Diversification and Specialization Paradox in Developing Country Trade

This paper examines and resolves a puzzling issue associated with less developed country (LDC) export compositions. Since the newly industrialized country (NIC) takeoff during the early 1970s, LDC exports have involved an increasingly broader and diversified export base. Yet trade theories, both “old” that focus on classic comparative advantage, and “new” which rely on scale economies, lead to expectations of growing specialization as a concomitant of LDC takeoff. This study examines periods of rapid growth and structural transformation of trade for a representative group of LDCs covering a wide geographic and temporal sample.     

Product Market Integration,Rents and Wage Inequality

Globalization in the form of product market integration affects labor markets and produces winners and losers. While there are aggregate gains, it is in general ambiguous how inequality is affected. We explore this issue in a Ricardian model and show that it depends on the balance between “protection” and “specialization” rents. In particular, wage inequality among similar workers (residual wage inequality) may be U ‐shaped, at first decreasing and then increasing in the process of product market integration. Consequently, there may be gains in both the efficiency and the equity dimension until integration reaches a certain level at which a trade‐off arises.     

Industrial subsidy policy and the optimal level of specialization

Despite compelling rationale based on the theory of comparative advantage for free trade, many countries adopt restrictive trade practices. In this paper we investigate this puzzle in a stylized two-country two-good Ricardian model of international trade. Governments can offer protection to domestic industries via industrial subsidy policy in this model. We prove the existence of a Nash equilibrium in the two-player game where industries choose the level of specialization. We determine the necessary conditions for complete specialization in (a) the free-trade regime; and (b) the protectionist regime implemented through industrial subsidy policy. Our results show that if the government intends to promote complete specialization, then a high degree of comparative advantage and a large elasticity of substitution between export and import goods are required. Empirical evidence on these two parameters indicate that complete specialization is unlikely to survive in the protectionist regime.     

Risk sharing and industrial specialization in China

We investigate how risk sharing shapes industrial specialization across prefecture-level cities in China. By unbundling the mechanisms of risk sharing, we find that ex ante risk sharing generates a first-order stimulant effect on the geographical concentration of manufacturing industries, particularly for non-state-owned enterprises and cyclical industries. Ex post risk sharing matters only for state-owned enterprises. This result remains robust to instrument variable estimation and controlling for other determinants of industrial specialization. Finally, we show that interregional labor migration (special fiscal transfers) plays an important role in promoting interregional ex ante (ex post) risk sharing. The study implies that much more risk sharing and efficiency gains from industrial specialization would be achieved if capital markets and credit markets are better developed.     

地方保护主义对地区产业结构的影响——理论与实证分析

本文旨在考察地区政府保护对地方产业结构的作用,对地区间产业结构趋同问题进行了研究。本文首先提出理论模型,在一个厂商投资行为模型中,从改变地区间贸易成本和政府直接投资两个方面引入地方政府行为变量,讨论政府行为对地区产业结构的影响。模型分析发现贸易成本的增加会促使地区间产业结构趋同,而政府直接投资对产业结构的影响并不确定,在一定情况下会促进地区间产业结构差异化。这些结论在随后进行的对中国近年地区和产业数据的实证研究中得到了验证。趋势分析发现样本年间我国地区产业结构差异的全国平均水平在逐年增大。而以地区为着眼点的计量回归分析则发现,在控制了运输条件、地区资源差异和产业结构等历史因素之后,政府变量对地区间产业结构差异变化有显著影响。政府设置贸易壁垒增加地区间贸易成本,会促进地区间产业结构趋同。政府的投资行为则在整体上促进了地区间产业结构的差异化。     

Labor immobility and the transmission mechanism of monetary policy in a monetary union

It is believed that a common monetary policy in a monetary union will have identical effects on different countries as long as these countries have identical fundamentals. We show that, when there is specialization in production, the terms of trade react to the shock. The transmission mechanism of a monetary shock has in this case an additional channel, the terms of trade. This is the case even if state contingent assets can be traded across countries. For a reasonable parametrization, the differential on the transmission across countries is quantitatively significant when compared with the effect on the union's aggregates. Monetary shocks create cycles with higher volatility in “poor” countries than in “richer” ones.     

Trade and Inequality with Limited Labor Mobility: Theory and Evidence from China

Does globalization increase inequality in developing countries, and if so, how? In a theoretical model of a regionally heterogeneous economy, we show how different regional rates of technical progress due to trade and FDI interact with constraints to unskilled labor mobility. As favored regions benefit more from trade, their growing demand for skills drains skilled workers from disadvantaged areas, and average incomes in the former grow faster than in the latter. Moreover, this unbalanced regional growth may also raise inequality within each region. It could even reduce absolute income per capita in the less favored region. We test these predictions with Chinese data from the Open Door era. Results confirm that different regional growth rates have increased both interregional and intraregional inequality. Moreover, growth of skills‐based export industries in coastal regions is associated, other things equal, with lower incomes for the poor in inland provinces.     

