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on International Trade |
| By: | Yea, Sangjun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | The article discusses how geopolitical interests are influencing trade policies and global supply chains, leading to a reevaluation of international relationships. The U.S. and China are specifically highlighted, with the U.S. implementing export controls on semiconductors to prevent China's military advancement, while China responds with its own export restrictions on essential raw materials. Using a game-theoretic model, the study illustrates how countries use export control measures to balance security interests and economic benefits, ultimately impacting the global semiconductor supply chain and production decisions of multinational corporations. |
| Keywords: | export control; global integration; trade policy; global supply chain; China and US |
| Date: | 2024–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2024_022 |
| By: | Sébastien Jean; Kevin Lefebvre |
| Abstract: | This paper investigates the bilateral impacts of antidumping measures, beyond directly targeted products and exporting firms. It focuses on the country whose exports are most exposed to such measures, China. Productlevel analysis shows that export volumes are negatively affected for products similar to a product targeted by an antidumping case, i.e. belonging to the same tariff heading. Using firm-level data, we show that this impact is driven by within-firm contagion: targeted firms not only cut their exports of targeted products, they also reduce significantly their exports of non-targeted products. The decrease is half as large for the latter than for the former, but the total impact on bilateral trade is far larger, because the value of export flows affected by these indirect impacts is ten times larger than the value of directly targeted export flows. In addition, interestingly, this effect is more pronounced for small and private firms. |
| Keywords: | Antidumping;Spillovers;Multi-product firms;China |
| JEL: | F12 F13 F14 F15 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-10 |
| By: | Ibrahim Nana; Rasmané Ouedraogo; Mr. Sampawende J Tapsoba |
| Abstract: | This paper empirically investigates the relationship between uncertainty and trade. We use a gravity model for 143 countries over the 1980-2021 period to assess the impact of uncertainty on bilateral trade. We confirm that, in general, uncertainty has a negative impact on trade. The findings suggest that a one standard deviation increase in global uncertainty is associated with a decline in bilateral trade by 4.5 percent, with fuel and industrial products trade being the most impacted. This negative impact is observed for uncertainty on both sides of the border, with a higher impact of uncertainty from the importing country. The article goes deeper into the analysis and shows that deeper trade integration (horizontal integration) mitigates the negative impact of uncertainty on trade. In contrast, higher participation in global value chains (vertical integration) amplifies the negative effect of uncertainty on trade. We find that geopolitical tensions amplify the deterrent effect of uncertainty on trade. Finally, the result is heterogeneous across income levels, regions, and resource endowment: (a) uncertainty has a negative impact on bilateral trade between Emerging Markets and Developing Economies and Advanced Economies; however, (b) at the regional level, Africa and Europe’s intraregional trade decrease as uncertainty surges. (c) Evidence shows that non-resources-rich countries are more at risk. |
| Keywords: | Trade; Uncertainty; Geopolitics; Global Value Chains; Gravity model |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/139 |
| By: | Leal, Alan (Departamento de Economia, Universidade de São Paulo); Haddad, Eduardo (Departamento de Economia, Universidade de São Paulo) |
| Abstract: | Contingent free trade agreements are an instrument of interaction between countries that is being used more recently. In this paper, we consider the European Union-Mercosur Free Trade Agreement and how this FTA can be used by EU to induce certain land use changes in Brazil. This analysis uses a quantitative trade model and different trade arrangements to test whether these conditional trade agreements accomplish what they originally intend. We find that in the case of the EU-Mercosur FTA, Brazilian Legal Amazon states tend to alternate at seeing reduction of land use. However, for the kinds of trade arrangement, among the ones considered in this paper, welfare seems to increase state-wide. This indicates that even if Brazil concede entering in non-totally free trade agreements, there are trade gains to be obtained. Internally to Brazil, nevertheless, a contingent free trade agreement might create some political instability for the country. Our paper aims to anticipate this political discussion by bringing to the front the fact the any kind of trade agreement will benefit states differently. |
| Keywords: | trade; land use; quantitative spatial model |
| JEL: | F10 |
| Date: | 2024–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:2024_004 |
| By: | Kazuhiro Takauchi (Faculty of Business and Commerce, Kansai University and Graduate School of Economics, Kobe University, JAPAN); Tomomichi Mizuno (Graduate School of Economics, Kobe University, JAPAN); Katsufumi Fukuda (School of Global Studies, Chukyo University and Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN) |
| Abstract: | The type of marginal cost faced by a firm is important when considering the firm's export behavior. However, in the literature, it is frequently assumed that firms have constant marginal costs. By contrast, this paper considers the case in which a firm's marginal cost is increasing, and the firm pays a fixed cost when it exports. We show that an asymmetric trade pattern, whereby one country exports but the other does not, appears in a symmetric two-country two-firm setting. We also show that trade liberalization produces a non-monotonic change in welfare because of reduced transport costs. |
| Keywords: | Increasing marginal cost; Fixed export cost; Transport cost; Trade pattern |
| JEL: | F12 L13 D43 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-21 |
| By: | Aliyu, Shehu Usman Rano; Salissu, Afees; Kale, Oyeyemi |
| Abstract: | This study explores the effect of intra-African migration on total unemployment and youth unemployment. It further distils the effect of intra-African migration on male and female youth unemployment and later employs a two-level estimation approach to determine gravity models of migration using Poisson pseudo maximum likelihood techniques and a 2-stage least squares approach, which is efficient in dealing with endogeneity bias. The results show that income per capita and population size of both origin and destination countries influence intra-African migration. Additionally, regional trade agreements are the main drivers of bilateral migration among African countries, suggesting that an Africa-wide trade agreement such as the African Continental Free Trade Area (AfCFTA) will stimulate migration. The results show a negative and statistically significant relationship between migration and youth as well as with overall unemployment in Africa. However, total unemployment tends to reduce faster than youth unemployment, suggesting that adults and experienced labour will benefit more from the employment opportunities created by the AfCFTA than the youth. In addition, the study finds that intra-African migration tends to reduce female youth unemployment than male youth unemployment. |
| Keywords: | migration, unemployment, AfCFTA, 2SLS, Poisson pseudo maximum likelihood, Africa |
| JEL: | C51 J60 N37 R23 |
| Date: | 2024–04–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121437 |
| By: | Mr. JaeBin Ahn; Chan Kim; Ms. Nan Li; Andrea Manera |
| Abstract: | This paper examines the impact of Foreign Direct Investment (FDI) on knowledge diffusion by analyzing the effect of firm-level FDI activities on cross-border patent citations. We construct a novel firm-level panel dataset that combines worldwide utility patent and citations data with project-level greenfield FDI and crossborder mergers and acquisitions (M&A) data over the past two decades, covering firms across 60 countries. Applying a new local projection difference-indifferences methodology, our analysis reveals that FDI significantly enhances knowledge flows both from and to the investing firms. Citation flows between investing firms and host countries increase by up to around 10.6% to 13% in five years after the initial investment. These effects are stronger when host countries have higher innovation capacities or are technologically more similar to the investing firm. We also uncover knowledge spillovers beyond targeted firms and industries in host countries, which are particularly more pronounced for sectors closely connected in the technology space. |
