The Role of Geography in Financial and Economic Integration: A Comparative Analysis of Foreign Direct Investment,Trade and Portfolio Investment Flows

The objective of this paper is to examine the role of geography in explaining the patterns of financial and economic integration among both developed and developing countries. Using a gravity model, we compare North‐North, North‐South and South‐North FDI, trade and portfolio investment flows to examine how geographical factors influence these bilateral flows. The results indicate that the impact of geography variables on FDI and portfolio are similar to their effect on trade. Geography variables have a statistically significant effect both on FDI and portfolio investment, but FDI is more sensitive to distance. We interpret the negative effect of distance as the existence of information costs in financial flows. Also bilateral FDI, trade and portfolio investment flows react to macroeconomic fundamentals in the same way, however, with different degrees of sensitivity. There are significant differences between North‐North and North‐South flows. Our results find support for the argument that most FDI among industrial countries are horizontal, whereas most FDI investment in developing countries is vertical. The fact that the significance of geographical variables on financial flows still remained even after controlling for the macroeconomic fundamentals, is in contrast with the standard capital market model. The results can, however, be reconciled if geographical factors can proxy for information costs, which may in turn explain why country portfolios are still home‐biased. The significant effect of distance on financial flows may also explain how idiosyn cratic shocks are spread (i.e. contagion) to other countries in the same region. Ultimately, the geographical location of a country may determine its economic and financial integration into the world economy.     

四川省深化与东盟新四国经贸合作大有可为

当前,四川省开放经济合作已进入新的历史时期,加快“走出去”步伐,积极探寻扩大开放的新路径和新成效,对于提升全省国际化水平和企业竞争力尤为重要。东盟新四国（越南、缅甸、柬埔寨和老挝以下简称“四国”）,无论是其地理区住、资源禀赋还是经济发展阶段性,都对四川产业发展具有重要的战略意义。基于分析四川省深化与东盟四国经贸合作的优势条件、合作现状以及优势重点领域。提出加强政府间合作;充分发挥行业商协会的作用;构建双向务实合作平台;强化政策支持和政府服务;密切旅游文化交流合作;积极推动企业“走出去”,开展互利合作等对策建议。     

Book review

The paper develops a general equilibrium model of international production and trade. Technology is carried across borders by multinational producers and the set of technologies being used in a particular country is endogenous. Production locations are chosen based on the costs of production and getting the product to market. A producer may manufacture its product in its home country, target market country, or a third country. Estimated model parameters describe the states of technology in different countries, barriers to international investment, and trade costs. It is found that the barriers to international trade and investment are highly correlated. The model is used to measure the extent of technology diffusion across countries, study the relationship between international production and trade, investigate the effects of free-trade agreements (FTAs) on offshoring, and to quantify the welfare effects of international production and trade.     

The effects of refugee and non-refugee immigrants on US trade with their home countries

Employing data on US immigrants and trade with 59 home countries for the years 1996–2001, we compare the extent to which refugee and non-refugee immigrants affect US trade with their home countries and provide the first evidence of variation in the US immigrant–trade relationship across immigrant types. We also consider the abilities of refugee and non-refugee immigrants to offset the trade-inhibiting influence of cultural distance. Our results show that while immigrants, in general, exert positive influences on US imports from – and exports to – their home countries, the influence of refugee immigrants is quite minimal when compared with that of non-refugee immigrants. For both immigrant types, however, evidence supporting the notion that immigrants act to offset cultural distance is observed. To conceptualize the economic meaning of our results, we provide estimates of the extent to which each type of immigrants offset transport costs.     

国内市场效应理论:主要论题及近期拓展

国内市场效应理论（HME理论）是新贸易理论最重要的组成部分之一,这一理论将规模经济作为内生变量,认为一国特定产品的国内市场需求规模是其出口贸易的决定因素。文章就这一理论最近的发展进行了系统的考察。研究显示,HME理论基于规模收益递增、不完全竞争的市场结构以及正的贸易成本这三个核心假定之上,近十年以来,无论是理论拓展,还是实证研究,大多围绕对这三个假定条件的修改展开。迄今为止,绝大多数研究支持了这一理论最初的核心推论,少数与其相悖的实证结论则源自对假定条件的修改。     

Where at home do exporters produce and export?

Foreign growth can induce changes in production structures across domestic regions through international trade. With a two‐country model with the explicit incorporation of two regions in the home country, we show that effects of foreign growth on exports and production to be possibly asymmetric among home regions. This foreign‐growth effect is especially prominent in Asia with China emerging as the largest trading country. We empirically test our theoretical hypothesis with the data set of Japanese regions. We find evidence that the growth of Asian countries leads to a change in the regional structure of exports and production in Japan. With respect to an adjacent Asian country, the growth of a foreign country exerts opposite effects on production among Japanese regions.     

