Exchange-rate volatility and export performance: Do emerging market economies resemble industrial countries or other developing countries?

Authors who do not distinguish between Emerging Market Economies (EMEs) and other developing countries, find evidence of negative and significant effects of exchange-rate volatility on trade. We investigate the effects of real exchange-rate volatility on exports of ten EMEs and eleven other developing countries that were not classified as EMEs over our estimation period. We use panel-data sets that cover the periods 1980:Q1–2006:Q4 for the EMEs and 1980:Q1–2005:Q4 for the other developing countries. We use two estimation methods — generalized method of moments (GMM) estimation and time-varying-coefficient (TVC) estimation. The TVC procedure removes specification biases from the coefficients, revealing the underlying stable parameters of interest. We obtain similar results as previous authors for only the eleven non-EME developing countries we consider. In contrast, our results for the EMEs do not show a negative and significant effect of exchange-rate volatility on the exports of the countries considered. Our findings suggest that the open capital markets of EMEs may have reduced the effects of exchange-rate fluctuations on exports compared with those effects in the cases of other developing countries.     

Does exchange-rate volatility depress export flows: The case of LDCs

In the area of international trade, few studies have examined whether increases in exchange-rate volatility depress trade flows of LDCs. The aim of this paper is to investigate empirically the impact of exchange-rate volatility on the export flows of 10 developing countries over the quarterly period 1973–98. The econometric analysis exploits the theory of cointegration, given the obvious nonstationarity of the data. Estimates of the cointegrating relations are obtained using Johansen's multivariate procedure. Evidence of stability of the cointegrating space is examined using Hansen's [1992a] tests. Short-run dynamic modelling is accomplished using the error-correction technique, and the stability test results are obtained using Hansen [1992b] tests. In conformity with theoretical considerations, the results indicate that increases in the exchange-rate volatility exert a significant negative effect upon export demand in both the short-run and the long-run in most of the countries studied. These effects may result in significant reallocation of resources by market participants.     

The new goods margin in new markets

We analyze the role of the new goods margin in the Baltic countries’ exports and imports growth during the 1995–2008 period. Using the methodology developed in Kehoe and Ruhl (2013), we define the set of least-traded goods as those that account for the lowest 10% of total exports and imports in 1995, and then trace its growth in several markets including the Baltics’ main trade partners, the European Union and Russia. We find that, on average, by 2008 least-traded goods accounted for nearly 50% of total Baltic exports to their main trade partners. Moreover, we find that increases in the share of least-traded exports coincided with the timing of the trade liberalization reforms implemented by the Baltic countries. Least-traded imports also grew at robust rates, but their growth was lower than that of exports, accounting for slightly less than a quarter of total imports, that is, about half of the exports value. Moreover, we find that the shares of least-traded imports from the EU 15 and from Russia started diverging around the time the Baltic countries joined the EU, with the EU 15 share increasing and the Russian one declining. We also find that the Baltics’ share of least-traded exports outpaced that of other economies in Central and Eastern Europe. Finally, exports of new goods from the Baltic countries suffered noticeably during the Global Financial Crisis. After the crisis ended, the restart in new goods exports growth displayed mixed patterns.     

The Energy-Bias of North–South Technology Spillovers: A Global,Bilateral, Bisectoral Trade Analysis

We examine variations in the South–North ratios (emerging vs. industrialized countries) of energy and labor intensities driven by imports. We use the novel World input-output database that provides bilateral and bisectoral data for 40 countries and 35 sectors for 1995–2009. We find South–North convergence of energy and labor intensities, an energy bias of import-driven convergence and no robust difference between imports of intermediate and investment goods. Accordingly, trade helps emerging economies follow a ‘green growth’ path, and trade-related policies can enhance this path. However, the effects are economically small and require a long time horizon to become effective. Trade-related policies can become much more effective in selected countries and sectors: China attenuates labor intensity via imports of intermediate goods above average. Brazil reduces energy intensity via imports of intermediate and investment goods above average. Production of machinery as an importing sector in emerging countries can immoderately benefit from trade-related reductions in factor intensities. Electrical equipment as a traded good particularly decreases energy intensity. Machinery particularly dilutes labor intensity. Our main results are statistically highly significant and robust across specifications.     

