|
on International Trade |
| By: | Yvonne Wolfmayr; Elisabeth Christen; Hendrik Mahlkow; Birgit Meyer; Michael Pfaffermayr |
| Abstract: | Abstract: Geoeconomic concepts are gaining importance in EU trade policy. In this context new trade policy instruments are designed to protect the internal market against unfair trade practices, coercive actions as well as to ensure sustainable supply chains and the protection of human rights. The study extensively overviews seven policy instruments: Anti-Coercion Instrument (ACI), Enforcement Regulation (ER), International Procurement Instrument (IPI), Carbon Border Adjustment Mechanism (CBAM), Corporate Sustainability Due Diligence (CSDD), Level Playing Field Provisions in the EU-UK Trade and Cooperation Agreement (LPF), and EU Regulation on Deforestation-Free Products (EUDR). Using gravity models and a quantitative general equilibrium trade model, the impact of the selected trade policy instruments on trade and welfare of the EU as well as Austria is estimated based on different scenarios. |
| Keywords: | trade, Welfare, human rights, EU trade policy, unfair trade practices, sustainable supply chains, internal market, Geoeconomic concepts, trade policy instruments, Anti-Coercion Instrument, coercive actions, Foreign Subsidy Instrument, International Procurement Instrument, gravity models, Deforestation Initiative, Enforcement Regulation, EU-UK Trade and Cooperation Agreement, impact, Level Playing Field Provisions, quantitative general equilibrium trade model, Carbon Border Adjustment Mechanism, Corporate Sustainability Due Diligence |
| JEL: | F14 F55 F15 F13 Q56 F18 Q01 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:ecbook:y:2024:m:01:i:2024-02&r= |
| By: | Pablo D. Fajgelbaum; Amit Khandelwal |
| Abstract: | Section 321 of the 1930 Trade Act allows up to $800 in imports per person per day to enter the US duty-free and with minimal customs requirements. Fueled by rising direct-to-consumer trade, these “de minimis” shipments have exploded yet are not recorded in Census trade data. Who benefits from this type of trade, and what are the policy implications? We analyze international shipment data, including de minimis shipments, from three global carriers and US Customs and Border Protection. Lower-income zip codes are more likely to import de minimis shipments, particularly from China, suggesting that the tariff and administrative fee incidence in direct-to-consumer trade is pro-poor. Theoretically, imposing tariffs above a threshold leads to terms-of-trade gains through bunching, even in a setting with complete pass-through to linear tariffs. Empirically, bunching pins down the demand elasticity for direct shipments. Eliminating §321 would reduce aggregate welfare by $11.8-$14.3 billion and disproportionately hurt lower-income and minority consumers. |
| JEL: | F1 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32607&r= |
| By: | Mustafizur Rahman; Mahrab Al Rahman |
| Abstract: | The policy brief focuses on Bangladesh-China trade ties to identify opportunities of expanding Bangladesh’s exports to the growing import market of China. The paper argues that Bangladesh ought to seize the opportunities offered by the growing import market of China, which it has failed to do till now. While China continues to remain Bangladesh’s foremost bilateral trading partner, the increasingly large trade deficit with the country has emerged as a major concern for Bangladesh in recent times. |
| Keywords: | Bangladesh-China trade, exports, bilateral trade, import market of China |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:pdb:pbrief:46&r= |
| By: | Crowley, Meredith A.; Han, Lu; Prayer, Thomas |
| Abstract: | How does trade policy affect competition? Using the universe of product exports by firms from eleven low and middle income countries, we document that tariff reductions under trade agreements have strong pro-competitive effects — they encourage entry and reduce the (tariff exclusive) price-cost markups of exporters. This finding, that markups fall with tariff cuts, contradicts a core prediction of standard oligopolistic competition models of trade. We extend a workhorse international pricing model of oligopolistic competition to include multiple countries and a rich preference structure. Our preference structure allows for fierce competition among firms from the same country and less intense competition among firms from different countries. We show a firm’s optimal markup after a tariff cut can rise or fall depending on the parameters of the preference structure and tariff-induced reallocation of market share among firms and across countries. |
| Keywords: | trade agreements; variable markups; markup elasticity; trade elasticity; competition policy; firm level data |
| JEL: | F13 F14 F15 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123982&r= |
