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on International Trade |
| By: | Chimere O. Iheonu (University of Nigeria, Nsukka, Nigeria); Ekene ThankGod Emeka (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Johannesburg, South Africa); Princewill U. Okwoche (Benue State University, Makurdi, Nigeria) |
| Abstract: | This study complements existing literature by examining the short-run heterogeneous and long-run homogeneous impacts of foreign direct investment (FDI) and international trade on ecological footprints in 37 African countries for the period 1990 to 2019. Utilizing the pooled mean group estimator, our findings show considerable heterogeneity in the impact of FDI and international trade on ecological footprints in the short run. In particular, the findings revealed that while FDI increases ecological footprints in Botswana, Egypt, and Mauritania, it reduces ecological footprints in Algeria, Comoros, Gambia, and Togo. Furthermore, the findings revealed that international trade increases ecological footprints in Cameroon, Cote d'Ivoire, and Eswatini but reduces ecological footprints in Algeria, Mauritania, and Morocco. Nonetheless, the study finds that in the long run, FDI significantly reduces ecological footprints while international trade has no significant influence on the environment. The study further finds economic growth and population to be significant in propping up ecological footprints in the long run. Policy recommendations based on these findings are discussed. |
| Keywords: | Foreign Direct Investment, International Trade; Environmental Sustainability; Ecological Footprints; Pooled Mean Group |
| JEL: | C33 F18 F21 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:23/053&r=int |
| By: | Ajmani, Manmeet |
| Abstract: | Every nation strives to establish its competitiveness in the global agri-food trade. However, defining and quantifying this concept remains a challenge, lacking a universally accepted description or a consolidated metric. Among the prevalent gauges in international research are the Balassa index and its adaptations (such as revealed trade advantage, revealed competitiveness, normalized revealed comparative advantage, and revealed symmetric comparative advantage), alongside diverse indicators tied to exports and imports (like the Grubel-Lloyd index or trade balance index). This comprehensive literature review identifies these metrics and highlights key determinants for bolstering competitiveness in agri-food trade. Foremost among these factors is the presence of supportive legislation and effective trade policies, followed by the production of higher value-added and more sophisticated goods, as well as efficient and profitable manufacturing processes. While the European Union (EU) and its member states feature prominently in the studied materials, the analysis extends to encompass candidate countries and significant EU trade partners including Canada, China, and ASEAN nations. As such, several of these insights could potentially be applied more broadly. |
| Keywords: | Agri-food trade, trade competitiveness, international trade |
| JEL: | F13 F17 O32 |
| Date: | 2023–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118396&r=int |
| By: | Wei Luo; Siyuan Kang; Sheng Hu; Lixian Su; Rui Dai |
| Abstract: | The trade tension between the U.S. and China since 2018 has caused a steady decoupling of the world's two largest economies. The pandemic outbreak in 2020 complicated this process and had numerous unanticipated repercussions. This paper investigates how U.S. importers reacted to the trade war and worldwide lockdowns due to the COVID-19 pandemic. We examine the effects of the two incidents on U.S. imports separately and collectively, with various economic scopes. Our findings uncover intricate trading dynamics among the U.S., China, and Southeast Asia, through which businesses relocated portions of their global supply chain away from China to avoid high tariffs. Our analysis indicates that increased tariffs cause the U.S. to import less from China. Meanwhile, Southeast Asian exporters have integrated more into value chains centered on Chinese suppliers by participating more in assembling and completing products. However, the worldwide lockdowns over pandemic have reversed this trend as, over this period, the U.S. effectively imported more goods directly from China and indirectly through Southeast Asian exporters that imported from China. |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2309.02271&r=int |
| By: | Freeman, Rebecca (CEP); Manova, Kalina (University College London, CEPR and CEP); Prayer, Thomas (University of Cambridge); Sampson, Thomas (London School of Economics, CEPR and CEP) |
| Abstract: | This paper studies the impact of Brexit on the UK’s trade with the EU relative to its trade with the rest of the world. We find no evidence that uncertainty and anticipation effects led to a significant decline in relative UK trade with the EU during the period after the UK voted for Brexit in 2016 and before the change in policy was implemented under the new Trade and Cooperation Agreement (TCA) in 2021. However, the UK’s departure from the EU’s single market and customs union at the start of 2021 caused a major shock to UK-EU trade. We estimate that the new TCA trade relationship led to a sudden and persistent 25% fall in relative UK imports from the EU. In contrast, we find a smaller and only temporary decline in relative UK exports to the EU, but nevertheless a large and sustained drop in the extensive margin of exports, driven by the exit of low-value relationships. The timing and asymmetry of Brexit effects on UK imports and exports is puzzling and provides evidence of important differences in adjustment to integration and disintegration shocks. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bda:wpsmep:wp2022/12&r=int |
