nep-int New Economics Papers
on International Trade
Issue of 2024‒02‒19
47 papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Climate Policy and Trade in Polluting Technologies By Ferguson, Shon M.; Heijmans, Roweno J.R.K.
  2. Reassessing the Effects of Corporate Income Taxes on Mergers and Acquisitions Using Empirical Advances in the Gravity Literature By Sebastien Bradley; Federico Carril-Caccia; Yoto V. Yotov
  3. Reducing trade with Russia: Sanctions vs. reputation By Juan de Lucio; Raúl Mínguez; Asier Minondo; Francisco Requena
  4. Global Value Chains (GVCs) participation and Markups By Dolores Añon Higón; Ionnanis Bournakis
  5. International Sourcing during COVID-19: How did Chilean firms fare? By Jennifer Peña; Elvira Prades
  6. Corporate Globalization and Worker Representation By Uwe Jirjahn
  7. The Macroeconomic Consequences of Import Tariffs and Trade Policy Uncertainty By Lukas Boer; Malte Rieth
  8. Economic Costs of Friend-Shoring By Beata S. Javorcik; Lucas Kitzmüller; Helena Schweiger; Muhammed A. Yildirim; Beata Smarzynska Javorcik; Muhammed Ali Yildirim
  9. Does FTA Import Utilization Enhance Firm Performance? An Assessment of the Philippine Manufacturing Sector By Quimba, Francis Mark A.; Andrada, Abigail E.; Moreno, Neil Irwin S.
  10. Mind the gaps: Gender complementarities in migration and FDI By Federico Carril-Caccia; Ana Cuadros; Jordi Paniagua
  11. The distributional effects of trade: theory and evidence from the United States By Borusyak, Kirill; Jaravel, Xavier Laurent
  12. China's Trade Strategies and Korea-China Cooperation Plans By LEE , Seung Shin; HYUN, Sang Baek; NA, Su Yeob; KIM, Young Sun
  13. The Leisure Gains from International Trade By Agustin Velasquez
  14. International Sanctions and Emigration By Jerg Gutmann; Pascal Langer; Matthias Neuenkirch
  15. Robots and Extensive Margins of Exports - Evidence for Manufacturing Firms from 27 EU Countries By Joachim Wagner
  16. Hidden exposure: measuring US supply chain reliance By Baldwin, Richard; Freeman, Rebecca; Theodorakopoulos, Angelos
  17. The Effects of Immigration in a Developing Country By David Escamilla-Guerrero; Andrea Papadia; Ariell Zimran
  18. Determinants of FDI flows to Sub-Saharan Africa: Does economic development play a role? By Mukosa Chakufyali; Christine S. Makanza
  19. Trade, innovation and optimal patent protection By Hémous, David; Lepot, Simon; Sampson, Thomas; Schärer, Julian
  20. When Quality Management Helps Agri-food Firms to Export By Charlotte Emlinger; Karine Latouche
  21. 미국의 대중 금융제재 영향과 시사점(The US Financial Sanctions on China and Its Implications on Korea) By Yeon, Wonho; Kim, Hyosang; Moon, Jiyoung; Na, Suyeob; Kim, Youngsun
  22. The social footprint of globalization: Towards the introduction of strategic industries in quantitative trade models By Italo Colantone; Gianmarco I. P. Ottaviano; Piero Stanig
  23. Immigration, Monopsony and the Distribution of Firm Pay By Amior, Michael; Stuhler, Jan
  24. Migration for Happiness? By Bellaumay, Rémy
  25. Generalized Welfare Gains from Trade Formulas By Wisarut Suwanprasert
  26. Migration response to an immigration shock: Evidence from Russia's aggression against Ukraine By Zuchowski, David
  27. An Integrative Institutional Framework on the Canada-U.S. Business Performance Gap By Morgan, Horatio M.
  28. What Drives Attitudes toward Immigrants in Sub-Saharan Africa? Evidence from Uganda and Senegal By Becker, Malte; Krüger, Finja; Heidland, Tobias
  29. African Slavery and the Reckoning of Brazil By Nuno Palma; Guilherme Lambais
  30. Inclusivity of Factor Flows in a Labor-Surplus Economy: Experience of the Philippines By Tullao, Tereso Jr. S.; Rivera, John Paolo R.
  31. Resurgence of the Social Clause?: A critical analysis of labor provisions in RTAs in the Asia-Pacific region By NAKAGAWA Junji
  32. Rethinking revealed comparative advantage with micro and macro data By Huang, Hanwei; Ottaviano, Gianmarco Ireo Paolo
  33. Does immigration affect native wages? A meta-analysis By Nedoncelle, Clément; Marchal, Léa; Aubry, Amandine; Héricourt, Jérôme
  34. Covid 19, Taxes Trump et Brexit : comparaison des effets sur les exportations françaises de vin entre vignerons indépendants et coopératives vinicoles By Carole Maurel; Foued Cheriet
  35. Behind the Eastern-Western European convergence path: the role of geography and trade liberalization By Adolfo Cristobal Campoamor; Osiris Jorge Parcero
  36. Gender and migration aspirations in Nigeria: A comparative study of the states of Edo and Kaduna By Daniel Tuki
  37. Global managers, local workers: Wage setting inside a multinational firm By Virginia Minni
  38. The Rise of Korea's Defense Industry in the New Global Security Paradigm By Jang, Won-Joon; Park, Hea Ji
  39. Mineral resource volatility and green growth: the role of technological development, environmental policy stringency, and trade openness By Feng, Meihong; Zou, Donghang; Hafeez, Muhammad
  40. Digital Mobility of Financial Capital Across Different Time Zones, Factor Prices and Sectoral Composition By Mandal, Biswajit
  41. Asymmetric Exchange Rate Pass-through between Unexpected Yen Appreciation and Depreciation: The case for Japanese machinery exports By LIU Nan; SATO Kiyotaka
  42. World Wine Exports: What Determines the Success of New World Wine Producers? By Osiris Jorge Parcero; Emiliano Villanueva
  43. Assessing the impact of used vehicle imports ban policy: Evidence from Côte d’Ivoire By Daouda Bamba
  44. Undiversity, inequity, and exclusion in supply chains : The unintended fallout of economic sanctions and consumer boycotts By Timofey Shalpegin; Ajay Kumar; Tyson Browning
  45. Global political ties and the global financial cycle By Ambrocio, Gene; Hasan, Iftekhar; Li, Xiang
  46. Foreign economic policy uncertainty shocks and real activity in the Euro area By Arigoni, Filippo; Lenarcic, Crt
  47. Optimal National policies towards multinationals when local regions can choose between firm-specific and non-firm-specific policies By Osiris Jorge Parcero

  1. By: Ferguson, Shon M. (Dept. of Economics, Swedish University of Agricultural Sciences); Heijmans, Roweno J.R.K. (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: This paper studies international trade in equipment used in the combustion of fossil fuels. Informed by a theoretical analysis, we identify a type of technology leakage hitherto unexplored in the literature: a country’s export of combustion equipment tends to increase, all else equal, in the stringency of its climate policy. We test this prediction by estimating the impact of carbon pricing on international trade in combustion equipment using detailed data on bilateral trade and domestic carbon prices for the period 1995–2021. Our estimates reveal a robust positive association between the stringency of climate policies and exports of combustion equipment, providing clear evidence for the existence of technology leakage. We argue that standard policies to mitigate carbon leakage are unlikely to prevent technology leakage, raising novel policy questions.
