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on International Trade |
| By: | Rosenow, Samuel Kaspar |
| Abstract: | Firms increasingly must contend with trade regulations to access foreign markets. This paper quantifies the relative importance of trade regulations and their heterogeneous effects for Colombian firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm-level gravity model with a difference-in-differences identification strategy, technical barriers to trade and quantity control measures both decrease trade on average. Other non-tariff measures and tariffs play a minor role. The technical barriers to trade and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firms will leave export markets to the benefit of smaller ones. The results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size. |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10795 |
| By: | Freund, Caroline; Mattoo, Aaditya; Mulabdic, Alen; Ruta, Michele |
| Abstract: | This paper examines the reshaping of supply chains using detailed US 10-digit import data (tariff-line level) between 2017 and 2022. The results show that while US-China decoupling in bilateral trade is real, supply chains remain intertwined with China. Over the period, China’s share of US imports fell from 22 to 16 percent. The paper shows that the decline is due to US tariffs. US imports from China are being replaced with imports from large developing countries with revealed comparative advantage in a product. Countries replacing China tend to be deeply integrated into China’s supply chains and are experiencing faster import growth from China, especially in strategic industries. Put differently, to displace China on the export side, countries must embrace China’s supply chains. Within products, the reorientation of trade is consistent with a “China + 1” strategy, as opposed to diversified sourcing across multiple countries. There is some evidence of nearshoring, but it is exclusive to border nations, and there is no consistent evidence of reshoring. Despite the significant reshaping, China remained the top supplier of imported goods to the US in 2022. |
| Date: | 2023–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10593 |
| By: | Freeman, Rebecca; Garofalo, Marco; Longoni, Enrico; Manova, Kalina; Mari, Rebecca; Prayer, Thomas; Sampson, Thomas |
| Abstract: | How does dismantling deep integration affect international trade? This paper provides new evidence on the consequences of disintegration by estimating the impact of Brexit on goods trade by UK firms. The UK's exit from the EU's single market and customs union in January 2021 led to an immediate, sharp drop in both exports and imports with the EU for the average firm. In addition, many exporters and importers stopped trading with the EU entirely. However, heterogeneous firm-level responses to the implementation of trade barriers mitigated Brexit's impact on aggregate trade. The decline in exports was concentrated among smaller firms, but insignificant for the largest firms. Our estimates imply that, in the short run, leaving the EU reduced worldwide UK exports by 6.4% and worldwide imports by 3.1%. The fall in imports was driven by lower imports from the EU, which importers offset by sourcing more from the rest of the world. |
| Keywords: | deep integration; brexit; trade policy; firms |
| JEL: | F13 F14 F15 |
| Date: | 2024–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126762 |
| By: | Fontagné, Lionel; Lebrand, Mathilde Sylvie Maria; Murray, Siobhan; Ruta, Michele; Santoni, Gianluca |
| Abstract: | Economic integration of the African continent rests on two pillars: the ratification of an ambitious trade agreement and massive investment in transportation infrastructure. Leveraging a newly created city-level database on African exporters’ transport times, transport route optimization and general equilibrium modeling of international trade, the paper quantifies the impact of greater trade and transport integration in Africa. A pan-African agreement, such as the African Continental Free Trade Area, would increase African countries’ exports by an average of 3.4 percent and increase gross domestic product by 0.6 percent. Complementing trade integration by reducing transportation time on roads, ports and border posts would increase exports by 11.5 percent and increase gross domestic product by 2 percent. Major transport investments are necessary to reap the full benefits of the African Continental Free Trade Area. |
| Date: | 2023–11–16 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10609 |
| By: | Winkler, Deborah Elisabeth; Kruse, Hagen; Aguilar Luna, Luis Alejandro; Maliszewska, Maryla |
| Abstract: | Trade expansion can create more and better jobs. This paper revisits the linkages between trade and jobs, focusing on employment, labor incomes, and job activities across a large sample of countries and sectors over 1995 to 2018. Instrumental variables regressions and new input-output measures of jobs and activities in exports highlight several patterns: Exports and especially imports of intermediate inputs are associated with more jobs and higher incomes, while final imports show weaker correlations. Manufacturing has the biggest potential for job and income creation both directly and indirectly in supplying sectors. As countries move from specialization in commodities to limited manufacturing to advanced manufacturing and services global value chains, export-employment and export-income elasticities increase. Global value chain–intensive developing countries tend to have larger shares of production activities in exports compared to resource-intensive countries. As countries get richer, nonproduction activities in exports, such as support, engineering, and managerial services, become increasingly important. Finally, the paper explores the role of policy for the export job share across countries. |
| Date: | 2023–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10635 |
| By: | Kee, Hiau Looi; Nicita, Alessandro |
| Abstract: | Bilateral trade relationships between countries vary across products. Such heterogeneity poses challenges when assessing the economic impacts of trade agreements. This paper estimates bilateral trade elasticities at the product level and explores these impacts using a hypothetical no-deal Brexit as an example. The findings indicate that the European Union’s demand for the United Kingdom’s products is often less elastic compared to products from other trading partners. The findings also show substantial heterogeneity in the elasticities across products and a negative correlation between these elasticities and tariffs. These factors mitigate the extent of trade welfare losses compared to a scenario using homogeneous elasticities. |
| Date: | 2023–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10634 |
| By: | Masashige Hamano (Waseda University) |
| Abstract: | This paper documents that product quality in international trade is negatively correlated with the number of traded varieties in global data. We account for this substitutability between trade variety and quality by developing a two-country international business cycle model with heterogeneous firms that endogenously determine product quality while entering and exiting export markets. Our theoretical model successfully replicates the wedge-shaped pattern of cross-correlations between the number of product varieties and the quality of trade, along with key statistics on U.S. trade dynamics. |
| Keywords: | business cycle; product variety; product quality; firm heterogeneity |
| JEL: | F12 F41 F43 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2419 |
| By: | Barba Navaretti, Giorgio; Bugamelli, Matteo; Forlani, Emanuele; Ottaviano, Gianmarco I. P. |
| Abstract: | Understanding producers' selection into exporting and its consequences for micro-founded gravity estimation calls for an in-depth analysis of the interplay between aggregate exports and the distribution of producers' productivity. Yet, knowledge about such interplay is still rather limited from both a theoretical and an empirical standpoint. We supplement this knowledge by studying how different moments of the distribution of producers' productivity affect the trade elasticity, and in turn how shocks that alter those moments in different ways may have different impacts on aggregate exports. We first show that, to obtain an unbiased measure of that elasticity, gravity regressions have to account not only for the share of producers that export, but also for their productivity premium relative to all producers. This is particularly important when the share is small and the premium is large, that is, when aggregate exports are driven by few overperforming 'superstar exporters'. We then assess how aggregate exports react to shocks entailing the same change in the first moment of the distribution of producers' productivity, but different changes in its higher moments. Our empirical results confirm that taking into full consideration the productivity premium of exporters and the occurrence of 'superstar exporters' is crucial to correctly explain and predict the response of aggregate exports to different productivity shocks. |
| Keywords: | trade flows; superstar exporters |
| JEL: | F12 F14 F17 |
| Date: | 2024–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126754 |
| By: | Alessandro Barattieri; Aaditya Mattoo; Daria Taglioni |
