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on International Trade |
| By: | Aaron Flaaen; Fariha Kamal; Eunhee Lee; Kei-Mu Yi |
| Abstract: | Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using U.S. Census microdata, we develop novel measures of the linkages between U.S. manufacturing establishments’ imports and exports. We document three new GVC patterns. First, for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017, substantially higher than what aggregate data suggests. Second, we find strong complementarities between input and output markets reflected in “round-trip” trade linkages where an establishment sources inputs from and exports output to the same country. Third, we find a strong positive association between regional trade agreements and GVC trade flows. The aggregate data used to build global input-output tables requires proportionality assumptions that we find mute these relationships. Finally, with a global firms model, we show that the roundtrip results are consistent with a notion of country-specific fixed costs that are at least partially common between sourcing (imports) and foreign sales (exports). |
| Keywords: | global value chains; manufacturing; exports; imports; establishments; microdata |
| JEL: | F1 F14 O51 |
| Date: | 2024–12–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:99325 |
| By: | Muhammad Zeshan (Pakistan Institute of Development Economics); Tehmina Asad (Pakistan Institute of Development Economics) |
| Abstract: | The global value chain (GVC) breaks down production across borders. Businesses in different countries perform stages of making a product or service, then trade them. Countries can join GVCs by importing materials for export of final products (backward participation) or exporting parts for further processing elsewhere (forward participation). Bangladesh thrives in backward GVCs for apparel, making it the worlds second-largest exporter whereas Vietnam excels in forward GVCs for smartphones, assembling parts from other countries.Pakistan lags in both backward and forward linkages. While SMEs worldwide participate well in GVCs, Pakistans low R and D and high trade barriers hinder this channel. Our backward participation is low (5.8%) while forward participation is a bit better (34.4%), see Table 1. However, our exports are mostly low-value goods. Export industry in the country is dependent on local natural fiber, yarn and fabric materials to integrate into the apparel GVC (see Figure 1), and high import tariffs (11% to 16%) do not allow the industry to use cheaper raw material from international market followed |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2024:129 |
| By: | Gustavo de Souza; Ruben Gaetani; Martí Mestieri |
| Abstract: | How does international trade affect technology diffusion? We show that tariff increases in Brazil lead to more international technology transfers to Brazilian firms and more citations to foreign patents. The highest increase in citations occurs among firms located near those receiving technology transfers, and it is driven largely by citations to firms transferring technology to Brazil. These findings suggest that import tariffs can facilitate the diffusion of foreign technology by promoting technology transfers. We quantify this effect in a growth model that incorporates trade, technology transfers, and their effect on diffusion. When tariffs in Brazil rise, foreign firms transfer their technology rather than export their products, boosting the diffusion of foreign knowledge. An optimal subsidy to technology transfers significantly amplifies the welfare gains from trade liberalization. |
| Keywords: | Technology diffusion; Growth; technology transfer; International trade |
| JEL: | O33 O40 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedhwp:99305 |
| By: | Zongwu Cai (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA); Jinyan Li (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | The escalating trade war between China and the United States, initiated in 2018, has significantly impacted the trade pattern of these two nations. This event can be treated as an intervention which has led to a series of retaliatory actions, resulting in substantial economic and trade frictions between the two largest economies. This paper aims to analyze the economic impacts of the trade war effects using advanced econometric techniques. Our empirical study employs panel data analysis combined with a factor model, inspired by the methodologies of Hsiao, Ching and Wan (2012) and Bai, Li and Ouyang (2014), to construct trade patterns for both China and the US. By using annual trade data from multiple countries as a control group, we construct counterfactual results for China's and the US's imports, exports, and trade balance, respectively. Under a non-stationary setting, the counterfactual results indicate a significant decline in China's exports and a notable reduction in its trade surplus with the US post-2018. Meanwhile, US imports from China decreased, aligning with the trade war's goal of reducing the trade deficit, while US exports to China unexpectedly increased, possibly influenced by the Phase One trade agreement. Furthermore, our method, compared to other approaches, demonstrates superior accuracy and reliability in illustrating the effects of the trade war. |
| Keywords: | Causal inference; Counterfactual estimation; Trade balance; Trade friction; Trade war effects. |
| JEL: | C10 F51 F13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:kan:wpaper:202319 |
| By: | Alan Wm. Wolff (Peterson Institute for International Economics) |
| Abstract: | There has been a profound shift in American foreign economic policy. The United States has abandoned promotion of a rules-based open international trading system and no longer supports the World Trade Organization (WTO). The United States and its allies created the current world trading system as an essential part of the liberal world order, a series of rules-based international organizations and agreements to help rebuild the global economy and foster peaceful cooperation after World War II. Today, rising populism, heightened geopolitical tensions, and persistent inequality are threatening this order. Wolff emphasizes that the WTO is still relevant to the liberal international order, and it is in the core interest of the United States and other countries to continue to support that order. But he cautions that the WTO needs major reforms if it is to survive as an effective force governing world trade. WTO members must engage in serious negotiations to find acceptable solutions to shared problems. The resulting agreements can be political commitments or adoption of binding rules. Regressing to a lack of accountability for one's trade policy measures, however, would be unacceptably damaging. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb24-15 |
| By: | Sanjeev Vasudevan (Assistant Professor, Madras School of Economics, Chennai, Tamil Nadu, India, 600025); Suresh Babu Manalaya (Professor and Director, Madras Institute of Department Studies, Chennai, Tamil Nadu, India, 600020.) |
| Abstract: | This study examines the Eurasian Economic Union's trade effects, focusing on global production sharing. We measure the extent of global production sharing with the exports of parts and components. With a panel dataset of disaggregated bilateral flows of 5 members and 28 partners, we estimate an augmented gravity model for 2010-17 using the Hausman and Taylor Estimator. The study has two important findings. First, there are significant trade diversion effects in final goods, parts, and components. Second, the formation of the economic union results in declining intra-bloc exports. Besides, we find that market size, inter-country differentials of income, business-friendly climate, and cultural similarities are the other significant determinants of bilateral trade. |
| Keywords: | Eurasian Economic Union, Trade Effects, Global Production Sharing, Parts and Components Trade, Gravity Model, Hausman and Taylor Estimator |
| JEL: | F10 F14 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2024-272 |
| By: | Lorenzo Rotunno; Sanchari Roy; Anri Sakakibara; Pierre-Louis Vezina |
| Abstract: | We use the US-China tariffs of 2018-19 as an exogenous shock to export opportunities in Vietnam to identify how trade policy affects job creation. Using a difference-in-differences framework, we first show that US tariffs on China increased the range of products exported by Vietnam to the US in the two years after the hikes. We then show using firm level data that this expansion in export opportunities led to job creation. Around 5% extra jobs were created in firms hit with average tariffs above 15%. Results point towards this effect being driven mostly by female employment. |
| Keywords: | Vietnam; US-China trade tensions; trade policy; exports; employment |
| Date: | 2024–12–23 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/263 |
| By: | Mary Amiti; Matthieu Gomez; Sang Hoon Kong; David E. Weinstein |
| Abstract: | One key motivation for imposing tariffs on imported goods is to protect U.S. firms from foreign competition. By taxing imports, domestic prices become relatively cheaper, and Americans switch expenditure from foreign goods to domestic goods, thereby expanding the domestic industry. In a recent Liberty Street Economics post, we highlighted that our recent study found large aggregate losses to the U.S. from the U.S.-China trade war. Here, we delve into the cross-sectional patterns in search of segments of the economy that may have benefited from import protection. What we find, instead, is that most firms suffered large valuation losses on tariff-announcement days. We also document that these financial losses translated into future reductions in profits, employment, sales, and labor productivity. |
| Keywords: | trade war; Import tariff; stock returns |
| JEL: | F13 F14 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:99237 |
| By: | Moreno, Neil Irwin S. |
| Abstract: | The emergence of global value chains (GVCs) in recent years has highlighted the increasing reliance of manufacturing industries on services. Manufacturing firms have intensively used service inputs, performed in-house service activities, and sold services embedded in or bundled with goods. Considered a services economy, the Philippines could leverage services to develop a competitive manufacturing sector and strengthen GVC integration. This study assessed the servicification of the Philippine manufacturing sector in the context of trade and GVCs. Using trade in value added data, evidence shows that the contribution of services to Philippine manufacturing exports has been on par with that of regional neighbors; however, Philippine manufacturing has had weak linkages with modern services, such as ICT and business services. Based on establishment surveys and censuses, Philippine manufacturing firms extensively use service inputs, but R&D activities and the sale of services have been less common. The relationship between servicification and export participation was estimated, revealing that the sale of industrial services, utilization of transport services, and employing R&D personnel were associated with a higher probability of exporting. Drawing from the empirical findings, there is a need to develop the country’s modern services sectors and strengthen their linkages with manufacturing industries. Promoting R&D and innovation among firms could also enhance capabilities, making them competitive in entering export markets. Moreover, firms looking to export could benefit from potential reductions in transport and logistics costs brought about by the streamlining of transport regulations and procedures. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | servicification;trade in value added;manufacturing;GVCs;global value chains |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-39 |
