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on International Trade |
| By: | Kerola, Eeva; McCully, Tuuli; Nuutilainen, Riikka |
| Abstract: | Over the past twenty years, China has become the world's largest trading nation and a significant trading partner for most countries. Despite these important links, concerns regarding China's commercial and diplomatic goals persist due to its unique state-centric economic structure. This paper applies an augmented gravity model to tease out drivers of China's bilateral trade relationships, asking why some countries are more important than others as sources of Chinese imports. Our results show that both business and political considerations drive China's import decisions. Political friendliness with China, as measured by UN General Assembly voting records, or established trade agreements, has a positive impact on exports to China. The results further suggest that countries with official diplomatic ties with Taiwan export less to China. Membership in China's Belt and Road Initiative, however, does not generally translate into a significant increase in Chinese imports from the member country. |
| Keywords: | gravity model, international trade, China |
| JEL: | C23 F14 F15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitp:302570 |
| By: | DESEATNICOV, Ivan; Fukao, Kyoji; HAYAKAWA, Kazunobu; ITO, Keiko; KUCHERYAVYY, Konstantin |
| Abstract: | In this paper, we address the ongoing debate on technological decoupling by examining the effect of US export controls and China’s import tariffs on trade. By creating a detailed mapping between the products under the US export controls and 10-digit HS codes of US export products, we analyze the differences in US export reductions to China compared to other countries in 2017-2021. Contrary to expectations, we find no evidence that US export controls have led to a decrease in exports to China; in fact, these exports are either neutral or tend to increase relative to other countries. Additionally, our research indicates that China's imposition of additional import tariffs will likely diminish US exports to China. |
| Keywords: | Export regulation, Trade, Tariffs, Technological decoupling, United States, China |
| JEL: | F15 F53 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hituec:756 |
| By: | Yea, Sangjun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Eom, Jun Hyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Seungrae (Hankuk University of Foreign Studies); Jung, Yeonha (Sung Kyun Kwan University) |
| Abstract: | 본 보고서에서 수출규제란 국가가 특정 목표를 달성하기 위한 수단으로 자국의 수출 흐름에 제약을 가하는 정책을 의미한다. 본 보고서에서는 수출규제 정책의 역사적 사례를 살펴보고, 현대 수출규제 정책의 유형과 각 유형에 관한 법적 근거를 제시하며, 수출규제 정책 시행이 가치사슬과 공급망에 미치는 영향을 실증적ㆍ이론적 분석 방법을 통해 살펴본다. 본 보고서는 수출규제 정책에 관한 이해를 제고하고, 우리 기업과 정부가 외국의 수출규제 정책에 대응하는 전략을 수립할 때 참고할 만한 기초자료를 제공하는 것을 목적으로 한다. For the purposes of this study, export measures refer to the general policies by which a country imposes restrictions on the flow of its exports as a means of achieving certain objectives. Modern export measures can be broadly categorized into export restrictions, export controls, and economic sanctions based on their objectives, targets, and underlying laws. The number of export measures imposed by governments has increased in all three categories in recent years. Understanding the impact of export measures along global supply chains, where companies are intertwined in complex trading relationships, is an essential step in developing policy responses to achieve the goal of supply chain stabilization. This study aims to improve the overall understanding of export measures by examining the background and economic effects of export measures, an area which has received relatively little attention in the literature on international trade, and the changes in supply chains as a result of export measures. In Chapter 2, we examine some of the most prominent examples of export measures dating back to the Industrial Revolution, examining the policy objectives they sought to achieve, the extent to which they actually helped to achieve those objectives, and the circumstances under which they were successful as policy instruments. We also examine several studies analyzing the economic effects of export measures in the post-Cold War era, and suggest recommendations for implementing and responding to export measures. (the rest omitted) |
| Keywords: | export measures; global supply chain; export restrictions; export controls; economic sanctions; global value chain |
| Date: | 2023–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieppa:2023_021 |
| By: | Daria Suprunenko (Osnabrueck University) |
| Abstract: | Geographic neighbors of sanctioned countries (targets) may suffer from indirect effects of sanctions or benefit by helping targets circumvent restrictions. I study the effects of sanctions on trade among neighbors and targets using data from BACI for 2002–2022 and separately accounting for export of sensitive goods: arms, dual use goods and machinery. I find that export of dual use goods (in value) and machinery (in value and weight) from benevolent neighbors to targets increases when sanctions are in place. Additionally, I show that the weight of arms exported by neighbors to Iran, as well as value of dual use goods and weight of machinery exported to Russia were significantly higher with sanctions in place suggesting that their neighbors were not innocent bystanders. |
