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on International Trade |
| By: | Davis, Eric; Sabala, Ethan; Russell, Dylan; Beckman, Jayson |
| Abstract: | Since the turn of the century, Japan has relied on domestic pork production to supply around half of its pork consumption. In part, this production has been aided by import barriers that have helped shield domestic pork producers from foreign competition. Between 2018 and 2021, Japan ratified trade agreements with the United States, European Union, United Kingdom, and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries that will virtually eliminate these import barriers by 2028. With essentially all of Japan’s pork imports coming from these trade agreement partners, Japan’s pork market could change considerably in the next 6 years, with imports taking a larger share of domestic consumption. For the United States, this change is estimated to lead to an additional $281 million worth of pork exports to Japan. This report uses a global economic model to estimate the impacts of these trade agreements. Results from the Global Trade Analysis Project (GTAP) model suggest that when the trade agreements are fully implemented in 2028, there could be a 3.6- to 13.9-percent increase in pork imports into Japan in 2028 relative to 2018 levels. This increased exposure to foreign competition could also reduce Japan’s pork production between 4.2 and 11.8 percent. |
| Keywords: | Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Livestock Production/Industries, Research Methods/ Statistical Methods |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:338952&r=int |
| By: | Kossi Messanh Agbekponou (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Angela Cheptea (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | This paper analyzes how the quality of produced goods affects firms' position in global value chains (GVCs). Extending the theoretical framework of Chor et al. (2021), we find that quality upgrading increases the span of production stages performed by the firm: it imports more upstream (less transformed) intermediate products and exports more downstream (more highly processed) products. Expansion along GVCs through quality upgrading is accompanied by an increase in input purchases, assets, value added, and profits. These theoretical predictions are tested using 2000-2018 firm-level data on French agri-food industries (from French customs and the AMADEUS database). In line with recent work, we identify firms that participate in GVCs with those that jointly import and export, and measure firms' position in value chains through the level of transformation (upstreamness) of goods they use and produce. We use several ways to measure product quality at firm level, all inspired by the commonly accepted assumption that, at equal prices, higher quality products are sold in larger quantities. Our findings confirm the prediction that higher-quality firms use more upstream inputs produced by other firms to produce more transformed outputs, and perform a larger span of intermediate production stages in-house. We find limited empirical evidence in support of other predictions. |
| Keywords: | International trade, Global value chains, Quality, Firm strategies, Agrifood industry |
| Date: | 2023–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04321554&r=int |
| By: | Rodolfo Campos; Samuel Pienknagura; Jacopo Timini |
| Abstract: | We study the evolution of trade globalization in a set of countries in Latin America (mostly the largest ones) and Asia over the past 25 years. Relying on structural gravity models, we first estimate a proxy of trade globalization that captures the ease of trading internationally with respect to trading domestically. Results indicate that the evolution of trade globalization since the mid-1990s has been similar between the two regions, but very heterogeneous within them. Trade globalization has been particularly strong in agriculture, mining and manufacturing, but has lagged in services. The paper also documents that trade globalization has been particularly strong in agriculture, mining and manufacturing, but it lagged in services. Within region heterogeneity is associated to a set of trade policy instruments, including tariffs, non-tariff measures, WTO membership. and trade agreements. Next, we quantify the economic implications of the estimated globalization trends. Simulations of a multi-sector trade model point to heterogeneous long-term impacts of globalization on GDP—some countries exhibiting substantial gains and others experiencing large losses—, with no single sector playing a preponderant role. |
| Keywords: | Trade; Globalization; Structural gravity; Latin America; Asia |
| Date: | 2023–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/255&r=int |
| By: | Sabala, Ethan; Davis, Eric |
| Abstract: | From December 2018 to January 2021, Japan entered into four trade agreements (TAs) with regions that, collectively, have supplied more than 98.5 percent of Japan’s beef imports every year for at least the last 10 years. These TAs include annual reductions in Japan’s tariff rates to the respective trade partners for beef products and changes to Japan’s beef safeguards, which may generate large changes in the composition of Japan’s market for these products. This study utilizes a global economic model to estimate the impacts of these TAs on Japan’s beef market 5 and 10 years in the future. After 10 years, the model estimates that Japan’s production of beef products will have decreased by 17.2 percent, and imports will have increased by 26.6 percent. Most of the import increases are estimated to come from the United States and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries whose beef export values to Japan see an estimated increase of $413.8 million and $541.0 million, respectively. These impacts are dependent, however, on whether Japan’s beef import safeguards are triggered. |
| Keywords: | Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Research Methods/ Statistical Methods |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:338953&r=int |
| By: | Peluffo Adriana; Scasso Juan |
| Abstract: | We explore the link between export and import products quality to/from high-income countries using a rich database for Uruguay over the period 1997-2008. We use two econometric techniques to tackle the likely endogeneity problem: fixed effects by firm panel models with lagged regressors and dynamic panel models. The most robust results are a negative effect of distance on export quality, and that a higher share of exports to high-income countries and average GDP to export countries have a negative effect on import quality. The negative impact of exports to high-income countries on import quality results can be explained by the type of goods exported to high-income countries, which are mainly commodities in nature with low scope for vertical differentiation and that use mainly local inputs. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4681&r=int |
| By: | Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | This paper theoretically shows that when the trade elasticity is allowed to be country specific and it increases with trade openness across countries, it is possible for the gains from trade to decrease with trade openness across countries under certain conditions, which we call as the diminishing gains from trade. In order to empirically test this possibility, country-specific trade elasticity measures are estimated by using quarterly time-series data for 40 countries, where the model-implied macroeconomic relationship between the home expenditure share and the real income per capita is employed. The average trade elasticity is estimated about 2.7, with a range between 0.3 and 11.9 across countries, which corresponds to the gains from trade of about 30% for the average country. Instead, when a common trade elasticity of 2.7 is used for all countries, the gains from trade are underestimated by about 8% for the average country, showing the importance of using country-specific trade elasticity measures. In a secondary cross-country analysis, the country-specific trade elasticity estimates are shown to increase and the gains from trade are shown to decrease with trade openness measures. It is implied that there are diminishing gains from trade across countries with respect to their trade openness. |
| Keywords: | Trade Elasticity, Gains from Trade, Trade Openness |
| JEL: | F14 F41 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:2306&r=int |
| By: | Muhammad Zeshan (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | We believe that high tariff rates have increased the overall cost of production in Pakistan, and the domestic prices of many products have become much higher than the international market prices. Reducing import tariffs will reduce not only the domestic prices but will also increase the export competitiveness of the country because many imported products are complementary intermediate inputs in various exporting industries. Further, it will allow the country to take advantage of the augmented technology in the new imported products, which will be helpful to add new products to its export portfolio. Hence, we eliminate the import tariffs of the 10 major import items of Pakistan such as cooking oil from Indonesia; textiles, chemicals, basic metals, machinery and electrical equipment from China; mining, coke and petroleum from the United Arab Emirates; and mining and chemicals from the Kingdom of Saudi Arabia. |
