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on International Trade |
| By: | Karin Mayr-Dorn; Gaia Narciso; Duc Anh Dang; Hien Phan |
| Abstract: | This paper investigates the effects of the U.S.-China trade war on trade diversion and the labor market in a third country, Vietnam. We exploit variation in Vietnamese exports to the U.S. across industries and districts based on the extent of the U.S. tariff hikes on Chinese imports and provide evidence of a positive effect on labor market outcomes in Vietnam. Vietnamese workers and districts that are more exposed to the trade war display higher employment, working hours, and wages as a result. Our findings reveal that bilateral trade policy can have substantial offsetting effects on trade flows and labor markets in third countries. |
| Keywords: | trade diversion, trade war |
| JEL: | F14 F16 R23 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2023-04&r=int |
| By: | Rotunno, Lorenzo; Roy, Sanchari; Sakakibara, Anri; Vezina, Pierre-Louis |
| Abstract: | We use the US-China trade war as an exogenous shock to export opportunities in Vietnam and examine its effect on Vietnam’s exports and labor markets. We find that Vietnamese exports to the US were around 40 percent higher in 2020 relative to 2017 in sectors hit by US tariffs on Chinese products. This increase is driven by both new export product varieties and increased exports in existing categories. This expansion in export opportunities led to job creation and increased working hours in affected sectors relative to non-affected ones. It also led to an increase in wages, even more so for women workers. |
| Date: | 2023–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:9rdne&r=int |
| By: | Saroj, Sunil; Roy, Devesh; Kamar, Abul; Pradhan, Mamata |
| Abstract: | The focus of research on international trade has recently shifted from industries and countries to firms. Firm heterogeneity is shown to be a determinant of trade at both the intensive margin (increase exports per firm/product) and extensive margins (the number of firms exporting – new products, new partners, new varieties, and new prices). It is now widely accepted that exporting firms are larger, comparatively productive, more skilled, and capital-intensive, and pay higher wages than non-exporting firms. The innovations in international trade literature that explains both the emergence as well as levels and the nature of trade flows through value chain integration necessitates examining trade-based exchanges at the highest possible levels of product disaggregation. Developments in trade theory emphasize that it is individual firms not countries that trade and analysis needs to incorporate firm characteristics in decisions and ability for exporting and importing. Firms are the appropriate unit of analysis for trade flows. It helps several paradoxes once the import of firm heterogeneity is understood. Despite the substantive importance of granular level data and the significant level of disaggregated product-level bilateral trade flow data and enhanced computing power that are becoming available, most studies have tended to rely on analysis with high level of aggregation. Recent research on firm heterogeneity in international trade highlights the importance of extensive margins i.e., new products, new partners, new varieties, and cumulative of these i.e., new prices in trade patterns and firms' responses to trade liberalization and other policy changes. However, the high dimensionality of the data and the large number of responses to changes can easily overwhelm researchers. Additionally, bigger data sets may contain more noise, which can mask important systematic patterns. In analysis of trade flows, notwithstanding the rising incidence of differentiated products (varieties) and value chains that transcend national boundaries, methods in agri-food trade analysis in particular have not kept pace in terms of empirical methods and suitable data. |
| Keywords: | BANGLADESH; BHUTAN; NEPAL; INDIA; SOUTH ASIA; MYANMAR; BURMA; SRI LANKA; THAILAND; SOUTH EAST ASIA; ASIA; international trade; firms; exports; productivity; wages; value chain; innovations; data; agri-food system; policies |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:prnote:april2023&r=int |
| By: | Kyvik Nordås, Hildegunn (Örebro University School of Business) |
| Abstract: | This paper analyses the proposed free trade agreement (FTA) between EU and India focusing on services trade. Based on the text published by the European Union, I use the OECD STRI simulator to calculate the preference margin implied by the agreement and next predict the impact on services trade flows using a general equilibrium structural gravity analysis. I find that the preference margin on the STRI for Indian exports to the EU is between four and eight basis points depending on the sector, while for EU exports to India the preference margin is between 10 and 35 basis points. The predicted effect is almost a doubling of EU services exports to India, while India’s services exports to the EU would increase by about 50%. EU’s trade with the rest of the world would not change much, while India’s exports to the rest of the world would decline by about 3%. Real services output would not change much in the EU or India. Lifting trade restrictions in the telecommunications sector is the most important policy area for facilitating services trade. |
| Keywords: | Services; Trade; FTA; India; EU |
| JEL: | F13 F15 F17 |
| Date: | 2023–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2023_005&r=int |
| By: | Annika Westen |
| Abstract: | International migration emerges as an important driver of globalization since migrants play a salient role in diffusing international norms and practices across borders. Through a variety of channels migrants are capable of encouraging democratic behavior back in their countries of origin. On the other hand, immigration is commonly at the forefront of political debates in hosting economies of migrants, demonstrated for instance by the impact of migration on the voting behavior of natives. This round-up reviews literature on the political economy of emigration and immigration in home as well as host countries of migrants before broaching the percussions on these countries’ trade relations. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:144en&r=int |
