Import Diversion under European Antidumping Policy

This paper studies empirically the effects of European antidumping cases on trade diversion from importers named in an antidumping investigation, to countries not named in the investigation. For this purpose we use a unique data set at the 8-digit product level. The amount of import diversion can be regarded as an indication of the effectiveness of antidumping policy. We find that trade diversion in the European Union caused by antidumping actions—in contrast to the United States—is limited, suggesting that the European Union's antidumping policy is more effective in keeping imports out. This result holds even after controlling for selection bias in the antidumping investigation procedure. A number of explanations for this difference in trade diversion as a result of antidumping policy between the European Union and United States are formulated.     

Realizing stock market crashes: stochastic cusp catastrophe model of returns under time-varying volatility

This paper develops a two-step estimation methodology that allows us to apply catastrophe theory to stock market returns with time-varying volatility and to model stock market crashes. In the first step, we utilize high-frequency data to estimate daily realized volatility from returns. Then, we use stochastic cusp catastrophe theory on data normalized by the estimated volatility in the second step to study possible discontinuities in the markets. We support our methodology through simulations in which we discuss the importance of stochastic noise and volatility in a deterministic cusp catastrophe model. The methodology is empirically tested on nearly 27 years of US stock market returns covering several important recessions and crisis periods. While we find that the stock markets showed signs of bifurcation in the first half of the period, catastrophe theory was not able to confirm this behaviour in the second half. Translating the results, we find that the US stock market’s downturns were more likely to be driven by the endogenous market forces during the first half of the studied period, while during the second half of the period, exogenous forces seem to be driving the market’s instability. The results suggest that the proposed methodology provides an important shift in the application of catastrophe theory to stock markets.     

Gross job flows and the evolution of size in U.K. establishments

This paper analyzes a relationship between establishment size and gross job creation and destruction in the U.K. during the 1980's. I find that the gross job creation rate is highest in small plants and lowest in large ones. In contrast, the gross job destruction rate is lowest in small plants and highest in large ones. In absolute numbers, however, large plants create, but also destroy most jobs. I test convergence in plant size by computing Markov transition matrices. The advantage of this approach is that it avoids Galton's fallacy of regression towards the mean and that it reflects job creation and destruction between size classes. I find no evidence of convergence, hence no regression towards the mean.This paper benefitted from seminars at the London School of Economics and Trinity College, Dublin. I thank A. Lamo, R. Koopmans, A. Manning, A. Oswald, C. Pissarides, D. Quah, H. Vandenbussche and an anonymous referee for helpful comments and discussions. All errors are mine.     

Gross job flows in Ukraine

This paper documents and analyses gross job flows and their determinants in Ukraine using a dataset of more than 2200 Ukrainian firms operating in manufacturing and non‐manufacturing for the years 1998–2000. Job destruction dominates job creation in both 1999 and 2000. Another clear‐cut result of our analysis is the strong positive effect of new private firms on net employment growth. We also find an inverse relationship between job reallocation and size for both manufacturing and non‐manufacturing, while only in the latter sector is employment growth inversely related with size. The main focus of the paper is the effect of trade flows on employment adjustment in manufacturing. Our results show that both employment growth and job reallocation at the firm and two‐digit sector level are affected by strong exposure to import competition and product market competition in export markets. These effects are more pronounced when we consider trade flows to the world at large and to the EU than when the analysis is based on trade flows to the CIS. JEL Classifications: E24, F14, J63, P23.     

The Effect of E-Business on Corporate Performance: Firm Level Evidence for Belgium

E-business offers buyers and sellers a new form of communication and provides an opportunity to create new marketplaces. In general it is suggested that the development of e-business results in higher firm productivity and efficiency as a result of lower search and transaction costs. However, there are a number of recent studies, which demonstrate that firms engaging in e-commerce need not perform better compared to more traditional enterprises. To date, there is little empirical evidence on the impact of information technology on corporate performance. This paper is the first that uses a large representative data set of Belgian firms to study empirically the impact of e-business on productivity and cost efficiency of firms. Our main conclusions can be summarised as follows: (1) The penetration of the Internet in Belgian firms is high; however, the use of e-business is still limited. (2) It is especially the large firms that engage in e-business and mostly in e-procurement. (3) E-business has no effect on total factor productivity in small firms; however, we find positive effects on performance of e-business in large firms.