|
on International Trade |
| By: | Luisa Kinzius; Alexander-Nikolai Sandkamp; Erdal Yalcin |
| Abstract: | A growing share of modern trade policy instruments is shaped by non-tariff barriers (NTBs). Based on a structural gravity equation and the recently updated Global Trade Alert database, we empirically investigate the effect of NTBs on imports. Our analysis reveals that the implementation of NTBs reduces imports of affected products by up to 12%. Their trade dampening effect is thus comparable to that of trade defence instruments such as anti-dumping duties. It is smaller for exporters that have a free trade agreement with the importing country. Different types of NTBs affect trade to a different extent. Finally, we investigate the effect of behind-the-border measures, showing that they significantly lower the importer’s market access. |
| Keywords: | non-tariff barriers, trade protection, gravity equation |
| JEL: | F13 F14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7419&r=all |
| By: | Santeramo, Fabio Gaetano; Lamonaca, Emilia; Nardone, Gianluca; Seccia, Antonio |
| Abstract: | During the last decades, significant changes in trade regulations are modifying the global trade of wine. The number of non-tariff measures (NTMs) implemented in the wine sector is relevant: a large number of country-specific NTMs, set in the occasion of trade agreements, have been adopted. The impact of these policy instruments on trade is not always clear, nor quantified at global scale. We investigate the effects that country-specific NTMs are showing on global imports of wine. In particular, we estimate a gravity model to explain how and to what extent country-specific NTMs influence wine trade, and we disentangle these effects for different segments of the international market of wine. Our results suggest that country-specific NTMs tend to favour imports of wine. Differences emerge across market segments and types of regulations. In particular, the Technical Barriers to Trade favour (friction) bottled (bulk) wine; pre-shipment inspections enhance imports of bottled wine; the Sanitary and Phytosanitary Standards and the export-related measures are the most trade-enhancing NTMs, regardless of the market segment. |
| Keywords: | Global trade; NTM;Policy; SPS; TBT |
| JEL: | F13 Q17 Q18 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90647&r=all |
| By: | Maria Bas; Pamela Bombarda; Sébastien Jean; Gianluca Orefice (Université de Cergy-Pontoise, THEMA) |
| Abstract: | Inequalities between workers of different skills have been growing in the era of globalization. Firms' internationalization mode has an impact on job stability. Exporting firms are not only exposed to different foreign shocks, they also pay skill-intensive fixed costs to serve foreign markets. This implies that, for larger exporters, the labor demand for skilled workers is expected to be less volatile than for unskilled workers. In this paper we study the relationship between firms' export activity and job stability across employment skills. Relying on detailed firm-level data from France for the period 1996-2007, we show that firms with higher export intensity exhibit a lower volatility of skilled labor demand relative to the volatility of unskilled labor demand. Our identification strategy is based on an instrumental variable approach to provide evidence on the causal effect of the export performance of the firm on the volatility of employment of different skills. Our findings suggest that exporting increases the stability of skilled jobs, but feeds the precariousness of unskilled ones. |
| Keywords: | Exports, employment volatility, skilled labor, firm-level data. |
| JEL: | F1 F16 L25 L60 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2019-01&r=all |
| By: | Lodefalk, Magnus (The Ratio Institute); Tangz Sofia Tano, Aili (Örebro University); Agarwal, Natasha (World Education Foundation); Wang, Zheng (University of Nottingham) |
| Abstract: | Many countries offer government-backed export credit guarantees to domestic firms. We investigate the effects of such guarantees on firm exports, jobs and value added. Using uniquely detailed and exhaustive transaction-level panel data on guarantees and granular information on trade as well as on exporters and foreign-buyers, we perform difference-in-difference matching estimations. We find that guarantees improve firm performance. However, the effects are strikingly heterogeneous across firm size and response variables. Using guarantees increases the firm-destination probability to export and the value of exports by 18 and 172 percent, respectively, but does not generally increase jobs and value added. Smaller firms benefit the most in terms of exports. Overall, the evidence suggests a causal link from guarantees to firm export performance. |
| Keywords: | Export Credit Guarantees; Credit Constraints; Trade; Firm Performance |
| JEL: | D22 F14 F36 G28 G32 H81 L25 |
| Date: | 2018–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0316&r=all |
| By: | K De Bruyne; Glenn Magerman; Jan Van Hove |
| Abstract: | This paper analyzes the impact of market size and trade costs on bilateral trade flows. A multi-country trade model with firm-level heterogeneity in productivities and countries’market potential provides a simple micro foundation for the link between these variables. In the model, market size and trade costs jointly determine a country-specific pecking order of exporters serving their destination countries. In a hypothetical setting where bilateral trade costs are homogeneous across country pairs, market size then implies a common ranking of exporters among destination countries. This leads to a unique core-periphery structure of the world trade network. Relaxing the assumption of homogeneous trade costs, we illustratethe impact of market size and trade costs on bilateral trade flows and its margins in a simple gravity-like setting. Using an instrumental variables approach, we find that both market size and trade costs (measured through the network position of countries) have a significant impact on bilateral exports: countries in the core bilaterally trade more with other countries in the core than with peripheral countries, conditional on typical observables. |
| Keywords: | D85, F1, L1. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/280986&r=all |
| By: | Susan Aaronson (George Washington University) |
| Abstract: | In 2017, the three signatories of NAFTA — Canada, Mexico and the United States — agreed to update the agreement to include a new “digital trade chapter.†The renegotiation of NAFTA presents a continent-wide opportunity to encourage new sectors built on cross-border data flows, while simultaneously preserving domestic policy space to regulate such sectors. Canada, Mexico and the United States can make NAFTA the first digital economy trade agreement. All three nations should agree to: →→ clarify the rules governing crossborder data flows; →→ encourage the free flow of information and protect personal data, while also promoting internet openness and stability; and →→ address new technologies as well as future trade barriers by including language that is technologically neutral (for example, not favouring specific technologies or regulatory approaches) |
| Keywords: | NAFtA, FTA, digital trade, artificial intellgience, data |
| JEL: | F1 F5 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2018-12&r=all |
| By: | Raphael Auer; Barthélémy Bonadio; Andrei A. Levchenko |
| Abstract: | We provide a quantitative assessment of both the aggregate and the distributional effects of revoking NAFTA using a multi-country, multi-sector, multi-factor model of world production and trade with global input-output linkages. Revoking NAFTA would reduce US welfare by about 0.2%, and Canadian and Mexican welfare by about 2%. The distributional impacts of revoking NAFTA across workers in different sectors are an order of magnitude larger in all three countries, ranging from -2.7 to 2.26% in the United States. We combine the quantitative results with information on the geographic distribution of sectoral employment, and compute average real wage changes in each US congressional district, Mexican state, and Canadian province. We then examine the political correlates of the economic effects. Congressional district-level real wage changes are negatively correlated with the Trump vote share in 2016: districts that voted more for Trump would on average experience greater real wage reductions if NAFTA is revoked. |
| JEL: | F11 F13 F16 R13 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25379&r=all |
| By: | Leonardo Baccini; Giammario Impullitti; Edmund J. Malesky |