| By: | Hong, Sungwoo (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | Due to the accelerating digital transformation in the post-COVID-19 world, the share of service trade in the economies of major countries worldwide is expected to increase further. Services and participation in the global value chain (GVC) are closely related because services serve as a significant input factor in the manufacturing sector. The recent movement to open the service market in Latin American countries has an inherent policy goal of enhancing participation in the GVC centered on the manufacturing industry by facilitating the introduction of services within and outside the region in product trade. Korea’s exports are still concentrated on the trade of manufacturing-centered products, and improving competitiveness in the service sector is a challenge. In a situation where Korea's exports to the world are sluggish due to the spread of protectionism and delayed global economic recovery, the Korean government and companies need to move away from the traditional Korea-Latin America cooperation model that was focused on manufacturing-oriented product trade. In addition, they need to expand service trade and create new solutions in the service sector. Therefore, against this background, it is essential to understand the level of service market openness in major Latin American countries, provide information to governments and companies, and provide the logic for economic cooperation between Korea and Latin America in the service sector. This report briefly shows the status of service market opening in major countries in Lain America and empirical findings of relationships between service market opening and manufacturing GVCs of Latin America. As a result of reviewing the domestic laws of MERCOSUR and the Pacific Alliance in Latin America, the level of regulation on investment in the service sector has been lowered due to the past active policy of attracting foreign direct investment except for some cases. However, the level of service concessions in these countries was significantly lower than the level of investment liberalization based on domestic law. As a result of the empirical analysis, I found that when Latin American countries signed a bilateral service trade agreement with a Global North country, the agreement significantly strengthened the backward linkages of Latin American exporting countries. Among Latin American countries, when a country in the Global North concluded a service trade agreement with a Global North country, forward linkages of Latin American exporting countries also increased. |
| Keywords: | Latin America; Service Market Opening; Manufacturing GVCs |
| Date: | 2024–05–17 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2024_014&r= |
| By: | Dennis Novy; Thomas Sampson; Catherine Thomas |
| Abstract: | This briefing summarises the evidence about how leaving the European Union (EU) has affected UK trade. Overall, Brexit has had a negative effect on UK trade. But, so far, this effect has been smaller than economists expected. |
| Keywords: | Brexit, Election2024, Globalisation, UK Economy, trade, |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepeap:058&r= |
| By: | Dutta, Sourish |
| Abstract: | This article reiterates the importance of understanding and addressing the strategic inquiries and potential responses in the context of global value chain (GVC) participation. Policymakers must address these crucial matters to engage in GVCs effectively. Governments aspiring to participate in GVCs must focus on determining which tasks to prioritise and exploring various forms of GVC governance. The challenges and opportunities of establishing top-notch GVC connections and fostering a favourable environment for foreign assets are significant for countries looking to integrate into GVCs. While navigating power dynamics and supply chain risks, these efforts can attract suitable foreign investors, enhance market connectivity, and develop high-quality infrastructure and services, all of which can lead to significant economic growth and development. The potential benefits of GVC participation are vast, and by understanding and addressing the strategic inquiries and possible responses, policymakers can take control of the situation and pave the way for a prosperous future. |
| Keywords: | Global Value Chains, Trade Policy, Industrial Policy, International Political Economy |
| JEL: | F13 L52 O24 O25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:298399&r= |
| By: | Costas Milas (University of Liverpool, UK; Rimini Centre for Economic Analysis); Theodore Panagiotidis (University of Macedonia, Greece); Georgios Papapanagiotou (University of Macedonia, Greece) |
| Abstract: | This paper uses time-varying Bayesian models to assess the impact of the shifting, and progressively more volatile (especially since the EU Referendum vote in 2016) macroeconomic landscape on Foreign Direct Investment (FDI) inflows to the UK. FDI inflows are depressed in response to higher UK-specific economic and geopolitical uncertainty. A stronger real exchange rate and a higher interest rate also have a negative effect. It benefits from lower UK corporate tax rates and higher US uncertainty, the latter creating investment opportunities in the UK. Rising economic policy uncertainty since the EU Referendum, has led to FDI losses of up to 0.5% of GDP. |
