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on International Trade |
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Issue of 2025–04–28
35 papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Gnangnon, Sèna Kimm |
| Abstract: | The present analysis investigates the effect of the World Trade Organization (WTO)’s surveillance of trade policies (MSTP) on its member states’ economic institutions (regulatory quality and government effectiveness), participation in global value chains (GVCs) and export upgrading. The analysis shows that the MSTP helps improve economic institutions in NonAfrican countries than on African countries, although to a greater extent in the former than in the latter. However, there is no significant effect of the MSTP on backward GVC participation and export upgrading in African countries, reflecting the fact that the review of trade policies has not led to a diversification of manufactured exports across different types of manufactures. On the other hand, the MSTP promotes backward GVC participation and export upgrading in NonAfrican countries. The analysis has also shown that member states that are subject to a higher frequency of trade policy reviews enjoy a greater participation in GVCs, and a higher export upgrading. However, there is no systematic evidence that the MSTP enhances economic institutions, fosters GVC participation and export upgrading, as countries undertake greater liberalization commitments. Overall, the analysis shows that by enhancing multilateral trade cooperation and helping member states (e.g., NonAfrican countries) improve domestic policy and institutional reforms, the MSTP can be instrumental in enhancing GVC participation and export upgrading in reviewed member states. These findings are particularly relevant in the present context of intensification of geopolitical tensions. |
| Keywords: | Multilateral Surveillance of Trade Policies, Economic institutions, Participation in GVCs, Export upgrading |
| JEL: | F13 F14 H11 O1 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:313119 |
| By: | Steinbach, Sandro; Yildirim, Yasin |
| Abstract: | The U.S. walnut industry is experiencing growing economic uncertainty due to shifting trade policies and the threat of retaliatory tariffs. This report analyzes the potential trade risks under seven different policy scenarios, drawing on historical trade data and trade elasticity estimates. The findings indicate that while isolated actions, such as China’s 125% tariff, may have limited effects, broader retaliation from multiple trading partners could significantly disrupt export demand, with losses reaching up to $160 million. |
| Keywords: | Agribusiness, Agricultural and Food Policy, International Relations/Trade |
| Date: | 2025–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:ags:ndsure:356492 |
| By: | Vigninou Gammadigbe (Central Bank of West African States) |
| Abstract: | What are the effects of sanctions on trade with third countries in a context of globalization and increasingly interconnected economies? This paper addresses this issue, using the new Global Sanctions Database (GSDB) and a gravity model estimated on a global sample of 191 countries, from 1960 to 2021. First, it emerges that the imposition of sanctions initially favors trade between the sanctioning country and third countries. However, a decrease in exports with third countries (back to sender effect) occurs when the number of countries sanctioned by the sender exceeds a threshold. Second, sanctions disrupt the targeted country’s exports to third countries. However, there is evidence of a non-linear relationship with an increase in exports to third countries as the number of countries imposing sanctions on the target exceeds a threshold (back to equilibrium effect). These effects are made possible on the one hand by the implicit sanctions imposed by consumers and companies in third countries, and on the other by their involvement in evading sanctions. The results suggest that sanctioning countries need to be transparent, credible and honest about their objectives, to win the support of third countries in international organizations, or face significant costs in terms of export losses as the number of sanctioned countries increases. The back to equilibrium effect in the sanctioned country suggests the exploration of alternative avenues such as diplomacy in the resolution of international conflicts to avoid huge economic losses for both sanctioned and sanctioning countries. |
| Keywords: | Economic sanctions, bilateral trade, gravity model |
| JEL: | F10 F13 F14 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202508 |
| By: | Gnangnon, Sèna Kimm; Iyer, Harish |
| Abstract: | This article examines the effect of special and differential treatment (S&D) flexibilities embedded in the World Trade Organization (WTO) rules on trade reforms, manufactured exports and export upgrading in least developed countries (LDCs). The empirical analysis uses the entropy balancing approach over different samples with data spanning the annual period from 1996 to 2018. The treatment group includes LDCs that acceded to the WTO under the WTO Article XII, (LDC Article XII Members). Control groups include carefully selected countries among non-LDC developing countries that did not join the WTO under Article XII (referred to as LDC founding Members). The findings show that the utilization of S&D flexibilities is associated with a greater trade policy liberalization in LDC Article XII Members, but with a greater trade protectionism in LDC founding Members. The utilization of S&D flexibilities is also associated with higher trade costs for manufactured goods, but to a lesser extent for LDC Article XII Members than for LDC founding Members. In connection with these findings, the utilization of S&D flexibilities leads to an improvement in manufactured exports across different types of manufactures, and export upgrading in LDC Article XII Members, but to the reverse outcomes in LDC founding Members. Finally, the utilization of S&D flexibilities enhances the integration of LDC Article XII Members into the world market of manufactured exports, while it does not for LDC founding Members. The implications of the analysis are discussed. |
