|
on International Trade |
| By: | Angela Cheptea; Charlotte Emlinger; Karine Latouche |
| Abstract: | This paper questions the impact of the globalization of the retail sector on the export activity of origin country agrifood firms. In a previous paper (Cheptea et al. 2015), we showed that the overseas expansion of a country's retailers fostered its exports to foreign markets. This effect can be explained by a reduction in trade costs for retailers' supplying firms in the origin country, or to a change in consumer preferences in the host country that benefits all origin country firms. In this paper, we evaluate which of the two mechanisms dominates. For that, we use an original firm-level database of French agri-food exports, identifying the domestic suppliers of French retailers through certification with the private IFS standard. We find that IFS certified French firms are more likely to export and export larger volumes than non-certified firms to markets where French retailers established outlets. We also show that when French retailers close down their activities in a market, IFS firms face a drop in exports to this market in the subsequent years. The results are robust to the use of different sets of firm- and country-specific fixed effects, are unaffected by possible selection and endogeneity biases, and by the presence in export markets of other retailers. The difference in behavior for certified and non-certified exporting firms on markets where French retailers operate confirms the trade cost advantage of retailers' suppliers, which is lost when French retailers exit from the destination country. |
| Keywords: | Multinational retailers;Firm-level exports;Private standards |
| JEL: | F12 F14 F23 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2015-21&r=int |
| By: | Pierola Castro,Martha D.; Fernandes,Ana Margarida; Farolec,Thomas |
| Abstract: | Using highly disaggregated firm-level customs transaction data for imports and exports in Peru over the 2000?2012 period, this paper explores the relationship between imports of intermediate inputs and firm export performance. The paper shows that greater use, variety, and quality of imported intermediate inputs is significantly correlated with higher exports, faster export growth, greater diversification of export markets, and higher quality exports (as measured by relative unit prices) at the firm level. This relationship is robust and persistent to controls for unobserved firm heterogeneity and year fixed effects. The use of imported inputs is also associated with higher productivity at the firm level. Considering the relationship between specific trade policy measures and the import performance of those exporters that are direct importers, the analysis shows that those exposed to higher tariffs and nontariff measures import less in total and exhibit lower import variety. The use of the advanced clearance procedure as the modality to clear customs for imports is favorable to the import performance of exporter-importers, in that the users of the modality import more and import a more diversified bundle of inputs than those that do not use it, even after controlling for firm size. |
| Keywords: | Free Trade,Economic Theory&Research,Trade Policy,Debt Markets,Currencies and Exchange Rates |
| Date: | 2015–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7492&r=int |
| By: | Liisa Saikkonen |
| Abstract: | The objective of this paper is to estimate transformation and Armington substitution elasticities for South African trade. We use linear methods to estimate elasticities without growth factors. We then employ a non-linear system of equations to estimate Armington import elasticities and related growth factors. Using the linear estimation method, we find positive (0.386-1.379) short-run Armington substitution elasticities for most studied industries. Moreover, positive transformation elasticities for exports contradict our assumption that increased relative export prices result in increased exports. The results of the non-linear estimation suggest that growth affects imports more than domestic consumption of domestic production in the manufacturing industry. |
| Keywords: | South Africa, trade, Armington elasticity, constant elasticity of transformation |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-104&r=int |
| By: | Kee,Hiau Looi; Tang,Heiwai |
| Abstract: | China has defied the declining trend in domestic content in exports in many countries. This paper studies China?s rising domestic content in exports using firm- and customs transaction-level data. The approach embraces firm heterogeneity and hence reduces aggregation bias. The study finds that the substitution of domestic for imported materials by individual processing exporters caused China?s domestic content in exports to increase from 65 to 70 percent in 2000?2007. Such substitution was induced by the country?s trade and investment liberalization, which deepened its engagement in global value chains and led to a greater variety of domestic materials becoming available at lower prices. |
| Keywords: | E-Business,Economic Theory&Research,Currencies and Exchange Rates,Markets and Market Access,Water and Industry |
| Date: | 2015–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7491&r=int |
| By: | Samuel Standaert; Glenn Rayp (-) |
| Abstract: | While the endogeneity of trade and regional integration agreements was established early on, this issue has only been addressed explicitly in gravity models during the last decade and a half. Initial attempts using instrumental variables proved unreliable, causing authors to look for alternative solutions. This paper brings together the literature on both gravity equations explaining trade and probit regressions explaining the probability of an integration agreement. This is done by estimating them simultaneously in a qualitative vector autoregression model. The qualitative VAR allows us to estimate their interdependence without having to resort to instrumental variables. In addition, the endogenous nature of other control variables like the GDP or the capital labor ratio can be taken into account. Our preliminary findings confirm that an increase in trade raises the probability of an agreement and vice versa, although the response can di er over specific continents. We find a relatively small average treatment effect of RIAs: trade increases with 10% after one year and 40% after five years whereafter it slowly rises to 80% after 35 years. |