| Keywords: | Foreign Direct Investment, economic policy uncertainty, Brexit |
| JEL: | C11 C32 F21 F23 F30 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:rim:rimwps:24-09&r= |
| By: | Giorgio Barba Navaretti; Matteo Bugamelli; Emanuele Forlani; Gianmarco I. P. Ottaviano |
| Abstract: | Understanding producers' selection into exporting and its consequences for micro-founded gravity estimation calls for an in-depth analysis of the interplay between aggregate exports and the distribution of producers' productivity. Yet, knowledge about such interplay is still rather limited from both a theoretical and an empirical standpoint. We supplement this knowledge by studying how different moments of the distribution of producers' productivity affect the trade elasticity, and in turn how shocks that alter those moments in different ways may have different impacts on aggregate exports. We first show that, to obtain an unbiased measure of that elasticity, gravity regressions have to account not only for the share of producers that export, but also for their productivity premium relative to all producers. This is particularly important when the share is small and the premium is large, that is, when aggregate exports are driven by few overperforming 'superstar exporters'. We then assess how aggregate exports react to shocks entailing the same change in the first moment of the distribution of producers' productivity, but different changes in its higher moments. Our empirical results confirm that taking into full consideration the productivity premium of exporters and the occurrence of 'superstar exporters' is crucial to correctly explain and predict the response of aggregate exports to different productivity shocks. |
| Keywords: | trade flows, superstar exporters |
| Date: | 2024–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2010&r= |
| By: | Mr. Kevin Fletcher; Veronika Grimm; Thilo Kroeger; Thilo Kroeger; Ms. Aiko Mineshima; Christian Ochsner; Mr. Andrea F Presbitero; Paul Schmidt-Engelbertz; Jing Zhou |
| Abstract: | Global geopolitical tensions have risen in recent years, and European energy prices have been volatile following Russia’s invasion of Ukraine. Some analysts have suggested that these shifting conditions may significantly affect FDI both to and from Germany. To shed light on this issue and other factors affecting German FDI, we leverage two detailed and complementary FDI datasets to explore recent trends in German FDI and how it is affected by geopolitical tensions and energy prices. In doing so, we also develop a new measure of geopolitical alignment. Our main findings include the following: (i) the post-pandemic recovery in Germany’s inward and outward FDI has been weaker than in the US or the rest of the European Union (EU27) as a whole; (ii) Germany’s outward FDI linkages with geopolitically distant countries have been weakening since the Global Financial Crisis; (iii) the relationship between Germany’s outward FDI and geopolitical distance has become more pronounced over the last six years; (iv) Germany’s outward FDI to China-Russia bloc countries is more sensitive to recent geopolitical developments compared with that to US-bloc countries; and (v) Germany’s outward FDI in energy-intensive sectors decreases as destination countries’ energy costs increase, but energy costs do not appear to have a statistically significant effect on outward FDI in non-energy intensive sectors. |
| Keywords: | Germany; foreign direct investment; geopolitical fragmentation |
| Date: | 2024–06–28 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/130&r= |
| By: | Ken-ichi Hashimoto; Kaz Miyagiwa; Yoshiyasu Ono; Matthias Schlegl |
| Abstract: | This paper first presents a dynamic model that features both real and monetary aspects of international trade and is capable of dealing with both full employment and secular unemployment. The model is then utilized to examine the effect of a tariff on the terms of trade, the trade pattern, real consumption and employment of labor. It is shown that with full employment in both countries, a tariff by the home country improves its terms of trade and increases its national welfare at the expense of the foreign country. These results however are reversed in the presence of unemployment in both countries. We also examine the asymmetric cases and calibrate our model to evaluate numerically the effect of large tariff changes. The main finding is that the tariff only worsens the economy when it is already stagnant. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1245&r= |
| By: | Mr. Diego A. Cerdeiro; Parisa Kamali; Siddharth Kothari; Mr. Dirk V Muir |
