nep-int New Economics Papers
on International Trade
Issue of 2024‒02‒26
34 papers chosen by
Luca Salvatici, Università degli studi Roma Tre

  1. Trade Openness and Global Crop Supply: Implications for Global Value Chains By Zereyesus, Yacob Abrehe; Kee, Jennifer; Morgan, Stephen
  2. Why Origin Matters in Trade Data By Pierre Cotterlaz; Vincent Vicard
  3. Import competition, trade credit and financial frictions in general equilibrium By Esposito, Federico; Hassan, Fadi
  4. North-South Trade: The Impact of Robotization By Andreas Baur; Lisandra Flach; Isabella Gourevich; Florian Unger
  5. Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States By David Autor; Anne Beck; David Dorn; Gordon H. Hanson
  6. Corporate Globalization and Worker Representation By Jirjahn, Uwe
  7. Pioneering a new classification: a comprehensive study of healthcare products in global trade By Pierre Cotterlaz; Guillaume Gaulier; Aude Sztulman; Deniz Ünal
  8. Network Externalities, Strategic Delegation and Optimal Trade Policy By Anomita Ghosh; Rupayan Pal
  9. The Effects of Immigration in a Developing Country: Brazil in the Age of Mass Migration By Escamilla-Guerrero, David; Papadia, Andrea; Zimran, Ariell
  10. The Effects of Immigration in a Developing Country: Brazil in the Age of Mass Migration By David Escamilla-Guerrero; Andrea Papadia; Ariell Zimran
  11. Are trade wars class wars? The importance of trade-induced horizontal inequality By Borusyak, Kirill; Jaravel, Xavier Laurent
  12. FDI and superstar spillovers: evidence from firm-to-firm transactions By Amiti, Mary; Duprez, Cedric; Konings, Jozef; Van Reenen, John
  13. The OECD-UNSD Multinational Enterprise Information Platform By Graham Pilgrim; Shirly Ang
  14. The Impact of Technological Change on Immigration and Immigrants By Yvonne Giesing
  15. Skilled Immigration Frictions as a Barrier for Young Firms By Federico S. Mandelman; Mehra Mishita; Hewei Shen
  16. Responsible sourcing? Theory and evidence from Costa Rica By Alfaro-Urena, Alonso; Faber, Benjamin; Gaubert, Cecile; Manelici, Isabela; Vasquez Carvajal, Jose Pablo
  17. Dissecting the sinews of power: international trade and the rise of Britain's fiscal-military state, 1689-1823 By Dal Bo, Ernesto; Hutkova, Karolina; Leucht, Lukas; Yuchtman, Noam Meir
  18. Estimation of empirical models for margins of exports with unknown nonlinear functional forms: A Kernel-Regularized Least Squares (KRLS) approach By Wagner, Joachim
  19. Financial integration and international shock transmission: The terms-of-trade effect By Krenz, Johanna
  20. The Role of Free Trade Agreements (FTAs) in Achieving Sustainable Development Goals (SDGs) (Japanese) By TAKAGI Seiji
  21. Discrimination and the Fiscal Benefits of Immigration By Nicholas Lawson
  22. Does the Restriction Policy of High-skill Immigrants Benefit Native Workers? By Takuma Sugiyama
  23. From abnormal FDI to a normal driver of sudden stop episodes By Maria Siranova; Menbere Workie Tiruneh; Brian Konig
  24. Host Country Politics and Internationalization By Alvaro Cuervo-Cazurra; Patricio Duran; Jean-Luc Arregle; Marc van Essen
  25. How do environmental shocks affect competitors in a supply chain? Evidence from a competitors’ weighting matrix By Jhorland Ayala-García; Federico Ceballos-Sierra
  26. Interrelationship between international trade and environmental performance: Theoretical approaches and indicators for sustainable development By Sorroche-del-Rey, Yolanda; Piedra-Muñoz, Laura; Galdeano-Gómez, Emilio
  27. Korea-India Economic Cooperation in the Indo-Pacific Era By Kim, Jeong Gon; Kim, Kyunghoon; Pek, Jonghun; Nam, Yoo Jin; Cho, Wondeuk
  28. Media Coverage of Immigration and the Polarization of Attitudes By Sarah Schneider-Strawczynski; Jérôme Valette
  29. The 2013 Cypriot Banking Crisis and Blame Attribution: survey evidence from the first application of a bail-in in the Eurozone By Sofia Anyfantaki; Yannis Caloghirou; Konstantinos Dellis; Aikaterini Karadimitropoulou; Filippos Petroulakis
  30. The Effect of Migration on Careers of Natives: Evidence from Long-Term Care By Haan, Peter; Wnuk, Izabela
  31. The Causal Effects of Global Supply Chain Disruptions on Macroeconomic Outcomes: Evidence and Theory By Xiwen Bai; Jesús Fernández-Villaverde; Yiliang Li; Francesco Zanetti
  32. Age at Immigrant Arrival and Career Mobility: Evidence from Vietnamese Refugee Migration and the Amerasian Homecoming Act By Sari Pekkala Kerr; William R. Kerr; Kendall E. Smith
  33. Exploring Regional Integration with Indo-Pacific Economies: A Background Analysis for IPEF Strategies By Quimba, Francis Mark A.; Barral, Mark Anthony A.
