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on International Trade |
| By: | Sajjad Faraji Dizaji; Mohammad Reza Farzanegan |
| Abstract: | We investigate the effects of US-imposed trade sanctions on the global trade patterns of sanctioned countries by employing a gravity model that incorporates data spanning from 1980 to 2020 across 79 nations. The results reveal that both partial and complete US sanctions lead to significant reductions in bilateral trade between the US and target countries as well as between target and third countries. A unit increase in the intensity of complete trade sanctions in place reduces US bilateral trade flows with its sanctioned trading partners by about 76 percent while a unit increase in the intensity of partial US sanctions decreases trade by 16 percent. When complete export and import sanctions are implemented, US bilateral trade flows with its sanctioned trading partners witness a staggering decline of about 90 percent and 39 percent, respectively. In contrast, the application of partial export and import sanctions leads to a decrease in trade by 13 percent and 17 percent, respectively, all other factors remaining constant (ceteris paribus). Moreover, we show that target countries with stronger political institutions, as measured by democracy indicators, manage to alleviate some of the adverse effects of US sanctions on bilateral trade with both the US and third countries. |
| Keywords: | sanctions, trade, import, export, democracy, political institutions, gravity model |
| JEL: | D74 F14 F51 O24 O43 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10910&r=int |
| 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 on Bayesian SVARs. We find mostly adverse consequences of protectionism. Tariff shocks are more important than trade policy uncertainty shocks. Tariff shocks depress trade, investment, and output persistently, in aggregate and across sectors and space. 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 cumulatively 4%. The findings imply higher output costs of protectionism than partial equilibrium or static trade models. |
| Keywords: | Trade policy, international trade, structural vector autoregressions, narrative identification, general equilibrium, United States |
| JEL: | C32 E30 F13 F14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2072&r=int |
| By: | Yan Bai; Keyu Jin; Dan Lu; Hanxi Wang |
| Abstract: | We study optimal dynamic trade policies in an Eaton-Kortum model with technology diffusion through trade. The process of innovation and diffusion is one in which new ideas are combined with insights from others. Trade thus affects technology by determining the distribution from which producers draw their insights. Our theory shows that optimal policies capture a dynamic motive for a country to alter global technology. These policies take into account selection effects, country endowments, and other alterations to trade patterns that affect the degree and quality of diffusion. We provide explicit formulas showing that a Home country would like to subsidize imports from places that improve the quality of learning at Home; or lower its export tax to another country if a) higher productivity in that country is good for the Home, and b) more exports to that country improve the quality of learning and, in turn, the country’s technology. We also calibrate the model using cross-country data and quantify dynamic trade policies and their attendant welfare implications. |
| JEL: | F1 F13 O3 O49 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32097&r=int |
| By: | TANI Naoki; OGAWA Eiji |
| Abstract: | This study investigates the rationale for firms to establish foreign affiliates without export experience in the affiliate destinations despite facing demand uncertainty. As over half of Japanese firms start their first internationalization process through foreign direct investment (FDI), we attempt to explain this pattern by developing a statistical decision-making model in which firms make decisions about entering foreign markets via FDI or exports under demand uncertainty. Our model incorporates the proximity-concentration tradeoff and the demand-learning mechanism through which firms predict their demand level based on information about the number and average productivity of their neighbors. We analytically show that demand-learning from neighbors affects firms' entry and exit decisions regarding FDI. We provide supporting evidence for the main predictions of the model by using a rich micro-level dataset of Japanese multinational firms. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24019&r=int |
| By: | Akgündüz, Yusuf Emre (Sabanci University); Aydemir, Abdurrahman B. (Sabanci University); Cilasun, Seyit Mümin (TED University); Kirdar, Murat Güray (Bogazici University) |
| Abstract: | This paper investigates the degree to which immigration shock to a region propagates through supply chains. Using the unexpected arrival of Syrian refugees densely concentrated in border regions of Turkey, we estimate how firms throughout the country are affected in terms of their sales, employment, and wages. We also estimate the effect of the shock on interprovincial trade, focusing on trade volume and network formation. The results point to positive spillover effects of immigration for firms with pre-existing links to Syrian refugee-hosting regions through upstream and downstream linkages. We further find evidence for increased trade volume and network expansion through new trade linkages. |