Trade and the location of industries: Some new results

We study a two-country two-sector model with free entry and monopolistic competition where both industries use labour to produce differentiated goods. The two countries are identical except for size. Labour is freely mobile across industries but it cannot move internationally. Transport costs affect both industries. The location of industries and the pattern of trade are the results of the interaction of two effects: the home market effect and the wage differential effect. The main results are: (i) if the two countries are sufficiently close in size and demand elasticities differ across industries (transport costs being equal), a continuous fall in transport costs from a prohibitive level to zero is associated with a reversal in the pattern of trade at some intermediate level. For large transport costs, the large country is a net exporter of the more differentiated good. For lower transport costs, the large country becomes a net exporter of the less differentiated good; (ii) if the two countries are very different in size and demand elasticities differ across industries (transport costs being equal), the larger country is always a net exporter of the less differentiated good.     

EMU and trade: A PPML re-assessment with intra-national trade flows

This paper examines the EMU effect on trade for the eleven early joiners and Greece relying for the first time on data that include both international and intra-national trade flows, in line with all the microfoundations of the structural gravity model of trade. We find that the overall EMU impact on trade is positive between its members and, specially, for trade between members and non-members. Interestingly, we further show that the effect of the EMU on bilateral trade remarkably differs across countries. For Ireland, Belgium–Luxembourg, Spain, Portugal and Austria, we find robust evidence that EMU has boosted trade both with other members and with third countries, while for Finland, France, Germany, Italy and the Netherlands, the results suggest that only trade with third countries has been enhanced by the EMU. Greece is the only country that shows a negative impact in trade with other EMU members and no effect in trade with non-members. Finally, the results across countries according to the direction of the trade flows (exports versus imports) do not show significant differences in any case.     

基于贸易引力模型的FDI与省区双边贸易流量的实证分析

运用贸易引力模型分析FDI和各省市区国际贸易的关系,对2007年我国30个省市区和26个国家或地区的双边贸易面板数据进行实证研究,结果表明各省市区FDI与国际贸易之间存在互补关系,从三大经济区域来看,东部FDI对国际贸易的弹性最大,其次是中部地区,西部地区最小。基于资源禀赋差异的垂直贸易体制加剧了FDI投资于我国的趋势。各省市区的贸易模式取决于贸易双方的经济规模和地理距离。双边贸易流量的规模与各自的经济总量呈正比,双方的地理距离(运输成本)构成了两地之间贸易的阻力因素,地理位置成为阻碍中部和西部地区国际贸易发展的重要因素。     

Trade Liberalisation: The Effects of Free Trade Agreements on the Competitiveness of the Dairy Sector

In recent years, preferential trade agreements (PTAs), free trade agreements (FTAs) in particular, have proliferated while WTO negotiations have stagnated. This paper contributes to the literature on trade liberalisation and the agricultural sector by analysing the effects of FTAs on the competitiveness of the dairy sector across 76 countries and over a 20‐year period from 1990 to 2009. With a longitudinal econometric model, the results demonstrate that when a country has a revealed comparative advantage in the dairy sector, FTAs positively influence several indicators of competitiveness in the dairy sector, such as production, market share and trade balance. The results also indicate that multilateral FTAs are more beneficial than bilateral FTAs. There is strong empirical evidence that FTAs are more beneficial to developed countries than to developing countries. There is no statistical evidence to support the hypothesis about a relationship between FTAs and farm‐gate price.     

The Trade‐Off between Foreign Direct Investments and Exports: The Role of Multiple Dimensions of Distance

To serve foreign markets, firms can either export or set up a local subsidiary through horizontal foreign direct investment (FDI). The conventional proximity–concentration theory suggests that FDI substitutes for trade if distance between countries is large, while exports become more important if scale economies in production are large. This paper investigates empirically the effect of different dimensions of distance on the choice between exports and FDI. We find that different dimensions of distance affect exports and FDI differently. There is clear evidence of a proximity–concentration trade‐off in geographical terms: the share of FDI sales in total foreign sales increases with geographical distance. The positive relation between import tariffs and FDI intensity provides further evidence for a trade‐off resulting from trade costs. On the other hand, the share of FDI decreases with language differences and cultural and institutional barriers. The latter dimensions of distance thus affect FDI more strongly than exports.     

中美贸易平衡中的地理走向因素分析

20世纪90年代以来,中美贸易不平衡已经成为两国经贸发展的焦点问题,其形成的原因是多方面的,特别是随着第三次全球产业转移浪潮的兴起,产业转移的地理因素已经成为中美贸易不平衡的主导因素。从产业资本对贸易格局改变的角度,通过对美国、东亚和中国这三个经济区域之间的产业转移现状分析,阐述了全球产业转移中的地理走向因素对中美贸易不平衡产生的影响。     

Subnational home market bias in Vietnam: Evidence from enterprise‐level data

This paper contributes to the home (market) bias literature where administrative or political borders limit trade across borders. Home bias is well documented at the national and subnational level. To sort out macro (e.g., location characteristics) and micro (e.g., enterprise characteristics) factors behind home bias, we use small and medium‐sized enterprise (SME) data from Vietnam. Using the fractional multinomial logit model, we find that the proportion of SME sales outside of their home markets is positively associated with enterprise size, age, number of business association memberships and the distance of SMEs' most important supplier. In contrast, the proportion of SME sales to neighbouring provinces is negatively associated with the share of SME production for final consumption. Besides enterprise‐level frictions, market characteristics matter too. The proportion of SME sales to customers in their home markets is negatively associated with home or neighbouring provinces' governance quality, while the proportion of sales to customers in neighbouring provinces is positively associated with these areas' governance quality. These suggest that good governance frees SME resources for use in selling to less familiar markets.     