| Abstract: | What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private _rms. Then we empirically study the effect of the 2007 WTO accession on selection, competition, and productivity. Our results show that WTO entry is associated with higher probability of exit, lower firm profitability, and substantial increases in productivity for private firms but not for SOEs. Our estimates suggest that the overall productivity gains would have been about 40% larger in a counterfactual Vietnamese economy without SOEs. We highlight some economic mechanisms possibly driving these findings through the lenses of a model of trade with heterogeneous private and state-owned firms. The model suggests that political/regulatory barriers to entry and access to credit are key drivers of the different response of SOEs to trade liberalization. Further empirical tests broadly validate these insights. |
| Keywords: | state-owned enterprises, state capitalism, heterogeneous firms, gains from trade, WTO, Vietnam |
| JEL: | F12 F13 F14 P31 P33 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1593&r=all |
| By: | Mi Dai (Beijing Normal University); Francesco Nucci (Sapienza University); Alberto Franco Pozzolo (University of Molise and Centro Studi Luca d'Agliano); Jianwei Xu (Beijing Normal University) |
| Abstract: | The recent empirical literature estimating the elasticity of exports to exchange-rate fluctuations has shown that, while devaluations have in general a positive effect on exports, the size of it varies significantly depending on firm, sector and country characteristics. In this paper we lend theoretical and empirical support to the view that the financial conditions of a firm have a relevant effect on the way in which exchange rate movements affect its export decisions. In particular, we show that exporting activities by more financially constrained firms are more sensitive to exchange rate fluctuations than those by firms with a better ability to raise external capital. This finding is detected at both the intensive and extensive margin of export. Consistent with the result on export quantities, we also document that the exchange rate pass-through to export prices denominated in the domestic currency is lower for firms facing stronger financial constraints. Moreover, we show that our results are robust to controlling for a variety of alternative features that may affect the firm-level elasticity of exports to exchange-rate, such as the intensity of use of imported inputs, labor productivity, the degree of price stickiness and firm size. |
| Keywords: | Exports; Exchane Rate; Financial Constraints |
| JEL: | F14 F31 |
| Date: | 2019–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:442&r=all |
| By: | Filomena Pietrovito (University of Molise); Alberto Franco Pozzolo (University of Molise and Centro Studi Luca d'Agliano) |
| Abstract: | We study the relationship between credit contraints and export behavior using a large and heterogeneous sample of small and medium size firms from 65 emerging and developing countries between 2003 and 2014. We measure credit contraints by means of each firm's self-assessment of whether it is credit rationed, and we follow an instrumental variable approach that uses firm-level instruments to address the potential endogeneity of credit constraints with respect to export performance. We find robust evidence of a negative, statistically and economically significant effect of financial constraints on both the probability that a firm exports (the extensive margin of exports) and the share of exports over total sales (the intensive margin of exports). |
| Keywords: | export decisions; margin of exports; credit contraints; firm level |
| JEL: | D22 F10 F14 |
| Date: | 2019–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:441&r=all |
| By: | Susan Aaronson (George Washington University) |
| Abstract: | No nation alone can regulate artificial intelligence (AI) because it is built on cross- border data flows. • Countries are just beginning to figure out how best to use and to protect various types of data that are used in AI, whether proprietary, personal, public or metadata. • Countries could alter comparative advantage in data through various approaches to regulating data — for example, requiring companies to pay for personal data. • Canada should carefully monitor and integrate its domestic regulatory and trade strategies related to data utilized in AI. |
| Keywords: | AI, trade, FTA, WTO, internet, data |
| JEL: | F1 F5 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2018-11&r=all |
| By: | - |
| Abstract: | United States Trade Developments 2018, provides an overview of the most relevant developments in United States trade relations with Latin America and the Caribbean and of the measures that inhibit the free flow of goods among countries in the Western Hemisphere. This is an annual report elaborated by the ECLAC Washington Office. |
| Keywords: | COMERCIO INTERNACIONAL, POLITICA COMERCIAL, CONVENIOS COMERCIALES, ARANCELES, NEGOCIACIONES COMERCIALES, RESTRICCIONES COMERCIALES, ARREGLO DE CONTROVERSIAS, ESTADISTICAS COMERCIALES, INTERNATIONAL TRADE, TRADE POLICY, TRADE AGREEMENTS, TARIFFS, TRADE NEGOTIATIONS, TRADE RESTRICTIONS, DISPUTE SETTLEMENT, TRADE STATISTICS |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col896:44392&r=all |
| By: | Tiago Domingues (GEE) |
| Abstract: | This paper evaluates the growing participation of the Portuguese economy, and especially of the textiles, leather, and shoes industry, in the so-called Global Value Chains (GVCs).We use the 2016 edition of the World Input-Output Database (WIOD) to empirical assess the changes in the geography of imports and exports of the Portuguese textiles, leather and shoes industry as well as quantify the growing vertical specialization in this sector. We also measure value added, import and employment coefficients for the Portuguese economy and the Portuguese textiles, leather, and shoes sector. The results show that Portuguese textiles, leather, and shoes trade have been more concentrated in Spain, Italy, India and China and less concentrated in Germany, France, and the United Kingdom. This sector is more relevant in the Portuguese economy than in any other Eurozone economy in terms of output, employment and value-added, and it has been recovering its relevance in the Portuguese economy since 2009.Textiles, leather, and shoes is the manufacturing industry with the higher potential to generate new jobs in Portugal. Despite the negative contribution of the financial crisis, vertical specialization of Portuguese textiles, leather, and shoes exports have been increasing ever since. |
| Keywords: | Global value chains; Textile, leather, and shoes; Input-Output models |
| JEL: | C67 D57 E01 F14 L67 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:00117&r=all |
| By: | A. Baronchelli; T.E. Uberti |
| Abstract: | Trade and foreign direct investments (FDI) represent the real and the capital side of international economic integration, recently challenged by the late 2000s worldwide economic crisis and by new scepticisms against globalisation. The economic literature on the description of world trade network (WTN) is wide, but few analyses have been carried out so far on world investment networks (WIN), since FDI data suitable for comparison are very scarce and very complex to collect. In this analysis we exploit a database (FDI Bilateral Statistics by UNCTAD (UNCTAD, 2014), in order to compare WTN and WIN in the first decade of the new millennium, before and after 2008 economic crisis. We focus on the dynamics of Exports and bilateral outward FDI stocks networks from 2001 to 2012 among 75 countries, representing 96.5% of world GDP and about 81% of world population in 2012. Results show that these networks are very similar - completely integrated with no isolated nodes when original data are used to analyse the networks (confirming the complexity of global value chain), and a relatively sub- group of countries connected to a unique largest component when the threshold level is increased. Since 2008, the economic crisis affected exclusively Exports, but later on the rise of economic connections continuously increased over time. The key players in WIN and WTN are stable - USA, Germany and China are leaders for Exports, while USA, Germany and France for FDI. In addition, countries do not match randomly - all networks are disassortative with respect to degree, but assortative according to geography and (partially) to economic development. Finally, WIN and WTN links are mutual in all networks, confirming that once a link is established, it is easier to maintain all kinds of commercial relations. Concluding there is a positive association between couplets of WTN and WIN networks, conjecturing that FDI and Exports networks could be complements, rather than substitute. |
