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on International Trade |
| By: | Hiro Lee (Osaka School of International Public Policy, Osaka University); Ken Itakura (Graduate School of Economics, Nagoya City University) |
| Abstract: | The U.S. withdrawal from the Trans-Pacific Partnership (TPP) has had an influence on the prospects of mega-regional trade agreements (MRTAs). In the Asian Pacific, negotiations for the Regional Comprehensive Economic Partnership (RCEP) might accelerate. In addition, ministers from the 11 other TPP signatories have confirmed their intention to proceed with the TPP without U.S. participation. Using a dynamic computable general equilibrium (CGE) model, we estimate welfare and sectoral output adjustment effects of alternative sequencings of MRTAs on ASEAN countries. Welfare gains for ASEAN countries under the scenario led by the RCEP, followed by RCEP + Taiwan and a Free Trade Area of the Asia-Pacific (FTAAP), are greater than or equal to those under the scenario led by TPP sans US, followed by an enlarged TPP and an FTAAP. When the two scenarios are assumed to develop at the same time, welfare gains of the RCEP and TPP-11 countries are found to be less than the sum of the gains under the first two scenarios. For a number of ASEAN countries, output expansion of textiles and apparel and/or electronic equipment is significant. in the trade and transport margins. When all effects are combined, Vietnam’s economic welfare is projected to increase by 8.4 per cent in 2020 compared with the baseline. Many manufacturing sectors would expand, whereas agricultural, minerals and fuel sectors would contract. The output expansion is most significant in the textiles and wearing apparel sectors. |
| Keywords: | MRTA, RCEP, TPP, FTAAP, CGE model, ASEAN |
| JEL: | F13 F14 F15 F17 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:17e006&r=int |
| By: | Borin, Alessandro; Mancini, Michele |
| Abstract: | Following the spread of global value chains new statistical tools, the Inter-Country Input-Output tables, and new analytical frameworks have been recently developed to provide an adequate representation of supply and demand linkages among the economies. Koopman, Wang and Wei propose an innovative accounting methodology to decompose a country's total gross exports by source and final destination of their embedded value added. However this decomposition presents some limitations and relevant inexactnesses in some of its components. We develop their approach further by deriving a fully consistent counterpart for bilateral trade flows, also at the sectoral level, addressing the main shortcomings of previous works. We also provide correct breakdown of the foreign content in total (world) trade flows and a brand new classification of these components that take the perspective of the exporting country. Finally, drawing on our methodology we derive for the first time a precise measure of international trade generated within global production networks. Two examples of empirical applications with relevant policy implications are also provided. |
| Keywords: | global value chains; input-output tables; trade in value added; trade elasticity |
| JEL: | F1 F14 F15 |
| Date: | 2017–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82692&r=int |
| By: | Nina Ranilović (The Croatian National Bank, Croatia) |
| Abstract: | The paper shows that Croatia trades more with higher income and closer countries, which is in line with the standard gravity model assumption, and that a strong bias exists towards trade with countries of the former Yugoslavia. In addition, Croatian accession to the European Union proved to affect trade positively. On the other hand, free trade agreements signed with non-EU countries do not have a statistically significant and positive effect on Croatian trade. Although the positive impact of Croatia's membership in Central European Free Trade Agreement (CEFTA) did not prove to be robust, this could be explained by its strong overlap with the group of countries from former Yugoslavia. Additionally, it was found that the crisis affected the determinants of Croatian exports and imports in different ways and that some disparities exist between trade in goods and trade in goods and services. |
| Keywords: | merchandise trade, Croatia, gravity model, EU accession, free trade agreements, CEFTA membership |
| JEL: | C23 F13 F14 F15 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:hnb:wpaper:50&r=int |
| By: | LA, Meeryung (Korea Institute for International Economic Policy) |
| Abstract: | Korea Abstract: 2017년 1월 30일 미국이 환태평양경제동반자(TPP) 협정에서 공식적으로 탈퇴함에 따라 협정 발효 가능성이 불투명해지면서 아태 역내 주요 메가 FTA인 역내포괄적경제동반자(RCEP) 협정에 대한 관심이 높아지고 있다. 전 세계적으로 보호무역주의 움직임이 확산되고 있어 RCEP이 갖는 의미는 더 없이 중요하다고 하겠다. 본 연구는 GVC 분석을 통해 역내 글로벌 가치사슬이 심화되었음을 확인하고, RCEP 협정을 통한 역내 무역장벽 인하 및 규범의 조화가 갖는 중요성을 설명하였다. 또한 역내 가치사슬의 효율적 활용의 관점에서 RCEP 협상방향에 시사점을 제시하고자 하였다. English Abstract: The Regional Comprehensive Economic Partnership (RCEP) is an ongoing multilateral trade agreement involving ASEAN member states, Australia, China, India, Japan, South Korea and New Zealand. With the global trade slowdown, the importance of the RCEP including various dimensions, such as trade in goods, trade in services, investment, trade facilitating measures, competition, intellectual property, e-commerce, is increasing. In this study, I conduct GVC analysis to identify the intra -regional trade and production network of RCEP-participating countries (RPCs). This study provides a number of indicators that capture the RCEP value chains, and provides a picture of the economic integration within the region. Through this work, we can identify the economic significance of the comprehensive multilateral agreement amid growing complexity of production networks. This study also investigates the level of liberalization in tariffs of ASEAN+1 FTAs, then provides specific policy implications for RPCs to leverage engagement in RCEP value chains. |
| Keywords: | RCEP; GVC; RPCs |
| Date: | 2017–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2017_008&r=int |
| By: | Görg, Holger; Hanley, Aoife |
| Abstract: | [Introduction ...] This paper, however, is not about evaluating whether or not Germany has, on aggregate, done well out of globalization. Rather, we dig deeper into the economy and acknowledge the fact that it is not countries that trade or invest, but rather firms. We therefore look at data at the micro (firm or establishment) level to shed light on questions such as: What types of firms are involved in trade or investments? What distinguishes these globalized firms, if anything, from firms that are not engaged in these international activities? What benefits are there for the firms and also their workers? To look at these questions, the first part of the paper provides some insights from the existing literature. We firstly review what has become a substantial literature on exporting activity, using data for German firms. Interestingly, but in a sobering way, studies on imports are far less prolific. This knowledge gap is most likely due to a lack of data on import activities of firms. We also look at some studies that investigate the implications of inward investment, or foreign ownership, as well as outward investment by German multinational enterprises (MNEs) at the firm level. In Section 3 of the paper we then use establishment data to provide some more recent evidence on these relationships. While our data easily cover the activities of exporting and foreign ownership, a clear definition of outward investment by German MNEs is more difficult. Information on import activities is not at all available in our data set, the IAB Betriebspanel, which we describe in more detail below. We describe the participation of establishments in international activities. Additionally, we estimate performance premia for establishments engaged in these activities. Finally, we also investigate whether firms starting these activities experience performance improvements as a result. By “performance” we mean establishment productivity and innovation activity, but also employment, wages and skill structure of establishments in order to say something about workers in these types of firms. In the final part of the paper we summarize the main findings, both from our own work and the existing literature, and offer some conclusions. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:svrwwp:042017&r=int |
| By: | KIM, Sangkyom (Korea Institute for International Economic Policy) |
