nep-int New Economics Papers
on International Trade
Issue of 2023‒11‒20
33 papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Shock Infections through Global Value Chains By Kuusi, Tero; Ali-Yrkkö, Jyrki
  2. Double-edged sword: understanding the localized effect of foreign direct investment inflow in conflict settings By Lorenzo Crippa; Laura Saavedra-Lux
  3. Demographic Shifts and Potential Food Trade Impacts: A case of ASEAN food export By Wanissa Suanin; Panit Wattanakoon
  4. Exports to Improve Women's Economic Opportunities in Morocco By Roche Rodriguez, Jaime Alfonso; Robertson, Raymond; Lopez-Acevedo, Gladys; Zárate, Daniela Ruiz
  5. Import Price Reaction to the Ruble Exchange Rate and Leaving the Russian market by Foreign Suppliers By Firanchuk, Alexander (Фиранчук, Александр)
  6. International trade in the wake of multiple shocks: OECD global trade monitor By OECD
  7. Hidden Exposure: Measuring US Supply Chain Reliance By Richard Baldwin; Rebecca Freeman; Angelos Theodorakopoulos
  8. Regional Medical Device Security through Safety Standard Harmonization By Panit Wattanakoon; Wanissa Suanin
  9. Innovation and trade in the automotive industry: evidence from European countries (1990-2018). By Novaresio, Anna; Patrucco, Pier Paolo
  10. Pandemic-induced increases in container freight rates: assessing their domestic effects in a globalised world By José Pulido
  11. Global value chains in developing countries: a relational perspective from coffee and garments By Boudreau, Laura; Cajal-Grossi, Julia; Macchiavello, Rocco
  12. The Bitter Taste of Brazil’s Temporary Import Ban on Robusta Coffee By Otgun, Hanifi (University of Nebraska Lincoln); Beghin, John (University of Nebraska Lincoln); Maximiliano, Fernando (StoneX)
  13. Geoeconomic Fragmentation and Commodity Markets By Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
  14. Export Induced Spatial Divergence By Jonas Casper; Lei Li; Jinfeng Luo
  15. The Unintended Consequences of Trade Protection on the Environment By Taipeng LI; Lorenzo Trimarchi; Rui XIE; Guohao YANG
  16. Immigration and Nationalism in the Long Run By Valentin Lang; Stephan A. Schneider
  17. Why is Trade Not Free? A Revealed Preference Approach By Rodrigo Adão; Arnaud Costinot; Dave Donaldson; John A. Sturm
  18. The Impact of Multinationals along the Job Ladder By Ragnhild Balsvik; Doireann Fitzgerald; Stefanie Haller
  19. Determinants of invoice currency selection by Russian exporters By Kuznetsov, Dmitrii (Кузнецов, Дмитрий)
  20. The Labor Market Effects of Restricting Refugees’ Employment Opportunities By Achim Ahrens; Andreas Beerli; Dominik Hangartner; Selina Kurer; Michael Siegenthaler
  21. Extended producer responsibility and trade flows in waste: The case of batteries By Marco Compagnoni; Marco Grazzi; Fabio Pieri; Chiara Tomasi
  23. The Linear Algebra of Economic Geography Models By Benny Kleinman; Ernest Liu; Stephen J. Redding
  24. Innovative agro-food industries in the EU Outermost Regions By OECD
  25. International Mobility of Inventors and Innovation: Empirical Evidence from the Collapse of the Soviet Union By Gaetan de Rassenfosse; Gabriele Pellegrino
  26. Are Innovation Barriers Different for Chilean Exporters and Non-Exporters? By Roberto Alvarez; Miguel A. Gonzalez
  27. Global Technology Cycles and Local Economic Performance By Sebastian Heinrich; Samad Sarferaz; Martin Wörter
  28. Production Function Estimation with Multi-Destination Firms By Geoffrey Barrows; Hélène Ollivier; Ariell Reshef
  29. Impact of foreign ownership on market power: Do regional banks behave differently in ASEAN countries? By Canan Yildirim; Adnan Kasman; Fazelina Sahul Hamid
  30. Profit Shifting in the 21st Century: Multinationals’ Use of Intrafirm Patent Transfers By Mickenzie Bass; Jesse LaBelle; Ana Maria Santacreu
  31. Geopolitical Risk and Foreign Portfolio Investment: A Tale of Advanced and Emerging Markets By Sangyup Choi; Jiri Havel
  32. FOOD DEVELOPMENT STRATEGIES OF RUSSIA AND THE USA: A COMPARATIVE ANALYSIS By Nikulin, Alexander (Никулин, Александр); Kurakin, Alexander (Куракин, Александр); Trotsuk, Irina (Троцук, Ирина)
  33. Think Globally, Act Globally: Opportunities to Mitigate Greenhouse Gas Emissions in Low- and Middle-Income Countries By Rachel Glennerster; Seema Jayachandran

  1. By: Kuusi, Tero; Ali-Yrkkö, Jyrki
    Abstract: Abstract We examine how the Covid-19 shock was transmitted from the foreign, upstream parts of value chains to domestic (downstream) production. After categorizing global value chains based on their home-producer industry and country, we quantify the multiplier effect of the transmitted shock on the entire value chain by considering changes in home production. The upstream shock was measured using world input-output data, and our analysis relies on the upstream dependence on the early shock in China during 1-4/2020, employing a differences-in-differences research setup. Our findings reveal that the impact was large: For every percentage point of dependence on the Chinese value chain, there was a 1.3 percent larger contraction in domestic production. In essence, the multiplier effect of the manufacturing contraction amplified the direct foreign shock by an order of magnitude. These effects varied across industries and regions, with the most substantial multiplier effects observed in highly digitalized, high-R&D industries, particularly in the EU and North America. Furthermore, we provide evidence on the dynamics of adjustment.
