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on International Trade |
| By: | Mirabelle Muuls |
| Abstract: | This paper analyzes the interaction between credit constraints and trading behavior, decomposing trade in extensive and intensive margins. I construct a unique dataset containing firm-level trade transaction data, balance sheets and credit scores from an independent credit insurance company for Belgian manufacturing firms between 1999 and 2007. Firms are more likely to be exporting or importing if they enjoy lower credit constraints. Also, firms that have better credit rating export and import more. Importing and exporting behaviors differ in how both the level and growth of the various margins of trade are related to credit constraints in one important dimension. In the case of exports, it is the intensive and extensive margins of exports in terms of both product and destinations that are significantly associated with credit constraints whereas for imports it is the extensive margin in terms of products only. |
| Keywords: | credit constraints; international trade; firms' heterogeneity; imports; exports; margins of trade |
| JEL: | F10 F14 G20 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61898&r=int |
| By: | Dincer, Nergiz; Tekin-Koru, Ayça |
| Abstract: | This paper provides a firm level portrait of services exporters along with goods exporters in a developing country. Current findings of firm level services trade literature suggest that the stylized facts of goods trade apply to services trade as well for a set of developed countries. This paper investigates if similar results hold for a developing country, Turkey, for the period 2003-2008. Most results lend support to the evidence found in the previous literature. However, the analysis of Turkish data shows that firms that export both goods and services are larger than those exporting goods or services only. |
| Keywords: | Goods and services exporters, services exports, firm heterogeneity, developing country |
| JEL: | F10 F14 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64363&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Center, Institute of Developing Economies, Thailand); Tadashi ITO (inter-disciplinary Studies Center, Institute of Developing Economies) |
| Abstract: | This paper provides the first empirical evidence about the tariff passthrough in world-wide trade. Specifically, we estimate the effects of tariff reduction on import prices for our tariff line-level data in 46 importing countries in 2007- 2011. The estimation results show that the average pass-through rate for tariff reduction by regional trade agreements (RTAs) is higher than that for reduction by the most favoured nation rates. Namely, most of the tariff rent goes to the importer in the case of multilateral trade liberalization and to the exporter in the case of trade liberalization by RTAs. We also find that product differentiation has an impact of a substantial magnitude on the tariff pass-through for RTAs. The difference in income level of country pairs affects much the tariff pass-through for RTAs. Bargaining over prices between the importer and exporter might explain these results because the use of RTAs requires exporters to incur some costs for certifying the products’ origin. |
| Keywords: | Tariff pass-through; RTAs; Import prices; Tariff-line level |
| JEL: | F15 F33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-34&r=int |
| By: | Siim Rahu |
| Abstract: | Export growth requires not only entry into new markets, but also the survival of trade flows. This paper analyses the role of initial product export share and product differentiation in Estonian manufacturing export survival. For this purpose, detailed firm-product-destination level export data is used from 1995–2011. The data show that adding and dropping new products is rife, about half of the firms change their export portfolio annually, but the average export flow duration remains modest at two years and the median even less. The Cox proportional hazards model reveals in various settings that survival is better if the initial export share is larger and exports are more differentiated. Previous experience with foreign markets and different products has a positive impact on survival. Policies aimed at increasing knowledge about foreign markets are supporting export success. |
| Keywords: | export survival, product level, Estonian manufacturing, Cox model |
| JEL: | F12 F14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:97&r=int |
| By: | Antoine Berthou (Banque de France); Emmanuel Dhyne (National Bank of Belgium); Matteo Bugamelli (Banca d’Italia); Ana-Maria Cazacu (Banca Nationala a României); Calin-Vlad Demian (European Central Bank); Peter Harasztosi (Magyar Nemzeti Bank); Tibor Lalinsky (Národná banka Slovenska); Jaanika Meriküll (Eesti Pank); Filippo Oropallo (ISTAT); Ana Cristina Soares (Banco de Portugal) |