| Abstract: | This paper explores the effects of industrial policy on trade, focusing on the role of preferential trade agreements. The analysis uses data for the period 2012–2022 on detailed product-level bilateral trade, industrial policy announcements, and rules on subsidies in different preferential trade agreements. The introduction of a new industrial policy measure in a destination market reduces export growth to that market on average by about 0.28 percent. However, exports from fellow members of preferential trade agreements are not adversely affected and may even be positively affected if the agreements have deep disciplines on subsidies. These findings suggest that preferential trade agreements have a shielding effect against the trade distorting effects of industrial policies. |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10806 |
| By: | Bastos, Paulo S. R.; Castro, Lucio; Vargas Da Cruz, Marcio Jose |
| Abstract: | Imported digital goods are critical for productivity growth in low-income countries. Using detailed data on international trade flows and tariffs, this paper finds that African nations tend to import relatively low quality, low price digital goods. It also finds that digital goods in Africa are subject to relatively higher tariffs, along with other factors that contribute to their higher cost in the domestic market compared to other regions, especially in some low-income countries. The findings show that the African Continental Free Trade Area will do little to reduce this tariff burden, as most digital goods are sourced from higher income nonmembers. In contrast, unilateral tariff liberalization toward all countries would significantly increase the imports of digital goods in Africa. |
| Date: | 2024–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10718 |
| By: | Roche Rodriguez, Jaime Alfonso; Lopez-Acevedo, Gladys C.; Robertson, Raymond; Zárate, Daniela Ruiz |
| Abstract: | Morocco’s trade liberalization policies coincided with macroeconomic growth over the past two decades. The relationship between trade liberalization and individual-level labor market outcomes, however, are not well understood. By combining three complementary approaches and modeling techniques, this paper estimates (i) the relationship between trade agreements and trade flows, (ii) the relationship between trade exposure and various local labor market outcomes, and (iii) the relationship between firm employment and exports. The results show that tariffs have fallen and trade as a share of gross domestic product has increased. Morocco’s trade agreements, however, are not always associated with higher trade flows. Furthermore, trade has led to mixed results for workers. Increased trade has decreased informality but may have adversely affected female labor force participation. Trade liberalization seems to have induced a shift from female labor-intensive industries, such as apparel, to capital-intensive sectors that are predominantly male-intensive. The firm-level analysis confirms these results by showing that increases in employment from exports has occurred mainly in male, capital-intensive sectors. |
| Date: | 2023–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10595 |
| By: | Kalliny, Marize; Zaki, Chahir |
| Abstract: | Despite the efforts made to increase women’s inclusion in the economy, they are still underrepresented in trade in general and in global value chains in particular. Thus, this paper aims at examining the impact of global value chains on women’s trade participation as entrepreneurs and employees. It also analyzes how this effect is moderated through external (gender provisions in trade agreements) and internal (investment climate variables) factors. The analysis uses firm-level data for 154 developing economies and emerging markets with a special focus on the Middle East and North Africa region, being one of the regions with the lowest female labor force participation. The main findings show that global value chains integration increases the likelihood of being a female owner and the share of female employees, especially production ones. A less robust negative effect is found for the impact on being a female top manager. These effects are moderated by the inclusion of gender provisions in trade agreements and by the characteristics of the investment climate (especially tax policy, access to finance, and corruption). These results remain robust after controlling for the endogeneity of global value chains using an instrumental variable approach and a propensity score estimation method where the treatment is being part of a global value chains. Thus, global value chains can be perceived as a tool that boosts women’s empowerment in emerging economies, especially in the Middle East and North Africa region. |
| Date: | 2024–01–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10667 |
| By: | Khalil, Makram; Osten, David; Strobel, Felix |
| Abstract: | In recent years, major exporting economies experienced rising geopolitical risk. From the perspective of the US and the euro area, we employ detailed product data panels to study the consequences of trading-partner geopolitical risk shocks on bilateral imports. We find that these shocks lower import volumes and raise import prices. The decline in imports is stronger when the shocks hit countries that exhibit greater geopolitical distance to the US and the euro area, or when geopolitical risk shocks hit countries that are under US sanctions. Thus, increasing geopolitical risk triggers dynamics that are conducive to a fragmentation of global trade. A case in point are large effects for geopolitical risk shocks originating in China. We find that US and euro area imports from non-Chinese trading partners are also affected by such shocks, which also owes to US dollar and global oil price movements as well as trading-partner value chain linkages with China. |
| Keywords: | Geopolitical risk, imports, United States, euro area |
| JEL: | F14 F41 F61 F62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:311836 |
| By: | Artuc, Erhan; Sommer, Konstantin Heinrich Ludwig |
| Abstract: | This paper analyzes the effects of carbon taxation and border carbon adjustments in a setting where firms can choose to respond to taxation by abating or by outsourcing part of their production. For this, this paper sets up a general equilibrium trade model, calibrated with world trade and input-output data that features a discrete choice production structure, where the producers choose between outsourcing or abating emission-intensive intermediate production steps. The paper finds that border adjustments that cannot target scope 3 emissions can lead to outsourcing, and thus leakage, further down the value chain, but nevertheless induce higher abatement both in the countries that impose the border adjustment and in the ones affected by it. |
| Date: | 2024–01–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10665 |
| By: | Rebecca Freeman; Marco Garofalo; Enrico Longoni; Kalina Manova; Rebecca Mari; Thomas Prayer; Thomas Sampson |
| Abstract: | The UK left the EU's single market and customs union at the start of 2021, entering into the Trade and Cooperation Agreement with the EU. Rebecca Freeman, Marco Garofalo, Enrico Longoni, Kalina Manova, Rebecca Mari, Thomas Prayer and Thomas Sampson find that it is smaller UK firms that have been hit hardest, with a significant drop in their exports to the EU. |
| Keywords: | UK Economy: Brexit, Trade |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:701 |
| By: | Ana M. de Almeida; Graeme Walsh; Horatiu Lovin; Marek Benda; Wilko Bolt |
| Abstract: | This article provides an overview of recent developments in the EU-UK foreign direct investment (FDI) relationships since Brexit. We begin with a conjunctural analysis that looks at recent trends in EU-UK FDI at a broad level, which includes detail at the sectoral and geographical level. Also included in the conjunctural analysis is a breakdown of foreign affiliates and an investigation of new FDI projects and jobs in the UK. We then look at recent developments in the financial sector, in terms of the real economy, FDI flows, banks, insurance companies, pension funds, and its evolving status as a leading global financial centre. The final part of the article turns to non-conjunctural analysis and provides an econometric investigation into the potential impact of Brexit in EU-UK FDI using a gravity-modelling approach. The formal analysis is a non-trivial exercise because the Brexit period overlaps with other significant events, such as the COVID-19 pandemic. Compared to a no-Brexit scenario, we find that Brexit contributed to a decline in EU FDI flows between the EU and the UK of around 4 per cent. Furthermore, business relocations involving temporary capital flows among important European financial centers marked the significant challenge the UK exit from the EU brought to the financial sector. |
| JEL: | F21 F36 C54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:o202403 |
| By: | Mauricio Ulate; Jose P Vasquez; Roman D. Zarate |