| Keywords: | Endogenous trade agreements; Gravity equation; Qualitative choice models; Qualitative VAR. |
| JEL: | C11 C25 F14 F15 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:15/912&r=int |
| By: | Gootiiz,Batshur; Mattoo,Aaditya |
| Abstract: | Can regionalism do what multilateralism has so far failed to do?promote greater openness of services markets? Although previous research has pointed to the wider and deeper legal commitments under regional agreements as proof that it can, no previous study has assessed the impact of such agreements on applied policies. This paper focuses on the Association of Southeast Asian Nations (ASEAN), where regional integration of services markets has been linked to thriving regional supply chains. Drawing on surveys conducted in 2008 and 2012 of applied policies in the key services sectors of ASEAN countries, the paper assesses the impact of the ASEAN Framework Agreement on Services (AFAS) and the ambitious ASEAN Economic Community Blueprint, which envisaged integrated services markets by 2015. The analysis finds that over this period, ASEAN did not integrate faster internally than vis-à-vis the rest of the world: policies applied to trade with other ASEAN countries were virtually the same as those applied to trade with rest of the world. Moreover, the recent commitments scheduled under AFAS did not produce significant liberalization and, in a few instances, services trade policy actually became more restrictive. The two exceptions are in areas that are not on the multilateral negotiating agenda: steps have been taken toward creating regional open skies in air transport, and a few mutual recognition agreements have been negotiated in professional services. These findings suggest that regional negotiations add the most value when they are focused on areas that are not being addressed multilaterally. |
| Keywords: | Transport Economics Policy&Planning,Trade and Services,Housing&Human Habitats,Banks&Banking Reform,Public Sector Corruption&Anticorruption Measures |
| Date: | 2015–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7498&r=int |
| By: | THORBECKE, Willem |
| Abstract: | This paper uses a gravity model to investigate the evolution of Japan's exports. Before the U.S. housing bubble burst in 2007, Japan's exports to the United States were $40 billion more than predicted each year, but they have moderated since then. Japan's exports to China increased markedly relative to predicted values after China joined the World Trade Organization in 2001. Evidence from disaggregating Japan's exports into ordinary and processing trade indicates that this increase in exports to China was driven by a surge of parts and components for re-export, and that Japan's exports of goods for the Chinese domestic market remained negative outliers. Japan's exports to South Korea and Europe are also much less than predicted. If Japan entered into free trade agreements with China, South Korea, and the European Union, it would significantly increase its exports to these destinations. This would help Japanese companies to diversify their export structure and reduce their exposure to slowdowns in the United States and the Association of Southeast Asian Nations (ASEAN). |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15131&r=int |
| By: | Ronald B. Davies; Arman Mazhikeyev |
| Abstract: | Using firm level data from Africa and Asia, we estimate the impact of being in a special economic zone (SEZ) on a firm’s probability of exporting, export intensity, and value of exports. At the extensive margin, we find that SEZ firms in open economies are 25% more likely to export than their non-SEZ counterparts, with a large negative effect in closed economies. At the intensive margin, we find that SEZs increase the value of exports, but only in countries with barriers to imports where the estimate increase is 3.6%. Thus, the estimated effect of introducing an SEZ can be meaningful, but is heavily contingent on the local economic environment. |
| Keywords: | Exporting; Trade barriers; Special economic zones |
| JEL: | F14 J16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201528&r=int |
| By: | Knobel, Alexander; Chokaev, Bekhan |
| Abstract: | This paper investigates the possible economic effects of Russia-EU free trade agreement, implying a mutual zero import tariffs in the trade of the Customs Union and the EU. Analysis of the effects is made using CGE Globe v1 model. We estimate the impact of an FTA on the economies, both at the level of the entire economy and at the industry level. The sensitivity analysis is made. It is shown that, in both relative and absolute terms, Russia potentially more benefits from the agree-ment than the EU. The cumulative gain of the CU is strictly positive, but the benefits and costs are unevenly distributed among its members, with negative effect for Belarus. |
| Keywords: | Customs Union,European Union,Free Trade Agreement,CGE |
| JEL: | C68 F15 F17 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:121853&r=int |
| By: | Scott French (School of Economics, UNSW Business School, UNSW) |
| Abstract: | A widely used class of quantitative trade models implicitly assumes that patterns of comparative advantage take a specific form such that they have no influence over the effect of trade barriers on aggregate trade flows and welfare. In this paper, I relax this assumption, developing a framework in which to analyze the role of interactions among countries' patterns of comparative advantage in determining the aggregate effects of trade barriers. My model preserves much of the tractability of standard aggregate quantitative trade models while allowing for the effects of any pattern of comparative advantage, across many products and countries, to be taken into account. After fitting my model to product-level trade data, I find that the composition of trade flows is quantitatively important in determining the welfare gains from trade and the aggregate effects of trade barriers. A key finding is that the welfare gains from trade tend to be larger and more skewed in favor of low-income countries than an aggregate model would suggest. |
