The effects of input tariffs on productivity: panel data evidence for OECD countries

Based on a panel of 16 OECD countries and 10 manufacturing industries over 1996–2007, this paper investigates the impact of tariffs on foreign intermediate goods on productivity growth in downstream manufacturing industries. The results show that imposing tariffs on imported intermediate goods is particularly harmful for industries that operate close to the global technological frontier. We also consider the possibility that input-tariff liberalisation may have different effects depending on the technological content of imported intermediate goods. Our findings suggest that protecting imports of high-technological goods is more harmful for productivity improvements in industries that operate close to global best practice.     

European exports and outward foreign direct investment: A dynamic panel data approach

European Exports and Outward Foreign Direct Investment: A Dynamic Panel Data Approach. — This paper implements a panel data approach for studying the determinants of and relationships between bilateral economic activities in terms of both trade and foreign direct investment between the EU member states. The familiar equation for testing the determinants of bilateral exports is reformulated to reflect recent theoretical work. It is specified as a dynamic panel data model designed to answer questions about their relationship according to changes in different exogenous determinants. Exports and stocks of outward FDI are found to be substitutes with respect to changes in transport costs and complements with respect to most of the other determinants.     

Extreme heat and exports: Evidence from Chinese exporters

Does extreme heat have causal effects on exports? If so, how do the effects evolve? This paper exploits monthly fluctuations in the number of extremely hot days within a city to identify their effects on firm-level exports in that city. We find robust evidence that hot temperatures have persistent adverse effects on firm-level exports. Specifically, export losses gradually arise following a heat shock, beginning from an undetectable impact and eventually accumulating to a large and significant impact. An additional >30 °C day in a month could generate cumulative losses up to 0.83% of a firm's annual exports twenty-four months later. The negative effects of extreme heat are mainly through its adverse impacts on the firm's investment, capital, and production output. Capital-intensive sectors and FDI-related enterprises are among the most affected by high temperatures. Our findings support the “no-recovery” hypothesis after weather extremes and have implications for future climate change policies.     

Heterogeneous multinational firms and productivity gains from falling FDI barriers

This paper quantitatively assesses the impact of falling foreign direct investment (FDI) barriers on individual firms and its implications for intra-industry reallocation and aggregate productivity. We calibrate the firm-heterogeneity model of Eaton et al. (Econometrica 79(5):1453–1498, 2011) to match micro-level data on Japanese multinational firms facing fixed and variable costs of foreign production. We demonstrate that the calibrated model can be used to replicate the entry and sales patterns of Japanese multinationals. Counterfactual simulations show that declining FDI barriers lead to a disproportionate expansion of foreign production by more efficient firms relative to less efficient firms. A hypothetical 20 % reduction in FDI barriers is found to generate up to a 26.8 % improvement in industry-level productivity through global market-share reallocations within the industry. Compared with fixed entry barriers, reallocation effects and productivity gains are larger for a reduction of variable costs of foreign production.     

Powerless: gains from trade when firm productivity is not Pareto distributed

Most trade models featuring heterogeneous firms assume a Pareto productivity distribution, on the basis that it provides a reasonable representation of the data and because of its analytical tractability. However, recent work shows that the characteristics of the productivity distribution crucially affect the estimated gains from trade. This paper thoroughly compares the gains from trade obtained under three different productivity distributions (Pareto, lognormal, and Weibull) and investigates their policy implications. We find that both the magnitude of the welfare gains and the relative importance of the fixed versus variable trade costs change significantly. Hence, relying blindly on a single distribution is dangerous when performing trade policy analysis.     

Time zones and German exports: first evidence from firm-product level data

Review of World Economics - This paper uses a tailor-made new data set of 3,390,871 observations for German exports to non-EU countries at the firm-product-destination level in 2011 to investigate...     

Global value chains participation and productivity gains for North African firms

The emergence of global value chains (GVCs) has provided some firms the opportunity to internationalize by specializing in the production of specific inputs or tasks along the chain, with a direct impact on a country’s competitiveness. China, for instance, managed to enter low value added phases in GVCs to rapidly become a major player in world trade. Against this background, this paper asks whether North Africa, given its favourable geographic position in the Mediterranean and proximity to Europe, can grab similar opportunities. In particular, it analyzes the GVCs participation of North African firms and its implications for productivity. Since the coordination of vertically fragmented production processes increasingly relies on an adequate level of quality and reliability, especially when the inputs from several stages and locations must come together in a specific way, we identify firms involved in GVCs as traders with internationally recognized quality certification. Using a propensity score matching diff-in-diff method, the paper finds that firms that enter GVCs both perform better ex ante and show additional productivity gains ex post. Results suggest that policies designed to support certifications and compliance with international standards and to increase trust between firms in different countries, represent an important tool for linking developing countries to global production networks, with possible positive consequences on their economic development and growth.     

