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on International Trade |
| By: | Bouët, Antoine (CEPII, Paris); Edo, Anthony (CEPII, Paris); Emlinger, Charlotte (CEPII, Paris) |
| Abstract: | We investigate the local effects of trade exposure and immigration on voting behavior in France from 1988 to 2022. We use the content of each candidate's manifesto to construct an anti-globalization voting index for each French presidential election. This index shows a significant increase in the anti-globalization positions of candidates, and a growing anti-globalization vote beyond the far right. We show that increasing local exposure to import competition and immigration increases anti-globalization votes, while increasing export exposure reduces them. We also find that imports have different effects depending on the products imported. While exposure to imports of final goods increases anti-globalization voting, exposure to imports of intermediate goods reduces it. |
| Keywords: | voting, trade, immigration, political economy |
| JEL: | D72 F6 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17353 |
| By: | Vicente Pinilla (Universidad de Zaragoza and Instituto Agroalimentario de Aragón (IA2), Zaragoza, Spain); Agustina Rayes (Instituto de Investigaciones Políticas (Universidad Nacional de San Martín and Consejo Nacional de Investigaciones Científicas y Técnicas), Argentina) |
| Abstract: | From the Independence, the region that later became Argentina was interested in promoting foreign economic relations. One way was to sign trade treaties, in particular since the second half of nineteenth century. All of them had a clear goal: to improve commercial connections not only with European countries but also with American ones. In fact, the literature has recognised those agreements as part of the country´s economic integration into the global system during the so-called First Globalisation (c. 1850-1914). Nevertheless, to the best of our knowledge, their impact on foreign trade has not been measured. Thus, in this research, we ask whether a direct link existed between the signing of agreements and the performance of different types of exports (livestock, crops, and processed agri-food products), and the application of the Most Favoured Nation clause (absolute or conditional). Specifically, the sources used to carry out this analysis are a database of Argentine exports from 1880 to 1929 and each of the ratified trade treaties signed by Argentina during the period (or before). |
| Keywords: | Argentine economic history, Latin American economic history, Bilateral Trade Agreements, Most-Favoured-Nation Clause, First Globalisation |
| JEL: | F13 F14 N56 N76 Q17 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ahe:dtaehe:2406 |
| By: | Chinmaya Behera (Goa Institute of Management); Badri Narayan Rath (Indian Institute of Technology Hyderabad) |
| Abstract: | This study examines the effect of trade openness and COVID-19 shock on output volatility. Quarterly data from 2010 to 2022 are used, focussing on six Member States within the Association of Southeast Asian Nations (ASEAN). The analysis, conducted through timeseries regression, reveals that trade openness had a notable impact on output volatility in most ASEAN Member States, excluding Thailand and Indonesia. Furthermore, it found that the pandemic had an impact on the output volatility of Thailand and the Philippines. Macroeconomic variables were also incorporated, such as foreign direct investment (FDI) and inflation. Under the panel framework, it was found that both variables significantly impacted output volatility. These findings indicate that policymakers should prioritise trade openness and inflation control during uncertain events, such as a global pandemic. |
| Keywords: | Trade openness; COVID-19 shock; Output volatility; Inflation; FDI |
| JEL: | F10 F1 F17 |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-31 |
| By: | Tastan, Kadri |
| Abstract: | The foundation of the European Union-Turkey economic and trade relations lies in the Customs Union and more broadly in the bilateral preferential trade framework, established in December 1995. For over nearly three decades, this partnership has played a pivotal role in integrating Turkish industries into European supply chains, significantly multiplying bilateral trade volumes. However, as the global economic and geopolitical environment has changed and concerns about trade resilience and national security have increased, new trends such as protectionism, offshoring, or friend-shoring are increasingly being discussed. These global developments present new challenges but also opportunities for EU-Turkey relations. |
| Keywords: | Customs Union, single market, European Economic Area, deglobalisation, decarbonisation, re-shoring, friend-shoring, European Chips Act, Critical Raw Materials Act, Carbon Border Adjustment Mechanism, CBAM, Inflation Reduction Act, IRA, Green Deal |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:304323 |
| By: | C.T. Vidya (Centre for Economic and Social Studies (CESS), Hyderabad, India) |
| Abstract: | This paper analyses the trade characteristics, competition networks, and fragility of global trade in goods in the Association of Southeast Asian Nations (ASEAN) economies, particularly in the context of the coronavirus disease (COVID-19). The study covers the 10 ASEAN Member States and 110 trade partners, using the Harmonized System (HS) 6-digit product classification from 2010 to 2021. The findings reveal that ASEAN dominates with trade complementarity. Dense and intense competition networks are found. The electrical and machinery imports from central players are highly sensitive to shocks, with electronics also becoming susceptible to shocks after the pandemic. The study also shows that liquefied natural gas products and countries such as Singapore, Indonesia, Brunei, and Myanmar experienced increased shocks. The research underscores the importance of policymakers prioritising their understanding of trade linkages and potential spillover effects when formulating policies to mitigate the impact of shocks. The findings have implications for policymakers, highlighting the need for them to take a holistic approach when devising policies and strategies to mitigate the adverse effects of global shocks. |
| Keywords: | Export similarity, trade complementarity, competition trade networks, trade fragility, ASEAN |
| JEL: | F14 F15 L14 |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-27 |
| By: | Hanwei Huang; Kalina Manova; Oscar Perelló; Frank Pisch; Kalina B. Manova |
| Abstract: | We study the role of firm heterogeneity and imperfect competition for global production networks and the gains from trade. We develop a quantifiable trade model with two-sided firm heterogeneity, matching frictions, and oligopolistic competition upstream. More productive buyers endogenously match with more suppliers, thereby inducing tougher competition among them to enjoy lower input costs and superior performance. Transaction-level customs data confirms that downstream French and Chilean firms import higher values and quantities at lower prices as upstream Chinese markets become more competitive over time, with stronger responses by larger firms. Moreover, suppliers charge more diversified buyers lower mark-ups. Counterfactual analysis indicates that entry upstream benefits high-productivity buyers, while lower matching or trade costs benefit all buyers, with the biggest boost to mid-productivity buyers. All three shocks generate sizeable welfare gains, especially under package reforms. Global production networks thus mediate bigger effects and cross-border spillovers from industrial and trade policies. |
| Keywords: | production networks, global value chains, matching frictions, imperfect competition, gains from trade |
| JEL: | D24 F10 F12 F14 L11 L22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11302 |
| By: | Kaoru Nabeshima (Waseda University); Ayako Obashi (Keio University); Kunhyui Kim (Nagoya University) |
| Abstract: | In this paper, we develop and examine an indicator for regulatory harmonisation amongst member countries in a given regional agreement based on the regulatory differences between countries using a non-tariff measure (NTM) data set. This study defines the ‘optimal’ set of regulations as the set of regulations where the adoption cost (i.e. differences in regulation between a base country and a partner country) is the lowest, considering all the possible trading pairs in an agreement. This provides guidance to policymakers regarding which country’s regulations could serve as the basis for discussion on regulatory harmonisation. To do so, we examine regional integration efforts in Asia – the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and China–Japan–Republic of Korea Free Trade Agreement negotiations (CJK). |
| Keywords: | NTMs, regional integration, AEC, CPTPP, RCEP, and China–Japan–Korea FTA negotiations |
| JEL: | F13 F14 F15 |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-25 |
| By: | Egger, Peter; Foellmi, Reto; Schetter, Ulrich; Torun, David |