| By: | Yeboah, Samuel |
| Abstract: | This analysis delves into the diverse landscape of Foreign Direct Investment (FDI) policies within developing nations and their profound implications for entrepreneurial ecosystems. Through comparative analysis, the study uncovers a range of strategies countries employ, from liberal to restrictive FDI approaches, which significantly impact interactions between foreign investors and local startups, ultimately shaping innovation, growth, and competitiveness in entrepreneurial ecosystems. In some developing nations, liberal FDI policies play a pivotal role, strategically designed to attract foreign capital, technology, and expertise. For instance, Singapore and Ireland have implemented proactive, incentive-driven measures, particularly in high-tech sectors, resulting in thriving entrepreneurial ecosystems integrated into global value chains. These policies foster collaborative environments, granting local startups improved access to capital, markets, and invaluable knowledge from foreign investors. Conversely, other nations adopt more restrictive FDI policies to safeguard strategic sectors and protect domestic enterprises from undue foreign influence. India and China exemplify this approach, erecting regulatory barriers in industries like telecommunications and banking to retain policy autonomy and nurture domestic capabilities. While preserving local interests, these policies inadvertently limit access to FDI benefits, including advanced technologies, skills, and global market connectivity. Governments often utilize incentive schemes such as tax breaks and subsidies to attract FDI, making their countries appealing to foreign investors and providing local startups with essential resources and mentorship, significantly contributing to their growth. However, ownership restrictions, particularly in strategically significant sectors, serve to protect domestic control but may discourage potential investors and hinder collaboration between startups and foreign entities. Striking a balance between preserving sovereignty and promoting global integration becomes a pivotal challenge for these nations. The regulatory environment plays a central role in shaping the relationship between FDI policies and entrepreneurial ecosystems. Favourable regulatory frameworks that encourage competition, safeguard intellectual property and simplify business registration drive innovation and attract FDI, which subsequently benefits startups. Transparent regulations that reduce uncertainty and risks bolster investor confidence, making FDI a potential lifeline for local startups. |
| Keywords: | Entrepreneurial Ecosystems; Comparative Analysis; Liberal FDI Policies; Restrictive FDI Policies; Incentive Schemes; Ownership Restrictions; Regulatory Environment; Innovation; Investor Confidence; Ease of Doing Business; Policy Alignment |
| JEL: | F21 F23 G38 L26 |
| Date: | 2023–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118473&r=int |
| By: | Alejandro G. Graziano; Kyle Handley; Nuno Limão |
| Abstract: | We estimate the impact of trade policy uncertainty (TPU) on CES import price indices, focusing on the implications of Britain's exit from the European Union (Brexit). Our analysis reveals that an increase in the probability of Brexit increases U.K. import price indices by raising the prices of existing products and by reducing product variety from the E.U. We find evidence that the risk of higher import protection from the 2016 referendum increased current import price indices by more than 10%. This amounted to a 2 log point increase in manufactured goods prices and a 0.6 log point decrease in consumers' real income. |
| JEL: | D8 E02 F02 F13 F14 F15 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31600&r=int |
| By: | Mandal, Biswajit; Das, Maitrayee |
| Abstract: | This paper aims to explain that distance may not always be harmful for international trade, unlike the explanations provided by the gravity model. In case of service trade distance may be helpful instead, because of the existence of non-overlapping time zones between two trading countries. So, we will try to examine this phenomenon whether distance is always affecting trade symmetrically. This paper begins by introducing a basic model that examines a two-sector economy and investigates the impact of trade on factor prices and output changes in case of both goods trade and service trade. The findings reveal that in case of service trade, an increase in the geographical distance between trading countries leads to a rise in skilled labour wages, while rent of capital decreases. Consequently, this causes the service sector to expand while the other sector contracts. Conversely, these outcomes are completely reversed in the case of goods trade. Next, the model is expanded to incorporate an informal sector. This extension demonstrates similar effects to those observed in the basic model, but the effects are profound compared to basic model when an informal sector is present. Therefore, our model highlights the contrasting outcomes between goods trade and service trade and emphasizes the intensified effects when an informal sector is taken into account. |
| Keywords: | Trade; Time Zone; Factor prices; Output Changes; Informality |
| JEL: | D24 E26 F1 J3 J31 |
| Date: | 2023–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118256&r=int |
| By: | Yeboah, Samuel |