| Abstract: | Korea Abstract: 한국 대외교역의 70% 이상이 집중되어 있는 아시아·태평양 지역의 경제가 높은 수준으로 통합된다면 한국에 새로운 무역기회가 창출될 것으로 기대된다. 한국은 APEC 경제공동체 논의 활성화에 보다 주도적인 역할을 담당함으로써, 아시아·태평양 시장의 안정적 확보와 외연확장의 기회로 삼아야 할 것이다. 이와 같은 맥락에서 본 연구는 최근 APEC에서 전개되고 있는 경제통합 관련 논의 현황, 쟁점 및 통합효과를 검토·분석함으로써 한국의 APEC 경제통합 사업 참여와 기여방안을 제시할 목적으로 수행되었다. English Abstract: Since the turn of the 21st century, the growing interdependence and interconnectedness of the global economies intensified the need for individual economies to engage in regional economic cooperation and integration. Recent statistics indicate that the number of regional trade agreements notified to the WTO by APEC economies has reached 265 cases, making it the most prolific period in APEC history. Given this upsurge, the significance of policy coordination and cooperation within the framework of APEC’s Regional Economic Integration activities ― inter alia, discussion on implementing “Free Trade Area of the Asia-Pacific (FTAAP)” ― has attracted considerable attention from Korean policy makers and stakeholders. APEC’s vision to create a single economic community was designed not only to reduce obstacles of trade in goods and services but also to adopt more advanced trade- and investment-related rules and measures to increase the transparency and efficiency of the economic system. Successful regulatory reforms and conformity to the international rules and standards embodied in the FTAAP framework, therefore, would help accelerate the regional economic restructuring and opening of the Asia-Pacific economy. These will eventually provide the Korean economy with increased participation in global value chains (GVCs), the export and investment markets, and strengthen political and economic ties among members. In this context, the opportunity cost of being excluded from the general trend of economic integration has become a tangible threat. |
| Keywords: | APEC; FTAAP; GVCs |
| Date: | 2017–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2017_002&r=int |
| By: | BAHMANI-OSKOOEE, Mohsen; Aftab, Muhammad |
| Abstract: | A study in this journal that assessed the impact of exchange rate volatility on Malaysia-EU trade at commodity level used the linear ARDL approach of Pesaran et al. (2001) and did not find significant effects in most of the 81 Malaysian exporting and 66 importing industries. In this paper, we argue for asymmetric effects of exchange rate volatility on the same industries’ trades which implies using Shin et al.’s (2014) nonlinear ARDL approach. While we find short-run asymmetric effects of volatility in almost all industries, we find evidence of adjustment asymmetry in 17 exporting and nine importing industries. We also find significant impact or short-run cumulative asymmetry in 12 exporting and six importing industries. The most important finding is significant long-run asymmetric effects in 36 Malaysian exporting industries and 25 Malaysian importing industries. Clearly, trade flows react to an increased exchange rate volatility differently than to a decreased volatility. |
| Keywords: | Exchange rate volatility; Asymmetry effects; Commodity trade; Malaysia; US; Nonlinear ARDL |
| JEL: | F1 F14 F3 F31 |
| Date: | 2016–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82687&r=int |
| By: | Kang, Jong Woo; Ramizo, Dorothea |
| Abstract: | In principle, sanitary and phytosanitary (SPS) measures aim to protect the health of humans, plants and animals, while technical barriers to trade (TBT) ensure product quality and safety. However, governments may overshoot the requirements of health and consumer safety and use SPS and TBT to shield domestic producers from fair competition. Potential abuses of both measures as protectionist tools not only constrain international trade but also consumers’ welfare by restricting the choices of goods available to them. Our analysis shows that in general the measures seem to be positive for trade after controlling for other factors. However, the impacts are mainly driven by exports from advanced economies. Less developed countries do not gain as much when implementing the measures or are disadvantaged in exporting goods, particularly when importers are advanced economies. Within South countries, developing Asia are more adversely affected by SPS while non-Asian developing country exports are afflicted more by TBT. SPS in particular is damaging intraregional agricultural trade among Asian countries, which calls for policy makers to act more proactively in resolving nontariff hurdles in the region. |
| Keywords: | agriculture, protectionism, sanitary and phytosanitary measures, technical barriers to trade |
| JEL: | F13 F15 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82352&r=int |
| By: | Yahmed, Sarra Ben |
| Abstract: | I introduce taste-based discrimination in a trade model with imperfect competition and provide an explanation for the heterogeneous effects of international trade on the gender wage gap within sectors. Firms operate in an oligopoly where prejudiced employers can use their rents to pay men a premium in line with Becker's theory. On one hand, import competition reduces local rents and with them the average gender wage gap in sectors that were sheltered from competition prior to trade liberalization. On the other hand, easier access to foreign markets can increase domestic firms' profits and enable discriminatory firms to maintain wage gaps. Evidence from the Uruguayan trade liberalisation supports the empirical relevance of the taste-based discrimination mechanism at the sectoral level. |
| Keywords: | gender wage gap,employer taste-based discrimination,international trade,imperfect competition |
| JEL: | F16 J31 J7 L13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17047&r=int |
| By: | Przemyslaw Kowalski (OECD); Daniel Rabaioli (OECD); Sebastian Vallejo (OECD) |
| Abstract: | The aim of this paper is to inform the ongoing debate on the policies being used to encourage international technology transfer (ITT) and, of these, which have the potential to distort trade or investment and which may effectively promote ITT. The paper develops a first-cut approach to cataloguing ITT-related measures across countries. Following the literature, technology transfer-related policies are grouped into six categories: 1) absorptive capacity policies; 2) measures related to intellectual property rights (IPR); 3) FDI promotion measures; 4) FDI restrictions and FDI screening; 5) performance requirements; and 6) investment incentives. A list of regulatory questions about measures in place is devised for the four categories 3 through 6 on which information is currently particularly scarce. Summary results are presented for twenty four developing and developed countries which are important actors in global FDI, technology and product markets. The findings of the literature addressing both the impact of these measures on technology transfer and on market competition are summarised for each of the four policy categories. The paper also explores the extent to which various ITT measures are covered by existing international agreements, with a view to helping inform future approaches. The concluding section elaborates on policy implications. |
| Keywords: | competition, FDI, innovation, intellectual property, international technology transfer, international trade |
| JEL: | F1 F13 F15 F23 O3 |
| Date: | 2017–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:206-en&r=int |
| By: | James E. Anderson; Yoto V. Yotov |
| Abstract: | Short run gravity is a geometric weighted average of long run gravity and bilateral capacity. The model features (i) joint trade costs endogenous to bilateral volumes, (ii) long run gravity as a limiting case of effcient investment in bilateral capacities, (iii) a structural ratio of short run to long run trade elasticities equal to a microfounded buyers’ incidence elasticity, and (iv) tractable short and long run models of the extensive margin. Application to manufacturing trade of 52 countries during the globalization period 1988-2006 strongly supports the model. Results solve several time invariance and trade elasticity puzzles in the literature. |
| Keywords: | trade elasticity puzzles, export dynamics, missing globalization |
| JEL: | F13 F14 F16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6502&r=int |
| By: | Kim, Young Gui (Korea Institute for International Economic Policy); Park, Hyeri (Korea Institute for International Economic Policy); Keum, Hye Yoon (Korea Institute for International Economic Policy); Lee, Seungrae (Kyungpook National University) |
| Abstract: | In this paper, we analyze determinants of Korea's imports in the context of the interaction between exports and foreign investments, and investigate the effects of imports on firms' exit and productivity, in order to understand Korea's import structure and distributional influences of imports. In order to analyze the determinants of imports by type, we constructed a theoretical model and found two propositions. The results of the empirical analysis based on the theoretical model are summarized as follows. As exports grow, imports of intermediate goods and raw materials used as production input factors will increase, while imports of consumer goods will decrease. Imports of intermediate goods and raw materials are positively related with inward foreign direct investment (FDI), but imports of consumption goods are negatively affected by inward FDI. The main results of analyzing the effects of imports on a probability of firms' exit are as follows. First, the increase in total imports raises the probability of a firm's exit due to increased market competition, whereas the firm size, capital stocks, and productivity lower the probability. Second, imports of raw materials and intermediate goods lower the probability of a firm's exit. Technological upgrade or cheap imported intermediate goods improve marginal firms' competitiveness and hence their survival chances. Third, whether firms are exporting or not does not significantly affect the relationship between import penetration and firms' exit. Fourth, the magnitude of the effects of imports on firms’ exit varies from industry to industry. |