| Abstract: | Countries trade more if they liberalized their trade relationship earlier. We derive a gravity equation featuring this path dependence due to sunk market-access costs that generate incumbency effects. We provide supporting evidence for the underlying mechanism and derive an augmented ACR formula (Arkolakis et al., 2012) for the gains from trade that accounts for incumbency effects. A quantification suggests our mechanism explains up to 25% of countries’ home shares, and the gains from trade are, on average, 10% larger when allowing for incumbency effects. The analysis further reveals novel distributional effects of trade, boosting real wages but reducing profits. |
| Keywords: | incumbency effects, sunk cost of market access, gravity equation, gains from trade, home bias, path dependence |
| JEL: | F12 F14 F15 F17 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:usg:econwp:2024:04 |
| By: | Hinh T. Dinh |
| Abstract: | President Biden's announcement of new tariffs on China, though not economically significant on its own, symbolizes the deepening decoupling of the U.S. and Chinese economies. These tariffs, supported by both major political parties, represent the latest step in a broader strategy that favors policy interventions over traditional free-market principles and aims to protect domestic workers, maintain technological leadership, and prioritize economic security. This policy brief discusses the factors behind this shift in U.S. economic policy, including the experiences from the first and second China shocks. This shift, along with China's subsequent export policy reactions, will have important implications for the trade policies of developing countries. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_28_24 |
| By: | Ugur Aytun (Department of Economics, Middle East Technical University, Ankara, Turkey); Julian Hinz (Faculty of Business Administration and Economics, Bielefeld University , Bielefeld, Germany); Cem Ozguzel (Centre d'Economie de la Sorbonne, Paris School of Economics, Paris, France) |
| Abstract: | In November 2015, Turkey's unexpected downing of a Russian military jet in Syria prompted Russia to impose a swift and comprehensive embargo on specific Turkish exports. This study leverages this quasi-natural experiment to estimate both the immediate and longer-term effects of the imposition and subsequent lifting of these sanctions. Utilizing administrative data encompassing all Turkish exporters, we first examine the impact on trade at the firm level, assessing the direct effects of the embargo, the redirection of trade to alternative markets, and the circumvention through other products. Second, we investigate broader repercussions on domestic operations, including firms' sales, procurement, and employment. Our findings show that while the embargo caused immediate and substantial declines in exports of affected products to Russia, firms partially mitigated these losses through trade diversion. Although relative trade patterns normalized post-sanctions, absolute trade values remained subdued. The analysis reveals that affected firms experienced declines in domestic sales and supplier relationships, with temporary disruptions in employment. However, most negative effects dissipated following the embargo's removal, except for some persistent reductions in procurement and supplier links. These results contribute to the understanding of sanctions' broader economic implications and the resilience of firms facing trade disruption. |
| Keywords: | Sanctions, Embargoes, Firm-level Effects, Gravity |
| JEL: | F10 F13 F14 F51 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:met:wpaper:2404 |
| By: | Katharina Erhardt; Apoorva Gupta |
| Abstract: | This paper aims to understand the pathways by which exporters become entities that sell multiple goods to multiple customers. To understand firms’ export strategies, we analyse new trade flows – new seller-buyer-product combinations – of individual exporters. Our first finding highlights that these new trade flows are an important margin for firms of all size classes, accounting for approximately 62% of their overall trade flows. Classifying new trade flows into going-wide (introducing new products) and going-deep (reaching new buyers for existing products), we find that the dominant margin of export expansion depends on the size and life-cycle stage of exporters; smaller firms rely relatively more on going-wide and large firms more on going-deep. We also demonstrate that selling new products is different from selling existing products: Firms target new products to a single, often new, buyer. To rationalize these facts, we propose a conceptual framework where firms allocate scarce sales personnel between selling existing products to more buyers and matching with new buyers for introducing new products. We empirically test and confirm the model’s key predictions. In particular, we use the 2015 Swiss exchange rate shock and show that going-deep is more pronounced as an export strategy when a firm’s effective market size is relatively larger. The findings suggest varying scope and size for firms born in different phases of globalisation. |
| Keywords: | export strategies, product introduction, customer accumulation, buyer-seller relationships, multi-product firms |
| JEL: | F10 F14 L25 O31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11269 |
| By: | MARTINEZ CILLERO Maria (European Commission - JRC); CIANI Andrea (European Commission - JRC); GIANELLE Carlo |
| Abstract: | In order to understand the role of foreign-owned business activity in regional economic development and the relevance of this phenomenon for regional policies, it is necessary, although not exhaustive, to have an appropriate mapping of investment flows that can lead to a regional characterisation of the geography of foreign direct investment (FDI). |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136533 |
| By: | Bhushan Praveen Jangam (School of Management and Entrepreneurship, Indian Institute of Technology Jodhpur, India); Badri Narayan Rath (Indian Institute of Technology Hyderabad, Kandi, Sangareddy, Telangana – 502 284, India) |
| Abstract: | This study examines the relationship between global value chain (GVC) integration and business cycle synchronisation in selected Association of Southeast Asian Nations (ASEAN) countries from 2007 to 2021. Using a panel fixed effects approach, we discover the following key findings: First, we find that GVC integration is associated with both output synchronisation and desynchronisation in ASEAN countries. Second, we notice that the outcomes differ depending on the type of GVC integration, such as forward integration, backward integration, or two-sided integration. Third, for a more in-depth understanding, we conduct an industry-specific analysis. We examine three major industry categories: manufacturing, services, and high-technology industries. The findings show mixed evidence of an association between GVC integration and BCS in these industries. The findings highlight the shock transmission associated with GVC integration. |
| Keywords: | Global value chains; Business cycle synchronisation; Fixed effects; Industries; ASEAN |
| JEL: | F1 C5 L6 L8 |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-28 |
| By: | Paola Conconi; Florin Cucu; Federico Gallina; Mattia Nardotto |
| Abstract: | The European Union (EU) has long been accused of suffering from a “democratic deficit.” The European Parliament (EP), the only EU institution directly elected by citizens, is seen as having limited powers. Moreover, its members (MEPs) are often portrayed as unresponsive to the interests of their constituents due to the second-order nature of European elections: instead of being shaped by EU policies, they are driven by domestic politics. In this paper, we provide evidence against these Eurosceptic arguments using data on a key policy choice made by MEPs: the approval of free trade agreements. First, we show that MEPs are responsive to the trade policy interests of their electorate, a result that is robust to controlling for a rich set of controls, fixed effects, and employing an instrumental variable strategy. Second, we carry out counterfactual exercises demonstrating that the EP’s power to reject trade deals can help explain why only agreements with broad political support reach the floor. Finally, against the idea that European elections are driven solely by domestic politics, we find that the degree of congruence between MEPs’ trade votes and their electorate’s interests affects their re-election chances. |
| Keywords: | EU democratic deficit, European Parliament, roll-call votes, trade agreements |
| JEL: | F13 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11405 |
| By: | Alvaro Silva |