| Keywords: | Greenfield FDI; Brownfield FDI; cross-border M&A; Inward FDI; Outward FDI; Knowledge spillover; Patent citation; LP-DiD |
| Date: | 2024–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/152 |
| By: | Fontagné, Lionel (Bank of France, CEPII and PSE); Yotov, Yoto V. (Drexel University, ifo Institute) |
| Abstract: | Based on new, disaggregated trade and production data and using established and cutting-edge empirical methods, we find (i) that the gains from European integration are substantial, (ii) albeit heterogeneous across member states and sectors, and (iii) that the cost of strategic autonomy of the Single Market can be offset by deeper, but comparatively modest, integration efforts within the EU |
| Keywords: | European Integration, Trade Costs, Trade Policy, Risky Suppliers |
| JEL: | F10 F14 F16 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2024/25 |
| By: | LEE, Jukwan (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This paper discusses the emergence of climate clubs as a new form of international cooperation to address climate change and its implications for trade policy. Climate clubs are presented as a potential solution to overcome the limitations of multilateral efforts and unilateral climate-trade measures. The paper explores the concept of climate clubs, examines real-world examples like the G7 Climate Club and the Global Sustainable Steel and Aluminum Agreement, and analyzes their potential economic impacts using simulation models. It also presents findings from interviews with domestic industries in South Korea regarding their perspectives on climate clubs. |
| Keywords: | Climate Clubs; trade policy; international cooperation |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2024_019 |
| By: | Chengwei Xu (Graduate School of International Relations, International University of Japan, Japan); Guanie Lim (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | In anticipation of the impending memberships of China, the UK, and Taiwan in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), this paper analyses the three economies’ foreign direct investment (FDI) flows entering the region over the last 20 years. Several findings are noteworthy. Firstly, the UK outinvested China and Taiwan between 1995 and 2008. However, its preponderance has been trimmed in the years after the 2008 global financial crisis. Secondly, UK FDI is largely geared towards Singapore and Malaysia, suggesting the resilience of former colonial ties. FDI from China predominantly enters its immediate neighbours (e.g., Laos, Myanmar, and Cambodia) and those sharing sociopolitical similarities with it (i.e., Singapore and Indonesia). Taiwanese firms invested relatively more in Vietnam and the Philippines, which are adjacent to Taiwan. Thirdly, all three FDI donors invested mostly in the tertiary sector. Nevertheless, relative to China, the UK and Taiwan channelled more of their FDI towards manufacturing activities. The findings could provide essential evidence to understand or anticipate which economy will play a more significant role in the region’s political and economic affairs especially when their CPTPP membership is ratified. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ngi:dpaper:24-05 |
| By: | Lisha Mengge (University of Oxford) |
| Abstract: | This research analyzes the effect of foreign trade on economic performance of the late Qing China. A new dataset of the adjusted Chinese trade series from 1867 to 1913 has been created using the data from the Chinese Maritime Customs. GDP estimations from 1860 to 1912 are from Ma and de Jong's recent study. Foreign trade of China expanded moderately during the |
| Date: | 2024–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:boc:fsug24:14 |
| By: | Countryman, Amanda M.; Litvinov, Valentyn; Kolodiazhnyi, Ivan; Bogonos, Mariia; Nivievskyi, Oleg |
| Abstract: | The war in Ukraine caused export disruptions that jeopardize the availability and affordability of agricultural and food products around the world. This research employs a computable general equilibrium modeling framework to understand the global economic effects of warinduced agricultural export declines under varying success of alternate transport from Ukraine given inability to export through the Black Sea. Results show net global welfare effects ranging from more than $5 billion to nearly $20 billion depending on the success of transport through European Solidarity Lanes. |
| Keywords: | Agribusiness, Food Consumption/Nutrition/Food Safety, International Relations/Trade |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:ags:iatrcp:344185 |
| By: | Dutta, Sourish |
| Abstract: | This article underscores the immense potential for substantial economic growth and development that can be harnessed through effective participation in global value chains (GVCs). It emphasises the role of policymakers in adeptly navigating GVCs, prioritising tasks, exploring different forms of GVC governance, and fostering a conducive environment for foreign investments. By effectively managing power dynamics and supply chain risks, countries can attract valuable foreign investors, enhance market connectivity, and improve infrastructure and services, leading to significant economic growth. The potential benefits of GVC participation are vast, and policymakers can shape the situation by understanding and addressing strategic inquiries, laying the foundation for a prosperous future. Furthermore, the article explores the potential for a country to enhance its involvement in GVCs and progress to more lucrative activities by strengthening existing connections between GVCs and the local economy. By enhancing the capacity of local stakeholders to acquire knowledge, policymakers can play a crucial role in maximising the benefits from GVC spillovers, positively impacting a country's economic development. |
| 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:300530 |
| By: | Hanwei Huang; Kalina Manova; Oscar Perello; Frank Pisch |
| Abstract: | We study the role of firm heterogeneity and imperfect competition for global production networks and the gains from trade. We develop a quantifiable trade model with two-sided firm heterogeneity, matching frictions, and oligopolistic competition upstream. More productive buyers endogenously match with more suppliers, thereby inducing tougher competition among them to enjoy lower input costs and superior performance. Transaction-level customs data confirms that downstream French and Chilean firms import higher values and quantities at lower prices as upstream Chinese markets become more competitive over time, with stronger responses by larger firms. Moreover, suppliers charge more diversified buyers lower mark-ups. Counterfactual analysis indicates that entry upstream benefits high-productivity buyers, while lower matching or trade costs benefit all buyers, with the biggest boost to mid-productivity buyers. All three shocks generate sizeable welfare gains, especially under package reforms. Global production networks thus mediate bigger effects and cross-border spillovers from industrial and trade policies. |
| Keywords: | production networks, global value chains, matching frictions, imperfect competition, gains from trade |
| Date: | 2024–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2020 |
| By: | Naohisa Hirakata (General Manager, Niigata Branch, Bank of Japan (E-mail: naohisa.hirakata@boj.or.jp)); Mitsuru Katagiri (Associate Professor, Faculty of Business Administration, Hosei University (E-mail: mitsuru.katagiri@hosei.ac.jp)) |
| Abstract: | This paper investigates the role of foreign direct investment (FDI) in accounting for the long-term trend of capital flows under demographic changes. For this purpose, we incorporate horizontal FDI under the proximity-concentration trade-off into a two-country DSGE model and conduct a quantitative analysis using long-term Japanese data for capital flows since the 1960s. The quantitative analysis finds that the transition dynamics solely driven by demographic changes well account for the long-term trend of capital flows and that multinational firms' endogenous decision on FDI in response to population aging is key to explaining the long-term trend. |