    Keywords: Global value chains, Shock, Infection, Covid-19, Transmission, Transmit, Linkage
    JEL: F21 F23 F13 F62 L24
    Date: 2023–11–06
  2. By: Lorenzo Crippa; Laura Saavedra-Lux
    Abstract: We analyse how inward foreign direct investment (FDI) received amid ongoing violence shapes armed conflict. We argue that FDI affects patterns of violence by influencing the state's counterinsurgency strategy. To prevent disinvestment, governments strive to capture territory linked to investment. Yet, heightened military presence in areas close to FDI projects reinforces rebel group reliance on irregular warfare, thus amplifying civilian victimization as a tool to elicit cooperation or enforce control.
    Keywords: FDI, Foreign Direct Investment, Armed conflict
    Date: 2023
  3. By: Wanissa Suanin; Panit Wattanakoon (Faculty of Economics, Thammasat University)
    Abstract: Despite the declining fertility rates, demographic changes are anticipated to increase the world's population over the next several decades. Due to this shift, elderly people will outnumber younger ones. Because of age-related dietary preferences and food production efficiency, population demographics may have an impact on food trade patterns. The study uses structural gravity analysis to investigate the impact of demographic shifts on ASEAN food exports. The findings indicate that global population growth influences demand for ASEAN food exports. However, import demand is dwindling with age, particularly in developed countries and the European Union (EU). In contrast, the United States and China are prospective markets for ASEAN food exporters. These also apply to healthy food exports. A demographic shift toward an aging population also boosts ASEAN's export capacity.
    Keywords: Food trade, Healthy food, Demographic shifts, ASEAN
    JEL: F10 F14 Q18
    Date: 2023–10
  4. By: Roche Rodriguez, Jaime Alfonso (World Bank); Robertson, Raymond (Texas A&M University); Lopez-Acevedo, Gladys (World Bank); Zárate, Daniela Ruiz (Bank of Mexico)
    Abstract: Morocco's trade liberalization policies coincided with macroeconomic growth over the past two decades. The relationship between trade liberalization and individual-level labor-market outcomes, however, are not well understood. By combining three complementary approaches and modeling techniques, this paper estimates: (i) the relationship between trade agreements and trade flows, (ii) the relationship between trade exposure and various local labor market outcomes, and (iii) the relationship between firm employment and exports. Our results show that tariffs have fallen and trade, as a share of GDP has increased. Morocco's trade agreements, however, are not always associated with higher trade flows. Furthermore, trade has led to mixed results for workers. Increased trade has decreased informality but may have adversely affected female labor force participation (FLFP). Trade liberalization seems to have induced a shift from female labor-intensive industries, such as apparel, to capital-intensive sectors that are predominantly male-intensive. Our firm level analysis confirms these results by showing that increasing in employment from exports has occurred mainly in male, capital-intensive sectors. Labor-abundant countries might want to provide incentives to labor-intensive industries rather than only supporting capital-intensive ones - especially in industries where women typically perform the labor-intensive jobs. It is important to note that we focus mainly on the labor demand side. Policies related to the supply side should also be weighed to create incentives for females to join the labor force, such as policies addressing social norms, regulation, and barriers to job mobility.
