Gains from trade in used goods: Evidence from automobiles

I investigate the welfare effects of trade liberalization by exploiting a natural policy experiment in the economy of Cyprus. A 1993 law relaxed import restrictions on used vehicles and enabled the importation of second-hand Japanese automobiles into the country. This led to a dramatic shift of consumer purchases from new to used cars and a substantial expansion of the overall market. Welfare gains computed from a structural demand system average $2000 per purchaser per year over a four-year period after the policy change. The findings are suggestive of the potential for substantial gains from liberalizing trade in used goods.     

源于比较优势的贸易所得:来自中国的证据

本文根据新古典贸易模型中的贸易所得的理论定义,对测算源于比较优势的贸易所得的基本方法及其理论基础进行了回顾和分析,在此基础上利用进出口额的现值与贸易所得的估算值之间的格兰杰逻辑关系,对中国源于比较优势的贸易所得进行了测算。本文的测算结果表明,中国源于比较优势的贸易所得的最大估算值约为GDP的5%。从比较的角度考察,这一结论的政策含义是,主要依赖劳动力资源或不可再生自然资源比较优势的贸易模式已不具备可持续发展性,建立基于动态比较优势的对外贸易战略应成为包括中国在内的发展中国家的贸易政策选择。     

Gains from trade and the size of a country

Who gains more from trade—the small country or the large country? In the standard Ricardo–Mill two-country model the small country reaps all the gains from trade and the large country (the rest of the world) gains nothing. The present paper considers this question of the distribution of gains from trade between the large country and the small country in terms of a multicountry framework. In this altered setting it is shown that the distribution of gains will generally be independent of the size of the country so long as there is universal free trade. With trade restrictions the presumption, if there is any, would rather be in favour of the large country gaining more than the small country.     

Gains and Losses from Preferential Trade Agreements: Some Evidence from NAFTA

In this article we integrate two topics in international trade policy that have received (separately) a lot of attention: the effects of regional trade blocs, and export pessimism regarding poorer countries. The specific issue that allows us to bring together these questions is whether regional integration adversely affects non-members. We use quarterly data on bilateral trade flows for the period 1990 through 1997 to examine U.S. imports from its NAFTA partners as well as from non-NAFTA trade partners, and more specifically, those countries expected to be hurt by NAFTA. Two measures are used:

1. “import penetration” or imports from a particular source as a share of US GDP, and

2. the income elasticity of expenditure on imports from a particular source. Both “import penetration” and the income elasticity of expenditure affect the export earnings of U.S. trade partners, a matter of particular concern for developing countries.

The broadest pattern observed in the income-expenditure elasticities is clear evidence of increased penetration by non-oil developing countries. This is in marked contrast to the stable GDP share and expenditure elasticity for developed country imports. Regional results suggest that the Caribbean and the East Asian NICs were the only area groupings that experienced a reduction in income-expenditure elasticity. But overall on the basis of U.S. income-expenditure elasticities it appears that the first four years of NAFTA were associated with trade expansion rather than trade diversion.     

Gains from trade and the size of a country,II

This paper establishes the generalized, multicountry, classical presumption that larger countries gain less from free trade than do smaller countries. The proposition is then used to clarify a recent contribution by Alok Ray.     

Similarity in trade structure: Evidence from ASEAN + 3

The present paper aims to explore the competition in exports among ASEAN + 3 members by applying the export similarity index for the disaggregation export data from 1990 to 2014. We also discuss the changes of comparative advantage of ASEAN + 3's exports through the revealed comparative advantage index and its relation with similarity index. First, the results support the idea that export similarity varies among ASEAN + 3 member states over the period 1990–2014. Second, we find evidence of several export communities. In particular, five countries, notably China, Japan, Malaysia, Singapore and South Korea, with the highest similarity index form an export community mainly in the electronic microcircuits and parts of office machines. Third, the revealed comparative advantage seems to be the key factor defining the similarity level of exports. Finally, the revealed comparative advantage analysis partly allows us to verify the Ricardo's theory and New Trade theory in the context of ASEAN + 3 trade integration.     