| Abstract: | We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyze its effects on labor market outcomes using a quantitative trade model with downward nominal wage rigidities. The increase in trade costs leads to a temporary but prolonged decline in U.S. labor force participation. However, there is a temporary increase in manufacturing employment as the United States is a net importer of manufactured goods, which become costlier to obtain from abroad. By contrast, service and agricultural employment experience temporary declines. Nominal frictions lead to temporary unemployment when the shock dissipates, but this depends on the degree of monetary accommodation. Overall, the shock results in an 8.5 basis points welfare loss for the United States. The impact on labor force participation and welfare across countries varies depending on the initial degree of openness and sectoral deficits. |
| Keywords: | supply chain disruptions, trade costs, downward nominal wage rigidity |
| Date: | 2025–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2078 |
| By: | Thierry Warin |
| Abstract: | This study examines the intricate trade interdependencies between Canada and the United States, highlighting how aggregate export–import figures can mask deeper economic realities. Approximately three-quarters of Canadian merchandise exports head to the United States each year, contributing to a bilateral merchandise trade surplus for Canada in the range of 100 to 170 billion Canadian dollars. Yet, when energy products are excluded, the United States shows a small surplus with Canada, illustrating how both sides benefit from specialized cross-border value chains. Analyses of selected sectors demonstrate that a hypothetical 25 percent tariff on Canadian goods would translate into lost export revenue for Canada, but it would also raise production costs for many U.S. manufacturers dependent on Canadian imports. Despite Canada’s smaller economy, the potential for economic harm runs in both directions. Automakers in Michigan and Ohio, for instance, rely on numerous Canadian inputs that cross the border multiple times, and integrated refiners on the Gulf Coast often process crude oil from Alberta. Inelastic supply chains amplify these vulnerabilities: short-run elasticity estimates indicate that energy flows might see only a 2 percent immediate reduction under a 10 percent tariff, yet over a longer horizon, both sides risk further setbacks if either country shifts to alternative markets. On both sides, adjustments to cross-border barriers are neither simple nor immediate because specialized capital investments and elaborate production networks cannot be realigned without significant cost. These findings underscore the limitations of viewing trade solely through the lens of net balances. They suggest that resilience policies, dispute-resolution frameworks, and incremental diversification strategies are integral to mitigating risk. In a climate where protectionist rhetoric can swiftly translate into new barriers, maintaining stable, predictable conditions for trade in both Canada and the United States is essential to preserving the mutual gains flowing from decades of close economic integration. Cette étude examine les interdépendances commerciales complexes entre le Canada et les États-Unis, mettant en évidence la manière dont les chiffres globaux des exportations et des importations peuvent masquer des réalités économiques plus profondes. Environ les trois quarts des exportations canadiennes de marchandises sont destinées aux États-Unis chaque année, contribuant à un excédent commercial bilatéral en marchandises pour le Canada, se situant entre 100 et 170 milliards de dollars canadiens. Pourtant, lorsque les produits énergétiques sont exclus, les États-Unis affichent un léger excédent commercial avec le Canada, illustrant comment les deux pays bénéficient de chaînes de valeur transfrontalières spécialisées. L’analyse de certains secteurs démontre qu’un tarif hypothétique de 25 % sur les produits canadiens entraînerait une perte de revenus d’exportation pour le Canada, mais augmenterait également les coûts de production pour de nombreux fabricants américains dépendants des importations canadiennes. Malgré la taille plus modeste de l’économie canadienne, le potentiel de dommages économiques est réciproque. Par exemple, les constructeurs automobiles du Michigan et de l’Ohio dépendent de nombreux intrants canadiens qui traversent la frontière à plusieurs reprises, tandis que les raffineries intégrées de la côte du Golfe transforment souvent du pétrole brut en provenance de l’Alberta. La rigidité des chaînes d’approvisionnement amplifie ces vulnérabilités : les estimations de l’élasticité à court terme indiquent que les flux énergétiques pourraient ne diminuer que de 2 % en cas de tarif de 10 %, mais à plus long terme, les deux pays risquent des pertes supplémentaires si l’un d’eux se tourne vers des marchés alternatifs. Des deux côtés, l’ajustement aux barrières transfrontalières est ni simple ni immédiat, car les investissements en capital spécialisé et les réseaux de production élaborés ne peuvent être réorganisés sans coûts significatifs. Ces résultats soulignent les limites d’une approche du commerce basée uniquement sur les soldes nets. Ils suggèrent que des politiques de résilience, des cadres de règlement des différends et des stratégies de diversification progressive sont essentiels pour atténuer les risques. Dans un contexte où la rhétorique protectionniste peut rapidement se traduire par de nouvelles barrières, le maintien de conditions commerciales stables et prévisibles entre le Canada et les États-Unis est crucial pour préserver les bénéfices mutuels issus de décennies d’intégration économique étroite. |
| Keywords: | Trade interdependencies, Trade balance, Supply chains, Tariffs, Economic integration, Interdépendances commerciales, Balance commerciale, Chaînes d’approvisionnement, Tarifs douaniers, Intégration économique |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:cir:circah:2025pr-01 |
| By: | Colantone, Italo; Ottaviano, Gianmarco I. P.; Takeda, Kohei |
| Abstract: | This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we find that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of residents. In particular, higher exposure to Chinese import competition lowers the income mobility of the cohort of U.S. workers born in 1980-1982. We present a general equilibrium theory in which path dependence in sector choice of individuals over generations and mobility frictions determine the dynamics of industrial compositions across locations in a country. The theory predicts that rising import competition reduces intergenerational income mobility, consistent with the empirical findings. |
| Keywords: | import competition; distributional consequences; intergenerational income mobility |
| JEL: | F2 F14 F16 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126781 |
| By: | Zavala, Lucas; Fernandes, Ana Margarida; Haygood, Ryan; Reed, Tristan; Reyes, Jose Daniel |
| Abstract: | Quality regulation has become the dominant instrument of trade policy. Panel evidence shows that regulations classified as sanitary and phytosanitary measures and technical barriers to trade both increase trade on average. Other non-tariff measures like quotas decrease trade. Sanitary and phytosanitary measures reallocate trade from lower-income exporting countries to higher-income exporting countries, while technical barriers to trade measures do the opposite. Sanitary and phytosanitary and technical barriers to trade measures increase the sales concentration of exporting firms from lower-income countries, but do not affect the concentration of exporting firms from higher-income countries or importing firms. The costs of quality regulation are primarily borne by exporting firms, especially in lower-income countries. |
| Date: | 2023–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10601 |
| By: | Ghose, Devaki; Pinheiro Fraga, Eduardo; Fernandes, Ana Margarida |
| Abstract: | This paper quantifies the value of fertilizer for agricultural production and trade in a developing economy where agriculture is centrally important by using an unprecedented natural experiment whereby the government of Sri Lanka imposed an abrupt and unexpected ban on the imports of all chemical fertilizers in May 2021. The analysis combines novel high-frequency firm-level trade data, detailed agricultural ground production data, crop yield estimates from state-of-the-art remote sensing techniques, an d dynamic event study designs. The findings show that the fertilizer ban led to dramatic declines in agricultural production, fertilizer imports, and exports of fertilizer-dependent crops. Using a quantitative trade model, the paper finds that the ban’s welfare effects were equivalent to a 1.5 percent income reduction on average, with losses disproportionately concentrated on landowners (whose income is tied to agriculture) relative to workers and on regions specialized in the cultivation of relatively fertilizer-intensive crops. The findings quantify the equilibrium value of fertilizer in agriculture, an important estimate for any fertilizer-related policy (such as fertilizer subsidies) and for the public debate on the costs and benefits of environmental regulation more generally. |
| Date: | 2023–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10642 |
| By: | João Amador; Paulo Barbosa; Esmeralda Arranhado |
