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on International Trade |
| By: | Acharya, Rohini; Parajuli, Thakur |
| Abstract: | This paper examines the evolution of global merchandise trade, between 2010 and 2022, assessing the share of imports subject to regional trade agreements (RTAs). A key question for us is whether the share of merchandise trade subject to preferences has kept pace with the proliferation in RTAs. The paper finds that with the growing number of RTAs over the period, the share of the total volume of global imports involving RTA partners increased from 37% in 2010 to 52% in 2022. However, potential preferential imports between them under RTAs remained relatively stable, rising slightly from almost 17% in 2010 to 23% in 2022. Moreover, we find that on average 80% of global imports which do not fall under RTA preferences continued to dominate global merchandise trade between 2010 and 2022. Using tariff-line level import data for 157 customs territories and their RTAs, we find that, to a large extent, an increase in MFN duty-free imports globally has limited the scope of preferential imports under RTAs, highlighting the continued significance of MFN principles in international trade. |
| Keywords: | WTO, RTAs, Preferential Trade, MFN Trade |
| JEL: | F13 F14 F15 F53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:311210 |
| By: | Caselli, Mauro; Traverso, Silvio |
| Abstract: | This study examines whether trade competition from low-wage countries (LWCs) can influence immigration patterns in an advanced economy. We focus on Italy between 2003 and 2013, a period characterized by rising market pressure from China and Eastern Europe. Using census data on sectoral employment, administrative records on immigrants by nationality, and disaggregated bilateral trade data, we investigate whether heightened import competition acted as a pull factor for migrant workers at the local labor market level. To identify the exogenous component of these trade shocks, we adopt a shift-share instrumental variable strategy, while disaggregating immigrant data by nationality allows us to control in detail for the role of local networks and for bilateral push and pull factors. Our findings indicate that trade competition from LWCs significantly increased local immigrant shares. We hypothesize, and provide indirect evidence, that firms under competitive pressure tried to cut labor costs by relying on a more flexible, lower-paid workforce, primarily composed of foreign workers. |
| Keywords: | Import competition, International migration, Trade shocks, Italy |
| JEL: | F14 F16 F22 J61 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1562 |
| By: | Angella Faith Montfaucon; Socrates Kraido Majune |
| Abstract: | The paper examines whether firms in global value chains (GVCs) participate more in green trade relative to non-GVC firms and tests whether importing green goods leads to exporting green goods. We find that imports of green goods far exceed exports, signaling that trade currently serves more as an access to green technologies with limited exports of these products. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:b987176c-c365-47ae-a083-0e62da34ae28 |
| By: | Antoine Bouët; Anthony Edo; Charlotte Emlinger |
| Abstract: | We investigate the local effects of trade exposure and immigration on voting behavior in France from 1988 to 2022. We use the content of each candidate's manifesto to construct an anti-globalization voting index for each French presidential election. This index shows a significant increase in the anti-globalization positions of candidates, and a growing anti-globalization vote beyond the far right. We show that increasing local exposure to import competition and immigration increases anti-globalization votes, while increasing export exposure reduces them. We also find that imports have different effects depending on the products imported. While exposure to imports of final goods increases anti-globalization voting, exposure to imports of intermediate goods reduces it. |
| Keywords: | Voting;Trade;Immigration;Political Economy |
| JEL: | D72 F6 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-12 |
| By: | Antoine Bouët; Leysa Maty Sall; Yu Zheng |
| Abstract: | Using the MIRAGE-Power model, we simulate a trade war initiated in 2025 by the new US administration. The central scenario consists in a 60 percentage point tariff increase on all US imports from China, a 10 percentage point tariff increase on all products from other partners, except Canada and Mexico, and reciprocal tariff retaliation. World GDP and world trade decrease respectively by 0.5% and 3.4% in volume, with significant losses for the US and China, and gains for Canada and Mexico. A substantial reallocation of bilateral goods trade flows is taking place at global level. Additional scenarios show that: details of the tariff reform matter; the discriminatory tariff treatment of China benefits other trading partners; trade retaliation increases US economic losses; if Non-Tariff Measures are included in this trade war, the consequences are worse; if Canada and Mexico are included in the trade war, both experience significant losses in terms of GDP and trade. Last, we show that the US will not be able to replace the federal income tax with tariff revenues, even with a revenue-maximizing tariff. |
| Keywords: | US Trade Policy;Tariff;Trade Retaliation;Computable General Equilibrium Models |
| JEL: | F13 F14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-03 |
| By: | Antoni Estevadeordal (GU - Georgetown University [Washington], Institut Barcelona d’Estudis Internacionals); Gaston Nievas (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We study the determinants of international cooperation and its effect on trade. We rely on a unique database of 31, 982 International Cooperation Agreements (ICAs) signed between 1945-2022 by 193 countries. Estimating bilateral gravity equations, we find that trade follows the flag: ICAs increase bilateral exports by around 1-3%, with stronger effects for South-South relations. We address potential endogeneity through panel approach and an instrumental variable that exploits the network structure of international relations. Further, using LPM we find that gravity forces explain country pairs entering an ICA. Importantly, we find that ICAs serve as stepping stones towards Regional Trade Agreements, confirming a previous step in Balassa (1961) theory of economic integration. Our results shed new light on the international relations-trade nexus and contribute to the current debate on friendshoring. |
| Keywords: | International cooperation agreements, International trade flows, Regional trade agreements, Gravity equation |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721902 |
| By: | Andreas Baur (ifo Institute and LMU Munich); Florian Dorn (ifo Institute and LMU Munich); Clemens Fuest (ifo Institute and LMU Munich); Lisandra Flach (ifo Institute and LMU Munich) |
| Abstract: | We analyze how non-aligned countries affect welfare outcomes in scenarios of global trade fragmentation. Using a quantitative trade model covering 141 countries and 65 economic sectors, we simulate different scenarios of geoeconomic fragmentation. We find that major non-aligned countries benefit from their neutral position, with welfare gains of up to 0.7%. Their manufacturing sectors particularly benefit under incomplete fragmentation, experiencing value added gains of 2.5%, while agriculture and services face modest declines. These gains turn into significant losses if they join either the Western or Eastern trade bloc. Moreover, world welfare losses increase from -1.9% under incomplete fragmentation to -2.7% when non-aligned countries join the West and to -3.7% when they join the East. Our results highlight the strategic importance of non-aligned countries in mitigating the negative effects of global trade fragmentation. |
| Keywords: | trade policy; gains from trade; global value chains; quantitative trade models; general equilibrium; |
| JEL: | F11 F13 F15 F17 F51 |
| Date: | 2025–02–11 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:526 |
| By: | Douglas A. Irwin |