| Keywords: | Capital flows, Demographic changes, Foreign direct investment (FDI) |
| JEL: | F12 F23 F32 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:24-e-05 |
| By: | Wannaphong Durongkaveroj |
| Abstract: | Developing countries have greatly benefited from globalization, coinciding with economic growth and structural transformation. Standard trade theory postulates that trade openness contributes to poverty alleviation directly by changing factor proportions of production and indirectly through the trickledown effect of growth. Existing multi-country studies using the trade-to-GDP ratio to measure openness often fail to find a direct effect of openness on poverty over and above the growth-poverty nexus. This paper is motivated by the concern that failure of these studies to detect the effectiveness of the factor proportion channel may be due to limitations of the commonly used measure of trade openness, the trade-to-GDP ratio. Using a newly constructed index of trade openness, which I dub ‘the price convergence index’ (PCI), I find significant direct effect of openness on poverty reduction. The results also suggest that the impact of growth on poverty is greater for countries with more open trade regimes. |
| JEL: | F13 F14 F15 F43 I30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pas:papers:2024-7 |
| By: | Meister, Moritz (Institute for Employment Research (IAB), Nuremberg, Germany ; Kiel University) |
| Abstract: | "This paper investigates the causal effect of global value chain (GVC)-related trade on the German labor market during the COVID-19 crisis, using a difference-in-differences approach combined with entropy balancing. The analysis of monthly establishment-level data from January 2019 to December 2021 shows that a one standard deviation increase in GVC-related trade with China leads to an increase in short-time work of up to 27 percentage points, with significant positive effects observed from May to October 2020. For this period, the regression results imply that a one standard deviation increase in GVC integration gives rise to an additional expenditure on short-time work of around 7.3 billion euros. In contrast, GVC-related trade with the whole world as a trading partner does not show a significant impact. Additional survey data support these findings, suggesting that establishments that are more GVC-integrated with China face more difficulties in obtaining inputs or dealing with suppliers in 2020." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation |
| JEL: | C22 C23 D57 F16 F61 |
| Date: | 2024–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202410 |
| By: | Lee, Jaeyoon (Korea Institute for Industrial Economics and Trade); Tak, Eun-myeong (Korea Institute for Industrial Economics and Trade); Kim, Jeong-Hyun (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Climate-conscious trade norms are rapidly taking root worldwide, transforming the trade environment andfueling uncertainty in the steel industry. This new trade paradigm presents a significant challenge to the Koreansteel industry, the country’s largest emitter of greenhouse gases (GHGs). With the European Union (EU)having finally adopted a Carbon Border Adjustment Mechanism (CBAM) after years of rumor and speculation, Korean steelmakers — and particularly those with businesses exporting carbon-intensive steel — mustbrace for the impact of the CBAM and other carbon regulations. While the introduction of the CBAM poses threatens steelmakers who rely heavily on exports to the EU(particularly of steel plates), the CBAM also creates new opportunities for market participants. In this paper, we analyze the potential impacts of the CBAM on Korean steel exports and imports. Assuming the currentexport basket and carbon intensity levels remain unchanged, initially the CBAM is likely to erode the marketshare of Korean steel in Europe. But it could also create space for Korean producers to capture demanddisplaced from competitors even less prepared for the new regulatory regime. This effect is likely to intensifyafter 2030 as the CBAM’s carbon reduction measures tighten. The evolving landscape in the Europeanmarket may also see increased competition from steel producers in China as well, with implications forKorea’s own domestic market. The path forward for the Korean steel industry lies in embracing green steelmaking. This necessitates swiftand decisive action from Korean decisionmakers, who ought to immediately begin implementing a roadmapfor achieving net zero in steelmaking, enhancing the competitiveness of Korean steel and navigating theincreasingly uncertain trade environment. Broad-based support from both the government and society isnecessary to ensure that Korean steelmakers are equipped to effectively compete with their internationalrivals backed aggressive state investments in green technologies. |
| Keywords: | Korea; EU; Carbon Border Adjustment Mechanism; CBAM; steel; steel industry; steelmaking; green steel; hydrogen reduction; manufacturing; emissions; greenhouse gases; GHGs; KIET |
| JEL: | F13 F51 F53 L61 Q52 Q55 Q56 Q58 |
| Date: | 2024–03–29 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:2024_004 |
| By: | Rodrigo Adão; Arnaud Costinot; Dave Donaldson; John Sturm |
| Abstract: | A prominent explanation for why trade is not free is politicians’ desire to protect some of their constituents at the expense of others. In this paper we develop a methodology that can be used to reveal the welfare weights that a nation’s import tariffs implicitly place on different groups of society. Applied in the context of the United States in 2017, this method implies that redistributive trade protection accounts for a significant fraction of US tariff variation and causes large monetary transfers between US individuals, mostly driven by differences in welfare weights across sectors of employment. Perhaps surprisingly, differences in welfare weights across US states play a much smaller role. |
| Keywords: | International trade; Trade policy; Political economy |
| JEL: | D60 D70 F10 F00 |
| Date: | 2024–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedmoi:98573 |
| By: | Aliyu, Shehu Usman Rano |
| Abstract: | The study investigates the influence of intra-African trade on Africa's macroeconomic performance. To mitigate potential biases, the paper employs a two-step estimation technique (2SLS). In the first step, the paper uses Poisson pseudo maximum likelihood (PPML) to estimate the gravity model for intra-African trade. In the second step, the paper uses the 2SLS instrumental variable (IV) estimator to estimate the macroeconomic models. The paper fills a gap in the literature by considering macroeconomic indicators that were previously overlooked, such as inflation, financial market development, and human capital development. In addition to the commonly considered factor, real GDP per capita, the study also captures recent periods between 1990 and 2022. Findings based on the PPML model show that in addition to the real GDP per capita and regional trade agreements (RTAs), the distance between importing and exporting countries, though counterintuitive, significantly affects intra-African trade, whereas sharing the same colonial history and speaking the same language do not necessarily increase trade in the continent. Further, the 2SLS estimates show that intra-African trade exerts a robust positive impact on Africa's GDP per capita, has a modest effect on financial market development, and dampens inflation over the study period. Accordingly, the paper underscores the need for effective implementation of the African Continental Free Trade Area (AfCFTA protocols) to realise the full potential impact of intra-African trade on income, financial development, and reduced inflation in the continent in the medium to long term. |
| Keywords: | AfCFTA, intra-African trade, macroeconomic performance, Poisson pseudo maximum likelihood (PPML), 2SLS instrumental variable (IV) estimator |
| JEL: | C26 F13 F42 F43 |
| Date: | 2024–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121436 |
| By: | Bao, Alex; Bontems, Philippe; Cardebat, Jean-Marie; Chiappini, Raphael |