| Abstract: | This paper studies inflation in small open economies with production networks. I show that production networks alter the elasticity of the consumer price index (CPI) to changes in sectoral technology, factor prices, and import prices. Sectors can import and export directly but also indirectly through domestic intermediate inputs. Indirect exporting dampens the inflationary pressure from domestic forces, while indirect importing increases the inflation sensitivity to import price changes. Computing these CPI elasticities requires knowledge of the production network structure because these do not coincide with typical sufficient statistics used in the literature such as sectoral sales-to-GDP ratios, factor shares, or imported consumption shares. Using input-output tables, I provide empirical evidence that adjusting CPI elasticities for indirect exports and imports matters quantitatively for small open economies. I use the model to illustrate the importance of production networks during the COVID-19–related inflation in Chile and the United Kingdom. |
| Keywords: | inflation; Small open economies; networks; input-output tables; COVID-19 |
| JEL: | C67 D57 E31 F14 F41 L16 |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:99025 |
| By: | K.P. Prabheesh (Indian Institute of Technology Hyderabad, India); C.T. Vidya (Center for Economic and Social Studies, Hyderabad, India.) |
| Abstract: | This paper examines the global semiconductor industry trade network and the place of the Association of Southeast Asian Nations (ASEAN) in it. The network analysis parameters (e.g. degree centrality, eigenvector centrality, and closeness) are calculated for two semiconductor product classifications (i.e. Harmonized System (HS) 8541 and HS 8542) as well as key inputs for the manufacturing process and testing, packaging, and distribution. The study finds that the coronavirus disease (COVID-19) pandemic has a significant adverse effect on the semiconductor trade network. It finds that the central position in the network is determined by Germany, the United States, China, Belgium, India, Italy, Spain, the Netherlands, France, and the United Kingdom. It is also found that Singapore, an ASEAN Member State, occupies the central position in the trade network. Other ASEAN Member States, such as Viet Nam, Malaysia, Thailand, the Philippines, and Indonesia, have been well integrated in the trade network in recent years. However, countries such as Myanmar, Cambodia, Brunei, and the Lao People’s Democratic Republic (Lao PDR) are still in the peripheral area of the network. Nonetheless, over the years, these countries have improved their participation in semiconductor trade.The COVID-19 pandemic has impacted trade in key inputs and manufacturing parts of semiconductor production. It has drastically reduced the trade flows, connectivity, and dependence of many countries in the network. |
| Keywords: | Semiconductor trade; COVID-19; ASEAN; trade network; regional trade |
| JEL: | D85 F14 F15 L63 |
| Date: | 2024–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-32 |
| By: | Arundhati Sinha Roy; Anwesha Aditya; Siddhartha Chattopadhyay; Sugata Marjit |
| Abstract: | Traditional gravity models posit an inverse relationship between geographical distance and bilateral trade due to increased transportation costs. However, recent literature suggests that bilateral service trade may increase between two countries located at an appropriate geographical distance. Using the Poisson Pseudo-Maximum Likelihood (PPML) method, this research analyses two key effects of time difference for 162 countries in 2018 - the continuity effect (enabling 24/7 operations) and the synchronization effect (influenced by cultural and/or institutional differences) for aggregate services, ICT-enabled services, and travel-transportation services. Our findings indicate a positive continuity effect across all service categories, while the synchronization effect varies across categories. We also find that 8-10 hour time difference between two countries appears most advantageous for ICT-enabled service trade between them. This paper underscores the importance of ICT and physical infrastructure, coupled with transparent governance, to boost service trade. |
| Keywords: | service trade, time zone difference, continuity effect, synchronization effect, information and communication technology (ICT) |
| JEL: | F10 F14 L86 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11290 |
| By: | Jean-Marie Baland (University of Namur); François Woitrin (University of Namur); Cédric Duprez (National Bank of Belgium); Wouter Gelade (University of Namur) |
| Abstract: | In this paper, we develop a model of North-South trade to investigate the impact of Fair Trade. In the absence of a label, Southern producers are exploited by monopsonisitic traders who export to Northern markets. The Fair Trade label certifies the adoption of high labour standards and the payment of fair prices to producers in the South. We first show that the label is never Pareto-improving: the welfare of unlabeled producers in the South falls if and only if the welfare of Northern consumers increases. An expansion of Fair Trade tends to exacerbate those effects. We also show that the consequences of fair trade are systematically dampened in environments where traders enjoy more market power. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nam:defipp:2407 |
| By: | Otaviano Canuto |
| Abstract: | Multiple shocks faced by the global economy over the past three years have apparently shaken the conventional wisdom on gains from economic integration, and have sparked widespread calls for protectionist and nationalist policies. Is there already evidence of some ‘deglobalization’, or do the factors that underlie globalization remain strong enough despite the shocks? So far, there are no signs of an overall reversal in the long-term trend of greater global trade integration. However, a partial realignment seems to be underway, reflecting the more durable side of those recent shocks. This is probably leading to higher costs and prices on the margin, in the case of realignments done to overcome shocks of a geopolitical nature. The answer seems to be that global trade has been resilient, although it is undergoing some realignment. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_44_23 |
| By: | Lili Yan Ing (Economic Research Institute for ASEAN and East Asia (ERIA)); Justin Yifu Lin |
| Abstract: | World economic governance was largely dominated by major developed countries in the 20th century. Over the last half-century, we have witnessed a global economic transformation. The shift is evident in the changing global shares amongst developed and developing countries across four key economic metrics: total output, trade in goods, manufacturing value added, and foreign direct investment. What we find is that the substantial transformations are not primarily caused by significant changes in the growth performance of developed countries but rather by the rapid catch-up of a few developing countries. Sustainable economic growth is a continuous process of technological innovation, elevating labour productivity, and industrial upgrading. Drawing on insights from the growth and structural transformation patterns observed in both developed and developing countries, achieving sustainable economic growth requires (i) optimising comparative advantage and effective infrastructure, (ii) managing gradual transitions economically and politically, and (iii) optimising the use of digital transformation |
| Keywords: | Economic transformation, international trade, investment, world economy |
| JEL: | F1 O N P |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-26 |
| By: | Imran Ali, Imran; Foday, Foday; Zahid Usman, Muhammad |
| Abstract: | This study investigates the complex Relationship between Foreign Direct Investment (FDI), Exchange Rates (LEXR), GDP per Capita (LGDPPC), Inflation (LINF), and Natural Resources (LNR). Understanding these dynamics is pivotal for formulating effective economic policies and enhancing economic sustainability. The primary objective is to analyze the long-term and short-term relationships among these variables and to identify their impacts on FDI. The study aims to address how each variable influences FDI and to assess the policy implications of these relationships. By Employing the Johansen Cointegration Test and Vector Error Correction Model (VECM), the study examines the equilibrium relationships and dynamics among the variables. Granger Causality tests are used to determine the predictive relationships between FDI and its determinants. The long-run analysis shows that exchange rates significantly increase FDI, while higher GDP per capita reduces FDI. Inflation and natural resources also affect FDI but to a lesser degree. Short-term dynamics reveal that GDP per capita and natural resources have significant positives impacts on FDI, whereas the effects of exchange rates and inflation are weaker. Granger Causality tests confirm that GDP per capita influences FDI and exchange rates, while inflation affects GDP per capita. The study highlights the importance of economic growth, stable exchange rates, and controlled inflation for attracting FDI. Recommendations include investing in infrastructure and innovation, managing exchange rate volatility, and implementing transparent resource management policies to enhance economic stability and growth. |