    Keywords: Emissions pricing; cap-and-trade; carbon leakage; international trade in technologies
    JEL: F14 F18 Q37 Q54 Q58
    Date: 2024–01–30
  2. By: Sebastien Bradley; Federico Carril-Caccia; Yoto V. Yotov
    Abstract: We study the relationship between corporate income taxes and mergers and acquisitions (M&As). To this end, we compile and deploy a dataset consisting of all cross-border and domestic M&A deals for 118 source (acquirer) and 122 destination (target) countries and 84 sectors over the period 1995-2019. From a methodological perspective, we implement leading methods from the empirical gravity literature on trade, foreign direct investment, and migration, and we demonstrate their importance for estimating the impact of corporate income taxes on cross-border versus domestic M&A activity. Our main finding is that a one percentage point increase in target country corporate income tax rates decreases the number of cross-border acquisitions by about 0.8 percent relative to domestic M&As. This result is robust to various sensitivity checks and is comparable to previously published estimates. Nevertheless, our stepwise estimation strategy exemplifies the importance of individual empirical refinements. These should serve as the basis for future work investigating the effects of taxation on bilateral flows.
    Keywords: corporate income taxes, mergers and acquisitions, gravity methods
    JEL: F10 F14 F21 F23 H25 H87
    Date: 2023
  3. By: Juan de Lucio (Universidad de Alcalá. Pza. San Diego, s/n, 28801, Alcalá de Henares (Spain).); Raúl Mínguez (Cámara de Comercio de España and Universidad Antonio de Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Asier Minondo (Corresponding author. Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain).); Francisco Requena (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: The invasion of Ukraine in February 2022 led the European Union to impose a wide range of economic sanctions on Russia. Parallel to this process, many multinational firms, due to reputational concerns, voluntarily decided to suspend their activities in Russia. This paper quantifies the impact of trade sanctions and the decision of firms to suspend activities on Spanish exports and imports with Russia. Using an event study methodology, we find that the decision of firms to suspend activities in Russia contributed to the reduction in exports and imports by 26% and 43%, respectively, while sanctions contributed by 9% and 21%, respectively. These figures highlight that firms’ actions to protect their reputation can significantly complement sanctions in reducing the amount of trade with target countries.
    Keywords: sanctions, reputation, Russian invasion of Ukraine, firm-level exports and imports, Spain
    JEL: F10 F14
    Date: 2024–01
  4. By: Dolores Añon Higón (Department of Applied Economics II and ERI-CES, Faculty of Economics, Universitat de València, Avda. Tarongers, s/n, 46022 Valencia (Spain)); Ionnanis Bournakis (SKEMA Business School. Avenue Willy Brandt. 59777 Euralille, France)
    Abstract: We examine the relationship between firms’ participation in global value chains (GVCs) and price markups. We use data from 14, 316 firms in six European countries obtained from AMADEUS data linked to the EFIGE project. There is substantial heterogeneity between countries and industries in terms of firm-specific time variant markups. After controlling for sample selection bias using coarsened exact matching (CEM), we find that firms involved in exporting produced-to-order goods and importing service and material inputs have between a three and four percent markup premium relative to nontrading firms. Our results remain robust to alternative definitions of GVC participation, different data matching techniques (Propensity Score Matching) and different markup estimates. Our findings contribute to the scarce but increasingly significant literature on markup heterogeneity and provide ample opportunities for designing industrial policies.
    Keywords: FDI, migration, elasticity of substitution, gender, discrimination
    JEL: F21 F22 F23
    Date: 2024–01
  5. By: Jennifer Peña; Elvira Prades
    Abstract: COVID-19 has proven to be a unique and complex shock for firms. In this paper we analyze the performance of individual Chilean firms during this episode drawing on administrative datasets. In particular we empirically characterize the international trade adjustment at the firm and product level. Importer firms, specially in the manufacturing sector, have adjusted their import flow through three margins along 2020/21. In 2020 imports declined as some firms either stopped their import activity, or they imported less product varieties (product and country of origin) or by reducing the intensity of imported varieties. In this period importers faced a short-lived increase in imported input costs. In 2021 imports rebound strongly. While exporter firms (excluding mining) kept their export activity as well as their selling price stable. We also explore if foreign factors such as the incidence of COVID-19 and containment measures in partner countries had an impact on Chilean trade during 2020. We find that these foreign factors had an impact on intermediate rather than consumption goods imports.
    Date: 2023–10
  6. By: Uwe Jirjahn
    Abstract: This chapter reviews research on the linkages between corporate globalization and worker representation. Studies have identified various transmission channels through which the activities of foreign multinational companies (MNCs) affect host-country institutions of union and non-union representation. First, countries compete for inbound foreign direct investment (FDI) and the ability to attract FDI depends among others on a country's industrial relations system. Second, once foreign MNCs have invested in a host country, they exert an influence on the country's institutions of worker representation through how their affiliates adapt to those institutions or tend to avoid them. Third, the affiliates of foreign MNCs affect the bargaining power of host-country worker organizations. Fourth, foreign affiliates have an impact on labor conflicts and the quality of industrial relations. Altogether, the available evidence provides indications that the activities of foreign MNCs can be a challenge for worker representation within host countries.