| Keywords: | Import Tariffs, Industry, Trade, CGE, Pakistan, |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2023:15&r=int |
| By: | Dale-Olsen, Harald (Institute for Social Research, Oslo) |
| Abstract: | Trade policies might affect firms' market power and their ability to reap product-market mark-ups. Thus, potentially they influence not only firms' economic performance, but also worker pay. Utilising panel-data on Norwegian Manufacturing exporters from 2005-18 and multi-product production function-estimation techniques and recent development within the literature on dynamic treatment effects in event studies with heterogeneous treatment effects, we show that free-trade agreements increase exports and return-on-assets for Norwegian incumbent exporters, but their mark-ups decline. On average, workers in these established firms benefit from free-trade agreements, but this depends on occupations, union strength and labour market tightness. |
| Keywords: | free-trade agreements, price-cost markups, profits, wages, multiproduct-function-estimation, dynamic treatment effects |
| JEL: | D24 F14 L11 J31 J42 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16649&r=int |
| By: | Quang Hoan Truong (Institute for Southeast Asian Studies, Viet Nam Academy of Social Sciences (VASS)); Van Chung Dong (Viet Nam Academy of Social Sciences (VASS)) |
| Abstract: | This study employs data from the Viet Nam Enterprise Survey (VES) for 2007 and 2011 to examine the effect of foreign direct investment (FDI) and product sophistication as well as the interaction between these two factors on the skilled and unskilled labour demand on Viet Nam's small and medium-sized enterprises (SMEs). It finds that the FDI presence in the same industry but different regions-and FDI in the same region but different industries - has a positive effect on the skilled labour demand and a negative impact on the unskilled labour demand. FDI in the same industry has a negative effect on the skilled labour demand and an advantageous impact on the unskilled labour demand. The product sophistication index is found to positively affect the skilled labour demand but decreases the demand for unskilled labour. When interacting with product sophistication, FDI presence in the same industry and region positively affects the skilled labour demand. The study also finds the opposite impacts of different types of FDI presence as well as the interaction between FDI presence and product sophistication on the demand for highly, medium-, and basic-skilled labour. Thus, it is important to consider the opposite effects of different types of FDI and the interaction between FDI presence and product sophistication on SME labour demand by skills level. |
| Keywords: | FDI presence; Product sophistication; SMEs; Skilled and unskilled labour demand; Viet Nam |
| JEL: | F15 F23 J23 |
| Date: | 2023–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2022-40&r=int |
| By: | Kim, Key Hwan (Korea Institute for Industrial Economics and Trade); Kang, Ji Hyun (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The new green industry bill (known as la loi industrie verte) in France can be seen as the French version of the United States’ Inflation Reduction Act (IRA). The bill introduces new subsidies for electric vehicles (EVs), necessitating an analysis of the possible impact of these subsidies on Korean industries. The EV subsidies of the IRA are designed to relocate production and assembly of finished vehicles and key components parts back to the United States or the countries with which the US has free trade agreements (FTAs) in place. The EV subsidies introduced by the new bill in France, on the other hand, base subsidization on the carbon footprints of EV production and distribution. The new system of EV subsidies seeks to reduce the carbon footprint in six major areas of EV manufacturing: steel, aluminum, other materials, battery production, assembly, and transportation. This system effectively favors EVs produced in European countries, whose industries make more use of renewable energy and which are closer to France, at the cost of EV makers in China and elsewhere in Asia, as the long distances involved in transportation essentially preclude them from subsidization, and constitute non-tariff barriers (NTBs). Serving environmental and industrial objectives simultaneously, the new bill embodies an important paradigm shift in policymaking. From a trade perspective, this shift in the focus of protectionist policymaking from intermediate goods such as EV batteries to finished goods such as EVs threatens to see NTBs erected at every stage of the value chain in which these finished goods are produced. More barriers to trade under protectionist statutes like the IRA and France’s new green industry are likely to prompt the reintegration of markets and production bases after decades of geographical separation. Korean businesses will therefore be forced to change their business model, from an export-led approach that favored production in Korea to a model in which they increasingly produce goods in target markets. This has the potential to hollow out Korean industries. The manufacturing-driven Korean economy needs to adapt to new global reality radically different from the heyday of globalization, when major importing countries were neutral about foreign manufacturers. |
| Keywords: | electric vehicles; EVs; batteries; secondary batteries; Inflation Reduction Act; IRA; la loi industrie verte; France; subsidies; EV subsidies; non-tariff barriers; NTBs; protectionism; economic nationalism; economic security; reshoring; France; Korea |
| JEL: | H23 H25 K32 L60 L62 Q56 Q58 |
| Date: | 2023–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietrp:2023_016&r=int |
| By: | Kim, June Dong (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Seong-Bong (SEOUL WOMEN’S UNIVERSIT); Kim, Hyuck-Hwang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 본 연구에서는 미국, EU, 일본, 중국 등 주요국의 최근 전략산업 투자유치 인센티브 제도에 대한 조사를 바탕으로 ‘현금지원제도 확충 및 개선’과 ‘첨단산업 특화단지 및 기회발전특구 활용’을 국내 전략산업 투자유치 인센티브 개선 방향으로 제시하였다. 구체적으로 현금지원제도 확충 및 개선 방향의 경우 현금지원 예산 규모의 확대, 소프트웨어 측면의 연구개발 지출에 대한 지원 확대, 고용창출 효과뿐만 아니라 고용의 질을 함께 고려한 현금지원 규모 산정 등이 필요한 것으로 분석되었다. 이와 함께 전략산업의 대규모 투자에 대한 파격적인 지원이 가능하도록 첨단산업 특화단지와 기회발전특구를 연계하는 방안을 제시하였다. Foreign direct investment(FDI) in Korea remains at a lower level compared to that of major countries, although the amount of FDI in Korea in 2022 on notification basis exceeded 30 billion USD for the first time in history. And major advanced countries have recently expanded investment incentives to strategic industries such as semiconductors and secondary batteries. Therefore, we need to make a landmark transformation of our FDI incentive policies. In this regard, this study first took a look at the recent trends of FDI in Korea and reviewed the incentive systems for attracting strategic investment in major countries such as the U.S., the EU, Japan, and China. And then it attempted to present policy directions for reforming incentive systems to attract strategic investment to Korea. In particular, it aimed to present the improvement of the cash incentive system as well as the use of specialized complexes for advanced industries and specialized zones for equal opportunity development.First, by looking at the recent trends of FDI into Korea (2010~2022), there are more FDI from advanced countries and tax haven countries such as U.S.A., Japan, Singapore, Malta, Netherland than from others. Also, we found more FDI in services industry than in manufacturing industry. Finally, there were more greenfield FDI than M&As. Next, we investigated recent incentive systems to attract investment in strategic industries in some key countries. These include the CHIPS and Science Act along with the Inflation Reduction Act of the U.S., and the European New Investment Strategy, InvestEU Program, and European Chips Act in the EU. We also analyzed Japan’s Direct Investment Promotion Strategy toward Japan, Promotion Act of 5G, Semiconductor Fund, and Green Innovation Fund, as well as China’s FDI expansion policy in the manufacturing sector. From this investigation, we confirmed that major countries (ⅰ) operate investment incentive systems without any discrimination between foreign and domestic firms, (ⅱ) provide large amounts of investment subsidies, and (ⅲ) have formed a social consensus that large-scale assistance is necessary to attract investment in strategic industries.(the rest omitted) |
| Keywords: | Foreign direct investment; subsidies; incentives |
| Date: | 2023–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2023_007&r=int |
| By: | Jesse LaBelle; Immaculada Martinez-Zarzoso; Ana Maria Santacreu; Yoto Yotov |
