This paper proves that most previous studies to solve for the optimal tariff rate have committed various mathematical mistakes. When the mistakes are corrected, such studies actually derive zero tariff rate. This paper then shows that the so-called tariff-protected offer curve does not exist, as tariff changes only the terms of trade, and in a way very unfavorably to the host country. Imposing tariff is like hitting one’s own feet with one’s stones, and is actually lowering the host country’s welfare. To increase the gain from trade, a country must improve production efficiency.
{"title":"The Optimal Tariff Theory: Review and Alternative","authors":"Hak Choi","doi":"10.2139/ssrn.1392707","DOIUrl":"https://doi.org/10.2139/ssrn.1392707","url":null,"abstract":"This paper proves that most previous studies to solve for the optimal tariff rate have committed various mathematical mistakes. When the mistakes are corrected, such studies actually derive zero tariff rate. This paper then shows that the so-called tariff-protected offer curve does not exist, as tariff changes only the terms of trade, and in a way very unfavorably to the host country. Imposing tariff is like hitting one’s own feet with one’s stones, and is actually lowering the host country’s welfare. To increase the gain from trade, a country must improve production efficiency.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85740114","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 first disproves the traditional trade theory and its optimal tariff implication. Then, it develops a theory to explain trade liberalization, which shows that liberalization increases output and profit to the benefit of the host country. This paper supports the works by WTO.
{"title":"A Trade Liberalization Theory","authors":"Hak Choi","doi":"10.2139/ssrn.1390982","DOIUrl":"https://doi.org/10.2139/ssrn.1390982","url":null,"abstract":"This paper first disproves the traditional trade theory and its optimal tariff implication. Then, it develops a theory to explain trade liberalization, which shows that liberalization increases output and profit to the benefit of the host country. This paper supports the works by WTO.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"64 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90742639","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}
Trade policy has well documented effects on trade volumes. Reaching beyond volumes, I explore the impact of European emerging economies’ recent institutional trade liberalisation on extensive (i.e., the set of imported goods) versus intensive import margins (volumes per imported good) with highly disaggregated data. Differentiating goods categories by use, I find robust evidence of stronger extensive import margin effects of liberalisation for intermediate and capital goods compared to consumer goods. This identifies an important channel for the link between reforms and growth in transition. The results also support new models of heterogeneous firms and trade, which predict that extensive import margin effects of a country’s institutional trade liberalisation should – via lowering fixed costs for rest of the world exporters – increase with decreasing substitutability among products.
{"title":"Trade Liberalisation and Import Margins","authors":"Richard Frensch","doi":"10.2139/ssrn.1402668","DOIUrl":"https://doi.org/10.2139/ssrn.1402668","url":null,"abstract":"Trade policy has well documented effects on trade volumes. Reaching beyond volumes, I explore the impact of European emerging economies’ recent institutional trade liberalisation on extensive (i.e., the set of imported goods) versus intensive import margins (volumes per imported good) with highly disaggregated data. Differentiating goods categories by use, I find robust evidence of stronger extensive import margin effects of liberalisation for intermediate and capital goods compared to consumer goods. This identifies an important channel for the link between reforms and growth in transition. The results also support new models of heterogeneous firms and trade, which predict that extensive import margin effects of a country’s institutional trade liberalisation should – via lowering fixed costs for rest of the world exporters – increase with decreasing substitutability among products.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"24 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73970159","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}
In this study, the effect of global development on labour and position of Turkey’s labour section throughout this process were examined. Primarily, in this study, the effect of global trade policies on the labour section was considered as a centre-neighbour country focus. The heterogenous effects of trade on labour were examined by focusing on the technological changes as well as income differences it creates between workers. The effect of these differences was examined in the scale of Turkey. In the study, the effects of global trade on centre-neighbour countries were considered within the framework of macro economic trends and in theoretical frame of labour’s heterogenous structure. Its effects on labour was discussed. In this sense, it was discussed whether the hypothesis “that the labour is globalized with trade” which was claimed by liberal groups is realistic or not. By focusing on this discussions, the employment structure of Turkey was analysed; it was discussed within the scope of global development.