| By: | Ariell Reshef (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique) |
| Abstract: | We study the evolution of labor shares in 1995-2014, while taking into account international trade based on value added concepts. Declines in labor shares accelerate in 2001-2007, concurrently with global value chain (GVC) integration, after which there is no trend for both. We develop a gravity-based instrument for GVC integration and find that the acceleration in the decline in labor shares is caused by increased intensity of forward GVC integration. The integration of China into GVCs has a disproportionally large effect through this mechanism. Declines in labor shares are shouldered mostly by less skilled workers in fabrication functions. Relatively capital abundant countries integrate more into forward GVCs linkages, which is associated with greater upstreamness within GVCs and increases in capital intensity. Forward GVC integration is associated with international vertical integration of both upstream intermediate input production and of offshoring of downstream assembly. |
| Keywords: | labor share, global value chains, upstreamness |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04083452&r=int |
| By: | Kamar, Abul; Roy, Devesh |
| Abstract: | The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organization that comprises seven nations, five of which are from South Asia (Bangladesh, Bhutan, India, Nepal, Sri Lanka) and two from Southeast Asia (Myanmar and Thailand). BIMSTEC aims to increase trade including agri-food products to much higher levels than its historical low values lying much below potential. In 2020, intra-BIMSTEC trade accounted for a mere 6.15% of the total trade among its member countries. In contrast, intra-ASEAN trade made up around 23% of the total trade within the Association of Southeast Asian Nations (ASEAN). These figures highlight the significant room for growth in intra-regional trade among BIMSTEC member countries. Importantly the low share of intra BIMSTEC trade is not due to greater integration with supra-BIMSTEC partners. This policy note seeks to spell out some of the key agricultural trade policy-related challenges in the BIMSTEC region and their implications for economic integration in the area. |
| Keywords: | SRI LANKA; BANGLADESH; BHUTAN; INDIA; NEPAL; MYANMAR; BURMA; THAILAND; SOUTH ASIA; SOUTH EAST ASIA; ASIA; trade; agrifood sector; agricultural sector; policies; economic integration |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:prnote:march2023a&r=int |
| By: | Alejandro G. Graziano; Yuan Tian |
| Abstract: | In 2020, a pandemic generated by a novel virus caused a large and abrupt decline in world trade, only comparable within the last half-century to the Great Trade Collapse during the 2008-09 Financial Crisis. This collapse followed naturally from the difficulty of locally producing, transporting, and consuming goods in the affected regions worldwide. In this paper, we study the impact of these disruptive local shocks on international trade flows during the COVID-19 pandemic. Using rich product-level import data from Colombia, we first show that import collapse at the onset of the pandemic was due to a decrease in import quantities, and the import recovery in later periods was partially explained by a rise in both foreign export prices and shipping costs. Using smartphone data tracking local human mobility changes to identify local shocks, we decompose the trade effects into shocks originating from exporter cities, seaports, and importer cities. We find that while the decline in quantity was driven by both changes in exporter and importer shocks, the increase in price was entirely driven by exporter shocks. Using data on port calls made by container ships, we document a decline in port productivity during the pandemic. We show that mobility changes at port locations induced a decline in port efficiency and a rise in freight costs. We also document a positive correlation between product-level domestic inflation and mobility shocks to foreign exporters. |
| Keywords: | International trade, local shocks, COVID-19 pandemic, shipping costs, mobility, supply chain, inflation |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2023-06&r=int |
| By: | Aleksandra Kordalska; Magdalena Olczyk |
| Abstract: | This paper aims to identify factors that determine functional specialisation (FS) in global value chains (GVCs) in European Union countries. We focus on fabrication and R&D as two opposite business functions in terms of their character and their potential of creating value-added. To make our results robust two different approaches to measuring functional specialisation are used – an FDI-based approach and a trade-based approach. To assemble a relative functional specialisation index, for each approach we use the same metric – a revealed comparative advantages index. Our results suggest a positive effect of wages on specialisation in an R&D function, and a negative impact on FS in fabrication. Increasing labour productivity boosts both specialisation in fabrication and in R&D. The results are robust to different model specifications and different time intervals. The instrumental variables method allows us to interpret the results as causal relationships. Additionally, human capital and labour skills foster FS in R&D (only in FDI data), and growing employment makes FS in fabrication increase. The growth of GDP per capita positively affects functional specialisation in R&D activities. Among GVC participation measures, we confirm the importance of increasing backward linkages to explain the boost in fabrication activities. Dividing a full sample into a group of EU15 countries and a group of Central Eastern European countries we observe that patterns for the EU15 are similar to those for the full sample, while for CEE countries wages are insignificant and labour productivity affects FS in fabrication only. |
| Keywords: | functional specialisation, global value chains, smile curve, factory economy, headquarters economy |
| JEL: | F15 F21 F23 F63 L23 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:228&r=int |
| 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; Supply Chain |
| JEL: | F10 F11 F16 F40 F66 |
| Date: | 2023–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:95735&r=int |