| Abstract: | This systematic review explores the multifaceted impact of Foreign Direct Investment (FDI) on local startups' access to global markets. FDI plays a pivotal role in facilitating the expansion of local businesses into international markets by offering valuable resources and insights. The review delves into several critical dimensions: Distribution Networks: FDI grants startups access to established distribution networks of multinational corporations (MNCs), providing a channel to reach a broader customer base. It discusses the trade-offs between distribution-oriented and production-oriented FDI, highlighting their effects on startups' global reach. Market Knowledge: Foreign investors bring invaluable market insights and intelligence, aiding startups in understanding customer preferences, cultural nuances, and competitive landscapes. This section explores how market knowledge helps foreign investors overcome the liability of foreignness and enhances their competitiveness and innovation. Brand Visibility: Partnering with well-known foreign corporations enhances startups' credibility and visibility in global markets, leading to increased trust among potential customers. It investigates the determinants of brand visibility and its role in overcoming foreignness. Local Insights: FDI provides startups with access to foreign investors' local expertise, enabling them to tailor their products or services to meet the demands of specific international markets. This paper analyses the sources and determinants of local insights. Through an examination of these dimensions, this systematic review sheds light on the transformative potential of FDI in enabling local startups to access international markets. It also emphasizes the importance of strategic partnerships, knowledge sharing, and the adaptation of strategies for success in global business environments. |
| Keywords: | Global Markets; Distribution Networks; Market Knowledge; Brand Visibility; Local Insights; Startups; International Expansion; Market Entry; Multinational Corporations (MNCs) |
| JEL: | D22 F21 F23 L25 L26 L86 M13 O32 |
| Date: | 2023–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118434&r=int |
| By: | N.M. Odhiambo (University of South Africa) |
| Abstract: | In this study we re-examine the relationship between foreign direct investment (FDI) and economic growth in 27 sub-Saharan African (SSA) countries during the period 1990–2019. Unlike some previous studies, we clustered SSA countries into two groups, namely low-income and middle-income countries. We also employed three panel data techniques in a stepwise fashion, namely the dynamic ordinary least squares (DOLS), the fully modified ordinary least squares (FMOLS), and heterogeneous Granger non-causality approaches. Our results show that while the positive impact of FDI on economic growth is supported by both DOLS and FMOLS techniques in low-income countries, in middle-income countries only the DOLS technique supports this finding. This shows that the impact of FDI may be sensitive to the level of income of the recipient country. Overall, the results show that FDI inflows play a larger role in stimulating economic growth in low-income SSA countries than in middle-income SSA countries. These findings are also corroborated by heterogeneous Granger non-causality results. However, these findings are not surprising, given that many low-income countries tend to be more dependent on inward FDI inflows to stimulate their economic growth than middle-income countries. Policy recommendations are discussed. |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:afa:wpaper:aesri-2022-20&r=int |
| By: | N.M. Odhiambo (University of South Africa); T. Saungweme (University of South Africa) |
| Abstract: | In this study, the relationship between tourism development and trade in 12 sub-Saharan African (SSA) countries is examined during the period 1995-2019. Three proxies of trade are used, namely the total trade, total exports, and total imports of goods and services to examine this linkage, thereby leading to three separate model specifications. A wide range of modern econometric techniques were also employed to examine the relationship between the various proxies of trade and tourist arrivals. These include i) cross-sectional dependence tests based on Breusch-Pagan (1980) LM, Pesaran (2004) scaled LM, Baltagi et al. (2012) bias-corrected scaled LM, and Pesaran (2004) CD; ii) a slope homogeneity test based on Pesaran and Yamagata (2008); iii) an ECM panel cointegration test based on Westerlund (2007); and iv) a heterogeneous panel causality model based on Dumitrescu and Hurlin (2012), among others. Using the dynamic ordinary least squares (DOLS) and the fully modified ordinary least squares (FMOLS), the study found that, overall, international tourism has a positive and significant impact on trade in SSA countries. This finding is also corroborated by the heterogeneous Granger causality test, which found a distinct unidirectional causal flow from international tourism arrivals to trade. The study, therefore, recommends that SSA countries should implement policies aimed at promoting international tourism in order to increase their international trade and boost their overall trade balance. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:afa:wpaper:aesri-2021-08&r=int |
| By: | Di-Comite, Francesco (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)); Pasimeni, Paolo (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)) |