| Abstract: | The decision by developing countries to open up their economies to foreign trade and investment in the 1980s and 1990s was a momentous event in world history. How and why did this trade policy revolution take place? Most accounts of trade politics stress domestic interest groups or trade agreements as driving policy changes, but these explanations fail in this period. This paper notes that many import restrictions were imposed for balance of payments purposes, as a way of avoiding a devaluation and protecting foreign exchange reserves from depletion under fixed exchange rates. A shortage of foreign exchange in the mid-1980s led countries, under the guidance of economists, to adopt more flexible exchange rate arrangements that boosted export earnings and made import controls unnecessary for payments balance. Like during the Great Depression, the exchange rate regime was a key factor behind a country’s trade policy. |
| JEL: | F13 F31 F68 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33426 |
| By: | Charlotte Emlinger; Karine Latouche |
| Abstract: | This article examines the impact of firms' quality policies on export performance. Using French administrative data at the employee and firm level, we assess the level of firms' commitment to issues related to product reliability and safety through the presence of quality management personnel. We merge these data with French customs data, which provide the value and quantity of exports for each firm by product and destination. We show that firms with quality management employees have better market penetration, export higher volumes and have longer trade relationships, especially in markets with high standards requirements (higher number of sanitary and phytosanitary or technical measures). Overall, our paper highlights the role of agri-food firms' "quality investment" in export performance and emphasizes that product quality is not limited to product differentiation perceived by the final consumer. Product traceability and reliability are essential factors for firms' competitiveness, especially in the context of global value chains. |
| Keywords: | Quality Management;Trade Margins;Trade Duration;Non-tariff-Measures |
| JEL: | F14 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-01 |
| By: | Andrea Ariu |
| Abstract: | This paper analyzes the growth of trade in business services with a particular focus on Ghana. The main factor underlying this growth is the improved capacity to export business services, which is likely to be accounted for by an impressive inflow of foreign companies attracted by the economic and political conditions, together with the establishment of the Secretariat of the African Continental Free Trade Area in the country. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:bc0371ce-575e-4167-b05d-c8be02c19a65 |
| By: | Dorothee Hillrichs; Anita Wölfl |
| Abstract: | This EconPol Report sheds light on the global supply of semiconductors. Our analysis of value-added data for the US underscores the importance of semiconductors for advanced economies. Using global trade data and an extensive list of semiconductor-related goods, we provide a detailed description of the global semiconductor economy. We show that while final chip exports have been dominated by Taiwan, China, and Korea at an aggregate level since the early 2010s, export leadership varies substantially across chip types. Moreover, we identify nine core countries in North America, Europe, and Asia that dominate semiconductor-related trade including material inputs and equipment. The nine countries exhibit substantial mutual trade dependencies due to the fragmentation of semiconductor production. Against the backdrop of a rise in policy interventions affecting semiconductors since 2021, we end this report by flagging open questions about the economics of semiconductor production. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpr:_54 |
| By: | Xiwen Bai; Jesús Fernández-Villaverde; Yiliang Li; Le Xu; Francesco Zanetti |
| Abstract: | We examine the rise of dark shipping – oil tankers disabling AIS transceivers to evade detection – amid Western sanctions on Iran, Syria, North Korea, Venezuela, and Russia. Using a machine learning-based ship clustering model, we track dark-shipped crude oil trade flows worldwide and detect unauthorized ship-to-ship transfers. From 2017 to 2023, dark ships transported an estimated 7.8 million metric tons of crude oil monthly – 43% of global seaborne crude exports – with China absorbing 15%. These sanctioned flows offset recorded declines in global oil exports but create distinct economic shifts. The U.S., a net oil exporter, faces lower oil prices but benefits from cheaper Chinese imports, driving deflationary growth. The EU, a net importer, contends with rising energy costs yet gains from Chinese demand, fuelling inflationary expansion. China, leveraging discounted oil, boosts industrial output, propagating global economic shocks. Our findings expose dark shipping’s central role in reshaping oil markets and macroeconomic dynamics. |
| Date: | 2025–02–10 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1070 |
| By: | Gideon Ndubuisi; Solomon Owusu |
| Abstract: | This paper examines the effect of global value chain (GVC) participation on firm job growth volatility and the role of product quality in shaping this relationship. We find robust evidence suggesting that embeddedness in GVC reduces firm volatility, especially for firms that produce and export higher-quality products in the value chain. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:9705d6c4-3a3e-4eb9-b4d7-ed909f8ebd4c |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Francesca Micocci (IMT - School for Advanced Studies Lucca); Armando Rungi (IMT - School for Advanced Studies Lucca) |
| Abstract: | This paper introduces a causal machine learning approach to investigate the impact of the EU-Canada Comprehensive Economic Trade Agreement (CETA). We propose a matrix completion algorithm on French customs data to obtain multidimensional counterfactuals at the firm, product and destination levels. We find a small but significant positive impact on average at the product-level intensive margin. On the other hand, the extensive margin shows product churning due to the treaty beyond regular entry-exit dynamics: one product in eight that was not previously exported substitutes almost as many that are no longer exported. When we delve into the heterogeneity, we find that the effects of the treaty are higher for products at a comparative advantage. Focusing on multiproduct firms, we find that they adjust their portfolio in Canada by reallocating towards their first and most exported product due to increasing local market competition after trade liberalization. Finally, multidimensional counterfactuals allow us to evaluate the general equilibrium effect of the CETA. Specifically, we observe trade diversion, as exports to other destinations are re-directed to Canada. |
| Keywords: | Free Trade Agreements, International Trade, Causal Inference, Machine Learning, Matrix Completion |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-04913313 |
| By: | Michael Blanga-Gubbay (WTO, UZH - Universität Zürich [Zürich] = University of Zurich); Paola Conconi (University of Oxford, CEPR - Center for Economic Policy Research, CESifo - CESifo, CEP - Center for Economic Performance); Mathieu Parenti (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CESifo - CESifo, CEPR - Center for Economic Policy Research) |
| Abstract: | Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we construct a unique dataset that allows us to identify which firms lobby on Free Trade Agreements (FTAs) negotiated by the United States, their position (in favour or against) and their lobbying effort on the ratification of each trade agreement. Using this dataset, we show that lobbying on FTAs is dominated by large multinational firms, which are in favour of these agreements. On the intensive margin, we exploit exogenous variation across FTAs to show that individual firms put more effort supporting agreements that generate larger potential gains -larger improvements in their access to foreign consumers and suppliers and smaller increases in domestic competitionand that are more likely to be opposed by politicians. To rationalise these findings, we develop a new model of endogenous lobbying on trade agreements. In this model, heterogeneous firms select into trade and choose whether and how much to spend lobbying on the ratification of an FTA, and politicians may be biased in favour of or against the agreement. |
| Keywords: | Trade agreements, Endogenous lobbying, Heterogeneous firms |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04777509 |
| By: | Irina Balteanu (BANCO DE ESPAÑA); Katja Schmidt (BANQUE DE FRANCE AND OECD); Francesca Viani (BANCO DE ESPAÑA) |
