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Highlights • Countries' transition into non-traditional exports attracts policy attention. We unpack the channels behind this evolution. • We combine cross-country exports data (1990–2010) with measures of Marshallian linkages: technology, labor and input-output. • We find that countries tend to diversify towards technologically related products. • Developing countries also tend to diversify upstream of current exports, not through downstream processing. • This last finding is consistent with Albert Hirschman's claim in his classical work of 1958. Abstract The transition into non-traditional export activities attracts important policy and academic attention. Using international trade data, we explore how alternative linkages relate to the take-off and acceleration of export industries. Concretely, we run a horse-race among alternative Marshallian linkages across sectors: input-output relations, technology and labor. Technology has a predictive power depending on the specification used. We consistently find, however, that export take-offs are more likely to occur in sectors that are upstream to already competitive export industries. Our findings, which are mostly driven by developing economies, are consistent with Albert Hirschman's 60-year-old view that the forces behind upstream linkages fueled the growth of new competitive industries in the developing world. [ABSTRACT FROM AUTHOR]

Un aspecto fundamental de los países en desarrollo es la existencia de un gran sector informal. En el presente trabajo se analiza el efecto que este rasgo tiene sobre la relación entre las variaciones en el desempleo y el crecimiento de la producción en el caso de México, un país que se caracteriza por la existencia de un gran sector informal. Partiendo de estudios recientes sobre el coeficiente de Okun, en primer lugar, pondremos a prueba si la relación ente los componentes cíclicos de desempleo y producción es asimétrica. A continuación, exploraremos la posibilidad de que esta relación no lineal pueda verse afectada por variaciones en el sector informal. Nuestros resultados apuntan a la existencia de una relación asimétrica entre los componentes cíclicos. [ABSTRACT FROM AUTHOR]

This article investigates how combining global value chain and innovation system approaches can help to foster an understanding of the possible trajectories that learning and innovation may take in developing countries. Based on the wealth of empirical evidence collected in the special issue, we introduce the notion of the co-evolution of global value chains and innovation systems and outline a framework for investigating the interaction between the two in a dynamic perspective with multiple trajectories. We find that, in some cases, there is an improvement in local innovation capabilities with potentially positive effects on overall competitiveness, while in others there is little progress or even a loss of previous innovation capacity. [ABSTRACT FROM AUTHOR]

This paper explains how successful innovation systems interact with trade and global value chains (GVC) participation to foster learning and technological upgrading. It conducts an empirical investigation of 74 developing countries for 3 years, 2000, 2005 and 2010, to show that, while some countries manage to trade and export across a large number of technological export categories, many remain embedded in the export of low technology goods with little movement technologically. The analysis looks at why this is the case and what factors account for how firms are able to leverage trade to learn and upgrade in some instances, but not all. The results show that the ability to technologically diversify across export categories is linked to stronger innovation systems, as measured by national capability indicators, such as public R&D investments, scientific publications, intellectual property payments and patents by residents. The results also confirm the rise of several outperforming countries, the emerging economies. We conclude that, in successful, outperforming countries, firms rely on several attributes of the innovation system to leverage knowledge flows within and outside of GVCs to build export capacity and diversify horizontally into new GVCs. [ABSTRACT FROM AUTHOR]

In this paper we investigate the relationship between participation in global value chains (GVCs) and countries’ innovation performance. We use the recently released world input-output database to build spillover variables by weighting the aggregate R&D stock of partners supplying inputs with two alternative measures of participation in GVCs: the share of foreign value added in a country’s gross exports and the offshoring index. We use these indicators to test empirically the relationship between a country’s innovation performance, proxied by patent per capita, and spillovers generated by GVCs. Our results show that the involvement in GVCs, in particular for developing countries importing inputs from advanced economies, is positively related with a country’s innovation outcome suggesting that international fragmentation of production can indeed be a channel allowing for international technology transfer from developed to developing countries. [ABSTRACT FROM AUTHOR]

A literary criticism of the book "Wealth of Nations," by Adam Smith is presented. Topics discussed include how Smith acknowledged labor implications of the expansion of developing nations into manufacturing and commerce, factors associated with population structures such as fertility and mortality, and potential reasons behind the stagnation of agricultural societies.