| Abstract: | This study examines how exporters make export decisions when faced with production and demand shocks. Using a unique dataset of French wine shipments from 2001 to 2020 across 134 Protected Denomination of Origin (PDO) regions, and daily weather data from M´et´eo-France, we employ gravity estimations to show that extreme weather affects both trade intensive and extensive margins, while favorable weather boosts them. A heterogeneity analysis reveals that exports to core markets are less sensitive than peripheral markets to extreme weather, indicating market prioritization by exporters. Our theoretical analysis explains how climate-induced production shock volatility shapes export behavior, leading firms to reallocate resources to most attractive markets and streamline their destination markets portfolios by exiting less favorable ones. |
| JEL: | F12 F18 Q18 Q56 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129521 |
| By: | Joyce P. Jacobsen (Hobart and William Smith Colleges, and Wesleyan University); Sooyoung A. Lee (Department of Economics, Hobart and William Smith Colleges) |
| Abstract: | A literature has developed in labor economics regarding employer discrimination and how it may be detrimental to firms, particularly firms operating in more competitive sectors. A second literature in international trade considers the effects of import competition and export orientation on gender employment and earnings gaps. Finally, factors affecting firm survival have been increasingly studied as more panel data have become available for firms. We unite these diverse literatures and test several pertinent hypotheses from them using a 2005-2018 panel of Vietnamese firms. We find that firms with higher proportions of female labor are more likely to survive, controlling for other firm-level and industry-level characteristics, and that exporting and foreign- owned firms have higher proportions of female labor. We also examine earnings and women-run firms to consider other dimensions of firm gendering and their effects on firm survival. |
| Keywords: | Vietnam, gender discrimination, trade competition |
| JEL: | D22 F16 J16 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:wes:weswpa:2024-009 |
| By: | Dan Xie |
| Abstract: | Real manufacturing output increased rapidly in China from 1998 to 2012 while sulfur dioxide (SO2) pollution emissions grew at a much lower rate. To study the reasons for this, I focus on the contributions of environmental policy, trade liberalization, and other factors linked to China’s development process. Using China’s entry into the World Trade Organization and the 11th Five-Year Plan as policy shocks, the difference-in-differences analyses show that these policies effectively reduced firm-level pollution intensity. The change in pollution is primarily driven by within-sector firm heterogeneities rather than industry structural change toward less polluting sectors. Finally, the counterfactual analysis based on a quantitative model reveals that environmental regulations play a major role in reducing pollution and the implicit pollution tax faced by firms grew substantially over the period. In addition, tariff cuts due to trade liberalization reduce variable costs of trade and allow firms to abate pollution more. |
| Keywords: | international trade, China, Environmental regulation, Pollution emission |
| JEL: | L60 Q56 F68 F18 Q58 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:wpaper:y:2024:m:07:i:198 |
| By: | Congressional Budget Office |
| Abstract: | The number of people entering the United States has increased sharply in recent years. Most of the increase comes from a surge in people whom CBO categorizes as other foreign nationals. On the basis of pre-2020 trends, CBO would have expected the net immigration of people in that category to average around 200, 000 per year. In the agency’s projections, the net immigration of other foreign nationals exceeds that rate by a total of 8.7 million people over the 2021–2026 period. |
| JEL: | F22 F66 J11 J15 J61 |
| Date: | 2024–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:cbo:report:60165 |
| By: | Ahmad, Wasim; Chahal, Rishman Jot Kaur; Rais, Shirin |
| Abstract: | This study examines the impact of the coronavirus pandemic on the economic integration of the ASEAN-6 region. The study finds that the coronavirus pandemic's impact can be easily traced using stringency, bilateral exports, and tourist arrivals, indicating a significant implication for the economic integration process. The firm-level analysis suggests that though the coronavirus outbreak's impact has caused uniformly to firms, the effect varies across ASEAN-6 nations. The pandemic strongly impacts large firms. |
| Keywords: | coronavirus pandemic; firm-level data; market integration; networks; Covid-19; coronavirus |
| JEL: | F15 F23 D85 |
| Date: | 2022–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124068 |
| By: | Kelsey J. O'Connor |
| Abstract: | The immigrant (foreign-born) population increased by 32 million in total across 37 European countries from 1990 to 2019. Much of this movement was from east to west. Indeed, both the total and foreign-born populations declined in the former Eastern Bloc over this period. Such demographic shifts could be expected to affect both the immigrant destination and origin countries in diverse ways. However, we find no evidence of positive or negative impacts on aggregate subjective well-being, among both the destination and origin countries. Immigrants, in contrast, experienced increased well-being, converted to monetary terms, in excess of £25, 000 per person. Previous research had reduced scopes, e.g., covering destination countries or impacts on income only. We offer more comprehensive evidence, in terms of country and period, and by assessing impacts on subjective well-being, which implicitly includes all of the factors perceived to be important to people, both economic and non-economic. |
| Keywords: | immigration, emigration, migrants, life satisfaction, happiness |
| JEL: | I31 J15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1461 |
| By: | OECD |
| Abstract: | This paper highlights recent trends on FDI screening to safeguard essential security interests and merger control mechanisms while exploring the relationship between investment and competition policies. It was prepared as a background note for discussions on “The Relationship between FDI Screening and Merger Control Reviews” held at the November 2022 joint session of the OECD Competition Committee and the OECD Investment Committee. |
| Date: | 2022–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:oec:dafaac:287-en |
| By: | Andreas Baur; Lisandra Flach |
| Abstract: | In February 2024, the ifo Institute conducted a representative firm survey on import relations with China. The survey results suggest significant changes compared to a previous survey conducted immediately before the outbreak of the war in February 2022. The share of German manufacturing firms that rely on important inputs from China has fallen from 46 percent in February 2022 to 37 percent in February 2024. Similar declines can be observed in wholesale (2024: 35 percent, 2022: 44 percent) and retail trade (2024: 36 percent, 2022: 43 percent) The share of firms that plan to reduce their imports from China has also fallen considerably and is at 38 percent in manufacturing (2022: 45 percent) Increasing political uncertainty has become one of the main reasons for plans to reduce imports from China (65 percent), alongside firms’ general diversification efforts (80 percent) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_57 |
| By: | Zi Wang; Xingcheng Xu; Yanqing Yang; Xiaodong Zhu |
| Abstract: | We propose a deep learning framework, DL-opt, designed to efficiently solve for optimal policies in quantifiable general equilibrium trade models. DL-opt integrates (i) a nested fixed point (NFXP) formulation of the optimization problem, (ii) automatic implicit differentiation to enhance gradient descent for solving unilateral optimal policies, and (iii) a best-response dynamics approach for finding Nash equilibria. Utilizing DL-opt, we solve for non-cooperative tariffs and industrial subsidies across 7 economies and 44 sectors, incorporating sectoral external economies of scale. Our quantitative analysis reveals significant sectoral heterogeneity in Nash policies: Nash industrial subsidies increase with scale elasticities, whereas Nash tariffs decrease with trade elasticities. Moreover, we show that global dual competition, involving both tariffs and industrial subsidies, results in lower tariffs and higher welfare outcomes compared to a global tariff war. These findings highlight the importance of considering sectoral heterogeneity and policy combinations in understanding global economic competition. |
