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Global trade and economics

Works Count: 214821

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This cluster of papers explores the impact of international trade on productivity, firm-level dynamics, and economic growth. It covers topics such as trade liberalization, firm-level data analysis, globalization, technology, market size, innovation, and economic development.

Keywords

International Trade; Productivity; Trade Liberalization; Firm-Level Data; Globalization; Exporting; Technology; Market Size; Innovation; Economic Development

Scale Economies, Product Differentiation, and the Pattern of Trade

1990-03-14

Paúl Krugman

The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence

1985-08-01

Jeffrey H. Bergstrand

Despite the equation's empirical success in trade flows, the model's predictive potential has been inhibited by an absence of strong theoretical foundations. A general equilibrium world trade model is presented … Despite the equation's empirical success in trade flows, the model's predictive potential has been inhibited by an absence of strong theoretical foundations. A general equilibrium world trade model is presented from which a is derived by making certain assumptions, including perfect international product substitutability. If, however, trade flows are differentiated by origin as evidence suggests, the typical is misspecified, omitting certain price variables. The last section presents empirical evidence supporting the notion that the is a reduced form from a partial equilibrium subsystem of a general equilibrium model with nationally differentiated products. THE gravity equation has been long recognized for its consistent empirical success in explaining many different types of flows, such as migration, commuting, tourism, and commodity shipping. Typically, the log-linear specifies that a flow from origin i to destination j can be explained by economic forces at the flow's origin, economic forces at the flow's destination, and economic forces either aiding or resisting the flow's movement from origin to destination. In international trade, bilateral gross aggregate trade flows are explained commonly using the following specification: PXi, = fo(yi) (I?) 2(Dij )3(A 1)4u (1) where PXij is the U.S. dollar value of the flow from country i to country j, Yi (Y1) is the U.S. dollar value of nominal GDP in i (j), Dij is the distance from the economic center of i to that of j, Aij is any other factor(s) either aiding or resisting trade between i and j, and u is a log-normally distributed error term with E(ln uij) = 0. This specification was used in Tinbergen (1962), Poyhonen (1963a, 1963b), Pulliainen (1963), Geraci and Prewo (1977), Prewo (1978), and Abrams (1980).1 Table I presents results from estimating a similar to (1) for 15 OECD countries' trade flows.2 Coefficient estimates are stable across years and are representative of trade equations. Despite the model's consistently high statistical explanatory power, its use for predictive purposes has been inhibited owing to an absence of strong theoretical foundations. The most common justification-used in Linnemann (1966), Aitken (1973), Geraci and Prewo (1977), Prewo (1978), Abrams (1980), and Sapir (1981)-was developed by Linnemann and asserts that the model is a reduced form from a four-equation partial equilibrium model of export supply and import demand. Prices are always excluded since they merely adjust to equate supply and demand.3 However, critics have argued that this approach is loose and does not explain the multiplicative functional form.4 This study addresses these and other issues in developing further the microeconomic foundations of the equation. The looseness critique is addressed by systematically describing assumptions necessary to generate a similar to (1) from a general equilibrium framework. Specific, yet intuitively plausible, functions for utility and production generate the equation's multiplicative form. Section I presents a general equilibrium model of world trade derived from utilityand profit-maximizing agent behavior in N countries assuming a single factor of production in Received for publication June 16, 1983. Revision accepted for publication December 12, 1984. *Federal Reserve Bank of Boston. The author is very grateful to J. David Richardson, Robert Baldwin, Rachel McCulloch, James Alm, Saul Schwartz and two anonymous referees for helpful comments on earlier drafts, and Doug Cleveland for research assistance. All errors remain the author's responsibility. The views expressed do not necessarily reflect the views of the Federal Reserve Bank of Boston or the Federal Reserve System. 'Linnemann (1966), Aitken (1973), Sattinger (1978) and Sapir (1981) used the same general specification, but also included exporter and importer populations. Microeconomic foundations of this alternative specification are discussed in Bergstrand (1984). 2The countries are Canada, United States, Japan, BelgiumLuxembourg, Denmark, France, West Germany, Italy, Netherlands, United Kingdom, Austria, Norway, Spain, Sweden, and Switzerland. The adjacency, EEC, and EFTA dummies are explained in the appendix. 3Linnemann (1966), p. 41; Leamer and Stern (1970), p. 146; (Geraci and Prewo (1977), p. 68; Prewo (1978), p. 344; and Sapir (1981), p. 341. 4See, for example, Anderson (1979), p. 106 and Leamer and Stern (1970), p. 158.

The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade

1989-02-01

Jeffrey H. Bergstrand

A general equilibrium model of world trade with two differentiated-product industries and two factors is developed to illustrate how the gravity equation, including exporter and importer populations, as well as … A general equilibrium model of world trade with two differentiated-product industries and two factors is developed to illustrate how the gravity equation, including exporter and importer populations, as well as incomes, fits with the Heckscher-Ohlin model of interindustry trade and the Helpman-Krugman-Markusen models of intraindustry trade. The study extends the microeconomic foundations for a generalized gravity equation in Bergstrand (1985) to incorporate relative factor-endowment differences and nonhomothetic tastes. Empirical estimates of this generalized gravity equation for single-digit Standard Industrial Trade Classification industry groups yield plausible inferences of their capital-labor intensities. Copyright 1989 by MIT Press.

Theoretical Notes on Trade Problems

1964-05-01

Paul A. Samuelson

The Variety and Quality of a Nation's Exports

2005-06-01

David Hummels , Peter J. Klenow

Large economies export more in absolute terms than do small economies. We use data on shipments by 126 exporting countries to 59 importing countries in 5,000 product categories to answer … Large economies export more in absolute terms than do small economies. We use data on shipments by 126 exporting countries to 59 importing countries in 5,000 product categories to answer the question: How? Do big economies export larger quantities of each good (the intensive margin), a wider set of goods (the extensive margin), or higher-quality goods? We find that the extensive margin accounts for around 60 percent of the greater exports of larger economies. Within categories, richer countries export higher quantities at modestly higher prices. We compare these findings to some workhorse trade models. Models with Armington national product differentiation have no extensive margin, and incorrectly predict lower prices for the exports of larger economies. Models with Krugman firm-level product differentiation do feature a prominent extensive margin, but overpredict the rate at which variety responds to exporter size. Models with quality differentiation, meanwhile, can match the price facts. Finally, models with fixed costs of exporting to a given market might explain the tendency of larger economies to export a given product to more countries.

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Does globalization affect growth? Evidence from a new index of globalization

2006-06-10

Axel Dreher

Abstract The study develops an index of globalization covering its three main dimensions: economic integration, social integration, and political integration. Using panel data for 123 countries in 1970–2000 it is … Abstract The study develops an index of globalization covering its three main dimensions: economic integration, social integration, and political integration. Using panel data for 123 countries in 1970–2000 it is analysed empirically whether the overall index of globalization as well as sub-indexes constructed to measure the single dimensions affect economic growth. As the results show, globalization indeed promotes growth. The dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries. Although less robustly, information flows also promote growth whereas political integration has no effect. Acknowledgements The author thanks Bernhard Boockmann, Christos Kotsogiannis, Quan Li, Verena Liessem, Fulvio Mulatero, Torsten Saadma, Lars-H. R. Siemers, seminar participants at the ENTER Jamboree Meeting 2003, the Passau Workshop ‘Internationale Wirtschaftsbeziehungen’ 2003, the 6th Annual Conference on Global Economic Analysis (2003), the European Economic Association (2003), the Verein fuer Socialpolitik (2003), the Malmö workshop on Globalization and Health (2005), the universities of Goettingen, de las Americas and Exeter, and a referee of this journal for valuable comments.

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Trading Tasks: A Simple Theory of Offshoring

2008-11-01

Gene M. Grossman , Esteban Rossi‐Hansberg

We propose a theory of the global production process that focuses on tradeable tasks, and use it to study how falling costs of offshoring affect factor prices in the source … We propose a theory of the global production process that focuses on tradeable tasks, and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a productivity effect of task trade that benefits the factor whose tasks are more easily moved offshore. In the light of this effect, reductions in the cost of trading tasks can generate shared gains for all domestic factors, in contrast to the distributional conflict that typically results from reductions in the cost of trading goods. (JEL F11, F16)

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The Organisation of Industry

1972-09-01

George B. Richardson

Journal Article The Organisation of Industry Get access G. B. Richardson G. B. Richardson St. John's College, Oxford Search for other works by this author on: Oxford Academic Google Scholar … Journal Article The Organisation of Industry Get access G. B. Richardson G. B. Richardson St. John's College, Oxford Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 82, Issue 327, 1 September 1972, Pages 883–896, https://doi.org/10.2307/2230256 Published: 01 September 1972

Integration of Trade and Disintegration of Production in the Global Economy

1998-11-01

Robert C. Feenstra

The last few decades have seen a spectacular integration of the global economy through trade. The rising integration of world markets has brought with it a disintegration of the production … The last few decades have seen a spectacular integration of the global economy through trade. The rising integration of world markets has brought with it a disintegration of the production process, however, in which manufacturing or services activities done abroad are combined with those performed at home. The author compares several different measures of foreign outsourcing and argues that they have all increased since the 1970s. He also considers the implications of globalization for employment and wages of low-skilled workers and for trade and regulatory policy, such as labor standards.