| Abstract: | We build a stylized model that captures the relationships between cross-border patenting, globalization, and development. Our theory delivers a gravity equation for cross-border patents. To test the model’s predictions, we compile a new dataset that tracks patents within and between countries and industries, for 1980-2019. The econometric analysis reveals a strong, positive impact of policy and globalization on cross-border patent flows, especially from North to South. A counterfactual welfare analysis suggests that the increase in patent flows from North to South has benefited both regions, with South gaining more than North post-2000, thus lowering real income inequality in the world. |
| Keywords: | cross-border patents; gravity; policy; globalization; development |
| JEL: | F63 O14 O33 O34 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:97470&r=int |
| By: | Ikumo Isono (Economic Research Institute for ASEAN and East Asia (ERIA)); Satoru Kumagai (Economic Geography Studies Group, Development Studies Center, IDE-JETRO) |
| Abstract: | The war between Russia and Ukraine since February 2022 has triggered renewed concerns about global economic decoupling. Although the face-to-face meeting between the United States and China leaders in November 2022 agreed to continue the dialogue, it is premature to assert that progress has begun in the direction of avoiding decoupling. We used the geographical simulation model (IDE/ERIA-GSM) to examine the possible economic impacts of global economic decoupling on the Association of Southeast Asian Nations (ASEAN). We define decoupling as policy changes that raise barriers to trade in goods and services and firms' responses to these changes. If policy decoupling occurs despite the efforts of economic agents, the global economy is negatively affected. ASEAN has a relative advantage through positive trade diversion effects if it does not join any of the groups. Adherence to a rules-based international trade order will ultimately benefit ASEAN Member States and people. ASEAN should demonstrate ASEAN centrality and show the world its efforts to avoid decoupling. It should also avoid participating in decoupling if it occurs. |
| Date: | 2023–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2022-10&r=int |
| By: | Alejandro Riaño |
| Abstract: | This article shows how to use the publicy-available firm-level surveys produced by the World Bank Enterprise Surveys (WBES) to reproduce the stylized facts that characterize firm heterogeneity and its relationship with global engagement, as established by Bernard et al. (2007) for manufacturing firms in the U.S. The article describes how to incorporate this exercise in different teaching activities such as small group classes and homework and courseworks assignments. The activities proposed allow students to develop skills handling and analyzing firm-level data and, since WBES surveys are available for more than 150 countries since 2002, they offer an unique opportunity to evaluate the extent to which the stylized facts established from U.S. data are also representative of countries of different size and stage of development. The activities proposed connect the theory of trade with heterogeneous firms to the real-world empirical evidence that motivated the development of these models. |
| Keywords: | teaching international trade, heterogeneous firms, exports, imports, economic data, stylized facts |
| JEL: | A22 F12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10816&r=int |
| By: | Alali, Walid Y.; Alali, Haider |
| Abstract: | This paper examines the effects of the economic Russian Republic's sanctions on global trade, macroeconomic dynamics, and welfare losses by using a calibrated novel model of three groups sets of the global economy. These groups are Russia, the second imposing the sanctions (EU, UK and the United States) and the third group (Turkey, India and China Republic). We assume that each nation of the group has two spheres subject sanctioned, these are the gas and final necessary commodity product of consumer. We consider three different sanctions types: Financial, trade on Gas and trade sanctions on finished products or goods. We demonstrate that currency rate changes reflect the type of sanction and the direction of the consequent sectoral reallocation's within countries, rather than indicating the effectiveness of sanctions. Our welfare study shows that if the third nation group does not ratify the sanctions, the sanctioned country's welfare losses are greatly reduced, and the sanctioning country's welfare losses are increased, but the third country gains from not being associated with the sanctioning group nations. These results demonstrate the need for international sanction coordination but also its difficulties. |
| Keywords: | International coordination, Currency volatility, Economic growth, Reallocation, Welfare, Sanctions |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:280740&r=int |
| By: | Shandre Mugan Thangavelu (Jeffrey Cheah Institute for Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide); Vutha Hing (Institute for International Trade, University of Adelaide) |
| Abstract: | This policy brief examines the structural transformation of the Cambodian economy based on the impact of the CKFTA in terms of trade, output growth, and employment. It summarises the key results of the CKFTA study that examined the impact of the CKFTA on the Cambodian economy - specifically quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and structural transformation of the economy in the global and regional value chains. The policy brief also highlights the key benefits of the CKFTA to the Cambodian economy |
| Date: | 2023–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2022-12&r=int |
| By: | Kim, Ji Hyeon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 본 연구에서는 Digital Policy Alert 데이터베이스를 활용하여 디지털 정책과 규제의 추세와 현황을 살펴보았으며, 주요국을 중심으로 그 세부내역을 검토하였다. 이를 바탕으로 우리나라 디지털 정책과 규제의 대응 방향을 제시 하였다. Digital policies and regulations are changing rapidly in advanced and major emerging economies. Based on the newly built Digital Policy Alert data, we found 3, 876 changes in digital policies and regulations in major countries such as US, EU, China, and India. This is the result of governments’ efforts to embrace the digital age and create a fair and stable digital economy. However, we do not have an accurate understanding of digital policies and regulations’ content around the world. This report aims to provide policy implications for our government’s policy making by objectively analyzing the international trends and status of digital policies and regulations and reducing uncertainty about foreign countries. Digital trade, which is the trade of goods and services through digital means, has increased worldwide due to the development of digital technology. It can be divided into Business-to-Customer(B2C) and Business-to-Business(B2B) trade. By 2023 B2C trade is expected to reach $6 trillion and B2B trade $24.4 trillion. Asia, in particular, accounts for a large share of digital trade, accounting for more than 50% of the world’s B2C trade and on average 78% of B2B trade in 2022. Korea’s digital trade in goods is also expanding, and the proportion of its exports to China and Japan is decreasing while that to Europe is increasing. According to existing data, such as that from the OECD and EUI, the level of restrictions on digital services trade around the world is generally increasing. If we look at the regulatory environment of digital trade more broadly, there are many restrictive measures, but the level of restriction is not very high. Specifically, the level of openness in e-commerce and intellectual property rights have increased. On the other hand, the level of restriction in infrastructure and connectivity, or data is the highest. The level of restriction in other areas, which includes online advertising ban, local presence requirements, is also increasing. By region, Europe and North America have the most open regulatory environment, while Central Asia and South Asia have the most restrictive regulatory environment. East Asia-Pacific’s regulatory environment is more restrictive than the global average.(the rest omitted) |
| Keywords: | Digital policy; digital regulation; digital trade; e-trade; e-commerce |
| Date: | 2023–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2023_006&r=int |
| By: | Philipp Engler; Ms. Margaux MacDonald; Mr. Roberto Piazza; Galen Sher |
| Abstract: | We propose a novel approach to measure the dynamic macroeconomic effects of immigration on the destination country, combining the analysis of episodes of large immigration waves with instrumental variables techniques. We distinguish the impact of immigration shocks in OECD countries from that of refugee immigration in emerging and developing economies. In OECD, large immigration waves raise domestic output and productivity in both the short and the medium term, pointing to significant dynamic gains for the host economy. We find no evidence of negative effects on aggregate employment of the native-born population. In contrast, our analysis of large refugee flows into emerging and developing countries does not find clear evidence of macroeconomic effects on the host country, a conclusion in line with a growing body of evidence that refugee immigrants are at disadvantage compared to other type of immigrants. |
