Firms increasingly have to contend with trade regulations to access foreign markets. We quantify their relative importance and the heterogeneous effects for Colombians firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm‐level gravity model with a difference‐in‐differences identification strategy, technical barriers to trade (TBTs) and quantity control measures both decrease trade on average. Other non‐tariff measures and tariffs play a minor role. At its core, TBT and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firm will leave export markets to the benefit of smaller ones. Our results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size.
{"title":"Barrier or opportunity? How trade regulations shape Colombian firms' export strategies","authors":"Samuel Rosenow","doi":"10.1111/roie.12739","DOIUrl":"https://doi.org/10.1111/roie.12739","url":null,"abstract":"Firms increasingly have to contend with trade regulations to access foreign markets. We quantify their relative importance and the heterogeneous effects for Colombians firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm‐level gravity model with a difference‐in‐differences identification strategy, technical barriers to trade (TBTs) and quantity control measures both decrease trade on average. Other non‐tariff measures and tariffs play a minor role. At its core, TBT and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firm will leave export markets to the benefit of smaller ones. Our results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139980433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
To gain membership in the World Trade Organization (WTO) in 2001, China substantially modified its regulation of foreign direct investment. These reforms coincided with rapid changes in the composition of capital inflows, as the dominant entry mode shifted from joint venture to wholly foreign owned affiliate. Foreign‐invested enterprises contributed a rising share of China's rapidly growing exports. We investigate how much China's foreign ownership liberalization contributed to these observed trends in foreign investment flows and Chinese exports. Accounting for both the set of activities from which it removed foreign equity caps and those into which it newly encouraged investment, we estimate the impact of China's reforms on firm entry and exports using a difference‐in‐differences estimator. To eliminate bias resulting from heterogeneous and dynamic treatment effects, we also apply novel dynamic difference‐in‐differences estimators. We find that removal of foreign equity caps induced entry of wholly foreign owned firms, while having no significant effect on entry of new joint ventures. Concurrently, the designation of new activities for investment incentives induced foreign entry, particularly in the form of joint ventures. Reduced‐form calculations imply that FDI policy changes explain almost 9% of the increase in exports from foreign‐invested firms over the decade studied. The effect was larger in sectors identified as “high‐tech industries” by the Chinese government, as they contribute most of the estimated policy‐driven export growth from foreign‐invested firms. Thus, China's FDI regulation reform following WTO entry was targeted liberalization: elimination of equity share limits induced new foreign entry, while investment incentives encouraged formation of joint ventures.
{"title":"Targeted Liberalization: China's foreign investment regulation reform and its post‐WTO‐accession export surge","authors":"Yang Liang, Mary E. Lovely, Hongsheng Zhang","doi":"10.1111/roie.12737","DOIUrl":"https://doi.org/10.1111/roie.12737","url":null,"abstract":"To gain membership in the World Trade Organization (WTO) in 2001, China substantially modified its regulation of foreign direct investment. These reforms coincided with rapid changes in the composition of capital inflows, as the dominant entry mode shifted from joint venture to wholly foreign owned affiliate. Foreign‐invested enterprises contributed a rising share of China's rapidly growing exports. We investigate how much China's foreign ownership liberalization contributed to these observed trends in foreign investment flows and Chinese exports. Accounting for both the set of activities from which it removed foreign equity caps and those into which it newly encouraged investment, we estimate the impact of China's reforms on firm entry and exports using a difference‐in‐differences estimator. To eliminate bias resulting from heterogeneous and dynamic treatment effects, we also apply novel dynamic difference‐in‐differences estimators. We find that removal of foreign equity caps induced entry of wholly foreign owned firms, while having no significant effect on entry of new joint ventures. Concurrently, the designation of new activities for investment incentives induced foreign entry, particularly in the form of joint ventures. Reduced‐form calculations imply that FDI policy changes explain almost 9% of the increase in exports from foreign‐invested firms over the decade studied. The effect was larger in sectors identified as “high‐tech industries” by the Chinese government, as they contribute most of the estimated policy‐driven export growth from foreign‐invested firms. Thus, China's FDI regulation reform following WTO entry was targeted liberalization: elimination of equity share limits induced new foreign entry, while investment incentives encouraged formation of joint ventures.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140433296","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
With falling tariffs the role of regulatory heterogeneity in international trade has become central in recent debates about regional integration and trade costs. In describing the NTM incidence few studies explicitly take into account the specific nature of underlying regulatory differences. We propose distinguishing regulatory heterogeneity with respect to the intensity, coverage, and structure of regulations, and present indicators reflecting each one of these dimensions. Enabled by detailed product‐level regulatory data based on coded reviews of national legislation, we illustrate the different channels of regulatory heterogeneity on the country‐ and sector‐level. The findings motivate a separate treatment of the different heterogeneity dimensions in the assessment of non‐tariff measures in international trade.
