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on International Trade |
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Issue of 2025–07–21
twenty-one papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Tatjana Schulze; Weining Xin |
| Abstract: | So-called “connector” countries have been argued to benefit from the US-China trade tensions, given their rising share in US imports. This paper draws an important distinction between trade reallocation—countries increase domestic production to substitute for declining Chinese exports to the US—and trade rerouting—countries serve as one-stop place for transshipment of Chinese exports to the US. Leveraging granular data on trade and FDI flows and global input-output linkages, focusing on six Asian countries, we first document that the connector role of these countries may reflect their growing domestic markets and Chinese supply chain reconfiguration, beyond trade rerouting from China to the US. We then zoom in on value-added components and deploy a synthetic control approach to disentangle trade reallocation from trade rerouting. While the evidence remains elusive for five of the six countries, Vietnam appears to have benefited from trade reallocation, with increased domestic content in its exports to the US in strategic sectors, instead of facilitating significant transshipment of Chinese exports to the US. Such domestic production expansion also helped increase domestic content in Vietnam’s exports to the rest of the world, and may be partly due to Chinese firms relocating to Vietnam through greenfield FDI. Despite potential short-term gains, trade reallocation increases connector countries’ vulnerability to geoeconomic fragmentation with losses to all countries in the long run. |
| Keywords: | Geoeconomic Fragmentation; Trade Reallocation; Trade Rerouting; US-China Trade Tensions; Connector Countries |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/129 |
| By: | Natalie Chen; Dennis Novy; Diego Solorzano |
| Abstract: | In 2018 and 2019, the US administration increased tariffs on imports from China. Did these tariffs lead to more US imports from other countries such as Mexico? Using highly disaggregated data on the universe of Mexican firm-level exports, we find evidence of trade diversion from China to Mexico. We then combine the export data with detailed longitudinal employer-employee data to investigate the impact of trade diversion on labor market outcomes for workers employed by Mexican exporters. We find that trade diversion increased the labor demand of exporters exposed to US tariffs against China, resulting in more employment and higher wages, especially for low-wage workers such as female, unskilled, younger, and non-permanently insured employees. The effects were concentrated in technology and skill-intensive manufacturing industries. |
| Keywords: | Employment, exports, firms, tariffs, trade costs, trade diversion, wages, workers |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2109 |
| By: | Hinnerk Gnutzmann (Leibniz Universität Hannover); Arevik Gnutzmann-Mkrtchyan (Leibniz Universität Hannover & CESifo); Tobias Korn (Leibniz Universität Hannover & Heidelberg University) |
| Abstract: | Abstract Empirical models of trade agreements implicitly assume that withdrawal from a trade agreement has an equal and opposite trade effect as accession, i.e., symmetry. With increasing opposition to international economic cooperation, it becomes urgent to test this assumption. We analyze a quasi- natural experiment to explicitly test the symmetry assumption in the context of FTA termination using the gravity model. In 2004, Estonia joined the European Union, which mandated that it withdraws from its FTA with Ukraine. Carefully controlling for possible confounding effects of EU enlargement using a variety of methods, we isolate the FTA withdrawal effect and find strong support in favour of symmetry. Moreover, while import tariffs are part of the impact, the bulk of the effect comes from non-tariff effects of an FTA. General equilibrium estimates suggest that the FTA withdrawal led to a noticeable loss in members’ welfare. |
| Keywords: | Free trade agreement, withdrawal, gravity, welfare analysis, European Union, Estonia, Ukraine |
| JEL: | F13 F14 J13 F15 F17 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ost:wpaper:407 |
| By: | Stender, Frederik; Vogel, Tim |