| Keywords: | Immigration; productivity; dynamic gains |
| Date: | 2023–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/259&r=int |
| By: | Julian di Giovanni; Åžebnem Kalemli-Özcan; Alvaro Silva; Muhammed A Yildirim |
| Abstract: | We estimate a multi-country multi-sector New Keynesian model to quantify the drivers of domestic inflation during 2020–2023 in several countries, including the United States. The model matches observed inflation together with sector-level prices and wages. We further measure the relative importance of different types of shocks on inflation across countries over time. The key mechanism, the international transmission of demand, supply and energy shocks through global linkages helps us to match the behavior of the USD/Euro exchange rate. The quantification exercise yields four key findings. First, negative supply shocks to factors of production, labor and intermediate inputs, initially sparked inflation in 2020–2021. Global supply chains and complementarities in production played an amplification role in this initial phase. Second, positive aggregate demand shocks, due to stimulative policies, widened demand-supply imbalances, amplifying inflation further during 2021–2022. Third, the reallocation of consumption between goods and service sectors, a relative sector-level demand shock, played a role in transmitting these imbalances across countries through the global trade and production network. Fourth, global energy shocks have differential impacts on the US relative to other countries' inflation rates. Further, complementarities between energy and other inputs to production play a particularly important role in the quantitative impact of these shocks on inflation. |
| Keywords: | inflation; supply chains; trade economics; structural global network model; supply shocks |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbaacp:acp2023-01&r=int |
| By: | Paula Beltran; Metodij Hadzi-Vaskov |
| Abstract: | Our work is positioned at the intersection of migration and climate change—two key forces shaping the economic outlook of many countries. The analysis explores: (i) the relative importance of origincountry vs destination-country factors in explaining migration patterns; (ii) importance of climate disasters as driver of cross-border migration; and (iii) the importance of climate-driven migration on the overall impact of climate on macroeconomic outcomes. It arrives at the following main findings. First, both origin-country and destination-country contribute to explaining migration outflows from EMDEs, although only the global shocks seem important for advanced economies. Second, climate disasters are important for explaining the origincountry migration shocks in LICs and EMDEs, are especially relevant for smaller countries, and lead to migration of both genders, albeit relatively more for males out of LICs. Third, important portion of climate’s overall impact on economic outcomes—especially agricultural GDP, remittances, and inequality—is captured via climate-driven migration. Finally, higher investment in climate-resilient infrastructure can reduce the impact of climate on cross-border migration, and thereby, result in potentially important economic gains. |
| Keywords: | International Migration; Climate; Climate Disasters |
| Date: | 2023–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/250&r=int |
| By: | Xianglong Locky Liu; James Giesecke; Jason Nassios |
| Abstract: | We investigate the economic consequences and tax efficiency of a 5% international student levy (ISL). Like any tax, ceteris paribus, an ISL will reduce certain economic activities. At the industry level, the negative effects on activity will be largest for sectors involved in the export of education services. At the regional level, the negative economic consequences will be largest for regions that have relatively large export education sectors. Due to limited empirical evidence on the price elasticity of demand for export education, we test the sensitivity of our results under a range of elasticity estimates. For sufficiently inelastic demand for export education, an ISL improves the terms of trade and increases real consumption. By evaluating and comparing the marginal excess burden of an ISL with other hypothetical service export taxes, we demonstrate that these results stem from imposing an export tax at a low rate on a commodity that is generally tax-exempt and carries a low foreign export demand elasticity, rather than being a unique feature of the ISL. If the policy objective is to assist the education sector, our results draw into question the suitability of the ISL. |
| Keywords: | Taxation, International Student, CGE modelling, Excess Burden |
| JEL: | C68 H2 H5 H72 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-343&r=int |
| By: | Felix Hugger; Ana Cinta González Cabral; Massimo Bucci; Maria Gesualdo; Pierce O’Reilly |
| Abstract: | The paper assesses the impact of the global minimum tax (GMT) on the taxation of multinational enterprises (MNEs), based on a comprehensive dataset capturing the global activities of large MNEs. It has four key findings. First, the GMT substantially reduces the incentives to shift profits. Second, the GMT is estimated to very substantially reduce low-taxed profit worldwide through lower profit shifting and top-up taxation. Third, the GMT is estimated to increase CIT revenues. Finally, the GMT is estimated to reduce tax rate differentials across jurisdictions with potential impacts on the allocation of investment and MNE activity. |
| JEL: | F23 H26 H25 |
| Date: | 2024–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:68-en&r=int |
| By: | Carrera Jorge; Montes Rojas Gabriel; Solla Mariquena; Toledo Fernando |
| Abstract: | We study the diffusion of shocks in the global financial cycle and global liquidity conditions to emerging and developing economies. We show that the classification according to their external trade patterns (as commodities’ net exporters or net importers) allows to evaluate the relative importance of international monetary spillovers and their impact on the domestic financial cycle volatility —i.e., the coefficient of variation of financial spreads and risks. Given the relative importance of commodity trade in the economic structure of these countries, our study reveals that the sign and size of the trade balance of commodity goods are key parameters to rationalize the impact of global financial and liquidity conditions. Hence, the sign and volume of commodity external trade will define the effect on countries’ financial spreads. We implement a two-equation dynamic panel data model for 33 countries during 1999:Q1-2020:Q4 that identifies the effect of global conditions on the countries’ commodities terms of trade and financial spreads, first in a direct way, and then by a feedback mechanism by which the terms of trade have an asymmetric additional influence on spreads. |
| JEL: | F41 Q02 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4613&r=int |
| By: | Falcone Guillermo; César Andrés |
| Abstract: | We study the causal impact of export growth on Chilean local economic development by exploiting spatial and time variations in local exposure arising from past differences in industry specialization across local labor markets and the evolution of tariffs and exports across industries. We find that growing exports implied a significant reduction in labor informality and labor income gains in more exposed local markets, driven by job creation and wage growth in the formal sector. These effects concentrate on senior skilled workers. Exposed locations also exhibit a relative decline in monetary poverty. |
| JEL: | F14 F16 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4651&r=int |
| By: | Cho, Jaehan (Korea Institute for Industrial Economics and Trade); Cho, Eun Kyo (Korea Institute for Industrial Economics and Trade); Kyung, Heewon (Korea Institute for Industrial Economics and Trade); Choi, Mincheol (Korea Institute for Industrial Economics and Trade); Kim, Yong (Korea Institute for Industrial Economics and Trade); Kim, Hanhin (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The Biden-Harris Administration issued an Executive Order in August to limit the financing of and investment in advanced technologies in China. Semiconductors, quantum computers, and artificial intelligence (AI) were specifically targeted. Beijing is expected to respond to the White House’s Executive Order by introducing its own financial restrictions targeting American companies, such as delays in the authorization of merger-and-acquisition (M&A) deals, while also taking measures to accelerate the fragmentation of the world economy into blocs by its augmenting technological competitiveness and related ecosystems. The direct recent order and its ramifications on South Korea are likely to be limited because financial linkages between China and Korea in many key technologies are weak. Nevertheless, Korean policymakers need to devise strategies that enhance the competitiveness of Korean certain technologies and attract investments from international investors, while navigating an increase in uncertainties over technology financing and investment stemming from White House action. The Korean strategy ought to (1) prepare for greater uncertainties in the financial markets of certain technologies and for a broadening of scope of certain technologies in the future, and potential calls to cooperate in US-led efforts to contain China, (2) prepare for an escalation of the US-China technology hegemony rivalry across all fronts, now that the US's China policy measures encompass the financial markets, (3) increase support for and technological cooperation with foreign investors, with a view toward attracting friend-shoring investments in Korean technologies, and (4) reinforce financial and investment strategies and loosen regulations to attract cutting-edge technologies through strategic M&A with foreign companies. |
