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on International Trade |
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Issue of 2026–03–23
eight papers chosen by Nicola Daniele Coniglio, Università degli Studi di Bari “Aldo Moro” |
| By: | Gianmarco Ottaviano |
| Abstract: | This paper studies how digital infrastructure is associated with the spatial structure of international trade in goods. We embed data availability into a structural gravity framework, conceptualizing it as an information friction that interacts with geographic distance and equilibrium market access. Using the topology of the global subsea cable network, we construct country-level measures of digital network position. We find that countries with greater digital network embeddedness, particularly on the exporter side, exhibit lower distance elasticities of trade. Other dimensions of digital connectivity are more closely associated with multilateral resistance, highlighting distinct channels through which digital infrastructure affects goods trade. |
| Keywords: | digital network centrality, spatial integration, international trade, subsea cable networks |
| Date: | 2026–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2158 |
| By: | Matteo Neri-Lainé |
| Abstract: | International insecurity can severely disrupt trade. This paper studies treaties aimed at preventing such insecurity: military alliances. We develop a quantitative model of trade with endogenous international insecurity, where alliances affect trade flows by reducing the risk of violent expropriation faced by firms. Taking a structural gravity approach, we show that alliances increase trade by 66% on average. The effects of military alliances are dynamic and heterogeneous. They depend to a large extent on the type of alliance and the economic size of partners. An instrumental variable strategy and an event study confirm the causal interpretation of the results. Investigating the mechanism behind the impacts of military alliances, we demonstrate that alliances increase trade by reducing international insecurity. Moreover, employing the full scope of our theoretical model, a general equilibrium analysis shows that the growth in trade generated by military alliances brings substantial welfare gains for signatories and losses for non-aligned countries. |
| Keywords: | Military Alliances;Trade;International Insecurity;Conflict;Geoeconomics;Structural Gravity;General Equilibrium;Welfare |
| JEL: | F1 F5 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2026-05 |
| By: | Chris Jackson; Daniel Rivera Greenwood |
| Abstract: | This paper presents a nowcasting model for global trade that allows for regional dynamics and spillovers. World trade growth is driven by common global factors but also regional trends. While existing trade nowcasting models have focused on the former, we allow for the latter using a dynamic factor model (DFM) with a multi-factor block structure. By directly modeling global trends, regional variation and spillovers, we improve on the performance of standard trade nowcasting models, particularly periods characterized by regional heterogeneity. A multi-factor regional framework may be particularly advantageous for tracking trade developments in the future given a period changing trade patterns and geo-economic fragmentation. The model also sheds light on trade spillovers and the drivers of news in global trade: Asia, in particular, has notable spillovers to the global and other regional trade cycles. |
| Keywords: | Global trade; Nowcasting; Dynamic Factor Model; Spillovers |
| Date: | 2026–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/048 |
| By: | Yu Ji; Cong Peng; Wei Tian; Yiqun Zhuang |
| Abstract: | The paper estimates the causal effect of short-term export credit insurance (ECI) on firm exports in a major developing economy. Using data from China's policy-oriented export credit insurer matched to customs and tax records, we exploit quasi-random variation in insurance availability generated by buyer-level credit ceilings and a first come, first served allocation rule. Combining propensity score matching with an instrumental variables strategy, we find that a 1% increase in insured export value raises total exports by about 0.225%. ECI also expands export scope, increasing the number of exported products and the likelihood of entering new destination markets, while leaving unit values largely unchanged. The effects are significantly stronger for smaller and private firms, exporters in financially constrained cities, and shipments to riskier destinations, and were amplified during the global financial crisis. Back-of-the-envelope calculations imply sizable social returns, suggesting that short-term ECI can be an effective trade finance instrument for promoting export-led growth in developing economies. |
| Keywords: | short-term export credit insurance, export, trade finance, trade policy |
| Date: | 2026–03–17 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2163 |