| Abstract: | Access to critical raw materials (CRMs) is increasingly being shaped by geopolitical dynamics, fuelling a global competition for supply security. This paper applies the gravity model of trade to examine how OECD countries leverage Aid for Trade (AfT), Bilateral Investment Treaties (BITs), and Preferential Trade Agreements (PTAs) to influence CRM imports from developing countries. Using extensive bilateral panel data from 1995 to 2023, we find that PTAs are particularly effective, affecting both the intensive and extensive margins of trade. These findings highlight the strategic role of formal trade agreements and suggest that a coordinated policy mix of trade diplomacy, investment, and aid is essential for resilient and diversified CRM supplies. |
| Keywords: | Aid for Trade, Bilateral Investment Treaties, critical raw materials, extensive margin, intensive margin, gravity model, Preferential Trade Agreements |
| JEL: | F13 F14 F15 F21 F35 F53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:320560 |
| By: | Yusheng Feng; Haishi Li; Siwei Wang; Min Zhu |
| Abstract: | Using Chinese firm-level trade data combined with global anti-dumping (AD) and countervailing duty (CVD) investigations, we uncover a hidden cost of industrial policy under WTO agreements. At every stage of AD/CVD investigations, industrial subsidies significantly raise the probability of affirmative tariff rulings and lead to higher imposed tariffs. Firms that received larger subsidies are also less likely to be granted firm-specific duties, which are lower than the product-level tariffs applied to all other firms exporting the investigated product. While AD/CVD tariffs create a moderate trade barrier that an average Chinese firm expects to face, they represent a significant cost of subsidy for those heavily subsidized and those potentially receiving firm-specific duties. AD/CVD tariffs induced by subsidies reduced the subsidy effect on firm revenue growth by 25%. The intended benefits of industrial subsidies are partially offset by increased foreign trade protection. |
| Keywords: | industrial policy, subsidies, anti-dumping, countervailing duties |
| JEL: | F13 L52 O25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11982 |
| By: | Chen, Natalie (Department of Economics, University of Warwick, CAGE, CESifo, and CEPR); Novy, Dennis (Department of Economics, University of Warwick, CAGE, CESifo, CEP/LSE, and CEPR); Solórzano, Diego (Banco de México) |
| Abstract: | In 2018 and 2019, the US administration increased tari¤s on imports from China. Did these tariffs lead to more US imports from other countries such as Mexico? Using highly disaggregated data on the universe of Mexican firm-level exports, we find evidence of trade diversion from China to Mexico. We then combine the export data with detailed longitudinal employer-employee data to investigate the impact of trade diversion on labor market outcomes for workers employed by Mexican exporters. We find that trade diversion increased the labor demand of exporters exposed to US tariffs against China, resulting in more employment and higher wages, especially for low-wage workers such as female, unskilled, younger, and non-permanently insured employees. The effects were concentrated in technology and skill-intensive manufacturing industries. JEL Codes: F12 ; F14 ; L11. |
| Keywords: | Employment ; exports ; firms ; tariffs ; trade costs ; trade diversion ; wages ; workers |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1563 |
| By: | Britz, Wolfgang; Olekseyuk, Zoryana; Vogel, Tim |
| Abstract: | With President Trump's return to office, United States (US) trade and development policy has undergone a decisive shift - marked by sweeping cuts to the United States Agency for International Development (USAID), shifting alliances, escalating trade tensions, and a broader retreat from multilateralism. The expiration of the Generalized System of Preferences (GSP) in 2020 and the scheduled end of the African Growth and Opportunity Act (AGOA) in 2025 had already raised concerns among sub-Saharan African (SSA) countries. Recent shifts under the renewed "America First" agenda - particularly the introduction of new tariffs - have now effectively brought AGOA to an early end. This policy brief examines the potential effects of the shift from duty-free treatment under the US GSP and AGOA to the new Trump-era tariffs, including a universal 10% tariff applied to all US trading partners and so-called "reciprocal" tariffs announced for 57 countries on "Liberation Day". Applying a multi-region Computable General Equilibrium (CGE) model, we find the following: • Notable adverse effects for specific SSA eco-nomies, such as Lesotho, Madagascar, Chad, Botswana, Nigeria, South Africa, Mauritius, and Malawi. • Limited aggregate impact on AGOA-eligible countries with overall exports declining by up to 1.1% and real gross domestic product (GDP) largely unchanged. • Most affected sectors include wearing apparel, leather products, and other manufacturing. • The US and China would