Multi-destination firms and the impact of exchange-rate risk on trade

Based on a French firm-level database that combines information on balance-sheet and destination-specific export information over the period 1995–2009, we document a new stylized fact related to the heterogeneous reaction of exporters to RER volatility: we show that strongly multi-destination firms tend to reduce significantly more their exports to a destination that faces higher exchange-rate volatility. We also show that, following an exchange-rate volatility shock in a given country, strongly multi-destination firms increase exports to all other destinations served. This specific behavior of multi-destination firms has significant aggregate implications. First, the bilateral aggregate impact is increasingly negative with the weight of multi-destination firms in total exports towards the considered destination. Second, the reallocation behavior of large, multi-destination firms ultimately translates into stable total French exports (summed over all destinations).     

The effects of government expenditure on imports in the Eurozone reconsidered: evidence from panel data

This study examines the impact of government expenditure on imports. The empirical analysis is based on annual data of the euro area countries for the period 1995–2015. We employ econometric methods that mitigate heterogeneity and cross-sectional dependence. We provide empirical indications that the components of expenditure have different impact on imports demand. The findings of this study indicate that the import context of government expenditure is lower than the import context of others expenditure components. Finally, we find that an increase in government expenditure leads to an increase in imports; this implies that, ceteris paribus that it can lead to a deterioration of the trade balance.     

Does international oil volatility have directional predictability for stock returns? Evidence from BRICS countries based on cross-quantilogram analysis

While numerous studies have investigated the relationship between oil volatility and stock returns, it is surprising that little research has examined the quantile dependence and directional predictability from oil volatility to stock returns in BRICS (Brazil, Russia, India, China, and South Africa) countries. We address this issue by using the cross-quantilogram model proposed by Han et al. (2016). The empirical results show that, overall, oil volatility has a directional predictability for the stock returns in BRICS countries. When the oil volatility is in a low quantile (lower than its 0.1 quantiles), it is less likely to show either a large loss or a large gain in the stock market. In contrast, there is an increased likelihood of either large loss or a large gain in the stock market when the oil volatility is in a high quantile (higher than its 0.9 quantiles). The directional predictability from the oil volatility to stock returns depends on the net position of oil imports and exports of these BRICS countries in the oil market. The net oil exporters (Russia and Brazil) are less likely to have large gains and large losses in the stock market than are the net oil importers (India, China, and South Africa) when the oil volatility is in a low quantile. The net oil exporters are more likely to have large gains and large losses than are the net oil importers when the oil volatility is in a high quantile. The results are robust to change in the variable of oil volatility and the sample interval.     

Knowledge spillovers through FDI and trade: the moderating role of quality-adjusted human capital

The paper extends the findings of the Coe and Helpman (Eur Econ Rev 39(5):859-887, 1995) model of R&D spillovers by considering foreign direct investment (FDI) as a channel for knowledge spillovers in addition to imports. Deeper insights on the issue are provided by examining the inter-relationship between knowledge spillovers from imports and inward FDI. Furthermore, human capital is added to the discussion as one of the appropriability factors for knowledge spillovers, with special focus on its quality-content, using journal publications and patent applications. Applying cointegration estimation method on 20 European countries from 1995 to 2010, the direct effects of FDI-related as well as import-related spillovers on domestic productivity are confirmed. Furthermore, a strong complementary relationship is found between knowledge spillovers through the channels of imports and inward FDI. When considering quality-adjusted human capital, countries with better human capital are found to benefit not only from direct productivity effects, but also from absorption and transmission of international knowledge spillovers through imports and inward FDI. Finally, technological distance with the frontier does not appear to play a role in the absorption of import and FDI related knowledge spillovers.     

Output volatility,composition of trade,and transmission of economic shocks across countries

In this paper we investigate how supply and demand shocks in one country affect output volatility in other countries. While the evidence for cross‐country transmission of demand shocks is mixed, we find that volatile supply in one country leads to larger imports and output volatility in other countries. As a result, the effect of trade openness on output volatility is highly heterogeneous across countries and depends on the composition of their trade. Those countries whose imports originate in economies with volatile supply experience a greater impact of trade on output volatility.     