| By: | Mkandawire, Petros Suzgo Kayovo; Fiankor, Dela-Dem Doe; Martínez-Zarzoso, Inmaculada; Brümmer, Bernhard |
| Abstract: | The ubiquity of environmental provisions in trade agreements is well documented, but their economic effects are largely inconclusive. This article analyzes whether environmental provisions in preferential trade agreements (PTAs) have differential effects on sectoral trade. It further examines whether these effects depend on the heterogeneity of environmental provisions and exporters’ level of development and quality of regulation. We exploit two finegrained panel datasets on product-level bilateral trade flows for nearly 200 countries and 300 different types of environmental provisions contained in 775 PTAs for the period 1996 to 2021. We use a theory-consistent industry-level structural gravity model and Pseudo Maximum Likelihood estimator to estimate the trade effects of PTAs with environmental provisions. We use a three-way fixed effects approach to control for unobserved heterogeneity and potential reverse causality. Overall, we find that environmental provisions do not reduce export values and volumes, but their effects are heterogenous across sectors and exporters’ income levels and regulatory quality. These effects also depend on the number and types of environmental provisions included in PTAs (i.e., design of PTAs). We also find that exporters’ level of income and quality of regulation moderate the trade effects of environmental provisions. We show that the trade effects of environmental provisions are more pronounced in developing exporting countries and/or those that have weak regulatory quality. Moreover, environmental provisions affect export values through their relatively larger effects on the intensive export margin. We show that environmental provisions in PTAs can be used as targeted trade policy strategy to jointly promote economic and environmental sustainability. Our results demonstrate the importance of assessing the effects of targeted trade policies at disaggregated level to capture heterogeneity and enhance formulation of trade policies and achieve sustainable development. |
| Keywords: | International Development, International Relations/Trade, Research Methods/ Statistical Methods, Sustainability |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gausfs:348250 |
| By: | Pol Antràs |
| Abstract: | The field of international trade has undergone significant theoretical and empirical advancements over the last twenty-five years. A key breakthrough has been the emergence of firm-level approaches to studying exporting, importing, and global value chains. The field has also experienced a quantitative revolution, driven by medium-scale models that rapidly assess the implications of trade cost shocks on real income. Additionally, a branch of the empirical literature has unshackled itself from the discipline of theoretical frameworks and from traditional data sources. Yet, several underexplored areas, or `uncharted waters, ' remain in international trade research. I outline new potential areas for theoretical research, including incorporating oligopolistic (strategic) behavior into core models, and fostering greater cross-disciplinary collaboration with other fields in economics and social sciences, such as behavioral economics or political science. I also discuss potential uncharted waters for empirical trade economists, while identifying potential new sources of data and ways in which official trade statistics could be improved. Finally, I explore how big data and artificial intelligence could reshape the design of international trade policy in coming years. |
| JEL: | B27 D21 D22 F12 F14 F23 F52 L11 L13 L22 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33312 |
| By: | Kris James Mitchener; Kirsten Wandschneider |
| Abstract: | The Great Depression is the canonical case of a widespread currency war, with more than 70 countries devaluing their currencies relative to gold between 1929 and 1936. What were the currency war’s effects on trade flows? We use newly-compiled, high-frequency bilateral trade data and gravity models that account for when and whether trade partners had devalued to identify the effects of the currency war on global trade. Our empirical estimates show that a country’s trade was reduced by more than 21% following devaluation. This negative and statistically significant decline in trade suggests that the currency war destroyed the trade-enhancing benefits of the global monetary standard, ending regime coordination and increasing trade costs. |
| JEL: | F13 F14 F33 F42 N10 N70 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33313 |
| By: | Attinasi, Maria Grazia; Mancini, Michele; Boeckelmann, Lukas; Giordano, Claire; Meunier, Baptiste; Panon, Ludovic; Almeida, Ana M.; Balteanu, Irina; Bańbura, Marta; Bobeica, Elena; Borgogno, Oscar; Borin, Alessandro; Caka, Peonare; Campos, Rodolfo; Carluccio, Juan; Di Casola, Paola; Essers, Dennis; Gaulier, Guillaume; Gerinovics, Rinalds; Ioannou, Demosthenes; Khalil, Makram; Lebastard, Laura; Lechthaler, Wolfgang; Martínez Hernández, Catalina; Morris, Richard; Zangrandi, Michele Savini; Schmidt, Katja; Serafini, Roberta; Strobel, Felix; Stumpner, Sebastian; Timini, Jacopo; Viani, Francesca; Bottone, Marco; Conteduca, Francesco Paolo; Martins, Bernardo De Castro; Giglioli, Simona; Kaaresvirta, Juuso; Kutten, Ambre; Matavulj, Noemi; Nuutilainen, Riikka; Quintana, Javier; Smagghue, Gabriel |
| Abstract: | In light of recent global economic and geopolitical shocks threatening trade openness, this report aims to shed light on geoeconomic fragmentation and develops a rich set of new tools to assess its economic effects and implications for central banks. The report shows that, although global trade integration has largely withstood recent disruptions and the rise of inward-looking policies, selective decoupling between few trading partners (United States vis-à-vis China, western economies vis-à-vis Russia) and for specific products (such as advanced technologies) is occurring. Survey data show that, although European firms are reorganising supply chains critical foreign dependencies persist. A firm-level stress test reveals that sudden disruptions in the supply of critical inputs from high-risk countries would lead to significant, albeit very heterogeneous, economic losses across firms, regions and sectors. Addressing foreign dependencies with broad-based protectionism policies, however, is self-defeating. In an extreme counterfactual scenario involving prohibitive and across-the-board trade barriers between geopolitical blocs, global GDP could decline by up to 9% coupled with an increase in global inflation of 4 percentage points in the first year, with the impact persisting for at least five years. It is conceivable that trade fragmentation will unravel over the course of a number of years, with supply disruptions becoming more frequent and severe than in the past. If this process should ultimately lead to a less interconnected global economy, countries might suffer from increased volatility and price pressures, as shocks cannot be easily diversified away through trade. [...] JEL Classification: F13, F14, F51, F52, F61, F62, E31, E50 |
| Keywords: | critical inputs, geoeconomics, globalisation, global value chains, trade fragmentation |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024365 |
| By: | Ken Itakura; Tomohiro Iwamoto |
| Abstract: | There has been growing interest in sub-national economic impact of mega-FTAs (Free Trade Agreements). Our aim is to explore the linkages between sub-national regions in a country and the global economy. We incorporates sub-national regions(prefectures) in Japan to a global computable general equilibrium (CGE) model. Pre-fectures are introduced to the Global Trade Analysis Project (GTAP) database (Aguiar et al., 2019), and the comparative static GTAP model (Hertel, 1997; McDougall, 2003; Corong et al., 2017). Input-Output (IO) table from each prefecture is used to database construction. In the modified model, domestic inflows and outflows of goods and services in Japan are introduced. To illustrate sub-national impact of mega-FTA, we experiment a set of trade liberalization scenarios. Results reveals that all prefectures in Japan gains from the liberalized trade in terms of the positive impact on economic welfare. In contrast, results on real gross regional product (GRP) of prefecture are mixed in effect where some prefectures gain and some lose. As the parameter value of substitution of domestic trade among prefectures increases, the real GDP in Japan tends to decrease while economic welfare slightly increases. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:61 |
| By: | Mary Amiti; Matthieu Gomez; Sang Hoon Kong; David E. Weinstein |
| Abstract: | During 2018-19, the U.S. levied import tariffs of 10 to 50 percent on more than $300 billion of imports from China, and in response China retaliated with high tariffs of its own on U.S. exports. Estimating the aggregate impact of the trade war on the U.S. economy is challenging because tariffs can affect the economy through many different channels. In addition to changing relative prices, tariffs can impact productivity and economic uncertainty. Moreover, these effects can take years to become apparent in the data, and it is difficult to know what the future implications of a tariff are likely to be. In a recent paper, we argue that financial market data can be very useful in this context because market participants have strong incentives to carefully analyze the implications of a tariff announcement on firm profitability through various channels. We show that researchers can use movements in asset prices on days in which tariffs are announced to obtain estimates of market expectations of the present discounted value of firm cash flows, which then can be used to assess the welfare impact of tariffs. These estimates suggest that the trade war between the U.S. and China between 2018 and 2019 had a negative effect on the U.S. economy that is substantially larger than past estimates. |
| Keywords: | trade war; tariffs; stock returns |
| JEL: | F13 F14 |
| Date: | 2024–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:99230 |
| By: | Italo Colantone (Bocconi University, Baffi Research Centre, GREEN Research Centre, CESifo and Fondazione Eni Enrico Mattei); Gianmarco I.P. Ottaviano (Bocconi University, Baffi Research Centre, CEP, CEPR and IGIER); Kohei Takeda (National University of Singapore and CEP) |
| Abstract: | This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we find that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of residents. In particular, higher exposure to Chinese import competition lowers the income mobility of the cohort of U.S. workers born in 1980-1982. We present a general equilibrium theory in which path dependence in sector choice of individuals over generations and mobility frictions determine the dynamics of industrial compositions across locations in a country. The theory predicts that rising import competition reduces intergenerational income mobility, consistent with the empirical findings. |
| Keywords: | Import competition, Distributional consequences, Intergenerational income mobility |
| JEL: | F1 F14 F16 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.29 |
| By: | Stephan Heblich (University of Toronto and NBER); Stephen J. Redding (Princeton University, NBER and CEPR); Yanos Zylberberg (University of Bristol and CEPR) |
