{"title":"Environmental Regulation: An Incentive for Foreign Direct Investment","authors":"B. Dijkstra, A. Mathew, A. Mukherjee","doi":"10.1111/j.1467-9396.2011.00966.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2011.00966.x","url":null,"abstract":"Empirical evidence has so far failed to confirm that lenient environmental regulation attracts investment from polluting firms. In a Cournot duopoly with a foreign firm and a domestic firm, we show that the foreign firm may want to relocate to the domestic country with stricter environmental regulation, when the move raises its rival domestic firm's cost by sufficiently more than its own. The domestic (foreign) country's welfare is (usually) lower with foreign direct investment.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126581279","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intra‐Industry Trade Liberalization: Why Skilled Workers are More Likely to Support Free Trade","authors":"Eugene Beaulieu, M. Benarroch, J. Gaisford","doi":"10.1111/j.1467-9396.2011.00967.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2011.00967.x","url":null,"abstract":"This paper presents a theoretical model and empirical analysis that connects the prevalence of intra‐industry trade with increased wage inequality from trade liberalization in both skilled and unskilled labor abundant countries. The Stolper–Samuelson effect is incorporated into an intra‐industry trade liberalization (intra‐ITL) hypothesis where skilled labor opposes protectionism in all countries engaged in intra‐industry trade because skilled workers gain at the expense of unskilled workers from multilateral trade liberalization within the skill‐intensive sector. We examine empirical evidence on whether skilled individuals are more supportive of trade liberalization than unskilled individuals across 31 countries with different levels of intra‐industry trade and skill endowments. We find that the extent to which countries engage in intra‐industry trade in high‐tech commodities is strongly linked with the intensity of opposition to protection by skilled labor. Regression results strongly support our hypothesis that skilled workers, almost everywhere, are more likely to support free trade.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"330 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116748447","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Laborde, W. Martin, Dominique van der Mensbrugghe
{"title":"Measuring the Impacts of Global Trade Reform with Optimal Aggregators of Distortions","authors":"D. Laborde, W. Martin, Dominique van der Mensbrugghe","doi":"10.1111/roie.12271","DOIUrl":"https://doi.org/10.1111/roie.12271","url":null,"abstract":"Traditional weighted-average measures of trade distortions are widely used in analyzing global and regional reforms, despite well-known deficiencies. This paper develops and applies optimal aggregators for the real-world case of multiple countries and commodities with much more detailed information on trade than on production and consumption. The approach reflects the fact that different aggregators are needed for expenditure on imported goods and for tariff revenues, and allows for incorporation of both intensive and extensive margins of adjustment to reform. Applications confirm that the technique is straightforward enough for widespread use, and point to close to a doubling of the welfare gains at the intensive margin when using the highest possible level of international commodity disaggregation, with larger gains in developing regions than in the industrial countries. The measured income gains increase along the entire path of liberalization, with slightly larger increases in the earlier stages, where the gaps between the responses of the expenditure and tariff revenue aggregators are largest. Sensitivity analysis suggests that, for global trade reform, the ease of substitution between tariff lines is much more important than that between varieties from different countries.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128129605","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"What Drove the Massive Hoarding of International Reserves in Emerging Economies? A Time‐Varying Approach","authors":"Anne-Laure Delatte, Julien Fouquau","doi":"10.1111/j.1467-9396.2011.01015.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2011.01015.x","url":null,"abstract":"Existing empirical models fail to explain the surge in the accumulation of foreign exchange reserves by emerging countries during the last decade. In this paper, we estimate the demand for international reserves on a panel of emerging countries using a Time-Varying Panel Smooth Transition Regression model (TV-PSTR) to relax the assumption of coefficient stability in the relationship. We find evidence that the parameters are not constant. In addition, we observe that the coefficients remained relatively stable until 2000 and then increased gradually and strongly thereafter. Our specification accounts for an acceleration that linear specifications fail to explain. Finally, we find that mercantilist motives are the major driver of this acceleration.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122545783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Time Preference and Trade Imbalance","authors":"T. Kikuchi, K. Hamada","doi":"10.1111/j.1467-9396.2011.00954.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2011.00954.x","url":null,"abstract":"This paper presents a unified theory of trade and investment in a world where the rate of time preference varies between countries. In the framework proposed by Buiter (1981), we can analyze a situation wherein two countries have different rates of discount. Here, the value of the debt to income does not converge to zero but remains constant even in the long run. Furthermore, we show that the existence of less-capital-intensive nontradables promotes capital movements: since a more patient country incompletely specializes in less-capital-intensive nontradables, capital must flow out of it.