bear the largest losses under the new tariff regime. Given the relatively weak ties of SSA to the US as well as declining utilisation rates of US preferential trade programmes over time, the limited aggregate effects for all AGOA-eligible countries are not surprising. However, empirical results likely understate the full impact of new Trump-era tariffs and do not capture the indirect effects like reduced foreign investment, weakened supply chains, rising poverty, or the loss of capacity-building linked to AGOA. Moreover, our simulations do not account for potential retaliatory measures, so an intensified global trade war and economic downturn might further harm SSA economies. For these countries, the risks are compounded by limited fiscal space and growing debt vulnerabilities. This underscores the importance for SSA countries of continuing to build more resilient and diversified trade structures, deepening regional integration through the African Continental Free Trade Area (AfCFTA), and pursuing value chain upgrading. At the same time, the European Union (EU) must reaffirm its role as a reliable, development-friendly partner by defending World Trade Organisation (WTO)-based rules, renewing its GSP ahead of 2027, and avoiding retaliatory tariffs that harm vulnerable countries. Strategic engagement with the Global South - through initiatives like Clean Trade and Investment Partnerships (CTIPs) or Sustain-able Investment Facilitation Agreements (SIFAs) - offers a timely opportunity to strengthen trust and promote sustainable, inclusive trade. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:idospb:320459 |
| By: | Danyal Arnold; Shania Bhalotia; Swati Dhingra |
| Abstract: | Deglobalisation policies promote the vision that pulling back from economic integration can help correct international imbalances and reposition national economies for renewed prosperity. A core vision of Brexit was to transform the UK to a new Global Britain - a sovereign trading nation free from EU constraints, and capable of reinvigourating its historical comparative advantage in the world economy. Central to this was the idea of "taking back control" of regulations, particularly in high-value-added services where EU rules were seen as limiting the UK's longstanding global competitiveness. We develop granular and comprehensive measures of UK's departure from regulatory alignment with the EU, and find that they have introduced significant new bilateral trading frictions that have not been offset by increased competitiveness in markets beyond the EU. UK exports to the EU in services that have got these new Brexit barriers have declined by 16 percent relative to other bilateral trade flows. Overall, UK services exports are estimated to be 4 to 5 percent lower, indicating that five years on, Brexit has fallen short of delivering its vision of Global Britain. |
| Keywords: | deglobalisation, services, non-tariff barriers, Brexit |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2110 |
| By: | Geoffroy Dolphin; Gianluigi Ferrucci |
| Abstract: | The EU Carbon Border Adjustment Mechanism (CBAM) came into force on October 1, 2023, introducing reporting requirements for importers of covered products and, from 2026, an obligation to pay a fee on the carbon content of imported goods. This paper uses indices of ad valorem tariffs to assess the incidence of the EU CBAM on both EU member states and the EU’s trading partners. Overall, the direct impact on EU countries’ trade is estimated to be small, adding 0.1 percent to the value of EU imports when averaged across all imports, and 0.04 percent to the average cost of non-EU countries’ exports to the EU—with a maximum of 1.2 percent. However, effects could be sizeable for specific products such as iron, steel and aluminium, which can help explain CBAM’s political salience. Moreover, an expanded CBAM featuring full coverage of ETS sectors and a significantly higher carbon price could entail larger costs in the more distant future. |
| Keywords: | Carbon Leakage; Emissions Trading; Carbon Taxation; Trade Policy |
| Date: | 2025–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/125 |
| By: | Michael Chui; Leonardo Gambacorta; Emanuel Kohlscheen; Han Qiu |
| Abstract: | Africa is not immune from trade challenges. Its direct exposure to new US tariffs is relatively limited, but indirect effects through slower global demand and financial conditions may be larger. Strengthening regional trade integration through initiatives like the African Continental Free Trade Area (AfCFTA) can help build regional supply chains and reduce reliance on commodity exports. Africa's young workforce, digital innovation and rich natural resources provide longer-term growth tailwinds. Unlocking these opportunities requires investment in skills, infrastructure and financial integration to boost trade and value-added. |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:bis:bisblt:109 |