| Abstract: | We examine the distributional consequences of trade using the New World Grain Invasion that occurred in the second half of the 19th century. We use a newly-created dataset on population, employment by sector, property values, and poor law transfers for over 10, 000 parishes in England and Wales from 1801–1901. In response to this trade shock, we show that locations with high wheat suitability experience population decline, rural-urban migration, structural transformation away from agriculture, increases in welfare transfers, and declines in property values, relative to locations with low wheat suitability. We develop a quantitative spatial model to evaluate the income distributional consequences of this trade shock. Undertaking counterfactuals for the Grain Invasion, we show that geography is an important dimension along which these income distributional consequences occur. |
| Keywords: | United Kingdom; international trade, income distribution, geography |
| JEL: | F14 F16 F66 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:pri:cepsud:337 |
| By: | Christopher Clayton; Matteo Maggiori; Jesse Schreger |
| Abstract: | Hegemonic powers, like the United States and China, exert influence on other countries by threatening the suspension or alteration of financial and trade relationships. Mechanisms that generate gains from integration, such as external economies of scale and specialization, also increase the hegemon’s power because in equilibrium they make other relationships poor substitutes for those with a global hegemon. Other countries can implement economic security policies to shape their economies in order to insulate themselves from undue foreign pressure. Countries considering these policies face a tradeoff between gains from trade and economic security. While an individual country can make itself better off, uncoordinated attempts by multiple countries to limit their dependency on the hegemon via economic security policies lead to inefficient fragmentation of the global financial and trade system. We study financial services as a leading application both as tools of coercion and an industry with strong strategic complementarities. We estimate that U.S. geoeconomic power relies on financial services, while Chinese power relies on manufacturing. Since power is nonlinear and increases disproportionally as the hegemon approaches controlling the entire supply of a sectoral input, we estimate that much economic security could be achieved with little overall fragmentation by diversifying the input sources of key sectors currently controlled by the hegemons. |
| JEL: | F02 F12 F15 F33 F36 F38 F43 F45 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33309 |
| By: | Umar Isah, YAHAYA; Ojonugwa Anthony, BERNARD; Z.S., SAHEED; salihu, AYODEJI; Yakubu, ALFA |
| Abstract: | The paper investigates the impact of trade tariff and non-tariff barriers on food security in the ECOWAS region. The paper relied on fixed and random effects approach to empirically capture the effects of tariff and non-tariff barriers alongside relevant trade-related macroeconomic variables on food security among ECOWAS member countries during 2010-2022. Major findings from the fixed effect model revealed that non-tariff barriers have significant negative impact on food security in the ECOWAS region. Further findings revealed that trade regulatory environment and food price inflation have significant positive impact on food security in the ECOWAS region. The paper concludes that regardless of its context, intention and deepening, non-tariff strategic trade policy reduce food security of ECOWAS member countries with a major implication that whether ECOWAS member countries pursue a policy of food self-reliance or food self-sufficiency, adherence to a common customs policy would help eliminate major delays in the movement of essential food items, agricultural labor and machinery across borders, hence, improving food security in the region. |
| Keywords: | Tariff barrier, non-tariff barrier, ECOWAS, food security, fixed effect |
| JEL: | F13 Q0 Q17 Q18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123114 |
| By: | Otaviano Canuto; Mahmoud Arbouch; Pepe Zhang; Abdelaaziz Ait Ali |
| Abstract: | The COVID-19 pandemic and the war in Ukraine have reignited the debate on efficiency versus resilience in international trade and global value chains (GVCs). This policy brief [a] (i) explains the contrasting perspectives of the private sector (primarily seeking efficiency) and the public sector (aiming for resilience); (ii) demonstrates that GVCs are still flourishing, despite some mounting signals of a geo-fragmentation leading to greater reallocation of the GVCs; and (iii) provides recommendations to help the G20 navigate the balancing act between efficiency and resilience considerations. Domestic policy design in the G20 countries and international coordination among these countries is essential. |
| Date: | 2023–06 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pbnn_32 |
| By: | OECD |
| Abstract: | Projections indicate that scrap use should rise to 45-50% of steel production by 2050 to meet climate targets. However, the availability of scrap varies widely across regions, driven by differences in industrial maturity and recycling infrastructure. International trade plays an essential role in meeting the demand for steel scrap in domestic recycling markets. Yet, there are significant export restrictions in some economies, which account for the largest scrap supplies globally. As secondary steel production through electric-arc furnaces grows, particularly in high-income countries, it is essential to expand the collection, processing and trade of scrap metal. Policies that encourage open trade and investment in digital tools to improve tracking and quality control are critical to ensuring adequate scrap availability for low-carbon steel production globally. |
| Keywords: | Decarbonisation, Export restrictions, Metals, Raw materials, Recycling, Scrap, Steel, Trade |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:170-en |
| By: | Otaviano Canuto; Sandra Rios; Renato Baumann; Abdelaaziz Ait Ali; Mahmoud Arbouch |
| Abstract: | This paper was originally published on t20brasil.org The resurgence of Neo protectionism as a reality is creating a pressing need to establish New Industrial Policies (NIPs) capable of striking a balance between Global Value Chains (GVC) managers' quest for efficiency and policy makers' need for more increasing resilience or national security in a turmoiled geopolitical landscape. Furthermore, although NIPs might pursue legitimate non-economic objectives, they are often captured by vested interests, resulting in protectionist measures. These policies produce negative spillovers, jeopardizing other countries’ development perspectives. This policy brief posits that countries embracing industrial policies with trade diversion components must allocate efforts to implement additional trade liberalization in sectors where the affected exporting countries have comparative advantages as compensation for the negative spillovers their unilateral domestic policies impose on third countries. This highlights the need to establish a structured system that penalizes protectionist countries for exceeding predetermined limits on subsidies and distortive measures. This policy brief also recommends that advanced economies implementing industrial policies with high amounts of embodied subsidies contribute to an international fund dedicated to financing developing economies' access to new green technologies. This approach acknowledges the undeniable push towards aggressive industrial policies, yet simultaneously strives to establish a framework to temper this emerging trend. This mechanism aligns with the principles of economic fairness and encourages nations to adopt less distortive behaviors in their pursuit of economic security or resilience to shocks. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:tf04_st_06 |
| By: | Buesa, Alejandro (European Commission); Pedauga, Luis (European Commission); Pinero, Pablo (European Commission); Rueda-Cantuche, Jose Manuel (European Commission); Baldassarre, Brian (European Commission) |
| Abstract: | Strategic autonomy can be bolstered by applying circularity strategies such as reducing primary inputs and recycling critical raw materials in key technologies. However, effective actions require high definition at the material or technology level, leading to a non-systematic and often tedious data collection process. This paper extracts information from heterogeneous data sources attaining sufficient detail to conceive circularity scenarios and gauge their potential impact on global supply chains. Using titanium metal in the EU as a showcase, we start by merging qualitative, macroeconomic and micro-level trade information to disaggregate secondary (i.e., titanium scrap) flows depending on their production stage, sector of origin and quality. Subsequently, we design two enhanced circularity scenarios with marked strategic autonomy implications: a reduction of scrap buyback agreements in the EU with the US, and an increase in scrap collection from end-of-life aircraft. Finally, these scenarios are fed into an inter-country input-output model to compute their economic and employment impact. The results of our simulations show that the EU would benefit from valorising secondary titanium flows domestically, most notably if domestic processing capacity is also increased, by up to 20 million euros in value added and around 380 jobs. |
| Keywords: | Circular economy, open strategic autonomy, critical raw material, global value chains, titanium scrap, granular data, input-output |
| JEL: | Q53 L61 D57 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202406 |
| By: | Martin Chorzempa (Peterson Institute for International Economics); Mary E. Lovely (Peterson Institute for International Economics); Yuting (Christine) Wan (Peterson Institute for International Economics) |
| Abstract: | Concerns over China's national security and human rights activities have led the United States to rely increasingly on financial sanctions and export controls to curb Beijing's behavior. But the tools are so complex it is difficult to assess their effectiveness. A new PIIE dataset sheds light on this economic statecraft. The first Trump administration added three times as many Chinese entities to export control and other sanctions lists than the previous four administrations; the Biden administration added even more to these lists. Most sanctions and controls target high-tech sectors, especially electronics, military and defense entities, aviation, space, and aerospace; targets are chosen under a veil of secrecy, raising questions over accountability and transparency. The benefits of isolating Chinese firms come with potential costs, hobbling innovation for US and allied business, encouraging circumvention of sanctions, and accelerating Chinese innovation. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iie:pbrief:pb24-14 |
| By: | Silke Anger; Jacopo Bassetto; Malte Sandner |
| Abstract: | While Western countries worry about labor shortages, their institutional barriers to skill transferability prevent immigrants from fully utilizing foreign qualifications. Combining administrative and survey data in a difference-in-differences design, we show that a German reform, which lifted these barriers for non-EU immigrants, led to a 15 percent increase in the share of immigrants with a recognized foreign qualification. Consequently, non-EU immigrants' employment and wages in licensed occupations (e.g., doctors) increased respectively by 18.6 and 4 percent, narrowing the gaps with EU immigrants. Despite the inflow of non-EU immigrants in these occupations, we find no evidence of crowding out or downward wage pressure for natives. |