  34. The Role of International Financial Integration in Monetary Policy Transmission By Jing Cynthia Wu; Yinxi Xie; Ji Zhang

  1. By: Zereyesus, Yacob Abrehe; Kee, Jennifer; Morgan, Stephen
    Keywords: Agribusiness, Agricultural Finance, International Relations/Trade
    Date: 2022–12
  2. By: Pierre Cotterlaz; Vincent Vicard
    Abstract: Different reporting standards are applied to determine the country of origin of trade flows in existing international trade databases, altering the geography of trade. We illustrate this issue using two extensively used trade databases, UN-Comtrade and IMF-DoTS and show that it has important implications when evaluating the impact of trade policies using a gravity framework. We provide evidence that IMF-DoTs applies different reporting standards for intra- and extra-EU trade from 1999 onwards. Such discrepancies generate a (significant) upward bias in the estimated impact of RTA, the EU and the euro area on trade. Reporting standards also differ across declaring countries in UN-Comtrade. We show that it inflates the estimated impact of Brexit on trade.
    Keywords: Gravity Equation;International Trade;Statistics;Regional Trade Agreements;European Union;Brexit
    JEL: F14 F13 F15 F62
    Date: 2023–12
  3. By: Esposito, Federico; Hassan, Fadi
    Abstract: We analyze the role of trade credit and financial frictions in the propagation of international trade shocks along the supply chain. First, we show empirically that exposure to import competition from China increased the use of trade credit in the U.S. Then, we use a multi-country input-output trade model with borrowing constraints, trade credit, and endogenous employment to quantify the general equilibrium effects of such increase, characterizing the different channels at work. Borrowing constraints amplify the negative consequences of the China shock on employment, but introducing trade credit reduces these losses by 8%-27%, depending on the tightness of the constraints.
    Keywords: trade credit; trade shocks; financial frictions; borrowing constraints; employment
    JEL: E10 E44 F14 F15 F16 G20
    Date: 2023–02–09
  4. By: Andreas Baur; Lisandra Flach; Isabella Gourevich; Florian Unger
    Abstract: This paper investigates the effect of robotization in high-income countries on firm-level North-South trade along the value chain. Using a novel combination of data sources including firm-level export data, input-output linkages, and robot adoption, we show contrasting implications for Southern firms. Increased exposure to robot adoption in the destination country of exports reduces firm-level exports in case of robot adoption in the same industry. However, the opposite holds when accounting for input-output linkages and trade along the value chain. We outline a North-South trade model with endogenous robot adoption that accounts for the different channels shown in the data. Our findings highlight the importance of taking into account supply chain linkages and suggest net positive effects for Southern exporters.
    Keywords: robotization, firm-level trade, value chain linkages, sourcing
    JEL: D20 F14 L20 O33
    Date: 2023
  5. By: David Autor; Anne Beck; David Dorn; Gordon H. Hanson
    Abstract: We study the economic and political consequences of the 2018-2019 trade war between the United States, China and other US trade partners at the detailed geographic level, exploiting measures of local exposure to US import tariffs, foreign retaliatory tariffs, and US compensation programs. The trade-war has not to date provided economic help to the US heartland: import tariffs on foreign goods neither raised nor lowered US employment in newly-protected sectors; retaliatory tariffs had clear negative employment impacts, primarily in agriculture; and these harms were only partly mitigated by compensatory US agricultural subsidies. Consistent with expressive views of politics, the tariff war appears nevertheless to have been a political success for the governing Republican party. Residents of regions more exposed to import tariffs became less likely to identify as Democrats, more likely to vote to reelect Donald Trump in 2020, and more likely to elect Republicans to Congress. Foreign retaliatory tariffs only modestly weakened that support.