| Keywords: | Special and Differential Treatment, WTO rules, Least developed countries, Trade reforms, Manufactured exports, Export Upgrading |
| JEL: | F13 F14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:313359 |
| By: | Thuy Hang Duong; Weifeng Larry Liu |
| Abstract: | From the 1990s until COVID-19, the world experienced a sustained period of low and stable inflation, alongside a marked increase in trade integration among countries. This paper examines the impacts of international trade on inflation through production networks. We first construct a theoretical model of an open economy to illustrate how input-output networks propagate the price impacts of trade shocks. Using Australia as a case study, we find that the network impacts of trade shocks on inflation are as significant as their direct impacts, and primarily propagate upstream, based on data of 47 manufacturing industries from 2000 to 2023. Australia’s low inflation before COVID benefited from increasing exposure to China’s low-cost exports, while inflation surged during COVID due to global supply chain disruptions, among other factors. This paper underscores the importance of economic globalization for inflation through production networks, and offers several implications for monetary and trade policies. |
| Keywords: | inflation, international trade, production networks, propagation of shocks |
| JEL: | C67 D57 E31 F13 F41 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-23 |
| By: | Rodolfo Campos (Banco de Espana); Mario Larch (University of Bayreuth); Jacopo Timini (Banco de Espana); Elena Vidal (Banco de Espana); Yoto Yotov (School of Economics, Drexel University) |
| Abstract: | The World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), are key institutions of the multilateral trading system. While the WTO is expected to promote trade by reducing tariffs and non-tariff barriers, existing estimates of its effect on trade vary widely in magnitude, sign, and significance. We collect 2, 547 estimates from 71 papers and apply meta-analysis techniques to conduct a systematic quantitative review of the literature, complementing it with established advances in gravity models to obtain estimates of the WTO's impact on trade. The meta-analysis shows that, on average, the literature finds a significant and positive trade effect of the WTO, although the estimates depend strongly on study characteristics. Moreover, we find no evidence of publication bias. Our structural gravity estimates confirm these findings: the WTO increases trade. However, the effects are heterogeneous across sectors and income levels of trading partners. |
| Keywords: | World Trade Organization, trade, gravity model, meta-analysis |
| JEL: | C83 F13 F14 F15 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202505 |
| By: | Jang, Youngook (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This brief examines recent trends in the EU's industrial and trade policies related to net-zero strategic technologies and their supply chains. It then analyzes the impact of these policies on global supply chain reshaping. As a major player in global supply chains and an active participant in the transition to a net-zero economy, the EU has recently been promoting industrial competitiveness through various industrial and trade policies. Quantitative analyses imply that these policies will likely increase intra-EU trade and reduce extra-EU trade. Korea should respond and adapt to changes in the global trade environment by drawing up Korean industrial policies using EU examples as a reference. |
| Keywords: | EU; strategic; net-zero; technology; global; supply chain |
| Date: | 2025–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:2025_008 |
| By: | Hu, Cui; Li, Ben G. |
| Abstract: | Although Google is blocked in China, Chinese provinces export significantly more to foreign countries that recently searched for them (up to 12 months prior). This attention premium is found mainly at the extensive margin of exports, larger in products that are relatively homogeneous, substitutable, and upstream in the production process, and more pronounced during the COVID pandemic and during the holiday season. The attention premium is not found for Chinese imports from the rest of the world. Our findings attest to online attention as a scarce resource in international trade allocated by importers. |
| Keywords: | Trade, information frictions, scarce attention, internet censorship |
| JEL: | D83 F14 |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124177 |
| By: | Mr. Gilles Montagnat-Rentier; Brian Brimble; Georges Dudouyt; José M García-Sanjinés |