| Keywords: | Koreas imports; exports; FDI |
| Date: | 2017–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_021&r=int |
| By: | Ingo Borchert; Yoto V. Yotov |
| Abstract: | For a long time globalization could be seen everywhere but in gravity estimates. We offer evidence how globalization affects manufacturing trade over the period 1986-2006 and show that, on average, the effect of distance has fallen whereas the effects of proximity and regional trade agreements have increased over time. We also document substantial cross-country heterogeneity in the extent to which distance elasticities have changed. Countries in the middle of the per-capita income distribution have seen the steepest fall in distance coefficients. At the same time, distance as a trade friction has not lost its bite for a number of low income countries, which may jeopardize their integration into global markets. We present suggestive evidence that the heterogeneous change in distance elasticities is related to secular shifts in the composition of exports. |
| Keywords: | distance puzzle, missing globalization, structural gravity, poor countries |
| JEL: | F13 F14 F16 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6275&r=int |
| By: | To Minh Thu (Diplomatic Academy of Vietnam, Hanoi, Vietnam); Hiro Lee (Osaka School of International Public Policy, Osaka University) |
| Abstract: | Vietnam is on the way to undertake deeper trade liberalisation, including both tariff reductions and reforms in other trade-related areas. In this paper, the impacts of Vietnam’s trade reform on its economic welfare and sectoral adjustments are assessed using a dynamic computable general equilibrium (CGE) model. We consider the effects of goods and services trade liberalisation, an increase in foreign direct investment inflows, a reduction in administrative and technical barriers to trade, and a reduction in the trade and transport margins. When all effects are combined, Vietnam’s economic welfare is projected to increase by 8.4 per cent in 2020 compared with the baseline. Many manufacturing sectors would expand, whereas agricultural, minerals and fuel sectors would contract. The output expansion is most significant in the textiles and wearing apparel sectors. |
| Keywords: | Trade reform, economic welfare, sectoral adjustments, Vietnam, CGE model |
| JEL: | F13 F15 F17 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:17e005&r=int |
| By: | Sofia Torreggiani; Giuseppe Mangioni; Michael J. Puma; Giorgio Fagiolo |
| Abstract: | Achieving international food security requires improved understanding of how international trade networks connect countries around the world through the import-export flows of food commodities. The properties of food trade networks are still poorly documented, especially from a multi-network perspective. In particular, nothing is known about the community structure of food networks, which is key to understanding how major disruptions or 'shocks' would impact the global food system. Here we find that the individual layers of this network have densely connected trading groups, a consistent characteristic over the period 2001 to 2011. We also fit econometric models to identify social, economic and geographic factors explaining the probability that any two countries are co-present in the same community. Our estimates indicate that the probability of country pairs belonging to the same food trade community depends more on geopolitical and economic factors -- such as geographical proximity and trade agreements co-membership -- than on country economic size and/or income. This is in sharp contrast with what we know about bilateral-trade determinants and suggests that food country communities behave in ways that can be very different from their non-food counterparts. |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1711.05784&r=int |
| By: | Gumpert, Anna (LMU Munich); Moxnes, Andreas (University of Oslo); Ramondo, Natalia (University of California at San Diego); Tintelnot, Felix (University of Chicago) |
| Abstract: | This paper studies the life-cycle dynamics of exporters and multinational enterprises (MNEs). We present a dynamic model of trade and MNE activity in which the mode of serving a market depends on the well-known proximity-concentration tradeoff. We show that the option of performing MNE activities in the model produces life-cycle patterns for exporters that differ from those in an export-only model. Calibrating our model to rich firm-level data from France and Norway, our main quantitative finding is that a reduction in trade costs triggers much larger responses in growth rates and exit rates, for young exporters, in the model with MNEs than in the model without MNEs. We also show that the model is largely consistent with a set of new facts on the joint life-cycle dynamic behavior of exporters and MNEs. |
| Keywords: | international trade; exporters; multinational firm; markov process; sunk cost; proximity-concentration tradeoff; trade liberalization; |
| JEL: | F01 F02 |
| Date: | 2017–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:55&r=int |
| By: | Kim, Heung Chong (Korea Institute for International Economic Policy); Lee, Cheol-Won (Korea Institute for International Economic Policy); Lee, Hyun Jean (Korea Institute for International Economic Policy); Yang, Hyoeun (Korea Institute for International Economic Policy); Kang, Yoo-Duk (Hankuk University of Foreign Studies) |
| Abstract: | Beginning with the Global Europe Initiative in 2006, the EU has conducted active trade policy measures to contribute to economic growth, job creation and social cohesion in the European community. Comprehensive and high-leveled bilateral FTA initiatives, among others, have rapidly emerged as a major tool of the new trade policy to achieve such goals. More than a decade has passed since the Global Europe Initiative was declared. In the meantime, the EU successfully established several new generational FTAs with the Republic of Korea, Singapore, Vietnam and others, despite harsh economic turmoil led by global and European financial crises, the Greek crisis, Brexit, etc. This paper aims to illuminate how the goals of the new trade policy have been achieved through the EU's FTA strategies over the years since the Global Europe Initiative. To do this, we focus on three topics: EU standards, the evaluation process of market openness and the global value chain (GVC). In other words, we will evaluate how much the EU's FTA strategies have contributed to achieving globalization of EU standards, job creation through careful evaluation processes, and economic growth of the community by utilizing GVCs. |
| Keywords: | New Trade Policy; EU standard; Evaluation process; GVC |
| Date: | 2017–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_019&r=int |
| By: | Wilson, Norbert L. W. (Asian Development Bank Institute) |
| Abstract: | Several of the Sustainable Development Goals (SDGs) suggest that improving well-being is achievable through trade. The free flow of goods and services internationally, which encourages efficient production and expansion of consumption, may support SDGs concerning inclusive and sustainable economic growth and sustainable consumption and production patterns. However, trade restrictions such as nontariff barriers (NTBs) may stymie potential gains from trade, which supports the SDGs. This chapter explores the trade effects of different NTBs, especially labeling and food safety regulations in food and agriculture. The upshot of this chapter is that trade can enhance economic growth and development. Standards such as labels and food safety regulations may contribute to or hamper this growth, which affects the capacity to attain the relevant SDGs. Thus, future analysis must provide careful assessments of industries, proposed standards, multiple outcomes, and power relationships to identify the effects of standards on trade and development. |
| Keywords: | labels; food safety; SPS; TBT; non-tariff barriers (NTB); Sustainable Development Goals |
| JEL: | F13 O24 Q17 Q18 |
| Date: | 2017–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0657&r=int |
| By: | Bakari, Sayef |