{"title":"The Effect of Global Development on the Labour Section and the Position of Turkey's Labour Section in this Process","authors":"Tahsin Bakirtas","doi":"10.2139/ssrn.1375076","DOIUrl":"https://doi.org/10.2139/ssrn.1375076","url":null,"abstract":"In this study, the effect of global development on labour and position of Turkey’s labour section throughout this process were examined. Primarily, in this study, the effect of global trade policies on the labour section was considered as a centre-neighbour country focus. The heterogenous effects of trade on labour were examined by focusing on the technological changes as well as income differences it creates between workers. The effect of these differences was examined in the scale of Turkey. In the study, the effects of global trade on centre-neighbour countries were considered within the framework of macro economic trends and in theoretical frame of labour’s heterogenous structure. Its effects on labour was discussed. In this sense, it was discussed whether the hypothesis “that the labour is globalized with trade” which was claimed by liberal groups is realistic or not. By focusing on this discussions, the employment structure of Turkey was analysed; it was discussed within the scope of global development.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"162 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76562571","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 : 2009-04-01DOI: 10.1111/j.1467-8586.2008.00289.x
S. Marjit, H. Beladi
Using a Ricardian setting we argue that trade in technology generates higher global welfare relative to trade in goods. Hence, free trade in commodities can only be the second best outcome for the world welfare.
{"title":"Is Trade in Technology Superior to Trade in Goods?","authors":"S. Marjit, H. Beladi","doi":"10.1111/j.1467-8586.2008.00289.x","DOIUrl":"https://doi.org/10.1111/j.1467-8586.2008.00289.x","url":null,"abstract":"Using a Ricardian setting we argue that trade in technology generates higher global welfare relative to trade in goods. Hence, free trade in commodities can only be the second best outcome for the world welfare.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89546826","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 empirically investigates the antecedents of internationalization of SMEs, focusing on differences between the manufacturing and service sectors. Specifically, employing a bivariate probit model based on survey data of approximately 3,900 East German firms, I analyze which firm-related and external factors affect a firm's decision to export and/or relocate production or other operations abroad. Generally, I find that SMEs from the manufacturing sector do more exporting than service firms. The results reveal that size, having main competitors located abroad, and introducing a novel product all are significantly positively related to the internationalization of SMEs regardless of industry affiliation. However, manufacturing firms in the high-tech sector are far more likely to be engaged in internationalization activity than are service firms, regardless of whether the latter are high-tech. Locational conditions and cooperation activities are generally less important for internationalization of service firms, too, compared to their manufacturing counterparts.
{"title":"Determinants of Internationalization: Differences between Service and Manufacturing SMES","authors":"Anna Lejpras","doi":"10.2139/ssrn.1461395","DOIUrl":"https://doi.org/10.2139/ssrn.1461395","url":null,"abstract":"This paper empirically investigates the antecedents of internationalization of SMEs, focusing on differences between the manufacturing and service sectors. Specifically, employing a bivariate probit model based on survey data of approximately 3,900 East German firms, I analyze which firm-related and external factors affect a firm's decision to export and/or relocate production or other operations abroad. Generally, I find that SMEs from the manufacturing sector do more exporting than service firms. The results reveal that size, having main competitors located abroad, and introducing a novel product all are significantly positively related to the internationalization of SMEs regardless of industry affiliation. However, manufacturing firms in the high-tech sector are far more likely to be engaged in internationalization activity than are service firms, regardless of whether the latter are high-tech. Locational conditions and cooperation activities are generally less important for internationalization of service firms, too, compared to their manufacturing counterparts.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"53 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84183482","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 : 2009-04-01DOI: 10.1111/j.1467-6435.2009.00433.x
S. Dobson, Carlyn Ramlogan
One of the key features of research on income inequality is the search for a Kuznets curve. Two curvilinear relationships in particular have been documented in the literature: one between inequality and income and the other between inequality and environmental factors. More recently, inequality and its link to trade liberalisation has received a good deal of attention, not least because it is among the major controversies provoked by the globalisation process. The outcomes for developing countries of greater openness do not fit neatly with the predictions of standard trade theory. Given this, it is natural to ask whether the relationship between trade openness and inequality may be better understood in terms of the Kuznets hypothesis. To this end, the study tests the Kuznets hypothesis in the context of trade liberalisation using data for Latin America. The evidence is new and is consistent with the Kuznets hypothesis: inequality increases with trade openness until a critical level of openness is reached after which inequality begins to fall. The curvilinear relationship between openness and inequality suggests that Latin American countries should continue with trade liberalisation measures but also introduce redistribution policies to ease the (initial) adverse consequences of liberalisation.