| Keywords: | Trade sanctions, extraterritorial effects, trade |
| JEL: | F13 F51 |
| URL: | https://d.repec.org/n?u=RePEc:iee:wpaper:wp0123 |
| By: | Konstantin Sommer (Vrije Universiteit Amsterdam and University of Amsterdam) |
| Abstract: | We study the implications of the Chinese waste import ban of 2018 on intra- European plastic waste trade. Specifically, we ask if it led to a “waste haven†effect, which would imply that countries with high disposal and recycling costs started to export more plastic waste to countries with lower costs. We study this question in a gravity difference-in-differences setting with detailed data on the costs of waste processing. We find strong evidence that countries with higher costs of disposal indeed started to export more waste towards lower cost countries as a result of this ban. We do not find consistent evidence that more waste was exported to countries with lower recycling costs. Our results raise distributional questions about the allocation of waste externalities in integrated markets and have implications for current debates on the legislation of international waste shipments. |
| Keywords: | Trade, Environment, Waste, Circular Economy, Europe |
| JEL: | F18 Q53 Q27 |
| Date: | 2024–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240053 |
| By: | Sander, Harald (RS: GSBE MSM, RS: GSBE other - not theme-related research, MSM Global Education - Academics); Kleimeier, Stefanie (RS: GSBE MORSE, Finance) |
| Abstract: | Cross-border finance matters for cross-border trade and, hence, the global financial conditions driven by a global financial cycle, in which the U.S. dollar’s nominal effective exchange rate plays a key role. Utilizing empirical gravity models for both trade and finance, we explore the relevance of cross-border loans for bilateral trade. We also detail how a global dollar cycle affects exports both directly and indirectly via a finance-trade channel. In line with the macroeconomic literature, we confirm that also on a bilateral level these effects are particularly strong if one trading partner is an emerging market or developing economy. By developing a finance-augmented trade gravity model, we are also shedding new light on the workings of classical gravity variables, such as physical distance and common borders, but also currency unions and regional trade agreements on the gravity of trade. |
| JEL: | F10 F30 G15 G21 |
| Date: | 2024–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2024012 |
| By: | Nebenführ, Miriam |
| Abstract: | Wissenschaftler untersuchen seit langem den Einfluss institutioneller Faktoren des Gastlandes auf Standortentscheidungen multinationaler Unternehmen für ausländische Direktinvestitionen (FDI). In dieser Studie wird die Beziehung zwischen zwei institutionellen Faktoren, Demokratie und politische Stabilität, und ausländischen Direktinvestitionen anhand eines großen Paneldatensatzes von Sekundärdaten aus den Jahren 2003 bis 2021 empirisch untersucht. Neben der multiplen Regressionsanalyse wird in dieser Studie auch die neue Necessary Condition Analysis (NCA) angewandt. Auf der Grundlage des OLI-Modells von Dunning und der Institutionentheorie ist das Hauptergebnis, dass Demokratie einen signifikant positiven Effekt auf ausländische Direktinvestitionen hat, während politische Stabilität einen signifikant negativen Effekt hat. Außerdem sind beide Faktoren notwendige Bedingungen für ausländische Direktinvestitionen: Länder erhalten keine ausländischen Direktinvestitionen, wenn ein bestimmtes Niveau dieser Faktoren nicht erreicht wird. Die Ergebnisse tragen zum Verständnis bei, wie bestimmte institutionelle Faktoren Entscheidungen über die Ansiedlung ausländischer Direktinvestitionen beeinflussen, und bieten Einblicke in notwendige Bedingungen in der internationalen Wirtschaftsforschung. |
| Abstract: | Scholars have long examined the influence of host country institutional factors on foreign direct investment (FDI) location decisions by multinational enterprises (MNEs). This study empirically examines the relationship between two institutional factors, democracy and political stability, and FDI using a large panel dataset of secondary data covering the years 2003 to 2021. In addition to multiple regression analysis, this study also employs the new necessary condition analysis (NCA). Relying on Dunning's OLI model and institutional theory, the main finding is that democracy has a significantly positive effect on FDI, while political stability has a significantly negative effect. Moreover, both factors are necessary conditions for FDI: Countries do not receive FDI if certain levels of those factors are not reached. The results contribute to the understanding of how certain institutional factors influence FDI location decisions and provide insights into necessary conditions in international business research. |