| Keywords: | US-China rivalry; protectionism; reshoring; friendshoring; economic security; economic nationalism; chips; semiconductors; batteries; electric vehicles; EVs; manufacturing; trade policy; trade protectionism; advanced technologies; Korea |
| JEL: | F02 F13 F21 F50 F51 F52 |
| Date: | 2023–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietia:2023_003&r=int |
| By: | DELIS Fotis (European Commission - JRC); DELIS Manthos; LAEVEN Luc; ONGENA Steven |
| Abstract: | We provide estimates of profit shifting for over 2 million firm-year observations in 100 countries over the period 2009-2020. Employing nonparametric estimation techniques within a mainstay model of profit shifting, we examine how profits for both parent and subsidiary firms within a multinational group respond to marginal changes in the composite tax indicator. The key merit of this approach is that it yields firm-year estimates of profit shifting. We find that multinational firms engage in extensive profit shifting by maintaining affiliates in low-tax countries and zero-tax havens. Multinational groups with an ultimate owner in tax havens exhibit the largest responses of profits to the tax incentive. Our comprehensive estimates of global profit-shifting volumes exceed those obtained elsewhere in the literature using firm-level data and are in line with estimates obtained using macro-level data. Our new database opens important avenues to analyse the sources and effects of profit shifting. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:202312&r=int |
| By: | Kim, Hyuck-Hwang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Hyuck-Hwang (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, So Eun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Choi, Kyunghee (Seoul National University Asia Center) |
| Abstract: | South Korea (hereafter Korea) and Indonesia are commemorating the 50th anniversary of their diplomatic ties in 2023. Since establishing a strategic partnership in 2006, the two nations have cultivated strong bonds based on mutual trust and respect. Recognizing the deepening common interests and shared strategic values, Korea and Indonesia upgraded their bilateral relations to a "special strategic partnership" in 2017. This move is particularly significant against the backdrop of heightened strategic competition between the U.S. and China, where Indonesia has emerged as a key partner for Korea to diversify its economic and diplomatic engagements. The challenges posed by the Russia-Ukraine war, coupled with disruptions in the global supply chain caused by the Covid-19 pandemic, have further underscored Indonesia's importance as a critical collaborator for Korea in supply chain cooperation. From Indonesia's perspective, Korea is a major economy that can contribute to the modernization of its manufacturing sector, the relocation of its capital city, and the growth of its defense industry. Notably, as middle powers in the Indo-Pacific region, the two countries share a common goal of fostering an inclusive regional order amid the escalating rivalry be-tween China and the U.S. In light of these dynamics, this paper assess-es the progress of Korea-Indonesia relations to date and delves into the opportunities and challenges that lie ahead in enhancing bilateral cooperation. |
| Keywords: | ROK-Indonesia relations; ROK-Indonesia Comprehensive Strategic Partnership |
| Date: | 2023–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_043&r=int |
| By: | Chikako Baba; Ting Lan; Ms. Aiko Mineshima; Florian Misch; Magali Pinat; Asghar Shahmoradi; Jiaxiong Yao; Ms. Rachel van Elkan |
| Abstract: | Geoeconomic fragmentation (GEF) is becoming entrenched worldwide, and the European Union (EU) is not immune to its effects. This paper takes stock of GEF policies impinging on—and adopted by—the EU and considers how exposed the EU is through trade, financial and technological channels. Motivated by current policies adopted by other countries, the paper then simulates how various measures—raising costs of trade and technology transfer and fossil fuel prices, and imposition of sectoral subsidies—would affect the EU economy. Due to its high-degree of openness, the EU is found to be exposed to GEF through multiple channels, with simulated losses that differ significantly across scenarios. From a welfare perspective, this suggests the need for a cautious approach to GEF policies. The EU’s best defence against GEF is to strengthen the Single Market while advocating for a multilateral rules-based trading system. |
| Keywords: | Geoeconomic fragmentation; cross-border restrictions; trade; innovation; multinational production; energy; European Union; Single Market |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/245&r=int |
| By: | Zahniser, Steven; Avendaño Ruíz, Belem; Astill, Gregory |
| Abstract: | The Food Safety Modernization Act (FSMA) gave the U.S. Food and Drug Administration new powers to ensure that imported food meets U.S. standards. This case study used interviews with Mexican horticultural growers focused on the export market to explore how their industry responded to FSMA’s new requirements. Half of the 26 companies interviewed identified training the head of the firm’s food safety program as the main challenge. Medium-to-large companies (300–1, 000 seasonal workers) were more likely to have modified their food safety activities and hold 3 or more food safety certifications—facilitating the sector’s growing presence in the U.S. market. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, International Relations/Trade |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersrr:338954&r=int |
| By: | Luu Duc Toan Huynh (Queen Mary University of London); Khanh Hoang (Lincoln University); Steven Ongena (University of Zurich; Swiss Finance Institute; KU Leuven; NTNU Business School; CEPR) |
| Abstract: | We assess the economic effects of two decades of recent sanctions on Russian firms. We find that foreign sanctions leave energy firms in Russia unaffected but do undermine firm performance in the other (non‐energy) sectors. While firms with connections to Russian oligarchs linked to Putin are unaffected, sanctions do not differentiate in their impact between firms with Russian and foreign origins. Interestingly, Russian firms seem to be prepared for the Crimea event and the Ukraine war. Ultimately, we find that increasing export to China at country‐level helps alleviate the negative impact of sanctions on firm performance in Russia. |
| Keywords: | firm performance; sanctions; Russia; political connection |
| JEL: | G20 O16 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp23115&r=int |
| By: | Patrick Dylong; Silke Uebelmesser |
| Abstract: | We examine the relationship between beliefs about and attitudes towards immigrants and intergroup contact between natives and migrants in eastern Germany, a region characterized by anti-immigrant sentiment. Using probability-based survey data, we randomly vary respondents’ access to a signal about the true size of the immigrant population in the region. Respondents who receive the signal show more supportive attitudes toward immigration, with effect sizes being more pronounced for attitudes toward high-skilled immigrants. Importantly, estimating conditional average treatment effects shows that respondents who have less contact with immigrants prior to our intervention respond more strongly to the treatment. Additional findings suggest that the level of intergroup contact and biased beliefs about immigrants are complementary targets for information campaigns on immigration. |
| Keywords: | beliefs about immigrants, immigration attitudes, intergroup contact, information campaign |
| JEL: | C90 D83 F22 J15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10808&r=int |
| By: | Kevin R. Kaushal; Lars Lindholt; Hidemichi Yonezawa (Statistics Norway) |
| Abstract: | Unilateral CO2 emission reduction can lead to carbon leakage, such as relocation of power-intensive and trade-exposed industries. In the EU emission trading system, these industries are also subjected to higher cost of electricity due to emission pricing in this sector. As a result, the industries in the EU receive free emission allowances to mitigate carbon leakage as well as CO2 compensation due to higher electricity cost. This paper examines the welfare effects of supplementing free allowances with a CO2 compensation on the power-intensive and trade-exposed goods. The analytical results suggest that introducing CO2 compensation has a regional and global welfare improving effect under certain plausible conditions. Numerical simulations in the context of the EU ETS support the analytical findings if the emission reduction target is stringent enough. |
