Free lunch or vital support? Export promotion in The Netherlands

Purpose The purpose of this paper is to add to the debate concerning the merits of export promotion efforts by governments by investigating the effect of export promotion program (EPP) participation on the export performance of Dutch small and medium-sized enterprises (SMEs). Design/methodology/approach The authors confront participation data of an EPP targeting SMEs with rich firm-level data and use propensity score matching techniques combined with regression analysis. Findings The authors show that exports generated by participants do generally rise in the years after program entry, however, export growth does not outpace that of comparable, but unsupported firms. Nonetheless, there is some evidence suggesting that export shares in sales rise faster among program entrants, particularly in the first and second years after participation. Furthermore, the authors present evidence suggesting that the probability of becoming a permanent exporter is higher for participants relative to beginning exporters that did not receive support from the program. Originality/value The analysis contributes to the still relatively small literature dealing with the impact of government export promotion instruments on export performance using firm-level micro-data. The subject of analysis are Dutch small businesses. SMEs, particularly operating in advanced economies, are a group that is not frequently considered separately in this respect.

Gulf Cooperation Council (GCC) and Regional Integration in Asia

In Asia, SAARC (South Asian Association of Regional Cooperation), ASEAN (Association of South East Asian Nations) and GCC (Gulf Cooperation Council) are being considered as an active regional trading blocs although East Asian integration is on primary cooperation stage and BIMSTEC is treated as organised sub-regional trading bloc. The GCC has completed all criterion of economic integration except introduction of a single currency and ASEAN is advancing its optimum stage of monetary integration but the advancement of SAARC is halted by the shock of non-cooperation from Pakistan. Therefore, contribution of GCC in integrating Asian bloc is to scrutinise in a new outlook. In this paper, the author endeavours to show the impact of economic integration of Gulf Cooperation Council (GCC) on the Asian economic integration in the sense that the process of integration of GCC with SAARC and ASEAN can accelerate the criterion of Asian integration process. Therefore, the author used cointegration and vector error correction model among the indicators of trade integration of exports such as Asian export share, intra export share of GCC, export concentration index of GCC, ASEAN’s export with GCC and SAARC’s export with GCC during 1995-2019. Similarly, the author applied same methodology among the trade indicator of imports such as Asian import share, intra import share of GCC, import concentration index of GCC, ASEAN’s import with GCC and SAARC’s import with GCC during the specified period. The findings revealed that Asian export share has long run significant causalities with SAARC and ASEAN export shares to GCC. Intra export share of GCC has long run causalities with SAARC and ASEAN export shares to GCC. The export concentration index of GCC has significant long run causalities with SAARC and ASEAN export shares to GCC respectively. Even, the short run causalities from export concentration index of GCC to intra export share of GCC, export share of ASEAN and SAARC with GCC and the short run causality from ASEAN export share with GCC to export share of Asia and from intra export share of GCC to export share of ASEAN with GCC were strictly observed. Again, the import share of Asia has long run causalities with the import shares of ASEAN and SAARC with GCC. The intra import share of GCC has long run causalities with the import shares of ASEAN and SAARC with GCC and the import concentration index of GCC has long run causalities with the import shares of ASEAN and SAARC with GCC respectively. The intra import share of GCC has short run causalities with import share of Asia, import concentration index of GCC and import share of ASEAN with GCC respectively. The import concentration index has short run causality with the import share of Asia. The import share of SAARC with GCC has short run causality with import share of ASEAN with GCC. The cointegration and vector error correction among Asian GDP, sum of intra export and import shares of GCC, sum of export and import shares of ASEAN with GCC, and sum of export and import shares of SAARC with GCC during 1995-2019 indicated that the GDP of Asia has long run causalities with the sum of intra export and import shares of GCC, the sum of export and import shares of ASEAN with GCC and the sum of export and import shares of SAARC with GCC and even they have short run causalities also. All these observations can justify that GCC has great impact on Asian economic integration process associated with SAARC and ASEAN.

