Tariff Liberalization and Trade Integration of Emerging Countries

This paper investigates how tariff liberalization has affected exporting at the product‐destination level in emerging countries. We use a highly disaggregated (six‐digit level of the harmonized system—HS—classification) bilateral measure of market access to compare tariffs applied in 1996 and 2006, which includes the timing of the Uruguay Round and episodes of bilateral liberalization. Our econometric estimations consider impacts of tariff cuts on three components of the trade margins: extensive margin of entry (new trade relationships at the product‐destination level), extensive margin of exit (disappearance of existing relationships) and intensive margin of trade (deepening existing relationships). Our main estimates indicate that a reduction of bilateral applied tariffs of 1 percentage point increases the extensive margin of entry by 0.1% and the intensive one by 2.09%, while it reduces the extensive margin of exit by 0.25%.     

Simulating World Trade in the Decades Ahead: Driving Forces and Policy Implications

Notwithstanding the current slowdown, the geography and composition of international trade are changing fast. We link a macroeconomic growth model and sectoral computable general equilibrium framework in order to project the world economy forward to the year 2035 and assess to what extent current trends in trade are expected to continue. Constructing fully traceable scenarios based on assumptions grounded in the literature, we are also able to isolate the relative impact of key economic drivers. We find that the stakes for developing countries are particularly high: the emergence of new players in the world economy, intensification of South–South trade and diversification into skill‐intensive activities may continue only in a dynamic economic and open trade environment. Current trends towards increased regionalisation may be reversed, with multilateral trade relationships gaining in importance. Hypothetical mega‐regionals could slow down, but not frustrate the prevalence of multilateralism. Continuing technological progress is likely to have the biggest impact on future economic developments around the globe. Population dynamics are influential as well: for some countries, upskilling will be crucial; for others, labour shortages may be addressed through migration. Several developing countries would benefit from increased capital mobility; others will only diversify into dynamic sectors, when trade costs are further reduced.     

Relational Goods and Associational Participation

Abstract *** :  In this paper, we focus on the role of interpersonal contact and the possibility of a relational motive to explain participation and volunteering in associations. Drawing on the relational goods theory, we show that associational activities are favorable to production and consumption of such goods. So, associational participants are expected to have more personal interactions. This theoretical hypothesis is tested using a cross‐sectional data set conducted in France in 1999. Our econometric analysis, which controls for endogeneity of associational participation using a simultaneous equations model, emphasizes a significantly positive relationship between this participation and preferences for relational goods .     

When Does the Stepping‐Stone Work? Fixed‐Term Contracts Versus Temporary Agency Work in Changing Economic Conditions

This paper emphasizes differences among short‐term contracts in terms of career prospects. Using French data over the 2002–2010 period, we rely on a dynamic model with fixed effects to disentangle state dependence from unobserved heterogeneity. Although fixed‐term contracts may provide a ‘stepping‐stone’ to permanent positions, temporary agency work is hardly better than unemployment in this regard. The Great Recession of 2008 has changed the dynamics on the labor market and amplified the difference between fixed‐term contracts and temporary agency work. For both types of temporary workers, providing overtime work does not significantly increase the transition to permanent employment. Copyright © 2014 John Wiley & Sons, Ltd.     

The U-Shaped Productivity Dynamics of French Exporters

We use data on French manufacturing firms to reveal that the productivity dynamics of new exporters is typically U-shaped. Prior to entry, firm productivity temporarily decreases, then recovers contemporaneously with entry, as the benefits from sales to foreign markets accrue. We show that the U-shaped pattern is more pronounced for intensively exporting firms and for firms operating in capital-intensive or high-technology sectors. This finding suggests that firms prepare to become exporters through prior specific investments and learning-to-export mechanisms. We then point to the limitations of studies that focus only on date of entry to exporting to discriminate between self-selection versus learning mechanisms. JEL no.  F10, F14, L60     

Equilibrium, Trade, and Capital Accumulation

The paper summarizes the author's principal contributions to economic theory: (1) one of the first rigorous proofs of the existence of competitive equilibrium; (2) existence of competitive equilibrium with weakened assumptions; (3) the minimum income approach to demand theory; (4) tatonnement stability with weak gross substitutes; (5) a general theory of comparative advantage; (6) factor price equalization with attention to factor supplies; and (7) turnpike theory allowing for von Neumann facets and neighbourhood convergence.
JEL Classification Number: B10     

Migrant remittances,agriculture investment and cropping patterns

We investigate how the receipt and amount of domestic or international transfers influences household decisions regarding farm investment and the selection of capital and labour-intensive crops. We argue that, even though recipient households may use additional income to increase agricultural investment, investment can fall in the short run if labour constraints arising from the migrant member's absence are binding and capital accumulation is suboptimal. Employing a set of endogenous treatment estimates, we test this hypothesis on data from 5636 rural households in Pakistan. Our findings show a substantial difference between recipient and non-recipient households in terms of their economic behaviour. Recipient households make 100% less agricultural investment and generate 82% less production compared to non-recipient households. The estimates are found to be robust when tested with alternate empirical techniques (Heckman Selection and matching). The impact is stronger in the case of households that receive domestic transfers, with 100% less farm investment and 77% less production than non-recipient households. Remittances result in a decrease in production of both capital- and labour-intensive crops, reflecting a decline in overall farm activity. Similar farm investment and cropping patterns are observed relative to the amount of remittances received. The results are robust to different model specifications and estimation procedures.