| Keywords: | Network Analysis;FDI;exports |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201813&r=all |
| By: | Sharif M. Hossain (Research Fellow, Japan Society for the Promotion of Science (JSPS)/National Graduate Institute for Policy Studies (GRIPS), Japan/Department of Economics, Jagannath University, Bangladesh); Nobuhiro Hosoe (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | Bangladesh is one of the top remittance recipient countries in the world and it is the second largest source of the country fs foreign exchange earnings. However, in recent years, remittance inflows into Bangladesh have declined steadily because of real income reductions of migrants. This trend in income has increased the number of returning migrants, making domestic employment less secure. To address this issue, we develop a recursive dynamic CGE model for Bangladesh that describes the allocation of employment between domestic and foreign labor markets in response to a foreign wage premium, competition between local firms and multinational enterprises in the ready-made garments (RMG) sector, and distributional impacts of factor mobility on different household groups. Our simulation results show that returning migrants reduce household welfare by lowering wages and increasing unemployment, particularly for unskilled workers in the domestic labor market. Using counteractive policy options, we examine the impacts of FDI promotion in the RMG sector and of a human-capital development program. Based on our results, we conclude that the former policy minimizes the negative impacts of foreign labor market shocks, while a combination of both policies is more equitable. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:18-22&r=all |
| By: | Susan Aaronson (George Washington University) |
| Abstract: | Companies, governments, and individuals are using data to create new services such as apps, artificial intelligence (AI) and the internet of things (IoT). These data-driven services rely on large pools of data and a relatively unhindered flow of data across borders (few market access or governance barriers). The current approach to governing cross-border data flows through trade agreements has not led to binding, universal, nor interoperable rules governing the use of data. Trade diplomats first established principles to govern cross-border data flows, and then drafted e-commerce language in free trade agreements, rather than through the WTO, the most international trade agreement. Data-driven services however, will require a different domestic and international regulatory environment than that developed to facilitate e-commerce. Most countries with significant numbers of data-driven firms are in the process of debating how to regulate these services and the data that underpins them. I argue that policymakers must devise a more effective approach to regulating trade in data for four reasons: the unique nature of data as an item exchanged across borders; the sheer volume of data exchanged; much of this data exchanged across borders is personal data, and the fact that although data could be a significant source of growth, many developing countries are unprepared to participate in this new data driven economy and to build new data driven services. This article begins by with an overview and then describes how trade in data de is different from trade in goods or services. It then examines analogies used to describe data as an input, which can help understand how data could be regulated. Next, we discuss how trade policymakers are regulating trade in data and how these efforts have created a patchwork. Finally, it suggests an alternative approach. " |
| Keywords: | data, digital trade, AI, internet, trade, FTA, WTO |
| JEL: | F1 F5 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2018-10&r=all |
| By: | Hübler, Michael; Axel Herdecke |
| Abstract: | This article evaluates the recent protectionist US trade policy and the retaliation of the EU and China. The article employs a New Quantitative Trade Theory model and an Armington model for comparison. The simulation results show that US car tariffs are a credible threat to the EU, but the steel and aluminum tariffs are not. China suffers considerably from the US tariffs, especially the extended, tightened tariffs that have been announced. The retaliation measures of the EU and China, however, do not cause US welfare losses compared to the situation without such a trade policy. |
| Keywords: | Trade policy, trade war, numerical model, USA, EU, China |
| JEL: | F11 F17 F42 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-648&r=all |
| By: | Muscillo, Alessio (University of Siena); Pin, Paolo (Bocconi University); Razzolini, Tiziano (University of Siena); Serti, Francesco (Universidad de Alicante) |
| Abstract: | We investigate whether network closure in the supply chain can explain the heterogeneity observed in import premia. Using unique panel data on trade flows among beef farms in the Italian region of Piedmont, we analyze a purely sequential supply chain characterized by the co-existence of two competing production systems: domestic cattle, of lower quality and less risky, and imported cattle, of higher quality and exposed to higher risks. Our findings indicate that trust and mutual cooperation, computed in terms of network closure, are associated with increasing gains from imports and may promote the use and investment in inputs of superior quality. |
| Keywords: | import premium, network closure, sequential supply chain |
| JEL: | D22 D85 F10 F14 L14 O13 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12036&r=all |
| By: | Francesca Casalini (OECD); Javier López González (OECD); Evdokia Moïsé (OECD) |
| Abstract: | The digital transformation has had a profound impact on international trade, lowering barriers to internationalisation and contributing to growing trade competitiveness, but at the same time making international trade transactions more complex. Distinctions between goods and services and between modes of delivery have become blurred, and trade today must not only to be faster and more reliable, but also meet a range of regulatory requirements that differ across markets, including those related to privacy, consumer protection and security. Against this backdrop, this paper suggests that new and more holistic approaches to market openness are needed for the 21st century. These should take into consideration issues that span goods, services and digital networks more jointly and involve more international dialogue between a range of stakeholders and policy communities. The paper then discusses how principles of good regulatory practice in relation to market openness – in particular, transparency, non-discrimination, interoperability and avoidance of unnecessary trade restrictiveness – can provide guidance when approaching some of these emerging challenges, with a view to helping inform policy makers as they consider rules for the digital age. |
| Keywords: | data flows, Digital trade, digitalisation, market openness, trade policy |
| JEL: | F13 O33 |
| Date: | 2019–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:219-en&r=all |
| By: | Nicola Gagliardi (SBS-EM, CEB and DULBEA); Benoît Mahy (University of Mons (humanOrg) and DULBEA); François Rycx (Université libre de Bruxelles (CEB and DULBEA), humanOrg, IRES, GLO and IZA) |
| Abstract: | This paper examines social upgrading related to firms’ participation in Global Value Chains (GVCs) from a developed countries’ perspective. Merging detailed matched employer-employee data relative to the Belgian manufacturing industry with unique information on firm-level upstreamness, we investigate whether workers on the upstream stage of GVCs benefit from higher wages. We also enrich our analysis with a gender dimension. Unconditional quantile regressions and decomposition methods reveal that firms’ upstreamness fosters workers’ social upgrading. Nevertheless, gains are found to be unequally shared among workers. Male top-earners are the main beneficiaries; whereas women, irrespective of their earnings, appear to be unfairly rewarded. |
| Keywords: | Social upgrading, global value chains, WagesGender, Developed countries |
| JEL: | J16 J31 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201810-359&r=all |
| By: | Bratu, Cristina (Uppsala University); Dahlberg, Matz (IFAU - Institute for Evaluation of Labour Market and Education Policy); Engdahl, Mattias (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nikolka, Till (ifo Institute) |
