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This article contests the idea that the world has entered a post‐globalization era. It argues that rapid globalization has evolved rather than ended. Even though the global goods trade‐to‐GDP ratio reached its zenith 15 years ago, the rapid rise of services trade has persisted and now accounts for one‐fifth of international commerce. The paper makes a statistical and logical case that the future of trade lies in services trade—especially trade in intermediate services. [ABSTRACT FROM AUTHOR]

We propose a model of international oligopoly with two countries, two vertically-differentiated goods, and heterogeneous consumers in terms of their willingness to pay for quality. Various sources of pollution are taken into account: consumption, production and the transportation of goods between the two countries. Green persuaded consumers display consumption home bias : they derive additional satisfaction when consuming a domestic good because buying locally abates transportation pollution. We investigate whether consumption home bias effectively curbs global emissions. Finally, we uncover the environmental role played by the globalization of markets. [ABSTRACT FROM AUTHOR]

Aim/purpose – This paper surveys three decades of empirical literature on foreign direct investment (FDI) and international trade across the former Soviet economic space. In this survey, we outline the current state of research, discuss data limitations, and identify topics for further studies.

The identification of the full range of ingredients of the Schumpeterian dynamics enables to contribute the analytical framework of evolutionary complexity. According to this Schumpeterian perspective, broad societal transformations, as the opening of international trade, can be viewed as the causes and consequences of the Schumpeterian creative response that enables economies to cope with the rapid and radical change of product and factor markets by means the introduction of innovations. Innovations support the increase of total factor productivity (TFP), however, only if, when, and where new technological knowledge could be generated at costs below equilibrium. The econometric evidence of 14 European countries in the years 1990–2016 shows that a larger country's trade openness increases the TFP both directly, from market selection, and indirectly, from greater innovative efforts that were stronger the lower the unit patent costs. [ABSTRACT FROM AUTHOR]

Using a novel database on multinational production (MP), this article investigates the impact of preferential trade agreements on foreign affiliates' production activities. We find that trade agreements with investment provisions have a positive effect on MP. On average, signing an agreement including investment provisions is associated with increased MP up to 26% in the manufacturing sector and 34% in the services sector. Our findings suggest that investment provisions increase MP by facilitating multinationals operations in foreign markets, especially for activities requiring the proximity of suppliers and consumers, and by helping multinationals joining global value chains. [ABSTRACT FROM AUTHOR]

This research focuses on the impact of German exports on exports of the other selected EU countries. We used the Global VAR approach to build a robust trade model between 23 EU countries, the USA, and China. By stressing this model with different shocks, we were able to observe how exports of the EU countries react to German loss of competitiveness and decline of demand from Germany. Based on our simulation, we could identify countries which i. are Germany’s competitors and would benefit from German loss of competitiveness, ii. are tied with German trade so tightly that loss of German competitiveness would negatively affect their exports.

Aim/purpose – This paper aims at determining the role of Poland in the Belt and Road Initiative (BRI) and identifying an alternative course of the trail. However, there are still many variables that can significantly affect the extent of Poland’s participation in BRI. Design/methodology/approach – The paper was based on a literature query and interviews with six experts of the Polish logistics environment closely connected to the concept of the New Silk Road. The interviews and the literature analysis allowed of the authors to define potential scenarios for the course of the New Silk Road. In addition, the SWOT analysis was used to identify the Poland’s role in BRI.

This paper investigates the impact of economic integrations on entrepreneurial outcomes. The study bridges a gap between the literature on entrepreneurship and trade by exploring how international trade and global value chain (GVC) integration influence the share of start-ups and high-growth firms in manufacturing industries in eleven Central and Eastern European (CEE) member states of the European Union (EU) during the 2011–2016 period. Exports, imports, and forward GVC participation increase the share of start-ups and high-growth firms, and these effects are evident in low- and high-technology-intensive industries. The effects of trade and GVC integration are more pronounced among the first group of CEE that joined the EU than among latecomers. [ABSTRACT FROM AUTHOR]

This is the first paper that analyzes for a global sample of countries how trade agreements that include technology-related provisions impact exports of goods, and how this impact differs depending on the technology content of the goods. It includes estimations of a structural gravity model for a panel of 176 countries over the period 1995–2015. The model differentiates between provisions relating technology transfer, technical cooperation, research and development, and patents and intellectual property rights. It also estimates the differences in these effects depending on whether the trade flow in question is between countries with similar or different levels of development. The main results indicate that regional trade agreements (RTAs) that contain technology provisions generate a significantly higher volume of trade than RTAs that do not, after controlling for the depth of the RTAs. For countries that ratify RTAs that include such provisions, it is exports of technology-intensive goods that increase the most. Trade agreements including such provisions have a heterogeneous effect that varies by income level of the trading partners and depends on the extent to which the RTA incorporates other provisions. [ABSTRACT FROM AUTHOR]