| Keywords: | Skill Transferability, Occupational Recognition, Immigrant Integration |
| JEL: | J24 J31 J62 F22 |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:csl:devewp:498 |
| By: | Gaaitzen de Vries; Hagen Kruse; Emmanuel Mensah; Yabo Vidogbena; Kei-Mu Yi |
| Abstract: | We study the evolution of manufacturing value added shares in 11 sub-Saharan African (SSA) countries through the lens of an open economy model of structural change. Our analysis leverages recent developments in input-output tables in SSA countries. Our model allows for income effects via non-homothetic preferences, substitution and relative price effects, as well as comparative advantage and specialization effects. We calibrate our model to include each SSA country with nine other major economies for each year between 2000 and 2018. We also do a similar set of calibrations for 11 developing Asian (DA) countries. Our main results are that domestic and foreign sectoral TFP are important drivers of structural change. Trade integration over time plays only a small role. However, trade is important as a transmission mechanism of foreign productivity trends. Finally, the drivers and mechanisms of industrialization are broadly similar in low-income SSA and DA countries. |
| Keywords: | international trade; structural change; input-output; low-income countries |
| JEL: | F11 F43 O11 O41 |
| Date: | 2024–12–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:99314 |
| By: | Chad P. Bown (Peterson Institute for International Economics); Dan Wang (Yale Law School) |
| Abstract: | Semiconductors have emerged as a headline in the resurgence of modern industrial policy. This paper explores the political economic history of the sector, the changing nature of the semiconductor supply chain, and the new sources of concern that have motivated the most recent turn to government intervention. It also explores details of that turn to industrial policy by the United States, China, Japan, Europe, South Korea, and Taiwan. Modern industrial policy for semiconductors has included not only subsidies for manufacturing, but also new import tariffs, export controls, foreign investment screening, and antitrust actions. |
| Keywords: | semiconductors, supply chains, industrial policy, tariffs, subsidies, export controls |
| JEL: | F13 L52 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp24-3 |
| By: | Giovanni Maggi; Monika Mrázová |
| Abstract: | We examine the potential role of international agreements on product standards through a stylized model where countries have different regulatory preferences and firms incur fixed costs of regulatory diversity. Overall, our analysis suggests that the common perception of regulatory agreements as playing a key role in promoting harmonization may have been overstated. We show that regulatory harmony can arise even in the absence of an agreement, and that “spontaneous” harmonization may be inefficient, suggesting that the role of regulatory agreements could be to promote regulatory diversity rather than harmonization. Moreover, the role of regulatory cooperation depends in important ways on the pattern of trade: in the presence of intra-industry trade, the potential role of an agreement tends to be more limited, and under some conditions it can only play a coordination role. Finally, through the lens of our model, we examine the “Pop Critique” of regulatory agreements, according to which lobbying by corporate interests may lead to welfare-reducing harmonization. Our analysis lends only limited support to this critique. |
| JEL: | F12 F13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33318 |
| By: | Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Since the beginning of the war in Ukraine, Turkey has adeptly navigated a balancing act between Russia and the West, leveraging its position as a credible mediator. However, Turkey’s geo-economic vulnerabilities and strong economic ties with the West have made this approach untenable, especially given the recent escalation in pressure from the United States. As the US adopts a firmer stance and Turkey starts to distance itself from Russia, the implications for the European Union’s strategy towards Turkey become increasingly important, presenting an opportunity to revitalise relationships. However, relations may sour again owing to stalled progress in relations and ongoing regional instability. Turkey's vocal stance against Israel and the war in Gaza underlines its dissatisfaction with US and EU responses, but at present the country has only limited leverage to effect change. The EU needs to adopt a proactive stance towards Turkey, moving beyond waiting for a post-Erdoğan era, and establish new forms of engagement other than EU accession. A modernisation of EU-Turkey customs rules is long overdue and would benefit both sides. Given Turkey’s geopolitical significance and NATO membership, it is crucial for the EU to maintain relations with the country to prevent it from aligning more closely with Moscow and Beijing. |
| Keywords: | Turkey, EU, foreign trade, customs union, sanctions, investment |
| JEL: | F14 F50 F51 O10 O53 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:90 |
| By: | Larabi Jaïdi; Bruce Byiers; Saloi El Yamani |
| Abstract: | As the African Continental Free Trade Area (AfCFTA) enters its fifth year, the rules of origin for trade in goods are still being finalised, but the institutional architecture is nearly complete with increased capacity, technical committees and new supporting instruments. Despite this progress in AfCFTA ‘policy supply’, meaningful trade under the AfCFTA is still to begin. For this to happen, there must be ‘policy demand’ from the private sector to use the agreement’s range of protocols in shaping their investment and trade decisions and relations. Private sector engagement has so far varied across member states, with some demonstrating robust integration of business feedback while others lag in private sector consultation and involvement. Recommendations focus on enhancing private sector engagement and thus the use and impact of the AfCFTA through: - Increased awareness and practical application of AfCFTA protocols. - Sector-specific support aligned with AfCFTA’s goals. - Strengthening the roles of AU, RECs and the AfCFTA secretariat in national strategy alignment. - Promoting regional value chains with strategic financing and partnerships. - Improving the investment climate to facilitate cross-border trade and investment. Ultimately, AfCFTA’s success depends on robust implementation, dynamic private sector involvement and tailored strategies to meet diverse economic needs across Africa. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pbnn_40 |
| By: | Angela Dalmonte; Tommaso Frattini; Sofia Giorgini |
| Abstract: | This paper explores the overeducation of tertiary-educated migrants in European labour markets. Using data from the European Labour Force Survey (2012-2022), we show that immigrants, particularly those from non-EU countries, are significantly more likely to be overeducated than natives. Despite a general decline in overeducation levels for all groups over time, the immigrant-native gap remains, especially for foreign-educated migrants. Furthermore, the likelihood of overeducation for foreign-educated migrants increases until 15-19 years after migration, a pattern consistent across all areas of origin and migration cohorts. Importantly, differences in educational quality between origin and destination countries do not primarily account for these overeducation differentials. The findings underscore the need for policies that better align immigrants' skills with labour market demands in Europe to avoid the waste of valuable immigrants' skills, which are harmful not only to migrants but to the economies of receiving countries too. |
| Keywords: | EU labour markets, immigration, Skill mismatch |
| JEL: | J15 J61 F22 |
| Date: | 2024–10–18 |
| URL: | https://d.repec.org/n?u=RePEc:csl:devewp:496 |
| By: | RODRIGUEZ, FRANCISCO |
| Abstract: | This paper examines the potential impact of different US economic sanctions policies on Venezuelan migration flows. I consider three possible departures from the current status quo in which selected oil companies are permitted to conduct transactions with Venezuela’s state-owned oil sector: a return to maximum pressure, characterized by intensive use of secondary sanctions, a more limited tightening that would revoke only the current Chevron license, and a complete lifting of economic sanctions. I find that sanctions significantly influence migration patterns by disrupting oil revenues, which fund imports critical to productivity in the non-oil sector. Reimposing maximum pressure sanctions would lead to an estimated one million additional Venezuelans emigrating over the next five years compared to a baseline scenario of no economic sanctions. If the US aims to address the Venezuelan migrant crisis effectively, a policy of engagement and lifting economic sanctions appears more likely to stabilize migration flows than a return to maximum pressure strategies. |
| Keywords: | Sanctions, Migration, Venezuela |
| JEL: | F22 F51 O54 |
| Date: | 2024–12–26 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123104 |
| By: | Colantone, Italo; Ottaviano, Gianmarco; Takeda, Kohei |
| Abstract: | This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we find that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of residents. In particular, higher exposure to Chinese import competition lowers the income mobility of the cohort of U.S. workers born in 1980-1982. We present a general equilibrium theory in which path dependence in sector choice of individuals over generations and mobility frictions determine the dynamics of industrial compositions across locations in a country. The theory predicts that rising import competition reduces intergenerational income mobility, consistent with the empirical findings. |
| Keywords: | Industrial Organization, Political Economy |
| Date: | 2024–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:348542 |
| By: | Maczulskij, Terhi; Kässi, Otto |
| Abstract: | Abstract This study utilizes unique Finnish firm-level microdata on service imports, productivity, and employment during the 2002–2016 period. We use world service export demand shocks as an instrument to identify the causal effect of service offshoring on firm-level performance. Our results indicate that while service offshoring does not impact productivity, it increases the number of employees and also immigrant employment. Despite the rise in overall employment, service offshoring affects the occupational structure within firms. Specifically, firms that increase service sourcing from abroad exhibit reduced shares of managerial and technical jobs, accompanied by a simultaneous increase in the share of production work. |
| Keywords: | Service offshoring, Productivity, Employment |
| JEL: | F10 F14 L80 |
| Date: | 2024–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:155 |
| By: | Hayato Kato (Osaka University); Andreas Haufler (LMU Munich) |
| Abstract: | The Global Minimum Tax (GMT) is applied only to firms above a certain size threshold, permitting countries to set differential tax rates for small and large firms. We analyze tax competition among multiple tax havens and a non-haven country for heterogeneous multinationals to evaluate the effects of this partial coverage of GMT. Upon the introduction of a moderately low GMT rate, the havens commit to the single uniform GMT rate for all multinationals. However, gradual increases in the GMT rate induce the havens, and subsequently the non-haven, to adopt discriminatory, lower tax rates for small multinationals. Our calibration exercise shows that the implementation of a 15% GMT rate results in a regime where only the havens adopt split tax rates. Upon GMT introduction, welfare and tax revenues fall in the tax havens but rise in the non-haven, yielding a positive net gain worldwide. |
