nep-int New Economics Papers
on International Trade
Issue of 2023‒11‒27
forty-four papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Re-Assessing the Impacts of Exports on Local Labour Market Outcomes: A Supply Chain Perspective. Evidence from Egypt By Tillian, Pablo; Kokas, Deeksha; Góes, Carlos; Lopez-Acevedo, Gladys
  2. The Impact of Offshoring and Import Competition on Firm-Level Carbon Emissions By Leisner, Jonathan; Munch, Jakob R.; Nielsen, August Twile; Schaur, Georg
  3. Effect of Aid for Trade on Recipient-Countries' Participation in Global Value Chains By Gnangnon, Sèna Kimm
  4. Long Live Globalization: Geopolitical Shocks and International Trade By Mr. Serhan Cevik
  5. Export rebates and the EU carbon border adjustment mechanism: WTO law and environmental objections By Leonelli, Giulia Claudia
  6. Factors Affecting Carbon Dioxide Emissions Embodied in Trade By Kang , Jong Woo; Gapay, Joshua Anthony
  7. ESTIMATES OF DISTORTIONS OF THE ECONOMIES OF THE EAEU COUNTRIES FROM EXISTING NON-TARIFF BARRIERS (first stage) By Eremin, Vladimir (Ерёмин, Владимир); Sedalishchev, Vladimir (Седалищев, Владимир)
  8. Trading places: Mobility responses of native and foreign-born adults to the China trade shock By David Autor; David Dorn; Gordon H. Hanson
  9. How can governments help small enterprises integrate into global value chains? By Pundir, Gaurav
  10. Learning from Brexit: What parallels for decoupling from China? By Hufbauer, Gary Clyde
  11. What role for aid for trade in (deep) PTA relations? Empirical evidence from gravity model estimations By Stender, Frederik; Vogel, Tim
  12. The distributional effects of trade: Theory and evidence from the United States By Kirill Borusyak; Xavier Jaravel
  13. Carbon border measures, environmental effectiveness and WTO law compatibility: is there a way forward for the steel and aluminium climate club? By Leonelli, Giulia Claudia
  14. The Arms Trade and Its Bearing on the Russia-Ukraine War By Subhayu Bandyopadhyay; Praew Grittayaphong
  15. Pollution havens? Carbon taxes, globalization, and the geography of emissions By Schroeder, Christofer; Stracca, Livio
  16. Heterogeneous Agent Trade By Michael E. Waugh
  17. Russia-CIS co-operation development in the context of world economic structural transformation. (Part I) By Knobel, Alexander (Кнобель, Александр); Bagdasaryan, Kniaz (Багдасарян, Княз); Zaytsev, Yuriy (Зайцев, Юрий); Sedalishchev, Vladimir (Седалищев, Владимир); Firanchuk, Alexander (Фиранчук, Александр); Baeva, Marina (Баева, Марина); Kazaryan, Maria (Казарян, Мария); Kuznetsov, Dmitrii (Кузнецов, Дмитрий)
  18. How U.S. Import Shipping Costs Vary across Countries and Industries By Jason Dunn; Fernando Leibovici
  19. The Nature, Evolution and Potential Implications of Data Localisation Measures By Chiara Del Giovane; Janos Ferencz; Javier López González
  20. Beyond the Hump: Structural Change in an Open Economy By Lidia Smitkova
  21. Non-tariff Measures vs. Tariffs: A Fresh Look at the Evidence By David J. Kuenzel
  22. CFIUS part II? The US moves to restrict outbound FDI to China By Egan, Brian J.; Clarke, Katie
  23. Dissecting the sinews of power: international trade and the rise of Britain's fiscal-military state, 1689-1823 By Ernesto Dal Bo; Karolina Hutkova; Lukas Leucht; Noam Yuchtman
  24. The Impact of Multinationals Along the Job Ladder By Ragnhild Balsvik; Doireann Fitzgerald; Stephanie Haller
  25. Dissecting the sinews of power: International trade and the rise of Britain's fiscal military state, 1689-1823 By Ernesto Dal Bo; Karolina Hutkova; Lukas Leucht; Noam Yuchtman
  26. Economic Cooperation Policies of China, Japan and India towards South Asia and Their Implications for Korea By KIM , Jeong Gon
  27. The Role of Petrochemical Sector Exports in the Diversification of the Saudi Economy: A Scenario Analysis of Foreign and Domestic Price Shocks By Fakhri Hasanov; Muhammad Javid; Heyran Aliyeva
  28. FDI spillovers and productivity in Vietnamese manufacturing industries - New insights from the unconditional quantile regression By Thanh Tam Nguyen-Huu
  29. The Interwar Period International Trade in Arms (IPITA): A New Dataset By Mehrl, Marius; Thurner, Paul
  30. FDI and superstar spillovers: Evidence from firm-to-firm transactions By Mary Amiti; Cedric Duprez; Jozef Konings; John Van Reenen
  31. 클라우드 서비스 해외투자 동향과 국내 규제 분석(Cloud Services FDI and Regulatory Trends) By Lee, Kyu Yub; Eom, Jun Hyun
  32. Systematic literature review: theory on GVCs' impact on wages, employment, and productivity By Sabina Szymczak
  33. FDI spillovers, New Industry Development, and Economic Growth By Thanh Tam Nguyen-Huu; Ngoc‐sang Pham
  34. The world uncertainty index By Hites Ahir; Nicholas Bloom; Davide Furceri
  35. The Role of Infrastructure in the Dynamics of Intra-African Trade: Implications for the AfCFTA By Ibrahima Alassane Ba
  36. Rethinking umbrella clauses in international investment agreements By Chaisse, Julien
  37. The European refugee crisis and public support for the externalisation of migration management By Vrânceanu, Alina; Dinas, Elias; Heidland, Tobias; Ruhs, Martin
  38. East Asia Outpaces Other Regions in International Patenting By Jesse LaBelle; Ana Maria Santacreu
  39. Effect of Economic Uncertainty on Remittances Flows from Developed Countries By Gnangnon, Sèna Kimm
  40. Impact of China's Emissions Trading System on Industries and its Policy Implications By Jung , Jihyun
  41. Immigration and U.S. Labor Market Tightness: Is There a Link? By Maggie Isaacson; Hannah Rubinton
  42. International Relations And Global Politics: Germany’s Cultural Diplomacy: A Political-Logical Case Study Of Friedrich-Ebert-Stiftung In Vietnam By blessing, elisha; eric, charles; alexis, serena
  43. Methods used to estimate the poverty impact of increases in international food prices By Minot, Nicholas; Martin, Will
  44. Terms-of-Trade Shocks, External Adjustments and Growth in Pakistan: How Much to Sacrifice By Mahmood, Asif; Asif, Hashaam

  1. By: Tillian, Pablo (World Bank); Kokas, Deeksha (Nanyang Technological University, Singapore); Góes, Carlos (University of San Diego); Lopez-Acevedo, Gladys (World Bank)
    Abstract: This paper examines the overall impact of exports while accounting for supply chain linkages on local labor market outcomes in Egypt between 2007 and 2018. We assess the effects not only on directly exporting industries but also on industries indirectly affected by rising export demand. Furthermore, we examine potential impacts on specific worker groups, such as high-skilled individuals and female workers. The results show that trade does not lead to the same connection with domestic labor markets in Egypt as observed in other countries, as highlighted in the existing literature explaining the adverse effects of imports on developing countries. Despite being more open to trade, trade-intensive industries in Egypt have not experienced a significant increase in their share of employment within the overall workforce.
