scholarly journals Merger Policy in a Quantitative Model of International Trade*

2019 ◽  
Author(s):  
Holger Breinlich ◽  
Volker Nocke ◽  
Nicolas Schutz
Keyword(s):  
International Trade ◽  
Quantitative Model ◽  
Trade Costs ◽  
Oligopolistic Competition ◽  
Merger Policy ◽  
Trade Model ◽  
Level Data ◽  
The Impact ◽  
Industry Level Data ◽  
The U.S

Abstract In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is too tough or too lenient from the viewpoint of the foreign country. We calibrate the model to match industry-level data in the U.S. and Canada. Our results suggest that at present levels of trade costs, merger policy is too tough in the vast majority of sectors. We also quantify the resulting externalities and study the impact of different regimes of coordinating merger policies at varying levels of trade costs.

Capital-Skill Complementarity and the Skill Premium in a Quantitative Model of Trade

2013 ◽  
Vol 5 (2) ◽  
pp. 72-117 ◽  
Author(s):  
Fernando Parro
Keyword(s):  
Technical Change ◽  
Quantitative Model ◽  
Trade Costs ◽  
Relative Price ◽  
Skill Premium ◽  
Unskilled Labor ◽  
Capital Goods ◽  
Trade Model ◽  
Skilled And Unskilled Labor ◽  
The Impact

Technological change has reduced the relative price of capital goods. Reductions in trade costs make it cheaper to import capital goods. With capital-skill complementarity, both can increase the skill premium. I construct a general-equilibrium trade model with capital-skill complementarity to study the impact of changing worldwide trade costs and technologies on the skill premium. The impacts of trade costs and technical change are comparable, especially in developing countries, and much larger than Stolper-Samuelson effects. I find that both skilled and unskilled labor gain from trade, and that larger gains from trade are associated with larger increases in the skill premium. (JEL E22, F11, F16, J24, O33)

scholarly journals International Trade and Foreign Direct Investment as Innovation Factors of the U.S. Economy

2014 ◽  
Vol 41 (1) ◽  
pp. 60-75
Author(s):  
Tomasz M. Napiórkowski
Keyword(s):  
Foreign Direct Investment ◽  
International Trade ◽  
Direct Investment ◽  
Positive Impact ◽  
The United States ◽  
Annual Data ◽  
Main Portion ◽  
The Impact ◽  
Total Impact ◽  
The U.S

Abstract The aim of this research is to asses the hypothesis that foreign direct investment (FDI) and international trade have had a positive impact on innovation in one of the most significant economies in the world, the United States (U.S.). To do so, the author used annual data from 1995 to 2010 to build a set of econometric models. In each model, 11 in total) the number of patent applications by U.S. residents is regressed on inward FDI stock, exports and imports of the economy as a collective, and in each of the 10 SITC groups separately. Although the topic of FDI is widely covered in the literature, there are still disagreements when it comes to the impact of foreign direct investment on the host economy [McGrattan, 2011]. To partially address this gap, this research approaches the host economy not only as an aggregate, but also as a sum of its components (i.e., SITC groups), which to the knowledge of this author has not yet been done on the innovation-FDI-trade plane, especially for the U.S. Unfortunately, the study suffers from the lack of available data. For example, the number of patents and other used variables is reported in the aggregate and not for each SITC groups (e.g., trade). As a result, our conclusions regarding exports and imports in a specific SITC category (and the total) impact innovation in the U.S. is reported in the aggregate. General notions found in the literature are first shown and discussed. Second, the dynamics of innovation, trade and inward FDI stock in the U.S. are presented. Third, the main portion of the work, i.e. the econometric study, takes place, leading to several policy applications and conclusions.

scholarly journals Trade Liberalization and Pollution Havens

2004 ◽  
Vol 3 (2) ◽  
Author(s):  
Josh Ederington ◽  
Arik Levinson ◽  
Jenny Minier
Keyword(s):  
Trade Liberalization ◽  
Trade Agreements ◽  
The United States ◽  
Executive Order ◽  
Direct Mechanism ◽  
Time Period ◽  
Level Data ◽  
Industry Level Data ◽  
Careful Assessment ◽  
The U.S

Abstract U.S. Presidential Executive Order 13141 commits the United States to a careful assessment and consideration of the environmental impacts of trade agreements. The most direct mechanism through which trade liberalization would affect environmental quality in the U.S. is through the composition of industries. Freer trade means greater specialization, increasing the concentration of polluting industries in some countries and decreasing it in others. We begin by documenting the substantial shift in U.S. manufacturing toward cleaner industries from 1972 to 1994. We then use annual industry-level data on imports to the U.S. to examine whether this compositional shift can be traced to the significant trade liberalization that occurred over the same time period, and we conclude that no such connection exists. A shift toward cleaner industries has also occurred among U.S. imports, and we find no evidence that pollution-intensive industries have been disproportionately affected by the tariff changes.