| Abstract: | The African Continental Free Trade Area (AfCFTA), initiated by the African Union in 2012, aims to create the world's largest free trade area by reducing tariffs and facilitating trade among 54 African countries. Officially entering into force on May 30, 2019, it has the potential to diversify exports, accelerate growth, and attract foreign investment, potentially boosting regional incomes by 9 percent by 2035 and helping 50 million people exit extreme poverty. The agreement includes provisions to facilitate trade and investment, address regulatory measures, and cover trade in both goods and services. Customs administration is crucial for its success, requiring modernization, government support, and business cooperation. Trading under the AfCFTA began on January 1, 2021, but significant changes are needed for full implementation. This note discusses recommendations for customs administration reforms to optimize AfCFTA implementation, suggesting a regional one-year deadline for most relevant measures. |
| Keywords: | AfCFTA Agreement; Digital Trade; Competition Policy; Protocol on Trade in Goods; Protocol on Trade in Services; Women and Youth in Trade; Intellectual Property Rights |
| Date: | 2025–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfhtn:2025/002 |
| By: | Keo, Borin; Li, Bin; Younis, Waqas |
| Abstract: | High trade costs pose substantial barriers to the process of trade liberalization. This study aims to measure trade costs and explore the driving forces behind the growth of bilateral trade between Cambodia and its top 30 trading partners from 1993 to 2019. Using a micro-founded measure of trade costs derived from the gravity model, we find that Cambodia’s average trade costs decreased by 35.43 percent between 1993 and 2019. Fluctuations in average trade costs persisted until 2014, despite Cambodia’s accession to the World Trade Organization (WTO) in 2004. Since then, these costs have declined more rapidly. Cambodia’s bilateral trade costs are lower with its major trading partners in Southeast Asia and East Asia than with those in South Asia, Oceania, Europe, and North America. Cambodia’s average trade costs with developing and emerging economies are lower than those with developed economies. Between 2014 and 2019, Cambodia experienced a notable decline in average trade costs with trading partners along the Belt and Road Initiative (BRI) corridors by 34.78 percent, twice as fast as with non-BRI trading partners. Regarding the decomposition of trade growth, we find that the expansion of Cambodian trade over the period from 1993 to 2019 was driven by three factors: the rise in income (59.65 percent), the decline in trade costs (56.69 percent), and the decline in multilateral resistance (–16.34 percent). The findings of this study have significant implications for a better understanding of Cambodia’s development process toward global trade integration over the past two decades. Our results suggest that Cambodia can optimize its trade expansion potential by focusing on its relations with trading partners exhibiting high economic growth potential and those showing substantial reductions in trade costs. |
| Date: | 2025–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:d6vte_v1 |
| By: | Huu Nhan DUONG; Jota ISHIKAWA; Katsumasa NISHIDE; S. Ghon RHEE |
| Abstract: | This study examines the impact of geopolitical risk (hereafter GPR) on the behavior of multinational manufacturing firms from Japan. We construct firm-level exposures to GPR indices using data on foreign direct investment and international trade. We find that only large firms respond to GPR, whereas small firms exhibit no significant reaction. Furthermore, the effect of GPR on accounting-based decisions, such as cash holdings and investment, varies depending on firms’ modes of internationalization. In particular, the results indicate that firms exposed to GPR through FDI reduce asset-side variables, such as cash holdings and capital expenditures. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25029 |
| By: | Stefani Stefanova (ETH Zurich); Sophie Bandarkar (School of Public and International Affairs, Princeton University); Yoto Yotov (School of Economics, Drexel University) |
| Abstract: | Using disaggregated data and established econometric methods, we re-evaluate the impact of the Organization for Economic Co-operation and Development (OECD) on international trade among its members. In contrast to previous studies, we conclude that, overall, the OECD has not led to increased trade among its members. However, we find evidence that the OECD has promoted members’ trade in certain sectors and, more importantly, for certain groups of European countries, i.e., the Visegrad group and the Baltic states, which share common history and economic characteristics. Based on this, we expect similar positive trade effects for some prospective OECD members. |
| Keywords: | OECD, Trade Flows, Institutional Quality, Development |
| JEL: | F10 F14 F15 O43 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202509 |
| By: | Hany Abdel-Latif; Khushboo Khandelwal; Ms. Longmei Zhang |
| Abstract: | This paper explores export and import dynamics in sub-Saharan Africa (SSA), both regionally and across various country groups. The findings underscore the significant associations that domestic demand and exports have with import changes, albeit the magnitude of these associations varies across countries. Variations in consumption and investment are highly correlated with changes in imports across the region and in nearly all country groups. Changes in exports are also associated with increased import growth, with this link being most notable in resource-intensive countries. Furthermore, an appreciation of the real effective exchange rate is correlated with reduced import growth in East African countries, while resource-intensive countries experience a less pronounced correlation. Exports, on the other hand, show a strong sensitivity to global economic cycles, reflecting the region's reliance on commodities. Finally, the correlation between exchange rates and exports exhibits considerable heterogeneity across countries. |