| Abstract: | The contribution of this paper is investigating the impact of citrus exports on economic growth on Tunisia since it never been treated before. In order to achieve this purpose, annual data were collected from the reports of Tunisian Central Bank for the periods between 1970 and 2016 was tested by using co integration analysis of Error Correction Model. According to the result of the analysis, citrus exports have not any influence on economic growth in the long term. However, empirical results show that there is a positive unidirectional causality from citrus exports to economic growth in the short run. These results provide on evidence that citrus exports, thus, are not seen as source of economic growth in Tunisia and suffer a lot of problems and poor economic strategy. For this reason, it is very important to make new reforms and to create robustness strategies to refine investment and trade strategy in this sector, so it can support Tunisian economic flourishing. |
| Keywords: | Citrus Exports, Economic Growth, Cointegration, ECM, Tunisia |
| JEL: | F11 F13 F14 O47 O55 Q1 Q17 Q18 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82414&r=int |
| By: | BAHMANI-OSKOOEE, Mohsen; Iqbal, Javed; Nosheen, Misbah; Muzammil, Muhammad |
| Abstract: | In investigating the short run and the long run impact of currency depreciation on Pakistan’s trade balance, previous studies have either relied on using bilateral trade data between Pakistan and her trade partners or between Pakistan and the rest of the world and have found not much support for successful depreciation. Suspecting that these studies may suffer from aggregation bias, in this paper we use disaggregated trade data at commodity level from 77 industries that trade between Pakistan and EU. While we find short-run significant effects in 22 industries, these effects do not last into the long run in most industries. Most of the affected industries are found to be small, as measured by their trade shares. |
| Keywords: | J-Curve, Bound testing, commodity trade, Pakistan, EU. |
| JEL: | F14 F32 |
| Date: | 2016–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82686&r=int |
| By: | Lim, Sooho (Korea Institute for International Economic Policy); Choi, Yoojeong (Korea Institute for International Economic Policy) |
| Abstract: | This study examines the necessity and possibility of an inter-Korean FTA in order to expand inter-Korean economic cooperation and economic integration between the two Koreas. In the meantime, inter-Korean economic cooperation has been free of tariffs (zero tariffs) since 1992 in accordance with the principle of "domestic transaction," and has been tolerated by the international community. However, as the scale of inter-Korean economic cooperation increases and economic integration is discussed in a fuller context, it is expected to become inevitable for the international community to raise the issue of trade practices. Also in the long run, if North Korea joins the WTO, there is the possibility of a complaint being lodged against South Korea, a member of the WTO, by WTO member countries. In this paper, we propose a Closer Economic Partnership Arrangement (CEPA) as a new development model of inter-Korean economic cooperation that will secure international legal legitimacy and contribute to economic change in North Korea. According to this study, it would be desirable to conclude the CEPA between the two Koreas in the form of an inter-agency arrangement rather than an intergovernmental agreement. Also, given the dynamics of the relationship between North and South Korea, it is important for the two Koreas to secure the "irreversibility" of agreements reached by defining as much detail as possible during the initial negotiations. |
| Keywords: | FTA; CEPA; inter-Korean economic cooperation |
| Date: | 2017–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_020&r=int |
| By: | Dent, Christopher M. (Asian Development Bank Institute) |
| Abstract: | East Asia is a region of great global significance, currently accounting for around 30% of the global economy by most measures, e.g. production, trade, investment, and finance. It has also become increasingly integrated in various ways. Integration at the micro-level has steadily progressed since the 1960s, as indicated by rising intraregional trade. Moreover, East Asia’s economic regionalisation has become more functionally integrative, this broadly relating to the spread of transnational business and other technical systems where production, trade, and investment have become a function of each other within those systems. For example, as later explored, much of East Asia’s regionalised trade concerns cross-border movement of parts and components within the international production networks of multinational enterprises. Since the 1990s, East Asian states have in addition looked to strengthen regional cooperation and integration intergovernmentally at the macro-level, i.e. involving whole country economies. This has been driven by the need to manage their growing regional economic interdependencies and address future challenges that confront them all, such as globalisation and climate change. As we will discuss, this has been part of regional economic community-building efforts in East Asia, both across the whole region and within it at various subregional levels. We examine the key dimensions of East Asia’s integration, how they have developed over time, and what likely paths lie ahead in the endeavour to strengthen regional economic community-building. |
| Keywords: | regionalism; regional integration; regional community; East Asia |
| JEL: | F13 F15 F18 F36 F42 F53 F55 N75 Q27 Q37 Q42 R10 R11 R12 |
| Date: | 2017–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0665&r=int |
| By: | Hinz, Julian; Leromain, Elsa |
| Abstract: | The proliferation of international supply chains makes the domestic production of goods increasingly dependent on inputs from foreign sources. By expanding their sourcing portfolio to foreign suppliers, firms and by extension entire economies are more prone to the trade effects of adverse bilateral political shocks. In this paper, we analyze the relation between political relations and trade at lower levels of aggregation, allowing for a heterogeneous effect by types of inputs. We show that a negative shock to political relations has a more pronounced effect on trade of critical goods, conditional on the ease of switching suppliers. We construct a simple model exhibiting input-output linkages to clarify the mechanisms at play, from which we derive testable predictions. Using a new measure for countries' dependence on these critical inputs, we then test the proposed mechanism in a difference-in-differences framework. To address potential endogeneity issues we perform an event study, in which the treatment is an exogenous adverse political shock. Using a new dataset on the status of diplomatic representation and monthly trade data, we exploit the recalling or summoning of the ambassador of a country as a shock to bilateral political relations. |
| Keywords: | Trade frictions,Political Relations,Dependence,Input Sourcing |
| JEL: | F13 F14 F51 F52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2092&r=int |
| By: | E.O. Annette Pelkmans-Balaoing; Gerrit Hugo van Heuvelen; Jean-Marie Viaene |
| Abstract: | This paper explores firms’ export dynamics in emerging economies where local firms face stiff foreign competition, both at home and abroad, and thus compelled to choose the level of quality in which to export. We develop and test a model of vertical product differentiation where the link between export performance and product quality is central. The impact of other governmental decisions related to multiple uncertainties faced by exporters such as exchange rate, freight and trade policies, are investigated as well. A rich and new firm-level data base is employed, which matches the firm-coded trade transactions data (7-digit) of Philippine manufacturing firms, with their corresponding firm survey data from 1996-2007. Using discrete survival analysis, we show that export spells have a short duration, 20 months on average. Particularly 72.2% of trade relationships in year one do not survive to year two. Market uncertainties, particularly those linked to exchange rates and transport costs increase the probability of firm exit as expected. Export survival rates are highest among firms that select an export price contained in the interval between the median and mean of the international distribution of product prices. In contrast, those choosing a price located at both ends of this distribution have the least chance of survival. |
| Keywords: | intra-product trade, product quality, firm dynamics, survival analysis, multiple uncertainty |
| JEL: | F10 F14 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6270&r=int |
| By: | Villamil, Isabela Rosario G.; Uy, Krystal T. |
| Abstract: | This paper aims to promote competitive access for telecommunications providers. Among other things, it includes provisions for interconnection, access to physical facilities, and transparency. Reforms in these areas will likely benefit consumers and help businesses become more competitive. There is a need, however, to determine if or what regulatory and policy reforms are necessary for the Philippines to qualify for entry into emerging new trade agreements such as the Trans-Pacific Partnership Agreement (TPPA). This paper uses the TPPA Final Text on Telecommunications (Chapter 13, Article XIII.4) released on February 6, 2016, to measure the Philippines' readiness to join the trade agreement. |
