Trade,Diaspora and Migration to New Zealand

This paper examines the hypotheses that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand, and a greater stock of New Zealanders living overseas in a particular country leads to more trade between that country and New Zealand. It also examines the relationships between migration, diaspora and tourism exports. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. Our approach is to apply panel data techniques, within the framework of a standard gravity model of trade, to a dataset consisting of information on 233 countries in each of the 26 years between 1981 and 2006. We estimate a random effects panel sample selection model using correlated random effects. Our results indicate that migration does indeed stimulate trade. In our benchmark specification, merchandise exports from and imports to New Zealand both have a statistically significant relationship with numbers of migrants in New Zealand; imports also have a statistically significant relationship with numbers of New Zealanders overseas. Our results also suggest that migration stimulates imports more than exports.     

Determinants of Bilateral Trade Protection

In this paper, determinants of bilateral protection levels are empirically identified when controlling for multilateral trade regulation and importing‐country‐specific factors. Strong empirical support is provided of that three bilateral factors are influencing the bilateral protection level. Specifically, a country's protection level on goods from a trade partner is positively affected by the domestic import penetration of goods produced by the trade partner, negatively influenced by the intra‐industry traded share of these imports and positively affected by the trade partner's protection level on domestic goods. Moreover, very high explanatory values are provided in the cross‐section estimations, indicating that these determinants, policy regulations and importer‐specific factors jointly explain almost all of the variation in bilateral protection levels. The results are general in the sense that estimations are performed for a large sample of bilateral trade relations including 22 trade partners that are highly differentiated in terms of country characteristics. The overall results indicate that, to the extent that policy makers can affect bilateral protection levels under multilateral trade regulation, they act on political‐economy rather than economic goals.     

RISK AND ILLEGAL TRADE

In many countries illegal imports have reached a considerable share of all national imports. Therefore, we have to investigate the economic effects resulting from smuggling. This paper explains this phenomenon by means of the managers' different individual attitudes towards risk and their different estimation of the exposure costs of illegal trade. It could be shown that this basis of smuggling is also an important aspect for a national economy, since the relative prices are affected by the risk and cost estimations of the trade firms.     

ARAB-ISRAELI POTENTIAL TRADE: THE ROLE OF INPUT SHARING

In this article we sought to develop a methodology for estimating the level and composition of potential trade between Israel and its Arab neighbors. The need for such a methodology derives from the fact that the existing trade of these countries with the rest of the world constitutes an insufficient basis for predicting bilateral trade patterns between them. Trade based on input sharing can be an important source of ''new trade'' that is, trade that is not necessarily related to goods and services currently traded by the countries in question. New trade based on input sharing pertains to the imports by Arab countries of inputs in which Israel has a proven comparative advantage, and to imports by Israel of inputs produced in Arab countries in which the latter have a proven comparative advantage. It stands to reason that branches characterized by comparative advantage in the exporting country can improve the competitive position of the import ing country, when incorporated in the latter's final products. The analysis confirms that in agricultural produce, food products, and certain sub-branches of the textiles and clothing industry, Jordan, Syria, and Egypt all appear to be potential suppliers to Israel. Inter alia, the results show that the Israeli import potential of inputs from Jordan appears to be both larger and more evenly distributed among the different branches than the import potential from Syria and even from Egypt. This finding does not accord with expectations in view of the fact that Jordan has a smaller population and a lower gross domestic product than either Egypt or Syria. Jordan stands out in that its construction industry, including ceramic products, nonmetallic minerals, and structural metals, are also potential suppliers. The methodology developed in this article specifically concerns potential trade between Israel and its Arab neighbors. It can be usefully employed in other situations where trade between pairs of countries is either nonexistent or severely distorted by political or other factors. Examples which come to mind include trade between countries which in the past belonged to the Soviet bloc, or trade between these countries and the rest of the world. In such cases it is improper to base one's trade predictions on the countries' existing trading patterns. New trade, which can be very substantial, and which may have a very different composition from current trade of the parties concerned, must be added to the equation. The methodology demonstrated in this article can be easily adapted for this purpose.     