| By: | Paul Neilmer Feliciano; Manuel Leonard Albis |
| Abstract: | The agricultural trade between the Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China (PRC) has seen substantial and sustained growth, with total trade of USD 14 billion in 2004 to USD 68 billion in 2018. This expansion in trade is attributed to the ASEAN-China Free Trade Agreement-Agreement on Trade in Goods (ACFTA-ATIG), which was signed on 29 November 2004 between the parties and came into force on 1 January 2005. Ahead of this, an Early Harvest Program was instituted on 6 October 2003 to accelerate trade by immediately removing tariffs on selected agricultural goods. The involved parties are the PRC and all ASEAN members—Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. This paper examines how ASEAN trade in the agriculture sector benefited from such an agreement, using trade data of the parties. Employing an augmented gravity model with 51 economies and 24-year time series with 75.9 million data points, the empirical results provide evidence of trade creation effects on agricultural commodities via two channels: (1) intra-trade among ASEAN members and the PRC and (2) ASEAN exports to the rest of the world. Country-level analysis, however, shows that Vietnam, Indonesia, Thailand, Malaysia, and the Philippines demonstrated trade creation effects to varying degrees and channels, while the rest of ASEAN shows either no trade effects or diversionary trade effects. Policymakers and trade authorities can use the results of our study to recalibrate their respective country strategies in the agriculture sector. Moreover, lessons learned from Vietnam, which has benefited the most from the ACFTA, can be explored further by economies that have yet to maximize the benefits arising from the agreement. |
| Keywords: | free trade agreement, ACFTA-ATIG, ASEAN integration, Asia, Southeast Asia |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:sag:seadps:2025:601 |
| By: | Larch, Mario; Meinen, Philipp; Nagengast, Arne J.; Yotov, Yoto |
| Abstract: | We develop and test a theory of efficient international trade. Efficiency gains arise through lower trade costs faced by 'trade specialists', whose superiority over 'common traders' manifests itself through lower trade costs. To test our theory, we construct and deploy a novel dataset based on firm-level merchanting data. Our estimates reveal that, on average, the trade costs for the 'trade specialists' are about four times lower than for non-specialists. The corresponding welfare effects from globally efficient trade amount to a remarkable gain of 80%, on average, which sends an encouraging message for the potential gains from trade that are missing in the existing literature. |
| Keywords: | Efficiency, International Trade, Trade Costs, Gains from Trade |
| JEL: | D60 D61 F14 F12 F10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:319639 |
| By: | Joseph Francois (University of Bern); Neil Foster-McGregor (Asian Development Bank) |
| Abstract: | This paper employs a computational general equilibrium model to examine the potential impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM). The paper considers the impact of extending CBAM to other economies, examining whether approaches that require increased coordination of carbon pricing over a greater number of jurisdictions can increase the impact of CBAM. Results suggest that while an expanded scheme of carbon prices and border carbon taxes can reduce emissions, underlying global economic growth trends are more than enough to quickly undo the highest emissions reductions modelled here. As such, sustained technical innovation and major changes in the underlying structure of energy systems will be required to meet Intergovernmental Panel on Climate Change (IPCC) targets. The results also reinforce another message of recent IPCC reports, namely that in some cases the potential impacts of mitigation actions through domestic and trade-related carbon taxes may fall disproportionately on poorer regions. |
| Keywords: | computable general equilibrium;carbon pricing;border carbon adjustments |
| JEL: | C68 Q56 |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021407 |
| By: | Pierre Cotterlaz; Christophe Gouel |