    Keywords: Multinational Company, Foreign Direct Investment, Union Avoidance, Bargaining Power, Labor Conflict, Centralized Bargaining, Works Council
    JEL: F23 F66 J51 J52 J53 J83
    Date: 2024
  7. By: Lukas Boer; Malte Rieth
    Abstract: We estimate the macroeconomic effects of import tariffs and trade policy uncertainty in the United States, combining theory-consistent and narrative sign restrictions in Bayesian SVARs. We find mostly adverse consequences of protectionism, in aggregate and across sectors and regions. Tariff shocks are more important than trade policy uncertainty shocks. Tariff shocks depress trade, investment, and output persistently. The general equilibrium import elasticity is –0.8. Historically, NAFTA/WTO raised output by 1-3% for twenty years. Undoing the 2018/19 measures would raise output by 4% over three years. The findings imply higher gains of trade than partial equilibrium or static trade models.
    Keywords: Trade policy; international trade; structural vector autoregressions; narrative identification; general equilibrium; United States.
    Date: 2024–01–19
  8. By: Beata S. Javorcik; Lucas Kitzmüller; Helena Schweiger; Muhammed A. Yildirim; Beata Smarzynska Javorcik; Muhammed Ali Yildirim
    Abstract: Geo-political tensions and disruptions to global value chains have led policy makers to re-evaluate their approach to globalisation. Many countries are considering friend-shoring – trading primarily with countries sharing similar values – as a way of minimising exposure to weaponisation of trade and securing access to critical inputs. If followed through, this process has the potential to reverse global economic integration of recent decades. This paper estimates the economic costs of friend-shoring using a quantitative model incorporating inter-country inter-industry linkages. The results suggest that friend-shoring may lead to real GDP losses of up to 4.7% of GDP in some economies. Thus, although friend-shoring may provide insurance against extreme disruptions and increase the security of supply of vital inputs, it would come at a substantial cost.
    Keywords: friend-shoring, regionalisation, global trade and production network, international I-O linkages
    JEL: F15 F51 F60 R15
    Date: 2023
  9. By: Quimba, Francis Mark A.; Andrada, Abigail E.; Moreno, Neil Irwin S.
    Abstract: This study assessed how utilizing free trade agreements (FTAs) in imports affects the performance of Philippine manufacturing firms. It used recent developments in differences-in-differences (DID) estimation with multiple time periods and variations in treatment timing. This DID method was applied to a rich Philippine microdata set that integrates the annual firm surveys/censuses with import transaction data. The empirical analysis reveals that the FTA import utilization effects varied across different groups and periods; some estimates did not have the expected signs. Overall, productivity gains were limited for importers who started to use FTAs. However, the productivity losses observed from quitting FTA use suggest potential long-run productivity gains obtained by consistent FTA users. The results also confirm the trade-facilitating effects of FTAs, as FTA starters consistently experienced substantial import growth. Meanwhile, quitting use only generated short-term adverse effects on firm imports, implying that some importers might have eventually increased their imports from non-FTA partners. Among others, policymakers must prioritize easing FTA procedures, intensifying firm support mechanisms, and improving data access and monitoring. The country’s ongoing effort in monitoring import surges could also be leveraged to identify sectors that heavily rely on imported intermediate inputs. This could facilitate their participation and upgrading in global value chains. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: free trade agreements;firm performance;import facilitation;difference-in-differences;doubly robust;FTA
    Date: 2023
  10. By: Federico Carril-Caccia (University of Granada); Ana Cuadros (Universitat Jaume I and Institute of International Economics); Jordi Paniagua (University of Valencia, Kellogg Institute, University of Notre Dame)
    Abstract: This paper analyzes the effect of increasing the share of female migrants on Foreign Direct Investment (FDI). We develop a model that introduces gendered labor and discrimination into a structural model of FDI. Our estimates reveal that the increasing feminization of the immigrant labor force is positively associated with FDI. Furthermore, the model drives the quantification of the elasticity of substitution (EoS) between male and female labor for 27 OECD countries (1.3 on average) and three job types: managers (3.2), professionals (2.1), and non-qualified workers (6.0). The EoS is lower in countries with small gender gaps (e.g., 0.3 in Sweden) than in countries with large gender gaps (e.g., 6.1 in Mexico). Our analysis offers novel perspectives on the impacts of migration and the potential implications of policies targeted at enhancing female workforce participation.
    Keywords: FDI, migration, elasticity of substitution, gender, discrimination
    JEL: F21 F22 F23
    Date: 2024–01
  11. By: Borusyak, Kirill; Jaravel, Xavier Laurent
    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 flat 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: trade liberalization; distributional effects; inequality; non-homothetic preferences
    JEL: F14 F16 F00 D63
    Date: 2023–10–20
    Abstract: As uncertainties in the global trade environment expand, China's trade strategy is changing, and these changes are expected to have a significant impact on our trade environment with China. This paper analyzed China's policies on new trade issues such as supply chain reorganization, digital trade, climate change response and proposed policy implications.
    Keywords: China; Trade Strategy; Korea-China Cooperation
    Date: 2024–01–26
  13. By: Agustin Velasquez
    Abstract: The average number of hours worked has been declining in many countries. This can be explained if workers have preferences with income effects outweighing substitution effects. Then, an optimal response to rising income is to reduce labor supply to enjoy more leisure. In this paper, I develop a novel structural link between trade and aggregate labor supply. Using a multi-country Ricardian trade model, I show that reducing trade barriers leads to fewer hours worked while being compatible with an increase in welfare. In addition, I derive an hours-to-trade elasticity and estimate it by exploiting exogenous income variation generated by aggregate trade. On average, I quantify that the rise in trade openness between 1950 and 2014 explains 7 percent of the total decline in hours per worker in high-income countries.
    Keywords: Hours worked; leisure; labor supply; Marshallian elasticity; uncompensated elasticity; international trade
    Date: 2024–01–19
  14. 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 (largely OECD) 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 for 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: exit, gender differences, international sanctions, migration, voice
    JEL: F22 F51 J16 O15
    Date: 2024
  15. By: Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre and Kiel Centre for Globalization)
    Abstract: The use of robots by firms can be expected to go hand in hand with higher productivity, higher product quality and more product innovation, which should be positively related to export activities. This paper uses firm level data from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate the link between the use of robots and export activities in manufacturing enterprises from the 27 member countries of the European Union. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use robots do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated robots premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of robots are positively related.