Gatekeepers to consumer markets: the role of retailers in international trade

This study explores how recent developments in the retail sector affect trade in consumer goods. It focuses on three developments in the retail sector: (i) internationalization; (ii) market structure; and (iii) the growing market share of retailers' private labels. Using gravity model estimation techniques it is found that the foreign operations of a retailer are positively related to imports from the host to the home country of the retailer. Imports are negatively related to ownership concentration, while the market share of private labels is negatively related to imports of food and positively related to imports of non-food consumer goods. For both product categories private labels shift sourcing towards poor countries. The trade response to trade liberalization is higher both at the extensive and intensive margin in countries with lower retail concentration.     

三角贸易模式对中国对美出口增长的影响

中国在国际生产网络中的地位日益突出,主要扮演着加工装配地的角色,即从日本、韩国等工业化国家或地区进口中间品,经过加工装配后再将最终产品出口至以美国、欧盟为主的发达国家或地区,从而形成了三角贸易模式。中国对美出口的快速增加与三角贸易模式的发展密切相关,文章研究表明,中间品进口的增加和三角贸易模式的发展显著地促进了中国对美出口的增加,因此中美贸易失衡主要不是一种双边贸易现象,而是一种结构性现象。     

Trade and migration flows between some CEE countries and the UK

The recent enlargement of the European Union (EU) has enhanced interest in the causes and also the consequences of migration between Central and Eastern European (CEE) and Western European countries. This paper considers the possibility that some of these consequences make themselves felt in the trade flows between migrants' countries of origin and destination. Using a panel of data covering a number of CEE countries between 1996 and 2003, we employ an augmented gravity model to examine the effects of immigration from these transition countries on their bilateral trade flows with the UK. We pay attention to a number of issues that have been raised within the literature on gravity models. We find evidence that migration positively enhances the bilateral exports of the migrants' home country; however, there is less (but some) evidence that the imports from their destination country are also enhanced.     

Assessing the Impacts of US‐Japan Bilateral Trade Agreements, 1980–1995

The paper presents three different viewpoints on the effects of US‐Japan bilateral trade agreements and finds some evidence to support each one using trade data from 1980–1995. For most of the 25 industry‐agreement cases, the data do not support a conclusion of significant positive impacts of the agreements on Japan's imports of targeted manufactured products from either the US or non‐US sources. In at least one high‐profile case involving autos, I find evidence suggesting positive impacts on imports from the US, but in this case the data suggests trade diversion benefiting US0based producers at the expense of European ones. I also find a few cases where the agreements may have produced positive effects on Japan's imports from non‐US sources.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

Movies and the Mystery of the Missing Trade: Is Hollywood Good for U.S. Exporters?

Research has shown that consumers have a preference for goods based on the origin of production. This is important because it suggests that, in some cases, even lowering trade barriers may not significantly increase trade flows. In particular, flows may be lower than are predicted by trade theories such as Heckscher-Ohlin. Despite evidence that home consumption bias exists in many countries, it is only recently that research has begun to examine the sources of this bias.

This article fills a gap in the literature by testing a model that addresses the source of this consumption bias. The paper's model incorporates consumers' exposure to foreign products and culture through media imports and tourist visits as factors affecting consumers' preferences for foreign products. Using panel data from 19 countries, the article's results support the hypothesis that lagged exports of U.S. movies have a positive impact on other U.S. exports. Some evidence is also found of a positive effect of tourist visits on U.S. exports.

Since U.S. media exports may generate demand for other U.S. goods and services, opening up foreign media markets should receive a higher priority in U.S. trade negotiations. Another interesting implication of the paper is that overall U.S. export losses resulting from media piracy may be lower than previously calculated, as the consumption of pirated media products may increase demand for other U.S. exports.     

The trade facilitation impact of the Chinese diaspora

Using an enhanced data set on the population share of overseas Chinese in 1970 and 1990, this paper analyses the impact of the Chinese diaspora on facilitating China's bilateral trade during the period 1973–2013. Our findings suggest substantial trade creation effects resulting from the presence of ethnic Chinese in the trade partner population. Diaspora impacts on Chinese bilateral imports are in general higher than those found for exports. Coethnic networks play a larger role as long as the partner country does not have an RTA with China in place. Among export sectors, effects found were strongest for food, as well as for machinery and transport equipment. In regard to imports, coethnic networks matter mostly for raw materials, machinery and transport equipment, and chemicals.     