| By: | D. Dessì; R. Paci |
| Abstract: | Participation in Global Value Chains (GVC) is widely considered a potential driver for productivity growth due to the advantages gained by the firms through technology transfers, vertical specialization, and access to new markets. However, in the last years, a series of consecutive shocks have led to a reduction in the volume of global trade and this trend is likely to have long-term consequences. Relying on the latest available data, we empirically investigate the relationship between labour productivity and GVC inclusion to assess the potential impact of the global trade slowdown on countries' productivity. The analysis is performed using an augmented production function framework applied to a sample of 76 countries over the period 1995-2019. Our findings add new insights into the ongoing debate on the uneven distribution of GVC participation advantages across different trade partners depending on their development stage. On average, developed countries benefit from a larger production efficiency from both upstream and downstream connections. On the other hand, in developing countries, the influence of the major economies seems to have harmful effects on productivity through forward participation, as domestic production is influenced by foreign demand for low-cost inputs, which can make developing economies stuck in low-value-added activities. |
| Keywords: | Global Value Chains;global trade;labour productivity;forward linkages;backward linkages |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:202305&r=int |
| By: | Aggarwal, Sakshi |
| Abstract: | The rise in global trade has led to improvements in the standard of living and lifted many out of poverty, but not all countries have been able to fully integrate into the world trading system due to lack of resources. Access to food supplies is critical for those with inadequate access to food for sustainable consumption. The evolving trade dynamics and climate change will result in winners and losers for the global food system, with some regions experiencing double exposure to economic and climate-related shocks and stressors. Trade openness can significantly reduce vulnerabilities and enhance food security, if necessary, infrastructure is in place. Although global trade can play a crucial role in ensuring that the global food system adapts to a changing climate, this potential will only be realized if trade is managed to maximize the benefits of broadened access to new markets and minimize the risks of increased exposure to international competition and market volatility. For regions like Africa, enhanced transportation networks, combined with greater national reserves of cash and enhanced social safety nets, could reduce the impact of double exposure on food security. |
| Keywords: | International trade, food security, climate change |
| JEL: | F18 O19 Q54 Q55 |
| Date: | 2023–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117152&r=int |
| By: | Michele Imbruno (Sapienza University of Rome and GEP, Nottingham); Alessia Lo Turco (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)); Daniela Maggioni (Department of Economics, Catholic University of the Sacred) |
| Abstract: | We inspect whether multinational supply chains bring energy efficiency gains to domestic firms active in a host country. Our theoretical model suggests that the presence of foreign firms in upstream manufacturing and energy industries expands the availability of high-quality inputs for downstream domestic firms, implying a reduction in their energy intensity. We test these theoretical predictions using data from Turkish manufacturing firms over the period 2010-2015. Our empirical analysis shows that domestic-owned firms in sectors that are more likely to buy manufacturing and energy inputs from foreign-owned suppliers tend to reduce their energy intensity, confirming environmental gains from FDI. When exploring the underlying mechanisms, we provide evidence that the presence of foreign firms in upstream sectors leads to an increase in the quality of available inputs which turns into improvements in downstream domestic firms' energy efficiency. |
| Keywords: | Energy Efficiency, FDI, MNEs, Turkey |
| JEL: | F23 D22 L20 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:477&r=int |
| By: | Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw); Zuzana Zavarská (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Specialisation in value-chain functions is one of the new phenomena introduced by global value chains (GVCs). This report investigates the effects of functional specialisation on labour markets in fabrication and R&D activities as the two polar cases of value-chain functions, whereby the former is associated with factory economies, while the latter is characteristic of headquarter economies. More precisely, a metric similar to revealed comparative advantage is used to study the effect of relative functional specialisation on wages and non-wage working conditions. In line with the GVC literature emphasising power relations and organisational aspects of production networks, we are able to identify differentiated effects for functional specialisation patterns on wages in EU member states at the industry level across time. While relative functional specialisation in fabrication tends to hold back wages, functional specialisation in R&D has a positive effect on wage progression, controlling for labour productivity, GVC participation and numerous labour supply- and labour demand-side factors. The use of a constructed ‘sharp’ instrument allows giving these results a causal interpretation. Conversely, both functional specialisation measures are found to improve some non-wage working conditions, namely workers’ physical environment and their work intensity, which is evidence against a potential ‘race to the bottom’ effect of functional specialisation along GVCs. The effect is stronger for relative specialisation in fabrication than for relative specialisation in R&D. |
| Keywords: | Functional specialisation, wages, non-wage working conditions, global value chains |
| JEL: | F15 F21 F23 F63 J31 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:227&r=int |
| By: | Alessandro Nicita |