| Keywords: | Philippines, telecommunications, TPP, free trade agreement, telecommunications laws, telecommunications regulations, Trans-Pacific Partnership Agreement, telecommunications services, telecommunications providers |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2016_vol__43_no__1d&r=int |
| By: | Hinz, Julian |
| Abstract: | Economic sanctions are a frequently used tool of foreign policy. Constraining trade flows towards or from the target country is supposed to coerce its government into changing certain policies. However, sanctions constitute an obstacle to trade, thereby affecting flows of all countries, including those of sanctioning countries themselves. I gauge the global impact of three recent sanctions regimes using a structural gravity framework and quantify the "lost trade" in a general equilibrium counterfactual exercise. Each of the episodes, sanctions against Iran, Russia and Myanmar, are instructive in their own way, due to the different nature of bilateral trade and severity of measures applied. |
| Keywords: | sanctions,embargo,General equilibrium counterfactuals,foreign policy |
| JEL: | F51 F14 F13 F52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2093&r=int |
| By: | Fritsch, Manuel; Kolev, Galina; Matthes, Jürgen |
| Abstract: | In the debate of the US current account deficit, Donald Trump focuses his criticism to a large extent on Germany. But in the case of a trade war it would not affect Germany alone. Due to intermediate input linkages, hundreds of thousands of jobs in the EU partner countries depend on the success of German exports to the US. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkkur:732017e&r=int |
| By: | Eom, Jun Hyun (Korea Institute for International Economic Policy) |
| Abstract: | Korea Abstract: 금융서비스 산업은 그 자체가 하나의 중요한 산업일 뿐만 아니라 다른 산업의 성장을 촉진한다는 점에서 국가경제에 특별한 의의를 갖는다. 또한 좋은 일자리를 많이 제공하는 고부가가치 산업이기도 하다. 금융서비스 공급의 안정성에 문제가 발생하면 상품 또는 다른 서비스 공급은 물론 국가경제 전체에도 부정적 파급효과가 있을 수 있다. 때문에 자유무역협정(FTA)에서도 금융서비스 분야의 서비스무역을 자유화하기 위한 노력과 동시에, 금융건전성을 보장하기 위한 조치의 필요성에도 공감대가 형성되었다. 이에 본 연구는 우리나라 FTA의 금융서비스 규정과 주요국 FTA의 협상 동향을 살펴보고, 특히 건전성 조치 조항을 비교 분석하고 관련분쟁 사례를 검토함으로써 우리나라가 FTA 정책을 추진하는 과정에 참고가 될 시사점을 도출했다.English Abstract: This study aims to draw some implications for Korea to develope its FTA policy, by reviewing the financial services regulations of Korea’s Free Trade Agreements (FTAs) and compare them with other major countries’ so-called ‘Best’ FTAs. In the second chapter, the study overviews the financial services regulations of Korea’s and major countries’ FTAs. In the third chapter, the study analyzed the provisions on prudential measures of Korea’s and major countries’ FTAs. In the fourth chapter, the study reviewed relevant dispute settlement cases. In the fourth chapter, the study reviewed relevant dispute settlement cases. As a conclusion, from these findings this study draws some implications for Korea to develope its FTA policy. First, there is a possibility that room for the financial authority to take prudential measures might be narrowed by incorporating the investment chapters and its articles on investor-state disputes system (ISDS), and the domestic regulation chapters without limiting the extent incorporated. Such attempts are observed in the CETA. Other newly added parts in the TPP and the CETA identified in this study need to be further scrutinized for Korea’s amendment negotiates with the countries which are the parties to those FTAs. Second, Korea should review the financial service regulations of its FTAs to make some necessary amendments. Particularly, it will be good if the lessons of the WTO case are reflected into Korea’s FTAs. |
| Keywords: | FTA; TPP; CETA; ISDS |
| Date: | 2017–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2017_007&r=int |
| By: | Yoshihiro Hashiguchi (OECD); Norihiko Yamano (OECD); Colin Webb (OECD) |
| Abstract: | Conventional studies on the impacts of economic shocks using global input-output tables (sensitivity analyses) assume stable production structures and thus, only reveal the marginal impacts of changes in final demand. However, when economic shocks occur, whether at home or abroad, economic agents are expected to react to reduce the negative impact or amplify the positive effects. The ability of a country to contain economic losses can be defined as the resilience to economic shocks. Using the OECD's annual Inter-Country Input-Output (ICIO) tables, 1995 to 2011, this paper investigates the relationship between changes in final demand and production structures for 61 economies. Our findings are summarised as follows. Production and final demand structures tend to change to reduce the negative feedbacks from final demand shocks. During economic downturns, structures tend to change so that the dependence on domestic services increases, while the dependence on domestic demand for goods, and the dependence on foreign demand for domestic goods and services, both decrease. Therefore, the domestic service sector seems to play a key role in temporarily containing the negative feedback. Countries that are able to prop up their economy by domestic service sectors instead of domestic goods and foreign sectors are more resilient to negative economic shocks. |
| Keywords: | economic resilience, global value chains, input-output, structural changes |
| JEL: | C14 D57 E12 F47 |
| Date: | 2017–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2017/09-en&r=int |
| By: | Mamoon, Dawood |
| Abstract: | The paper tries to find out the impact of trade liberalization on income inequality. The literature suggests that trade favors one segment of the society over other and cause uneven development. For example, one possible way through which inequality is suspected to seep into the economy through processes of liberalization is by increasing the relative wages of skilled labor as compared to the unskilled ones. Empirical evidence is provided to this effect by employing Theil Wage inequality Index and up to 28 different concepts of openness/ trade policy. OLS as well as 2SLS regressions with numerous specifications were run. It is found out that openness not only causes wage inequality but the relationship is significant for the developing countries. Additionally, the study also suggests that human capital, which is accrued from liberalization processes, is responsible for amplifying wage inequality. |
| Keywords: | International Trade, Education, Labor Markets |
| JEL: | F16 J23 |
| Date: | 2017–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82449&r=int |
| By: | Antonio Rodriguez-Lopez |
| Abstract: | This paper introduces a framework to study the links between the supply of liquid assets for the financial market and the international allocation of economic activity. Private assets’ liquidity properties - their usefulness as collateral or media of exchange in financial transactions - affect assets’ values and interest rates, with consequences on firm entry, production, aggregate productivity, and total market capitalization. In a closed economy, the liquidity market increases the size and productivity of the sector of the economy that generates liquid assets. In an open economy, however, cross-country differences in financial development|as measured by the degree of liquidity of a country’s assets - generate an allocation of real economic activity that favors the country that supplies the most liquid assets. In such a setting, trade liberalization magnifies the gap in economic activity between the countries. |
| Keywords: | liquidity, trade, financial development, interest rates |
| JEL: | E43 E44 F12 F40 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6286&r=int |
| By: | Marcel Henkel; Tobias Seidel |
| Abstract: | We use a quantitative model to study the implications of European integration for welfare and migration flows across 1,318 regions. The model suggests that an increase of trade barriers to the level of 1957 reduces welfare by about 1-2 percent on average, depending on the presumed trade elasticity. However, remote regions may face initial welfare losses of up to 4 percent causing an estimated migration of about 8 million individuals to the European core. This implies that the dismantling of trade barriers in Europe has led to a more homogeneous spatial distribution of economic activity. With regard to the Brexit, we find moderate welfare losses for the UK of -0.44 percent in the most pessimistic scenario while continental Europe’s welfare declines by 0.18 percent. In the most unfavorable scenario, about 500,000 people would leave the UK in the long run. |
| Keywords: | regional integration, labor mobility, spatial inequality |
| JEL: | F10 F12 F15 R11 R12 R13 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6289&r=int |
| By: | Sara Biancini (Normandie University, UNICAEN, CREM UMR CNRS 6211, France); Pamela Bombarda (Université de Cergy-Pontoise, ThEMA, France) |