| Abstract: | Highly concentrated imports can be a source of vulnerability in an environment characterized by geopolitical tensions. In light of this concern, some recently adopted policies aim to dilute advanced economies’ import concentration for key products. Likewise, a tendency towards supplier diversification has been observed in firm surveys. In this paper, we study how countries’ import concentration in a few external providers affects import prices. Import concentration decreased in OECD countries in the last two decades, especially up to the global financial crisis, in the hyper-globalization period. For EU countries, integration in the single market was crucial to foster diversification also beyond the hyper-globalization years. Yet, for a number of strategic goods, imports tend to be more concentrated in geopolitically distant providers. Panel regression analysis based on granular trade data at the country-product level shows that high import concentration is associated with higher import prices, which supports the view that strongly concentrated markets correspond to low levels of competition. This effect tends to be more pronounced when a supplier country’s perceived market power is strong, i.e. for goods whose production is highly concentrated at the global level or for those that a country cannot (fully) produce by itself. The positive relationship between import concentration and import prices is less pronounced in high-technology industries, consistent with the notion that in these sectors a high concentration is also related to the presence of cost-efficiency effects owing to economies of scale. Exclusive trade relations, i.e. those in which the importer sources a product from one provider only, are associated with lower import prices and could therefore be costlier to break. |
| Keywords: | trade dependencies, import concentration, import prices, market concentration, economies of scale, globalization, critical products |
| JEL: | F6 F14 F15 E31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2503 |
| By: | Thierry Mayer (Institut d'Études Politiques [IEP] - Paris, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPR - Center for Economic Policy Research); Hillel Rapoport (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPR - Center for Economic Policy Research, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, LISER - Luxembourg Institute of Socio-Economic Research); Camilo Umana-Dajud (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique) |
| Abstract: | Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. We document the increasing complexity of Free Trade Agreements and develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether these are included in dispute settlement mechanisms. We show that provisions facilitating business travel are effective in promoting them and eventually increase bilateral trade flows. The paper provides (indirect) evidence of the role of face-toface interaction on aggregate bilateral trade flows. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721181 |
| By: | Ural Marchand, Beyza (University of Alberta) |
| Abstract: | This paper examines the impact of imports from developed countries on industry-specific employment in India between 1983 and 2010. The identification strategy relies on comparing differential changes in import exposure across regions to the differential changes in employment within industries. The variation in the changes in imports to other developing countries is used to identify the component of the changes in imports driven by world demand. The results suggest that the increase in import exposure during the post-liberalization period reduced agricultural employment but increased employment in manufacturing, business, and social services. No significant impacts were found in the pre-liberalization period. |
| Keywords: | Imports, International Trade, Employment |
| JEL: | F16 J21 J23 O33 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17656 |
| By: | Boschma, Ron; Hernández-Rodríguez, Eduardo; Morrison, Andrea; Pietrobelli, Carlo (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn) |
| Abstract: | This paper combines insights from the literatures on Global Value Chains (GVC), Economic Complexity and Evolutionary Economic Geography to assess the role of GVC participation and regional capabilities in fostering economic complexity in EU NUTS-2 regions. Our results suggest there is no such thing as a common path towards economic complexity across EU regions. Low-income regions manage to benefit from both regional capabilities and GVC participation. In contrast, high-income regions rely more on their existing local capabilities rather than on GVC participation. |
| JEL: | B52 F23 O19 O33 R10 |
| Date: | 2025–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025002 |
| By: | Karim El Aynaoui |
| Abstract: | This paper (see pages: 182-186), included in the report 'Foresight Africa - Top Priorities for the Continent 2025-2030, ' was originally published on brookings.edu In an increasingly fragmented world grappling with common challenges such as the global climate crisis, the Atlantic Ocean can be leveraged for Africa’s climate action, continental integration, contribution to the provision of global public goods, development, improved participation to the global economy, international cooperation, and peace and security. The global context in which this opportunity should be seized is two-pronged. On the one hand, in recent years, geopolitical conflict has blocked multilateral institutions, fueled military expenditures, increased barriers to investment and trade restrictions, and led to a surge in violent deaths and forced displacement. It is against this backdrop that internationalized civil wars in the Great Lakes, Horn, and Sahel regions, the effects of which have often been compounded by climate change, have claimed hundreds of thousands of African lives and displaced millions. Geo-economic fragmentation driven by heightened competition over global influence, technology, and manufacturing jobs and value added adds another layer of complexity. For instance, the disruption of global value chains triggered by the COVID-19 pandemic and the Russia-Ukraine war increased the number of people suffering from acute food insecurity in sub-Saharan Africa by 40 million in 2020-22 alone, giving an indication of Africa’s vulnerability to trade imbalances. On the other hand, nations have also demonstrated increased appetites for entering agreements with each other. Minilateralism and multi-alignment are becoming commonplace. New international coalitions, groupings, fora, and organizations have blossomed on topics such as biodiversity, clean energy, economic cooperation, food security, and technology. In the face of global challenges, the contribution of nations to global initiatives aiming at the delivery of global public goods is an increasingly important aspect of policymaking and smart power... |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:for_182 |
| By: | Amiti, Mary; Duprez, Cedric; Konings, Jozef; Van Reenen, John |
| Abstract: | Using firm-to-firm transactions, we show that starting to supply a ‘superstar’ firm (large domestic firms, exporters and multinationals) boosts productivity by 8% after three years. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of “superstar spillovers”. Consistent with a model of technology transfer, we find bigger treatment effects from technology-intensive superstars and also falls in markups (in order to win superstar contracts). We also show that firms that start supplying superstar firms enjoy a ‘dating agency’ effect — an increase in the number of new buyers that is particularly strong within the superstar firm’s network. Taken together, the results suggest an important role for raising productivity through superstars’ supply chains regardless of multinational status. |
| Keywords: | FDI; productivity; spillovers |
| JEL: | F23 O30 F21 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124676 |
| By: | Neuhoff, Karsten; Sato, Misato; Ballesteros, Fernanda; Böhringer, Christoph; Borghesi, Simone; Cosbey, Aaron; Das, Katsuri; Ismer, Roland; Johnston, Angus; Linares, Pedro; Matikainen, Sini; Pauliuk, Stefan; Pirlot, Alice; Quirion, Philippe; Rosendahl, Knut Einar; Sniegocki, Aleksander; van Asselt, Harro; Zetterberg, Lars |