| Keywords: | international trade, welfare, composition, product level, comparative advantage, trade barriers, gravity, trade cost elasticity, developing countries |
| JEL: | F11 F14 F17 O19 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2015-24&r=int |
| By: | Vincent Anesi (University of Nottingham and GEP); Giovanni Facchini (University of Nottingham,CEPR, CES-Ifo, CReAM, GEP, IZA and Centro Studi Luca d'Agliano) |
| Abstract: | Empirical evidence suggests trade coercion exercised unilaterally is significantly less likely to induce concessions than coercion exercised through an international organization. In this paper we build a two-country model of coercion that can provide a rationale for this finding, and for how "weak" international institutions might be effective, even if their rulings cannot be directly enforced. In particular we show that if coercion is unilateral, the country requesting the policy change will demand a concession so substantial to make it unacceptable to its partner, and a trade war will ensue. If the parties can instead commit to an international organization (IO), compliance is more likely, because the potential IO ruling places a cap on the Foreign government's incentives to signal its resolve. |
| Keywords: | GATT, WTO, Dispute Settlement, Political Economy |
| JEL: | F12 F16 L11 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:376&r=int |
| By: | Kim Ruhl (New York University Stern School of Busi); Horag Choi (Monash University); George Alessandria (University of Rochester) |
| Abstract: | We build a micro-founded two-country dynamic general equilibrium model in which trade responds more to a cut in tariffs in the long run than in the short run. The model introduces a time element to the fixed-variable cost trade-off in a heterogeneous producer trade model. Thus, the dynamics of aggregate trade adjustment arise from producer-level decisions to invest in lowering their future variable export costs. The model is calibrated to match salient features of new exporter growth and provides a new estimate of the exporting technology. At the micro level, we find that new exporters commonly incur substantial losses in the first three years in the export market and that export profits are backloaded. At the macro level, the slow export expansion at the producer level leads to sluggishness in the aggregate response of exports to a change in tariffs, with a long-run trade elasticity that is 2.9 times the short-run trade elasticity. We estimate the welfare gains from trade from a cut in tariffs, taking into account the transition period. While the intensity of trade expands slowly, consumption overshoots its new steady-state level, so the welfare gains are almost 15 times larger than the long-run change in consumption. Models without this dynamic export decision underestimate the gains to lowering tariffs, particularly when constrained to also match the gradual expansion of aggregate trade flows. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1361&r=int |
| By: | Facundo Albornoz (Department of Economics, Universidad de San Andres); Ezequiel García Lembergman (Department of Economics, Universidad de San Andres) |
| Abstract: | In this paper, we uncover a novel fact about the relationship between exporting and importing. Using a comprehensive database of Argentine rms, we nd that exporting to a new destination increases the probability of a rm beginning to import from that market within the lapse of one year. We develop a standard model of import behavior and, by testing its predictions, we rule out productivity as an explanation and argue that export entry reduces import xed costs. We show that the eect is stronger in distant markets and when importing involves non-homogenous and rarely imported goods. Taken together, our results suggest that rms gain knowledge on -or establish links with- potential suppliers after export entry, which reduces the costs associated with searching for import sources. |
| Keywords: | importing, exporting, trading costs, learning |
| JEL: | F10 F12 F14 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:sad:wpaper:122&r=int |
| By: | Ronald B. Davies; Arman Mazhikeyev |
| Abstract: | Using firm level data across 99 developing and transition economies, we explore the productivity differences between firms depending on their export status and the gender of their owners. We find that female-owned exporters have roughly half the exporter productivity premium of comparable male firms. This is particularly true for larger firms, suggesting that this difference may reflect greater difficulty in implementing learning by exporting for female-owned firms. Nevertheless, we also find evidence consistent with selection into exporting where female-owned firms face relatively higher export costs. Together, these point to significant discrimination barriers female firms face when exporting. |
| Keywords: | Exporting; Gender; Discrimination; Trade barriers |
| JEL: | F14 J16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201525&r=int |
| By: | Roberto Guadarrama-Baena, Povilas Lastauskas |
| Abstract: | This paper combines current literature on the heterogeneous firms in international trade with the public economics of fiscal policy. We study the nexus between the intensive and extensive margins of trade, and their relationship with fiscal policy. When taxes are collected through the fixed per-period production payments, borne by all active firms, they impact firm partitioning and exporting decisions, but are nevertheless left unmodelled and treated as a pure loss in the literature. Instead, we show theoretically how such taxes can be channelled back into an open economy through spending on education (thereby affecting workers’ skill distribution), and contrast the result with the standard trade liberalisation exercise and a wasteful channel, which are prevalent in the literature. We estimate the model’s predictions using a novel data set covering 40 countries from 1995 to 2011. Employing the instrumental-variable panel techniques, we find support to our main testable predictions: fixed production taxes, used as the source to fund education, create an educational channel on the aggregate expenditure and the extensive margin of trade. A decrease in expenditure and an increase in the extensive margin are both amplified once an educational channel is allowed for. |