| Keywords: | Import demand; Export determinants; Sub-Saharan Africa; AfCFTA |
| Date: | 2025–02–21 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/045 |
| By: | Himanshu Jaiswal (Indira Gandhi Institute of Development Research); A. Ganesh Kumar (Indira Gandhi Institute of Development Research) |
| Abstract: | The trade war initiated by the US through inappropriate tariffs against its trading partners is not justified on several grounds. The President of the US has accused its trading partners several times of using higher tariffs on US products and sustaining a trade surplus with the US. In our analysis in this article, we find that though the US has a deficit in goods, it runs a surplus in services; though few trading partners apply high tariffs on US products, the US also protects its markets using excessive use of non-tariff measures. We assess the impact of the trade war, using four different sets of scenarios, on the economy of countries and the world using a global CGE model. Several policies for India have also been tested. We find that the trade war will be very detrimental to the entire world, including the US itself. The world GDP may go down by 14. In terms of change in GDP and welfare, almost all the countries will face a loss, except India. Though India may lose in several sectors like pharmaceuticals, processed foods, and energy products like coal, oil, and gas, India's economy will boom overall due to external demand. Though no-retaliation policy will benefit India, a tariff cut may boost India's GDP more than by 2. A significant tariff cut by India will surely generate a lot of jobs for both skilled and unskilled labor force. |
| Keywords: | Trade War, Trade Balance, Non-tariff Measures, Tariffs cut, CGE Analysis |
| JEL: | F10 F13 F14 F15 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ind:igiwpp:2025-004 |
| By: | Gurpriya Sadana (Indian Institute of Foreign Trade (IIFT), Delhi, India); Jaydeep Mukherjee (Department of Commerce, Ministry of Commerce and Industry) |
| Abstract: | The study examines the relationship between exports and FDI inflows at the subnational /state level for the Indian economy from 2011-2020. The study employs panel random effect regression and found that GSDP, infrastructure index, financial deve lopment index and state policy variable representing distinct export promotion policies pursued by the states are significant determinants of exports at the state level. However, a substitutable relationship has been established between FDI inflows and exports at the state level, suggesting that FDI is market-seeking and does not contribute to improved export performance by the states. |
| Keywords: | Subnational Exports, Spatial factors, Panel Data, India |
| JEL: | F10 O53 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ift:wpaper:2470 |
| By: | Srinka Bose (Indian Institute of Foreign Trade (IIFT), Delhi, India); Debashis Chakraborty (Indian Institute of Foreign Trade (IIFT), Delhi, India) |
| Abstract: | Import of different services through Cross-Border Supply route (i.e., Mode 1) in an economy can increase with wider internet usage therein. In practice, however, restrictive policy framework often causes a dampening effect on the digitally enabled components of services trade. In a cross-country framework involving 50 countries over 2014-17, the current analysis explores this relationship for six major service categories, which are, along with other channels, supplied significantly through digital medium. The study adds value to the existing literature in the following manner. First, along with the measures for country-level services trade barriers, indices for regulatory heterogeneity have been incorporated in the empirical model. Second, the gravity model in the current context compares two alternative scenarios - one with a smaller number of potential exporters (top 10 exporters) and the other with a more diverse (top 30 exporters) group. The empirical results reveal considerable variations across sectors in direction and magnitude of the effect of deeper internet usage on service imports in the presence of regulatory barriers, with crucial policy implications. |
| Keywords: | Services imports, Cross-Border Supply, Internet usage, Service Trade Barriers |
| JEL: | F13 F14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ift:wpaper:2474 |
| By: | Michelle Garfinkel (University of California-Irvine); Constantinos Syropoulos (School of Economics, Drexel University) |
| Abstract: | We provide a selective overview of the literature on the linkages between interstate conflict and international trade, paying special attention to how trade openness (i) affects arming incentives, (ii) the channels through which its effects travel, and (iii) its consequences for the emergence of war (or peace) as an equilibrium outcome. We also discuss how restrictive trade policies may interact with national security concerns and what they imply for welfare. |
| Keywords: | Gains from trade, National security, Arming, War and peace |
| JEL: | C78 D30 D70 D74 F10 F51 F60 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202510 |
| By: | Merchán, Federico; Görg, Holger |