| Abstract: | Context and problem • The European Union’s Carbon Border Adjustment Mechanism (CBAM) was introduced to prevent carbon leakage, and to incentivise global carbon pricing. The UK is set to introduce a CBAM in 2027 for the same reasons. However, this policy measure will face limitations in a fragmented geopolitical environment if progress on global carbon pricing remains slow. • The reliance on international progress in carbon pricing exposes European climate and industrial policies to external risks, threatening investment certainty and decarbonisation goals. • The current transition period for the EU’s CBAM, in which free allocation of emissions allowances is in place until 2034, creates funding and incentive gaps for green industrial investments. Proposal for a climate contribution • A straightforward charge in the form of a ‘climate contribution’ would complement emissions trading and the CBAMs. It would be non-discriminatory, as it would be levied on domestically produced and imported carbon-intensive basic materials like steel, cement and plastic, and be based on standardised values equal to the value of free allowance allocation to conventional production. • Unlike a CBAM, the climate contribution would be product-based, thus a relief for exports would be possible, in line with World Trade Organization (WTO) rules. The standardised value avoids resource shuffling and allows consistent application along the value chain. • The climate contribution could help fill the funding gap left by free allocation, ensuring stable revenues to finance, for example, Carbon Contracts for Difference (CCfDs), which are critical for green industrial investments. • It offers the flexibility to extend free allocation if progress in advancing global carbon pricing proves slow, without compromising climate and industrial objectives. • We recommend introducing the climate contribution as a bridging instrument to complement emissions trading and ensure investment stability and incentives for green industry during the CBAM transition period. • In summary, the climate contribution provides a practical, WTO-compliant solution to address carbon leakage risk, ensure investment stability, and support industrial decarbonisation in the face of global policy fragmentation. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:311220 |
| By: | Mathieu Parenti (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ULB - Université libre de Bruxelles, CESifo - CESifo, CEPR - Center for Economic Policy Research); Gonzague Vannoorenberghe (UCL - Université Catholique de Louvain = Catholic University of Louvain) |
| Abstract: | Which countries should aim for regulatory cooperation, and to what extent should they pursue it? We develop an imperfectly competitive trade model that accounts for differences in technology and regulatory preferences regarding local consumption externalities across countries. Each country sets unique product standards, and firms incur costs when tailoring products to different markets. Trade occurs when the benefits of comparative advantages outweigh the desire for asymmetric regulations. Our findings indicate that regulatory cooperation, defined as the cooperative setting of standards, is most advantageous for countries with moderate differences in regulatory preferences. Shallow integration, however, falls short of achieving the optimal planner's solution. Countries with strong comparative advantages in distinct externality-generating goods can pursue deeper regulatory cooperation through mutual regulatory concessions. Additionally, when regulatory preferences are highly dispersed, international cooperation tends to form regulatory blocs. |
| Keywords: | Deep economic integration, Standards, Trade policy, Trade agreements |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721397 |
| By: | Guida Nogueira (Gabinete de Estratégia e Estudos (GEE)); Paulo Inácio (Gabinete de Estratégia e Estudos (GEE)); Joana Almodovar (Gabinete de Estratégia e Estudos (GEE)) |
| Abstract: | The COVID-19 pandemic has had profound and enduring effects on economic activity worldwide, with heterogeneous impacts across countries and sectors. While countries strive to rebound, amid a myriad of significant and persisting challenges, there is a growing awareness that returning to pre-pandemic conditions is challenging. In fact, geopolitical tensions are hardening, pushing the world into uncharted territory and adding layers of complexity to the ongoing recovery efforts. For policymakers and businesses, it is crucial to remain adaptable and resilient, amid shifting global power dynamics, but also vigilant, continuously re-evaluating their alliances. In this evolving landscape, monitoring trade dependencies has thus become a critical tool to assess potential sources of vulnerability and shape resilient strategies to promote increased strategic autonomy. Against this backdrop, this article updates the analysis performed by Nogueira et al. (2022) and provides a time-extended perspective on Portugal’s trade dependencies, capturing evolving trends that deepen our understanding on how the country has been navigating different waves of complex challenges over time, within a shifting geopolitical landscape. |
| Keywords: | International Trade, Strategic dependencies |
| JEL: | F13 F15 F60 L52 O14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:mde:wpaper:189 |
| By: | Nobumichi Teramura (Universiti Brunei Darussalam); Luke Nottage (The University of Sidney); Bruno Jetin (Universiti Brunei Darussalam, CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord) |
| Abstract: | In parallel with their strong economic growth, Asian jurisdictions have scaled up campaigns against bribery and other illegal misconduct by foreign investors by adopting international anti-corruption frameworks. Nonetheless, corruption remains common in many places and there is also still a lack of consensus on the influence of corruption and illegality over foreign direct investment (FDI), as well as in investor–state arbitration cases. There is also a paucity of literature considering how Asian countries have dealt with such serious misconduct by foreign investors. The foregoing chapters have started to fill the gaps, finding that there are some ‘Asian approaches' to corruption and bribery in investment arbitrations: some individual jurisdictions have started to address the issues of corruption and illegality through treaty (re)drafting and/or investment disputes. However, a uniform Asian approach towards corruption and illegality in investment arbitration has not yet been established. Thus, this chapter proposes a roadmap for a more harmonised regional approach to corruption and illegality in Asian investment arbitration. It recommends that Asia should (1) establish a forum for all jurisdictions to discuss corruption and other serious misconduct involved in FDI, (2) develop more unified rules on corruption and illegality specifically in Asian investment arbitration and (3) consider creating an independent institution or permanent court to better handle Asian investment disputes—not necessarily limited to allegations of corruption and illegality. |
| Keywords: | Corruption, Bribery, International trade and investment agreements, Arbitration, Foreign Direct Investment (FDI) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04554334 |
| By: | Kim, Sungjin (Korea Institute for Industrial Economics and Trade) |
| Abstract: | We expect global economic conditions in 2025 to be characterized by improving consumer sentiment, increased investment, and a gradual recovery in global demand as central banks in major economies begin to cut interest rates. However, Korea’s 13 flagship industries will nonetheless be confronted with numerous risks, and these risks will continue to weigh on growth prospects. Key uncertainties include stagnant economic growth in China, geopolitical conflict and war, and ever-higher barriers to trade. The election of Donald Trump as the 47th president of the United States introduces a host of additional complexities. Trump has pledged to institute a universal tariff on all goods imported into the United States, and has also signaled disdain for eco-friendly industries. As a major trade partner of the US, a universal tariff would have a negative impact on Korea’s key industries, particularly on the automotive sector, and a shift away from promoting greener cars and technologies would affect the Korean battery sector. But not all of Trump’s policies would necessarily harm Korea, if they ever come to pass. Trade controls and other measures targeting China could benefit Korea’s shipbuilding, ICT, and display sectors, and shipments of machinery used in the fossil fuel sector would likely increase. 2025 forecasts are a mixed bag for Korea’s 13 flagship industries. The IT sector which includes the semiconductor, information and communication devices, and biohealth industries, is expected to record robust growth in exports, domestic demand, and production. But other key sectors, including the shipbuilding, home appliances, and displays industries, are more likely to stagnate or even decline. Projections for the automotive, steel, textiles, and batteries industries are downbeat, reflecting weaker demand and fiercer competition. We do anticipate that the petrochemicals, oil refining, and general machinery sectors will gradually enter a recovery phase, driven by improved demand conditions and price adjustments. To navigate these challenges, Korea must address declining domestic demand in contracting industries and counter the risks posed by increased imports. Strengthening export competitiveness and preemptively adapting to shifts in demand markets are other major priorities. Moreover, the government must work with the private sector to stabilize supply chains in response to a rising tide of protectionism, while at the same time fostering increased investments in green and digital transformation initiatives essential to securing long-term industrial competitiveness. Combined, these efforts are vital to helping ensure the continued resilience and growth of the Korean economy in an uncertain global trade and policy environment. |