| Keywords: | Fiscal policy, intensive and extensive margins of international trade, education, skill distribution |
| JEL: | C26 F12 F16 E62 I28 |
| Date: | 2015–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1533&r=int |
| By: | Reshad Ahsan (School of Economics, University of Melbourne); Arpita Chatterjee (School of Economics, UNSW Business School, UNSW) |
| Abstract: | In this paper, we make two novel contributions to the literature on trade and inequality. First, we show that the same mechanism that causes greater cross-sectional inequality, higher relative demand for skill, also facilitates intergenerational occupational mobility. In particular, we develop a stylized model that shows that the innovation induced by international trade causes an increase in the employment share of high-skill occupations. In turn, this allows an increasing number of sons to enter better occupations than their father. We then exploit spatial variation in exposure to trade liberalization in urban India to test our model’s prediction. Our empirical results confirm that sons that live in urban districts with a greater exposure to trade liberalization have a higher probability of being in a better occupation than their father. Further, as predicted by our model, we find that this positive impact of trade liberalization on intergenerational mobility is stronger in relatively technologically advanced districts. In a second contribution, we show that increased investment in education alone need not facilitate intergenerational occupational mobility. Instead, it only does so in urban districts where there has been a sufficient increase in the employment share of high-skill occupations. |
| Keywords: | Trade and Labor Markets, Intergenerational Mobility |
| JEL: | F14 F16 J62 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2015-23&r=int |
| By: | Rabah Amir (University of Iowa); Jim Y. Jin (University of St Andrews); Michael Tröge (ESCP-Europe) |
| Abstract: | The paper compares free trade with autarky in an asymmetric multi-country world with Cournot competition, constant returns and linear demand. We first derive conditions for free trade to hurt a country’s consumers, to benefit its firms, to induce it to export, to increase its output, and to raise its welfare. We further show these conditions are linked in a clear order, with each one implying the next. We then demonstrate that with different reservation prices trade can reduce world output and total consumer surplus as well as world welfare and correct oversights in earlier findings by Dong and Yuan (2010). |
| Keywords: | free trade, Cournot competition, welfare loss |
| JEL: | F12 F15 D43 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1509&r=int |
| By: | Nakada, Yoshiaki |
| Abstract: | In this article, we analyze how factor endowment affects production in the three-factor two-good general equilibrium trade model. These relationships determine whether ‘a strong Rybczynski result’ holds or not. We search for a sufficient condition for this result to hold (or not to hold). We assume factor intensity ranking is constant. We use ‘the economy-wide substitution’ (or EWS) and EWS-ratios to analyze Rybczynski sign pattern in a systematic manner. We also analyze Stolper-Samuelson sign pattern, which expresses the commodity price-factor price relationships. |
| Keywords: | three-factor two-good model; general equilibrium; Rybczynski result; economy-wide substitution. |
| JEL: | D58 F11 |
| Date: | 2015–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67863&r=int |
| By: | Chesnokova, Tatyana; Rupa, Jesmin; Sim, Nicholas |
| Abstract: | The paper examines if exports have unequal influence on the work decisions of men and women using household panel data from the Indonesian Family Life Survey. We construct a novel measure – the export exposure index – which allows us to estimate the relationship between exports and the work decisions of individuals even after controlling for household and province-year fixed effects. Our regression analysis shows that an increase in exports does not have a statistically significant effect on men, but encourages women to allocate time away from paid employment towards unpaid house or family work. These results are consistent with our simple theoretical model which predicts that the relative increase in spousal income (following an increase in export exposure) strengthens females' comparative advantage in unpaid housework and allows them to devote more time to home production. |
| Keywords: | Exports, Gender, Labor Force Participation |
| JEL: | O12 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2015-3&r=int |
| By: | Bonfiglioli, Alessandra; Crinò, Rosario; Gancia, Gino A |
| Abstract: | We study the equilibrium determinants of firm-level heterogeneity in a model in which firms can affect the variance of their productivity draws at the entry stage and explore the implications in closed and open economy. By allowing firms to choose the size of their investment in innovation projects of unknown quality, the model yields a Pareto distribution for productivity with a shape parameter that depends on industry-level characteristics. A novel result is that export opportunities, by increasing the payoffs in the tail, induce firms to invest in bigger projects with more spread-out outcomes. Moreover, when more productive firms also pay higher wages, trade amplifies wage dispersion by making all firms more unequal. These results are consistent with new evidence on how firm-level heterogeneity and wage dispersion vary in a panel of U.S. industries. Finally, we use patent data across U.S. states and over time to provide evidence in support of a specific mechanism of the model, namely, that export opportunities increase firm heterogeneity by fostering innovation. |