    Keywords: Robots, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS)
    JEL: D22 F14
    Date: 2024–01
  16. By: Baldwin, Richard (IMD, CEPR, and NBER); Freeman, Rebecca (Bank of England); Theodorakopoulos, Angelos (Aston Business School)
    Abstract: Supply chain problems, previously relegated to specialized journals, now appear in G7 Leaders’ Communiqués. Our paper looks at three core elements of the problems: measurement of the links that expose supply chains to disruptions, the nature of the shocks that cause the disruptions, and the criteria for policy to mitigate the impact of disruptions. Utilizing global input-output data, we show that US exposure to foreign suppliers, and particularly to China, is ‘hidden’ in the sense that it is much larger than what conventional trade data suggest. However, at the macro level, exposure remains relatively modest, given that over 80% of US industrial inputs are sourced domestically. We argue that many recent shocks to supply chains have been systemic rather than idiosyncratic. Moreover, systemic shocks are likely to arise from climate change, geoeconomic tensions, and digital disruptions. Our principal conclusion is that concerns regarding supply chain disruptions, and policies to address them, should focus on individual products, rather than the whole manufacturing sector.
    Keywords: Global supply chains; exposure; input reliance; risk; resilience; globalization
    JEL: F10 F13 F14 F60
    Date: 2023–11–17
  17. By: David Escamilla-Guerrero; Andrea Papadia; Ariell Zimran
    Abstract: The effects of immigration are reasonably well understood in developed countries, but they are far more poorly understood in developing ones despite the importance of these countries as immigrant destinations. We address this shortcoming by studying the effects of immigration to Brazil during the Age of Mass Migration on its agricultural sector in 1920. This context benefits from the widely recognized value of historical perspective in studies of the effects of immigration. But unlike studies that focus on the United States to understand the effects of migration from poor to rich countries, our context is informative of developing countries’ experience because Brazil in this period was unique among major migrant destinations as a low-income country with a large agricultural sector and weak institutions. Instrumenting for a municipality’s immigrant share using the interaction of aggregate immigrant inflows and the expansion of Brazil’s railway network, we find that a greater immigrant share in a municipality led to an increase in farm values. We show that the bulk of the effect of immigration can be explained by more intense cultivation of land, which we attribute to temporary immigrants exerting greater labor effort than natives. Finally, we find that it is unlikely that immigration’s effect on agriculture slowed Brazil’s structural transformation.
    Date: 2024–01–31
  18. By: Mukosa Chakufyali (School of Economics, University of Cape Town); Christine S. Makanza (School of Economics, University of Cape Town)
    Abstract: There is a disparity in the trends of Foreign Direct Investment (FDI) flows to Sub- Saharan Africa (SSA) across nations at different stages of economic development, thereby indicating that economic development could play a role in attracting FDI to the region. This study assesses whether economic development plays a key role in attracting FDI to SSA, and examines whether the determinants of FDI differ across nations at different stages of economic development. The study constructs a panel dataset consisting of twenty-seven Sub-Saharan African (SSA(n)) nations, separated into higher and lower income nations, for the period 2000-2019. Both static and dynamic panel regression analysis is conducted, where the dynamic model is estimated using a system of Generalised Method of Moments (GMM) procedure, whereas static panel analysis is conducted using fixed effects and random effects models. A dummy variable is included to represent economic development. The dummy was created by assessing each nations country classification by income level, according to the World Bank, in each year included in the analysis, and not by taking a nations classification at the end-point of the analysis, as end-point classification is likely to lead to a misclassification of nations that have transitioned from lower to higher income nations throughout the period under investigation. The full sample regression results found the dummy variable to be strongly significant, thereby supporting the claim that economic development does play a role in attracting FDI to SSA. Additional factors identified to be key drivers of FDI to SSA include inflation, FDI flows in the previous period, and trade openness. A comparison of the determinants of FDI across lower and higher income SSA(n) nations indicates that the determinants of FDI differs across nations at different stages of economic development. The factors that attract FDI to higher income SSA(n) nations are inflation, and government effectiveness, whereas the factors that attract FDI to lower income SSA(n) nations are lagged FDI flows, inflation, and trade openness.
    Date: 2023
  19. By: Hémous, David; Lepot, Simon; Sampson, Thomas; Schärer, Julian
    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 F43 O34
    Date: 2023–11–13
  20. By: Charlotte Emlinger (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Keywords: Non-tariff-Measures, Quality, Export competitiveness
    Date: 2023–08–29
    Abstract: 본 연구에서는 미·중 간 전략경쟁이 첨예화되는 가운데, 미국의 대중국 금융제재 현황과 중국의 대응을 살펴봤다. 향후 미국의 대중국 제재는 본격적인 금융제재로 확대될 가능성이 커 보인다. 본 연구는 2014년 러시아에 대한 금융제재 사례연구를 통해 금융부문의 탈세계화가 중국의 경제성장에 부정적인 영향을 미칠 것으로 전망했다. 다만 미국과 중국이 금융부문에서 완전한 탈동조화를 시도하는 시나리오는 가능성이 낮아 보인다. Economic sanctions are typically imposed as coercive measures to restrict a target’s economic activities, with the aim of achieving foreign policy and national security objectives. The United States has employed many methods of economic sanctions, such as imposing import and export limitations, withholding foreign aid and investment, seizing foreign assets, and forbidding its nationals from doing economic transactions with sanctioned individuals and companies. Financial sanctions encompass a range of measures that particularly limit the movement of funds and other forms of asset value to countries, companies, and individuals subject to sanctions. These measures have a wide-reaching impact as they can freeze assets, prohibi t or restrict financial transactions, and even disrupt the settlement of import and export activities. The utilization of economic sanctions as a geopolitical instrument has a lengthy historical background, but, the current impact and efficacy of U.S. sanctions are unparalleled. Although countries other than the United States have the authority to enforce tariffs, import and export controls, and other non-tariff barriers, they lack the ability to independently limit access to the global financial system, unlike the United States. Therefore, the secondary sanctions imposed by the United States, which limit dollar transactions, enables the United States to exert its influence on a worldwide scale through working in conjunction with other economic restrictions, such as export controls. Amidst the escalating strategic rivalry between the United States and China, the United States is broadening both the extent and substance of its financial sanctions. In the ongoing competition for technological supremacy between the United States and China, the United States can leverage its influence in the financial sector to impede China’s access to the necessary resources for the advancement of its own high-tech sectors. Furthermore, the United States has the ability to intervene in transactions occurring within the supply chain of high-tech enterprises that utilize U.S. currency, in addition to imposing restrictions on domestic U.S. companies selling components to China. (the rest omitted)
    Keywords: Economic security; financial liberalization; US financial sanctions against China
    Date: 2022–12–30
  22. By: Italo Colantone; Gianmarco I. P. Ottaviano; Piero Stanig
    Abstract: We argue that our understanding of industrial policy in the presence of 'strategic' industries that exert positive externalities on the national economy may benefit from an extension of quantitative general equilibrium trade models making the extent and pattern of trade-induced re-allocations more salient. To make these features relevant for national welfare, we introduce the notion of the 'social footprint' of globalization as the result of suboptimal trade-induced structural transformation in the presence of externalities. For proof of concept, we use simple workhorse models featuring two countries and two industries (only one of which is 'strategic') to highlight the role of the 'scale elasticity' of the strategic industry and the consequences of the most common assumptions on market structure in quantitative trade analyses.