| Abstract: | This paper uses the Brexit referendum in 2016 as a quasi-natural experiment to estimate the effect of an exogenous negative shock to globalization on executive compensation for German companies listed in the DAX and MDAX stock indices. We show that it matters whether they work for firms exporting goods or services. The main results indicate that executive compensation in firms operating in sectors that export services was negatively affected, in particular through lower variable compensation. On the contrary, executives of firms that operate in sectors exporting goods were not negatively affected overall, though they experienced a compositional change (from bonuses to equity payments). Sectoral regressions suggest that manufacturing firms redirected successfully exports from the UK to other relevant trade partners, while this was not the case in the service sector. |
| Keywords: | Brexit, executive compensation, dividend, services |
| JEL: | F14 F16 E24 J33 G35 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:315468 |
| By: | Sonia Pant (Indian Institute of Foreign Trade (IIFT), Delhi, India); Debashis Chakraborty (Indian Institute of Foreign Trade (IIFT), Delhi, India) |
| Abstract: | A major section of the existing literature on export behaviour of firms does not consider services as a source of heterogeneity. However, over the last few decades the manufacturing sector has witnessed increasing use of services inputs, especially in case of exporting firms, across the development spectrum. This paper proposes a theoretical basis for this trend by adapting the existing literature to the services context. An empirical analysis involving developing country firms by using the World Bank Enterprise Survey (WBES) database confirms that exports from manufacturing firms are positively influenced by the use of services inputs, both at the intensive and extensive margins. The empirical results underline that services input use in manufacturing could be a source of heterogeneity in determining export behaviour of these firms. It is further noted that services such as transport & communication services, IT services, R&D services, legal and related services play an important role in determining the decision to enter the export market, while they do not play a significant role impacting the intensive margin. A key policy implication for developing countries is that efficiency enhancing reforms, covering the unshackling of services sector, will go a long way in promoting manufacturing competitiveness and export performance. |
| Keywords: | Services imports, Cross-Border Supply, Internet usage, Service Trade Barriers |
| JEL: | F13 F14 F23 L80 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ift:wpaper:2475 |
| By: | Ananya Das (Indian Institute of Foreign Trade (IIFT), Delhi, India); Kanupriya (Indian Institute of Foreign Trade (IIFT), Delhi, India) |
| Abstract: | This perspective is an attempt at understanding the linkages between trade in value added and employment in India’s manufacturing sector. The same uses the techniques of panel data and simple time series regression analyses. The main contention of this study is that trade in value added influences employment in the manufacturing sector positively.The potential impact of this research on India’s future industrial policies is immense, especially considering the country’s strong focus on the manufacturing sector in recent years. Initiatives such as Make in India and Production Linked Incentive schemes highlight this emphasis. The outcomes of this research would greatly assist the stakeholders in India’s manufacturing in devising and executing pro-industrial policies, with a key focus on socio-economic factors, particularly employment, given the growing significance of Global Value Chains (GVCs) in the coming years. |
| Keywords: | Employment; Global Value Chains; Manufacturing; Trade in Value Added |
| JEL: | F16 F66 J21 L60 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ift:wpaper:2472 |
| By: | Michelle Garfinkel (University of California-Irvine); Constantinos Syropoulos (School of Economics, Drexel University) |
| Abstract: | We consider a dynamic setting where two countries with competing claims to a resource/asset first arm and then choose whether to resolve their dispute through war or peacefully through settlement. War precludes international trade and can be destructive, but also locks gains and eliminates arming costs in the future. By contrast, a peaceful resolution, possibly supported by arming, avoids destruction and allows for mutually advantageous trade; yet future settlements must be renegotiated under the threat of war. We characterize the conditions under which peace is stable and show that, depending on war’s destructiveness, time preferences, and the distribution of resource endowments, greater gains from trade can pacify international tensions, but possibly only for more uneven endowment distributions. |
| Keywords: | Interstate war, Armed peace, Unarmed peace, Security policies, Gains from trade, Shadow of the future |
| JEL: | C72 C78 D30 D70 D74 F10 F51 F60 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202511 |
| By: | Kim, Nam Seok (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Choo, Jaewoo (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Shin, Minlee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Jegook (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 본 연구에서는 보호무역정책의 정치경제적 결정요인을 각국의 국내 정치 지형에 초점을 맞추어 분석한다. 이론적 분석과 양적 분석을 통해 결정요인에 관한 이해를 제시하고, 주요국의 국가별 사례 분석을 통해 질적 특수성을 연구한다. 제2장의 이론적 논의를 기반으로 제3장에서는 각국의 요소 부존과 자국 내 불평등 간의 상호작용이 무역장벽 형성을 통계적으로 유의하게 설명함을 확인한다. 제4장과 5장에서는 2장과 3장의 이론적, 실증적 분석이 담지 못하는 질적 영역을 살펴보기 위해 사례 분석을 실시한다. 국제통상에 있어서 가장 많은 영향력을 행사하고 있는 두 국가인 미국과 중국, 그리고 가장 큰 규모의 관세동맹 중 하나인 유럽연합, 그리고 한국의 주요 제조업 기업들이 대규모로 투자를 확대해 온 베트남과 인도네시아의 정책 사례들을 연구한다. This research studies the political economic determinants of protectionist trade policies by focusing on the role of domestic politics. The authors provide theoretical frameworks with empirical evidence, and expand discussions towards policy case studies of selected nations. This multi-dimensional approach broadens understanding on protectionist trade policy implementation of major trade partners of Korea. The authors provide implications for Korea’s policy reactions to its major trade partners. (the rest omitted) |