    JEL: D72 F14 F16 J23
    Date: 2024–01
  6. By: Jirjahn, Uwe (University of Trier)
    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: 2024–01
  7. By: Pierre Cotterlaz; Guillaume Gaulier; Aude Sztulman; Deniz Ünal
    Abstract: International trade in healthcare products took off in the 2000s at the height of hyper-globalisation. Twenty years on, the Covid-19 shock drove home to governments the importance of health security and trained the spotlight on the industrial sovereignty issues raised by the international organisation of production. However, the tangled web of international value chains has compromised the traceability of the manufacturing of these essential goods. In addition, the classification of healthcare products across a multitude of industries in the trade and production nomenclatures makes them hard to identify and muddies the picture further. In this paper, we have painstakingly identified these products and classified them together in one industry grouping to assess the scale of and trends in trade to meet the needs of national health systems. Covering a vast range of products (medicinal products and their compounds, medical technology equipment and small medical materials), this healthcare industry grouping has posted the strongest relative growth since 2000, rising to take the number two share of world trade in 2021 just behind electronic products. This paper details the nature of world trade in the healthcare industry grouping and its five branches by production stage (intermediate and final), type of trade flows (one-way and two-way) and quality/price range. It goes on to present how the advanced countries are positioned compared with the rest.
    Keywords: Health Products;International Trade;Advanced Economies;Emerging and Developing Economies
    JEL: F13 F14 F15 I11 L65
    Date: 2024–01
  8. By: Anomita Ghosh (National Council of Applied Economic Research); Rupayan Pal (Indira Gandhi Institute of Development Research (IGIDR))
    Abstract: This paper examines strategic trade policy for differentiated network-goods oligopolies under alternative scenarios when there is export-rivalry between two countries. We demonstrate that, in the absence of managerial delegation, the optimal trade policy entails an export tax (subsidy) if network externalities are weak (strong). However, when price competition is combined with managerial delegation, the opposite is true. Subsidizing exports, on the other hand, is always optimal under quantity competition. We also show that the welfare consequences of strategic trade policy depend not only on the mode of product market competition, but also on firms’ internal organizations and the strength of network externalities.
    Keywords: Strategic trade policy, network goods, relative-performance based managerial delegation, price competition, quantity competition.
    JEL: F12 F13 L13 L22 D21
    Date: 2024–01–01
  9. By: Escamilla-Guerrero, David (University of St Andrews); Papadia, Andrea (University of York); Zimran, Ariell (Vanderbilt University)
    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.
    Keywords: immigration, developing countries, effects of immigration, age of mass migration, Brazil, agriculture
    JEL: F22 J61 N36 N56 O13 O15 Q15
    Date: 2024–01
  10. 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.
    JEL: F22 J61 N36 N56 O13 O15 Q15
    Date: 2024–01
  11. By: Borusyak, Kirill; Jaravel, Xavier Laurent
    Abstract: What is the nature of the distributional effects of trade? This paper demonstrates conceptually and empirically the importance of "trade-induced horizontal inequality, " i.e., inequality brought about by trade shocks that occurs among workers with the same level of earnings prior to the shock. While this type of inequality does not affect the income distribution, it generates winners and losers at all income levels and may thus affect political support for trade policy. To quantify the horizontal inequality and changes in the income distribution induced by trade in a data-driven way, we develop a characterization of the welfare impacts, governed by simple and intuitive statistics of labor market and consumption exposure to trade. This characterization holds in a class of quantitative trade models allowing for a broad set of preferences, including non-homothetic, and production functions. Taking this framework to U.S. data, we find substantial heterogeneity in exposure and thus in the welfare effects of trade shocks across workers, with horizontal inequality as the dominant force. Over 99% of the variance of welfare changes from trade shocks arise within income deciles, rather than across. This finding runs against a popular narrative that "trade wars are class wars".
    Keywords: trade liberalization; distributional effects; inequality
    JEL: F14 F16 D63
    Date: 2023–04–04
  12. By: Amiti, Mary; Duprez, Cedric; Konings, Jozef; Van Reenen, John
    Abstract: Using firm-to-firm transactions, we show that starting to supply a "superstar" firm (large domestic firms, exporters and multinationals) boosts productivity by 8% in the medium-run. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of "superstar spillovers". Consistent with a model of technology transfer, we find falls in markups and bigger treatment effects from technology-intensive superstars. We also show that the increase in new buyers is particularly strong within the superstar firm's network, a "dating agency" effect. This suggests an important role for raising productivity through superstars' supply chains regardless of their multinational status.
