Does Gibrat’s Law Hold? Evidence from Canadian Retail and Manufacturing Firms

This paper investigates the validity of Gibrat’s Law holding for firms in manufacturing and retail trade sectors. The object is to expand our knowledge of Gibrat’s Law to include non-manufacturing firms. A unique longitudinal firm-level database, which contains information on Canadian incorporated establishments, enables the inter-industry comparison. The findings of the analysis are that Gibrat’s Law is violated in both manufacturing and retail sectors. Violations of Gibrat’s Law for both sectors include (i) growth rates that depend on firm size (ii) growth variability that depends on firm size and (iii) a negative persistence of firm growth. Finally, age effects or selection effects are not the causes of these violations.      

国际贸易、技术进步对相对工资差距的影响——基于我国制造业数据的实证分析

笔者运用2000-2005年的面板数据模型分析了我国制造业27个细分行业的对外贸易、技术进步等因素对行业相对工资差距的影响,并进一步将27个细分行业按照要素密集度的不同分为三种类型,分别分析了技术密集型、劳动密集型和资本密集型行业的进出口贸易、技术进步等变量对相对工资差距的影响。结论如下:在不考虑制造业行业特征的情形下,行业的对外贸易引起相对工资差距的扩大,行业的技术进步对相对工资差距的影响是不显著的;在将对外贸易分解为进口贸易和出口贸易的情形下,进口贸易引起相对工资差距的扩大,技术进步引起相对工资差距的缩小;在考虑制造业行业特征的情形下,行业要素密集度的不同会导致进、出口贸易和技术进步对相对工资差距产生不同的影响。     

Turkey: Trade Policy Review

The purpose of the paper is to discuss the main issues highlighted in the Trade Policy Review: Turkey 2003. The paper studies first the main developments in Turkey's trade regime and trade performance. Next it discusses Turkish trade policy emphasising the measures affecting imports, exports and foreign direct investment. The paper points out that agriculture is highly protected, and that autonomous reforms have been implemented in some of the services sectors of the economy. Since joining the EU will require Turkey to adopt and implement the whole body of EU legislation – the acquis communautaire– in all areas, Turkey needs to liberalise its agricultural and services sectors further. Finally, the paper discusses an issue that has largely been neglected in Trade Policy Reviews. It is the sustainability of current account. The paper stresses that Turkey needs to pay close attention to the sustainability of the current account.     

The rise of vertical specialization trade

Manufacturing and vertical specialization (VS) trade, trade in goods that incorporate imported inputs, have grown rapidly since the 1960s. I argue that declining trade costs are an important explanation for these facts. I present a three stage vertical specialization trade model, with raw materials, manufactured parts and final goods sectors. In the simulated model, falling trade costs explain much of the observed growth in overall and VS trade. Manufacturing trade grows twice as fast as overall trade. Raw materials trade was more important in the 1960s when trade costs were high, since their production is more strongly linked to endowments than manufacturing. Therefore, materials will be traded even when trade costs are high. Trade costs have fallen more for manufactured goods over the last 40 years, leading to a rapid expansion of manufactured parts trade relative to materials.     

Agricultural Policies and Trade Paths in Turkey

In 1959, shortly after the European Economic Community was founded under the 1957 Treaty of Rome, Turkey applied for Associate Membership of the then six‐member common market. By 1963, a path for integrating the economies of Turkey and the eventual European Union had been mapped. As with many trade agreements, agriculture posed difficult political hurdles, which were never fully cleared, even as trade barriers to other sectors were eventually removed and a Customs Union formed. In this paper, we trace the influences the Turkey‐EU economic institutions have had on agricultural policies and the agricultural sector. Using an applied general equilibrium framework we provide estimates of what including agriculture under the Customs Union would mean for the sector and the economy. We also discuss the implications of fully aligning Turkey's agricultural policies with the EU's Common Agricultural Policy, as would be required under full membership.     