    Keywords: trade policy, trade flows, labor market outcomes, firm dynamics
    JEL: F13 F14 F15 F16 J23 J31 O15 O19
    Date: 2023–10
  2. By: Leisner, Jonathan (University of Copenhagen); Munch, Jakob R. (University of Copenhagen); Nielsen, August Twile (University of Copenhagen); Schaur, Georg (University of Tennessee)
    Abstract: We use Danish firm-level data to examine the causal link between carbon emissions, offshoring, and import competition. Offshoring reduces firms' emission intensity but increases their production. Import competition reduces firms' production without affecting their emission intensity. For Denmark, these effects imply that observed offshoring trends reduced the overall manufacturing emission intensity while import competition did not. However, despite the emission reducing effects in local manufacturing, offshoring did not affect global emissions. Furthermore, import competition substantially increased global emissions. Therefore, based on offshoring and Chinese import competition, our results suggest that international trade may be bad for the global environment.
    Keywords: carbon emissions, offshoring, import competition
    JEL: F14 F18 Q54 Q56
    Date: 2023–10
  3. By: Gnangnon, Sèna Kimm
    Abstract: The present analysis has investigated, at the country-level, the effect of Aid for Trade (AfT) flows on recipient countries' participation in Global Value Chains (GVCs), measured through countries' participation in forward and backward GVCs as well as their position in GVCs. The analysis has covered 80 countries over the period from 2002 to 2018, and used the within fixed effects, the random effect Mundlak approach and the "Quantile via Moments" approach. It has established several findings. On average, AfT interventions promote backward GVC participation, but do not affect forward GVC participation. Total AfT flows (including AfT flows for economic infrastructure, AfT for productive capacities and AfT for trade policy and regulation) enhance backward GVC participation across all quantiles, and the magnitude of this positive is larger for countries in lower quantiles (including the lowest one) than for those in upper quantiles. These resource inflows do not affect forward GVC participation by countries situated in upper quantiles, but do increase forward GVC participation by countries located in lower quantiles. They do not affect the GVC position of countries in lower quantiles, but encourage more engagement in downstream activities than in upstream activities for countries located in the 75th and 90th quantiles. The effects of the three components of AfT flows on countries' forward GVC participation and GVC position are mixed, and vary across quantiles. Finally, the analysis has shown that the effect of AfT interventions on countries' participation in GVCs does depend on the overall trade costs faced by countries, including their tariff and nontariff costs.
    Keywords: Aid for Trade flows, Participation in Global Value Chains
    JEL: F15 F35
    Date: 2023
  4. By: Mr. Serhan Cevik
    Abstract: Are we really witnessing the death of globalization? A multitude of shocks over the past three years has unsettled the conventional wisdom on economic integration and fueled widespread calls for protectionist and nationalist policies. Using an extensive dataset with more than 4 million observations, I develop an augmented gravity model of bilateral trade flows among 59, 049 country-pairs over the period 1948–2021 and find that the much-debated geopolitical alignment between countries has contradictory and statistically insignificant effects on trade, depending on the level of economic development. Moreover, the economic magnitude of this effect is not as important as income or geographic distance and it diminishes significantly when extreme outliers are removed from the sample. The empirical analysis presented in this paper also confirms that the level of income in both origin and destination countries has a positive impact on trade, while the greater the distance between countries, the smaller the flow of bilateral trade due to higher trade costs. Cultural similarities and historical ties are also important in shaping trade flows, just like trade agreements that tend to lead to higher level of international trade.
    Keywords: Globalization; international trade; gravity model; geopolitics
    Date: 2023–10–27
  5. By: Leonelli, Giulia Claudia
    Abstract: The EU proposal for a carbon border adjustment mechanism (‘CBAM’) has triggered a lively academic and policy debate. In June 2022, the European Parliament put forward amendments regarding the potential introduction of export rebates under the EU Emission Trading System (‘ETS’) and the CBAM. This article focuses on this specific proposal, enquiring into the WTO law compatibility of ETS/CBAM export rebates. First, it enquires whether the ‘pecuniary burden’ associated with compliance with the CBAM would qualify as a ‘charge’ that is ‘equivalent to an internal tax’ and that is ‘imposed consistently with Article III:2 GATT’. Second, it suggests that the ‘pecuniary burden’ associated with compliance with the ETS/ CBAM is unlikely to qualify as an adjustable product tax; the analysis draws on a close examination of relevant provisions in the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Subsidies and Countervailing Measures (‘SCMA’). Finally, the article develops some brief considerations on the detrimental environmental effects of export rebates. As the article concludes, the regulatory design of the CBAM is not perfect; export rebates, however, would make this scheme considerably worse.
