nep-int New Economics Papers
on International Trade
Issue of 2024‒01‒01
forty-one papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Migrants, Trade and Market Access By Barthélémy Bonadio
  2. The Effects of the United States-China Trade War During the COVID-19 Pandemic on Global Supply Chains: Evidence from Viet Nam By Duc Anh Dang; Ngoc Anh Tran
  3. Comparative Advantage and the Quality Choice of Heterogeneous Firms By Dongzhe Zhang; Antonio Navas; Ian Gregory-Smith
  4. Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries By Gnangnon, Sèna Kimm
  5. Revisiting the Trade-Creating Effects of Non-Tariff Barriers By Gabriel Felbermayr; Feodora Teti
  6. The Free Rider Effect and Market Power in Trade Agreements By Woan Foong Wong
  7. Staggered Difference-in-Differences in Gravity Settings: Revisiting the Effects of Trade Agreements By Arne J. Nagengast; Yoto V. Yotov
  8. Foreign Direct Investment, Agglomeration, and Production Networks in Indonesian Manufacturing By Dionisius A. Narjoko
  9. Structural Changes and the Impact of FDI on Singapore's Manufacturing Activities By Shandre Mugan Thangavelu
  10. The COVID-19 Pandemic and World Machinery Trade Network By Kozo Kiyota
  11. To What Extent Does Finland Engage in International Trade of Services? By Ali-Yrkkö, Jyrki; Kuosmanen, Natalia
  12. Divergence in Non-Tariff Measures and the Quality of Traded Products By Ha Thi Thanh Doan; Kunhyui Kim; Mahdi Ghodsi
  13. The Effect of Economic Sanctions on World Trade of Mineral Commodities. A Gravity Model Approach from 2009 to 2020 By Raul Caruso; Maria Cipollina
  15. Climate cha(lle)nges in global wine production and trade patterns By Lamonaca, Emilia; Seccia, Antonio; Santeramo, Fabio Gaetano
  16. Trade Between WAEMU And EU Countries Ante-Brexit : Lessons From A Gravity Model By COULIBALY, Niénéyéri Mamadou
  17. International sanctions and limits of Lerner Symmetry By Itskhoki, Oleg; Mukhin, Dmitry
  18. Affiliate Ownership Structure Responses to FDI Liberalization Policies By Ryan, Michael; Tanaka, Ayumu
  19. The Impact of Economic Sanctions on International Migration By Jerg Gutmann; Pascal Langer; Matthias Neuenkirch
  20. Missing Tariffs By Feodora Teti
  21. Latest developments in Russian imports of sanctioned technology products By Simola, Heli
  22. Trade, Innovation and Optimal Patent Protection By David Hémous; Simon Lepot; Thomas Sampson; Julian Schärer
  23. Investment Facilitation and Promotion in Cambodia: Impact of Provincial-level Characteristics on Multinational Activities By Shandre Mugan Thangavelu; Leng Soklong; Vutha Hing; Ratha Kong
  24. Global Value Chain Disruptions and Firm Survival During COVID-19: An Empirical Investigation By Sasidaran Gopalan; Ketan Reddy
  25. Unveiling Structure and Dynamics of Global Digital Production Technology Networks: A new digital technology classification and network analysis based on trade data By Antonio Andreoni; Guendalina Anzolin; Mateus Labrunje; Danilo Spinola
  26. Estimating the Effects of GATT/WTO Membership on Trade Using Staggered Difference-in-Differences Design By Tanaka, Ayumu
  27. Institutional configurations in international investment research By Weber, Christopher; Mayer, Pascal
  28. Do trade frictions distort the purchasing power parity (PPP) hypothesis? A closer look. By Bonga-Bonga, Lumengo
  29. Can Lebanon Export Cannabis for Medicinal Purposes? By Haidar, Jamal Ibrahim; Zeaiter, Hussein; Darwich, Salem
  30. Economic relations between the Western Balkans and Non-EU countries: How the EU can respond to challenges concerning direct investment, trade and energy security By Vulović, Marina
  31. Monthly Report No. 5/2023 - FDI in Central, East and Southeast Europe By Alexandra Bykova; Branimir Jovanović; Olga Pindyuk; Nina Vujanović
  32. Implications of Russia’s war against Ukraine for African economies: A CGE analysis for Ethiopia By Amsalu Woldie Yalew; Victor Nechifor; Emanuele Ferrari
  33. The Role of Export Incentives and Bank Credit on the Export Survival of Firms in India During COVID-19 By Radeef Chundakkadan; Subash Sasidharan; Ketan Reddy
  34. The EU’s competitive advantage in the "clean-energy arms race" By Dahlström, Petter; Lööf, Hans; Sjöholm, Fredrik; Stephan, Andreas
  35. Migration Crisis in the Local News: Evidence from the French-Italian Border By Silvia Peracchi
  36. Monthly Report No. 11/2023 - FDI in Central, East and Southeast Europe By Doris Hanzl-Weiss; Branimir Jovanović; Olga Pindyuk
  37. Containing Tariff Evasion By Clément Anne; Cyril Chalendard; Ana Fernandes; Bob Rijkers; Vincent Vicard
  38. Profit Shifting of Multinational Corporations Worldwide By Javier Garcia-Bernardo; Petr Jansky
  39. Enhancing Welfare and Rights of Migrants and Migrant Communities: Role of National Budget By Khondaker Golam Moazzem; ASM Shamim Alam Shibly; Moumita A Mallick
  40. Demand and Supply Side Linkages in Exporting Multiproduct Firms By Carsten Eckel; Lisandra Flach; Ning Meng
  41. Balance of Payments Constrained Growth in the Eurozone: Evidence onMulti-Sector Thirlwall’s Law for a Sample of 9 Founding Euro Countries, 1992-2019 By Miguel García Duch

  1. By: Barthélémy Bonadio
    Abstract: Migrants shape market access: first, they reduce international trade frictions and second, they change the geographical location of domestic demand. This paper shows that both effects are quantitatively relevant. It estimates the sensitivity of exports and imports to immigrant population and quantifies these effects in a model of inter- and intra-national trade and migration calibrated to US states and foreign countries. Reducing US migrant population shares back to 1980s levels increases import (export) trade costs by 7% (2.5%) on average and decreases US natives’ real wages by more than 2%. States with higher exposure to immigrant consumer demand (both from within the state and from other states) than to migrant labor supply competition suffer more from the removal of migrants. States with higher export and import exposure suffer more from the increased trade costs.
