nep-int New Economics Papers
on International Trade
Issue of 2023‒10‒09
33 papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Supply Chain Adjustments to Tariff Shocks: Evidence from Firm Trade Linkages in the 2018-2019 U.S. Trade War By Kyle Handley; Fariha Kamal; Ryan Monarch
  2. The US-China Trade War and the Relocation of Global Value Chains to Mexico By Hâle Utar; Alfonso Cebreros Zurita; Luis Bernardo Torres Ruiz; Hale Utar
  3. Do international investment and trade flows show any signs of fragmentation? By Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
  4. 국경간 전자상거래가 글로벌 가치사슬에 미치는 영향(The Role of Cross-Border e-Commerce in Shaping Global Value Chains) By Yea, Sangjun; Kim, Hyuk-Hwang; Keum, Hyeyoon; Lee, Seungrae
  5. A Theory of Trade Policy Transitions By Renee Bowen; J. Lawrence Broz; B. Peter Rosendorff
  6. No 22-27: 미·중 전략 경쟁 시대 글로벌 기업의 대응과 중국진출 한국기업에 대한 시사점(Response to U.S.-China Competition by Multinational Companies and Implications for Korean Companies in China) By Hyun, Sang Baek; Moon, Jiyoung; Park, Minsuk; Oh, Jonghyuk; Oh, Yun Mi
  7. Global Supply Chains: The Looming “Great Reallocation” By Laura Alfaro; Davin Chor
  8. Firm Export Dynamics in Interdependent Markets By Alonso Alfaro-Urena; Juanma Castro-Vincenzi; Sebastian Fanelli; Eduardo Morales
  9. India's rice export restrictions and BIMSTEC countries: Implications and recommendations By Kamar, Abul; Roy, Devesh; Pradhan, Mamata; Saroj, Sunil
  10. "Navigating Global Markets: The Impact of FDI on Startups' Access to Insights, Networks, and Brand Visibility" By Yeboah, Samuel
  11. Digital intensity, trade costs and exports' quality upgrading By Raphaël Chiappini; Cyrielle Gaglio
  12. 국제사회의 성평등 무역규범 도입 현황과 한국의 정책과제(Introduction of the ‘Trade and Gender’ Rules and its Policy Implications) By Oh, Soo Hyun; Ko, Bomin
  13. Implications of the Russian Invasion on the Logistical Competition for Corn Shipments from the United States and Ukraine By Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
  14. Policies at the End of the Global Value Chain Rainbow: What Has the World Bank Discovered? By Xiaolun Sun; Shahid Yusuf
  15. "The Dual Nature of FDI: Boosting Local Startups and SMEs While Posing Challenges" By Gyan, Sylvester; James Nyarkoh, Bright; Yeboah, Samuel
  16. A Sourcing Risk Index for U.S. Manufacturing Industries By Andrea De Michelis; Mariano A. Somale
  17. 외국인 직접투자가 베트남의 성별 임금 격차에 미치는 영향과 시사점(Foreign Direct Investment and Gender Wage Gap: Vietnamese Evidence) By Kim, Jegook
  18. "Empowering Communities: A Systematic Review of FDI Initiatives for Skill Development and Local Capacity Building" By Yeboah, Samuel
  19. The Impact of Foreign Capital Inflows on Poverty in Vietnam: An Empirical Investigation By MT Musakwa; N.M. Odhiambo
  20. The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates By Michael A. Clemens
  21. "Harmonizing FDI and Local Entrepreneurship: Strategies for Inclusive Growth" By Yeboah, Samuel; Gyan, Sylvester; James, Bright
  22. The Effect of Immigration Policy on Founding Location Choice: Evidence from Canada's Start-up Visa Program By Saerom (Ronnie) Lee; Britta Glennon
  23. Time to say goodbye? The impact of environmental regulation on foreign divestment By Mao, Haiou; Görg, Holger; Fang, Guopei
  24. Global Capital Allocation By Sergio Florez-Orrego; Matteo Maggiori; Jesse Schreger; Ziwen Sun; Serdil Tinda
  25. The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery By Michael A. Clemens; Ethan G. Lewis
  26. Replication of Dickens (2022) "Understanding Ethnolinguistic Differences: The Roles of Geography and Trade" By Gonzalez, Javier; Özak, Ömer
  27. Global supply chain interdependence and shock amplification – evidence from Covid lockdowns By Sally Chen; Eric Tsang; Leanne Si Ying Zhang
  28. Technological Sovereignty and Strategic Dependencies: The case of the Photovoltaic Supply Chain By Caravella, Serenella; Crespi, Francesco; Cucignatto, Giacomo; Guarascio, Dario
  29. Strengthening Bangladesh-Japan Partnership Through Enhanced Trade, Investment, and Technological Collaboration By Khondaker Golam Moazzem; Fahmida Khatun; Syed Yusuf Saadat; Kashfia Ashraf; Afrin Mahbub
  30. Deconstructing the Cartography of Sino-African Relations : the Case of Ports By Xavier Aurégan
  31. Review of the OECD Recommendation on Cross-Border Co-operation in the Enforcement of Laws Protecting Privacy By OECD
  32. How authoritarian regimes counter international sanctions pressure By von Soest, Christian
  33. Scenarios for Future Global Growth to 2050 By Charles Kenny; Zack Gehan

  1. By: Kyle Handley; Fariha Kamal; Ryan Monarch
    Abstract: We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer–foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019.