On unit prices and their use in the analysis of the international specialization pattern within heterogeneous industries

The existence of factor intensity reversals between industrial countries has sometimes been attributed to differences in intra-industry specialisation. The industries studied are in fact quite heterogeneous. Consequently the relationships between the specialisation pattern of individual countries and differences in technology between industries may be obscured. In this paper a new method is presented with which specialisation of engineering trade can be studied in great detail. The method rests on the hypothesis that so called (metric) ton prices can be used as a proxy variable for differences in technology in a cross-section of engineering products. This hypothesis is further specified and tested in the paper for a cross-section of engineering products consisting of 40 subindustries of the Swedish engineering industry. If the outcome of the test can be assumed to hold both for a lower level of commodity aggregation and for other countries as well, the new method can be used to test different trade theories (including the factor proportions theory) on the engineering trade of industrial countries. It uses among other variables three variables constructed from the ton prices in engineering exports of OECD-Europe.The results of this paper carry major implications also on the construction and earlier use of price indices of engineering products. The results seem to imply that ton prices fo not measure product prices of engineering goods but rather the technology used in converting tons of metals into units of engineering goods. The price indices used in studies estimating price elasticities in foreign trade or production functions on time series data rest, however, im part on such an assumption.     

基于制度质量视角的我国出口贸易区位选择影响因素研究——扩展引力模型的面板数据实证检验

本文从引力方程的微观基础出发,推导出包含制度质量的引力模型,进而把正式制度分为政治制度、经济制度和法律制度三大类共15个子指标,研究制度质量和我国出口贸易的关系,利用占我国对外贸易额85%以上的35个国家(或地区)1996-2011年的面板数据进行部分变量和全变量实证检验。所得结论验证了我国出口贸易偏好于经济发展水平比较高的国家(或地区)这一传统结论,同时认为我国的出口贸易对制度质量高的国家(或地区)也存在较强偏好,制度质量对我国出口贸易地理结构有重要影响,是影响我国出口贸易区位选择非常重要的因素。     

Offshoring of Tasks: Taylorism Versus Toyotism

This paper contributes to the recent debate on trade in tasks, drawing on insights from the theory of the firm as well as recent developments in trade theory. Recent empirical literature suggests that between 20 and 30 per cent of all jobs in key OECD countries could be digitised and offshored. This study offers a cluster analysis which documents that offshorable and non‐offshorable tasks tend to be performed together across occupations. Therefore, when assessing the offshorability of a job, one needs to take into account all tasks being performed by the worker and the gains from fragmenting jobs versus the benefits of multi‐tasked workers (taylorism versus toyotism). Furthermore, one needs to distinguish between fragmentation of production and fragmentation of jobs.     

金融发展、技术创新与对外贸易产业升级——基于空间计量的实证研究

内生经济增长理论认为,金融发展对技术创新和对外贸易产业升级均具有十分重要的作用。文章利用省际数据,引入空间回归方法估计了金融发展对技术创新水平的影响;再进一步控制技术创新水平,加入空间依赖性来估计金融发展对对外贸易产业升级的促进作用。实证研究表明银行信贷与技术创新和对外贸易产业升级均具有显著的正向关系;股票市场仅与对外贸易产业升级有着显著的正向关系;保险市场并没有表现出对技术创新和对外贸易产业升级的促进作用。     

供应链分工情境下内贸流通研究的理论主题

随着生产要素的跨国流动和信息资源的全球共享,国别界限和空间分离不再成为限制市场范围和分工发展的主要因素;借由模块化网络,特定产品的生产可以被拆分为一系列独立模块,当这些模块被离散分布至不同国家的不同企业进行并经由核心企业的集中组织而完成最终生产,便构成了供应链分工的典型情境。这种分工使整体贸易活动的理论逻辑发生变化,内贸流通在其中的角色发生转换。供应链分工情境为内贸流通理论提供了新的逻辑起点,更新了内贸流通的研究主题,是流通基础理论发展的重要现实依据。     

中国农药产业国际竞争力的变动分析

本文通过计算国际市场占有率、贸易竞争力指数、显示性比较优势指数(RCA),比较了中国与部分国家农药产业的国际竞争力;利用迈克尔·波特的“钻石”模型理论,从中国农药产业的要素禀赋、国内需求、相关产业、产业组织、政府行为和机遇等六个方面,探究其竞争力形成的原因,分析其发展趋势;并提出提高我国农药产业国际竞争力的政策建议。     

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.