Income distribution and total factor productivity: a cross-country panel cointegration analysis

International Economics and Economic Policy - This study investigates the relationship between income inequality and total factor productivity (TFP) across countries for a period covering the years...     

Employer-provided training and productivity: Evidence from a panel of Japanese Firms

This study presents evidence on the relationship between employer-provided training and productivity. The important contributions of this study are its comparison of the relative contribution of training to productivity and wages and its distinction between manufacturing and service firms. The results indicate that training significantly contributes to the labor productivity, particularly for firms in the service sector. The elasticities of productivity and wages to training stock are similar in size, meaning that the returns to firms’ training investments are shared by their workers in proportion to the wage share of the value-added.     

Preference erosion and the developing countries exports to the EU: a dynamic panel gravity approach

The erosion of preferences due to multilateral tariff reductions is a long-standing concern for many developing countries. This paper focuses on the erosion of the preferences granted by the EU in the rice industry. Since 2004 there has been a sharp decrease in border protection for the EU rice industry. Because the EU grants trade preferences to a considerable number of rice exporting developing countries, the reform implied preference erosion as well. By addressing the impact of preference erosion on developing countries rice exports to the EU, this paper contributes two original insights to the literature: first, by proposing a new empirical approach to compute the preference margin when tariff rate quotas are in force which is based on the assumption of the existence of fixed costs and economies of scale in international trade; second, by estimating the trade elasticities of preferences by means of a dynamic panel gravity equation to deal with the issues of endogeneity of preferences and persistency in bilateral trade flows. The results show that the way preference margins are calculated matters significantly when assessing the existence and extent of their erosion and the values of trade elasticities. Finally, the estimations highlight the fact that the impact of preferences is still very strong for some of the countries concerned.     

Geography and firm exports: new evidence on the nature of sunk costs

This paper presents an examination of the trading patterns of individual firms, looking at their coverage of export markets and movements into and out of destinations. This analysis is made possible by access to a new survey data set of Irish firms, which includes detailed information on firm characteristics and on the destinations of their exports over a 2-year period. In line with Eaton et al. (Am Econ Rev 94:150–154, 2004), we find that a large number of firms serve only the domestic market and many exporting firms export to a single foreign market. Although there is little movement of firms into and out of exporting, firms’ involvement in individual export markets is much more dynamic. Over one-third of firms change their market coverage, usually by entering or exiting one additional market. This is consistent with an interpretation where the bulk of any sunk cost encountered in exporting is incurred during the initial entry to the export market. Subsequent entry to additional markets may be made easier by prior export experience, which could help reduce the sunk cost of extending market coverage.     

Firm-level interactions between exporting and productivity: Industry-specific evidence

This paper investigates interactions between exporting and productivity at the firm level, using a panel of firms in the UK chemical industry. This is both highly technology intensive and the UK’s largest exporting sector. We find exporters are more productive than non-exporters, but are also on average smaller. This superior productivity performance among exporters appears to be caused by both self-selection and learning-by-exporting effects. In contrast to other studies, we find learning effects are significantly positive among new entrants, weaker for more experienced exporters and negative for established exporters. JEL no. F14, D21, L65     

Firm-level interactions between exporting and productivity: Industry-specific evidence

This paper investigates interactions between exporting and productivity at the firm level, using a panel of firms in the UK chemical industry. This is both highly technology intensive and the UK’s largest exporting sector. We find exporters are more productive than non-exporters, but are also on average smaller. This superior productivity performance among exporters appears to be caused by both self-selection and learning-by-exporting effects. In contrast to other studies, we find learning effects are significantly positive among new entrants, weaker for more experienced exporters and negative for established exporters. JEL no. F14, D21, L65     

Freight rates and productivity gains in British tramp shipping 1869-1950

The standard source for pre-WWII global freight rate trends is the Isserliss index. We think it is time for a new look at his British tramp shipping index, especially given his sources offer vastly more information than Isserliss used. Our new estimates confirm the precipitous decline in real freight rates before World War I, but we also extend them to 1997, a long period of relative stability. In an effort to identify the contribution of transport revolutions to global commodity price convergence, we create route-specific deflators, rather than relying on the Sauerbeck index. Finally, using the price-dual and new factor price indices, we calculate total factor productivity growth for five global routes, and then identify the sources of productivity growth along them.     