{"title":"Is There an Openness Kuznets Curve?","authors":"S. Dobson, Carlyn Ramlogan","doi":"10.1111/j.1467-6435.2009.00433.x","DOIUrl":"https://doi.org/10.1111/j.1467-6435.2009.00433.x","url":null,"abstract":"One of the key features of research on income inequality is the search for a Kuznets curve. Two curvilinear relationships in particular have been documented in the literature: one between inequality and income and the other between inequality and environmental factors. More recently, inequality and its link to trade liberalisation has received a good deal of attention, not least because it is among the major controversies provoked by the globalisation process. The outcomes for developing countries of greater openness do not fit neatly with the predictions of standard trade theory. Given this, it is natural to ask whether the relationship between trade openness and inequality may be better understood in terms of the Kuznets hypothesis. To this end, the study tests the Kuznets hypothesis in the context of trade liberalisation using data for Latin America. The evidence is new and is consistent with the Kuznets hypothesis: inequality increases with trade openness until a critical level of openness is reached after which inequality begins to fall. The curvilinear relationship between openness and inequality suggests that Latin American countries should continue with trade liberalisation measures but also introduce redistribution policies to ease the (initial) adverse consequences of liberalisation.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82601221","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}
Services trade reform matters, but what is Doha doing about it? It has been hard to judge, because of the opaqueness of services policies and the opaqueness of the request-offer negotiating process. This paper attempts to assess what is on the table. It presents the results of the first survey of applied trade policies in the major services sectors of 56 industrial and developing countries. These policies are then compared with these countries' Uruguay Round commitments in services and the best offers that they have made in the current Doha negotiations. The paper finds that at this stage, Doha promises greater security of access to markets but not any additional liberalization. Uruguay Round commitments are on average 2.3 times more restrictive than current policies. The best offers submitted so far as part of the Doha negotiations improve on Uruguay Round commitments by about 13 percent but remain on average 1.9 times more restrictive than actual policies. The World Trade Organization's Hong Kong Ministerial had set out ambitious goals for services but the analysis here shows that much remains to be done to achieve them.
{"title":"Services in Doha: What's on the Table?","authors":"Batshur Gootiiz, A. Mattoo","doi":"10.1596/1813-9450-4903","DOIUrl":"https://doi.org/10.1596/1813-9450-4903","url":null,"abstract":"Services trade reform matters, but what is Doha doing about it? It has been hard to judge, because of the opaqueness of services policies and the opaqueness of the request-offer negotiating process. This paper attempts to assess what is on the table. It presents the results of the first survey of applied trade policies in the major services sectors of 56 industrial and developing countries. These policies are then compared with these countries' Uruguay Round commitments in services and the best offers that they have made in the current Doha negotiations. The paper finds that at this stage, Doha promises greater security of access to markets but not any additional liberalization. Uruguay Round commitments are on average 2.3 times more restrictive than current policies. The best offers submitted so far as part of the Doha negotiations improve on Uruguay Round commitments by about 13 percent but remain on average 1.9 times more restrictive than actual policies. The World Trade Organization's Hong Kong Ministerial had set out ambitious goals for services but the analysis here shows that much remains to be done to achieve them.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"34 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75557208","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 : 2009-04-01DOI: 10.1111/j.1467-6435.2009.00434.x
Nabamita Dutta, Sanjukta Roy
In our paper we establish foreign direct investment (FDI) as a major determinant of media freedom. Global integration can strengthen the media sector financially, make it technologically enhanced and can also improve the economic environment as a whole. This, in turn, would work towards the enhancement of media freedom. The sample includes high, middle and low income economies. Using a panel of 115 countries over a period of 20 years, our results reveal that FDI is an absolute necessity for a free and efficient media. The results are robust to various alternate specifications and inclusion of additional control variables.