| Keywords: | macroeconomic outlook; economic forecasting; South Korea; Korean economy; economic indicators; production; exports; imports; investment; KIET |
| JEL: | E60 E66 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:2024_028 |
| By: | David H. Autor; David Dorn; Gordon Hanson; Maggie R. Jones; Bradley Setzler |
| Abstract: | This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Using comprehensive register data for 2000–2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover primarily by adding workers to non-manufacturing who were below working age when the shock occurred. Entrants are disproportionately native-born Hispanics, foreign-born immigrants, women, and the college-educated, who find employment in relatively low-wage service sectors such as medical services, education, retail, and hospitality. Using the panel structure of the employer-employee data, we decompose changes in the employment composition of places into trade-induced shifts in the gross flows of people across sectors, locations, and non-employment status. Contrary to standard models, trade shocks reduce geographic mobility, with both in- and out-migration remaining depressed through 2019. The employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas, with minimal contributions from cross-sector transitions of former manufacturing workers. Although worker inflows into non-manufacturing more than fully offset manufacturing employment losses in trade-exposed locations after 2010, incumbent workers neither fully recover earnings losses nor predominantly exit the labor market, but rather age in place as communities undergo rapid demographic and industrial transitions. |
| Keywords: | sectoral reallocation; worker mobility; China trade shock; Local labor markets; Manufacturing decline |
| JEL: | J62 F16 J23 R12 L60 J31 |
| Date: | 2025–02–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedmoi:99548 |
| By: | Douglas A. Irwin |
| Abstract: | In July 1991, India began to dismantle its long-standing, highly restrictive import control regime and move toward a more open economy. How were policymakers able to dislodge and replace an entrenched system with powerful vested interests behind it? Standard reasons for policy change—pressure from domestic producer interests, shifts in political power, or conditionality by international financial institutions—fail to explain why the shift in trade policy took place. Instead, reform-minded technocrats persuaded political leaders to reject what had been a standard response to balance of payments pressure (import repression to avoid a devaluation) and embrace a new approach (exchange rate adjustment and a reduction of import restrictions). This paper explores the economic and political context behind the country’s dramatic policy transformation. India’s experience highlights the crucial link between exchange rate policy and trade policy. |
| JEL: | F13 F31 N75 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33420 |
| By: | Mohr, Cathrin; Trebesch, Christoph |
| Abstract: | We review the literature on geoeconomics, defined as the field of study that links economics and geopolitics (power rivalry). We describe what geoeconomics is and which questions it addresses, focusing on five main subfields. First, the use of geoeconomic policy tools such as sanctions and embargoes. Second, the geopolitics of international trade, especially work on coercion and fragmentation. Third, research on the geopolitics of international finance, which focuses on currency dominance and state-directed capital flows. Fourth, the literature on geopolitical risk and its spillovers to the domestic economy, e.g. on investments, credit, and inflation. Fifth, the economics of war, in particular research on trade and war and on military production. As geopolitical tensions grow, we expect the field to grow substantially in the coming years. |
| Keywords: | Geoeconomics, geopolitics, political economy, power, trade, international finance, war, sanctions, coercion |
| JEL: | F01 P45 D74 H56 N40 F1 F2 F3 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:310330 |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Ariell Reshef (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Giulio Vannelli (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Increases in upstream, forward GVC integration directly reduce labor shares, mostly through reductions in fabrication, but also via other business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is "upstream-biased". Rapid robotization in China shaped robotization in Europe and, therefore, relative demand for labor there. |
| Keywords: | labor share, functional specialization, global value chains, upstreamness, technological change, automation, robots |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04346960 |
| By: | Julien Martin (UQAM - Université du Québec à Montréal = University of Québec in Montréal, CEPR - Center for Economic Policy Research); Isabelle Mejean (Institut d'Études Politiques [IEP] - Paris, CEPR - Center for Economic Policy Research); Mathieu Parenti (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research, ULB - Université libre de Bruxelles) |
| Abstract: | We study how stickiness in business relationships influences the trade impact of aggregate uncertainty. To begin, we construct a product-level index of relationship stickiness using firm-to-firm relationship duration data. We then demonstrate how relationship stickiness shapes trade dynamics in response to uncertainty shocks.We find that episodes of uncertainty lead to a decline in the overall establishment of new business relationships, with the impact varying depending on the level of stickiness. In markets characterized by high stickiness, uncertainty shocks primarily impede investments in new firm-to-firm relationships. In contrast, for non-sticky products, the adjustment to uncertainty shocks mainly manifests as the disruption of existing relationships. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721417 |
| By: | Delgado-Téllez, Mar; Quintana, Javier; Santabárbara, Daniel |
| Abstract: | An increase of e100 per tonne in the EU carbon price reduces the carbon footprint but lowers GDP due to higher energy costs and carbon leakage. Using a dynamic multi-sector, multi-country model augmented with an energy block that includes endogenous renewable energy investment, we analyze the macroeconomic and emissions effects of a carbon price. Investment in renewable energy mitigates electricity price increases in the medium term, leading to a smaller GDP loss (up to -0.4%) and a larger emissions reduction (24%) in the EU. Neglecting renewable energy investment overestimates the negative economic impact. We also find that a Carbon Border Adjustment Mechanism (CBAM) reduces carbon leakage but slightly hurts GDP and inflation as the competitive gain is offset by the higher costs of imported intermediate inputs. JEL Classification: C6, H2, Q5 |
| Keywords: | carbon border adjustment, carbon pricing, production networks, renewable energy investment |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253020 |
| By: | David Autor; David Dorn; Gordon H. Hanson; Maggie R. Jones; Bradley Setzler |