| Keywords: | global minimum tax; profit shifting; multinational firms; |
| JEL: | F23 H25 H87 |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:516 |
| By: | Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Vlados, Charis (Democritus University of Thrace, Department of Economics) |
| Abstract: | This paper explores the combined impacts of certain geopolitical and geoeconomic shifts on the global energy transition, focusing on developments related to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) agreements. The New Globalization Scenario Matrix (NGSM) and a correlative SWOT analysis in transnational terms are utilized to understand and conceptualize potential future global trends in the emerging new globalization. Findings suggest that the examined contemporary global events may enhance the overall performance of the global system, thereby accelerating energy transitions. Consequently, a re-envisioned approach to the International Political Economy (IPE) of energy is proposed, blending repositioned realism and liberalism to foster a realistic and innovative new global liberalism. |
| Keywords: | international political economy; energy transition; new globalization; geopoliticalgeoeconomic shifts; New Globalization Scenario Matrix (NGSM); correlative SWOT analysis |
| JEL: | F60 P48 Q40 Q49 |
| Date: | 2024–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:ris:duthrp:2024_007 |
| By: | Ferid Belhaj |
| Abstract: | In an era marked by shifting global dynamics, Africa and the Middle East are experiencing a profound transition from traditional geopolitics to a more nuanced geoeconomic framework. This evolution reflects the growing recognition that economic interests, rather than mere political allegiances, are driving international relations in these regions. The rise of emerging powers, particularly China and other Asian nations, has challenged the long-standing dominance of Western economies, offering alternatives that prioritize infrastructure development and trade over political conditionality. As governments in Africa and the Middle East seek to maximize their economic potential, they are increasingly inclined to engage in partnerships that enhance their sovereignty and promote self-reliance. The implications of this shift are profound, heralding a new chapter in international cooperation in which economic collaboration is viewed as the pathway to stability and growth. This paper explores the ramifications of this transition, examining how the focus on geoeconomics is reshaping diplomatic ties, investment flows, and regional integration initiatives. It argues that this paradigm shift not only empowers Africa and the Middle East, but also redefines the global landscape, as these regions assert themselves as key players in the emerging multipolar world. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb_48-24 |
| By: | Eva González; Cindy Rangel; Leonardo Torre; Alejandrina Salcedo; Jorge Alvarado |
| Abstract: | The paper analyzes how the initial disruption in the supply of imported inputs associated to the COVID-19 pandemic may have induced heterogeneous responses in regional and sectoral gross output in México. Using the Regional Input-Output Matrices estimated by Banco de México, and the Supply Ghosh Model, the effects associated to the supply-side shock that ensued from the sudden reduction of imported inputs from China, the European Union, and the United States at the onset of the pandemic are calculated. The Northern region experienced the greatest contraction in gross output, while at the sectoral level, the manufacturing sector gross output was the most affected by the shock relative to a scenario with constant availability of inputs. These results are consistent with the fact that both, the Northern region and the manufacturing sector, are the most integrated to the global supply chain. |
| Keywords: | COVID-19;Input-Output;Ghosh Model;Mexico |
| JEL: | R11 R12 R15 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2024-19 |
| By: | Bosello, Francesco; Parrado, Ramiro |
| Abstract: | The aim of this paper is to analyze the domestic costs and international competitiveness effects of ambitious mitigation targets implemented by a club of abating countries facing groups of potential free riders. The club can adopt two alternative measures to even the playing field for its energy-intensive trade-exposed (EITE) sectors: a tax rebate to firms, and carbon border adjustment mechanisms (CBAMs). Different club configurations are considered. Initially they include the European Union only and then progressively expand to other member countries of the Organisation for Economic Cooperation and Development (OECD), China, and India. We show that the club membership is much more influential than the use of border adjustments or rebates in determining the aggregated policy costs. However, both measures are effective at the sectoral level. We find that OECD countries’ firms would prefer protection by CBAMs, while China and India would favor rebates. This depends on the size of the club when China and India join and on their role as sellers of emission reduction permits within the club. We also show that CBAMs and rebates can shift the policy burden to non-protected sectors with possible (though moderate) net efficiency losses. |
| Date: | 2024–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-24 |
| By: | Pascal Beckers; Tesseltje de Lange; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Ksenija Ivanović; Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Emigration from the Western Balkans (WB) to the European Union (EU) has long been a significant source of workers for the EU. In light of population ageing and the twin (digital and green) transitions in the EU, and as candidate countries for EU membership, their contribution may be more relevant than ever. At the same time, the outflow of workers from the WB has exacerbated labour and skill shortages across occupations in the region, depleting the talent pool needed for economic development. This challenge – while also an opportunity – requires immediate attention. Based on new research findings, this policy brief highlights incentives that encourage (i) emigration from the WB region and (ii) immigration to EU countries. In particular, it examines the impact of emigration on labour shortages in the WB and proposes timely policy recommendations for WB and EU policy makers. The policy recommendations are in three main categories (i) industrial policy to address labour shortages and boost technological development, (ii) migration and skills development policies, and (iii) improving data quality for market research and academia. |
| Keywords: | Pull and push factors of migration, migration aspirations/desires, destination decision, choice model, migration policy, skills development, Western Balkans, EU |
| JEL: | F22 O15 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:87 |
| By: | Ana Maria Santacreu; Ashley Stewart |
| Abstract: | An analysis examines how U.S. multinationals’ tax and profit-shifting strategies might affect yields on direct investment in tax havens versus G7 economies. |
| Keywords: | multinational corporations; taxes; profits; tax havens; investment |
| Date: | 2024–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:99189 |
| By: | Barral, Mark Anthony A. |
| Abstract: | The integration of the concept of environment, social, and governance (ESG) into trade and investment to contribute to the Sustainable Development Goals (SDGs) is becoming a new consensus. ESG considerations are increasingly crucial in national and regional policies for sustainable development strategies and regulatory frameworks, highlighting the role of governments in shaping the landscape by incentivizing companies to adopt sustainable practices, disclose ESG information, and integrate social and environmental factors into decision-making. This also emphasizes the role of international investment agreements in coordinating trade, investment, and sustainable development, as they form a legal framework that is conducive to enhancing the transparency and predictability of the international investment ecosystem, thereby reducing uncertainties and prompting long-term and stable investment. While ESG and sustainability change the way businesses, policymakers, and rule-makers make decisions, trade and investment become pivotal conduits for operationalizing SDG-related global priorities. This paper explores the growing relevance of ESG principles in trade and investment as they gain traction not only in the conduct of businesses but also in national policies, corporate governance, and regulatory frameworks. It aims to examine the ESG landscape in the Philippines and the region, understand its potential to enhance trade and investment toward achieving the SDGs, and explore strategies for effective ESG adoption. The results highlight varying responses of SDGs to trade and investment indicators. With respect to ESG interactions, the results indicate that the influence of trade and investment improves when integrated with ESG. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ASEAN;biodiversity trade;carbon emissions;carbon pricing;decarbonization;green bonds;investment liberalization;renewable energy;environmental, social, and governance;ESG;Foreign Direct Invetments;FDI;sustainable development goals;SDG |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-28 |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics) |
| Abstract: | This study explores the evolving theoretical divide within the field of International Political Economy (IPE), focusing on the debate between the advocates of new globalization and critics from the anti-globalization perspective. By conducting an integrative review of the contemporary literature, we explore the foundational theories, core components, and primary theorists of both perspectives, aiming to understand their predictions for future global dynamics. The investigation reveals a polarization in theoretical orientation, reflecting divergent views on the implications of globalization. Through a critical analysis, the paper identifies the liberal international order and the respective contemporary neo-Marxist viewpoints as central to the debate, evaluating their critiques and contributions to understanding the new globalization’s trajectory. We suggest a synthesis of these perspectives, positing that the future of globalization—or “new globalization”—will be influenced by structural changes in global power dynamics, ongoing crises, and technological progress. This is encapsulated in the “evolutionary structural triptych” (EST) approach, which perceives the world economy as an evolutionary result of political, economic, and technological structures, which correspondingly reposition the objectives of stability, growth, and innovation in the new emerging era. In conclusion, we advocate for a balanced approach to globalization, emphasizing the need for policies that promote fairness, sustainability, and cooperation in the changing global environment. This leads to the re-introduction of an appealing concept for globalization’s future: a new, realistic, open, and innovative global liberalism. |
| Keywords: | international political economy; new globalization; anti-globalization; liberal international order; neo-Marxist perspectives; evolutionary structural triptych; socioeconomic development |
| JEL: | F60 |
| Date: | 2024–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:ris:duthrp:2024_005 |