    Keywords: productivity; FDI; spillovers; POID
    JEL: F23 O30 F21
    Date: 2023–04–21
  13. By: Graham Pilgrim; Shirly Ang
    Abstract: The OECD and the United Nations Statistics Division (UNSD) have developed jointly the new Multinational Enterprise Information Platform (MEIP). MEIP is built on past OECD and UN efforts to compile statistics on the scale and scope of the international activities of Multinational Enterprises (MNEs). The new platform uses publicly available data to gather information on the world’s 500 largest MNEs in a timely manner, facilitating a comprehensive view of their physical and digital presence. It also includes a monitoring tool for large events such as Mergers and Acquisitions (M&A). The platform also provides a valuable benchmark for National Statistical Offices (NSOs) and researchers, allowing them to compare the national presence of an individual MNE to the global presence. Information on MNEs and their global network can also be visualised in a user-friendly dashboard.
    Keywords: business register, multinationals, open source
    JEL: C55 C81 F23
    Date: 2024–02–02
  14. By: Yvonne Giesing
    Abstract: We study the effects of technological change on immigration flows as well as the labor market outcomes of migrants versus natives. We analyse and compare the effects of two different automation technologies: Industrial robots and artificial intelligence. We exploit data provided by the Industrial Federation of Robotics as well as online job vacancy data on Germany, a highly automated economy and the main destination for migrants in Europe. We apply an instrumental variable strategy and identify how robots decrease the wage of migrants across all skill groups, while neither having a significant impact on the native population nor immigration flows. In the case of AI, we determine an increase in the wage gap as well as the unemployment gap of migrant and native populations. This applies to the low-, medium- and high-skilled and is indicative of migrants facing displacement effects, while natives might benefit from productivity and complementarity effects. In addition, AI leads to a significant inflow of immigrants. Policymakers should devote special attention to the migration population when designing mitigation policies in response to technological change to avoid further increases in inequality between migrants and natives.
    Keywords: technological change, AI, robots, immigration
    JEL: F22 J15 J61 J78 O15 O33
    Date: 2023
  15. By: Federico S. Mandelman; Mehra Mishita; Hewei Shen
    Abstract: This paper studies the impact of skilled immigration policy frictions in the United States on technology-intensive firms by age cohorts. We use firm-level data and a general equilibrium model with endogenous firm entry and exit. The empirical results show that skilled immigration policy frictions directly influence young firm dynamics in technology-intensive sectors by affecting firm survival. Our general equilibrium model incorporates skilled foreign labor and immigration policy frictions that mimic the H-1B policy and matches the age distribution of firms in high-technology sectors, showing also that increased entry of younger firms leads to a greater exit of older firms.
    Keywords: skilled immigration; start-ups; high-technology firms; firm dynamics
    JEL: F22 M13
    Date: 2024–02–05
  16. By: Alfaro-Urena, Alonso; Faber, Benjamin; Gaubert, Cecile; Manelici, Isabela; Vasquez Carvajal, Jose Pablo
    Abstract: Multinational enterprises (MNEs) increasingly impose "Responsible Sourcing" (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just "hot air" or do they impact exposed suppliers and their workers? What is the welfare incidence of RS in sourcing countries? To answer these questions, we develop a quantitative general equilibrium (GE) model of RS and combine it with a unique new database. In the theory, we show that the welfare implications of RS are ambiguous, depending on an interplay between what is akin to an export tax (+) and a labor market distortion (-). Empirically, we combine the near-universe of RS rollouts by MNE subsidiaries in Costa Rica since 2009 with firm-to-firm transactions and matched employer-employee microdata. We find that RS rollouts lead to significant reductions in firm sales and employment at exposed suppliers, an increase in their salaries to initially low-wage workers and a reduction in their low-wage employment share. We then use the estimated effects and the microdata to calibrate the model and quantify GE counterfactuals. We find that while MNE RS policies have led to significant gains among the roughly one third of low-wage workers employed at exposed suppliers ex ante, the majority of low-wage workers lose due to adverse indirect effects on their wages and the domestic price index.
    Keywords: multinational enterprises; supply chains; low-wage workers; Costa Rica
    JEL: N0 L81 R14 J01
    Date: 2023–03–29
  17. By: Dal Bo, Ernesto; Hutkova, Karolina; Leucht, Lukas; Yuchtman, Noam Meir
    Abstract: We evaluate the role of taxes on trade in the development of imperial Britain's fiscal-military state. Influential work, e.g., Brewer's (1989) Sinews of Power, attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in taxes on traded goods, accounting for over half of indirect taxation around 1800. This challenges the conventional wisdom attributing the development of the British state to domestic factors: international factors mattered, too.