| Abstract: | We evaluate the importance of spillover effects of national migration policies by estimating the effect of stricter rules on family reunification in Denmark in 2002 on migration to neighboring countries. We reach two main conclusions. First, we show that stricter rules for reunification lead to a clear and significant increase in emigration of Danish citizens with immigrant background. Most of the emigrants left Denmark for Sweden, a neighboring country in which reunification was possible. Second, we demonstrate that a significant fraction of the individuals that came to Sweden to reunite with a partner left the country again; within two (eight) years around 20% (50%) had left, with the absolute majority leaving for Denmark. Our results indicate that potential spillover effects from national migration policies should be taken into account when forming migration policy. |
| Keywords: | Migration Policy; family reunification; international migration; spillover effects |
| JEL: | F22 J12 J15 |
| Date: | 2018–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2018_013&r=all |
| By: | Ayhab Saad (Doha Institute for Graduate Studies) |
| Abstract: | This paper examines the manufacturing export market in Egypt after the Arab Spring using firm level census data from 2013. Exports are quite rare in Egypt, concentrated in a few industries and regions, and dominated by superstar exporters. The estimated conventional export premia are very high, except for firm productivity. Exporters have stark effects on labor market outcomes, including wages, employment, and demand for skilled and female workers, wage inequality, and job security. These findings have two important implications: (1) Manufacturing exports might be monopolized by large but not necessarily the most efficient firms, and (2) promoting exports could potentially improve labor market outcomes by providing good jobs, especially for college graduates and females. |
| Date: | 2018–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1208&r=all |
| By: | Kikkawa, Ken; Sasahara, Akira |
| Abstract: | Increasing international flows of goods, services, and financial assets have been shown to increase a country's welfare through various channels. This paper studies the interaction between a country's welfare gains from international trade and its sovereign’s access to bond markets. We do so by incorporating a sovereign bond market into a simple Armington (1969)'s trade model. While standard trade models suggest surprisingly small gains from trade, our model implies that introducing channels through a sovereign bond market greatly magnifies the gains from trade. |
| Keywords: | Gains from trade, Sovereign debt, Sovereign default, Trade openness |
| JEL: | F14 F15 |
| Date: | 2018–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90685&r=all |
| By: | Csaba Weiner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | Investigating the Russian economic footprint through outward foreign direct investment (OFDI) and the activities of Russian multinationals has not become either outdated or less interesting, even though, understandably, most of the current attention on Russian influence in Europe has been focused on direct interference in political affairs. This paper is the second of a four-part series that outlines the international expansion of Russian multinationals in five EU-member Central and East European (CEE) states, i.e., the Czech Republic, Hungary, Poland, Slovakia and Slovenia. Here, the focus is on the pull factors responsible for Russian FDI inflows into these countries, as well as on the sectors in which investments are made. In doing so, the research relies on company data analysed using Dunning’s eclectic paradigm of international production and his typology of four motives behind FDI. We find that most Russian FDI has been done in hydrocarbons, iron, steel and machinery, but banking, software solutions, electronic production, real estate and even the light industry have also been targeted. Investment is dominated by market-seeking and, to a lesser extent, efficiency-seeking projects carried out by state-owned or state-related private firms. There are a limited number of innovative private Russian companies on the market that show features similar to those of multinationals from developed countries. |
| Keywords: | outward foreign direct investment, multinational enterprises, pull factors, Russia, Europe, Czech Republic, Hungary, Poland, Slovakia, Slovenia |
| JEL: | D22 F23 M16 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:250&r=all |
| By: | Cabral Torres René; Mollick André V.; Saucedo Eduardo |
| Abstract: | This paper examines the effect of different crimes on Foreign Direct Investment (FDI) inflows into the 32 Mexican states. Using a state-quarter panel data for the period 2005 to 2015, we estimate alternative models of FDI, with fixed effects throughout a flexible lag-lengths methodology and System Generalized Method of Moments (SGMM) models in order to identify the determinants of FDI inflows into the country. The dependent variable in our model is the annual inflow of FDI and the independent variables are state level indicators (real wages and electricity consumption), and macroeconomic forces (the real exchange rate and interest rate). We find that homicides and thefts have negative statistically significant effects on FDI, while other crimes show no effects. Partitions of the sample suggest higher negative effects in the most violent states. |
| Keywords: | Crime, Foreign Direct Investment, Mexico, Panel Data |
| JEL: | C33 F21 F52 P45 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2018-24&r=all |
| By: | Friebel, Guido (Goethe University Frankfurt); Manchin, Miriam (University College London); Mendola, Mariapia (University of Milan Bicocca); Prarolo, Giovanni (University of Bologna) |
| Abstract: | Irregular migrants from Africa and the Middle East flow into Europe along land and sea routes under the control of human smugglers. The demise of the Gaddafi regime in 2011 marked the opening of the Central Mediterranean Route for irregular border - crossing between Libya and Italy. This resulted in the immediate expansion of the global smuggling network, which produced an asymmetric reduction in bilateral distance between country pairs across the Mediterranean sea. We exploit this source of spatial and time variation in irregular migration routes to estimate the elasticity of migration intentions to illegal moving costs proxied by distance. We build a novel dataset of geolocalized time-varying migration routes, combined with cross-country survey data on individual intentions to move from Africa (and the Middle East) into Europe. Netting out any country-by-time and pair-level confounders we find a large negative effect of distance along smuggling routes on individual migration intentions. Shorter distances increase the willingness to migrate especially for youth, (medium) skilled individuals and those with a network abroad. The effect is stronger in countries closer to Libya and with weak rule of law. |
| Keywords: | international migration, human smuggling, illegal migration, Libyan Civil War |
| JEL: | K23 K42 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11978&r=all |
| By: | Aygun Garayeva (Central Bank of Azerbaijan Republic); Gulzar Tahirova (Central Bank of Azerbaijan Republic) |
| Abstract: | The impact of institutional quality on the exchange rate-export relation is assessed in a panel of 33 countries and quarterly time period of 1991Q1- 2016Q3. Empirical estimation is conducted in 2 steps. As a first step, using panel DOLS, FMOLS and PMG estimation techniques, it is confirmed that a negative and significant relation between exchange rates and exports exists. The estimation suggests that in the countries under study, 1% appreciation of the real effective exchange rate leads to, approximately, 0.55% decrease in total exports on average, holding other variables constant. In a separate cross-sectional estimation using simple OLS, some empirical evidence has been found to prove that institutional quality positively affects the exchange rate elasticity of exports. Also it has been shown that in oil exporting countries institutional quality has a greater impact on exchange rate-export link, compared to oil importers. But these results are only weakly significant and are not robust to the use of other proxy variables. |
| Keywords: | Exchange rates, exports, institutional quality, oil exporters, panel data |
| JEL: | F14 F31 D73 C31 C33 |
| Date: | 2017–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:aze:wpaper:1702&r=all |
| By: | Wael Bousselmi (CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz]); Patrick Sentis (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier) |