| Keywords: | CO2 compensation; Emission trading system; Unilateral policy; Carbon leakage |
| JEL: | D61 F18 H23 Q54 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:1008&r=int |
| By: | Rabah Arezki (Harvard Kennedy School); Adnan Mazarei (Peterson Institute for International Economics) |
| Abstract: | The Middle East and North Africa region (MENA) is addicted to fossil fuels, but so too is the rest of the world economy. Solutions to the energy transition have thus to be found in a coordinated global shift in both the supply and demand for fossil fuels and clean(er) energy, where multilateral institutions can play an important role. These institutions could help bolster international technology transfers to MENA, as well as scale up investment and trade in clean energy to facilitate the global energy transition. Given the potential in MENA for solar power, the region could remain a global hub, this time for clean energy. |
| Date: | 2023–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:ppaper:283&r=int |
| By: | Chahir Zaki (University of Orléans); Alzaki Alhelo (University of Khartoum); Kabbashi Suliman (University of Khartoum) |
| Abstract: | The objective of this paper is to examine the nexus between trade, food security and the war in Ukraine with a special focus on Egypt and Sudan. Given the high dependency of the two countries on wheat imports, both experienced high inflation and lower economic growth, threatening their food security. Thus, the contribution of the paper is threefold: first, it examines the macroeconomic implications of the war on the two economies. Second, it analyzes the extent to which food security deteriorated and finally how trade can partially help improve food security in the two countries. To do so, using an error correction model, our results show that the exchange rate pass through was high in Egypt and Sudan and can have long-term implications on inflation. To move forward, we explore how the two countries might develop bilateral capacities targeting agriculture, electricity, and infrastructure with the view to scale-up the economic cooperation. We show, using the trade complementarity index that despite a limited complementarity between their trade structures, there is room to increase their bilateral exports if infrastructure and other behind-theborder barriers are addressed. |
| Date: | 2023–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1659&r=int |
| By: | Marika Viertola (VATT Institute for Economic Research) |
| Abstract: | This paper studies how Nordic multinational enterprises (MNEs) react to tax incentives generated by international corporate income tax rate differences and shift profit to low tax countries. A firm level panel data set containing ownership and accounting information is used to study profit shifting within the time period of 2012-2017. Applying a panel data adjusted Hines-Rice approach including firm and year fixed effects results in statistically significant tax semi-elasticity estimates between -0.7 to -1.3. The results are confirmed by several robustness checks as well as by applying the newest methods in two-way fixed effects literature. This suggests that MNEs with ultimate owners located in the Nordic countries seem to react to tax rate differences by shifting profit. Additionally, the MNEs within the euro area seem to engage more heavily in profit shifting. |
| Keywords: | Multinational frms; proft shifting; international corporate taxation; tax avoidance |
| JEL: | F23 H25 H26 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:fit:wpaper:18&r=int |
| By: | Jeong, Minhyeon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Jeong, Dongyeon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Min, Jiyoung (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Boogyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | The purpose of this research is to derive the future directions of the cooperation between Korea and Central Asia under the global uncertainty that is deepening with the competition and confrontation of major powers that cannot be easily resolved, and as the strategic value of economic security increases. In the situation where the sanctions against the Russian economy are expected to be prolonged, the geographical value of Central Asia, which connects Russia and Europe, becomes more prominent. In addition, given the rich natural resources and relatively young population structure of Central Asia, expanding cooperation with Central Asia has even more significant implications. In this study, we classified the five Central Asian countries into three middle-income countries (Kazakhstan, Uzbekistan, Turkmenistan) and two low-income countries (Kyrgyzstan, Tajikistan) based on the similarities and differences revealed in the structural characteristics of each country's economy and the level of development. According to this classification, we analyzed the direction of cooperation in the digital, climate change, and health and medical sectors, which are currently in high demand for cooperation. |
| Keywords: | Korea-Central Asia cooperation; supply chain; digital transformation; climate change; health and medical |
| Date: | 2023–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2023_044&r=int |
| By: | Lim, Soyoung (Korea Institute for Industrial Economics and Trade) |
| Abstract: | However, the global economy is in the midst of a polycrisis. Major issues in every sector worldwide have prompted a paradigm shift in industrial ODA. In calling for an adjustment to this new paradigm, this report outlines an updated industrial ODA strategy: Industrial ODA 2.0. The Korean Ministry of Trade, Industry and Energy (MOTIE) has announced plans to reform its industrial ODA programs to emphasize supply-chain, green, and technological ODA. These different areas of industrial ODA should be combined to enable developing countries to better deal with the global polycrisis, and also to strengthen the resilience of their industries and trade. The Korean government should expressly include supply-chain and trade ODA in its country partnership strategies (CPS). A system needs to be established in the long run to ensure effective performance management, monitoring, and evaluation in industrial ODA. The Korean government also needs to actively cooperate with the private sector to seize and develop new ODA opportunities, expand the Korean ODA ecosystem, and maximize the intended effects of its ODA activities. |
| Keywords: | Official Development Assistance; ODA; industrial ODA; sustainable development; industrial development; strategic ODA; Korea |
| JEL: | F53 F55 H77 H81 H87 O14 O25 |
| Date: | 2023–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietia:2023_002&r=int |
| By: | Soheila Khajoui; Saeid Dehyadegari; Sayyed Abdolmajid Jalaee |
| Abstract: | The present study aimed to forecast the exports of a select group of Organization for Economic Co-operation and Development (OECD) countries and Iran using the neural networks. The data concerning the exports of the above countries from 1970 to 2019 were collected. The collected data were implemented to forecast the exports of the investigated countries for 2021 to 2025. The analysis was performed using the Multi-Layer-Perceptron (MLP) neural network in Python. Out of the total number, 75 percent were used as training data, and 25 percent were used as the test data. The findings of the study were evaluated with 99% accuracy, which indicated the reliability of the output of the network. The Results show that Covid-19 has affected exports over time. However, long-term export contracts are less affected by tensions and crises, due to the effect of exports on economic growth, per capita income and it is better for economic policies of countries to use long-term export contracts. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2312.15535&r=int |
| By: | Fasani, Francesco (University of Milan); Frattini, Tommaso (University of Milan); Pirot, Maxime (University of Milan) |
| Abstract: | Is naturalization an effective tool to boost refugees' labor market integration? We address this novel empirical question by exploring survey data from 21 European countries and leveraging variation in citizenship laws across countries, time, and migrant groups as a source of exogenous variation in the probability of naturalization. We find that obtaining citizen status allows refugees to close their gaps in labor market outcomes relative to non-refugee migrants while having non-significant effects on the latter group. We then further explore the heterogeneity of returns to citizenship in a Marginal Treatment Effect framework, showing that migrants with the lowest propensity to naturalize would benefit the most if they did. This reverse selection on gains can be explained by policy features that make it harder for more vulnerable migrant groups to obtain citizenship, suggesting that a relaxation of eligibility constraints would yield benefits for both migrants and host societies. |