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Globalization and Its Discontents

2015-01-01

Joseph E. Stiglitz

The promise of global institutions broken promises freedom to choose? the East Asia crisis - how IMF policies brought the world to the verge of a global meltdown who lost … The promise of global institutions broken promises freedom to choose? the East Asia crisis - how IMF policies brought the world to the verge of a global meltdown who lost Russia? unfair trade laws and other mischief better roads to the market the IMF's other agenda the way ahead.

Trade Liberalisation and “Revealed” Comparative Advantage<sup>1</sup>

1965-05-01

Béla Balassa

Toward an Eclectic Theory of International Production: Some Empirical Tests

1980-03-01

John H. Dunning

Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing

2011-03-16

Loren Brandt , Johannes Van Biesebroeck , Yifan Zhang

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A Simple Theory of International Trade with Multinational Corporations

1984-06-01

Elhanan Helpman

Using the idea that firm-specific assets associated with marketing, management, and product-specific R & D can be used to service production plants in countries other than the country in which … Using the idea that firm-specific assets associated with marketing, management, and product-specific R & D can be used to service production plants in countries other than the country in which these inputs are employed, I develop a simple general equilibrium model of international trade in which the location of plants in a differentiated product industry is a decision variable. The model is then used to derive predictions of trade pattern, volumes of trade, the share of intra-industry trade, and the share of intrafirm trade as functions of relative country size and differences in relative factor endowments.

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International Investment and International Trade in the Product Cycle

1966-05-01

Raymond Vernon

Location of new products, 191. — The maturing product, 196. — The standardized product, 202. Location of new products, 191. — The maturing product, 196. — The standardized product, 202.

The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions

1988-03-01

John H. Dunning

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Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco

1998-08-01

Sofronis Clerides , Saul Lach , James Tybout

Do firms become more efficient after becoming exporters? Do exporters generate positive externalities for domestically oriented producers? In this paper we tackle these questions by analyzing the causal links between … Do firms become more efficient after becoming exporters? Do exporters generate positive externalities for domestically oriented producers? In this paper we tackle these questions by analyzing the causal links between exporting and productivity using plant-level data. We look for evidence that firms' cost processes change after they break into foreign markets. We find that relatively efficient firms become exporters; however, in most industries, firms' costs are not affected by previous exporting activities. So the well-documented positive association between exporting and efficiency is explained by the self-selection of the more efficient firms into the export market. We also find some evidence of positive regional externalities.

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The China Syndrome: Local Labor Market Effects of Import Competition in the United States

2013-10-01

David Autor , David Dorn , Gordon Hanson

We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry … We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization and instrumenting for US imports using changes in Chinese imports by other high-income countries. Rising imports cause higher unemployment, lower labor force participation, and reduced wages in local labor markets that house import-competing manufacturing industries. In our main specification, import competition explains one-quarter of the contemporaneous aggregate decline in US manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets. (JEL E24, F14, F16, J23, J31, L60, O47, R12, R23)

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Export Versus FDI with Heterogeneous Firms

2004-02-01

Elhanan Helpman , Marc J. Melitz , Stephen Yeaple

This paper builds a multi-country, multi-sector general equilibrium model that explains the decision of heterogeneous firms to serve foreign markets either through exports or local subsidiary sales (FDI).These modes of … This paper builds a multi-country, multi-sector general equilibrium model that explains the decision of heterogeneous firms to serve foreign markets either through exports or local subsidiary sales (FDI).These modes of market access involve different relative costs, some of which are sunk while others vary with sales volume (such as transport costs and tariffs).Relative to investment in a subsidiary, exporting involves lower sunk costs but higher per-unit costs.In equilibrium, only the more productive firms choose to serve the foreign markets and the most productive among this group will further choose to serve the overseas market via FDI.The paper then explores several implications of the individual firms' decisions for aggregate export and FDI sales relative to the domestic and foreign market sizes.In particular, it is shown that firm level heterogeneity is an important determinant of relative export and FDI flows.We use the model to derive testable empirical predictions on the relative aggregate export and FDI sales in a given country for a given sector based both on relative costs and the extent of firm level heterogeneity in that sector.These predictions are tested on data of US affiliate sales and US exports in 38 different countries and 52 sectors.The comparative statics based on relative costs are very similar to those tested by Brainard (AER 1997) and are confirmed in our data: sector/country specific transport costs and tariffs have a strong negative effect on export sales relative to FDI.More importantly, our new predictions for the effects of firm-level heterogeneity on the relative export and FDI sales are also strongly supported by the data: more heterogeneity leads to significantly more FDI sales relative to export sales.

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The Log of Gravity

2006-11-01

João Santos Silva , Silvana Tenreyro

Abstract Although economists have long been aware of Jensen's inequality, many econometric applications have neglected an important implication of it: under heteroskedasticity, the parameters of log-linearized models estimated by OLS … Abstract Although economists have long been aware of Jensen's inequality, many econometric applications have neglected an important implication of it: under heteroskedasticity, the parameters of log-linearized models estimated by OLS lead to biased estimates of the true elasticities. We explain why this problem arises and propose an appropriate estimator. Our criticism of conventional practices and the proposed solution extend to a broad range of applications where log-linearized equations are estimated. We develop the argument using one particular illustration, the gravity equation for trade. We find significant differences between estimates obtained with the proposed estimator and those obtained with the traditional method.

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Gravity Equations: Workhorse,Toolkit, and Cookbook

2014-01-01

Keith Head , Thierry Mayer

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Technology, Geography, and Trade

2002-09-01

Jonathan Eaton , Samuel Kortum

We develop a Ricardian trade model that incorporates realistic geographic features into general equilibrium. It delivers simple structural equations for bilateral trade with parameters relating to absolute advantage, to comparative … We develop a Ricardian trade model that incorporates realistic geographic features into general equilibrium. It delivers simple structural equations for bilateral trade with parameters relating to absolute advantage, to comparative advantage (promoting trade), and to geographic barriers (resisting it). We estimate the parameters with data on bilateral trade in manufactures, prices, and geography from 19 OECD countries in 1990. We use the model to explore various issues such as the gains from trade, the role of trade in spreading the benefits of new technology, and the effects of tariff reduction.

Globalization and the Inequality of Nations

1995-11-01

Paúl Krugman , Anthony J. Venables

A monopolistically competitive manufacturing sector produces goods used for final consumption and as intermediates. Intermediate usage creates cost and demand linkages between firms and a tendency for manufacturing agglomeration. How … A monopolistically competitive manufacturing sector produces goods used for final consumption and as intermediates. Intermediate usage creates cost and demand linkages between firms and a tendency for manufacturing agglomeration. How does globalization affect the location of manufacturing and gains from trade? At high transport costs all countries have some manufacturing, but when transport costs fall below a critical value, a core-periphery spontaneously forms, and nations that find themselves in the periphery suffer a decline in real income. At still lower transport costs there is convergence of real incomes, in which peripheral nations gain and core nations may lose.

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The nature and growth of vertical specialization in world trade

2001-06-01

David Hummels , Jun Ishii , Kei‐Mu Yi

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What Determines Productivity?

2011-06-01

Chad Syverson

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited … Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, labor, and trade. This paper surveys and evaluates recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes are manifold, and differ depending on the particular setting. They include elements sourced in production practices—and therefore over which producers have some direct control, at least in theory—as well as from producers' external operating environments. After evaluating the current state of knowledge, I lay out what I see are the major questions that research in the area should address going forward. (JEL D24, G31, L11, M10, O30, O47)

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Do free trade agreements actually increase members' international trade?

2006-06-07

Scott L. Baier , Jeffrey H. Bergstrand

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An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production

2015-04-10

Marcel P. Timmer , Erik Dietzenbacher , Bart Los +2 more

Abstract This article provides guidance to prudent use of the World Input–Output Database ( WIOD ) in analyses of international trade. The WIOD contains annual time‐series of world input–output tables … Abstract This article provides guidance to prudent use of the World Input–Output Database ( WIOD ) in analyses of international trade. The WIOD contains annual time‐series of world input–output tables and factor requirements covering the period from 1995 to 2011. Underlying concepts, construction methods and data sources are introduced, pointing out particular strengths and weaknesses. We illustrate its usefulness by analyzing the geographical and factorial distribution of value added in global automotive production and show increasing fragmentation, both within and across regions. Possible improvements and extensions to the data are discussed.