| Abstract: | This paper estimates the impact on firms’ goods exports of two key policies implemented by export promotion agencies (EPAs): matchmaking in international markets and financial grants for internationalization. We merge Portuguese rich firm-level data on exports of goods, balance sheets, and income statements, with detailed information on the activity of the EPA between 2012 and 2021. The empirical exercise estimates the causal effect of these policies with a staggered difference-in-difference estimator. We conclude that the support provided to Portuguese firms significantly and positively affected their exports of goods. Financial grants for internationalization led to a significant increase in firms’ goods exports, with a greater effect on micro and small firms and in the sectors of “Wholesale of household goods” and “Manufacture of wearing apparel”. Similarly, matchmaking activities led to a significant increase in exports. In France, the country for which Portuguese companies request the most matching support, the effect is greater for micro and small firms and in the sector of “Manufacturing of other textiles”. |
| JEL: | D22 F13 F14 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202421 |
| By: | Mitikj, Sonja; Kaushik, Siddhesh Vishwanath |
| Abstract: | Accurate trade data remain central for empirical investigations of international trade and informed formulation of trade policies. However, discrepancies in trade reporting, stemming from reasons such as logistics to deliberate misclassification, pose challenges to obtaining an accurate representation of trade activities. This paper provides a systematic examination of these discrepancies by using the Discrepancy Index, a measure of bilateral asymmetry in trade reporting. First, the paper proposes a rich set of country- and product-level indicators that capture both the frequency of misreporting and its impact on the overall recorded trade value. Second, it demonstrates how the Discrepancy Index database can aid analysis and resolve data reliability issues in international trade. This comprehensive data set is used to analyze the general trends in trade data reporting and its reliability, providing empirical insights into the nature and extent of reporting discrepancies. Finally, the paper demonstrates the practical application of the developed discrepancy database and aggregate indicators through case studies of Senegal and the trade relationship between Madagascar and France, shedding light on reporter-specific instances. The paper seeks to equip trade analysts and researchers with tools and resources to make informed decisions on the use of reported trade data and their mirror. In doing so, the study contributes to the broader endeavor of enhancing the reliability of international trade data, thereby contributing to a more accurate empirical investigation of global trade patterns and their policy ramifications. |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10792 |
| By: | Tillan, Pablo Antonio; Kokas, Deeksha; Bezerra De Goes, Carlos Andre; Lopez-Acevedo, Gladys C. |
| Abstract: | This paper examines the overall impact of exports while accounting for supply chain linkages on local labor market outcomes in the Arab Republic of Egypt between 2007 and 2018. The paper assesses the effects not only on directly exporting industries, but also on industries indirectly affected by rising export demand. Furthermore, it examines potential impacts on specific groups of workers, such as high-skilled individuals and female workers. The results show that trade does not lead to the same connection with domestic labor markets in Egypt as observed in other countries, as highlighted in the existing literature explaining the adverse effects of imports on developing countries. Despite being more open to trade, trade-intensive industries in Egypt have not experienced a significant increase in their share of employment within the overall workforce. To harness the benefits of trade, Egypt must undertake deeper reforms aimed at significantly expanding the export sector. |
| Date: | 2023–11–21 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10614 |
| By: | Beck, Anne Helene; Lim, Sunghun; Taglioni, Daria |
| Abstract: | This paper explores the evolution and resilience of global value chains (GVCs) in the agrifood sector, which intensified since the 1994 Uruguay Round Agreement. Using unique data from the FactSet database, along with Fortune 500 lists, the comprehensive analysis of approximately 17, 500 agribusiness companies worldwide examines more than 150, 000 supplier and customer connections from 2014 to 2022. The findings reveal that large corporations, acting as central nodes, have increased their network centrality in global value chains, particularly through geographic diversification and a concentrated supply strategy. The study also indicates that there is a correlation between the complexity and depth of firm-to-firm linkages and increased resilience, suggesting that firms with greater connectivity are less likely to exit the industry. The analysis not only contributes new insights into the structure and dynamics of agribusiness networks, but also highlights the role of firm linkages in navigating recent disruptive global events, such as the United States-China Trade War, the COVID-19 pandemic, extreme weather episodes, and geopolitical tensions. |
| Date: | 2024–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10774 |
| By: | Aguilar Luna, Luis Alejandro; Winkler, Deborah Elisabeth |
| Abstract: | This paper examines the relationship between trade and job quality, using productivity and wage rate data for export and non-export activities in a sample of 60 countries across all income levels and 45 sectors spanning the whole economy over 1995–2019. First, the analysis finds that workers involved in export activities are more productive and better paid than those in non-export activities. While the productivity premium for export activities is confirmed in low- and middle-income countries, there is no wage rate premium. Second, this study finds a positive relationship between exports and labor productivity at the country-sector level, which can be attributed to productivity gains within export activities as well as spillovers to non-export activities. Countries’ specialization in global value chains and sectors also matters for the relationship between exports and job quality, with manufacturing, agriculture, and business services showing stronger associations. The link between exports and the wage rate is smaller than for productivity. Finally, productivity and wage rate growth decompositions suggest that growth within rather than between activities was the driving force. Within export activities, productivity and wage increases were dominated by within-sector growth, although labor movement toward more productive sectors also matters in low- and middle-income countries. |
| Date: | 2024–03–26 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10737 |
| By: | Yuping Deng (School of Economics and Trade, Hunan University, Changsha, P.R. China); Haicheng Wang (Business School, Beijing Normal University, Beijing, P.R. China); Yanrui Wu (Department of Economics, Business School, University of Western Australia, Perth, Australia) |
| Abstract: | This paper employs web-crawling and sentiment analysis techniques to quantify public opinion and then investigates its effects on Chinese exports to trading partners during 2007-2019. The empirical results show that, after the control of possible reverse causality, negative China-related public opinion is associated with decreased exports. This relationship could be nurtured through three channels namely consumer preference, economic policy uncertainty and political conflicts. Further analysis reveals that the observed relationship is especially prevalent in developed markets and non-participatory countries of the Belt and Road Initiative as well as for industrial and capital-intensive products. In addition, it is found that political relation is positively associated with exports and plays a mitigating role in the negative relationship between public opinion and exports. Our findings have important policy implications. Policy makers are encouraged to think outside the box and exploit soft power of country image to promote exports. |
| Keywords: | China-related public opinion, export, sentiment analysis, political relations |
| JEL: | F14 F19 P16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:uwa:wpaper:24-03 |
| By: | Adao, Rodrigo; Costinot, Arnaud; Donaldson, Dave |
| Abstract: | The primary motivation behind quantitative modeling in international trade and many other fields is to shed light on the economic consequences of policy changes. To help assess and potentially strengthen the credibility of such quantitative predictions we introduce an IV-based goodness-of-fit measure that provides the basis for testing causal predictions in arbitrary general-equilibrium environments as well as for estimating the average misspecification in these predictions. As an illustration of how to use our IV-based goodness-of-fit measure in practice, we revisit the welfare consequences of Trump's trade war predicted by Fajgelbaum et al. (2020). |
| Keywords: | international trade; urban economics; testing economic models |
| JEL: | C52 C68 E17 F10 R10 |
| Date: | 2024–06–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126756 |
| By: | Alexandros Ragoussis; Rigo, Davide; Santoni, Gianluca |
| Abstract: | Using two decades of granular data on foreign direct investments, this study shows a consistent global rise in the concentration of cross-border investments within fewer multinational firms. This concentration is most prominent in developing economies, reaching record highs in recent years. Structural shifts into services do not stand out as the primary driver of variation in investment concentration across countries and over time. Instead, concentration has grown significantly more in destinations facing high economic uncertainty. |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10815 |