Transnational crime brings substantial foreign capital into a number of fragile and developing states. Yet the economic and political impacts of such capital have rarely been studied, due to the challenges of obtaining accurate data on illicit activities. We overcome this challenge by compiling a dataset on the amount and disbursement dates of ransom payments made by ship owners and insurers to Somali pirates from 2005 to 2012, along with sub-national commodity prices and trade flows in Somalia. Using a difference-in-differences strategy, we find that ransoms have effects similar to those associated with the Dutch Disease. These effects include appreciating the local currency, decreasing export competitiveness, and increasing import dependence. Our results illuminate a new and distinct channel through which illicit capital can undermine long-term economic development and foster an economic and political dependency on illicit sectors. [ABSTRACT FROM AUTHOR]

Micro and small enterprises in developing countries rarely upgrade and grow. The reasons are disputed. Recently, the 'Doing Business' reports strongly influenced the policy agenda, attributing small enterprise stagnation mainly to excessive bureaucracy and over-regulation. They claim a strong causal relationship running from regulatory reform and formalisation to business performance and overall economic growth and advocate reforms to reduce the complexity and cost of regulation. Our findings from research in the Philippines, India and Egypt challenge this view. Bureaucratic hurdles are of secondary importance. Entrepreneurs who want to formalise are usually able to do so. Formalisation usually comes after a firm has upgraded, i.e. when the entrepreneur perceives that the advantages of formalisation outweigh its disadvantages. Success in upgrading is strongly related to entrepreneurial attitudes and skills: know-how, proactive search for market opportunities, risk-taking attitude and creativity in dealing with financial constraints and deficits in the rule of law. [ABSTRACT FROM AUTHOR]

By modeling an international industry where developed and developing countries' firms reciprocally trade differentiated goods under global pollution and the incomplete internalization of the pollution externality, we examine the firms' dumping and anti-dumping duty (ADD). We assume that the product quality, pollution emissions, and consumer's pollution internalization are worse in the developing country. We find, among others, that the developing country's firm always conducts dumping, but the developed country's firm only does so under a certain condition and that if the two countries' internalization degrees of the pollution externality are the same, the firms' dumping disappears, regardless of product qualities and units of pollution emissions. We also show that a rise in the developed (developing) country's ADD decreases (increases) global pollution and that a rise in a country's ADD always decreases its rival country's welfare, but there is the possibility that it also reduces its own welfare in a certain case. [ABSTRACT FROM AUTHOR]

This study examines the role of intellectual property rights ( IPRs) in contractual research and development (R&D) in developing countries. We find that strong IPRs provide incentives for firms, both multinational and local, to specialize in R&D activities in which they have competitive advantage (the specialization effect). They also facilitate the switching process from imitators to potential innovators for local firms (the switching effect). Moreover, we also demonstrate that a multinational firm's strategic IPRs enforcement behavior can be an effective instrument for subsidizing contractual R&D in developing countries (the subsidizing effect). We further illustrate how a policy mix of IPRs and a foreign direct investment subsidy in these countries affects R&D activities by adding an offshore R&D subsidiary as an additional organizational form. ( JEL L13, O31, O34) [ABSTRACT FROM AUTHOR]

El artículo discurre sobre la relación entre la mejora de la producción de bienes y el progreso de un país. Los autores comentan sobre los desafíos asociados con abriendo la economía de un país al exterior o protegiendo el sector de la competencia del exterior. También se considera el posible impacto en el desarrollo de un país emergente.

