We examine competition in the market for innovation and show that it is distinct from the widely studied issue of competition for existing products. We introduce new measures of information gathering capacity by Chinese firms based on industry agglomeration and internet penetration, which predict actual internet downloads of U.S. firm filings by Chinese internet users. Increases in the ability of Chinese industry peers to gather knowledge through the internet are followed by reductions in R&D and subsequent patents, and corresponding increased patenting by Chinese firms. The new Chinese patents also cite the patents of U.S. firms at a high rate, consistent with direct intellectual property competition.
{"title":"U.S. - China Innovation Competition","authors":"Gerard Hoberg, Bruce Yuan Li, G. Phillips","doi":"10.2139/ssrn.3294389","DOIUrl":"https://doi.org/10.2139/ssrn.3294389","url":null,"abstract":"We examine competition in the market for innovation and show that it is distinct from the widely studied issue of competition for existing products. We introduce new measures of information gathering capacity by Chinese firms based on industry agglomeration and internet penetration, which predict actual internet downloads of U.S. firm filings by Chinese internet users. Increases in the ability of Chinese industry peers to gather knowledge through the internet are followed by reductions in R&D and subsequent patents, and corresponding increased patenting by Chinese firms. The new Chinese patents also cite the patents of U.S. firms at a high rate, consistent with direct intellectual property competition.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"36 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79802258","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter provides an overview of the new governance framework for EU-UK cooperation, exploring the mechanisms established by the Trade and Cooperation Agreement (TCA) in managing bilateral relations. It examines the complex institutional machinery created by the TCA, including the Partnership Council, a dispute resolution system, and dozens of committees and sub-committees. As a consequence of the thin material scope of the TCA, its institutional mechanism will become the framework for continuing future negotiation between the parties. The chapter warns that the ongoing mistrust between the partners to the bilateral relation does not bode well for cooperation ahead, as a degree of trust is a necessary precondition for any efficient governance scheme.
{"title":"Governance: Managing Bilateral Relations","authors":"Nicolas Levrat","doi":"10.2139/ssrn.3811236","DOIUrl":"https://doi.org/10.2139/ssrn.3811236","url":null,"abstract":"This chapter provides an overview of the new governance framework for EU-UK cooperation, exploring the mechanisms established by the Trade and Cooperation Agreement (TCA) in managing bilateral relations. It examines the complex institutional machinery created by the TCA, including the Partnership Council, a dispute resolution system, and dozens of committees and sub-committees. As a consequence of the thin material scope of the TCA, its institutional mechanism will become the framework for continuing future negotiation between the parties. The chapter warns that the ongoing mistrust between the partners to the bilateral relation does not bode well for cooperation ahead, as a degree of trust is a necessary precondition for any efficient governance scheme.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"60 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77888559","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article investigates the current crisis surrounding the Appellate Body of the World Trade Organization, as well as solutions that have been proposed in order to remedy it. Citing frustrations with the Appellate Body, since 2017, the United States has blocked any new appointments to the Appellate Body. As a result, due to the expiration of its members' terms, the Appellate Body has not been able to rule on any disputes appealed within the World Trade Organization since December 2019. This paper provides a summary of the United States' criticisms of the body, as well as a variety of proposals to address them, written by other World Trade Organization members, academics, and experts. Implementing a mixture of these proposals will prove critical to the revival of the Appellate Body and to the continued success of the World Trade Organization.