    JEL: F1 F13 F14
    Date: 2023–08
  2. By: Hâle Utar; Alfonso Cebreros Zurita; Luis Bernardo Torres Ruiz; Hale Utar
    Abstract: Did the 2018/19 US-China trade war trigger adjustment of Global Value Chains (GVCs) and nearshoring to Mexico? We address this question with confidential longitudinal firm-level trade data from Mexico that covers the universe of international trade transactions over 2015-2021. By merging the firm-level customs data with a registry of GVC firms and constructing firm-level measures of trade policy exposures based on firms’ pre-shock trade at the level of HS 6-digit products-destination pairs, we show that increased Chinese import protection in the US has a significant positive impact on Mexican firms’ trade with the US, and this positive impact is entirely driven by GVC firms, and especially those in skill-intensive manufacturing industries. The nature of the impact of the heightened Chinese import tariffs on GVC firms’ sourcing suggests a rise in GVC activities in Mexico with linkages to Asian and US-based GVCs. Our analysis also reveals increased net exports and product offerings of Mexican GVC firms in response to the heightened Chinese import protection in the US, suggesting increased domestic activities in Mexico. However, we also document a negative impact of the retaliatory tariffs of China, primarily affecting export services and a counterbalancing negative effect of the US tariffs via GVC firms’ inputs from China, highlighting the complex dynamics at play. Overall, our findings show a reorganization of GVCs towards Mexico as a consequence of the trade war and provide evidence for the role of trade policy in reshaping GVCs.
    Keywords: trade war, GVCs, nearshoring, Mexico, US, China
    JEL: F13 F14 F23 F61 F68
    Date: 2023
  3. By: Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka
    Abstract: This paper utilizes available aggregate country-level data, as well as bilateral trade and investment data, to identify signs of fragmentation in trade and investment patterns among ten major trading countries or regional trading blocks. We compare the trade and investment trends in the years during the US-China trade war and increase in geopolitical tensions (2018-2021) against the years preceding the trade war (2014-2017). Our analysis generally corroborates findings in the existing literature. Bilateral flows between the US and China have been damaged, but there is little evidence of wider fragmentation or that the world is splitting into competing spheres. Even focusing on technologyintensive manufactures that are increasingly subject to trade restrictions, we find no evidence of broad fragmentation. Our analysis does reveal, however, shifts in global trade and FDI, particularly towards Central and Eastern Europe (CEE) and ASEAN countries. This may reflect a partial reshuffling of global value chains that is a natural outcome of favorable developments in these regions, as well as rising production costs in China. Such shifts do not necessarily reflect global fragmentation driven by geoeconomics factors.
    Keywords: Global trade, foreign direct investments, fragmentation
    Date: 2023
    Abstract: 미치는 영향을 파악하기 위한 종합적인 연구 결과를 담고 있다. 기업과 국가 수준의 실증 분석을 통해 전자상거래의 참여 또는 활성화가 기업의 가치사슬 참여와 국가별 가치사슬 참여도 지수에 미치는 영향을 알아보고, 이러한 결과를 뒷받침할 수 있도록 전자상거래와 중간재 교역에 관한 새로운 이론 모형을 제시한다. 또한 분석 결과를 바탕으로 전자상거래와 글로벌 가치사슬에 대한 정책적 시사점을 도출한다. The continuous development of the digital economy has led to a rising volume of e-commerce. From 2014 to 2020, global B2C e-commerce sales witnessed a yearly increase of 21%, while B2B e-commerce transactions grew by 16% annually from 2014 to 2019. As e-commerce gains ground rapidly, its impact extends to international trade as well. China, being the world’s largest trade partner, experienced an annual increase of 18% in cross-border B2B e-commerce since 2016. With the long-term global trend of digital transformation, e-commerce is expected to continue growing, and cross-border e-commerce will play a significant role in global trade. This study analyzes the economic impacts of expanding cross-border e-commerce on global trade, with a particular emphasis on intermediate goods trade and global value chains. Chapter 2 explores recent trends in e-commerce and global value chains (GVCs). According to the 2021 data from UNCTAD, total global e-commerce sales reached approximately $26.7 trillion in 2019, with 81.7% attributed to B2B transactions and the remainder to B2C transactions. The United States, Japan, China, and South Korea emerged as the leading countries, contributing the largest share of total e-commerce sales. Among these countries, B2B e-commerce sales accounted for over 85% of total e-commerce sales in the United States, Japan, and South Korea, whereas in China, it constituted only 41%. Notably, various metrics related to B2C e-commerce, such as retail e-commerce sales, the number of global digital shoppers, e-commerce’s share of total retail sales, and user penetration, experienced significant growth during the COVID-19 pandemic. In contrast, the size of the B2B e-commerce market, as measured by total merchandise value, has experienced double-digit growth since 2016, but in 2020, the pandemic slowed the year-over-year growth rate. (the rest omitted)
    Keywords: E-commerce; trade structure; cross-border e-commerce; global value chain
    Date: 2022–12–30
  5. By: Renee Bowen; J. Lawrence Broz; B. Peter Rosendorff
    Abstract: Trade policy is set by domestic political bargaining between globalists and protectionists, representing owners of factors specific to export and import-competing sectors respectively. Consistent with the post-Civil War Era of Restriction, protectionists implement high tariffs when status quo tariffs are low. When status quo tariffs are high, reciprocal free trade combined with domestic transfers to protectionists are implemented, explaining the 1930s Era of Reciprocity with Re- distribution. Consensus emerges for Retreat from free trade when imports are high and domestic transfers are low, suggesting that US protectionist turn in the late 2010s was in part due to low levels of social transfers.