| Abstract: | This paper provides a new cross-country evaluation of competitiveness, focusing on the linkages between productivity and export performance among European economies. We use the information compiled in the Trade module of CompNet to establish new stylized facts regarding the joint distributions of the firm-level exports performance and productivity in a panel of 15 countries, 23 manufacturing sectors during the 2000’s. We confirm that exporters are more productive than nonexporters. However, this productivity premium is rising with the export experience of firms, with permanent exporters being much more productive than starters. At the intensive margin, we show that both the level and the growth of firm-level exports rise with firm productivity, and that the bulk of aggregate exports in each country are made by a small number of highly productive firms. Finally, we show that during the crisis, the growth of exports by high productive firms sustained the current account adjustment of European “stressed” economies. This last result confirms that the shape of the productivity distribution within each country can have important consequences from the point of view of the dynamics of aggregate trade patterns. |
| Keywords: | Firm-level exports, productivity, firm heterogeneity |
| JEL: | F10 F14 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201505-282&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Center, Institute of Developing Economies, Thailand); Tadashi ITO (inter-disciplinary Studies Center, Institute of Developing Economies); Fukunari KIMURA (Economic Research Institute for ASEAN and East Asia, Indonesia; Faculty of Economics, Keio University, Japan) |
| Abstract: | This paper empirically decomposes trade creation effects of regional trade agreements (RTAs) into those due to the tariff reduction effects and due to non-tariff barrier (NTB) removal by using the most disaggregated tariff-line level trade data in a large number of countries in the world. Specifically, making the full use of the fineness of our dataset, we employ the standard gravity equation and identify those effects by estimating trade creation effects of RTAs for products ineligible and eligible to RTA preferential schemes separately. Our major findings are as follows. First, for the whole samples, there are significantly positive trade creation effects due to tariff reduction while weak effects are detected for NTB removal. Second, effects of tariff reduction and NTB removal are smaller for differentiated products than for non-differentiated products. Third, trade creation effects of tariff reduction and NTB removal are substantially large in cases of trade between low-income countries while weak in cases of trade including high-income countries. Fourth, although larger tariff margins on average lead to larger trade creation effects, the relationship between tariff margins and trade creation effects is highly non-linear. |
| Keywords: | Regionalism; RTAs; NTB; gravity equation; tariff line |
| JEL: | F15 F33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-35&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Center, Institute of Developing Economies, Thailand); Nuttawut LAKSANAPANYAKUL (Science and Technology Development Program, Thailand Development Research Institute, Thailand); Shujiro URATA (Graduate School of Asia-Pacific Studies, Waseda University, Japan) |
| Abstract: | We examine the firm-level impact of the use of free trade agreement (FTA) schemes on import prices by employing firm-level import data that enables us to identify the use of different tariff schemes, such as FTA schemes and most favoured nation (MFN) schemes. Unlike the previous studies, we estimate the firm-level effects of FTA use on import prices by controlling for firms’ characteristics. We find that, on average, the use of FTA schemes raises (tariffexclusive) import prices by 3 percent in total. Interestingly, the use of FTA schemes raises import prices even if FTA rates are same as MFN rates. We also find that the large-sized firms in terms of import values reduce the positive effects of the use of FTA schemes on import prices. |
| Keywords: | FTA; Prices; Thailand |
| JEL: | F15 F33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-33&r=int |
| By: | Xue Bai; Kala Krishna; Hong Ma |
| Abstract: | This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 30 and 37 percent lower respectively. |
| JEL: | F13 F14 L1 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21164&r=int |
| By: | Svetlana Demidova |
| Abstract: | We study unilateral trade liberalization in the model with variable markups. First, we show that the e¤ect of falling per unit trade costs depends on the use of the outside good assumption: in its presence trade liberalization reduces welfare at home, and raises it otherwise. Second, we derive the optimal values of import tari¤s for the large and small economies and show that in both cases protection is a desirable policy. Finally, we demonstrate that compared to the models with constant markups, variable markups in our setting result in negative pro-competitive effects, reducing gains from trade. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2015-04&r=int |
| By: | Caetani, Maria Inês; Alvim, Augusto Mussi; Hubbard, Carmem |
| Abstract: | This study analyzes and discusses the impacts of the costs of trade transaction and tariff barriers and subsidies in the international soy trade. To achieve such a purpose, a partial equilibrium model is used, formulated as a Mixed Complementarity Problem - MCP - which allows including of the costs and the tariffs and subsidies in addition to building scenarios. Three simulations are built for testing the impacts: in the first one the costs are eliminated, in the second one, the trade policies are removed and in the third one, an increase of 20% in the consumption of soy is tested. The results show that eliminating the trade transaction costs favors Brazil, Argentina and China in the increase of exports and raises imports in the United States and Europe. The countries in the rest of the world are the ones who benefit the most from the free market condition. The scenario of increase in the world consumption shows that with the rhythm of soy consumption in the same levels of the years from 2009 to 2011 in the world and with the same pattern of the transaction costs and the trade policies, Brazil is the only one among the large producers who cannot manage to increase its participation in the world soy exports. |
