Estimating domestic content in exports when processing trade is pervasive

For many questions, it is crucial to know the extent of domestic value added (DVA) in a country's exports, but the computation is more complicated when processing trade is pervasive. We propose a method for computing domestic and foreign contents that allows for processing trade. By applying our framework to Chinese data, we estimate that the share of domestic content in its manufactured exports was about 50% before China's WTO membership, and has risen to nearly 60% since then. There are also interesting variations across sectors. Those sectors that are likely labeled as relatively sophisticated such as electronic devices have particularly low domestic content (about 30% or less).     

Exchange rate and foreign GDP elasticities of Swiss exports across sectors and destination countries

This article uses a detailed breakdown of Swiss trade flows to identify how the impact of the two main determinants of Switzerland’s exports – foreign demand and the real exchange rate – varies across sectors and export destinations. Our main findings are that (i) both foreign demand and exchange rate elasticities vary substantially across both export sectors and export destinations. (ii) Foreign demand trends are more important for structural considerations than the exchange rate. This is due to the fact that exports of the two largest export sectors are relatively sensitive to long-run foreign demand developments while they are relatively insensitive to changes in the exchange rate. (iii) The sectoral structure of Switzerland’s exports has shifted towards goods that have a lower short-run demand elasticity and a higher long-run demand elasticity. Goods exports are thus less influenced by business cycle fluctuations while they benefit more from long-term growth trends. (iv) The export share of sectors with a relatively low exchange rate elasticity has increased. However, this result is mainly driven by the strong rise in exports of chemicals and pharmaceuticals as well as precision instruments and watches, which are also the two important sectors responsible for the Swiss trade surplus.     

Africa's export structure in a comparative perspective

Cross-country econometric analysis informed by Heckscher–Ohlintrade theory suggests that the concentration of Africa's exportson unprocessed primary products is caused largely by the region'scombination of low levels of education and abundant naturalresources. In some African countries, the share of manufacturesin exports could be raised by improving infrastructure and policies.For most of Africa, however, the highest priority is to raisethe absolute level of exports in all sectors, and particularlyin sectors based on natural resources, following a developmentpath more like that of land-abundant America than of land-scarceAsia.     

External income shocks and Turkish exports: A sectoral analysis

This study assesses how the growth rates of Turkish trading partners affected Turkish exports in various sectors for the period 1996:01 to 2009:12. To determine this, we modeled the destination countries and the export demand for each sector separately. Each model is estimated as a system of equations, where each equation represents a country using a seemingly unrelated regression method. The empirical evidence suggests that Motor Vehicles, Basic Metals, and Radio–Television are the sectors with the highest income elasticities for most of the analyzed countries, whereas the Food Products and Beverages sector has the lowest income elasticity. We also performed simulations for the effect of a 1% increase in the growth rate of each country on Turkish exports.     

Exchange rate disconnect and financial constraints —evidence from Chinese firms

One puzzling observation in international economics is the lack of response of exports to exchange rate fluctuations. Employing the most comprehensive export data from China for the 2000–2007 period, we provide sector- and firm-level evidence that the response of exports to exchange rate movements depends crucially on the level of financial constraints. For sectors with large financial constraints, the response is small, whereas, for less financially constrained sectors, the response can be much larger, with the estimated elasticity decreasing with the sector's degree of financial constraints. At the firm-level, financial constraints affect the firm's response to exchange rate shocks at both the intensive and the extensive margins. At the intensive margin, financial constraints dampen the effect of exchange rate on exports by restricting the firm's export value to the existing destination market; at the extensive margin, financial constraints restrict the number of firms participating in exporting, the number of firm-product pairs being exported, and the probability of entering a new destination market.     

产业关联视角下的碳关税征收对我国产业经济的影响

最终需求的生产诱发系数和依存度系数揭示,我国高耗能产业部门生产对出口依赖程度较高;碳关税征收在减少高耗能产品出口的同时,由于其产业影响力较大,会对其它产业部门的生产产生较大的波及。高耗能产业部门的感应度系数表明,当各个部门的最终需求变化时,其生产将受到较大的影响。碳关税对高耗能产品的征收最终会通过产业间的关联波及各个产业部门,进而全面影响我国产业经济的发展。     

Measuring Vertical Specialization: The Case of China

The explosive growth of Chinese trade may be due to international production fragmentation, but few have assessed these phenomena together, in part, because it is difficult to measure the vertical specialization (VS) of China's trade. Unique features of China's processing trade cause both identification of imported inputs and their allocation across sectors to vary by trade regime. This paper estimates the VS of Chinese merchandise exports, addressing these two challenges. A new method to identify Chinese imported inputs is developed, and used to calculate VS by sector and destination. VS estimates based on the official Chinese input–output table are contrasted with those based on a split table, capturing processing and normal exports separately. Last, the paper tests whether Chinese “export sophistication” can be explained by VS.     