| Abstract: | This chapter analyzes the distinct adjustment paths of U.S. labor markets (places) and U.S. workers (people) to increased Chinese import competition during the 2000s. Using comprehensive register data for 2000–2019, we document that employment levels more than fully rebound in trade-exposed places after 2010, while employment-to-population ratios remain depressed and manufacturing employment further atrophies. The adjustment of places to trade shocks is generational: affected areas recover primarily by adding workers to non-manufacturing who were below working age when the shock occurred. Entrants are disproportionately native-born Hispanics, foreign-born immigrants, women, and the college-educated, who find employment in relatively low-wage service sectors such as medical services, education, retail, and hospitality. Using the panel structure of the employer-employee data, we decompose changes in the employment composition of places into trade-induced shifts in the gross flows of people across sectors, locations, and non-employment status. Contrary to standard models, trade shocks reduce geographic mobility, with both in- and out-migration remaining depressed through 2019. The employment recovery stems almost entirely from young adults and foreign-born immigrants taking their first U.S. jobs in affected areas, with minimal contributions from cross-sector transitions of former manufacturing workers. Although worker inflows into non-manufacturing more than fully offset manufacturing employment losses in trade-exposed locations after 2010, incumbent workers neither fully recover earnings losses nor predominantly exit the labor market, but rather age in place as communities undergo rapid demographic and industrial transitions. |
| JEL: | F16 J23 J31 J62 L6 R12 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33424 |
| By: | Kim, Gueyon (University of California, Santa Cruz); Lee, Dohyeon (Amazon); Pozzoli, Dario (Copenhagen Business School) |
| Abstract: | This paper examines how offshoring affects worker skill demands and studies its implications for wage inequality. Using Danish administrative data, we find that offshoring increases firm-level demand for higher skills in occupations with high exposure to foreign competition. This effect is more pronounced in low-productivity firms, highlighting distributional impacts across firms. By constructing a Becker-type worker-firm matching model in a global economy, we demonstrate underlying mechanisms and quantify the role of offshoring-induced adjustments. Offshoring increases firm similarity in worker skill and wages within high-exposed jobs, leading to a decrease in between-firm inequality—a contrast to the effects of technological change. |
| Keywords: | offshoring, worker-firm matching, segregation by skill, wage inequality, between-firm inequality |
| JEL: | C78 F14 F16 J24 J31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17663 |
| By: | Joaquin Blaum; Federico Esposito; Sebastian Heise |
| Abstract: | We study the effect of climate risk on how firms organize their supply chains. We use transaction-level data on U.S. manufacturing imports to construct a novel measure of input sourcing risk based on the historical volatility of ocean shipping times. Our measure isolates the unexpected component of shipping times that is induced by weather conditions along more than 40, 000 maritime routes. We first document that unexpected shipping delays induced by weather shocks have significant negative effects on importers’ revenues, profits, and employment. We then show that more exposed firms actively diversify the risk of weather delays by using more routes and sourcing from more foreign suppliers, although their total imports decline. To rationalize these findings, we introduce shipping time risk into a general equilibrium model of importing with firm heterogeneity. Our quantitative analysis predicts substantial costs for the U.S. economy associated with different sources of supply chain risk. |
| Keywords: | supply chains; Climate shocks; shipping time risk; input sourcing |
| JEL: | F10 F15 Q54 |
| Date: | 2025–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:99545 |
| By: | Bruno Jetin (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Jamel Saadaoui (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Haingo Ratiarison |
| Abstract: | This chapter looks at the effect of corruption on foreign direct investment (FDI) at the world and regional levels, with a focus on East, South and Southeast Asia. The academic literature is inconclusive because the nature of corruption can be different from one country to another and because various other factors can decide whether a foreign company will invest in a country or region despite a relatively high level of corruption. To shed light on the effect of corruption, the authors proceed to a panel econometrics investigation that assesses the relationship between the stock of FDI and the ‘control of corruption', published by the World Bank, for a sample of 180 countries over the period 2002–2019. The ‘control of corruption' index combines 23 different assessments and surveys capturing perceptions of the extent to which public power is exercised for private gains. A low score means that the authorities do not fight corruption or are not effective in fighting it, and therefore corruption is high; and vice versa. The authors include two control variables (real GDP and secondary school enrolment) to better estimate the specific role of corruption. Their results show that at the world level, the control of corruption is low and has a positive effect on FDI, which means that corruption is a stimulus to FDI, in line with Egger and Winner's findings. However, in East Asia, Southeast Asia, Australia and New Zealand, corruption has a ‘grabbing hand' effect. In the European Union, corruption is a helping hand. The authors' results confirm the importance of a regional approach to the analysis of the effect of corruption on FDI. |
| Keywords: | Foreign Direct Investments FDI, Corruption, Control of Corruption, Helping Hand, Grabbing Hand, Region, Asia, Pacific, Southeast Asia, East Asia, South Asia, Australia, New Zealand, European Union, Panel Econometrics, Fixed Effects |
| Date: | 2024–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04553636 |
| By: | Sebastián Fanelli (CEMFI); Juan Carlos Hallak (UBA-CONICET); Yin Yongkun (Shandong University) |
| Abstract: | Two facts distinctively separate exporter dynamics from firm dynamics. One is the strikingly low survival rate of new entrants into export markets. The second is that new entrants survive less than re-entrants. We argue that these two facts are critical to discipline exporter dynamics models because many sources of firm heterogeneity (e.g. fixed costs) do not affect survival rates when firms time their entry decision optimally. We extend a standard exporter dynamics model by positing that firms experiment to resolve an uncertain component in foreign-market profitability. We estimate the model using customs data from Peru. Despite its parsimony, having only four relevant parameters, the model matches the survival profile of entrants and re-entrants. It is also sufficiently rich to deliver predictions about many exporter dynamics facts highlighted in the literature. Finally, we exploit variation across products and markets to provide additional evidence supporting the model’s experimentation mechanism. |
| Keywords: | Exporter dynamics, uncertainty, experimentation, foreign demand, geometric Brownian motion. |
| JEL: | F10 F12 F14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:354 |
| By: | Nobumichi Teramura (Universiti Brunei Darussalam); Luke Nottage (The University of Sydney); Bruno Jetin (Universiti Brunei Darussalam, CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord) |
| Abstract: | This open access book explores Asian approaches towards investment arbitration—a transnational procedure to resolve disputes between a foreign investor and a host state—setting it in the wider political economy and within domestic law contexts. It considers the extent to which significant states in Asia are, or could become, "rule makers" rather than "rule takers" regarding corruption and serious illegality in investor-state arbitration. Corruption and illegality in international investment are widely condemned in any society, but there remains a lack of consensus on the consequences, especially in investment arbitration. A core issue addressed is whether a foreign investor violating a host state's law should be awarded protection of its investment, as per its contract with the host state and/or the applicable investment or trade agreement between the home state and the host state. Some suggest such protection would be unnecessary as the investor committed a crime in the host state, while others attempt to establish an equilibrium between the investor and the host state. Others claim to protect investment, invoking the sanctity of promises made. The book starts with a deep dive into economic and legal issues in corruption and investment arbitration and then explores the situation and issues in major countries in the region in detail. It is a useful reference point for lawyers, economists, investors, and government officials who are seeking comprehensive and up-to-date information on anti-bribery rules in Asian investment treaties. It is of particular interest to students and researchers in economics, finance, and law, who are undertaking new research relating to the multifaceted impacts of corruption. |