    Keywords: fiscal capacity; international trade; British Empire; taxation
    JEL: N43 N73 H20 P16
    Date: 2023–07–05
  18. By: Wagner, Joachim
    Abstract: Empirical models for intensive or extensive margins of trade that relate measures of exports to firm characteristics are usually estimated by variants of (generalized) linear models. Usually, the firm characteristics that explain these export margins enter the empirical model in linear form, sometimes augmented by quadratic terms or higher order polynomials, or interaction terms, to take care or test for non-linear relationships. If these non-linear relationships do matter and if they are ignored in the specification of the empirical model this leads to biased results. Researchers, however, can never be sure that all possible non-linear relationships are taken care of in their chosen specifications. This note uses for the first time the Kernel-Regularized Least Squares (KRLS) estimator to deal with this issue in empirical models for margins of exports. KRLS is a machine learning method that learns the functional form from the data. Empirical examples show that it is easy to apply and works well. Therefore, it is considered as a useful addition to the box of tools of empirical trade economists.
    Keywords: Margins of exports, empirical models, non-linear relationships, kernel-regularized least squares, krls
    JEL: F14
    Date: 2024
  19. By: Krenz, Johanna
    Abstract: What are the effects of financial integration on global comovement? Using a standard two-country DSGE model, I show that in response to country-specific supply shocks higher exposure to foreign assets leads to lower cross-country output correlations, while the opposite is true for country-specific demand shocks. I argue that an important, yet overlooked, transmission channel originates in the interplay between financial integration and terms of trade movements in response to the shocks hitting the economy. The transmission channel is independent of whether the agents who hold the foreign assets are financially constrained or not.
    Keywords: Business cycle comovement, Financial cycle comovement, Financial integration, Demand versus supply shocks, Terms of trade, Transfer Problem, Balance sheet effect
    JEL: E30 E44 F41 F44 G15
    Date: 2023
  20. By: TAKAGI Seiji
    Abstract: This paper analyzes the contributions of Free Trade Agreements (FTAs) towards achieving the Sustainable Development Goals (SDGs) using three major FTAs of which Japan is a member as case studies. The analysis focuses on the current state of contributions and explores the potential for further contributions in the future. Although the 17 goals and 169 targets of SDGs have limited direct linkages to international trade issues, considering the broader context of negotiations related to SDGs, the contribution of FTAs, with their primary goal of trade liberalization, can be considered substantial. Upon analyzing the specific content of the three FTAs—CPTPP, Japan-EU EPA, and RCEP, it is evident that all the three FTAs include many provisions that contribute to SDGs. CPTPP and Japan-EU EPA include provisions in new, broader areas such as the environment, labor, and transparency, contributing to SDGs. While RCEP has relatively limited provisions in new areas compared to the other two FTAs, it has strengthened provisions in such areas as special consideration for developing countries and cooperation. Thus, in the existing agreements, contributions to SDGs are observed across a wide range of fields. The expansion of existing FTA memberships, improvements in content, and the establishment of new FTAs could potentially enhance contributions to SDGs in the future. Moreover, contributions to SDGs through economic agreements that do not involve trade liberalization can also continue to expand. The regulations within FTAs that contribute to SDGs often include less legally binding provisions and many provisions on cooperation. The extent and evaluation of contributions in these provisions are likely to be determined through practical implementation in the future.
    Date: 2024–02
  21. By: Nicholas Lawson (Department of Economics, University of Quebec in Montreal)
    Abstract: In recent decades, there has been a lengthy debate about the fiscal costs or benefits of immigration, and much of the literature has found fiscal impacts that are close to zero. However, these studies have ignored the possibility that immigrants may be victims of wage discrimination in the labour market, despite evidence of such discrimination in various countries. In the presence of such discrimination, existing estimates of the fiscal impact of immigration will be biased: if immigrants are paid less than their marginal products, then someone else is receiving that income ? mostly likely the firm?s owners or other workers ? and paying taxes on it, and that fiscal benefit is ignored by a model that disregards discrimination. In this paper, I evaluate the quantitative importance of this mechanism, by calibrating a search-and-matching model to Canadian data and simulating the fiscal impact of increases in immigration. When the model and calibration omits wage discrimination against immigrants, the average fiscal impact of immigration is negative, but it becomes positive if discrimination explains the wage gaps between natives and immigrant workers: at an economy-wide level, an annual fiscal cost of about $3 billion in the absence of discrimination becomes a fiscal benefit of about $4 billion in the presence of discrimination. My results indicate that wage discrimination against immigrants could significantly affect our estimates of the fiscal impact of immigration.