Summary The Aid for Trade (AfT) Initiative was launched in 2005 at the Hong Kong Ministerial Conference where high-income countries pledged to increase their AfT contributions to developing countries. AfT, comprised almost entirely of aid for trade-related infrastructure and building productive capacity, would promote growth by easing supply-side constraints and improving transportation, energy, and communication infrastructure. By lowering costs of operating in recipient countries, AfT may increase both trade and investment. Most research on the effects of AfT on international transactions focuses on trade. The sparse research on investment investigates aid and net foreign direct investment flows based on the international balance of payments. We contribute to the literature by assessing AfT effects on new greenfield investment. Using bilateral data for 25 donor and 120 recipient countries for the period 2003–13, we find that bilateral AfT promotes greenfield investment. Our preferred specification includes bilateral and country-time fixed effects and employs the Poisson Pseudo-Maximum Likelihood (PPML) estimator. Robust effects emerge between the top five donors and more developed recipient countries, cases where aid flows are large. Thus, we see evidence that a critical level of aid is required to encourage greenfield investment. Both aid for infrastructure (particularly, transportation and energy) and building productive capacity are found to exert strong effects. To the extent that greenfield investment creates jobs and generates technology transfer, it appears that AfT is accomplishing its development objectives, at least with regard to the more advanced recipient countries. [ABSTRACT FROM AUTHOR]

The objective of the paper is to explore potential changes in trade induced by a liberalization scenario when taking into account persistence in trading partners. Our approach is based on the development of a gravity model that takes into account the dynamics at the extensive margin of trade as well as the persistence effect of the intensity of trade. Our empirical contribution is on the egg sector, where the persistence in trading partners is acute. Our results indicate that the use of static models underestimate imports of table eggs by more than 50% in Canada, when compared with the use of panel dynamic specification. The dynamic specification helps explain why trade liberalizations often increase trade creation between countries that had already been trading partners, while new trading partnerships remain scarce following trade liberalization. Our results also confirm the importance of sunk cost and their negative impact on the probability of export market participation for developing countries. Those results raise questions regarding the benefit of trade liberalization for developing countries, in terms of accessing new market, if they do not benefit from special treatments. [ABSTRACT FROM AUTHOR]

The rapid development of information and communications technology is transforming the entire industry landscape, heralding a new era of convergence services. As one of the developing countries in the financial sector, China is experiencing an unprecedented level of convergence between finance and technology. This study applies the lens of actor–network theory (ANT) to conduct a multi-level analysis of the historical development of China’s financial technology (fintech) industry. It attempts to elucidate the process of building and disrupting a variety of networks comprising heterogeneous actors involved in the newly emerging convergence industry. This research represents a stepping stone in exploring the interaction between fintech and its yet unfolding social and political context. It also discusses policy implications for China’s fintech industry, focusing on the changing role of the state in fostering the growth of national industry within and outside of China. [ABSTRACT FROM AUTHOR]

This article views the history of the Group of 77 through the lens of its relations with unctad's establishment in 1964, its unsuccessful struggle for the nieo in the 1970s, and the subsequent loosening of ties. The debt crisis of the 1980s, the Uruguay Round negotiations, and the arrival of the wto are seen as crucial forces unravelling the previously close links. Growing differentiation among developing countries and the changing leadership of the G77 are also cited as important influences on its current relationship with unctad. [ABSTRACT FROM AUTHOR]

The article further investigates the relationship between returns to education and trade openness in developed and developing countries. It contests Babones’ interpretation of the divergent experiences in terms of the greater credentialism associated with education in poorer countries. It identifies an alternative explanation based on classical trade theory which is at least as convincing. However, it further argues that the heterogeneity of labour markets is greater than either model suggests and that the characteristics of specific national and regional economies, rather than globalization, might be primarily responsible for the interesting statistical differences. [ABSTRACT FROM PUBLISHER]

