1,720,996 research outputs found
Trade sanctions and green trade liberalization
Get PDFThis paper studies the impact of a WTO withdrawal of trade concessions against countries
that fail to respect globally recognized environmental standards. We show that a punishing
tariff can be effective when environmental and trade policies are endogenous. When required standards lie within a reasonable range, compliance along with free trade as a reward is the unique equilibrium outcome. A positive optimal tariff in the case of non-compliance prevents pollution-motivated delocation, but only works as a successful credible threat and does not emerge in equilibrium. Results are consistent with broad empirical evidence that disputes the pollution haven hypothesis and suggests capital movements to be non-pollution related
Offshoring production: a simple model of wages, productivity, and growth
Get PDFWe examine the relationship between o§shoring and the labour market in an occupational
choice model of trade and endogenous growth where workers are employed on the basis of their
individual skill levels. Trade liberalization leads to o§shoring and reduces employment in the
manufacturing sector. Displaced workers move into the traditional and innovation sectors according to their skill levels, shaping real wages and aggregate productivity in the manufacturing
sector. The paper aims to show how inter-sectoral labour market adjustments, highlighted by
skill heterogeneity, could be a possible explanation for the simultaneous rise in productivity and
reduction in real wages that have coincided with the sharp escalation of o§shoring activities in
the US manufacturing sector since 2004
Parallel Imports and Innovation in an Emerging Economy
Get PDFThis paper studies the consequences of parallel import (PI) on process innovation of Örms heterogeneous in their production technology. In an international
setting where foreign markets di§er with respect to their intellectual property
rights regime, a move by a technologically inferior Örm to exploit a new unregulated market can result in imitation and PI. The impact of PI on innovation
is determined by the degree of heterogeneity between Örms and trade costs.
Increasing trade costs shifts from the market share losses brought by PI from
the more to the less productive Örm. This induces the former to invest more in
R&D. At this point, sales in the foreign market become a determinant of the
R&D decision by the technologically inferior Örm. For low levels of Örm heterogeneity, PI increases output by this Örm targeted for the unregulated market,
hence increases its Innovation e§orts. A tari§ policy accompanied by opening
borders to PI only increases welfare when the technological gap between the
two Örms are su¢ ciently large
New protectionist policies, intellectual property rights, and the organization of firms
Get PDFThe aim is to explore the causes and effects of trade and trade-related policies in the current global context, providing a framework to identify new protectionist challenges and anticipate their impact on location, ownership, and organizational patterns of international production. The focus is on intellectual property regulations amid mounting populism and worldwide protectionist pressures with a critical attitude towards international economic exchange, international institutions, foreign firms, and governments. It is essential to understand the role of IPR protection on firm ownership and organizational decisions, which governs the extent of knowledge diffusion within international business groups and across global value chains. This is particularly important today because protectionist trends include restrictions on technology transfer, making the structure of firms’ business strategy and IPR policy of paramount importance in reducing the negative consequences and preserving global innovation
Intellectual property rights and NorthSouth joint ventures
No full textWe study the e§ect of the intellectual property rights (IPR) regime of a host country (South) on a multinationalís decision between serving a market via greenÖeld foreign direct investment to avoid the exposure of its technology or a North-South joint venture (JV) with a local Örm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs
Outsorcing, complementary innovations and growth
Get PDFthis papers studies the parallel creation of complementary upstream and downstream innovations by independent labs to sheld light on the impact of outsourced on R&D when supply contracts are incomplete. In particular, we argue tha outsourced upstream producion contributes to the emergence of innovation networks by creating a demand for upstream R&D. We then analyze under which conditions this leads to faster innovation thaan in the case of vertically integrated production relying on integraed R&D. In the presence of incomplete supply contracts, the ex-post bargaining power of upstream and downstream parties feed back to innovation. this determines whether outsourcing decisions leading to static gains from specialized production generate or not also dynamic gains in terms of faster innovation
Autocracies and Development in a Global Economy: A Tale of Two Elites
Get PDFData on the growth performances of countries with similar comparative (dis)advantage and
political institutions reveal a striking variation across world regions. While some former autocracies such as the East Asian growth miracles have done remarkably well, others such as the
Latin American economies have grown at much lower rates. In this paper, we propose a political economy explanation of these diverging paths of development by addressing the preferences
of the countryís political elite. We build a theoretical framework where factors of production
owned by the political elites di§er across countries. In each country, the incumbent autocrat will
cater to the preferences of the elites when setting trade policy and the property rights regime.
We show how stronger property rights may lead to capital accumulation and labor reallocation
to the manufacturing sector. This, in turn, can lead to a shift in the comparative advantage, a
decision to open up to trade and an ináow of more productive foreign capital. Consistent with
a set of stylised facts on East Asia and Latin America, we argue that strong property rights are
crucial for success upon globalizatio
The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency
Get PDFThis paper aims to explain the rise and fall of communism by exploring the
interplay between economic incentives and social preferences in di§erent economic
systems. We introduce inequality-averse and ine¢ ciency-averse agents responding
to economic incentives and transmitting their ideology as they are a§ected by evolving outcomes. We analyze their conáict through the interaction between leaders
with economic power and followers with ideological determination. The socioeconomic dynamics of our model generate a pendulum-like switch from markets to a
centrally-planned economy abolishing private ownership, and back to restoring market incentives. The grand experiment of communism is thus characterized to have
led to the discovery of a trade-o§ between equality and e¢ ciency at the scale of
alternative economic systems
Trade and Geographyin the Economic Origins of Islam: Theory and Evidence
Get PDFThis research examines the economic origins of Islam and uncovers two empirical regularities. First,
Muslim countries, virtual countries and ethnic groups, exhibit highly unequal regional agricultural
endowments. Second, Muslim adherence is systematically larger along the pre-Islamic trade routes in
the Old World. The theory argues that this particular type of geography (i) determined the economic
aspects of the religious doctrine upon which Islam was formed, and (ii) shaped its subsequent economic
performance. It suggests that the unequal distribution of land endowments conferred di§erential gains
from trade across regions, fostering predatory behavior from the poorly endowed ones. In such an
environment it was mutually beneÖcial to institute a system of income redistribution. However, a
higher propensity to save by the rich would exacerbate wealth inequality rendering redistribution
unsustainable, leading to the demise of the Islamic unity. Consequently, income inequality had to
remain within limits for Islam to persist. This was instituted via restrictions on physical capital
accumulation. Such rules rendered the investments on public goods, through religious endowments,
increasingly attractive. As a result, capital accumulation remained low and wealth inequality bounded.
Geography and trade shaped the set of economically relevant religious principles of Islam a§ecting its
economic trajectory in the preindustrial world
Islam and human capital in historical Spain
Get PDFWe use a unique dataset on Muslim domination between 711-1492 and literacy in 1860 for about 7500 municipalities to study the long-run impact of Islam on human-capital in historical Spain. Reduced-form estimates show a large and robust negative relationship between length of Muslim rule and literacy. We argue that, contrary to local arrangements set up by Christians, Islamic institutions discouraged the rise of the merchant class, blocking local forms of self-government and thereby persistently hindering demand for education. Indeed, results show that a longer Muslim domination in Spain is negatively related to the share of merchants, whereas neither later episodes of trade nor differences in jurisdictions and different stages of the Reconquista affect our main results. Consistent with our interpretation, panel estimates show that cities under Muslim rule missed-out on the critical juncture to establish self-government institutions
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