Administrative barriers to trade

We build a model of administrative barriers to trade to understand how they affect trade volumes, shipping decisions and welfare. Because administrative costs are incurred with every shipment, exporters have to decide how to break up total trade into individual shipments. Consumers value frequent shipments, because they enable them to consume close to their preferred dates. Hence per-shipment costs create a welfare loss.We derive a gravity equation in our model and show that administrative costs can be expressed as bilateral ad-valorem trade costs. We estimate the ad-valorem equivalent in Spanish shipment-level export data and find it to be large. A 50% reduction in per-shipment costs is equivalent to a 9 percentage point reduction in tariffs. Our model and estimates help explain why policy makers emphasize trade facilitation and why trade within customs unions is larger than trade within free trade areas.     

Front-Loading protection: canada's approach to phasing out the multi-fiber arrangement

One of the most significant achievements of the GATT Uruguay Round was the Agreement on Textiles and Clothing (ATC). The agreement specifies the gradual phasing out of the nearly twenty-year-old Multi-Fiber Arrangement (MFA) in a manner that grants the importing (industrialized) countries considerable discretion. Although three liberalization steps have been dictated for the ten-year transition period leading up to a final liberalization step in 2005, there are no rules on when heavily protected products must be liberalized.

Using Canada as a case in point, we show that political economy as well as rent-seeking considerations characterize the decisions regarding the products selected for the initial liberalization step. Our main finding is that through administrative discretion the 16% of import volume to be liberalized in phase one translated into a mere 11.3% of the value of textile and clothing imports. Thus the liberalization can be said to be only 70% effective.     

WTO架构下反补贴与竞争的关联与冲突

贸易自由化与竞争政策目标在本质上的一致性,决定了WTO的政策目标和法律体系中必须包括竞争政策,否则就是不完整的.但WTO反补贴制度与竞争政策之间存在一定程度的差异与冲突,在实践中成为一些国家实现其贸易保护主义政策的工具,必须对其加以改革.     

Innovation and trade with heterogeneous firms

This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. Among the robust results that hold both in the short run when there is no entry, and in the long run under free entry are that trade liberalization increases aggregate R&D when trade costs are low and decreases R&D when trade costs are high. Expected industry productivity rises as trade costs fall.     

Charting the pacific: an empirical assessment of integration initiatives

Trade negotiations after Uruguay may well be dominated by the Pacific Rim, where two free trade areas (ASEAN Free Trade Agreement, or AFTA; and North American Free Trade Agreement, or NAFTA) already exist and larger agreements are under active discussion (involving the Asia Pacific Economic Cooperation, or APEC, area and an East Asian Economic Group). This article analyzes several initiatives using a simple global general equilibrium model that incorporates conventional welfare gains as well as benefits derived from firm level economies of scale, induced changes in foreign investment, and dynamic increases in productivity. Broad Pacific liberalization—i.e., East Asia, North America, and Australasia—is shown to be superior for each participant to liberalization limited to individual countries or East Asia, but not by much. Most favored nation liberalization is shown to be superior for each participant to preferential liberalization—if the actor is East Asia, but not the Pacific as a whole. These estimates will need to be refined, but they suggest that the benefits from Pacific liberalization could exceed $100 billion per year.     

Estimates of trade-displacement costs for U.S. workers

This paper examines the costs to society when prolonged unemployment of resources occurs following trade liberalization. Clearly such costs could be of sufficient magnitude to outweigh the benefits of a move towards freer trade. The paper analyze the characteristics of a sample of trade-displaced workers, and from this analysis the costs of trade liberalization is a displaced worker and to society are estimated.     

Distribution in a Centrally Planned and Market-Oriented Economy

Distribution in market-oriented economies is shaped on the basis of market regulation while in socialist economies the main role is played by various types of nonmarket regulation. The seller's market is a structural characteristic of the socialist economy. Its consequences for various economic and social phenomena are entirely different from the buyer's market. The adaptive process of economic units proceeds differently. Characteristics of the market distribution and the administrative distribution playing a significant role in Poland differ as well. The distribution is characterized by its low adaptability, and it constitutes a bottleneck in the economy contributing with its high social costs to the deepening of the economic disequilibrium. The article discusses various characteristics of the centralized and administrative distribution. In the socialist economy, there exist parallely different systems of product allocation, which aggravates a negative impact of the distribution on the entire economy. It is characterized, moreover, by its excessive and unjustified concentration. The author points at directions of improving the distribution system in Poland.     