| Keywords: | forced migration, citizenship, asylum policy |
| JEL: | J15 J61 F22 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16651&r=int |
| By: | FATICA Serena (European Commission - JRC); PYCROFT Jonathan; STASIO Andrzej Leszek (European Commission - JRC); STOEHLKER Daniel (European Commission - JRC) |
| Abstract: | We examine the effect of compliance frictions in reclaiming foreign withholding taxes on Foreign Portfolio Investments (FPI) using a comprehensive panel of FPI stocks of 83 countries, including EU Member States, between 2005 and 2019 and country-pair-specific withholding tax rates. We find a negative and statistically significant elasticity of the FPI stock of equity and debt holdings to non-refundable withholding taxes. The estimated elasticities imply that a 10 percentage point reduction in non-refundable withholding taxes increases the FPI stock of equity holdings by 8.2%. In a second step, we employ a general equilibrium model to quantify the macroeconomic implications of compliance frictions. In absence of costs in the withholding tax reclaim process, average GDP in the EU27 countries would increase by 0.10%, capital and wages would rise by 0.21% and 0.06%, respectively, suggesting noticeable macroeconomic costs arising from such compliance frictions. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:202309&r=int |
| By: | Dany Bahar (Brown University; Harvard Growth Lab; Center for Global Development); José Morales-Arilla (Princeton University; Harvard Growth Lab); Sara Restrepo (Development Innovation Lab at the University of Chicago) |
| Abstract: | This paper studies the formal labor market integration and firm creation of Venezuelan immigrants and refugees in Colombia between late 2019 to late 2021. It applies a novel framework to identify segments of the Colombian economy where Venezuelan immigrants and refugees are lagging behind. When it comes to labor market dynamics, we identify professional services as one of the sectors where Venezuelan workers are not integrating fast enough consistently across different parts of the country, hinting that the recognition of professional credentials might be an important bottleneck to effective integration. As for entrepreneurship, we find that sectors where there are fewer firm creations by foreigners as compared to locals include commerce and service industries all across the nation. This paper is accompanied by a set of downloadable files which list sectors of the economy in each geographic department with poor integration of Venezuelan immigrants both for labor markets and firm creation. These lists are meant to be used by national and local policymakers for further investigation of possible market failures or distortions hindering immigrant integration, given our results. |
| Date: | 2022–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:ppaper:280&r=int |
| By: | Chen, Shuai (University of Leicester) |
| Abstract: | This paper examines how unemployment and cultural anxiety have triggered different dimensions of the current populism in the United States. Specifically, I exploit the Great Recession (GR) and the 2014 Northern Triangle immigrant influx (IM) to investigate the effects of recent unemployment and unauthorized immigration on attitudes related to populism. I find that recent unemployment during GR, rather than existing unemployment from before GR, increased the probability of attitudes against wealthy elites by 15 percentage points (PP). Such attitudes are connected with left-wing populism. I identify perceived economic unfairness as a mechanism through which recent unemployment drove left-wing populism. However, cultural anxiety rather than economic distress more likely led to the over 10 PP rise in the probability of anti-immigration attitudes during IM. These attitudes are related to right-wing populism. This study intentionally links distinct economic and cultural driving forces, respectively, to different types of populism, while still accounting for their potential interaction effects. This strategy facilitates disentangling the economic and cultural triggers of the currently surging populism. |
| Keywords: | populism, unemployment, immigration, Great Recession |
| JEL: | A13 D31 J01 J64 P16 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16642&r=int |
| By: | Navid Sabet; Christoph Winter |
| Abstract: | We study the impact of immigrant legalization on fiscal transfers from state to local governments in the United States, exploiting variation in legal status from the 1986 Immigration Reform and Control Act (IRCA). State governments allocate more resources to IRCA counties, an allocation that is responsive to the electoral incentives of the governor. Importantly, the effect emerges prior to the enfranchisement of the IRCA migrants and we argue it is driven by the IRCA’s capacity to politically empower already legal Hispanic migrants in mixed legal status communities. The IRCA increases turnout in large Hispanic communities as well as Hispanic political engagement, without triggering anti-migrant sentiment. |
| Keywords: | distributive politics, state and local government, immigrant legalization |
| JEL: | J15 H72 P16 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10787&r=int |
| By: | António Afonso; José Alves; Sofia Monteiro |
| Abstract: | We assess the impact of geopolitical risk and world uncertainty on the sovereign debt risk of 26 European Economies during the period 1984-2022, through the implementation of OLS-Fixed Effects regressions and the Generalized Method of Moments (GMM). We find that geopolitical tensions and global uncertainty in border countries contribute to the rise of European country’s sovereign risk as measured by 5- and 10-year Credit Default Swaps (CDS) and bond returns. Moreover, this interconnection is more pronounced during turbulent times such as the subprime crisis. Lastly, we found that geopolitical tensions in other country’ groups such as South America and Asia have a significant impact on the government risks of European countries. |
| Keywords: | geopolitical risk, world uncertainty, political tensions, sovereign risk, European economy, GMM, subprime crisis |
| JEL: | C23 E44 G32 H63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10801&r=int |
| By: | Costanza Naguib |
| Abstract: | We analyze the impact of an inflow of foreign workers on the wage distribution of residents in a small open economy like Switzerland. We exploit the fact that Swiss mobility regions were differently affected by the intensity and the timing of the Agreement on the Free Movement of Persons, depending on their distance from the national border. We extend the results by Beerli, Ruffner, Siegenthaler and Peri (2021) by analyzing heterogeneity in treatment effect via causal forests. We find statistically significant evidence that the treatment effect of opening the borders has been heterogeneous across age, education, and type of activity groups. |
| Keywords: | wage distribution, Bilateral Agreements, causal forest, Conditional Average Treatment Effect |
| JEL: | C14 J31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp2312&r=int |
| By: | Ben-Hur Francisco Cardoso; Eva Yamila da Silva Catela; Guilherme Viegas; Fl\'avio L. Pinheiro; Dominik Hartmann |
| Abstract: | Research on productive structures has shown that economic complexity conditions economic growth. However, little is known about which type of complexity, e.g., export or industrial complexity, matters more for regional economic growth in a large emerging country like Brazil. Brazil exports natural resources and agricultural goods, but a large share of the employment derives from services, non-tradables, and within-country manufacturing trade. Here, we use a large dataset on Brazil's formal labor market, including approximately 100 million workers and 581 industries, to reveal the patterns of export complexity, industrial complexity, and economic growth of 558 micro-regions between 2003 and 2019. Our results show that export complexity is more evenly spread than industrial complexity. Only a few -- mainly developed urban places -- have comparative advantages in sophisticated services. Regressions show that a region's industrial complexity is a significant predictor for 3-year growth prospects, but export complexity is not. Moreover, economic complexity in neighboring regions is significantly associated with economic growth. The results show export complexity does not appropriately depict Brazil's knowledge base and growth opportunities. Instead, promoting the sophistication of the heterogeneous regional industrial structures and development spillovers is a key to growth. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2312.07469&r=int |
| By: | Masako Ikefuji; Yoshiyasu Ono |