| Keywords: | free trade, trade transaction costs, PCM, soy, International Development, International Relations/Trade, Marketing, |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc15:204202&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Center, Institute of Developing Economics, Thailand); Nuttawut LAKSANAPANYAKUL (Science and Technology Development Program, Thailand Development Research Institute, Thailand); Shujiro URATA (Graduate School of Asia-Pacific Studies, Waseda University, Japan) |
| Abstract: | In this paper, we measure the costs for utilization of free trade agreement (FTA) tariff schemes. To do that, we use shipment-level Customs data on Thai imports, which identify not only the firms, source country, and commodity, but also the tariff schemes. We propose several measures as a proxy for the FTA utilization costs. The example includes the minimum amount of firm level saving of tariff payments, i.e. trade values under FTA schemes multiplied by the tariff margin, in all transactions. As a result, for example, the median costs for FTA utilization are estimated to be around two thousand US dollars in the case of exporting from China and around one thousand US dollars in the case of exporting from Korea. We also found that FTA utilization costs differ by rule of origin and industry. |
| Keywords: | FTA; Fixed costs; Thailand |
| JEL: | F15 F33 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-38&r=int |
| By: | Ponciano INTAL Jr (Economic Research Institute for ASEAN and East Asia, Indonesia) |
| Abstract: | As the intra-ASEAN tariffs are virtually eliminated, it is the non-tariff measures and trade costs associated with moving goods and services across border that hinder intra-ASEAN trade. This paper focuses on reviewing the state of trade facilitation initiatives in ASEAN, especially on customs modernization, National Single Window, and National Trade Repository. The study uses questionnaires and interviews with the government officials of eight ASEAN Member States (Malaysia and Singapore are excluded). The questionnaires are similar to the ones for the ERIA Mid-Term Review Study 2011, thus, allowing for monitoring of progress across period. The result shows there has been significant progress in trade facilitation in the region in recent years. Nonetheless, there remains a huge gap between the front runners and the tail-enders. The main challenges include inadequacy of funds, availability of technical talent, long process of development of the technical infrastructure of the system, and coordination issues among agencies. For initiatives post-2015, the paper recommends amplification of the WTO Trade Facilitation Agreement at the regional level. The paper also notes that political will, human capital, and persistence are the key determinants for the success of trade facilitation initiatives in the region. |
| Keywords: | ASEAN Economic Community, trade facilitation, custom modernization, national single window, trade repository. |
| JEL: | F13 F14 F15 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-41&r=int |
| By: | RRenato Fonseca |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0062&r=int |
| By: | Atkin, David; Faber, Benjamin; Gonzalez Navarro, Marco |
| Abstract: | The arrival of global retail chains in developing countries is causing a radical transformation in the way that households source their consumption. This paper draws on a new collection of Mexican microdata to estimate the effect of foreign supermarket entry on household welfare. The richness of the microdata allows us to estimate a general expression for the gains from retail FDI, and to decompose these gains into several distinct channels. We find that foreign retail entry causes large and significant welfare gains for the average household that are mainly driven by a reduction in the cost of living. About one quarter of this price index effect is due to pro-competitive effects on the prices charged by domestic stores, with the remaining three quarters due to the direct consumer gains from shopping at the new foreign stores. We find little evidence of significant changes in average municipality-level incomes or employment. We do, however, find evidence of store exit, adverse effects on domestic store profits and reductions in the incomes of traditional retail sector workers. Finally, we show that the gains from retail FDI are on average positive for all income groups but regressive, and quantify the opposing forces that underlie this finding. |
| Keywords: | foreign direct investment; gains from trade; Supermarket revolution |
| JEL: | F15 F23 O24 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10593&r=int |
| By: | Paola Conconi; David R. DeRemer; Georg Kirchsteiger; Lorenzo Trimarchi; Maurizio Zanardi |