Effects of the Exchange Rate on the Export Share of Sales in Borsa Istanbul Firms

For many years, the current account deficit problem is on the agenda of policymakers and academics in Turkey. With the exchange rate shock experienced in 2018, the importance of the current account deficit has become clearer. The relationship between exchange rates and trade flow is one of the issues frequently discussed in the literature. In this study, to contribute to the subject from a different perspective, the 12-year data of 230 companies traded on Borsa Istanbul from 2008 to 2019 were used and the share of these companies' exports in their total sales was analyzed. According to the research findings, there is a strong, statistically significant, and positive relationship between real Euro/USD exchange rate and export shares of Turkish firms. There is also a positive relationship between the real Euro rate and export share of automotive firms in Borsa İstanbul.

Always a Winning Strategy? Wage Moderation’s Conditional Impact on Growth Outcomes

Wages and wage bargaining institutions are foundational components of comparative capitalism research. Supply-side comparative capitalism research has often assumed that wage moderation—facilitated through highly coordinated wage-setting institutions—produces beneficial growth outcomes. This supposition stems from the logic that restrained unit labor cost growth causes firms to increase employment and output. However, through its demand-side perspective, new growth model literature questions the virtues of wage moderation, because the restraint of wages can be detrimental to growth via its suppression of domestic consumption. This chapter empirically tests under what conditions will wage moderation produce economic growth. Using a first-difference, distributive lag panel analysis of eighteen OECD countries from 1970 to 2015, its findings largely resonate with predictions within the growth model literature. In the presence of wage restraint, countries with larger export shares and highly coordinated wage-setting institutions realize higher growth and lower unemployment than countries with smaller export shares and uncoordinated wage-setting institutions. In contrast, wage inflation produces better growth outcomes for countries with uncoordinated wage-setting, relative to those with highly coordinated wage-setting institutions. These results suggest that wage restraint is not a winning strategy for all growth models. Rather, wage moderation is associated with better growth (and unemployment) outcomes only for countries with export-led growth strategies.

Aspects of the European natural gas market in the dynamic context of global energy resources

The purpose of this article is to illustrate the structural changes of the European natural gas market through the lenses of the dynamic economic relations between European Union and its biggest energy supplier, Russia. The economic and political aspects are two essential dimensions to understand the measures taken by the EU in order to assure their security of supplies and at the same time to observe the Russian capacities to maximize their profits driven from its vast energy resources. Otherwise Russia is experiencing some difficulties in increasing its export shares on the European gas market, owing to several geopolitical challenges. Nevertheless, the relation between these two blocks could be defined as one of interdependence and symbiosis due to the evolution of the energy trade agreements. We attempt to identify those different market fundamentals and economic processes that have led to the mismatch between the crescent liberalisation in the EU gas sector and the Russian approach to energy market governance.

BEYOND CONVENTIONAL TRADE: TRADE OPENNESS IMPLICATIONS OF TRADE IN VALUE ADDED

This study compares the impacts of gross trade openness measures with trade openness in value-added measures on economic growth for the years 1995–2014 by employing a dynamic panel data estimation. Our findings suggest that although gross trade shares promote growth, using value-added trade shares magnifies this positive effect. Compared with gross terms, estimates also imply that while exports in value-added terms have much larger growth effect, imports in value-added terms have no significant impact. We then evaluate the impacts of tariffs on growth in terms of gross trade and trade in value added separately. Although our results imply the negative growth effects of gross import tariffs, this negative impact disappears for tariffs in value-added terms. These results reaffirm that trade protectionism has potential to lower global growth through reducing exports because it is clear that export shares regardless of their measurements and disaggregation levels promote growth. Our results indicate that countries should support not only exports of final products but also exports of intermediates. However, given the necessity of imports for exports, our results do not lend any evidence to discourage overall imports.

A PANEL ANALYSIS FOR DETERMINING THE VARIABLES AFFECT FDI INFLOWS TOWARDS FRAGILE FIVE COUNTRIES

Globalization is increasing since the mid-1990s. Along with the globalization, increased international trade caused the foreign direct investment (FDI) inflows for economies. Economists often emphasize that FDI contributes developing countries to confront the international competition by boosting their economy, increasing productivity and export capacity. This paper aims to investigate the factors that affect the FDI flows towards the Fragile Five countries (Turkey, Brazil, India, Indonesia, South Africa) for 1994-2017 through panel data analysis. The results from the panel ordinary least square indicate that political freedom as a proxy variable of institutional quality, real exchange rate, and the degree of productive knowledge and capability of the Fragile Five countries are statistically significant determinants of FDI attraction. Thus, developing countries, aiming to increase FDI inflows have to strengthen their political conditions and stabilization of their exchange rates. As well as, it is important to increase these countries’ export shares of the more complex product in order to be able to attract more FDI.