{"title":"Future of WTO Reform: Paths Forward for the Appellate Body","authors":"Jennifer Dikler","doi":"10.2139/ssrn.3820380","DOIUrl":"https://doi.org/10.2139/ssrn.3820380","url":null,"abstract":"This article investigates the current crisis surrounding the Appellate Body of the World Trade Organization, as well as solutions that have been proposed in order to remedy it. Citing frustrations with the Appellate Body, since 2017, the United States has blocked any new appointments to the Appellate Body. As a result, due to the expiration of its members' terms, the Appellate Body has not been able to rule on any disputes appealed within the World Trade Organization since December 2019. This paper provides a summary of the United States' criticisms of the body, as well as a variety of proposals to address them, written by other World Trade Organization members, academics, and experts. Implementing a mixture of these proposals will prove critical to the revival of the Appellate Body and to the continued success of the World Trade Organization.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"2020 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73583719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The OECD seeks to align transfer pricing and profit taxation with value creation. This article argues that taking this objective seriously requires profit splitting. This is shown by applying Shapley value theory to the problem of allocating a firm’s profit tax base to the jurisdictions in which the firm is active. The application of cooperative game theory is justified with the argument that interjurisdictional cooperation on legal issues is a necessary condition for firms earning profit abroad. The profit tax base should therefore be allocated to jurisdictions according to standards generally considered as equitable when distributing the gains of cooperation. At least, this should be the primary objective, which finds its limitations only in the consideration of information and efficiency-related costs. This insight provides the basis for arguing for a two-step approach to profit taxation that has similarities to residual profit allocation but is conceptually and practically different.
{"title":"Aligning Profit Taxation with Value Creation","authors":"W. Richter","doi":"10.2139/ssrn.3374581","DOIUrl":"https://doi.org/10.2139/ssrn.3374581","url":null,"abstract":"The OECD seeks to align transfer pricing and profit taxation with value creation. This article argues that taking this objective seriously requires profit splitting. This is shown by applying Shapley value theory to the problem of allocating a firm’s profit tax base to the jurisdictions in which the firm is active. The application of cooperative game theory is justified with the argument that interjurisdictional cooperation on legal issues is a necessary condition for firms earning profit abroad. The profit tax base should therefore be allocated to jurisdictions according to standards generally considered as equitable when distributing the gains of cooperation. At least, this should be the primary objective, which finds its limitations only in the consideration of information and efficiency-related costs. This insight provides the basis for arguing for a two-step approach to profit taxation that has similarities to residual profit allocation but is conceptually and practically different.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"42 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73587689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Amid the prolonged COVID-19 pandemic, the miraculous breakthroughs of multiple effective and safe COVID-19 vaccines offer hopeful prospects. Yet, the endgame of the pandemic is not vaccines; it is vaccination. The daunting challenge of vaccinating the world offers ample investigative opportunities for management scientists who are interested in improving the efficiency and equity of vaccine supply chains. In this article, we provide a brief overview of these opportunities through three constituent parts: (1) supply, (2) demand, and (3) matching supply with demand.
{"title":"Transforming COVID-19 Vaccines into Vaccination: Challenges and Opportunities for Management Scientists","authors":"Tinglong Dai, Jing-Sheng Jeannette Song","doi":"10.2139/ssrn.3797192","DOIUrl":"https://doi.org/10.2139/ssrn.3797192","url":null,"abstract":"Amid the prolonged COVID-19 pandemic, the miraculous breakthroughs of multiple effective and safe COVID-19 vaccines offer hopeful prospects. Yet, the endgame of the pandemic is not vaccines; it is vaccination. The daunting challenge of vaccinating the world offers ample investigative opportunities for management scientists who are interested in improving the efficiency and equity of vaccine supply chains. In this article, we provide a brief overview of these opportunities through three constituent parts: (1) supply, (2) demand, and (3) matching supply with demand.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"15 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80222155","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Growing evidence suggests that a large share of international trade transactions are made through intermediaries and that whether firms use them or not depends on different factors. In this paper, we investigate whether credit constraints introduce a degree of difference among firms in their mode of importing. To begin, we develop a simple analytical framework highlighting the possible links between credit constraints and reliance on import intermediaries, and then use firm-level data from 66 developing and developed countries to test the model's predictions. The results show that credit-constrained firms exhibit a higher probability of importing their inputs using an intermediary, while unconstrained firms are more likely to import directly. Our results also establish that the impact of credit constraints on the probability of indirect importing is amplified for firms with a higher distance from their international sourcing network. Moreover, if firms face other types of frictions to imports, then the probability that credit-constrained firms rely on intermediaries is estimated to be higher. The frictions we consider relate to the degree of regulatory burden and the extent of documentary compliance, time to import and other costs involved in import activities.