| By: | Mario F. Carillo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB), IPEG & CSEF.); Lavinia Piemontese (Bocconi University, Unit CLEAN, BAFFI.); Francesco Flaviano Russo (Università Federico II di Napoli & CSEF) |
| Abstract: | This paper examines the impact of migrant integration policies on local wealth, focusing on implementation timing. Leveraging a unique policy measure that converted centers providing temporary reception for refugees into centers aimed at integrating them in the hosting society, we conduct an event study analysis. Our findings reveal that the timing of integration policy is important: implementation during heightened public attention to immigration negatively impacts local wealth. By contrast, Integration interventions implemented during periods of low attention have no impact on wealth. Our findings highlight that the backlash effect of integration policy estimated in the literature might be largely explained by extreme public perceptions of the migration crisis. |
| Keywords: | Immigration, Attention, Real Estate Prices, Reception, Integration |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2405 |
| By: | Huang, Kaixing; You, Yaxuan |
| Abstract: | Genetically modified (GM) crops are expected to reduce agricultural carbon emissions, which account for approximately 30\% of global carbon emissions, by reducing the use of high-emission production inputs. However, upon examining the gradual roll-out of GM crops across countries, we find that GM crops have increased total agricultural carbon emissions by 7.4% and increased the carbon-emission intensity of crops by 9.4%. A key reason is that GM crops have expanded cultivation into marginal lands, which require more fertilizer and energy inputs. While exporting GM crops to non-GM countries could reduce the global carbon-emission impact of GM crops, a large portion of GM crops is used for domestic livestock production, which further increases carbon emissions. Policies that restrict GM crops to the lands most suitable for them and encourage the export of GM crops could help mitigate the impact of GM crops on global carbon emissions. |
| Keywords: | Genetically modified crops, agricultural carbon emissions, agricultural technology, crop yield |
| JEL: | O13 O50 Q16 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122650 |
| By: | Schulze, Meike; Schrolle, Mark |
| Abstract: | Saudi Arabia has entered the geopolitical competition for mineral resources - and it has done so in a determined manner and with substantial funds at its disposal. As part of its Vision 2030, the Kingdom aims to strengthen local processing and industrial value added. Currently, Saudi Arabia secures its mineral resources through international investments and offtake agreements; but, in the long term, it plans to develop its domestic mining industry. Many initiatives remain in the conceptual phase. As it looks to realise its ambitions, Saudi Arabia continues to rely on international partners. Positioning itself as a geopolitically neutral "link" between the major powers, the Kingdom is seeking closer ties with China while at the same time competing with the People's Republic. Simultaneously, it presents itself to the West as a potential partner for resource diversification. The EU appears to regard cooperation with Saudi Arabia as a viable option for securing its raw material supply. However, the key conditions for a strategic partnership have still not been met. |
| Keywords: | Saudi Arabia, Mineral Supply Chains, Saudi Arabian Mining Company (Ma'aden), "Vision 2030", European Union (EU), mining industry, China, resource diversification, Critical Raw Materials Act (CRMA), Saudi Public Investment Fund (PIF), gold, phosphate, bauxite, copper, zinc, feldspar, silver, Gulf Cooperation Council (GCC), EU Corporate Sustainability Due Diligence Directive (CSDDD), Carbon Border Adjustment Mechanism (CBAM), International Governmental Forum on Mining and Minerals (IGF) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:306295 |
| By: | Ferid Belhaj |
| Abstract: | This paper examines the complex interplay between global climate ambitions and national interests within the New South—defined as a diverse group of emerging economies, each pursuing distinct geopolitical strategies, economic priorities, and development goals—seen through a realist lens at the COP29 climate summit. As the climate crisis deepens, the geopolitical stakes involved in climate governance become more pronounced. The New South, grappling with the dual challenges of economic development and environmental vulnerability, finds itself navigating between international climate commitments and the imperatives of national security, energy needs, and sovereignty. Taking a realist international relations perspective, the paper explores how countries from the New South, including emerging powers and resource-rich nations, prioritize state-centric goals in the face of shifting global power dynamics. At COP29, hosted by gas-producing Azerbaijan, these tensions underscore the limitations of multilateral climate agreements, as national interests take precedence over global cooperation. The analysis explores the role of climate finance, energy security, and geopolitical alliances, offering an insight into how the realist approach can better explain the current global climate impasse, and its implications for the future of international climate negotiations. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb_58-24 |
| By: | Carol C. Bertaut; Stephanie E. Curcuru; Ester Faia; Pierre-Olivier Gourinchas |
| Abstract: | The allocative efficiency of capital flows is one of the oldest and most contentious questions. We answer it by matching cross-border securities holdings reported in the US external statistics from 1995 to 2022 with the corresponding firm-level measures of allocative efficiency. We find that US investors tilt their international equity investment toward firms with high MRPK and markups, thereby fostering their potential for growth. Foreign investors tilt their holdings toward US firms with high productivity and intangible capital. A horse race shows that productivity is the best predictor of foreign investment in US firms and MRPK for US investment in foreign firms. Both US and foreign firms that receive more international funding increase spending on intangible capital, and foreign firms also increase tangible capital. The results are stronger for more productive firms. |
| Keywords: | Productivity; Capital allocation; capital flows |
| JEL: | E20 F30 F60 |
| Date: | 2024–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1399 |
| By: | Kauhanen, Antti; Maczulskij, Terhi; Riukula, Krista; Ropponen, Olli |
| Abstract: | Abstract This report deals with foreign talent in Finland. The report begins by discussing Finland’s attractiveness from the perspective of foreign talent and considering what Finland’s strengths are and what needs to be developed in Finland to make Finland more attractive. After this, foreign experts are studied in Finland and it is determined what kind of tasks they work in, how long they stay in Finland and how their careers develop. The potential discrimination of foreign workers is also examined in connection with mass layoffs. Various special tax solutions have been used to attract foreign talent, and the report also describes these solutions and considers how the Key Employee Act could be developed in Finland. Finland has sought to improve the chances of successful international recruitment by speeding up permit processes and increasing recruitment activities in certain focus countries. We will also consider these policy measures in the light of statistics. |
| Keywords: | Immigration, Foreign professionals |
| JEL: | J61 J31 D24 |
| Date: | 2024–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:154 |
| By: | Jonas Werth (Ca’ Foscari University of Venice; BI Norwegian Business School); Alessia Russo (University of Padua; CEPR); Fabio Miessi Sanches (São Paulo School of Economics) |
| Abstract: | This paper develops a dynamic model of environmental treaty formation with heterogeneous countries that allows for entry, exit and country specific uncertainty on the benefits from other countries ratifying the treaty. Using a dataset comprising the cross-section of ratification dates of global environmental treaties for 1980-2020, we structurally estimate the model's parameters. The estimates inform about the existence of strategic complementarity or substitutability in the formation of environmental treaties, which occur when the relative benefits from cooperation increase or decrease after the inclusion of an additional country. Through counterfactual experiments, we illustrate how mechanisms fostering strategic complementarity can expedite the establishment of a grand coalition in support of environmental treaties and quantify associated welfare gains. |
| Keywords: | Dynamic Model Estimation, Heterogeneous Countries, International Environmental Agreement, Strategic Complementarity |
| JEL: | D86 F55 H87 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2024:19 |
| By: | Asada, Hidekatsu |
| Abstract: | Determinants of regional foreign direct investment inflows in China from 2008 to 2019 are analysed in terms of the progress of the marketisation such as non-state-owned sectors’ share of output, investment and employment, the state of price controls in commodity markets, the state of development of factor markets such as finance and labour, and the state of development of the institutional system supporting the market economy system. Additionally, human capital development, infrastructure development and industrial structure are incorporated as control variables. Key results of the analysis of China’s regional FDI inflows include: 1) the progress of marketisation had a positive impact; 2) an increase in per capita GDP had a positive impact, and 3) the increase in the ratio of the secondary industry to GDP had a negative impact, while the tertiary industry had a positive impact. This result reflects the ongoing shift from vertical FDI in export-oriented labour-intensive manufacturing industries to horizontal FDI oriented toward sales to the local market. |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:4xu36 |
| By: | Mkandawire, Petros Suzgo Kayovo; Fiankor, Dela-Dem Doe; Brümmer, Bernhard |
| Abstract: | This article explores the effects of including environmental provisions (EPs) in preferential trade agreements (PTAs) on climate change mitigation. It further examines whether the effects depend on the heterogeneity of the EPs. We exploit a panel dataset of the climate change performance index (CCPI) from 2006 to 2019 and the environmental performance index (EPI) from 2000 to 2020 for multiple countries. We combine these datasets with the TREND database that contains information on almost 300 different types of EPs in 775 PTAs. Empirically, we use an autoregressive panel data model with an exponential fractional regression framework and a two-step system generalized method of moments (GMM) estimator. Potential endogeneity issues are addressed with suitable instrumentation and panel estimation techniques. Our results shows that the inclusion of EPs in PTAs significantly improves climate change mitigation. The effectiveness of these provisions, however, depends on their diversity. Key benefits include reduced greenhouse gas emissions, increased renewable energy use, and enhanced climate policies. Furthermore, PTAs with direct CPs yield greater improvements in climate change mitigation outcomes compared to those addressing environmental issues more generally or indirectly. Finally, we show that PTAs with climate change provisions are an effective tool for climate change mitigation, regardless of the development status of the signatories. However, the effects are more pronounced for North-South PTAs compared to North-North and South-South PTAs. |