{"title":"The Impact of Foreign Direct Investment on Press Freedom","authors":"Nabamita Dutta, Sanjukta Roy","doi":"10.1111/j.1467-6435.2009.00434.x","DOIUrl":"https://doi.org/10.1111/j.1467-6435.2009.00434.x","url":null,"abstract":"In our paper we establish foreign direct investment (FDI) as a major determinant of media freedom. Global integration can strengthen the media sector financially, make it technologically enhanced and can also improve the economic environment as a whole. This, in turn, would work towards the enhancement of media freedom. The sample includes high, middle and low income economies. Using a panel of 115 countries over a period of 20 years, our results reveal that FDI is an absolute necessity for a free and efficient media. The results are robust to various alternate specifications and inclusion of additional control variables.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"237 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75850306","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 analyzes the e¤ects of the formation of a regional trade agreement on the level and nature of multinational rm activity. We examine aggregate data that captures the response of U.S. multinational rms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous rms from a source country decide how to serve two foreign markets. Following a reduction in tari¤s on trade between the two foreign countries, the model predicts growth in the number of source-country rms engaging in foreign direct investment, growth in the size of a¢ liates that are active in reforming countries both before and after the tari¤ reduction, and an increase in the extent to which the sales of a¢ liates in reforming countries are directed towards other reforming countries. Analysis of rm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions. Harvard University and NBER; Harvard Business School and NBER. This paper was prepared for the Workshop on Quantifying the Costs and Bene ts of Regional Economic Integration,held on January 19-20, 2009 in Hong Kong. The statistical analysis of rm-level data on U.S. multinational companies was conducted at the Bureau of Economic Analysis, U.S. Department of Commerce under arrangements that maintain legal con dentiality requirements. The views expressed are those of the authors and do not reect o¢ cial positions of the U.S. Department of Commerce. We are grateful to Eduardo Morales for superb research assistance and to Robert Barro, Elhanan Helpman, Jong-Wha Lee, Emanuel Ornelas, Bill Zeile, and seminar participants at Harvard and the Asian Development Bank for helpful suggestions.
{"title":"Regional Trade Integration and Multinational Firm Strategies","authors":"Pol Antràs, C. Foley","doi":"10.2139/ssrn.1375488","DOIUrl":"https://doi.org/10.2139/ssrn.1375488","url":null,"abstract":"This paper analyzes the e¤ects of the formation of a regional trade agreement on the level and nature of multinational \u0085rm activity. We examine aggregate data that captures the response of U.S. multinational \u0085rms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous \u0085rms from a source country decide how to serve two foreign markets. Following a reduction in tari¤s on trade between the two foreign countries, the model predicts growth in the number of source-country \u0085rms engaging in foreign direct investment, growth in the size of a¢ liates that are active in reforming countries both before and after the tari¤ reduction, and an increase in the extent to which the sales of a¢ liates in reforming countries are directed towards other reforming countries. Analysis of \u0085rm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions. Harvard University and NBER; Harvard Business School and NBER. This paper was prepared for the Workshop on Quantifying the Costs and Bene\u0085ts of Regional Economic Integration,held on January 19-20, 2009 in Hong Kong. The statistical analysis of \u0085rm-level data on U.S. multinational companies was conducted at the Bureau of Economic Analysis, U.S. Department of Commerce under arrangements that maintain legal con\u0085dentiality requirements. The views expressed are those of the authors and do not reect o¢ cial positions of the U.S. Department of Commerce. We are grateful to Eduardo Morales for superb research assistance and to Robert Barro, Elhanan Helpman, Jong-Wha Lee, Emanuel Ornelas, Bill Zeile, and seminar participants at Harvard and the Asian Development Bank for helpful suggestions.","PeriodicalId":14396,"journal":{"name":"International Trade","volume":"11 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78196739","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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