| Abstract: | This paper explores the development of international supply networks in four manufacturing sectors: communication equipment, electrical machinery, motor vehicles, textiles and apparel. The study investigates changes in the trade of intermediate products using descriptive statistics, network metrics and visualization, and econometric methods. The findings of the paper suggest that the evolution of international supply networks towards far-shoring has stagnated since 2015. The paper also reveals some evidence of nearshoring and friend-shoring trends in most recent trade statistics. Developed countries and East Asian economies continue to dominate supply networks, while Latin American and African nations are largely absent. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unc:wpaper:3&r=int |
| By: | Carlos Casacuberta; Omar Licandro |
| Abstract: | In 2002 Uruguay faced a sudden stop of international capital flows, inducing a deep financial crisis and a large devaluation of the peso. The real exchange rate depreciated and exports expanded. Paradoxically, export shares and real exchange rates negatively correlate among Uruguayan exporters around 2002. To unravel this paradox, we develop a small open economy model of heterogeneous firms. Domestic firms are price takers in the international market, operate under monopolistic competition in the domestic market, and face financial constraints when exporting. Confronted to a large nominal devaluation, financial constraints deepen. Financially constrained exporters cannot optimally expand in the export market and react by passing-through the devaluation to the domestic price only partially, expanding domestic sales. As a consequence, the more financially constrained exporters are, the less their export shares expand and the more their firm specific real exchange rates depreciate. As a result, export shares and real exchange rates of exporters are negatively correlated as in the data. |
| Keywords: | Uruguay; export shares; exchange rates |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2023-04&r=int |
| By: | Atkinson, Craig |
| Abstract: | With the emergence of new modes of governance, the article specifies a legal-technical basis – background, analytical structure, sources, methods, and research questions – to advance the notion of a ‘computable’ transatlantic trade agreement. |
| Abstract: | Applications of Computational Law (CompLaw) are emerging that allow for the expression and online publication of digital versions of rules as algorithms to improve accessibility for humans and support operationalization via machines. As instruments begin to refer to governance for, of, and by information and communications technology (ICT), this article introduces public and private branches of law to construct a five-point legal-technical basis for a Transatlantic Trade and Investment Partnership (TTIP) 'version 2.0' with computational rules (and data sources) in parallel to its natural language, other texts, and associated systems. First, the nature of the European Union (EU)-United States (US) relationship is described in the age of Computational Law and the Internet. Second, the analysis explores the ‘multilateral interface’ and proposals under the World Trade Organization (WTO) Joint Initiative on E-commerce. Third, existing and envisaged sources of EU and US trade, business, technology, and privacy law are compared. Fourth, the investigation frames institutional sources of transnational commercial law, including the principles, conventions, and model laws of the United Nations Commission on International Trade Law (UNCITRAL) and the International Institute for the Unification of Private Law (UNIDROIT). Fifth, technical requirements to seize the CompLaw opportunity for transatlantic trade are articulated. Outputs of the specified analytical structure are set to contribute to the advancement of legal informatics at the nexus of EU-US trade and technology policy regimes. Article by Craig Atkinson, WTI Non-Resident Fellow and Visiting Scholar at Singapore Management University's Yong Pung How School of Law, published by the Stanford –Vienna Transatlantic Technology Law Forum in the Transatlantic Antitrust and IPR Developments Newsletter Issue No. 1/2023 (May 12, 2023), pp. 31-37 (open access). |
| Date: | 2023–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:1394&r=int |
| By: | Filippo Bontadini (LUISS University/University of Sussex); Mercedes Campi (CONICET/IIEP); Marcos Dueñas (IMT) |
| Abstract: | We propose a novel measure to investigate firms’ product specialisation: product coreness, that captures the centrality of exported products within the firm’s export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, the composition of firms’ export baskets changes relatively littlefrom one year to the other, and products far from the firm’s core competencies, with low coreness, are more likely to be dropped. Second, higher coreness is associated with larger export flows at the firm level. Third, such firm-level patterns also haveimplications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level, which holds across all levels of product complexity. Therefore, the paper shows that how closely a product fits within a firm’s capabilities is important for economic performance at both the firm and country level. We explore these issues within an econometric framework, finding robust evidence both across our three countries and for each country separately. |
| Keywords: | International Trade; Diversification; Capabilities; COVID–19 |
| JEL: | F14 L25 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:239&r=int |
| By: | Campbell, Erin (Resources for the Future); Pizer, William (Resources for the Future) |