The impact of globalization on the business position of European Union

We are meeting with the term globalization for many years. The globalization process sets in motion goods, services, financial flows, information, through globalization come to the mobility of people, the workforce and globalization is also a power drive to move the whole world. This paper deals with the contribution of globalization to the EU market. The aim is to find out to what extent EU countries are involved in world trade. It also points to the position of the World Trade Organization, which is the only organization connecting the countries of the world, with the aim strengthening of world trade and ensuring its liberalization. We assume that the EU as the largest integration group in the world will play an important role in world trade and that EU countries will be among the top 10 world players. The document contains an analysis of the EU’s position in world trade. The methodology used is based on comparing the export shares of the top 10 world trade countries and assessing how the countries of the EU positioned on the scale in 2018. The discussion deals with assessing the findings and estimating the situation in the future.

THE PROGRESSIVE EXPORT TAX AND INDONESIA’S PALM OIL PRODUCT EXPORT COMPETITIVENESS

Abstrak Hubungan antara daya saing produk kelapa sawit dan intervensi kebijakan pemerintah di Indonesia masih sering menjadi perdebatan diantara pemangku kepentingan. Terkait dengan hal tersebut, penelitian ini menganalisis hubungan antara pajak ekspor progresif dengan perubahan pangsa ekspor CPO Crude Palm Oil (CPO) dan Refined Palm Oil (RPO) serta mengkaji daya saing kedua komoditi. Metode yang digunakan adalah Revealed Compared Advantage (RCA) dan Export Product Dynamic (EPD) untuk mengukur perubahan pangsa ekspor serta tingkat daya saing produk CPO dan RPO ke negara tujuan utama ekspor. Untuk melihat dampak kebijakan tersebut, kajian ini membandingkan sebelum dan sesudah diberlakukannya kebijakan pajak ekspor progresif pada akhir tahun 2007 dan menggunakan data bulanan ekspor produk CPO dan RPO periode 1997-2018. Hasil analisis menunjukkan bahwa setelah diberlakukannya pajak ekspor progresif, pada komoditi CPO telah terjadi penurunan pangsa ekspor sebesar 21% dan pergeseran tingkat daya saing produk dari posisi Rising Star ke Lost Opportunity. Sebaliknya pada komoditi RPO terjadi peningkatan pangsa ekspor dan daya saing dari Falling Star ke Rising Star. Peningkatan pangsa ekspor dan daya saing RPO merupakan salah satu pencapaian dari tujuan kebijakan pajak ekspor. Analisis ini memberikan catatan penting bagi pemerintah dalam membuka alternatif pasar baru dengan tetap mempertahankan pangsa ekspor di negara tujuan ekspor utama. Kata Kunci: CPO, Pajak Ekspor, Daya saing, RCA, EPD Abstract The relationship between Indonesia’s palm oil product competitiveness and the government's policy intervention is still disputable among stakeholders. This research analyzes the association between the progressive export tax and the changes in export shares of Crude Palm Oil (CPO) and Refined Palm Oil (RPO) as well as the competitiveness of both commodities. Revealed comparative advantage (RCA) and export product dynamic (EPD) are used to measure the change in the export shares of CPO and RPO as well as of their export competitiveness to the main destination countries. To examine the impact of this policy, this research compares before and after the enactment of a progressive export tax policy at the end of 2007 and uses monthly export data for CPO and RPO products for the period 1997-2018. The result finds that after the enactment of the progressive export tax of CPO , the export share of CPO declined by 21% and the level of competitiveness of CPO products moved from Rising Star to Lost Opportunity compared with the condition during 1997-2007. In contrast, the export share of RPO products increased and its competitiveness level moved to a better position from Falling Star to Rising Star. Although shifting the export value of both CPO and RPO, as one of the objectives of the implementation of the export tax, was achieved, this study is highlighting essential commentary in which policymaker still needs to search for new export markets while maintaining export shares in the main export destinations. Keywords: CPO, Export Tax, Competitiveness, RCA, EPD JEL Classification: Q17, F13, O24