{"title":"Intermediated Trade and Credit Constraints: The Case of Firm's Imports","authors":"F. Nucci, F. Pietrovito, A. Pozzolo","doi":"10.2139/ssrn.3815116","DOIUrl":"https://doi.org/10.2139/ssrn.3815116","url":null,"abstract":"Growing evidence suggests that a large share of international trade transactions are made through intermediaries and that whether firms use them or not depends on different factors. In this paper, we investigate whether credit constraints introduce a degree of difference among firms in their mode of importing. To begin, we develop a simple analytical framework highlighting the possible links between credit constraints and reliance on import intermediaries, and then use firm-level data from 66 developing and developed countries to test the model's predictions. The results show that credit-constrained firms exhibit a higher probability of importing their inputs using an intermediary, while unconstrained firms are more likely to import directly. Our results also establish that the impact of credit constraints on the probability of indirect importing is amplified for firms with a higher distance from their international sourcing network. Moreover, if firms face other types of frictions to imports, then the probability that credit-constrained firms rely on intermediaries is estimated to be higher. The frictions we consider relate to the degree of regulatory burden and the extent of documentary compliance, time to import and other costs involved in import activities.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"20 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90640514","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This note takes a contrarian position on the significance of China’s subsidies, which are generally viewed as intractable and damaging to the rules-based system. It considers the implications of Lerner Symmetry for the aggregate effect of China’s subsidies and the implications of comparative advantage for the differential effects across industries, in a context where the effective differential tax burdens are unknown, as indeed is also the case with differential effects of tax and subsidy regimes in the rest of the world. It concludes that the net effect of China’s subsidies is much less than commonly supposed and that differential effects that may be damaging can be handled, as they have been in the past, through tools available under the WTO Agreement.
{"title":"The Trade Policy Collision of Our Times: China’s Subsidies Encounter Abba Lerner and David Ricardo","authors":"Dan Ciuriak","doi":"10.2139/SSRN.3789391","DOIUrl":"https://doi.org/10.2139/SSRN.3789391","url":null,"abstract":"This note takes a contrarian position on the significance of China’s subsidies, which are generally viewed as intractable and damaging to the rules-based system. It considers the implications of Lerner Symmetry for the aggregate effect of China’s subsidies and the implications of comparative advantage for the differential effects across industries, in a context where the effective differential tax burdens are unknown, as indeed is also the case with differential effects of tax and subsidy regimes in the rest of the world. It concludes that the net effect of China’s subsidies is much less than commonly supposed and that differential effects that may be damaging can be handled, as they have been in the past, through tools available under the WTO Agreement.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"74 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72675337","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the implications of the Trade and Cooperation Agreement for financial services. It outlines the major features of the TCA as regards financial services and considers the limitations of the TCA as regards securing access by UK financial services firms to the EU financial market. Given these limitations, the paper reviews the major access routes to the EU financial market which EU law makes available for UK financial services firms and addresses in particular the future for the ‘equivalence’ regime. The paper concludes by identifying lessons which can be learned from the treatment of financial services under the TCA and from the recent development of the equivalence regime.