    Keywords: discrimination, immigration, fiscal benefits
    JEL: H27 J61 J79
    Date: 2024–01
  22. By: Takuma Sugiyama (Research Institute for Economics & Business Administration, Kobe University, JAPAN)
    Abstract: To protect native workers, discussions on immigration restrictions have emerged. However, limited studies have analyzed the economic impact of such restrictions on native workers. Past literature demonstrated a small effect of immigration restrictions on the labor outcomes of native workers, attributing it to capital substitution. Notably, this analysis focused on restrictions on low-skilled immigrants. Past literature of theoretical analysis highlighted that labor scarcity affects labor outcomes differently based on the substitutability of labor and capital. Anticipating a distinct impact, this paper examined the restriction of skilled immigrants exploiting the H-1B visa restrictions after 2004. The analysis, using triple differences estimation, revealed a significantly positive impact on labor outcomes of natives. Additionally, the visa restrictions positively impacted capital accumulation. These results suggest that the shortage of skilled labor supply induced capital accumulation. Nevertheless, capital investment could not fully adjust to the lack of labor supply, resulting in improved labor outcomes for natives.
    Keywords: Immigration; Labor Economics; Labor Policy; Technological Change
    JEL: J15 J18 J22 J31 J44 J61 O33
    Date: 2024–02
  23. By: Maria Siranova (Slovak Academy of Sciences); Menbere Workie Tiruneh (Slovak Academy of Sciences & Webster Vienna Private University); Brian Konig (Slovak Academy of Sciences & University of Economics in Bratislava)
    Abstract: In this paper we study role of ‘abnormal FDI‘ as a potential driver of sudden stops during the 2009-2019 period. The unexplained part of country fixed effects in a bilateral gravity regression is used to calculate the abnormal FDI. We then construct three measures of ‘FDI abnormalcy‘ that assess: i) the possible role of an economy as financial centre or tax haven, ii) the contribution of ‘FDI abnormalcy‘ to total FDI position, and iii) the exposure toward territories considered as tax havens or financial centres. Determinants of sudden stops are analysed by the panel probit model. We find that economies labelled as tax havens or financial centres and economies with comparably higher shares of inward ‘abnormal FDI’ were associated with a lower incidence of sudden stops. In contrast, the presence of capital inflows linked to tax haven or financial centre territories may increase the likelihood of a sudden stop event.
    Keywords: Sudden stop, FDI, illicit financial flows, tax havens, international financial centres
    JEL: F G
    Date: 2024
  24. By: Alvaro Cuervo-Cazurra (Northeastern University [Boston]); Patricio Duran (University of Richmond); Jean-Luc Arregle (EM - emlyon business school); Marc van Essen (University of South Carolina [Columbia])
    Abstract: We study how host country politics influence internationalization. Our meta-analysis clarifies which ideas receive support across the empirical literature and reveals new theoretical insights in three areas: the conceptualization of host country politics, the impact of host country politics on internationalization steps, and the moderating influence of home-country conditions on the previous relation. First, regarding the concept of host country politics, we propose analysing host country politics rather than political risk, and separating political decision-making, i.e., regulation creation, from political administration, i.e., regulation implementation. Second, on the effect of host country politics on internationalization steps, we suggest a dynamic management across the internationalization process, with managers shifting from avoiding harm through country selection to pre-empting harm through entry mode selection, to adapting to harm to ensure survival. Third, studying how home-country conditions modify the impact of host country politics on internationalization, we propose that multinationals build political and uncertainty management capabilities from their exposure to home country conditions that help them manage host country politics better.