| Keywords: | firm heterogeneity; international trade; productivity dispersion; wage inequality |
| JEL: | E24 F12 F16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10938&r=int |
| By: | Stéphane BECUWE; Bertrand BLANCHETON; Karine ONFROY |
| Abstract: | This paper proposes to give an account of Base Montesquieu project computing with annual data from Tableau General du Commerce de la France between 1836 and 1938. The article presents also key original data concerning sectoral dimensions of French foreign trade. We used different level of disaggregation to analyze product’s inflows and outflows. These data can be interesting in order to drive studies on sectors in long run perspective or to analyse annually French international trade. |
| Keywords: | international trade, France, products, countries |
| JEL: | N70 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2015-35&r=int |
| By: | Tilak Liyanaarachchi; Athula Naranpanawa; Jayatilleke S. Bandara |
| Keywords: | Poverty, Trade liberalisation, Computable general equilibrium model, Microsimulation, Income distribution, South Asia, Sri Lanka |
| JEL: | I32 C68 F14 C53 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:gri:epaper:economics:201505&r=int |
| By: | Franklin Amuakwa-Mensah (Department of Economics, Swedish University of Agricultural Sciences) |
| Abstract: | The debate about how environmental or climate factors affect migration decisions has generated a lot of interest in recent times, however empirical studies about the subject are limited and fragmented. This paper investigates the effect of climate factors on migration decisions by comparing the 2005/06 and 2012/13 rounds of Ghana Living Standards Survey (GLSS5 and GLSS6), using Heckman two-stage method to account for selectivity bias. The climate condition in various ecological zones of Ghana is used as a proxy to investigate the effect of climate elements on migration decision. Results show that socio-economic factors such as anticipated welfare gains, household size, education, the sector of employment and others, together with climatic element do significantly affect an individual’s migration decision. Findings further suggest a positive effect of climate element on migration decisions. The coastal savannah and forest ecological zones have a greater probability of accommodating more in-migrants relative to the northern savannah ecological zone. In addition, marginal effects reveal that the probability to migrate to coastal savannah zone relative to northern zones is higher than the probability to migrate to forest zones relative to northern zone. Moreover, anticipated welfare gains reinforce the effect of climate elements and also entrenches the divergence between the probability of migrating to coastal and forest zones relative to the northern zones. With the current climate change of high temperature and low rainfall, migration may be considered as one of the several adaptation strategies in response to changes in the environment. |
| Keywords: | Climate; environment; migration; Heckman two-stage; Ghana. |
| JEL: | Q54 O15 R23 Q57 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2015.18&r=int |
| By: | Alexandre Vidmer; An Zeng; Mat\'u\v{s} Medo; Yi-Cheng Zhang |
| Abstract: | Predicting the future evolution of complex systems is one of the main challenges in complexity science. Based on a current snapshot of a network, link prediction algorithms aim to predict its future evolution. We apply here link prediction algorithms to data on the international trade between countries. This data can be represented as a complex network where links connect countries with the products that they export. Link prediction techniques based on heat and mass diffusion processes are employed to obtain predictions for products exported in the future. These baseline predictions are improved using a recent metric of country fitness and product similarity. The overall best results are achieved with a newly developed metric of product similarity which takes advantage of causality in the network evolution. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1511.05404&r=int |
| By: | Eliasson, Kent (Umeå University and Growth Analysis); Hansson, Pär (Örebro University School of Business); Lindvert, Markus (Growth Analysis) |
| Abstract: | Using Swedish micro data we find no evidence for the concerns circulating in the public debate that foreign acquisitions lead to reductions in R&D expenditures and high-skilled activities in targeted domestic firms, neither in MNEs nor in non-MNEs. Previous studies have only focused on larger firms. In this paper we are able to study the impact on smaller firms (less than 50 employees). This is important since 90 percent of the firms acquired by foreign enterprises have less than 50 employees. For this group of firms there is no information on R&D, but by using the register of educational attainment we have data on the share of high-skilled labor in all Swedish firms, irrespective of size. Interestingly, we find that among smaller firms foreign enterprises tend to acquire high-productive, skill-intensive firms (cherry-picking) and after the acquisitions skill upgrading appears in acquired smaller, non- MNE firms. |
| Keywords: | foreign acquisitions; skill upgrading; R&D; intensity; propensity score matching |
| JEL: | F23 J24 O32 O33 |
| Date: | 2015–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2015_010&r=int |
| By: | Leilei Shen (Kansas State University); Peri Silva (Kansas State University) |