    Keywords: agreement on Subsidies and Countervailing Measures; border tax adjustment; carbon border adjustment Mechanism; carbon border measures; charge; emission trading system; export rebates; GATT 1994; tax
    JEL: J1
    Date: 2023
  6. By: Kang , Jong Woo (Asian Development Bank); Gapay, Joshua Anthony (Asian Development Bank)
    Abstract: Trade encourages economic expansion and improves welfare based on international division of labor. However, trade also has an environmental footprint, particularly in the form of carbon dioxide (CO2) and other emissions. This paper examines the impact of environmental regulation in exporter and importer economies on cross-border carbon flows. It uses pooled estimation, random effects, fixed effects, fixed effects with instrumental variables, and Poisson pseudo maximum likelihood models to estimate the effect of more stringent environmental regulation, while controlling for scale, technique, and composition effects associated with CO2 emissions. While stricter environmental regulations help reduce CO2 emissions from domestic production, leading to lower CO2 emissions embodied in exports, stricter regulations on the importing side lead to higher CO2 emissions embodied in imports. More importantly, stricter environmental regulations could encourage further outsourcing of intermediate inputs by exporters, prompting carbon leakages in the upstream segment of global value chains
    Keywords: CO2 emissions; carbon leakage; trade; global value chain
    JEL: F10 F14 F18
    Date: 2023–10–30
  7. By: Eremin, Vladimir (Ерёмин, Владимир) (The Russian Presidential Academy of National Economy and Public Administration); Sedalishchev, Vladimir (Седалищев, Владимир) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Inevitably, non-tariff barriers (NTBs) that exist in trade between countries generate rents associated with them, which can either be distributed in some ratio between trading partners or dissipate, thereby leading to a loss of resources. The valuation of these rents and their distribution is not an easy task, because the effect of NTBs in their entirety is usually difficult to quantify due to the different nature of the trade restrictions that make up NTBs. Nevertheless, in the light of the global trend towards tariff liberalization that has been going on for more than a hundred years, this task sometimes becomes more important in the study of trade than classical studies of the impact of import and/or export tariffs, since NTB rents can multiply tariff revenue. One of the possible tools for modeling the impact of NTBs on the economies of various countries (and in particular on the domestic prices of goods), taking into account the existing trade relations between states, are static CGE trading models (from the English Computable General Equilibrium models - computable general equilibrium models). One of the objectives of this study is to prepare our own database based on the most recent available statistical data, similar in structure to the GTAP 10 database, but with a smaller number of regions and supplemented with information about the ad valorem equivalents of the goods we are interested in in the context of trading partners. As the results in this study, the following aspects of the work carried out can be distinguished, such as a review of the literature on existing approaches to assessing the imbalances of economies generated by NTM, as well as an analysis of trade in goods and services between the EAEU countries and their main partners, which is necessary for interpreting the results of the numerical modeling stage, a scheme for preparing input data for calibration of the used CGE models.
    Keywords: global economy, international trade, CGE, trade policy, Russian Federation, foreign economic strategy, computable general equilibrium models, GTAP database, export restrictions, global matrices of social accounts, EAEU, non-tariff barriers
    JEL: F02 F13
    Date: 2023–10–19
  8. By: David Autor; David Dorn; Gordon H. Hanson
    Abstract: Previous research finds that the greater geographic mobility of foreign than native-born workers following economic shocks helps to facilitate local labor market adjustment to shifting regional economic conditions. We examine the role that immigration may have played in enabling U.S. commuting zones to respond to manufacturing job loss caused by import competition from China. Although population headcounts of the foreign-born fell by more than those of the native-born in regions exposed to the China trade shock, the overall contribution of immigration to labor market adjustment in this episode was small. Because most U.S. immigrants arrived in the country after manufacturing regions were already mature, few took up jobs in industries that would later see increased import penetration from China. The foreign-born share of the working-age population in regions with high trade exposure was only three-fifths that in regions with low exposure. Immigration thus appears more likely to aid adjustment to cyclical shocks, in which job loss occurs in regions that had recent booms in hiring, rather than facilitating adjustment to secular regional decline, in which hiring booms occurred in the more distant past.
    Keywords: geographic mobility, foreign-born, native-born, economic shocks, China, immigration, labor
    Date: 2023–06–01
  9. By: Pundir, Gaurav
    Abstract: Though MNE-SME linkages accelerate integration of small businesses into global value chains, FDI alone does not suffice. This Perspective argues that supportive host country policies like spurring adoption of digital tools, promoting ease of acquiring certifications, improving access to finance, and attracting investment from MNE suppliers make firms linkage-ready.
    Date: 2023
  10. By: Hufbauer, Gary Clyde
    Abstract: Geopolitical decoupling is intended to, and generally succeeds in, reducing bilateral trade flows. But what about its impact on FDI? This Perspective examines the recent experience of UK FDI after Brexit, and Chinese FDI after Trump.
    Date: 2023
  11. By: Stender, Frederik; Vogel, Tim
    Abstract: While recent preferential trade agreements (PTAs) cover an increasingly broad range of policy areas beyond their traditional competence for reducing bilateral tariffs, little is known about the implications of this new emphasis on interactions with other trade-related policy measures. We approach this gap by examining the effectiveness of bilateral aid for trade (AfT) in deep North-South PTA relations. To this end, we use a structural gravity model for bilateral panel data of 29 OECD DAC countries and 144 developing countries from 2002-2015 and find that the marginal effect of AfT decreases as the policy areas of a PTA expand. Further investigation of the underlying mechanisms suggests that the observed trade-off between PTA depth and AfT effectiveness may be due to compliance with the non-tariff provisions contained in deep PTAs. We find two lines of reasoning plausible. First, compliance efforts appear to consume large fractions of AfT and thus reduce AfT available for potentially more effective projects, as we do not observe an alignment of AfT in deep PTAs. Second, since we also observe heterogeneity in interactions across donors, depending on their specific project portfolios, AfT provided by high-income PTA partners could well be used to redirect exports to third countries with comparatively fewer bilateral obligations. Donor countries should therefore carefully weigh compliance costs to developing countries against the non-trade benefits of common deep PTAs, and accurately identify financial and technical assistance needs together with their PTA partners.