    JEL: B27 F13 P0 P11
    Date: 2023–09
    Abstract: 본 보고서는 미·중 전략 경쟁 시대 글로벌 기업의 대응전략을 살펴보고, 중국진출 한국기업에 주는 시사점을 도출하였다. 미·중 분쟁과 공급망 재편에 대응하기 위한 글로벌 기업의 대중국 전략 변화, 경영실태 및 유형별 사례를 분석하였다. 이러한 글로벌 기업의 대응과 중국진출 한국 제조업체의 실태조사 결과를 종합하여 시사점을 도출하였다. This report examines how multinational companies in China are responding to the intensifying strategic competition between the U.S. and China, and draws implications for Korean companies in China. With the integration of resources and markets around the world sparked by the trend of globalization, multinational companies have continued to grow at a rapid pace. In particular, global manufacturers have maintained their competitiveness by distributing resources more efficiently while establishing a global value chain with China as their main production hub. However, measures taken by the U.S. to block China’s access to technology and supply chains in some high-tech industries have prompted discussions on reorganization of the global supply chain, placing these multinational companies in an uncertain situation concerning their operations in China. At a time when competition between the U.S. and China is intensifying, it is necessary to look at the response strategies of global companies that have entered China and seek effective countermeasures for Korean companies. Chapter 2 examines the changes in the Chinese government’s foreign capital attraction policy and the current status of foreign direct investment (FDI) in China. Under its “dual circulation” strategy, China is responding to U.S. control measures and expanding foreign capital attraction in the service and high-tech manufacturing sectors necessary for China’s industrial advancement. In particular, the U.S.-China competition has led the Chinese government to expand its efforts to attract foreign capital through more preferential policies in high-tech manufacturing sectors, where the U.S. has concentrated its blocking measures. On the other hand, due to stricter labor and environmental regulations, and China’s establishment of an independent supply chain, the business environment of multinational companies in China is deteriorating as systems and laws related to economic security are undergoing transformation. he trend of foreign investment seen through Chinese FDI statistics indicates that, despite the U.S. ramping up efforts to contain China, the inflow of foreign investment is steadily increasing, especially in the service and high-tech manufacturing sectors that the Chinese government hopes to foster. (the rest omitted)
    Keywords: Economic cooperation; corporate management; era of strategic competition between the US and China; global companies; Korean companies entering China
    Date: 2022–12–30
  7. By: Laura Alfaro; Davin Chor
    Abstract: Global supply chains have come under unprecedented stress as a result of US-China trade tensions, the Covid-19 pandemic, and geopolitical shocks. We document shifts in the pattern of US participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming “great reallocation” in supply chain activity: Direct US sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notably: Mexico) gaining in import share. The production line positioning of the US’ imports has also become more upstream, which is indicative of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: It is unclear if these measures will reduce US dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.
    JEL: F0 F1
    Date: 2023–09
  8. By: Alonso Alfaro-Urena; Juanma Castro-Vincenzi; Sebastian Fanelli; Eduardo Morales
    Abstract: We estimate a model of firm export dynamics featuring cross-country complementarities. The firm decides where to export by solving a dynamic combinatorial discrete choice problem, for which we develop a solution algorithm that overcomes the computational challenges inherent to the large dimensionality of its state space and choice set. According to our estimated model, firms enjoy cost reductions when exporting to countries geographically or linguistically close to each other, or that share deep trade agreements; and countries, especially small ones, sharing these traits with attractive destinations receive significantly more exports than in the absence of complementarities.
    JEL: F12 F13 F14
    Date: 2023–08
  9. By: Kamar, Abul; Roy, Devesh; Pradhan, Mamata; Saroj, Sunil
    Abstract: The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) brings together five South Asian countries (Bangladesh, Bhutan, India, Nepal, and Sri Lanka) and two Southeast Asian countries (Myanmar and Thailand). Recent events have raised global concerns on food security, including for BIMSTEC countries; these events include Russia’s withdrawal from the Black Sea Grain Initiative with Ukraine, India’s prohibition on the export of non-basmati white rice, and its 20 percent export duty on parboiled rice. This policy note spells out the likely impact of one of these events, that is, India’s restrictions on rice exports to its fellow BIMSTEC nations. Trade moves food from surplus to deficit regions and hence is crucial for maintaining a stable food supply. Historically, the global supply of cereals has been stable (Bradford et al. 2022); this implies that trade (or the lack of it) can be directly mapped onto area-specific food insecurity. At the same time, shocks leading to trade disruption can pose serious challenges, particularly for countries with high import penetration in food.