| Keywords: | Democracy, Institutional Theory, International Investments, Necessary Condition Analysis, Political Stability |
| JEL: | C35 C46 D02 F21 F23 O16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:umiodp:302546 |
| By: | Steven Brakman; Tristan Kohl; Charles van Marewijk; Charles van Marrewijk |
| Abstract: | The availability and composition of labor is fundamental for the structure of international trade. This points towards the importance of demographic transitions that affect trade through, for example, changing capital-labor ratios, urbanization dynamics, or changes in the composition of demand over the life cycle of individuals. Key in this respect is the so-called demographic dividend, which is the potential economic growth stemming from lower dependency ratios. We use the gravity model to link long-run changes of the demographic dividend to changes in the level of world trade for the 21st century. All the scenarios that we distinguish point towards the same conclusion: Compared to the current situation, North America and Europe will no longer be the center of global trade in 2100 due to their aging populations. In contrast, South Asia and Sub-Saharan Africa will experience a substantial increase in their share of world trade throughout the remainder of this century, while the impact of the demographic drag facing China will be most pronounced around 2060. |
| Keywords: | demographic transition, trade, income, gravity model |
| JEL: | F10 J11 O11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11262 |
| By: | Xin Du; Xiaoxia Shi |
| Abstract: | What impact does import competition have on firms' production organizational choices? Existing literature has predominantly focused on the relationship between import competition and firms' global production networks, with less attention given to domestic. We first develop a Nash-bargaining model to guide our empirical analysis, then utilize tariff changes as an exogenous shock to test our theoretical hypotheses using a database of Chinese listed firms from 2000 to 2023. Our findings indicate that a decrease in downstream tariffs lead to an increase in vertical integration. In our mechanism tests, we discover that a reduction in upstream tariffs also enhances this effect. Moreover, the impact of tariff reductions on vertical integration is primarily observed in industries with high asset specificity, indicating that asset-specificity is a crucial mechanism. We further explore whether import competition encourages vertical integration for technological acquisition purpose, the effect is found only among high-tech firms, while it's absent in non-high-tech firms. Our research provides new perspectives and evidence on how firms optimize their production organization in the process of globalization. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.13706 |
| By: | Mavrigiannakis, Konstantinos; Sakkas, Stelios |
| Abstract: | This paper aims at assessing quantitatively the macroeconomic impact of EU sanctions against Russia for the economy of Cyprus. To this end, we use a medium-scale micro-founded DSGE model of a small open economy participating in a currency union like the euro area calibrated to the economy of Cyprus. The model features two sectors of production, namely the tradable and the non-tradable one. In this model, EU sanctions influence the sanctioning economy (i.e. Cyprus) through a mix of foreign shocks that hit in principle the tradable sector. In particular, to mimic the economic environment (namely, how all this started in 2022), we analyze first the effects of an energy-type shock modeled as a standard cost-push shock on imported goods. In turn, we add to this economic environment the impact of policy reactions like EU sanctions against Russia. In this context and given the strong trade ties of Cyprus with Russia we model sanctions as two simultaneous negative exogenous shocks, that is, a temporary decrease in the exported goods reflecting primarily reductions observed in tourism and financial services, and inward foreign direct investment (FDI). Contrary to the mild impacts reported in the literature for the majority of EU countries we find non negligible adverse effects for the economy of Cyprus which range from -1.28% to -3.36% in terms of average output loss in the short run. Given Cyprus’s vulnerable external position we show that the impact of sanctions depend crucially on the degree of tightening financing conditions which are likely to hit particularly more countries with high initial current account deficits and debt stocks. |
| Keywords: | Cyprus; economic sanctions; trade disintegration |
| JEL: | F16 F51 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125336 |
| By: | Görg, Holger; Jäkel, Ina Charlotte |