| Abstract: | We examine how the Brexit announcement influenced the long-run market performance of British and European listed firms. Using daily data and a sample composed of 3,015 European listed firms (805 UK and 2,210 non-UK), we find that, over a 12-month horizon, the Brexit announcement negatively affected the long-run market performance of UK firms (regardless of their business activities) and European non-British (non-UK hereafter) firms that conduct most of their business activities within the British area. We also provide evidence that, after the Brexit announcement, analysts' earnings forecasts and the realized accounting decreased and the return volatility increased for UK firms |
| Keywords: | Brexit,buy-and-hold,event study,financial market,macroeconomic news |
| Date: | 2018–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01954920&r=all |
| By: | Karine Constant (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Marion Davin (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier) |
| Abstract: | In this paper, we consider the unequal distribution of climate change damages in the world and we examine how the underlying costs can spread from a vulnerable to a non-vulnerable country through international trade. To focus on such indirect effects, we treat this topic in a North-South trade overlapping generations model in which the South is vulnerable to the damages entailed by global pollution while the North is not. We show that the impact of climate change in the South can be a source of welfare loss for northern consumers, in both the short and the long run. In the long run, an increase in the South's vulnerability can reduce the welfare in the North economy even in the case in which it improves its terms of trade. In the short run, the South's vulnerability can also represent a source of intergenerational inequity in the North. Therefore, we emphasize the strong economic incentives for non-vulnerable - and a fortiori less-vulnerable - economies to reduce the climate change damages on - more - vulnerable countries. |
| Keywords: | international trade,heterogeneous damages,climate change,overlapping generations |
| Date: | 2018–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01947416&r=all |
| By: | Elisa Trujillo (Chair of Energy Sustainability (UB), University of Barcelona.) |
| Abstract: | This paper explores energy trade in the electrical market by proving a solid theoretical model along with a comprehensive empirical analysis. The model rests on standard goods trade gravity models, which we adapt to energy trade in the electrical market. We derive a tractable gravity equation, which we then estimate with standard gravity techniques. We use energy trade ows between European countries to quantify the effect of economic, structural, cultural and institutional variables on energy ows. The results reveal that energy trade determinants are similar to trade in goods, and that standard notion of international economics like comparative advantage emerge in energy economics. However, we observe some distinctive traits. Our results suggest that energy trade ows are mainly driven by demand at the importer due to an increase in economic activity and institutional agreements in the context of energy integration. |
| Keywords: | gravity equation, electricity trade, Energy Market Integration, European single market |
| JEL: | F20 F21 F23 Q40 Q43 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1901&r=all |
| By: | Noe Wiener (Department of Economics, University of Massachusetts, Amherst) |
| Abstract: | Competition between immigrant and native workers takes place in labor markets that are segmented along various, often unobservable dimensions. It is desirable to measure the extent to which native workers are effectively shielded from competition by immigrant workers by virtue of such patterns of segmentation. This paper proposes measures of group differences in labor market segmentation on the basis of incomplete data, such as can be obtained from the US Census. These measures are derived from a general class of models of labor competition in the Smithian tradition. The observed wage distributions of native and foreign-born workers in the United States (at the national and metropolitan level) can be approximated remarkably well with this class of model, suggesting that a parsimonious account of wage inequality is feasible. |
| Keywords: | Immigration, labor market competition, segmented labor markets, wage inequality, statistical equilibrium |
| JEL: | J15 J31 J42 J61 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1901&r=all |
| By: | Miguel Almunia; Pol Antràs; David Lopez-Rodriguez; Eduardo Morales |
| Abstract: | We exploit plausibly exogenous geographical variation in the reduction in domestic demand caused by the Great Recession in Spain to document the existence of a robust, within-firm negative causal relationship between demand-driven changes in domestic sales and export flows. Spanish manufacturing firms whose domestic sales were reduced by more during the crisis observed a larger increase in their export flows, even after controlling for firms’ supply determinants (such as labor costs). This negative relationship between demand-driven changes in domestic sales and changes in export flows illustrates the capacity of export markets to counteract the negative impact of local demand shocks. We rationalize our findings through a standard heterogeneous-firm model of exporting expanded to allow for non-constant marginal costs of production. Using a structurally estimated version of this model, we conclude that the firm-level responses to the slump in domestic demand in Spain could well have accounted for around one-half of the spectacular increase in Spanish goods exports (the so-called ‘Spanish export miracle’) over the period 2009-13. |
| JEL: | F12 F14 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25372&r=all |
| By: | Keith Head; Thierry Mayer |
| Abstract: | This paper estimates the role of country-variety comparative advantage in the decision to offshore assembly of more than 2000 models of 197 car brands headquartered in 23 countries. While offshoring in the car industry has risen from 2000 to 2016, the top five offshoring brands account for half the car assembly relocated to low-wage countries. We show that the decision to offshore a particular car model depends on two types of cost (dis)advantage of the home country relative to foreign locations. The first type, the assembly costs common to all models, is estimated via a structural triadic gravity equation. The second effect, model-level comparative advantage, is an interaction between proxies for the model's skill and capital intensity and headquarter country's abundance in these factors. |
| Keywords: | FDI;Gravity;Offshoring |
| JEL: | F1 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2018-22&r=all |
| By: | Till Nikolka |
| Abstract: | This paper investigates the link between family ties and return migration using Danish full population register data. Couples returning from Denmark to the non-Nordic countries are positively selected with respect to income of the primary earner. Positive selection holds for male and female primary earners, but is weaker among dual earner couples and among couples with children. Results suggest that schooling considerations as well as factors related to cultural identity play a role for return decisions of couples with children. |
| Keywords: | International migration, family migration, return migration, education |
| JEL: | F22 J13 J61 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_286&r=all |
| By: | Francesca Borgonovi; Artur Pokropek (European Commission - JRC) |
| Abstract: | The paper examines the role of education in shaping individuals’ attitudes towards migration in European countries using data from the 2012, 2014 and 2016 editions of the European Social Survey (rounds 6, 7 and 8). Results indicate that, despite the large influx of migrants experienced by many European countries in 2015, attitudes towards migration reported by 25-65 year olds in Europe did not vary significantly over the period considered. Education was strongly associated with individuals’ attitudes towards migration although the strength of the association and how the association changed over time varied greatly across countries. On average a difference of one standard deviation in educational participation is associated with a difference of 20% of a standard deviation in reported opposition to migration. Around three quarters of the association between education and opposition to migration can be explained by the lower economic threat, cultural threat and prejudice that individuals with higher educational participation experience. Between 2014 and 2016 the overall association between education and attitudes towards migration became weaker in countries with an increase in foreign-born population, a decrease in polarisation that was accompanied by no changes in overall levels of opposition to migration. The presence of migrants in a country and the unemployment rate moderate the extent to which the association between education and attitudes towards migration is mediated by cultural threat but not economic threat or prejudice. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc112909&r=all |