{"title":"Financial Services under the Trade and Cooperation Agreement: Reflections on Unfinished Business for the EU and UK","authors":"N. Moloney","doi":"10.2139/SSRN.3783135","DOIUrl":"https://doi.org/10.2139/SSRN.3783135","url":null,"abstract":"This paper examines the implications of the Trade and Cooperation Agreement for financial services. It outlines the major features of the TCA as regards financial services and considers the limitations of the TCA as regards securing access by UK financial services firms to the EU financial market. Given these limitations, the paper reviews the major access routes to the EU financial market which EU law makes available for UK financial services firms and addresses in particular the future for the ‘equivalence’ regime. The paper concludes by identifying lessons which can be learned from the treatment of financial services under the TCA and from the recent development of the equivalence regime.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87153451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-02-07DOI: 10.30722/anzjes.vol10.iss1.15188
D. Treisman, Giovanni Di Lieto
The process towards Brexit will impact on the entire global trading system and significantly influence the global value chains that rely on ease of trade and investment within a single European market. In light of this process, Australia with its high levels of international economic integration and interdependency of trade and investment to and from the European region, now faces a stark challenge in forging an economic position that best suits its national interests. This paper analyses the possible implications of Brexit on Australia’s economic governance position, with specific regard to the global value chains that rely on ease of trade and investments in the European single market. The exploration relies on empirical analysis that distinguishes between and disaggregates data on Australian trade and investment with the UK and the rest of the European Union. This analysis indicates that it is in Australia’s best interest is to prioritise a preferential partnership with the EU over a new free trade agreement with the UK. However, in order to maximise Australia’s position, the paper argues that, under the present political climate and technical difficulties, a multi-pronged and decoupled approach of concerted unilateralism with the UK and preferential bilateralism with the EU is best placed to enhance Australia’s geo-economic role in Europe in the post-Brexit era.
{"title":"Having the Cake and Eating It Too: The Benefits of Decoupling Australia’s Trade Governance in Europe After Brexit and Beyond","authors":"D. Treisman, Giovanni Di Lieto","doi":"10.30722/anzjes.vol10.iss1.15188","DOIUrl":"https://doi.org/10.30722/anzjes.vol10.iss1.15188","url":null,"abstract":"The process towards Brexit will impact on the entire global trading system and significantly influence the global value chains that rely on ease of trade and investment within a single European market. In light of this process, Australia with its high levels of international economic integration and interdependency of trade and investment to and from the European region, now faces a stark challenge in forging an economic position that best suits its national interests. This paper analyses the possible implications of Brexit on Australia’s economic governance position, with specific regard to the global value chains that rely on ease of trade and investments in the European single market. The exploration relies on empirical analysis that distinguishes between and disaggregates data on Australian trade and investment with the UK and the rest of the European Union. This analysis indicates that it is in Australia’s best interest is to prioritise a preferential partnership with the EU over a new free trade agreement with the UK. However, in order to maximise Australia’s position, the paper argues that, under the present political climate and technical difficulties, a multi-pronged and decoupled approach of concerted unilateralism with the UK and preferential bilateralism with the EU is best placed to enhance Australia’s geo-economic role in Europe in the post-Brexit era.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"46 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80549677","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The U.S.-China relationship over the past four years can be summarized into actions by the U.S. and reactions by China. Assuming that such nature of the U.S.-China relationship will continue, it seems important to predict the newly launched Biden government’s China policy in advance. So far Biden has disclosed only a few details about his plans for U.S.-China relations. After examining Biden’s statements, interviews, and articles which have been released, I expect there will be more competition but less confrontation with China while he is in the Oval Office. The Biden administration is likely to negotiate hard but in a less provocative manner through skillfully and sophisticatedly using both engagement and containment approaches. Given the Biden administration laying much value on a united front with allies rather than taking unilateral measures, now it is time for the Korean government to formulate a more thorough response strategy where the confrontation between the U.S. and China is expected to escalate.
{"title":"What Will Biden's China Policy Look Like","authors":"Weonho Yeon","doi":"10.2139/ssrn.3901622","DOIUrl":"https://doi.org/10.2139/ssrn.3901622","url":null,"abstract":"The U.S.-China relationship over the past four years can be summarized into actions by the U.S. and reactions by China. Assuming that such nature of the U.S.-China relationship will continue, it seems important to predict the newly launched Biden government’s China policy in advance. So far Biden has disclosed only a few details about his plans for U.S.-China relations. After examining Biden’s statements, interviews, and articles which have been released, I expect there will be more competition but less confrontation with China while he is in the Oval Office. The Biden administration is likely to negotiate hard but in a less provocative manner through skillfully and sophisticatedly using both engagement and containment approaches. Given the Biden administration laying much value on a united front with allies rather than taking unilateral measures, now it is time for the Korean government to formulate a more thorough response strategy where the confrontation between the U.S. and China is expected to escalate.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"41 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84560845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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