| Abstract: | In this paper, we investigate whether gender norms and institutions act as a constraint to the performance of female businesses. We exploit novel and unique micro data on start-ups in Denmark, which we combine with information on individual-level characteristics of the entrepreneur as main decision maker of the firm. We overcome the challenge of disentangling norms and institutional biases against women from other constraints and hurdles that female businesses might face by exploiting detailed trade data. In this trade context, we study the relative performance of firms across markets with varying institutions, while controlling for other factors that affect female businesses uniformly across all markets. We provide evidence that gender inequality and institutional biases against women in trade partner countries play an important role in explaining gender differences in export and import behaviour. We also perform an event study of a concrete policy change in a destination market - the introduction of quotas for the share of females on the boards of directors in Norway - and how it has affected the gender gap in trade participation. |
| Keywords: | Gender Inequality, Firm Internationalization, Start-up Performance |
| JEL: | F14 J16 M13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:302556 |
| By: | Mateo Hoyos (Division of Economics, CIDE) |
| Abstract: | This paper documents that the relationship between tariffs and growth varies significantly with economic structure. Using a panel of 161 countries from 1960 to 2019 and employing a local projections difference-in-differences strategy, I show that tariff reductions are associated with higher GDP per capita in manufacturer countries but lower GDP per capita in nonmanufacturer ones. I then reveal that these results are consistent with, and possibly explained by, heterogeneous changes in productivity, capital accumulation, and the manufacturing share of GDP. The heterogeneity is further confirmed by a comprehensive set of robustness checks. The findings suggest that the recent rise in protectionism in manufacturer countries might end up being harmful, and that existing calls for further liberalization in nonmanufacturers could have unintended consequences. |
| Keywords: | tariffs, trade liberalization, trade policy, growth, economic structure |
| JEL: | F14 F63 O24 O47 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:emc:wpaper:dte638 |
| By: | King Abdullah Petroleum Studies and Research Center (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | As shipping has the advantage of being the most cost-effective mode of transportation, it will continue to grow with increasing international trade flows. Therefore, this advantage must be leveraged to achieve the long-term goals of the maritime industry. |
| Keywords: | Alternative fuels, Carbon market, Clean technology, Climate change |
| Date: | 2024–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:prc:wbrief:ks--2024-wb04 |
| By: | Koski, Heli |
| Abstract: | Abstract The data on Finnish patent applications filed at the European Patent Office and the United States Patent and Trademark Office between 2011 and 2021 indicate that foreign inventors and international collaboration have been crucial to Finland’s technological development. Throughout the 2010s, Finnish patent applications have included inventors from 68 different countries, and the share of foreign inventors has steadily increased over this period. In 2021, 60 percent of the patent applications filed involved foreign inventors, with over one-fifth featuring collaboration between both Finnish and foreign inventors. The United States has been Finland’s most important innovation partner, while Germany, Sweden, and China have also played significant roles in the development of patented ideas. When analyzed by technology sector, foreign and internationally based inventors are particularly prominent in ICT-related patent applications. Immigrant inventors contributed to more than one-fifth of ICT patent filings during the review period. In other technology sectors, the involvement of immigrant inventors has also grown, with their share of USPTO patent applications rising from 9 percent to 17 percent, and from 18 percent to 23 percent in EPO applications. |
| Keywords: | Innovations, Patents, Innovation collaboration, Inventors, Immigration |
| JEL: | D23 F22 J61 O3 |
| Date: | 2024–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:138 |
| By: | Gilles Paché (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon) |
| Abstract: | Over the past four decades, the emergence and consolidation of global supply chains has become a widely studied managerial reality. The reference model is that of an interdependent worldwide network, in which the exchange of goods has never been easier and less costly. But are we aware that global supply chains are also the source of the spread of the Asian tiger mosquito, with ever-increasing health risks for populations? This paper sheds light on this dark side of globalisation, which we urgently need to take fully into account. |
| Keywords: | Disease, Global supply chain, Asian tiger mosquito |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04671688 |