| Abstract: | This paper estimates the costs of ‘de-risking’ scenarios between China and OECD members at the aggregate and sectoral levels. Aggregate large-scale de-risking – reshoring by increasing reliance on domestic production and friend-shoring by reducing imports from specific foreign countries – is quantified with the IMF’s GIMF model, suggesting significant permanent effects on the global economy. Returning integration to 2000 levels translates into long-term global GDP losses of 4.5 percent under reshoring and as much as 1.8 percent under friend-shoring. Friend-shoring does not necessarily deliver a boon to third countries as trade diversion benefits might be largely offset by contractions in China and OECD members. Sectoral de-risking, where all trade between rivals is eliminated in specific products, is quantified through empirical estimation of the scope for quality downgrading. The results demonstrate the potential for significant losses in input quality should there be an escalation in export bans. Losses are asymmetric against China in the specific case of semiconductors but can be significant for both sides in other sectors—including in critical areas such as environmental goods. |
| Keywords: | De-risking; fragmentation; reshoring; friend-shoring; export bans; quality downgrading. |
| Date: | 2024–06–21 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/122&r= |
| By: | Giordano Mion; Joana Silva |
| Abstract: | We examine how firms adjust their production and technology in response to exogenous trade shocks. We develop a model in which revenue TFP can be distinguished from quantity TFP, and where skill upgrading is explicitly embedded into the firm's technology choice. Within our framework, firms respond to export and import shocks by adjusting their trade-off between quantity and quality, as well as the skill composition of their workforce. Ultimately, these decisions impact firms' quantity and revenue TFP, marginal costs, prices, and markups. We quantify the model using detailed firm and product data from Brazil and show how export and import shocks, instrumented using exogenous changes in exchange rates, GDP, and tariffs, affect a wide array of firm margins. Our results indicate both skill and quality upgrading in response to export shocks, while import shocks foster technology upgrading and productivity improvements. |
| Keywords: | exports, imports, shocks, skill upgrading, quality, technology, quantity TFP, revenue TFP, markups |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2009&r= |
| By: | Larabi Jaïdi; Bruce Byiers; Saloi El Yamani |
| Abstract: | As the African Continental Free Trade Area (AfCFTA) enters its fifth year, the rules of origin for trade in goods are still being finalised, but the institutional architecture is nearly complete with increased capacity, technical committees and new supporting instruments. Despite this progress in AfCFTA ‘policy supply’, meaningful trade under the AfCFTA is still to begin. For this to happen, there must be ‘policy demand’ from the private sector to use the agreement’s range of protocols in shaping their investment and trade decisions and relations. Private sector engagement has so far varied across member states, with some demonstrating robust integration of business feedback while others lag in private sector consultation and involvement. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:ppaper:pb24-25vc&r= |
| By: | Birgit Meyer; Klaus S. Friesenbichler; Harald Oberhofer |
| Abstract: | Abstract: This study is the first to examine employment effects by gender in Austrian firms and thus provides insight into the role of Austrian firms engaged in foreign trade for women's labour market opportunities and participation in firms. Using a matched employer-employee dataset based on various microdata from the Austrian Micro Data Center (AMDC) of Statistics Austria, the study looks at different indicators and possible differences between female employees in foreign trade-affiliated firms compared to exclusively domestic firms. |
| Keywords: | international trade, gender pay gap, female labour force participation, Matched employer-employee data, Exporter |
| JEL: | F14 F16 J31 J16 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:ecbook:y:2024:m:05:i:4&r= |
| By: | Ling Cen; Lauren Cohen; Jing Wu; Fan Zhang |
| Abstract: | Using both the onset of the US-China trade war in 2018 and the most recent Russia-Ukraine war and associated trade tensions, we show a counterintuitive pattern in global trade. Namely, while the average firm trading with these nations significantly decreases their trade with these jurisdictions following sanctions, government-linked firms show a marked contrast. In particular, government-linked firms actually significantly increase their trading activity following the onset of formal sanctions. The increase is large - roughly 33% (t=4.01). We find no increase broadly to other countries (even countries in the same regions) at the same time, nor of these same firms in these same regions at other times. In terms of mechanism, government-linked supplier firms are nearly twice as likely to receive tariff exemptions. More broadly, these effects are increasing in the level of government connection. For instance, firms geographically closer to the government agencies they supply increase their imports more acutely. Using micro-level data, government-supplying firms recruiting more employees with past government work experience also increase trading activity more – particularly when the past employee worked in a government-contracting role. Lastly, this results in sizable accrued benefits in terms of firm-level profitability, market share gains, and outsized stock returns. |