| Keywords: | Corruption, Bribery, Arbitration, International commercial Law, Foreign Direct Investment, Helping hand, Grabbing hand, Asian Economics, Business Law, Dispute Resolution, Mediation, Political Economy/Economic Systems, Macroeconomics, Monetary Economics, Financial Economics, International Economic Law, Trade Law |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-04553647 |
| By: | Yan Li; Carol Alexander; Michael Coulon; Istvan Kiss |
| Abstract: | This study investigates the inherently random structures of dry bulk shipping networks, often likened to a taxi service, and identifies the underlying trade dynamics that contribute to this randomness within individual cargo sub-networks. By analysing micro-level trade flow data from 2015 to 2023, we explore the evolution of dry commodity networks, including grain, coal, and iron ore, and suggest that the Giant Strongly Connected Components exhibit small-world phenomena, indicative of efficient bilateral trade. The significant heterogeneity of in-degree and out-degree within these sub-networks, primarily driven by importing ports, underscores the complexity of their dynamics. Our temporal analysis shows that while the Covid-19 pandemic profoundly impacted the coal network, the Ukraine conflict significantly altered the grain network, resulting in changes in community structures. Notably, grain sub-networks display periodic changes, suggesting distinct life cycles absent in coal and iron ore networks. These findings illustrate that the randomness in dry bulk shipping networks is a reflection of real-world trade dynamics, providing valuable insights for stakeholders in navigating and predicting network behaviours. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.00877 |
| By: | Harald Oberhofer; Vasily Astrov; Elisabeth Christen; Robert Stehrer |
| Abstract: | Im abgelaufenen Kalenderjahr dürften die österreichischen Güterexporte um 2, 9% und die Importe um 4, 9% gesunken sein. Die Warenhandelsbilanz hat sich verbessert und dürfte das erste Mal seit 2007 einen Überschuss erzielen. Für heuer und im nächsten Jahr prognostiziert das FIW ein preisbereinigtes Exportwachstum von 1, 4% und 2, 3% wobei die Abwärtsrisiken wie etwa die notwendigen Budgetkonsolidierungen in Europa und die protektionistische Handelspolitik des neuen US-Präsidenten überwiegen. |
| Keywords: | international trade, Austrian Foreign Trade, Economic Outlook Austria |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:fiwjag:y:2025:m:02 |
| By: | Dickson Wandeda Onyango; Kenneth Kigundu Macharia; Dianah Ngui; Lanoi Maloi |
| Abstract: | The Russia-Ukraine war disrupted global supply chains, leading to higher fuel prices as well as food and fertilizer prices, exacerbating existing gender disparities in Kenya. The study uncovered significant gendered differences in cooking strategies and found that women spent more time on fuel collection and meal preparation. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:c20718eb-cbc7-4461-9d84-b8116964a29f |
| By: | Aliakbar Akbaritabar (Max Planck Institute for Demographic Research, Rostock, Germany); José Ignacio Carrasco Armijo (Max Planck Institute for Demographic Research, Rostock, Germany); Athina Anastasiadou (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Reviews of migration theories start from more classical and deterministic views and follow with more recent developments that consider networks, cumulative causation, planned behaviour, agency, and aspiration/capability frameworks. One of the less discussed dimensions is gender differences in how one’s network affects their migration decision before, during, and after migration. In this chapter, we intend to provide an overview and critically delve into the literature discussing the network’s effect on international migration and show the underexplored dimension of gender differences. The chapter has an additional focus on a subset of the highly-skilled population i.e., the case of migration of scholars, and is concluded by avenues for future research. |
| Keywords: | Global, World, computational demography, computational social science, gender, internal migration, international migration, network, sex, social network |
| JEL: | J1 Z0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2025-004 |
| By: | Mathieu Couttenier; Julian Marcoux; Thierry Mayer; Mathias Thoenig |
| Abstract: | This paper presents a framework for estimating and simulating a quantitative spatial model of trade and violence. In this new theoretical and empirical setup, designed for the analysis of bilateral flows, we first model the general equilibrium interactions between the economic and fighting margins in a micro-founded setup. We then show how the structural parameters can be recovered from the data in a simple and transparent way. A central element of the procedure consists in estimating a structural gravity equation of violence. Studying continental Africa over the period 1997 to 2023, we test the key predictions of the model and uncover new facts related to spatial frictions and conflicts. Finally, the model is simulated to quantify different policy-relevant experiments in weakly institutionalized contexts where insecurity is pervasive. Positive and spatially-diffusing feedback loops between development and pacification are one of the main findings of our analysis. |
| Keywords: | Violence;Conflicts;Trade;Development;Gravity |
| JEL: | F1 D74 O1 R1 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-02 |
| By: | Mamadou Lah (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Hadi Salameh (Université Paris-Panthéon-Assas) |
| Abstract: | This paper investigates the relationships between remittances, the informal sector, and political stability across various large geopolitical sets, including the Middle East and North Africa (MENA), Sub-Saharan Africa, Latin America, and the Organisation for Economic Cooperation and Development (OECD) countries. Employing Granger causality tests to determine the predominate direction of causality and panel vector autoregressive models, we explore the dynamics of these relationships over short, medium, and long-term periods.Our findings reveal a significant short-term impact of remittances on the growth of the informal sector in the MENA, Sub-Saharan Africa, and Latin America, suggesting that remittances directly influence economic activities within this sector, likely due to their use in undeclared activities and the funding of informal local businesses. However, the influence of remittances wanes over time, indicating their primary role in addressing immediate economic needs rather than fostering long-term sector growth. Political stability shows minimal direct causal interaction with the informal sector, hinting at the sector's role as an adaptive mechanism in politically volatile regions.In OECD countries, remittances maintain a persistent influence on the informal sector over longer periods, reflecting their role in more strategic economic decisions. Additionally, our study explores the complex dynamics in countries with high remittance-to-GDP ratios, identifying a strong predictive power of the informal sector size on remittance flows, which points to the sector's pivotal economic role. We have extended our analysis to OECD countries, using outward remittances as a proxy for inward migration. We found that the size of the informal sector can predict outward remittance flows and political stability, highlighting the crucial role of the informal economy in migration and political dynamics.The results underscore the need for region-specific policy interventions and highlight the importance of understanding the temporal dynamics of remittances. This study contributes to the discourse on economic development strategies, suggesting that leveraging remittances effectively requires comprehensive policy approaches that consider their varied impacts across different regional and economic contexts. |