    Keywords: INDIA; SOUTH ASIA; ASIA; BANGLADESH; BHUTAN; INDIA; NEPAL; SRI LANKA; trade; food security; exports; rice; cereals; shocks; imports; trade barriers; Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)
    Date: 2023
  10. 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
  11. By: Raphaël Chiappini (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Cyrielle Gaglio (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: his paper studies the relationships between digitalisation, trade costs, quality upgrading and trade flows, using an extended version of a gravity model. Based on information from various sources of data, we estimate these relationships sequentially for a sample of 18 manufacturing and 14 service sectors in 40 countries over the period 2000–2014. Using input–output tables from World Input–Output Database, we define an original measure of digitalisation at the country-sector level that reflects the use of digital inputs into a country's production function. Using trade databases from the CEPII and OECD, we estimate a series of gravity models of trade augmented with this measure of digitalisation. Our results show that sectoral digital intensity positively affects sectoral exports. We provide evidence that this result is not ruled out by other possible factors, such as internet adoption or participation in a global value chain. A heterogeneous analysis also reveals that the effect of digital intensity is stronger for manufacturing trade and for trade between emerging economies. We explore two possible mechanisms explaining this positive relationship. First, we find that digital intensity facilitates trade between countries by reducing communication and transport costs. Second, we show that digital intensity improves the quality of exported products.
    Keywords: Digital intensity, gravity model, Export upgrading
    Date: 2023–06–21
    Abstract: 본 연구에서는 다자체제와 지역무역협정에서의 성평등 무역규범 논의를 조사하였다. ‘무역과 성평등’ 규범이 조항에서 챕터로 확대되고 이후 단독 약정으로 진화하는 형태에 대해 살펴보며, 각 무역협정 내 포함된 성평등 규범의 내용을 분석한다. 또한 우리나라 최초로 FTA 내 성평등 챕터의 도입을 앞두고 있는 상황에서 협상전략 측면의 시사점을 제시하고, 나아가 여성을 고려한 통상정책 전반에 대한 시사점을 제시한다.(This study examines the latest standard linking trade and gender and suggests policy implications as Korea prepares to introduce the first gender chapter in an FTA. Inclusive growth or sustainable growth approach, an alternative to the growing inequalities that have emerged during globalization and trade expansion, is also applicable to trade and women. The discussion on trade and gender is based on the idea that the impact of trade may differ by gender. Factors that prevent women from reaping the benefits of trade include the existence of unique barriers to trade for women; the low level of direct participation in trade by the service sector, where women predominantly work; and the generally small size of firms worked in or owned by women. Therefore, there is a need to elaborate trade policies to provide opportunities for women to participate in trade and to ensure that women share in the benefits of trade, which will lead to quantitative and qualitative economic growth. In response, the WTO adopted ‘the Buenos Aires Declaration on Trade and Women’s Economic Empowerment’ at its 11th Ministerial Conference in 2017, established voluntary reporting in the WTO’s Trade Policy Review Process. WTO, through an informal working group and a dedicated unit on trade and gender, is actively engaged in discussions on women’s empowerment through trade. In FTAs, provisions on ‘trade and gender’ have evolved as follows. The gender standard was first included as a few articles in other chapters, such as labor and development, and then in the late 2010s, as Chile, Canada and others became active international advocates on the issues, a chapter on trade and gender was included in FTAs. In 2020, Chile, Canada, and New Zealand agreed to the Global Trade and Gender Arrangement(GTAGA), which provides a stand-alone text for a trade and gender rules. The ‘Trade and Gender’ chapter in an FTA consists of four main types of provisions. These are: general provisions, provisions citing international agreements, provisions relating to cooperation activities, and provisions on institutional arrangements.)(the rest omitted)
    Keywords: Trade policy; economic growth; trade and women; trade and gender; gender equality; gender norms; free trade agreement
    Date: 2023–05–06
  13. By: Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
    Abstract: The Russian invasion of Ukraine disrupted the grain flows from that region and worldwide. These changes are critical due to the war’s influence on logistical costs, routes and capacities. As a result of the invasion, Ukraine has evolved from having some of the lowest logistical costs in the world to having the highest logistical cost. Logistics are critical for international competitiveness in commodities, and due to the invasion, these functions have been severely affected. Essential features for a logistical competition include internal logistical functions and costs, quality, port capacity and ocean shipping costs, each compounded by seasonal demands. This paper’s purpose is to analyze the effects of the Russian invasion on the logistical functions and the costs for corn exports from Ukraine and its competitors using an optimized Monte Carlo simulation model. The findings indicate that before the invasion, Ukraine had logistical advantages for shipments to the European Union (EU) and was highly competitive in Indonesia and China; the United States had a logistical cost advantage over Ukraine to serve China, South Korea (from the U.S. Gulf) and Japan (from the Pacific Northwest (PNW)). The changes due to the invasion are substantial. Most important is the radical increase in shipping costs from Ukraine, reduced port capacity and export supplies. However, concurrent with the invasion were changes in some critical trade and marketing policies, thus influencing the international competition for corn.
