Interindustry flows, non-traded intermediate goods and the theory of effective protection : A general equilibrium analysis

This paper examines the response of net and gross outputs of tradeable goods to changes in tariff structure in the context of a comprehensive general equilibrium model with interindustry flows and non-traded, as well as imported, intermediate goods. There are two major results. First, the nominal rate of tariffs on a tradeable good is shown to correctly indicate the movements of its net output under most general conditions. Second, the (modified and) generalized Corden index of effective protection for a tradeable good is revealed to be in a close relationship with the behavior of its gross output under certain restrictions on the input substitutability of industries.     

Non-traded inputs,interindustry flows,resource allocation and the ERP theory

This paper investigates the movement of gross outputs and resource allocation under the condition allowing for substitutability among various inputs within the framework of a simple general equilibrium model with both non-traded intermediate inputs and interindustry flows. Particular attention is paid to the sufficient conditions under which the gross output of the protected industry goes up and the industry attracts domestic factors under the Bhagwati-Srinivasan restriction on tariff change.     

Welfare and market-access effects of piecemeal tariff reforms on environmentally preferable products

We examine how welfare and market access are affected by piecemeal tariff reforms on environmentally preferable products (EPP) in a small open economy. We define EPP as clean goods that, when consumed, have no impact on pollution. First, we show that a uniform reduction of all tariffs improves welfare if a country’s imports consist only of clean goods. If a clean good is a net substitute for all other goods in excess demand, then reducing the highest tariff on the clean good improves welfare. Second, we show that a proportional tariff reduction leading to a welfare improvement also increases the value of imports if all tariffs are set at the same ad valorem rates. If the clean good is a net substitute for all other goods in excess demand, then reducing the lowest tariff on the clean good increases the value of imports. Finally, we explore the link between the change in welfare and the change in the value of imports in response to the tariff reforms, and we show that unlike a proportional tariff reduction, a tariff reduction on the clean good does not necessarily lead to improvements in both welfare and market access.     

Income distribution and unequal gains from trade

This paper studies welfare gains from trade in a tractable model with a nonhomothetic preference over product quality. We show that the welfare changes due to trade shocks are unequal across consumers and derive a parsimonious formula to measure these welfare changes as in Arkolakis et al. (2012, American Economic Review, 102, 94–130). We find that the welfare changes are larger for consumers with lower income. Moreover, this paper shows that the welfare implications are different between a change in (iceberg-type) variable trade cost and a change in tariff when tariff revenue matters. More importantly, we show that the difference varies across consumers with different income levels.     

An Inquiry into the Effects of U.S. Multinationals on U.S. Intraindustry Trade

Abstract

This study is among the first to examine the relations and interrelations among variables that measure the activities of U.S. multinational enterprises and their affiliates through the use of data that has recently become available. None of the results seem to contradict, and a large number seem to corroborate many hypotheses of contemporary international trade and global marketing theory. An important finding is that a strong gross complementarity between the variables exists which results in the values of these variables increasing simultaneously. Hence, the levels of intraindustry and international trade also increase simultaneously. However, it is found that net substitution relations exists between a number of pairs of the variables considered.     

ICT,conflicts in financial intermediation and financial access: evidence of synergy and threshold effects

In this study we investigate the role of information and communication technology (ICT) in conflicts of financial intermediation for financial access. The empirical evidence is based on contemporary (or current values) and non-contemporary (or lagged by a year) quantile regressions in 53 African countries for the period 2004-2011. The main findings are: First, the net effect of ICT in formalization for financial activity in the banking system is consistently beneficial with positive thresholds. The fact that corresponding, unconditional and conditional effects are persistently positive is evidence of synergy or complementary effects. Second, the net effect of ICT in financial informalization for financial activity in the financial system is negative with a consistent negative threshold. Hence, the positive (negative) complementarity of ICT and financial formalization (informalization) is an increasing (decreasing) function of financial activity. Policy measures on how to leverage the synergy or complementarity between ICT and financial formalization in order to enhance financial access are discussed.     