| Keywords: | Deep Learning; Tariff Wars; Industrial Policies; Optimal Policies; Nash Equilibria; Best-response dynamics; Quantitative Trade Models |
| JEL: | F12 F51 C61 C63 |
| Date: | 2024–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-781 |
| By: | Dutta, Sourish (Vivekananda Institute of Professional Studies-Technical Campus) |
| Abstract: | This article underscores the immense potential for substantial economic growth and development that can be harnessed through effective participation in global value chains (GVCs). It emphasises the role of policymakers in adeptly navigating GVCs, prioritising tasks, exploring different forms of GVC governance, and fostering a conducive environment for foreign investments. By effectively managing power dynamics and supply chain risks, countries can attract valuable foreign investors, enhance market connectivity, and improve infrastructure and services, leading to significant economic growth. The potential benefits of GVC participation are vast, and policymakers can shape the situation by understanding and addressing strategic inquiries, laying the foundation for a prosperous future. Furthermore, the article explores the potential for a country to enhance its involvement in GVCs and progress to more lucrative activities by strengthening existing connections between GVCs and the local economy. By enhancing the capacity of local stakeholders to acquire knowledge, policymakers can play a crucial role in maximising the benefits from GVC spillovers, positively impacting a country's economic development. |
| Date: | 2024–06–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2gvkc |
| By: | Kim, Jongduk (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Koo, Kyonghyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Gusang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Hyuk-Hwang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This study investigates the role of Korean investors' outward foreign direct investment (OFDI) in the U.S. as a conduit for knowledge spillovers. Specifically, we focus on the impact of M&As and patent acquisitions on the innovation activities of acquiring firms, and the subsequent financial performance of both the acquirers and their domestic partners (vendors) within supply chains. The findings are as follows: First, the M&A investments in the U.S. firms have played a role in facilitating knowledge spillover from the U.S. to Korea, as shown by an increase in the cumulative number of backward patent citations after such deals. Second, the patent quality of Korean acquirers significantly explains variations in their domestic financial performance. Notably, the relationship between U.S. patent citations and financial performance strengthens in magnitude and significance when considering citations from earlier periods, especially within high-tech industries. Third, The U.S. patent quality of acquirers in high-tech is also positively correlated with the financial performance of their domestic first-tier suppliers. It appears that it takes an additional one to two years for U.S. patent quality improvement of Korean acquirers to translate into the financial performance of parent companies in Korea. Finally, policy Implication. The fact that it takes some time for innovation gains to be realized by domestic firms and to spill over to other related domestic agents in supply chains highlights the need for support policies to focus on improving performance over the medium to long term rather than the short term. |
| Keywords: | outward FDI; innovation acitivity and financial performance; Korea |
| Date: | 2024–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2024_021 |
| By: | Hammoud Gallego, Omar |
| Abstract: | Most countries across the globe introduce visa restrictions to regulate immigration, yet little is known about their effect on migrants’ decision to migrate and their well-being. I study the mass displacement of Venezuelan nationals, and through a difference-in-differences research design, I compare the effectiveness of introducing visa restrictions in reducing overall migration flows in certain countries across South America. I use a data set of 85, 000 migrants and refugees - mostly Venezuelans - surveyed by the UNHCR. Findings suggest that visa restrictions increased the likelihood of irregular entry and irregular visa status for migrants while also leading to changes in their priorities. Unexpectedly, I do not find evidence of increased violence suffered by migrants who switch towards irregular entry channels in specific countries. This research contributes to the academic and policy debate on the effectiveness of visa restrictions on migratory flows, as well the literature on the effects of migration policies on migrants’ well-being. |
| Keywords: | migration; forced displacement; visa restriction; Venezuala; South America; borders; Elsevier deal |
| JEL: | F22 O15 R23 |
| Date: | 2024–07–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124093 |
| By: | Marc-Antoine Faure; Bárbara Polo Martin; Fabio Cremaschini; César Ducruet |
| Abstract: | Conflicts, whether political, commercial or military, affect transport networks. Operators seek to avoid the most tense areas or reconsider certain routes. Certain links can be disrupted in case of local geopolitical tensions, which can have a significant global impact. The article is devoted to studying Ukraine’s maritime network and identifying changes in these structures because of the conflict that started in 2014. The purpose of the paper is to measure and visualise the main changes in the Ukrainian seaport system and maritime forelands from 2010 until the most recent data available (December 2023), from a network models, bilateral trade and route simulation framework. The principal results confirm the huge impact of military conflict on port connectivity, thereby contributing to the recent literature on shipping network vulnerability. |
| Keywords: | Black Sea, Complex networks, Shipping Trade, Russian-Ukrainian War |
| JEL: | F14 F51 R40 L91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-24 |
| By: | Mehdi Abbas (PACTE - Pacte, Laboratoire de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - UGA - Université Grenoble Alpes) |
| Abstract: | Cette note de recherche analyse le nouveau mécanisme d'ajustement carbone aux frontières (MACF) de l'Union européenne pour questionner sa pertinence du triple point de vue de l'efficacité climatique, de la politique commerciale et de la stratégie de gouvernance globale de l'UE. On formule l'hypothèse que le MACF est porteur d'une gouvernance polydimensionnelle qui en explique la portée et les limites. |
| Keywords: | Union européenne multilatéralisme gouvernance climat-énergie-commerce gouvernance polydimensionnelle mécanisme d'ajustement carbone aux frontières économie politique internationale de la décarbonation transitions écologique-énergétique internationale, Union européenne, multilatéralisme, gouvernance climat-énergie-commerce, gouvernance polydimensionnelle, mécanisme d'ajustement carbone aux frontières, économie politique internationale de la décarbonation, transitions écologique-énergétique internationale |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04626238 |
| By: | Blaise Gnimassoun; Carl Grekou; Valérie Mignon |
| Abstract: | Premature deindustrialization in most emerging and developing economies is one of the most striking stylized facts of the recent decades. In this paper, we provide solid empirical evidence supporting that the choice of a fixed exchange rate regime accelerates this phenomenon. Relying on a panel of 146 developed, emerging, and developing countries over the 1974-2019 period, we show that fixed exchange rate regimes have had a negative, significant, and robust effect on the size of the manufacturing sector —developing countries being the most affected by the industrial cost of such a regime. Additional gravity model regressions show that the impact of fixed regimes passes through the trade channel. In particular, this regime has kept countries with low relative productivity in a state of structural dependence on imports of manufactured products to the detriment of the emergence of a strong local manufacturing sector. |