| By: | Sharat Ganapati (Walsh School of Foreign Service and Department of Economics, Georgetown University); Rebecca McKibbin (School of Economics, University of Sydney) |
| Abstract: | Pharmaceutical prices are widely dispersed across countries with comparable quality standards. We study two elements of this dispersion; non-tariff barriers and buyer bargaining power. Under monopoly, generic drug prices are 3-4 times higher in the United States. With 6 or more competitors, generic drug prices are similar across countries. Motivated by this, we use a bargaining model to examine two policy solutions to reduce drug prices. First, we remove non-tariff barriers to increase the number of competitors through a reciprocal approval arrangement and market entry. Second, we explore the US government's unexploited purchasing power to negotiate drug prices. Regarding Medicaid, the first measure can reduce total expenditures by 8% and the second by 18%. There is very little additional savings from doing both procedures in tandem. |
| Keywords: | Law of One Price, Competition, Bargaining, Pharmaceuticals, Non-Tariff Barriers, Healthcare Economics, International Trade |
| JEL: | I11 F14 L44 |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~18-18-23&r=all |
| By: | Hicham Ganga; Javier Alonso; Vincenzo Spiezia; Jan Tscheke |
| Abstract: | This paper presents econometric evidence on the determinants of domestic and cross-border e-commerce in Spain based on BBVA anonymised data. The paper applies the gravity model of trade to explain online credit card payment flows, using all private customer transactions of BBVA for Spain. |
| Keywords: | Working Paper , Consumption , Digital economy , Analysis with Big Data , Spain |
| JEL: | B22 F41 L81 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1818&r=all |
| By: | Yanling Chang; Eleftherios Iakovou; Weidong Shi4 |
| Abstract: | Blockchain in supply chain management is expected to boom over the next five years. It is estimated that the global blockchain supply chain market would grow at a compound annual growth rate of 87% and increase from \$45 million in 2018 to \$3,314.6 million by 2023. Blockchain will improve business for all global supply chain stakeholders by providing enhanced traceability, facilitating digitisation, and securing chain-of-custody. This paper provides a synthesis of the existing challenges in global supply chain and trade operations, as well as the relevant capabilities and potential of blockchain. We further present leading pilot initiatives on applying blockchains to supply chains and the logistics industry to fulfill a range of needs. Finally, we discuss the implications of blockchain on customs and governmental agencies, summarize challenges in enabling the wide scale deployment of blockchain in global supply chain management, and identify future research directions. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1901.02715&r=all |
| By: | Birg, Laura |
| Abstract: | In this paper, I study the effect of a change in the mandatory manufacturer rebate on wholesale prices for pharmaceuticals on competition by parallel imports. First, I analyze the effect of a manufacturer rebate on competition by parallel imports in a two-country model. An increase in the manufacturer rebate increases the market share of parallel imports. Second, I exploit a policy reform in Germany in 2010 that increased the manufacturer rebate by 10 percentage points. Using a data set with prescription drugs with competition from parallel imports, I estimate the effect of the change in the manufacturer rebate on competition by parallel imports. Estimation results suggest that an increase in the manufacturer rebate has increased the market share of parallel imports. |
| Keywords: | parallel imports,manufacturer rebate,pharmaceuticals,regulation |
| JEL: | F12 I11 I18 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:363&r=all |
| By: | Guntram B. Wolff |
| Abstract: | This Policy Contribution, based on a note written for the Bundestag EU Committee, explores the possible consequences of a no-deal Brexit for the European Union and assesses preparations on the EU side. It also provides guidance on the optimal strategy for the EU, depending on the choices made by the United Kingdom. Overall, a no-deal Brexit would be disruptive in the short-term - There would be immediate very significant administrative and logistical challenges in trade. Preparations to reduce those disruptions are underway but are unlikely to be sufficient. But while Most-Favoured Nation tariffs will affect some sectors significantly, the macroeconomic effect on the German economy might not be huge. If the UK fails to honour its financial commitments to the EU, about €16.5 billion would be missing for the remainder of the current EU budgetary period. The gap could be filled thanks to the existing ‘own resources’ ceiling. The overall missing ‘Brexit bill’ would amount to about €45-50 billion. Not honouring financial commitments would be considered by the EU as akin to default and would likely lead to an uncooperative no-deal Brexit. It would be more disruptive than a cooperative no-deal Brexit, in which the EU and the UK cooperate on a number of pressing emergency files. The European Commission has issued a number of draft regulations to mitigate the effects of a no-deal Brexit, including on issues such as aviation and visas. These are comprehensive but would not offset the effects of a no-deal Brexit, which would be highly disruptive in some sectors. The effects of a no-deal Brexit in the medium to long term are difficult to assess. A no-deal Brexit would lead to deterioration in long-term political relationships, which would make a new trade arrangement and other cooperation in the future less likely. A specific concern is the situation in Ireland, which is also the most contentious part of the Brexit negotiation. If the EU wants to protect the integrity of its single market, a no-deal Brexit will mean the imposition of customs controls on the Irish border. The European Commission’s draft legislation aims to preserve the peace process, but a hard border could provoke renewed violence. The overall strategic direction the EU should take would be to increase the cost to the UK of a no-deal Brexit as much as possible (respecting ethical limits), while showing more flexibility over the political declaration and possibly the withdrawal deal itself. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:29074&r=all |
| By: | Bilal Malaeb (University of Southampton); Jackline Wahba |
| Abstract: | This paper provides overall evidence of the migration dynamics in Jordan between 2010 and 2016, during which the country experienced a large influx of Syrian refugees. This paper gives a detailed description of immigration in Jordan during that period in particular the composition, characteristics and labour market activities of immigrants in Jordan. It also examines the emigration and return migration patterns of Jordanians as well as the changes in their migration dynamics before and after the inflow of Syrian refugees. We find evidence of a fall in temporary international migration of Jordanians during this period. We also find that almost half of current emigrants have left Jordan with their entire family. Furthermore, we also find a decrease in return migration across the two years. When analysing data on immigrants, we find a change in immigrants’ geographical distribution in 2016 compared to 2010, with lower shares of immigrants in areas of high refugee population. Despite similar distribution across occupations of immigrants and refugees in 2016, we find lower immigrants’ share in sectors like manufacturing, in which refugees are concentrated. Immigrants themselves have increased their engagement in informal work and differed in occupations and economic activities from 2010 to 2016 suggesting that immigrants might have been affected by the refugee influx. |
| Date: | 2018–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1190&r=all |
| By: | Ilpo Kauppinen; Panu Poutvaara |
| Abstract: | The Tiebout hypothesis suggests that people who migrate from more to less redistributive countries are more negative towards redistribution than non-migrants. However, differences between migrants’ and non-migrants’ redistributive preferences might also reflect self-interest. We present a model in-corporating these competing mechanisms and test it using survey data on Danish emigrants and non-migrants. We find strong support for the Tiebout hypothesis among men, while women’s preference patterns are opposite to what the hypothesis predicts. Even though emigrants neither pay taxes nor receive benefits in their country of origin, they tend to support policies that would be beneficial for people like themselves. |