After over a decade of languishing in stalemate, the Doha Development Agenda – the first round of trade negotiations launched under the auspices of the World Trade Organization – finally achieved a breakthrough at the Bali ministerial in 2013. Given that the Doha mandate places development – and particularly the concerns of the Least Developed Countries (ldcs) – at the heart of its agenda, our paper focuses on what the Bali outcome means for the world’s poorest countries. As a first step we provide a brief background against which the Bali negotiations took place. In the second section we assess the achievements and limitations of the Bali outcome, focusing on theldc-specific package and also commenting on other issues that affect theldcs. In the third section we explain the reasons for some of the achievements at Bali, which include negotiating strategies used by theldcs themselves. In the fourth and final section we identify a plan of action for the future. [ABSTRACT FROM PUBLISHER]

This article examines the historical legacy of contemporary development alliances through an analysis of the British government’s Empire Marketing Board poster campaign from 1926 to 1933. The primary aim of these posters was to instil in the British public a preference for buying empire-grown goods and the significance of their role as consumers in maintaining the Empire. By conveying messages of a common humanity and invoking a visual language of interdependence between Britain and its colonies, the posters attempted to open up new connections and create new moral communities across distance in ways that are not dissimilar to fair trade campaigns today. [ABSTRACT FROM PUBLISHER]

Inequalities in global development invalidate the usefulness of the dominant paradigms of international trade, and the agricultural is one of the most affected sectors. The Fair Trade contributes to achieving the objectives of a progressive local development guided by considerations of social, environmental and economic sustainability. Thus the aim of this work is to investigate the contribution of Fair Trade on local development in coffee-producing agricultural areas in developing countries. The methodology used is the case study of four Fair Trade cooperatives. It was found that all of them met the principles of Fair Trade and that there were local changes in the economic, social and environmental spheres. [ABSTRACT FROM AUTHOR]

The article discusses the foreign policy and the economic and political power of Great Britain. It comments on the impact of the global financial crisis on Great Britain beginning in 2008. The author considers Great Britain's foreign relations and economic ties with developing countries, including China and India, as well countries in the Persian Gulf and Latin American regions. Protectionist measures of Great Britain's trade partners are considered, and British domestic economic policy is also addressed.

The article discusses the promotion of transparency in government-industry relations associated with natural-resource extraction in developing countries. The author indicates that such transparency gives the public recourse in dealing with governments and extraction companies when problems arise from oil, gas, and mineral mining. The author discusses the emergence of these concepts and the global evolution of the Extractive Industries Transparency Initiative (EITI) from its beginnings in Great Britain under the administration of Prime Minister Tony Blair.

Preferential trade agreements pose a big challenge for the multilateral trading system. Throughout the first decade of the twenty-first century, their number has grown significantly. However, these agreements have a range of disadvantages compared with the multilateral regime, for example, in trade facilitation and in dispute settlement. Whereas it will be difficult to stop the further spreading of this wave of preferential agreements, attempts can be made to reduce the negative effects of trade agreements that do, by definition, discriminate against other countries. In this article, a range of potential remedies are discussed, from a moratorium to the better enforcement of World Trade Organization rules on preferential agreements as well as improved monitoring. [ABSTRACT FROM AUTHOR]

The article discusses the global trade of raw materials and finished goods, reporting that a revolution in world commerce will occur between 2009-2034. Countries below the equator, which the author terms the South, will begin trading directly finished goods with other countries in the South, the article indicates. Other topics include the challenges of the 2008 financial crisis that have outgrown the developed countries belonging to the G-7 countries and the emergence of the South as a distinct hub of wealth creation.