| Abstract: | This paper analyses the economic implications for the European Union (EU) of the Russian invasion of Ukraine, and of the following developments. It illustrates the challenges faced by the European economy at the moment of the invasion and the massive, on-going adjustment since then. The paper starts with a comprehensive description of the structural exposures and dependencies of the EU, first at macroeconomic and then at product level. It then uses high-frequency customs data to track how such exposures and dependencies developed in recent months and how the economy is trying to adjust. At the moment of the invasion, the EU was highly exposed to the import of Russian commodities, notably fossil fuels and critical raw materials, but it has gradually managed to reduce this exposure in the course of 2022. We document a sizeable reduction of EU exports to Russia, due to export restrictions, but at the same time, since imports of energy fossil fuels and critical raw materials were less elastic to prices, and prices for these goods have increased, the value of EU imports from Russia has increased. This has led to the EU accumulating an additional bilateral trade deficit vis-à- vis Russia of roughly €67bn in 2022, compared with the same period in 2021. Such additional trade surplus for Russia corresponds to roughly 3.7% of its GDP and is likely to be one of the driving factors of the strengthening of its currency, the rouble. Nevertheless, in the most recent months, the EU has managed to stop the accumulation of this trade deficit, by reducing imports. The EU was dependent on Russia for a number of critical commodities, including energy products. For the majority of these key industrial inputs, imports from Russia have been falling significantly in the course of the year, signalling a reconfiguration of supply chains in favour of alternative sources. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:bda:wpsmep:wp2022/4&r=int |
| By: | Yun, Jeonghwan (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); CHEONG, Jaewan (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); SHIN, Mingeum (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); KIM, Jegook (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | The Mekong subregion has emerged as a key hub in the global value chain (GVC), driven by a surge in foreign direct invest-ment (FDI). This development is rooted in the Mekong subregion's robust economic growth, positioning it strategically amid the ongoing competition between the United States and China for global hegemony. The RoK recognizes the strategic significance of the Mekong subregion and has embarked on cooperative efforts in this context. We delve into the potential of harnessing the Mekong subregion to enhance RoK's supply chain diversity. While it may pose challenges for the Mekong subregion to promptly function as a target for RoK's supply chain diversifi-cation due to its developmental and infra-structural status, we proactively explore po-tential avenues of RoK-Mekong cooperation to determine feasibility. |
| Keywords: | Mekong; Supply Chains |
| Date: | 2023–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_029&r=int |
| By: | Yeboah Asuamah, Samuel |
| Abstract: | Foreign Direct Investment (FDI) has emerged as a significant driver of skill development and local capacity building within host countries. This systematic review explores the mechanisms through which FDI initiatives contribute to skill enhancement, knowledge transfer, and the overall development of local talent and economies. By examining various channels of knowledge exchange, including training programs, joint ventures, technology licensing, mentorship, research collaborations, and more, this review provides insights into the dynamic synergy created when global expertise meets local talent. The review highlights the multifaceted benefits of FDI for communities, including improved competitiveness, innovation, and sustainable growth. Through a systematic and comprehensive analysis of existing literature, this review sheds light on the pivotal role FDI plays in empowering communities and fostering continuous development. Policymakers, scholars, and practitioners seeking to leverage FDI for local capacity building will find this review to be a valuable resource. |
| Keywords: | Skill Development; Local Capacity Building; Knowledge Transfer; Training Programs; Joint Ventures; Technology Licensing; Mentorship; Research Collaborations; Empowerment; Sustainable Development; Innovation; Global Expertise; Local Talent; Community Development |
| JEL: | F21 F23 H8 I25 O32 O33 O35 O38 |
| Date: | 2023–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118410&r=int |
| By: | Yeboah, Samuel; Boateng Prempeh, Kwadwo |
| Abstract: | This systematic review explores the multifaceted challenges and opportunities presented by Foreign Direct Investment (FDI) inflows for local entrepreneurial development. FDI is known to bring both potential benefits and pitfalls for local startups, and understanding this delicate balance is crucial for sustainable economic growth. Firstly, FDI often ushers in increased competition as well-funded foreign firms enter local markets. While this can hinder local startups' market share, it can also stimulate innovation and efficiency. Secondly, local entrepreneurs relying heavily on FDI face dependency risks, as shifts in foreign investors' priorities or sudden exits can disrupt their operations. Thirdly, FDI can transfer technology and knowledge but also poses the risk of technology leakage, potentially stifling local startups' independent capabilities. Fourthly, asymmetrical power dynamics between foreign investors and local startups can result in unequal partnerships. Lastly, FDI might lead to market fragmentation, overshadowing local players and limiting diversity and competition. Furthermore, cultural differences in corporate cultures and management styles can create collaboration challenges between foreign corporations and local startups. In navigating these challenges, local startups must adopt strategies to differentiate themselves from foreign competitors, negotiate fair partnerships, and foster cross-cultural collaboration. Policymakers also play a crucial role in balancing the benefits and costs of FDI through measures that prevent or mitigate market fragmentation and promote interoperability and harmonization across industries. Understanding the nuanced interplay between FDI and local entrepreneurship is essential for achieving sustainable economic growth and fostering innovation in a globalized world. |