    Keywords: globalization, quantitative trade models, trade liberalization, market structure, externalities, strategic industries
    Date: 2024–01–17
  23. By: Amior, Michael (Hebrew University, Jerusalem); Stuhler, Jan (Universidad Carlos III de Madrid)
    Abstract: We argue that the arrival of immigrants with low reservation wages can strengthen the monopsony power of firms. Firms can exploit "cheap" migrant labor by offering lower wages, though at the cost of forgoing potential native hires who demand higher wages. This monopsonistic trade-off can lead to large negative effects on native employment, which exceed those in competitive models, and which are concentrated among low-paying firms. To validate these predictions, we study changes in wage premia and employment across the firm pay distribution, during a large immigration wave in Germany. These adverse effects are not inevitable, and may be ameliorated through policies which constrain firms' monopsony power over migrants.
    Keywords: immigration, monopsony, firms
    JEL: J31 J42 J61 J64 J11
    Date: 2023–12
  24. By: Bellaumay, Rémy
    Abstract: When people dream of emigration, do they want to go to a rich country or for a happy one? While on an international scale, the two often go hand in hand, the Gallup World Poll, which asks questions about emigration aspirations, shows that the two elements come into play separately: countries with greater average life satisfaction exert an attraction beyond their wealth and historical proximity to countries of origin. Plans to emigrate in the next year, more concrete than aspirations or hopes, follow a similar pattern with only some modifications due to regulatory and geographical constraints. The persistence of life satisfaction of destination countries as a predictor indicates the force of attraction of the possibility of a better life. Where people actually go may be different from the place that they hoped to go – attesting to the power of immigration barriers. Once arrived in the host country, immigrants' life satisfaction tends to be lower than that of the native-born – however, the ranking of countries is the same whether we consider the criterion of their satisfaction or that of the native-born.
    Keywords: Wellbeing, Migration
    Date: 2023–12
  25. By: Wisarut Suwanprasert
    Abstract: This paper develops a novel approach to derive welfare gains from trade formulas applicable to a wide range of trade models. First, I derive a general formula for classical trade models based on the formula established by Arkolakis et al. (2012), henceforth referred to as “ACR.†This new formula incorporates a nuanced consideration of the production share and elasticity of substitution between outputs, offering a refined formula for assessing the welfare gains associated with movements along the production possibility frontier. Second, I use this new approach to generalize the ACR formula. This new derivation broadens the applicability of the ACR formula, extending its relevance to a broader class of trade models than previously considered.
    Keywords: Trade theory; Gains from trade; Classical trade models; ACR formula
    JEL: F1
    Date: 2024–02
  26. By: Zuchowski, David
    Abstract: Russia's attacks against Ukraine have triggered massive and unexpected migration movements. In this paper, I examine the impact of the inflow of Ukrainians that resulted from Russia's aggression in 2014 on local migration patterns in Poland. For identification, I use an instrumental variable approach drawing on unique historical data on the forced resettlement of Ukrainians in Poland after World War II. The results show that the regional inflow of immigrants decreases both internal and international out-migration of the Polish population. I provide supportive evidence that the decrease in out-migration is due to the upscaling of local labor markets.
    Abstract: Die Angriffe von Russland auf die Ukraine haben massive und unerwartete Migrationsbewegungen ausgelöst. In diesem Artikel untersuche ich die Auswirkungen des Zustroms ukrainischer Arbeitskräfte infolge der russischen Aggression im Jahr 2014 auf lokale Migrationsbewegungen in Polen. Zur Identifizierung der Effekte verwende ich einen Instrumentalvariablenansatz, der sich auf einzigartige historische Daten zur Zwangsumsiedlung ukrainischer Familien in Polen nach dem Zweiten Weltkrieg stützt. Die Ergebnisse zeigen, dass die regionale Zuwanderung sowohl die interne als auch die internationale Abwanderung der polnischen Bevölkerung verringert. Ich finde Indizien dafür, dass dieser Rückgang der Abwanderung auf das Hochskalieren der lokalen Arbeitsmärkte zurückzuführen ist.
    Keywords: Migration, immigrant workers, Poland, Ukraine
    JEL: F22 J61 O15
    Date: 2023
  27. By: Morgan, Horatio M.
    Abstract: Canada is consistently ranked among the best places to live. However, its potential for sustainable prosperity could depend on how well its business sector navigates a rapidly changing world. Canadian companies innovate and export less than their American peers and generate lower returns from such activities. Prior studies have provided insights into different aspects of this underperformance problem. Still, we can gain more helpful insights by synthesizing the distinct views. This article develops an institutional perspective on comparative economic development between Canada and the United States (U.S.). The general thesis posits that initial institutional differences, linked to different separation patterns from British colonial rule, induced distinct path dependencies in the Canadian and U.S. economies. A vital premise is that the U.S. historically adopted more classically liberal mercantilist institutions than Canada. This initial institutional disparity is associated with American firms’ nationalistic and profit motives, plus their early attempts to organize and lead global value chains (GVCs). Ultimately, this article presents an integrative institutional framework that links the Canada-U.S. business performance gap to a complex interplay between a trio of institutionally induced gaps at the firm, GVC, and business-leader levels.
