Trade openness,tax reform and tax revenue in developing countries

This article investigates empirically whether the effect of tax reform (involving the progressive replacement of trade tax revenue with domestic tax revenue) in developing countries' tax revenue performance (measured by tax revenue‐to‐GDP ratio) depends on the degree of trade openness of these countries. The analysis has used an unbalanced panel data set of 95 developing countries over the period 1981–2015 and the two‐system GMM approach. Results suggest that tax reform is positively and significantly associated with tax revenue performance in developing countries, with the magnitude of this positive effect increasing as countries experience a higher development level. Additionally, and more importantly, countries that further open up their economies to international trade enjoy a higher positive effect of tax reform on tax revenue than countries that experience a lower degree of trade openness. Therefore, these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international trade would further erode their tax revenue, including by lowering their international trade tax revenue. In fact, the implementation of an appropriate tax reform in the context of greater trade openness would generate higher tax revenue, while concurrently allowing countries to reap the well‐known benefits of international trade.     

The environmental effect of trade liberalization: Evidence from China's manufacturing firms

While prior literature on trade liberalisation and the environment has mostly focused on the macroeconomic ramifications, this study explores at the firm level whether and how changes of trade barriers brought about by China's accession to the WTO may impact on its manufacturing firms’ environmental performance. Adopting a difference-in-differences (DID) methodology, we document the effects of tariff reductions on improving firm-level SO2 emission intensity, and the key corporate strategic decisions responsible for delivering the observed results, with robustness tests covering other major pollutants. In response to trade liberalisation, firms are found to increase labour resources for environmental protection and to improve their production processes to reduce emission intensity. This study contributes to the literature by investigating at the level of the operating firm how output and input tariff reductions may impact on environmental performance and uncovering for the first time the specific actions responsible for the results.     

Trade openness and financial development in sub-Saharan Africa: The role of institutional structures

This article examines the role of institutional structures in the relationship between trade openness and financial development in sub-Saharan economies. The study is based on empirical data from sampled sub-Saharan African countries for a period of 1996–2017. The system generalized method of moment was employed to estimate the models. The findings suggest that, even though trade openness has a positive significant influence on the level of financial development in sub-Saharan African economies, this relationship is enhanced through the presence of good institutions in these economies. Thus, for these economies to realize the full benefit of the effect of trade openness on financial development, they need to strengthen their institutions.     

Income Inequalities and International Trade in Goods and Services: Short- and Long-Run Evidence

In this article, we study the short- and long-run effects of trade openness in services on wage inequalities. The sample covers ten Organization for Economic Cooperation and Development (OECD) countries from 1980 to 2005. We find a differentiated impact of trade in goods compared to trade in services: while trade in goods has a short- and a long-run impact on inequalities, trade in services has only long-run effects. Moreover, we also find that international trade in services has a stronger impact on inequalities than international trade in goods, and this effect does not concern only inequalities between top incomes and low incomes but also between top incomes and median incomes.     

Trade and the enforcement of environmental property rights

Abstract

This paper explores the relationship between trade and the regulation of what are otherwise open-access resources when enforcement of property rights is costly. When enforcement costs are significant, environmental property rights are only adopted and enforced when the potential resource rents exceed the regulatory cost. Since trade affects the magnitude of these rents, trade can affect the willingness to regulate. One of the most striking consequences of the presence of an enforcement cost is that the decision to liberalize trade, even at autarkic prices, can result in a switch in the regulatory regime and potentially reduce economic welfare.     

The relationship between trade openness and economic growth: Some new insights on the openness measurement issue

Empirical results on the links between trade openness and economic growth often suggest that, in the long run, more outward‐oriented countries register better economic growth. However, a similar level of trade openness can hide different types of trade structures. The aim of this paper was to enrich the way of measuring trade openness taking into account two different dimensions of countries’ integration in world trade: export quality and export variety. Based on the estimation of an endogenous growth model on a panel of 169 countries between 1988 and 2014 using a generalised method of moments estimator, our results confirm that countries exporting higher quality products and new varieties grow more rapidly. More importantly, we find a non‐linear pattern between the export ratio and the quality of the export basket, suggesting that openness to trade may impact growth negatively for countries which are specialised in low‐quality products. A non‐linear relationship between export variety, the export ratio and growth is also found, suggesting that countries increasing their exports will grow more rapidly after reaching a certain degree of the extensive margin of exports.     