    Keywords: gender, trade policy, trade flows, labor market outcomes, firm dynamics
    JEL: F13 F14 F15 F16 J23 J31 O15 O19
    Date: 2023–10
  5. By: Firanchuk, Alexander (Фиранчук, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The aim of the work is an empirical analysis of the ruble exchange rate pass-through into prices under reorientation of imports to suppliers from neutral countries due to the withdrawal of some suppliers from the Russian market. The motivation is related to the structural transformation of Russian foreign trade and the continued volatility of the ruble exchange rate. I collected a database of Russian imports based on statistics of the main trading partners. The data shows three periods since February 2022: a drop of import flows from all countries in February-April 2022; a period of reorientation (increase) of imports from neutral countries in May – December; and following general stabilization of trade. The result of econometric analysis at commodity-group level consistent with the hypothesis of reorientation of imports: the average growth rates of import prices from "unfriendly" countries during the considered period significantly exceed the rate of price growth in the pre-crisis period. The difference is from 1.9 to 4.9 percentage points in a year basis. At the same time, there is no evidence in favor of the hypothesis of an increase in the growth rate of import prices from neutral countries during the crisis period. The main conclusion is that, by the end of 2022, the ruble exchange rate pass-through into import prices returned to the characteristic values of previous periods. This suggests that the current weakening of the ruble will affect import prices and lead to a reduction of imports volumes. The period of turbulence and reorientation of Russian imports has ended. Its result was a multiple drop in imports from "unfriendly" countries and a higher increase in the prices of imports from them.
    Keywords: imports, prices, exchange rates, reorientation of imports, strategic competition, international trade
    JEL: L23 F14
    Date: 2023–10–24
  6. By: OECD
    Abstract: In the midst of the recovery from the COVID-19 pandemic, trade and economic growth face new challenges as the Russian Federation’s large-scale war against Ukraine has increased uncertainty and tensions along supply chains and the People’s Republic of China’s trade performance has fallen short of expectations. Merchandise trade is recovering slowly and has been dampened by high and volatile commodity and energy prices, coupled with monetary tightening. Some durable goods, such as motor vehicles, have not regained their pre-pandemic share in global trade. Services trade has yet to recover losses incurred during the pandemic, with travel services in particular recovering slowly. Russia’s trade is adjusting as the war continues, with repercussions for commodities markets. This report uses detailed trade data to monitor recent developments in trade in goods and services and in commodity markets.
    Keywords: China, Economic recovery, Russia, Transport
    JEL: F13 F14 F51 Q02
    Date: 2023–11–06
  7. By: Richard Baldwin; Rebecca Freeman; Angelos Theodorakopoulos
    Abstract: Supply chain problems, previously relegated to specialized journals, now appear in G7 Leaders’ Communiqués. Our paper looks at three core elements of the problems: measurement of the links that expose supply chains to disruptions, the nature of the shocks that cause the disruptions, and the criteria for policy to mitigate the impact of disruptions. Utilizing global input-output data, we show that US exposure to foreign suppliers, and particularly to China, is ‘hidden’ in the sense that it is much larger than what conventional trade data suggest. However, at the macro level, exposure remains relatively modest, given that over 80% of US industrial inputs are sourced domestically. We argue that many recent shocks to supply chains have been systemic rather than idiosyncratic. Moreover, systemic shocks are likely to arise from climate change, geoeconomic tensions, and digital disruptions. Our principal conclusion is that concerns regarding supply chain disruptions, and policies to address them, should focus on individual products, rather than the whole manufacturing sector.
    JEL: F0 F13 F14 F60
    Date: 2023–10
  8. By: Panit Wattanakoon; Wanissa Suanin (Faculty of Economics, Thammasat University)
    Abstract: The 2019 global pandemic has served as a wake-up call for policymakers regarding the importance of prioritizing medical device security. As the virus spread, it was depleting supplies of key vital medical devices around the world. Many nations have then decided to impose export restrictions on certain pandemic-prevention-related medical devices. This paper argues that harmonization of regional safety standards could be another means for countries to promote regional medical device security. We examine how the EU Medical Device Regulation and ASEAN Medical Device Directive, regional efforts to harmonize safety standards, facilitates regional trade and contributes to the improvement of regional medical device security, using the gravity modeling framework. We find that EU version of safety standard harmonization promotes both regional and global trades, while ASEAN version can encourage only the regional, not the global one.
    Keywords: Medical Device Trade, Safety Standard Harmonization, EU, ASEAN, COVID-19
    JEL: F10 F14 I18
    Date: 2023–10
  9. By: Novaresio, Anna; Patrucco, Pier Paolo (University of Turin)
    Abstract: The goal of the paper is threefold: 1) to empirically investigate whether out-of-equilibrium conditions in international economic performances (exports & imports) are correlated with greater innovative efforts (R&D expenditures) in the automotive industry, by means of both descriptive and inferential techniques; 2) to explore, by using descriptive means, whether and which countries display the abovementioned path, in search for possible local-specific dynamics; 3) to provide empirical evidence in support of the existence of a self-feeding loop between trade indicators (exports & imports) and R&D expenditures in the European automobile sector, by using an appropriate econometrical strategy inspired by the “Crépon-Duguet-Mairesse†(CDM) method. Our empirical analysis, based on a panel sample of European countries between 1990-2018, provide substantial support to the hypothesis that a “creative response†to out-of-equilibrium export conditions drives innovation also in the automotive industry. Finally, our study confirms the existence of a self-reinforcing loop between exports, imports and innovation in the automotive industry, which is yet mediated by the industry size, suggesting that the economies of scale are still the major driver of the sectoral growth and innovation capability.