| Abstract: | Measuring the effects of international trade on labor market outcomes has never been more im-portant given the increasing interconnections among economies around the globe. However, using measures of exposure to trade flows based on gross exports may lead to a misleading picture given that production processes have essentially become globalized, allowing firms to have access to im-ported inputs as an example. We consider the effects of international trade by building a model with firm heterogeneity where firms have the ability to offshore the production of inputs. Our model highlights that international trade offers an opportunity for firms to become more productive by en-gaging in o ff-shoring activities while they face competition from imports of final goods in the do-mestic market. We then construct a measure of U.S. exposure to Chinese goods using value added trade to analyze its effects on U.S. local labor markets. Using value added trade, we find that con-tinuously rising exports from China to the U.S. do not have significant effects on employment and wages. We further decompose the measure of exposure into value added trade in intermediate and in final goods. In line with the theoretical framework, we find that an increase in value added ex-ports from China in final goods leads to a decrease in employment across U.S. local labor markets, while the effects from a change in the exposure to trade in intermediate goods are not significant. |
| Keywords: | Value added exports, employment, wages |
| JEL: | F13 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:373&r=int |
| By: | Minford, Patrick (Cardiff Business School) |
| Abstract: | The EU protects agriculture and manufacturing through its commercial policies, namely its tariffs, its non-tariff barriers and the Common Agricultural Policy. By leaving the EU the UK would be able to abandon the EU’s protectionist system in favour of free trade combined with transitional compensation for those hit by the changes. This would raise economic welfare by around 4% (i.e. UK households would be able to consume 4% more goods and services) and enhance the shift of the UK economy away from manufacturing into service industries where UK growth has been concentrated largely in the decades since 1979. As the UK is a small country with little if any monopoly power in world markets, bilateral trade agreements have trivial effects on it. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2015/17&r=int |
| By: | Philip Gunby (University of Canterbury); Yinghua Jin; W. Robert Reed (University of Canterbury) |
| Abstract: | This study performs a meta-analysis of research that estimates the relationship between FDI and Chinese economic growth. Our sample includes 37 studies and a total of 280 estimates. We include both English- and Chinese-language studies. Our initial “raw” finding is that FDI has had a substantial, positive impact on Chinese economic growth. Furthermore, our results suggest that the effect is not inflated by endogeneity, nor impacted by publication bias. However, the positive effect is found to be smaller for more recent and better designed studies. When we adjust for preferred study and sample characteristics, we find that the estimated economic effect of FDI on Chinese economic growth is much smaller than indicated by the overall literature, and statistically insignificant. This suggests that the cause(s) of the Chinese “economic miracle” likely lie elsewhere. |
| Keywords: | Meta-analysis, FDI, China, economic growth |
| JEL: | O53 F20 |
| Date: | 2015–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:15/16&r=int |
| By: | Michelle R. Garfinkel (Department of Economics, University of California-Irvine); Constantinos Syropoulos (Department of Economics and International Business, Drexel University) |
| Abstract: | We embed resource insecurity into a modified Ricardian model in order to examine the consequences of trade openness for conflict. Our analysis features a terms-of-trade channel through which arming influences world prices that feed back into the countries' incentives to arm, thereby rendering security policies trade-regime dependent. Specifically, we demonstrate that trade between adversarial countries reduces their incentive to arm as compared with autarky. Thus, in the spirit of the classical liberal argument, we find that trade ameliorates conflict and promotes peace, bringing with it not only the familiar gains from trade but also a reduction in the amount of resources diverted to conflict. Our central findings are robust to the presence of trade costs. However, when the two adversarial countries do not trade with each other but instead trade with a third (friendly) country, a move from autarky to trade intensifies conflict between the two adversaries. If the added security costs are sufficiently large, then such a move can lower the countries' payoffs. |
| Keywords: | Resource insecurity; Interstate disputes; Conflict; Trade openness; Comparative advantage |
| JEL: | D30 D74 F51 F52 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:151603&r=int |
| By: | Jean-Marc Fournier |
| Abstract: | The determinants of foreign direct investment (FDI) are explored with gravity models, using a Poisson estimator and a linear estimator, both with fixed effects. The heterogeneity of product market regulations has a large and robust impact on cross-border investment: a reduction of regulatory divergence by one fifth could increase FDI by about 15%. In particular, the divergence of command and control regulations and of protection of incumbents (antitrust exemptions, entry barriers in networks and services) reduce cross-border investment. In addition, countries with higher employment protection have both less inward and less outward FDI, and there is some evidence that more complex regulatory procedures reduce inward FDI.<P>L'effet négatif de l'hétérogénéité des réglementations sur l'investissement direct étranger<BR>Les déterminants de l’investissement direct étranger (IDE) sont analysés au moyen de modèles de gravité, en utilisant un estimateur de Poisson et un estimateur linéaire à effets fixes. L’hétérogénéité des réglementations des marchés de produits a un impact significatif et durable sur l’investissement international : une réduction d’un cinquième des différences entre les réglementations nationales pourrait accroître l’IDE d’environ 15 %. En particulier, les divergences entre les réglementations du type injonction et contrôle et entre les protections des acteurs en place (en termes de dérogations au droit de la concurrence, d’obstacles à l’entrée dans les industries de réseau et les secteurs de services) sont un frein à l’investissement international. En outre, les pays dotés d’une législation plus rigoureuse sur la protection de l’emploi enregistrent à la fois moins d’IDE entrant et moins d’IDE sortant, et des éléments montrent que des procédures réglementaires plus complexes réduisent l’IDE entrant. |