The economic and trade effects of the UK–Korea free trade agreement on the United Kingdom,Korea, Japan,China, and the European Union

We explored a comparative static computable general equilibrium model with six regions and 12 sectors to estimate the impacts of the recent UK–Korea free trade agreement (FTA) along with the European Union (EU)–Korea FTA. The empirical results provide quantitative evidence of the impact on national GDP, national exports and imports by sector, and the changes in exports or imports among the United Kingdom, Korea, Japan, China, and the EU. The UK–Korea FTA, along with the EU–Korea FTA, increases GDP and welfare for the United Kingdom and Korea; moreover, there is a large increase in automobiles, transport equipment, and machinery exports between Korea and the United Kingdom. The GDP and welfare level of non-member countries such as Japan and China will slightly decline. Exports from the United Kingdom and Korea to non-member countries are also expected to decrease in most manufacturing sectors. The UK–Korea FTA will lead to increases in imports between the United Kingdom and Korea due to mutual trade creation effects and trade diversion effects. However, non-member countries such as Japan's exports are expected to experience a large decline in automobiles to the United Kingdom and in most manufacturing products to Korea due to the negative impact of the UK–Korea FTA.     

The European Single Currency and MENA's Exports to Europe

The paper investigates future exchange rate policy of the Middle East and North African (MENA) countries vis‐à‐vis the euro aimed at fostering their manufactured exports towards Euroland. The exchange rate policy is captured through three different indicators: the real effective exchange rate changes, volatility, and misalignment. The investigation is conducted for 11 sectors over the period 1970–1997. The sample includes four North African countries (Algeria, Morocco, Tunisia, Egypt) and Turkey. The results show that exchange rate management plays a crucial role in providing incentives for manufactured exports toward Euroland. The food sector is weakly responsive to real exchange rate changes while the textile sector is highly responsive. Four growing sectors (electronic, electrical, mechanical, and vehicles) were also found to be highly sensitive to exchange rate changes. The results suggest that policymakers should be more concerned with misalignment than with volatility.     

Structural transformation and growth of merchandise trade of low-income economies 1980–1992

The Heckscher-Ohlin Vanek theorem, which predicts a direct relationship between exports and greater supply of factors used to produce those exports, performs only 50 percent of the time. However, there is no alternative theory which explains such a relationship. This paper analyzes the growth of merchandise trade of low-income countries, with particular reference to the growth of exports and net exports as these countries move from the predominantly agricultural goods producing era to the manufactured goods producing era. Results suggest, among other things, that industrial structure and governmental policies play an important role in the growth of merchandise trade.     

HOW THE GLOBALIZATION OF R&D COMPETITION AFFECTS TRADE AND GROWTH

The implications of international R&D competition on trade and growth are investigated. The model is one in which a separate R&D sector competes with the manufacturing sector to secure human capital, and technology is licensed to manufacturers by the winner of a pre-emptive R&D competition. The results show that globalization of R&D competition leads to trade between countries (even identical countries), because the result of competition leads to a reallocation of human capital between sectors. The winning country exports technology and traditional goods, while the loser exports manufactured goods. Globalization with indiscriminate technology licensing increases the world's economic growth rate.     

Trade Sophistication Indicators: Balancing Diversity and Specialization

Motivated by the important role of trade in driving and reflecting economic transformation, we focus on the export structure of two small export-oriented economies, Ireland and Finland 2000–2009, from the perspective of the sophistication of both economies’ exports, i.e., the extent to which high-value products characterise each country’s export profile. The Product Space method is used as the basis of our comparison of the economies in terms of their sectors, activities, and structural transformation of the economies. The method focuses attention on the estimated density of the product space as evident in patterns of revealed comparative advantage (RCA) in goods exports. The Information and Communication Technology (ICT) sector, as a significant export sector for both economies, is examined specifically to investigate its further export potential.     

IDENTIFYING AND ESTIMATING SOURCES OF TECHNICAL INEFFICIENCY IN KOREAN MANUFACTURING INDUSTRIES

This study estimated translog stochastic frontier production functions using an unbalanced panel of Korean manufacturing firms in the food, textile, paper, chemical, basic-metal, and fabrication sectors. The sectors were estimated individually to investigate whether technical efficiency is systematically related to firm size, dependency on external funds, research and development investments, and exports. The empirical results suggest that firm size has a positive and significant effect in every sector. The effects of the other factors are less systematic and vary across sectors.     

LONG‐RUN DETERMINANTS OF JAPANESE EXPORTS TO CHINA AND THE UNITED STATES: A SECTORAL ANALYSIS

During the period 1971–2007, Japanese sectoral exports to China and the United States depended on real exchange rate fluctuations and external demand (GDP of the country of destination). This result holds for both geographical destinations and for all six sectors under investigation in this study: foods, textiles, metal products, chemicals, non‐metal products, and machinery and equipment. For both China and the United States and for almost all sectors, the real exchange rate fluctuations and GDP have had the expected effects. Real appreciation of the yen and greater uncertainty derived from increased exchange rate volatility have reduced Japanese exports.     