| Keywords: | Climate Change, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Sustainability |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gausfs:348251 |
| By: | Agnolin, Paolo; Colantone, Italo; Stanig, Piero |
| Abstract: | We study the implications of post-treatment bias in the context of the globalization backlash. We discuss whether horse-race regressions can inform about the relative role of economic vs. cultural drivers. We make three methodological points: (1) if and insofar as cultural variables are post-treatment with respect to economic factors, the estimates of the effect of economic shocks on voting are biased in regressions that include cultural controls (and vice versa); (2) for the same reason, such horse-race regressions do not allow to accurately estimate the relative role of economic vs. cultural factors; (3) one cannot infer mediation effects from changes in regression coefficients for a given factor of interest before and after including post-treatment controls. We accompany the methodological discussion with empirical evidence on the relevance of post-treatment bias in studies of the globalization backlash, both by replicating and expanding on earlier studies, and by presenting novel cross-country results on the culture-economy nexus. |
| Keywords: | Institutional and Behavioral Economics, International Relations/Trade, Sustainability |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:348541 |
| By: | Jaan Masso; Amaresh K Tiwari |
| Abstract: | This paper develops a new method to estimate a production function and the total factor productivity (TFP)impact of persistence in exporting. Certain “proxymethods” for estimating the production function invert the demand for flexible inputs with respect to TFP to obtain a proxy for the unobserved TFP. When markets are imperfectly competitive, the demand for inputs depends on unobserved demand shifters (UDS), which violates the “scalar unobservability” required for inversion. We write the production function as a partially linear model, where the nonparametric part, the proxy for productivity, depends on the UDS. Identification rests on postulating (i) a law of motion for the UDS, which evolves endogenously, and(ii) distributional restrictions to control for the correlation between the UDS and the variables of interest. Output elasticities and productivity impact of endogenous treatments are identified. Using Estonian firm-level data, we find that revenue per employee and the amount, in physical units, of goods exported per employee generally increase with the number of years of exporting activities (NYrEx). However, we find limited evidence of the TFP impact of exporting, with only the most persistent of exporters experiencing such gains. In comparison, the estimated productivity impact of NYrEx from analternative estimator, which assumes perfect competition, closely matches the way revenue per employee varies with the NYrEx. Finally, exporters charge lower markups than non-exporters, where the difference between the exporters’and the non-exporters’ markups increases with NYrEx. |
| Keywords: | Production Function Estimation, Imperfect Competition, Variable Markups, TFP, Unobserved Demand Shifters, Learning by Exporting |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mtk:febawb:150 |
| By: | Simone Bertoli (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, IC Migrations - Institut Convergences Migrations [Aubervilliers], IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Melchior Clerc (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Jordan Loper (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Èric Roca Fernández (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - 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. Self-selection 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 |
| Date: | 2024–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cdiwps:hal-04801563 |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A. |
| Abstract: | The Association of Southeast Asian Nations is considered one of the most successful regional cooperations and has played a remarkable role in regional and potentially global order through principles of consensus, non-interference, and peaceful resolution of conflicts, providing a platform for dialogue both among member states and external partners. Crucial to its architecture is ASEAN centrality, the principle that directs ASEAN to be at the center of every mechanism and discussion concerning political, security, and economic issues, among others. Over the years, however, regional and global developments have placed some weight on the region, leaving the credibility of ASEAN’s centrality in question. For instance, the global order, once thought to be aligned with a unipolar authority, the United States, is increasingly exhibiting the characteristics of a multipolar world, with the emergence of stronger and more independent economies. To understand how the increasing global multipolarity influences ASEAN, this paper investigates how the shifting global geopolitical landscape, characterized by power rivalries and economic interdependence, impacts ASEAN in its central role in regional affairs. The study highlights the varied short-term geopolitical influences that diminish over time, emphasizing the need for ASEAN and the Philippines to strengthen regional integration, diversify partnerships, and balance external relations to maintain and sustain resilience and leadership in the region. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | ASEAN;centrality;cooperation;free trade;geopolitics;globalization;influence;integration;international relations;international trade;multipolarity;polar;power;regional cooperation;regional economy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-38 |
| By: | Gabriel Baratte (ENPC - École nationale des ponts et chaussées); Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Raphaël Lafrogne-Joussier (INSEE) |
| Abstract: | In an increasingly uncertain environment, firms are differently exposed to shocks and may or may not bear the costs of reorganizing their value chain by reshoring or offshoring. This paper is based on a survey of French firms on the decision to reorganize part of their value chain between January 2018 and December 2020, in order to study the prevalence and the modalities of such reorganizations. Such decision turn out to be rare, carried out by firms with a higher share of skilled workers, in manufacturing rather than in services, and dominated by multinational firms. Although high-skilled firms reorganize more, the reorganized business functions are less skillintensive and more intensive in routine tasks. Activities that are more intangibles-intensive are more likely to be reorganized within the firm. Finally, apart from reshoring in France, activities that are offshored are located close to France. India, which combines low average wages with a large pool of highly skilled labour, receives a disproportionate share of skill-intensive activities. |
| Keywords: | Supply-chains, Reshoring, Offshoring |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-04851449 |
| By: | OECD |
| Abstract: | Circular economy strategies in the steel industry hold significant potential for reducing emissions by lowering demand and promoting secondary, low-emission steelmaking processes. Extending the “4R” framework—Reduce, Reuse, Remanufacture, and Recycle—could lead to a 20% reduction in global steel-related emissions by 2050 and relieve pressures on scrap markets that currently face regional imbalances and export restrictions. However, implementing these approaches is challenging due to limited policy focus on steel-specific circularity, quality issues in recycled materials and insufficient infrastructure for scrap management. Therefore, developing targeted policies that integrate circular economy principles in both upstream and downstream steel sectors is essential. Additionally, advanced technologies like blockchain and AI could support traceability and efficiency in scrap collection, boosting circularity and aligning with broader decarbonisation goals. |
| Keywords: | 4R framework, AI, Artificial Intelligence, Blockchain, Circular economy, Circularity, Decarbonisation, Digitalisation, Recycle, Reduce, Remanufacture, Reuse, Steel, Trade |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:169-en |
| By: | Lim, Soyoung (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Growing international demand for more stable and sustainable supply chains presents a fresh new set of challenges for developing countries, which are home to both large reserves of important raw materials as well as production facilities for major global corporations. In response, Official Development Assistance (ODA) is increasingly being deployed to shore up supply chains in developing countries. This ODA typically goes to firms in the logistics, business services, manufacturing, mining and quarrying, and trade sectors. In 2022, supply chain ODA comprised 9.9 percent (USD 18.3 billion) of all ODA provided by member states of the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD), a grouping of ODA donors. South Korea, a major ODA donor, is also sending more and more supply chain assistance to developing countries, as supply chain ODA has risen from USD 390 million in 2012 to USD 1.72 billion in 2022. The vast majority of Korean supply chain ODA (94.2 percent as of 2022) is concentrated in the logistics (transportation and storage) sector. Korea is among the largest providers of supply chain ODA in this sector, but the country has contributed little to no ODA for development in the business services, mining and quarrying, and trade sectors. In this report, I identify several key issues in supply chain ODA and propose solutions for tackling some of the more intractable problems in the space. First, as the scope and definition of supply chain ODA lacks clarity, I survey the landscape to better identify its contours. We find that while mining and quarrying has emerged as the central area of concern in recent years, it is important for policymakers to consider entire supply chains in designing ODA programs, rather than focusing to an excessive extent on procurement of raw materials. Second, most supply chains extend across multiple countries, making it difficult to spatially demarcate supply chain ODA with any degree of accuracy. To deal with this, I advise policymakers to consider the offer-based approach to ODA, an alternative to the more traditional request-based approach. Third, because supply chain ODA is often meant to serve the interests of both the donor and recipient countries, there can be confusion and even tension over how to evaluate the performance of these ODA programs. It is therefore important to adopt measures that help prevent conflicts of interest between donors and recipients in the planning, execution, and evaluation of such programs. Thanks for reading this abstract of a report by the Korea Institute for Industrial Economics and Trade! |
| Keywords: | Official Development Assistance; ODA; supply chain ODA; industrial ODA; aid; Korea; KIET |
| JEL: | F34 F35 O19 O25 |
| Date: | 2024–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:2024_008 |