| Abstract: | Cet article explore les liens entre les envois de fonds, le secteur informel et la stabilité politique dans plusieurs ensembles géopolitiques majeurs, dont le Moyen-Orient et l'Afrique du Nord (MENA), l'Afrique subsaharienne, l'Amérique latine et les pays de l'Organisation de Coopération et de Développement Économiques (OCDE). En utilisant des tests de causalité de Granger pour déterminer la direction prédominante de la causalité et des modèles autorégressifs vectoriels de panel, nous examinons la dynamique de ces relations sur des périodes courtes, moyennes et longues. Nos résultats révèlent un impact significatif à court terme des envois de fonds sur la croissance du secteur informel dans la région MENA, l'Afrique subsaharienne et l'Amérique latine, suggérant que les envois de fonds influencent directement les activités économiques au sein de ce secteur, probablement en raison de leur utilisation dans des activités non déclarées et le financement d'entreprises locales informelles. Cependant, l'influence des envois de fonds diminue avec le temps, indiquant leur rôle principal dans la réponse aux besoins économiques immédiats plutôt que dans la promotion de la croissance à long terme du secteur. La stabilité politique montre une interaction causale directe minimale avec le secteur informel, suggérant le rôle du secteur comme mécanisme d'adaptation dans les régions politiquement instables. Dans les pays de l'OCDE, les envois de fonds maintiennent une influence persistante sur le secteur informel sur de plus longues périodes, reflétant leur rôle dans des décisions économiques plus stratégiques. De plus, notre étude explore la dynamique complexe dans les pays ayant des ratios envois de fonds/PIB élevés, identifiant un fort pouvoir prédictif de la taille du secteur informel sur les flux de transferts de fonds, ce qui souligne le rôle économique central du secteur. Nous avons étendu notre analyse aux pays de l'OCDE, en utilisant les envois de fonds sortants comme indicateur de la migration entrante. Nous avons constaté que la taille du secteur informel peut prédire les flux de fonds sortants et la stabilité politique, soulignant le rôle crucial de l'économie informelle dans la dynamique migratoire et politique. Les résultats soulignent la nécessité d'interventions politiques spécifiques à chaque région et l'importance de comprendre la dynamique temporelle des envois de fonds. Cette étude contribue au discours sur les stratégies de développement économique, suggérant qu'une utilisation efficace des envois de fonds nécessite des approches politiques globales qui prennent en compte leurs impacts variés selon les contextes régionaux et économiques. |
| Keywords: | Informal sector, Remittances, Political stability, Granger causality, PVAR model, Migration, Secteur informel, Envois de fonds, Stabilité politique, Causalité de Granger, Modèle PVAR |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721826 |
| By: | Leonardo Bursztyn (University of Chicago, NBER - The National Bureau of Economic Research); Thomas Chaney (USC - University of Southern California, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research); Tarek A Hassan (BU - Boston University [Boston], NBER - The National Bureau of Economic Research, CEPR - Center for Economic Policy Research); Aakaash Rao (Harvard University) |
| Abstract: | We study how the presence of individuals of a given foreign descent shapes natives' attitudes and behavior toward that group. Using individualized donations data from large charitable organizations, we show that the long-term presence of a given foreign ancestry in a US county leads to more generous behavior specifically toward that group's ancestral country. To shed light on mechanisms, we focus on attitudes and behavior toward Arab-Muslims, combining several existing large-scale surveys, cross-county data on implicit prejudice, and a newly-collected national survey. We show the presence of a larger Arab-Muslim population: (i) decreases both natives' explicit and implicit prejudice against Arab-Muslims, (ii) reduces natives' support for policies and political candidates hostile toward Arab-Muslims, (iii) leads to more personal contact between natives and Arab-Muslim individuals, and (iv) increases natives' knowledge of Arab-Muslims and Islam. |
| Keywords: | Contact, Attitudes, Immigration, Prejudice |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04900080 |
| By: | Mawuli Segnon (Department of Economics (CQE), University of Munster, Germany); Bjorn Schulte-Tillmann (Department of Economics (CQE), University of Munster, Germany); Riza Demirer (Department of Economics & Finance, Southern Illinois University Edwardsville, Illinois, USA); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | This paper investigates the relationship between supply chain pressures and foreign exchange (FX) volatility in fundamentals-based component frameworks. We utilize mixed data sampling (MIDAS) volatility models that formalize FX rate volatility as a product of short- and long-run components. We allow the long-run component to be driven by the monthly global supply chain pressure (GSCPI) and the global economic conditions (GECON) indicators along with monetary and economic control variables. The dynamics governing short-run component of FX volatility is modeled via GARCH, GJR, Markov switching multifractal (MSM) and factorial hidden Markov volatility (FHMV) processes. Our analysis yields a statistically significant and positive relationship between supply chain pressures and foreign exchange volatility in both the developed and developing economies and across the different model specifications. The positive impact of global supply chain pressures is particularly prevalent during the post-2017 period which coincides with the beginning of Donald Trump's first term as president as the promised America first policy took effect. Out-ofsample tests further show that the information content in the global supply pressures index can help improve the accuracy of both the volatility and Value at Risk forecasts in the FX market. Our findings establish a clear link between proxies of deglobalization and foreign exchange volatility, while they also provide valuable insights that can be used in the management of currency exposures by firms. |
| Keywords: | Supply chain pressure index, Foreign exchange rate volatility, Deglobalization, MIDAS volatility models, EPA test, Encompassing test, Backtesting |
| JEL: | F31 G17 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202506 |
| By: | Francis Bloch (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Philippe Gagnepain (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We study a model of non-cooperative interaction between two infrastructure managers (IMs) for international rail transport. We compare equilibrium access charges when the IMs are unregulated and regulated. We show that cooperation among IMs eliminates double-marginalization to the benefit of passengers and IMs. We also show that the delegation of access charge collection with adequate transfers allows the two IMs to reach efficiency, both in the unregulated and regulated régimes. We study the effect of differences in regulatory policies, and analyze the effect of monopoly power of train operators and competition among high speed and low speed train routes on access charges. |
| Keywords: | International Rail Transport, Access Charges, International Regulation, Infrastructure Managers |
| Date: | 2025–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04892920 |
| By: | Emmanuel Farhi (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IAST - Institute for Advanced Study in Toulouse); Jean Tirole (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IAST - Institute for Advanced Study in Toulouse) |
| Abstract: | Authorities' support policies shape the location and continuation of industrial and banking activity on their soil. Firms' locus of activity depends on their prospect of receiving financial assistance in distress and therefore on factors such as countries' relative resilience. We predict that global firms are global in life and national in death; and that they become less global when competition is more intense, times are turbulent, and international risk sharing (say, through swap lines) weak. We analyse the competitive benefits of industrial and banking policies as well as their limitations, such as currency appreciation. |
| Keywords: | Exhorbitant duty, Hegemon, Economic geography, National champions, Cross-border banking, Liquidity support, Too domestic to fail, Home bias |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04906462 |