| By: | Fourné, Marius; Li, Xiang |
| Abstract: | This study employs bilateral data on external assets to examine the impact of climate policies on the reallocation of international capital. We find that the stringency of climate policy in the destination country is significantly and positively associated with an increase in the allocation of portfolio equity and banking investment to that country. However, it does not show significant effects on the allocation of foreign direct investment and portfolio debt. Our findings are not driven by valuation effects, and we present evidence that suggests diversification, suasion, and uncertainty mitigation as possible underlying mechanisms. |
| Keywords: | capital flows, climate change policy, green investment, international asset allocation |
| JEL: | F21 F36 F64 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:302560 |
| By: | Gimiseve, Harry; Miamba, Nelson; Na’ata, Bartholomew; Dorosh, Paul; Schmidt, Emily; Yadav, Shweta |
| Abstract: | In 2023, Papua New Guinea introduced a partial ban on poultry imports from Australia and Asian countries (representing about 70 percent of total PNG poultry imports) in response to the biosecurity threat posed by Avian Influenza (bird flu). Such a restriction on supply has the potential to lead to sharp price increases, steep reductions in household consumption and greater food insecurity. This memo presents an overview of PNG’s poultry sector and describes an analysis of the ef fects of these trade restrictions on poultry prices, production and consumption using a partial equilibrium model of PNG’s poultry sector. This new analysis builds on earlier work (Dorosh and Schmidt, 2023) that explored the implications of a total ban on poultry imports, by simulating the impacts of a partial poultry ban, including the effects on various household groups within PNG. |
| Keywords: | PAPUA NEW GUINEA; OCEANIA; poultry; imports; biosecurity; avian influenza; supply; prices; household consumption; food security; trade |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:pngprn:13 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study examines the impact of agricultural exports and CO2 emissions on economic growth in 78 high-income countries from 2004 to 2023. Using a robust econometric framework that includes fixed-effects and random-effects models, the research finds that agricultural exports positively influence economic growth by generating revenue and enhancing competitiveness, while CO2 emissions negatively affect growth due to the associated environmental costs. The analysis, supported by the Hausman test and panel data techniques, highlights the need for balanced policy interventions that promote agricultural export growth while mitigating CO2 emissions. This study provides valuable insights for policymakers seeking to achieve sustainable economic development by integrating environmental considerations into economic strategies. |
| Keywords: | Agricultural Exports, CO2 Emissions, Economic Growth, Static Gravity Model, High-Income-Countries. |
| JEL: | F11 F14 O47 Q17 Q18 R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121888 |
| By: | Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Lisa Scheckenhofer; Camille Semelet; Feodora Teti |
| Abstract: | Recent high-frequency data suggest a further strengthening of growth momentum, driven by the ongoing tightness of the labour market and the muted response of credit expansion to last year’s monetary policy tightening. At the same time, the short- and medium-term fiscal outlook has brightened – despite increased military and social spending. On the external front, imports picked up at the end of 2023, but have suffered more recently due to increased payment difficulties – a result of renewed US pressure on banks from third countries dealing with Russia. The effectiveness of trade sanctions crucially hinges on the degree to which missing high-quality Western goods can be replaced with lower-quality products from third countries. Our calculations suggest that in 2023, the share of sanctioned CHP items that Russia was able to obtain ranged from 60% to 170% of the 2021 level, depending on underlying assumptions regarding the extent of the deterioration in quality. |
| Keywords: | economic growth, fiscal situation, foreign trade, sanctions, unit value ratios |
| JEL: | F14 F51 H20 H62 O10 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:wii:rusmon:6 |
| By: | Ventsislavova Georgieva, Daniela |