    Keywords: Aid for trade effectiveness, gravity model of trade, non-tariff provisions, preferential trade agreements, PTA depth, South-North trade
    JEL: F14 F15 F35
    Date: 2023
  12. By: Kirill Borusyak; Xavier Jaravel
    Abstract: How much do consumption patterns matter for the impact of international trade on inequality? In neoclassical trade models, the effects of trade shocks on consumers' purchasing power are governed by the shares of imports in consumer expenditures, under no parametric assumptions on preferences and technology. This paper provides in-depth measurement of import shares across the income distribution in the United States, using new datasets linking expenditure and customs microdata. Contrary to common wisdom, we find that import shares are at throughout the income distribution: the purchasing-power gains from lower trade costs are distributionally neutral. Accounting for changes in wages in addition to prices in a unified nonparametric framework, we find substantial distributional effects that arise within, but not across, income and education groups. There is little impact of a fall in trade costs on inequality, even though trade shocks generate winners and losers at all income levels, via wage changes.
    Keywords: consumption patterns, international trade, inequality, trade shocks, technology, income distribution, United States
    Date: 2023–06–01
  13. By: Leonelli, Giulia Claudia
    Abstract: with its narrow focus on price-based policies and 'explicit' carbon prices, the EU carbon border adjustment mechanism (CBAM) aims to prevent carbon leakage by ensuring that imported products 'bear' the same exact economic costs 'borne' by EU products. The proposed US border carbon adjustment (BCA) and the recent proposal for a global steel and aluminium arrangement (GSAA), by contrast, reflect a broader focus on environmental equivalence and recourse to punitive or quasi-punitive remedies. All recently proposed carbon border measures suffer from specific limitations. Further, albeit to a different extent, they are all associated with problematic aspects in terms of WTO law compatibility. This research note enquires whether the GSAA could be fine-tuned at the regulatory design stage in such a way as to provide an environmentally effective and WTO law compatible way forward. The analysis illustrates that recourse to an installation-based approach, emission limit values and product standards would achieve these goals. Nonetheless, the implementation of this ambitious strategy would be fraught with political obstacles.
    Keywords: 'Global Steel and Aluminium Arrangement'; 'Green Steel Deal'; carbon border measures; CBAM; climate clubs; GATT 1994
    JEL: J1
    Date: 2022–06–24
  14. By: Subhayu Bandyopadhyay; Praew Grittayaphong
    Abstract: The arms trade links nations through their security interests, and its current patterns may be complicating a political resolution of the Russia-Ukraine war.
    Keywords: Russian invasion of Ukraine; Russia; Ukraine; arms trade
    Date: 2022–11–21
  15. By: Schroeder, Christofer; Stracca, Livio
    Abstract: This paper studies the impact of national carbon taxes on CO2 emissions. To do so, we run local projections on a cross-country panel dataset, matching measures of emissions of carbon dioxide with information on the introduction of carbon taxes and their implied price. Importantly, we consider both measures of territorial emissions — emissions emitted within a country’s borders — and consumption emissions — emissions emitted anywhere in the world to satisfy domestic demand. We find that carbon taxes reduce territorial emissions over time, but have no significant effect on consumption emissions. Our estimates are robust to propensity-score weighting adjustments and are driven by countries which are more open to trade. Carbon taxes also lead to a modest increase in imports, suggesting that international trade may imply a negative carbon externality. Together, our findings highlight the limitations of national carbon taxes in isolation and the importance of international cooperation in reducing global emissions. JEL Classification: F18, F64, H23, Q58
    Keywords: carbon leakage, carbon taxes, emissions
    Date: 2023–11
  16. By: Michael E. Waugh
    Abstract: This paper studies the implications of household heterogeneity for trade. I develop a model where household heterogeneity is induced via incomplete markets and results in heterogeneous price elasticities. Conditional on exposure to trade, heterogeneous price elasticities imply that different households value price changes differently, and thus rich and poor households experience different gains from trade. I calibrate the model to match bilateral trade flows and micro-facts about household-level expenditure patterns and elasticities. I find gains from trade that are pro-poor and that the average gains from trade are substantially larger than representative agent benchmarks.
    Keywords: International trade; Heterogeneous agent; Inequality
    JEL: E20 F40 F10 D30
    Date: 2023–10–18
  17. By: Knobel, Alexander (Кнобель, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Bagdasaryan, Kniaz (Багдасарян, Княз) (The Russian Presidential Academy of National Economy and Public Administration); Zaytsev, Yuriy (Зайцев, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); Sedalishchev, Vladimir (Седалищев, Владимир) (The Russian Presidential Academy of National Economy and Public Administration); Firanchuk, Alexander (Фиранчук, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Baeva, Marina (Баева, Марина) (The Russian Presidential Academy of National Economy and Public Administration); Kazaryan, Maria (Казарян, Мария) (The Russian Presidential Academy of National Economy and Public Administration); Kuznetsov, Dmitrii (Кузнецов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The first part of the research studies theoretical approaches, models and factors in determining the structural transformation of the world economy and presents some empirical assessments. The object of this study is trade and economic cooperation of the CIS countries in the context of structural transformation of the world economy and new trade and political restrictions introduced against Russia and Belarus, which have a significant impact on the entire system of foreign economic relations. The aim of the study is to assess the changes in the level of integration in different spheres of Russia, the EU, China with the CIS countries and CIS countries among themselves and the impact of sanctions against Russia and Belarus on the CIS countries. The relevance of the work is justified by the transformation of economic ties of the CIS countries, the forced need for Russia to search for new international transport and logistics routes and financial schemes and the processes of transformation of the system of international economic relations, which together form a new economic reality for the CIS. The paper uses an empirical method of quantitative data research, econometric method of calculating various indicators and indices, as well as systemic analysis. The main results of the study consist in analyzing changes in the conditions of trade and economic cooperation of post-Soviet countries and integration in different spheres in 2022, including interrupted projects, including those with third countries.