    Keywords: migration, market access, trade
    JEL: F16 F22
    Date: 2023
  2. By: Duc Anh Dang (Central Institute for Economic Management, Viet Nam); Ngoc Anh Tran (Indiana University Bloomington)
    Abstract: The trade war between the United States (US) and China has affected their bilateral trade as well as that with other countries. This study investigates how Vietnamese firms performed during the COVID-19 pandemic under the shadow of this trade war. The change in the log of Vietnamese exports to the US from 2017 to 2020 is used to measure the impact of the trade war, and the change in the log of Chinese exports to the US is then used as an instrument for the Vietnamese export change during the same period. It is found that firms that faced more trade war exposure increased their investment, profit, and value added, which may be due to the market exit of unproductive firms. Moreover, the trade war impact is more pronounced for large firms. Foreign-invested firms gained less from trade war exposure. The pandemic weakened the trade war effect on firm performances; however, it exacerbated the trade tension effect on foreign-trade firms.
    Keywords: Trade diversion; Trade war; Pandemic
    JEL: F14 F16 R23
    Date: 2023–08–29
  3. By: Dongzhe Zhang (Department of Economics, University of Sussex Business School, UK); Antonio Navas (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK); Ian Gregory-Smith (Department of Economics, Newcastle University, UK)
    Abstract: This paper examines how trade openness affects firms’ product quality across industries based on a country’s comparative advantage. We develop a Heckscher-Ohlin model with heterogeneous firms and endogenous quality upgrading. Trade openness affects a firm’s product quality differ- ently within an industry based on the firm’s export status. In particular, trade openness increases exporters’ product quality and reduces the quality from non-exporting firms. These effects are not homogeneous across industries; they are more pronounced in a country’s comparative advan- tage industry. We test the main predictions of the model using transaction-level data of Chinese exports. Consistent with our theoretical predictions, we find that Chinese exporters export higher quality products in those industries in which China reveals a comparative advantage.
    Keywords: Heterogeneous Firms, Product Quality, Comparative Advantage
    JEL: F11 F14
    Date: 2023–12
  4. By: Gnangnon, Sèna Kimm
    Abstract: The present article aims to complement the nascent literature on the effect of non-reciprocal trade preferences (NRTPs) on beneficiary countries' trade policies. It has investigated, at the aggregate level, the effect of GSP programs and other trade preference programs provided by the QUAD countries on beneficiaries' trade policies. The analysis has revealed that the utilization of NRTPs is associated with greater trade policy liberalization. As the utilization rate of other trade preferences increases in countries that make simultaneous use of the two NRTPs, the utilization of GSP programs leads to greater reduction of tariffs and regulatory trade barriers, but at a diminishing rate for the latter.
    Keywords: Utilization of unilateral trade preferences, Developing countries, QUAD countries, Trade Policies
    JEL: F13 F14 O11
    Date: 2023
  5. By: Gabriel Felbermayr (Austrian Institute for Economic Research (WIFO), Vienna University of Economics and Business (WU), CESifo, GEP); Feodora Teti (ifo Institute, LMU Munich, CESifo)
    Abstract: Modern regional trade agreements focus on promoting bilateral exchange mostly by lowering non-tariff barriers to trade. But do existing regional trade agreements actually deliver what they promise? This paper argues that existing results in the literature are upward biased because of measurement error in a crucial control variable: tariff rates. Using a novel data set of high-quality tariff information, the paper shows that, on average, non-tariff barriers reductions in deep regional trade agreements boost services trade but not goods trade. Estimating separate non-tariff barrier effects for each regional trade agreement reveals strong heterogeneity: only 23 percent of all regional trade agreements seem to lower non-tariff barriers. For most regional trade agreements, we fail to find any significant effect, while 9 percent appear to reduce trade, possibly because a more balanced regulation evens out comparative advantages. The trade agreements that foster trade the most include non-discriminatory trade policy changes.
    Keywords: RTAs; non-tariff barriers; trade policy; tariffs;
    JEL: F13 F14
    Date: 2023–11–20
  6. By: Woan Foong Wong
    Abstract: Regional trade agreements have proliferated in the past two decades while multilateral trade negotiations have stalled. Both these agreements are governed by the WTO and have to abide by the non-discriminatory (Most-Favored Nation, MFN) clause to varying degrees-regional agreements to a lesser extent than multilateral agreements. This paper investigates the free rider effect that can stem from the MFN clause and how it impacts country incentives towards these agreements. Free-riding occurs because countries cannot be excluded from the benefits of other countries’ liberalizations and thus have less incentive to contribute to the cost of liberalization by signing trade agreements and offering their own market access. I extend the equilibrium model of endogenous trade liberalization via trade agreements developed by Saggi and Yildiz (2010) to better capture the effects of MFN. Within multilateral agreements, I show that the free rider effect eliminates global free trade as an equilibrium even when countries have symmetric market power. Within regional agreements, smaller countries are excluded more under the equilibrium with MFN compared to without.
    Keywords: trade agreements, tariffs, World Trade Organization, coalition proof Nash equilibrium, multilateral trade agreements, preferential trade agreements, welfare
    JEL: F10 F13
    Date: 2023
  7. By: Arne J. Nagengast; Yoto V. Yotov
    Abstract: We nest an extended two-way fixed effect (ETWFE) estimator for staggered difference-in-differences within the structural gravity model. To test the ETWFE, we estimate the effects of regional trade agreements (RTAs). The results suggest that RTA estimates in the current gravity literature may be biased downward (by more than 50% in our sample). Sensitivity analyses confirm the robustness of our main findings and demonstrate the applicability of our methods in different settings. We expect the ETWFE methods to have significant implications for the estimates of other policy variables in the trade literature and for gravity regressions on migration and FDI flows.
    Keywords: staggered difference-in-differences, gravity model, trade agreements
    JEL: C13 C23 F10 F13 F14
    Date: 2023
  8. By: Dionisius A. Narjoko (Economic Research Institute for ASEAN and East Asia)
    Abstract: This study examines the importance of globalisation - defined by international production networks - in determining foreign direct investment (FDI) flows into Indonesian manufacturing since 2000. It is motivated by the fact that the extent of connection between the Indonesian and the global economy had increased after the 1997-98 Asian financial crisis. Models of FDI are estimated by utilising plant-level data and various trade and tariff data. Production networks or agglomeration are found to play an important role in driving FDI in Indonesia's manufacturing sector, at least for the period 2000-2015. This study provides the insight that agglomeration could be utilised to increase FDI in Indonesia. This not only improves the productivity of the sector targeted by the investment but also promotes productivity growth. Creating more agglomeration areas could therefore be a policy direction taken by Indonesia to help increase FDI.