    Date: 2023–05
  10. By: José Pulido
    Abstract: The Covid-19 pandemic severely disrupted the sea transportation industry, leading container freight rates to reach record highs from late 2020 and into 2021. This study examines the welfare effects of this disruption on a specific country, Colombia. For this, I use a quantitative model of international trade with out-of-steady-state transitional dynamics and a rich structure for the organization of production, plus an instrumental variable approach to estimate a trade elasticity to freight. I quantify both the direct effects of freight increases on goods transported to and from Colombia, as well as the indirect impact of heightened rates on routes across the rest of the world. The resulting welfare loss of 1.4% is solely attributable to the direct effects, as the indirect impact simultaneously improves Colombia's relative trade openness, thereby compensating for the effects of the increased shipping costs worldwide.
    Keywords: container freight, transportation costs, international trade, Covid-19
    JEL: F16 F62 F17
    Date: 2023–10
  11. By: Boudreau, Laura; Cajal-Grossi, Julia; Macchiavello, Rocco
    Abstract: There is a consensus that global value chains have aided developing countries' growth. This essay highlights the governance complexities arising from participating in such chains, drawing from lessons we have learned conducting research in the coffee and garment supply chains. Market power of international buyers can lead to inefficiently low wages, prices, quality standards, and poor working conditions. At the same time, some degree of market power might be needed to sustain long-term supply relationships that are beneficial in a world with incomplete contracts. We discuss how buyers' market power and long-term supply relationships interact and how these relationships at the export-gate could be leveraged to enhance sustainability in the domestic part of the chains. We hope that the lessons learned by combining detailed data and contextual knowledge in two specific chains—coffee and garments—have broader applicability to other global value chains.
    Keywords: 818767
    JEL: L14 F14 F23 J81 L66 L67 O14
    Date: 2023–08–01
  12. By: Otgun, Hanifi (University of Nebraska Lincoln); Beghin, John (University of Nebraska Lincoln); Maximiliano, Fernando (StoneX)
    Abstract: Brazil, one of the world's largest producers and exporters of Robusta coffee can experience droughts and poor harvest and becomes a temporary importer of Robusta. The 2016-17 drought lowered Brazilian Robusta production and depleted stocks. Imports of one million 60-kg bags of Robusta coffee were temporarily allowed in the spring of 2017. An import ban was set before imports occurred, due to rent-seeking pressures of coffee farmers. We analyze the welfare and trade implications of this drought episode and coffee import ban for various actors in the Robusta bean and soluble markets. The ban increased Brazilian Robusta producers’ welfare between $174 and $277 million nearly offsetting the impact of the drought. The ban hurt Brazilian soluble processors by raising their cost by 10% and lowered final consumers’ surplus in Brazil between $109 and $173 million. Deadweight losses were small as these markets are price inelastic. Major Robusta exporters lost 32 to 69 thousand metric tons (tmt) of exports to Brazil and faced up to 9 % lower prices on their total exports of Robusta. Foreign consumers of Brazilian soluble coffee lost between $62 and $107 million of consumer welfare because of higher prices. The world price in the absence of the ban would have been 12$/bag higher for these stakeholders. The import ban benefited Robusta buyers in the rest-of-the-world (RoW). The drought itself created large rents for the RoW net exporters of Robusta but at the cost of net importers of Robusta beans and soluble coffee, globally.
    Keywords: Agricultural and Food Policy, International Relations/Trade
    Date: 2023–11–06
  13. By: Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
    Abstract: This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
    Keywords: Commodities; international trade; sanctions; spillovers; prices; geoeconomic fragmentation; trade disruption; price change; commodity producer; net-commodity-importing country; trade fragmentation; Commodity markets; Commodity price fluctuations; Agricultural commodities; Inflation; Global
    Date: 2023–10–03
  14. By: Jonas Casper (LMU Munich); Lei Li (University of Mannheim); Jinfeng Luo (Lingnan University)
    Abstract: How does export liberalization affect firm location choice and the spatial concentration of economic activity? We address these questions using the geo-coordinates of Chinese manufacturing firms and find that export widens inter-city and intra-city spatial disparities by reinforcing initially large industry centers. We first show that there has been an increased spatial concentration across cities in response to improved foreign market access. Only industry city pairs that were large initially increase their employment density following trade liberalization. Second, there has also been an increased spatial concentration within cities. For a given industry, districts closer to city centers are getting denser, mainly driven by the extensive margin. Third, the above effects are not exclusive to industries directly exposed to export shocks but also spill over positively to upstream and downstream industries and negatively to industries competing for the same workers locally.