考虑价格因素的原油进口多元化路径研究

价格风险是我国原油进口面临的主要风险之一,通过构建我国原油进口的价格-风险模型,量化研究了我国原油进口来源国的最优风险结构。结论显示,中东地区依然是我国最重要的原油进口来源地,进口更多来自政治稳定地区的原油,可以有效地分散我国原油的供应风险。从长期来看,我国需要积极拓展更多的石油供应渠道,进一步提高从阿联酋、美国、澳大利亚、加拿大、哈萨克斯坦、埃及以及卡塔尔的进口量,保证我国的原油进口安全。     

What's so great about the Great Moderation?

This paper examines how volatilities of output growth and inflation have changed over a long period for eight countries. We obtain a number of robust empirical results based on a variety of different econometric methods. The lowest volatility occurs during or shortly after the Great Moderation period. Volatility is reduced during that time for most of the countries; however, these reductions in volatility pale in comparison with stability gains achieved during two other periods. One of those periods is the Postwar Moderation, which began near the end of World War II for each country. Not only is the decline in volatility impressive, but also the volatility is typically at the lowest level up to that point in a sample or at least has fallen to a low not seen for decades. And those reductions in volatility are statistically significant, in contrast to the Great Moderation. A second fall in volatility that in nearly all cases exceeds that of the Great Moderation is for inflation during the 1920s. And this moderation in inflation during the 1920s is statistically significant in almost every case. Overall, these and a number of other notable changes in volatility are remarkably robust across countries, different data sources, and alternative econometric methodologies. For example, implementation of a broad-based fixed exchange rate system is typically associated with a substantial reduction in macroeconomic volatility. Another finding, obtained from structural vector autoregression models, is that the changes in volatility for each variable are primarily driven by a fundamentally different type of disturbance.     

Are imports and remittances cointegrated for the Central and Eastern European countries?

In this article, we investigate the existence of long-run common trends between imports and remittances in 11 Central and Eastern European countries which are part of the European Union. Using the Engle–Granger two-step procedure, we determine that for all countries in our sample there are no long-run common trends (no cointegration) between imports and remittances. However, the results are mixed when running a Granger causality test. For nine countries, we can establish either a bidirectional or unidirectional Granger causality, indicating that past values of one variable have predictive content on the other variable. In two countries, there is no Granger causality between imports and remittances.     

Inflation,openness, and exchange-rate regimes: The quest for short-term commitment

This paper further tests Romer's [Romer, D., 1993. Openness and inflation: theory and evidence. Quarterly Journal of Economics 58, 869–903] extension of Kydland and Prescott's [Kydland, F., Prescott, E., 1977. Rules rather than discretion: the inconsistency of optimal plans. Journal of Political Economy 85, 473–491] predictions for dynamic inconsistency problems in open economies. In a panel data set of developed and developing countries from 1973 to 1998, I find that openness does not play a role in restricting inflation in the short run. On the other hand, a fixed exchange-rate regime plays a significant role. The results are robust to controlling for other variables that determine inflation, performing sensitivity analysis, and using a de facto exchange-rate regime classification.     

Pollution Offshoring and Emission Reductions in EU and US Manufacturing

Between 1995 and 2008, the European Union and the United States raised environmental standards and concurrently experienced important reductions in emissions from manufacturing despite a rise in output. Levinson (Am Econ Rev 99(5):2177–2192, 2009) finds that the offshoring of polluting industries to countries with lower environmental standards played only small role in the cleanup of US manufacturing, which was largely due to improvements in production technique. But there is no evidence of whether US patterns hold in other developed economies. I provide the first analysis of the pollution intensity of EU production and imports to examine which forces drove the EU cleanup. I find that concerns about the effect of pollution offshoring were unfounded in the European Union, not because the effect was small like in the United States, but because the patterns of specialization of EU production and imports were exactly opposite to what pollution offshoring would predict. Starting in the early 2000s, EU manufacturing increasingly produced more pollution-intensive goods while imports became progressively less pollution-intensive, especially from low-income countries. There are two notable exceptions: primary aluminum and electrometallurgical products, except steel, which do provide evidence of offshoring from the EU to lower income countries. The “brown” specialization of EU production is difficult to explain, but about a quarter can be matched by increased demand for EU exports of polluting goods. However, similar to the US cleanup, changes in production and imports were overwhelmed by improvements in production technique, which were the main drivers of the cleanup of manufacturing.     

