A CGE model of 'Dutch disease' economics in Taiwan

A computable general equilibrium (CGE) model of Dutch disease economics in Taiwan's economy is established in order to examine the impacts of the imbalanced growth in output, endogenous learning effects from imports and exports and the import tariff reduction. Twenty-nine industry sectors and five quintiles of households are taken to measure the changes in industry structure and functional distribution of income. An imbalanced growth, either from output or exports, contributes to the reduction in the share of manufacturing industry, but the deterioration in the functional distribution of income only happens to an imbalanced growth in intersectoral output. A widespread trade liberalization policy helps to mitigate the Dutch disease phenomenon in the sense that de-industrialization and deterioration of the distribution of income by an imbalanced growth in manufacturing industry are not so severe.     

Intermediary Products: FDI Strategies,Imports, Exports,and Trade Balances in Developed Economies

Has the relationship between the dominant investment motives of multinational enterprises (MNEs) and national trade balances, imports, and exports changed over time? A 1996 study hypothesized and found that the MNE market versus resource seeking investment motives in developed countries (DCs) resulted in different aggregate impacts on national trade balances, imports, and exports. In this study, we ask whether the increased use of intermediary products, a major change in the way MNEs conduct business, affect the previously found patterns. Because firm‐level data on intermediary products is not widely available across countries, we indirectly test their impact, hypothesizing that the rise in use of intermediary products has changed MNE investment motives in DCs, resulting in stronger relationships between foreign direct investment (FDI) and imports/exports in high‐FDI DCs but weaker links between FDI and national trade balances. Implications and future research directions are discussed. © 2015 Wiley Periodicals, Inc.     

The DNA of the domestic value added (DVA) in exports: Firm‐level analysis of DVA in exports

This paper sheds light on the relationship between domestic value added in exports (DVA) and the different ways firms participate in GVCs by exploiting a detailed firm‐level data set for the whole population of Slovenian exporting firms for the period 2002–14. The paper draws attention to those firm characteristics that allow a greater share of DVA to be captured. Although reliance on industry‐level data from input–output tables is the most common way of doing this in the literature, this paper develops a method for estimating DVA in exports using firm‐level data by adapting the approach taken by Kee and Tang (2016). The paper finds that in terms of DVA, domestic‐owned exporting firms outperform more productive foreign‐owned firms and that firms not affiliated with permanent suppliers from abroad capture higher DVA in exports. Positive outcomes of DVA in exports can be observed, all else being equal, for firms with a larger share of intangible capital per worker and firms with a smaller share of exports based on imports of the same products. The results also show that when exporting more to less demanding markets, like the countries of former Yugoslavia, firms benefit more in terms of greater DVA gains in exports.     

Liberalising Trade in the Agriculture Sector of a Small Island State: The Case of Fiji

This paper uses Fiji as a case study to investigate the impacts of three trade liberalisation policies – removal of sugar price subsidies, unilateral trade liberalisation and multilateral trade liberalisation, implied by the successful completion of the Doha Round. Removal of the sugar price subsidies has an adverse effect on real output, real national welfare and employment, but promotes growth of non‐agricultural exports in the long run. Unilateral trade liberalisation, in the form of tariff cuts in the agricultural sector, increases real output, real national welfare and non‐agricultural exports in the medium term. However, this growth is not sustained in the long term. The best outcome for Fiji is multilateral trade liberalisation which increases real output, real national welfare, non‐agricultural exports and employment. It is argued that reform of trade policies in less developed countries could come at a cost, therefore highlighting the need for compensating mechanisms to deal with the adverse impacts. Other measures to assist farmers to expand output in response to a rise in prices could include measures to reduce transport, storage and packaging costs, as well as institutional measures to enhance the functioning of input and factor markets.     

Some Surprising Facts About the Concentration of Trade Across Commodities and Trading Partners

The present paper documents unexplained concentration in trade. Bernard et al. (Producer Dynamics: New Evidence from Micro Data, 2009, University of Chicago Press) have documented concentration at the level of the firm and in exports. Taking a step forward, we document trade volume concentration at the level of nations and in both exports and imports. Firm level concentration has been relatively easy to explain in terms of models of heterogeneous‐firm models with entry costs in both the domestic and foreign markets. But as we shall see, the concentration at the level of the nation, especially in imports if not exports, turns out to be far more difficult to explain.     