| Keywords: | Exchange Rate Regimes;(De)industrialization;Manufacturing;Developing Countries;Emerging Economies |
| JEL: | E42 F43 F45 F6 O14 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-07 |
| By: | Elkerbout, Milan (Resources for the Future); Nehrkorn, Katarina (Resources for the Future) |
| Abstract: | Climate policies that interact with international trade tend to have some administration linked to the quantification of carbon intensities in traded goods. Administrative costs—and transaction costs more broadly—can undermine trade or raise costs for society. As climate-and-trade policies, such as border adjustment mechanisms, gain in popularity, the potential for burdensome red tape also increases, especially for countries that have less developed carbon-accounting policies. “Interoperability” of carbon intensity quantification is shorthand for the ability of nations to design trade-related climate policies without creating barriers to trade in terms of administrative costs. Pursuing interoperability is a way to limit transaction costs and improve policy efficiency. Interoperability in the context of climate-and-trade policy does not mean trying to harmonize policies. Countries understandably adopt policy designs that fit their national political and economic circumstances. Interoperability should be seen more as a bottom-up process that leads to gradual alignment on methodologies and processes while allowing countries to pursue distinct policy goals and designs.The potential for administrative burdens to harm trade is well recognized. Brexit provided an almost ideal natural experiment in what happens when administrative complexity in conducting trade suddenly increases. It has led to an overall reduction in trade volumes between the European Union and the United Kingdom, and some small parties decided to stop trading altogether. Conversely, reducing barriers to trade that arise from different standards and processes (i.e., technical barriers to trade) can boost trade more than tariff reductions do.Quantifying carbon intensities involves measurement, calculation, or both. The carbon intensity of a product is often the result of a specific production process, so some of the quantification is linked to facilities. Industrial facilities are often already regulated under carbon policies. How to move from facility-based to product-level carbon accounting is one challenge in achieving interoperability.Similarly, carbon-accounting policies often come with distinct system boundaries—that is, the boundary of a production process or value chain within which greenhouse gases will be counted. These system boundaries often make sense for a domestic policy, but comparability between carbon-accounting systems using different system boundaries can be challenging. Examples include whether to include the emissions associated with consumed electricity and heat (“Scope 2” emissions) or exchanges of waste heat between industrial facilities. Under US and EU facility-level reporting (the Greenhouse Gas Reporting Program and EU Emissions Trading System, respectively), only Scope 1 emissions—the direct emissions from sources controlled by the firm—are counted, whereas environmental product declarations typically require reporting of the entire life-cycle emissions. Upstream issues such as methane leakage and emissions linked to mining are another example. Ideally, policymakers should agree on technical indicators and methodological approaches that do not impinge on the political aims of a policy, but for which mutual recognition might be feasible. Even if some broader carbon-accounting standards, guidelines, and initiatives already exist with the GHG Protocol and within the International Standardization Organization, interoperability becomes more challenging when addressing product-level accounting, reconciling significant policy differences, involving dissimilar countries. We suggest that policymakers consider the following issues as they incrementally build interoperability:Distinguish between the technical and the political. Some climate policies have goals for innovation, security or competitiveness that do not strictly target emissions reductions. This is likely to be reflected in policy design.Confidentiality and trust matter. Some data required to quantify carbon intensities is sensitive corporate data. Companies need to have trust that this data will be handled safely, both vis-à-vis competitors and regulators.Product-level carbon intensity disclosure is not yet common. Broadening carbon-accounting systems’ focus to facilities and basic and intermediate industrial goods would aid comparability and interoperability.Anticipate the challenges posed by developments in decarbonization, for example, hydrogen, carbon capture and sequestration, and mass-balancing A method for estimating a product’s carbon intensity when dealing with energy and material inputs of varying carbon intensities. accounting issues. As economies progress towards net-zero, new carbon accounting and interoperability challenges will arise—anticipate them and discuss them before they become critical.Variety is a fact of life in the climate policy world. The Paris Agreement and UN Framework Convention on Climate Change itself are based on nationally determined contributions and assume that countries move at different speeds. The potential of decarbonization technologies differs widely among regions, and the industrial clusters of the past may not be the same in the future. Hence, the pursuit of interoperability should not become a straitjacket that constrains domestic climate policy action.Perhaps the most important question to be answered in the short term—once policymakers and stakeholders agree on its importance in the first place—is where the discussion should be pursued. Of the many candidates, two organizations stand out: the Organisation for Economic Co-operation and Development (OECD) and the International Energy Agency. Both have the technical capacity to analyze and compare industrial processes, methodologies, and policies. With its Inclusive Forum on Carbon Mitigation Activities, the OECD seems to have a good setup. What is needed, however, is a truly inclusive forum where emerging and developing countries participate on equal footing. These countries potentially have the most to lose from transaction costs, and their domestic climate policy approaches tend to look different from those of countries that have the greatest incentive to pursue climate and trade policies. |
| Date: | 2024–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-11 |
| By: | Park, Byungyul (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The “Self-Reliant India” initiative is India’s national vision for fostering the manufacturing industry. It presents a multifaceted approach to enhancing the country’s manufacturing sector and alleviating the country’s chronic trade deficits. In implementing the policy provisions of this overarching strategy, the government has actively promoted designated manufacturing sectors through production-linked incentives (PLIs) to attract investment while at the same time shielding these industries from global competition with trade remedies and import restrictions. As the recent elections saw Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) cling to power, the government is likely to continue these and other efforts to rectify the country’s lopsided balance of payments and realize its vision of a self-reliant India. For one, India is expected to expand the scope of industries and products eligible for PLIs. In August 2023, the government announced that it would provide PLIs for information technology (IT) hardware, including laptop, tablet, and desktop computers, as well as servers. Later this year, toys, textiles, and steel should join the list of eligible products. This means that the central government may attempt to curb imports to protect these newly PLI-boosted industries. The government in fact tried to do so in the IT hardware sector in August2023, announcing that it would restrict imports going forward, but quickly canceled the policy following backlash from the United States and other major industry players. But the government seems poised to try to curb imports of IT hardware again this year. Furthermore, India is likely to invoke safeguards, such as tariff rate quotas and the lesser-duty rule, to guard against spikes in steel imports. As India’s industries continue to modernize, Korea needs to present it with a model of what a mutually beneficial partnership looks like in order to maintain productive ties with the world’s fastest-growing economy. Korean policymakers need to prioritize establishing channels of communication through which they can quickly identify India’s needs and develop corresponding models of industrial cooperation. |
