Exports to Smuggle and Smuggling Technologies*

Our analysis is motivated by cases of cigarette smuggling in Canada and in the UK. In the 1990s, domestic cigarettes were legally exported to be subsequently illegally imported. At first, smuggling was done by individual consumers who bought cigarettes abroad and brought them back through policed points of entry. This Mom and Pop smuggling was a mechanism to implement a second‐degree price discrimination scheme by cigarette manufacturers. Regrets from committing tax evasion and labels on exported cigarettes packs permit vertical differentiation of illegal and legal cigarettes. Paradoxically, labeling measures can make illegal sales more resilient to tax reductions, and stricter border enforcement encourages a switch to a less benign smuggling technology exclusive to criminal organizations. High export taxes terminated export‐to‐smuggle schemes, but brought about a surge of counterfeit cigarettes. Because of a second‐degree price discrimination scheme, the elimination of taxes need not suffice to eradicate smuggling.     

US Exports of Knowledge-intensive Services and Importing-country Characteristics

This paper studies the determinants of US exports of knowledge‐intensive services. Using US export data to as many as 29 countries between 1989 and 2002, I find the following. First, gross product and per capita income have heterogeneous effects on affiliated and non‐affiliated exports of knowledge‐intensive services. Secondly, property rights protection matters. Thirdly, infrastructure quality and political institutions only matter in the transfer of knowledge assets. Finally, financial depth is only correlated with the export of services to non‐affiliates.     

Latin American Growth and Exports to China*

ABSTRACT

After 2001, the booming trade between China and Latin American and the Caribbean countries (LAC) has led to concerns about a potential ‘resource curse’ and losses in manufacturing due to rising import competition. Little attention was paid to potential gains to LAC from growing Chinese demand for commodities. I address this issue empirically adopting a difference-in-difference framework and find that China's demand did deliver significantly higher growth rates to LAC exporters over the last decade and a half.     

Ethnic Networks and Price Dispersion

We offer and test a model linking ethnic networks to global price dispersion which predicts lower price dispersion as shared ethnic populations between countries rise, effects that may reverse at higher levels as network discipline breaks down. Using Chinese, Indian and Japanese data, we find that country pairs linked by the Chinese network have significantly lower mean price dispersion. A one standard deviation increase in the size of the Chinese coethnic network lowers price dispersion by 6–33%, an effect that reverses as the network gets large. No such evidence exists for the Indian or Japanese networks.     

当前美国经济前景与中国出口问题

第二交民办大战后的5次世界性经济危机，世界生产大都下降，而世界贸易量不降反增，主要原因是危机较轻，科技革命与GATT/WTO的合力作用，一些重要周期指标显示美国经济高增长正逐渐消逝，但出现“V型”走势，而不会出现严重的经济衰退，90年代美国进口增幅明显高于出口，近几年美国进口对经济周期的变动劝相当敏感，中国对美国市场具有较高的依存性，美国经济增长放慢，不仅影响中国对美国出口，还影响到中国对东南亚等国家与地区的出口，使今年中国的出口形势变得有些严峻复杂，中国应更加重视以加工贸易带动出口，适度增加从美国的进口，并将对欧出口作为工作重点之一。     

Global Linkages of Subnational Regions: Coastal Exports and International Networks

This article explores the determinants of exports of the two coastal regions of the continental United States and the differences between them. The authors evaluate the contribution of international sociocultural and business networks to exports of the two major coastal regions of the United States, the West Coast and the East Coast, and examine their geographic trading affinities. The article finds that although transnational business ties play a significant positive role in boosting overall exports of both coasts, social networks of foreign-born immigrants play a similar role only for the West Coast. The study also suggests that the significance of distance as a proxy for transportation costs is somewhat diminished once these networks are taken into account. Both regions seem to share a propensity for exports to the Asia-Pacific region. (JEL R0 , F10 , F20 )     

Ethnic and Cultural Diversity by Country*

For their empirical evaluation, several active research programs in economics and political science require data on ethnic groups across countries. Ethnic group, however, is a slippery concept. After addressing conceptual and practical obstacles, I present a list of 822 ethnic groups in 160 countries that made up at least 1 percent of the country population in the early 1990s. I compare a measure of ethnic fractionalization based on this list with the most commonly used measure. I also construct an index of cultural fractionalization that uses the structural distance between languages as a proxy for the cultural distance between groups in a country.     

Do Migrants get Good Jobs in Australia? The Role of Ethnic Networks in Job Search*

We study the role of ethnic networks in migrants’ job search and the quality of jobs they find in the first years of settlement. We find that there are initial downward movements along the occupational ladder, followed by improvements. As a result of restrictions in welfare eligibility since 1997, we study whether this increases the probability that new migrants accept ‘bad jobs’ quickly and then move onto better jobs over time. Holding employability constant, our results support this view. However, accounting for their higher employability, new migrants seem to fare better up to 1.5 years after settlement.     

The Impact of Chinese Exports on Global Import Prices*

This paper evaluates the evidence bearing on the question of whether China's buoyant export growth has led to significant changes in the import prices, and thus inflation performance, of its trading partners. This evidence suggests that the impact of Chinese exports on global import prices has been, while non‐ negligible, fairly modest. We identify a statistically significant effect of US imports from China on US import prices, but given the size of this effect and the relatively low share of imports in US GDP, the ultimate impact on US consumer prices has likely been quite small. Moreover, imports from China had little apparent effect on US producer prices. Finally, using a multi‐country database of trade transactions, we estimate that, since 1993, Chinese exports lowered annual import inflation in a large set of economies by 0.25 percentage point or less on average.     