| JEL: | F42 F51 G15 G38 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32621&r= |
| By: | Elisabeth Christen; Birgit Meyer; Harald Oberhofer; Julian Hinz; Katrin Kamin; Joschka Wanner |
| Abstract: | The creation of uniform, legally binding norms and standards is an essential basis for the functioning of the EU single market, which at the same time is increasingly spread beyond the EU's borders through international trade relations. The shaping of global standards and regulations according to EU directives even beyond the EU's borders represents an important competitive advantage of the EU. The EU also manages to impose rules, regulations and standards only through market mechanisms in third countries without international treaties or agreements. This has in many areas contributed to the "Europeanisation" of important aspects of global trade. In the academic literature, this regulatory influence of the EU is defined as the "Brussels Effect". The focus of this study is to give a comprehensive overview of the Brussels Effect and to analyse the linkages regarding EU trade policy, outlining to what extent a Brussels Effect can be observed in the network of EU trade agreements. Based on a comprehensive and broad identification of the Brussels Effect, this study aims to quantify the trade effects in terms of the leading role in shaping global standards and regulations for the EU and Austria and to qualitatively identify further areas in which untapped potentials of a "Brussels Effect 2.0" seem possible in the context of EU trade policy. |
| Date: | 2022–10 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:ecbook:y:2022:m:10:i:viii-007&r= |
| By: | Bettina Meinhart |
| Abstract: | Abstract:International climate targets have far-reaching implications for all areas of the economy and life, including trade policy. To reach the target of the Paris Agreement, it may be necessary to link trade and environmental policy, whereby one way of linking the two policy areas is to include environmental provisions (EPs) in trade agreements. Several motives for including environmental concerns in trade agreements exist, ranging from promoting environmental cooperation and ensuring a level playing field to pursuing protectionist interests. In principle, the inclusion of environmental aspects is not a new development. Since the 1990s, EPs have been frequently integrated into trade agreements, for example on issues such as hazardous waste, deforestation or biodiversity protection. In recent years, as climate initiatives have gained prominence at the EU level, the number of EPs in trade agreements has steadily increased. Thereby, the inclusion of these concerns is very heterogeneous in terms of the subject matter and enforceability. A closer look at the enforceability indicator is crucial, because if EPs are not legally enforceable, addressing environmental concerns may not have an impact on trade and the environment. The European Commission is aware of this issue and therefore published the review of its policy chapter on trade and sustainable development in June 2022. This identifies how the contribution of EU trade agreements to promoting environmental protection can be improved, mentioning, among other actions, the strengthening of enforcement through trade sanctions as a last resort. Whether the current changes are effective in terms of environmental and trade impacts will be seen in further research. |
| Date: | 2022–10 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:pbrief:y:2022:m:10:i:055&r= |
| By: | Tessa Hall; Alan Manning |
| Abstract: | In 2023, the majority of migrants were workers or students, and their dependants. Humanitarian immigration also increased - with visa schemes set up for those fleeing Ukraine and Hong Kong. |
| Keywords: | Election 2024, Election2024, UK Economy, Immigration |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepeap:062&r= |
| By: | Rimmer, Matthew (Queensland University of Technology) |