| Keywords: | political-economic determinant; protectionist trade policy; cross-country |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieppa:2024_013 |
| By: | Deepali Gupta (Indira Gandhi Institute of Development Research); C. Veeramani (Centre for Development Studies) |
| Abstract: | Several studies show that countries increasingly participate in Global Value Chains (GVC) by specialising in intermediate goods. Theoretical fragmentation models sug gest that backward GVC participation has a double advantage for a low-skilled, labour abundant country like India. It increases employment, and it reduces wage inequality. This paper assesses the impact of backward GVC participation on employment, wages, and labour productivity of workers engaged in Indian organised manufacturing indus tries. We use plant-level data provided by the Annual Survey of Industries (ASI) for 2008-09 till 2019-20. We find that GVC plants employ more workers and pay higher wages but find no significant differences in labour productivity. The share of female and contractual workers is not significantly different from non-GVC plants, but the share of production workers is slightly higher in GVC plants. We also find a lower wage gap between male and female workers; and contractual and non-contractual workers but a higher wage gap between production and non-production workers for GVC plants. |
| Keywords: | Global value chains, Backward GVC participation, Employment, Wage Inequality, India |
| JEL: | F14 F16 F66 J24 J31 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ind:igiwpp:2025-005 |
| By: | Luong-Thanh Tran (University of Jena; Germany); Andreas Freytag (University of Jena; Germany; University of Stellenbosch, South Africa; Institute for International Trade Adelaide, Australia) |
| Abstract: | Vietnam’s path to sustainable and innovative growth increasingly depends on how effectively it diversifies and repositions its export portfolio in the global market, or how the country 'brand' itself through its exports to the world. Using data from UN Comtrade, we construct the Product Space model for Vietnam, visualizing the relatedness among the products in the country's export basket. Benchmarking against the Product Income Index (PRODY), the Product Gini Index (PGI), and the Product Complexity Index (PCI), we find that Vietnam’s high-volume export products such as garments and textiles are hindering the country’s development goals of sustainable growth, income equality, and innovation. Conversely, Vietnam has been able to export a number of small machine and precision equipment that yield higher added value in terms of sustainability and innovation, but these industries are lacking investment to scale up production. This suggests expansion strategies toward these precision tools and contraction for garments and textiles. Alternative options include radical innovation by shifting production to most knowledge-intensive products Vietnam is producing like cermet tools, or a moderate approach of pursuing export strategies of countries with slightly higher level of development than Vietnam. |
| Keywords: | Product Space, Product Complexity, Economic Complexity, PRODY, PGI, Innovation, Sustainability, Vietnam Export, Export Diversification, Export Product Targeting, Network Analysis |
| JEL: | F14 F17 L7 O11 |
| Date: | 2025–04–26 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2025-0006 |
| By: | Rodríguez Chatruc, Marisol; Stein, Ernesto H.; Vlaicu, Razvan; Zuluaga, Víctor |
| Abstract: | International trade increases aggregate welfare but also creates winners and losers, which makes free trade a contentious political issue. Recent research has established that individuals are more sensitive to anti-trade information about the prospect of employment loss than to pro-trade information regarding lower product prices and increased variety. This means that we know what works to decrease support for trade, but it is still unclear what works to increase it. In this paper, we fill this gap by studying how individual attitudes and beliefs change in response to information regarding employment losses (in import-competing sectors), to information regarding employment gains (in export-oriented sectors), and to information regarding the possibility of compensation to those displaced by trade. To this end, we conducted a large-scale survey experiment in 18 Latin American countries using nationally representative samples. Results indicate that anti-trade information reduces support for trade even if compensation to losers is mentioned and that pro-trade messages increase support only if they are worded so that a job gain is perceived. Belief updating about the consequences of increased trade on employment seems to be a relevant mechanism. Our findings have important implications on what types of messaging work to increase support for trade. |
| Keywords: | Employment;Survey experiment |
| JEL: | F13 D72 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14050 |
| By: | Davide Cipullo; Barton E. Lee |