Trade reform,infrastructure investment,and structural transformation in Africa: Evidence from Guinea-Bissau

This study examines the impacts of trade reform and infrastructure investment on structural transformation and poverty alleviation in Guinea-Bissau using a dynamic computable general equilibrium model. We found that partial or complete tariff rate cuts accompanied by a scaling-up infrastructure investment funded by debt only positively impact macro-and micro-outcomes but do not generate structural transformation. Conversely, trade reform and infrastructure investment funded by a mix of debt and tax rates on the firm's income generate structural transformation with labor reallocation from agriculture to non-agricultural sectors. This structural transformation pattern favors the poor and contributes to reducing income inequality over time.     

Trade Policy Flexibilities and Turkey: Tariffs,Anti‐dumping,Safeguards and WTO Dispute Settlement

The commitment to lower import tariffs and to maintain tariffs at low levels entails political‐economic trade‐offs. Empirical work examining the relationship between such commitments and the ‘flexibilities’ that policymakers exercise to get around them is still relatively nascent, especially for emerging economies. This paper provides a rich, empirically based assessment of ways that Turkey exercised trade policy flexibilities during the global economic crisis of 2008–11. First, and despite multilateral and customs union commitments that might limit changes to its applied tariffs, Turkey exercised flexibilities during 2008–11 by making changes to both its applied MFN and preferential tariffs that could affect nearly 9 per cent of its manufacturing imports. Second, Turkey's cumulative application of temporary trade barrier (TTB) policies – that is, anti‐dumping, safeguards and countervailing duties – is estimated to impact an additional 4–6 per cent of Turkey's manufacturing imports by 2011. Other surprising results include Turkey's lengthy extensions to the duration of previously imposed anti‐dumping and safeguards beyond expected removal dates, conversion of product coverage from one TTB policy to another, extensive coverage of upstream and downstream segments of important industries and potential deepening of discriminatory preferences already inherent in existing preferential trade agreements.     

增加值贸易视角下中国比较优势动态演变研究

利用WIOD数据库及KWW分解框架对1995~2011年中国总出口额进行分解,得到35个部门出口增加值。在此基础上,从两种统计方式对比角度,测算分析了中国总体及不同行业的增加值比较优势(VRCA)与贸易总额比较优势(TRCA),同时与美国进行对比。研究结果表明,在增加值贸易统计方式下,中国总体对外贸易表现为比较劣势,制造业部门VRCA较为明显但长期呈下降趋势,服务业VRCA呈上升趋势,1995~2011年间部分部门的比较优势出现逆转。相对于VRCA,TRCA对中国总体对外贸易真实比较优势高估了约12.94%,制造业部门的比较优势高估程度更大;从行业分类来看,中国低技术制造业及劳动密集型服务业的比较优势更为显著。从中美对比来看,美国总体VRCA与中国水平相当,但其优势部门集中于中高技术制造业与知识密集型服务业;总额统计方式低估了美国总体尤其是服务业部门的真实比较优势。     

Input tariff liberalisation and servitisation in manufacturing: Evidence from China's WTO accession

This paper links the sharp drop in China's manufacturing servitisation (MS) in early 21st century to China's accession to WTO featured by conspicuous input trade liberalisation (ITL). The results show that manufacturing industries exposed to higher degree of ITL suffer more MS declines after China's accession to the WTO. Heterogeneous analysis shows that industries with high import intensity, capital intensity or technology intensity suffer more MS declines following input trade liberalisation. Further analysis shows that input trade liberalisation increases the import of intermediate inputs while significantly reduces the proportion of service imports for manufacturing industries. The results are robust to a series of robustness checks.     