The Impact of International Trade on Democracy: A Long-Run Perspective

2008 ◽  
Vol 60 (4) ◽  
pp. 539-575 ◽  
Author(s):  
J. Ernesto López-Córdova ◽  
Christopher M. Meissner
Keyword(s):  
International Trade ◽  
World War Ii ◽  
Positive Impact ◽  
World War ◽  
Standard Deviation Increase ◽  
Labor Ratio ◽  
Long Run ◽  
Causal Impact ◽  
The Impact ◽  
The U.S

The likely endogeneity between democracy and trade is addressed with an instrumental variables strategy in this article about whether international trade fosters democracy. The authors use a measure of natural openness to obtain estimates of the causal impact of openness on democratization in three separate samples spanning the last 130 years. A positive impact of openness on democracy is apparent in the data over the long run. The post–World War II results suggest that with a rise in trade with other countries equal to a one standard deviation increase, countries such as Indonesia, Russia, and Venezuela could eventually become as democratic as the U.S., Great Britain, or France. There is some variation in the impact of openness by region that may be because trade seems to have a positive impact only when the capital-to-labor ratio is sufficiently high. This is consistent with the idea that openness promotes democracy when it strengthens the economic fortunes of the middle class.

The Impact of Trade on Organization and Productivity*

2012 ◽  
Vol 127 (3) ◽  
pp. 1393-1467 ◽  
Author(s):  
Lorenzo Caliendo ◽  
Esteban Rossi-Hansberg
Keyword(s):  
International Trade ◽  
Trade Liberalization ◽  
Bilateral Trade ◽  
Gains From Trade ◽  
Span Of Control ◽  
Number Of Layers ◽  
Standard Models ◽  
Increase In Productivity ◽  
The Impact ◽  
The U.S

Abstract A firm's productivity depends on how production is organized. To understand this relationship we develop a theory of an economy where firms with heterogeneous demands use labor and knowledge to produce. Entrepreneurs decide the number of layers of management and the knowledge and span of control of each agent. As a result, in the theory, heterogeneity in demand leads to heterogeneity in productivity and other firms' outcomes. We use the theory to analyze the impact of international trade on organization and calibrate the model to the U.S. economy. Our results indicate that, as a result of a bilateral trade liberalization, firms that export will increase the number of layers of management. The new organization of the average exporter results in higher productivity, although the responses of productivity are heterogeneous across these firms. Liberalizing trade from autarky to the level of openness in 2002 results in a 1% increase in productivity for the marginal exporter and a 1.8% increase in its revenue productivity. Endogenous organization increases the gains from trade by 41% relative to standard models.

scholarly journals Trade Liberalization and its Environmental Impact in India: An Empirical Analysis

2018 ◽  
Vol 7 (1) ◽  
pp. 111-119
Author(s):  
Ranjan Aneja ◽  
Ummed Singh
Keyword(s):  
Trade Liberalization ◽  
Significant Contribution ◽  
Manufacturing Industries ◽  
Economic Activities ◽  
Environmental Consequences ◽  
Pollution Haven ◽  
Level Data ◽  
Pollution Haven Effect ◽  
The Impact ◽  
Industry Level Data

The debate on the impact of trade on environment is pertinent considering the increasing volume of trade among world nations and the changes in environmental quality. In India, this increase was higher because of the gradual lifting of the quantitative restrictions and reduction in tariffs after trade liberalization in 1991. The pollution haven effect occurs when trade liberalization, coupled with lax environmental regulations results in increasing economic activities in pollution intensive industries. Using industry level data for the period 1998-2008, for fifty eight manufacturing industries in India, this paper looks at output and export trends and attempts to examine, whether trade liberalization is associated with a shift in production and exportation towards pollution intensive goods industries (pollution haven effect). Manufacturing output has been significantly higher from the water pollution intensive sectors compared to the air and toxic pollution intensive sectors. This evidence provides some support for concerns that there is significant contribution in production of manufacturing industries from dirty industries. The results of the study suggest that while trade liberalization measures have been pursued to promote economic growth in India but they have led to some potentially adverse environmental consequences.

scholarly journals Railroads of the Raj: Estimating the Impact of Transportation Infrastructure

2018 ◽  
Vol 108 (4-5) ◽  
pp. 899-934 ◽  
Author(s):  
Dave Donaldson
Keyword(s):  
Real Income ◽  
Trade Costs ◽  
Transportation Infrastructure ◽  
Reduced Form ◽  
Sufficient Statistic ◽  
Income Levels ◽  
Colonial India ◽  
Trade Model ◽  
Railroad Network ◽  
The Impact

How large are the benefits of transportation infrastructure projects, and what explains these benefits? This paper uses archival data from colonial India to investigate the impact of India's vast railroad network. Guided by four results from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) increased real income levels; and (4) that a sufficient statistic for the effect of railroads on welfare in the model accounts well for the observed reduced-form impact of railroads on real income in the data. (JEL H54, L92, N75, O22, R12, R42)

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