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Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence

2000-01-01

Francisco Rodríguez , Dani Rodrik

Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to … Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include those by Dollar (1992), Ben-David (1993), Sachs and Warner (1995), Edwards (1998), and Frankel and Romer (1999). We find little evidence that open trade policies-in the sense of lower tariff and nontariff barriers to trade-are significantly associated with economic growth.

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Globalization and the Gains From Variety

2006-05-01

Christian Broda , David E. Weinstein

Journal Article Globalization and the Gains From Variety Get access Christian Broda, Christian Broda University of Chicago, Graduate School of Business, and Federal Reserve Bank of New York Search for … Journal Article Globalization and the Gains From Variety Get access Christian Broda, Christian Broda University of Chicago, Graduate School of Business, and Federal Reserve Bank of New York Search for other works by this author on: Oxford Academic Google Scholar David E. Weinstein David E. Weinstein Columbia University and National Bureau of Economic Research Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 121, Issue 2, May 2006, Pages 541–585, https://doi.org/10.1162/qjec.2006.121.2.541 Published: 01 May 2006

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Increasing Returns and Economic Geography

1991-06-01

Paúl Krugman

This paper develops a simple model that shows how a country can endogenously become differentiated into an industrialized "core" and an agricultural "periphery." In order to realize scale economies while … This paper develops a simple model that shows how a country can endogenously become differentiated into an industrialized "core" and an agricultural "periphery." In order to realize scale economies while minimizing transport costs, manufacturing firms tend to locate in the region with larger demand, but the location of demand itself depends on the distribution of manufacturing. Emergence of a core-periphery pattern depends on transportation costs, economies of scale, and the share of manufacturing in national income.

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Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia

2007-12-01

Mary Amiti , Jozef Konings

This paper estimates the productivity gains from reducing tariffs on final goods and from reducing tariffs on intermediate inputs. Lower output tariffs can increase productivity by inducing tougher import competition, … This paper estimates the productivity gains from reducing tariffs on final goods and from reducing tariffs on intermediate inputs. Lower output tariffs can increase productivity by inducing tougher import competition, whereas cheaper imported inputs can raise productivity via learning, variety, and quality effects. We use Indonesian manufacturing census data from 1991 to 2001, which include plant-level information on imported inputs. The results show that a 10 percentage point fall in input tariffs leads to a productivity gain of 12 percent for firms that import their inputs, at least twice as high as any gains from reducing output tariffs. (JEL F12, F13, L16, O14, O19, O24)

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Distorted Gravity: The Intensive and Extensive Margins of International Trade

2008-08-01

Thomas Chaney

By considering a model with identical firms, Krugman (1980) predicts that a higher elasticity of substitution between goods magnifies the impact of trade barriers on trade flows. In this paper, … By considering a model with identical firms, Krugman (1980) predicts that a higher elasticity of substitution between goods magnifies the impact of trade barriers on trade flows. In this paper, I introduce firm heterogeneity in a simple model of international trade. I prove that the extensive margin and the intensive margin are affected by the elasticity of substitution in exact opposite directions. When the distribution of productivity across firms is Pareto, the predictions of the Krugman model with representative firms are overturned: the impact of trade barriers on trade flows is dampened by the elasticity of substitution, and not magnified. (JEL F12, F13)

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Openness, Productivity and Growth: What Do We Really Know?

1998-03-01

Sebastián Edwards

Comparative data for 93 countries are used to analyse the robustness of the relationship between openness and total factor productivity growth. Nine indexes of trade policy are used to investigate … Comparative data for 93 countries are used to analyse the robustness of the relationship between openness and total factor productivity growth. Nine indexes of trade policy are used to investigate whether the evidence supports the view that total factor productivity growth is faster in more open economies. The results are robust to the use of openness indicator, estimation technique, time period and functional form, and suggest that more open countries experienced faster productivity growth. Although the use of instrumental variables help dealing with endogeneity, issues related to causality remain somewhat open, and require time series analyses to be adequately addressed

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Estimating Trade Flows: Trading Partners and Trading Volumes<sup>*</sup>

2008-04-10

Elhanan Helpman , Marc J. Melitz , Yona Rubinstein

Journal Article Estimating Trade Flows: Trading Partners and Trading Volumes Get access Elhanan Helpman, Elhanan Helpman Harvard University and CIFAR Search for other works by this author on: Oxford Academic … Journal Article Estimating Trade Flows: Trading Partners and Trading Volumes Get access Elhanan Helpman, Elhanan Helpman Harvard University and CIFAR Search for other works by this author on: Oxford Academic Google Scholar Marc Melitz, Marc Melitz Princeton University, Centre for Economic Policy Research, and National Bureau of Economic Research Search for other works by this author on: Oxford Academic Google Scholar Yona Rubinstein Yona Rubinstein Brown University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 123, Issue 2, May 2008, Pages 441–487, https://doi.org/10.1162/qjec.2008.123.2.441 Published: 01 May 2008

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Trade, Growth, and Poverty

2004-02-01

David Dollar , Aart Kraay

A key issue today is the effect of globalisation on inequality and poverty. Well over half the developing world lives in globalising economies that have seen large increases in trade … A key issue today is the effect of globalisation on inequality and poverty. Well over half the developing world lives in globalising economies that have seen large increases in trade and significant declines in tariffs. They are catching up the rich countries while the rest of the developing world is falling farther behind. Second, we examine the effects on the poor. The increase in growth rates leads on average to proportionate increases in incomes of the poor. The evidence from individual cases and cross‐country analysis supports the view that globalisation leads to faster growth and poverty reduction in poor countries.

Misallocation and Manufacturing TFP in China and India

2007-08-01

Chang‐Tai Hsieh , Peter J. Klenow

Resource misallocation can lower aggregate total factor productivity (TFP).We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. … Resource misallocation can lower aggregate total factor productivity (TFP).We use micro data on manufacturing establishments to quantify the potential extent of misallocation in China and India compared to the U.S. Compared to the U.S., we measure sizable gaps in marginal products of labor and capital across plants within narrowly-defined industries in China and India.When capital and labor are hypothetically reallocated to equalize marginal products to the extent observed in the U.S., we calculate manufacturing TFP gains of 30-50% in China and 40-60% in India.

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Market Size, Trade, and Productivity

2008-01-01

Marc J. Melitz , Gianmarco I.P. Ottaviano

We develop a monopolistically competitive model of trade with firm heterogeneity—in terms of productivity differences—and endogenous differences in the “toughness” of competition across markets—in terms of the number and average … We develop a monopolistically competitive model of trade with firm heterogeneity—in terms of productivity differences—and endogenous differences in the “toughness” of competition across markets—in terms of the number and average productivity of competing firms. We analyse how these features vary across markets of different size that are not perfectly integrated through trade; we then study the effects of different trade liberalization policies. In our model, market size and trade affect the toughness of competition, which then feeds back into the selection of heterogeneous producers and exporters in that market. Aggregate productivity and average mark-ups thus respond to both the size of a market and the extent of its integration through trade (larger, more integrated markets exhibit higher productivity and lower mark-ups). Our model remains highly tractable, even when extended to a general framework with multiple asymmetric countries integrated to different extents through asymmetric trade costs. We believe this provides a useful modelling framework that is particularly well suited to the analysis of trade and regional integration policy scenarios in an environment with heterogeneous firms and endogenous mark-ups.

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The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity

2003-10-24

Marc J. Melitz

This paper develops a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade. The model shows how the exposure to trade will induce only the … This paper develops a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade. The model shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market) and will simultaneously force the least productive firms to exit. It then shows how further increases in the industry's exposure to trade lead to additional inter-firm reallocations towards more productive firms. The paper also shows how the aggregate industry productivity growth generated by the reallocations contributes to a welfare gain, thus highlighting a benefit from trade that has not been examined theoretically before. The paper adapts Hopenhayn's (1992a) dynamic industry model to monopolistic competition in a general equilibrium setting. In so doing, the paper provides an extension of Krugman's (1980) trade model that incorporates firm level productivity differences. Firms with different productivity levels coexist in an industry because each firm faces initial uncertainty concerning its productivity before making an irreversible investment to enter the industry. Entry into the export market is also costly, but the firm's decision to export occurs after it gains knowledge of its productivity.