A dynamic analysis of the impacts of export taxes: The case of Argentinean soy and beef markets

Argentina plays an important role in the global soy market as one of the world's leading exporters of soy products. In an effort to shift its agricultural sector's focus to value‐added exports and to raise revenue, Argentina's government has maintained a regime of differential export taxes on soy products. In addition to soy products, Argentina is a major producer, consumer and exporter of beef. However, over the last decade it has relinquished much of its world market share as its beef exports have fallen because the government has periodically imposed a ban on exports of beef along with maintaining an export tax. As the soy and livestock sectors are inextricably linked, owing to both industries’ intensive land use and the utilisation of soymeal as a feed supplement for cattle, trade policies in one sector have pronounced cross‐sectoral impacts. This study develops a theoretical model of these different sectors and trade policies, incorporating the dynamic decisions of cattle stock management. The model is calibrated to real‐world data on the Argentinean economy, and the impacts of trade liberalisation are quantified. Key results show modelling the various intersectoral linkages and the dynamic implications of cattle stock is essential for obtaining accurate estimates.     

GROWTH,UNEMPLOYMENT AND ENDOGENOUS TECHNICAL PROGRESS: A HICKSIAN RESOLUTION OF HARROD'S KNIFE‐EDGE

This paper presents a neo‐Kaleckian growth model with unemployment, endogenous technical progress, and a steady‐state requirement of balanced labor demand and supply growth. There are two key innovations: first, a Marx–Hicks unemployment rate–profit rate channel affecting labor‐saving technical progress; second, a Keynesian unemployment rate channel affecting saving and investment. Changes in the unemployment rate change the profit rate, rebalancing effective labor supply and employment growth. This provides a Hicksian resolution of Harrod's knife‐edge. The Keynesian unemployment rate channel strengthens the growth benefits of a lower unemployment rate, potentially obviating any growth–unemployment trade‐off.     

China's foreign trade marketing strategy: Problems and prospects 1

It has been seven years since the open door policy was officially instituted by the People's Republic of China. During this time, changes have taken place within Chinese society and China's dealings with the rest of the world. In this paper, the authors evaluate the problems and prospects for China's foreign trade marketing strategy. They make recommendations in five policy areas: (1) export promotion; (2) the mix of exports; (3) a systems approach to trade; (4) joint ventures stressing value‐added labour and (5) the role of assembly technology. Each strategy is identified and discussed in terms of its future prospects in the development of China's trade.     

Japan's Fiscal Policies in the 1990s

This paper first summarises Japan's fiscal policies in the 1990s. Then, we investigate the macroeconomic impact of government debt and the sustainability problem. We find that the Keynesian fiscal policy in the 1990s was not effective and fiscal sustainability may therefore become a serious issue. We also estimate the optimal level of deficits and evaluate fiscal reconstruction movements. It is shown that the actual deficit exceeded the optimal level in the late 1990s. We then inspect fiscal reconstruction movements in the Hashimoto Administration in 1997 and find that the major factor of recession in 1997 was not fiscal consolidation. An important lesson from Japan's fiscal policies in the 1990s is that long‐run structural reform is more important than short‐run Keynesian policy.     

Is India Specialising in Polluting Industries? Evidence from US‐India Bilateral Trade

Recently, the apex environmental agency of India observed that domestic industrial pollution has been increasing at an alarming rate over the last two decades, and the need to rein in traditional polluting industries. This raises the pertinent question of whether the poor domestic pollution regime has affected the pattern of India's trade in dirty manufactured products in the post‐liberalisation era since 1991. We find that on the whole, India has remained a net importer of pollution‐intensive manufactured goods; however, there is a distinct trend of increasing specialisation in specific dirty industries especially in the bilateral trade with high‐income countries, and to a lesser degree with low‐income countries. The USA being India's single largest country trading partner in the post‐liberalisation era, we test for pollution offshoring at the finer industry level in US‐India bilateral trade. While we find that the pollution haven effect is not significant, India's specialisation in certain dirty manufacturing industries through the last decade remains a disturbing trend. India needs to integrate environmental sustainability within industrial growth urgently, and it is pertinent to implement policies which would reflect the true pollution costs in an industry that is increasingly competing in the international market.     