{"title":"Patterns of regulatory heterogeneity in international trade: Intensity, coverage, and structure","authors":"Irene Garcés, Achim Vogt","doi":"10.1111/roie.12736","DOIUrl":"https://doi.org/10.1111/roie.12736","url":null,"abstract":"With falling tariffs the role of regulatory heterogeneity in international trade has become central in recent debates about regional integration and trade costs. In describing the NTM incidence few studies explicitly take into account the specific nature of underlying regulatory differences. We propose distinguishing regulatory heterogeneity with respect to the intensity, coverage, and structure of regulations, and present indicators reflecting each one of these dimensions. Enabled by detailed product‐level regulatory data based on coded reviews of national legislation, we illustrate the different channels of regulatory heterogeneity on the country‐ and sector‐level. The findings motivate a separate treatment of the different heterogeneity dimensions in the assessment of non‐tariff measures in international trade.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139953617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines spatial spillovers in the formation of preferential trade agreements (PTAs) through a new channel of institutional proximity. Our dependent variable is the status of PTAs between country attributes within a country‐pair. The explanatory variable of interest is the status of PTAs in neighbouring country‐pairs that share proximity in institutional development. We consider democracy and economic freedom as the main aspects of institutions, and use both as the fundamental components of institutional distance between country‐pairs. Employing a spatial econometric method, we find strong evidence of the institutional interdependence of PTAs: country‐pairs tend to influence each other's decision on the formation and the chosen type of PTAs (i.e., deep or shallow), such a neighbourhood effect increases with institutional proximity and is more prominent for the decisions on the type of PTAs. The institutional spatial channel is robust to various robustness checks.
{"title":"Spatial spillovers in trade agreement memberships: Does institutional proximity matter?","authors":"Renliang Liu, Thanasis Stengos, Yiguo Sun","doi":"10.1111/roie.12740","DOIUrl":"https://doi.org/10.1111/roie.12740","url":null,"abstract":"This paper examines spatial spillovers in the formation of preferential trade agreements (PTAs) through a new channel of institutional proximity. Our dependent variable is the status of PTAs between country attributes within a country‐pair. The explanatory variable of interest is the status of PTAs in neighbouring country‐pairs that share proximity in institutional development. We consider democracy and economic freedom as the main aspects of institutions, and use both as the fundamental components of institutional distance between country‐pairs. Employing a spatial econometric method, we find strong evidence of the institutional interdependence of PTAs: country‐pairs tend to influence each other's decision on the formation and the chosen type of PTAs (i.e., deep or shallow), such a neighbourhood effect increases with institutional proximity and is more prominent for the decisions on the type of PTAs. The institutional spatial channel is robust to various robustness checks.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139953618","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Government policy responses to the COVID‐19 pandemic often included changes to trade policies. This article uses detailed data on trade policy measures targeting medical products during the first 18 months of the pandemic (January 2020–June 2021) compiled by the Global Trade Alert to analyze the relationship between national trade policy activism and pre‐pandemic trade patterns, import protection and international integration. The focus is on both potential country‐specific drivers of unilateral trade policies and the duration of implemented measures. We find significant heterogeneity in the relationships between trade policy actions and country characteristics. The likelihood of import liberalization was more prevalent among net exporters of medical products, whereas net importers were more inclined to impose export restrictions. The results suggest trade policy responses to the challenges raised by the COVID‐19 pandemic are only partially explained by extant theory.