    Keywords: firm location; localization; spatial concentration; regional inequality; export; comparative advantage;
    JEL: F6 F14 R12
    Date: 2023–10–16
  15. By: Taipeng LI; Lorenzo Trimarchi; Rui XIE; Guohao YANG
    Abstract: We analyze the impact of a rise in protectionism on environmental regulation. Using the 2018 US-China trade war as a quasi-natural experiment, we find that higher exposure to tariffs leads to less stringent regulation targets in China, increasing air pollution and carbon emissions. Politically motivated changes in environmental policies rationalize our results: the central government and local party secretaries relax environmental regulations to mitigate the negative consequences of tariffs for polluting industries. We find heterogeneous effects depending on politicians' characteristics: younger, recently appointed, and more connected local politicians are more likely to ease environmental regulation. This policy reaction benefits politicians: prefectures with the most considerable easing in environmental regulation manage to curb the negative economic consequences of the trade war, while their mayors have a relatively larger probability of promotion. This paper presents the first empirical evidence of political incentives to manipulate environmental regulation to curb negative economic shocks.
    Keywords: Political Cycles, Environmental Regulation, Trade Protection, US-China Trade War
    Date: 2023–10
  16. By: Valentin Lang (Universität Mannheim, Germany); Stephan A. Schneider (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: During recent immigration waves, nationalist parties increased their vote shares in many countries, but the political backlash against immigration in some regions was much stronger than in others. We examine whether past experience with migrant inflows shapes voters' reactions to current immigration waves. Our study is based on a natural experiment from Germany, where a short-term and demonstrably arbitrary drawing of occupation zones entailed a discontinuous distribution of forced migrants after World War II. Combining historical migration and election records in a 1949-2021 panel at the municipality level, we exploit these differences in a spatial fuzzy regression discontinuity design. Our results show a substantially weaker nationalist backlash against current immigration in regions that received more forced migrants in the past. Current immigration levels activate and mute this effect of exposure to immigration in the past over a period of at least 70 years.
    Keywords: Migration, Nationalism, Persistence, Voting Behavior
    JEL: D72 O15
    Date: 2022–08
  17. By: Rodrigo Adão; Arnaud Costinot; Dave Donaldson; John A. Sturm
    Abstract: A prominent explanation for why trade is not free is politicians’ desire to protect some of their constituents at the expense of others. In this paper we develop a methodology that can be used to reveal the welfare weights that a nation’s import tariffs implicitly place on different groups of society. Applied in the context of the United States in 2017, this method implies that redistributive trade protection accounts for a significant fraction of US tariff variation and causes large monetary transfers between US individuals, mostly driven by differences in welfare weights across sectors of employment. Perhaps surprisingly, differences in welfare weights across US states play a much smaller role.
    JEL: D60 D7 D70 F0 F10
    Date: 2023–10
  18. By: Ragnhild Balsvik; Doireann Fitzgerald; Stefanie Haller
    Abstract: Multinational affiliates are more productive than domestic firms, so how do they affect a host country through the labor market? We use data for Norway to show that the labor market is characterized by a job ladder, with multinationals on the upper rungs. We calibrate a general equilibrium job ladder model with endogenous multinational entry to the Norwegian data. In a counterfactual where multinationals face an infinite entry cost, payments to labor fall and profits of domestic firms rise, but the impact is heterogeneous. Competition for workers increases low down on the job ladder, while it decreases high up.
    Keywords: multinationals, labor market, job ladder
    JEL: E24 F23 F66 J63 J64
    Date: 2023
  19. By: Kuznetsov, Dmitrii (Кузнецов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The presented paper empirically accesses the determinants of invoice currency choice by Russian exporters. The relevance of the work is dictated by the sanctions imposed against Russia, which, among other things, make international settlements in the dominant currencies difficult and facilitate the transition of Russian exporters and importers to settlements in other currencies. The existing economic literature considers the invoice currency as one of the most important factors of the magnitude of the exchange rate passthrough into prices and quantities. The basic assumption of such models is short-term price rigidity in terms of invoice currency, which is in line with the data. The dominant view is that the choice of contract currency made by exporters based on the desired medium-term exchange rate pass-through, which in turn depends on company’s share in the market and the intensity of imported components using. In this paper using the detailed data of customs statistics of the Russian Federation it is show that key determinants of the Russian exporter’s contract currency choice are the competitor’s choice of the contract currency, the firm’s market share, the invoice currency import structure and firm productivity, as well as the degree of differentiation of the exported product. The main conclusion is that the currency structure of export payments will change due to changes in the currency structure of imports, and in many product markets the short-term stability of the share of Russian exporters will suffer, including due to difficulties in using the US dollar as the currency for nominating exports.
