Non-tariff and overall protection: evidence across countries and over time

This paper analyzes the evolution of the incidence and intensity of non-tariff measures (NTMs). It extends earlier work by measuring protection from NTMs over time from a newly available database and provides evidence on the evolution of NTMs. In particular, building on Kee et al. (Econ J 119(534):172–199, 2009), this paper estimates the ad valorem equivalents of NTMs for 97 countries at the product level over the period 1997–2015. We show that the incidence and the intensity of NTMs were both increasing over this period, with NTMs becoming an even more dominant source of trade protection. We are also able to investigate the evolution of overall protection derived jointly from tariffs and NTMs. The results show that the overall protection level, for most countries and products, has not decreased despite the fall in tariffs associated with multilateral, regional and bilateral trade agreements in recent decades. We also document an increase in overall trade protection during the recent 2008 financial crisis. Overall, this study sheds light on an under-researched aspect of trade liberalization: the proliferation and increase of NTMs.     

Product price differences across countries: determinants and effects

A substantial part of international differences in prices of individual products, both goods and services, can be explained by differences in per capita income, wage compression, or low wage dispersion among low-wage workers, and exchange rate fluctuations. Higher per capita income is associated with higher prices and higher wage dispersion with lower prices. The effects of higher income and wage dispersion are moderated for the more tradable products. The effects of wage dispersion, on the other hand, are magnified for the more labor-intensive products, particularly low-skill services. The differences in prices across countries are reflected in differences in the composition of consumption. Countries in which prices of labor-intensive services are very high, such as the Nordic countries, consume much less of them. For some services, the shares of GDP consumed in high-price countries are less than 20% of the shares in low-price countries. Since these are services of very low tradability, the low consumption levels of these services imply low employment in them.     

Trade openness, real exchange rates and job reallocation: evidence from Belgium

This paper investigates the impact of real exchange rate movements on job reallocation at the industry level. The analysis focuses on the manufacturing sector of Belgium, using data for 82 NACE 3-digit industries, over the time span 1996–2002. I find that real exchange rate changes do have a significant impact on job flows, and that this impact is magnified by increasing levels of trade exposure. In particular, a real appreciation is found to lower net employment growth through higher job destruction, while job creation is not significantly affected. These results are in line with previous empirical evidence on the United States, and differ from earlier findings for France and Germany, where the adjustment to real exchange rate shocks has been found to occur mainly through the job creation margin. I suggest that these differences may be explained by the fact that Belgium is a small open economy.     

The effects of taxation on married women's labour supply across four countries

The labour force participation rate of married women variesconsiderably between European countries. There may be severalexplanations for this evidence. In this study, the effect ofthe different income tax schemes on female labour force participationis investigated and compared. A common labour supply functionis estimated on cross-section household samples for each ofthe countries Britain, Denmark, Ireland, and East and West Germany.Based on the estimated labour supply functions, we calculatefor each of the countries the hypothetical part time and fulltime participation rates of married women if the householdswere taxed by either separate or split taxation principles,as in Britain and Ireland, respectively. The results suggestthat the design of the tax scheme is highly important for theeconomic incentives that married women face and their resultinglabour supply behaviour.     

An aggregate model of output,inflation and interest rates for industrialised countries

Zusammenfassung Ein aggregiertes Modell für Produktion, Inflation und Zinss?tze der Industriel?nder. - In diesem Artikel wird ein ?konometrisches Modell für die Industriel?nder insgesamt mit Hilfe von j?hrlichen Daten aus der Nachkriegszeit gesch?tzt. Das Modell enth?lt Gleichungen für Bruttoinlandsprodukt, Inflation, Zinss?tze und Güterpreise (au\er ?lpreisen). Bruttoinlandsprodukt und sein Deflator spiegeln die Entwicklung von Angebot und Nachfrage wider, w?hrend die Rohstoffpreise positiv mit der Wirtschaftst?tigkeit und den realen ?lpreisen und negativ mit den Realzinsen variieren. Diese h?ngen ab von dem Angebot an und der Nachfrage nach Anlagekapital auf dem Weltkapitalmarkt, den Verm?gensumschichtungen sowie von der Wirtschaftst?tigkeit.

