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31. The Impact of Economic Globalisation on Firm Performance and the Labour Market: Evidence from Japan

Author:
Keiko Ito
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper summarises the major findings and arguments in the literature on the impact of globalisation on firm performance and the labour market, focusing on the case of Japan. Internationalised firms show better performance. Although offshoring has shifted labour demand towards skilled workers, thedirect contribution of globalisation to the widening wage gap is quite limited. The empirical evidence for Japan is more or less consistent with that for other developed countries, but some observations on Japan are worth pointing out. First, several empirical studies confirm a learning-by-exporting effect. Second, there is no strong evidence that increases in imports from China have reduced domestic employment. Increases in imports from China have a positive effect on value added growth in downstream industries, implying that imports from China are likely to be complementary to domestic production in Japan.
Topic:
Globalization, Industrial Policy, Labor Issues, Exports, and Imports
Political Geography:
Japan, China, and Asia

32. How does China fare on the Russian market? Implications for the European Union

Author:
Alicia Garcia-Herrero and Jianwei Xu
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
China’s economic ties with Russia are deepening. Meanwhile, Europe remains Russia’s largest trading partner, lender and investor. An analysis of China’s ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia’s market. Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.
Topic:
Economics, Markets, Bilateral Relations, Governance, Investment, and Exports
Political Geography:
Russia, China, Europe, Eurasia, and Asia

33. Restructuring Public Finances in Yemen

Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
Even before the current conflict, Yemen’s public finances suffered from an overdependence on energy exports, one of the lowest tax collection rates in the world, and chronic budget and balance of payments deficits. The government’s consistent operating deficits were funded through domestic debt instruments – drawing investment away from the private sector – borrowing from its own central bank, and foreign loans. Meanwhile, current (or recurring) expenditures dominated government spending relative to capital investments, indicating the state’s poor track record in development initiatives.
Topic:
Development, Economics, Tax Systems, Exports, Economic Development, and Capital Controls
Political Geography:
Asia, Yemen, and West Asia

34. The US–China trade–tech stand-off and the need for EU action on export control

Author:
Brigitte Dekker and Maaike Okano-Heijmans
Publication Date:
08-2019
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
As the great power rivalry and (technological) trade conflict between the United States (US) and China intensifies, calls for an export control regime tailored to so-called emerging technologies are growing. In August 2018 the US government announced the Export Control Reform Act (ECRA), seeking to limit the release of emerging technologies to end uses, end users and destinations of concern. The contest is on for the leader in the development and use of emerging technologies, but also for shaping norms and writing the rules for their use. This requires the Netherlands and other EU member states – in coordination with key stakeholders from business and academia – also to redouble their efforts to recraft their own approach to export controls of so-called ‘omni-use’ emerging technologies. This Clingendael Report outlines four levels of action in the field of export control for the Dutch government to pursue in parallel: bilaterally with the US; European Union cooperation; ‘Wassenaar’ and beyond; and trusted communities.
Topic:
Development, Science and Technology, Power Politics, Exports, and Trade
Political Geography:
China, Europe, Asia, North America, and United States of America

35. The Effect of Export Insurance and Guarantees on Export Performance: An Empirical Analysis for Korea

Author:
Kyunghun Kim and Hyelin Choi
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
There is a series of empirical papers (Kim and Lee 2004; Egger and Url, 2006; Moser, Nestmann, and Wedow, 2008; Baltensperger and Herger, 2009; Auboin and Engemann, 2014; Van der Veer. 2015) which show that trade finance is positively associated with export. Despite its positive impact on export, trade finance has been a contentious issue in international organizations such as the WTO and OECD in terms of implementing related policy measures. This is based on the argument that trade finance hurts fair international trade because it ultimately plays a role just like a subsidy. Regarding this contentious issue, in this paper we examine whether there is evidence supporting that trade finance is associated with an increase in export. We also investigate the channel through which the effect of the trade finance on export is working. To this end, we focus on a specific part of trade finance: short-term export insurance and export credit guarantee. This is because noble and ample data on these types of trade insurance are available. This confidential data is provided by the Korea Insurance Trade Corporation (henceforth K-SURE) exclusively. We conduct a panel regression using Korean sector-level export data covering from 2010Q1 to 2017Q4. This dataset enables us to control for destination country-, sector-, and time-fixed effects. Our empirical results show that the short-term export insurance and export credit guarantee have a positive impact on exports, and the main channel behind this is related to mitigating financial constraints of exporting firms. The trade finance effectively eliminates the risk of importers' payment, which helps export firms reduce the financial frictions. This ultimately leads to an increase in export. Since the main mechanism in which the trade insurance affects export is related to alleviating financial frictions, it becomes more definite that the way how trade insurance contributes to an increase in export is somewhat different from that of a subsidy. When we consider the fact that financial friction is an important factor for restraining international trade, which can partly explain the great collapse in international trade during the global financial crisis, the trade insurance policies would rather be a useful policy measure which can dampen negative impact on export during recession.
Topic:
Finance, Economic Policy, Exports, and Trade Policy
Political Geography:
Asia and South Korea