| By: | Norris Keiller, Agnes; Obermeier, Tim; Teichgraeber, Andreas; Van Reenen, John |
| Abstract: | When firms sell in multiple markets, estimates of markups from the demand-side will generally diverge from estimates based on the supply-side (e.g. via production functions). The empirical examination of the importance of this fact has been hampered by the absence of market-specific cost data. To overcome this, we show production markups can be expressed as the revenue-weighted average of demand-based markups across markets (and products). This highlights that a divergence in demand-based and production-based markups is due to the revenue shares and markups across foreign and domestic markets, factors that can be assessed with readily available trade data. Using data from auto firms producing in the UK, we show production-based markups increased between 1998 and 2018 whereas demand-based markups decreased. These trends can be reconciled by an increase in the markup that UK-based producers gained on their exports, which we corroborate using administrative trade data. We find that increases in production-based markups have been driven by exports, particularly to China where foreign brands command high markups. |
| Keywords: | markup divergence; auto markets; supply and demand |
| JEL: | F10 L10 |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126747 |
| By: | Alrababah, Ala; Beerli, Andreas Jürg; Hangartner, Dominik; Ward, Dalston |
| Abstract: | The main theories explaining electoral backlash against immigration focus on citizens' cultural, economic, and security concerns. We test these predictions in Switzerland, which opened its labor market to neighboring countries in the 2000s. Employing a difference-in-differences design, we document a substantial rise in immigrant workers in Swiss border municipalities after the border opened. This was accompanied by a 6-percentage-point (95% confidence interval: 2--10) increase in support for anti-immigrant parties, equivalent to a 32% rise at the mean. However, we find no adverse effects on citizens' employment, wages, or subjective perceptions of economic, cultural, or security threats. Instead, we describe how far-right parties introduced novel narratives related to overcrowding to advance hostility toward immigrants. We provide evidence that this rhetoric targeted border municipalities, where it had the greatest impact on voters susceptible to political persuasion. Together, these findings suggest that elites can play a role in driving anti-immigrant votes. |
| Date: | 2024–01–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:hgczq_v1 |
| By: | Boehm, Johannes; Chaney, Thomas |
| Abstract: | What caused the end of antiquity, the shift of economic activity away from the Mediterranean towards northern Europe? We assemble a large database of coin flows between the 4th and 10th century and use it to document the shifting patterns of exchange during this time period. We build a dynamic model of trade and money where coins gradually diffuse along trade routes. We estimate the parameters of this model and recover time-varying bi-lateral trade flows and real consumption from data on the spatial and temporal distribution of coins. Our estimates suggest that technical progress, increased minting, and to a lesser degree the fall in trade flows over the newly formed border between Islam and Christianity contributed to the relative growth of Muslim Spain and the Frankish lands of northern Europe and the decline of the Roman-Byzantine world. Our estimates are consistent with the increased urbanization of western and northern Europe relative to the eastern Mediterranean from the 8th to the 10th century. |
| Keywords: | gravity models; international trade; market access; diffusion |
| JEL: | F1 O1 N73 |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126785 |
| By: | Von Arnim, Rudiger; Tröster, Bernhard; Raza, Werner |
| Abstract: | Is the harmonization of different food standards between countries in the context of free trade agreements exclusively positive, or is there a risk of high social costs for consumers? The harmonization of different national regulations plays an important role in contemporary trade policy. In this paper, the costs and benefits of harmonizing food safety regulations between the EU and the USA are estimated, using the ÖFSE Global Trade Model. The results show that the cost savings for companies due to the harmonization of regulatory standards are significantly lower than the associated negative effects on public health. Trade policy impact assessments must therefore take into account the social costs of regulation. |
| Abstract: | Ist die Angleichung unterschiedlicher Lebensmittelstandards zwischen Ländern im Kontext von Freihandelsabkommen ausschließlich positiv zu bewerten, oder besteht hier die Gefahr von Qualitätsverlusten mit hohen sozialen Kosten für die betroffene Bevölkerung? Die Angleichung unterschiedlicher nationaler Regulierungen spielt in der zeitgenössischen Handelspolitik eine wichtige Rolle. In diesem Working Paper werden die Kosten und Nutzen der Angleichung von Lebensmittelsicherheitsvorschriften zwischen der EU und den USA mithilfe des "ÖFSE Global Trade Model" exemplarisch abgeschätzt. Die Ergebnisse zeigen, dass die Kostenersparnisse für Unternehmen aufgrund der Angleichung regulatorischer Standards deutlich geringer ausfallen als die damit einhergehenden negativen Effekte auf die öffentliche Gesundheit. Die handelspolitische Folgenabschätzung muss daher die gesellschaftlichen Kosten regulatorischer Qualitätsverluste systematisch berücksichtigen. |
| Keywords: | non-tariff barriers, TTIP, CETA, free-trade agreements, global markets |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:hbsfof:311845 |
| By: | Ottaviano, Gianmarco I. P.; Suverato, Davide |
| Abstract: | Fantastic beasts are magical creatures that cannot be seen unless one looks for them with the eye of the wizard, but that still play a significant role in the world. The fantastic beasts we hunt and find in the present paper are welfare changes induced by resource shocks that are invisible in quantitative trade models with monopolistic competition and heterogeneous firms if one relies on the pervasive assumption of demand exhibiting constant elasticity of substitution. We argue that, for fantastic beasts to materialize, markups have to vary across firms and firm heterogeneity has to vary across sectors. This is shown both theoretically and empirically exploiting a panel of 76 countries and 17 manufacturing industries for the period 1995-2020. |
| Keywords: | quantitative trade models; variable markups; incomplete pass-through; resource shocks; immiserizing growth |
| JEL: | F12 F43 |
| Date: | 2024–04–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126822 |
| By: | Leone, Fabrizio |
| Abstract: | The diffusion of automation technology raises questions about the future of work, leading to calls for policy interventions. The ongoing debate centers on the decisions made by technology adopters. In this paper, I study supply-side adjustments and their role in shaping policy outcomes. I focus on the global market for industrial robots, a leading type of automation technology, where a few multinational enterprises (MNEs) dominate sales. To evaluate how these MNEs respond to policy changes, I collect new data on their characteristics and global sales networks. I then develop and estimate a multi-country general equilibrium model featuring oligopolistic multinational robot sellers. Using this model, I find that MNEs' market entry and pricing responses transmit internationally and amplify the aggregate and distributional effects of policies targeting robots. |
| Keywords: | multinational enterprises; market power; automation |
| JEL: | F1 F16 F23 L13 O33 |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126784 |
| By: | John C. Keyser; Charles Kunaka; Walkenhorst, Peter |
| Abstract: | The mobility restrictions and health measures imposed during the COVID-19 pandemic have had highly adverse impacts on small-scale cross-border trade. One coping strategy that traders have pursued is to engage in group trade, that is to combine their loads and cross the border using a larger cart or vehicle. This paper uses a cross-sectional data set derived from a survey of traders at the borders between the Democratic Republic of Congo and Burundi and Rwanda to assess the determinants of participation in group trade. The findings from the econometric analysis point to association membership, business registration, and motorized transport as being important factors for traders’ participation in new cooperative trade arrangements. Moreover, successful group traders have been in a position to increase their incomes by reaching new clients and obtaining higher prices. These results suggest that policy efforts to promote group trade could usefully focus on enhancing the integration of small-scale traders into regional supply chains. However, group trade has mainly benefitted the better-off segments of the trader population, so that any assistance projects to enhance group trade risk further increasing the income gap in border communities. |
| Date: | 2023–10–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10589 |