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Résumé Un modèle agrégé d’output, d’inflation et des taux d’intérêt pour des pays industrialisés. - L’auteur estime un modèle économétrique en utilisant des données annuelles agrégées de la période après-guerre pour des pays industrialisés. Le modèle inclut des équations pour le PIB, l’inflation, les taux d’intérêt et les prix des matières premières non-pétrole. Le PIB et l’inflation reflètent l’évolution de l’offre et de la demande agrégée pendant que les prix des matières premières varient directement avec l’activité économique et des prix réels pétroliers et inversement avec des taux d’intérêt réels. Les derniers variables dépendent de l’offre et de la demande des fonds disponibles pour avances à l’échelle mondiale aussi bien que des effects de la balance de portefeuille et de l’activité économique.

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Resumen Un modelo agregado de producto, inflación y tasas de interés para países industrializados. - Se estima un modelo econométrico utilizando datos anuales agregados del perfodo de la posguerra para países industrializados. El modelo incluye ecuaciones para el PBI, la inflaci’on, las tasas de interés y precios de materias primas exceptuando el petróleo. El PBI y la inflación reflejan la evolución de la oferta y la demanda agregadas, mientras que los precios de las materias primas siguen de manera directamente proporcional a la actividad econ?mica y al precio real del petróleo y de manera inversamente proporcional a las tasas de interés real. Estas últimas dependen de la oferta de crédito en el mercado mundial de capitales como también de efectos de ?portfolio balance? y de la actividad económica.

     

R&D,trade in intermediate inputs,and the comparative advantage of advanced countries

This paper examines the accumulation of physical capital versus knowledge (R&D) capital as a determinant of advanced countries’ comparative advantage. I show that advanced countries are abundant in R&D resources, specialize in knowledge-intensive stages of high-technology industries, and outsource labor-intensive stages of the industries to labor-abundant countries. In contrast, global data on production and trade cannot support the conventional view that advanced countries specialize in and export capital-intensive goods. My results indicate that the accumulation of knowledge capital plays a vital role in explaining advanced countries’ comparative advantage.     

Behind the heterogeneous trade effects of standards: Multi-sector evidence from China

Standards can influence trades via multiple channels, such as signaling effects, common language effects, and compliance costs. We argue that the impacting channels of standards differ across sectors, which originates from diverse sector features and results in heterogeneous trade effects of standards. In this paper, we focus on the trade effects of standards in developing countries as exporters. Gravity models are applied on the panel data of China’s bilateral trades in 33 sectors from 2002 to 2016. We examine the moderating role of sector features, including the intensity of capital, labor, and technology, on the trade effects of standards. We find that trade-promoting effects of standards are stronger in high-capital sectors and weaker in high-labor sectors. In high-tech sectors, the trade-promoting effects are stronger for internationally harmonized standards while weaker for national standards. Our findings provide managerial implications on standardization policies for China and other developing countries. For instance, international harmonization of standards should be highlighted in high-tech sectors.     

Environmental regulation,firm heterogeneity,and intra-industry reallocation

We describe a model with firm heterogeneity and endogenous pollution abatement to show how emission intensity and exit/entry selections vary across firms. Using Chinese firm-level emission and production data, we find evidence that low productivity firms have higher emission intensity. The emission intensity of firms with productivity below 10 percentile is 5.26 times larger than firms with productivity above 90 percentile. Combining the Annual Survey of Chinese Industrial Enterprises (CIE) data, and applying a triple-difference research design, we find that firms with high emission intensity or low productivity have a higher probability of exit when exposed to strict environmental policy. We also find the exit of unproductive firms contributes to aggregate productivity and strict environmental policy can help to reduce misallocation.     

The dynamics of aggregate demand and supply shocks in ASEAN countries

This paper revisits the issue of identification of aggregate demand and supply shocks in ASEAN countries using an alternative identification scheme where the aggregate demand and supply shocks are allowed to be correlated. Applying the technique of Cover, Enders, and Hueng (2006) within a bivariate Structural VAR model, this paper shows that aggregate demand and supply shocks are interrelated (positively) in ASEAN countries. Unlike most of the previous studies, it is found that changes in the output level are mainly driven by aggregate demand shocks, whereas supply shocks play the dominant role in affecting inflation in ASEAN countries. The correlation of the shocks across the countries is found to be quite small, suggesting that ASEAN is still not set to form a common currency union.     