Regionalism Within Multilateralism: The WTO Trade Policy Review of Canada

The World Trade Organisation published a Trade Policy Review of Canada in 2003. In this paper, we discuss the WTO Review and augment the discussion by presenting original data and reviewing the empirical literature. The WTO concludes that Canada's trade regime is open and transparent but maintains barriers in a few important sectors. We subject this claim to empirical scrutiny, comparing Canada's actual imports to a multilateral benchmark based on the gravity equation. We show that Canada imports about what should be expected given the size of its economy and its location. In a second benchmarking exercise, we show that Canada's anti‐dumping initiations are in proportion to its imports and that Canada's exports are targeted less by other countries’ anti‐dumping investigations than what might be expected based on Canadian export levels. Like many other countries, Canada has pursued trade liberalisation through the World Trade Organisation while simultaneously signing multiple regional trade agreements. Our summary of the recent literature indicates that Canada's regional trade agreements have generated more trade creation than trade diversion. Canada has also spurred imports from the least developed countries by unilaterally eliminating tariffs and quota barriers on 48 of the world's poorest countries in January 2003. We also discuss Canadian progress in opening its agriculture and clothing industries. Overall, we conclude that Canada appears committed to advancing globalisation through multilateral trade liberalisation supplemented by unilateral and bilateral initiatives.     

Mergers and acquisitions & trade: A global value chain analysis

The present paper deals with how the insertion in international trade and global value chains (GVCs) of countries affects their capacity of attracting foreign mergers and acquisitions (M&As). To this end, we combine data for bilateral M&As and trade in value added for the period 2001–15 and estimate an augmented gravity equation. Results indicate that trade openness per se does not favour M&As. Nevertheless, bilateral free trade agreements, heterogeneity of destinations (sources) for exports (imports) of intermediate and final goods, and position and participation in global value chains are relevant for explaining bilateral M&As. Moreover, their role is significantly different depending on the level of development of the home and host countries.     

The potential of African trade integration – Panel data evidence for the COMESA-EAC-SADC Tripartite

ABSTRACT

The COMESA-EAC-SADC Tripartite FTA, formed in 2011, is supposed to be a milestone towards Africa's continental trade integration. This study analyzes the impact of regional integration among the Tripartite countries on their bilateral imports before that date to evaluate the latest integration efforts. We estimate an extended gravity model on a large panel of 51 African countries using yearly observations from 1995 to 2010. We proxy existing formal trade barriers by sample average tariff data on imports from the world as well as indicator variables for the membership in regional FTAs. We consider different estimation techniques and discuss distinct sets of fixed effects. The PPML regression results indicate that remaining tariffs are significantly negatively correlated with imports throughout the preferred multiplicative models. An FTA status does not show a clear-cut import enhancing effect. In the specifications that control for country-year effects, the EAC coefficient is positively correlated with imports, and the COMESA and SADC FTA membership show a positive relation to imports within some reduced-sample robustness checks.     

Resource Structure and Imports: An Analysis of the Relationship between Skill-Intensive Imports and Skill Endowment

Countries generally import those goods which they do not produce, and there is a possibility that this might be due to unavailability of resources needed to produce the goods which the countries import. Hence, countries with lower levels of total skill endowment are supposed to import more skill-intensive goods than countries with higher levels of total skill endowment. However, the presence of vertical and horizontal intra-industry trade makes this picture complex. Using a theoretical model derived on the basis of earlier theories and some empirical investigation on data of 72 countries of 3 years, this article tries to find out whether there is any relation between total skill endowment and imports of a country. The results show that there is indeed a relationship, but the nature of this relationship depends on the effect of total skill endowment on the country's skill-intensive exports as well.     

Reverse importing and asymmetric trade and FDI: a networks explanation

This paper considers the impact of business and social networks on international trade and FDI. I propose that differences in the strength of network effects across countries can produce asymmetric trade and investment flows that may lead to trade friction. A firm from a country with strong network effects has a cost advantage in selling to buyers from its own country. This advantage results in lower inward FDI, lower total imports but larger volumes of reverse imports into the country with strong network effects. The model’s predictions match observed asymmetric trade and investment flows that sometimes lead to US-Japan trade friction.     