    Keywords: Indonesia, foreign direct investment, production networks, agglomeration
    JEL: O14 F12 F21
    Date: 2023–05–04
  9. By: Shandre Mugan Thangavelu (Jeffrey Cheah Institute for Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide)
    Abstract: This chapter examines the investment and foreign direct investment (FDI) policy of Singapore's economy in terms of the structural transformation of the economy from 1998 to 2018. The study also examines the impact of FDI on the productivity of the Singapore manufacturing industries in a panel framework from 2017 to 2019. The results indicate that FDI activities have a positive impact on labour productivity. The export activities of multinational businesses have a positive impact on labour productivity. We also observe agglomeration effects from FDI activities (average FDI activities over 3 years) in Singapore's manufacturing industries. However, we observe a negative impact of outsourcing labour productivity. The study also derives policy implications for forwardlooking policies in terms of the position of Singapore in the global production value chain.
    Keywords: Structural Transformation, FDI Policy
    Date: 2023–06–09
  10. By: Kozo Kiyota (Keio University, Research Institute of Economy, Trade and Industry (RIETI), and Tokyo Center for Economic Research (TCER))
    Abstract: In light of the importance of the machinery trade in global trade, this study examines whether the patterns of machinery exports changed significantly after the COVID19 pandemic. Frameworks of network analysis and structural break analysis are applied to monthly level bilateral export data from January 2016 to March 2022. The main findings are threefold. First, positive structural change is found in exports in major machinery-exporting countries. Second, negative structural change in centrality is found in Japan and some ASEAN Member States (AMS), which implies a decline in the relative importance of these countries in the global machinery network. Third, the decline in Japanese centrality was not caused by the decline in export values or number of destination countries. Rather, it is attributable to the decline in the centrality of Japan's export destination countries such as AMS. Noting that Japan has a relatively strong trade relationship with AMS, these results together suggest that the negative shock of the pandemic spread throughout the supply chain, which led to the decline in the relative importance of some countries - such as Japan - in the global machinery trade network.
    Keywords: Machinery trade; COVID-19 pandemic; Network; Centrality
    JEL: F14 F40
    Date: 2023–08–16
  11. By: Ali-Yrkkö, Jyrki; Kuosmanen, Natalia
    Abstract: Abstract This report examines the development and composition of Finland’s international trade in services compared to other countries. The findings reveal a substantial growth in Finland’s service exports, though at a slower pace than the EU average. Different countries have specialized in various types of services. Finland stands out for its prominent presence in IT services and software, while Sweden specializes in music services, and Denmark in maritime transport services. Both Finland and Denmark have focused their service exports in specific areas. In the future, diversifying the range of service exports is crucial.
    Keywords: Comparison, Exports, Internationalization, Imports, Service
    JEL: F14 L8
    Date: 2023–11–30
  12. By: Ha Thi Thanh Doan (Economic Research Institute for ASEAN and East Asia); Kunhyui Kim (Nagoya University); Mahdi Ghodsi (The Vienna Institute for International Economic Studies)
    Abstract: : Non-tariff measures (NTMs) constitute a grey area where trade policy meets public policy goals. NTMs comprise a diverse set of regulatory policy measures, including testing and certification, rather than traditional international trade policy measures such as tariffs or tariff-rate quotas. Regulatory NTMs protect plants, animals, humans, and consumers from imported harmful products containing diseases; regulate the use of hazardous substances in production; ensure conformity with common standards; and protect the environment. Trade literature has focused on the impact of NTMs on trade flows, whereas few studies address the potential welfare-improving effects of these measures. This paper fills this gap by examining the relationship between NTM applications and the quality of traded products. Two questions are addressed. First, do more or additional burdens of NTMs in the foreign market incur a higher quality of exported products? Second, is the quality impact of NTMs in different sectors different between food and other manufacturing goods? We adopt a recently developed indicator to capture the additional requirements for exporters stemming from importers' imposition of NTMs, and a quality estimator that controls for price. Our empirical results indicate that, overall, divergence in sanitary and phytosanitary (SPS) measures between the two trading partners reduces the quality of traded goods. Furthermore, while the divergence in SPS measures reduces the quality of traded goods in the manufacturing sector, the divergence in technical barriers to trade shows no statistically significant impact on the quality of traded goods between the two trading partners. The results imply that additional costs from technical barriers to trade are negligible compared with those from SPS measures in the manufacturing sector.
    Keywords: additional compliance requirements indicator, international trade, non-tariff measures, quality of traded goods
    JEL: F13 F14
    Date: 2023–05–09
  13. By: Raul Caruso (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore, Milano, Italy - Catholic University ‘Our Lady of Good Counsel’, Tirana, European Center of Peace Science, Integration and Cooperation (CESPIC)); Maria Cipollina (Dipartimento di Economia, Università del Molise, Italy)
    Abstract: This study employs a gravity model to investigate the impact of sanctions on trade of mineral commodities (HS 6-digit level) from 2009 to 2020, employing a dataset encompassing flows from 239 exporter countries to 38 OECD members. Main results highlight that: (i) a substantial trade disruption is evident, marked by an immediate 90 percent reduction, with a growing impact observed over time; (ii) sanctions-busting appears effective only in the very short term, albeit with weak supporting evidence; (iii) sender countries experience a decline in trade not only with target countries but also with third-party nations (negative network effect). When scrutinizing by world regions and HS chapters, the evidence becomes nuanced. It appears that sender North American countries demonstrate the capability to replace imports from target countries with alternative suppliers, while EU countries experience a clear-cut trade disruption. When examining different HS chapters, findings indicate that sanctions lead to a reduction in trade of mineral commodities classified under chapters 26 and 27, but not in those under chapter 25. As for sanctions-busting, it appears to be evident for commodities under chapter 26. Yet, sender countries importing commodities under chapter 25 appear to be able to shift to other sources whereas sender countries importing commodities under chapter 27 experience a substantial trade disruption.