| Abstract: | This paper shows that electoral incentives affect the occurrence of trade disputes. Focusing on WTO disputes filed by the United States during the 1995-2012 period, we show that U.S. presidents are more likely to initiate a dispute in the year preceding their re-election date. Moreover, disputes led by the U.S. tend to target industries that are important to swing states in the presidential election. To explain these regularities, we develop a theoretical model in which an incumbent can file a trade dispute to appeal to voters motivated by reciprocity. The incumbent's ability to initiate a dispute during the re-election campaign provides an advantage over the challenger, who cannot commit to file the dispute if elected. If voters' ideological preferences are not too strong in favor of either candidate, the incumbent will le a trade dispute to increase his re-election chances. |
| Keywords: | trade disputes, elections, reciprocity |
| JEL: | F13 D72 D78 D63 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:81843399&r=int |
| By: | Steingress, Walter (Banque de France) |
| Abstract: | Immigrants can increase international trade by shifting preferences towards the goods of their country of origin and by reducing bilateral transaction costs. Using geographical variations across US states for the period 1970 to 2005, we quantify the impact of immigrants on intermediate goods imports. We address endogeneity and reverse causality – which arises if migration from a country of origin to a US state is driven by trade opportunities between the two locations – by exploiting the exogenous allocation of refugees within the US refugee resettlement program. Our results are robust to an alternative identification strategy, based on the large influx of Central American immigrants to the United States after hurricane Mitch. We find that a 10 percent increase in recent immigrants to a given US state raises intermediate imports from those immigrants' country of origin by 1.5 percent. |
| Keywords: | international trade, international migration, political refugees, hurricane Mitch |
| JEL: | F14 F22 J61 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9058&r=int |
| By: | Susan Stone; James Messent; Dorothee Flaig |
| Abstract: | Despite the predominately negative evidence of the impact of local content requirements on trade, they continue to play a significant role in trade policy. This has been particularly true since the financial crisis of 2008. The work presented here provides new evidence of the detrimental effects these policies have on the imposing country’s own economy. Most empirical studies have focused on the long run inefficiencies associated with LCRs, notably in the effected sector. This paper highlights the costs to other sectors in the economy, the different impacts on intermediate versus final demand, and the declines in trade in third-party economies, despite not engaging in direct trade with the imposing country. Economies imposing LCRs experience a decrease in exports in non-LCR effected sectors and a growing concentration of domestic activity in a few targeted sectors, undermining potential growth and innovation on a broader scale. The paper concludes by offering policy alternatives. |
| Keywords: | impact, CGE, trade policy, Local Content Requirements |
| JEL: | F14 F47 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:180-en&r=int |
| By: | Trewin, Ray; Vanzetti, David; Thang, Tran Cong |
| Keywords: | International Relations/Trade, Livestock Production/Industries, |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare15:202582&r=int |
| By: | Letizia Montinari; Massimo Riccaboni; Stefano Schiavo |
| Abstract: | This paper contributes to the literature explaining firm-level heterogenenity in the extensive margin of trade, defined as the number of products exported by each firm. We develop a dynamic model where firms must invest in RD to maintain and increase their portfolio of goods: the process of product innovation by incumbent firms is such that the probability to capture new products is a function of the number of varieties already exported. Varieties can also be produced from scratch by new entrepreneurs. The entry/exit dynamics of varieties, together with population growth that characterize the economy, gives rise to a distribution for the number of products exported by each firm with a heavy right tail, which is consistent with the data. This markedly heterogeneous behavior in export markets occur even if we do not assume any heterogeneity in productivity to start with. On the other hand, we assume that differences in export sales across products originate from the demand- side of the model, in the form of a product-specific preference attribute. Finally, a simple extension of the model allows us to derive some interesting insights on the behavior of multi-products firms: sales of different products across destinations are not uncorrelated, but show a rather strict hierarchy. |
| Keywords: | international trade, extensive margin, innovation, preferential attachment, multi-product firms |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2015/04&r=int |
| By: | Helson C. Braga; William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0025&r=int |
| By: | João Victor Issler; Ricardo Costa Gazel |
| Abstract: | This paper investigates the recent boom od the Brazilian trade surplus by estimating a partial adjustment model for exports and imports. The results indicate that exports quantum is basically explained by the income of the rest of the world and by the gap of domestic output. The role of the exchange rate seemed to be negligible and sometimes contradictory vis-à-vis economic theory. The imports quantum depend solely on the evolution os the real exchange rate, and domestic output fluctuations did not impact imports. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0024&r=int |
