Greece’s Potential Trade Flows: A Gravity Model Approach

This paper attempts to access whether Greece’s low openness is a reflection of its low trade integration primarily as a result of the country’s relatively poor goods export performance. The analysis estimates potential trade flows for Greece through a gravity model using a panel of cross-country data, which cover bilateral trade flows concerning the EU member states. These flows are then derived by applying the estimated parameters to the Greek economy. The results show that actual Greek exports fall short of potential ones, while the opposite is true with respect to imports. This becomes more profound when the extent of intra-industry trade is included in the analysis. The findings for the Greek exports differ considerably from the corresponding ones for Portugal, a country with similar characteristics, manifesting the limited convergence of Greece’s trade patterns towards the EU average as well as its unique geographical location relatively to the other EU countries.

Induced Institutional Change in the Trade and Environment Debate

Because of the assumption of constant emission factors, economy-environment models often show that free trade has negative environmental consequences. However, this pessimistic view ignores the possibility of trade strengthening the demand for regulatory institutions. An `institutional optimism hypothesis, stating that the net environmental result of trade liberalization is benign, is thus formulated in this paper. The hypothesis is examined with a CGE model that treats institutional change as an endogenous process dependent on income. Application to NAFTA, using a broad range of scenarios, provides some support for the institutional optimism hypothesis. The net pollution effect of trade liberalization is in many cases beneficial or low, even for the country specializing in polluting industries. The implication is that in many cases environmental interests are served better by a focus on institution building in trading partners, than on the process of trade liberalization itself.     

The explanatory power of market-based trade theories for the trade between market economies and reform countries

We try to explain the bilateral trade structure between Austria and three of its former socialist neighbours by trade theories developed for market economies, specifically focussing on the Heckscher-Ohlin model in its commodity version. We use data on factor intensities in about 100 industries in the EC and in Austria and can explain a modest amount of the trade structure before and after the start of the transition process and to some degree also of the change in the trade structure. The restrictions given by the data, the absence of a price system in socialist countries and the disequilibria in the actual trade suggest why the explanatory power of the tested theory is not higher. The study however indicates that at least some part of the industry in the former Czechoslovakia and in Poland had been well endowed with capital and energy before the transition. In the first five years of the transition a balanced trade turned into a high deficit of the reform countries.The authors wish to thank the participants of the EMPIRICA ECONOMIC POLICY FORUM Consequences of Eastern European Reform in Vienna, October 18, 1993 for an intensive discussion. Thanks to Robert Holzmann, Michael Landesmann, Gabor Oblath, Sandor Richter, Gunther Tichy, Michael L. Wyzan for comments. We also thank Christa Magerl and Elisabeth Neppl-Oswald for the calculations and for reading various drafts of the paper.     

Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development

We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instrumental variables for institutions and trade. Our results indicate that the quality of institutions trumps everything else. Once institutions are controlled for, conventional measures of geography have at best weak direct effects on incomes, although they have a strong indirect effect by influencing the quality of institutions. Similarly, once institutions are controlled for, trade is almost always insignificant, and often enters the income equation with the wrong (i.e., negative) sign. We relate our results to recent literature, and where differences exist, trace their origins to choices on samples, specification, and instrumentation.     

Impact of openness, economic policy reform and regional shocks on trade and growth of Thailand： An econometric study

Thailand has currently enhanced and promoted intensive trade and investment liberalization and implemented long-term growth policy according with current regional economic integration, WTO obligations and globalization. Nevertheless, several recent internal and external factors e.g. the massive SARS and avian flu outbreaks, the Indian Ocean tsunami devastation, the Asia financial crisis and domestic policy reforms （ICSEAD, 2006） have also impeded this policy. While the issues are important for Thailand and developing countries in Asia, only limited research has been undertaken to investigate them. The paper conducts a substantive quantitative study to contribute to these trade and development policy issues. A new econometric modelling policy method, namely the generalized gravity theory （Tran Van Hoa, 2004） is used to develop a simple flexible simultaneous-equation econometric model of Thailand＇s openness model with its seven major trade partners （ASEAN-4, Australia, the USA, the EU, China, Japan and India）. Using data from the ICSEAD, the World Development Indicators and the Bank of Thailand databases, the paper reveals efficient and reliable empirical findings on trade-growth causality, trade determination including the impact of shocks and policy reform on trade and growth between Thailand and its major trade partners over the past two decades. The paper also provides evidence on the linkages between trade in goods, FDI and services and regional economic integration for more credible policy implications.     

