Macroeconomic Analysis (CAMA), Australian National University); Yixiao Zhou (Crawford School of Public Policy, Centre for Applied Macroeconomic Analysis (CAMA), Australian National University)
    Abstract: The Australian economy has benefited from several decades of extraordinary Chinese expansion. Slowing growth has diminished these gains and geopolitics between China and the Western democracies has seen restricted commerce between China and Australia. We use a global economic model to assess the consequences were these tensions to restrict all inter-state commerce. Bilaterally, effects on Australia are large and proportionally larger than those on China. A “bamboo curtain”, restricting all commerce between Western democracies and other regions, would see Australia’s welfare per capita impaired most and the US least because of differences in trade dependence.
    Keywords: Trade and financial blockade, general equilibrium analysis, China, Australia
    JEL: D33 E52 J11 O33
    Date: 2022
  27. By: ZHANG Hongyong; DOAN Thi Thanh Ha
    Abstract: Firms hold inventory to manage input shortages and stockout risks. This is particularly true for firms relying on international supply chains and imported inputs. Using a large-scale quarterly government survey of Japanese manufacturing firms (Q1 2015 – Q2 2021), we examine firm-level inventory adjustments to supply chain shocks and focus on firms that sourced inputs globally during the pandemic. We find that before the pandemic, relative to firms that purchase inputs only domestically, importing firms tend to have larger inventories (inventories over sales) in materials, work-in-process (intermediate goods), and finished goods, even after controlling for firm size. After the pandemic, importers significantly and persistently increased their inventories of intermediate inputs, especially in the case of firms with ex-ante higher import intensity and multinational firms that experienced supply chain disruptions in China. These results suggest the possibility of a shift from just-in-time to just-in-case production during the pandemic. We then discuss the role of inventories as a buffer against input shortages and other factors affecting inventory holdings, such as the prefecture-level severity of COVID-19 infections, industry-level input and output prices, and firm-level financial constraints and uncertainties regarding the economic and business outlook.
    Date: 2023–03
  28. By: Maria Ojeda; Camila Luciana Marengo
    Keywords: Importaciones, Mercado Laboral, China
    JEL: F16 F14 J21 J31
    Date: 2021–11
  29. By: Luik, Marc-André; Steinhardt, Max Friedrich; Voss, Simon
    Abstract: In this paper we deliver first causal evidence on the relationship between immigrant host country language proficiency and homeownership. Using an instrumental variable strategy, we find a substantial positive impact of language skills on the propensity to own a home and the quality of housing. While this effect is mediated by education and household income, our estimates also speak in favor of a direct effect. Our results highlight the importance of host-country-specific human capital and, in particular, language proficiency for socio-economic assimilation.
    Keywords: language, immigrants, assimilation, homeownership
    JEL: J11 J13 J61 R21 Z13
    Date: 2023
  30. By: Maria Garcia-Vega; Apoorva Gupta; Richard Kneller
    Abstract: This paper examines how acquisition-FDI during a financial crisis, or fire-sale FDI, affects the R&D investments of target firms. We compare these effects with acquisitions that occur during periods of strong economic growth. Using a panel of Spanish firms from 2004 to 2014, we find that irrespective of when in the business cycle the acquisition occurs, the best domestic firms are cherry-picked by foreign multinationals. Using propensity score matching and difference-in-difference regressions, we find that firms acquired during crises experience smaller declines in domestic R&D than firms acquired during periods of robust growth. To explain why fire-sale FDI does not result in large declines in R&D in target firms, we rely on the macroeconomic literature on the opportunity cost of R&D over the business cycle. Consistent with this theory, we find that firms acquired during crises search for new markets and technologies by becoming more exploratory in their innovation than firms acquired during non-crisis periods.
    Keywords: foreign acquisition; recession; innovation; business cycle
    Date: 2023
  31. By: Alan Manning
    Abstract: More people in a country leads to a bigger economy, but not necessarily an improved standard of living. Alan Manning unpicks the complexities in the debate.
    Keywords: immigration, GDP, growth, UK Economy, labour markets, Wages
    Date: 2023–02–21
  32. By: Mitze, Timo; Breidenbach, Philipp
    Abstract: We use four subsequent EU enlargement waves over three decades (1980s, 1990s, 2000s) to assess the regional effects of macro-institutional changes. Our focus is set on EU internal border regions which are specifically exposed to international integration, but it remains unclear how they benefit from this exposure. Treatment effects for different outcomes (per capita GDP, labor productivity, employment, population, night light emissions) are estimated by comparing the performance of EU internal border regions to overall regional development trends in the EU. We find significant border effects that build up over time and decay with spatial distance to the enlargement border. While per capita GDP, labor productivity levels and night light emissions develop positively on average, negative effects are found for the employment rate in border regions. However, effects can be specific to enlargement waves and country groups considered: Border regions in established member countries mainly gain from EU enlargement in terms of increasing their GDP per capita and labor productivity levels but face lower employment rates and population decline. However, border regions in new member countries, particularly in 2004 and 2007, most significantly gain through population and employment increases. This complex pattern of effects makes a straight 'winner-loser' categorization difficult and poses challenges to policy support for EU border regions.