| Keywords: | Foreign Direct Investment (FDI); Local Entrepreneurship; Challenges; Opportunities; Competition; Dependency Risks; Technology Leakage; Power Dynamics; Market Fragmentation; Cultural Challenges; Economic Growth; Innovation; Sustainable Development; Cross-Cultural Collaboration; Market Share |
| JEL: | D22 F21 F23 L20 L26 L53 M21 O16 O33 O57 |
| Date: | 2023–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118359&r=int |
| By: | Alexander Schiersch; Irene Bertschek; Thomas Niebel |
| Abstract: | Our paper contributes to the discussion about Europe’s digital sovereignty. We analyze the relationship between firm performance and the diversification of sourcing countries for imported ICT goods. The analysis is based on administrative data for 3888 German manufacturing firms that imported ICT goods in the years 2010 and 2014. We find that firms that diversify the sourcing of ICT goods across multiple countries perform better than similar firms with a less diversified sourcing structure. This result holds for value added as well as for gross operational surplus as performance measures and for two different indicators of diversification. |
| Keywords: | ICT goods imports, global sourcing, digital sovereignty, firm performance |
| JEL: | F14 F23 L14 L23 D24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2043&r=int |
| By: | Costas Arkolakis; Federico Huneeus; Yuhei Miyauchi |
| Abstract: | We use new theory and data to study how firms endogenously form production networks across regions and countries. Supplier and buyer relationships form depending on firms’ productivity and geographic location. We characterize the normative and positive properties of the spatial distribution of economic activity and welfare in general equilibrium. We calibrate the model using domestic and international firm-to-firm trade data from Chile. Both iceberg trade costs and search and matching frictions are important for aggregate trade flows and production networks. Endogenous formation of production networks leads to larger and more dispersed effects of international and intranational trade cost shocks. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:971&r=int |
| By: | Ding Ding; Yannick Timmer |
| Abstract: | In this paper, we estimate exchange rate elasticities of international tourism. Both the bilateral exchange rate and the U.S. dollar exchange rate relative to tourism origin countries are important drivers of tourism flows. The U.S. dollar exchange rate is more important for tourism destination countries with higher U.S. dollar borrowing, pointing toward a complementarity between U.S. dollar pricing and financing. Country-specific dominant currencies (CSDCs) play only a minor role on average but are important for tourism-dependent countries and those with a high concentration of foreign tourists. Consistent with dominant currency pricing, we also find that local hotel prices do increase strongly when the domestic currency depreciates against the U.S. dollar. The importance of the U.S. dollar exchange rate represents a strong piece of evidence of dominant currency pricing (DCP) in the international trade of services. The results suggest that the benefits of exchange rate flexibility for tourism-dependent countries may be weaker than previously thought and that a broad appreciation of the U.S. dollar is associated with a significant decline in tourism flows globally. |
| Keywords: | Exchange rates; Trade flows; Tourism; Dominant currency pricing |
| JEL: | F31 F14 F41 |
| Date: | 2023–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1378&r=int |
| By: | Yun, Jeonghwan (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | Jang et al. (2022) investigate the recent shifts in the European Union's medium- to long-term trade strategies, which have evolved in response to a rapidly changing global trade landscape. We closely examine the policy domains currently in the EU's spotlight, including supply chain resilience, digitalization, tackling climate change, and public health crisis management. Another objective of this study is to identify opportunities for cooperation between Korea and the EU in the above-mentioned areas. Our recommendations include fostering partnerships in Net-zero technology development and multilateral climate discussions, modernizing digital trade agreements, and enhancing pharmaceutical cooperation. |
| Keywords: | Korea-EU cooperation; supply chain; climate change; digitalization |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_031&r=int |
| By: | Valentin Lang; Stephan A. Schneider |