The true story of wine and cloth, or: building blocks of an evolutionary political economy of international trade

Standard trade theory is a theory about the structure of international production which emerges from an international arbitrage equilibrium. It is not a theory about the activity of trading which is simply taken for granted or which is treated implicitly in the concept of exogenous trade costs. This paper proposes an alternative evolutionary framework based on networks as structures of non-price interactions into which price/quantity-interactions are embedded. These networks manifest different levels with specific problems of coordination and communication, i.e. levels of market transactions, of transaction-enabling transactions, of markets for market access rights, and of the respective transaction-enabling transactions. Furthermore, the theory is based on the analysis of capabilities to trade, resting upon competitive advantage, which cannot be imitated. The exploitation of competitive advantage presupposes the capability to control network interactions, identified as social capital. Finally, the security of market access reflects power balances among countries.

Trade,product variety and welfare: a quantitative assessment for mainland China

We calculate a variety of welfare gains for Mainland China, following the approach of Romer (1994 Romer, P. 1994. New goods, old theory, and the welfare costs of trade restrictions. Journal of Development Economics, 43(1): 5–38. [Crossref], [Web of Science ®] , [Google Scholar]), who emphasized that proper modelling of the impact of trade restrictions on the number of available product varieties is crucial for quantifying the welfare impact of trade liberalization. The empirical work presented relies on direct measures of product variety calculated from highly disaggregated trade data. The emerging conclusion is that freer trade has indeed boosted welfare.     

Trade and the Transmission of Technology

This paper integrates earlier studies on the link of productivity and research and development (R&D) in different industries of a closed economy with the more recent emphasis on R&D-driven growth and international trade in open economies. In this framework, technology in the form of product designs is transmitted to other industries, both domestically as well as internationally, through trade in differentiated intermediate goods. I present empirical results based on a new industry-level data set that covers more than 65 percent of the worlds manufacturing output and most of the worlds R&D expenditures between 1970 and 1991. The analysis considers productivity effects from R&D in the domestic industry itself, from R&D in other domestic industries, as well as in the same and other foreign industries. I estimate strong productivity effects both from own R&D spending and R&D conducted elsewhere. The contribution of R&D in the industry itself is about 50 percent in this sample. Domestic R&D in other industries is the source of 30 percent of the productivity increases, and the remaining 20 percent are due to R&D expenditures in foreign industries.     

Measuring intraregional trade

This article develops a novel measure of intraregional trade. The new measure is easy to implement and robust to different gravity models. I use the new measure to study the economic integration of the major trade blocs and discuss how the measure can be extended to analyse the roles of trade policies and institutions in regional integration.     

Vertical Innovation and Catching-Up: Implications of EU Integration for CEECs-5

We analyze the role of vertical innovation in trade patterns for developing economies trading with technologically advanced countries. A model is presented where the international diffusion of knowledge, promoted by economic integration, is the source of a technological catching up and leads to a convergence in the quality of traded goods, with a positive effect on exports. We then turn our attention on the evolution of trade between the Central and Eastern European countries (CEECs-5) and their European Union partner countries, assessing whether economic integration has increase the quality of the goods produced. For the period 1995–2005, we find evidence of the increasing role of intra-industry trade and vertical differentiation and a process of specialization in higher quality products, especially in the medium- and high-skill sectors.