    Keywords: Commonwealth of Independent States (CIS), post-soviet region, integration processes, structural transformation, economic cooperation, impact of sanctions, integration index, Russian Federation
    JEL: F02 F2 F5 R11
    Date: 2023–10–18
  18. By: Jason Dunn; Fernando Leibovici
    Abstract: Shipping costs vary greatly across countries and industries. So surging costs likely have a greater impact on imports from distant sources and imports of large, low-value goods.
    Keywords: imports; shipping; shipping costs
    Date: 2023–04–17
  19. By: Chiara Del Giovane; Janos Ferencz; Javier López González
    Abstract: This paper examines the nature and evolution of data localisation measures and their impact on business activity. It highlights that data localisation measures are growing and increasingly restrictive. By early 2023, 100 such measures were in place across 40 countries, with more than two-thirds combining local storage requirements with flow prohibition, the most restrictive form of data localisation. Insights gained from businesses operating in the e-payments, cloud computing, and air travel sectors suggest that data localisation can have unintended consequences. It not only increases operating costs, with implications for downstream users, but can also lead to increased vulnerabilities to fraud and cybersecurity risks, and reduced resilience to unexpected shocks. While international regulatory efforts have largely taken place through regional trade agreements (RTAs), this paper calls for continued monitoring of the regulatory environment with a view to informing efforts to agree on global rules that take into account legitimate public policy objectives while avoiding excessive fragmentation, especially through discussion at the WTO under the Joint Initiative on e-commerce.
    Keywords: data flows, Data storage, digital economy, digital trade, e-commerce, trade policy
    JEL: F13 F14
    Date: 2023–11–10
  20. By: Lidia Smitkova
    Abstract: This paper investigates the role of trade in driving structural change. First, I develop a decomposition that attributes change in manufacturing shares to adjustments along three margins: international sourcing decisions, sectoral expenditure shares, and aggregate trade deficits. Using a structural model, I interpret these as endogenous responses to exogenous shocks. Applying the decomposition to data from twenty economies between 1965 and 2011, I find that 40% of the observed change in manufacturing shares was due to specialization subject to comparative advantage and compositional effects arising from international borrowing. Moreover, these mechanisms were key in driving the cross-country heterogeneity and changes in the composition of aggregate manufacturing. Finally, I use counterfactual analysis to inspect two popular narratives that link trade and industrialization. My results show that the competition with China has resulted in a world-wide squeeze in manufacturing shares, and that in South Korea, trade specialization was responsible for both its rapid industrialization, and the shift towards high-technology manufacturing.
    Date: 2023–05–15
  21. By: David J. Kuenzel (Department of Economics, Wesleyan University)
    Abstract: This paper examines the relationship between tariffs and the usage of non-tariff measures (NTMs) for a product-level global panel of 97 countries over the period 1996-2020. Using the most comprehensive NTM data set to date, I find that tariff levels or changes therein are of little relevance for implementing NTMs. Instead, smaller tariff overhangs, the difference between WTO members’ bound and applied tariff rates, emerge as a significant predictor of future NTM actions. The inverse link between tariff overhangs and NTMs is observable both (i) at the aggregate NTM level and (ii) for the large majority of different NTM subcategories.
    Keywords: Non-tariff Measures, Tariffs, GATT/WTO
    JEL: F13 F14 F53
    Date: 2023–10
  22. By: Egan, Brian J.; Clarke, Katie
    Abstract: The Biden Administration recently released its executive order to ban certain outbound U.S. FDI to China and implement reporting requirements for other investments in China. This Perspective provides important context for the order and highlights key issues the Administration must address in its draft rulemaking.
    Date: 2023
  23. By: Ernesto Dal Bo; Karolina Hutkova; Lukas Leucht; Noam Yuchtman
    Abstract: We evaluate the role of taxes on trade in the development of imperial Britain's fiscal-military state. Influential work, e.g., Brewer's (1989) Sinews of Power, attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in taxes on traded goods, accounting for over half of indirect taxation around 1800. This challenges the conventional wisdom attributing the development of the British state to domestic factors: international factors mattered, too.
    Keywords: fiscal capacity, international trade, British empire, taxation
    Date: 2023–07–05
  24. By: Ragnhild Balsvik; Doireann Fitzgerald; Stephanie 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: Job ladder; Multinationals; Labor market
    JEL: F66 F23 J63 J64 E24
    Date: 2023–10–12
  25. By: Ernesto Dal Bo; Karolina Hutkova; Lukas Leucht; Noam Yuchtman
    Abstract: We evaluate the role of taxes on trade in the development of imperial Britain's fiscal-military state. Influential work, e.g., Brewer's (1989) Sinews of Power, attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in taxes on traded goods, accounting for over half of indirect taxation around 1800. This challenges the conventional wisdom attributing the development of the British state to domestic factors: international factors mattered, too.
    Keywords: Fiscal capacity, international trade, British empire, taxation
    Date: 2022–12–20
    Abstract: With the Indo-Pacific region increasingly gaining recognition for its strategic im-portance, countries such as China, Japan, and India are seeking close economic coop-eration with South Asian countries. This report analyses these countries’ strategic perspectives and cooperation policies towards South Asia (Pakistan, Bangladesh, Sri Lanka) under the rapidly changing international political and economic environment, and examines Korea’s future economic cooperation strategies and policies. Korea’s economic cooperation with South Asian countries has mainly focused on ODA. Although trade and investment have been centered on some manufacturing industries, they have recently shown a shrinking trend. While competition among major countries in South Asia is in full swing, it is necessary to establish a new direction for economic cooperation and promote policies towards South Asia from a strategic perspective.