| Abstract: | This study examines the evolution of France's carbon footprint from 2000 to 2014, with a particular focus on the role of international trade. During this period, France's territorial emissions decreased by 18%, yet its consumptionbased footprint declined by only 5%. This modest reduction reflects an increase in emissions embedded in imports, which grew from 45% to 54% of the total. Employing a novel structural decomposition analysis, we disentangle the contributions of scale, composition, and technique effects from a consumption perspective. Our approach advances traditional methods by explicitly distinguishing between domestic and foreign influences and by separately analyzing trade openness and the geographic reallocation of trade flows. The results underscore the dominance of the technique effect in reducing emissions (-28%), driven primarily by efficiency improvements abroad. However, the geographic composition effect led to a substantial increase in emissions (+18%), especially due to shifts toward more carbon-intensive trading partners prior to 2008. This pattern - characterized by a growing reliance on foreign improvements for emission reductions - likely foreshadows developments in other developed economies as domestic decarbonization advances. It highlights the need for greater coordination between trade and climate policies. |
| Keywords: | Carbon footprint;Structural decomposition analysis;Consumption-based accounting;Scale, composition, and technique effects;France |
| JEL: | F18 Q54 Q56 C67 F64 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-09 |
| By: | Till Köveker; Philipp M. Richter; Alexander Schiersch; Robin Sogalla |
| Abstract: | This paper revisits the exporter’s environmental premium (EEP) by incorporating emissions embodied in domestically and internationally sourced intermediate inputs. Combining administrative firm-level data and customs records for German manufacturers with an environmentally extended input-output table and fuel specific emission factors, we document three stylized facts: (i) embodied emissions account for over half of firms’ total emissions; (ii) exporters’ production involves disproportionately more embodied emissions, particularly through international sourcing; and (iii) once embodied emissions are considered, the EEP reverses: exporters appear cleaner based on production-related emissions alone, but dirtier in total emissions. We rationalize these patterns in a sourcing model and test its predictions using a shift-share IV strategy based on foreign demand shocks. Export expansion lowers the production-related emission intensity without affecting total emissions, underscoring the role of sourcing in shaping firm-level environmental outcomes. These findings highlight the importance of accounting for embodied emissions when evaluating the welfare and environmental consequences of trade liberalization. |
| Keywords: | Exporter’s environmental premium, CO2 emission intensity, embodied emissions, international sourcing, heterogeneous firms |
| JEL: | F18 F12 L23 Q54 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2126 |
| By: | Cecilia Bellora; Lionel Fontagné; Christophe Gouel; Youssef Salib |
| Abstract: | This paper revisits the existence of a carbon bias in trade policies, where emissions-intensive sectors receive lower trade protection than cleaner sectors. Using a stylized general equilibrium model that accounts for greenhouse gas emissions, we confirm the presence of a carbon bias but find it to be significantly smaller than previously estimated. Our analysis reveals that this bias is primarily driven by low tariffs on fossil fuels, particularly crude oil. Incorporating the finite nature of fossil fuel resources into the model reduces the responsiveness of fossil fuel production to tariff changes, effectively neutralizing the carbon bias. Furthermore, when accounting for domestic consumption taxes on fossil fuels in non-producing countries –which act as de facto tariffs– the bias shifts toward a pro-environmental stance. These findings underscore the importance of integrating energy markets' specificities and domestic distortions into trade models to better account for the impact of trade policies on the environment. |
| Keywords: | Fossil Fuels;Greenhouse Gases;International Trade;Tariffs |
| JEL: | F13 F18 Q40 Q56 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-08 |
| By: | Hazem, Nada; Zaki, Chahir |