| Keywords: | product market regulation, foreign direct investment, gravity model, multinational firms, heterogeneity, hétérogénéité, modèle de gravité, IDE, entreprise multinationale, réglementation des marchés de produits |
| JEL: | F15 F21 F23 K20 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1268-en&r=int |
| By: | Jack Rossbach (University of Minnesota) |
| Abstract: | This paper theoretically and quantitatively evaluates the hypothesis that, due to the existence of large firms (granularity), idiosyncratic shocks to individual firms can lead to significant variation in the growth of countries. I embed granularity, through finiteness in the set of firms, in a general equilibrium environment featuring monopolistic competition, growth, and international trade. Firm productivities grow according to idiosyncratic productivity shocks, which obey a Gibrat's law proportional growth process, and are the only source of growth in the model. I derive an approximate analytic mapping for the standard deviation of GDP growth in this framework, which is non-zero due to granularity. This mapping depends on only a few key parameters, which I estimate for a wide-range of countries using firm-level micro data. My results indicate that idiosyncratic shocks to firms can play a significant role in generating both short-run macroeconomic fluctuations and variation in longer-run growth trends, particularly for countries that engage heavily in international trade. Empirically, I show that the model does well in matching relative differences in GDP volatility across OECD countries. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1311&r=int |
| By: | Taganov, Boris |
| Abstract: | In this paper, we assess the value of Russia’s preferential imports from all trade partners and CIS countries in particular. Total value of preferential imports in Russia (both duty free imports as well as imports subject to the discounted MFN duty under GSP) is equal to ca 12% (37.8 USD bln.) of the total imports, of which ca 7.4% accounted for imports of Russia from CIS countries. We should note that ca 2.5% of preferential imports of Russia under GSP treatment was not imported duty free, but was subject to a 25% discount to MFN duty. |
| Abstract: | В этой статье, мы оцениваем стоимость льготного импорта России из всех торговых партнеров и в частности - из стран СНГ. Общая стоимость льготного импорта в России (как дьюти-фри импорт, так и импортльготный импорт в режиме наибольшего благоприятствования под GSP) равна приблизительно 12% (37,8 млрд. долл.) от общего объема импорта, из которых около 7,4% приходится на импорт России из стран СНГ. Отметим, что приблизительно 2,5% преференциального импорта России в режиме GSP не ввозится беспошлинно, однако имеет скидку в 25% в режиме наибольшего благоприятствования. |
| Keywords: | trade preferences,preferential trade agreement,MFN,GSP |
| JEL: | F13 F15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:121997&r=int |
| By: | JINJI Naoto; SAKAMOTO Hiroaki |
| Abstract: | Using Japanese firm-level data, we investigate the firm-level relationship between export status and environmental performance in terms of carbon dioxide (CO₂) emissions intensity and energy intensity. As in previous studies, we first find that exporting firms have significantly lower CO₂ emissions/energy intensity. We then investigate the effects of exporting on CO₂ emissions/energy intensity by employing the propensity score matching (PSM) method, and find that the effects significantly vary across industries. Whereas exporting significantly improves environmental performance in most industries, exporting actually increases CO₂ emissions/energy intensity in the iron & steel industry. This finding suggests that the effect of exporting varies across industries. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15130&r=int |
| By: | Kollmann, Robert |
| Abstract: | This paper analyzes the effects of output volatility shocks and of risk appetite shocks on the dynamics of consumption, trade flows and the real exchange rate, in a two-country world with recursive preferences and complete financial markets. When the risk aversion coefficient exceeds the inverse of the intertemporal substitution elasticity, then an exogenous rise in a country’s output volatility triggers a wealth transfer to that country, in equilibrium; this raises its consumption, lowers its trade balance and appreciates its real exchange rate. The effects of risk appetite shocks resemble those of volatility shocks. In a recursive preferences-complete markets framework, volatility and risk appetite shocks account for a noticeable share of the fluctuations of net exports, net foreign assets and the real exchange rate. These shocks help to explain the high empirical volatility of the real exchange rate and the disconnect between relative consumption growth and the real exchange rate. |
| Keywords: | consumption-real exchange rate anomaly; exchange rate; external balance; risk appetite; volatility shock |
| JEL: | F31 F32 F36 F41 F43 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10940&r=int |
| By: | Taganov, Boris |
| Abstract: | In this paper we consider relationship between foreign direct investment (as one of the mechanisms of technological development) and long-term economic growth. In the beginning we discuss the role of FDI in the increase of total factor productivity from the viewpoint of endogenous growth theory. We then turn to the comparative analysis of FDI inflow to Russia and other countries broken down by economic industries. We find that Russian industries capable of increasing TFP and positively impacting the long-term economic growth are significantly underinvested relative to other countries. Since, in our opinion, pre-existing sources of Russia’s economic growth are almost completely exhausted, we suggest several economic policy measures aimed at attracting FDI in Russia and improve the absorptive capacity of the country. |