| Abstract: | Border carbon adjustments (BCAs) are national or possibly multicountry trade measures—typically taxes on imports (and sometimes rebates on exports)—intended to support ambitious national climate mitigation policies. They are meant to address part of the problem that ambitious mitigation policies in one jurisdiction can lead to increased emissions in jurisdictions with less ambitious policies (“leakage†). In particular, they address the portion of leakage associated with energy-intensive production moving from areas with more ambitious policies to those with weaker policies (“competitiveness†). BCAs are being discussed as part of broader carbon pricing policies, like the European Union’s Emissions Trading Scheme (EU ETS), which recently put forward a concrete BCA proposal; they have also been described and modeled alongside a domestic carbon tax. Much has been written about the design of a BCA in this world with what we might call “full†carbon pricing.Yet, nations’ climate mitigation policies may or may not include carbon pricing, and when they do, the carbon pricing is often not comprehensive. In the United States, for example, carbon pricing has been implemented at the state level (California, Washington State, and the northeastern states’ Regional Greenhouse Gas Initiative) but is currently a lower priority in national policy than incentives and regulatory standards. China has implemented an ETS that allocates free allowances based on performance benchmarks like a firm’s production level of electricity or (in the future) other industrial products. That is, the policy might regulate tons of CO2 per megawatt of electricity, per ton of steel produced, or per ton of cement. This is frequently referred to as a tradable performance standard (TPS; see Pizer and Zhang 2018). Even the EU ETS gives significant free allocation to energy-intensive, trade-exposed industries, thereby blunting some of the ETS effects. This raises the question of how a BCA might work with a “partial-price†or “nonprice†policy.In this paper, we talk about “partial†price policy as implementing an explicit carbon price that is paid on some, but not all of a firm’s actual emissions. Perhaps there is a free allocation tied, one way or another, to production of a given product. This might be explicit, through a tradable performance standard or output-based allocation, or implicit, through a free allocation that helps address competitiveness effects.We talk about a “nonprice†policy as regulating emissions through some type of non-tradable technical or performance-based standard; there is no observed price. Although it is possible to estimate an implicit price or marginal cost associated with the most recent (most expensive) ton of carbon dioxide reduced, it is not observed explicitly.In this short paper we outline basic principles of how such partial-price or nonprice policies might equivalently be applied to imports as a BCA. Full carbon-pricing policies (auctioned ETS credits or a carbon tax) typically put an equivalent price on the carbon content of imports, usually with an adjustment for any carbon pricing in the country of origin. In contrast, partial-price or nonprice policies exempt a portion of the carbon content of imported goods before applying any price. Moreover, the price paid on emissions above the exemption should be based on some notion of marginal cost if a market price or tax is not observed. That is, it should be based on the cost of the last ton abated domestically, not the average cost.Our lens on this issue is an economic notion of roughly equivalent treatment. That is, are exporters to a regulated market facing the same incentives and charges, on average, as a domestic producer? “On average†is a critical term. Unless there is a transparent, fully national climate policy that is easily replicated on imports, the existence of state- (or even local-) level regulation means different producers will likely face different incentives and costs. Even with national regulation under the Clean Air Act, states may have some discretion in their implementation. Or a national regulation may give some deference to the starting point of individual firms in the application of benchmarks. The choice of how to match a range of observed a range of domestic incentives and charges to BCA parameters has consequences that might motivate matching the high or low end of observed values instead of the average.We note at the outset that we are also ignoring issues of WTO compatibility. This has been discussed elsewhere at length for full-price policies (Hillman 2013; Howse 2021). Partial-price and especially nonprice policies raise even more issues as the treatment of imports, while attempting to mimic domestic policy incentives and costs, is not the same. There may be no explicit domestic charges even as BCAs are implemented as a charge. We leave this for future work.BCAs raise myriad other design questions, including treatment of exports, measurement of emissions, scope (e.g., are indirect emissions targeted?), types of imports covered, and use of revenue. There is also the question of BCAs’ fairness with respect to developing and emerging economies. We believe these questions apply regardless of whether there are full-, partial-, or non-price domestic policies and we do not attempt to tackle them here (see, e.g., Marcu, Mehling, and Cosbey 2020). Rather, our plan is, first, to review the costs imposed by full-, partial-, and nonprice policies and the application of BCAs in the context of full-price domestic policies. This frames our economic notion of trying to apply equivalent treatment to imports. We then discuss how BCAs could seek equivalent treatment with a partial-price or nonprice policy similar to the notion applied with full-price policies. Finally, we consider how domestic policies intersect with one other, and how BCAs might account for a trade partner’s similar or different policies.To continue reading, click "download" above. |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-21-21&r=int |
| By: | Stefano Federico; Giuseppe Marinelli; Francesco Palazzo |
| Abstract: | We study how a demand shock in an export market propagates to the exporting country’s banking system. Using the dual shocks of sanctions and falling oil prices suffered by Russia in 2014, we investigate the effects on Italian firms and banks more exposed to the Russian market. This event implied a sharp decline in sales for firms with a significant share of sales to Russia, but it did not affect the overall amount of credit available to them. Banks relatively more exposed to Italian exporters to Russia cut their overall credit supply, especially vis-à-vis ex ante risky borrowers, but continued to provide credit towards firms moderately hit by the trade shock, in an attempt to let them cope with the liquidity shortfall. Our results suggest that banks mitigate trade shocks for certain hit firms, while at the same time propagate them to other firms not directly affected by the shock. |