| Abstract: | Analyzing U.S. House elections (2002-2010), measures of legislators’ effectiveness, and exogenous increases in Chinese import competition, we document a conditional relationship between legislative effectiveness and electoral success. In districts ex-posed to large trade shocks, incumbent legislators who were more effective legislators were more likely to be reelected compared to less effective incumbents. Instead, in districts exposed to small trade shocks, more effective incumbents were less likely to be reelected. Our results are driven by trade shocks affecting voters’ preferences for policy change and, in turn, their support for effective legislators. Our results have consequences for the effectiveness of future legislators. |
| Keywords: | legislative effectiveness, China shock, elections, trade shock |
| JEL: | D72 F14 P00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11791 |
| By: | Maria Bas; Lionel Fontagné; Irene Iodice; Gianluca Orefice; Lionel Gérard Fontagné |
| Abstract: | This paper investigates the role played by firms’ managerial skills in the heterogeneous reaction of exporters to common exogenous changes in their international competitiveness (here captured by changes in the real exchange rate). Relying on a simple theoretical framework, we show that firms with better managerial skills have higher profits, market power, and are able to adapt their markup more when faced with a competitiveness shock. We test this prediction relying on detailed firm-product-destination level export data from France for the period 1995-2007 matched with specific information on the firms’ share of managers. Our findings show that managerial intensive firms have larger exporter price elasticity to real exchange rate variations. The effect is not trivial: in the wake of a depreciation, exporters whose management intensity is one standard deviation higher than the average, increase their prices by 51% to 73% more than the average exporter. This finding is robust to controlling for the alternative explanations suggested by the previous literature to explain the heterogeneous pass-through of firms. |
| Keywords: | exchange rate pass-through, heterogeneous pricing-to-market, managerial skills |
| JEL: | F12 F14 F31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11750 |
| By: | Andres Rodriguez-Clare; Mauricio Ulate; Jose P Vasquez |
| Abstract: | We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those uncovered by the empirical literature studying the "China shock". We find that the China shock leads to average welfare increases in most U.S. states, including many that experience unemployment during the transition. However, nominal rigidities reduce the overall U.S. gains by around two thirds. In addition, there are 18 states that experience welfare losses in the presence of downward nominal wage rigidity that would have experienced gains without it. |
| Keywords: | trade, unemployment, China shock, downward nominal wage rigidity |
| Date: | 2025–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2088 |
| By: | Berger, Axel; Mashayekhi, Mina; Smeets, Marten |
| Abstract: | The WTO Investment Facilitation for Development Agreement (IFDA) offers significant development perspectives by speeding up and streamlining administrative procedures and reducing transaction costs. Domestic regulatory reforms, combined with comprehensive special-and-differential treatment as well as substantial technical and financial support are essential to ensure the beneficial implementation of the IFDA and sustainable and productive FDI. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:315728 |
| By: | MHA Ridhwan (Bank Indonesia); Nurul Pratiwi (Bank Indonesia); Sulistiyo K. Ardiyono (Bank Indonesia); Amelia A. Hidayat (Bank Indonesia) |
| Abstract: | This study investigates the role of servicification within Indonesia’s manufacturing sector, focusing on its impact on productivity, global value chain (GVC) participation, and regional diversity in servicification practices. Empirical results indicate that servicification is positively correlated with firm productivity, with a 10% increase in service intensity linked to approximately a 1% productivity boost. The study further explores the differential impact of servicification across regions, technological classifications, and firm sizes. It reveals that in regions such as Java and Sumatra, high-value-added sectors benefit more from service integration, while the Eastern of Indonesia (EoI)’s reliance on primary manufacturing highlights challenges due to skill gaps and resource constraints. Also, based on regional survey data, they reveal how the integration of services—such as logistics, R&D, and customer support—into manufacturing operations can drive productivity and increase the sector’s competitiveness. This analysis provides policy recommendations to optimize servicification, enhance GVC participation, and support the transition to a service-oriented manufacturing landscape. |
| Keywords: | Servicification, Manufacturing Sector, Productivity, Global Value Chains, Digitalization |
| JEL: | L60 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:idn:wpaper:wp032024 |
| By: | Aaheli Ahmed (Indian Institute of Foreign Trade (IIFT), Kolkata, India); Debashis Chakraborty (Indian Institute of Foreign Trade (IIFT), Kolkata, India) |