    Keywords: internationalization, meta-analysis, multinational enterprises, political administration, political decision-making, political risk
    Date: 2023–01
  25. By: Jhorland Ayala-García; Federico Ceballos-Sierra
    Abstract: Quantifying the impact of supply shocks on global commodity trade networks is an increasing concern for researchers under the current threats of climate change and the lessons from the COVID-19 pandemic. This paper proposes a novel methodology to estimate these effects across the entire trade network: we create a weight matrix based on an index that captures the extent to which two coffee-producing countries compete within consumer markets. Using this matrix, we estimate the degree to which an adverse weather shock in a coffee-producing country influences the coffee production of its competitors. Our results show that this adverse shock has a negative direct effect on the country’s coffee exports and, importantly, a positive effect on the quantities produced by its competitors. **** Resumen: Cuantificar el impacto de los choques de oferta en las cadenas mundiales de comercio de productos básicos es una preocupación cada vez mayor para los investigadores ante las amenazas actuales del cambio climático y las lecciones de la pandemia del COVID-19. Este artículo propone una metodología novedosa para estimar estos efectos en toda la red comercial: creamos una matriz espacial de competidores basada en un índice que captura el grado en que dos países productores de café compiten dentro de los mercados de consumo. Utilizando esta matriz, estimamos el grado en que un choque climático adverso en un país productor de café influye en la producción y exportación de café de sus competidores. Nuestros resultados muestran que este choque adverso tiene un efecto directo negativo sobre las exportaciones de café del país y, más importante aún, un efecto positivo sobre las cantidades producidas por sus competidores.
    Keywords: coffee, frosts, supply shocks, weighting matrix, spatial spillovers, Café, heladas, choques de oferta, matriz de pesos espaciales, difusión
    JEL: E23 F1 Q02 Q17 Q56
    Date: 2024–02
  26. By: Sorroche-del-Rey, Yolanda; Piedra-Muñoz, Laura; Galdeano-Gómez, Emilio
    Abstract: In recent years, a great deal of research has analyzed the impact of trade openness on the environment, with the aim of determining whether internationalization contributes to the improvement of environmental performance or, on the contrary, hinders the achievement of sustainable development. The objective of the present work is to conduct a systematic literature review on the interrelationship between international trade and environmental performance (EP) at the micro and macroeconomic levels, analyzing the existent theoretical approaches and the EP indicators utilized in practice. The most prominent theories found are firm heterogeneity, at a microeconomic level, and the pollution haven/halo hypotheses, at a macroeconomic level. Also, the EP indicators have been classified according to five dimensions: energy consumption, resource consumption, emissions, risk potential and toxic potential, of which pollutant gas emissions and energy consumption are the most used. The results obtained show evidence of the interrelationship mentioned from the perspective of the different theories. In addition, this analysis helps to identify several gaps in this line of study.
    Keywords: international trade, environmental performance, sustainable development, indicators, theoretical framework, systematic literature review.
    JEL: D21 F13 F18 F41 Q01 Q56
    Date: 2023
    Abstract: With the geopolitical and geoeconomic importance of the Indo-Pacific region in the spotlight, India's strategic value has come to the fore. The Korean government has included cooperation with India as a key task under its Indo-Pacific Strategy. This article aims to contribute to the establishment of economic cooperation with India from a medium- to long-term strategic perspective. Accordingly, this article analyzes the strategic changes of major countries towards India and India's response strategies, and the emerging agendas of economic cooperation between India and major countries. Lastly, this article proposes policy directions and key agendas for Korea-India economic cooperation.
    Keywords: India; Korea-China Cooperation
    Date: 2024–02–07
  28. By: Sarah Schneider-Strawczynski; Jérôme Valette
    Abstract: This paper investigates the effect of media coverage on immigration attitudes. It combines data on immigration coverage in French television with individual panel data from 2013 to 2017 that records respondents’ preferred television channel and attitudes toward immigration. The analysis focuses on within-individual variations over time, addressing ideological self-selection into channels. We find that increased coverage of immigration polarizes attitudes, with initially moderate individuals becoming more likely to report extremely positive and negative attitudes. This polarization is mainly driven by an increase in the salience of immigration, which reactivates preexisting prejudices, rather than persuasion effects from biased news consumption.
    Keywords: Immigration;Media;Polarization;Salience
    JEL: D8 F22 L82
    Date: 2024–01
  29. By: Sofia Anyfantaki; Yannis Caloghirou; Konstantinos Dellis; Aikaterini Karadimitropoulou; Filippos Petroulakis
    Abstract: We document and analyse key deficiencies of the Greek economy, with the view to providing new insights and articulate policy proposals. We consider issues which are the purview of both horizontal policies, raising productivity across sectors, and vertical policies, which allow for realignment of activity. With respect to the first dimension, we focus on two specific problem-areas of Greek industry, with high importance: skills and management practices. We also use information from a novel survey on entrepreneurship, technological developments, and regulatory change and examine structural characteristics of innovation and technology adoption of Greek firms, with a focus on the role of size, ownership structure, and global value chain participation. With respect to the second dimension, we provide an overview of Greece’s export performance and analyse its sectoral comparative advantage. In an empirical study we also focus on the determinants of export sophistication. Overall, the collection of our empirical findings provides ample fodder for concrete policy proposals to increase productivity in Greek manufacturing.