Service Trade and Occupational Tasks: An Empirical Investigation

Using microdata for Belgium, we investigate the relationship between changes in the task content of production and the rise in the number of service exporters. We show that occupational tasks changes display an extremely consistent relationship with participation to service exports: in sectors in which the importance of face‐to‐face communication with customers has increased, the firm‐level likelihood of entering export markets has decreased; instead, the likelihood of exporting increased in sectors in which the sophistication of production and delivery has expanded (following an increase in cognitive tasks). Moreover, our analysis suggests that the change in IT use per se does not strike as being a key underlying force behind the increase in the extensive margin of service exports. These results are robust controlling for comparative advantage, offshoring, trade liberalisation and demand shifts.     

What Drives India's Surge in Service Exports?

India's prowess in the service sector has been recognised the world over. Sustaining services exports is important not only to sustain India's high growth rate but also to compensate for a consistent deficit in merchandise trade and to maintain stability on the external sector. In this context, we analyse the factors of India's performance in services exports over the past three decades. The results reveal that endowment factors such as human capital, improvement in physical infrastructure and financial development are key drivers for India's surge in services exports along with world demand, exchange rate and manufacturing exports. While factors such as institutions, R&D expenditure, telecommunication, foreign direct investment and financial development significantly impact the export of modern services, traditional services exports are more dependent on infrastructure development, manufacturing exports, world demand and exchange rate. India's economic reforms in the financial sector, FDI, communication so far have helped the services exports, but India needs to focus on supply‐side factors to improve the competitiveness – and thereby volume – of services exports.     

Export diversification,composition, and economic growth: Evidence from cross-country analysis

We investigate the export-growth relationship at disaggregate levels – disaggregation both at the country level and at the level of exports – focusing on the diversification and the composition of exports of countries. In a sample of 65 countries for the period 1965–2005 the dynamic panel estimation reveals that both diversification and composition of exports are important determinants of economic growth after controlling for the impacts of other variables like lagged income, investment, and infrastructure. There is a critical level of export concentration beyond which increasing export specialization leads to higher growth. Below this critical level, diversification of exports matters for gross domestic product (GDP) growth. Growth of high technology exports also contributes tothe output growth; the relationship becomes stronger for countries that have share of manufacturing exports in their total exports greater than the world average. These results are robust even when the dataset isclassified in four sub-panels based on the export-economic growth relationship.     

An explicit partial‐equilibrium model to justify the Generalized Marshall‐Lerner condition (GML)

Robinson's derivation of the Marshall‐Lerner condition (ML) is more general in that she considers a situation where initially the trade balance is not in equilibrium with the incorporation of the supply curves of exporters. This paper examines a partial equilibrium analysis of a country's imports and exports markets within a theoretical model which considers both the demand and supply sides in these two internationally traded‐goods markets. The aim here is to show explicitly how the Generalized Marshall‐Lerner condition (GML) of Robinson can be obtained. We examined the two effects of the nominal depreciation of the domestic currency on the trade balance: the volume effect and the value effect and how they counterbalance each other. We found that the standard Marshall‐Lerner condition (ML) was not sufficient when the trade balance was initially in deficit and it was also not necessary if the trade balance showed an initial surplus. Moreover, this study provides a new interpretation for Robinson’ sufficiency condition where the trade balance must improve following a nominal depreciation of domestic currency when the elasticity of foreign demand exceeds the ratio of imports to exports. This paper also examines the situation of a small open economy which could not influence the world prices where the foreign demand for exports and the foreign supply of exports are infinitely large. Finally, there is a discussion on two policy implications for exchange rate regulation: the amount of devaluation that is necessary to improve a given trade imbalance as a governments intervention and additional support for the slow improvement of the trade balance in the short run after a devaluation policy known as the J‐Curve effect.     

企业异质性、技术变迁与动态比较优势

运用中性技术和偏向性技术对比较优势进行理论拓展,异质性企业理论扩大了H-O模型的比较优势。与中性技术相比,偏向性技术具有扩大或缩小出口的作用;偏向于丰裕要素的技术进步有助于扩大出口;而偏向稀缺要素的技术进步不利于出口扩张。要素禀赋、企业异质性和偏向性技术进步使得一国出口产品具有锁定在密集使用丰裕要素的固化特征,难以实现比较优势的动态升级。这一结论不仅可以解释中国多年来未能实现出口产品的动态比较优势问题,也为进一步的经验验证提供理论支持。     

Variable Trade Costs,Composition Effects and the Intensive Margin of Trade

We estimate the elasticity of extra EU French firm‐level exports with respect to applied tariffs – a variable trade cost. We implement a method controlling for unobserved firm characteristics driving selection in exports market, and controlling for the multilateral resistance terms. Results confirm a significant negative impact of tariffs on firm‐level exports, with one fifth of this impact falling on the induced adjustment in the exporters' product mix. When controlling for this adjustment and focusing on the core exported products, the elasticity of the product‐destination firm‐level exports with respect to applied tariffs is estimated at about −2.5.     