The welfare effect of tariff rate reductions in a many country world

Consider a two-commodity n-country model without inferior goods where import tariffs are the only trade barriers. In this paper we establish that the world's welfare is improved if the country with the highest tariff rate unilaterally reduce its rate to the level of the second highest country or if all the countries of the world reduce tariff rates proportionally. The second rule serves as a theoretical justification of the Kennedy and Tokyo Round Tariff Reductions.     

关税减让对我国农产品进口的影响分析

本文运用理论和实证的分析方法,研究了关税减让对我国农产品进口的实际影响。研究结果表明,关税减让与我国农产品的进口之间存在着高度的负相关关系,在影响我国农产品进口行为的诸多因素中,关税起到了主要的作用,但并非唯一因素。同时,关税减让与农产品的进口额、进口结构之间存在密切的关系,最后,还提出几点政策性意见。     

Practical general equilibrium estimation of resource pulls under trade liberalization

This paper discusses the application of a model similar to the one developed in Leif Johansen's Multi-sectoral study of economic growth (1964) to the problem of determining general equilibrium responses of the economy to changes in commercial policy. This method amounts essentially to specifying a log-linear approximation to the general equilibrium solution for the economy, and solving the resulting linear equations for changes in endogenous variables as functions of exogenous variable changes. For a 35-sector model of the Chilean economy with labor as the only variable factor of production (to avoid the problem of overdetermination of many commodity price and output shifts when only two factors are considered in constant returns production functions), it is found that (i) the specification of the way in which intermediate inputs enter the production function is numerically important in determining output responses to tariff changes, detracting from the credibility of fixed coefficient effective rate of protection calculations if variable intermediate input coefficients are the rule (as appears likely empirically); (ii) exchange rate elasticities with respect to individual tariff changes are fairly large, so that the usual partial equilibrium assumption of exchange rate insensitivity to ‘small’ tariff revisions is not valid; (iii) employment effects of different tariff revisions are highly variable and in some cases substantial.     

资本品进口、资本技能互补与中国的相对工资差距

中国是资本品净进口国,资本品进口引致资本积累并通过资本与技能互补效应增加对熟练劳动力的相对需求,是影响熟练劳动力与非熟练劳动力之间相对工资差距的一个重要机制。文章实证检验了资本品进口与中国熟练劳动力的互补效应及其对中国相对工资差距的影响。研究结论表明：资本与技能互补效应在中国长期存在,资本品进口促进了中国的资本积累,并通过资本与技能互补效应提高了熟练劳动力的边际产出,增加了对熟练劳动力的相对需求,扩大了相对工资差距。然而,劳动力的相对数量效应和相对效率效应对中国不断扩大的相对工资差距的解释力不强。     

中国外商投资与贸易政策的经济学分析

文章对经典文献中的关税决定与外商投资的政治经济学模型进行了扩展,引入了内生外商投资决定机制.通过MATLAB模拟出特定数值参数下博弈的均衡解并对均衡解的性质进行讨论,得出了在一定条件下,均衡的贸易保护水平与外资水平之间存在正向关系的命题,而均衡解是高水平均衡还是低水平均衡则取决于该行业的特定行业参数,正是这些行业特定参数的差异导致了现实中复杂的贸易保护结构和外商投资水平.为了检验由模型所得出的命题,文章利用中国第三次工业普查的数据进行了实证检验,通过联立方程组计量模型对数据进行回归,结果对理论模型的结论给予了支持.     

Non-preferential trading clubs

This paper examines the welfare implications of non-discriminatory tariff reforms by a subset of countries, which we term a non-preferential trading club. We show that there exist coordinated tariff reforms, accompanied by appropriate income transfers between the member countries, that unambiguously increase the welfare of these countries while leaving the welfare of non-members unaltered. In terms of economic policy implications, our results show that there exist regional, MFN-consistent arrangements that lead to Pareto improvements in world welfare.     

An economic analysis of the duty-free zone

This paper presents a theoretical framework to analyze the economic implication of a duty-free zone, where duties are exempted in order to attract foreign investments. Using the standard two-factor, two-commodity trade model, it is shown that in the absence of foreign investment the establishment of a duty-free zone does not affect production if the protection is in the form of import tariff; also that the increase in foreign investments in the duty-free zones does not necessarily improve the consumption possibilities available to a developing country.     