| Abstract: | Refereed Article - Matthew Rimmer. 'The Regional Comprehensive Economic Partnership: Intellectual Property and Trade in the Asia-Pacific' (2024) 32 (2) Asia Pacific Law Review 392 - 435 ISSN: 1019-2557 Abstract: This article considers the evolution of the Regional Comprehensive Economic Partnership (RCEP) – with a particular focus on intellectual property, trade, and sustainable development. This narrative concentrates on the position of Australia – while also discussing the interests of other participating nations. This article charts the aims and objectives of the intellectual property chapter of RCEP. It explores the copyright provisions of RCEP – considering the implications for access to knowledge, innovation, and competition. This article examines the treatment of trade mark law, Internet Domain Names, and geographical indications. It evaluates the regime for patent law and related rights such as data protection, trade secrets, and biologics – with a particular concern for access to medicines and the COVID-19 crisis. It also explores sui generis regimes of intellectual property – such as plant breeder's rights, access to genetic resources, and Indigenous intellectual property. The conclusion considers the future of RCEP – especially given competing mega agreements such as the Trans-Pacific Partnership (TPP); the Belt Road Initiative; and the Indo-Pacific Economic Framework for Prosperity. |
| Date: | 2023–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:uhxr3&r= |
| By: | Jürgen Janger |
| Abstract: | Abstract:Interrupted supply chains in the wake of COVID-19 and Russia’s attack on Ukraine have highlighted the geopolitical risks of sourcing critical raw materials and products from a small number of authoritarian countries. The EU has initiated a flurry of activities to reduce unilateral dependencies, witnessed by trade, innovation and industrial policy instruments, such as the IPCEIs, the Chips Act and new anti-subsidy measures. This policy brief focuses on fostering technological sovereignty to insure against risks from international trade specifically in critical general purpose technologies. Bundles of innovation, industrial and trade policies enter three consistent policy mixes according to the distance to the technological frontier: for emerging technologies, the frontier policy mix emphasises an improvement in general framework conditions such as a more integrated European capital market. Technologies which lag behind the frontier benefit from coordinated support within the catch-up policy mix, while technologies at risk of losing their position at the frontier fall within the remit of the defensive policy mix. |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:pbrief:y:2024:m:01:i:61&r= |
| By: | Javier Flórez Mendoza; Bernhard Moshammer |
| Abstract: | Abstract:Since the second half of 2022, the debate regarding the ratification of the EU–Mercosur agreement has gained significant momentum on both sides of the Atlantic. On one side, there's the recently elected Brazilian president who supports its ratification, a libertarian Argentinian presidential candidate who believes the agreement doesn't go far enough, and a Paraguayan president who has stated that negotiations with the EU will be terminated if the parties do not reach a deal by December when Paraguay assumes Mercosur's presidency. On the other side, the European Union is grappling with ongoing supply-chain disruptions and the geopolitical implications of the Russian war against Ukraine, leading to a need to reevaluate its global political and economic relationships and the varying opinions within the EU regarding the agreement.This policy brief will analyze significant developments since 2019, explore the potential benefits of the EU–Mercosur agreement, and address concerns that have been raised. It will also assess the economic roles of other key actors in the region, namely the USA and China, and the economic sectors of particular importance, such as agriculture and raw materials, in the ongoing discussions surrounding the conclusion of the EU–Mercosur agreement. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:pbrief:y:2023:m:11:i:60&r= |
| By: | Jesús Fernández-Villaverde; Tomohide Mineyama; Dongho Song |
| Abstract: | After decades of rising global economic integration, the world economy is now fragmenting. To measure this phenomenon, we introduce an index of geopolitical fragmentation derived from various empirical indicators. This index is developed using a flexible dynamic factor model with time-varying parameters and stochastic volatility. We then employ structural vector autoregressions and local projections to assess the causal effects of changes in fragmentation. Our analysis demonstrates that increased fragmentation negatively impacts the global economy, with emerging economies suffering more than advanced ones. Notably, we document a key asymmetry: fragmentation has an immediate negative effect, while the benefits of reduced fragmentation unfold gradually. A sectoral analysis within OECD economies reveals that industries closely linked to global markets—such as manufacturing, construction, finance, and wholesale and retail trade—are adversely affected. Finally, we examine the interaction between fragmentation and the economic dynamics of regional economic blocs, highlighting significant differences in the impacts across various geopolitical blocs. |