| Abstract: | The Middle East and North Africa (MENA) region stands among the most vulnerable areas to the impacts of climate change. At the same time, with lax environmental regulations, this region’s integration into Global Value Chains (GVC) is modest. Thus, this paper aims to examine the effect of environmental stringency on GVC participation in MENA countries. To do so, using the World Bank Enterprise Surveys, this paper analyzes how environmental regulations and treaties affect both the extensive and the intensive margins of GVCs. The main results show that national environmental regulations increase the likelihood of integrating into GVCs when it is measured using both the simple and the strict definitions. This result highlights the role of such regulations in attracting GVCs in developing countries and thus lends support to the Porter Hypothesis. The paper also shows that these regulations increase the effect of spending on research and development on GVC. Yet, the results are less conclusive for the role of environmental treaties. These results remain robust when a mixed multilevel approach is used, and when large exporters, who might lobby to affect policy choices, are dropped from the analysis. In addition, at the sectoral level, national regulations are associated with higher GVC participation in the food sector in the MENA region and lower participation in the plastics one. Finally, regulatory stringency increases the probability of GVC participation for both SMEs and large firms, with the effect generally stronger for SMEs. |
| Date: | 2025–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11161 |
| By: | Lovo, Stefania; Varela, Gonzalo J. |
| Abstract: | This paper investigates the impact of an export promotion policy consisting of ad-valorem subsidies for a set of targeted products, on the performance of Pakistani exports in the textile sector. The findings show that the policy had a small overall impact on exports, while it induced substantial reallocation of exports across products. The policy induced an increase in exports of traditional products, mostly garments, which were eligible for the highest rebate rates, at the expense of non-eligible or lower-rated products. The paper presents suggestive evidence indicating that the observed effects are partially attributed to shifts in the composition of exporters, through exits and entries alongside capacity constraints. Finally, the evidence shows that the scheme induced strategic misreporting at the border, which contributed marginally to the overall effects. |
| Date: | 2025–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11136 |
| By: | Nadia Ali; Giacomo De Giorgi; Aminur Rahman; Eric Verhoogen |
| Abstract: | Many countries seek to promote exports by subsidizing market access, but evidence on such efforts has been mixed. We present the first randomized evaluation of a government financial-support program explicitly targeting exports, the Tasdir+ program in Tunisia. The program offered matching grants for fixed market-access costs but not variable costs. Tracking outcomes in administrative data, we find positive effects on exports on average. We find limited impacts on the number of destinations or exported products, which were stated policy targets. The finding that the fixed-cost subsidies expanded exports on the intensive margin but not the extensive margins of destinations or products stands in contrast to the predictions of several workhorse trade models. |
| JEL: | F14 O14 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33985 |
| By: | Céline Poilly (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Fabien Tripier (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This short paper provides U.S. state-level evidence regarding the effects of trade policy uncertainty on the labor market. We show that a higher exposure to trade policy uncertainty generates a contraction in total hours worked at the state level. The extensive margins of labor is the primary margin of employment adjustment. State-level employment is more strongly impacted by trade policy uncertainty in goods-producing industries, and more particularly in the durable goods industry. States which are more specialized in goods industries, when they face higher uncertainty, tends to postpone hiring by more, which explains the drop in total employment.> |
| Keywords: | Uncertainty Shocks, Tariffs, Labor Market |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05099742 |
| By: | Rabah Arezki; Frederick van der Ploeg; Rick van der Ploeg |
| Abstract: | Economic super-powers are racing to control critical minerals in developing economies fueling conflict, environmental damage and poverty. In this paper, we first explore what could well constitute a new “critical minerals curse”. We then highlight the dualism of institutions required for developing countries to navigate the phenomenon. Specifically, we argue that the difficulty for developing countries rich in minerals lies in the balancing act between these two different types of institutions, namely outward- and inward-facing institutions. |
| Keywords: | imports, market concentration, natural resources, resource curse |
| JEL: | O12 O13 F14 F10 L12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11966 |