    Keywords: Crop Production/Industries, International Development, International Relations/Trade
    Date: 2023–09–22
  14. By: Xiaolun Sun (Independent Evaluation Group of the World Bank Group); Shahid Yusuf (Growth Dialogue; Center for Global Development; GW Institute of Korean Studies)
    Abstract: The concept of global value chains (GVCs) has become a workhorse of trade analytics ever since it was identified around the turn of the century. By showing empirically how value addition is distributed across trading economies, it provides a better handle on the contribution of each country as goods crisscross international borders in the production process. The concept was quickly adopted by the World Bank Group—and other international financial institutions (IFIs)—and has become a fixture of country diagnostics. In fact, the disruption caused by the COVID-19 shock made GVCs something of a cause célèbre. But this paper argues that conceptual attractions aside, the use of GVCs for analytic purposes has not enlarged the policy toolkit, expanded the spectrum of usable policies, or enhanced their efficacy. Especially in low- and lower-middle-income countries, policymakers are no better equipped to promote development export-led or other. Based on its dealings with four countries—Bangladesh, Côte d’Ivoire, Ethiopia, and Vietnam—each of which is participating in one or multiple GVCs, this paper shows that the World Bank’s recommendations are no different from ones that were the norm in pre-GVC times. To paraphrase Robert Solow, we see GVCs everywhere except in the policy menu. Implementing conventional policies more effectively is what counts.
    Date: 2023–06–29
  15. By: Gyan, Sylvester; James Nyarkoh, Bright; Yeboah, Samuel
    Abstract: This systematic review delves into the multifaceted relationship between Foreign Direct Investment (FDI) and entrepreneurial ecosystems, with a particular focus on the impact of FDI on local startups and Small and Medium-sized Enterprises (SMEs). The study investigates both the positive and negative effects of FDI, shedding light on its role as a double-edged sword in shaping local entrepreneurial landscapes. The positive effects encompass access to vital funding, enhanced resources, market expansion opportunities, the magnetism of skilled talent, and a culture of knowledge sharing. FDI serves as a lifeline, bridging the funding gap that often hampers local startups, and infusing them with the capital essential for growth, innovation, and global market access. Additionally, foreign investors bring valuable resources, advanced technologies, and managerial expertise, augmenting the capabilities of local entrepreneurs. The presence of foreign corporations also facilitates market expansion, enabling local startups to access international markets and leverage established investor networks. Furthermore, FDI acts as a talent magnet, attracting skilled professionals to the region, thereby enriching the local labour pool. Moreover, interaction with foreign investors fosters a culture of knowledge sharing, exposing local entrepreneurs to global best practices and diverse perspectives. However, alongside these positive effects, negative consequences emerge. Increased competition from foreign firms can stifle the growth prospects of local startups. An overreliance on foreign investors for funding and resources can make local startups vulnerable to shifts in investor sentiment. Unequal power dynamics may lead to unequal partnerships, where local startups have limited negotiating leverage. Moreover, the transfer of technology and knowledge raises concerns about the outflow of critical intellectual property. This systematic review critically examines these dynamics, offering valuable insights into the intricacies of FDI's impact on entrepreneurial ecosystems. The findings inform policymakers, entrepreneurs, and investors alike, guiding them in optimizing the benefits of FDI while mitigating its potential pitfalls. By understanding the complex interplay between FDI and local startups, stakeholders can foster a more vibrant and resilient entrepreneurial ecosystem, conducive to innovation, growth, and sustainability.
    Keywords: Foreign Direct Investment (FDI), entrepreneurial ecosystems, startups, Small and Medium-sized Enterprises (SMEs), funding, resources, market expansion, talent attraction, knowledge sharing.
    JEL: F21 F23 L26 L33 M13 O16 O33 O38
    Date: 2023–07–09
  16. By: Andrea De Michelis; Mariano A. Somale
    Abstract: Modern manufacturing production is organized in complex global value chains (GVCs), whereby the production process of a good is split into multiple stages across many countries and sectors. By allowing producers to specialize in a narrow set of tasks according to their comparative advantage, GVCs have brought significant productivity gains.