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121594346","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does it Matter Who You Sign with? Comparing the Impacts of North–South and South–South Trade Agreements on Bilateral Trade","authors":"A. Behar, Laia Cirera‐i‐Crivillé","doi":"10.1111/roie.12069","DOIUrl":"https://doi.org/10.1111/roie.12069","url":null,"abstract":"Free trade agreements lead to a rise in bilateral trade regardless of whether the signatories are developed or developing countries. Furthermore, the percentage increase in bilateral trade is higher for South-South agreements than for North-South agreements. In this paper, the results are robust across a number of gravity model specifications in which the analysis controls for the endogeneity of free trade agreements (with bilateral fixed effects) and also takes account of multilateral resistance in both estimation (with country-time fixed effects) and comparative statics (analytically). The analytical model shows that multilateral resistance dampens the impact of free trade agreements on trade by less in South-South agreements than in North-South agreements, which accentuates the difference implied by the gravity model coefficients, and that this difference gets larger as the number of signatories rises. For example, allowing for lags and multilateral resistance, a four-country North-South agreement raises bilateral trade by 53 percent while the analogous South-South impact is 107 percent.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"94 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124898448","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Fractional Integration of Nominal Exchange Rates: Evidence from CEECs in the Light of Emu Enlargement","authors":"C. Barros, L. Gil‐Alana, R. Matousek","doi":"10.1111/j.1467-9396.2010.00933.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2010.00933.x","url":null,"abstract":"This paper uses fractional integration models to describe the long-run dependence of nominal exchange rates in Central and Eastern European countries (CEECs). The analysis is validated using nonparametric, semiparametric and parametric techniques. From comparing the results across the three approaches, it was clear that mean reversion takes places only for the euro exchange rates in Bulgaria, Estonia, and Slovenia. Other exchange rates based on the euro also display mean reversion with the parametric methods. For the US dollar rates, the unit-root null hypothesis cannot be rejected in any single country, indicating that shocks affecting the exchange rates against the US dollar are of a permanent nature, while those directed against the euro are less persistent, and tend sometimes to disappear in the long run. Policy implications are derived.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132548902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Market Size and Firm Location in a Service Industry","authors":"H. Kurata, Takao Ohkawa, M. Okamura","doi":"10.1111/j.1467-9396.2010.00927.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2010.00927.x","url":null,"abstract":"This paper investigates the welfare effects of firm location in a service industry. We consider the situation where firms determine their locations in either of two regions with a difference in market size. From the viewpoint of the consumers' welfare, there are too few firms in the large market and too many in the small market. However, from the viewpoint of the producers' and social welfare, the opposite is true. Further, an increase in the difference in market size is unambiguously unfavorable for the producers. On the other hand, such an increase is favorable for the consumers and the economy as a whole.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122634800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Globalization and the Inequality–Unemployment Tradeoff","authors":"Joël Hellier, Nathalie Chusseau","doi":"10.1111/j.1467-9396.2010.00924.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2010.00924.x","url":null,"abstract":"Over the last 20 years, advanced economies have experienced an “unemployment versus inequality” tradeoff that is critically uneven across countries. To explain this, we propose an extended HOS model in which: the factors are skilled and unskilled labor; there is a continuum of goods; the world comprises two North countries (one egalitarian and one nonegalitarian) and the South; there is no factor price equalization; globalization consists in the South cornering a growing share of world production. In the North, globalization entails an inequality–unemployment tradeoff and the adjustment to globalization is more painful for the country that was initially inequality-oriented.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122968344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Gains from Trade in a Cournot–Nash Trading Equilibrium","authors":"M. Kemp","doi":"10.1111/j.1467-9396.2010.00897.x","DOIUrl":"https://doi.org/10.1111/j.1467-9396.2010.00897.x","url":null,"abstract":"It has recently been suggested by several authors that a Cournot–Nash free-trade equilibrium might leave each country worse off than under autarky, in apparent contradiction of earlier findings. In the present note it is shown that the suggestion is typically based on self-contradictory assumptions and is therefore unacceptable.","PeriodicalId":351939,"journal":{"name":"Wiley-Blackwell: Review of International Economics","volume":"296 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132300710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}