Persistency of Turkish export shocks: a quantile autoregression (QAR) approach

This study analyzes the persistency of total and disaggregated Turkish exports for different shock magnitudes using the quantile autoregression (QAR) method in line with Koenker and Xiao (J Am Stat Assoc 99:775–787, 2004). The results suggest that the persistence of shocks are not similar across different quantiles of Total Exports and disaggregated export sectors, indicating an asymmetry in the case of negative and positive shocks across different export sectors. The persistency behavior of Total Exports as well as Food and Beverages, Chemicals, Basic Metals, Raw Materials, Motor Vehicles and Radio & TV exports are asymmetric to negative versus positive shocks, which cannot be captured by traditional unit root tests. Thus, sound interpretation of QAR results is necessary for policy makers to identify shock characteristics and thereby pursue appropriate policies for overcoming adverse impacts on the economy.     

中美贸易的反比较优势之谜

通过统计分析,本文发现中美贸易间存在"反比较优势之谜"。即美国在其具有技术上比较优势的行业,对中国出口相对较少,且在其比较优势越大的行业,对中国出口量相比世界其他地区越少;相比之下,中国对美国的出口则符合比较优势原理。为进一步检验该现象,本文将Eaton-Kortum模型扩展到多部门,并将其应用于中美贸易结构影响因素的经验分析。结果显示:在控制了行业生产规模和贸易成本等因素后,比较优势在中美双边贸易中的不对称作用依然存在,且结果稳健。     

Rate of growth and sector specialisation coevolution in a Kaldorian export-led growth model

This paper describes and simulates the way in which the growth rate and specialisation coevolve in an export-led growth model of Kaldorian type. The feedback from growth to exports is based on the causal chain ‘growth-profits-technology-income elasticity of exports’. The strength of this feedback differs among sectors, which are heterogeneous. Given the feedback from growth to the income elasticity of exports, growth and specialisation coevolve: sector specialisation determines aggregate growth, while aggregate growth modifies sector specialisation. An economic system converges towards a medium-period macro equilibrium where the rate of growth and sector specialisation are constant. After a certain period endogenous structural changes emerge, the system changes its growth regime and shifts towards another equilibrium. The result is strongly path and time dependent.JEL classification: F43, O31, O41     

加工贸易的本土增值 对人民币升值影响的放大效应

本文基于2001-2010年中国11个制造业的季度进出口贸易数据,利用面板DOLS方法,分析了人民币升值联合出口品本土增值对一般贸易与加工贸易的影响。研究结果表明,随着中国出口品本土增值度的提升,原本缺乏汇率弹性的加工贸易出口将变得敏感,而加工贸易进口由于与出口存在着“一对一”的关系,因而汇率弹性也表现出显著为负。加工贸易的本土增值将放大人民币有效升值对减少中国贸易顺差的作用,因此,加快国内技术进步,生产更加复杂的中间品,将适当缓解人民币“被迫”持续快速升值的压力。     

开放条件下中国工业能源强度的影响因素分析——基于31个行业面板数据的实证分析

本文运用中国工业31个行业1998年-2004年的面板数据,分析了能源价格、FDI的进入程度、进出口商品结构、工业内部的行业结构和R＆D投资强度对中国工业能源强度的影响。研究发现,能源价格的上涨对提高工业能源利用效率有显著的促进作用;降低FDI的进入程度与R＆D投资强度都有助于降低工业特别是高能源强度行业的能源强度;降低高能源强度行业的出口额在工业出口总额中的比重,有利于降低高能源强度行业的能源强度,进口商品结构变化对工业能源强度没有显著影响;降低高能源强度行业的工业增加值在整个工业增加值中的比重,有助于降低全工业行业和低能源强度行业的能源强度。     

China’s Outward FDI: An Industry-Level Analysis of Host-Country Determinants

We use disaggregated data by country and industry to empirically analyze the host country determinants of Chinese outward foreign direct investment (FDI) for the years 2003 to 2011. Our results suggest that the host-country determinants of Chinese FDI differ between high- and low-income countries. While all Chinese FDI is invariably market seeking, other motivations stand out for differing sectors in specific country groups. The resource seeking motivation is relevant for manufacturing FDI to high-income countries with relatively high fuel abundance, and to low-income countries with primary resource abundance (other than fuels). Differently, the strategic-asset seeking motivation, measured by the level of R&D spending on GDP, only positively and significantly affects Chinese manufacturing and service FDI to OECD countries, while higher education levels are an attraction factor for all investing firms. Natural resource is an important attraction factor for Chinese FDI, not only in resource-related sectors, but also in manufacturing and service sectors. Finally, Chinese FDI tends to follow exports (rather than foster them), especially in service sectors.