The Gravity of China's African Export Promise

Africa's largest trade partner, China, criticised for exchanging resources for manufactures, has promised to increase imports and optimise the structure of trade with Africa. Using a gravity model of China's imports for the years 1995–2009, we explore potential dynamics for this promise, uniquely accounting for market economy recognition and Taiwan recognition. The former is associated with increased imports, while the latter effect is ambiguous and statistically insignificant. Comparison of projected against actual imports across three growth‐path‐aligned economic geography typologies – resource‐rich; landlocked and resource‐poor; coastal and resource‐poor – sets out China's imports trends in an abstract framework of African export potential. We find not only ‘under’ importing across a majority of resource‐poor countries. We also find that current trade policy is the least applicable to these comparatively poor exporters’ trade with China. If the latter are to serve a broader catalytic role in Africa's regional industrial transformation as compared to the role of coastal and resource‐poor countries in regional economic transformation in Asia and Latin America, China–Africa trade and investment policies may need additional thinking.     

Modes of Foreign Direct Investment and Patterns of Trade: An Alternative Empirical Approach

Modes of FDI can be clarified by analysing the changing patterns of trade among host, home and third countries. However, most empirical experiments of foreign direct investment (FDI) determinants have been confined to general characteristics of host countries and multinational enterprises' outward investment activities. This may not clearly characterise the specific characteristics of inward FDI in regard to the host country. Thus, we introduce an alternative approach to clarify modes of FDI by investigating the link between patterns of trade and inward FDI. To empirically test whether our approach is applicable, we choose China during the period 1998–2007. We construct a modified gravity equation of bilateral trade while considering spatially lagged interdependence between host, home and third countries. The problem of endogeneity is controlled by applying the system generalised method of moments (GMM) estimation technique. Our findings are consistent with results in existing studies on modes of outward FDI to China and prove that our approach in dealing with the link between patterns of trade and inward FDI has wide applicability to all modes of FDI. We discover there is strong evidence for statistically significant complementarity between bilateral trade and inward FDI within the aggregate trade data. As we decompose the aggregate trade data into final and intermediate goods, we find the motivation concerning export‐platform and complex vertical FDI is very significant. In addition, as we separate the bilateral partners into developing partners and developed partners, we find both bilateral and multilateral linkages are much stronger with developing partners.     

Product Complexity,Quality of Institutions and the Protrade Effect of Immigrants

The paper assesses the trade‐creating impact of foreign‐born residents on the international imports and exports of the French regions where they are settled. The protrade effect of immigrants is investigated along two intertwined dimensions: the complexity of traded goods and the quality of institutions in partner countries. The trade‐enhancing impact of immigrants is, on average, more salient when they come from a country with weak institutions. However, this positive impact is especially large on the imports of simple products. When we turn to complex goods, for which the information channel conveyed by immigrants is the most valuable, immigration enhances imports regardless of the quality of institutions in the partner country. Regarding exports, immigrants substitute for weak institutions on both simple and complex goods.     

Is India Specialising in Polluting Industries? Evidence from US‐India Bilateral Trade

Recently, the apex environmental agency of India observed that domestic industrial pollution has been increasing at an alarming rate over the last two decades, and the need to rein in traditional polluting industries. This raises the pertinent question of whether the poor domestic pollution regime has affected the pattern of India's trade in dirty manufactured products in the post‐liberalisation era since 1991. We find that on the whole, India has remained a net importer of pollution‐intensive manufactured goods; however, there is a distinct trend of increasing specialisation in specific dirty industries especially in the bilateral trade with high‐income countries, and to a lesser degree with low‐income countries. The USA being India's single largest country trading partner in the post‐liberalisation era, we test for pollution offshoring at the finer industry level in US‐India bilateral trade. While we find that the pollution haven effect is not significant, India's specialisation in certain dirty manufacturing industries through the last decade remains a disturbing trend. India needs to integrate environmental sustainability within industrial growth urgently, and it is pertinent to implement policies which would reflect the true pollution costs in an industry that is increasingly competing in the international market.