| By: | Fassio, Claudio (CIRCLE, Lund University) |
| Abstract: | This paper investigates the effect of exporting activities on the innovation strategies of firms in France, Germany, Italy, Spain and UK. It puts forward the hypothesis that the positive effect usually found in the related literature is driven by two main mechanisms. The first is a technological learning effect that allows firms active in international markets to benefit from foreign knowledge spillovers in technologically advanced markets and decrease their research cost for the development of innovations. The second is a foreign demand effect according to which the increase of demand induced by the access to foreign markets increases also the profitability of introducing innovations. The paper uses firm-level information about the export destinations of exporters and creates two indices to proxy the two effects, using respectively foreign R&D intensity and foreign growth of imports of the countries of destination of exports, measured at the sectoral level. The empirical analysis, which takes into account possible endogeneity issues related with the firms’ strategic choice of the markets of destination, shows that the two effects induce the adoption of different innovation strategies: while the technological learning effect increases mainly the incentives to introduce brand new product innovations, the foreign demand effect fosters the adoption of efficiency strategies. |
| Keywords: | Export activity; Innovation strategies; Destination of exports; International Spillovers; International demand |
| JEL: | F10 O33 P51 |
| Date: | 2015–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_017&r=int |
| By: | Christopher David Absell; Antonio Tena Junguito |
| Abstract: | The objective of this paper is to reappraise both the accuracy of the official export statistics and the conventional narrative of Brazilian export growth during the period immediately following independence. We undertake an accuracy test of the official values of Brazilian export statistics and find evidence of considerable under-valuation. Once corrected, during the postindependence decades (1821-1849) Brazil's current exports represented a larger share of its economy and its constant growth is found to be more dynamic than any other period of the nineteenth century. We posit that this dynamism was related to an exogenous institutional shock in the form of British West Indies slave emancipation that afforded Brazil a competitive advantage. |
| Keywords: | Brazil , trade accuracy , export growth , American tropical exports , Nineteenth century |
| JEL: | F14 N76 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp15-03&r=int |
| By: | Sayantan Ghosh Dastidar; Vudayagi Balasubramanyam |
| Abstract: | Much of the recent discussion on the impact of immigrants on the host economies relate to the costs they impose on the host country’s public finances and the labour market rather than their contribution to the growth of incomes, technology and trade. This paper analyses the contribution of immigrants into the UK to the exports of the country. The analysis suggests that immigrants make a significant contribution to the growth of exports of services from the UK. Exports of services account for more than a third of UK’s exports and the immigrants. The statistical analysis suggests that Whilst both the immigrants from the EU contribute to the growth of exports of services from the country the contribution of the immigrants from the Commonwealth is somewhat more than that of the EU immigrants mostly because of the recognised presence of the Commonwealth immigrants in professional and technical occupations in the services sector. |
| Keywords: | immigrations, services |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:81843151&r=int |
| By: | Ponciano S. INTAL Jr. (Economic Research Institute for ASEAN and East Asia) |
| Abstract: | Investment liberalization is central for ASEAN to attract greater FDI inflows and intra-region direct investment flows. This paper focuses on measuring and examining the progress and challenges in the implementation of the investment liberalization initiatives in the AEC Blueprint 2009–2015. It also draws on country reports produced as part of the AEC Scorecard Project regarding other constraints on creating much better investment regimes in selected ASEAN countries. The result shows the foreign investment liberalization rate, based on the ASEAN Comprehensive Investment Agreement (ACIA), is high in manufacturing with the challenges to further liberalization to be found primarily in Indonesia and Viet Nam. The picture of liberalization in the agriculture–mining sector is much more mixed across ASEAN, with some ASEAN Member States very liberal in their foreign investment stance, while several others are more cautious, measured, and/or restrictive towards foreign equity participation. The main challenges of further investment liberalization in the region include complex cultural, political, and security sensitivities regarding foreign equity majority control in some sectors, especially in agricultural and natural resource–based industries. There may also be strategic industrial, nationalist, and/or developmental gap considerations working against foreign majority ownership in some manufacturing sectors in several ASEAN Member States. The paper ends with some recommendations for ASEAN investment liberalization initiatives post-2015. |
| Keywords: | ASEAN Economic Community, investment liberalization, ACIA. |