    Keywords: Economic Cooperation Policies of China; Japan and India; towards South Asia and Their Implications for Korea
    Date: 2023–10–19
  27. By: Fakhri Hasanov; Muhammad Javid; Heyran Aliyeva (King Abdullah Petroleum Studies and Research Center)
    Abstract: Diversification of the economy, including exports, is a core goal of Saudi Vision 2030 (SV2030). The petrochemical sector can considerably contribute to the Kingdom’s diversification strategy, as it holds a substantial share in non-oil exports. First, this study econometrically estimated how exports of chemicals and rubber-plastics were shaped by theoretically articulated domestic and foreign factors over the 1993-2020 period. Then, the estimated export equations were integrated into a general equilibrium model, called the King Abdullah Petroleum Studies and Research Center (KAPSARC) Global Energy Macroeconometric Model (KGEMM), and a scenario analysis was conducted for the diversification implications of foreign and domestic price shocks until 2035.
    Keywords: Agent based modeling, Analytics, Applied Research, Autometrics
    Date: 2023–10–22
  28. By: Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)
    Abstract: This research investigates the effects of FDI spillovers on the productivity of domestic firms by relying on unconditional quantile regression. Using panel data of Vietnamese enterprises over the period 2000–2012, we find evidence of positive spillovers for firms at the lower tails and negative spillovers for those at the upper tails of the productivity distribution. Time and the firm's legal status are other factors determining the effect of FDI spillovers. Notably, only low productivity state-own enterprises benefit from positive horizontal spillovers, but in the long run rather than in the short run.
    Keywords: FDI spillovers, Total factor productivity, Unconditional quantile regression
    Date: 2023–07–11
  29. By: Mehrl, Marius; Thurner, Paul
    Abstract: International weapons transfers send military capabilities, make arms production economically feasible, and construct security relations. They influence buyers’ and sellers’ foreign policies, domestic politics, and military spending behavior. However, data availability has limited their study to the bipolar Cold War and unipolar post-Cold War periods. We thus introduce the Interwar Period International Trade in Arms (IPITA) data, covering dyadic transfers of small arms, light weapons, ammunition, explosives, and major conventional weapons in the years 1920-1939. The IPITA data will offer new avenues to study the drivers, dynamics, and consequences of arms transfers, both in past and future multipolar systems.
    Date: 2023–11–02
  30. By: Mary Amiti; Cedric Duprez; Jozef Konings; John Van Reenen
    Abstract: Using firm-to-firm transactions, we show that starting to supply a 'superstar' firm (large domestic firms, exporters, and multinationals) boosts productivity by 8% in the medium run. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of "superstar spillovers". Consistent with a model of technology transfer, we find falls in markups and bigger treatment effects from technology intensive superstars. We also show that the increase in new buyers is particularly strong within the superstar firm's network, a "dating agency" effect. This suggests an important role for raising productivity through superstars' supply chains regardless of their multinational status.
    Keywords: productivity, FDI, spillovers
    Date: 2023–04–27
    Abstract: 이 보고서에서는 클라우드 서비스 해외직접투자의 목적, 규모, 투자 패턴, 주요 경쟁국과 투자대상국, 기업 사례를 통계 분석하고, 주요국을 중심으로 클라우드 산업 관련 국내 규제인 시장개방, 데이터 현지화, 국경간 데이터 이동 제한, 보안인증, 콘텐츠 통제 등을 비교 검토한다. This report examines cloud services FDI and regulatory trends. We obtain 2, 442 cloud services FDI projects (firm-level) from FDI Markets for the period 2016-22, and do statistical analysis using information on investment purpose, year, destination country, investment size, and industry. First, the total amount of FDI in cloud services from 2016 to 2022 is about $214 billion. The main purpose is to invest in overseas facilities to build ICT and infrastructure, and the telecommunications industry, software and IT services industry account for 98.7% of the total investment. Outward FDI between high-income countries accounts for about 62% ($132.9 billion), which rises to 85.5% ($183.9 billion) if transactions between high-income countries and upper middle-income countries are included. Lower middle-income countries invest more in high-income countries ($1.5 billion) than in lower middle-income countries ($900 million). There is no outward investment among low-income countries. Countries in the Americas, Europe, Asia, and Africa regions (excluding Oceania) are the most active, with the largest share (29.3%) of outward investment between the Americas and Europe. The Americas are the leading region for outbound direct investment in cloud services (61.9% of investment), and when looking at transaction patterns between regions, investment is concentrated in Europe (35.5%), Asia (25.6%), and the Americas (24.4%). Second, the total amount invested in the European region (43 investor countries and 37 recipient countries) is about $76 billion. Countries in the Americas have invested about $52.9 billion in the region, accounting for 69.6% of the total. The leading investor in Europe is the United States ($51.9 billion), and the top investee country in Europe is the Netherlands. The total amount invested in Asia (35 investor countries and 39 recipient countries) is about $54.9 billion. Countries in the Americas account for 58.1% of the total, with about $31.9 billion invested in the region. The leading investor in the Asia region is the United States ($31.6 billion), and the leading recipient country in the region is India. The Americas (37 investor countries and 21 recipient countries) received about $52.3 billion in investment. Countries in the Americas account for 56.9% of the total, with about $29.8 billion invested in the region. (the rest omitted)
    Keywords: Cloud services; overseas investment; domestic regulations; e-commerce; personal information protection
    Date: 2023–10–20
  32. By: Sabina Szymczak (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study presents a systematic literature review (SLR) to provide a collection of theories explaining the impact of global value chains (GVCs) on labour market outcomes. Due to the complex nature of GVCs and the interconnectedness of wages, employment, and productivity, many direct and indirect effects are at play. To ensure a transparent and systematic flow of the review process, I follow the PRISMA guide. Eventually, 36 records out of 1221 results from Scopus database were selected for full-text analysis. This SLR may be useful for theorists, empirical economists, and policy makers as an up-to-date overview of theoretical developments and convenient map of potential outcomes expected from involvement in GVCs. It identifies and systematizes a number of effects existing in the literature under various names. Additionally, it shows the shortcomings of the existing theories. They often adopt the perspective of developed country trading with developing one, while nowadays the intermediate trade occurs in many forms, affecting various actors. Less aggregated levels of analysis could be a great input to the discussion, as well as addressing different GVCs' dimensions and types of organisation. The understanding of relation between GVC position and labour market is especially worth exploration as the existing evidence adopt different and even contradicting perspectives on the definition of upgrading the GVC position.