| Keywords: | immigration, propagation, firm-to-firm trade, employment, production networks |
| JEL: | D22 J61 L14 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16770&r=int |
| By: | Pol Antràs; Evgenii Fadeev; Teresa C. Fort; Felix Tintelnot |
| Abstract: | We develop a model of export-platform foreign direct investment (FDI) in which final goods are produced only with labor and there are no fixed costs of exporting. We derive a simple condition that determines whether an MNE's plants are substitutes or complements. This condition is shaped by the relative size of (i) the cross-firm elasticity of demand the MNE faces for its goods and (ii) the within-firm elasticity of labor substitution across the MNE's plants. In two extensions of the model, we show that this complementarity is enhanced by firm-level (rather than plant-level) fixed costs of exporting and of sourcing inputs. |
| JEL: | F1 F2 F4 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32081&r=int |
| By: | Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre and Kiel Centre for Globalization) |
| Abstract: | The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing 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 cloud computing are positively related. |
| Keywords: | Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:427&r=int |
| By: | Shahid Yusuf (Growth Dialogue; Center for Global Development) |
| Abstract: | Discontent has dogged globalization for over two decades even as it has tangibly contributed to growth and poverty reduction worldwide with global value chains (GVCs) serving as its sinews. The COVID-19 pandemic demonstrated the degree to which countries depend upon an international network of suppliers for a wide range of commodities and services. That crisis, climate change, and other existential threats in the offing, bring home the need for countries to hang together, or they will hang separately. No country however large, will benefit from the overzealous pursuit of greater self-sufficiency, and for the majority, attempting to achieve even a moderate degree of autarky would entail sacrificing decades of material progress, although under the circumstances, the pursuit of strategic industrial policies by some countries may be prudent. A fracturing of the institutional infrastructure undergirding globalization and a turning inward, would also materially hamper efforts to cope with urgent national problems and international crises. Thus, the imperative for the leading economic powers is to defuse the threats to globalization and to promote resilience of GVCs. In this endeavor, the economic advantages of globalization will be pitted against strong political currents breeding domestic distrust among nations and making it harder to agree on policies necessary for economic flourishing in a planetary environment the viability of which is no longer assured. The paper makes the case that the flows of trade, capital, and technology should be safeguarded, and that dealing with the downsides of globalization is not beyond the wit of humanity. |
| Date: | 2024–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:680&r=int |
| By: | Diego A. Comin; Robert C. Johnson; Callum J. Jones |
| Abstract: | During the recovery from the COVID-19 pandemic, international shipping and logistics capacity was strained, limiting the quantity of imports. We investigate the impact of an import constraint on inflation, following an increase in domestic demand. Whether the binding import constraint raises inflation depends on how it affects trade intermediation costs. If the binding constraint raises trade costs, then import price inflation also increases. In this case, however, foreign producer price inflation falls, and import quantities rise more for inputs than final goods. Both these model results appear counterfactual, which suggests that import constraints may not explain observed import price inflation. |
| JEL: | E31 F1 F40 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32072&r=int |
| By: | KWAK, Sungil (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) have two attributes. They act as barriers to trade expansion by protecting producers, but their importance has grown in terms of consumer protection measures after the COVID-19 pandemic. Rather than eliminating related regulations, achieving harmonization within the ASEAN region can simultaneously serve two objectives: expanding trade between South Korea and ASEAN and improving consumer protection. We assess the level of regional economic integration by measuring regulatory distances among ASEAN member states. We also measure regulatory distances between South Korea and ASEAN, and between Japan and ASEAN. We estimate the impact of ASEAN's TBT and SPS on the export performance of countries exporting goods to the ASEAN region. |
| Keywords: | ASEAN Economic Integration; TBT; SPS |
| Date: | 2024–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2024_004&r=int |
| By: | Ron Boschma; ; |