    Date: 2023–09–08
    Abstract: 한국을 포함한 세계 다국적 기업의 주요 투자처인 베트남은 사회주의 체제를 유지하고 있으며, 남녀평등을 포함한 평등의 가치를 중요하게 여기는 국가 중 하나이다. 그러나 2010년대 이후 베트남으로의 FDI 유입 확대 추이와 달리, 2015년 이후 성별 임금 격차는 악화되는 모습을 보였다. 이러한 배경에서 본 연구는 베트남 63개 지역의 패널 자료를 사용해 FDI 유입이 유발할 수 있는 성별 임금 격차를 실증분석하고, 노동시장에 대한 정량적 분석과 양성평등 제도에 대한 정성적 분석을 종합해 시사점을 도출했다. 실증분석 결과 FDI 유입과 성별 임금 격차 간에는 대체로 음의 관계가 추정되었는데, 이는 여성 고용이 많은 산업 혹은 이러한 산업이 집중된 지역에서 두드러졌다. 통제변수 중 숙련노동 비중도 대체로 음의 관계가 추정되었다. 이상의 내용을 바탕으로 여성 고용의 양과 질 제고를 위한 FDI 유인구조 설계, 직업훈련 및 교육의 중요성, 양성평등 제도 이행을 위한 노력, 여성의 사회·경제 활동 참여 자기결정권 제고를 시사점으로 제시한다. On July 4, 2023, Foxconn, the Taiwanese electronics manufacturer best known for producing Apple’s products such as iPhone and MacBook, announced plans to invest more than $200 million in northern Vietnam to reduce its dependence on Apple and participate in the electric vehicles market. Including this investment, Foxconn has invested more than 2 billion dollars in Vietnam. Other multinationals such as Intel, LG, Nike, and Samsung are also rushing to invest in Vietnam. As a result Vietnam is sometimes called the FDI darling. These Foreign direct investment (FDI) contributes to Vietnam’s economic growth, not only through the role of capital as a factor of production, but also through the introduction of management skills from advanced economies. The impact of FDI on the host country is not limited to the target enterprises, but includes the transfer of capital or technology to industries and regions. The impact also affects factor markets in the region, in particular labor conditions, including employment, labor productivity, and wages. These effects may vary by industry, occupation, skill, educational level, and Executive Summary 102 • 외국인 직접투자가 베트남의 성별 임금 격차에 미치는 영향과 시사점 gender. This can be a matter of discrimination, especially when other conditions are equal, but the difference is simply due to innate gender differences. Against this backdrop, this paper aims to examine the statistical and institutional status of FDI inflows and the gender wage gap in Vietnam, and to derive implications for governments and firms in Korea and Vietnam. Chapter 2 compares the status of gender equality in Vietnam with key ASEAN countries, Indonesia, Malaysia, the Philippines, and Thailand, focusing on the labor market, and assesses Vietnam’s gender equality institutions. Given Vietnam’s stage of economic development, gender equality in economic activities is good, but there is a need to expand political empowerment, provide paid parental leave, and reduce the gender gap in retirement ages. (the rest omitted)
    Keywords: 외국인직접투자; 노동시장; 외국인직접투자; 성별임금격차; 베트남; Foreign direct investment; labor market; foreign direct investment; gender wage gap; Vietnam
    Date: 2023–09–08
  18. By: Yeboah, 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 I25 O32 O33 O35 O38
    Date: 2023–06–10
  19. By: MT Musakwa (University of South Africa); N.M. Odhiambo (University of South Africa)
    Abstract: This study investigates the impact of foreign capital inflows on poverty in Vietnam, using annual time series data from 1990 to 2018. The study was motivated by the need to establish if burgeoning foreign capital inflows in Vietnam can support the poverty alleviation agenda. Foreign direct investment (FDI) and external debt were used as proxies for foreign capital inflows; and infant mortality rate, Human Development Index (HDI) and household consumption expenditure were used as poverty proxies. Using the autoregressive distributed lag (ARDL) approach, the study found foreign direct investment to reduce poverty in the short run and long run when household consumption expenditure was used as a poverty measure. However, the study found FDI to worsen poverty in the short run when infant mortality rate and HDI were used as poverty proxies. The study found external debt to have poverty mitigating effect in the short run regardless of the poverty measure used and in the long run only when household consumption expenditure was used as a poverty measure.
    Date: 2021–10
  20. By: Michael A. Clemens (Center for Global Development; IZA; CReAM/UCL)
    Abstract: Immigration policy can have important net fiscal effects that vary by immigrants’ skill level. But mainstream methods to estimate these effects are problematic. Methods based on cash-flow accounting offer precision at the cost of bias; methods based on general equilibrium modeling address bias with limited precision and transparency. A simple adjustment greatly reduces bias in the most influential and precise estimates: conservatively accounting for capital taxes paid by the employers of immigrant labor. The adjustment is required by firms’ profit-maximizing behavior, unconnected to general equilibrium effects. Adjusted estimates of the positive net fiscal impact of average recent U.S. immigrants rise by a factor of 3.2, with a much shallower education gradient. They are positive even for an average recent immigrant with less than high school education, whose presence causes a present-value subsidy of at least $128, 000 to all other taxpayers collectively.
    JEL: F22 H68 J61
    Date: 2023–02–21
  21. By: Yeboah, Samuel; Gyan, Sylvester; James, Bright
    Abstract: This systematic review explores the complex dynamics between Foreign Direct Investment (FDI) and local entrepreneurial ecosystems, focusing on their impact on startups and Small and Medium-sized Enterprises (SMEs). FDI has emerged as a critical driver of economic development and innovation in an increasingly globalized world. While FDI offers numerous advantages, it also presents challenges, particularly for local startups. Positive effects of FDI include improved access to funding, enhanced resources, market expansion, talent attraction, and knowledge sharing. These benefits can boost the competitiveness and profitability of startups, enabling them to enter new markets and scale their operations. However, FDI can also have negative repercussions, such as increased competition, dependency risks, unequal partnerships, and potential loss of intellectual property. These challenges underscore the need for a nuanced approach to harness the benefits of FDI while mitigating its risks. To address these issues, strategies to maximize FDI's benefits for entrepreneurship are discussed. These strategies encompass creating supportive ecosystems, diversifying funding sources, promoting collaborative innovation, strengthening intellectual property protection, investing in education and skill development, facilitating cultural integration, and establishing startup incubation programs. Ultimately, achieving a harmonious balance between FDI and local entrepreneurship is essential for driving inclusive economic growth and sustainable innovation. This systematic review provides insights to guide policymakers, entrepreneurs, and investors in optimizing the advantages of FDI while proactively addressing its inherent challenges.