| JEL: | F13 F15 F36 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-32&r=int |
| By: | William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0002&r=int |
| By: | Jayjit Roy |
| Abstract: | In the trade and environment debate, the relevance of intra-industry trade (IIT) cannot be overemphasized. However, an empirical analysis of the environmental implications of such trade is long overdue. Although a number of studies have largely found overall trade to be pro-environment, the consequences of IIT may di¤er due to lower adjustment costs, easier technology absorption, and a distinct composition e¤ect. In this light, we provide the ?rst empirical investigation of IIT?s impact on the environment. Apart from utilizing data on eight environmental indicators from roughly 200 countries over 2000-2005, we also attend to concerns over endogeneity by instrumenting for our trade and income variables. Across several sets of instruments, we consistently ?nd (i) IIT to typically bene?t the environment, Key Words: Intra-Industry Trade, Environmental Quality, Instrumental Variables |
| JEL: | C31 F18 Q56 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:15-01&r=int |
| By: | Armando Castelar Pinheiro |
| Abstract: | In this paper we review, examine and comment the empirical li terature that relies on cross-country statistical analyses to show that export orientation has a positive and significant impact on total factor productivity growth. We comment the work reviewed along four lines. First, we address the question of properly identifying the degree of export bias of an economy and the ways by which exports and growth are related. Second, we consider the sensitivity of the results to sample and period selection. Third, we review the evidence with respect to the direct íon of causali ty between export and output growth. Finally, we extend the analysis beyond the single-equation cross-country regression model to see the relevance of specification problems. Our main conclusion is that, although adequate to search for stylized facts, the cross-country model is not the best way to examine the association between total factor productivity growth and trade orientation. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0023&r=int |
| By: | Aurore Gary; Audrey-Rose Menard |
| Abstract: | This paper aims at explaining how aid, trade and migration in developed nations are connected, in particular in times of economics crisis. It relates to a new strand of the aid allocation literature, which aims at determining how donors’ domestic policies and their political environment can delineate bilateral aid allocations. We use a gravity model framework to jointly determine aid, trade and migration between pairs of developed and developing countries as well as their relation to unemployment in OECD nations. Namely, we focus on the core determinants of these policies with the particular aim of determining whether aid, trade, migration and unemployment policies are interdependent or not. We apply a three-stage least squares method on a data set covering 22 Development Assistance Committee (DAC) countries and 153 recipient countries from 2000 and 2010. Our data reveal that not only aid, trade and migration policies affect respectively aid, trade and migration flows but also they affect each other. Likewise, these policies can be substitutes for developed countries unemployment policies. |
| Keywords: | Foreign aid, Trade, Migration. |
| JEL: | F22 F4 F35 O11 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2015-11&r=int |
| By: | Taguchi, Hiroyuki; Lar, Ni |
| Abstract: | This chapter addresses the issues on inward foreign direct investment (FDI), industrial upgrading, and economic-corridor development in Myanmar. We first present the economic profile of Myanmar by comparing with other economies in Mekong region as well as its brief history. Second, we discuss the role of inward FDI in Myanmar. From a short-term perspective, Myanmar needs to accept inward FDI to participate in international production networks and thus to develop a manufacturing sector. This section represents empirical evidence on the linkage between FDI and the growth of GDP and exports, and investigates a specific issue to be addressed for accepting inward FDI in Myanmar manufacturing sector. Third, from a long-term perspective, we discuss the issues on industrial upgrading and geographical linkage in Myanmar economy. Myanmar now depends heavily on natural resource production in its economy, and also on labor-intensive production in its manufacturing sector. Thus, the industrial reformation should address how to diversify its industries towards a variety of manufacturing sectors and how to upgrade its industries towards upstream and high-valued manufacturing sectors. From the geographical viewpoint, Myanmar also now depends on spot-area development through its SEZ framework. For extending the economic impacts of the SEZ development to nation-wide level, the SEZ development should contribute to an economic corridor approach linked with neighboring countries. |
| Keywords: | FDI, industrial upgrading, economic corridor, Myanmar |
| JEL: | F23 O53 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64411&r=int |
| By: | Kazunobu HAYAKAWA (Bangkok Research Center, Institute of Developing Economics, Thailand); Nuttawut LAKSANAPANYAKUL (Science and Technology Development Program, Thailand Development Research Institute, Thailand); Pisit PUAPAN (Fiscal Policy Office, Ministry of Finance, Thailand); Sasatra SUDSAWASD (School of Development Economics, National Institute of Development Administration, Thailand) |