    Keywords: Trade Sanctions, Mineral sector, Industrial raw materials, Gravity Model, Trade disruption, Trade diversion, Sanctions - Busting
    JEL: F10 F13 F14 F50 F51 N40 N50
    Date: 2023–12
  14. By: Nilsson, Lars (DG Trade)
    Abstract: Preferential rules of origin (RoO) are an integral and necessary part of preferential trading arrangements, as control of the origin of the preferentially imported goods is needed to prevent trade deflection. But complying with RoO are associated with costs. These can come in the form of burden to deal with the necessary administrative requirements and in terms of increased costs of imported intermediates should the RoO lead to a distortion of sourcing of inputs. This paper matches the RoO under the EU-Canada Comprehensive Economic and Trade Agreement with the exact products they apply to, which is novel. It further provides descriptive statistics on preference eligible trade, information on the value of potential duty savings and on the associated preference utilisation rates (PUR) by RoO. The empirical part of the paper conducts a comparative analysis of the impact of the various RoO on the PUR in EU trade with Canada for the 2018-2021 period. It also examines whether the same RoO has a different impact on the PUR depending on the direction of trade (EU imports vs. EU exports)
    Keywords: RoO; preference utilisation rates; CETA
    JEL: F13 F14
    Date: 2023–11–30
  15. By: Lamonaca, Emilia; Seccia, Antonio; Santeramo, Fabio Gaetano
    Abstract: The global wine trade is interested by significant changes since a few decades, due to new productive scenarios induced by climate change and to (rapidly) evolving trade and policy regimes. We investigate how these changes are altering trade dynamics. Following a gravity-type approach, we find that higher temperatures are beneficial for the terms of trade, and are boosting trade values. As for policy interventions, the impact of technical measures on trade values is heterogeneous across objectives: While technical measures tend to friction trade, the environment-related policies show pro-trade effects.
    Keywords: Climate change; Environmental measure; Technical barrier to trade
    JEL: F13 F18 Q17 Q18 Q56
    Date: 2023–11–24
  16. By: COULIBALY, Niénéyéri Mamadou
    Abstract: The aim of this study is to analyse trade between the member countries of the West African Economic and Monetary Union (WAEMU) and those of the European Union (EU) pre-Brexit over the period 2014-2019. It estimates a gravity model based on panel data. Three econometric estimation techniques are used : the WITHIN method, the Generalised Least Squares (GLS) method and the Hausman and Taylor (HT) method. These different estimation techniques are then compared to determine which is the most appropriate. The data used are secondary data from several sources : the International Monetary Fund (World Economic Outlook), the World Bank (World Development Indicators), the United Nations (UN Comtrade) and the ephemeride website. The results show that trade between these two groups of countries is positively and significantly influenced by income in WAEMU countries, infrastructure in WAEMU countries and population in EU countries. They also show that when an EU country is landlocked, its trade flows with WAEMU countries are reduced, while at the same time, the landlocked status of a WAEMU country does not affect its trade with EU countries. Variables such as the bilateral real exchange rate, distance, language and colonial links were found to be insignificant.
    Keywords: Trade, trade flows, gravity model, EU, WAEMU and Brexit
    JEL: C13 C33 F10 F15
    Date: 2023–09
  17. By: Itskhoki, Oleg; Mukhin, Dmitry
    Abstract: After a wave of globalization, trade wars and financial sanctions again become frequent tools of international policymaking, leading to an increased interest in the consequences and effectiveness of international sanctions. Itskhoki and Mukhin (2022b) show that Lerner symmetry provides an important benchmark with import and export sanctions equivalent in terms of their effects on allocations and welfare. This abstracts from several practical issues, including the timing of sanctions, interactions between trade and financial restrictions, and the effects of sanctions on the financial sector. We incorporate these features to study their implications and emphasize points of departure from Lerner symmetry.
    JEL: F12 F13 F32 F34 F51
    Date: 2023–05–01
  18. By: Ryan, Michael; Tanaka, Ayumu (Aoyama Gakuin University)
    Abstract: The 1990s saw many countries liberalize their inward foreign direct investment (FDI) policies. From a macro view, the speed of liberalization varied, with most countries gradually liberalizing. Korea, however, implemented rapid FDI liberalization after the 1997 Asian currency crisis and provides an ideal case for our analysis. Using matched parent-firm-foreign subsidiary data, this study analyzes how multinational enterprises (MNEs) changed their ownership ratios, FDI stock, and the number of subsidiaries in response to liberalization. Our difference-in-differences (DiD) analysis of the Korean liberalization case shows that MNEs did not increase their FDI stock but increased their ownership ratio and the number of subsidiaries in Korea. At the same time, we also find that the ownership ratio of Japanese firms in Korea is still lower than that in other developed countries, suggesting that there is a strong hysteresis effect at work in the subsidiary ownership ratio.
    Date: 2023–11–20
  19. By: Jerg Gutmann; Pascal Langer; Matthias Neuenkirch
    Abstract: In this first empirical analysis of how sanctions affect international migration, we apply two estimation strategies, a panel difference-in-differences model and an event study approach. Our dataset covers 79, 791 dyad-year observations, reflecting migration flows from 157 origin countries to 32 destination countries between 1961 and 2018. The data supports that UN and joint EU-US sanctions increase emigration from target countries by around 20 percent. Our event study results of joint EU-US sanctions imply a gradual increase in emigration over the course of a sanction episode. The impact of UN sanctions on international migration is smaller and less persistent. Moreover, the effects are driven by target countries with fewer political rights and civil liberties, where emigration substitutes for the costly voicing of dissent. Finally, our results do not support systematic gender differences in the effect of sanctions on migration.
    Keywords: Gender Differences, International Sanctions, Migration
    JEL: F22 F51 J16 O15
    Date: 2023
  20. By: Feodora Teti (ifo Institute, LMU Munich, CESifo)
    Abstract: Many studies use tariffs to measure changes in trade policy. This paper shows that standard sources for tariffs suffer from substantial measurement error due to misreporting and the resulting false imputation: Countries fail to report tariffs every year and missing data are more prevalent for preferential than for most favored nation (MFN) tariffs. WITS, the main data provider for tariffs, falsely interpolates missing preferential tariffs with MFN tariffs. This practice leads to artificial spikes in bilateral time series data and, hence, induces massive measurement error. I introduce a new global tariff dataset at the six-digit product level for 197 countries and 30 years that combines five different sources for tariffs and proposes a new interpolation algorithm taking the misreporting into account. Lastly, I show using gravity that correcting for the messy data increases the estimates of the trade elasticity by 2.89 times.