    Keywords: Economic integration, EU enlargement, internal border regions, regional development, treatment effect estimation
    JEL: C23 F15 O47 R11
    Date: 2023
  33. By: Simola, Heli
    Abstract: The share of private consumption has long been small in the Chinese GDP. The share started to increase in the past decade, but the trend reversed with the covid-19 pandemic. Now as the Chinese economy reopens and recovers from covid restrictions, the share of consumption could return to a growing trend. This resumption of a longer-term trend could have important implications for global trade. Our simulations, which are based on recent international input-output data, suggest that the current shift in China's demand structure is likely to increase import demand for sectors such as the food industry, agriculture, textiles, and travel services. Sectors facing a demand slowdown include base metals, non-metallic minerals, and machinery and equipment.
    Keywords: China, imports, rebalancing, input-output
    Date: 2023
  34. By: Susana Nudelsman
    Abstract: Abstract: One of the most vehement criticisms to the current global era refers to the issue of huge income disparities within and between countries. At present, global inequality is higher than it was 200 years ago but, at the same time, up to COVID 19, the Gini index marks the first time since the Industrial Revolution that it stopped rising. This downward trajectory has been driven by a decline in between-country inequality —the main explanatory factor for global income disparities— partially offset by a rise in within-country inequality. The downward trend between countries should not be unexpected, since low-income countries in Asia, particularly China, have experienced growth rates substantially above the world average in the context of a rapid industrialization process. The pandemic has revealed and worsened preexisting inequalities in both within and between countries, so that global inequality also appears to have increased since its outbreak. Resumen: Una de las críticas más vehementes a la actual era global se refiere a la cuestión de las enormes disparidades de ingresos dentro de los países y entre ellos. En la actualidad, la desigualdad mundial es mayor que hace 200 anos, pero, al mismo tiempo, hasta el COVID 19, el índice de Gini marca la primera vez desde la Revolución Industrial que dejó de aumentar. Esta trayectoria descendente se ha visto impulsada por un descenso de la desigualdad entre países —el principal factor explicativo de las disparidades de ingresos a nivel mundial— parcialmente compensado por un aumento de la desigualdad dentro de los países. La tendencia a la baja entre países no debería ser inesperada, ya que los países de bajos ingresos de Asia, especialmente China, han experimentado tasas de crecimiento sustancialmente superiores a la media mundial en el contexto de un rápido proceso de industrialización. La pandemia ha revelado y agravado las desigualdades preexistentes tanto dentro de los países como entre ellos, de modo que la desigualdad mundial también parece haber aumentado desde su estallido.
    Keywords: Inequality, International Economics, Economic Impacts of Globalization, International Economic Order (en)desigualdad, globalización, política económica (es)
    JEL: D3 F01 F6
    Date: 2022–07–28
  35. By: Cremers, Jan
    Abstract: [Introduction] This paper discusses the possibility for the trade union movement to perform assumed, expected, or allotted tasks in the area of workers' mobility and cross-border labour migration. It aims to give an overview of support activities performed by the trade union movement towards mobile and migrant labour in the EU. It is neither meant to be an exhaustive nor a complete picture of supporting activities. In the European Union, the social partners can play a vital role in the process of drafting and concluding legal and conventional components of the EU acquis. In addition, the social partners are seen, in certain areas, as relevant stakeholders in the implementation of EU-Directives and Regulations. Moreover, they play a role as assigned actors in the application or observance of implemented social policies. In many respects, they are supposed to deliver adequate information to all workers, whether a union member or not. And in the end, several EU Directives empower collective actors like the trade unions with legal instruments to defend workers' rights. All in all, unions are considered the collective voice. The paper starts with a brief explanation of rights that can be derived from a labour relationship as formulated in international and European conventions and regulations. The labour relationship is not only the key point of reference for determining the nature and extent of employers' rights and obligations towards their workers, but also the starting point for rights-based labour mobility. It is the condition that determines the application of labour and social security law provisions addressed to workers, in order to guarantee the necessary protection. Several rights are formulated irrespective of the juridical status of the worker and are therefore relevant for mobile migrant labour. Besides, this entitlement is often guaranteed for every type of worker residing and moving legally within the EU. The second paragraph focuses on the EU acquis with the objective to provide an overall picture of relevant parts of the acquis that allocate (certain) tasks or competences to the trade union or the social partners in the area of rights-based labour mobility. The related work can be seen as an important contribution to the implementation of the social EU acquis and its application. Moreover, this contribution goes far beyond the social dimension, as it touches directly on the functioning (and the success or failure) of the internal market and the related free movement of citizens and workers. Thirdly, some examples are treated of practical experiences with support activities. The focus is on forms and instruments of information, advice, support, and counselling initiated by the trade union movement and related to mobile and migrant labour in the EU. This section ends with an overview of barriers and limitations faced by the organisers of these activities. The final paragraph looks at the support needs in the evolving Single Market and ends with suggestions and recommendations for more direct material assistance from both the EU and the Member States to the supportive work. Basic aim of this paper is to identify some noteworthy practices and to contribute to the debate about the collective defence of the interests of mobile and migrant labour through trade union activities as a contribution to fair and rights-based mobility in the EU.