The Common Market for Eastern and Southern Africa (COMESA) is a Free Trade Area (FTA) regional trade agreement in Africa. Currently, Ethiopia is negotiating to join COMESA FTA. This study assesses the impact of three regional trade arrangements, COMESA FTA, customs unions, and the European Partnership Agreement (EPA) on the economy of Ethiopia. The analysis is based on a static Global Trade Analysis Project (GTAP) model, version 9 database. Unlike previous studies, the customs union scenarios are designed at the detailed Harmonized System (HS) level. COMESA FTA (scenario 1) with standard GTAP model results in a welfare loss for Ethiopia due to negative terms of trade and investment-saving effect, but with unemployment closure (scenario 2); Ethiopia enjoys a welfare gain mainly due to endowment effect. In scenario 3 (COMESA customs union) and scenario 4 (European Partnership Agreement), Ethiopia loses due to negative terms of trade and investment-saving effect. There is a large increase in demand for unskilled labor force in Ethiopia by around US$23 million, US$112 million, and US$43 million for scenario 2, 3, and 4 respectively. Moreover, there is a positive output effect for oilseeds, leather, and basic metals across all scenarios. The world, as a whole, enjoys welfare gains with COMESA FTA (scenario 1 and 2). However, with scenario 3 and 4, there is an overall welfare loss. There is no strong reason for Ethiopia to move to the customs union, and the EPA in the short run. Therefore, a transition period is necessary, but it is recommended for Ethiopia to join COMESA FTA. [ABSTRACT FROM AUTHOR]

The decision of the United Kingdom (UK) to leave the European Union (EU) is unprecedented, especially considering the recent trend in the global economy toward economic integration. There is a multitude of research concerning the implications of economic integration; however, research in the field of disintegration is scarce. Brexit serves as an interesting case study to investigate the effects of economic disintegration. The implications for trade are especially fascinating as trade liberalization is one of the most important benefits of economic integration. Existing studies focus mainly on Brexit’s impact on the UK’s exports and imports, while less attention has been paid to Brexit’s effects on the trade of other countries. The main objective of our research is to estimate Brexit’s influence on Polish exports. We present several possible scenarios of future trade relations between the UK and the EU and assume that, at least in the nearest-future post-Brexit scenario, trade under the World Trade Organization rules is most likely. This will result in the imposition of tariffs on trade between the UK and the EU members, including Poland. In our research, we used the real exchange rate of the Polish zloty against the British pound as a proxy for the changes in price competitiveness of Polish exports due to the imposition of tariffs. We find that in the first year after Brexit, the dynamics of Polish exports to the UK will decrease due to the imposition of customs duties by 1.3 percentage points (pp) and by 0.1 pp when it comes to total Polish exports. This paper contributes to the discussion on the effects of disintegration on trade. We propose a new method for assessing changes in trade volume due to increase of trade barriers.

A prominent argument as to why countries sign "deep" preferential trade agreements (PTAs) is to foster global value chains (GVCs) operations. By exploiting a new dataset on the content of PTAs, this paper quantifies the positive impact of deep PTAs on GVC participation, mostly driven by value-added trade in intermediate rather than in final goods and services. On average, each additional policy areas increases the domestic and the foreign value added of intermediates by 0.48 and 0.38%. Deep PTAs facilitate integration in industries with higher levels of value added. Their content also matters for GVC integration by income group. [ABSTRACT FROM AUTHOR]

The global value chain of lithium batteries (GVCLB) is revolutionizing different industries in the world, such as computers and vehicles, since their batteries allow the energy storage produced from various sources of electricity, renewable and conventional, online with the approaches to sustainable development and even the circular economy, highlighting that the first type is ideal for use in rural areas, as a social value, when there is no power grid. Within this global context, studies in Africa on this subject are scarce, in spite of this continent has a series of climatic characteristics, which allow the use of lithium batteries to improve the quality of life of a large percentage of its population. For this reason, the objective of this research is to analyze the degree of participation of Africa in the different components of this chain, focusing on the international trade of lithium batteries, the decomposition of comparative advantages, trade flows, and the balances of countries. Our findings show a low level of international trade in African countries within the GVCLB, except in Tunisia and South Africa, which depend heavily on imports of lithium batteries in relation to the world, especially from China and Japan. As for the commercial flows of these products within the continent, South Africa is the indisputable leader in Africa, because it exports lithium batteries to the highest number of countries. [ABSTRACT FROM AUTHOR]