平等与增长携手并进——收益递增、策略性行为和分工的效率损失

本文中的策略性劳动分工模型解释了为什么人们有时不选择分工，并造成社会产出损失。由于在高技能部门里存在“干中学”效应，低技能者如果背离比较优势而从事高技能部门的生产，就可以在未来分享劳动分工收益的过程中获得更高的谈判地位，甚至可能逆转自己的比较优势。然而，这种个人理性的选择却可能导致社会的产出损失。这个模型的一个意外而合理的含义是，在策略性的劳动分工决策中，如果未来一期由交易关系瓦解而造成的损失足够小，那么，交易成本的减少也可能导致当期分工的恶化。但我们的模型也包含了交易成本下降可能促进分工这一既有理论中的特殊情况。这个模型有助于理解在国际贸易、国内区域间分工和家庭内分工中广泛被观察到的低效率现象及相应的政策。     

Effect of goods market segmentation on labor mobility: Evidence from China

This study empirically investigates the effects of goods market segmentation on interregional labor mobility using data from National Population Surveys in China. The findings reveal that a one-standard deviation increase in the goods market segmentation index reduces interprovincial migration by 4.0%. Restraining interregional trade and improving industrial specialization are the two mechanisms at work. Further analysis indicates that the restrictive effect of goods market segmentation is greater on highly educated laborers and the labor flows from poorer to richer regions. The heterogeneous analysis also implies that migrants are more concerned about educational resources and consumption diversity.     

Making Sense of the Comparative Advantage Gains from Trade: Comment on Batra

This paper addresses Ravi Batra’s (2002 ) criticism of the basic comparative advantage gains‐from‐trade model. While Batra’s criticism is based on the selection view interpretation of real income, the gains from trade can only be properly understood from the options view interpretation of real income. I also show how a recent empirical implementation of the gains‐from‐trade model defies Batra’s claim that “the consumption gain . . . is not subject to measurement” (2002, p. 642).     

POLITICAL ECONOMY OF GOVERNMENT SPENDING FOR TRADE LIBERALIZATION: POLITICS OF AGRICULTURE RELATED GOVERNMENT SPENDING FOR THE URUGUAY ROUND IN JAPAN

This paper investigates the effect of political factors on the interregional allocation of the budget to assist farmers in coping with agricultural trade liberalization in Japan. We present a simple model to show the relationship between political factors and interregional budget allocation and empirically examine whether political factors played a key role in the interregional allocation of Japanese government spending for the Uruguay Round agricultural trade liberalization. Our findings show that this allocation was distorted due to political reasons, which was problematic from the standpoints of fairness and social efficiency.     

收益递增、发展战略与区域经济的分割

本文考察了在收益递增条件下产生重复建设和区域经济分割的根源。由于发达地区在高技术产业拥有比较优势 ,且通常具有较快的技术进步速度 ,所以往往在贸易利益的分享中得到了较大的份额。而落后地区如果选择暂时不加入分工体系 ,它将失去当期分工的收益 ,但却可以提高自己在未来分配分工收益的谈判中的地位 ,甚至可能实现对发达地区的赶超。落后地区的战略性行为虽然在一定条件下对于其自身是有利的 ,但却造成了社会总产出减少和资源配置效率的损失。中央政府的财政转移可以促使落后地区加入分工体系 ,这时 ,财政转移就兼有了改善收入分配和资源配置效率两种功能     

Pushing Economies (and Students) Outside the Factor Price Equalization Zone

Despite overwhelming empirical evidence of the failure of factor price equalization, most teaching of international trade theory (even at the graduate level) assumes that economies are incompletely specialized and that factor price equalization holds. The behavior of trading economies in the absence of factor price equalization is not well understood, and some major textbook treatments err. The authors map regions of specialization and diversification for standard competitive economies and show how outputs, goods, and factor prices change as economies move within and across different regions of diversification and specialization. Two examples of how the analysis can enrich graduate-level trade teaching are given: the substitutability of goods trade and factor movements, and debates over the trade and inequality.     