{"title":"Country characteristics and trade policy during the COVID‐19 pandemic","authors":"B. Hoekman, Filippo Santi, A. Shingal","doi":"10.1111/roie.12733","DOIUrl":"https://doi.org/10.1111/roie.12733","url":null,"abstract":"Government policy responses to the COVID‐19 pandemic often included changes to trade policies. This article uses detailed data on trade policy measures targeting medical products during the first 18 months of the pandemic (January 2020–June 2021) compiled by the Global Trade Alert to analyze the relationship between national trade policy activism and pre‐pandemic trade patterns, import protection and international integration. The focus is on both potential country‐specific drivers of unilateral trade policies and the duration of implemented measures. We find significant heterogeneity in the relationships between trade policy actions and country characteristics. The likelihood of import liberalization was more prevalent among net exporters of medical products, whereas net importers were more inclined to impose export restrictions. The results suggest trade policy responses to the challenges raised by the COVID‐19 pandemic are only partially explained by extant theory.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139774350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Government policy responses to the COVID‐19 pandemic often included changes to trade policies. This article uses detailed data on trade policy measures targeting medical products during the first 18 months of the pandemic (January 2020–June 2021) compiled by the Global Trade Alert to analyze the relationship between national trade policy activism and pre‐pandemic trade patterns, import protection and international integration. The focus is on both potential country‐specific drivers of unilateral trade policies and the duration of implemented measures. We find significant heterogeneity in the relationships between trade policy actions and country characteristics. The likelihood of import liberalization was more prevalent among net exporters of medical products, whereas net importers were more inclined to impose export restrictions. The results suggest trade policy responses to the challenges raised by the COVID‐19 pandemic are only partially explained by extant theory.
{"title":"Country characteristics and trade policy during the COVID‐19 pandemic","authors":"B. Hoekman, Filippo Santi, A. Shingal","doi":"10.1111/roie.12733","DOIUrl":"https://doi.org/10.1111/roie.12733","url":null,"abstract":"Government policy responses to the COVID‐19 pandemic often included changes to trade policies. This article uses detailed data on trade policy measures targeting medical products during the first 18 months of the pandemic (January 2020–June 2021) compiled by the Global Trade Alert to analyze the relationship between national trade policy activism and pre‐pandemic trade patterns, import protection and international integration. The focus is on both potential country‐specific drivers of unilateral trade policies and the duration of implemented measures. We find significant heterogeneity in the relationships between trade policy actions and country characteristics. The likelihood of import liberalization was more prevalent among net exporters of medical products, whereas net importers were more inclined to impose export restrictions. The results suggest trade policy responses to the challenges raised by the COVID‐19 pandemic are only partially explained by extant theory.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139834044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Massimiliano Calì, Marco Le Moglie, Giorgio Presidente
This paper extends the evidence on the impact of trade reforms on firms by focusing on non-tariff measures (NTMs), an increasingly important trade policy instrument in advanced and developing economies. We build a novel time-varying dataset on all NTMs applied to imported products by Indonesia and quantify the trade distortions they generate. We find that unlike tariffs, which reduce plants' productivity, NTMs do not significantly affect plants' performance. However, the most trade-reducing NTMs are associated with lower plant-level markups, which is consistent with the increase in the cost of imported inputs induced by these NTMs.
{"title":"Gain without pain? Non-tariff measures, plant markup, and productivity","authors":"Massimiliano Calì, Marco Le Moglie, Giorgio Presidente","doi":"10.1111/roie.12731","DOIUrl":"https://doi.org/10.1111/roie.12731","url":null,"abstract":"This paper extends the evidence on the impact of trade reforms on firms by focusing on non-tariff measures (NTMs), an increasingly important trade policy instrument in advanced and developing economies. We build a novel time-varying dataset on all NTMs applied to imported products by Indonesia and quantify the trade distortions they generate. We find that unlike tariffs, which reduce plants' productivity, NTMs do not significantly affect plants' performance. However, the most trade-reducing NTMs are associated with lower plant-level markups, which is consistent with the increase in the cost of imported inputs induced by these NTMs.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139677895","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A simple two‐country model with trade, fiscal and interest rate externalities is used to study strategic interactions between national policymakers. Optimal fiscal policy internalizes a trade‐off between output stability and fiscal stability. With lump‐sum taxation, the noncooperative equilibrium is inefficient and both countries are better off under coordination. These results also hold if taxation is distortionary and trade generates a fiscal externality as well, regardless of how strong the preference for output stability is. In response to a negative global demand shock, consistent with the disruptions that occurred during the recent pandemic, the optimal policy response is to increase spending by more under cooperation. However, if budget deficits generate a sufficiently strong negative cross‐border externality through higher interest rates, the optimal response calls for lower spending under cooperation.