We develop a tractable general equilibrium model of international trade with firm heterogeneity and sequential production, based on the partial equilibrium model of Antràs and Chor (Econometrica 81:2127–2204, 2013). The length of supply chains is endogenous, and in the autarky equilibrium more productive final-good producers are served by longer supply chains. International trade in final goods magnifies the differences in the length of supply chains between firms, with exporting firms being served by longer supply chains, and non-exporting firms being served by shorter supply chains than in autarky. We show that, for given model parameters, the gains from trade are larger than in the canonical Melitz model with Pareto-distributed productivities, since production along a sequential supply chain in the Antràs–Chor model is subject to external increasing returns to scale. [ABSTRACT FROM AUTHOR]

This article is based on a transcript of the Leonard K. Elmhirst Memorial Address, delivered at the 30th International Conference of Agricultural Economists in Vancouver, Canada, on July 29, 2018. The presentation provided an overview of work that I have done recently on comparative advantage and its role in agricultural trade patterns and trade‐driven changes in welfare. Two topics are addressed: (a) the static gains from intranational agricultural trade due to comparative advantage; and (b) how trade might mitigate consumption losses and food insecurity from changes in agricultural productivity caused by drought and climate change. [ABSTRACT FROM AUTHOR]

Technological advancements affect economic growth, income distribution and levels of unemployment. However, quantifying the pace of technological diffusion is problematic. This paper develops a new measure of technological progress by estimating the high-skill content of imports using industry-level, bilateral trade data. Intuitively, during periods of trade liberalization, a higher skill content embodied within imports will lead to a faster change in the arrival rate of new technologies. Trade accelerated since the 1980s and with that came a diffusion of new technologies into developing countries. By utilizing the industry-level trade data in conjunction with the high-skill factor content of each industry, a measure of technological diffusion is developed using a theoretically consistent gravity model. This measure is highly correlated with other measures of technological progress and provides a new data set for a large number of both developed and developing countries. How the high-skill content of imports increased is analyzed for countries across the development spectrum. This measure of technological progress is applied to income inequality. It significantly increases inequality, consistent with theoretical expectations, and provides an additional avenue in how to measure technological progress. [ABSTRACT FROM AUTHOR]

The authors estimate the domestic value-added content in exports of manufacturing goods (VAX-D ratio) for 91 countries over the period from 1970 to 2013. They find a strong decline in the world VAX-D ratio since the mid-1980s mostly accounted for by the substitution of foreign for domestic intermediates. Using a breakpoint detection method, they identify three waves of vertical specialisation in the world economy: 1970–1979, 1986–1995 and 1996–2008. The authors find that most countries (79) initiated a period of vertical specialisation at least once. They find strong evidence that the VAX-D ratio correlates negatively with GDP per capita, and that the negative slope is flattening out at higher levels of income. [ABSTRACT FROM AUTHOR]

Regional trade integration is viewed by both international institutions and local political leaders as a key tool for promoting inclusive growth and reducing poverty in Africa. However, several structural weaknesses in African economies undermine trade integration and inhibit its income-enhancing effect. This paper aims to study the conditional effects of intra-African trade openness on the standard of living in Africa by highlighting the influence of these structural weaknesses. Our results clearly show that the impact of intra-regional trade on income depends on the diversification of African economies, their financial development and the quality of their transport and telecommunications infrastructures. Specifically, we find that a substantial improvement in these fundamentals would make intra-African trade significantly income-enhancing. [ABSTRACT FROM AUTHOR]

How does geographic distance affect the impact of trade agreements on bilateral exports, and through what channels? This paper examines these questions in a gravity model context for different types of goods for 185 countries over the period 1965–2010. Three stylized facts emerge. First, although economic integration agreements have a positive impact on trade flows, geographic distance significantly decreases their effect. Second, this phenomenon is in large part explained by the impact of economic integration agreements on intermediate goods. These results hold when controlling for trade agreement depth, measured by the type of agreement and content of provisions, and economic similarity among trading partners. Third, this paper finds either a smaller negative effect or no effect on the interaction between distance and economic integration agreements for non-intermediates. This underscores that while economic integration agreements promote trade in all goods, there is an additional benefit to intermediates which diminishes faster with distance. [ABSTRACT FROM AUTHOR]