| Abstract: | Intellectual Property Rights (IPR) protect firms from imitation and are considered crucial to promote innovation and technological diffusion. This paper examines the impact of IPR on import sourcing decisions of multinationals. We consider a framework in which firms offshore production of an intermediate good in a developing country. Firms can either decide to import the intermediate from vertically integrated producers, or from independent suppliers. In both cases, offshoring part of the production process embodies a risk of imitation. The model predicts that, under reasonable assumptions, stronger IPR encourage by a larger extent the imports of intermediates through vertical integration. Using U.S. Related-Party Trade database, we find empirical evidence supportive of the positive link between level of IPR and the relative share of imports from vertically integrated manufacturers. |
| Keywords: | Intellectual Property Rights, MNF, FDI, outsourcing, international trade |
| JEL: | F12 F23 O34 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2017-12&r=int |
| By: | Hamid Beladi; Sugata Marjit; Suryaprakash Misra |
| Abstract: | Credit rationing in the presence of asset inequality affects production and trade pattern in this paper, but not in the conventional way. A Ricardian general equilibrium framework with heterogeneous levels of asset ownership is developed to show that more equal asset distribution may contract the output of the credit intensive sector as redistribution to the bottom of the ladder fails to promote entrepreneurs. However, the same in favor of the middle of the ladder may do the opposite. We point out the possibility that an economy with relatively equal distribution of asset ownership may import capital or credit intensive good and also export capital, unlike in a conventional HOS model. |
| Keywords: | credit, inequality, egalitarian distribution, trade |
| JEL: | F12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6307&r=int |
| By: | Asongu, Simplice |
| Abstract: | This study investigates the effect of globalisation on governance in 51 African countries for the period 1996-2011. Four bundled governance indicators and four globalisation (political, economic, social and general) variables are used. The empirical evidence is based on Instrumental Variable Quantile Regressions. The motivation for the estimation technique is that blanket governance-globalisation policies are not likely to succeed unless they are contingent on initial levels of governance and tailored differently across countries with low, intermediate and high levels of governance. The following findings are established. First, globalisation promotes good governance. Second, for the most part, the effect of globalisation is higher in terms of magnitude in the bottom quantiles of the political, institutional and general governance distributions. Third, the impact of globalisation is overwhelmingly higher in terms of magnitude in the top quantiles of the economic governance distribution. |
| Keywords: | Africa; Governance; Globalization |
| JEL: | F10 F30 I30 O10 O55 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82629&r=int |
| By: | YANG, Hyoeun (Korea Institute for International Economic Policy) |
| Abstract: | The EU’s proposal to establish a new Investment Court System during the TTIP negotiations has well represented the cumulative resentment of the public, governments, civil societies as well as academics in regard to the existing ISDS mechanism. Such issues as the lack of legitimacy, transparency, consistency, the absence of a review mechanism, and the high burden to public finance in the existing system have been criticized as undermining the sovereignty of the State and its right to regulate for legitimate policy objectives such as the environment, health, and safety. Despite the merits of the existing ISDS mechanism, the increasing demand for improved safeguards against abusive claims and discretionary power of private adjudicators should be adequately addressed in consideration of the democratic principles and the objectives of sustainable development goals. It is also noteworthy that the function of the traditional ISDS system, devised as a preferential instrument for foreign investors, has evolved over time as the distinction between capital-exporting and capital-importing countries became blurred and more attention is focused on the equality and balance of power among domestic and foreign businesses as well as between investors and the host States. In this vein, the establishment of a permanent tribunal and the public appointment of tribunal members with a fixed-term, as proposed by the EU in the new ICS, are indicative of the shifting paradigm in the discourse of treaty-based investor to State arbitration systems. Despite the fact that the system of ICS can hardly solve all of the problems, it may possibly improve the level of legitimacy by incorporating public features of the procedure. At the same time, it is noteworthy that the objective of improving the legitimacy and consistency of the dispute settlement system cannot be achieved without the prospect of establishing a multilateral dispute settlement mechanism with consolidated and harmonized standards of investment rules. Considering the difficulties of reaching a multilateral agreement on investment as witnessed in the past decades, the approach of the Mauritius Convention, which adopted an opt-in mechanism, would be useful as it reduces the risk of failure in negotiations while building a consensus among participants and allowing them to decide when to ratify the Convention in consideration of their domestic circumstances. Considering the extensive network of trade and investment agreements that Korea has concluded in the past decade, it is more than necessary for the Korean government to pay close attention to the recent development in this process and actively participate in discussions on the possibility of establishing a multilateral investment court and the key principles of investment protection and facilitation in international fora. |
| Keywords: | investor-State dispute settlement (ISDS); investment court system (ICS); multilateral investment court; TTIP; CETA; UNCITRAL Transparency Rules; Mauritius Convention |
| JEL: | F13 K33 |
| Date: | 2017–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2017_006&r=int |
| By: | Mamoon, Dawood |
| Abstract: | The recent election results in US, Germany, Japan and China and vote for BRIXIT in Britian suggest that political outcomes increasingly relate to the economic, political and social orientation in both developed and developing countries. Countries that have not promoted social and economic harmony in the country - democracy eventually puts the pressure through the discontent local polity resulting in election outcomes similar to US presidential elections in 2016. To avoid anti-globalization feelings among local population and its negative outcomes, improving political orientation towards greater participation of local polity and investments in education in developing countries would result in more equality. The research is applicable to countries like India, China, Pakistan, Argentina, Sub-Saharan Africa who have all liberalised but still need to draw lessons from East Asia for their Industrialisation and Growth Promotion with early emphasis on Social and Institutional Development. |
| Keywords: | Democracy, Autocracy, Wage Inequality, International Trade |
| JEL: | F1 F12 F14 F15 F16 P1 P11 P16 |
| Date: | 2017–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82492&r=int |
| By: | José Pedro Pontes; Carlos Eduardo Lobo e Silva |
| Abstract: | This paper deals with the location of R&D by vertical multinational firms. By taking the colocation of laboratories and productive plants as a benchmark, we can see that the spatial separation of both emerges under two conditions – high intensity of R&D spillovers and strong size asymmetry between countries. The latter condition is effective since it is related with a rising international inequality of wages. If the spatial separation of R&D and manufacturing takes place, headquarters services (namely R&D units) will be likely located in the smaller country. The converse pattern, where laboratories are place in the larger country, may arise if production is high-tech and the localized externalities of research activity are strong. Hence, this article confirms the main results of the literature on this topic but in the context of a different framework which allows us to tackle two usually disregarded topics: the transfer cost of technology; and the direct engagement of industrial workers in R&D spillovers. These aspects are dealt with by presupposing that, in addition to a “technological” externality among researchers, there is an “educational” externality exerted by researchers upon neighbouring industrial workers. When a country loses its laboratories, the inhabitants become intellectually “impoverished” and their labour starts to have a lesser efficiency. |