| Keywords: | Foreign Direct Investment, Exchange Rates, GDP per Capita, Inflation, Natural Resources, Vector Error Correction Model, Cointegration, Granger Causality |
| JEL: | F62 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122185 |
| By: | Hongyong ZHANG (RIETI); Ha Thi Thanh DOAN (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | Firms hold inventory to manage input shortages and stockout risks. This is particularly true for firms relying on international supply chains and imported inputs. Using a large-scale quarterly government survey of Japanese manufacturing firms (Q1 2015–Q2 2021), we examine firm-level inventory adjustments to supply chain shocks and focus on firms that sourced inputs globally during the pandemic. We find that before the pandemic, relative to firms that purchase inputs only domestically, importing firms tend to have larger inventories (inventories over sales) in materials, work in process (intermediate goods), and finished goods, even after controlling for firm size. After the pandemic, importers significantly and persistently increased their inventories of intermediate inputs, especially for firms with ex ante higher import intensity and multinational firms that experienced supply chain disruptions in China. These results suggest the possibility of a shift from just-in-time to just-in-case production during the pandemic. We then discuss the role of inventories as a buffer against input shortages and other factors affecting inventory holdings, such as the prefecture-level severity of COVID19 infections, industry-level input and output prices, and firm-level financial constraints and uncertainties regarding the economic and business outlook. |
| Keywords: | global sourcing, imports, inventory, COVID-19 |
| Date: | 2024–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-30 |
| By: | Ping, Guo; Hamzah, Hanny Zurina; Chin, Lee |
| Abstract: | The current study aims to discover the impact of cross-border e-commerce (CBEC) exports on regional economic growth in China. A benchmark regression via the fixed panel effect model was conducted based on Chinese provincial data from 2015 to 2020. The results demonstrated that CBEC exports significantly increased regional economic growth in China. The heterogeneity test also revealed CBEC exports have a significant positive impact in less developed regions rather than in more developed regions. Furthermore, the threshold effect test discovered that the technological input of manufacturing enterprises produced a non-linear significant impact on CBEC exports to elevate economic growth. When the proportion of technological input to GDP is less than the threshold of 0.031, the significant impact of CBEC exports on economic growth was larger; and then the impact became smaller and insignificant after the threshold. The findings suggested the Chinese government should vigorously develop CBEC export in terms of improvements in trade facilitation, CBEC talent training, and encouraging enterprises to explore different oversea markets. Simultaneously, attention should be paid to providing more policy support for the development of CBEC exports in less developed areas, and emphasis should be placed on guiding manufacturing enterprises to make rational use of Research and Development(R&D) funds. The empirical parts of this study are conducted by STATA 16 software. |
| Keywords: | Cross-border e-commerce, exports, economic growth, Research and Development Intensity, •Market environment quality, Technological developing level |
| JEL: | F14 F63 R11 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122405 |
| By: | Carsten Eckel; Ina Charlotte Jäkel; Luca Macedoni; Raymond Riezman; Raymond G. Riezman |
| Abstract: | Using firm-level data on production and trade from Denmark, we document that firms frequently employ a strategy of entering new export markets with Carry-Along Trade (CAT), i.e., with products manufactured by other firms. This strategy is surprising because, empirically, CAT products have below average market shares and mark-ups, and trade models predict firms to focus on core products with large sales in export markets with additional fixed and variable costs. To rationalize this new stylized fact, we propose a model where CAT plays a pivotal role in enabling firms to learn about market conditions and assess market viability. In our framework, exporting own-produced core products requires upfront sunk entry investments that create a benefit of knowing the exact market conditions. Firms can learn these market conditions by either investing first based on expected market conditions, or by exporting CAT products that do not require additional investments. We provide empirical evidence in support of our mechanism by showing that entering with CAT is particularly prevalent (i) among small firms, (ii) in distant markets, and (iii) among firms with no prior exporting experience. |
| Keywords: | market entry, carry-along trade, delivery of own goods, learning |
| JEL: | F14 F12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11340 |
| By: | Emanuel Ornelas |
| Abstract: | I study how political competition affects the feasibility of free trade agreements (FTAs). I show that the possibility of political turnover creates strategic motivations for the formation of FTAs. Specifically, a government facing a high enough probability of losing power will have an incentive to form a trading bloc to “tie the hands” of its successor. This incentive mitigates inefficiencies in the incumbent’s decision to form FTAs, regardless of its bias toward special interests. An FTA can affect the likelihood of political turnover as well. Accounting for that effect, I show that an incumbent party with a known bias toward special interests could seek an FTA as a commitment device toward less distortionary policies, thereby enhancing its own electoral prospects. Overall, the analysis reveals the importance of considering the time horizon of policymakers when studying their decision to enter in FTAs. |
| Keywords: | regionalism, free trade agreements, political competition, lobbying |
| JEL: | F15 F13 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11403 |
| By: | Andrew AGYEI-HOLMES (University of Ghana - ISSER); Kwadwo Opoku (University of Ghana - ISSER); Richmond Atta Ankomah (University of Ghana - ISSER); Victor Nechifor (European Commission – JRC); Emanuele Ferrari (European Commission – JRC); Ole Boysen (European Commission – JRC); Antti Simola (European Commission – JRC) |
| Abstract: | This study employs the economy-wide model DEMETRA to provide a detailed characterisation of the impacts of the African Continental Free Trade Area on the Ghanaian economy from 2020 to 2035 and how these economy-wide impacts will affect food consumption and affordability. It considers two liberalisation scenarios – tariff-only liberalisation and tariff and non-tariff measures liberalisation – across four potential liberalisation schedules defined by different government revenue, food security and economic development objectives. Results from a continental-level assessment are linked to the DEMETRA model to accommodate changes in international markets as a result of the establishment of the African Continental Free Trade Area. The study shows that tariff-only liberalisation leads to positive effects on trade and that there is a further boost to trade when tariffs are combined with non-tariff measures. A moderate growth in gross domestic product potentially increases capital stock and intermediate goods for manufacturing. Demand for labour in the manufacturing sector also rises, but labour demand in livestock production declines. In terms of food security, prices of processed food generally decline, while prices of cash crops rise. Overall, household consumption of food and other commodities rises. Ultimately, overall government tax revenue falls as a result of a significant reduction in trade taxes, which calls for innovative ways to expand tax collection in country. |
| Keywords: | Trade, Ghana, Africa, general equilibrium model, food security |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc137662 |
| By: | Hung Tran |
| Abstract: | Heightened geopolitical rivalry has greatly complicated the challenges facing the Global South. Countries identifying with the Global South now have to deal with the long-standing problem of promoting changes in the current international political and economic system to better serve their development needs, while navigating the geopolitically driven fragmentation of trade and investment flows. Moreover, the strategic approaches that could be adopted to deal with those challenges are influenced by the vague definition of the ‘Global South’ itself. Further complicating the picture is the fact that China and Russia have played very ambiguous roles—siding with developing countries in the desire for change, but representing one side of the geopolitical competition for global influence. Against the backdrop of an ill-defined Global South, developing countries need to examine the various approaches pursued by major countries. This can inform their efforts to calibrate an appropriate strategy for themselves, depending on their specific circumstances. |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_07_24 |