| Abstract: | There is an ongoing dialogue that explores how the Global Production Network and Evolutionary Economic Geography (EEG) literatures can make promising crossovers. This paper aims to contribute to this debate by outlining a theoretical-analytical approach to regional studies on Global Value Chains (GVCs). Building on the EEG literature on relatedness, economic complexity and regional diversification, this approach aims to develop a better understanding of the ability of regions to develop new and upgrade existing GVCs, and why regions may experience the loss or downgrading of existing GVCs. We present the features of this relatedness/complexity approach to GVCs, and discuss potential fields of applications. |
| Keywords: | Evolutionary Economic Geography, Global Value Chains, Global Production Networks, regional diversification, relatedness, economic complexity |
| JEL: | B52 F23 O19 O33 R10 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2402&r=int |
| By: | Portes, Jonathan (King's College London) |
| Abstract: | The end of free movement and the introduction of the post-Brexit migration system represent the most important changes to the UK migration system in half a century. Coinciding with the aftereffects of the pandemic, the result has been very large changes both to the numbers of those coming for work and study, and to their composition, both in terms of countries of origin and in the sectors and occupations of new migrants. It has also resulted in a political backlash, resulting in significant further changes to the system announced in December 2023. I discuss the evidence to date of the impact of recent migration trends on the UK economy and labour market, distinguishing between different sectors. |
| Keywords: | migration, productivity, labour markets, Brexit |
| JEL: | F22 J48 J61 J68 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16728&r=int |
| By: | Stephen J. Redding; David E. Weinstein |
| Abstract: | We develop a quantitative framework for decomposing trade patterns. We derive price indexes that determine comparative advantage and the aggregate cost of living. If firms and products are imperfect substitutes, we show that these price indexes depend on variety, average appeal (including quality), and the dispersion of appeal-adjusted prices. We show that they are only weakly related to standard empirical measures of average prices. We find that 40 percent of the cross-section variation in comparative advantage, and 90 percent of the time-series variation, is accounted for by variety and average appeal, with less than 10 percent attributed to average prices. |
| Keywords: | comparative advantage, trade, prices, quality, variety |
| JEL: | F11 F12 F14 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-07&r=int |
| By: | Grant, Jason; Legrand, Nicolas; Bolub, Alla; Arita, Shawn; Sydow, Sharon |
| Keywords: | Agribusiness, Agricultural and Food Policy, Agricultural Finance, International Relations/Trade |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iats23:339496&r=int |
| By: | León, Daniel; Abdulkadri, Abdullahi |
| Abstract: | This study assesses international migration trends in 28 Caribbean countries from 2000 to 2020 and discusses the implications of these trends for different aspects of sustainable development in the subregion. It is well-documented that the Caribbean is a subregion that has exhibited net emigration, but this trend has intensified over the last two decades, with Global North regions representing the main destination of Caribbean emigrants. Although immigration to the Caribbean increased from 2000 to 2020, this increase was less substantial than that recorded for emigration from the subregion. By 2020, intra-Caribbean migration stocks accounted for just over half of all immigration stocks in the subregion, showing growing intra-Caribbean mobility of persons. International migration trends in the Caribbean, particularly emigration from the subregion, have implications for the subregion’s sustainable development, and these are reflected in indicators such as international financial flows, demographic dynamics, and labour productivity. In general, the high net emigrant stock of the Caribbean directly correlates with remittance inflows to the subregion. Furthermore, many countries of the subregion with ageing populations stand to gain from increased immigration as it rejuvenates their labour forces. However, with highly skilled labour constituting a large and growing proportion of the net emigrant stocks, the resulting brain drain in the Caribbean could have a more profound impact on the sustainable development of the subregion. Available data showed that most countries with net emigration during the period covered by this study experienced negative or stagnant labour productivity levels. Considering the importance of quality data in assessing international migration trends, it is pertinent to collect, analyse, and disseminate international migration data in the Caribbean following international standards and best practices to facilitate optimal use of the subregion’s international migration statistics. This study has revealed some advances and gaps among Caribbean countries in producing international migration data. Some Caribbean countries have included questions on international migration in their national censuses, household surveys, and labour force surveys. Nevertheless, gaps remain in collecting international migration indicators, especially those related to labour and international university student mobility. Leveraging administrative data, inter-agency coordination, and international cooperation can help countries improve the collection of international migration data, thereby enhancing national statistical capacity in the Caribbean. |