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Export subsidies and international market share rivalry

1985-02-01

James A. Brander , Barbara J. Spencer

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Exceptional exporter performance: cause, effect, or both?

1999-02-01

Andrew B. Bernard , J. Bradford Jensen

A growing body of empirical work has documented the superior performance characteristics of exporting plants and firms relative to non-exporters. Employment, shipments, wages, productivity and capital intensity are all higher … A growing body of empirical work has documented the superior performance characteristics of exporting plants and firms relative to non-exporters. Employment, shipments, wages, productivity and capital intensity are all higher at exporters at any given moment. This paper asks whether good firms become exporters or whether exporting improves firm performance. The evidence is quite clear on one point: good firms become exporters, both growth rates and levels of success measures are higher ex-ante for exporters. The benefits of exporting for the firm are less clear. Employment growth and the probability of survival are both higher for exporters; however, productivity and wage growth is not superior, particularly over longer horizons.

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Plants and Productivity in International Trade

2003-08-01

Andrew B. Bernard , Jonathan Eaton , J. Bradford Jensen +1 more

We reconcile trade theory with plant-level export behavior, extending the Ricardian model to accommodate many countries, geographic barriers, and imperfect competition. Our model captures qualitatively basic facts about U.S. plants: … We reconcile trade theory with plant-level export behavior, extending the Ricardian model to accommodate many countries, geographic barriers, and imperfect competition. Our model captures qualitatively basic facts about U.S. plants: (i) productivity dispersion, (ii) higher productivity among exporters, (iii) the small fraction who export, (iv) the small fraction earned from exports among exporting plants, and (v) the size advantage of exporters. Fitting the model to bilateral trade among the United States and 46 major trade partners, we examine the impact of globalization and dollar appreciation on productivity, plant entry and exit, and labor turnover in U.S. manufacturing.

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Gravity with Gravitas: A Solution to the Border Puzzle

2003-02-01

James E. Anderson , Eric van Wincoop

Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both … Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is unfounded. We develop a method that (i) consistently and efficiently estimates a theoretical gravity equation and (ii) correctly calculates the comparative statics of trade frictions. We apply the method to solve the famous McCallum border puzzle. Applying our method, we find that national borders reduce trade between industrialized countries by moderate amounts of 20–50 percent.

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Firms in International Trade

2007-07-01

Andrew B. Bernard , J. Bradford Jensen , Stephen J. Redding +1 more

Since the mid-1990s, researchers have used micro datasets to study countries' production and trade at the firm level and have found that exporting firms differ substantially from firms that solely … Since the mid-1990s, researchers have used micro datasets to study countries' production and trade at the firm level and have found that exporting firms differ substantially from firms that solely serve the domestic market. Across a wide range of countries and industries, exporting firms have been shown to be larger, more productive, more skill- and capital-intensive, and to pay higher wages than nonexporting firms. These differences exist even before exporting begins and have important consequences for evaluating the gains from trade and their distribution across factors of production. The new empirical research challenges traditional models of international trade and, as a result, the focus of the international trade field has shifted from countries and industries towards firms and products. Recently available transaction-level U.S. trade data reveal new stylized facts about firms' participation in international markets, and recent theories of international trade incorporating the behavior of heterogenous firms have made substantial progress in explaining patterns of trade and productivity growth.

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Market Structure and Foreign Trade

1986-05-01

James A. Brander , Helpman , Krugman

Trade Costs

2004-08-01

James E. Anderson , Eric van Wincoop

This paper surveys the measurement of trade costs: what we know and don't know but may usefully attempt to learn. Partial and incomplete data on direct measures of costs go … This paper surveys the measurement of trade costs: what we know and don't know but may usefully attempt to learn. Partial and incomplete data on direct measures of costs go with inference on implicit costs from trade flows and prices. Total trade costs in rich countries are large. The ad valorem tax equivalent is about 170 percent when pushing the data hard. Poor countries face even higher trade costs. There is a lot of variation across countries and across goods within countries, much of which makes economic sense. In our survey, theory provides interpretation and perspective and suggests improvements for the future. Some new results are presented to properly apply and interpret gravity theory and handle aggregation.

Trade openness, income inequality and economic growth in the Democratic Republic of Congo

2025-12-27

Elie Bola Boongo , Jonathan Kitoko Asenga , Moïse Barhakengera Bahati

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The impact of international trade shocks on domestic output, income distribution, and inflation in an agent-based model

2025-06-25

Lílian Nogueira Rolim , Gilberto Tadeu Lima , Carolina Troncoso Baltar | Journal of Economic Interaction and Coordination

Impact of global value chain on China's automobile industry upgrading: The mediating effect of technology investment and moderating effect of foreign direct investment

2025-06-25

Tingting Sun , Muhammad Abdullah | Asian Journal of Business Research

The automobile industry is a cornerstone of China's economy, with its upgrading significantly influencing overall economic growth. Global value chain (GVC), as a framework that connects global markets and production … The automobile industry is a cornerstone of China's economy, with its upgrading significantly influencing overall economic growth. Global value chain (GVC), as a framework that connects global markets and production resources, substantially impacts an industry's international competitiveness. This study employs the Malmquist Productivity Index based on the Data Envelopment Analysis (DEA) method to assess China's automobile industry (CAI). Additionally, a system Generalized Method of Moments (GMM) approach is utilized to investigate the influence of GVC on the upgrading process while further examining the mediating and moderating roles of technological innovation and foreign direct investment (FDI). The findings show that GVC has a significant negative effect on upgrading CAI, with technology investment acting as a mediating factor; specifically, GVC hinders industry upgrading by inhibiting technology investment. Furthermore, FDI mitigates the negative impact of GVC on the upgrading of CAI. Based on these findings, this study offers policy implications to promote the upgrading of CAI.

Los vehículos eléctricos chinos en Europa: desafíos y soluciones

2025-06-25

Tianhe Niu , Huixian Feng | Interacción Sino-Iberoamericana / Sino-Iberoamerican Interaction

Resumen Este artículo analiza el desarrollo internacional de la industria de vehículos de nueva energía de China, con un enfoque particular en su expansión en el mercado europeo. Con la … Resumen Este artículo analiza el desarrollo internacional de la industria de vehículos de nueva energía de China, con un enfoque particular en su expansión en el mercado europeo. Con la aceleración del proceso global de descarbonización, los automóviles eléctricos, los equipos fotovoltaicos y las baterías de litio se han convertido en importantes motores de las exportaciones chinas. Los vehículos de nueva energía, como un sector clave para una movilidad baja en carbono, están liderando la transformación de la industria automotriz hacia la electrificación, la inteligencia y la conectividad. Gracias a su cadena de suministro integrada, su innovación tecnológica y sus ventajas de escala, China ha mostrado una fuerte competitividad en el mercado internacional. Impulsadas por la iniciativa “la Franja y la Ruta”, las empresas automotrices chinas no solo están expandiendo su presencia en Europa, sino también en otros países y regiones a lo largo de la ruta de la iniciativa, promoviendo la adopción global de vehículos de nueva energía. Europa, como el segundo mercado más grande de vehículos de nueva energía en el mundo, ha acelerado la adopción de automóviles eléctricos gracias a las políticas ambientales. Este artículo comienza con un resumen del estado actual del mercado europeo de vehículos de nueva energía y las razones detrás de su rápido crecimiento. Luego, se exploran las ventajas competitivas de la cadena de suministro completa de las empresas chinas en este sector a nivel global. Finalmente, se analizan los desafíos legales y regulatorios que enfrentan las empresas chinas al ingresar al mercado europeo, incluidos el acceso al mercado, los estándares ambientales y la protección de datos. Este estudio proporciona referencias clave para el desarrollo sostenible de las empresas chinas de vehículos de nueva energía en Europa.

Otomotiv Sektöründe Dış Ticaretin Türkiye Ekonomisine Etkisi: Ekonometrik Bir Model

2025-06-25

Umut İnanç Ekizoğlu , Güldenur Çetin | İstanbul Ticaret Üniversitesi Dış Ticaret Dergisi

Bu çalışmada Türkiye’nin otomotiv ihracatının ekonomik büyüme üzerinde yaptığı etki araştırılmaktadır. Çalışma üç bölümdür. Birinci bölümde ekonomik büyümenin tanımı, ekonomik büyümenin ölçülmesi, özellikleri, türleri, kaynakları, ile maliyetine yer verilmiştir. Çalışmada … Bu çalışmada Türkiye’nin otomotiv ihracatının ekonomik büyüme üzerinde yaptığı etki araştırılmaktadır. Çalışma üç bölümdür. Birinci bölümde ekonomik büyümenin tanımı, ekonomik büyümenin ölçülmesi, özellikleri, türleri, kaynakları, ile maliyetine yer verilmiştir. Çalışmada ikinci bölümde büyüme modelleri ile dış ticaret ilişkisine bakılmıştır. Ayrıca bu bölümde otomotiv sektörünün tarihi, üretimi, ithalatı ve ihracatı konularında bilgi verilmiştir. Çalışmada yer alan üçüncü bölümde otomotiv ihracatı ile ekonomik büyüme ilişkisi incelenmiştir. Analiz bu kısımda yapılmıştır. Bu amaçla 1969 ile 2023 yılları arasında otomotiv ihracatı ile ekonomik büyüme verisine ARDL analizi uygulanmıştır. Burada yıllık veriler kullanılmıştır. Sonuç bölümünde ise otomotiv ihracatının ekonomik büyüme üzerinde olumlu yönde etki ettiği görülmüştür.