Employment adjustment in two countries with poor reputations: Analysis of aggregate, firm, and flow data for Portugal and Germany

This paper supplements aggregate time-series analysis of the speed of employment adjustment with evidence from firm panel and flow data for two countries – Portugal and Germany – sharing unenviable labor market reputations. The Portuguese labor market is often portrayed as terminally inert, while that of Germany as badly ailing. We report broad consistency in the results across data sets in favor of Portugal. In benchmarking Portugal against Germany, the adverse reputation of the former – if not necessarily that of the latter country – may have been exaggerated in contemporary policy debate.We thank, without implicating, two anonymous reviewers of this journal for their helpful remarks on an earlier version of the paper.     

The dynamic effects of shocks to labour markets: evidence from OECD countries

This paper uses a set of plausible long-run identifying restrictionson a three-variable system, including output growth, real wagegrowth, and the unemployment rate, to isolate three independentstructural shocks which drive fluctuations in those variablesin a sample of 16 OECD countries during 1950-96. These shocksare interpreted as aggregate demand, productivity, and laboursupply disturbances. As a by-product of the previous analysis,the cyclical behaviour of real wages in response to a demandshock is re-examined and two indices of real wage rigidity arederived.     

Decomposing polarisation across developing countries: case study of China,India, and Indonesia

We investigate the contributions of various factors in the differences in polarisation across China, India, and Indonesia using micro‐simulation and decomposition methods. Using household expenditure from harmonised data from these countries, China was found to have the highest polarisation, while India has the lowest. Using India as the base country, the differences in the labour market structures in India and Indonesia have a slightly decreasing effect on polarisation. The effects of the differences in demographic composition and expenditure structures/parameters, however, are uncertain. Further, the differences in polarisation between China and Indonesia can be explained mostly by the differences in the expenditure structures. China's expenditure structure tends to increase polarisation, as evidenced by the resulting reduction in the size of the middle class.     

The effects of input tariffs on productivity: panel data evidence for OECD countries

Based on a panel of 16 OECD countries and 10 manufacturing industries over 1996–2007, this paper investigates the impact of tariffs on foreign intermediate goods on productivity growth in downstream manufacturing industries. The results show that imposing tariffs on imported intermediate goods is particularly harmful for industries that operate close to the global technological frontier. We also consider the possibility that input-tariff liberalisation may have different effects depending on the technological content of imported intermediate goods. Our findings suggest that protecting imports of high-technological goods is more harmful for productivity improvements in industries that operate close to global best practice.     

Determinants of intra-industry trade: Among countries and across industries

Zusammenfassung Determinanten des intraindustriellen Handels: Eine internationale und interindustrielle Querschnittsanalyse. — In der vorliegenden Untersuchung werden in einem kombinierten Ansatz die Hypothesen empirisch überprüft, da\ (i) die Intensit?t des intraindustriellen Handels zwischen L?ndern systematisch mit bestimmten Charakteristika der Handelspartner und (ii) die Intensit?t des intraindustriellen Handels in einzelnen Branchen systematisch mit bestimmten Industriecharakteristika zusammenh?ngt. Als Stichprobe werden bilaterale Handelsstr?me der Jahre 1972 und 1973 zwischen den OECD-L?ndern auf der Basis dreistelliger Positionen der SITC-Gruppen 5–8 herangezogen. Die Untersuchungsergebnisse lassen darauf schlie\en, da\ es in der Regel zu einer Zunahme von intraindustriellen Handelsstr?men kommt, wenn Handelspartner im wirtschaftlichen Entwicklungsniveau oder in der (heimischen) Marktgr?\e aufholen, die heimischen M?rkte von Handelspartnern simultan wachsen und natürliche oder künstliche Handelshemmnisse abgebaut werden. Im Branchenquerschnitt sind intraindustrielle Handelsstr?me insbesondere in jenen Industrien ausgepr?gt, in denen Transaktionskosten eine vergleichsweise geringe Rolle spielen; gewisse Anhaltspunkte deuten überdies darauf hin, da\ die Intensit?t des intraindustriellen Handels mit abnehmendem Standardisierungsgrad des Sortiments zunimmt.