| By: | Bell, Brian; Johnson, Philip |
| Abstract: | We examine the wage and occupation outcomes for cohorts of immigrants who arrived in the UK since 2002. Using the Annual Survey of Hours and Earnings (ASHE) with a matched migrant identifier, we can follow a 1% sample of all workers (native and migrant) within and across jobs. This also allows us to identify relative attrition rates between natives and migrants. The work focuses in particular on workers who arrived in the UK since 2004 as part of EU expansion. Consistent with prior work, we find substantial evidence of occupational downgrading for these migrants. Importantly, the panel data allows us to track these workers in subsequent years and we find very little evidence of substantial labour market improvement from initial entry. This result is robust to accounting for non-random attrition. |
| Keywords: | wages; immigration |
| JEL: | J31 J61 |
| Date: | 2024–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126753 |
| By: | Leonelli, Giulia Claudia |
| Abstract: | The exercise of environmental ‘leverage’ via trade-related measures and trade in environmental goods offers opportunities to tackle the climate crisis and advance transnational decarbonization. Inward-looking, adversarial, and short-term national security-centred approaches, however, are disrupting the trade and climate change mitigation linkage. This article employs the race for critical raw materials and US and EU strategies to promote the net-zero transition at the domestic level as case studies to illustrate the environmental pitfalls of the ‘securitization’ of the trade and climate change mitigation nexus. The article demonstrates that the pursuit of strategic dominance in key net-zero sectors, attempts to exclude systemic rivals and reshore supply chains, opportunistic forms of friendshoring and loose agreement on regulatory means jeopardize recourse to environmental ‘leverage’ and undermine decarbonization at both national and transnational levels. This analysis casts a light on the inherent tension between national security and climate change mitigation. Taking stock of these findings, the article advocates a radically different approach to the governance of the trade and climate change mitigation nexus. |
| Keywords: | decarbonisation; national security; critical raw materials; net-zero transition; Inflation Reduction Act; industrial policy; reshoring; friendshoring |
| JEL: | L81 |
| Date: | 2025–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:120553 |
| By: | João Amador; Paulo Barbosa; João Cortes |
| Abstract: | This paper studies firms’ distances to becoming successful exporters. The empirical exercise uses rich data on Portuguese firms and assumes that there are significant features distinguishing exporters from non-exporters. An array of machine learning models—Bayesian Additive Regression Tree (BART), Missingness Not at Random (BART-MIA), Random Forest, Logit Regression, and Neural Networks—are trained to predict firms’ export probability and to shed light on the critical factors driving the transition to successful export ventures. Neural Networks outperform the other models and remain highly accurate when export definitions and training and testing strategies are changed. We show that the most influential variables for prediction are labor productivity and the share of imports from the EU in total purchases. Additionally, firms at the median distance to sell in international markets operate with about twice the assets of the group in the decile more distance from exporting. Firms in the decile closest to the export market operate with around 12 times more assets than those in the decile more distant from exporting. |
| JEL: | C53 C55 L2 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202420 |
| By: | Schmitz, Tom; Colantone, Italo; Ottaviano, Gianmarco I. P. |
| Abstract: | This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy's impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250'000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries. |
| Keywords: | environmental policy; employment; trade; clean air act |
| JEL: | E24 Q50 Q53 |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126761 |
| By: | Carlos, Jean Clarisse T.; Baladjay, Deryk Matthew N. |
| Abstract: | This study examines the interplay between Asia-Pacific geopolitics and the Philippines' critical industries, focusing on telecommunications, energy, mining, and digital infrastructure. Utilizing a Philippine-centric lens, it explores how geopolitical tensions—particularly between the U.S. and China—affect industry-specific vulnerabilities and value chains. Drawing from qualitative data, including key informant interviews across APEC economies, the research highlights the strategic importance of multilateral cooperation, trade diversification, and policy harmonization within APEC. It integrates World-Systems theory to analyze the systemic impacts of geopolitical dynamics and proposes actionable strategies for bolstering industry resilience while aligning with regional and global development goals. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | critical industries;geopolitics;Asia-Pacific;APEC;Asia-Pacific Economic Cooperation |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-49 |
| By: | Nana, Ibrahim; Motelle, Sephooko Ignatius; Starnes, Susan K. |
| Abstract: | During the past decades, extensive literature has emphasized the role of both international trade and openness in fostering economic growth. Endogeneity bias is a nagging challenge for any empirical attempt to study the causal relationship between trade and economic growth. This study contributes to the existing stock of knowledge and helps to address these challenges by introducing new instrumental variables for trade. The study samples 197 countries over 1970–2020. The findings suggest that international trade has a positive and significant effect on gross domestic product per capita, which tends to be higher for emerging markets and development economies. Thus, the study provides an enhanced empirical foundation for the expectation that investments made to support trade are also good for economic growth, especially in emerging markets. |
| Date: | 2023–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10645 |
| By: | Hillberry, Russell Henry; Cases Jimenez, Manuel Felipe |
| Abstract: | This paper studies the consequences of a U.S. cabotage law for Puerto Rico (PR). Data on ship arrivals in PR show that the fleet of U.S. vessels that call there lacks capacity for carrying non-containerized freight. Empirical estimation using trade data shows that PR’s imports of sea-shipped final products are biased against U.S. mainland sources. This bias is strongest for heavy products and products not typically shipped in containers. Among upstream products, a strong bias against imports of sea-shipped products applies to all sources. Estimated tariff-equivalent costs among final products imply static annual welfare losses of 1.1 percent of household consumption ($203 per person). The same tariff-equivalent cost estimates imply that the law raises the cost of investment in PR by 3.0 percent. The observed bias against sea-shipped inputs in PR’s imports may result from long-run industry location decisions that have been influenced by the law's presence. |
| Date: | 2024–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10780 |
| By: | Rosenow, Samuel Kaspar; Mealy, Penelope Ann |
| Abstract: | Reaching net-zero emissions by 2050 requires unprecedented scaling up in the global deployment of critical decarbonization technologies, such as solar photovoltaics, wind turbines, and electric vehicles (EVs). This challenge is currently rife with risks and rewards. With global production perceived to be concentrated in a small number of countries, mitigating against possible supply-side risks has become an urgent policy priority for many countries. At the same time, these technologies’ high-growth potential offer lucrative rewards for countries able to strategically position themselves to produce requisite materials, components or assemble final products. As green industrial policies have become an increasingly popular tool for shoring up supply chains and stimulating production in key green sectors, this paper presents a data-driven framework for identifying which countries could have key strengths and latent comparative advantages in the production of solar PV, wind turbines and EVs. It constructs a new dataset of traded products, components, and materials associated with decarbonization technologies and develops new indices capturing countries’ current export strengths and future diversification potential in the global value chains of these technologies. It also highlights products with supply risks due to high market concentration levels and those with development rewards in terms of their potential for growth, knowledge spillovers, and technological upgrading. Our analysis suggests that there is plenty of opportunity to diversify these value chains across a larger number of countries and reduce risks associated with reliance on only a few countries. |
| Date: | 2024–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10696 |
| By: | Shepherd, Ben; Winkler, Deborah Elisabeth |