Low-Income Economy Country Cleft Craft: A Kenyan and Guinean Experience

2025-06-24

D. Tham | International Journal of Oral and Maxillofacial Surgery

Uncertainty, Deep Regional Trade Agreements, and Global Value Chain Trade

2025-06-24

Soonchan Park | East Asian Economic Review

Reassessing Services Trade Barriers: Evidence from Turkish Microdata and the STRI Framework

2025-06-24

Ömer Tarık Gençosmanoğlu | East Asian Economic Review

OECD Skills Strategy Thailand

2025-06-24

| OECD skills studies

Prioritization of logistics performance efficiency and trade development for developing economies; a case of ECOWAS using the gravity model

2025-06-24

Isaac Adjei Tetteh , Yu Wang , Daofang Chang +1 more | Applied Economics Letters

Trade Efficiency of Information and Communication Technology Products Between China and <scp>RCEP</scp> Member Countries

2025-06-24

Xiaomei Wang , Yixin Zhu , Tonghe Zhang | Australian Economic Papers

ABSTRACT Using the stochastic frontier gravity model and information and communication technology (ICT) product trade data from 2007 to 2021, this study measures and compares the efficiency of ICT product … ABSTRACT Using the stochastic frontier gravity model and information and communication technology (ICT) product trade data from 2007 to 2021, this study measures and compares the efficiency of ICT product trade between China and Regional Comprehensive Economic Partnership (RCEP) member countries. The results of this study indicate that the trade flow of ICT products is positively correlated with the level of economic development and negatively correlated with geographical distance. Government efficiency, trade and transport‐related infrastructure quality, higher education enrollment rate, and the number of mobile phone users have a positive effect on the trade efficiency of ICT products. Compared to the United States and the European Union, China has the lowest export efficiency and the highest import efficiency of ICT products to RCEP member countries. The trade efficiency estimates also reveal that China's efficient ICT product trading partners include Australia, Japan, New Zealand, Singapore, and South Korea, while inefficient ICT product trading partners include Brunei, Cambodia, Laos, and Myanmar. Moreover, there are significant differences in trade efficiency among different categories of ICT products. Therefore, China should focus on minimizing the impact of non‐efficiency factors in trade, implement differentiated cooperation strategies with RCEP member countries, and promote the diversification of ICT product trade.

The impact of the China-US tariff war on China and China’s countermeasures

2025-06-24

Yun Lou | Geopolitics under Globalization

Since the start of the China-US trade dispute in 2018, the United States has imposed numerous sanctions against China, citing national security concerns and unfair trade practices, including the imposition … Since the start of the China-US trade dispute in 2018, the United States has imposed numerous sanctions against China, citing national security concerns and unfair trade practices, including the imposition of tariffs. In April 2025, the US escalated tariffs on Chinese imports to 34% and threatened to raise rates to 245%. These actions came amid increased reciprocal trade measures between the countries. This paper examines the historical origins and evolutionary trajectory of the tariff dispute. Employing literature analysis, data comparison, and qualitative analysis, it evaluates the negative impacts and adaptive changes on China’s economic trade, technology manufacturing, and social welfare. The study found that while China’s total trade value initially declined by 0.96% year-on-year in 2019, it achieved a V-shaped rebound, reaching a historical record of USD 6.25 trillion in 2022. The trade surplus with the US decreased by 28.6% by 2024, yet China’s overall trade surplus grew to a peak of USD 992.2 billion in 2024, driven by significant expansions with the EU, ASEAN, and Mexico. Furthermore, China’s semiconductor self-sufficiency rate increased from 5% in 2018 to nearly 30% by 2024. These shifts underscore China’s accelerated economic transformation toward domestic demand and innovation, exemplified by total retail sales exceeding 48 trillion yuan in 2024. The paper also discusses new trends in global order restructuring and analyzes China’s strategic responses. By adopting a tripartite model of “precision countermeasures, strategic resilience, and multilateralism”, the paper advocates safeguarding China’s national interests while maintaining stable development.

The Role of International Trade Agreements During Economic and Policy Crises: Evidence From U.S. Firm Dynamics

2025-06-23

Jerónimo Carballo , Kyle Handley , Nuno Limão | Review of International Economics

ABSTRACT We use U.S. firm exports from 2003 to 2011 to establish facts about export dynamics in a crisis marked by economic and policy uncertainty. Uncertainty about foreign income, trade … ABSTRACT We use U.S. firm exports from 2003 to 2011 to establish facts about export dynamics in a crisis marked by economic and policy uncertainty. Uncertainty about foreign income, trade protection, and their interaction dampen export investments, which can be partially offset by trade agreements that mitigate policy uncertainty. We find a significant role for uncertainty in explaining the trade collapse in the 2008 crisis and partial recovery in its aftermath. We find that the negative effects worked (1) through the extensive margin, (2) in destinations without preferential agreements with the United States, and (3) in industries with higher potential protection. U.S. exports to nonpreferential markets would have been 6.5% higher under an agreement—equivalent to an 8% foreign GDP increase.

Intra-African immigration and Africa's external performance

2025-06-23

Blaise Gnimassoun , Hammed Adededji ADETOKUNBO , Anthony Simpasa | Research Square (Research Square)

<title>Abstract</title> Contrary to popular belief, the majority of Africans who leave their country remain in Africa and contribute to shaping the economic performance of the continent. This paper investigates the … <title>Abstract</title> Contrary to popular belief, the majority of Africans who leave their country remain in Africa and contribute to shaping the economic performance of the continent. This paper investigates the effects of intra-African immigration on the current account in African countries over the past thirty years. To this end, we use a panel data approach and a gravity-based 2SLS estimation strategy to overcome the potential endogeneity bias. We find that intra-African immigration has a positive, strong and robust impact on the current account of African countries. In particular, intra-African immigration contributes to significantly improve the trade balance of African countries, including inside and outside the continent. Further investigations reveal that the strengthening of intra-African trade or the reduction of trade extroversion as well as the demographic vitality favoured by intra-African immigration are the mechanisms behind these results. Thus, full implementation of the African Union protocol on free movement of people between countries can deepen regional integration and help reduce structural current account deficits that countries face. <italic><bold>JEL classification</bold></italic>: F14, F22, F32, O55.

The Role of Trade Tariff Policy on US Supply Chain Imbalance and Trade Deficits Reduction: Evidence from Trend and Univariate Analyses

2025-06-23

Ejiro Zaye | Journal of Business and Strategic Management

Purpose: Despite the free and lower trade tariff policy, the United States (US) has recorded a persistent trade deficit and trade imbalances in the last four decades ago, therefore, this … Purpose: Despite the free and lower trade tariff policy, the United States (US) has recorded a persistent trade deficit and trade imbalances in the last four decades ago, therefore, this study empirically investigates the role of trade tariff policy on US supply chain imbalance and trade deficits reduction. Methodology: The study employs simple random and stratified sampling techniques to analyses the trend and univariate. Secondary data from US Census Bureau of Economic Analysis Department of Commerce on US international trade in goods and services from 1852 to 2024 were analysed to drawn inferences. Findings: This study finds that US trade tariff policy is not automatic to reduce supply chain imbalances and trade deficits in the United States. The US trade liberalization policy is associated with supply chain imbalance and trade deficits while the U.S. trade protectionism policy accounted for more trade surplus and supply chain balance. Also the study finds that a minimum threshold of 10 percent US weighted trade tariff rate to reduce the US trade supply chain imbalance and trade deficits Unique Contribution to Theory, Practice and Policy: This study supports the protectionism trade theory over the trade liberalization theory to aggressively promote exports but reduces imports through a number of trade barriers like tariff rate, imports restriction, and currency depreciation (devaluation) to make trading partners imports dependence while protecting country’s domestic industry from foreign competition. Recommendations to the current US President, Trump is to set a minimum of 10 percent weighted tariff rates on all goods and services to other trading partners while US should imposes a higher weighted tariff rates above 10 to all goods and services from China to swiftly reduce US trade deficits and supply chain imbalance to be more effective than Trump former US President administration and also President Biden administration.