| By: | Mina Baliamoune |
| Abstract: | Greater female participation in the labor market and in international trade have been recognized as important drivers for economic growth and essential targets in the context of the United Nations Sustainable Development Goals (SDGs). However, achieving both targets simultaneously will be difficult, if not impossible, in most Middle East and North African (MENA) countries without additional policies to eliminate the remarkably high levels of gender inequality in the labor market. In such countries, women are either excluded from the gains from trade or bear most of the burden of adjustment to greater integration in the global economy. Policymakers should recognize the impacts of greater integration into global trade on women’s labor-market outcomes, and should implement resolute policy measures to alleviate (if not eliminate) these impacts. |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_06-24 |
| By: | Maurice Obstfeld (Peterson Institute for International Economics) |
| Abstract: | Election season debates over trade policy have brought renewed attention to the United States' longstanding deficit in foreign trade. Critics from both the right and left sides of the political spectrum, including Donald Trump and his allies, hold the trade deficit responsible for a range of alleged ills, among them, slower US economic growth, fewer jobs, the decline in manufacturing, and a transfer of American wealth to foreign owners. Trump supporters' ideas to reduce US trade deficits, such as far-reaching taxes on international transactions or forced dollar devaluation, rest on particular theories of why the deficits have arisen and persisted. These theories often have little basis other than macroeconomic accounting identities--relationships that are always true, by definition, and that therefore are consistent with a range of economic outcomes. Two key macroeconomic identities, the national income and product identity and the balance-of-payments identity, have been widely abused as justifications for radical policies to balance US trade. The identities describe relationships that necessarily hold among macro variables, but without the further input of behavioral reasoning, they cannot yield valid predictions or constructive policy conclusions. Identity-based reasoning is especially dangerous because it disguises the collateral damage that superficial fixes may inflict. It is much better to identify and directly correct the distortions that cause excessive trade deficits to emerge and persist. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb24-13 |
| By: | Chien-Chiang Lee (School of Economics and Management, Nanchang University, Nanchang, China Research Center of Central China for Economic and Social Development, Nanchang University, Nanchang, China); Farzan Yahya (College of Finance and Economics, Nanchang Institute of Technology, Nanchang, China) |
| Abstract: | In this paper, we examine the spillover and connectedness between the trade policy uncertainty (TPU) of the United States (US), China, Japan, and the Republic of Korea (henceforth, Korea) under global geopolitical risk (GPR), infectious disease equity market volatility (EMVID), and GPR from North Korea (GPRNK) using a relatively novel time-varying parameter vector autoregression (TVP-VAR) approach. Additionally, method of moments quantile regression is utilised to estimate the asymmetric effect of GPR, GPRNK, and EMVID on TPU. Our findings suggest that there is a high total and directional spillover amongst underlying variables during Sino–US trade friction that further elevated during the coronavirus disease (COVID-19) pandemic period. The US is a net receiver of spillover from the TPU of all economies, while the Chinese TPU receives spillover from EMVID. The results further confirm that both the TPU of China (TPUCN) and the TPU of the US (TPUUS) are vulnerable to EMVID, but the effect is stronger for Chinese TPU in the higher quantiles. Although Japanese TPU is less vulnerable to GPR and EMVID, it is significantly exposed to GPRNK. Korean trade shows resiliency and immunity to pandemic-induced volatility and GPRNK. |
| Keywords: | Trade policy uncertainty, global geopolitical risk, Sino–US trade friction, COVID19 pandemic |
| Date: | 2024–03–21 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-35 |
| By: | Oluwasola Omoju; Emily Ikhide; Augustine C. Osigwe; Rifkatu Nghargbu; Victor Nechifor (European Commission – JRC); Andrea El Meligi (European Commission – JRC); Valeria Soledad Ferreira Gregorio; Ole Boysen (European Commission – JRC); Antti Simola (European Commission – JRC); Emanuele Ferrari (European Commission – JRC) |
| Abstract: | The African Continental Free Trade Area (AfCFTA) is aimed at boosting intra-African trade and promoting regional development. However, the distribution of its benefits and costs are uneven, and it presents opportunities and threats to different sectors of the economy. This report assesses the impact of the AfCFTA on the Nigerian economy, with particular reference to the agri-food sectors. Using the MAGNET and DEMETRA models calibrated on the GTAP 10 database and Nigeria’s 2019 Social Accounting Matrix (SAM) respectively, the analysis shows that the AfCFTA has a negligible impact on GDP, and the impact is much larger under the tariff and NTM scenarios than under the tariff only scenario. Contrary to expectations, government revenue increase significantly as revenue from other sources offset the fall in customs revenue, and this effect is larger under the intermediate input liberalisation schedule. The outputs of industry, utilities, construction, services and agriculture sectors increase while outputs of public services, extractive and processed food sectors reduce. The reduction in the output of the processed food sector leads to an increase in imports of processed food commodities. The increase in output is bigger under the agricultural trade liberalisation schedule. The employment effects also mirror the output effect, with sectors that experience output contraction also experiencing fall in employment and vice versa. Low-skilled labour will be mostly affected. The welfare impact is higher for rural households compared to urban households. For urban households, some outlier households face some welfare losses in 2025 and 2030. But the negative welfare effects turn positive in the transition to 2035 as the AfCFTA benefits expand. In terms of the trade flows, the results show that trade between Nigeria and other AfCFTA member states will increases significantly by 2035. Based on the findings of the study, it is recommended that complementary policies be implemented to stimulate growth. Policies to protect key sectors that are negatively affected, including processed food sector, be implemented. |
| Keywords: | Trade, Nigeria, Africa, general equilibrium model, food security |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc138312 |
| By: | Frédéric Docquier; Ariane Gordan; Michel Tenikue; Aleksa Uljarevic |
| Abstract: | We study the factors that shape attitudes toward immigration in Luxembourg, a wealthy country with a long history of immigration, where 74\% of the population has a foreign background. Overall, a large majority of respondents acknowledge that immigration enriches national identity and has a positive impact on the economy. These attitudes are shaped by characteristics such as age, education and foreign background. Pro-immigration attitudes are stronger among second-generation immigrants and even more pronounced among first-generation immigrants from Portugal, neighboring and non-European countries. In addition, we find that the total share of immigrants in the immediate neighborhood does not significantly influence attitudes towards the economic and identitarian implications of immigration. However, local exposure to immigration influences natives' perceptions of the optimal level of immigration. We provide suggestive evidence that the latter effect is largely driven by recent inflows of non-European immigrants, indicating that acceptance of diversity and multiculturalism might take time. |
| Keywords: | Immigration; Attitudes; Well-being; Neighborhood |
| JEL: | J15 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:irs:cepswp:2024-08 |
| By: | Andres, Pia |
| Abstract: | Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2013, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10, 137 firms in 15 EU countries over the period 1999–2020. I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample. |
| JEL: | R14 J01 |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125801 |
| By: | Hafez Ghanem |