Currently, African countries are deepening and widening their regional trade agreements, aiming to establish a continent-wide free trade area by 2017. Using a comprehensive dataset of 148 countries for the period 1970-2010, I found robust evidence that African regional economic communities increase their members' exports and imports, albeit with varying degrees. The results reveal that African trade blocs increase members' exports by up to 175% and imports by as much as 200%. This paper documents a greater effect on exports and imports of those regional trade blocs with deeper integration. [ABSTRACT FROM AUTHOR]

Integration of Southern Africa has resulted in changes in trade structures and production process across borders. The aim of this article is to present transformations taking place in the structure of trade exchange of the Southern African states (Botswana, Lesotho, Namibia, Swaziland, and South Africa) that are members of the Southern African Customs Union (SACU), and the position of South Africa in global value chains. South Africa seems to be the group of the most advanced countries in analyzed region. The analysis takes advantage of both the conventional methods of comprehensive study on international trade and the modern indicators and measures examining similarity, concentration or the position of South Africa in global value chains in general and sectoral terms.

In new trade models with heterogenous firms, trade liberalization between high-cost and low-cost countries is expected, all the rest equal, to increase cost competitiveness (i.e., to decrease real marginal costs) relatively more in the former. We report evidence in favour of this prediction for a sample of countries, accounting for about 85 % of world trade, from the 1980s to the 2000s. The estimation of the country-sector changes in cost competitiveness (relative to the UK) hinges on taking advantage of the observability of international trade patterns to reveal information on cross-country differences in marginal costs, hence ‘ revealed’ ’ cost competitiveness. [ABSTRACT FROM AUTHOR]

In this paper, the author uses a generalized version of Kennan and Riezman (Int Econ Rev 29(1):81-85, 1988) trade war model with Stone-Geary preferences, where countries can choose between a Nash tariff or an export tax. Three scenarios emerge from this setting, namely: the standard tariff war, the export tax war and a mixed scenario—“the tariff-export tax war”—where one country applies a Nash tariff, while the other imposes an export tax. In this setting, countries derive their market power not only from their relative endowment size, but also from their subsistence consumptions. As a consequence, a large country does not necessarily win a trade war if it has a substantially higher consumption requirement than the small country. This finding explains why large economies sign trade agreements with small counterparts that prohibit the use of tariffs and export taxes. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of indirect exporting, using firm-level data for 27 countries in Eastern Europe and Central Asia. Indirect exporting depends on a combination of fixed and variable trade cost factors. We first hypothesize that firms that perceive customs, transportation, crime and legal systems as severe obstacles anticipate higher fixed costs and are more likely to export indirectly. The second hypothesis is that indirect exporting tends to be a temporary strategy. Econometric models are used to test the first hypothesis and transition matrices to test the second. In particular, probit, Heckman-probit and fractional response models are estimated to analyse the determinants of the export mode and the share of indirect exports. The results indicate that the factors that account for the fixed cost of exporting, mainly affect the decision to export indirectly (extensive margin), but some of them also affect, to a lesser extent, the amount exported indirectly (intensive margin). More specifically, factors such as customs and trade restrictions and transportation obstacles affect the extensive margin only, whereas crime affects both margins. Secondly, trade agreement membership mainly affects trade in manufactured goods, while exchange rate volatility affects positively the extensive and intensive margin of indirect exports of services. The results also indicate that firms are more likely to change their status as an indirect exporter than they are to change their status as a direct exporter or a non-exporter, which provides support to the second hypothesis. [ABSTRACT FROM AUTHOR]

This article provides new empirical evidence on the losses of real activity caused by various financial shocks. Spillover effects due to foreign trade linkages deserve special attention. To this end, we estimate a modify auto-regressive process and a Seemingly Unrelated Regression Equations estimator is used to account for the dependency of one’s country growth on its trade-weighted partners growth. We run estimations on a set of currency collapses, banking crises and sovereign defaults in 49 advanced and developing countries from 1978 to 2011. The trade-weighted foreign demand effect mitigated the economic downturn following a banking or a sovereign debt crisis in all countries, while only the advanced ones benefited from it after a currency collapse. Trade-based spillover effects make banking crises more costly in the developing countries, in those that liberalize their financial account. It contrasts with what is observed during currency or sovereign debt crises. [ABSTRACT FROM PUBLISHER]

This paper examines the impact of countries' distance between their Internet usage and the world' average of the Internet usage intensity on their integration into the world market of trade in commercial services. Using an unbalanced panel dataset of 175 countries over the annual period 2000–2013, the empirical analysis indicates that the narrowing of the Internet-related distance would improve countries' integration into the world trade in commercial services market. Furthermore, it helps those countries that are geographically far from the world market to compensate for the adverse effect of this geographical distance on their integration into the world market of trade in commercial services. [ABSTRACT FROM AUTHOR]