| Keywords: | Migration; emigration; welfare state; redistribution; political preferences |
| JEL: | D64 D72 F22 J61 H20 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_283&r=all |
| By: | Michele Starnini; Mari\'an Bogu\~n\'a; M. \'Angeles Serrano |
| Abstract: | The increasing integration of world economies, which organize in complex multilayer networks of interactions, is one of the critical factors for the global propagation of economic crises. We adopt the network science approach to quantify shock propagation on the global trade-investment multiplex network. To this aim, we propose a model that couples a Susceptible-Infected-Recovered epidemic spreading dynamics, describing how economic distress propagates between connected countries, with an internal contagion mechanism, describing the spreading of such economic distress within a given country. At the local level, we find that the interplay between trade and financial interactions influences the vulnerabilities of countries to shocks. At the large scale, we find a simple linear relation between the relative magnitude of a shock in a country and its global impact on the whole economic system, albeit the strength of internal contagion is country-dependent and the intercountry propagation dynamics is non-linear. Interestingly, this systemic impact can be predicted on the basis of intra-layer and inter-layer scale factors that we name network multipliers, that are independent of the magnitude of the initial shock. Our model sets-up a quantitative framework to stress-test the robustness of individual countries and of the world economy to propagating crashes. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1901.01976&r=all |
| By: | Bilal Malaeb (University of Oxford); Jackline Wahba |
| Abstract: | The Syrian refugee influx in Jordan came on top of an additional 1.6 million foreigners residing in Jordan. The non-national population of refugees and immigrants had increased Jordan’s population of 6.6 million by about 45%. This raises an important question on whether the inflow of refugees has displaced immigrants in the Jordanian labor market. In this paper, we use novel data from Jordan from before and after the Syrian refugee influx to test whether economic immigrants were affected by Syrian refugees. We address several threats to identifications: the selectivity of immigrants and the geographic sorting of immigrants and refugees within Jordan using instrumental variable approach. We find that, as a result of the Syrian refugee influx, immigrants were more likely to work in the informal sector, and they worked fewer hours and had lower total wages as a result. The results suggest that the main competition that occurred in the Jordanian labor market was not between refugees and natives, but rather between refugees and economic migrants. |
| Date: | 2018–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1194&r=all |
| By: | Falkingham, Jane; Giulietti, Corrado (University of Southampton); Wahba, Jackline (University of Southampton); Wang, Chuhong (University of Southampton) |
| Abstract: | This paper is the first attempt to study the causal impact of "Brexit", namely the UK's departure from the European Union (EU), on the post-graduation mobility decisions of EU students in the UK. We exploit the British government's formal withdrawal notification under Article 50 as a natural experiment and employ a difference-in-differences design. Using data from a new survey of graduating international students, we find that EU graduating students are significantly more likely than non-EU graduating students to plan on leaving the UK upon graduation immediately after the announcement. Interestingly, results are especially driven by students from the new EU countries and students from the EU14 countries who are undecided of their migration plans. We further show that the deterrent effects are heterogeneous and depend on age and subject among others. These findings carry important implications for post-Brexit UK and for other European countries with emerging calls for their own referendums. |
| Keywords: | Brexit, Article 50, higher education, international students, intention to leave |
| JEL: | J15 J61 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12032&r=all |
| By: | Bødker, Jonas Ehn (Aarhus University); Maibom, Jonas (Aarhus University); Vejlin, Rune Majlund (Aarhus University) |
| Abstract: | There is a large literature documenting that workers in exporting firms receive higher wages on average than workers in non-exporting firms. This is also the case for Denmark, where the unconditional exporter wage gap is 3 percent. However, little is known about the sources behind the gap: Is it because more productive (and/or higher paying) firms export, because more productive workers select into the export sector, or is it because matches in the export sector are more productive? In this paper we decompose the gap in wages into these different sources and assess their relative importance. We are the first to show that the presence of exporter-specific worker traits, that are unobservable to the econometrician, is the primary driver of the gap. To reach this finding, we employ a novel econometric strategy and exploit two state-of-art estimators. We start out with an AKM-style wage equation with worker, firm, and match fixed effects. We then use the model in a series of classical decompositions of the exporter wage gap. We show that allowing workers to have time-invariant traits specific to the exporting sector is very important for correctly assessing which factors drive the exporter wage gap. Our results suggest that workers in exporting firms have e.g. skills that are particularly valuable in the exporting sector, therefore generating higher wages in that sector. We also show that workers make job transitions based on these differential returns and thereby the exporter wage gap becomes a result of workers selecting into the export or non-export sector based on their comparative advantage. Finally, we show that our findings are not changed substantially if we instead perform the analysis in a non-linear framework instead of the linear AKM-style framework. |
| Keywords: | exporter wage gap, AKM decomposition, match effects |
| JEL: | F15 J31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11998&r=all |
| By: | East, Chloe N. (University of Colorado Denver); Velasquez, Andrea (University of Colorado Denver) |
| Abstract: | Recent decades have seen a surge in local interior immigration enforcement. In this paper we examine a little discussed, but potentially important, spillover effect of enforcement policies: changes in high-skilled citizen women's labor supply due to changes in the cost of outsourcing household production. Undocumented immigrants disproportionately supply household services - e.g. as maids, cooks, child care workers, and gardeners - so the price of outsourcing these services is expected to rise in response to enforcement. Combining data on the timing and location of these enforcement policies, with data on labor supply from the American Community Survey over 2005-2012, we implement a difference-in-difference approach with location and year fixed effects to take advantage of the staggered implementation of these policies. We find that an increase in intensity of immigration enforcement in a local area reduced the labor supply of citizen college- educated women with children. Several results suggest that changes in the price of outsourcing are driving these results: 1) we see an increase in time spent on household production tasks among mothers in the American Time Use Survey, 2) we confirm that there is an increase in the wages of household workers, and 3) we see no similar effects for high-skilled men or women without children. This indicates there are important unintended consequences of enforcement policies on high-skilled citizen mothers' ability to work. |
| Keywords: | immigration, labor supply, gender |
| JEL: | F22 J2 J16 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12029&r=all |
| By: | Wasseem Mina (United Arab Emirates University) |