    Date: 2023
  36. By: Pedro Esteban Moncarz; Manuel Flores; Sebastian Villano; Marcel Vaillant
    Keywords: América Latina, Integración, Desempeño comparado
    JEL: F13 F15
    Date: 2021–11
  37. By: Lee, Sora (Korea Institute for Industrial Economics and Trade); Kang, Sungwoo (Korea Institute for Industrial Economics and Trade)
    Abstract: The value of the Korean won (KRW) to the US dollar (USD) recently fell to its weakest level since 2009, and its real effective exchange rate (REER) was even lower. The KRW to USD rate exceeded 1, 400 won per dollar due to the tight monetary policy of major economies, the Russian invasion of Ukraine, and fears of a recession. Companies highly vulnerable to FX risks should receive policy support and monitoring to prepare for price fluctuations. Long-term tasks include pursuing differentiation with comparative advantage based on key technologies, securing a leading position in supply chains, and upgrading Korea’s economic structure by increasing the contributions of domestic consumption to economic growth.
    Keywords: monetary policy; money supply; exchange rates; USD-KRW; Korea; tight money; FX; foreign exchange; foreign exchange rates; competitiveness; exports; export competitiveness
    JEL: F18 F21 O24
    Date: 2022–10–19
  38. By: David Franzmann; Heidi Heinrichs; Felix Lippkau; Thushara Addanki; Christoph Winkler; Patrick Buchenberg; Thomas Hamacher; Markus Blesl; Jochen Lin{\ss}en; Detlef Stolten
    Abstract: Green hydrogen is expected to be traded globally in future greenhouse gas neutral energy systems. However, there is still a lack of temporally- and spatially-explicit cost-potentials for green hydrogen considering the full process chain, which are necessary for creating effective global strategies. Therefore, this study provides such detailed cost-potential-curves for 28 selected countries worldwide until 2050, using an optimizing energy systems approach based on open-field PV and onshore wind. The results reveal huge hydrogen potentials (>1, 500 PWh/a) and 86 PWh/a at costs below 2 EUR/kg in 2050, dominated by solar-rich countries in Africa and the Middle East. Decentralized PV-based hydrogen production, even in wind-rich countries, is always preferred. Supplying sustainable water for hydrogen production is needed while having minor impact on hydrogen cost. Additional costs for imports from democratic regions only total 7%. Hence, such regions could boost the geostrategic security of supply for greenhouse gas neutral energy systems.
    Date: 2023–03
  39. By: ITO Tadashi; Michael RYAN; TANAKA Ayumu
    Abstract: Using matched firm-bank-FDI data, this study explores the possibility that firms with stricter financial constraints tend to choose joint ventures with a lower ownership ratio for their foreign subsidiaries. In addition, this study tests the hypothesis that parent firms with banks as their largest shareholders have a lower stake in their foreign subsidiaries because banks are risk averse. The empirical analysis confirms that foreign subsidiary ownership ratios are negatively associated with parent firms' debt ratios. Moreover, this study finds that the greater the degree to which the parent firm has bank shareholders, the lower the parent firm's ownership share in its subsidiaries. However, this tendency weakens when a bank has an overseas subsidiary in the host country, presumably because the information asymmetry is mitigated.
    Date: 2023–03
  40. By: Patrick Dylong; Paul Setzepfand; Silke Uebelmesser
    Abstract: Using data from two representative and large-scale population surveys with more than 4000 participants, we investigate the effect of randomized priming interventions on attitudes towards immigrants. We document robust null effects of these interventions under two experimental settings, across two surveys and for a range of specifications. Our results suggest that (economic) attitudes towards immigrants are less sensitive to priming than previous research indicates. We thus provide (i) a reference point for settings in which intentional priming interventions are ineffective, and (ii) an upper bound for unintended priming effects. We argue that researchers should not be overly concerned about confounding priming effects when designing surveys to elicit attitudes towards immigrants.
    Keywords: attitudes towards immigration, priming, experimental design
    JEL: C83 C90 J15 F22
    Date: 2023

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