| Abstract: | Academic literature has theoretically discussed government strategy on regional trade agreements (RTAs) and has empirically identified some elements that play significant roles for that. The purpose of this study is to check the validity of these elements by means of a questionnaire survey of government officials in Thailand. For example, it asks how the officials choose the RTA partners, the products to be excluded from liberalization, and the liberalization patterns. Furthermore, in order to clarify who has influence on the officials' decision, the survey asks the order of priority among several kinds of stakeholders. Our findings provide valuable insight about understanding the formulation process of trade negotiation strategy and the motivation for different liberalization patterns from the policy-makers' perspective. |
| Keywords: | Regional trade agreements; Government; Thailand |
| JEL: | F15 F33 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-37&r=int |
| By: | Taguchi, Hiroyuki; Nozaki, Kenji |
| Abstract: | This chapter examines the issue on Mekong region’s connectivity on quantitative base through the analysis of the gravity trade model and its modified fragmentation model. The main findings are as follows: First, the evolution of international production networks (IPNs) between Thailand and Vietnam as well as the other advanced ASEAN could be identified in terms of their two-way trade integration of machinery parts and components beyond the gravity trade standard. Second, the trade intensity of machinery parts and components, in particular, the one between Thailand and Vietnam, could be partly explained by the fragmentation factors, i.e. their gaps in per capita GDP and the relatively lower service-link costs in Vietnam, through the fragmentation-model estimation. Third, the trade disintegration of machinery parts and components between Thailand and Mekong latecomers, such as Cambodia and Myanmar, could be explained by their higher service-link costs also through the fragmentation-model estimation. This chapter also investigates the border area development in Mekong region, which is a crucial issue for the connectivity in a continental area. Since the border areas have their own area-advantages called “border bonuses”: “complementary factor endowment” and “cross-border infrastructure services”, the areas might be the real gateways for IPN penetration across the countries in Mekong region, if their development were carefully designed. This was proved by the success stories of forerunners: the Maquila case at US-Mexico border and the Savannakhet SEZ at Thai-Lao PDR border. Considering their lessons, the strategies for border area development should be careful designing of institutional frameworks for Special Economic, enhancing outer-link connectivity from borders to central cities, and securing labor forces with skill developments. |
| Keywords: | Regional connectivity, ASEAN, Mekong region gravity trade model, border area development |
| JEL: | F23 O53 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64410&r=int |
| By: | Dionisius A. NARJOKO (Economic Research Institute for ASEAN and East Asia, Indonesia) |
| Abstract: | ASEAN has successfully reduced tariffs but not non-tariff measures (NTMs). Efforts to reduce NTMs always hit the debate surrounding justification of application of the measures. Efficiency of implementation of the measures adds to another issue in the agenda to reduce NTMs regardless the debate, and this is the topic addressed by this paper. It examines whether the extent of NTMs affects the operation of firms in doing business, utilizing a small sample of survey conducted at firm level in all ASEAN member states (AMSs). The results showed that significant costs are borne by implementation of NTMs in practice. The higher the cost to implement the measures, the higher the production cost, and this is added to the price of output. The results indicated that procedures and transparency in the process to acquire licenses, permits, and certificates of exporting/importing are the critical factors. This calls for the need of regulatory reform as the way to tackle the issue. The results also suggest the need to improve the availability and the quality of testing facilities which are found to be lacking in many AMSs. These policy recommendations are critical to increase the participation of small and medium enterprises in regional trade, utilizing many preferential measures offered by the ASEAN Economic Community. |
| Keywords: | Non-tariff measures (NTMs), ASEAN Economic Community (AEC), firm-level survey |
| JEL: | F15 F33 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-36&r=int |
| By: | Emily Christi A. CABEGIN (School of Labor and Industrial Relations, University of the Philippines) |