| Keywords: | India; Self-Reliant India; Make in India; manufacturing; industrial policy; Production-Linked Incentives; PLIs; Narendra Modi; Bharatiya Janata Party; BJP; protectionism; trade barriers; economic security |
| JEL: | L50 L52 L53 L60 L61 L63 |
| Date: | 2024–03–29 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:2024_003 |
| By: | MARTINEZ CILLERO Maria (European Commission - JRC); BIANCARDI Daniele (European Commission - JRC) |
| Abstract: | This note presents the latest trends in the investment behaviour of multinational enterprises, focusing on non-EU (foreign) investors. It looks at merger and acquisition (M&A) deals and other equity investments of at least 10% of capital of the target company in the EU, as well as at greenfield projects. A detailed overview of deals and greenfield projects corresponding the quarters 2 and 3 of 2023 is provided, including both quarterly and yearly comparisons. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136907 |
| By: | Martin Bodenstein; Pablo A. Cuba-Borda; Nils M. Gornemann; Ignacio Presno |
| Abstract: | We propose a model with costly international financial intermediation that links exchange rate movements to shifts in the demand for domestically produced goods relative to the demand for imported goods (trade rebalancing). Our model is consistent with stylized facts of exchange rate dynamics, including those related to the trade balance, which is typically overlooked in the literature on exchange rate determination. In a quantitative assessment, trade rebalancing explains nearly 50 percent of exchange rate fluctuations over the business cycle, whereas exogenous deviations from the uncovered interest rate parity—the primary source of exchange rate fluctuations in the literature—account for just above 20 percent. Using data on trade flows or the trade balance is key to properly identifying the determinants of the exchange rate. Thus, our model overcomes the sharp dichotomy between the real exchange rate and the macroeconomy embedded in other models of exchange rate determination. |
| Keywords: | Exchange Rates; Risk Sharing; Financial Intermediation; Trade Balance |
| JEL: | F31 F32 F41 |
| Date: | 2024–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1391 |
| By: | Hayes, Rachel M. (David Eccles School of Business, University of Utah); Silvers, Roger (European Corporate Governance Institute (ECGI)) |
| Abstract: | This paper studies cross-border mergers and acquisitions, finding that cooperation and institutional features are key determinants of economic outcomes in global integrated markets. |
| Keywords: | cross-border cooperation, M&A, regulatory networks, institutions, enforcement, legal frictions |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2024/23 |
| By: | FUJII Kojiro; MUROMACHI Shunya |
| Abstract: | In order to operationalize the DFFT initiative promoted by the Japanese Government, it is important how government access to data held by the private sector is disciplined. In the EU GDPR, an interpretation and practice has developed that protection from government access in third countries is a prerequisite for cross-border data transfers. At the international level, the Declaration on Government Access to Personal Data Held by Private Sector Entities was adopted at the OECD. In addition, some trade agreements include provisions to promote the free flow of data while ensuring the protection of personal data. On the other hand, in promoting the free flow of data, it is also important from the perspective of effective law enforcement to ensure appropriate and effective government access, including the collection of electronic evidence located not only in the country's own territory, but also at the destination of the cross-border transfer. In this regard, the US CLOUD Act provides a framework for executive agreements on cross-border data disclosure requests for the purpose of countering crime. This could be a means of ensuring the effectiveness and propriety of cross-border government access to data between like-minded countries. In light of these trends, this paper explores the future directions for cooperation among like-minded countries that will allow for the operationalization of DFFT with a focus on government access. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:24018 |
| By: | Faccio, Sondra |
| Abstract: | FDI contracts, especially in the extractive industry, increasingly feature investor obligations on sustainable development, with the aim of maximizing the contribution of FDI to sustainable development and attenuate its negative impacts. This Perspective illustrates some investor obligations on sustainable development contained in FDI contracts, discussing what are their benefits and how to make them more effective. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:300629 |
| By: | Bontems, Philippe; Cheikbossian, Guillaume; Hafidi, Houda |
| Abstract: | This paper focuses on the welfare effects of domestic and international lobbying in the context of two countries linked by both trade and pollution. We consider a reciprocal-markets model where, in each country, a domestic firm produces a polluting good, that can result in a cross-national environmental externality, and competes in quantities in each market with a foreign firm. Each government independently sets a pollution tax under political pressure from green and industrial lobbies `a la Grossman and Helpman (1994). Our results mainly show that political pressure from domestic and/or international lobbies can help mitigate tax competition between the two countries, resulting in an improvement in social welfare. In fact, lobbying acts much like a strategic delegation device by changing the social welfare weights in the objective function of each government. The (potential) welfare-improving effect of political pressure depends on the relative strengths of the lobbies and on the nature of the strategic interactions in taxes. |
| Keywords: | Lobbying; transboundary pollution; international trade; international politics; environmental tax |
| JEL: | D72 F12 F18 Q58 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129516 |
| By: | OECD |
| Abstract: | This paper discusses the extent to which, and how, government subsidies could be part of the competition analysis by competition authorities. For this, it identifies the potential competition concerns of subsidies – predominantly “deep pockets” and potential subsequent predation – and describes their modest role in competition case law to date. It was prepared as a background note for discussions on “Subsidies, Competition and Trade” held at the 2022 Global Forum on Competition. |
| Date: | 2022–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:oec:dafaac:289-en |
| By: | Italo Colantone; Gianmarco I. P. Ottaviano; Tom Schmitz |
| Abstract: | This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy's impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250'000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries. |
| Keywords: | environmental policy, employment, trade, clean air act |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2016 |
| By: | Kher, Priyanka |
| Abstract: | Countries have used outward FDI to benefit their own economies. In the context of evolving global uncertainties and India's development needs, this Perspective argues that it is timely for Indian firms to invest abroad - seeking strategic assets, resources and new markets - and suggests policy measures to support them. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:300561 |
| By: | Guerriero, Arthur Zito; Kapeller, Jakob |
| Abstract: | This paper provides a comprehensive overview of the ongoing debate on global income inequality. It shows that global income inequality is a valuable analytical concept that significantly enhances our understanding of global economic dynamics. By addressing key methodological issues in the measurement of global income inequality, the paper compares different datasets used in the literature and conducts an exploratory analysis of recent trends. This analysis re-evaluates the relative impact of inequality between and within countries and highlights how growth and distributional dynamics in specific countries influence global income inequality. |