    Keywords: Foreign Direct Investment (FDI); Entrepreneurial Ecosystems; Local Startups; Small and Medium-sized Enterprises (SMEs); Economic Development; Innovation; Competition; Power Dynamics; Intellectual Property Protection; Technology Transfer
    JEL: D22 F21 F23 L25 L26 M13 M21 O31 O33 O34
    Date: 2023–06–15
  22. By: Saerom (Ronnie) Lee; Britta Glennon
    Abstract: To spur entrepreneurship and economic growth, an increasing number of countries have introduced immigration policies that provide visas to skilled entrepreneurs. This paper investigates whether these policies influence the founding location choice of immigrant founders, by leveraging the introduction of Canada's Start-up Visa Program in 2013. We demonstrate that this immigration policy increased the likelihood that U.S.-based immigrants have a start-up in Canada by 69%. Our results show that Asian immigrants (who have a higher representation in Canada than in the U.S.) are disproportionately more likely to migrate to Canada to start their businesses, whereas Hispanic immigrants (who have a smaller representation in Canada than in the U.S.) are less inclined to do so. We also find that this propensity varies with the size of co-ethnic immigrant communities in the origin location. Overall, our study unveils the importance of immigration policies in determining founding location choice and has important implications for countries competing for global talent.
    JEL: F20 F22 J60 M13
    Date: 2023–08
  23. By: Mao, Haiou; Görg, Holger; Fang, Guopei
    Abstract: We look at divestments by foreign firms - a topic that has received comparatively little attention in the literature - and investigate how changes in the regulatory environment in the host country may impact on such divestment decisions. We use the implementation of China's Two Control Zone (TCZ) policy as a "quasi-natural experiment", using detailed firm level combined with city level data for the empirical analysis. Our results show that the implementation of TCZ policy has led to higher probabilities of divestments by foreign firms in targeted TCZ cities and industries. The mechanism behind this seems to be a TCZ-induced increase in discharge fees and efforts to reduce SO2 emissions. Allowing for heterogeneity of effects, we find that the effect is particularly strong for firms from source countries with less stringent environmental regulation, and those using less advanced technology. We furthermore show that firms using intermediates from polluting industries also experience a higher probability of divestment.
    Keywords: foreign divestment, environmental regulation, Two Control Zone Policy, China
    JEL: F23 Q58
    Date: 2023
  24. By: Sergio Florez-Orrego; Matteo Maggiori; Jesse Schreger; Ziwen Sun; Serdil Tinda
    Abstract: We survey the literature on global capital allocation. We begin by reviewing the rise of cross-border investment, the shift towards portfolio investment, and the literature focusing on aggregate patterns in multilateral and bilateral positions. We then turn to the recent literature that uses micro-data to document patterns in global capital allocations. We focus on the importance of the currency of denomination of assets in international portfolios and the role that tax havens and offshore financial centers play in intermediating global capital. We conclude with directions for future research in this area.
    JEL: F0 F3 F30
    Date: 2023–08
  25. By: Michael A. Clemens (George Mason University; IZA; CReAM; Center for Global Development); Ethan G. Lewis (Dartmouth College; NBER; CESifo; CReAM)
    Abstract: The US limits work visas for low-skill jobs outside of agriculture, with a binding quota that firms access via a randomized lottery. We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in US employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations. Forensic analysis suggests similarly low substitutability of black-market labor.
    JEL: F22 J61 D22
    Date: 2023–01–23
  26. By: Gonzalez, Javier; Özak, Ömer
    Abstract: Dickens (2022) studies the role of trade on long-run inter-ethnic linguistic differences. He establishes that neighboring ethnolinguistic groups have smaller (lexicostatistical) linguistic distances when there is a larger agricultural productivity variation between them. Specifically, he establishes that pre-1500 land productivity variation (CSI SD) and its change due to Columbian Exchange in the post-1500 (CSI SD CHANGE) era decrease linguistic distances between groups. In what can be considered his main specification, which includes geographical controls, spatial controls, and language family fixed effects (Table 1 column 5), he estimates that a one standard deviation increase in the change in land productivity variation (post-1500) decreases linguistic distances by 0.11 standard deviations (p-value
    Keywords: Replication, Linguistic Distances, Trade
    JEL: F10 O10 Z10
    Date: 2023
  27. By: Sally Chen; Eric Tsang; Leanne Si Ying Zhang
    Abstract: Supply disruptions from the Covid-19 pandemic raise questions about the benefits and costs of global value chain (GVC) participation and the possibility that supply chain networks may have shifted during this period. Using firm-level data on supply chain linkages, we document the evolution of GVCs during the pandemic by comparing GVC network diagrams and firms' shipment data over the course of the pandemic. Furthermore, we study how such linkages affected equity investors' reaction to pandemicrelated disruptions. Our findings suggest that GVCs contracted following the pandemic outbreak and were slow to recover in some sectors. We also find that firms with GVC links to countries undergoing Covid-related lockdowns suffered larger stock price losses than those without such links. In addition, sectoral responses to lockdown announcements varied, underscoring the need to consider sectoral differences in the study of GVC shifts.