    Keywords: tariffs; MFN; preferences; trade elasticity;
    JEL: F13 F14
    Date: 2023–11–20
  21. By: Simola, Heli
    Abstract: This brief examines the latest developments in Russian imports on the basis of mirror statistics. We focus particularly on technology products subject to export restrictions imposed by sanctioning coalition countries. While most Russian imports of technology products subject to sanctions fell considerably between the first half of 2021 and the first half of 2023, our analysis reveals that the value of certain imported technology products also increased substantially. Exports of these products grew dramatically particularly from Central Asia and Caucasus, but the share of these countries in Russian imports is still moderate. China was by far the most important provider of technology products to Russia in absolute terms during the observation period.
    Keywords: Russia, imports, sanctions
    Date: 2023
  22. By: David Hémous; Simon Lepot; Thomas Sampson; Julian Schärer
    Abstract: This paper provides a first comprehensive quantitative analysis of optimal patent policy in the global economy. We introduce a new framework, which combines trade and growth theory into a tractable tool for quantitative research. Our application delivers three main results. First, the potential gains from international cooperation over patent policies are large. Second, only a small share of these gains has been realized so far. And third, the WTO’s TRIPS agreement has been counterproductive, slightly reducing welfare in the Global South and for the world. Overall, there is substantial scope for policy reform.
    Keywords: trade policy, innovation, growth, patents, TRIPS
    JEL: F13 D43 O34
    Date: 2023
  23. By: Shandre Mugan Thangavelu (Jeffrey Cheah Institute for Southeast Asia, Sunway University and Institute for International University, University of Adelaide); Leng Soklong (Ministry of Economy and Finance, Cambodia); Vutha Hing (Institute for International Trade, University of Adelaide); Ratha Kong (Institute for International Trade, University of Adelaide)
    Abstract: This paper examines the foreign direct investment policy of Cambodia in terms of investment promotion and facilitation. The study examines the key factors affecting the location of foreign firms (with more than 10% ownership) in Cambodia accounting for key provincial-level (18 provinces) characteristics, such as infrastructure (roads), population density (young population), special economic zones (SEZs), the number of establishments, poverty rate, rainfall, water supply, electricity supply, sharing of an international border, sharing a coastal area, and consumption per capita. The paper uses administrative data from the Council for Development of Cambodia, which manages foreign direct investment and the special economic zones in Cambodia. The study consists of nearly 500 foreign firms that have been approved to invest in Cambodia from 2017 to 2020. The results indicate a positive impact of road infrastructure (national and provincial roads) on foreign investment activities as it improves the movement of people and goods, reduces transaction costs, increases market access, and increases the service linkages within the domestic economy. At the provincial level, we observe that electricity supply, rainfall (water supply), land area, and a young working population have a positive impact on the investment decisions of foreign investors in the provinces of Cambodia. We also observe a negative impact of SEZs on foreign investment in Cambodia. The results indicate an urgent need for structural transformation of the Cambodian economy in terms of investment in soft and hard infrastructure and the development of the critical skills and human capital of the labour force. It is important to improve and upgrade the SEZs with key technologies and innovation to be more competitive in attracting foreign investment activities, which will be critical for increasing the competitiveness of Cambodian industries in global value chain activities.
    Keywords: Cambodia, Investment Facilitation
    JEL: F2 F23 O11
    Date: 2023–08–03
  24. By: Sasidaran Gopalan (College of Business and Economics, United Arab Emirates University, Abu Dhabi, United Arab Emirates); Ketan Reddy (Indian Institute of Management Raipur, Raipur, India)
    Abstract: Despite the rapid acceleration of countries participating in global value chains (GVCs) over the last three decades, global GVC participation rates have plateaued since the global financial crisis (GFC) and worsened with the onset of the coronavirus disease (COVID-19) pandemic. Themassive supply chain disruptions induced by the pandemic not only appeared to expose the vulnerabilities of GVCs, largely because of concentration risks, but also contributed to a dramatic decline in trade flows globally. As countries around the world emerge from the shadows of the pandemic, there is growing academic and policy interest in deciphering how countries should build effective strategies that facilitate firm survival, especially viewed from the lens of resilience and robustness. Considering this background, in this paper, we propose to make a twofold contribution to this literature. First, we undertake a comprehensive firm-level investigation (in a cross-country setting) to ascertain whether firms engaged in GVCs relative to non-GVC firms exhibited better survival instincts during the COVID-19 pandemic. Second, we uncover the heterogeneity of the shock across sectors and industries, considering the varied sectoral/industrial exposure to the COVID-19 pandemic. We document that GVC firms showcased greater robustness and resilience during the pandemic phase compared with other firms. Our results also show that the degree of resilience and robustness varies significantly by industry.
    Keywords: Global value chains; firm survival; resilience; COVID-19
    Date: 2023–08–29
  25. By: Antonio Andreoni (Department of Economics, SOAS University of London); Guendalina Anzolin (Centre for Science, Technology and Innovation Policy, Institute for Manufacturing, University of Cambridge); Mateus Labrunje (Centre of Development Studies and Cambridge Industrial Innovation Policy, University of Cambridge); Danilo Spinola (College of Accounting, Finance and Economics, Birmingham City Business School; Maastricht Economic Research Institute for Innovation and Technology (UNU-Merit); and South African Research Chair in Industrial Development, University of Johannesburg)
    Abstract: This research pioneers the construction of a novel Digital Production Technology Classification (DPTC) based on the latest Harmonised Commodity Description and Coding System (HS2017) of the World Customs Organisation. The DPTC enables the identification and comprehensive analysis of 127 tradable products associated with digital production technologies (DPTs). The development of this classification offers a substantial contribution to empirical research and policy analysis. It enables an extensive exploration of international trade in DPTs, such as the identification of emerging trade networks comprising final goods, intermediate components, and instrumentation technologies and the intricate regional and geopolitical dynamics related to DPTs. In this paper, we deploy our DPTC within a network analysis methodological framework to analyse countries' engagements with DPTs through bilateral and multilateral trade. By comparing the trade networks in DPTs in 2012 and 2019, we unveil dramatic shifts in the global DPTs' network structure, different countries' roles, and their degree of centrality. Notably, our findings shed light on China's expanding role and the changing trade patterns of the USA in the digital technology realm. The analysis also brings to the fore the increasing significance of Southeast Asian countries, revealing the emergence of a regional hub within this area, characterised by dense bilateral networks in DPTs. Furthermore, our study points to the fragmented network structures in Europe and the bilateral dependencies that developed there. Being the first systematic DPTC, also deployed within a network analysis framework, we expect the classification to become an indispensable tool for researchers, policymakers, and stakeholders engaged in research on digitalisation and digital industrial policy.