    Keywords: Canada-U.S. business performance gap, global value chains, mercantilist institutions, myopia, path dependence, resource-capability bundles
    JEL: D21 F10 F23 L60 O31 O51 O57 P16
    Date: 2024–01–10
  28. By: Becker, Malte (Kiel Institute for the World Economy); Krüger, Finja (Kiel Institute for the World Economy); Heidland, Tobias (Kiel Institute for the World Economy)
    Abstract: We explore whether attitudes toward immigration and their determinants known from well-studied high-income countries also hold in so far understudied low-income settings where the economic, societal, and geopolitical circumstances differ markedly. Using a causal framework based on experimental and survey data in Uganda and Senegal, we extend the literature by introducing a new concept - power concerns - to test whether perceptions of foreign influence in business and politics affect attitudes toward immigrants. Furthermore, we provide evidence of the perceptions of Chinese immigrants in Africa, whose increasing presence is highly controversial and politicized.
    Keywords: attitudes toward immigration, China in Africa, migration, experiment, conjoint
    JEL: F22 O15 O55
    Date: 2024–01
  29. By: Nuno Palma; Guilherme Lambais
    Abstract: More enslaved Africans disembarked in Brazil than in any other country in the New World. Using new archival data (over 12, 000 observations), we analyze the consequences of the slave trade. We build the first real wages and inequality series covering more than three centuries (1574 to 1920) in Brazil, and find that these were initially on a similar level to Europe, but as the slave trade increased, wages decreased and inequality increased. Real wages for unskilled workers became among the lowest in the world, and only recovered with the end of the slave trade. We use slave trade prohibition shocks (1808, 1831, and 1850) to estimate the causal effect of ending slave imports on wages and inequality. The first prohibition led to an average increase of 24% in unskilled wages and a decrease of 25% in wage inequality, while later prohibitions led to even larger wage increases. We propose a mechanism suggesting that the slave trade affected long-run development through a labor market supply channel.
    Keywords: historical living standards, real wages, welfare ratios, comparative development, inequality, slave trade, colonial Brazil, frontier settlement, synthetic control methods
    JEL: N36 N96 J31 J47
    Date: 2023–12
  30. By: Tullao, Tereso Jr. S.; Rivera, John Paolo R.
    Abstract: Under the assumption of full employment, this study probed the impact of labor emigration on wages, employment, and production in the capital- and labor-intensive sectors of the Philippines, represented by manufacturing and agriculture, respectively. It investigated whether deployment, remittances, and foreign direct investment (FDI) flows are inclusive, given the consequential employment opportunities for unemployed resources left behind, specifically unskilled workers that are biased towards the employment of labor and the production of labor-intensive goods. Subjecting Philippine data from 1991 to 2021 to Vector Autoregression (VAR), the authors generated Orthogonal Impulse-Response Function (IRF) and Forecast Error Variance Decomposition (FEVD) to capture the response of wages, employment, and production in the capital- and labor-intensive sectors on impulses emanating from deployment, remittances, and FDI flows. Empirical results revealed the following key findings: (1) deployment, remittances, and FDI flows are not inclusive because they worsen the situation in the agricultural sector; (2) although deployment and FDI flows increase employment in the manufacturing sector, production does not increase due to limited capital inputs; (3) the capital-intensive sector benefits more from FDI flows than the labor-intensive sector. Despite such results, both sectors have potential inclusivity, provided critical constraints in the labor-sending economy are addressed. This study explains how development strategies that rely on labor emigration and FDI can be recalibrated and made sufficient to achieve inclusive growth. It also augmented literature on the impacts of labor emigration on the sending economy, particularly the Philippines. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: agriculture;employment;FDI;labor emigration;manufacturing;production;remittances;wages;foreign direct investment
    Date: 2023
  31. By: NAKAGAWA Junji
    Abstract: The discussion on the social clause, which repeatedly took place under the GATT/WTO, was finally settled in 1996 by the WTO Singapore Ministerial Declaration, which consigned the ILO to deal with core labor standards. The 1998 Declaration on Fundamental Principles and Rights at Work and its Follow-up (the Declaration) commissioned ILO members to respect, promote, and realize the four core labor rights and forbade the use of trade sanctions to enforce them. However, an increasing number of regional trade agreements (RTAs) came to refer to the Declaration and obliged parties to secure core labor rights. This phenomenon is referred to as the resurgence of the social clause. This study analyzes this treaty practice in the Asia-Pacific region, focusing on the domestic labor law reforms of Korea, Vietnam, and Japan under their RTAs with the US and EU. Korea and Vietnam carried out their labor law reform by implementing their treaty obligations to respect, promote, and realize freedom of association under the Declaration, which was incorporated into their RTAs with the US and EU. Japan voluntarily conducted its labor law reform and ratified ILO Convention No.105; however, the reference to the core ILO Conventions under the Japan-EU EPA put political pressure on carrying out the reform. Now that these countries have ratified the core ILO Conventions, the ILO will monitor their implementation, but RTAs will also monitor their implementation in parallel with the ILO.
    Date: 2024–01
  32. By: Huang, Hanwei; Ottaviano, Gianmarco Ireo Paolo
    Abstract: The Balassa's index of revealed comparative advantage does not necessarily reveal Ricardian comparative advantage. We propose an alternative sufficient statistics approach based on a quantitative standard trade model incorporating firm and product selection. We show that the model's micro foundations do not necessarily imply that the relevant data for the proposed sufficient statistics must include micro information, but its micro structure is needed to understand how only macro information can be used instead. Applying our approach to Chinese micro data and cross-country macro data, we find that firm behavior has far-reaching implications for understanding aggregate productivity and revealed comparative advantage.
    Keywords: revealed comparative advantage; sufficient statistics; firm heterogeneity; multi-product firms
    JEL: N0 J1 C1
    Date: 2023–11–28
  33. By: Nedoncelle, Clément; Marchal, Léa; Aubry, Amandine; Héricourt, Jérôme
    Abstract: The impact of immigration on native workers' wages has been a topic of long-standing debate. This meta-analysis reviews 42 studies published between 1987 to 2019, offering a comprehensive assessment of reduced-form estimates of the wage effect of immigration. The results confirm that immigration has a negligible effect on native wages. However, a more pronounced wage impact is observable for the U.S. and in recent years. Our analysis underscores the influence of methodological advances and increased data availability in shaping wage effect estimates. Results also highlight the role of the estimator (OLS vs. IV-2SLS, as well as the use of shift-share instruments) in determining the sign and magnitude of the estimated wage effect.
