|
on International Trade |
| By: | Conteduca, Francesco Paolo; Giglioli, Simona; Giordano, Claire; Mancini, Michele; Panon, Ludovic |
| Abstract: | In this work, we analyse the most recent shifts in trade patterns amid increasing ge-oeconomic fragmentation. We document five facts about the recent reconfiguration of global, US and EU trade flows. First, a broad retreat from globalization is not tak-ing place. Second, selective decoupling along geopolitical lines is ongoing, and is driven mostly by the weakening of specific trade relationships. Third, while the US dependency on China has been dropping since 2018, for the EU a decline is visible only in 2023, largely driven by few advanced technology products. Fourth, not all dependencies from China are diminishing. US and EU import shares of selected Chinese goods critical for the green transition have indeed even increased. Fifth, US supply chains from China are lengthening, at least for some production lines, as Chinese products increasingly flow through third countries to reach the US market; for the EU it is too early to tell. In general, micro data for Italy indicate that reduc-tions in dependencies from China may be less significant than those emerging from aggregate data, as some EU hubs are increasingly exporting products originated in China to other EU partners such as Italy. |
| Keywords: | Trade fragmentation; Global Value Chains; Trade policy; International Trade |
| JEL: | F10 F14 |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122657 |
| By: | Ritam Chaurey; Ryan Kim; Pravin Krishna |
| Abstract: | This paper examines how liquidity shocks caused by currency shortages impact exports. We explore this in the context of India’s 2016 currency demonetization, a sudden and unexpected policy announcement by the government that large-denomination currency notes—comprising 86% of the country’s currency in circulation—would cease to be legal tender within hours. Our analysis uses novel data, including high-frequency customs transaction records matched with exporting firms and their balance sheets, as well as with inter-district domestic trade. We develop direct measures of exporting firms’ exposure to cash shortages and indirect measures that act through domestic supply chain networks. While the cash shortages do not directly affect exporting firms, we find a significant and immediate decline in real exports for firms whose domestic customers experience liquidity shocks. These findings underscore the critical role of domestic supply chains in transmitting liquidity shocks to exports. |
| JEL: | E50 F1 F14 O16 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33142 |
| By: | Matthew E. Kahn; Wen-Chi Liao; Siqi Zheng |
| Abstract: | The Trump Administration's tariffs created a wedge between mutually beneficial trades between China's producers and U.S. consumers. Moving production to nearby Vietnam allows firms to jump the tariff wall. Within Vietnam, cities closer to China with respect to distance and industrial mix grow faster and attract more FDI. They are increasingly consuming renewable power to fuel their local economy. We study the local air quality gains and the carbon dioxide emissions reductions associated with the growth in regional trade. China’s regional trade increases have important implications for the rise of the system of cities across Asia. |
| JEL: | F14 R40 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33126 |
| By: | Chu, Angus C.; Furukawa, Yuichi; Peretto, Pietro; Xu, Rongxin |
| Abstract: | Is agricultural productivity conducive to economic development? We develop a two-country open-economy Schumpeterian growth model with endogenous takeoff. With agricultural trade and a subsistence requirement, higher domestic agricultural productivity has ambiguous effects on the economy's takeoff and its transitional growth rate if domestic and imported agricultural goods are substitutes. Without the subsistence requirement, higher domestic agricultural productivity delays industrialization and lowers transitional growth by increasing domestic demand for agricultural labor. This specialization force works in the opposite direction of the change in domestic consumption pattern governed by the subsistence requirement, which tends to release labor from agriculture. Without agricultural trade, the specialization force is absent and the subsistence requirement on agricultural consumption implies that higher domestic agricultural productivity reallocates labor from agriculture to industry, hastening industrialization and raising transitional growth. Using cross-country panel-data, we find that agricultural productivity has a direct positive effect on economic growth but this positive effect weakens and even becomes negative when reliance on agricultural imports is sufficiently high. Simulating the calibrated model, we find that improvement in domestic agricultural productivity accounts for about one-third of the changes in TFP growth in China and Japan, respectively, and more so for their main trading partner, the US. |
| Keywords: | international trade; agricultural productivity; innovation; endogenous takeoff |
| JEL: | F43 O3 O4 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122630 |
| By: | Rafi, Dilara |
| Abstract: | The Middle Corridor, a critical trade route connecting Europe and Asia, has gained importance after geopolitical challenges on the alternative routes, the Northern and Southern Corridors. Azerbaijan plays a strategic role in the Middle Corridor, investing in transport infrastructure and fostering regional cooperation. This paper examines Azerbaijan's efforts to enhance its position as a key global transit hub to strengthen its logistical capabilities, contributing to non-oil sector growth and economic diversification. Through regional partnerships, infrastructure projects, and improved multimodal transport systems, the country aims for capitalizing on its strategic location, further integrating into global trade networks. The paper concludes with recommendations for enhancing Azerbaijan's transit potential, emphasizing the need for digital innovations, regulatory reforms, and increased collaboration with corridor countries and global partners. |
| Keywords: | Middle Corridor, multimodal transport, non-oil sector, economic diversification |
| JEL: | R4 |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122499 |