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Résumé Déterminants du commerce intra-industriel: Une analyse transversale internationale et interindustrielle. — Dans cette analyse nous testons empiriquement à l’aide d’une approche combinée les hypothèses que (i) l’intensité du commerce intra-industriel entre des pays dépend systématiquement des certains caractéristiques des partenaires commerciaux et que (ii) l’intensité du commerce intra-industriel dans les branches dépend systématiquement des certains caractéristiques de líndustrie. Comme échantillon nous utilisons le commerce extérieur bilatéral des années 1972 et {dy1973} entre les pays de l’OCDE au niveau des groupes 3-digit de la CTCI 5–8. Les résultats démontrent qu’il y a une augmentation du commerce intra-industriel en général, si les partenaires gagnent du terrain en niveau de développement économique ou en dimension du marché local, si les marchés locaux des partenaires croissent simultanément et si les obstacles commerciaux naturels ou artificiels sont diminués. En section transversale des branches, le commerce intra-industriel est particulièrement prononcé dans les branches oú les frais de transaction jouent un r?le comparativement faible; de plus, certains signes indiquent que l’intensité de commerce intra-industriel augmente si le degré de standardisation diminue.

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Resumen Determinantes del comercio intra-industrial: entre países e industrias. — Este trabajo examina conjuntamente, determinantes especificos de naciones y bienes, que pueden influir sobre la intensidad del comercio intra-industrial, basándose en flujos bilaterales desagregados de comercio entre países pertenecientes a la OCDE. Los resultados son consistentes con las hipótesis de que una equiparación en el nivel de desarrollo o en tama?o del mercado, o crecimiento simultáneo en los mercados nacionales de los países que comercian entre si, o una disminuciń de barreras naturales o artificiales contra el comercio, tienden a ser acompanadas de un incremento en el comercio intra-industrial entre países. A lo largo de las diferentes industrias, este comercio parece ser especialmente intenso cuando los costes de transacción son bajos. Finalmente existe evidencia positiva aunque no definitiva, de que el comercio intra-industrial disminuye con el aumento en la uniformidad de los productos.

     

Offshoring, domestic outsourcing and productivity: evidence for a number of European countries

The growth in offshoring and its economic effects have been subject to extensive empirical analysis. Yet, many studies have not distinguished accurately between offshoring, domestic outsourcing, and supplier changes. The present study provides stylized facts on offshoring in Europe between 1995 and 2008 taking into account this distinction. This study shows that service activities have been systematically offshored and outsourced domestically during this period, whereas manufacturing activities have been systematically offshored or moved from domestic to foreign suppliers. Overall the share of internal production has gone down by 4.5 percentage points, which raises the question whether firms have achieved productivity gains through this specialisation effort. Combining industry-level data on offshoring and domestic outsourcing with a firm panel, this study finds that service offshoring and offshoring of non-core manufacturing activities have contributed to an increase in productivity, whereas no statistically significant link is found for offshoring of core manufacturing activities and domestic outsourcing. The estimated productivity gains are found to be driven in particular by the gains of multinational firms.     

Inward-looking policies,finite change,and employment: The capital reallocation effect

It is well recognized that there emerged a trend of inward-looking trade policies even before the COVID pandemic crippled the world. These were reflected in both BREXIT and US-China trade conflicts. As countries become inward-oriented, usually local prices start rising. With this backdrop, this paper explores how rising local prices are likely to affect employment in the short and long runs when we accommodate for the finite change in a general equilibrium structure whereby sectors not only contract but might also close down altogether due to the capital reallocation effect following a price incentive.     

Money,inflation, and output growth: Does the aggregate demand-aggregate supply model explain the international evidence?

Money, Inflation, and Output Growth: Does the Aggregate Demand-Aggregate Supply Model Explain the International Evidence? - Using annual post-war data for 32 countries, it is shown that output and the price level are positively related along the aggregate supply and negatively related along the aggregate demand curve. This implies that the negative correlation between inflation and growth simply means that the price level has been countercyclical as aggregate supply shocks domi-nated aggregate demand shocks. It is also shown that money growth has positive and permanent effects on inflation, but may affect output only in the short run: in the long run, money is probably neutral.     

On the design of international environmental agreements for identical and heterogeneous developing countries

I analyze the problem faced by an imperfectly informed supra-nationalgovernmental authority (SNGA) that wishes to design an InternationalEnvironmental Agreement (IEA). The SNGA cannot contract directlywith polluting firms in the developing countries (DCs), andit must deal with such firms through their governments. I findthat the transfers necessary to induce optimal behavior by governmentsand firms are sensitive to the timing of the underlying gameand to the existence of collusion. This analysis suggests thatIEAs are not doomed due to a monitoring and enforcement problemarising from national sovereignty. However, the success of IEAsis contingent on the funds available for environmental protection.