| Abstract: | During recent waves of immigration, support for nationalist parties has increased in many countries, but the political backlash against immigration differs strongly across regions. We identify an underlying cause for these differences by studying how local experience with immigration shapes nationalist sentiment and electoral reactions to current immigration in the long run. Our analysis draws on a natural experiment in post-war Germany, where a short-term demarcation of occupation zones led to a discontinuous and quasi-exogenous distribution of forced migrants. Across this border, the population share of migrants differed by 12 percentage points. Applying a spatial regression discontinuity design, we combine historical migration records with panel data at the municipality level for the 1925-2021 period. The results reveal a substantially weaker backlash against contemporary immigration in regions where more migrants settled in the late 1940s. This historical experience reduces the nationalist backlash by about 20 percent. High levels of immigration activate this effect over a period of at least 70 years. To study the mechanisms, we conduct a geocoded survey with a randomized experiment and open-ended questions in the study region. We find that both family history and local collective memory of successful immigrant integration contribute to these effects. The results of the randomized experiment are consistent with the natural experiment, revealing how experience with immigration can curb nationalism. |
| Keywords: | migration, nationalism, persistence, voting behavior |
| JEL: | D72 O15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10621&r=int |
| By: | Gustavo González |
| Abstract: | This paper constructs and calibrates a parsimonious two-country dynamic general equilibrium model of entrepreneurship and migration. Countries differ in their TFP and degree of financial frictions. The model is calibrated to replicate the economic and migratory situation of the United States and the rest of the world. I evaluate the impact of changing migration barriers on GDP per capita, average firms productivity, business ownership rates, and consumption on both regions. I find that migration barriers have a non-monotone impact on the average productivity of the host coun-try, depending this on the entrepreneurial skill and mass of people that move in and are displaced by entrants. A migration policy that favors the entry of foreign people with a higher entrepreneurial drive would reduce profits of native entrepreneurs, but would make the economy more efficient and would lift the welfare of workers of the host economy. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:985&r=int |
| By: | Vesa Pursiainen (University of St. Gallen; Swiss Finance Institute); Hanwen Sun (University of Bath); Yue Xiang (University of Bath) |
| Abstract: | A firm’s exposure to competition is negatively associated with its ESG performance. We measure exposure to domestic product market competition by product market fluidity, based on product text descriptions, and find that higher fluidity - indicating higher product market threats - is associated with lower ESG scores. Fluidity matters more for financially constrained firms, in capital-intensive industries, and for costly activities. Increasing exposure to Chinese import competition is associated with reduction in ESG scores. This effect of import competition is stronger for firms less exposed to domestic competition. Local climate attitudes and social norms moderate the effect of competitive pressure. |
| Keywords: | competition, product market threats, ESG, sustainability, international trade |
| JEL: | D40 F18 F64 G30 M14 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2369&r=int |
| By: | Park, Youngseok (Pukyong National University) |
| Abstract: | 최근 전 세계적으로 공공부문에서 ‘경제안보(economic security)’라는 개념이 대두되고 있다. 미중 간 무역 분쟁은 최근 경제안보의 개념과 관련 정책이 논의되기 시작한 핵심 요인이라고 볼 수 있다. 본고는 2016년 무렵 이후 현재까지 지속되고 있는 미중 분쟁의 원인을 설명할 수 있는 논리를 정치경제학적 시각에서 찾아보면서 전 세계적으로 경제안보 개념이 대두되고 있는 배경에 대한 경제학적인 고찰을 제공하고자 한다. (In this paper, I suggest a microeconomic foundation on the recent conflict between the United States and China. In addition, I review some formal models of international conflicts that examine the relationship between international conflicts and economic interdependence. Furthermore, I present a simple bargaining model of economic sanctions against a dictatorship country, which are increasingly employed around the world in recent years.) |
| Keywords: | Economic security; international trade; economic security; international conflict; economic interdependence; international trade; political economy |
| Date: | 2023–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2022_017&r=int |
| By: | José De Gregorio; Pablo García; Emiliano Luttini; Marco Rojas |
| Abstract: | We revisit a central question for international macroeconomics: The response of export prices and quantities to movements in the exchange rate (ER). We use a comprehensive dataset for Chile and study how the effects vary over time with the currency of invoicing and the destination of exports. For prices, we find that the short-run effects of bilateral ER movements vanish when we control for U.S. dollar ER, which supports the dominant currency paradigm. The longer the horizon, the larger the role is played by bilateral ER movements, which lends support to producer currency pricing. The dynamics do not depend on the invoicing currency. We find consistent results for quantities, supporting the view that bilateral exchange rate movements contribute to macroeconomic adjustment through exports. We also find that U.S. dollar fluctuations, holding bilateral exchange rates constant, show results suggestive of relevant supply and demand effects. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:970&r=int |
| By: | Gabriela Contreras |