Mapping Research Topics and Theories in Private Regulation for Sustainability in Global Value Chains

The globalization of production and trade has contributed to the rise in complex global value chains where the reach of state regulation is limited. As an alternative, private regulation, developed and administered by companies, industry associations, and nongovernmental organizations, has emerged to safeguard economic, environmental, and social sustainability in producer countries and along the value chain. The academic literature on private regulation in global value chains has grown over the last decade, but currently few major reviews of the research have been undertaken. This paper examines peer-reviewed research in the relevant disciplines published in academic journals up to December 2011. Our goal is to identify and classify the topics and theories in the global value chain literature. We conclude that the number of articles explicitly examining private regulation, in a global value chain context, is relatively small when considering the importance and growth of these chains in the world’s economy. We also conclude that agriculture, forestry, and apparel manufacturing are the most often studied economic sectors; in contrast, other sectors, such as the information, communication and technology, with their complex global value chains, and often problematic environmental and social conditions, are understudied.     

How to face growing competition

Hamburg's port, as a transshipment terminal and centre of trade, has more than national importance. Exporters and importers, shipowners and seafarers all over the globe know Hamburg as an international port of world rank. The exchange of goods across the seas lifts our port into the position of a catalyst drawing together the continents through a network of marine transport connections that grows progressively more elaborate. Government authorities and business people have joined together in Hamburg to undertake a vast task of reconstruction, when Hamburg's port was to be restored, after the last war, to its world importance. Hamburg's policies on port questions are devoted to the supreme effort of keeping the port abreast of the changing demands of future trade and transport. The present report is based on a highly authoritative study of the position and the development prospects of the port of Hamburg, that has been compiled by the Hamburg Department for Economic Affairs and Transport and was recently published     

Trade liberalization and intersectoral labor movements

This paper examines the impact of trade liberalization episodes on movements of labor across sectors. The aim is to assess empirically whether increased trade openness leads to increased structural change and, if so, to what extent. Results for a set of 25 liberalization episodes suggest weakly negative effects of liberalization on the extent of intersectoral labor shifts at the economy-wide 1-digit level of disaggregation. We do uncover increased sectoral change after liberalization at the 3-digit level within manufacturing, although the estimated effects are statistically weak and small in magnitude. The effects of liberalization on labor shifts differ across individual countries, in a way related to the scope and depth of reforms.     

India: Trade Policy Review

The review of India's trade policy by the WTO, the third of its kind, is in three parts: the report by the WTO secretariat, a statement by the government of India and minutes of the discussion of the report by the trade policy review board. The review provides detailed information not only on India's trade and foreign investment policies but also an analytical review of India's export and economic performance. The review notes that India has made considerable progress with the liberalisation of its trade and investment regime, but it has a long way to go if it were to achieve a growth rate of eight to nine per cent, the stated objective of the policy makers. This paper, drawing upon the material in the report, analyses India's growth prospects and endorses the broad conclusions of the report.     

The factor content of Chinese trade

This article demonstrates that the growth of China's exports in recent years is consistent with the Heckscher–Ohlin–Vanek (HOV) prediction of the factor content of trade based on international differences in factor endowments, after adjusting for substantial differences in factor-specific productivity. A comparison of the Organisation for Economic Co-Operation and Development input–output data in the year 2000 shows that China's labor productivity relative to the United States is the lowest in a sample of 33 diverse countries, although China's capital is more productive than US capital. This in turn demonstrates the importance of a factor-specific rather than factor-neutral productivity adjustment common in much of the HOV literature. The use of value-added data to measure factor usage helps to correct for unobserved differences in factor qualities and differences in productivity across sectors, as is demonstrated for China. China's low average labor productivity reflects the structure of the Chinese economy where most employment is still in the inefficient agriculture and service sectors, with only 11% of employment in the more modern export-oriented manufacturing sector. Due to a trade surplus, China exports both labor and capital but Leamer's (The Journal of Political Economy 1980;88: 495–503) test for trade-revealed factor abundance confirms that China is labor abundant even after substantial factor-specific productivity adjustments.