Structural breaks in Austrian foreign trade with Eastern Europe during the early 1970s

Between 1955 and 1987, Austrian trade with Eastern Europe was characterized by specific factors. On the one hand, trade flows were influenced by the central planning system in Eastern Europe. On the other hand, Austria applied non-standard policy tools to manage Eastern trade. Furthermore, Austrian trade with Eastern Europe was affected by the implementation of the free trade agreement with the European Communities (EC) and the change in the institutional framework for Eastern trade in the early 1970s. Austrian Eastern exports were fostered by increased export subsidies and barter trade. We assess the net effects of these contradictory measures of trade policy by estimating aggregate import and export equations and testing for a structural break in 1973. Our results are consistent with the view that Austria subsidized Eastern exports to pursue a countercyclical policy after 1973.

Against free trade: Neoclassical and steady-state perspectives

The author argues against free trade as a default position for international trade. He shows that arguments for free trade based on comparative advantage do not hold in reality. First, free trade makes cost-internalization for single countries difficult leading to standard-lowering competition and misallocation. Second, the international mobility of capital leads to absolute rather than comparative advantage for single countries, thus leading to maldistribution. Finally, the ecological basis seriously limits the scope for catching-up. Priority should be given alternatively to domestic production of a steady-state type with balanced trade.     

On the determinants of trade in services: evidence from the MENA region

This article examines the determinants of aggregate flows of service trade in MENA countries using an adapted version of the gravity model and a panel data set covering the 2000 to 2009 period for 21 countries and 10 sectors. A new determinant of trade performance is introduced: the number of bound commitments undertaken by a sector in the WTO as well as the availability of those commitments by mode of supply. The results show that being a WTO member boosts trade in services. In addition, the number of bound commitments increases exports, imports and trade in services. This positive and significant effect remains robust even after controlling for several econometric issues, namely, the selection bias related to the WTO membership and the endogeneity of commitments.¹1. We are grateful to the editor Mark Taylor and two anonymous referees for providing valuable comments and suggestions. We would also like to thank the participants to the ERF 18th Annual Conference and to the 32nd Annual Meeting of the Middle East Economic Association (MEEA). This work benefited from the financial support of Economics Research Forum (ERF). It does not reflect the Forum’s opinion.     

Trade,tropical deforestation and policy interventions

Trade interventions are increasingly advocated as a means for controlling timber-related tropical deforestation. This paper analyzes the impact on deforestation of such policy instruments in a dynamic framework. The forest is modelled as a potentially renewable resource, and timber is extracted for purposes of export and domestic consumption. Optimality conditions for a variety of model specifications are derived, and the impacts of changes in the terms of trade and market structure on long-run deforestation are analyzed. The results of this analysis suggest that trade interventions that seek to affect the terms of trade against the export of tropical timber products are in the long run a second-best policy option for influencing the deforestation process.We would like to thank Joanne Burgess for contributing to discussions that resulted in this paper, which were held at the Beijer Institute of Ecological Economics of the Royal Swedish Academy of Sciences. We acknowledge the financial support given by the Beijer Institute and the hospitality of its staff, and in particular we are grateful to Prof. Karl-Göran Mäler for inviting us to use the facilities at Beijer and to Charles Perrings, Director of the Biodiversity Programme. Additional support for Edward Barbier's participation in the research was also provided by the International Tropical Timber Organization, under contract no. PCM(XI)/4, Economic Linkages Between the International Trade in Tropical Timber and the Sustainable Management of Tropical Forests. We are grateful to comments provided by two anonymous referees; however, the usual disclaimer applies.     

Trade Structure and Trade liberalization: The emerging pattern between the EU and Transition Economies

The purpose of this study is to find empirical evidence for the assumption that trade liberalization unlocks the potential of the Transition Economies (TEs) to achieve technological upgrading, productivity progress and catching-up (in terms of income). The study examines the trade structure now emerging between the European Union (EU) and the TEs in the light of two sets of differently liberalized trade items identified by the European Agreements. The aim is to determine whether trade liberalization has helped to supersede the structures – reflected mainly in the low quality of products – inherited by the TEs from the command economy. The empirical results are interpreted in the light of the Flam-Helpman quality-cycle model. We find evidence of an ongoing division of labor between high quality products (EU) and low quality products (TEs) according to a cycle. The first stage comprises the already well established dominance of quality advantage products by EU countries producing and exporting high-quality products, which crowd out the TEs' production of similar products. The second stage is the exploitation of cost-advantages by TEs in less liberalized trade, and there they appear to achieve better results. All these results may be taken as support for an active government in TEs.     

