The trade structure effects of endogenous regional trade agreements

This paper formulates an empirical model to estimate the impact of endogenous new regional trade agreement (RTA) membership on trade structure. The likelihood of new RTA membership is influenced by economic fundamentals such as country size, factor endowments, and trade and investment costs. In a sample of country-pairs covering mainly the OECD economies we find a particularly strong effect of endogenous RTAs on intra-industry trade in a difference-in-difference analysis based on matching techniques. The associated trade volume effects are similar to the ones found in previous research on the effects of endogenous RTAs. Overall, this indicates that RTA membership might reduce inter-industry trade not only in relative but also in absolute terms and that the trade volume effect is due to the associated growth in trade within industries.     

Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education

Over the last decade or so a number of OECD economies have migrated from providing higher education free at the point of consumption to levying user charges. However, rather than charges for tuition being paid up‐front, contributions have taken the form of income‐contingent loans. Graduates therefore contribute to the costs of their education, after they have graduated and when they are earning. The earliest example of this instrument was in Australia, with the introduction of the Higher Education Contributions Scheme (HECS). This paper argues that following their successful introduction in Australia, income‐contingent loans offer a good example of successful international policy transfer, with elements of that scheme being adopted and modified for use in New Zealand, South Africa and the United Kingdom. The paper reviews the conditions for successful policy transfer and discusses the reasons why the arrangements have not proliferated in non‐OECD countries.     

Does antidumping stimulate FDI? Evidence from Japanese firms in the UK

Does Antidumping Stimulate FDI? Evidence from Japanese Firms in the UK. — This paper explores which factors influence the number of Japanese firms in the UK and the level of employment and fixed assets in those firms, at a highly disaggregated sector level. We are interested in whether trade policy has had a role to play in the entry and expansion of Japanese firms. The results give some support to the hypothesis that antidumping action has acted as an incentive for Japanese direct investment in the UK. However, it has a relatively modest effect —antidumping cases can explain a maximum of 8 per cent of the expansion in employment by existing Japanese firms in the UK, while they appear to have no influence on the arrival of new firms.     

Live or Let Die? Alternative Routes to Industry Exit

Each year around 8% of Swedish manufacturing firms leave an industry. Of the exit routes available, the least likely is firm closure. Firms are more likely to merge, become acquired or switch to a new industry. We investigate the importance of a range of firm and industry characteristics for the exit decision of Swedish firms from 1980–1996. From our analysis two patterns are evident. First, firms that close down appear to be the most distinct compared to those that remain within the sector. Second the same characteristics can have quite different associations with different exit strategies.

UK Intra-industry Trade with the EU North and South

This paper tests the traditional country and industry hypotheses of intra-industry trade (IIT) in vertically and horizontally differentiated products in the context of the UK's bilateral trade with EU countries. It distinguishes empirically between IIT in vertically and horizontally differential goods, between trade with EU 'North' and 'South' and between the effects of using GDP proxies and direct measures of national factor endowment differences. The paper shows that the robustness of the results of earlier multi-country studies are open to challenge, that the separation of IIT into vertical and horizontal IIT offers an important innovation to the empirical work in this area and that further development of large numbers models of IIT in quality differentiated goods is required.     

Tests for factor homogeneity and industry classification

Conclusions As we saw at the outset, the issue of whether statistical classifications of industries map on to groups of activities that can be aggregated together in an economically meaningful way is an important one. It is especially important in the context of IIT analysis, not only for its implications for measuring IIT but also from the standpoint of assessing its adjustment implications.     

Back to the future: Taking stock on intra-industry trade

Back to the Future: Taking Stock on Intra-Industry Trade. — This paper begins by examining the unresolved issues identified in an earlier analysis of the literature. It then sets out developments in theory, measurement, empirical analysis and policy. The progress made on each of these fronts is assessed and remaining unresolved issues identified. The paper argues that the last decade has seen very considerable progress in the measurement of intra-industry trade and in the way the empirical investigations are conducted. It also argues that on the modelling front considerable progress has been made in incorporating spatial and growth dimensions into the paradigm.     

Sectoral transformation and labour-market flows

This paper examines the pattern of sectoral transformation thathas occurred in the United Kingdom in the post-war period anddocuments the flows of workers that have occurred between industrialand services sectors and the non-employment that has resulted.It then examines what consequences sectoral transformation hashad for wages and unemployment, both at the aggregate and theindividual level. It concludes by examining the policy implicationsof its findings.