Tariff Caps and US Agricultural Trade

2025-06-23

Sheikh Jafar Emran , Andrew Schmitz | World Economy

ABSTRACT The United States maintains relatively low tariffs on imports of agricultural products compared to global standards. As our analyses show, the Ad‐valorem tariff of the United States on agricultural … ABSTRACT The United States maintains relatively low tariffs on imports of agricultural products compared to global standards. As our analyses show, the Ad‐valorem tariff of the United States on agricultural imports is roughly 4%–5% compare to Japanese duty, for example, exceeding to 25%. World Trade Organisation (WTO) introduced the notion of tariff cap defined as the maximum limit of a tariff that can be imposed on any importing commodity. This paper presents a theoretical framework to analyse the impact of a tariff cap on agricultural trade including the theory of an optimal cap. Utilising a Tobit model on the 2021 WTO dataset at the Harmonised System (HS) six‐digit level, we find that the introduction of new tariff lines within the agricultural sector has had little or no effect on reducing binding overhang, as still a gap remains between bound and applied tariffs for the US. The average Ad‐valorem duty and the proportion of duty‐free commodities within a sector are shown to negatively influence the extent of binding overhang. Conversely, import volumes increase the likelihood of binding overhang, highlighting a positive relationship between trade volume and tariff flexibility. A tariff cap has a limited impact on the US's ability to adjust tariffs in agriculture, further liberalise agricultural trade, or collect revenue from primary agricultural products. Therefore, in practice, the cap on tariffs has a negligible effect on US imports but holds a significant promise for enhancing US export opportunities. From policy perspective, negotiations within the WTO aimed at reducing tariff caps could potentially boost the United States' prospect to gain from international agricultural trade.

Japan's and India's Threat Perceptions of China in the Indo-Pacific

2025-06-23

Vindu Mai Chotani | Routledge eBooks

An Investigation of the Extent of Accessibility of Common Market for Eastern and Southern Africa Trade Facilitation Instruments by SMES in Zambia

2025-06-23

Leslie J. Francis , Eric E. Mang’unyi , Fines Mwiiya | African Journal of Commercial Studies

Background: The aim of the study was to investigate the extent of the accessibility of Common market for Eastern and Southern Africa trade facilitation instruments by SMEs in Zambia. The … Background: The aim of the study was to investigate the extent of the accessibility of Common market for Eastern and Southern Africa trade facilitation instruments by SMEs in Zambia. The objectives of the study were to establish the extent of TFIs Utilization by SMEs in Zambia, to determine the barriers to utilization of COMESA TFIs by SMES in Zambia and to develop a Framework for Zambian SMEs to capitalize on COMESA TFIs. Methodology: The study used a Questionnaire and an interview guide as key data collection instruments. There were 130 questionnaires that were distributed to respondents and 5 key informants. The results of the study revealed that 91.5% of the respondent said that they had never accessed Trade facilitation Instrument of COMESA while 8.5 % ever accessed TFIs. Findings: The findings also reveal another research objectives results and one key objective was to do with extent of utilization of TFIs. The findings demonstrate many reasons views of respondents on use of TFI. As observed most respondents do not use TFI, reasons behind that are Lack of Adequate finance by SMEs (14.6%), SMEs do not understand and know role of COMESA (23.1%), Policy Implementation being poor (43.1%), and inadequate procedures and Logistics (14.6%). However, most SMEs are not still not aware of the Programmes of COMESA and lot of them lack connectivity and internet skills (10%), Lack of digital financial capacity by SMEs (43.1%), Lack of communication and information (31.5%), Lack of inclusiveness/biasness (11.5%). The findings also revealed study highlighted challenges they are faced with in respect to COMESA trade facilitation instruments. These are limited access to technology (14.6%), unfavourable business environment (20. %), Lack of Finance and Knowledge on COMESA Procedures (33.1%), Slow Digital Economic Integration (18.5%), Laws on customs and Trade Facilitations (13.1%).

Unlocking Africa’s Economic Potential: A Comprehensive Analysis of AfCFTA Opportunities for Women and Youth as Workers, Consumers, Producers, and Traders

2025-06-23

Tabitha W. Kiriti Nganga | International Journal of Economics

Purpose: The African Continental Free Trade Area (AfCFTA) represents a monumental step toward the economic integration of the African continent, aiming to create a single market for goods and services … Purpose: The African Continental Free Trade Area (AfCFTA) represents a monumental step toward the economic integration of the African continent, aiming to create a single market for goods and services among 55 African Union member states. With an anticipated market of 1.3 billion people and a combined GDP exceeding $3.4 trillion, the AfCFTA holds transformative potential for fostering inclusive and sustainable growth. Central to this transformation is the strategic inclusion of two historically marginalized but economically vital groups: women and youth. This article critically examines the promises and practical pathways through which the AfCFTA can become a driver of inclusive economic empowerment for women and youth. Methodology: Drawing from treaty provisions, policy frameworks such as Agenda 2063, and a range of empirical data, the paper analyzes opportunities across the economic spectrum: as workers, consumers, producers, and traders. It also integrates case studies and comparative insights to underscore the practical realities and innovations shaping gender-responsive trade policies. Findings: Women account for the majority of the informal trade workforce across Africa, while youth represent over 70% of the population under the age of 30. Both groups possess immense economic potential but face significant structural and systemic barriers including limited access to finance, education, infrastructure, and representation in policy decision-making. Unique Contribution to Theory, Practice and Policy: The article offers actionable policy recommendations to national governments, the AfCFTA Secretariat, and civil society. Ultimately, the paper argues that the success of the AfCFTA hinges not only on economic liberalization but on its ability to deliver social transformation—where inclusivity, equality, and empowerment are foundational pillars of Africa’s economic renaissance.

Evaluating the effects of exchange rate volatility on knitwear export performance to assess economic growth in Bangladesh

2025-06-23

Tanushree Basak , Ashiqur Rahman , Md Nazmus Sadekin +1 more | Discover Sustainability

Revisiting the impact of trade facilitation measures in Africa: A structural gravity approach

2025-06-23

Mengistu Alamneh Wassie , Lukas Kornher , Chahir Zaki | Journal of International Trade & Economic Development

Effects of export subsidies in an endogenous growth model with transport costs and firm location

2025-06-23

Wataru Johdo | Economics and Business Letters

This paper analyzes the impact on world growth of an increase in export subsidies in one country based on an open economy endogenous growth model in which there are transportation … This paper analyzes the impact on world growth of an increase in export subsidies in one country based on an open economy endogenous growth model in which there are transportation costs and the movement of firms across international borders. In contrast to the negative effect of export subsidies on world growth in the open economy endogenous growth model without transportation costs and the movement of firms, the paper shows that an increase in export subsidies in one country increases world growth under a certain condition.

Intelligent Manufacturing and Corporate Offshoring Production: Estimation Based on Heterogeneity-Robust Nonlinear Difference-in-Differences Method

2025-06-23

Jing Lü , Jie Xu | Sustainability

Under the background of globalization and the latest technological changes, many enterprises ensure corporate competitiveness and sustainable development by deploying production globalization and transforming production modes. This paper proposes a … Under the background of globalization and the latest technological changes, many enterprises ensure corporate competitiveness and sustainable development by deploying production globalization and transforming production modes. This paper proposes a task-based enterprise model to study how enterprises’ production mode transformation toward intelligent manufacturing affects corporate offshoring production. Intelligent manufacturing forms relative push–pull forces on corporate offshoring production through reshoring effects and offshoring effects on the extensive margin of task sets while promoting corporate offshoring production through productivity effects on the intensive margin. Empirically, this paper constructs a staggered quasi-natural experiment using China’s Intelligent Manufacturing Pilot Demonstration Projects (IMPDP), adopts the heterogeneity-robust nonlinear Difference-in-Differences (DID) method, and confirms that intelligent manufacturing has significant positive causal effects on Chinese manufacturing enterprises’ offshoring production. The reshoring effect of intelligent manufacturing is stronger than the offshoring effect, but its powerful productivity effect masks the reshoring effect in overall empirical results. The positive effects of intelligent manufacturing are more significant in non-state-owned enterprises (non-SOEs) and capital-intensive enterprises. Further considering host country selection for corporate offshoring, this study finds that intelligent manufacturing simultaneously promotes corporate offshoring production to both developed and developing countries, but enterprises prefer Belt and Road Initiative countries. Additionally, intelligent manufacturing also promotes corporate offshore trade activities while causing the reshoring of offshore R&D activities. Overall, the transition of production modes toward intelligent manufacturing in Chinese manufacturing enterprises generally leads to a further expansion of corporate offshoring production.