| JEL: | F10 G21 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31171&r=int |
| By: | Gielen, Anne C. (Erasmus University Rotterdam); Webbink, Dinand (Erasmus University Rotterdam) |
| Abstract: | A ban on migration from Suriname, a former Dutch colony, to the Netherlands induced a mass migration and changed the selection of migrants. We exploit this historical episode to study the relationship between the self-selection of migrants and their long-term economic integration over three generations. 'Beat-the-ban' migrants, those arriving just before the ban, are negatively selected compared to economic migrants arriving earlier. This difference in selection is reflected in the outcomes of the first generation. However, the inequality in outcomes between differently selected migrants is not persistent. The offspring of negatively selected migrants has a faster catch-up to natives which can be explained by inequities in the country of origin. |
| Keywords: | mass migration, economic integration, intergenerational mobility, migrant selection |
| JEL: | J24 J6 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16065&r=int |
| By: | Kang, Munsu (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | The food security crisis in the Middle East has been exacerbated by several events, including COVID-19 and Russia's invasion of Ukraine, but the greater crisis is the decline in agricultural productivity caused by climate change and the rise of protectionist trade policies. This study examined the impact of drought on regional grain prices, specifically drought, which has the greatest impact on the Middle East region of Africa among weather changes. It was predicted by the IPCC (2019) that weather changes would affect agricultural production systems and that these changes would affect international grain markets and government trade policies. This study found that prices in the African Middle East maize and rice market increased as the drought intensified and the period lengthened, as predicted. Sorghum and millet, however, are relatively inelastic to climate change, so it can be assumed that they will receive attention as climate change intensifies. This study proposes areas for cooperation such as agricultural production, supporting the vulnerable, and crop reserve with the Middle East and Africa. |
| Keywords: | Climate change; Food security; Africa; Middle East |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_011&r=int |
| By: | Bryan Hardy; Felipe E. Saffie; Ina Simonovska |
| Abstract: | We show that trade credit mitigates exchange rate risk pass through along supply chains. We develop a theory of trade credit provision along supply chains that involve large intermediate-good suppliers and small final-good producers, both of which face bank borrowing constraints. Motivated by empirical findings, we assume that large suppliers borrow in foreign currency, while small final-good producers borrow in domestic currency at higher rates. Trade credit loosens borrowing constraints and allows for higher production scale. Additionally, the model predicts that unconstrained suppliers fully absorb increasing costs of borrowing in foreign currency when domestic currency depreciates: specifically, suppliers settle for lower profits but maintain unchanged trade credit lines with their trade partners. We verify the model's predictions using firm-level data for over 11, 000 large firms in 19 emerging markets over the 2004-2020 period. |
| JEL: | E30 F2 F3 F4 G15 G3 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31078&r=int |
| By: | Frick, Susanne; Rodríguez-Pose, Andrés |
| Abstract: | Special Economic Zones (SEZs) are a popular policy tool for the promotion of economic development. However, questions remain about their economic contribution and about what aspects of SEZ policies are most relevant to investors. This article sheds light on these issues by comparing SEZs across Africa, Asia and Latin America. We find that, while investment decisions by foreign companies are driven by market access, political stability and low labour costs, adequate SEZ policies facilitate the attraction of investment. A good industrial infrastructure together with a strategic location and service provision within the zones draw investment. Fiscal incentives, by contrast, have a limited influence on investment decisions. |
| Keywords: | special economic zones; inward investment; industrial policy; developing countries; FDI location decision |
| JEL: | F21 O14 O24 L52 |
| Date: | 2023–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118117&r=int |
| By: | Aggarwal, Sakshi |
| Abstract: | This survey aims to offer a thorough and organized overview of research on anomaly detection, which is a significant problem that has been studied in various fields and application areas. Some anomaly detection techniques have been tailored for specific domains, while others are more general. Anomaly detection involves identifying unusual patterns or events in a dataset, which is important for a wide range of applications including fraud detection and medical diagnosis. Not much research on anomaly detection techniques has been conducted in the field of economic and international trade. Therefore, this study attempts to analyze the time-series data of United Nations exports and imports for the period 1992 – 2022 using LSTM based anomaly detection algorithm. Deep learning, particularly LSTM networks, are becoming increasingly popular in anomaly detection tasks due to their ability to learn complex patterns in sequential data. This paper presents a detailed explanation of LSTM architecture, including the role of input, forget, and output gates in processing input vectors and hidden states at each timestep. The LSTM based anomaly detection approach yields promising results by modelling small-term as well as long-term temporal dependencies. |
| Keywords: | Anomaly detection, LSTM, Machine learning, Artificial intelligence, economic trade |
| JEL: | C54 F13 F15 |
| Date: | 2023–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117149&r=int |
| By: | Bucksteeg, Michael; Voswinkel, Simon; Blumberg, Gerald |