| JEL: | C11 C31 E00 F01 F2 F4 F6 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32638&r= |
| By: | Hugo Spring-Ragain (HEIP - Hautes Etudes Internationales et Politiques, Centre d'Etudes Diplomatiques et Stratégique) |
| Abstract: | This paper takes an in-depth look at the complexities and implications of nationalizing foreign companies in the context of international law. The first part defines nationalization and raises the legal, political and economic issues raised by this phenomenon. It highlights the tensions between national and international law, as well as the responsibilities of the host state towards foreign investors and the remedies available to them. The second part explores the implications of nationalization for economic and political stability, as well as the negotiation and arbitration processes between states and foreign investors. It also examines the impact on the host state's international reputation. The third part looks at the use of state ownership in economic warfare, its motivations, strategies and the need for international cooperation to prevent economic tensions and potential conflicts. Finally, the paper presents emblematic case studies of nationalizations, such as those in Bolivia, Russia and Argentina, highlighting the challenges, dynamics and implications associated with this complex phenomenon on the international stage. The case studies offer valuable insights into the different contexts, underlying motivations and consequences for the parties involved, while underlining the importance of careful, transparent management of these processes to minimize conflict and maximize long-term benefits for all concerned. |
| Abstract: | Cet article examine en profondeur les complexités et les implications de la nationalisation des entreprises étrangères dans le contexte du droit international. La première partie définit la nationalisation et soulève les questions juridiques, politiques et économiques que ce phénomène soulève. Elle met en lumière les tensions entre le droit national et le droit international, ainsi que les responsabilités de l'État hôte envers les investisseurs étrangers et les recours disponibles pour ces derniers. La deuxième partie explore les implications de la nationalisation sur la stabilité économique et politique, ainsi que les processus de négociation et d'arbitrage entre les États et les investisseurs étrangers. De plus, elle examine l'impact sur la réputation internationale de l'État hôte. La troisième partie se penche sur l'utilisation de l'actionnariat d'État dans la guerre économique, ses motivations, ses stratégies et la nécessité d'une coopération internationale pour prévenir les tensions économiques et les conflits potentiels. Enfin, le document présente des études de cas emblématiques de nationalisations, telles que celles de la Bolivie, de la Russie et de l'Argentine, mettant en lumière les défis, les dynamiques et les implications associées à ce phénomène complexe sur la scène internationale. Les études de cas offrent un aperçu précieux des différents contextes, des motivations sous-jacentes et des conséquences pour les parties impliquées, tout en soulignant l'importance d'une gestion prudente et transparente de ces processus pour minimiser les conflits et maximiser les bénéfices à long terme pour toutes les parties concernées. |
| Date: | 2024–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04606020&r= |
| By: | Robert Flynn; Britta Glennon; Raviv Murciano-Goroff; Jiusi Xiao |
| Abstract: | This paper examines the impact of rising U.S.-China geopolitical tensions on three main dimensions of science: STEM trainee mobility between these countries, usage of scientific works between scientists in each country, and scientist productivity in each country. We examine each dimension from a “U.S.” perspective and from a “China” perspective in an effort to provide evidence around the asymmetric effects of isolationism and geopolitical tension on science. Using a differences-in-differences approach in tandem with CV and publication data, we find that between 2016 and 2019 ethnically Chinese graduate students became 16% less likely to attend a U.S.-based Ph.D. program, and that those that did became 4% less likely to stay in the U.S. after graduation. In both instances, these students became more likely to move to a non-U.S. anglophone country instead. Second, we document a sharp decline in Chinese usage of U.S. science as measured by citations, but no such decline in the propensity of U.S. scientists to cite Chinese research. Third, we find that while a decline in Chinese usage of U.S. science does not appear to affect the average productivity of China-based researchers as measured by publications, heightened anti-Chinese sentiment in the U.S. appears to reduce the productivity of ethnically Chinese scientists in the U.S. by 2-6%. Our results do not suggest any clear “winner, ” but instead indicate that increasing isolationism and geopolitical tension lead to reduced talent and knowledge flows between the U.S. and China, which are likely to be particularly damaging to international science. The effects on productivity are still small but are likely to only grow as nationalistic and isolationist policies also escalate. The results as a whole strongly suggest the presence of a “chilling effect” for ethnically Chinese scholars in the U.S., affecting both the U.S.’s ability to attract and retain talent as well as the productivity of its ethnically Chinese scientists. |