{"title":"Global shocks, budgets deficits, and international fiscal policy coordination","authors":"P. Agénor","doi":"10.1111/roie.12732","DOIUrl":"https://doi.org/10.1111/roie.12732","url":null,"abstract":"A simple two‐country model with trade, fiscal and interest rate externalities is used to study strategic interactions between national policymakers. Optimal fiscal policy internalizes a trade‐off between output stability and fiscal stability. With lump‐sum taxation, the noncooperative equilibrium is inefficient and both countries are better off under coordination. These results also hold if taxation is distortionary and trade generates a fiscal externality as well, regardless of how strong the preference for output stability is. In response to a negative global demand shock, consistent with the disruptions that occurred during the recent pandemic, the optimal policy response is to increase spending by more under cooperation. However, if budget deficits generate a sufficiently strong negative cross‐border externality through higher interest rates, the optimal response calls for lower spending under cooperation.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140483652","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper introduces a model of corporate governance into the general oligopolistic equilibrium theory of international trade. Corporate governance defines the influence of workers and capital owners on manager contract and, through this contract, the scope of these two groups for subsequent rent extraction in the wage/employment negotiation between firms and unions. If capital owners have dictatorship over the manager contract, they can extract the full bargaining surplus and eliminate the union wage premium. If workers have dictatorship over the manager contract they can achieve a wage premium, driving the income of capital owners down to zero. In this setting, opening up to trade is to the detriment of the income group whose interests are decisive for the manager contract. This shows that distributional conflicts materializing from trade can be considerably different for countries with differing corporate governance regimes. Foreign investment allows capital owners in unionized industries to flee from disadvantageous corporate governance regimes at home, eliminating union wage premia and lowering manager remuneration in countries with corporate governance regimes that give workers dictatorship over manager contracts.
{"title":"International trade and income distribution: The effect of corporate governance regimes","authors":"Hartmut Egger, Peter H. Egger, Douglas Nelson","doi":"10.1111/roie.12728","DOIUrl":"https://doi.org/10.1111/roie.12728","url":null,"abstract":"This paper introduces a model of corporate governance into the general oligopolistic equilibrium theory of international trade. Corporate governance defines the influence of workers and capital owners on manager contract and, through this contract, the scope of these two groups for subsequent rent extraction in the wage/employment negotiation between firms and unions. If capital owners have dictatorship over the manager contract, they can extract the full bargaining surplus and eliminate the union wage premium. If workers have dictatorship over the manager contract they can achieve a wage premium, driving the income of capital owners down to zero. In this setting, opening up to trade is to the detriment of the income group whose interests are decisive for the manager contract. This shows that distributional conflicts materializing from trade can be considerably different for countries with differing corporate governance regimes. Foreign investment allows capital owners in unionized industries to flee from disadvantageous corporate governance regimes at home, eliminating union wage premia and lowering manager remuneration in countries with corporate governance regimes that give workers dictatorship over manager contracts.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139647802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Magdalena Szyszko, Agata Kliber, Aleksandra Rutkowska, Mariusz Próchniak
We seek to investigate the effects of communication by central banks on professional and consumer inflation expectations. Accordingly, we investigate 12 small open economies implementing inflation targeting. The communication tone of the central banks is determined based on their post-decision releases. We use computational linguistics to quantify this factor. With regard to two subsamples that are identified based on the central bank's experience in inflation targeting, we estimate panel models while controlling for other prospective drivers of expectations. The communication tone of a central bank significantly affects the expectations of professional forecasters from economies with more experience in inflation targeting.
{"title":"Central bank communication and expectations: Evidence for inflation-targeting economies","authors":"Magdalena Szyszko, Agata Kliber, Aleksandra Rutkowska, Mariusz Próchniak","doi":"10.1111/roie.12730","DOIUrl":"https://doi.org/10.1111/roie.12730","url":null,"abstract":"We seek to investigate the effects of communication by central banks on professional and consumer inflation expectations. Accordingly, we investigate 12 small open economies implementing inflation targeting. The communication tone of the central banks is determined based on their post-decision releases. We use computational linguistics to quantify this factor. With regard to two subsamples that are identified based on the central bank's experience in inflation targeting, we estimate panel models while controlling for other prospective drivers of expectations. The communication tone of a central bank significantly affects the expectations of professional forecasters from economies with more experience in inflation targeting.","PeriodicalId":47712,"journal":{"name":"Review of International Economics","volume":null,"pages":null},"PeriodicalIF":1.0,"publicationDate":"2024-01-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139518353","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：