| Abstract: | Power markets have been gradually integrated to achieve the target of a single European market. A major step was the introduction of the flow-based market coupling (FBMC) in Central Western and Eastern Europe (Core region). FBMC reflects the physical constraints of the underlying transmission grid in detail. However, the European Commission and regulators imposed minimum margins to increase cross-border trade and to foster price convergence between the different bidding zones, neglecting physical constraints and increasing redispatch volumes. Integrating redispatch poten-tials into FBMC allows for moving closer to physical reality while maintaining a high level of cross-border trade. In this study, we develop a multi-stage model covering capacity calculation, market coupling, and redispatch stages. This study is the first to evaluate different options for integrating FBMC and redispatch potentials based on a large-scale numerical analysis of Central Europe. The results reveal that minimum margins effectively increase cross-border trade. However, this comes at a high cost due to additional redispatch needs, which reduce overall welfare. Integrating redis-patch potentials in the market-clearing stage leads to a more efficient increase in cross-border ca-pacities and elevates welfare. In the case of combining both approaches, the analysis indicates improved welfare of roughly 80 M€ per year. |
| Keywords: | Flow-based market coupling, European electricity market, cross-border trade, congestion management, redispatch, market modeling |
| JEL: | Q4 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:270878&r=int |
| By: | Henry Wai-chung; ; |
| Abstract: | This paper builds common grounds for a future research agenda in the regional studies of evolutionary economic geography and global production networks. I put forward two “troubling themes†of (geo)politics and heightened risks as the most disruptive forces in today’s increasingly fragmented global economy and argue for their significance in regional studies throughout the post-pandemic 2020s. Massive global change through the reconfiguration of and strategic (de/re)coupling with global production networks will engender new path formation in regional transformation. In this analytical move from the global “back again†to the regional, there are common questions on epistemology (causal explanations) and substantive issues (network/regional resilience; institutions/the state; inequalities/uneven development; new forms of regional policies) for both communities of researchers. |
| Keywords: | evolutionary economic geography; global production networks; geopolitics; risks; regional economies; research agenda |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2312&r=int |
| By: | Knauss, Steven |
| Abstract: | Initially based in the ICT sector, technologies based on intangible assets have since generalized throughout the economy and are playing a central role in the digitalization of manufacturing. As global value chains (GVCs) potentially bring such changes to developing countries, hopes are raised for “sustainable industrialization, ” where the greater scalability, spillovers and synergies engendered by intangible assets could favor more rapid economic upgrading while at the same time unleashing significant gains in energy efficiency. To better assess the plausibility of such projections, this paper conducts a cross-country panel study of GVCs in 30 sectors and 67 countries between 1995 and 2018. The link is explored between the intangible asset intensity of GVCs and each of the two pillars of sustainable industrialization: energy efficiency and developing country upgrading. The results find little evidence for the optimistic view, suggesting that intangible spillovers in GVCs may be limited by winner take most dynamics and tendencies toward intellectual property monopolies. The path toward sustainable structural transformation in developing economies is therefore likely to require more active forms of industrial policy and a financial architecture that favors them. |
| Keywords: | global value chains; development; intangible assets; energy efficiency |
| Date: | 2023–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus045:36836831&r=int |
| By: | Marcia Tavares |
| Abstract: | When a country leaves (“graduates†from) the least developed countries (LDC) category, there is often concern about the impacts on the support it will receive from the international community. This paper reviews, as part of a preliminary assessment for the countries the Committee for Development Policy (CDP) will assess in 2024 (Cambodia, Comoros, Djibouti, Senegal and Zambia), the expected impacts on financial and technical assistance and on support for the participation of these countries in inter- national forums. Impacts on trade, often found to be the most significant, will be assessed separately. The general preliminary conclusion is that the impacts on development cooperation will be relatively small, as most development partners do not rely on whether or not a country is an LDC as a primary determinant of their assistance. However there are specific instruments, funds and flexibilities dedicated exclusively to LDCs and recent graduates, and some development partners have special terms and condi- tions for LDCs. It is important for countries approaching graduation to map out these areas in order to make the most of the LDC-specific support measures in the years leading up to graduation. |
| Keywords: | Development cooperation, international cooperation, financing for development, least developed countries (LDCs), LDC graduation |
| JEL: | F35 F53 F55 F63 O19 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:une:cpaper:053&r=int |
| By: | Vet, Cassandra |
| Abstract: | Kenya, Uganda and Rwanda introduced transfer pricing regulations into national law in 2006, 2011 and 2020 respectively, and invested in transfer pricing audits to reduce profit shifting by multinational enterprises (MNEs). These countries used the dominant OECD transfer pricing guidelines as a template for reform – the wisdom of this approach is contested. Critical authors stress that Western states largely dominate rule-setting procedures, and that costly transfer pricing enforcement drains the scarce resources of revenue authorities. How can we reconcile the critical perspective in global debates with the roll-out of OECD-type transfer pricing regimes on the ground? |
| Keywords: | Governance, |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:idq:ictduk:17947&r=int |