    Keywords: systematic literature review, global value chains, wage, employment, productivity
    JEL: F16 F60
    Date: 2023–11
  33. By: Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie); Ngoc‐sang Pham
    Abstract: The paper investigates the optimal strategy of a small open economy receiving FDI in an optimal growth context. We prove that no domestic firm can enter the new industry when the multinational enterprise's productivity or the fixed entry cost is high. Nevertheless, the host country's investment stock converges to a higher steady state than an economy without FDI. A domestic firm enters the new industry if its productivity is high enough. Moreover, the domestic firm can dominate or even eliminate its foreign counterpart.
    Keywords: Optimal growth, FDI spillovers, TFP, Fixed cost
    Date: 2023–10–18
  34. By: Hites Ahir; Nicholas Bloom; Davide Furceri
    Abstract: We construct the World Uncertainty Index (WUI) for an unbalanced panel of 143 individual countries on a quarterly basis from 1952. This is the frequency of the word "uncertainty" in the quarterly Economist Intelligence Unit country reports. Globally, the Index spikes around major events like the Gulf War, the Euro debt crisis, the Brexit vote and the COVID pandemic. The level of uncertainty is higher in developing countries but is more synchronized across advanced economies with their tighter trade and financial linkages. In a panel vector auto regressive setting we find that innovations in the WUI foreshadow significant declines in output. This effect is larger and more persistent in countries with lower institutional quality, and in sectors with greater financial constraints.
    Keywords: world uncertainty index, WUI, Economist Intelligence Unit, Gulf War, Brexit, Euro debit, Covid, pandemic, innovation
    Date: 2022–12–15
  35. By: Ibrahima Alassane Ba (Université Mohammed V de Rabat. Faculté des Sciences Juridiques, Economiques et Sociales, Souissi)
    Abstract: This study examines the impact of infrastructure development, both hard and soft , on the regionalization of intra-African trade. It is based on the analysis of panel data applied to the member countries of CENSAD, as well as an augmented gravity model enriched with variables describing the quality of logistics infrastructure, the levelof technological development, the degree of economic freedom, and the level of customs complexity. The results of this study highlight that the regionalism implemented within CENSAD stimulates intra-community exchanges. However, this positive impact is mitigated by infrastructure gaps, administrative and customs burdens, institutional opacity, as well as the weakness of information and communication technologies. In summary, this study demonstrates that a 5% improvement in infrastructure within the community would stimulate intra-CENSAD trade by 128%. The main increases would occur following the easing of customs procedures, as regionalization would be boosted by 48%. The second priority area for reform within the economic and regional community is the institutional environment. Furthermore, modernization and optimization of governance would increase the level of intra-regional trade by approximately 41%
    Abstract: Cette étude examine l'impact du développement des infrastructures, à la fois lourdes et légères, sur la régionalisation des échanges intra-africains. Elle repose sur l'analyse de données de panel appliquée aux pays membres de la CENSAD, ainsi que sur un modèle de gravité enrichi de variables décrivant la qualité des infrastructures logistiques, le niveau de développement technologique, le degré de liberté économique et le niveau de complexité douanière. Les résultats de cette étude mettent en évidence que le régionalisme mis en œuvre au sein de la CENSAD stimule les échanges intracommunautaires. Cependant, cet impact positif est atténué par les lacunes infrastructurelles, les lourdeurs administratives et douanières, l'opacité institutionnelle, ainsi que la faiblesse des technologies de l'information et de la communication. En somme, cette étude démontre qu'une amélioration de 5 % des infrastructures au sein de la communauté stimulerait les échanges intra-CENSAD de 128 %. Les principales augmentations surviendraient à la suite de l'assouplissement des procédures douanières, car la régionalisation serait stimulée à hauteur de 48 %. Le deuxième axe prioritaire de réforme pour la communauté économique et régionale est l'environnement institutionnel. De plus, la modernisation et l'optimisation de la gouvernance augmenteraient le niveau des échanges intrarégionaux de l'ordre de 41 %.
    Keywords: ZLECAF, CENSAD, Infrastructure, Modèle de gravité, donnée de panels, Hard infrastructures, Soft infrastructure, African Scientific Journal, intégration régionale
    Date: 2023
  36. By: Chaisse, Julien
    Abstract: This Perspective probes the complexities of umbrella clauses in international investment agreements, spotlighting their inherent legal ambiguities and potential for misuse. It advocates for careful negotiation and refinement of these clauses or, alternatively, their elimination to ensure clearer, more predictable investment frameworks.
    Date: 2023
  37. By: Vrânceanu, Alina; Dinas, Elias; Heidland, Tobias; Ruhs, Martin
    Abstract: What preferences do people have for cross‐country cooperation on irregular migration and refugee protection? Existing research improves our understanding of how voters react to large‐scale inflows of asylum seekers, like those experienced by European countries in 2015–2016, and the type of asylum seekers and policies preferred by European citizens. We know less, however, about people's views concerning a particular European Union (EU) response to the so‐called ‘refugee crisis’, namely the cooperation with Turkey in March 2016 to stem inflows of asylum seekers and other migrants. To study such views, we build on several strands of the international relations literature exploring key determinants of public preferences for international cooperation on cross‐national issues, namely (a) sociotropic concerns, (b) humanitarian considerations, and (c) perceptions of fairness and reciprocity. Our research design leverages conjoint experiments conducted simultaneously in Germany, Greece and Turkey. We find that the three factors indeed play a role in explaining preferences in the three countries. Moreover, while respondents are favourable to several core features of the current EU–Turkey migration deal (regarding the return of irregular migrants, financial aid to refugees, and border controls), we also find evidence of public support for increased cooperation on resettlement and EU support to Greece to deal with migration, which goes beyond the status quo. In certain aspects of cooperation, public preferences seem to respond to interactions between policy dimensions that capture reciprocity. These findings have important implications for research on public preferences for asylum and migration policies and public support for international cooperation more generally.