Price discrimination in the exports of a small economy: Empirical evidence

Zusammenfassung Preisdiskriminierung durch Exporteure kleiner L?nder: Ein empirischer Befund. — Theoretische Modelle des internationalen Handels gehen im allgemeinen von der Annahme aus, da\ die Exporteure kleiner L?nder einer voll-kommen elastischen Nachfrage nach ihren Exportgütern gegenüberstehen und da\ sie nicht die Macht haben, Preisdiskriminierung zu betreiben. Die Studie prüft auf der Grundlage israelischer Daten empirisch, ob diese zwei Annahmen berechtigt sind. Die Ergebnisse zeigen, da\ die israelischen Exporteure abw?rts geneigten Nachfrage-kurven gegenüberstehen und da\ sie in der H?lfte der überprüften F?lle Preis-diskriminierung praktizieren. Dieser Befund zweifelt also die Annahme des kleinen Landes und das Gesetz eines einzigen Preises an.

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Résumé La discrimination par des prix dans les exportations d’une économie petite: L’évidence empirique. — Les modèles théoriques du commerce international généralement supposent que les économies petites sont confrontées avec des courbes de demande parfaitement élastiques pour leurs biens exportés et qu’elles n’ont pas le pouvoir de pratiquer une discrimination par des prix. Cette étude teste, empirique-ment, la validité de ces deux suppositions pour les exportations d’une économie petite. Basés sur les données israéliennes les résultats indiquent que les exportateurs israéliens sont confrontés avec des courbes de demande orientées vers le bas et qu’ils pratiquent une discrimination en moitié des cas testés. Ces résultats mettent en doute la validité de la supposition d’une économie petite et le loi d’un seul prix.

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Resumen Discriminación de precios en las exportaciones de una economía peque?a: Empírica evidencia. — Modelos teóricos del comercio internacional suponen en general que las economías peque?as confrontan curvas de demanda perfectamente elásticas para sus productos de exportatión y no pueden enforzar una discriminación de precios. El estudio comprueba, empíricamente, la validez de estas dos hipótesis para las exportaciones de una economía peque?a. Basados en estadísticas de Israel, los resultados indican que los exportadores de este país confrontan curvas de demanda con pendiente negativa y practican discrimination de precios en la mitad de los casos estudiados. Estas resultados ponen en entredicho la validez de emplear la hipótesis de una economia peque?a y la ley de un solo precio en estudios analíticos.

     

Agglomeration and productivity: Firm-level evidence from China's textile industry

Is the spatial concentration of manufacturing activity able to enhance firm-level productivity? This question is particularly relevant to production in China, which has a huge territory and population, but a skewed distribution in terms of urban–rural development. This paper aims to examine the dynamics of industrial agglomeration and the impact of agglomeration on firm-level productivity in China's textile industry by using a firm-level panel dataset from 2000 to 2005. First, the average value of the Ellison–Glaeser (EG) index (city level) is found to be approximately 0.00019. Moreover, the calculated city EG index of spatial concentration for each year exhibits a decreasing trend of spatial agglomeration for garments and other fiber products, but an increasing trend for the textile industries' agglomeration in China. The above findings are similar to the findings of Lu and Tao (2009). Secondly and importantly, this study finds an inverted U-shape relationship between agglomeration and productivity. It suggests that while industrial agglomeration enhances firms' productivity, agglomeration diseconomies may appear if the degree of agglomeration is too high.     

Higher education expansion and domestic value added in exports: Theory and evidence from China

This paper analyzes the impact of China’s higher education expansion on domestic value added in exports. To be specific, we firstly construct a nested CES production function model, with import inputs being complementary to skilled labors, and substitutable to unskilled labors. By exploiting China’s higher education expansion as a quasi-natural experiment, this paper accurately examines the causal effect of the human capital expansion on the domestic value-added in exports. The results show that human capital expansion has negative effects on the domestic value-added in exports, and this result is driven by import inputs increase and processing trade engagement. We also find that the effect is more prominent for processing trade, foreign-invested firms, high-tech firms and disciplines of science and engineering.     

Foreign entry,quality, and cultural distance: product-level evidence from US movie exports

This paper investigates the effect of quality on foreign entry using data on international movie exports and direct and revealed measures of movie quality. Strict quality sorting is predicted by a model of firm heterogeneity. An alternative model is random entry, in which entry decisions are independent of the movie’s quality. I develop a discrete choice model that allows for both of these extremes as special cases, and use graphical techniques and simulations to compare their predictions to the data. I then use regression analysis to estimate the effect of quality on the propensity to enter foreign markets. A one-standard-deviation increase in quality increases the probability of entry by 25–50 %. Systematic differences in taste for different genre types are used to estimate a measure of cultural distance between countries. Movies in “culturally dependent” genres are less likely to enter foreign markets and their probability of entry is less sensitive to quality. The cultural distance measure enters a gravity equation of US bilateral trade significantly.     

浅谈我国扩大出口贸易的必要性和可能性

今后我国出口贸易依然会面临着不少困难，在这种情况下，本文就我国扩大出口贸易的必要性与可能性进行了一番探讨。