    Keywords: Immigration, Labour Market, Meta-Analysis, Wage
    JEL: C80 J61 J15 J31
    Date: 2024
  34. By: Carole Maurel (MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier, UM - Université de Montpellier); Foued Cheriet (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, IHEV Institut des hautes études de la vigne et du vin - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: In this paper, we aim at assessing the effects of the 2019-2020 context (Covid 19, Brexit, Trump Tariffs) on exporting activities of wine companies, relying on a survey carried out on French exporting wine companies. The aim is also to observe possible different effects on independent wineries and cooperatives. On a theoretical level, we adopt the institutional approach often mobilized in the field of international management which we will complete with recent work on the effects of disturbances in the institutional context and crisis management. Five main results have been obtained: (1) effects that were generally mastered by both independent wineries and cooperatives; (2) additional pressure on exports from the domestic market; (3) contrasting effects of changes in the institutional environment, with marked importance for disruptions due to the health crisis; (4) significant and differentiated adaptations of companies, and finally, (5) a distinct resilience according to territorial anchoring and export strategies with marked differences between independent wineries and cooperatives.
    Keywords: Crisis, Wine, Exports, France, Cooperatives, Independent wine growers, Institutional environment
    Date: 2023–12–15
  35. By: Adolfo Cristobal Campoamor; Osiris Jorge Parcero
    Abstract: This paper proposes a two blocks and three regions economic geography model that can account for the most salient stylized facts experienced by Eastern European transition economies during the period 1990 2005. In contrast to the existing literature, which has favored technological explanations, trade liberalization is the only driving force. The model correctly predicts that in the first half of the period, trade liberalization led to divergence in GDP per capita, both between the West and the East and within the East. Consistent with the data, in the second half of the period, this process was reversed and convergence became the dominant force.
    Date: 2024–01
  36. By: Daniel Tuki (Research Fellow, WZB Berlin Social Science Center, Berlin, Germany)
    Abstract: This study examined the effect of gender on migration aspirations in the states of Kaduna and Edo, which are in Nigeria’s Northern and Southern Regions respectively. The regression results showed that, in Kaduna, the effect of gender on migration aspirations was moderated by marital status: being female and married lowered migration aspirations. When I shifted the focus of the analysis to the concrete plans made to emigrate to another country, I found that being female lowered the probability of making international emigration plans. The effect was direct. These results may be explained by the patriarchal nature of society in Kaduna and the salience of gender norms: women are expected to be homemakers, and this attenuates their migration aspirations. In Edo, females did not differ from males in terms of migration aspirations; however, being female in a wealthy household reduced the probability of making international emigration plans. This suggests that households allocate more resources toward men’s emigration plans than those of women. Being female and married increased the probability of making international emigration plans. The emigration plans of married women might be associational—i.e., tied to their husbands’ emigration plans or driven by the desire to reunite with their husbands who have already emigrated.
    Keywords: Gender, norms, Migration aspirations, Emigration plan, Kaduna, Edo, Nigeria
    JEL: F22 J16 Z13
    Date: 2024–01
  37. By: Virginia Minni
    Abstract: How are wages set within a multinational firm? Combining cross-country data on wages and labor regulations with personnel records of a large multinational firm, I find that wage setting depends on the rank of the employee in the firm hierarchy. For managers, wages are set by the headquarters regardless of local labor market conditions. For factory workers, wages are adjusted according to country-specific wages and labor regulations. These results suggest that the multinational's internal labor market shields managers against changes in external market conditions, while the firm adapts to local labor markets for factory workers.
    Keywords: multinationals, firm wage-setting, inequality
    Date: 2024–01–24
  38. By: Jang, Won-Joon (Korea Institute for Industrial Economics and Trade); Park, Hea Ji (Korea Institute for Industrial Economics and Trade)
    Abstract: As of this writing, one and a half years have passed since Russia’s sudden invasion of Ukraine on February 24, 2022. Despite early prospects of a unilateral victory for Russia, which has the world’s second-most powerful military according to the Global Firepower Index (GFI), Ukraine (No. 22 by GFI) has stopped Russian progress thanks to full-fledged defense support from the United States, NATO and other global allies. As of December 2023, Russia and Ukraine continue to fight on the southeastern border of the country and around Crimea, and the war is expected to continue for the time being. The global defense market is in flux due to the prolonged Russia-Ukraine war. Major think tanks in advanced countries, such as the Center for Strategic and International Studies (CSIS), the Stockholm International Peace Research Institute (SIPRI), and Janes Information Services (Janes), are scrambling to analyze changes and describe the prospects of the global defense market as defense budgets in major countries began to surge following the outbreak of the Russia-Ukraine War. Indeed, the performance of the global defense market before and after the February 2022 has been diametrical. Exploring this phenomenon, this paper analyzes the recent trends and prospects of the global defense market after the outbreak of war in Ukraine, and identifies the implications carried by the analysis. It concludes by offering a suite of policy suggestions with the defense industry in mind.
    Keywords: defense; national security; defense industry; weapons development; weapons systems; arms exports; Russia-Ukraine war; defense R&D; defense spending; military budgets; defense technology; weapons technology; Korea; KIET
    JEL: F51 F52 H56 L64
    Date: 2023–12–31
  39. By: Feng, Meihong; Zou, Donghang; Hafeez, Muhammad
    Abstract: While natural resources significantly contribute to global socio-economic development, the unresolved question of their volatility's role in decoupling economic growth and carbon emissions persists. Previous empirical studies have underscored both positive and negative impacts of natural resource exploration on economic growth and the environment. This study addresses the knowledge gap by employing a linear non-linear panel ARDL framework to investigate the correlation between natural re source volatility and sustainable development in the BRICS economies. Our key findings reveal that natural resource volatility adversely impacts green growth within the linear model in both the short and long run. Conversely, in the non-linear model, an increase in natural resource volatility negatively influences green growth, whereas a decrease encourages green growth, albeit only in the long run. Moreover, we found that technological development, stringent environmental policies, and trade openness are conducive to green growth. These results underscore the necessity for managing natural resource volatility to foster sustainable development, particularly in emerging BRICS economies.
    Keywords: environmental policy stringency; green growth; mineral resource volatility; technological development; trade openness
    JEL: J1
    Date: 2024–02–12
  40. By: Mandal, Biswajit
    Abstract: In this paper I make an effort to formalize the possibility of transfer of financial capital across time zones to exploit the benefit of day night mismatch between two countries. The major pre-condition for such transaction is the completion of production, buying and selling of the product in twelve hours day-time of any calendar date. And the process of monetary transaction must be done through digital platform. In this backdrop I argue that exploration of such possibility reduces the effective cost of capital in the sector which is potentially time-zone difference exploitative. Subsequently we find other factor price effects and sectoral composition changes in a very conventional Heckscher-Ohlin nugget kind of structure. Though the results are not very surprising, but the mechanism. Without any traditional channels like trade, FDI, technology transfer, endowment changes I generate price effect due to digital mode of payment and twelve hours of activity.