| Date: | 2024–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col033:68841&r=int |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Ariell Reshef (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Giulio Vannelli (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Increases in upstream, forward GVC integration directly reduce labor shares, mostly through reductions in fabrication, but also via other business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is "upstream-biased". Rapid robotization in China shaped robotization in Europe and, therefore, relative demand for labor there. |
| Keywords: | labor share, functional specialization, global value chains, upstreamness, technological change, automation, robots |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-04346960&r=int |
| By: | Gary Clyde Hufbauer (Peterson Institute for International Economics); Megan Hogan (Peterson Institute for International Economics) |
| Abstract: | International trade may not be as popular in the United States as it once was, but this updated PIIE study demonstrates that the payoff to the US economy from globalization has been significant. Gains from trade since 1950, facilitated by vastly improved transportation and communications, added up to $2.6 trillion in 2022, lifting US GDP by 10 percent. These gains averaged $7, 800 per person and $19, 500 per household in the United States in 2022. Despite these gains, trade barriers were erected under former president Donald Trump and continued under the Biden administration, spurred by concerns over trade-related job loss. These protectionist policies, coupled with the global financial crisis and the COVID pandemic, have slowed globalization. To be sure, trade has inflicted losses on certain US workers. Between 2001 and 2016, more than 300, 000 workers annually lost or switched jobs because of imports. In comparison, more than 50 million workers change jobs each year. Americans enjoy large but less visible gains from trade through cheaper and more varied products and increased productivity at firms. Instead of restricting trade, US policymakers should adopt better safety nets for displaced workers and ensure that economic growth is more widely shared. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb23-17&r=int |
| By: | Kathrine von Graevenitz; Elisa Rottner; Philipp M. Richter |
| Abstract: | Relative prices determine competitiveness of different locations. In this paper, we focus on the role of regulatory differences between Germany and other EU countries which affect the shadow price of carbon emissions. We calibrate a Melitz-type model, extended by firms’ emissions and abatement decisions using data on aggregate output, trade and emissions. The parameter estimates are estimated from the German Manufacturing Census. The quantitative model allows us to recover a measure of how regulatory stringency evolved in the EU and Germany in terms of an implicit carbon price paid on emissions. This price reflects energy and carbon prices in addition to command-and-control measures and decreased from 2005 to 2019 in most sectors – both in Germany and other EU countries. The trend is more pronounced in Germany than in the rest of the EU. In counterfactual analyses, we show that this intra-EU difference has substantially increased German industrial emissions. Had the EU experienced the same decrease in implicit carbon prices as Germany, German emissions would have been substantially lower. Germany has increasingly become a pollution haven. |
| Keywords: | Carbon emissions, climate policy, manufacturing, international trade, heterogeneous firms |
| JEL: | F18 H23 L60 Q56 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_503&r=int |
| By: | Gomis, Benoît; Gallagher, Allen W. A.; Alebshehy, Raouf; Rowell, Andrew |
| Abstract: | Previous research has documented how British American Tobacco (BAT) and other transnational tobacco companies (TTCs) smuggled their own products into Iran in the 1990s in order to circumvent sanctions and other trade restrictions. In the early 2000s, BAT, along with other TTCs, signed legal agreements with Iranian authorities to sell its products legally and curb illicit tobacco trade (ITT). Our analysis of previously unreleased internal BAT documents (covering 2000–2014) suggests BAT remained potentially involved in ITT after those agreements were signed. Meanwhile, BAT engaged with government authorities to tackle ITT primarily for reputational and commercial purposes. With a business model based on a high number of contractors and distributors, extensive engagement with government authorities, and an anti-illicit trade strategy focusing more on reputation and growth than on effectively controlling its supply chain, further investigation into BAT’s activities in Iran – including potential sanctions breaching – may be warranted. This is especially relevant as, in April 2023, BAT agreed to pay penalties exceeding US$629 million to resolve charges of bank fraud and sanctions violations in North Korea, following a criminal investigation by the US Department of Justice and Office of Foreign Assets Control. Exploration of BAT’s activities in Iran would provide insight into the credibility of BAT’s response following these penalties, with the company having claimed that “Adhering to rigorous compliance and ethics standards has been, and remains, a top priority”. |