| By: | De Lucio, Juan (Universidad de Alcalá. Pza. San Diego, s/n, 28801, Alcalá de Henares (Spain)); Mínguez, Raúl (Cámara de Comercio de España and Universidad Antonio de Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain)); Minondo, Asier (Corresponding author. Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia – San Sebastián (Spain)); Requena, Francisco (Departamento de Economía Aplicada II, Universitat de València, Avda. dels Tarongers s/n, 46022 Valencia (Spain)) |
| Abstract: | Between June 2022 and October 2024, Algeria imposed a politically motivated embargo on imports from Spain. Because neither the imposition of the embargo nor its lifting was anticipated by Spanish firms, this episode provides a quasi-natural experiment to estimate the causal effect of a sudden market shutdown on subsequent export behavior. We interpret this causal effect as evidence on export hysteresis, i.e., the degree to which exporting fails to resume because of market-specific frictions. We show that the embargo reduced the post-embargo probability of exporting to Algeria by 34%. However, this negative effect is smaller than the impact of an observationally equivalent situation in which a firm simply does not export to a market for two and a half years in the absence of an embargo. This finding suggests that studies relying on non-experimental variation may overstate the effect of export hysteresis on the probability of exporting. We also show that the embargo’s negative effects continued even one year after it was lifted. Finally, we find that the largest decrease in the probability of exporting occurred in firms with a large pre-embargo market share and long export experience in Algeria. |
| Keywords: | export hysteresis, embargo, sunk entry costs in exporting, customer accumulation frictions, market experience, Spain, Algeria |
| JEL: | F10 F14 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2603 |
| By: | Sharat Ganapati; Colin J. Hottman |
| Abstract: | Transaction-level quantity discounts are a pervasive feature of US trade, shaping both price variation and tariff incidence. Using administrative microdata, we show that these discounts reflect transaction-level scale economies rather than market power. Accounting for these micro-level economies resolves a key puzzle: while observed import prices rose one-for-one with 2018-2019 US tariffs, we show this was driven by the loss of scale economies as transaction sizes collapsed. Controlling for this scale effect, the strategic pass-through of tariffs to scale-free prices falls to 60 percent, implying foreign exporters absorbed a significant share of the burden through reduced markups. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-17 |
| By: | Fabio Artuso (ADB - Asian Development Bank); Julian L Clarke (ADB - Asian Development Bank); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Mahdi Ghodsi (WIIW - Wiener Institut für Internationale Wirtschaftsvergleiche); Gianluca Santoni (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris) |
| Abstract: | Non-tariff measures (NTMs), especially sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), have become crucial components of climate, industrial, and regulatory policy, impacting the majority of global trade. However, quantifying their effects on trade is challenging because NTMs are usually non-discriminatory and challenging to identify in standard gravity frameworks. Using a multistage structural gravity estimation strategy combined with a control-function correction for endogeneity, we estimate the trade elasticities and ad valorem equivalents of NTMs at the HS6 level for over 5, 000 products. Our results reveal significant heterogeneity in NTM trade costs, especially in environmentally relevant sectors, such as clean technologies and electric vehicles. These estimates can inform regulatory impact assessments and general-equilibrium analyses of climate-aligned trade policies. |
| Keywords: | Non-tariff measures, Ad valorem equivalents, Environmental goods, Critical minerals |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-05545520 |
| By: | Sandra Baquie; Yueling Huang; Ms. Florence Jaumotte; Jaden Kim; Rafael Machado Parente; Samuel Pienknagura |
| Abstract: | This paper presents a global empirical analysis of how industrial policies (IPs) affect patent applications, with an instrumental-variable strategy that addresses selection in policy targeting by leveraging retaliatory dynamics. On average, IPs do not increase domestic patent applications over a four-year period, except when they target sectors with potential distortions or externalities, such as infant industries or low-carbon technologies. However, IPs temporarily boost foreign patent filings within the same timeframe, consistent with strategic front-loading by foreign inventors seeking to secure technology protection, and perhaps market access, in the IP-targeted sector. This link between foreign patent applications and IPs is stronger for export-oriented policies compared to domestic subsidies, for IPs targeting innovation-central sectors, and in emerging markets and developing economies. |
| Keywords: | Industrial Policies; Innovation; Patents; Networks; Low-carbon technology |
| Date: | 2026–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/047 |