| Abstract: | From a rising share in the global semiconductor market in the 1990s, which peaked at 7.7 percent in 1999, the standing of the Philippines has since weakened with shares declining to four percent in 2005 and 2.5 percent in 2012. Heavy reliance of the Philippine semiconductor industry on foreign capital, which was concentrated largely in the United States and Japan for the most part of the past two decades, had made it vulnerable to trade risks faced by these countries that resulted in significant downturns in exports in 2001 and 2009. The erosion in the worldwide market share for the Philippines was also associated with the phenomenal rise of China as a dominant global supplier in the 2000s for advanced packaging and test services. Lacking technological capability, the Philippine semiconductor industry was pushed farther down the lower tiers of back-end manufacturing as it struggled to compete in this market with China, which sustained a strong technological leadership. Unlike the more developed Association of Southeast Asian Nations (ASEAN) member countries of Singapore and Malaysia, which have demonstrated upgraded technological intensities and have more diversified international production linkages, the Philippines has failed to optimize the huge opportunity to tap into China’s large and growing semiconductor market and to attract Chinese capital inflow. Increased investments from Taiwan, South Korea, and Singapore in the 2000s, alongside a deepening ASEAN integration and economic interdependence, have cushioned the negative impact of the global crisis on Philippine semiconductor trade. This paper recommends policy reforms for the Philippines to facilitate its transition to more knowledge-intensive, higher-value operations |
| Keywords: | global value chain, semiconductor, technological capability, regional integration |
| JEL: | F14 F15 L63 O14 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-31&r=int |
| By: | William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0005&r=int |
| By: | William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0008&r=int |
| By: | de Melo, Jaime; Tsikata, Yvonne |
| Abstract: | Political motives, geography, and the uneven distribution of gains trumped the traditional efficiency gains across Africa’s Regional Economic Communities (RECs). The small, sparsely populated, fragmented, and often isolated economies across Africa make a compelling case for these economies to integrate regionally to reap efficiency gains, exploit economies of scale, and reduce the thickness of borders. But lack of complementarities among partners and diminishing returns to the exploitation of resources has reduced supply response to market-integration-oriented regional policies. Additionally, a very uneven distribution of resources has sharpened the trade-off between the benefits of common policies needed to tackle cross-border externalities and their costs, which are heightened by the sharp differences in policy preferences across members. African RECs have pursued the ‘linear model’ of integration with a stepwise integration of goods, labour, and capital markets, as well as eventual monetary and fiscal integration. With the exception of the franc zone, the RECs have not yet completed goods-markets integration; the lack of adjustment funds to address the uneven distribution of benefits across partners contributing to the delay. Estimates reported here reveal the shortcomings of the linear model of integration, as behind-the-border measures aiming to reduce trade costs were largely ignored across African RECs until recently. While this is probably due to the difficulty in gaining the confidence necessary to get collection action started, many behind-the-border measures could still have been undertaken unilaterally. |
| Keywords: | Africa; regional integration; trade creation; trade diversion |
| JEL: | F12 F15 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10598&r=int |
| By: | Dionisius A. NARJOKO (Economic Research Institute for ASEAN and East Asia, Indonesia) |
| Abstract: | This paper examines the progress of liberalization of the ASEAN Framework Agreement in Services (AFAS). It measures the changes in the rate of liberalization of the AFAS commitments from the 7th to the 8th package negotiations. The comparisons show only marginal improvement in the depth of services liberalization rate between the two packages, albeit significant increase in the number of subsectors covered in the 8th package. Deeper examination of the commitments suggests that many ASEAN Member States utilized a facility under AFAS (Flexibility Rule) to put a number of sensitive subsectors which are not subject to liberalization commitments. Mode 3 liberalization rate of package 8 increases significantly when the Flexibility Rule is considered. This suggests that many subsectors do not pass the threshold set by package 8. |
| Keywords: | AFAS, AEC, services liberalization |
| JEL: | F13 F15 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-39&r=int |
| By: | Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo |
| Abstract: | The paper studies developing countries' incentives to protect intellectual property rights (IPR). IPR enforcement is U-shaped in a country's market size relative to the aggregated market size of its trade partners: small/poor countries protect IPR to get access to advanced economies' markets, while large emerging countries tend to free-ride on rich countries' technology to serve their internal demand. Asymmetric protection of IPR, strict in the North and lax in the South, leads in many cases to a higher level of innovation than universal enforcement. An empirical analysis conducted with panel data covering 112 countries and 45 years supports the theoretical predictions. |
| Keywords: | developing countries; imitation; innovation; intellectual property rights; oligopoly; trade policy |
| JEL: | F12 F13 F15 L13 O31 O34 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10602&r=int |
| By: | William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0003&r=int |
| By: | William G. Tyler |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:0004&r=int |