| Abstract: | Trade and labor markets are intimately connected. This connection presents governments with a dual economic challenge that cannot be resolved without social compromise: maximizing aggregate gains but minimizing disaggregated costs, which can include losses to individuals and groups. This paper draws on recent research to develop a framework for thinking rigorously about these linkages. It then examines aspects of policy design and implementation that relate directly to labor market outcomes. It discusses three sets of policies that are required to help resolve the government’s dual challenge in a sustainable way: policies for people, sectors, and places. The framework includes policies to mitigate losses and facilitate movement of workers, classical trade policies, and a broad set of complementary policies that reduce trade costs. It also looks at the need for fiscal space to implement policies, and highlights the tension between tariff reductions and trade-related taxes, especially in countries where trade taxes account for a significant proportion of total government revenue. |
| Date: | 2023–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10637 |
| By: | Burgold, Peter; Ernst, Anne; Hinterlang, Natascha; Jäger, Marius; Stähler, Nikolai |
| Abstract: | In this paper, we compare the economic and welfare implications of two carbon pricing policies, namely the European Cap and Trade (CaT) regime and the Chinese Tradeable Performance Standard (TPS). The former sets an economy-wide emissions target and forces firms to purchase sufficient certificates. The latter sets an emissions intensity and requires firms with a higher intensity to either abate or buy emissions allowances from firms with lower-than-target intensities. It can be shown that TPS is equivalent to CaT when carbon pricing revenues are redistributed to firms according to output. In a dynamic multi-sector general equilibrium TANK model, we show that TPS outperforms a CaT regime that redistributes carbon revenues to households in a lump-sum manner, both, in terms of output gains and welfare due to lower costs on the production side. However, CaT with labor tax reduction increases welfare most because it alleviates distortions on the production side and improves the income situation of all households. |
| Keywords: | Carbon Pricing, Cap and Trade, Tradable Performance Standard, Dynamic General Equilibrium Model, Sectoral Heterogeneity, Input-Output Matrix |
| JEL: | E32 E62 H23 H32 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:311837 |
| By: | Anne, Clement Xavier Frederik; Chalendard, Cyril Romain; Fernandes, Ana Margarida; Rijkers, Bob; Vicard, Vincent |
| Abstract: | To identify transactions at risk of tariff evasion, this paper matches export transaction data from France with import transaction data from Madagascar using container identifiers. Reporting discrepancies between exporters and importers are prevalent but small, with over two-fifths of importers reporting in a way that increases their tariff liability. Yet, aggregate tariff revenues are 24 percent lower due to discrepancies. These revenue losses are highly concentrated: the top five evaders account for three-quarters of all tariff revenue losses and larger shipments are more at risk of evasion. Tariff enforcement in Madagascar is ineffective and only marginally mitigates revenue losses. |
| Date: | 2023–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10606 |
| By: | Tommaso Sonno; Davide Zufacchi |
| Abstract: | Large-scale land acquisitions are a key component of agricultural foreign direct investment. In 2023 alone, nearly 6% of the world's arable land was acquired globally. This paper examines their impact on agricultural production, environmental outcomes, and local communities. To identify these effects, we exploit an exogenous increase in palm oil land acquisitions driven by the Ebola epidemic in Liberia. We find a 54% growth in production, primarily due to an expansion in cultivated hectares rather than large improvements in land productivity, accompanied by a significant rise in palm oil exports. Our results indicate that LSLAs have altered the equilibrium of palm oil production, fuelling the adoption of an extensive monoculture system oriented toward international markets. The expansion of this tradable industry generated modest positive effects on the local economy and spurred a process of structural transformation. Women transitioned from agriculture to service and sales jobs, while men shifted into manual labour positions. However, all of this came at a cost: increased deforestation, air pollution, and a decline in local land ownership. |
| Keywords: | large-scale land acquisitions, agricultural production, structural transformation |
| Date: | 2025–02–17 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2075 |
| By: | Bou Habib, Chadi |
| Abstract: | This paper investigates the similarities between the economy of 1912 Mount Lebanon on the eve of the famine of 1916 and the economy of 2004 Lebanon that set the stage for the major economic and social crisis of 2019. A simple general equilibrium simulation shows that, as long as the Lebanese economy remains reliant on foreign inflows, crises will persist, with different manifestations. Regardless of the period considered, foreign inflows increase domestic prices and induce real appreciation. Low productive capacities and insufficient job creation lead to high emigration. Emigration increases the reliance on foreign inflows, which in turn increase domestic prices and reduce competitiveness, hence triggering further emigration and further reliance on foreign inflows. Income and prices increase, but exports decline, and growth remains volatile. The interruption of the flows of capital and goods and the impossibility to migrate due to the First World War drove Lebanon into starvation in 1916. The interruption of inflows of capital in 2019 led to a major crisis and massive outmigration, as predicted through the simulations based on the structure of the Lebanese economy in 2004. The simulations effectively capture the impact of external shocks on the Lebanese economy and closely align with the actual changes in economic variables during 2005 to 2020. |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10688 |
| By: | Di Maio, Michele; Elmallakh, Nelly Youssef Louis William; Leone Sciabolazza, Valerio |
| Abstract: | Changes in the sentiment of migration-related news published in destination countries affect the timing of migrants’ journeys to these countries. Using geo-localized data on migrants in Libya and the complete record of news articles in their country of destination, this paper shows that a worsening news sentiment leads to migrants staying longer in Libya, slowing down their journeys to their final destinations. The paper validates these results by showing that the effect is concentrated in locations with internet connections. The results indicate that changes in news sentiment have a significant impact only for some groups of migrants and under specific conditions, suggesting a limited effect on overall migrant movements. Finally, the paper provides suggestive evidence that a worsening news sentiment in the preferred destination induces substitution across destination countries, yet it does not make migrants return to their country of origin. |
| Date: | 2024–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10754 |
| By: | David Baqaee; Hannes Malmberg |
| Abstract: | This paper examines the long-run economic consequences of Western sanctions on Russia. Using a new framework for balanced growth path analysis, we find that the long-run declines in consumption are significantly larger when capital stocks are allowed to adjust --- 1.4 times larger for Russia and 2.2 times larger for Eastern Europe. This is contrary to the common intuition that long-run effects should be milder due to greater adjustment opportunities. In our model, Russian long-run consumption falls by 8.5%, Eastern European consumption by 2%, and Western countries' consumption by 0.3% in response to sanctions. The model also reveals important distributional effects: as capital adjusts, Russian real wages fall more than rental prices in the long run. These findings show that accounting for capital adjustment is quantitatively important when analyzing trade sanctions. |
| JEL: | E0 F0 F1 F5 F51 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33506 |
| By: | Chee, Liberty (Ca' Foscari University of Venice) |
| Abstract: | This draft contains parts of the conclusion of the book manuscript with the same title as above. The book unpacks the “market logic” of private recruitment and employment agencies as actors in migration governance. It looks into why these actors play such an outsized role in domestic worker migration, and examines their relations with employers, workers and state apparatuses. The book argues that these relations comprise neoliberal migration governance – a governmental rationality that cedes authority to the market. |
| Date: | 2024–04–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:qsyn3_v1 |
| By: | Antonin Bergeaud; Max Deter; Maria Greve; Michael Wyrwich |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on German patents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | patents, migration, Germany, iron curtain, innovation |
| Date: | 2025–02–19 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2076 |
| By: | Pavel, Md Eyasin Ul Islam Ul Islam |