    Keywords: iexports, imports, dominant currencies, contract currency, invoice currency, microdata, strategic complementarities, differentiated products
    JEL: L23 F14
    Date: 2023–10–24
  20. By: Achim Ahrens (Public Policy Group, ETH Zurich, Switzerland); Andreas Beerli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Dominik Hangartner (Public Policy Group, ETH Zurich, Switzerland); Selina Kurer (Public Policy Group, ETH Zurich, Switzerland); Michael Siegenthaler (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Refugees, and immigrants more generally, often do not have access to all jobs in the labor market. We argue that restrictions on employment opportunities help explain why immigrants have lower employment and wages than native citizens. To test this hypothesis, we leverage refugees’ exogenous geographic assignment in Switzerland, within-canton variation in labor market restrictions, and linked register data 1999–2016. We document large negative employment and earnings effects of banning refugees from working in the first months after arrival, from working in certain sectors and regions, and from prioritizing residents over refugees. Consistent with an effect of outside options on wages, removing 10% of jobs reduces refugees’ hourly wages by 2.8% and increases the wage gap to similar host-country citizens in similar jobs by 2.2%. Furthermore, we show that restrictions reduce refugees’ earnings even after they cease applying. Restrictions do not spur refugee emigration nor improve earnings of non-refugee immigrants.
    Keywords: Labor market integration, migration, labor market policies, labor market institutions, monopsony, refugees, employment, wages, outside options, employment opportunities
    JEL: J08 J31 J42 J68
    Date: 2023–01
  21. By: Marco Compagnoni (Department of Economics and Management, University of Trento); Marco Grazzi (Department of Economic Policy, Catholic University of the Sacred Heart and Laboratory of Economics and Management, Sant’Anna School of Advanced Studies); Fabio Pieri (Department of Economics and Management, University of Trento and Centro Studi Luca d’Agliano); Chiara Tomasi (Department of Economics and Management, University of Trento and Laboratory of Economics and Management, Sant’Anna School of Advanced Studies)
    Abstract: In the debate on international waste trade, the focus on resource efficiency and recycling has gradually begun to accompany the focus on negative environmental externalities. In this context, we examine the impact of Extended Producer Responsibility (EPR) on the export of waste batteries (WB). EPR is considered as a key policy for the “marketization of waste”. On the other hand, WB are a hazardous waste that also contain a high concentration of critical raw materials. As such, they are of strategic importance for the recovery of critical resources, while at the same time requiring proper environmental management. Therefore, it is crucial to understand where WB are treated and how this is affected by related policies. Our results, based on difference-in-difference models in a gravity framework, show a consistent increase in WB exports after EPR implementation compared to the trend for other wastes. This result is likely to be an indirect consequence of the ability of EPR to support growth in waste collection rates, more accurate tracking of transboundary waste flows, and specialization of national waste management systems. In particular, EPR exports appear to be directed to countries with more advanced waste management systems rather than to developing countries.
    Keywords: Extended producer responsibility, batteries, trade, recycling, circular economy
    JEL: K32 Q51 Q53 Q56
    Date: 2023–10
  22. By: triyawan, andi; izzaty, sya'na sekar
    Abstract: This study aims to analyse the effect of exchange rate, inflation, exports and imports on economic growth in Austria from 2000 to 2020. The method used in this research is multiple linear regression. Data on exchange rates, exports and imports are taken from the Worldbank (World Bank), Inflation data are taken from the IMF. The results showed that exchange rates, inflation, exports and imports had no effect together on economic growth in Austria. Similarly, partial testing of the exchange rate has a positive effect on economic growth in Austria, inflation has no significant effect on economic growth, the level of exports has no significant effect on the economic growth of this country, and imports have a positive and significant effect on economic growth in the country of GDP.
    Date: 2023–10–01
  23. By: Benny Kleinman (University of Chicago); Ernest Liu (Princeton University); Stephen J. Redding (Princeton University, CEPR, and NBER)
    Abstract: We provide sufficient statistics for nominal and real wage exposure to productivity shocks in a constant elasticity economic geography model. These exposure measures summarize the first-order general equilibrium elasticity of nominal and real wages in each location with respect to productivity shocks in all locations. They are readily computed using commonly available trade data and the values of trade and migration elasticities. They have an intuitive interpretation in terms of underlying economic mechanisms. Computing these measures for all bilateral pairs of locations involves a single matrix inversion and therefore remains computational efficient even with an extremely high-dimensional state space. These sufficient statistics provide theory-consistent measures of locations’ exposure to productivity shocks for use in further economic and statistical analysis.