Optimal trade policy with quality-differentiated goods

In this article we apply the model of vertically differentiated products to international trade. A foreign firm competes with a domestic firm in the latter's market, producing products of varying quality. We examine the nature of the equilibrium in this case, assuming the firms compete in prices. Contrary to the popular belief, we show that a protectionist policy of imposing a tariff on the foreign firm raises overall welfare in the domestic economy, as well as induces the domestic firm to upgrade the quality of its product, if it produces the lower quality product. Furthermore, if minimum quality standards are imposed on the foreign firm, the domestic firm upgrades quality, and overall welfare in the domestic economy is higher.     

The effect of border barriers to services trade on goods trade

This paper has two objectives (a) to introduce border policy-induced barriers (PIBs) to services trade and (b) analyse the impact of border PIBs in services sectors on goods trade. The World Input-Output Database covering 43 countries is used over the period 2000–14. A three-stage analysis is employed. The measures of bilateral services trade barriers calculated in each services sector in the first stage are decomposed into its cultural/geographic and policy-induced parts in the second stage. Border PIBs to services trade are used in the structural gravity estimations of bilateral goods trade in the final stage. The results demonstrate significant and robust adverse effects of barriers to services trade on goods trade. When the level of development is taken into consideration, there are marked differences in the impact of these barriers on goods trade.     

Foreign aid and trade reform: Evidence from ACP-EU data

Beside traditional motives of giving – namely, altruism and donors’ self-interest, foreign aid also serves to encourage poor countries to liberalize trade. In this paper, I use recent foreign aid data from 15 European donors to 45 African, Caribbean and Pacific countries (ACP) to assess the importance of each motive. Although all the motives are important, their relative importance varies from one sub-group of donors to another. In particular, big donors such as France, Germany and the United Kingdom seem to weight more their commercial interests than other European donors; besides, recipient needs appear to be less important. Contrary to other European donors, international cooperation, measured by the correlation in the votes at the United Nations General Assemblies influences their decision to allocate aid to ACP recipients. This last finding probably reflects their relatively high political power in international fora. Finally, I introduce a dummy variable for economic partnership agreement (EPA) and find that donors do not give to support trade liberalization per se. However, large donors give more aid to ACP exporters of raw materials that engage in the EPA. This result implies that foreign aid is a device to secure access to raw materials.     

国际货物贸易合同中常见的陷阱探析

国际贸易极其复杂,加之国际欺诈活动时有发生,若签订国际货物贸易合同时稍有不慎,就可能受骗上当,使企业遭受重大的经济损失.笔者以下对国际货物贸易合同中常见的陷阱合同条款进行分析并提出应对之策.     

国际货物贸易合同中常见的陷阱探析

国际贸易极其复杂,加之国际欺诈活动时有发生,若签订国际货物贸易合同时稍有不慎,就可能受骗上当,使企业遭受重大的经济损失.笔者以下对国际货物贸易合同中常见的陷阱合同条款进行分析并提出应对之策.     

Country size and trade in intermediate and final goods

This paper documents a negative relationship between country size and the share of final consumption goods in total exports. A model is developed, based on the division of labour and comparative advantage, to explain this relationship. Labour is used to produce traded intermediate inputs which are used in the production of traded final goods. Large countries gain relatively more from comparative advantage than from the division of labour, while the opposite is true for small countries. As in the data, large countries export a smaller share of final goods and a larger share of intermediate goods than small countries. It is shown that the model developed in the paper yields the same results as a model based on monopolistic competition.     