    Keywords: skills; management, innovation, knowledge, export sophistication.
    JEL: D22 F10 J24 J50 L22 O32
    Date: 2024–02
  30. By: Haan, Peter (DIW Berlin); Wnuk, Izabela (DIW Berlin)
    Abstract: This paper examines the effect of increasing foreign staffing on the labor market outcomes of native workers in the German long-term care sector. Using administrative social security data covering the universe of long-term care workers and policy-induced exogenous variation, we find that increased foreign staffing reduces labor shortages but has diverging implications for the careers of native workers in the sector. While it causes a transition of those currently employed to jobs with better working conditions, higher wages, and non-manual tasks, it simultaneously diminishes re-employment prospects for the unemployed natives with LTC experience.
    Keywords: immigration, shift-share instrument, long-term care, EU enlargement
    JEL: J61 I11
    Date: 2024–01
  31. By: Xiwen Bai; Jesús Fernández-Villaverde; Yiliang Li; Francesco Zanetti
    Abstract: We study the causal effects and policy implications of global supply chain disruptions. We construct a new index of supply chain disruptions from the mandatory automatic identification system data of container ships, developing a novel spatial clustering algorithm that determines real-time congestion from the position, speed, and heading of container ships in major ports around the globe. We develop a model with search frictions between producers and retailers that links spare productive capacity with congestion in the goods market and the responses of output and prices to supply chain shocks. The co-movements of output, prices, and spare capacity yield unique identifying restrictions for supply chain disturbances that allow us to study the causal effects of such disruptions. We document how supply chain shocks drove inflation during 2021 but that, in 2022, traditional demand and supply shocks also played an important role in explaining inflation. Finally, we show how monetary policy is more effective in taming inflation after a global supply chain shock than in regular circumstances.
    Keywords: supply chain disruptions, search-and-matching in the goods market, SVAR, state-dependence of monetary policy
    JEL: E32 E58 J64
    Date: 2024–01
  32. By: Sari Pekkala Kerr; William R. Kerr; Kendall E. Smith
    Abstract: We study the long-run career mobility of young immigrants, mostly refugees, from Vietnam who moved to the United States during 1989-1995. This third and final migration wave of young Vietnamese immigrants was sparked by unexpected events that culminated in the Amerasian Homecoming Act. Characteristics of the wave also minimized selection effects regarding who migrated. Small differences in the age at arrival, specifically being 14-17 years old on entry compared to 18-21, resulted in substantial differences in future economic outcomes. Using Census Bureau data, we characterize the different career profiles of young vs. older immigrants, and we quantify explanatory factors like education, language fluency, and persistence from initial employers.
    JEL: F22 J15 J44 J61 J71 L26 M13 M51
    Date: 2024–01
  33. By: Quimba, Francis Mark A.; Barral, Mark Anthony A.
    Abstract: From the launch of the Indo-Pacific Economic Framework (IPEF), apprehension surrounds its true intentions and objectives. While touted as a US-led strategy to counter China’s dominance in the region, IPEF seems to be a very slow-paced initiative. How it will progress and go about it remains a question that baffles economies. This paper presents IPEF’s cohesiveness with the member economies. It assesses IPEF’s alignment with domestic policies and FTA commitments, as well as in terms of priorities and visions of the country. Considering the integration among IPEF partners, results suggest that IPEF is aligned with the issues and policies of economies. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: clean economy;clean energy;connectivity;cooperation;environment;fair economy;globalization;governance;IPEF;regional stability;security;supply chain;trade;Indo-Pacific Economic Framework
    Date: 2023
  34. By: Jing Cynthia Wu; Yinxi Xie; Ji Zhang
    Abstract: Motivated by empirical evidence, we propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We find financial integration features an amplification for a domestic monetary policy shock and a negative spillover for a foreign shock. These results hold for conventional and unconventional monetary policies. Among various aspects of financial integration, the bond duration plays a major role, and our results cannot be replicated by a standard model of perfect risk sharing between households. Finally, we observe an important interaction between financial integration and trade openness and demonstrate trade alone does not have an economically meaningful impact on monetary policy transmission.
    Keywords: central bank research; international financial markets; monetary policy transmission
    JEL: E44 E52 F36 F42
    Date: 2024–02

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.