| Keywords: | income inequality, globalization, measurement of inequality, convergence |
| JEL: | D31 F01 F60 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:300260 |
| By: | Pablo de la Vega (Fundar & IIE-FCE-UNLP) |
| Abstract: | We analyze the potential economic impacts in Argentina of the European Union Deforestation Regulation (EUDR), which as of January 2025 will prohibit the export to the European Union of certain raw materials and related products if they involve the use of deforested land. A dynamic computable general equilibrium model is used to simulate the impact of such regulation on the Argentine economy. The results suggest that the potential macroeconomic impacts are limited. As a consequence of the EUDR, between 2025 and 2030, GDP would be reduced by an average of 0.46% with respect to the baseline scenario. However, of greater magnitude is the potential environmental impact. Deforested hectares would be reduced by 6.64% and polluting gas emissions by 0.39%. |
| JEL: | C68 F13 F18 F4 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:dls:wpaper:0333 |
| By: | Giovanni Donato (Graduate Institute of International and Development Studies); Cedric Tille (Graduate Institute of International and Development Studies, and CEPR) |
| Abstract: | Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the balance of payments. We use a broad sample of countries to document the heterogeneous evolution of the various components of investment income flows, with a rising role of FDI and equity income, especially in advanced economies. We then assess the impact of various variables on yields with a panel analysis. Various drivers have highly heterogeneous effects across investment categories and country groups, often impacting the yields on both assets and liabilities. This translates into substantial heterogeneity in the response of countries’ income balance, due to different compositions of asset and liabilities. This heterogeneity is amplified if we consider country-specific estimates in complement to the panel ones. Focusing on the impact of changes in interest rates, we find that higher rates only had a limited impact in the 2013 taper tantrum, investment income balances are likely to benefit from higher US rates in the current phase of higher rates, with offsetting effects of higher domestic rates. |
| Keywords: | Financial integration; primary investment income flows; interest rates; ex-change rates |
| JEL: | F32 F36 F40 |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:gii:giihei:heidwp13-2024 |
| By: | Tom Schmitz (School of Economics and Finance, Queen Mary University of London and CEPR); Italo Colantone (Baffi-Carefin Research Centre, Bocconi University, CESifo and Fondazione Eni Enrico Mattei); Gianmarco Ottaviano (Baffi-Carefin Research Centre, Bocconi University, CEP, CEPR and IGIER) |
| Abstract: | This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy’s impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250’000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries. |
| Keywords: | Environmental Policy, Fine Particles, Clean Air Act, Employment, Trade |
| JEL: | E24 Q50 Q53 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.10 |
| By: | Pedro Elosegui (Banco Central de la República Argentina); Gabriel Michelena (MESi-Universidad de Buenos Aires); Marcos Herrera Gómez (CIANECO-CONICET/Universidad Nacional de Río Cuarto) |
| Abstract: | Multi-regional input-output (MRIO) matrices are an important tool for regional economic analysis, but compiling the data for them remains challenging, especially in developing countries like Argentina. There is no consistent, up-to-date, official national I-O table available for Argentina, and data at the provincial level is limited and fragmented across different sources. This paper develops a premier (limited information) multi-regional input-output matrix for Argentina 2019 making a dual contribution: (i) constructing the first MRIO table for Argentina using official and customized sources, and (ii) evaluating I-O multipliers, providing insights for future applications. The MRIO table includes 5 regions aggregating the 24 Argentinean provinces and 20 economic sectors. While only basic multipliers are presented the table provides a foundation for more in-depth input-output modeling and analysis of production, consumption, and trade linkages between regions and sectors in Argentina. We found a high concentration in the provinces of the Pampeana region in gross output, value added and regional internal inputs, although less in external inputs, confirming the asymmetric structure of the country. In addition, the analysis of multipliers allows us to detect some relevant links in the peripheral regions reflecting the interaction of spatial location and sector specialization in a federal and heterogeneous open developing economy. |
| Keywords: | MRIO tables; input–output analysis, regional trade |
| JEL: | C67 D57 R15 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:332 |
| By: | Callahan, William A. |
| Abstract: | While many use rational IR theory to explain Chinese foreign policy behavior, this paper follows global IR to employ interpretivist theory to examine how Chinese elites understand their country's role in the world. In particular, it explores the Chinese global order ideas of socialism, tradition, and nation through a comparative analysis of how they work in China-Russia relations, especially after China's 20th Communist Party Congress in 2022. The first section presents a critical analysis of the realist understanding of the China-Russia-U.S. strategic triangle. It argues that the socialist concept of "united front work"better explains Chinese (and Russian) policy in terms of short-term "tactical triangles."To probe China's long-term global order ideas, the second section explores narratives of tradition to examine the concentric circles model of global order seen in Chinese tianxia and Russian Eurasianism. To understand these competing Russocentric and Sinocentric global orders, the third section explores how each country's official historiography highlights narratives of the nation and especially how national rejuvenation requires correcting the "national humiliation"of lost territories. Rather than see these narratives in a linear chronological history - i.e., from tradition to socialism to nationalism - this paper considers how they overlap in socialism, tradition, and nation, a non-linear dynamic triad of global order ideas. It concludes first that further research is necessary to examine the interrelation of these three narratives: while nation and tradition are often employed to support the overarching narrative of socialism in recent years, this could certainly change. The conclusion then argues that while these narratives may be coherent theoretically, they have not been very successful in achieving Beijing and Moscow's foreign policy objectives. |
| Keywords: | China; interpretivism; global order; socialism; foreign affairs; Russia; British Academy’s Chinese Global Orders project (2023–2025 |
| JEL: | B14 B24 P2 P3 |
| Date: | 2023–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:119417 |
| By: | Laroche Dupraz, Catherine |
| Abstract: | Can global food security be achieved by implementing food sovereignty strategies at different geographical scales? After distinguishing between food autonomy and food sovereignty, we show that the concept of food sovereignty alone does not provide an answer to the problem of inter-scale coherence, since the choices made by some territories could restrict the freedom of choice of others. Several projections make it possible to identify arrival points that are compatible with the objective of global food security, while respecting the limits of planetary resources, climate change and damage to biodiversity, they indicate the implications of respecting these conditions at national or sub-national territorial levels. However, much work remains to be done on the methodology to be adopted to ensure that regional strategies converge towards the same desirable future. |
| Keywords: | Agricultural and Food Policy, Institutional and Behavioral Economics, International Relations/Trade |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:ags:inrasl:344136 |