The geography of trade in goods and asset holdings

Gravity models have been widely used to describe bilateral trade in goods. Portes and Rey [Portes, R., Rey, H., 2005. The Determinants of Cross-Border Equity Flows. Journal of International Economics, 65(2), 269-296.] applied this framework to cross-border equity flows and found that distance, which proxies information asymmetries, is a surprisingly very large barrier to cross-border asset trade. We adopt a different point of view and explore the complementarity between bilateral trade in goods and bilateral asset holdings in a simultaneous gravity equations framework. Providing different instruments for both endogenous variables, we show that a 10% increase in bilateral trade raises bilateral asset holdings by 6% to 7%. The reverse causality is also significant, albeit smaller. Controlling for trade, the impact of distance on asset holdings is drastically reduced.     

Bilateral trade effects of fiscal devaluation: Evidence from OECD countries

This paper empirically examines the effects of a fiscal devaluation on bilateral trade. To this end, employers’ social contribution (ESC) and value-added tax (VAT), which stand as the factors that represent typical fiscal devaluation, are embodied within the framework of a gravity model. Fixed effects vector decomposition (FEVD) technique is applied to the empirical models specified within this framework, employing panel data from 22 OECD countries over the 1980–2014 periods. The findings show that the effectiveness of the fiscal devaluation policy seems to alter with respect to how ESC and VAT are measured. Considering the fiscal devaluation policy implemented unilaterally, the policy turns out to be effective in nine countries in the sample.     

International trade in durable goods: Understanding volatility, cyclicality, and elasticities

Data for OECD countries document: 1. imports and exports are about three times as volatile as GDP; 2. imports and exports are pro-cyclical, and positively correlated with each other; 3. net exports are counter-cyclical. Standard models fail to replicate the behavior of imports and exports, though they can match net exports relatively well. Inspired by the fact that a large fraction of international trade is in durable goods, we propose a two-country two-sector model in which durable goods are traded across countries. Our model can match the business cycle statistics on the volatility and comovement of the imports and exports relatively well. The model is able to match many dimensions of the data, which suggests that trade in durable goods may be an important element in open-economy macro models.     

Institutionalization of protection for intangible assets: Insights from the counterfeit and pirated goods trade in sub-Saharan Africa

Based on inductive qualitative multiple case studies of MNE subsidiaries in a sub-Saharan African market, this study investigates how multiple political networking capabilities are developed and leveraged to institutionalize protection for strategic internationally transferrable intangible assets in weak institutional environments. The study finds that MNE subsidiaries use a three-phase process to institutionalize protection for intangible assets: diagnosis of the nature of transaction costs and risks in the weak institutional environment (Phase 1); development of political networking capabilities to generate multiple political resources (Phase 2); and leveraging of a multiplicity of political resources to institutionalize protection for internationally transferable intangible assets (Phase 3). The study concludes that an ability to develop and leverage political networking capabilities to recombine multiple political resources enables MNE subsidiaries to institutionalize protection for internationally intangible assets in challenging host-market institutional environments. The wider theoretical, managerial, and public-policy complications of these findings are discussed, and avenues for future research proposed.     

A model of trade in money,goods and factors

The ‘Oil Crisis’ provides the challenge to analyze effects of a resource shortage in a minimal monetary model of a vertically trading world economy. The one-asset monetary approach to balance of payments theory is employed to demonstrate that in a model with one final good and two inputs the elasticity of substitution between the domestic factor of production and an imported raw material plays the key role in determining the reaction of the balance of payments (= balance of trade).     

Non-traded goods and optimal trade policy in a cash-in-advance economy

This paper develops a standard trade model of a small open monetary economy with two traded and one non-traded goods. Money is introduced through a generalized cash-in-advance constraint where the share of goods purchases that must be made using cash, varies across sectors. We find that free trade may be harmful so that alternative policy instruments may be considered to improve welfare. In addition, we study and compare the optimal tariff formula and the optimal consumption tax structure. In the presence of a monetary distortion of the non-traded good, a consumption tax may not Pareto dominate a tariff although the latter bears an additional production burden. This corroborates the theory of second best.