Preferential trade agreements and manufactured goods exports: does it matter whom you PTA with?

This article explores two questions. First, do preferential trade agreements (PTAs) affect manufactured goods exports of developing countries? Second, does it matter for developing countries whom they sign the PTAs with? We find that the answer to both questions is yes. Using bilateral manufactured goods exports data from 28 developing countries during 1978–2005; we find that South–South PTAs have a significantly positive effect on manufactured goods exports. In contrast, no such effect is detected in the case of South–North PTAs. We confirmed the robustness of these findings to estimation methodology, sample selection, time period, zero trade flows and multilateral trade resistance.     

Do South‐South trade agreements increase trade? Commodity‐level evidence from COMESA

Abstract .  South-South trade agreements are proliferating. Yet the impact of these agreements is largely unknown, as existing North-North and North-South micro-level studies are likely to yield misleading predictions for South-South trade agreements. This paper estimates the impact of COMESA on Uganda's imports between 1994 and 2003. Detailed import and tariff data at the 6-digit Harmonized System level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that – in contrast to evidence from aggregate statistics – COMESA's preferential tariff liberalization has not considerably increased Uganda's trade with member countries, on average, across sectors. The effect, however, is heterogeneous across sectors. Finally, the paper finds no evidence of trade-diversion effects.     

Exports and firm survival: do trade regime and productivity matter?

This article aims to investigate the role of trade regime and productivity in the link between exporting and firm survival. We use firm-level data from China to examine whether exporters engaged in different trade regimes and with different levels of productivity react differently with regard to survival probability. We find that exporters engaged in all types of trade regimes have higher survival probabilities in comparison with nonexporters; however, the survival probability of exporters engaged in processing trade is less positively affected by productivity.     

Protection and skills: Does trade policy favor low‐skill workers?

Many believe that international trade barriers in rich nations help low‐skill workers. Also, the empirical endogenous protection literature strongly implies that protection decreases with skill levels. This paper presents evidence against this conventional wisdom. Regressions based on a political economy model with search frictions and unemployment imply that protection and skill levels actually have a mound‐shaped relationship: industries with skills in the middle range get more protection than industries at either end of the distribution. Apparently, the politics of trade policy trump social concerns, rendering protection less “progressive” than is commonly believed.     

How much do immigration and trade affect labor market outcomes?

"This paper provides new estimates of the impact of immigration and trade on the U.S. labor market.... We examine the relation between economic outcomes for native workers and immigrant flows to regional labor markets.... We...use the factor proportions approach to examine the contributions of immigration and trade to recent changes in U.S. educational wage differentials and attempt to provide a broader assessment of the impact of immigration on the incomes of U.S. natives." Comments and discussion by John DiNardo, John M. Abowd, and others are included (pp. 68-85).     

How do employee training and knowledge stocks affect product innovation?

The main purpose of this paper is to explore how interactions of knowledge flows and knowledge stocks could shape firms’ innovative performance. Knowledge flows are measured on the grounds of human resource training practices while different levels and forms of knowledge stocks (i.e. educational attainment, exporting activity, and firm age) are considered. We make use of two-period panel probit regressions and a rich data survey of the 524 largest Greek manufacturing firms conducted in two waves (2011 and 2013). Our findings suggest that the beneficial effects of knowledge flows strengthen when knowledge stocks accumulated by employees’ education and firm age are low. When knowledge stocks are limited, knowledge flows can act as a bridge for product innovation. On the contrary, when knowledge stocks are high, higher investments in knowledge flows may lead to diminishing returns and, thus, to decreased innovation performance beyond a certain point.     

Changing the rules? Institutional innovation and the diffusion of microgeneration

The paper addresses the question of how institutional change relates to the diffusion of microgeneration energy technologies in the UK, posed in a research project comprising interviews with thirty-one respondents connected with the field of microgeneration in the UK. It analyses the nature of institutional rules in the prevailing regime of electricity generation and in microgeneration niches. It examines how such rules might facilitate systems innovation, or contribute to the maintenance of the prevailing system or partial change. The conclusions of the paper inform and deepen understanding of how conformity to or innovation in institutional rules may hamper or potentially contribute to diffusion of environmentally sustainable microgeneration of energy.     

How do mutual recognition agreements influence trade?