    Keywords: Digital Production Technology (DPT), DPT Classification, Network Analysis, Bilateral Trade, Digitalisation patterns.
    JEL: O14 O33 F14
    Date: 2023–12
  26. By: Tanaka, Ayumu (Aoyama Gakuin University)
    Abstract: There has been much debate over the past 20 years about whether accession to the GATT/WTO increases trade for member countries. Previous studies have used estimation methods that do not properly consider that the timing of GATT/WTO accession varies from country to country. This study uses a recently developed staggered difference-in-differences (DiD) estimator to explore the effects of GATT/WTO accession by explicitly accounting for the timing of accession. It finds evidence that GATT/WTO accession significantly increases trade in member countries. The DiD results show that the trade promotion effect of the GATT/WTO GATT/WTO reaches 12.5--25.7% and 21.5--79.5%, 5 and 10 years after both countries' accession.
    Date: 2023–11–17
  27. By: Weber, Christopher; Mayer, Pascal
    Abstract: In the area of International Business (IB), a substantial body of research has accumulated analyzing the effect of various host country characteristics on foreign direct investments (FDI). Special attention has been given to institutions. However, the conventional approach of addressing institutions in IB research has recently been criticized for not paying sufficient attention to the interrelationships among institutions. We address those calls and conceptualize institutions as 'holistic systems composed of interrelated components' (Kim & Aguilera 2016, p. 149) and employ the fuzzy set Qualitative Comparative Analysis (fsQCA) to investigate the interrelated effect of formal and informal institutions on FDI inflows. In our empirical methodology, we use data on FDI and formal and informal institutions from 57 countries. The results support the configurational approach and corroborate a systemic view on the effect of institutions on FDI. Our study contributes to a more nuanced understanding of the workings of institutions on FDI and demonstrate the value in adopting a configurational perspective in institutional research.
    Abstract: Viele Studien haben sich im Bereich International Business (IB) mit den Auswirkungen verschiedener Ländercharakteristika auf ausländische Direktinvestitionen (ADI) befasst. Insbesondere der Analyse von Institutionen wurde in diesem Zusammenhang besondere Aufmerksamkeit gewidmet. Der herkömmliche Ansatz, Institutionen in der IB-Forschung zu berücksichtigen, ist jedoch in letzter Zeit zunehmend kritisiert worden, da er den Wechselbeziehungen zwischen einzelnen institutionellen Elementen nicht genügend Aufmerksamkeit schenkt. Wir greifen diese Kritik auf und konzeptualisieren Institutionen als 'ganzheitliches System zusammenhängender Elemente' (Kim & Aguilera 2016, S. 149; eigene Übersetzung) und verwenden die Fuzzy Set Qualitative Comparative Analysis (fsQCA), um die zusammenhängende Wirkung von formellen und informellen Institutionen auf ADI-Zuflüsse zu untersuchen. In unserer empirischen Methodik verwenden wir Daten über ADI und formelle und informelle Institutionen aus 57 Ländern. Unsere Ergebnisse unterstützen den Konfigurationsansatz und bestätigen eine systemische Sichtweise auf die Auswirkungen von Institutionen auf ADI. Unsere Studie trägt zu einem differenzierteren Verständnis der Wirkungsweise von Institutionen auf ADI bei und verdeutlicht den Wert der konfigurativen Perspektive in der institutionellen Forschung.
    Keywords: Foreign Direct Investment, Institution, International Business, Location Choice, Qualitative Comparative Analysis
    JEL: D02 F21 F23
    Date: 2023
  28. By: Bonga-Bonga, Lumengo
    Abstract: This paper explores whether trade frictions are the primary barrier preventing the Purchasing Power Parity (PPP) hypothesis from holding true between trading nations. It specifically examines the influence of exchange controls, a form of trade friction, on the relationship between an emerging economy, South Africa, and its primary trading partners, categorized based on whether they implement exchange control regulations or not. The methodology employed incorporates nonlinearity through quantile unit root tests and quantile cointegration, aiming to account for diverse economic conditions between trading nations. Empirical results suggest that the PPP hypothesis is more valid between countries with similar economic frameworks and synchronized business cycles. We propose that trade frictions might not necessarily inhibit the PPP hypothesis from being valid among nations with aligned economic structures that react similarly to global economic disturbances.
    Keywords: PPP hypothesis; quantile cointegration; unit root test; exchange control.
    JEL: C58 F14 F3
    Date: 2023–11
  29. By: Haidar, Jamal Ibrahim; Zeaiter, Hussein; Darwich, Salem
    Abstract: The sale and consumption of cannabis are becoming more broadly accepted worldwide as research into its medicinal uses accelerates. Revenue in the global medical cannabis market is projected to reach 12.92 billion US dollars (USD) in 2023, and is expected to grow by 13.16% annually, resulting in a market volume of USD 23.97 billion by 2028. Moreover, Colombia, Costa Rica, Malaysia, Morocco, Thailand, Ukraine, the United States, and European Union countries have created regulatory frameworks for cannabis derivatives manufacturing and export and import licenses. As we previously argued, the goal of exporting cannabis from Lebanon for pharmaceutical processing and medicinal purposes should be welcome, despite many misunderstandings about Lebanon’s informal cannabis sector, as well as what would be required to establish a formal sector and ensure buy-in along the cannabis cultivation and export value chain. Among these challenges are cannabis importing country requirements and Lebanon’s ability to meet them.
    Keywords: cannabis; Lebanon; exports
    JEL: F0 I0 I00
    Date: 2023–09–23
  30. By: Vulović, Marina
    Abstract: The economic and financial crisis of 2008 disrupted the European Union's (EU) enlarge­ment policy for the Western Balkans. At least since that time, the region has seen greater involvement by economic actors from non-EU countries such as China, Russia, Turkey and the United Arab Emirates (UAE). Their engagement has been most evident in the areas of direct investment, trade and energy security. Investments from these countries can increase the risk of 'corrosive capital', which could have a negative impact on the development of the rule of law and democracy in the Western Balkans. In view of a visibly intensifying rivalry between the EU on the one hand and Russia and China on the other, the question therefore arises as to how the EU can react to and strategically counteract the intensified economic interconnectedness of the West­ern Balkans with these actors.