| Abstract: | This brief argues for a pan-African food security initiative that would: 1). encourage free trade in food products between African countries; 2). promote multi-country regional investments in infrastructure to enhance agricultural productivity and resilience to climate change; 3). support public-private partnerships to establish fertilizer factories across the continent; 4). create an African council responsible for coordinating and encouraging agricultural research and development; and 5). support a facility that would ensure vulnerable African countries can finance food imports in times of crisis. |
| Date: | 2022–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaagr:pb_62_22 |
| By: | David Hémous; Simon Lepot; Thomas Sampson; Julian Schärer |
| Abstract: | Intellectual property rights are a recurrent source of tensions between developed and developing economies. This paper provides the first quantitative analysis of optimal patent policy in trading economies. We develop a new model of trade, growth and patenting in which patent protection affects both innovation and market power. The model is estimated using data on patent applications to calibrate patent protection by country and the geography of innovation. Counterfactual analysis yields three main results. First, the potential gains from international cooperation over patent policies are large. However, achieving these gains requires more innovative economies to offer stronger protection. Second, only a small share of these gains has been realized so far. And third, by pushing towards policy harmonization, the TRIPS agreement hurts developing countries without generating global welfare gains. Overall, there is substantial scope for policy reforms to increase efficiency. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:456 |
| By: | Ilkova, Ivelina; Lebastard, Laura; Serafini, Roberta |
| Abstract: | Based on granular data at the product level, this paper looks at whether and how the euro area and the United States have modified their import sourcing strategies since 2016, the role played by geopolitical tensions and the potential impact on import prices. It considers two different, but not mutually exclusive, changes to sourcing strategies for a given product: (i) increasing the number of sourcing countries and (ii) reducing the import market share of the main supplier country. Data suggest that both regions have, on average, increased the number of sourcing countries, particularly for products that are mostly imported from “geopolitically distant” countries (based on UN General Assembly voting records). Broadening the number of supplier countries has come at a cost; however, it has affected only a small share of total imports, with modest implications for inflation and the terms of trade. At the same time, evidence of a reduction in the import share of the main supplier country is more mixed and is generally associated with a shift towards cheaper – but not necessarily geopolitically closer – countries, suggesting that cost considerations take precedence over supply chain resilience and national security concerns. JEL Classification: F14, F51, F62 |
| Keywords: | diversification, fragmentation, geopolitics, rebalancing |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024359 |
| By: | Christoph Böhringer; Knut Einar Rosendah; Halvor Briseid Storrøsten (Statistics Norway) |
| Abstract: | Countries with ambitious climate targets are concerned about carbon leakage to countries with more lenient or no carbon pricing. A common policy measure against leakage is output-based allocation of emissions allowances, whose effectiveness could be further enhanced by consumption taxes levied on the carbon intensity of goods. We combine theoretical and numerical analysis to derive optimal combinations of output-based allocation and consumption taxes for different assumptions on the stringency of emissions reduction targets, the coverage of emissions in regulated sectors, and their trade exposure. A key analytical finding is that output-based allocation and consumption taxes are complements rather than substitutes, i.e., the extent of output-based allocation should be higher if combined with a consumption tax. A key numerical finding is that the optimal output-based allocation and consumption tax rates should be set at almost the same rate and increase substantially with the stringency of the emissions reduction targets. |
| Keywords: | Carbon leakage; output-based allocation; consumption taxes |
| JEL: | D61 F18 H23 Q54 |
| URL: | https://d.repec.org/n?u=RePEc:ssb:dispap:1013 |
| By: | Elsby, Michael W.L.; Smith, Jennifer C.; Wadsworth, Jonathan |
| Abstract: | This article provides a first synthesis of population flows and labor market dynamics across immigrant and native-born populations. We devise a novel dynamic accounting methodology that integrates population flows from two sources-changes in birth cohort size and immigrant flows-with labor market dynamics. We illustrate the method using data for the United Kingdom, where population flows have been large and cyclical, driven first by the maturation of baby boom cohorts in the 1980s and later by immigration in the 2000s. New measures of labor market flows by migrant status uncover the flow origins of disparities in the levels and cyclicality of immigrant and native labor market outcomes and their more recent convergence. An application of our accounting framework reveals that population flows have played a nontrivial role in the volatility of labor markets among the UK-born and, especially, immigrants. |
| Keywords: | immigration; labor market dynamics; worker flows |
| JEL: | R14 J01 |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125889 |
| By: | Paul Lavery; Marina Spaliara; Holger Görg |
| Abstract: | This paper examines whether private equity (PE)-backed companies are better able to remain active on export markets compared to similar non-PE firms, when hit by a negative shock. We look at two such recent shocks, namely the global financial crisis (GFC) and COVID-19 pandemic. We construct two matched samples, one for each crisis period, to assess the resilience of exporting under PE ownership in recessionary periods. We then explore how improvements in working capital management allow PE-backed firms to engage in international activities and maintain their export relationships relative to similar, non-PE-backed firms. Our results show that the export activities of PE-backed firms are significantly more resilient to the e ects of the GFC but less pronounced following COVID-19. PE investment enhances working capital management, which in turn improves the persistence in export markets at the onset of the crises. |
| Keywords: | Private equity buyouts; exporting; working capital; recessions |
| JEL: | F14 G01 G32 G34 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:gla:glaewp:2024_09 |
| By: | Marcus Vinicius de Freitas |
| Abstract: | China is the largest developing country. Africa is the continent with the largest number of developing countries. The China-Africa economic relationship has developed rapidly over the last two decades. China has increased its investment in Africa over the last four decades. Flows surged from $75 million (2003) to $5 billion (2021). This has had both positive and negative impacts on Africa. Infrastructure improvement, job creation, and overall economic growth can be listed as positive results, leading to improved connectivity, trade, and transportation in a continent where infrastructure integration has always been challenging. Creating such opportunities in Africa has supported lower unemployment rates, particularly among young people, which is fundamental in a continent that enjoys a positive demographic bonus. |
| Date: | 2023–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_30-23 |
| By: | Isabelle Tsakok |
| Abstract: | If the recent peaceful transfer of power in Madagascar heralds a new trend, then the Malagasy people can dream big. For decades, the exercise of economic-cum-political power in the hands of a tiny elite has held the entire nation hostage. Today, the high poverty rate—around 80% (2021) stands in stark contrast to the natural resource abundance of this huge enormous island. There is hope, however, that with political stability, the Plan d’Émergence Madagascar (PEM) President Andry Rajoelina will undertake critical investments and reforms the Plan d’Émergence Madagascar (PEM) under President Andry Rajoelina will undertake key critical investments and reforms. If these initiatives persist, Madagascar can grow and exploit the historic market opportunities offered by the African Continental Free Trade Area (AfCFTA). Major sectors like agriculture and agri-business; tourism; textile and apparel industry hold promise for making a major significant contribution to poverty reduction in the short to medium terms, thus strengthening the current fragile recovery towards a more food secure and resilient Madagascar. |
| Date: | 2022–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pb_64-22 |
| By: | Hung Tran |