    Keywords: Time Zone Differences; Service Trade; Financial Capital, Outsourcing
    JEL: F12 F16 F2 F21
    Date: 2024
  41. By: LIU Nan; SATO Kiyotaka
    Abstract: This paper empirically investigates whether Japanese exporters have changed their exchange rate pass-through (ERPT) behavior in response to large fluctuations of the yen from January 2000 to December 2022. A novel development of this study is that it incorporates exchange rate prediction errors into a nonlinear autoregressive distributed lag (NARDL) model with multiple thresholds, which enables us to rigorously distinguish not only between strong yen and weak yen periods but also between phases of unexpected yen appreciation and depreciation. We find asymmetric ERPT between the periods of strong yen and weak yen in level. More intriguingly, Japanese exporters, especially in general machinery and transport equipment industries, strategically switch their pricing behavior from ERPT to pricing-to-market (PTM) and vice versa in response to unexpected yen appreciation and depreciation. Our empirical findings have significant implications for better pricing strategies by Japanese export firms in the face of sudden, large exchange rate changes.
    Date: 2024–01
  42. By: Osiris Jorge Parcero; Emiliano Villanueva
    Abstract: By using an econometric approach this paper looks at the evolution of the world wine industry in the period 1961-2005. A particular stylized fact is the appearance of nontraditional producing and exporting countries of wine from the beginning of the nineties. We show that the success of these new producing and exporting countries can be explained by the importance of the demand from non-producing countries with little or no tradition of wine consumption, relative to the world demand. This stylized fact is consistent with a testable implication of the switching cost literature and to the best of our knowledge this is the first time that this implication is tested.
    Date: 2024–01
  43. By: Daouda Bamba (UCA - Université Clermont Auvergne, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: In 2017, Côte d'Ivoire imposed restrictions on the imports of used vehicles into its territory, one of which aims is environmental protection. This paper focuses on this policy and investigates its impacts on both (i) vehicle smuggling and (ii) environmental protection in the country. As finding a credible control for Côte d'Ivoire in the aim of the evaluation is thus challenging, the Augmented Synthetic Control Method is implemented to construct a valid counterfactual for the country's path without the law, with WAEMU member countries as control states. This method is used with an outcome model in a Panel Fixed Effects simulation and covariates configuration, to assess the Average Treatment effect on the Treated (ATT) on the outcome of interest after the passage of the 2017 law. The use of a panel structure allows for controlling time-invariant omitted variables correlated with the law adoption. The assessment shows that the policy has led to an increase of almost 39% in the per capita vehicle smuggling in the country. Furthermore, the policy has induced a reduction in the per capita CO2 emissions in the country with an average treatment effect indicating a decrease of -0.051 metric tons per inhabitant. These effects do not vanish over time and results remain robust to different robustness and falsification placebo tests.
    Keywords: Synthetic Control Method, Policy evaluation, Smuggling, Environment
    Date: 2023–11–02
  44. By: Timofey Shalpegin (University of Auckland Business School [New Zealand]); Ajay Kumar (EM - emlyon business school); Tyson Browning (TCU - Texas Christian University)
    Abstract: "Economic sanctions and consumer boycotts are common tools to punish organizations for undesirable behavior and attempt to coerce them to change their actions. However, these tools occasionally spill over beyond the intended recipients and affect guiltless supply chain members, jeopardizing the principles of diversity, equity, and inclusion in supply chains. This study identifies four channels through which sanctions and boycotts propagate through supply chains. In particular, supply chain members can be affected by direct relationships with targeted organizations, disruptions in accessing foreign markets, inability to access technology, and logistics failures. Potential solutions include mapping supply chains, proactive cooperation, network analysis, and shortening supply chains. While the work provides a general framework for research and practitioners, it also identifies areas for further studies, such as the role of new technologies and the effect of sanctions and boycotts on supply chain sustainability."
    Date: 2023–04–04
  45. By: Ambrocio, Gene; Hasan, Iftekhar; Li, Xiang
    Abstract: We study the implications of forging stronger political ties with the US on the sensitivities of stock returns around the world to a global common factor - the global financial cycle. Using voting patterns at the United Nations as a measure of political ties with the US along with various measures of the global financial cycle, we document evidence indicating that stronger political ties with the US amplify the sensitivities of stock returns in developing countries to the global financial cycle. We explore several channels and find that a deepening of financial linkages along with a reduction in information asymmetries and an amplification of sentiment are potentially important factors behind this result.
    Keywords: global financial cycle, international spillovers, political ties, stock returns
    JEL: E44 F30 F50 G15
    Date: 2023
  46. By: Arigoni, Filippo (Central Bank of Ireland); Lenarcic, Crt (Banka Slovenije)
    Abstract: This paper estimates a Bayesian VAR model on Euro area data and quantifies the reaction of real activity to economic policy uncertainty shocks that originate abroad. Our findings show that US and Chinese uncertainty explains larger shares of fluctuations than European uncertainty. In an extended set-up, we perform a counterfactual simulation and verify the presence of a foreign economic policy uncertainty spillovers channel that magnifies the real effects of US and Chinese uncertainty shocks. The simulation also documents a non-negligible role played by bilateral trading activities in the transmission mechanism of Chinese shocks. In an application with Dutch data, we highlight that structural domestic factors shape region and country-specific uncertainty in the propagation of foreign economic policy uncertainty shocks onto the economy.
    Keywords: Uncertainty shocks, Euro area spillovers, real activity, US, China, Bayesian VAR.
    JEL: C32 E30 Q54
    Date: 2023–08
  47. By: Osiris Jorge Parcero
    Abstract: This paper looks at a country's optimal central-government optimal policy in a setting where its two identical local jurisdictions compete to attract footloose multinationals to their sites, and where the considered multinationals strictly prefer this country to the rest of the world. For the sake of realism the model allows the local jurisdictions to choose between firm-specific and non-firm-specific policies. We show that the implementation of the jurisdictional firm-specific policy is weakly welfare dominant. Hence the frequent calls for the central government to ban the former type of policies go against the advice of this paper.
    Date: 2024–01

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.