scholarly journals Effect of the Utilization of Non-Reciprocal Trade Preferences offered by the QUAD on Economic Complexity in Beneficiary Countries

2021 ◽  
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Jel Classification ◽  
Development Aid ◽  
Product Diversification ◽  
Economic Complexity ◽  
Generalized System ◽  
Generalized System Of Preferences ◽  
Generalized Methods Of Moments ◽  
Trade Preferences ◽  
Methods Of Moments ◽  
Positive Effect

Abstract This article aims to contribute to the nascent literature on the effect of non-reciprocal trade preferences (NRTPs) on industrialization in beneficiary countries. In so doing, it complements the few existing works on the effect of NRTPs on export product diversification by investigating the effect of NRTPs (both the Generalized System of Preferences- GSP programs- and other non-reciprocal trade preferences) offered by the QUAD countries on the level of economic complexity in beneficiary countries. The analysis has relied on 110 beneficiary countries of these NRTPs over the period 2002–2018, and made primarily use of the two-step system Generalized Methods of Moments estimator. The findings are quite interesting. First, beneficiary countries tend to use GSP programs (rather than other trade preferences) to achieve greater economic complexity, and the positive effect of the utilization of GSP programs on economic complexity is higher for high income beneficiary countries than relatively less advanced beneficiary countries. Second, both GSP programs and other non-reciprocal trade preferences are strongly complementary in promoting economic complexity in beneficiary countries, in particular if their usage reach high levels. Third, the utilization of NRTPs enhances economic complexity in countries that receive high foreign direct investment flows. Finally, development aid flows are strongly complementary with the utilization of NRTPs in fostering economic complexity in beneficiary countries, especially for high amounts of development aid. This suggests the need for preference-granting countries (that are also suppliers of development aid) to offer both generous NRTPs and higher development aid flows if those NRTPs are to be effective in expanding the manufacturing base in the beneficiary countries.Jel Classification: F13; F14; O14.

scholarly journals Effect of Productive Capacities on Economic Complexity: Do Aid for Trade flows Matter?

2021 ◽  
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Scale Up ◽  
Developed Countries ◽  
Least Developed Countries ◽  
Economic Complexity ◽  
Generalized Methods Of Moments ◽  
Aid For Trade ◽  
Low Levels ◽  
Methods Of Moments ◽  
First Time ◽  
Positive Effect

Abstract The COVID-19 health pandemic has exposed the strong vulnerabilities of countries, including developing ones to shocks, and underlined the need for exploring ways to strengthen countries' resilience to future shocks. The current paper uses the dataset made recently available by the United Nations Conference on Trade and Development (UNCTAD) to examine (for the first time) the effect of productive capacities on economic complexity. The analysis further investigates whether Aid for Trade (AfT) flows matter for the influence of productive capacities on economic complexity in recipient-countries. The analysis uses a sample of 126 countries (including both developed and developing countries) over the period 2002-2018, and adopts the two-step system Generalized Methods of Moments (GMM) approach. Results have shown that productive capacities exert a positive effect on economic complexity over the full sample. However, the magnitude of this positive effect varies across different sub-samples, with Least developed countries (LDCs) enjoying the lowest magnitude of this positive effect. Furthermore, total AfT flows are positively associated with economic complexity, with LDCs enjoying a higher positive effect than other countries. Interestingly, total AfT flows exert a higher positive effect on economic complexity in countries that experience low levels of overall productive capacities. The latter finding highlights the need for donor-countries to scale-up AfT flows in favour of countries (such as LDCs) that are characterized by low levels of productive capacities. Finally, the empirical outcomes indicate that productive capacities enhance economic complexity in countries that receive higher amounts of total NonAfT flows.

Structural Economic Vulnerability and the Utilization of Unilateral Trade Preferences: Does Development Aid Matter?

2021 ◽  
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Development Aid ◽  
Trade Preference ◽  
Economic Vulnerability ◽  
Generalized System ◽  
Generalized System Of Preferences ◽  
Trade Preferences ◽  
Conclusion Section

Abstract This article has investigated the effect of structural economic vulnerability on the utilization of non-reciprocal trade preferences (NRTPs) offered by the 'Quadrilaterals' and whether development aid flows alter this effect. It considers two major blocks of NRTPs, namely the Generalized System of Preferences (GSP) programs and 'other trade preferences programs'. The analysis uses a panel dataset of 84 beneficiary countries of both NRTPs and development aid, over the period of 2002-2019. Results reveal that a rise in the level of structural economic vulnerability reduces the utilization rates of both GSP programs and other trade preference programs. At the same time, when the level of structural economic vulnerability falls, countries tend to use both blocks of NRTPs in a complementarity way. While development aid inflows foster the utilization of the two blocks of NRTPs, the increase of these resource inflows in the context of greater structural economic vulnerability leads beneficiary countries to strengthen the utilization of other trade preferences programs at the expense of the utilization of GSP programs. The implications of these results are discussed in the conclusion section of the article.