| Abstract: | The Global South features prominently in the context of geopolitical rivalry and efforts by developing countries to change the current international economic and financial architecture. While there are questions about whether some countries—such as China or Russia—should be considered parts of the Global South (GS) , it is obvious that Africa is at the center of the group. Different aspects of Africa—its potential, its reality, and its efforts to realize its potential—embody the challenges and the prospects of the GS in general. More specifically, the difficulties Africa faces, how it will deal with them, its progress or lack of progress, and the changes it would like to see in the current international economic and financial system to help it overcome the obstacles to development, help make clear what the GS is all about. Africa’s desirable action plan constitutes a comprehensive agenda GS countries can rally around. On the other hand, the various fault lines inherent in Africa typify the lack of cohesiveness that has kept the GS from speaking with one voice, able to pull its weight in international fora. Instead, Africa, and similarly the GS, have been viewed by major powers as arenas of competition for influence. As such, how Africa deals with these problems will offer benchmarks to judge how the GS has progressed. In other words, Africa embodies the agenda of the GS; its progress drives that of the GS. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_32_24 |
| By: | Chiswick, Barry R.; Robinson, RaeAnn Halenda |
| Abstract: | This paper analyzes the occupational status of adult White foreign-born men in the antebellum United States, compared to White native-born men, and among the foreign born by country of origin. Hypotheses are developed regarding the effects on occupational status of human capital, demographic, and immigrant-related variables. The hypotheses are tested using the PUMS data for the 100 percent sample (full count) from the 1850 Census of Population, the first census to ask for the male respondent's occupation, as well as the linked 1850-1860 Census data. Two quantitative measures of occupational status serve as the dependent variables - the Occupational Income Score and the Ducan Socioeconomic Index. The hypotheses are found to be consistent with the data. Moreover, other variables the same, while there is a large gap in occupational status between the foreign and native born just after the former arrive, this gap narrows very quickly and, other variables the same, White male immigrants reached occupational-income parity with their native-born counterparts at about 8.4 years after immigration. |
| Keywords: | Immigrants, Occupational Status, Occupational Income Score, Duncan Socioeconomic Index, 1850 Census of Population, Antebellum United States, Labor Market Analysis, Longitudinal Analysis (1850-1860) |
| JEL: | N31 J15 J62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1512 |
| By: | Mickael Melki; Hillel Rapoport; Enrico Spolaore; Romain Wacziarg |
| Abstract: | We argue that migrants played a significant role in the diffusion of the demographic transition from France to the rest of Europe in the late 19th century. Employing novel data on French immigration from other European regions from 1850 to 1930, we find that higher immigration to France translated into lower fertility in the region of origin after a few decades - both in cross-region regressions for various periods, and in a panel setting with region fixed effects. These results are robust to the inclusion of a variety of controls, and across multiple specifications. We also find that immigrants who themselves became French citizens achieved lower fertility, particularly those who moved to French regions with the lowest fertility levels. We interpret these findings in terms of cultural remittances, consistently with insights from a theoretical framework where migrants act as vectors of cultural diffusion, spreading new information, social norms and preferences pertaining to modern fertility to their regions of origin. |
| Keywords: | migration, fertility control, social influence, cultural change, diffusion |
| JEL: | J13 F22 N13 O40 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11357 |
| By: | Hessami, Zohal (Ruhr University Bochum); Schirner, Sebastian (Ruhr University Bochum) |
| Abstract: | We study whether the arrival of a new immigrant wave changes natives' acceptance of former immigrants and their descendants. We exploit the 2015 European refugee crisis and the context of German open-list local council elections where voting for immigrant-origin candidates represents a consequential revealed preference. We combine hand-collected candidate-level election data with administrative asylum seeker data. Continuous difference-in-differences estimations (based on municipal %∆ in asylum seekers) reveal that immigrant-origin candidates receive more votes the more asylum seekers arrived locally. This shift in social group boundaries is driven by candidates with a Southern/Eastern European origin being culturally similar to Germans. |
| Keywords: | immigration, immigrant-origin candidates, local elections, social acceptance, cultural similarity |
| JEL: | D72 F22 J11 J15 N34 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17343 |
| By: | Revecca Pedi; Iannis Konstantinidis |
| Abstract: | This paper explores the geopolitical implications of EU sanctions on Russia for the Republic of Cyprus (RoC), employing small-state shelter theory and foreign policy analysis. It investigates whether these sanctions entrapped the RoC within its EU shelter or facilitated a Western-oriented emancipation. The study examines Cyprus's unique relationship with Russia, underpinned by economic, historical, and political ties, and its recent multivector foreign policy shift towards the US and the EU. Utilising a sample of 35 elite interviews and a public opinion survey of 505 participants, the paper highlights the political shock induced by the Ukraine war and subsequent sanctions, which strained Cyprus's multivector approach and its relations with Russia. The findings reveal a significant rift between elite and public perceptions: elites broadly support the EU sanctions and view them as a pivot towards the West, while the public disapproves of the sanctions, favouring a dual-track foreign policy. This divergence could potentially pose challenges to domestic unity and consensual politics. The study contributes to small state literature by proposing that shelters can be sources of political shocks and offers insights into Cypriot foreign policy dynamics, providing valuable perspectives for researchers and policymakers in Cyprus and the EU. |
| Keywords: | small state shelter seeking; The Republic of Cyprus Foreign Policy; Wan in Ukraine; Russia; US; EU |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hel:greese:202 |
| By: | Pascal Michaillat |
| Abstract: | Immigration is often blamed for increasing unemployment among local workers. However, standard models, such as the neoclassical model and the Diamond-Mortensen-Pissarides matching model, inherently assume that immigrants are absorbed into the labor market without affecting local unemployment. This paper presents a more general model of migration that allows for the possibility that not only the wages but also the unemployment rate of local workers may be affected by the arrival of newcomers. This extension is essential to capture the full range of potential impacts of labor migration on labor markets. The model blends a matching framework with job rationing. In it, the arrival of new workers can raise the unemployment rate among local workers, particularly in a depressed labor market where job opportunities are limited. On the positive side, in-migration helps firms fill vacancies more easily, boosting their profits. The overall impact of in-migration on local welfare varies with labor market conditions: in-migration reduces welfare when the labor market is inefficiently slack, but it enhances welfare when the labor market is inefficiently tight. |
| JEL: | E24 E32 J2 J6 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33047 |
| By: | Ju Hyun PYUN (Korea University Business School) |
| Abstract: | This study empirically examines the effect of services offshoring and regional amenities on the composition of skilled employment for services firms. Analysing Korean firm-level data spanning from 2006 to 2019, we find that services offshoring, characterised by the import of services intermediate inputs, correlates with an increase in the proportion of skilled workers within firms. Additionally, the effects of this shift are nuanced based on different skill levels: services offshoring leads to an increase in the share of permanent headquarters workers to total workers. However, it does not affect the share of high-end skilled workers, such as headquarters’ share of management and research and development (R&D) workers. Moreover, regional amenities promote the positive effect of services offshoring on permanent headquarters workers’ shares. Lastly, the positive effect of offshoring on demand for highend skilled workers in headquarters is significantly greater for firms with higher R&D intensity. |
| Keywords: | Services firms; Entry; Productivity; Korean firm-level data; Regional amenities;Industry heterogeneity |
| JEL: | F10 F14 L80 |
| Date: | 2024–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-01 |