| Abstract: | В этой статье мы рассмотрим отношения между прямыми иностранными инвестициями (в качестве одного из механизмов технологического развития) и долгосрочным экономическим ростом. В начале мы обсудим роль ПИИ в повышении общей производительности факторов с точки зрения теории эндогенного роста. Затем мы обратимся к сравнительному анализу притока ПИИ в России и других странах с разбивкой по отраслям экономики. Мы считаем, что российская промышленность, способная к повышению СФП и положительно влияющая на долгосрочный экономический рост, испытывает значительный дефицит инвестиций по сравнению с другими странами. Так, на наш взгляд, уже существующие источники роста российской экономики почти полностью исчерпаны, мы предлагаем ряд мер экономической политики, направленных на привлечение ПИИ в Россию и улучшение поглощающей способности страны. |
| Keywords: | FDI,TFP,economic growth,economic policy,human capital |
| JEL: | E66 F21 O15 O43 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:122049&r=int |
| By: | Giuranno, Michele; Nocco, Antonella |
| Abstract: | This paper studies the interplay between wage gap and government spending in a small open economy facing a liberalization of commodities trade with the external world. We consider a developing economy with two sectors: an export sector, which uses capital and unskilled labour, and an import-competing sector, which uses capital and skilled labour. In this specific factor model, the return to capital is the link between the two sectors. We show that there exists a direct relation between trade liberalization, which decreases the skilled-unskilled wage gap, and the level of government expenditure. However, either an unbalanced distribution of political bargaining power, or tariff revenue co-financing of public spending may break this direct relation. |
| Keywords: | wage gap; trade liberalization; positive political economy |
| JEL: | F15 F16 H5 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:181&r=int |
| By: | Martín Rossi (Department of Economics, Universidad de San Andres); Ezequiel García Lembergman (Department of Economics, Universidad de San Andres); Rodolfo Stucchi (Inter-American Development Bank) |
| Abstract: | This paper uses quantitative restrictions to exports implemented in Bolivia in order to investigate the impact of export restrictions on the volume of production. We apply a synthetic controls approach and show that production of cattle beef fell remarkably when quantitative restrictions are imposed. Importantly, we show that export restrictions have a negative impact not only on total production, but also on production for local market. The fact that export controls can actually harm production for local market bears important implications for the design of policies in the future. |
| Keywords: | production, exports, export controls, export restrictions, trade policy, synthetic controls |
| JEL: | F13 F42 O24 Q37 H23 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:sad:wpaper:124&r=int |
| By: | Giovanni Facchini (University of Nottingham); Cecilia Testa (Royal Holloway University of London) |
| Abstract: | We study migration policy enforcement by an elected government. The policy-maker faces uncer-tainty on the supply of migrants, but has more information than the public on its preferences and the extent and effectiveness of its enforcement activities. We show that a utilitarian government prefer-ring more migrants than the majority may find it optimal to set a restrictive target to please the me-dian voter, while relaxing its enforcement to admit more foreigners in a concealed way. Lax en-forcement may be achieved either by deploying inadequate resources on cost–effective activities (domestic enforcement) or by allocating a larger budget on less effective tools (border enforcement). The attractiveness of one instrument over the other depends on the size of the immigrant flow: if the supply is large, border enforcement might be preferred because, although more costly, it brings the number of migrants closer to the utilitarian optimum. Hence, re–election concerns might provide a rationale for the widespread use of less a effective enforcement tool, such as border control. |
| Keywords: | Illegal immigration, Immigration Policy, Political Economy |
| JEL: | F22 J61 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:371&r=int |
| By: | Gérard-François Dumont (ENEC - Espaces, Nature et Culture - UP4 - Université Paris-Sorbonne - CNRS) |
| Abstract: | The European Union is generally an immigration area, for two reasons: firstly, many people live in countries that prove repellents political causes and / or economic; on the other hand, the EU is attractive. However, the European Union argues, relying on accounting arguments for a unified migration policy. But it is difficult to implement given the demographic, economic and historical situations of the Member States differentiated strong and safe and societal issues. |
| Abstract: | L’Union européenne est globalement un espace d’immigration, pour deux raisons : d’une part, nombre de personnes vivent dans des pays qui s’avèrent répulsifs pour des causes politiques et/ou économiques ; d’autre part, l’UE est attractive. Or, l’Union européenne plaide, en s’appuyant sur des arguments comptables, pour une politique migra-toire unifiée. Mais celle-ci est difficile à mettre en œuvre compte tenu des situations démographiques, économiques et historiques fort différenciées des États membres ainsi que des questions sécuritaires et sociétales. |
| Keywords: | European Union , migration, immigration, geopolitical, economy, security , cultural, geography,Union européenne , géopolitique , économie , sécurité , culture |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01225931&r=int |