    Keywords: Western Balkans, Western Balkan countries, European Union, EU, China, Russia, Turkey, United Arab Emirates, UAE, direct investment, trade relations, energy security, investment in renewable energy, gradual EU accession, EU enlargement process, Instrument for Pre-Accession Assistance, IPA, Economic and Investment Plan, EIP
    Date: 2023
  31. By: Alexandra Bykova (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Nina Vujanović
    Abstract: ​This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Data availability and preliminary results for 2022 by Alexandra Bykova FDI inflows into CESEE countries, excluding Russia, grew by 10.8% last year. Performance was highly uneven across the countries of the region. Russia’s isolation due to its war in Ukraine led to large-scale disinvestment of EUR 40bn, according to preliminary estimates. Preliminary FDI data for 2022 are available from the wiiw FDI Database as a first FDI data release this year. Data revisions and FDI data by partner and by economic activity will be released later, in autumn. FDI has been holding up, but the outlook is getting cloudier by Olga Pindyuk In contrast to the global trends, FDI inflows in CESEE increased in 2022, apart from in Russia and Ukraine. However, recent trends in greenfield investment and mergers and acquisitions signal a worsening of investment prospects. Southeast Europe is emerging as the most dynamic sub-region in terms of FDI attraction. Spurred by digitalisation and green transition developments, investors in the region have become increasingly interested in the renewable energy and electronic components sectors. What lies behind the strong FDI inflows in the Western Balkans? by Branimir Jovanović The six Western Balkan economies stood out as top performers in terms of FDI inflows within the Central, East and Southeast Europe region in 2022. However, a closer examination reveals a more nuanced picture regarding the composition and characteristics of investments, prompting questions about the overall advantages and long-term sustainability of the inflows. Although the region is projected to continue to attract substantial FDI in the near future, it is likely that the pace will decelerate from the remarkable performance witnessed in 2022. Deriving the underlying FDI trend in CESEE by Nina Vujanović FDI has been pivotal for the growth of CESEE economies. However, the patterns of FDI flows have been highly volatile. To allow policy makers to draw sound conclusions, we derive the underlying FDI trend for the CESEE region. The results show that, although the trend has consistently been upward since 1997, shocks caused by the global financial crisis, COVID-19 and the war in Ukraine have had a strong impact. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025
    Keywords: FDI inflows; FDI outflows; FDI stocks; FDI by instrument of financing; greenfield investment; M&As; FDI by components; FDI by partner; FDI by sector; underlying FDI trend; intra-company loans
    Date: 2023–05
  32. By: Amsalu Woldie Yalew (Ca’ Foscari University of Venice, Euro-Mediterranean Center on Climate Change (CMCC)); Victor Nechifor (European Commission - JRC); Emanuele Ferrari (European Commission - JRC)
    Abstract: The ongoing Russia’s war of aggression against Ukraine is disrupting the global supply chains of essential commodities resulting in a cascading effects on the global economy. This study examines the implications of Russia’s military aggression for Ethiopian. It assesses the consequences of world market price increases for wheat, fertilizer, and petroleum on Ethiopia’s macro economy, production, and households’ consumption. The study employs a computable general equilibrium (CGE) model calibrated to the 2015/2016 social accounting matrix (SAM) of Ethiopia, updated to 2022 using the recursive dynamic features of the model. The impacts of the world price increases are presented as percentage changes to a counterfactual Ethiopian economy in 2022, without accounting for actual and anticipated repercussions from the war. The study finds that GDP, labour wage rates, and households’ consumption decline. The impacts of fertilizer and petroleum price changes are notable and unevenly distributed. Crop growing activities substitute animal manure for inorganic fertilizers. The effect on urban households’ consumption more severe than on rural households. Rising petroleum prices increase the demand for ethanol providing motives to expand sugar manufacturing. Increasing inorganic fertilizer prices tighten the competition for the use of animal manure between cropping activities and households. Promotion of biogas digesters among rural households could encourage the optimal use of animal manure.
    Keywords: Recursive Dynamic CGE Model, Ethiopia, international trade, Ukraine invasion
    Date: 2023–11
  33. By: Radeef Chundakkadan (Indian Institute of Technology Bombay, Mumbai, India); Subash Sasidharan (Indian Institute of Technology (IIT), Madras); Ketan Reddy (Indian Institute of Management Raipur, India)
    Abstract: The aim of this study is threefold. First, we analyse the relationship between export incentives on firm survival during the coronavirus disease (COVID-19) crisis; second, we explore the nexus between bank dependency and survival in the export market; and finally, we test the complementarity and substitutability effect of export incentives and bank dependency on export market survival. We use firm-level information on Indian firms from 2016 to 2022, covering 4 years of the pre-pandemic period and 2 years of the post-pandemic period. We find that both export incentives and bank dependency improve the probability of export market survival in the post-pandemic period. These results are applicable to both the manufacturing and services sector, stand-alone firms, and business group affiliates. Our results remain robust while employing alternative proxies for the primary variable of interest and different methodologies.
    Keywords: Export incentives; bank dependency; survival; export
    Date: 2023–08–29
  34. By: Dahlström, Petter (Royal Institute of Technology); Lööf, Hans (Royal Institute of Technology); Sjöholm, Fredrik (Research Institute of Industrial Economics); Stephan, Andreas (Linnaeus University)
    Abstract: The net-zero agreement on carbon emission from Paris 2015 gives a key role to fossil-free energy technologies with an expected multifold growth rate over the coming decades, when successively replacing oil, coal, and gas. In this paper, we delve into the EU’s competitive advantage in the evolving trade war in clean energy, investigate European strengths and weaknesses in innovation and production, and discuss the impact of the upcoming trade war on the global warming challenge. Our results show that the EU has a strong position in innovation capabilities in the strategic net-zero technologies. However, this is not matched by production capabilities: EU has only a few firms among the leading manufacturers in net-zero technologies.
    Keywords: energy geopolitics; net-zero technologies; patents; innovation
    JEL: F02 O18 Q50 R10
    Date: 2023–11–30
  35. By: Silvia Peracchi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: The massive inflows of migrants across the Mediterranean has generated widespread political attention and backlash. This paper explores the impact of migrants’ displacements at the EU’s internal borders, due to militarized border push-backs and arising from the European migrant crisis in the 2010s. It investigates how these displacements affect both the local news market and the local political economy. To do so, it relies on a policy implemented in June 2015, whereby French authorities introduced militarized controls at the Italian frontier to redirect migrants and asylum seekers, originally intending to cross the border irregularly, back to the Italian territory. These dynamics created a quasi-experimental setting, where natives in the Italian region were unevenly exposed to pushed back migrants: those residing close to the French border experienced more directly the evolution of events. Using novel text and count data from local news in the interested areas of Liguria, Italy, between 2012 and 2019, this study finds that, following the border push-backs, media coverage of migration decayed with commuting distance to the border. Conversely, anti-immigrant discourse in the news exhibited a relative increase in areas least directly impacted by the border events. Exploring further this framing dimension, the results turn out to be shaped by readers’ demand and to be closely associated with local news penetration. Finally, this study documents that voting preferences share a similar direction to news slant, while a related broad pattern also appears in hate-crime records.