36. Deeper Regional Integration and Global Value Chains

Author:
Nakgyoon Choi
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Recently, international trade has become regional rather than global. This paper aims to test if deeper regional integration contributes to the organization of global value chains along the regional clusters including Asia, Europe, and America. We estimate the impacts of deep regional integrations on global value chains by region, investigating the implications of mega FTAs for global value chains by scenario. We use not only data on trade in value added but also global value chains participation indexes which reflect the global value chains better than domestic value added in goods and services exports. The estimation results reveal that a deep regional trade agreement has heterogeneous effects on global value chains depending on the regional clusters. In particular, Asia turns out to import more intermediate goods than Europe and America while RTA member countries tend to import more intermediate goods from Europe than Asia and America.
Topic:
International Trade and Finance, Regional Integration, Economic Policy, and Exports
Political Geography:
Europe, Asia, Global Focus, and North America

37. A World Dividing: The International Implications of the Sino-American Rift

Author:
Chas W. Freeman Jr.
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
Quincy Institute for Responsible Statecraft
Abstract:
The Trump administration has declared economic war on China. The United States has raised taxes on Chinese imports to levels not seen since the Smoot–Hawley tariffs of the Great Depression. Over the course of this year, Chinese imports of American goods have decreased by 26.4 percent, while China’s exports to the United States are down 10.7 percent. Washington has embargoed exports to China of a constantly expanding list of high-tech manufactures. It seeks to block Chinese telecommunications companies from third-country markets. The United States has mounted a vigorous campaign to persuade other countries to reject Chinese investments in their infrastructure, notably in the case of 5G telecommunications networks.
Topic:
International Trade and Finance, Global Political Economy, Trade Wars, International Community, and Exports
Political Geography:
United States, China, Asia, and Global Focus

38. East Asia's Decoupling

Author:
Roland Rajah
Publication Date:
01-2019
Content Type:
Commentary and Analysis
Institution:
Lowy Institute for International Policy
Abstract:
East Asia is no longer reliant on US or Western markets to fuel its growth, giving it more room to manage amid global trade tensions. Heightened global trade tensions and the US desire to ‘decouple’ from the Chinese economy for national security reasons pose significant risks to East Asia’s export-driven growth model. However, the latest data suggests East Asia is no longer so dependent on exporting to the West, with China in particular eclipsing the United States as the leading source of ‘final demand’ for the rest of the region’s exports. This gives East Asia much greater room to manoeuvre, as regional integration is now a more viable platform for growth while US decoupling efforts will likely struggle to find traction in the region.
Topic:
Economics, International Trade and Finance, Global Markets, and Exports
Political Geography:
China, East Asia, Asia, North America, and United States of America

39. Determinants of Developing Countries' Export Upgrading: The Role of China and Productive Investment

Author:
Dic Lo and Yue Teng
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper explores the determinants of developing countries' export upgrading measured by export sophistication. In particular, as a response to the recent debate on China's impact on developing countries' industrialisation, we examine a new hypothesis that the considerable growth in developing countries' trade with China may serve as a source of productive investment for their export upgrading. Dynamic panel estimations based on HS 6-digit export data on 62 developing countries during 1995-2014 show the positive effects of human capital, productive investment, and absolute gains from trade with China measured by income terms of trade vis-à-vis China. Mediation analysis finds that the positive effect of trade with China on export upgrading takes effect largely through its enhancing effect on productive investment, which supports our hypothesis. By contrast, China's direct export-downgrading impact is minor. Our findings suggest that, for developing countries, China serves more as a stimulator of capital accumulation for industrial development than a competitor in manufacturing market or a predator of natural resources. This provides an alternative to the widespread argument of China's crowding-out and re- primarisation impact on developing countries. The priority for developing countries is therefore the appropriate use of the gains from trade for productive purposes.
Topic:
Development, International Trade and Finance, Hegemony, Investment, Exports, and Foreign Interference
Political Geography:
China and Asia

40. The Economic Importance of the KORUS FTA: A Case Study of the Korean Beef Market After Renegotiations

Author:
Jin Kyo Suh
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Beef trade was a major sticking point between the United States and South Korea in ratifying the KORUS FTA. The outcome of the renegotiations that led to the March 2018 agreement in principle did not impact sections pertaining to beef in the agreement, though looking at how beef trade would have been affected should the talks have failed highlights the importance of the agreement to both countries, but particularly the United States. This paper estimates the demand for imported beef in South Korea by source and product by using the production version of the Rotterdam demand system and assesses what the potential impact of U.S. withdrawal from the KORUS FTA would have been on beef trade between the U.S. and South Korea. The results suggest U.S. withdrawal from the KORUS FTA would have resulted in a considerable increase in Australian beef exports to South Korea, largely at the expense of U.S. beef. This is because there is significant price competition between beef imports from the United States and Australia. Furthermore, Korean consumers substitute American beef for Australian beef when the relative price of U.S. beef rises.
Topic:
Economics, Treaties and Agreements, Exports, and Trade Policy
Political Geography:
Asia, South Korea, North America, Korea, and United States of America