| Abstract: | Global value chains (GVCs) are a driver of economic transformation and growth of local economies. They are a channel for the dissemination of technological knowledge, entrepreneurial culture and innovation capacity. Global leaders can create opportunities for local producers to improve their position in the supply chain. A large part of Bulgarian enterprises do not participate in such chains. Presently, with Western markets experiencing stagnation, anticipations arise for disruptions within the Bulgarian furniture industry, likely to exert a substantial impact on the GVCs and hence on their innovativeness. The paper aims to outline the current state, trends and challenges ahead of the Bulgarian furniture enterprises, related to achieving innovativeness through participation in GVCs. It is done through a survey of managerial vision and opinion related to achieving innovativeness through participation in such chains. Data from online questionaries distributed among managers of Bulgarian furniture companies between November 2023 and February 2024 is presented. The study of statistical relationships and dependencies is based on the Chi-square test with the program IBM – SPSS Statistics. The study supports the literature concerning the involvement of furniture companies in GVCs |
| Keywords: | global value chain, innovation, furniture enterprises, questionaries |
| JEL: | O1 O10 O30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121809 |
| By: | Elvis K. Ofori (Taiyuan University of Technology, China); Festus V. Bekun (Istanbul, Turkey); Bright A. Gyamfi (Ä°stanbul Ticaret University, Turkey); Ali E. Baba (Ural Federal University, Russia); Stephen T. Onifade (KTO Karatay University, Konya, Turkey); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | The current study thus explored the impact of technological innovation and trade openness on clean energy while accounting for economic growth, access to electricity, pollution, industrial restructuring, and urbanization using data from 1990 to 2020 for both the MINT and BRICS economies. A series of test were performed for a robust analysis using second generation econometrics approaches before proceeding to investigate the long-run linkages between renewable energy and the duo of innovation and trade using the Prais-Winsten regression model with panel-corrected standard errors (PCSE) while the Driscoll-Kraay standard errors test was applied for robustness checks. The results, firstly confirm the presence of heterogeneity, cross-sectional dependence, and cointegration among the selected variables. Secondly, technological innovation as a renewable energy determinant demonstrated negative elasticities in both BRICS countries and the full sample, but a positive elasticity in the MINT countries. Thirdly, concerning trade liberalisation, negative elasticities were obtained for the full sample and MINT countries, while the elasticities were positive for the BRICS bloc. Fourthly, the roles of economic growth and environmental pollution reveal a negative impact on renewable energy consumption for all samples while urbanisation and industrial restructuring promote renewable energy developments only in the BRICS bloc. Policy implications are discussed. |
| Keywords: | Renewable energy, trade liberalization, technological innovation, Prais-Winsten regression |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:agd:wpaper:24/022 |
| By: | Michael A. Clemens (Peterson Institute for International Economics); William R. Kerr (Harvard Business School) |
| Abstract: | The United States depends on highly skilled workers from abroad to help drive economic innovation and dynamism, but it also extensively restricts which of these workers can enter and stay in the country. This Policy Brief proposes comprehensive reform of one lesser-known restriction, the Exchange Visitor Skills List. The US government uses the List to determine which types of high-skill workers, from which countries, have to leave the United States and go back to their home countries for two years after their visitor program ends. The original, admirable purpose of the Skills List was to avoid draining developing countries of scientists, physicians, educators, and other workers with specialized knowledge and expertise. But the current List, crafted to conform with foreign government requests over the past 52 years, is outdated and arbitrary. Clemens and Kerr propose a new system to modernize the Skills List by applying criteria based on various factors, including foreign countries' income level, population size, diaspora size, and departure rate--the number of a country's skilled workers in the United States as a share of those at home. Doing this would reduce the number of high-skill visitors forced to leave the United States by roughly three-quarters--affecting particularly those from the most advanced economies. It would make the US government fully responsible for determining the Skills List under a transparent, predictable, and systematic process that could be frequently updated at low cost. It would better serve the US national interest while supporting sustainable development in migrants' home countries. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb24-8 |
| By: | Cevat Giray Aksoy (European Bank for Reconstruction and Development (EBRD), King’s College London); Barry Eichengreen (University of California, Berkeley); Anastasia Litina (Department of Economics, University of Macedonia); Cem Özgüzel (Organisation for Economic Co-operation and Development (OECD) a); Chan Yu (University of International Business and Economics) |