Trade openness, investment instability and terms-of-trade volatility

In the presence of economies of scale in the investment technology, trade openness may have non-conventional effects on the level of investment, its cyclical behavior, and the volatility of the terms of trade. Trade openness may lead to boom-bust cycles of investment supported by self-fulfilling expectations. The economy may oscillate between ‘optimistic’ expectations, ‘good’ terms-of-trade and investment boom to ‘pessimistic’ expectations, ‘bad’ terms-of-trade and investment bust. We also suggest that the likelihood of such oscillations is higher for developing than for developed economies, because the former may typically incur higher setup costs of investment. This phenomenon may help to explain the excessive volatility of the terms of trade of developing countries, relative to industrial countries.     

中国产品内贸易发展的国际地位与地理方向特征——基于电子机械类产品的经验研究

对中国电子机械类产品内贸易的实证研究表明,中国仍然处于产品生产的低端环节或价值链的低附加值部分,但已经出现产品生产环节或价值链环节的攀升现象。从贸易地理方向上看,中国电子机械类产品内贸易已经从明显的三角贸易模式逐步转为融入到全球生产网络体系中去,具有明显的全球价值分割的特征。鉴于全球产品内贸易的深入发展,欧美不断引发针对中国的贸易争端是不公正的。     

借鉴美国经验实施对中国服务贸易的开放式保护

中国加入WTO后,时服务业的开放做出了实质性承诺,但在服务业的开放和服务贸易发展进程中,运用合理的服务贸易保护措施,培育服务业的国际竞争力,亦成为我国在服务贸易自由化趋势下的长期任务和对策。中国服务业开放应坚持适度保护和逐步开放原则,此原则体现为开放式保护主义的形式。鉴于中国政府的促进行为还不完善,因此有必要借鉴发达国家的开放式保护经验。     

环境规制对中国对外贸易竞争力的影响研究 ——基于中国省际面板数据的实证检验

基于全球经济失衡与中国贸易收支持续顺差的事实,欧美国家继"人民币汇率操纵论"之后又抛出"中国环境威胁论",认为中国贸易竞争力源于宽松的环境规制政策。本文使用面板数据方法对中国区域环境规制对贸易竞争力的影响进行了实证检验,结果显示中国区域贸易竞争力并非源于"宽松环境规制"。欧美国家提出的"中国环境威胁论"及相应的"碳排放边界调节税"只不过是单边贸易保护主义的借口。     

Trade openness,foreign direct investment,and finance-growth nexus in the Eurozone countries

The paper investigates causal relationships between trade openness, foreign direct investment, financial development, and economic growth in 19 Eurozone countries over the period 1988–2013. Using a panel vector error-correction model (VECM), the empirical results show that these variables are cointegrated. The study shows that a combination of opening the Eurozone countries for trade and fostering their financial and economic development have elevated inflows of foreign direct investment into the region in the long run. At the same time, increasing inflows of foreign direct investment in the short run have propelled economic growth, which in return has strengthened the role of financial development and international trade to sustain economic growth in the region through feedback effects. The empirical results have important policy implications for countries in the Eurozone, especially those who face challenges as a result of lack of confidence in their financial system and those who face a sovereign debt crisis.     

源于比较优势的贸易所得:来自中国的证据

本文根据新古典贸易模型中的贸易所得的理论定义,对测算源于比较优势的贸易所得的基本方法及其理论基础进行了回顾和分析,在此基础上利用进出口额的现值与贸易所得的估算值之间的格兰杰逻辑关系,对中国源于比较优势的贸易所得进行了测算。本文的测算结果表明,中国源于比较优势的贸易所得的最大估算值约为GDP的5%。从比较的角度考察,这一结论的政策含义是,主要依赖劳动力资源或不可再生自然资源比较优势的贸易模式已不具备可持续发展性,建立基于动态比较优势的对外贸易战略应成为包括中国在内的发展中国家的贸易政策选择。     