| By: | Bertoli, Simone (CERDI, Université Clermont Auvergne); Clerc, Melchior (CERDI, Université Clermont Auvergne); Loper, Jordan (CERDI, Université Clermont Auvergne); Fernández, Èric Roca (CERDI, Université Clermont Auvergne) |
| Abstract: | Data on individuals of immigrant origin are used in the epidemiological approach in comparative development for understanding cultural persistence, the determinants of cultural norms, and the effects of genetic traits. A widespread presumption is that this approach is exposed to attenuation bias. We describe how the increasing reliance on foreign ancestries to identify respondents' origin can invalidate this presumption. Selfselection into reporting a foreign ancestry and unobserved heterogeneity in the time elapsed since ancestral migration can overestimate the effect of interest. A simple theoretical framework describes the joint influence of these two factors on the estimates obtained from a canonical specification. We provide illustrative examples of the empirical relevance of our concerns drawing on two influential papers in the literature: Fernández and Fogli (2006) and Giuliano and Nunn (2021). |
| Keywords: | comparative development, migration, ancestry, culture, identity choice |
| JEL: | F22 Z10 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17356 |
| By: | Becker, Peter; Lippert, Barbara |
| Abstract: | Since 25 June 2024, the 27 member states of the European Union (EU) have been engaging in accession negotiations with Ukraine and Moldova. The EU wants and needs to provide a strategic response to new geopolitical challenges, especially the Russian war of aggression against Ukraine. At the same time, it intends to accelerate already tough negotiations with the countries of the Western Balkans. Indeed, new proposals are aiming to gradually integrate candidate and acceding countries into specific policy areas of the EU. Accession negotiations regularly focus on these countries' integration into the highly regulated European single market, and thus their adoption of the EU's acquis communautaire with regard to the free movement of people, goods, services and capital. Whether the EU's offer of these country's gradual integration into the EU single market sparks momentum depends on how both sides weigh expected costs and benefits, and whether it is possible to develop concrete measures and timetables for implementation. |
| Keywords: | European Union (EU), accession negotiations, Ukraine, Moldova, Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia (WB-6), Russian war of aggression against Ukraine, acquis communautaire, free movement of people, goods, services and capital, Moldova, Georgia, cohesion, prosperity |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:304329 |
| By: | Yudai Hatayama (Bank of Japan); Yuto Iwasaki (Previously Bank of Japan); Kyoko Nakagami (Bank of Japan); Tatsuyoshi Okimoto (Bank of Japan and Keio University) |
| Abstract: | This paper quantitatively examines the effect of globalization on the natural rate of interest in developed economies, including Japan, the US, and the euro area. By incorporating into the model the variables that capture global economic and financial trends, such as demand and supply of safe assets and cross-border spillovers, with a smooth-transition framework, we account for the existence of non-linear regime change of their coefficients, driven by globalization. Our findings indicate that along with the progress of globalization, (i) the impact of global factors rapidly increased around 2000, and (ii) the commonly observed decline in the natural rate of interest can be largely attributed to these global factors. These findings underscore the importance of incorporating global factors such as demand and supply of safe assets and global spillovers, with their increasing impact, alongside the domestic factors such as productivity and demographics, when investigating developments in the natural rate of interest. |
| Keywords: | Natural Rate of Interest; Globalization; Smooth Transition Model |
| JEL: | E43 E52 F41 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojwps:wp24e13 |
| By: | Sebastiano Cattaruzzo (Ca’ Foscari University of Venice); Giancarlo Corò (Ca’ Foscari University of Venice); Roshan Borsato (Ca’ Foscari University of Venice) |
| Abstract: | This study investigates the relationship between technological complexity and international performance in small and medium-sized enterprises (SMEs) using data from a 2023 survey of firms in the Veneto region. We develop a Technological Complexity Index (TCI) to capture firms' adoption of advanced Industry 5.0 technologies. Our results reveal that higher TCI is associated with greater export intensity, broader geographical diversification, and reduced market concentration. Firms that adopt more comprehensive organizational strategies, such as product customization and post-sale services, also perform better internationally. Policy recommendations include targeted support for SMEs to enhance technological adoption through financial incentives and skills development programs. |
| Keywords: | Technological complexity, international organization, export diversification |
| JEL: | F14 F23 L25 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2024:16 |
| By: | Abdessalam Jaldi; Hamza Mjahed |
| Abstract: | This policy paper examines India’s growing engagement in North Africa, focusing on five countries: Morocco, Algeria, Tunisia, Libya, and Egypt. Despite lacking a distinct regional policy for North Africa, India has amplified its bilateral engagement with these countries, underpinned by a steadfast commitment to the principle of South-South cooperation. Through its strategic moves in North Africa, India has established a powerful southern-west axis for its foreign policy that stretches from Iran to Morocco, enabling it to effectively cover the entire southern Mediterranean region. This paper traces the trajectory of India’s relations with North Africa, from an ideological approach to a more pragmatic approach focused on economic and security cooperation. It also highlights India’s economic engagement in the region, which has enabled it to emerge as one of the top trading partners for Morocco, Egypt, and Algeria. Based on this analysis, the paper concludes with recommendations to deepen India’s engagement in North Africa, and to enhance its regional presence. |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaagr:pp_04-23 |
| By: | Piergiorgio Pilo (Gran Sasso Science Institute) |
| Abstract: | This paper investigates the relationship between the presence of Multinational companies (MNCs) and urban life satisfaction. The aim is to understand the implications of MNCs by looking at the (i) degree of MNCs’ embeddedness in the local economic structure, (ii) the role of the MNCs’ heterogeneity in terms of sectors and activities, and (iii) and the cultural context of the location where MNCs invest. The empirical analysis employs a novel panel dataset of 101 European cities for 2012, 2015, and 2019 that integrates information from Eurostat's Perception Survey, Orbis-Bureau van Dijk, Eurobarometer, and World Input-Output Dataset. Results suggest that urban life satisfaction might be positively associated with MNC's degree of embeddedness in the local economic fabric. However, this depends on MNCs' sector and activity heterogeneity and the local cultural context. Areas with a closed cultural context seem to benefit less from the presence of embedded MNCs. |
| Keywords: | urban life satisfaction; globalization; multinational companies; embeddedness; input-output tables |
| JEL: | R10 I31 F60 F23 D57 Z13 |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp41 |
| By: | Canayaz, Mehmet (Pennsylvania State U); Erel, Isil (Ohio State U and ECGI); Gurun, Umit G. (U of Texas at Dallas); Wu, Yufeng (Ohio State U) |
| Abstract: | We examine the repercussions of protectionist policies implemented in the United States since 2018 on the composition of workforce and career choices within the semiconductor industry. We find that the shift towards protectionism, aimed at reviving domestic manufacturing and employment, paradoxically resulted in a significant drop in hiring domestic talent. The effect is stronger for entry-level and junior positions, indicating a disproportionate impact on newcomers to the workforce. Additionally, we trace the trajectories of undergraduate and graduate cohorts possessing chip-related skills over time, and document significant shifts away from the chip industry. These findings are consistent with our model in which protectionist policies affect labor markets through revenue, uncertainty, and substitution channels, potentially leading to decreased hiring of both domestic and foreign workers. Our findings highlight the challenges in achieving the goals of initiatives like the 2022 CHIPS and Science Act, emphasizing the need to address talent shortages to sustain the semiconductor industry's intended growth. |
| JEL: | F16 G15 J21 J23 L10 O30 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:ohidic:2024-07 |