| Keywords: | tobacco; cigarettes; sanctions; illicit trade; Iran; smuggling |
| JEL: | J1 L81 |
| Date: | 2024–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121625&r=int |
| By: | Kolev-Schaefer, Galina; Neligan, Adriana |
| Abstract: | After the agreement of the European Parliament and the Council of the EU in December 2023, a few formal steps remain to introduce the Corporate Sustainability Due Diligence Directive (CSDDD). The legislation is intended to improve environmental and labor standards along the chain of international activities of European companies. However, the scope is far-reaching, and its implementation will be associated with significant costs of compliance. Thus, the directive will not only deteriorate the competitiveness of European companies but also endanger the economic development of developing and emerging economies because their attractiveness as suppliers of intermediate or final products for the European market will significantly decrease. The experience with supply chain due diligence regulations from EU member states supports these arguments. The present paper investigates the adverse effects of the German supply chain act one year after its introduction by using trade data and the results of a recent survey among German companies: ◼ Trade data: It shows that imports in the high-risk sector of apparel from countries with problematic enforcement of sustainability standards like Bangladesh and Pakistan have decreased by more than 20 percent since the introduction of the law. This development seems not to be driven by shrinking demand in Germany but is rather an early sign of trade diversion due to this non-tariff barrier to trade especially with these countries. ◼ Company survey: Furthermore, survey results indicate that the range of companies affected by the existing German regulation is much wider than those directly covered by the law as many companies are indirectly affected as customers or suppliers. More than one out of eight companies have decided to purchase products or produce increasingly in countries with high human rights and environmental protection standards. For directly and indirectly affected firms the share is even 22 per cent. This explains at least partly the drop in imports from countries with weak governance. As it cannot be ruled out that supply chain regulations negatively impact development in third countries, there is a need for more experience and time to design the CSDDD in a way that it does not only represent a burden for European companies and disadvantage for developing countries. The scope should be restrained to reduce legal uncertainty and increased only gradually as soon as European companies are prepared for the next step of the implementation. Generally, a risk-based approach is preferable, where companies are obliged to monitor and report on the sustainability of their supply chains only when there is clear evidence of high risks of non-compliance with sound environmental and labor standards. Furthermore, the obligations to monitor the production conditions of intermediate products should be constrained to the direct suppliers like in the German approach instead of covering the whole chain of activities, as it is barely possible for companies to trace the whole chain of activities associated with the production of intermediate products - especially for highly complex products. The proposed CSDDD needs to undergo a major review to assure that it effectively improves production conditions abroad without significant negative side effects and risks for economic development in developing and emerging economies. |
| Keywords: | Lieferkette, Due Diligence, Rechenschaftspflicht, Deutschland |
| JEL: | F18 Q56 Q01 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkrep:282995&r=int |
| By: | Jason Lennard (London School of Economics (LSE); Centre for Economic Policy Research (CEPR); Centre for Macroeconomics (CFM); Economic Statistics Centre of Excellence); Meredith M. Paker (Grinnell College) |
| Abstract: | This paper evaluates how a major policy shift - the suspension of the gold standard in September1931 - affected employment outcomes in interwar Britain. We use a new high-frequency industry-level dataset and difference-in-differences techniques to isolate the impact of devaluation on exporters. At the micro level, we find that the break from gold reduced the unemployment rate by 2.7 percentage points for export-intensive industries relative to more closed industries. At the aggregate level, this effect stimulated the labor market, the fiscal outlook, and economic growth. Devaluation was therefore an important initial spark of recovery from the depths of the Great Depression. |
| Keywords: | exports, gold standard, interwar Britain, unemployment |
| JEL: | E24 F41 J64 N14 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2403&r=int |