    Keywords: economic geography, trade, migration
    JEL: F10 F15 R12
    Date: 2023–07
  24. By: OECD
    Abstract: This paper provides an overview of agro-food value chains in the EU Outermost Regions (EU ORs). It assesses emerging trends, discusses opportunities and challenges, reviews the policy frameworks and tools that can strengthen the beneficial participation of EU ORs in international agro-food value chains, and proposes priority actions. The paper is developed within the framework of the EU-OECD project on Global Outermost Regions.
    Keywords: Agriculture and Natural Resources, EU Outermost Regions, Global Value Chains, Regional Development
    JEL: L15 L66 O13 O52 O55 R11 R58 O54
    Date: 2023–10–25
  25. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Gabriele Pellegrino (Catholic University of Milan)
    Abstract: This paper assesses the extent to which the international migration of inventors affects innovation in the receiving country. Drawing on a novel database that maps the migratory patterns of inventors, we exploit the end of the Soviet Union and the consequent post-1992 influx of ex-Soviet inventors to the United States. Econometric analysis on a panel of U.S. cities and technological fields shows that the patenting activity of U.S. inventors increased significantly after the arrival of ex-Soviet Union inventors.
    Keywords: geographic mobility; innovation; inventors; patents
    JEL: O31 O34 O51 J61
    Date: 2023–10
  26. By: Roberto Alvarez; Miguel A. Gonzalez
    Abstract: In this paper, we study the existence of different innovation barriers between exporters and non-exporters in Chile. We deal with endogeneity of exporting using several econometric models. Our findings are very robust. For most of the aspects analyzed, exporters perceive lower innovation obstacles compared to non-exporters. Consistent with the concept of learning by exporting, it seems that the internationalization process allows firms to access new knowledge and technologies to improving their innovation capabilities. This can have relevant implications for public policy, particularly suggesting that public support for innovation would be more important for non-exporter firms.
    Date: 2023–10
  27. By: Sebastian Heinrich (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Samad Sarferaz (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper studies the global synchronicity of technology and its impact on the economy. We employ dynamic factor analysis to decompose patent data in different digital technologies for various countries into global and country-speciffc factors. Our findings confirm the existence of global and local technology cycles. We further find a significant positive correlation between the estimated global technology index and a country's economic performance. This positive effect is stronger in countries with broad tech-nological exposure. However, a concentration in only few dominant techno-logical fields seems to reduce the positive impact of the global technology cycle on a country's economic performance.
    Keywords: innovation index, dynamic factor model, patent data, produc- tivity growth, knowledge diffusion, digitalization, globalization
    JEL: O31 O33 O47 C38 L86
    Date: 2023–05
  28. By: Geoffrey Barrows; Hélène Ollivier; Ariell Reshef
    Abstract: We develop a procedure to estimate production functions, elasticities of demand, and productivity when firms endogenously select into multiple destination markets where they compete imperfectly, and when researchers observe output denominated only in value. We show that ignoring the multi-destination dimension (i.e., exporting) yields biased and inconsistent inference. Our estimator extends the two-stage procedure of Gandhi et al. (2020) to this setting, which allows for cross-market complementarities. In Monte Carlo simulations, we show that our estimator is consistent and performs well in finite samples. Using French manufacturing data, we find average total returns to scale greater than 1, average returns to variable inputs less than 1, price elasticities of demand between -21.5 and -3.4, and learning-by-exporting effects between 0 and 4% per year. Alternative estimation procedures yield unrealistic estimates of returns to scale, demand elasticities, or both.
    Keywords: production function, learning by exporting, trade, productivity
    JEL: F12 F63 D24
    Date: 2023
  29. By: Canan Yildirim (ESC [Rennes] - ESC Rennes School of Business); Adnan Kasman (Adnan Menderes Üniversitesi); Fazelina Sahul Hamid (USM - Universiti Sains Malaysia)
    Abstract: The change in crossborder financial intermediation and rise in regional banking have consequences for competitive conduct in emerging countries' banking markets. Using data from the Association of Southeast Asian Nations countries' banks during 2011–2018, we examine the nexus between foreign ownership and banks' market power by controlling for the heterogeneity of foreign banks concerning their countries of origin (advanced vs. emerging and regional vs. nonregional). We find that the increasing presence of foreign banks from advanced countries is associated with lower bank market power because of higher marginal costs and lower price–cost margins of the domestic banks. However, the increasing presence of emerging countries' banks is associated with higher bank market power because of lower marginal costs and prices of domestic lenders. Our findings have implications for policies regarding bank competitiveness and promoting regional banking integration because domestic banks conduct differently under increased participation levels of advanced and emerging country foreign banks.