| Keywords: | Location of R&D; Vertical Multinationals; Spillovers; Nash Equilibria in a Large Group of Agents. |
| JEL: | F23 O32 R12 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp0122017&r=int |
| By: | Amber Wadsworth; Adam Richardson (Reserve Bank of New Zealand) |
| Abstract: | An important focus for the Reserve Bank of New Zealand as a central bank of a small commodity exporting country is to understand movements in commodity prices and their flow through to incomes, real economic activity and inflation. Idiosyncratic movements in New Zealand export prices can have different implications for terms of trade and incomes compared to a generalised movement in all commodity prices. Therefore, a framework that can help distinguish between general and idiosyncratic movements in commodity prices can help shed some light on the implications for the New Zealand economy of movements in export commodity prices. In this analytical note, we use principal component analysis to estimate the underlying global trend in commodity prices and then determine whether movements in New Zealand dairy and meat export prices can be explained by the global trend in commodity prices or by idiosyncratic events in each market. Using commodity price data from 1986, we find that 95 and 93 percent of the volatility of New Zealand’s dairy and meat export prices can be attributed to the global trend. In addition, we find evidence that the divergence between commodity prices and our estimate of the global trend can be used to forecast individual commodity prices, in particular dairy prices. We conclude that if dairy prices are above the level implied by the global trend, then they will tend to fall until they reach the level implied by the global trend and vice versa. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nzb:nzbans:2017/06&r=int |
| By: | Peter Egger; Michael Stimmelmayr |
| Abstract: | This chapter provides a survey of issues which emerge with the taxation of multinational enterprises. It addresses tax rates which affect multinational firms directly and focuses on provisions and incentives which relate to the profits and investments of such firms directly. It survey positive as well as normative principles of such taxation and incentives, relates to tax-avoidance practices, and discusses their remedies. |
| Keywords: | taxation, foreign direct investment, multinational firms |
| JEL: | F21 F23 H25 H26 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6384&r=int |
| By: | Martin, Will (Asian Development Bank Institute) |
| Abstract: | Agricultural trade is vitally important for achieving the goal of ending hunger by 2030, as enshrined in the second Sustainable Development Goal. While trade is frequently seen as posing threats to this vitally important goal, it can in fact play a major role in achieving it. Trade helps in a number of ways, by allowing countries to take advantage of their radically different factor endowments, with land-abundant countries providing exports and land-poor countries taking advantage of much more efficiently-produced imports. Trade liberalization can also help by raising production efficiency in agriculture, allowing improvements in dietary diversity and increasing access to food. Allowing trade substantially reduces the volatility of food prices by diversifying sources of supply. By contrast, beggar-thy-neighbor policies of price insulation such as the imposition of export bans in periods of high prices redistribute, rather than reduce, volatility. However, the tendency of other countries to use price-insulating policies creates a serious collective action problem in world markets. Proposals for Special Safeguards would exacerbate these problems by adding massive duties—and creating even larger declines in world prices—during periods of already-depressed prices. |
| Keywords: | agricultural trade; food security; price insulation; protection; trade distortions; safeguards |
| JEL: | F10 F13 Q11 Q17 |
| Date: | 2017–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0664&r=int |
| By: | Estrin, Saul; Meyer, Klaus E.; Nielsen, Bo B.; Nielsen, Sabina |
| Abstract: | National institutions shape the ability of civil society and minority shareholders to monitor and influence decision-makers in listed state owned enterprises (SOEs), and thereby their strategies of internationalization. We argue that the weaker are such controls, the more likely such decision makers pursue self-serving motives, and thus shy away from international investment. Listed SOEs’ strategies will thus be more similar to those of wholly privately owned enterprises (POEs) when these controls are more effective. Building on Williamson's (2000) hierarchy of institutions, we examine how home country institutions exerting normative, regulatory, and governance-related controls affect the comparative internationalization levels of listed SOEs and POEs. Based on a matched sample of 153 majority state owned and 153 wholly privately owned listed firms from 40 different countries, we confirm that, when home country institutions enable effective control, the internationalization strategies of listed SOEs and POEs converge. |
| Keywords: | state owned enterprises; internationalization; home country institution; matched sample; Tobit regression |
| JEL: | J50 |
| Date: | 2016–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64605&r=int |
| By: | Deng-Shing HUANG (Institute of Economics, Academia Sinica, Taipei, Taiwan) |
| Abstract: | This paper firstly analyzes the relationship between Taiwan’s economic development policies since 1960s, and the corresponding change in the industrial structure. Along with the industrial upgrading process, the attached trade patterns are addressed, especially the dynamic path of major export sectors, increasingly dependence on the lately rising China market. In addition, we extend the study to worldwide trade pattern. The twin-hub trade regime since the beginning of 21st century is empirically reconfirmed using our modified hub index. Furthermore, we identify the rising China-hub along with a declining Japan-hub. The pseudo effect of AEC on the hub pattern reveals the potentiality of economic integrated Southeast Asia in the future. |
| Keywords: | Industrial policy, Hub index, Twin-hub trade pattern, Middle income trap |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:sin:wpaper:17-a014&r=int |
| By: | Mishra, SK |
| Abstract: | This paper is an exercise in construction of an alternative globalization index for 43 countries in Africa. It has used a new method for measurement of the degree of globalization (or construction of a globalization index) based on minimization of the Euclidean norm of the Shapley values, the concept borrowed from the cooperative game theory. It assigns weights to constituent variables such that their mean expected marginal contribution to the synthetic index is as equitable as possible. Since this index is based on combinatorial logic, it is also less likely to be affected by outlier data points. Globalization index for 43 African countries (for a time series of 45 years, 1970-2014) has been constructed. The new index has been compared with the KOF index of globalization for the countries under study. As its validation, it has been found that the index has stronger correlation (vis-à-vis the KOF index) with Human Development index, Corruption Perception index, Freedom index and the indicators of abject poverty in the African countries. Viewed as such the new index represents globalization closely in connection with other relevant socio-economic measures than its rival (KOF index of globalization) as well as it is based on more plausible theoretical premises based on marginal contribution rather than correlation. |
| Keywords: | Globalization; synthetic index; African countries; Shapley values; Equi-marginal contribution. |
| JEL: | C43 C71 F02 O55 |
| Date: | 2017–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82614&r=int |
| By: | DELOGU Marco; DOCQUIER Frédéric; MACHADO Joël |
| Abstract: | We develop a dynamic model of the world economy that jointly endogenizes individual decisions about fertility, education and migration. We then use it to compare the shortand long-term effects of immigration restrictions on the world distribution of income. Our calibration strategy replicates the economic and demographic characteristics of the world, and allows us to proxy bilateral migration costs and visa costs for two classes of workers and for each pair of countries. In our benchmark simulations, the world average level of income per worker increases by 12% in the short term and by approximately 52% after one century. These results are highly robust to our identifying strategy and technological assumptions. Sizable differences are obtained when our baseline (pre-liberalization) trajectory involves a rapid income convergence between countries or when we adjust visa costs for a possible upward bias. Our quantitative analysis reveals that the effects of liberalizing migration on human capital accumulation and income are gradual and cumulative. Whatever is the size of the short-term gain, the long-run impact is 4 to 5 times greater (except under a rapid convergence in income). |