| By: | Walsh, Tom |
| Abstract: | Through examination of elite-level discourse between 2014 and 2015, this paper argues that the exaggeration of Iranian involvement with the Houthis served to justify the Saudi-led intervention in Yemen. Ironically, this had the effect of benefiting Iran, as Riyadh moved their attention away from Iranian priorities in Syria, undermined their own international credibility and spent billions of dollars on this unwinnable conflict. Iran, Saudi Arabia (KSA) and some Western actors pushed the narrative that the Houthis were deeply connected with the Islamic Republic. While Iranian support was negligible during this period, Iran sought to increase Saudi insecurity through rhetorical support for the Houthis. Riyadh, keen to protect their interests in Yemen, over-exaggerated this connection to justify their airstrikes and blockades, which began with Operation Decisive Storm (ODS) on March 25, 2015. Certain Western actors, sharing similar regional geopolitical priorities, adopted this narrative. This validated their support for the Saudi-led intervention. This, in turn, has had devastating consequences for the people of Yemen. With these dynamics in mind, the paper asks three research questions: Was the Saudi-led over-exaggeration of Iranian involvement successful in securitising ODS to international audiences? Was ‘Iranian involvement’ over-exaggerated? Who ultimately benefited from this narrative?. |
| JEL: | J1 |
| Date: | 2023–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118712&r=int |
| By: | Giovanis, Eleftherios; Akdede, Sacit Hadi |
| Abstract: | In this study, we aim to explore and compare the frequency of attendance and the reasons for non-attendance to cultural activities between natives and first-generation immigrants in thirteen European countries. The empirical analysis relies on data from the special module on cultural participation in the European Union-Income and Living Conditions Survey (EU-SILC) in 2015. We apply the Probit and multinomial Probit models. This study contributes to the literature by exploring the determinants of cultural participation and comparing the frequency of participation in cultural activities between natives and first-generation immigrants. Furthermore, the study explores the reasons for non-participation in cultural activities, highlighting potential differences between countries and between the European Union (EU) and non-EU migrants. The results highlight that social interactions depend on several factors related mainly to the country of destination and employment opportunities and individual factors related to the migrant, including demographic and economic characteristics and the length of residence in the host country. The findings show that the length of residence of immigrants in the host countries is positively correlated with a higher frequency of attendance, indicating that cultural participation can be, by its nature, a long-term process or “experienced” activity. The findings also show that in most cases, migrants do not attend the cultural activities we explore because of financial constraints and not due to lack of interest. Thus, this highlights that the economic integration of migrants could be the primary driver of cultural participation and integration. |
| Keywords: | Cultural Integration; Discrete Choice Models; First-Generation Immigrants; International Migration; Integration; Multiculturalism |
| JEL: | Z10 Z13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117259&r=int |
| By: | Salaheddine Soummane; Aisha Al-Sarihi (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Climate policies are tightening in an effort to curb carbon dioxide emissions. As a result, global oil demand may peak and gradually decline, causing oil prices to fall. A structural fall in oil prices may have serious implications for Middle Eastern oil exporters. Many studies attempt to estimate the economic implications of climate change response measures for oil exporting countries. However, they have not reached a consensus regarding the magnitude of these implications. |
| Keywords: | Air conditioning, Applied general model, Article 6, Blockchain |
| Date: | 2023–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2022-dp16&r=int |
| By: | Adeliyi, Oluwaseyi; Adesoba, Adeola |
| Abstract: | In recent years, Australia-China relations started to decline, after Australia made an inquiry into the origins of COVID-19 (Peters et al. 2021). The involvement of the US in these activities and South China Sea tension has also led the tensions to grow more. Recent studies have analyzed political division on this topic on social media platforms such as Twitter (Stewart et al. 2018). In this paper, we utilize a multimethod analytical framework to analyze geopolitical discourse between Australia and China on YouTube. We analyze over 900 YouTube channels, 2 million comments, and 11, 000 videos from July 2019 through December 2020. Our results show COVID-19 topic had an impact on the geopolitical discourse in the short term, but was suppressed by trade, and defense related topics in the long term. Finally, we studied suspicious channel activity and found Defense Flash News YouTube channel tried to grow their user engagement statistics inorganically. |
| Date: | 2022–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:pe58w&r=int |
| By: | LEE, Eunsuk (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); YOON, Hyemin (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | As the volume of Korea's official development assistance (ODA) expands, the demand for systematic management of evaluations and improvement of their usefulness is increasing. This study focuses on developing evaluation methodology for technical cooperation (TC) which is an important part of Korea’s ODA. Based on the case studies of six multilateral organizations and four bilateral development agencies, we draw lessons for Korean ODA agencies in terms of selection criteria, types, and methodological aspects of evaluation of technical cooperation and propose a four-step project management and evaluation mechanism for TC activities. |
| Keywords: | ODA; Evaluation; Technical Cooperation; Technical Assistance; Evaluation Method |
| Date: | 2023–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_012&r=int |