| JEL: | F22 F6 O3 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32622&r= |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics) |
| Abstract: | Purpose: This study aims to analyze the emergence of a new structural configuration of globalization, with the 2008 global financial crisis serving as the first symptom of this change. By introducing the “Evolutionary Structural Triptych” (EST), this research seeks to understand the basic components of the new evolutionary trajectory of global capitalism post-2008. The study places emphasis on its interdependent and coevolving economic, political and technological dynamic facets. Design/methodology/approach: This research introduces the EST framework, critically contrasting it with conventional understandings in international political economy (IPE) to provide a comprehensive and structured analysis of global developments after 2008. It traces the phases of global capitalism since Second World War, examines the central dynamic dimensions during each evolutionary phase, identifies the basic patterns and delves into the foundational elements of the emerging era of globalization. Findings: The analysis reveals three key findings. First, the emerging restructured globalization indicates a need for a new balance in the contemporary world system; however, this balance cannot be achieved within the architecture of the old system. Second, the new era of globalization necessitates a re-equilibrated approach across different dimensions of geopolitical stability, economic development and innovation. This approach should emphasize sustainability, adaptability, resilience and inclusivity and lean toward responsible, open and organic innovation models for a revamped global structure. Third, while many current IPE theories tend to compartmentalize aspects of the new globalization, the EST advocates for a holistic perspective that integrates politics, economics and technology within the framework of global trends. This perspective bridges existing gaps and offers actionable insights for a dynamic and inclusive global future. Originality/value: The paper presents the EST as a novel analytical instrument in the realm of the modern IPE. This tool uniquely places technology and innovation at the forefront, parallel to economic and political spheres, to comprehend the progression of globalization. In doing so, it highlights the intertwined relationship of these structural dimensions in shaping the future of the subject of the IPE. |
| Keywords: | new globalization; evolutionary structural triptych; international political economy; evolutionary economics; global responsibility; world system phases |
| JEL: | B52 F50 M14 |
| Date: | 2024–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:duthrp:2024_002&r= |
| By: | Hugo Spring-Ragain (HEIP - Hautes Etudes Internationales et Politiques, Centre d'Etudes Diplomatiques et Stratégique) |
| Abstract: | This paper takes an in-depth look at the complexities and implications of nationalizing foreign companies in the context of international law. The first part defines nationalization and raises the legal, political and economic issues raised by this phenomenon. It highlights the tensions between national and international law, as well as the responsibilities of the host state towards foreign investors and the remedies available to them. The second part explores the implications of nationalization for economic and political stability, as well as the negotiation and arbitration processes between states and foreign investors. It also examines the impact on the host state's international reputation. The third part looks at the use of state ownership in economic warfare, its motivations, strategies and the need for international cooperation to prevent economic tensions and potential conflicts. Finally, the paper presents emblematic case studies of nationalizations, such as those in Bolivia, Russia and Argentina, highlighting the challenges, dynamics and implications associated with this complex phenomenon on the international stage. The case studies offer valuable insights into the different contexts, underlying motivations and consequences for the parties involved, while underlining the importance of careful, transparent management of these processes to minimize conflict and maximize long-term benefits for all concerned. |
| Keywords: | Economy, Diplomacy, Nationalization |
| Date: | 2024–04–19 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04615655&r= |