Making sense of Bolkestein-bashing: Trade liberalization under segmented labor markets

An increase in the range of tradable goods is analyzed in a two-country Dornbusch-Fischer-Samuelson style model, where labor cannot relocate to another sector upon a non-expected increase in the range of goods that can be traded.The effect of liberalization on the terms of trade tend to favor the poorer country (the “East”), if (as assumed) the most sophisticated goods are tradable before reform. Second, under ex-post liberalization, there exists a class of workers in the West who are harmed because they face competition from Eastern workers and cannot relocate to other activities. But if the East's economy is relatively small, their wage losses are not very large. Things are different, however, if there exist asymmetries in labor market institutions, such that upon reform, labor can relocate in the East but not in the West. Some workers in the West can then experience very large wage losses. Thus, rigid labor markets in the West magnify opposition to reform there.     

Added distance,entry mode choice,and the moderating effect of experience: The case of British MNEs in emerging markets

Distance has been viewed as a crucial determinant of the internationalization strategy of firms. Nonetheless, in recent years, there has been considerable debate with regards to, first, the type of distance considered most important when it comes to explaining the internationalization strategy of firms, and, second, how distance should be measured. In our study, we argue that a developed market multinational enterprise (DMNE)’s decision regarding the mode of entry into an emerging market (EM) will be affected by the geographic and administrative distance between the locations in which the MNE has previously held operations. Drawing our arguments on transaction costs economics (TCE) and Internalization Theory, we propose that, for low and high geographic and administrative distance, DMNEs will opt to enter EMs via a wholly owned subsidiary, while for moderate levels of distance via a joint venture. Furthermore, we argue that DMNEs’ previous international experience in EMs will have a positive effect on the suggested U‐shaped relationship, alleviating the negative effects associated with the coordination and knowledge dissipation costs incurred as a result of the level of distance. Our study contributes to existing literature both theoretically—notably via the examination of under‐researched facets of distance on entry mode choice—and also methodologically—through the adoption of a novel methodological approach in measuring distance. We test our hypotheses against a data set comprising 316 entries of FTSE 250 British MNEs in 39 EMs spanning the period 1971–2010.     

The costs of governance in international companies

Using foreign direct investment as a governance mechanism has a cost side that goes beyond mere production and input costs. The governance costs of foreign operations are often vague and underestimated, and sometimes even ignored by companies entering a foreign market. The effects of these costs have also largely been neglected in former empirical research. This study examines the governance cost effects on foreign subsidiary performance. Using data from a survey of 160 Norwegian multinational companies the study shows that there are significant and negative relationships between bargaining, monitoring, and maladaptation costs and subsidiary performance. Conversely, costs incurred due to bonding activities are positively associated with performance. Overall, this study indicates that governance costs play a significant role in explaining the performance of foreign subsidiaries: close to 40% of the variation in performance can be attributed to such costs. Dealing with such costs is hence of utmost importance for the management of multinational companies.     

WTO反倾销制度与竞争政策的关联与冲突

贸易自由化与竞争政策目标在本质上具有一致性,决定了WTO的政策目标和法律体系中必须包括竞争政策,否则就是不完整的.但WTO反倾销制度与竞争政策之间存在相当程度的差异与冲突,在实践中反倾销制度正日益取代保障措施成为"保护工具的上策",必须对其进行改革.     

Trade and technology adoption

This paper endogenizes firms' choices of production technology in what would be a standard Melitz model otherwise. The responses of firms' productivity to trade liberalization are heterogenous: exporters, on average, improve their level of technology adoption, whereas nonexporters downgrade their level of technology adoption. The degree to which firms adjust production technology depends on domestic market size, export destination market size, trade impediments, and export status. The conflicting empirical results of the impact of trade liberalization on exporters' productivity are rationalized by showing that changes in different trade costs (variable vs. fixed costs) affect firms' productivity differently. We calibrate the model's parameters to match firms' characteristics in the global economy. The results indicate that endogenous productivity increases the gains from trade liberalization.     

Investment liberalization and international trade

This paper estimates the cross-price elasticity of exports with respect to investment costs for bilateral relations between 36 countries. We show that the effect of reducing foreign direct investment costs on exports depends on country characteristics and trade costs as predicted by the [Markusen, 1997] and [Markusen, 2002] model. When countries differ in relative factor endowments and trade costs are low, investment liberalization stimulates exports, whereas when countries are similar in terms of relative factor endowments and size, and trade costs are moderate to high, investment liberalization reduces exports.     