| Keywords: | Migration; Migration policy; Liberalization; Growth; Human Capital; Fertility; Inequality |
| JEL: | F22 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2017-16&r=int |
| By: | Kim, Jong Duk (Korea Institute for International Economic Policy); Choi, Bo Young (Korea Institute for International Economic Policy); Cho, Moon hee (Korea Institute for International Economic Policy); Chung, Min-Chirl (Korea Institute for International Economic Policy) |
| Abstract: | Korea Abstract: 본 연구는 KIEP와 UNCTAD가 공동으로 구축한 비관세조치 데이터베이스를 바탕으로 한국의 비관세조치 현황을 살펴보았다. 본 연구에서는 비관세조치가 어떠한 수입품목과 국내산업에 영향을 미치는지를 NTM과 HS코드 연계 작업을 통해 보여준다. 또한 여기서 구축된 비관세조치 데이터는 각국의 비관세조치를 일정한 틀에서 비교 가능하도록 하고 있으므로 다양한 실증분석이 가능할 뿐 아니라 동 데이터를 통해 국가간 조화롭게 할 수 있는규제들이 존재하는지를 살펴볼 수 있을 것으로 기대된다. English Abstract: This study reports a summary of non-tariff measure database of Korea built upon the MAST non-tariff classification and analyzes the quantitative and qualitative characteristics of Korea’s non-tariff measures governing ten largest imported products (HS 2-digit). Study finds that ten largest imported products are concentrated in manufactured industries and hence Technical Barriers to Trade (TBT) are most identified non-tariff measures. Among them, the single most-identified non-tariff measure in Korea’s regulatory system is labeling requirements followed by product quality or performance requirement and testing requirement. A simple statistical illustration shows that the correlation between the volume of trade and the number of related measures tends to be higher than the correlation between the volume of imports and the number of related measures. Such correlations are believed to indicate that the measures and regulations stands accordingly to the size and to the extent of development of an industry, not for protectionist intentions. |
| Keywords: | non-tariff; NTM; HS; TBT |
| Date: | 2017–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2017_003&r=int |
| By: | Jorge A. Fornero; Miguel A. Fuentes; Andrés Gatty |
| Abstract: | How do manufacturing exports react to the real exchange rate and to foreign demand? We investigate this question using Chilean panel data spanning from 2003.Q1 to 2016.Q4. We find that the recent fall in manufacturing exports growth is consistent with a persistent slowdown in foreign demand, which has been partially offset by an average depreciation of the bilateral real exchange rate (with respect to destination countries of these exports). Specifically, the short-run elasticities of manufacturing exports differ in size: (i) the elasticity of foreign demand —approximated by trading partners’ activity aggregates— ranges between 1.4 and 2; and (ii) the elasticity with respect to the bilateral real exchange rate is comprehended in the interval [0.4 - 0.6]. Core estimated elasticities pass usual robustness checks. |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:810&r=int |
| By: | Badinger, Harald; Reuter, Wolf Heinrich |
| Abstract: | This study analyzes the effects of increased trade with China and Eastern Europe on manufacturing employment in 1,146 NUTS-3 regions of 17 Western European countries from 1991 to 2011. Building on Autor et al. (2013) we aim at identifying the causal effects of an increase in import and export exposure on regional manufacturing employment, thereby, explicitly accounting for labor and product market spillovers. Overall, our results support previous findings of a negative effect of increased import exposure from China for our sample of Western European countries, whereas spatial spillover effects turn out to be positive, slightly mitigating the quantitative impact without changing results quantitatively. Moreover, our cross-country study highlights the pronounced heterogeneity of the estimated effects of trade exposure on manufacturing employment across countries with respect to the trade balance. |
| Keywords: | International Trade,Globalization,Western Europe,China,Eastern Europe,Employment |
| JEL: | F16 J31 R11 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:svrwwp:062017&r=int |
| By: | Abrigo, Michael R.M.; Brucal, Arlan Z.I. |
| Abstract: | Conventional wisdom suggests that oil price increases have a negative effect on the output of oil-importing countries. This is grounded on the experience of the United States between the 1940s and the late 1980s, where recessions were generally preceded by oil price increases. This paper evaluates the impact of oil price shocks on the Philippines--a developing country and a net oil-importing economy. Following Kilian's (2008) structural decomposition of real oil price change, we find indications that the 2008-2009 and 2014-2015 oil price drops may have lowered the Philippine economy's output growth, potentially due to the economy's reliance on remittances from abroad and the export market. |
| Keywords: | Philippines, oil industry, oil price, oil price shock, oil-importing economy, oil price movement |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2016_vol__43_no__1c&r=int |
| By: | Oh, Yoon Ah (Korea Institute for International Economic Policy) |
| Abstract: | In recent years, China has emerged as a key partner of Southeast Asia across trade, investment, and infrastructure development. Bilateral trade reached $395 billion in 2015, accounting for 15 percent of Southeast Asia's external trade and making China the region's top trading partner. The trade flows are strongly influenced by an extensive regional production network established across East Asia where China used to be the processing hub but now it is expanding its role to supply parts and components to Southeast Asia. China is the fourth-largest investor in Southeast Asia, although it only accounts for 7 percent of SEA's inbound FDI flows in 2011-2015. Its FDI flows to the region reached $6.4 billion in 2015. Infrastructure development is the most visible area of China's rising economic influence in Southeast Asia. Inadequate infrastructure is the major obstacle to accelerated and sustained economic growth in the region and China's infrastructure development initiative provides a new and unprecedented momentum for tackling this challenge. External partners need to respond to the changing economic landscape in Southeast Asia proactively and constructively. China's deeper engagement in Southeast Asia may place competitive pressures on other foreign businesses and development partners, yet this may create more market opportunities and better infrastructure for everyone. External partners also need to pay greater attention to labor and environmental standards compliance in its FDI and infrastructure development in the region, taking lessons from some of the backlashes against China's investment activities. Finally, external partners and Southeast Asia share mutual interests in diversifying their economic relations away from over-dependency on China, as recent economic and security events have clearly suggested. |
| Keywords: | China; Southeast Asia; Trade; FDI; Infrastructure Development |
| Date: | 2017–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_018&r=int |
| By: | Forslid, Rikard (Dept. of Economics, Stockholm University); Nyberg, Sten (Dept. of Economics, Stockholm University) |
| Abstract: | Control over borders and access to the common market are key issues in the Brexit negotiations. We explore a sequential model, where the UK can commit to mobility, and the EU may constrain trade to dissuade future secession, or to punish the UK. The model highlights the importance of whether the EU views trade and labor mobility as substitutes, in line with standard trade theory, or as complements, as suggested by EU statements about inseparable freedoms. In the former case, the UK can attain its preferred mobility with impunity. Mobility and trade restrictions are higher in the latter case. While the EU's bargaining position hinges on a willingness to constrain trade, the EU does not benefit from strengthen this, say by fueling resentment about Brexit. The sequence of moves is clearly important. Our model implies that the UK moving first is optimal for both parties. This sequence is also in line with the phased approach guiding the negotiations. With uncertainty about preferences, the EU benefits from claiming to have complements preferences, irrespective of its true preferences. Uncertainty harms the UK. Nevertheless, it is worse off moving second, despite the EU’s preferences then being revealed. Also, if the EU has substitute preferences it could gain from committing to complement preference behavior. Finally, we discuss the scope for efficient bargaining taking the inefficient equilibrium points as points of departure. We note that contributions to the EU budget could potentially substitute for trade restrictions, thereby contributing to a more efficient outcome. |
| Keywords: | Brexit; immigration; trade; sequential game |
| JEL: | F15 F22 F55 |
| Date: | 2017–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2017_0007&r=int |