Using a case study of a controversial mine in an indigenous area of Guatemala, this article explores the transnational dynamics of development and regulation of large-scale extractive industry projects in the developing world. It examines the roles played in the Marlin mine dispute by national law, international law, international financial institutions, and corporate social responsibility. It concludes that these legal regimes have a role in protecting human rights but have not addressed the fundamental questions of democratic governance raised by this case. [ABSTRACT FROM AUTHOR]

The article presents a comparative analysis of the change in the technological structure of the high- and medium-technology industrial exports of Russia. It involved comparing the export profiles of Russia and 18 other post-communist countries with the export profiles of China, India Brazil, Mexico and Indonesia. Using the Krugman Specialization Index and the Balassa Index of Revealed Comparative Advantage, it was found that Russia's development in medium- and high-technology export activities have been inferior in comparison with other Eastern European countries, as well as most emerging market economies. Also, there is doubt in the potential of a state-led investment strategy to be competitive in higher value-added export activities in Russia.

Several misunderstandings have arisen about the Millennium Development Goals (MDGs). Most widespread is the view that each and every country must achieve the same numerical targets. This is obviously incorrect because the global performance is the aggregate of MDG-plus and MDG-minus countries. Another misconception is that a universal strategy exists for achieving the MDGs. This view contradicts the historical fact that different countries have applied different means towards achieving the same end - namely, human development. A third misunderstanding is that the cost of achieving the MDGs can be determined with precision over a multi-year period. Jan Vandemoortele' identifies growing disparities within countries as the main reason why the global targets will not be met by 2015. He outlines four practical steps for formulating homegrown and endogenous MDG-based national development strategies. He underscores the need for a new partnership between the rich and the poor, one that is based on 'ideas changing minds' rather than on 'money changing hands' because a partnership that is primarily based on money is inherently unequal. [ABSTRACT FROM AUTHOR]

This article examines the growing economic involvement of China in Africa. The author believes the Chinese have assumed that the era of civil wars and rebellion that began in the 1990s are winding down and Africa is ready for economic expansion. Sino-African trade is estimated to have grown from $4 billion in 1995 to $55. 5 billion in 2006. It is forecast to grow to $100 billion by 2010.

The article explores the recent literature on global imbalances. The author also discusses the policy implications of the various theories that have been advanced to explain their unprecedented increase. Most of these theories focus on the steady increase in the U.S. deficit, the shift to a surplus position by developing states, and low nominal and real interest rates globally. Several hypotheses that attempt to explain global imbalances are presented.

South Korea's growth as an outward foreign direct investment (OFDI) player is an example of developing countries becoming major foreign investors. China has become the largest destination for Korean OFDI, which appears to complement Seoul's exports to China. [ABSTRACT FROM AUTHOR]

Presents a study which analyzed the impact of the reduction of tariff and non-tariff barriers on the imports of developing countries. Theory of import demand functions; Descriptive evidence on trade policy; Fixed effects of generalized methods of moments.

Comments on the papers presented for the symposium on the boundaries of the World Trade Organization. Omission of a perspective from a developing country; Threat posed to the trading system by lobbies seeking to impose other agendas; Provision of compensation or adjustment assistance to poor countries.

Focuses on the impact of the world trade organization (WTO) on developing countries. Globalization of world economy; Issue on the unequal exchange of goods between developed and developing countries; Controversy on the non-transparency of WTO system.

Globalization has changed economic realities. First, the competences of multinational enterprises (MNEs) are becoming increasingly mobile and knowledge-intensive. MNEs thus give more attention to the availability and quality of the created assets of alternative locations. Second, among developing countries there are now considerable differences between the catching-up countries (e.g. newly industrialized countries) and falling behind , less developed countries. These developments have helped change the opportunity sets of both MNEs and host countries. Foreign direct investment (FDI)-based development strategies are now commonplace among less developed countries, but there is also increased competition for the right kinds of investment. In general, the balance in bargaining power has shifted in favour of the MNE, and less developed countries increasingly need to provide unique, non-replicable created assets to maintain a successful FDI-assisted development strategy. [ABSTRACT FROM AUTHOR]

The article looks at how demand for sustainably certified wild-caught fish and crustaceans has impacted developing country fisheries (DCFs), many of which do not have certification from the Marine Stewardship Council (MSC). Particular attention is also given to fishery improvement projects (FIPs) in which fishers are given conditional market access based on progress towards sustainability.