| Abstract: | In this study, I investigate the response of commodity exporters to the global financial cycle and how it depends on the type of commodity exported. I first show that following an upsurge in global financial risk, the prices of hard commodities (such as energy, metals, and minerals) decline considerably more than soft commodities. Through a panel SVAR analysis, I compare the reactions of hard and soft commodity exporters to an unexpected increase in global financial risk. My findings reveal that hard commodity exporters experience a more significant decline in their commodity terms of trade, a higher increase in their country spread, and a more substantial reduction in output. I set up a small open economy model to explore the effects of global risk shocks on country spreads, depending on the type of commodities an economy exports. The results of this model suggest that global risk shocks are primarily transmitted through commodity prices, which means that hard commodity exporters are impacted more severely due to the composition of their exports. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:989&r=int |
| By: | Aliakbar Akbaritabar (Max Planck Institute for Demographic Research, Rostock, Germany); Maciej J. Dańko (Max Planck Institute for Demographic Research, Rostock, Germany); Xinyi Zhao (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | The migration of scholars has been often studied across countries, however, these studies have rarely focused on sub-national regions. We used data on 28+ million Scopus publications of 8+ million unique authors and geo-coded the affiliation addresses. Our results show that by focusing on the sub-national regions, the share of mobile scholars increases from 8% to 12.4%. We found that in all continents when a sub-national region is attractive for international migrants, it is also attractive for internal ones. The reverse is not true, though. For most continents, a depopulation is happening where scholars move abroad and their position is filled by scholars arriving from other sub-national regions inside the country. In the US, as an example, states in the mid-eastern area have the highest net rate of scholars leaving for other destinations inside the US, mostly on the west coast. In Europe, multiple countries show a similar trend that more developed provinces receive scholars from internal origins and send scholars to international destinations. Our results have implications for the global circulation of academic talent by adding more nuance to the generally accepted image of brain drain and brain gain. We highlight the interrelation between internal and international migration, specifically for regions constantly losing their academic workforce. |
| Keywords: | World, internal migration, international migration, migration |
| JEL: | J1 Z0 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2023-038&r=int |
| By: | Lee E. Ohanian; Paulina Restrepo-Echavarria; Diana Van Patten; Mark L.J. Wright |
| Abstract: | This paper quantifies the positive and normative impact of Bretton Woods capital controls on global and regional economic activity. A three-region DSGE capital flows accounting framework consisting of the U.S., Western Europe, and the Rest of the World (ROW) is developed to quantify capital controls and evaluate their impact on the world economy. We find these controls had large effects. Counterfactual analysis show world output would have been 0:5 percent higher had there been perfect capital mobility, with substantial capital flowing from the ROW to the U.S. Bretton Woods capital controls raised welfare substantially in the ROW, but at the expense of much lower U.S. welfare. Given the U.S.’s goal of keeping capital within these countries to preserve their stability during this period, we interpret lower U.S. welfare due to Bretton Woods as the implicit value the U.S. placed on preserving geopolitical stability in ally countries during the Cold War. |
| JEL: | E0 F30 P0 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31595&r=int |
| By: | Arellano-Bover, Jaime (Yale University); San, Shmuel (The Hebrew University of Jerusalem) |
| Abstract: | We study how job mobility, firms, and firm-ladder climbing can shape immigrants' labor market success. Our context is the migration of former Soviet Union Jews to Israel during the 1990s. This setting presents unique institutional features—including the lack of barriers posed by migration regulations—and rich data availability. Differential sorting across firms and differential pay-setting within firms both explain important shares of immigrant-native wage gap levels and dynamics. Immigrants are persistently more mobile than natives and faster at climbing the firm ladder. We uncover a novel, sizable job utility immigrant-native gap when incorporating non-wage amenities into the analysis. |
| Keywords: | immigrants, firms, job mobility, firm ladder, assimilation |
| JEL: | J31 J61 F22 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16389&r=int |
| By: | Joana Andrade Vicente |
| Abstract: | In this paper we conduct an empirical analysis to assess the redistributional impact of implementing a Formulary Apportionment approach in the European Union, compared to the current system based on the separate entity approach, aiming to contribute with databased evidence to the ongoing sensitive political debate about the much-needed change in the international (and, specifically, European) corporate tax regime. We update and extend prior research to estimate which Member States will likely gain and lose in terms of corporate tax base and revenues from the implementation of the ‘Business in Europe: Framework for Income Taxation’ (BEFIT) initiative, planned to be soon launched by the European Commission. Using recently published Country-by-Country Reporting data released by the Internal Revenue Service, our findings show that the redistributional impact among Member States would be significant. Results are in line with international tax literature: larger economies with higher tax rates (such as Germany and France) would experience a considerable tax base increase, transferred from smaller countries with lower tax rates (like the Netherlands and Ireland), as multinational enterprises would have more restricted opportunities to engage in artificial profit shifting activities. |