It is argued that increased freedom to run economic activities combined with the growing impotence of national governments (i.e., globalization) have contributed to the secular growth slowdown at the global level. Fast globalisation-driven growth of international trade has unleashed the global race for economic surpluses. The process involves the suppression of wages and widening income inequalities – restricting aggregate demand globally. A “beggar-thy-neighbor” tactics of keeping large trade surpluses by countries successfully suppressing wages and domestic demand is likely to be unproductive. Overcoming the secular stagnation may not be possible without safeguarding equilibrium (or balance) in international transactions between major industrial countries – even if this may necessitate that in most (or all) of them the public sectors run large fiscal deficits permanently. [ABSTRACT FROM AUTHOR]

The present paper aims to explore the competition in exports among ASEAN + 3 members by applying the export similarity index for the disaggregation export data from 1990 to 2014. We also discuss the changes of comparative advantage of ASEAN + 3's exports through the revealed comparative advantage index and its relation with similarity index. First, the results support the idea that export similarity varies among ASEAN + 3 member states over the period 1990–2014. Second, we find evidence of several export communities. In particular, five countries, notably China, Japan, Malaysia, Singapore and South Korea, with the highest similarity index form an export community mainly in the electronic microcircuits and parts of office machines. Third, the revealed comparative advantage seems to be the key factor defining the similarity level of exports. Finally, the revealed comparative advantage analysis partly allows us to verify the Ricardo's theory and New Trade theory in the context of ASEAN + 3 trade integration. [ABSTRACT FROM PUBLISHER]

The Chinese One Belt One Road (OBOR) initiative often referred to as the New Silk Road (NSR), seems to be the greatest endeavour of our times in terms of economy, politics and logistics. The study aimed to examine the potential of Poland, Belarus, Lithuania, Latvia, Estonia and Russia to participate in the NSR. The method applied was comparative analysis including both quantitative and qualitative studies. The juxtaposition of data from the intensity of global integration enabled assessment of the potential negative consequences of non-participation of the countries in the NSR. In turn, the analysis of specific indicators of trade integration, the intensity of global integration and the logistics performance of the researched part of Europe has made it possible to answer the question about the most promising variants of the NSR. [ABSTRACT FROM PUBLISHER]

This paper investigates the effects that the increase in the importation of machinery parts and components and the changes in the supplier composition had in the trade of final products and parts and components inside Latin America. In our analysis, we consider these effects according to two dimensions: a quantity one that captures whether there was an intensification of trade and a quality one that captures changes in the sophistication of the traded goods. The research employs disaggregated trade data obtained from UN Comtrade for 17 Latin American countries between 1996 and 2011. We find evidence that an increase in the importation of parts and components from Latin America had positive impacts on both the quantity and quality dimensions. Subregional heterogeneities revealed that, in general, imports from East Asia had positive effects on the quantity dimension, nurturing the expansion of machinery production networks inside Latin America, and on the quality dimension, increasing the sophistication of the products traded inside Latin America, especially for Mercosur member exports. Imports from North America had positive quantity effects, especially for exports of countries from the Andean Community, Central America, Chile, and Mexico. [ABSTRACT FROM AUTHOR]

This paper studies local economic impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit, which are developed from a structural trade model. Average effects are predicted to be negative under both scenarios, and to be more negative under hard Brexit. The spatial variation in negative shocks across areas is higher in the latter case as some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are harder hit by Brexit under both scenarios. Again, this pattern is explained by sector specialisation. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit [ABSTRACT FROM AUTHOR]

The emergence of global value chains (GVCs) has provided some firms the opportunity to internationalize by specializing in the production of specific inputs or tasks along the chain, with a direct impact on a country's competitiveness. China, for instance, managed to enter low value added phases in GVCs to rapidly become a major player in world trade. Against this background, this paper asks whether North Africa, given its favourable geographic position in the Mediterranean and proximity to Europe, can grab similar opportunities. In particular, it analyzes the GVCs participation of North African firms and its implications for productivity. Since the coordination of vertically fragmented production processes increasingly relies on an adequate level of quality and reliability, especially when the inputs from several stages and locations must come together in a specific way, we identify firms involved in GVCs as traders with internationally recognized quality certification. Using a propensity score matching diff-in-diff method, the paper finds that firms that enter GVCs both perform better ex ante and show additional productivity gains ex post. Results suggest that policies designed to support certifications and compliance with international standards and to increase trust between firms in different countries, represent an important tool for linking developing countries to global production networks, with possible positive consequences on their economic development and growth. [ABSTRACT FROM AUTHOR]