    Keywords: supply chain, supply networks, amplification, equity prices
    JEL: F10 G12 G14 O24
    Date: 2023–09
  28. By: Caravella, Serenella; Crespi, Francesco; Cucignatto, Giacomo; Guarascio, Dario
    Abstract: This work sheds new light on the Photovoltaic Supply Chain (PVSC), providing fresh evidence on strategic 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
    JEL: C23 F18 O31 O38 Q42
    Date: 2023
  29. By: Khondaker Golam Moazzem; Fahmida Khatun; Syed Yusuf Saadat; Kashfia Ashraf; Afrin Mahbub
    Abstract: On the occasion of the 50-year anniversary of the diplomatic ties between Bangladesh and Japan, the Centre for Policy Dialogue (CPD) undertook a research study titled “Bangladesh-Japan Partnership for The Next Development Journey†. The aim of the research was to discuss how Japan may support Bangladesh in its next phase of growth during the 4IR and beyond its LDC graduation. This policy brief is based on the key findings of the aforementioned study. This policy brief titled †Strengthening Bangladesh-Japan Partnership Through Enhanced Trade, Investment, and Technological Collaboration†focuses on various issues and potentials involving Japan-Bangladesh partnership, and presents a number of recommendations.
    Keywords: Bangladesh-Japan Partnership, Trade, Investment, Technological Collaboration, LDC graduation,
    Date: 2022–05
  30. By: Xavier Aurégan (MUSE - ComMUnication, Société, Environnement - FLSH - Université Catholique de Lille - Faculté des Lettres et Sciences Humaines - ICL - Institut Catholique de Lille - UCL - Université catholique de Lille, IFG - Institut français de géopolitique - CERCEC - Centre d'études des mondes russe, caucasien et centre-européen - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - CETOBaC - Centre d'études turques, ottomanes, balkaniques et centrasiatiques - EHESS - École des hautes études en sciences sociales - CdF (institution) - Collège de France - CNRS - Centre National de la Recherche Scientifique - CRAG - Centre de recherches et d'analyses géopolitiques - UP8 - Université Paris 8 Vincennes-Saint-Denis)
    Abstract: Cet article propose une vision critique des productions – cartographiques – universitaires portant sur les rôles chinois dans les ports africains. Pour ce faire, une contre-représentation cartographique de ces présences chinoises est générée afin de prendre en compte tout d'abord les modalités d'intervention chinoises, de déconstruire ensuite la cartographie afférente et, enfin, d'inverser les représentations et la cartographie afro-chinoise portuaire. Les résultats de l'enquête font état d'une présence chinoise multimodale qui peut être qualifiée de parcellaire, avec 55 ports et 12 ports secs africains financés, construits et/ou subsidiairement gérés par un acteur chinois, mais également 149 qui ne le sont pas.
    Keywords: cartographie, ports, infrastructures, Afrique, Chine
    Date: 2023–06–29
  31. By: OECD
    Abstract: This report assesses the continued relevance of the OECD Recommendation on Cross-Border Co-operation in the Enforcement of Laws Protecting Privacy, originally adopted in 2007. It examines whether the Recommendation has kept pace with the evolving needs of Privacy Enforcement Authorities (PEAs) in light of significant technological and legal changes over the past 15 years. While the principles underlying the Recommendation are seen to remain solid, the report highlights several gaps and challenges for cross-border enforcement co-operation. It concludes that the OECD could either provide additional guidance to support the implementation of the Recommendation or consider revising it to better address current challenges.
    Date: 2023–09–22
  32. By: von Soest, Christian
    Abstract: Based on current literature, this paper analyses the nature and effects of external pressure imposed on authoritarian regimes. Around three-quarters of all countries under United Nations, United States, and European Union sanctions are authoritarian, and 'democracy sanctions' that aim at improving democratic and human rights in targeted countries constitute the biggest sanctions category. Yet, authoritarian regimes represent particularly problematic targets as they can more easily shield themselves from external pressure than their democratic counterparts can. Authoritarians have a tighter grip on the public discourse and the struggle over the meaning of sanctions. They often even use them to their own advantage, denouncing sanction senders as 'imperialist' and blaming them for their economic woes. The paper presents trends in the application of sanctions pressure against authoritarian regimes, reviews mechanisms of how economic and diplomatic restrictions work, and examines authoritarian targets' attempts to engage in pressure proofing.
    Keywords: Authoritarian regimes, external pressure, sanctions, rally-round-the-flag effect, pressure proofing
    Date: 2023
  33. By: Charles Kenny (Center for Global Development); Zack Gehan (Center for Global Development)
    Abstract: We develop scenarios for the shape of the global economy in 2050 building on a simple regression of the historic relationship between current income and lagged income, demographic features, climate, and education, using the coefficients to develop a “central” forecast and error terms to set high and low bounds on country outcomes. Scenarios examine combinations of low and high outcomes for different country groupings. “Central” forecasts suggest slowing per capita growth rates for high income countries as well as many upper middle income countries including China, with continued global income convergence. Scenario exercises suggest the potential for considerable variation in outcomes including global share of the economy and voting power in international institutions.
    Keywords: economic forecasts, global growth, international governance
    JEL: C53 E66 F01
    Date: 2023–03–06

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