| Abstract: | The liberalization policies were initiated in 1991 with the primary objective to enhance the role of foreign and private participation, in line with the newly embraced outward-oriented growth model. Since early nineties the country has initiated several policies to strengthen the economy, especially the manufacturing sector, which plays an important role in the development process. The current analysis evaluates the effects of the liberalization initiatives in India on industrial performance. A major branch of the literature has observed that when firms characterized by heterogeneity trade with their foreign counterparts, any change in trade policy will lead to a decrease in the number of firms and a rise in their average size (Melitz, 2003). Considering a dataset of twenty-four manufacturing industries, through the difference-in-difference (DID) estimation method the current empirical analysis illustrates that on average, trade reforms do not lead to an increase in the commodity prices and average size of establishments. In addition, both the real wages and real skilled wages appear to increase in the long run due to liberalization, with potential ramifications. |
| Keywords: | India, Trade Liberalization, Manufacturing Sector, Skilled and Unskilled workers, Price, Wage, Difference-in-Difference Method, Time-Varying Treatment Estimation |
| JEL: | D22 E31 J24 J31 L60 P41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ift:wpaper:2471 |
| By: | Adam Jakubik |
| Abstract: | We study the effects of services trade reforms in a multi-country multi-sector quantitative trade model with input-output linkages. We find that (i) welfare gains from substantial services trade liberalization are large, around 3 percent on average; (ii) gains are larger by 0.7 percentage points in a hypothetical scenario where EMDEs’ consumption patterns have converged to AEs, and by 5.7 percentage points when their production networks have converged; (iii) both EMDEs and AEs gain from EMDEs reducing services barriers to the level of AEs. Services-intensive AEs with strong supply linkages to EMDEs benefit the most. Our results are important to illustrate the increasing gains from services trade as EMDEs continue on their development trajectory, and therefore call for injecting further ambition into multilateral negotiations on services trade reforms. |
| Keywords: | Structural Transformation; Services Trade; Trade Model |
| Date: | 2025–03–28 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/061 |
| By: | Córdoba Solano, Daniela; Gomez-Trejos, Felipe; Vindas Quesada, Alberto |
| Abstract: | Research about trade liberalization's impact on markups has focused on manufacturing due to data availability considerations. How do these effects vary across sectors? Which industries become more and less competitive as trade barriers are eliminated? We leverage firm-level tax records from the universe of formal-sector businesses in Costa Rica with the 2009 trade liberalization as a natural experiment to evaluate its industry-specific effects on markups across all industries. We find negative effects on markups in agriculture, mining, electricity, water supply, and business services. Alternatively, the reform led to markup increases in accommodations and food services, information and communications, real estate, finance and insurance, and education, health, and social work. We do not observe statistically significant effects in manufacturing, transportation and storage, construction, and wholesale and retail trade. Our findings represent a more comprehensive evaluation of the potential pro-competitive effects from trade liberalization than existing studies exclusively focusing on manufacturing firms. |
| JEL: | D22 L11 F13 F14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14003 |
| By: | MATSUURA Toshiyuki; SAITO Hisamitsu |
| Abstract: | Using Japanese plant product-level data, this study focuses on the impact of increasing import competition pressure on changes in product portfolios by examining product entry and exit. We also consider the role of R&D activities at the plant level. While previous research on the adjustment of product portfolios for multi-product firms has emphasized the narrowing of products to core products, we show that firms engaged in R&D activities actively replace existing products with new ones and expand into new business fields due to increased import competition. These results are consistent with those of several studies on the relationship between competition and innovation. We also find that these effects are more pronounced in regions with larger public R&D stocks and in high-tech sectors. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25020 |
| By: | Fabrizio Leone; Rocco Macchiavello; Josepa Miquel-Florensa; Nicola Pavanini |
| Abstract: | Widespread market imperfections in agricultural value chains raise the possibility that regulatory interventions may enhance efficiency and farmers’ welfare. We develop a structural model of agricultural value chains and estimate it using rich data from Costa Rica’s coffee sector to evaluate common regulations. Farmers supply differentiated mills that strategically decide which rural markets to source from and bilaterally bargain prices with downstream exporters. Through counterfactuals, our analysis highlights the nuanced, and potentially counter-productive, effects of commonly observed pro-competitive regulations on farmers’ welfare. Tightening revenue-sharing rules to increase farm-gate prices, increases farmers’ welfare on average but makes many worse off. Similarly, banning vertical integration raises farm-gate prices but harms most farmers by lowering valuable services provided by integrated mills. |
| Keywords: | agricultural chains, market structure, farmers’ welfare |
| JEL: | O12 Q13 L22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11776 |