| By: | Liutang Gong (Guanghua School of Management and LMEQF, Peking University; School of International Economics and Management, Beijing Technology And Business University); Chan Wang (School of Finance, Central University of Finance and Economics); Liyuan Wu (Institute of World Economics and Politics, Chinese Academy of Social Science); Heng-fu Zou (Economics and Management School, Wuhan University) |
| Abstract: | In the literature on optimal monetary policy in open economies, the presence of local-currency pricing provides a rationale for targeting CPI inflation rather than PPI inflation. In this paper, we reexamine this conclusion by incorporating international trade in intermediate inputs into Engel (2011). We find that the cooperative monetary policymaker should target the final-goods output gaps, the PPI inflation rates at both stages of production, the currency misalignments at both stages of production, and the vertical relative price gaps. Welfare analysis shows that the monetary policymaker should target the weighted average intermediate-goods PPI (WPPI) inflation rather than CPI inflation for most combinations of price stickiness at both stages of production. |
| Date: | 2023–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:617&r=int |
| By: | Mnahel Babgi (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon) |
| Abstract: | Digitalization and internationalization have an important role in the growth of enterprises, especially small and medium-sized enterprises (SMEs). In recent years, Borndigital SMEs have increased and internationalized faster than brick-and-mortar companies across the world. Notably, the Kingdom of Saudi Arabia (KSA), the largest economy in the Middle East and North Africa region, recognizes the significance of digitalization in SMEs development, as these firms are contributing greatly to the country's GDP. Despite the increasing influx, there is a paucity of research that examines the factors affecting the digitization and internationalization processes of born-digital SMEs. Therefore, this doctoral research aims to develop a deeper understanding of this phenomenon to provide useful insights to the practitioners and policymakers. This research flows in three stages. In the first stage, a bibliometric analysis is conducted on 246 research papers in International Business and a subsequent front analysis is conducted to supplement the findings. To surge further, a quantitative survey is developed to investigate internationalization strategies and the role of digitalized value chain activities with the data collected from born digital SMEs. Finally, a case study analysis will be developed on the successful SMEs to examine the interplay of digitization and internationalization among SMEs in Saudi Arabia to enhance SMEs' global competitiveness and bridge the knowledge gap to contribute to the body of literature in this research area. |
| Keywords: | Digitalization Internationalization Born-digital companies, digitalized value chain, SMEs, Digitalization, Internationalization, Born-digital companies |
| Date: | 2023–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04401322&r=int |
| 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. |
| JEL: | E32 E58 J64 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32098&r=int |
| By: | Ricz, Judit; Sallai, Dorottya; Sass, Magdolna |
| Abstract: | The year 2020, with the outbreak of the COVID-19 pandemic and the subsequent crises, highlighted the significance of state intervention in shaping firm competitiveness. However, unprecedented government support for businesses has left us puzzled about the state’s role in firm internationalization, especially in emerging markets and the Global South, where government involvement has been accompanied by democratic backsliding and rising authoritarianism. Our Special Issue moves the current debate forward by exploring how the state’s changing role affects firm internationalization. The objective of this editorial is twofold: stimulating theory development by scrutinizing state intervention in emerging markets in recent decades and introducing the Special Issue articles. Contributions investigate how governments support the internationalization of their domestic businesses by focusing on firms’ institutional embeddedness and the impact of institutions as both resources and constraints to their internationalization. By linking the discourse on state capitalism with business internationalization, our empirical studies advance research on political economy and the state’s role in innovative ways, reflecting on recent geopolitical developments. Our introductory article situates the Special Issue papers in the state capitalism and firm internationalization literatures and discusses their implications for future research. |
| Keywords: | firm internationalization; state capitalism; institutional embeddedness; emerging markets; central and eastern Europe; Democratic governance in a turbulent age (Governance)’ grant no. 462-19-080 (POPBACK project); Sage deal |
| JEL: | R14 J01 L81 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121380&r=int |
| By: | Xiwen Bai (Tsinghua University); Jesús Fernández-Villaverde (University of Pennsylvania); Yiliang Li (University of International Business and Economics); Francesco Zanetti (University of Oxford) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2405&r=int |