    Keywords: public opinion, cross-country cooperation, migration, EU-Turkey agreement, conjoint analysis
    Date: 2023
  38. By: Jesse LaBelle; Ana Maria Santacreu
    Abstract: As foreign patenting continues to grow, East Asia has become both the main origin of innovations and the main destination for patent protection.
    Keywords: patents
    Date: 2022–10–03
  39. By: Gnangnon, Sèna Kimm
    Abstract: This article has investigated the effect of economic uncertainty on the remittances sent by migrants residing in developed countries to their home countries. The analysis builds on the economic uncertainty index developed by Ahir et al. (2018, 2019, 2022) that reflects the uncertainty related to economic and political events, regarding both near-term and long term concerns. It has revealed that economic uncertainty has deleterious effects on remittances outflows from developed countries, especially when it reaches high levels. This finding indicates that developing countries will suffer from reduced remittances inflows if the current fragmentation of the world were to become protracted, and result in higher barriers to the movement of capital and people.
    Keywords: Economic Uncertainty, Remittances Outflows, Developed Countries
    JEL: E30 F24
    Date: 2023
    Abstract: China, the world's largest carbon emitter and skeptical of developing countries’ emissions reduction commitments, announced internationally in 2020 its vision to peak carbon emissions in 2030 and achieve carbon neutrality by 2060. China's emission reduction strategy has a significant impact on China's economy and society as a whole, and Korea, which has a close economic ties with China, will also be affected. China's carbon neutral policy announced in 2021 includes the continuous promotion of policies such as direct regulation, public investment, and subsidies, as well as the nationwide implementation of the ETS and the expansion of applicable industries. This study analyzed the impact of China's ETS on Chinese industries using the input-output model, and derived implications for Korea-China economic relations based on the results.
    Keywords: China; ETS; Impact on Industries; Korea-China economic relations
    Date: 2023–10–19
  41. By: Maggie Isaacson; Hannah Rubinton
    Abstract: An analysis of survey data finds no direct correlation between pandemic-related interruptions to immigration and continued labor market tightness.
    Keywords: COVID-19; immigration; labor markets
    Date: 2023–06–29
  42. By: blessing, elisha; eric, charles; alexis, serena
    Abstract: I. Introduction In the intricate tapestry of international relations and global politics, cultural diplomacy stands out as a powerful tool, weaving connections, bridging gaps, and fostering understanding between nations. Within this framework, Germany has long been a stalwart proponent of cultural diplomacy, recognizing its potential to shape perceptions, influence policy, and facilitate meaningful dialogue on the world stage. At the heart of Germany’s cultural diplomacy efforts lies the Friedrich-Ebert-Stiftung (FES), an institution whose initiatives in Vietnam serve as a compelling case study. This exploration delves into the intricacies of FES’s endeavors, dissecting the political and logical dimensions that underpin its initiatives in Vietnam. The study of FES’s cultural diplomacy in Vietnam provides a unique lens through which to examine the intersections of politics and logic within the realm of international relations. By narrowing our focus to this specific case, we embark on a nuanced analysis of the deliberate strategies, collaborative partnerships, and socio-political impacts that characterize Germany’s engagement with Vietnam. In understanding the political motivations that drive cultural diplomacy and the logical discourse that accompanies it, we gain valuable insights into the broader landscape of global politics. This study endeavors to unravel the layers of Germany’s cultural diplomacy by probing into the multifaceted approach adopted by FES in Vietnam. As we navigate through the historical context of Germany-Vietnam relations and the conceptual underpinnings of cultural diplomacy, we lay the groundwork for a comprehensive analysis. Through an exploration of FES’s objectives, methods, and the outcomes of its initiatives, we aim to decipher the intricate dynamics at play. From educational programs fostering political awareness to cultural exchanges nurturing logical thinking, each facet of FES’s involvement underscores the symbiotic relationship between politics and logical discourse in diplomacy.
    Date: 2023–10–14
  43. By: Minot, Nicholas; Martin, Will
    Abstract: The prices of agricultural commodities have increased on international markets since the outbreak of the Covid-19 pandemic in early 2020 and spiked after the invasion of Ukraine by Russia in February 2022. The price increases were particularly notable in the case of wheat, maize, and sorghum, which are staple foods in many developing countries. This prompted a wave of research to better understand the effect of these price changes on income and poverty in low-income countries. IFPRI carried out a set of country studies to explore the poverty impact of higher staple grain prices on six countries in sub-Saharan Africa: Mali, Burkina Faso, Niger, Nigeria, Kenya, and Ethiopia (see Martin and Minot, 2023a, 2023b, and 2023c and Minot and Martin, 2023a, 2023b, and 2023c). This brief describes the methods and data used in those studies.
    Keywords: MALI; BURKINA FASO; KENYA; EAST AFRICA; NIGER; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; NIGERIA; ETHIOPIA; agricultural products; markets; Coronavirus; coronavirus disease; Coronavirinae; COVID-19; prices; wheat; maize; sorghum; staple foods; developing countries; income; poverty
    Date: 2023
  44. By: Mahmood, Asif; Asif, Hashaam
    Abstract: Pakistan is largely considered as having balance of payments constrained economy. These constraints become more intense when external shocks hit, such as unfavorable changes in the country’s external terms-of-trade. In this paper, we attempt to document the cost to the economy when sailing through such shocks. Empirical estimates show substantial external adjustment takes place after the terms-of-trade bust in case of Pakistan. These adjustments largely work through income effect as the role of expenditure switching effect is estimated to be lower, though overtime increasing. Our main finding is about the cost to the domestic output when such shocks hit, which we call a sacrifice ratio. We find this impact is quite large, albeit decreasing overtime. We also find that the role of exchange rate policy is an important determinant of how large that sacrifice ratio will be. From the policy perspective, including monetary policy, these are important findings as they provide insights to policymakers about choices they can make during the stress times.
    Keywords: Pakistan, Terms-of-trade, External adjustment, Growth
    JEL: E32 E65 F41
    Date: 2023–06–30

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