Increasing Forest Conservation in Norway: Consequences for Timber and Forest Products Markets

This paper analyses the impacts on timber and forest products markets of increasing forest conservation in Norway. A partial equilibrium forest sector model is applied to analyse effects on roundwood and forest products prices, quantities and trade of four alternative conservation extents. These alternatives are based on a recent biological analysis of the conservation needs in order to protect biodiversity in Norway. Roundwood prices are projected to increase moderately when conservation increases domestically only, since the Norwegian forest industry substitutes imported fibre for domestic. The impacts on roundwood prices are more substantial if also Norways forest products trading partners increase the forest conservation. If forest owners voluntarily conserve forests subject to an economic compensation (which currently is the most likely policy in Norway), the model results imply that forest owners on average are better off with increased conservation. Domestic sawnwood production is projected to reduce when assuming increasing forest conservation, while the production level in the pulp and paper industry is almost unaffected in the short-run. Finally, increasing demand for forest products as a result of environmental good-will may increase roundwood prices and harvest levels in unaffected forest areas significantly.     

The Austrian Theory of Institutions Applied to Science-Industry Relationships: The Relevance of Innovative Institutions

This contribution aims at using an Austrian approach of institutions to discuss specific institutional arrangements in the current working of science-industry relationships. By combining distinctive characteristics between Menger's and Hayek's research programs, we establish a typology of institutions that goes beyond the usual way to approach business institutions and allows us to identify transitory types of institutional arrangements called innovative institutions. We apply that Austrian approach of institutions and address its relevance to highlight some puzzling issues derived from empirical evidence. Then, innovative institutions reveal particularly suited to understand how public and private research work together in science-industry relationships.     

Environmental tariffs on polluting imports

This paper examines the implications for the use of trade measures as weapons to address global environmental concerns. There are already proposals in the U.S. senate to impose an environmental tariff against foreign nations whose cost advantages stem from less stringent environmental standards than the U.S. The paper argues that trade policy measures typically are not the first best instruments for achieving environmental objectives. Even theoretically they could be shown to be welfare improving only under a very narrow range of circumstances. Their use in place of more efficient policy instruments may not only end up distorting the patterns of world trade but also may worsen the overall patterns of environmental quality. Simulation exercises undertaken here suggest that it is highly unlikely that countries would alter their environmental behavior because of the imposition of the proposed U.S. tariff. Hence the proposed legislation has very uncertain environmental consequences. Even if the policy has been mainly designed to protect domestic industries, it would only provide a minor margin of protection because the costs of complying with the environmental standards represent a relatively small element in the total costs. The analysis suggests that trade policy introduced in this fashion will have no significant impact on the patterns of world trade and pollution.     

China–US trade: implications on conflicts

ABSTRACT

In this study, we examine various aspects of China’s trade, the U.S.’ trade, and the bilateral trade between the two countries. The analysis of each aspect has direct and indirect implications on trade conflicts between the two countries. We focus on important factors, such as the growth of trade, import penetration, increased competitiveness of Chinese firms, comparative advantages of Chinese goods, China’s WTO entry and its compliance, and bilateral trade imbalance. While each of the factors can lead to trade frictions, individual factors will not have led to a large-scale trade war. These factors converge within a brief period and thus can be considered the China shock, thereby making other countries’ adjustments to their economic structures difficult. Therefore, trade frictions are inevitable.     

基于国际贸易专业的本科英语教学思考

随着经济全球化进程的加快,对国际商务人员的英语也有着越来越高的要求,所以,高校中国际贸易专业学生的英语教学工作也显得越来越重要。我国高校教学改革的出发点和目的是学科知识和语言能力的＂双丰收＂。以认知心理学为基础,思考现阶段国贸专业的英语教学是高校教师的关注点,其中十分注重根据国贸专业学生学习外语的特点对专业用途英语教学（ESP）进行研究。