On necessarily welfare-enhancing free trade areas

The well-known Kemp-Vanek-Ohyama-Wan proposition establishes that if two or more countries form a customs union (CU) by freezing their net external trade vector through a common external tariff and eliminating internal trade barriers, the union as a whole and the rest of the world cannot be worse off than before. Owing to the fact that a Free Trade Area (whose member countries impose country specific external tariff vectors) does not equalize marginal rates of substitution across its member countries (in contrast to a CU), the literature has been unable to provide a parallel demonstration regarding welfare improving Free Trade Areas (FTAs). The present paper eliminates this gap. In extending the result to the case with intermediate inputs, the paper also sheds new light on the rules of origin required to support such necessarily welfare enhancing FTAs. We show here that provided no trade deflection is permitted, all that is required by way of rules of origin is that the goods produced within the union - whether final or intermediate - be allowed to be traded freely. The proportion of domestic value added in final goods does not enter as a criterion in the rules of origin.     

Job creation, job destruction, and the real exchange rate

Welfare gains from trade are reduced by adjustment costs associated with factor reallocation, but most studies of the effects of trade on labor markets focus only on net employment change. This paper takes a step toward identifying trade-related adjustment costs by estimating the effects of real exchange rates on labor reallocation using a new model of gross job creation and destruction applied to detailed U.S. manufacturing industries between 1973 and 1993. Trend real exchange rates significantly affect job reallocation but not net employment. Cyclical real exchange rates significantly affect net employment through job destruction only.     

Tariffs and the most favored nation clause

In an n country oligopoly model of intraindustry trade (n≥3), this paper explores the economics of the most-favored-nation (MFN) principle. Under the non-cooperative tariff equilibrium, each country imposes higher tariffs on low cost producers relative to high cost ones thereby causing socially harmful trade diversion. MFN adoption by each country improves world welfare by eliminating this trade diversion. Under linear demand, MFN adoption by the country with the average production cost is most desirable. High cost countries refuse reciprocal MFN adoption with other countries and also lose even if others engage in reciprocal MFN adoption amongst themselves.     

Job Flows and Job Quality by Establishment Size in the Finnish Manufacturing Sector 1980–94

This paper studies how employment patterns and growth vary with establishment size in the Finnish manufacturing sector during the period 1980–94. The findings are compared with the predictions of alternative theories of firm growth. The paper also examines some aspects of job quality in different size categories, including wages, labour productivity, working hours, labour turnover and the persistence of jobs. According to the findings, small establishments create and destroy jobs relatively more than large establishments. In addition, in the smallest size categories both the share of gross job creation and the share of gross job destruction is larger than the share of employment. However, there is no clear relationship between establishment size and net employment change. Furthermore, after studying different aspects of job quality, we can conclude that the jobs offered by small and large establishments differ greatly in many respects and it is difficult to evaluate the total welfare effect.     

Trade and growth in the presence of distortions

Abstract

Tariffs and other policy distortions typically lower real national income relative to what it otherwise would have been for any given rate of factor accumulation. Even so, policy distortions may raise an economy's real measured growth rate and, somewhat deceivingly, give the impression that national welfare has benefited from things like tariff protection. This would be an incorrect conclusion. This paper discusses the issue of how policy distortions can affect the rate of growth for a small, open economy. For example, in the presence of exogenously given factor accumulation, a tariff can either raise or lower an economy's growth rate (measured by the change in the value of output at world prices), relative to the no-distortion growth rate. We also discuss the relevance of this result for tariff uniformity, ‘tariff jumping’ foreign direct investment, and the empirical literature on trade and growth. Finally, we use a numerical simulation model of Egypt to assess whether the costs of its tax distortions have increased or declined over time.     

Financial development and the growth of cooperative firms

The purpose of this article is to empirically assess the relationship existing between local financial development and the growth of firms, with a special focus on cooperatives. Using Italian data, a multiplicative interaction model is specified, so as to allow the impact of local banking development to differ between cooperative and non-cooperative firms. The main finding is that although local banking development represents a determinant of firms’ growth, regardless of their legal structure, it plays a special role in boosting the growth of cooperatives. This result provides evidence in favor to the existence of an institutional complementarity relationship between the development of local banking institutions and cooperative firms.