scholarly journals European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries (WT/DS246/AB/R)

2006 ◽  
Vol 5 (S1) ◽  
pp. 220-253 ◽  
Author(s):  
Gene M. Grossman ◽  
Alan O. Sykes
Keyword(s):  
Developing Countries ◽  
Legal Authority ◽  
Most Favored Nation ◽  
Policy Area ◽  
Generalized System ◽  
Preferential Tariff ◽  
Generalized System Of Preferences ◽  
Trade Preferences ◽  
Enabling Clause ◽  
Unanimous Agreement

The WTO case brought by India in 2002 to challenge aspects of the European Communities’ Generalized System of Preferences (GSP) brings fresh scrutiny to a policy area that has received little attention in recent years – trade preferences for developing countries. The idea for such preferences emerged from the first United Nations Conference on Trade and Development (UNCTAD) in 1964. The ensuing negotiations led to Resolution 21(ii) at the second session of UNCTAD in 1968, acknowledging “unanimous agreement” in favor of the establishment of preferential arrangements. Tariff discrimination violates the most-favored nation (MFN) obligation of General Agreement on Tariffs and Trade (GATT) Art. I, however, and thus the legal authority for preferential tariff schemes had to await a GATT waiver of this obligation, which came in 1971. The waiver was to expire after 10 years, but the authority for preferences was extended by the GATT Contracting Parties Decision of November 28, 1979 on Differential and More Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries, popularly known as the “Enabling Clause,” and now incorporated into the law of the WTO along with the GATT itself.

Market differences and adjustment speed of debt, equity, and debt maturity

2020 ◽  
pp. 031289622096826
Author(s):  
Hasan Tekin
Keyword(s):  
Global Financial Crisis ◽  
Jel Classification ◽  
Debt Maturity ◽  
The United Kingdom ◽  
Adjustment Speed ◽  
Generalized Methods Of Moments ◽  
Trade Credits ◽  
The Global Financial Crisis ◽  
Methods Of Moments

This article investigates the role of market differences and the global financial crisis 2007–2009 (GFC) on the adjustment speed of debt issuance, equity issuance, and debt maturity. The sample of 9731 firm-years from highly regulated Main Market (MAIN) and slightly unregulated Alternative Investment Market (AIM) in the United Kingdom was used. Employing system generalized methods of moments, the findings show that AIM firms have a faster adjustment speed of debt and equity before the GFC than MAIN firms. However, it is vice versa after the GFC because AIM firms face greater problems in accessing finance due to the shrinkage of bank credits during the recession. Besides, MAIN firms have faster adjustments on long-term debt over the time, whereas AIM firms have faster adjustment speed of trade credits. Overall, investors should consider market differences and recessions to take accurate decisions on debt-equity and debt maturity to invest where and when. JEL Classification: C26, G01, G32

scholarly journals Tourism Specialization, Absorptive Capacity, and Economic Growth

2016 ◽  
Vol 56 (4) ◽  
pp. 423-435 ◽  
Author(s):  
Glauco De Vita ◽  
Khine S. Kyaw
Keyword(s):  
Economic Growth ◽  
Absorptive Capacity ◽  
System Development ◽  
Financial System ◽  
Policy Implications ◽  
Level Of Economic Development ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
The Relationship ◽  
Positive Effect

This article investigates the relationship between tourism specialization and economic growth while accounting for the absorptive capacity of host (tourism destination) countries, defined in terms of financial system development. We use the system generalized methods-of-moments (SYS-GMM) estimation methodology to investigate this relationship for 129 countries over the period 1995–2011. The results support the hypothesis that the positive effect of tourism specialization on growth is contingent on the level of economic development as well as the financial system absorptive capacity of recipient economies. Consistent with the law of diminishing returns, we also find that for countries with a developed financial system, at exponential levels of tourism specialization, its effect on growth turns negative. Significant policy implications flow from these findings.

Does Corruption Facilitate Growth? A Cross-national Study in a Non-linear Framework

2017 ◽  
Vol 6 (2) ◽  
pp. 178-193
Author(s):  
Shrabani Saha ◽  
Girijasankar Mallik ◽  
Dimitrios Vortelinos
Keyword(s):  
Fixed Effects ◽  
Jel Classification ◽  
National Study ◽  
Alternative Measure ◽  
Linear Framework ◽  
Non Linear ◽  
Generalized Methods Of Moments ◽  
Panel Fixed Effects ◽  
Cross National Study ◽  
Methods Of Moments