| Abstract: | This paper presents a comprehensive analysis of the dimensions of immigration integration and engagement within the United States, utilizing a dataset provided by the International City/County Management Association (ICMA). The study's objective was to identify and understand the factors that significantly affect the incorporation of immigrant populations into the social and political life of American communities. Through meticulous preprocessing and rigorous validation processes, including factor analysis and comparative studies, we analyzed variables such as the size of the immigrant population, forms of local government, regional influences, and service provisions. The results highlighted the size of the immigrant population as a pivotal factor, with larger communities exhibiting more pronounced integration and engagement. The form of government and regional characteristics also emerged as influential, affecting policy-making and access to resources, which are instrumental in shaping the immigrant experience. Notably, services provided by educational institutions were found to be critical in supporting immigrant integration. |
| Date: | 2023–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wyz96_v1 |
| By: | Jacob Moscona; Karthik A. Sastry |
| Abstract: | An influential explanation for global productivity differences is that frontier technologies are adapted to the high-income countries that develop them and "inappropriate" elsewhere. We study this hypothesis in agriculture using data on novel plant varieties, patents, output, and the global range of crop pests and pathogens. Innovation focuses on the environmental conditions of technology leaders, and ecological mismatch with these markets reduces technology transfer and production. Combined with a model, our estimates imply that inappropriate technology explains 15-20% of cross-country agricultural productivity differences and re-shapes the potential consequences of innovation policy, the rise of new technology leaders, and environmental change. |
| JEL: | O3 O33 O4 O44 Q16 Q56 Q57 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33500 |
| By: | Bertoli, Simone; Mckenzie, David J.; Murard, Elie |
| Abstract: | Migration changes how families form and dissolve, and how one should conceptualize the family. This has implications for thinking about how the migration decision is modelled when individuals are unable to picture the counterfactual families they may have. Differences in marital status can induce two otherwise identical individuals to make different migration decisions. It also has implications for attempts to causally estimate impacts of migration, when the family composition changes with the migration decision itself. This paper shows empirically that changing marital status after migration is widespread, and that the traditional model of a fixed family sending off a migrant who remains part of that same family only describes a minority of migrants moving from developing countries to the U.S. The authors draw out lessons from thinking about counterfactual families for empirical research and for migration policy. |
| Date: | 2023–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10626 |
| By: | Pia Andres |
| Abstract: | Should policymakers protect European firms by restricting imports of solar technology from China? Pia Andres finds that Chinese competition has resulted in many European firms going out of business, but it has also prompted more intense innovative activity among some of those that have survived. |
| Keywords: | Green Growth, Economic geography, Globalisation, Technological change |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:694 |
| By: | Alviarez, Vanessa; Pedroni, Peter; Powell, Andrew; Quevedo Rocha, Ingri Katherine |
| Abstract: | This study investigates the disconnect between falling agricultural commodity prices and persistent food inflation by applying a Heterogeneous Vector Autoregression (VAR) model to a panel of 203 countries using data from 1961 to 2022. It analyzes the impact of global crops, fertilizer, and oil prices on domestic inflation and explores the asymmetries in the pass-through of global shocks. Results show that fertilizer price shocks significantly influence crop prices, especially maize and soybeans, while production shocks have a weaker effect. Demand-driven price changes exhibit higher pass-through to food inflation compared to supply-driven shocks, with country-specific characteristics shaping these responses. A historical decomposition reveals that global factors played a larger role in inflation during 2021, particularly for emerging economies, while advanced economies were more affected by domestic shocks. These findings highlight the importance of tailored policies to mitigate inflation in the face of global commodity price volatility. |
| JEL: | E30 E31 Q02 Q11 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13986 |
| By: | Proestou, Maria; Schulz, Nicolai; Feindt, Peter |
| Abstract: | Policies to promote the transition from carbon-based to bio-based economies are proliferating around the globe. Meanwhile, concerns are growing about the resilience of bioeconomy, but the attention given to resilience issues in bioeconomy policies has remained underexplored. To address this gap, we conduct a systematic content analysis of the resilience orientation in 78 bioeconomy policy documents across 50 countries. Our descriptive statistical analyses show that more than 60 per cent of the average policy text concerns resilience-related goals or instruments, driven particularly by adaptability and transformability considerations. Our explorative correlational analysis indicates that policy design spac-es characterized by political openness, economic wealth, high arable land shares, low export shares, and limited oil rents might be conducive to high resilience orientation. These findings contribute to a better understanding of the role of resilience concepts in global bioeconomy policy making. |
| Date: | 2023–11–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:5xzwf_v1 |
| By: | Lall, Somik V.; Rajan, Raghuram Govind; Schoder, Christian |
| Abstract: | This paper proposes an objective way of estimating and allocating “differentiated” responsibilities for carbon emissions across countries. These responsibilities translate into specific obligations and incentives for future emission reductions and support for adaptation, mitigation, and development. The proposals in this paper should be seen as a starting point for an informed and productive debate. Under the Global Carbon Reduction Incentive, every country that emits more than the per capita global average pays into a global incentive fund. This annual payment will be calculated based on the “excess” emissions per capita, the country’s population, and a dollar amount called the Global Carbon Incentive. Countries below the global per capita average would receive a payout commensurate with their “under-emission.” The United States and China are the two biggest emitters and, assuming a Global Carbon Incentive of $10, they jointly would contribute more than $70 billion to the fund, from which nations such as India, Nigeria, Pakistan, Bangladesh, and Indonesia would be the major recipients. An important adjustment to the Global Carbon Reduction Incentive is to focus on consumption rather than production—a country should not avoid responsibility for the carbon it consumes by outsourcing production to another country. The proposal considers that countries that have used more of the collective carbon budget have benefited from the associated development and should pay for it. The proposal also considers methane emissions as well as crediting countries for their efforts toward preventing deforestation. |
| Date: | 2024–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10759 |
| By: | Gemma Dipoppa; Shanker Satyanath |
| Abstract: | Official reports from the International Labor Organization have been increasingly highlighting the pervasive presence of forced labor, especially involving migrants, in the developed world. There is, however, little work explaining the demand-side determinants of modern forced labor. We address this gap by focusing on variations in modern forced labor within a single developed country (Italy). Regression discontinuity and triple differences designs show that modern forced labor is strongly associated with prior exposure to the ideology of the Italian Fascist regime (1922-43) which emphasized the subjugation of non-white ethnic groups (the primary subjects of forced labor). |
| Keywords: | migration, ideology, political extremism, labor coercion |
| JEL: | J7 J15 J81 O15 P00 Z00 |
| Date: | 2023–06 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1395 |
| By: | Yang, Ron Nan |
| Abstract: | How prevalent are empty miles in freight trucking markets, and what are the economic frictions that contribute to empty miles This study collected estimates of empty trips, empty miles, and backhaul probabilities from the economics and transportation literature, covering 40 years and 27 countries. A meta-analysis provides an average empty mile share of 29 percent, with significant variation across settings. High-income countries tend to have lower shares of empty miles than low- and middle-income countries. This study reviews empirical evidence behind three potential mechanisms behind empty trips, geographic imbalances in freight demand, search and matching frictions, and regulatory barriers, and develops a stylized model to capture these sources and evaluate potential policies. |
| Date: | 2024–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10775 |