The Effect of Gender on the Motivation of Members of Generation Y College Students to Volunteer

Nonprofit organizations (NPOs) serve a unique purpose, filling gaps left by governments and for-profits. NPOs have the potential to do a lot of good in their communities. However, these organizations are often resource-constrained, both financially and in terms of human capital. Furthermore, NPOs are often judged on the ratio of administration costs to program costs. For these reasons, personnel in small NPOs are often diverted from the organization’s mission to administrative functions. Outsourcing, as research has shown in for-profits, offers the opportunity to refocus human capital to the mission cost effectively. However, there is little research on outsourcing for small NPOs. This study focuses on small NPOs in regard to outsourcing administrative functions. The study found that small NPOs often use staff time and board resources on administrative functions to keep costs down and may not understand the benefits of outsourcing.     

Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy

This paper analyzes the dynamics of trade policy reform under democracy. In an overlapping generations model, heterogeneous agents may acquire skills when young thereby determining the skill composition of their cohort. Current and anticipated trade policies influence education decisions and thus voters' trade policy preferences. We show that there may exist two political steady states: one protectionist and one liberal. Transition from the former to the latter can be achieved by government announcements, temporary educational subsidies, or tariff liberalization by trading partners, but generally not by transfer payments to adversely affected workers. We find additionally that reform is politically feasible only if the proposed liberalization is sufficiently large, suggesting that radical reform may be necessary for escaping a protectionist political rut.     

Cooperative and non-cooperative R&D and trade costs

We examine the effect of trade liberalization on the level and mode of R&D in an international duopoly setting. Firms have the choice to invest in R&D either independently or cooperatively. A reduction in trade cost increases R&D irrespective of the mode of R&D. However, an increase in spillovers has ambiguous effects on R&D. More precisely, we find that an increase in spillover leads to higher R&D activity under cooperation but lower R&D activity under non-cooperation. Concerning cooperation versus non-cooperation, we find that firms prefer cooperation only if trade costs are low. Consumers are better off under cooperation if spillovers are high. We find that there can be a mismatch between private and social incentives. If spillovers are low and trade costs are low then cooperation might be privately profitable but socially undesirable. On the other hand, if there are large spillovers and high trade costs then cooperation may be socially desirable but not privately profitable.     

Lessons from the EMU for Asian Regional Integration: An Economic Perspective

Critical costs and benefits of creating an EMU-like structure in Asia are identified. Analyzing the EU, we pay particular attention to two kinds of economic benefits and costs that do not appear much in conventional economic analysis. First, there are benefits and costs of harmonization in different areas including the monetary area. Second, giving up sovereignty within a policy area can provide many countries with a kind of insurance against domestic institutional, legal, and political weaknesses. Although we emphasize economic arguments it is necessary to recognize that the EU is very much a politically motivated project. Politics may well be the biggest obstacle to an EMU-like monetary system in Asia. Conditions in Asia require consideration of alternatives to a monetary union since there exist disparate economic and political systems that may well prove impossible to fully integrate.     

Bilateralism, multilateralism, and the quest for global free trade

We develop an equilibrium theory of trade agreements in which both the degree and the nature (bilateral or multilateral) of trade liberalization are endogenously determined. To determine whether and how bilateralism matters, we also analyze a scenario where countries pursue trade liberalization on only a multilateral basis. We find that when countries have asymmetric endowments or when governments value producer interests more than tariff revenue and consumer surplus, there exist circumstances where global free trade is a stable equilibrium only if countries are free to pursue bilateral trade agreements. By contrast, under symmetry, both bilateralism and multilateralism yield global free trade.     

论我国网上银行的风险及其监控对策

我国网上银行已开展了近５年，存在着信用、法律、技术和应用性等多种风险。为促进网上银行的健康发展，必须对发展网上银行新业务实行审批制，建立网上银行业务监管法规，成立研究和管理网上银行的专门机构，加强非现场监管与现场检查的配合以及加强跨国监管的协调。     

Trade and industrial location with heterogeneous labor

It is shown in the context of a new economic geography model that when labor is heterogeneous trade liberalization may lead to industrial agglomeration and inter-regional trade. Labor heterogeneity gives local monopsony power to firms but also introduces variations in the quality of the job match. Matches are likely to be better when there are more firms and workers in the local market, giving rise to an agglomeration force which can offset the forces against, trade costs and the erosion of monopsony power. A robust agglomeration equilibrium is derived analytically and its properties illustrated with numerical simulations.