China's exports,export tax rebates and exchange rate policy

This paper examines the relationship between China's exports, export tax rebates and exchange rate policy. It offers an explanation for why China's exports continued to rise under RMB real appreciations during the Asian financial crisis. Based on a traditional export demand model, we test our hypothesis that the counteracting effects of China's export tax rebate policy have diminished the effectiveness of real exchange rates in facilitating the resolution of trade imbalances under the current pegged exchange rate regime. We find evidence that RMB real appreciations during the crisis negatively affected China's exports, but the negative effects were mitigated by the positive effects of export tax rebates. We also find evidence of a long‐run relationship between China's exports and the other explanatory variables. The empirical evidence suggests that under the pegged exchange rate regime with limited adjustments, real exchange rate movements alone cannot resolve China's external imbalances. The policy implication of this study is that China needs to redirect its decades‐long export‐oriented development strategy to one that emphasises domestic demand‐oriented development and to replace the current pegged exchange rate regime with a market‐oriented more flexible exchange rate regime.     

Does Export Openness Increase Firm‐level Output Volatility?

There is a widespread concern that increased trade may lead to increased instability and thus risk at the firm level. Greater export openness can indeed affect firm‐level volatility by changing the exposure and the reaction of firms to macroeconomic developments. The net effect is ambiguous from a theoretical point of view. This paper provides firm‐level evidence on the link between openness and volatility. Using comprehensive data on more than 21,000 German manufacturing firms for the period 1980–2001, we analyse the evolution of firm‐level output volatility and the link between volatility and export openness. Our paper has three main findings. First, firm‐level output volatility is significantly higher than the level of aggregate volatility, but it displays similar patterns. Second, increased export openness lowers firm‐level output volatility. This effect is primarily driven by variations along the extensive margin, i.e. by the distinction between exporters and non‐exporters. Variations along the intensive margin, i.e. the volume of exports, tend to have a dampening impact on volatility as well. Third, small firms are more volatile than large firms.     

The Trade Effects of the EU–Turkey Customs Union

In the present study we argue that the salient features of both the EU‐15 countries and Turkey are conducive to making the effects of the 1995 EU–Turkey customs union asymmetric among the incumbent EU countries. In order to support our argument we rely on a model in which trade involves the exchange of vertically differentiated products. This model generates the prediction that the more contiguous an incumbent country is to the joining country in terms of technological sophistication, the larger will be the crowding out of this country's exports to the other incumbent countries as a result of the CU expansion. Using a gravity model we estimate the effects of the customs union between Turkey and the EU‐15 by differentiating between exports from (a) lower‐technology EU‐15 countries (we term this group of countries ‘South’) to higher‐technology EU‐15 countries (the ‘North’), (b) North to South, (c) South to Turkey, (d) North to Turkey, and (e) Turkey to EU‐15. Our econometric results indicate that, in contrast to North's exports to the other EU‐15 countries (which have remained intact), the Southern countries’ exports to the other EU‐15 countries have declined as a result of the CU. Moreover, the extra penetration of the Turkish market by the EU‐15 countries has not been more favourable to the Southern group.     

Some observations on models of growth and distribution with autonomous demand growth

This paper offers some theoretical and methodological observations on a model of growth and distribution, recently developed by Franklin Serrano and others and called the Sraffian supermultiplier model, in which the growth of autonomous capitalist consumption demand and distribution are exogenously given and capacity utilization is at an exogenously given “normal” level in long‐run equilibrium. First, it provides a simple long‐run equilibrium version and dynamic formulation of the model, and compares it to other models of growth and distribution using a common framework and focusing on the effect of a change in income distribution on growth. Second, it shows that the model can be modified to examine other components of autonomous demand growth, including government spending, exports, consumption by workers, and investment and technical change, and to simultaneous multiple sources of autonomous demand growth. Finally, it comments on some methodological issues concerning the model, and on its implications for the notion of long‐run equilibrium.     