    Keywords: Bank market power, Foreign ownership, Regional banks, ASEAN
    Date: 2021–12
  30. By: Mickenzie Bass; Jesse LaBelle; Ana Maria Santacreu
    Abstract: An analysis indicates that a high percentage of U.S. patents that shifted to tax havens like Bermuda are intrafirm transfers. Such transfers may be a tax avoidance strategy by multinationals.
    Keywords: patents; tax havens; intrafirm patent transfers; tax avoidance; multinational corporations
    Date: 2023–09–12
  31. By: Sangyup Choi (Yonsei University); Jiri Havel (University of Rochester)
    Abstract: We study the influence of local geopolitical risk on U.S. cross-border portfolio investment, covering the period from 1994 to 2021. We uncover significant heterogeneity between advanced and emerging market destinations, revealing that local geopolitical risk exerts a dampening effect on U.S. purchases of bonds and equities solely within emerging markets, while having no discernible impact on advanced markets. We identify poor institutional quality as the primary driver behind the heightened sensitivity of portfolio investment to geopolitical risk in emerging markets, thereby signaling potential implications for financial stability. Moreover, our analysis reveals a noteworthy phenomenon where U.S. investment in emerging market bonds experiences a considerable decline in response to the geopolitical risk within other emerging markets in close geographical proximity, displaying a robust contagion effect. However, such contagions do not manifest in cross-border equity investment. Notably, these contagion effects are observed exclusively among emerging markets, providing valuable insights into investors’ portfolio adjustments in the face of elevated geopolitical risk.
    Keywords: Geopolitical risk; Foreign portfolio investment; Emerging markets; Institutional quality; Trilemma; Contagion
    JEL: E44 F21 F51 G11
    Date: 2023–10
  32. By: Nikulin, Alexander (Никулин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Kurakin, Alexander (Куракин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Trotsuk, Irina (Троцук, Ирина) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The relevance of the food superpower study is determined not only by the scientific interest of agrarian economics, sociology or history, but, primarily, by the tasks of agricultural policy, by the need in strategic and practical decisions of the subjects of public administration. The study aims at a comparative analysis of the food development strategies of Russia and the United States in the historical and contemporary perspectives. The subject is food-development and food-security strategies applied by Russia and the USA. Interdisciplinary and comparative methods are used to identify the key features of the food and agro-industrial development in two countries. Based on the results, the study presents not only environmental or technological factors in the formation of the agrarian strategies of the USA and the USSR, but also political and economic factors (American depression and Soviet collectivization; NeoNEP in the USSR and the New Deal in the USA). The paper concludes with a set of variables for the study of strategies for becoming a food superpower and for keeping this status: at the stage of becoming a food superpower – state policy to support agriculture, introduction of new technologies and methods of farming, development of consulting services, agricultural cooperation, wholesale markets and supply chains, social development of the village and information infrastructure, integration with world markets and expansion of food trade; at the stage of keeping and strengthening the status – the use of the newest technologies and agricultural practices, effective consulting services, expanding links with retail markets and international food trade, regional climate resilience. The novelty of the study is determined by the attempt to model a path for becoming a food superpower based on the comparative analysis of the US and Russia food strategies, and by testing of the hypothesis that there are two stages in the evolution of a food superpower. Based on the study of the real global leadership of Russia and the United States as wheat exporting countries and of the planned development of organic food production, the paper provides some recommendations on the possible ways for combining these two strategies and overcoming their limitations.
    Keywords: food security, food superpower, agriculture, agricultural production, economic strategy, food development strategy, Russia, USA
    Date: 2022
  33. By: Rachel Glennerster (University of Chicago); Seema Jayachandran (Princeton University)
    Abstract: Reductions in greenhouse gas emissions are a global public good, which makes it efficient to act globally when addressing this challenge. We lay out several reasons that high-income countries seeking to mitigate climate change might have greater impact if they invest their resources in opportunities in low- and middle-income countries. Specifically, some of the easiest and cheapest options have already been tapped in high-income countries, land and labor costs are lower in low- and middle-income countries, it is cheaper to build green than to retrofit green, and global targeting matters in integrated economies. We also discuss economic counterarguments such as the challenge of monitoring emissions levels in low and middle-income countries, ethical considerations, the importance of not double counting mitigation funding as development aid, and policy steps that might help to realize this opportunity.
    Keywords: Climate change, mitigation, Paris Agreement, greenhouse gas emissions
    JEL: F18 O13 Q54 Q56
    Date: 2023–06

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