| Keywords: | Country-by-Country Reporting; European Union; Formulary Apportionment; profit shifting; United States multinational enterprises. |
| JEL: | F23 H25 H26 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02862023&r=int |
| By: | Benoit, Florence (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)); Connell-Garcia, William (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)); Herghelegiu, Cristina (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)); Pasimeni, Paolo (European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)) |
| Abstract: | There is mounting evidence of supply chains distress across different industrial ecosystems affecting the production capacity of firms and indirectly creating price pressures. At the same time, the need of policy makers to monitor and understand the underlying factors is also more pressing. This paper, therefore, proposes a methodology to detect and analyse supply chains disruptions. In a first step, it applies a new indicator based on business surveys to estimate at sectoral level the relative importance of supply constraints versus demand expansion in determining price pressures. This information is summarised in the form of an “alert system” that can be updated on a regular basis. In a second step, relying on two case studies on wood and magnesium, where price distress and shortages have been observed, an econometric model is built. This investigates the relation between the import price variation and several dependency indicators, as well as long-term demand variations in order to understand the likely determinants of price pressures associated with shortages. The results suggest that higher reliance on foreign imports combined with higher concentration in supply chains are the two key factors explaining price pressures at product level. In addition, we find that products where there is a strong structural demand increase are more likely to experience price pressures. These findings can shed light on the determinants of ongoing supply chains disrutpions and specific price pressures, thereby helping policy makers design appropriate responses. |
| Keywords: | International supply chains, price pressures, shortages, disruptions, trade data |
| JEL: | F13 F14 F60 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:bda:wpsmep:wp2022/1&r=int |
| By: | Serenella Caravella; Francesco Crespi; Giacomo Cucignatto; Dario Guarascio |
| Abstract: | This work sheds new light on the Photovoltaic Supply Chain (PVSC), providing fresh evidence on structural dependencies (SDs) and (asymmetrically distributed) technological capabilities. Bridging the perspectives of 'technological sovereignty' and 'strategic autonomy', a number of contributions are provided. First, we carry out a fine-grained mapping of the PVSC, combining trade and patent data. Second, we assess the long-term evolution of trade and technological hierarchies, documenting processes of polarization and growing SDs. Third, we zoom-in on critical PV areas (i.e. products and related technologies), providing a 'strategic intelligence' activity which may prove useful for tailoring trade, industrial and innovation policies. Fourth, we explore the relationship between technological specialization and productive capabilities showing that, in the upstream segment, reinforcing the former may help mitigating SDs. |
| Keywords: | Technological sovereignty; Strategic dependency; Photovoltaic industry; Trade; Patents. |
| Date: | 2023–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2023/32&r=int |
| By: | McEvoy, David; McGinty, Matthew; Cherry, Todd; Kroll, Stephan |
| Abstract: | The possibility of overshooting global emissions targets has triggered a public debate about the role solar geoengineering (SGE) - using technologies to reflect solar radiation away from Earth - may play in managing climate change. One major concern is that SGE technologies are relatively cheap, and could potentially be deployed by a single nation (the “free driver”) that could effectively control the global climate. Another concern is that SGE opportunities may alter countries’ incentives to cooperate on abatement. Here we develop a game-theoretic model to analyze how opportunities to deploy SGE impact global abatement and the effectiveness of international environmental agreements (IEAs) on climate change. We show that non-cooperative abatement levels may increase or decrease under the threat of SGE, depending on how damaging the free-driver’s level of deployment is on others. We also show the stability of IEAs that govern abatement is challenged by two competing strategic incentives. One is a familiar free-rider incentive, which is the benefit a country earns by leaving an agreement and lowering its abatement. The other incentive is the benefit a country earns by joining an agreement and increasing abatement in order to motivate the free-driver to reduce its level of deployment. We introduce the term anti-driver to describe this second incentive. Ultimately, we find that if the anti-driver incentives are high enough, the threat of SGE can expand both the depth (i.e., abatement level) and breadth (i.e., participation level) of stable IEAs compared to a world without SGE. |
| Date: | 2023–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-23-36&r=int |