Trade in health products and population health: A long-run relation

The effect of trade on different economic outcomes has been extensively studied but the literature on the specific effects of trade on health outcomes has remained relatively scanty. Our paper fills in the gap by examining the long-run association between import expenditures on health products and longevity in a cross-country panel setting of 32 developed and 24 developing countries, covering 1990–2018. It accounts for both time-series properties and cross-country heterogeneity, while remaining robust to omitted variables and endogeneity problems, by applying panel cointegration techniques. The results reveal that per capita medical import expenditure on pharmaceuticals, aggregate medical products and medicines have contributed around 0.34, 0.35 and 0.30 percentage points, respectively to the annual increase in life expectancy for an average country in our sample. The findings suggest that higher per capita import expenditure on health products can increase longevity significantly in the long-run. The results remain robust to cross-sectional dependence, sub-samples of developed and developing countries and alternate measures of health outcomes such as adult mortality rates. These findings set the context for treating health product imports as critical for long-term improvements in population health and outlines the need for greater coordination between health and trade policymakers for improving population health.     

The simultaneous evolution of economic growth,financial development,and trade openness

This article empirically investigates the interactions among economic growth, financial development, and trade openness through simultaneous equation systems. The identification and estimation of the systems rely on the methodology of identification through heteroskedasticity. The empirical results show that each of the three variables interacts in important ways. When controlling for the reverse causation, trade promotes economic growth in high-income, low-inflation, and nonagricultural countries but has a negative impact on growth in countries with the opposite attributes. Similarly, when accounting for the feedbacks from growth, banks and stock markets have different impacts on economic growth. While banking development is detrimental to output growth, stock market development is more favorable to growth in high-income, low-inflation, and nonagricultural countries. The data also reveal coexistence of a positive effect of financial development on trade and a negative effect of trade on financial development in poorer countries. In richer countries, financial development stimulates trade openness whereas trade has an ambiguous impact on financial development.     

Real Exchange Rate Changes and the Trade Balance: The Evidence from Pakistan

This study uses quarterly data from July 1980 to June 2006 to explore the relationship between changes in real exchange rate and the trade balance of Pakistan. Applying the Auto Regressive Distributed Lag (ARDL) approach to cointegration, we examine the existence of a possible long-run relationship. We find the following: (1) a long-run relationship between the series exists, and (2) the coefficient of elasticity is negative and statistically significant, which does not support for the J-relation.

Given this, the policymakers should take a conservative approach in using currency devaluation to cure the fundamental disequilibrium in the balance of payments. It is likely that such policy may not produce the desired outcome—i.e., the trade balance may not improve.     

Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.     

我国对外贸易、FDI与环境污染之间关系的研究:1995-2005

本文通过对面板数据的分析发现,FDI有利于我国环境质量的改善,而对外贸易则恶化了我国环境,发达国家通过对外贸易向我国转嫁污染,"污染避难所"假说在我国得到证实。通过对比分析时间序列模型和面板数据模型得出:我国的环境污染与人均GDP之间呈现出正"U"形关系,不符合EKC假说,但是面板数据选择的样本符合EKC假说。以上结论与之前的大量实证研究结果不一致,本文给出了合理解释,并提出了相应的政策建议。     

贸易开放度与经济增长研究进展述评

文章以贸易开放度度量指标的构建方式将贸易开放度的度量方法分为指标体系法和模型构建法进行阐述,并对每类方法存在的问题进行了评论;尽管贸易开放度与经济增长的关系在理论上有较为一致的观点.但是在实证研究方面却出现了不一致的结论,文章就实证研究结论不一致的原因进行了分析与评论.     

The impact of trade openness on the unemployment rate in G7 countries

Recent and ongoing literature strongly implies the existence of a significant and robust impact of trade openness (liberalisation) and globalisation on unemployment, particularly in developed economies. This paper empirically investigates the impacts of four different measures of trade openness and globalisation on the unemployment rate in an unbalanced panel framework. The analysis focuses on the G7 countries: Canada, France, Germany, Italy, Japan, the United Kingdom (UK), and the United States (US). Robust empirical findings from panel data estimates demonstrate that, along with macroeconomic indicators and market size, all the measures of trade openness and globalisation are significantly and negatively associated with the unemployment rate. Therefore, we conclude that the continuation of the globalisation process instead of protectionism is of great importance in reducing the unemployment rate in developed economies.