The article examines the corruption–growth relationship in a non-linear framework using panel fixed effects (FE) and system generalized methods of moments (SGMM) model for over 110 countries for the period 1984–2009. The results reveal that the least corrupt countries enjoy higher growth rates, whereas highly corrupt countries experience low growth. Furthermore, corruption has a positive and significant effect on economic growth up to a certain level and thereafter it reduces growth. The results are robust under various methodology and an alternative measure of corruption. JEL Classification: D73, O47, O50

Empirical Regularities of Inflation Volatility: Evidence from Advanced and Developing Countries

2017 ◽  
Vol 6 (1) ◽  
pp. 133-156
Author(s):  
Shesadri Banerjee
Keyword(s):  
Developing Countries ◽  
Developing Economies ◽  
Research Question ◽  
Jel Classification ◽  
Price Inflation ◽  
Country Level ◽  
Long Run ◽  
Generalized Methods Of Moments ◽  
Empirical Regularities ◽  
Methods Of Moments

How does volatility of inflation differ across the economies? Addressing this research question, the article undertakes an empirical exercise on monthly consumer price inflation over the sample period of M01, 1958 to M02, 2016 for 41 countries using the generalized autoregressive conditional heteroscedasticity (GARCH) (1, 1) model. The country-level analysis shows a modest difference of conditional volatility of inflation between the advanced and developing economies. However, this difference increases after controlling the country-specific traits by fixed effect panel estimation using generalized methods of moments on the estimated GARCH series. It is observed that, in the long run, the conditional variability of inflation is nearly three and half times greater in developing countries compared to advanced countries. JEL Classification: E10, E30, E31

scholarly journals Drought and Property Prices: Empirical Evidence from Provinces of Iran

2020 ◽  
Author(s):  
Mohammad Reza Farzanegan ◽  
Mehdi Feizi ◽  
Hassan F. Gholipour
Keyword(s):  
Panel Data ◽  
Dynamic System ◽  
Fixed Effects ◽  
Time Trend ◽  
Land Prices ◽  
Property Prices ◽  
Generalized Methods Of Moments ◽  
The Difference ◽  
Methods Of Moments ◽  
Positive Effect

AbstractThis study examines the effect of drought on housing and residential land prices in Iran. Using panel data covering the 2006–2015 period for 31 provinces of Iran and applying a dynamic system and the difference Generalized Methods of Moments (GMM) methods, we find that an increase in the balance of water (reducing the severity of drought) within provinces has a positive effect on property prices. Our results are robust, controlling for province fixed effects, time trend, and a set of control variables that may affect property prices.

scholarly journals Effect of Export Product Quality on Export Product Diversification at the Extensive Margins

2021 ◽  
Vol 1 (1) ◽  
Author(s):  
Sèna GNANGNON
Keyword(s):  
Product Quality ◽  
Product Diversification ◽  
Policy Implications ◽  
Linear Effect ◽  
Generalized Methods Of Moments ◽  
Conclusion Section ◽  
Methods Of Moments ◽  
Export Product ◽  
Export Product Diversification

This paper explores the effect of improvement in export product quality on export product diversification at the extensive margins. The analysis relies on a sample of 135 countries (both developed and developing countries) over the period 1970-2014. It uses the two-step system Generalized Methods of Moments (GMM) estimator to perform the empirical exercise. Results show the existence of a non-linear effect of export product quality on export product diversification at the extensive margins: improvement of export product quality in countries with low levels of export product quality leads to greater export product diversification at the extensive margins. However, countries with a high quality of export products experience greater export product concentration at the extensive margins. The SE findings have policy implications discussed in the conclusion section of the paper.

Does Poverty Matter for Tax Revenue Performance in Developing Countries?

2021 ◽  
pp. 227797872110335
Author(s):  
Sèna Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Developed Countries ◽  
Jel Classification ◽  
Development Aid ◽  
Tax Revenue ◽  
Least Developed Countries ◽  
Data Set ◽  
Performance Effect ◽  
Generalized Methods Of Moments ◽  
Negative Effect

This article explores the effect of poverty on tax revenue performance (tax revenue share), using an unbalanced panel data set of 102 developing countries over the period from 1996 to 2015. Based on the two-step system generalized methods of moments (GMM) approach, the empirical analysis shows that higher poverty rates significantly reduce tax revenue performance in developing countries. However, the magnitude of this negative effect is lower in least developed countries (LDCs) than in other countries of the sample. The analysis has also revealed that the tax revenue performance effect of poverty depends on the level of household consumption as well as the prevailing unemployment rate in the economy. Finally, development aid inflows help to mitigate the negative effect of poverty on tax revenue performance in developing countries. These findings not only highlight the importance of poverty for tax revenue performance in developing countries, but they additionally show that the provision of higher amounts of development aid to these countries could help them mitigate the adverse tax revenue effect of poverty, and even allow them to enjoy higher tax revenue performance, which is key for attaining their development objectives. JEL Classification: I30, I32, H20

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