| By: | Aggarwal, Aradhna |
| Abstract: | This article provides a summary of the recently published book, Special Economic Zones in South Asia: Structural Change, Competitiveness, and Growth (Routledge: London). This book represents the first comprehensive effort to systematically examine the rationale, objectives, design, and outcomes of SEZ policies with a focus on their role in structural change, growth and competitiveness in South Asia. The analysis is based on a mixed-methods approach. One of the highlights of this study is its use of a counterfactual approach at the firm level to evaluate SEZ outcomes, offering an evidence-based assessment of the policy. Through its insights, the book provides valuable lessons and actionable guidance for policymakers and practitioners working with SEZ frameworks. |
| Keywords: | Special economic zones; growth; structural change; competitiveness; South Asia; policy evaluation; investment climate; technology and innovation; knowledge linkages; global value chains; sustainable development |
| JEL: | C31 F13 F23 J53 O32 O43 O53 Q01 R11 R58 |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122671 |
| By: | Celebi, Ismail |
| Abstract: | Increasing high-speed railway planning in Central Europe and the lack of border effect estimations in this region encouraged a border effect study in this region. With rail transport data collected in 2022, border effects in railway transport between six coun- tries were estimated separately by basing on Czechia and Slovakia. Significant border effects were found between these countries and their neighbours, and these effect were estimated ranging from 0.46 to 0.69 for Czechia, and 0.11 to 0.37 for Slovakia. However, no significant border effect was found between Czechia and Slovakia. These findings support arguments about that countries with common language, culture and history have lower border effects. |
| Date: | 2024–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:jqctz |
| By: | Mertens, Matthias (MIT); Schoefer, Benjamin (University of California, Berkeley) |
| Abstract: | We document and dissect a new stylized fact about firm growth: the shift from labor to intermediate inputs. This shift occurs in input quantities, cost and output shares, and output elasticities. We establish this fact using German firm-level data and replicate it in administrative firm data from 11 additional countries. We also document these patterns in micro-aggregated industry data for 20 European countries (and, with respect to industry cost shares, for the US). We rationalize this novel regularity within a parsimonious model featuring (i) an elasticity of substitution between intermediates and labor that exceeds unity, and (ii) an increasing shadow price of labor relative to intermediates, due to monopsony power over labor or labor adjustment costs. The shift from labor to intermediates accounts for one half to one third of the decline in the labor share in growing firms (the remainder is due to wage markdowns and markups) and rationalizes most of the labor share decline ingrowing industries. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17461 |
| By: | KATTEL Rainer; SOETE Luc |
| Abstract: | European policymakers face difficult trade-offs when aiming to increase economic growth and industrial competitiveness, stepping up efforts in green and digital economies, and coming to terms with new security realities requiring increased investments. As European and several national elections in 2024 have shown, this is not an easy circle to square. This paper makes an argument for the European Union to develop a coherent and overarching approach to security investments aligned with the current green and digital agendas and based on a broadening of two of Europe’s unique, long-standing policy frameworks. The first is the area of research and innovation policy, where the nature of the multi-level governance between the EU and its Member States has been one of “shared parallel competence”, implying that EU Member States can carry out national science and research policies in parallel to the EU. This institutional set-up offers the opportunity to broaden, in a relatively straightforward way, the current European Research and Innovation Area (ERA) into a European Defence Research and Innovation Area (EDRIA). The second framework is the EU’s regional, so-called cohesion policy, which could be described as Europe’s “secret” weapon. The integration of security issues into European regional policies represents, in the current insecure international geo-political environment, a logical, new expression of intra-regional European solidarity, and offers the opportunity to enlarge current cohesion policy towards a European territorial security policy. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139401 |
| By: | Uysal, Sezgin (Masaryk University); Celebi, Ismail |
| Abstract: | The study focuses on the temporal differences (30 years on average) between ethnic groups migrating from the Austro-Hungarian Empire to the U.S. between 1850 and 1910. In our study, we argue that the main factor that led to differences in the timing of emigration was the differences in regional economic development of different ethnic groups living in different regions of the Empire. Migration costs: before the 1864 introduction of steam engine technology in transatlantic maritime transport, emigration costs were not affordable for Hungarians and Slovaks due to the sea and land voyage high ticket prices. Therefore, with more resources, Austrians and Czechs could afford to migrate earlier. However, after the introduction of steamship technology and the technological change in ship engines, travel became more affordable due to reduced ticket prices, faster voyages, and increased capacity. This allowed Hungarians and Slovaks from poorer regions to begin migrating in larger numbers as migration became economically feasible. In this study, we utilise a complete count of the U.S. Census records from 1900 and 1910 (Helgertz et al., 2023; Ruggles et al., 2021), which Integrated Public Use Microdata Series (IPUMS). On the other hand, we utilise economic indicators, which are regional daily wage, GDP per capita income and living standard data for the Austria-Hungary Empire from Cvrcek (2013) and Schulze (2000). |
| Date: | 2024–11–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:7vfxn |