| By: | Chuel, Cho (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Electric vehicle (EV) sales have slowed down worldwide since 2023, and this trend has continued throughout 2024, fueling concerns that EV demand has plateaued. Yet, this slowdown seems limited specifically to battery electric vehicles (BEVs), as sales of plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs) are surging. This suggests that the overall march toward electrification is proceeding, but may be taking a more circuitous route. In South Korea, HEV sales have been growing rapidly as PHEV sales remain flat and BEV sales crash. This leaves the Korean EV market far more vulnerable to a reverse pivot to internal combustion engine (ICE) vehicles than its global counterparts. The global slowdown in BEV sales has also suppressed sales of Korean-made batteries, but this is mitigated by continued strength in HEV and PHEV sales. The global drive toward carbon neutrality has fueled optimistic expectations regarding the sales of BEVs and PHEVs, and many experts have projected that EVs would account for nearly 40 percent to 50 percent of total global car sales by 2030. These projections now seem somewhat off the mark, however, and need to be revisited in light of the current downturn in the EV market, particularly as BEV sales have stalled. China plays a central role in the global battery and EV markets and presents a major threat to other countries producing these goods. The demand for Chinese EVs is strong not just within China but also around the world, with Chinese EV makers claiming an ever-rising share of the global market. Chinese EVs account for over 10 percent of all EVs sold across Europe, and dominate the EV markets of latecomer countries and developing nations. Chinese-made EVs accounted for nearly 30 percent of all EVs sold in South Korea in the first half of 2024. The same is true in the global battery industry; Chinese batteries enjoy worldwide popularity alongside Chinese EVs, owing to their affordability. Lithium iron phosphate (LFP) batteries made in China are both technologically competitive and cost-effective, offering an extremely strong value proposition. They are poised to dominate the world market. In the long run and on the global level, BEV sales should continue to grow, albeit at a more modest rate. The Korean government and businesses therefore need to do their part to ensure that Korean EVs remain competitive on the global market. New plans are needed to support the production of Korean PHEVs as well, as these EVs are enjoying a surge in popularity worldwide. In order for Korean automakers and battery makers to compete with their Chinese competitors — both in Korea and around the world — Korean automakers need to innovate their production systems and value chains to achieve a level of efficiency on a par with their Chinese competitors. Korean producers, moreover, need to differentiate their products from their Chinese competition by providing superior autonomous driving technologies, smart features, and attractive designs. Battery makers need to adjust their plans for investing in further facilities as global battery demand is unlikely to grow at the optimistic rates projected hitherto. |
| Keywords: | auto industry; automotive industry; electric vehicles; EVs; batteries; car batteries; battery industry; China; Chinese EVs; Korea; Korean EVs; Hyundai; Kia; BYD; KIET |
| JEL: | L52 L62 L65 O24 Q37 |
| Date: | 2025–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:2024_010 |
| By: | Paolo Agnolin (Bocconi University, Duke University and Dondena Research Centre); Italo Colantone (Bocconi University, Baffi Research Centre, GREEN Research Centre, CESifo and Fondazione Eni Enrico Mattei); Piero Stanig (Bocconi University, Yale-NUS and NUS) |
| Abstract: | We study the implications of post-treatment bias in the context of the globalization backlash. We discuss whether horse-race regressions can inform about the relative role of economic vs. cultural drivers. We make three methodological points: (1) if and insofar as cultural variables are post-treatment with respect to economic factors, the estimates of the effect of economic shocks on voting are biased in regressions that include cultural controls (and vice versa); (2) for the same reason, such horse-race regressions do not allow to accurately estimate the relative role of economic vs. cultural factors; (3) one cannot infer mediation effects from changes in regression coefficients for a given factor of interest before and after including post-treatment controls. We accompany the methodological discussion with empirical evidence on the relevance of post-treatment bias in studies of the globalization backlash, both by replicating and expanding on earlier studies, and by presenting novel cross-country results on the culture-economy nexus. |
| Keywords: | Globalization backlash, populism, radical right, post-treatment bias, causal mediation analysis |
| JEL: | F1 F5 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.28 |
| By: | Lin Wu; Jimmy Huang; Miao Wang; Ajay Kumar (EM - EMLyon Business School) |
| Abstract: | The global manufacturing supply chain is undergoing a digital transformation (DT) powered by various digital technologies. In both stable and turbulent environments, DT helps safeguard supply chain performance by enhancing supply chain agility. While research on the use of digital technologies and their impacts on supply chains is growing, there is a lack of an overarching theoretical lens to synthesize their diverse functionalities, effects, and benefits. To address this gap, we adapt the concept of the data network effect to the supply chain context and propose that DT improves supply chain performance by enhancing supply chain resilience (SCRes) and robustness (SCRob) capabilities. To validate our hypotheses, we conducted a large-scale survey for data collection and performed Partial Least Squares Structural Equation Modelling (PLS-SEM) for data analysis. The results confirm the positive effect of DT on supply chain performance and the mediating roles of SCRob and SCRes. Our study contributes to the ongoing discussion on DT in the context of supply chains by introducing a novel theoretical perspective on the supply chain data network effect. |
| Keywords: | Data-driven digital transformation, Data network effect, Supply chain resilience, Supply chain robustness, Supply chain performance |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04850421 |
| By: | Hugo Oriola; Jamel Saadaoui |
| Abstract: | This research provides novel empirical evidence about the exchange rate reaction to international organization loans and geopolitical preferences using an unbalanced panel of 153 countries observed from February 1993 to December 2019. For elected temporary members of the UN Security Council, the IMF loans cause a sizeable appreciation in the exchange rate vis-à-vis the USD of around 2 percent at the 12-month horizon, after controlling for institutional quality. ADB loans cause an appreciation of around 0.25 percent at the 4-month horizons. These effects are stronger when the geopolitical distance with China is higher, indicating a higher credibility for these loans. |
| Keywords: | Exchange rates, Geopolitical preferences, International organization loans, Institutional quality, Local projections |
| JEL: | D78 F30 F42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-2 |
| By: | Claudia Amadei (Department of Economics and Management, University of Padova and Interuniversity Research Centre on Public Economics – CRIEP); Cesare Dosi (Department of Economics and Management, University of Padova and Interuniversity Research Centre on Public Economics – CRIEP); Francesco Jacopo Pintus (Department of Economics, Ca’ Foscari University of Venice and Interuniversity Research Centre on Public Economics – CRIEP) |
| Abstract: | The decoupling of energy-related carbon emissions from economic growth has been mostly driven by reductions of the energy intensity of GDP, which can be attributed either to changes in countries’ economic structure or within-sector energy-efficiency improvements. One question is whether observed reductions in energy intensity may stem from shifts to less energy-intensive sectors without equivalent changes in consumption patterns, raising uncertainty on their true impact on global decarbonization. This paper aims to empirically investigate this mechanism in a panel of 15 OECD countries. First, using an Index Decomposition Analysis (IDA) including an offshoring factor, we show that structural changes in the production side have generally been unmatched with similar changes in consumption patterns. We then proxy a “demand-invariant structural change” in a Bayesian Structural Panel VAR model, by exploiting a novel measure given by the divergence between consumption-based and production-based carbon emissions. We find that shocks in this divergence measure are efficiently associated with demand-invariant structural changes and persistently and significantly reduce national energy intensity. Taken together, our results support the thought that caution should be taken when using production-based indicators to assess a country’s contribution to global carbon mitigation. |
| Keywords: | Energy intensity, Emissions accounting, Offshoring, IDA analysis, Structural VAR, Panel data |
| JEL: | C22 C33 F18 Q43 Q56 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2024.26 |
| By: | Ignacio García Bercero; Petros C. Mavroidis; André Sapir |
| Abstract: | This Policy Brief focuses on possible new Trump tariffs, based on statements made by the President-elect |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bre:polbrf:node_10520 |
| By: | Mohammad Reza Farzanegan (School of Business and Economics, Philipps-Universität Marburg); Jerg Gutmann (University of Hamburg) |
| Abstract: | This study investigates the case of Iran to evaluate how changes in the intensity of international sanctions affect internal conflict in the target country. Estimating a vector autoregressive model for the period between 2001q2 and 2020q3 with quarterly data on internal conflict and its three subcomponents (civil disorder, terrorism, and civil war) as well as a sanction intensity index, we find that an unexpected increase in sanction intensity causes an increase in both civil disorder and terrorism risk. In contrast, the risk of civil war declines after an increase in sanction intensity. These findings for Iran indicate that higher intensity sanctions may allow sender country governments to put pressure on target country political regimes without risking an outbreak of major violent conflicts. Therefore, more intensive sanctions, may also not be helpful in inducing violent regime change. |
| Keywords: | Sanctions, sanction intensity, internal conflict, civil disorder, terrorism, civil war, VAR model, Iran. |
| JEL: | D74 F51 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202420 |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics) |
| Abstract: | This chapter presents the STRA.TECH.MAN–R.A.S.I. framework in response to various global crises currently unfolding, including COVID-19, climate change, and the Russo-Ukrainian war. By combining the dimensions of Strategy, Technology, and Management (STRA.TECH.MAN) with those of Resilience, Adaptability, Sustainability, and Inclusiveness (R.A.S.I.), this approach addresses immediate priorities in today’s turbulent world. The framework offers an integrative theoretical model to guide businesses through innovation and change management in the face of significant global transformations. We argue that our proposed scorecard, accessible and applicable to organizations of varied scales and nature, paves the way for effective crisis management under the prevailing global crisis conditions. Conceptual in nature, this theoretical proposal underscores potential avenues for future research. |
| Keywords: | Stra.Tech.Man approach; new globalization; organizational strategy; crisis; innovation |
| JEL: | D23 F60 L10 |
| Date: | 2024–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:ris:duthrp:2024_008 |