Assessing differential impacts of a trade agreement using a quantile regression approach

2025-06-22

Jiyeon Kim , Jisang Yu | Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

Abstract Using farm‐level panel data, we directly estimate the impacts of the Korea–Chile Free Trade Agreements (FTA) on the revenue of the firms in South Korea that faced greater imports—agricultural … Abstract Using farm‐level panel data, we directly estimate the impacts of the Korea–Chile Free Trade Agreements (FTA) on the revenue of the firms in South Korea that faced greater imports—agricultural producers as the FTA induced greater imports of fruits and vegetables from Chile to South Korea. As expected, we find the negative effect of the increased imports on the total crop revenue and profit of the farms. We model and examine the differential impacts and find that the negative effects are greater for high‐revenue farms. We document the evidence of the lack of immediate adjustment as a response to the negative shocks from the trade agreement.

ASEAN Centrality and the Revitalisation of Regional Connectivity

2025-06-22

Hong Liu , Celia Lee , Jeremy Goh | WORLD SCIENTIFIC eBooks

Offensive Mercantilism and the Crisis of Liberal International Order: Reinterpreting the U.S.-China Trade War

2025-06-22

Hikmet Mengüaslan | Adnan Menderes Üniversitesi Sosyal Bilimler Enstitüsü Dergisi

This article employs Jonathan Holslag’s concept of offensive mercantilism as a framework to reinterpret the recent shifts in the U.S.-China economic relations, specifically the Trade War initiated in 2018 by … This article employs Jonathan Holslag’s concept of offensive mercantilism as a framework to reinterpret the recent shifts in the U.S.-China economic relations, specifically the Trade War initiated in 2018 by Donald Trump Administration’s decision to increase tariffs against imports from China, as a cataclysmic step for the trajectory of the Liberal International Order (LIO). The article asserts that trade war should be considered not as a mere departure from liberal norms, but as a strategic policy aimed at power projection through coercive economic diplomacy, given the broader structural erosion of U.S. hegemonic capabilities and the rise of alternative economic powers, albeit China. As such, in which ways the resurgence of protectionism and economic nationalism implicates on the U.S.-China economic relations, as well as the international order, guides the research. The findings of the paper suggest that trade protectionism, far from being an anomaly, is increasingly becoming a normalized strategy of economic competition within the multipolar international order. Accordingly, waging trade war as an offensive mercantilist option to contain China’s expanding economic, as well as military, clout, can be identified as a long-term strategy, rather than a short-term tactic, which would likely to be carried on, regardless of the ideological background of the U.S. governments, against perceived threats to the LIO and the U.S. hegemony within it.

Reassessing China’s economic power in Southeast Asia during the 2010 s: insights from the nexus of FDI-driven manufacturing and GVC trade

2025-06-21

Yoon Ah Oh | Asia Europe Journal

Abstract Southeast Asia’s primary foreign policy challenge amid the intensifying US-China rivalry is commonly framed as a pursuit of neutrality, which is premised on the region’s economic dependence on China … Abstract Southeast Asia’s primary foreign policy challenge amid the intensifying US-China rivalry is commonly framed as a pursuit of neutrality, which is premised on the region’s economic dependence on China and its security reliance on the USA. While widely accepted, the economic side of this framing largely rests on the assumption that China’s economic dominance in the region is indisputable. This article challenges this assumption by reassessing China’s role in Southeast Asia’s manufacturing sector during the 2010s. Empirical evidence shows that, while China was the region’s dominant supplier at the time, its role as an investor with key decision-making power in production networks remained limited. In this article, to better make sense of these results, a typology of sourcing relations centered on the alignment between foreign assemblers and their suppliers was developed, drawn from the FDI and GVC approaches. Two case studies illustrate key outcome categories involving Thailand and Vietnam. The findings suggest that China's economic position in SE Asia during the 2010s was more limited than commonly assumed, though this may be changing with the emergence of new technologies.

The impact of industrial spatial agglomeration on the quality of export products under trade facilitation reform: evidence from China

2025-06-21

Feng Zhang , Lei Wang , Wei Le +1 more | Review of World Economics

Authorities and hubs in global value chains: exploring the role of network centrality

2025-06-20

Marta Solaz , Mariola Sánchez | Research Square (Research Square)

<title>Abstract</title> This paper explores the evolution of global value chains (GVCs) from 1995 to 2020 to assess the changes that have taken place during the last decades. Using country-sector data … <title>Abstract</title> This paper explores the evolution of global value chains (GVCs) from 1995 to 2020 to assess the changes that have taken place during the last decades. Using country-sector data from the OECD’s TiVA database, we apply network techniques and graph theory to characterize the structure of the GVC network. We are interested in comparing the network at different moments in time to assess how its structure has evolved, and which countries and sectors -and how- participate in the network. To do so, we compute centrality metrics to identify countries and country-sectors’ position within these global production networks. Using the weighted hyperlink-induced topic search (HITS) algorithm, we identify key hubs and authorities in the GVC network: a hub is relevant supplier that is connected with relevant buyers, while an authority is a relevant buyer which is itself connected with relevant suppliers. Additionally, we also examine if the position of country-sectors in the GVC network matters: we conduct panel regressions to assess if changes in network centrality have an impact on upgrading in GVCs, as measured by changes in the domestic value-added content of gross exports. Our results suggest that centrality plays an important role, especially as a buyer: according to our preferred estimation, a 1 percentage point increase in a country-sector’s authority score leads to an increase in the rate of growth of domestic value added embodied in exports of 0.39 percentage points, whereas increases in the hub score boost domestic value added in exports by 0.14 pp. Being well connected to the sources of value-added seems to play a more important role in benefiting from GVC participation. JEL codes: F14, F60

State Institutions and Regional Institutions: A Derivation?

2025-06-20

Cynthia Hadita , Susi Dwi Harijanti , Afnila Afnila +1 more | Science of law.

The existence of regional institutions that have similarities with state institutions nomenclature but it needs to be analyzed whether regional institutions are derivatives of state institutions or instead regional governments … The existence of regional institutions that have similarities with state institutions nomenclature but it needs to be analyzed whether regional institutions are derivatives of state institutions or instead regional governments are given autonomy to form regional institutions as long as they are regulated in laws and regulations and needed by regional governments. This study used normative juridical methods. The results showed that local governments have the authority to make proposals and procedures for the administration of local government regulated in law because they are accommodated in Article 18 paragraph (7) of the Constitution of the Republic of Indonesia Year 1945 so that if needed, local governments can form regional institutions as long as needed by regional governments and can innovate on regional institutional concepts that are needed and not necessarily conform to the concept of state institutions.

India in SAFTA: Is It Welfare-generating? An Ex-post Analysis

2025-06-20

Saurav Kalita , Lijum Nochi | Journal of Asian Economic Integration

This study evaluates the welfare effects of India’s participation in the South Asian Free Trade Area (SAFTA), focusing on the impact of sensitive lists on trade flows and welfare from … This study evaluates the welfare effects of India’s participation in the South Asian Free Trade Area (SAFTA), focusing on the impact of sensitive lists on trade flows and welfare from 2011 to 2019. Using an ex-post Kemp–Wan model and partial least squares regression, we find that India’s sensitive lists have negatively affected imports, leading to a net welfare loss of $263 million. The study further explores a hypothetical scenario in which all sensitive lists are eliminated, projecting significant welfare gains for India through increased trade and consumer surplus. These findings highlight the restrictive nature of sensitive lists and the potential benefits of deeper tariff liberalisation. The results suggest that pruning sensitive lists should be a priority in future SAFTA negotiations to maximise welfare gains and promote stronger regional integration in South Asia. JEL Classification: F13, F14, F15, F17

Is the WTO Passé? The Impact of Multilateral Economic Integration on Agri‐Food Global Value Chains

2025-06-20

Dongin Kim , Sandro Steinbach | World Economy

ABSTRACT This paper assesses the impact of multilateral commitments under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO) on agri‐food global value chains (GVCs). … ABSTRACT This paper assesses the impact of multilateral commitments under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO) on agri‐food global value chains (GVCs). Against a backdrop of increasing regional trade agreements (RTAs) and questions about multilateralism's efficacy, we evaluate whether multilateral economic integration remains effective in advancing agri‐food GVCs. Relying on the isomorphic gravity framework, we find that GATT/WTO membership promotes agricultural GVC flows, increasing backward linkages by 56.7% and forward linkages by 43.9%, surpassing the effects of RTAs, which enhance backward and forward GVC linkages by only 7.9% and 4.1%, respectively. These results underscore the central role of multilateralism in driving agri‐food GVC integration despite its limitations in reducing agricultural tariffs. Meanwhile, RTAs significantly contribute to GVC integration by fostering connections between countries with substantial income disparities. The transition from GATT to WTO, marked by a more robust institutional framework and binding dispute resolution mechanisms, has further enhanced global agri‐food GVC integration. Our study highlights the continued relevance of multilateral economic integration in fostering agri‐food GVC integration, offering critical insights for policymakers in addressing worldwide trade and food security challenges.