| Abstract: | The six oil-rich Gulf Cooperation Council (GCC) countries adopted interventionist labor policies in the early 1990s to increase employment of nationals and control expatriate labor mobility. In the second half of the 2000s the GCC countries switched to market-oriented, flexible labor policies, intended to equate the cost of national and expatriate labor and enhance expatriate labor mobility. After the 2011 Arab Spring, the GCC labor policy responses had differed. In this paper we empirically examine the impact of market-oriented labor policies on FDI flows to the GCC countries for the period 2007-2015. Using panel data model and accounting for unobservable country effects, results show that cooperative labor employer relations, flexible hiring and firing practices, linking pay to productivity, and reliance on professional management encourage FDI flows to the GCC countries. Robustness checks show a positive influence of at least one dimension of labor market flexibility on FDI flows. This evidence lends support to the influence that flexible labor market policies have on FDI flows. The latter is perceived as key to income diversification in the GCC countries. |
| Date: | 2018–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1201&r=all |
| By: | Nelly El-Mallakh (University of Strasbourg); Jackline Wahba |
| Abstract: | This paper examines the impact of the Syrian refugee inflows on the migration dynamics of Jordanians. Using unique data from Jordan, we exploit the geographical distribution of Syrian refugees across Jordanian subdistricts and examine its impact on international, return and internal migration patterns of Jordanians. We rely on retrospective information to construct individual and household panel data before and after the beginning of the 2011 Syrian war. Using a Difference-in-Differences specification that takes into account unobserved heterogeneity, we find that the Syrian refugee inflows in Jordan do not have any effect on the international and return migration patterns of Jordanians. However, the Syrian presence increases the probability of Jordanian internal migration. Particularly, being a resident in camp governorates increases the probability of moving out while it decreases the probability of moving in. Our results are the first to show the impact of the massive refugee inflows on the host country’s migration dynamics. |
| Date: | 2018–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1191&r=all |
| By: | Michael Baltensperger; Uri Dadush |
| Abstract: | China’s Belt and Road Initiative (BRI) is an international trade and development strategy. Launched in 2013, it is one of the ways China asserts its role in world affairs and captures the opportunities of globalisation. The BRI has the potential to enhance development prospects across the world and in China, but that potential might not be realised because the BRI’s objectives are too broad and ill-defined, and its execution is too often non-transparent, lacking in due diligence and uncoordinated. This Policy Contribution recounts the background of the BRI and its context, what is known about the extent of the initiative and the intentions behind it. The initiative could address very large infrastructure investments gaps, which is welcome and needed. China’s goal of forging stronger links with its trading partners around the world is legitimate assuming, of course, the underlying intent remains peaceful. Though many observers welcome the BRI, many others oppose it for good reasons, while others misunderstand it and oppose it for bad reasons. We identify and discuss concerns about the initiative that relate to its geopolitical objectives, its priorities, its geographic scope, the role of state-owned enterprises, the allocation of resources and issues of transparency and of due diligence. In particular, we show that this initiative deals with a vast number of countries that are at very different states of development, and that an apparent lack of well-defined priorities holds the initiative back. We also highlight the issue of debt overload which is distressing several BRI countries and discourages further projects. There are improvements that China and other stakeholders in the BRI could make to get the most from their investments. The BRI, to be effective, needs to meet the basic conditions of a trade and development strategy, which are clear objectives, adequate resources, selectivity, a workable implementation plan, due diligence and clear communication. Involvement of multilateral lenders could help with this. Finally, China must improve the evaluation of the risks and costs of BRI projects and step up its approach to due diligence to demonstrate that it respects the long-term interests of those countries that are at the receiving end of its BRI projects. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polcon:29024&r=all |
| By: | Werner Kirsch; Wojciech S{\l}omczy\'nski; Dariusz Stolicki; Karol \.Zyczkowski |
| Abstract: | A mathematical analysis of the distribution of voting power in the Council of the European Union operating according to the Treaty of Lisbon is presented. We study the effects of Brexit on the voting power of the remaining members, measured by the Penrose--Banzhaf Index. We note that the effects in question are non-monotonic with respect to voting weights, and that some member states will lose power after Brexit. We use the normal approximation of the Penrose--Banzhaf Index in double-majority games to show that such non-monotonicity is in most cases inherent in the double-majority system, but is strongly exacerbated by the peculiarities of the EU population vector. Furthermore, we investigate consequences of a hypothetical "generalized Brexit", i.e., NN-exit of another member state (from a 28-member Union), noting that the effects on voting power are non-monotonic in most cases, but strongly depend on the size of the country leaving the Union. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1812.07048&r=all |
| By: | Xavier Chojnicki (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé, LEM - Lille - Economie et Management - CNRS - Centre National de la Recherche Scientifique - UCL - Université catholique de Lille - Université de Lille); Yasser Moullan (IRDES - Institut de Recherche et Documentation en Economie de la Santé, IMI - International Migration Institute - University of Oxford [Oxford], CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de la Réunion) |
| Abstract: | Many OECD countries are faced with the considerable challenge of a physician shortage. This paper investigates the strategies that OECD governments adopt and determines whether these policies effectively address these medical shortages. Due to the amount of time medical training requires, it takes longer for an expansion in medical school capacity to have an effect than the recruitment of foreign-trained physicians. Using data obtained from the OECD (2014) and Bhargava et al. (2011), we constructed a unique country-level panel dataset that includes annual data for 17 OECD countries on physician shortages, the number of medical school graduates and immigration and emigration rates from 1991 to 2004. By calculating panel fixed-effect estimates, we find that after a period of medical shortages, OECD governments produce more medical graduates in the long run but in the short term, they primarily recruit from abroad; however, at the same time, certain practising physicians choose to emigrate. Simulation results show the limits of recruiting only abroad in the long term but also highlight its appropriateness for the short term when there is a recurrent cycle of shortages/surpluses in the labour supply of physicians (pig cycle theory). |
| Keywords: | Physician shortages,International migration of doctors,Medical graduates,Foreign-trained physicians |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01793451&r=all |
| By: | Ibrahim Al Hawarin (Al-Hussein Bin Talal University); Ragui Assaad; Ahmed Elsayed |
| Abstract: | This paper investigates the impact of migration shocks on housing conditions and rental prices for locals. The identification comes from the regional variation in the large influx of Syrian refugees to Jordan in the wake of the Syrian conflict starting in 2011. We employ a difference in difference approach to evaluate the change in housing conditions and rental prices in areas with relatively higher flows of Syrian refugees compared to areas with relatively lower flows of Syrian refugees. The paper shows that the share of Syrian refugees seems to have a negative, yet small, impact on housing conditions of locals. Heterogeneity analyses shows that while poorer household are affected more negatively, richer household experience an improvement in their housing outcomes in response to the share of refugees. The paper further shows that housing rents significantly increased in the regions closer to Syrian borders. However, housing quality was more responsive to the crisis in regions that are relatively more distant |
| Date: | 2018–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1213&r=all |