| Abstract: | Scholars and politicians have expressed concern that immigrants from countries with low levels of political trust transfer those attitudes to their destination countries. Using large-scale survey data covering 38 countries and exploiting origin-country variation across different cohorts and surveys, we show that, to the contrary, immigrants more exposed to institutional corruption before migrating exhibit higher levels of political trust in their new country. Higher trust is observed for national political institutions only and does not carry over to other supra-national institutions and individuals. We report evidence that higher levels of political trust among immigrants persist, leading to greater electoral participation and political engagement in the long run. The impact of home-country corruption on political trust in the destination country is further amplified by large differences in levels of income and democracy between home and host countries, which serve to highlight the contrast in the two settings. It is lessened by exposure to media, a source of independent information about institutional quality. Finally, our extensive analyses indicate that self-selection into host countries based on trust is highly unlikely and the results also hold when focusing only on forced migrants who were unlikely to have been subject to selection. |
| Keywords: | Corruption, Institutions, Immigrants, Political Trust |
| JEL: | Z1 D73 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2024_08 |
| By: | Turati, Riccardo |
| Abstract: | This paper analyzes whether natives with a network abroad have a distinctive cultural stance compared to similar individuals without such connections within the same region. Using individual-level data on connectedness from the Gallup World Poll across 2, 256 within-country regions over 148 countries, it characterizes the cultural stance based on three traits: pro-social behavior, religiosity and gender-egalitarian attitudes. The paper shows that natives who have a connection abroad are characterized by stronger pro-social behavior, religiosity and genderegalitarian attitudes. To address potential biases arising from omitted variables, it controls for an extensive array of individual characteristics and region-by-year fixed effects. The results are also consistent after employing comprehensive measures of connectedness, employing matching techniques, and assessing selection biases related to unobservable factors. Finally, by leveraging both country and individual-level heterogeneity, the analysis indicates that the pro-social behavior stance of connected individuals is fairly consistent across different contexts and individuals, while the findings on religiosity and gender-egalitarian attitudes are more sensitive to local and individual factors. The paper therefore shows that factors enhancing or dampening this relation are cultural trait specific. |
| Keywords: | Cultural traits, Connectedness, Network, Social Remittances, International Migration |
| JEL: | F22 O15 Z10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1488 |
| By: | Könneke, Jule |
| Abstract: | Growing North-South tensions are impeding global climate cooperation and hampering Germany's search for reliable partners. Brazil is a key actor with the potential to alleviate tensions: it sees itself as a bridge-builder and will host the Climate Change Conference in 2025 (COP30). Under their new Partnership for a Socially Just and Ecological Transformation, Germany and Brazil should work to strengthen confidence in the climate negotiations, and more generally to promote effective North-South cooperation. |
| Keywords: | Germany, Brazil, German-Brazilian relations, Partnership for a Socially Just and Ecological Transformation, President Luiz Inácio Lula da Silva, Global North, Global South, climate policy, UNFCCC, COP30 Belém, COP28 Dubai, Global Stocktake, GST, Nationally Determined Contribution, NDC, Global Governance, climate finance, COP (30 : 2025 : Belém) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:302116 |
| By: | Bassetto, Jacopo (University of Bologna); Ippedico, Giuseppe (University of Nottingham) |
| Abstract: | Brain drain is a key policy concern for many countries. In this paper we study whether tax incentives are an effective policy to attract high-skilled expatriates back to their home country, exploiting a generous income tax break for Italian returnees. Using administrative data and a Triple Differences design, we find that eligible individuals are 27% more likely to return to Italy. Additionally, we uncover significant effects throughout the wage distribution, revealing that tax-induced migration is a broad phenomenon beyond top earners. A cost-benefit analysis shows that the tax scheme can pay for itself by targeting young high-skilled individuals. |
| Keywords: | brain drain, tax incentives, return migration, personal income tax |
| JEL: | F22 H24 H31 J61 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17224 |