This paper empirically tests how the magnitude of trade promotion effects of mutual recognition agreements (MRA s) varies with various mediums. The main rationale for the research is that because an MRA eliminates technical barriers to trade (TBT ), the trade promotion effects of MRA s are inversely much stronger if TBT originally restricted trade before their entry into force. Using data on MRA s and international trade in 34 countries and 22 manufacturing sectors covering 1995 to 2009, the paper empirically shows that the trade promotion effects of MRA s can be much stronger, depending on the type of contract, time period after the entry into force, components of exports, and country and industry characteristics such as technology level and global competitiveness. The results will provide insight for policy makers and stakeholders who cooperate with foreign countries in various regulations, especially in developing countries that have low levels of technology, competitiveness, and regulatory governance capacity.     

Patent assertion entities: do they impede innovation and technology commercialisation?

This article focuses on addressing a primary charge levelled against patent assertion entities (PAEs): that they impede innovation and technology commercialisation activities of US firms. The paper utilises an intellectual property (IP) strategy framework within the construct of a firm business model to delineate PAE typologies, and then evaluates how they ‘fit’ with either a framework for the protection of IP assets or the exploitation of IP assets. The PAE business model operates under neither an IP asset protection nor IP asset exploitation strategy, but its own IP monetisation strategy. Moreover, a review of recent research on the proliferation and economic impact of PAEs is undertaken, with the overwhelming empirical evidence showing that PAEs are having an adverse impact on innovation and technology commercialisation activities of US firms. Potential patent policy reforms and emerging marketplace options are identified for enhancing a business environment conducive to successful technology innovation and commercialisation.     

Did the Supreme Court just do you a favor?

By permitting depreciation of patient lists, the judges gave both buyers and sellers of medical practices a chance to make a better--but not great--deal.     

The Economics of Ageing—What do you Face?

The economics of ageing is the study of economic decision‐making by individuals and government aimed at fostering well‐being in old age. These decisions include preparing for old age and dealing with the risks of old age. The risks are substantial. Using the life‐cycle model, this article considers the risks for well‐being that people face in retirement and the role of government and private insurance in meeting those risks. The perspective of the life‐cycle model is also used to consider the gender gap in wealth on retirement.     

Post‐secondary education in Canada: can ability bias explain the earnings gap between college and university graduates?

Abstract .  Using the Canadian General Social Survey we compute returns to post-secondary education relative to high school. Unlike previous research using Canadian data, our data set allows us to control for ability selection into higher education. We find strong evidence of positive ability selection into all levels of post-secondary education for men and weaker positive selection for women. Since the ability selection is stronger for higher levels of education, particularly for university, the difference in returns between university and college or trades education decreases slightly after accounting for ability bias. However, a puzzling large gap persists, with university-educated men still earning over 20% more than men with college or trades education.     

Do South–South preferential trade agreements undermine the prospects for multilateral free trade?

Due to trade diversion, there have been concerns expressed over the proliferation of preferential trade agreements (PTAs) that include South countries. In this paper, we compare welfare across different geographic configurations of bilateral free trade agreements (FTAs) and customs unions (CUs) and examine their implications for the stability of multilateral free trade. While North–North PTAs do tend to yield higher global welfare than South–South PTAs, a single South–South FTA may make free trade more sustainable than any other single agreement. With pre‐existing North–North agreements and a large enough cost asymmetry between regions, an additional South member or a new South–South agreement always makes free trade harder to sustain.     

So you want to build a trade model? Available resources and critical choices

This paper reviews recent developments in trade theory, data, and modeling to provide guidance to researchers who are building and using trade models. Our findings show that trade models have fallen behind the latest development in theory, in part because data collection has not (and arguably will not) be able to keep pace with the needs of models built to incorporate the latest theories. The direction, much less the magnitude, of the errors made due to the limitations of today's trade models is uncertain, which should be a grave concern to modelers and the policymakers who rely on these models.     

Does trade liberalization and its associated increased economic activity affect permanently the value and pattern of trade flows?

Despite a number of multi-country case studies based on a variety of analytical frameworks and numerous econometric studies using large cross-country data sets that analyse trade openness and its induced economic activities that alters both the volume and value of trade flows, there is still disagreement among economists concerning the nature of this relationship. In this article, we follow a rather unique approach by estimating the density functions of the observed trade flows and the density functions of trade flows generated by tariff removal using an intertemporal global Computable General Equilibrium (CGE) model. Our inquiry is whether or not the trade flows generated by global tariff elimination impact economies in the long-run and alter their historical underlying distributions. If the latter case prevails, it implies that the economies follow a different transitional path into a new steady-state equilibrium. The density functions, estimated parameters and higher moments of the observed trade flow distributions are distinctly different from the parameter estimates of the trade flows generated by the model. In this sense, trade-inducing economic activity as generated by tariff removal and captured by the neoclassical specification of the model is associated with trade flows along a different transitional path from the observed trade flows.