Assessing Export Competitiveness through the Lens of Value Added

Extensive changes in the organization of world trade over the last two decades have renewed concerns about countries’ ability to compete in export markets. The impact could be especially large in industries that participate in global value chains (GVCs). This study assesses the recent export performance of 56 countries in five industries associated with GVCs using an index of normalised revealed comparative advantage (RCA) that can be compared across industries and countries and new data on the domestic value added in exports from the OECD's Trade in Value‐added database. For a number of the GVC industries, countries identified as the most competitive based on gross exports are often found to be less competitive when evaluated in terms of domestic value added. Business services are an important exception; several countries appear more competitive on a value‐added basis than based on conventional measures of gross exports. Despite concerns about hollowing out, a number of major industrial countries remain highly competitive in one or more GVC industries, even from the perspective of domestic value added. A value‐added approach to RCA provides insights that are not apparent from an exclusive focus on gross exports.     

Exports,Foreign Direct Investment and Employment: The Case of China

This paper analyses the growth of production and employment in China during the period 1978 to the early 1990s. It argues that the Chinese experience with export‐led growth provides an excellent case study of the phenomenon of a vent for surplus resources provided by exports, identified by Adam Smith in the Wealth of Nations and elaborated by Hla Myint. The paper extends the Smith‐Myint model of ‘vent‐for‐surplus’ productive capacity to ‘vent‐for‐surplus’ resources by allowing for foreign investment flows. The ‘vent‐for‐surplus’ effect of exports on employment and growth is examined in a dynamic labour demand framework for a panel of township and village enterprises (TVEs) in China.     

International Trade and Economic Growth Nexus in Australia: A Robust Evidence from Time‐Series Estimators

This study examines the effects of international trade on output and tests the null of Granger non‐causality between trade and economic growth in Australia. The single‐equation IV‐GMM, DOLS, FMOLS and NLLS and the system‐based ML estimates consistently support the positive and significant long‐run effects of exports and investment on output. The effects of imports are consistently negative across all the estimates. The OLSEG, RLS and ARDL‐ECM estimates provide a mixed and weak and that overparameterised level‐VAR estimates no support for the effects of trade on output. The estimates of the model with structural breaks provide a dominant support for the cointegrating relationship among variables. In conclusion, the evidence supporting the positive and significant long‐run effects overwhelms the evidence providing a mixed, weak or no support for the effects of trade on output. The results of the study can be inductively generalised to mimic the findings of the literature at large and to suggest that a part of the inconclusiveness over the gains of trade could analogously be ascribed to the use of different methodologies and test statistics across studies. The results support the acceleration of exports and investment to foster the higher levels of output and economic growth.     

出口退税政策的节能减排效应研究

调整出口退税已成为遏制高能耗、高排放产品出口的重要措施,研究首先从理论上分析了出口退税的节能减排效应,提出下调出口退税率,将降低单位产值能耗成本的假设,接下来又通过我国钢铁行业出口能源强度与出口退税率的协整分析来实证验证,结果表明:出口额能耗与出口退税率间存在长期协整关系,且出口退税率是出口额能耗变化的格兰杰原因;出口退税率调整对出口额能耗影响的长期弹性为0.47,短期弹性为0.07,即出口退税率的变化对出口额能耗的影响在短期内不明显,但具有长期深远的影响;变结构协整分析还表明,差别退税政策下,当退税率下调时,出口退税率变化对出口额能耗的影响更大。     

Are Trade Preferences more Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme

This study examines the effect of the ‘Everything But Arms’ (EBA) trade preferences regime on exports from the African, Caribbean and Pacific countries (ACP) to the European Union (EU). With this aim, an augmented gravity model is estimated for exports from the 79 ACP countries to the EU‐15 for the time period of 1995—2013 using panel data techniques. The results are used to quantify the effect of the eligibility for EBA preferences on the export performance of the ACP least developed countries (LDCs) and to relate it to the impact of official development assistance on exports. In addition to their separate effects, the combined impact of EBA and aid flows is examined. The main results do not provide evidence for an additional positive effect of the EBA agreement on the export performance of the ACP LDCs. However, receiving aid shows a significant and positive effect on exports from EBA‐eligible ACP countries to the EU‐15, supporting an EU development strategy that includes both sorts of assistance, aid and trade preferences.