| Abstract: | Global warming is a serious and acute threat to our planet, but, when negotiating the allocation of permissible carbon emissions, conflicts of interest exist between developed and developing countries. Developing countries insist that global warming is the result of prolonged pollution emissions by developed countries, while developed countries demand that developing countries make efforts comparable to their own to reduce carbon emissions. They both generally believe that stricter emission limits will burden their economies because of the extra abatement costs required. We use a two-country model with wealth preferences and find that the effects of a country’s emission limit on the two countries’ real consumption and pollution emissions differ, depending on the combination of their business situations. If both countries achieve full employment, one country’s stricter emission limit decreases both countries’ real consumption, as expected. However, if one country faces aggregate demand stagnation and the other achieves full employment, a stricter emission limit imposed by the stagnant country increases both countries’ real consumption. |
| Keywords: | persistent unemployment, wealth preferences, pollution, emission restriction, clean technology transfer |
| JEL: | F13 F41 F42 Q52 Q56 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10825&r=int |
| By: | Neuber-Pohl, Caroline (BIBB); Pregaldini, Damiano (University of Zurich); Backes-Gellner, Uschi (University of Zurich); Dummert, Sandra (Institute for Employment Research (IAB), Nuremberg); Pfeifer, Harald (BIBB) |
| Abstract: | By exploiting a labor market reform causing an outflow of German workers to Switzerland, we examine the effect of negative labor supply shocks on training in firms using the market for apprenticeships as an example. Analysis of administrative data reveals that the reform led to more apprentices in German firms despite a decrease in apprentice wages. This can be explained by a standard two-factor production model where firms substitute outflowing skilled workers with more apprentices; setting lower wages is possible because of a rising supply of apprentices owing to substantially improved employment prospects after border openings. |
| Keywords: | negative labor supply shock, training effects after worker outflow, wage effects, training incentives, apprenticeship training supply and demand |
| JEL: | J21 J22 J61 R23 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16652&r=int |
| By: | Schlund, David (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | The introduction of clean hydrogen as a future energy commodity has prompted significant interest in developing dedicated transportation and storage infrastructures as an enabler for cross-border hydrogen trade and cost-efficient supply. This paper addresses the complex challenges associated with the development of a European hydrogen infrastructure within the existing natural gas network while maintaining the security of supply for natural gas. Through an extension of an existing dispatch model for European natural gas supply and transportation by endogenous investments in hydrogen production, transportation, and storage infrastructure, a comprehensive analysis of the interplay between natural gas and hydrogen supply becomes accessible. The new model is formulated as a mixed-integer linear program in order to explicitly consider the binary decision of repurposing natural gas pipelines. The results offer insights into the cost-efficient strategic planning of a European hydrogen network by simulating a range of scenarios with varying economic and technical constraints. The case study finds a dominant role of the availability of renewable energy sources in shaping the network. Also, providing flexibility through flexible imports, production, or hydrogen storage becomes an essential element in a future hydrogen supply chain. The interconnection of all European countries with dedicated hydrogen pipelines is robust across all scenarios. However, the sizing and choice of large import pipelines strongly depend on the assumed techno-economic constraints. |
| Keywords: | hydrogen economics; hydrogen infrastructure; hydrogen storage; hydrogen trade; strategic energy planning; mixed-integer linear program |
| JEL: | C61 L95 M20 Q41 Q42 Q48 |
| Date: | 2023–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2023_008&r=int |
| By: | Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA)); Imam Pambagyo; Yessi Vadila (Economic Research Institute for ASEAN and East Asia (ERIA)); Ivana Markus (Economic Research Institute for ASEAN and East Asia (ERIA)); Livia Nazara (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Digital transformation has profoundly reshaped not only the way we work but also the way we live. It has shifted the focus of goods and services trade, emphasising not only what is produced and traded, but also how it is traded, customised, and delivered. The rapid digital transformation within the ASEAN region has ushered in an array of risks and challenges. These challenges encompass a spectrum of concerns, ranging from the safeguarding of data privacy and fortification against cyber threats to grappling with intensified competition and addressing the ever-widening digital divide. To fully embrace the opportunities presented by the digital age, ASEAN must lay the foundation for an ASEAN Digital Community (ADC) 2045, that can serve as a vision for ASEAN in embracing a new era. This visionary pursuit must be anchored in four pivotal cornerstones: robust data governance, the infusion of value-added principles, the establishment of seamless digital connectivity, and the propagation of digital inclusivity. |
| Date: | 2023–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2023-07&r=int |
| By: | Audi, Marc; Ehsan, Rehan; Ali, Amjad |
| Abstract: | Presently, monitoring and analysing financial integration has become a key function and requirement of the financial regulatory bodies and central banks of the countries. It has also been observed that financial integration is important to make the financial system streamlined and efficient which is eventually used to make monetary policies and to judge a country’s financial performance. Financial integration also highlights disruption in the financial system of the country if it does not work properly. This study has examined the impact of globalization on financial integration in the case of South Asian countries from 1996 to 2020. The results show that level of political instability has a negative and insignificant impact on financial integration. The outcome shows that monetary performance, globalization, and economic misery have positive and significant impacts on financial integration. Fiscal performance has a negative and significant impact on financial integration. Based on the results, it suggested that South countries should make stable monetary and fiscal performance with a rise in globalization to raise financial integration. Moreover, political instability and economic misery should be discouraged for higher financial integration. |
| Keywords: | globalization, financial integration, political instability, monetary performance, fiscal performance, economic misery |
| JEL: | F36 F50 F60 O23 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119365&r=int |
| By: | Mima Sefrina |
| Abstract: | The coronavirus disease (COVID-19) pandemic has accelerated the importance of digital technologies in the economy, particularly in e-commerce and digital financial services. Recognising the importance of digital technologies for economic recovery, the Association of Southeast Asian Nations (ASEAN) leaders signed the Bandar Seri Begawan Roadmap in 2021, which laid the foundation for the integration of the ASEAN digital economy in three phases - recovery, implementation, and transformation - and affirmed their interest in the establishment of a Digital Economy Framework Agreement (DEFA). The DEFA aims to deepen existing digital economy cooperation and ensure the interoperability of digital economy systems. The formulation and signing of the DEFA will require the provision of flexible timelines and technical assistance, as the ASEAN Digital Integration Index shows that ASEAN is still in the early stages of digital economy development and that ASEAN Member States are at different levels of readiness for digital economy integration. |
| Date: | 2023–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:pb-2023-01&r=int |
| By: | Rachael Calleja (Center for Global Development); Beata Cichocka (Center for Global Development); Mikaela Gavas (Center for Global Development); Samuel Pleeck (Center for Global Development) |
| Abstract: | This paper explores how and whether responses to COVID-19, particularly from non-DAC actors, have deepened the transition from an “international” to a “global” development paradigm, and it considers implications for the future of development cooperation. To do so, we map international responses to COVID-19—financial and beyond—to understand the changing nature of development challenges and cooperation as well as the growing role of non-DAC actors as part of this shift. Our analysis shows that while a diversity of actors contributed to international COVID-19 responses, the transition towards a global development paradigm has yet to materialize. Instead, responses to COVID-19 demonstrated clear tensions between the imperative for collaboration and the national interest, with the latter trumping the former. |
| Date: | 2022–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:ppaper:275&r=int |