Dialect,transaction cost and intra-national trade: evidence from China

Growing evidence emphasizes the important role of network effects on bilateral trade. This paper proposes a new factor – dialect difference, which decreases social network across regions, may increase transaction costs and thus shape interregional trade pattern. Taking China as an example, we use a gravity model considering network effects and provincial data from 1997 to 2009 to examine the effect of dialect difference on intra-national trade. We find that dialect difference has a significantly negative effect on interprovincial trade. Moreover, this paper explores the time dimension of the effect of dialect difference. We find that the negative effects of dialect difference on trade have been diminishing over time. Migration and the promotion of Mandarin have increased interregional cultural connections and thus mitigated the negative effects of dialect difference.     

Comparative Advantage and the Location of Production

The paper returns to a familiar topic in international trade, comparative advantage, introducing it into Krugman's classic, core–periphery model of economic geography. This extra force of dispersion radically changes the stability properties of the model. Instead of the familiar result that trade liberalization leads to increased industrial concentration, lowering trade costs leads initially to increased concentration and then to dispersion of production. When a pattern of comparative advantage exists, integration may lead to international specialization of production. This may be good news for peripheral countries, which may be able to retain industry despite the attraction of the core.     

Comparative Advantage and Economies of Scale: When Does Ricardo Dominate Smith?

This paper develops a two-country, two-sector (X and Y) model of international trade. One country has comparative advantage in the increasing returns Y-sector. The direction of trade depends on the relative size of the countries and the relative strength of economies of scale and comparative advantage. An equilibrium where the smallest country exports the Y-good and the largest country loses from trade is possible. A dynamic equilibrium where the X-sector is subject to learning by doing locks in the initial pattern of specialization. Yet, there may be few welfare gains from protecting the X-sector in the small country.     

自然开放度、政策导向开放度与劳动生产率提升——理论和基于中国省际面板数据的实证研究

本文以李嘉图模型为基础,分析了贸易开放对提升中国劳动生产率的效应。本文使用1994-2005年间中国省际面板数据,就贸易开放对提升中国劳动生产率水平所产生的效应进行了实证研究。本文得出两个重要的分析结果:第一,贸易开放可以通过比较优势来确定一国专业化产品的生产,如果一国的比较优势存在于干中学系数较大的部门,贸易开放将提高劳动生产率;但若一国的比较优势存在于干中学系数较小的部门,贸易开放将降低劳动生产率;第二,本文将贸易开放度分解为自然开放度和政策导向开放度,结果发现,当自然开放度较小时,政策导向开放度的增加将降低劳动生产率;当自然开放度较大时,政策开放度的增加将提高劳动生产率水平。     

“一带一路”沿线国家贸易网络结构特征及其对技术进步的影响——基于社会网络分析法的研究*

本文采用社会网络分析法探讨了2008—2018年“一带一路”沿线国家贸易网络结构特征,测算沿线国家贸易网络中心位置对技术进步的影响,并对不同收入国家进行异质性分析。研究发现：“一带一路”沿线国家整体贸易结构比较松散,意大利、土耳其、韩国、俄罗斯、中国和新加坡等国家（地区）位于网络核心,共有23个国家（地区）发挥“中介”或“桥梁”作用,影响着其余沿线国家之间的贸易联系;超过四成的沿线国家（地区）与非贸易伙伴国具有较强的间接贸易关系。贸易网络中心位置的提升能显著促进母国技术进步,间接贸易影响母国技术进步的边际效应大于直接贸易;中高等收入水平国家直接和间接贸易地位和贸易强度的提升均显著促进了技术进步,低等收入国家贸易强度的提升也能促进母国的技术进步。     

TRADE DISPUTES AND SETTLEMENT

We develop a model of trade agreements with renegotiation and imperfectly verifiable information. In equilibrium, trade disputes can occur and can be resolved in a variety of ways: Governments may settle “early” or trigger a court ruling, and in the latter case, they may implement the ruling or reach a post‐ruling settlement. The model yields predictions on how the dispute outcome depends on the contracting environment and how it correlates with the optimal contract form. We find support for a key prediction of our model using data on the outcomes of actual trade disputes in the General Agreement on Tariffs and Trade/World Trade Organization.     

Product Market Integration and Heterogeneity—Rent Sharing and Pricing to Market

International product market integration makes market penetration easier and therefore creates both export opportunities and import threats. This changes the competitive position of firms and is associated with changes in trade, production, and specialization structures. The gains and losses in this process are unlikely to be equally shared due to heterogeneity across firms/sectors. In a Ricardian trade model with heterogeneity across firms, we find “pricing to market”—effects not only for exports, but also for pricing in the domestic market even for nontradables. Rents to be shared in wage bargaining differ across tradables and nontradables. It is shown that lower trade frictions affect the scope for “pricing to market” and cause wages to become more closely driven by (relative) productivity. Labor market prospects tend not to improve for low wage jobs, and not to deteriorate for high wage jobs.