Ethnic Diversity,Civil War and Redistribution*

In a game‐theoretic framework, we analyse the circumstances under which self‐enforcing redistribution and power‐sharing coalitions can be used to peacefully resolve ethnic conflict. The existence of a pacific equilibrium depends crucially on ethnic diversity (the number of ethnic groups). The risk of civil war is comparatively high at intermediate levels of ethnic diversity. The risk is low if a society is either very homogeneous or very diverse. Predictions of the model are consistent with evidence on the incidence of civil war.     

Market Sharing Agreements and Collusive Networks*

We analyze reciprocal market sharing agreements by which firms commit not to enter each other's territory in oligopolistic markets and procurement auctions. The set of market sharing agreements defines a collusive network. We characterize stable collusive networks when firms and markets are symmetric. Stable networks are formed of complete alliances, of different sizes, larger than a minimal threshold. Typically, stable networks display fewer agreements than the optimal network for the industry and more agreements than the socially optimal network. When firms or markets are asymmetric, stable networks may involve incomplete alliances and be underconnected with respect to the social optimum.     

Financial Market Imperfections and the Impact of Exchange Rate Movements on Exports*

This paper analyzes empirically the role of financial market imperfections in the way countries’ exports react to a currency depreciation. Using quarterly data for 27 developed and developing countries over the period 1990–2005, we find that the impact of a depreciation on exports will be less positive—or even negative—for a country if: (i) firms borrow in foreign currency; (ii) they are credit constrained; (iii) they are specialized in industries that require more external capital; (iv) the magnitude of depreciation or devaluation is large. This last result emphasizes the existence of a nonlinear relationship between an exchange rate depreciation and the reaction of a country's exports when financial imperfections are observed. This offers a new explanation for the consequences of recent currency crises in middle‐income countries.     

Exports,jobs, growth! Congressional hearings on US trade agreements

Who testifies on US trade agreements before Congress and what do they say? We examine the content of Congressional testimony on US trade agreements, and the selection process which determines who testifies in the first place. We find that testimony is systematically tilted toward a sunny view of trade's positive economic effects, while import competition and offshoring are generally downplayed. We argue that trade's supporters strategically frame their motives for supporting trade agreements, and that pro‐trade committee chairs’ decisions on who testifies further skew testimony away from the distributive consequences of globalization within the United States. Congressional hearings on trade agreements therefore represent a key site where the influence of dominant pro‐trade interests is both revealed and reinforced.     

Occupational and Job Mobility in the US*

We propose a new methodology to measure worker mobility across occupations and jobs in the US, building on the limited longitudinal dimension of monthly CPS data. For the period 1979–2006, we find that about 3.5% of male workers employed in two consecutive months report different three‐digit occupations. This rate is procyclical, mildly rising in the 1980s and falling after 1995. We also revise upward current estimates of aggregate job‐to‐job mobility since 1994, from 2.7% to 3.2% of employment per month. Despite extreme similarity of average levels and time‐series behavior, occupational and job mobility are only weakly correlated.     

Pricing-to-Market Behavior: Japanese Exports to the US, Asia, and the EU

The paper examines the pricing-to-market (PTM) behavior of Japanese exporters in the US, Asian, and EU markets. Empirical evidence shows that PTM elasticity is highest to the US market. This matches the in-tuitive reasoning that the US market is more competitive than the EU and Asian markets for Japanese exporters. Furthermore, PTM elasticities estimated in this paper using expected exchange rates are positive but their amounts are smaller than PTM elasticities estimated by previous studies with actual exchange rates. The difference may be due to the fact that the invoice currency for most Japanese exports is the US dollar.     

Strategic Exports and R&D with Internationally Mobile Skilled Labor and Exchange Rate Volatility*

This paper extends the Spencer and Brander (1983) model of strategic exports and R&D by introducing exchange rate volatility and R&D activities that require internationally mobile skilled labor. We find that an increased volatility reduces both the levels of optimal export subsidy and R&D tax. We also find that the endogeneity of skilled wage increases the level of export subsidy and reduces the level of R&D tax if the country is an exporter of skilled labor.     

Ethnic Networks in FDI and the Impact of Institutional Development

Ethnic Chinese entrepreneurs are known for their active business networking practices, particularly in Southeast Asia. This paper empirically investigates the role of ethnic Chinese networks in promoting foreign direct investment (FDI). We further evaluate whether the effectiveness of networking activities are affected by the level of economic and institutional development of the source and the host countries. Using a standard gravity model, we find that ethnic Chinese networks are significant in facilitating cross‐border investment between countries. The strength of ethnic Chinese networks between country pairs, approximated by the product of the numbers of ethnic Chinese in both countries, is positively correlated with the cumulative amount of their reciprocal FDI. More importantly, this significant relationship is not limited to countries in Southeast Asia, but is applicable to other country pairs included in the study as well, regardless of whether the investment is originated from industrial countries or developing economies. Finally, the analysis finds no evidence that ethnic networks are only effective in countries where economic and legal institutions are under‐developed. Ethnic Chinese networks have played a significant role in promoting FDI to countries with a relatively higher bureaucratic quality, much more so than to countries with a lower bureaucratic quality.     

Trade Union Rights,Democracy, and Exports: a Gravity Model Approach*

The paper uses a gravity trade model to evaluate the effects of trade union rights and democracy on exports for the 1993 to 1999 period for four classifications of manufacturing industries by labor‐intensity. The model includes data for 162 countries and used eight indicators of trade union rights and democracy, including those constructed by the authors. The paper finds robust relationships between stronger trade union rights and higher total manufacturing exports and between stronger democracy and higher total exports, total manufacturing exports, and labor‐intensive manufacturing exports. The paper finds that the relationship between trade union rights and labor‐intensive manufacturing exports is highly sensitive to the classification of labor‐intensive manufacturing industries and to model specification, yielding statistically significant results of opposite sign depending on assumptions.