The Role of Trade in Intra‐Industry Productivity Growth—the Case of Old and New European Union Countries

The purpose of this paper is to evaluate the role of trade in productivity growth in a sample of 30 sectors in 25 EU countries in the period of rapid East–West integration (1995–2007). Shift‐share analysis is used to show that changes in value added per hour worked in these countries appear to be mainly due to positive developments (rising productivity) within single industries and only to a lower extent result from a shift towards higher productivity activities. Trade is found to be an important positive determinant of intra‐industry productivity growth in European countries. Exports and imports alike can be associated with efficiency gains, but intermediate good exchange and trade with New Member States exert a particularly strong influence on intra‐industry productivity growth in the EU.     

The transmission mechanism of business cycles among Germany,Japan, the UK and the USA

The study analyses the interdependent relationships of business cycles among four major countries using LA-VAR methods. The results are compared with results obtained using a standard VAR model. For the total sample (1962–1995), it is found that the economies of individual countries move independently and that inter-dependence is weak. However, causality from the USA to Japan, and from Japan to Germany can be observed. It is also found that the ripple effect differs in the first (1962–1973) and second (1973–1995) sample periods. A change in the international ripple effect on the business cycle may have occurred at the time of the first oil crisis. These results are almost robust to the empirical techniques employed in the analysis.     

Is education important in assessing the impact of institutions on economic growth in emerging economies?

ABSTRACT

In this article, we empirically revise the hypothesis that institutions cause economic growth for emerging countries starting from a theoretical model. Our sample consists of 21 countries covering different zones: European Emerging, Asia Pacific Emerging, Latin America, Middle-East and Africa while the status advanced versus secondary emerging countries based on FTSE (Financial Times Stock Exchange) classification is accounted for. The period analysed is 1995–2014. The methodology is based on System GMM estimator of Arellano-Bover and Blundell-Bond for dynamic panel data. Empirical findings suggest that only variables such as voice and accountability and government effectiveness have a significant positive impact on economic growth rates of the analysed countries. In the presence of control variables, i.e. trade and government final consumption, results are robust. Results remain robust for countries that have a high level of government expenditure on tertiary education which proves the role of education in assessing the impact of institutions on economic growth.     

The effectiveness of international knowledge spillover channels

Using panel data from 16 Organization for Economic Cooperation and Development (OECD) countries for the period 1981–2000, we examine the significance of international knowledge spillovers through inward and outward foreign direct investment (FDI), intermediate goods imports, and a disembodied direct channel. Knowledge spillovers through the disembodied direct channel are approximated by using a measure of technological proximity and patent citations between countries. Using estimation models that reflect recent developments in non-stationary panel data econometrics, we show that international knowledge spillovers through inward FDI and the disembodied direct channel are significant and robust. In contrast, outward FDI and imports of intermediate goods are not conducive to international knowledge spillovers.     

A spatial econometric analysis of the regional growth and volatility in Europe

Based on a sample of 1,084 European regions (EU15) from 1995 to 2004, we estimate the relationship between the average growth rate of GDP per capita and the volatility of the growth rate allowing for spatial effects. The spatial lag and spatial error models show that the regional per capita growth rate and volatility are significantly positively related on average. However, the inclusion of country interaction terms reveals that the volatility impact is not uniform across countries. In particular, the relationship between growth and volatility is significantly positive for the majority of countries but significantly negative for three countries (namely Finland, Italy, and Ireland).

The effect of the euro on aeronautic trade: A French regional analysis

After describing the spatial distribution of the aeronautic industry in France, this study analyzes the determinants of French regional bilateral exports and imports, according to a trade gravity model, for the period 2003–2010. The appreciation of the euro has a negative impact on exports and a positive effect on imports, confirming the fears of European politicians and managers in the aeronautic sector. The gravity equation, extended to integrate factor complementarities among partners, also shows that labor productivity levels in France and its partner countries are significant determinants of trade, supporting O-ring theory applied from Kremer (1993) to explicate trade in the aeronautical sector. The spatial organization of this sector is also analyzed via the impact of foreign military spending on French trade. Finally, by distinguishing French imports and arrivals of products manufactured in Europe and in France, supplementary estimations reveal that outward foreign direct investment FDI affects the imports and arrivals of European products negatively but has positive influences on the imports and arrivals of French products.