Focuses on foreign trade and investments in developing countries. Investment and trade performance in countries belonging to the Association of South East Asian Nations (ASEAN) and the South Asian Association for Regional Cooperation; Capital as the key role in investments; Average economic growth in ASEAN countries; Use of Global Monetary Unit as an instrument of trade.

Demonstrates the developing countries with outward-oriented trade policies have higher pollution intensities of gross domestic product that those following inward-oriented policies. Stylized facts concerning trade and the environment; Data and regression equations; Regression results.

Presents information on a study which aimed to validate a model which predicts developing countries' (LDC) countertrading activities based on economic characteristics. Determinants of LDC countertrade; Research method; Results; Conclusion and managerial implications.

Presents information on a study that examined how repatriation risk affected the exporting and licensing decisions of United States manufacturing firms in less developed countries (LDC). Determinants of modes of entry decisions in LDC; Methodology of the study; Results and discussion on the study.

Provides information on a study that profiled some differences between exporters and non-exporters of manufactured products in a small developing country. Potential benefits of exporting manufactured products; Methodology of the study; Results and discussion on the study.

Provides information on a study that described and analyzed the exchange of resources between partners in a joint venture (JV) relationship between Swedish firms and developing countries with a longitudinal perspective. Reason for forming a JV; Primary responsibility of the local partner; Methodology of the study; Conclusion.

Adjustment assistance to domestic firms and industries has tong been an integral part of reciprocal trade liberalization in the developed countries of the OECD, at least since the implementation of the Kennedy Round tariff cuts in the 1960s. Initially, assistance was designed to alleviate the burden of adjustment to liberalized trade by means of compensatory payments to displaced workers, and to promote enhanced mobility and retraining for alternative employment. The primary purpose of government intervention was to dampen the severity of short-run adjustment shocks in affected industries, while at the same time preserving the necessary degree of flexibility in allowing market forces to produce new equilibria. The assistance mechanisms, by and large, centred around affirmative adjustment, and the commitment to disengage from uncompetitive domestic industries was, at least in principle, recognized. [ABSTRACT FROM AUTHOR]

The effects of reductions in Canadian tariffs on imports from thirty non-OPEC Third World countries are estimated using quarterly data for the period 1972–79. Estimates of total trade expansion, trade diversion and trade creation are obtained using linear and a log-linear specification. The results imply that the trade diversion effect is in general and for most commodity groups larger than the trade creation effect. [ABSTRACT FROM AUTHOR]

The controversial Prebisch thesis in international economics of development asserts that (i) less-developed countries (LDCs) experience a long-run deterioration in their terms of trade with developed countries (DCs), and (ii) these experiences are the cause of the ever-widening gap in their per capita incomes with DCs. By surveying the controversy and discussing the connection between trends in terms of trade and international economic inequality, this paper attempts to disprove some widely held notions derived from misinterpretations and from broad generalisations with indirect inferences. We conclude that there is need for case studies, in order to evaluate and select appropriate policy options. [ABSTRACT FROM AUTHOR]

Provides evidence on the net barter terms of trade relating to resource-free manufactures of 37 industrialized and developing countries from 1967 to 1987. More favorable term-of-trade developments for high-income countries; Decline in prices of export goods from developing countries; Move into innovative goods by advance developing countries; Diversification efforts.

Empirical studies of the trade and development effects of the major preferential trading schemes between the industrialised countries and the developing countries are surveyed. Most studies find the agreements to be trade creating, improving welfare for the donor, though general equilibrium analysis indicates that terms-of-trade deterioration offsets efficiency gains. There is some evidence that trade preferences stimulate LDC exports of preferred products, but total exports are not significantly affected due to limited product coverage. The existing literature does not provide evidence on the degree of infant industry protection or on economic diversification of the beneficiaries. [ABSTRACT FROM AUTHOR]