    Keywords: Media slant, EU borders, immigration, diff-in-diff
    JEL: F22 L82 F50
    Date: 2023–12–11
  36. By: Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: ​This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Growing signs of bleak prospects by Olga Pindyuk and Doris Hanzl-Weiss FDI performance in CESEE significantly weakened in the first nine months of 2023, with FDI inflows decreasing year on year in most of the countries. EU-CEE experienced the sharpest contraction of FDI inflows among the subregions. Investors appear to have become more pessimistic about the region’s prospects, as indicated by the falling number of greenfield investment projects in all the subregions apart from CIS and Ukraine. In line with global trends, the renewable energy sector is gaining in importance in the FDI structure. Employment in new greenfield FDI in the Western Balkans by Branimir Jovanović Between 2010 and 2021, around 180, 000 jobs were created by new greenfield FDI projects in the Western Balkans, with manufacturing accounting for the bulk of them. About two thirds of the newly created jobs were medium skilled, with the skills intensity of the FDI-related jobs generally lower than overall for new employment in the region. This points to the importance of the careful calibration of incentives and benefits in policies to attract FDI. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025
    Keywords: FDI inflows, greenfield investment, FDI stocks, M&As, employment
    Date: 2023–11
  37. By: Clément Anne; Cyril Chalendard; Ana Fernandes; Bob Rijkers; Vincent Vicard
    Abstract: To identify transactions at risk of tariff evasion, this paper matches export transaction data from France with import transaction data from Madagascar using container identifiers. Reporting discrepancies between exporters and importers are prevalent but small, with over two-fifths of importers reporting in a way that increases their tariff liability. Yet, aggregate tariff revenues are 24 percent lower due to discrepancies. These revenue losses are highly concentrated: the top five evaders account for three-quarters of all tariff revenue losses and larger shipments are more at risk of evasion. Tariff enforcement in Madagascar is ineffective and only marginally mitigates revenue losses.
    Keywords: Tax Evasion;Mirror Statistics;Trade;Corruption;Exporters;Importers;Tariffs
    JEL: F14 H26
    Date: 2023–11
  38. By: Javier Garcia-Bernardo (1Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czechia; Department of Methodology & Statistics, Utrecht University, the Netherlands; Centre for Complex Systems Studies, Utrecht University, the Netherlands); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: We exploit the new country-by-country reporting data of multinational corporations, with unparalleled country coverage, to reveal the distributional consequences of profit shifting. We estimate that multinational corporations worldwide shifted over $850 billion in profits in 2017, primarily to countries with effective tax rates below 10%. Countries with lower incomes lose a larger share of their total tax revenue due to profit shifting. We further show that a logarithmic function is better suited for capturing the non-linear relationship between profits and tax rates than linear or quadratic functions. Our findings highlight effective tax rates’ importance for profit shifting and tax reforms.
    Keywords: multinational corporation, corporate taxation, profit shifting, effective tax rate, country-by-country reporting, global development
    JEL: F23 H25 H26 H32
    Date: 2023–12
  39. By: Khondaker Golam Moazzem; ASM Shamim Alam Shibly; Moumita A Mallick
    Abstract: Migrant workers make significant contributions to national development, yet their essential needs are frequently overlooked in national budget allocations. The FY2023–24 budget lacks migrant-focused programmes. Challenges persist in the different stages of migration: pre-migration, in the destination countries, and during reintegration. The Ministry of Expatriates’ Welfare and Overseas Employment is not solely responsible for the welfare and rights of migrant workers. This study identified eleven different ministries and divisions that are responsible for the implementation of welfare projects targeted towards migrant workers. This study examines these issues, reviews previous budgetary allocations, and suggests a BDT 4, 550 crore budget for the three stages of migration to strengthen ministries’ assistance for migrants. This research emphasises targeted measures to improve migrant welfare and recognises their critical economic contribution.
    Keywords: Migrant workers, Migrant Communities, Welfare and Rights, National Budget, FY2023–24
    Date: 2023–09
  40. By: Carsten Eckel (LMU Munich, CESifo, CEPR); Lisandra Flach (LMU Munich, ifo Institute, CESifo, CEPR); Ning Meng (Nanjing University, CESifo)
    Abstract: Products produced by a multiproduct firm can be linked through demand linkages or supply linkages. On the demand side, changes in the price of one product can affect the demand for a firm's other products through shifts in consumer expenditures. This is commonly referred to as the cannibalization effect. On the supply side, joint inputs can create a dependency of one product's marginal costs on the output of other products. The existence of these linkages is important for how firms respond to shocks and has major implications for several performance measures, such as productivity and markups. This paper provides first empirical evidence for the existence of cannibalization linkages in presence of supply linkages, which is implied evidence for market power.
    Keywords: multiproduct firms; cannibalization effect; demand linkages; supply linkages; anti-dumping tariffs; quality; mark-ups;
    JEL: D21 D24 F12 F13 F14 L11 L15 L25
    Date: 2023–11–17
  41. By: Miguel García Duch (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.)
    Abstract: This article examines Thirlwall's Law for a sample of 9 eurozone countries from 1992 to 2019. Thirlwall's Law states that a country's long-run growth rate is determined by the ratio of its income elasticities of demand for exports and imports. Using product level data from COMTRADE, this article constructs 5 main sectors based on technological intensity and estimates exports and imports equations for each sector and country in error correction model form. Estimation techniques are seemingly unrelated regressions for exports and three stages least squares for imports. The results reveal significant variations in the income elasticities across sectors and countries, with a strong correlation between higher elasticities for more technological sectors, especially among the so-called central economies. The article concludes that Thirlwall's Law is both a strong predictor of actual growth rates and a useful tool for understanding the role of external imbalances on Eurozone’s economic performance during the last decades.
    Keywords: : Balance-of-Payments-Constrained Growth; Thirlwall’s Law; Multi-Sector Analysis; Current Account Imbalances; Error Correction Models.
    JEL: C30 E12 F45
    Date: 2023

This nep-int issue is ©2024 by Luca Salvatici. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.