Foreign Affiliates' Position in Global Value Chains and Local Sourcing in Chile: Evidence From Plant‐Level Panel Data

2025-06-20

Yoshimichi Murakami | World Economy

ABSTRACT Local sourcing of intermediate inputs by foreign affiliates is a major source of the positive spillover effects of foreign direct investments (FDIs) in emerging countries. However, few studies have … ABSTRACT Local sourcing of intermediate inputs by foreign affiliates is a major source of the positive spillover effects of foreign direct investments (FDIs) in emerging countries. However, few studies have analysed the determinants of local sourcing; studies using panel data in a specific emerging country are particularly rare. Therefore, this study empirically analyses whether foreign affiliates' upstream positions in global value chains (GVCs) have positive effects on their local sourcing in Chile, which is well integrated into GVCs and its position in GVCs is relatively upstream. By matching industry‐level panel data, including positions in GVCs, to plant‐level panel data, this study constructs a unique dataset for the period from 1995 to 2006. We find that the upstream positions of foreign affiliates in GVCs are positively associated with the share of local material inputs to the total costs. We find that this positive effect is robust to the difference in entry modes between joint ventures and wholly owned subsidiaries, use of lagged affiliate‐level variables, exclusion of affiliates with changes in industry affiliation and industry‐level estimation including a more recent period.

Trade Disintegration and Agri‐Food Trade: <scp>United Kingdom</scp> Exit From <scp>EU</scp>

2025-06-20

Jun Du , Oleksandr Shepotylo , Yujie Shi | World Economy

ABSTRACT This study provides a comprehensive analysis of the impact of the Trade and Cooperation Agreement (TCA) on the United Kingdom's agri‐food trade post‐Brexit. Utilising a difference in differences (DiD) … ABSTRACT This study provides a comprehensive analysis of the impact of the Trade and Cooperation Agreement (TCA) on the United Kingdom's agri‐food trade post‐Brexit. Utilising a difference in differences (DiD) methodology, we find a significant decline in both the value and quantity of UK agri‐food exports and imports post‐TCA, with prices increasing due to additional trade costs imposed by worsened market access and additional border checks. This disruption in trade underscores the necessity for policy interventions to mitigate the adverse effects of the TCA, particularly for maintaining market competitiveness and addressing the specific challenges faced by importers. The study also highlights the importance of legal enforceability in trade agreements, especially concerning agricultural and sanitary and phytosanitary (SPS) provisions, to facilitate market access and enhance trade volumes. Deepening TCA to the Agriculture Extra agreement with legal enforceability would substantially mitigate the trade disruption.

Identifying and explaining the distribution of Chinese-Affiliated Ports around the world: A case control design

2025-06-20

M. Dylan Spencer , E.L. Christiansen , Stephen F. Pires +3 more | Ocean & Coastal Management

Decomposition of carbon emission chains in global value chains and its implications for bilateral trade between China and the United States

2025-06-20

Weiming Chen , Zhenjun Zhang | Environmental Impact Assessment Review

Influencing Determinants of Waste Import Trade: "A case study on ASEAN+6"

2025-06-20

Chinho Lin | The Singapore Economic Review

Analysis of Trade Creation and Trade Diversion Effects in Regional Economic Integration: A Case Study of the North American Free Trade Area

2025-06-20

Ke Xu | Lecture Notes in Education Psychology and Public Media

This article comprehensively reviews the impact of regional economic integration on trade creation and trade transfer, with a particular focus on the North American Free Trade Agreement (NAFTA) and the … This article comprehensively reviews the impact of regional economic integration on trade creation and trade transfer, with a particular focus on the North American Free Trade Agreement (NAFTA) and the subsequent USMCA. By extensively synthesizing various existing literature materials, this study explores in depth the impact of regional economic integration on the economic development of member and non member countries. The article reveals in detail the specific manifestations of trade creation and trade transfer in agriculture and automobile manufacturing, two key industries, during different time periods. The research results indicate that NAFTA and USMCA have effectively promoted trade between these two industries within the region, but have also to some extent triggered trade diversion among non member countries. Although regional economic integration has improved the overall economic welfare level of member countries, it also faces many challenges such as decreased public support and limited policy implementation space. In the future, regional economic integration urgently needs to explore a balance between deepening internal cooperation and effectively addressing the challenges of globalization.

Trade Usage and Transnational Trade Usage: A Comparative Analysis

2025-06-20

Trinh Thuc Hien | VNU Journal of Science Legal Studies

This paper discusses trade usages and transnational trade usages stipulated in the Law on Commerce 2005, comparing them with Anglo-American law and with reference to the United Nations Convention on … This paper discusses trade usages and transnational trade usages stipulated in the Law on Commerce 2005, comparing them with Anglo-American law and with reference to the United Nations Convention on International Sales and the UNIDROIT Principles of International Commercial Contracts. The result demonstrates that trade usage in general should be treated differently from legal custom. Particularly, trade usages and transnational trade usages should be applied based on the parties' explicit or implied consent, enabling their prior application over statutory rules, unless they are inconsistent with general principles of law or mandatory rules. Moreover, the scope of transnational trade usages should be expanded beyond those recognized or issued by international organizations.

Australia's Role in a Multipolar Global Competition Policy Environment

2025-06-20

William E. Kovacic | Routledge eBooks

The local Economic impact of large-scale factory closures: evidence from South Korea

2025-06-19

SangUk Nam , Kyungjin Kim | Applied Economics Letters

Regional trade agreements and safeguard measures

2025-06-19

Yong‐Shik Lee | Edward Elgar Publishing eBooks

Digitalization and the Global Competitiveness of Exported Services

2025-06-19

Selly Sipakoly | Journal of Economics and Management Scienties

As global trade increasingly shifts toward services, many countries struggle to remain competitive in digitally driven markets due to infrastructural gaps, regulatory fragmentation, and firm-level disparities. This literature review investigates … As global trade increasingly shifts toward services, many countries struggle to remain competitive in digitally driven markets due to infrastructural gaps, regulatory fragmentation, and firm-level disparities. This literature review investigates how digitalization reshapes the global competitiveness of exported services. Based on 58 peer-reviewed studies published between 2015 and 2024, the analysis identifies four recurring themes: digital infrastructure, firm-level digital capabilities, regulatory and institutional environments, and structural barriers. Findings show that while digitalization facilitates service scalability, market access, and innovation, competitiveness remains uneven and contingent on a country’s or firm’s ability to align digital assets with institutional coherence and strategic readiness. The review highlights that to enhance digital service competitiveness, governments must prioritize inclusive infrastructure investment, support SMEs in acquiring digital capabilities, harmonize cross-border digital regulations, and mitigate risks tied to platform dependency and cybersecurity. These implications point to the need for coordinated policy responses and long-term strategies that build digital resilience and equitable participation in global service trade.

Bilateral trade and productivity: analysis for trading partners of China and the United States

2025-06-19

Canh Phuc Nguyen , Chrıstophe Schınckus , Binh Quang Nguyen +1 more | Journal of Economics Finance and Administrative Science

Purpose This study investigates the extent to which bilateral trade with China and the United States (US) influences the productivity of trading partners. Design/methodology/approach This study uses panel data estimates … Purpose This study investigates the extent to which bilateral trade with China and the United States (US) influences the productivity of trading partners. Design/methodology/approach This study uses panel data estimates to identify the export and import policy channels separately and then their combination with trade integration and trade balance at both the country and sectoral levels between 99 countries and China and the US, incorporating institutional quality and geopolitical risks. The sample period covers the years 2002–2019, and the two-step generalized method of moments (GMM) is employed as the main estimation method. Findings Trade with China boosts total productivity at constant prices through exports and imports, especially in manufacturing, but reduces welfare-relevant total factor productivity through total trade and trade balance, particularly in agriculture. In contrast, trade with the US consistently enhances all productivity across all channels, except for agricultural imports, which lower welfare-relevant total factor productivity. Institutional quality amplifies the positive effects, while trade uncertainty and US–China tensions reduce them. Originality/value This study provides a comparative, channel-specific and sector-sensitive analysis of trade-productivity links with China and the US, offering timely insights for policymakers involved in navigating shifting global trade dynamics.