Browsing by Subject "Gravity model"

Now showing 1 - 7 of 7

Assessment of non-tariff barriers in food and agricultural trade : an empirical approach
(2015) Engelbert, Tanja; Brockmeier, Martina
Non-tariff barriers (NTBs) substantially govern and influence trade outcomes. They include a diverse range of policy and non-policy measures that directly or indirectly divert trade and are predominantly implemented on food and agricultural products. While multilateral negotiations of NTBs within the World Trade Organization (WTO) are a slow process, countries are more confident in accelerating the reduction and regulation of NTBs within free trade agreements (FTAs). Thus, considering NTBs might be of importance in analyzing potential effects of FTAs. This cumulative dissertation includes six articles addressing current research questions in agricultural economics on the identification of NTBs and their effects on trade and the evaluation of FTAs that explicitly consider NTBs. In all empirical analyses, the focus is on the agro-food sector. The first two articles serve as the foundation for policy analysis. The following articles draw on a two-step empirical approach to thoroughly assess regional trade liberalization by integrating econometric results from the theory-consistent gravity model into the computational general equilibrium (CGE) model Global Trade Analysis Project (GTAP) given a perfect match of data. The empirical analyses illustrate and reaffirm the high relevance of NTBs in the agro-food sector that by far exceeds tariffs. The use of different specifications of the gravity model and alternative identification strategies supports the stability of results. The joint econometric-CGE approach offers an appropriate and comprehensive framework for analyzing the effects of the reduction of NTBs in the process of economic integration. Extending the CGE model and augmenting the database with econometrically estimated parameters increase the quality and confidence of CGE-based assessments of deep FTAs. The reliability of the results is further increased by considering the most disaggregated level of data. Future research analyses might apply even more disaggregated data and rely on direct measures of NTBs by employing information from newly emerging databases on NTBs. To conduct CGE policy analyses, theory-consistent aggregation methods could be applied to obtain ad-valorem equivalents (AVEs) of NTBs at the CGE sector level. The composite-method approach that was selected for this thesis could be transferred to other case studies of regional trade liberalization. In addition, the method could be used to construct a detailed database of AVEs of NTBs for the CGE framework. This would enable one to conduct reliable and precise plurilateral and multilateral liberalization scenarios by considering NTBs.
Does immigration boost per capita income?
(2008) Sala, Davide; Felbermayr, Gabriel J.; Hiller, Sanne
Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to international labor mobility. Controlling for institutional quality, trade, and financial openness, we establish a robust and non-negative causal effect of immigration on real percapita income.
Enlarging the EMU to the East : what effects on trade?
(2007) Belke, Ansgar; Spies, Julia
The purpose of this paper is to assess the implications of the Economic and Monetary Union (EMU) accession of eight Central and Eastern European Countries (CEECs) on their share in EMU-12 imports. Overcoming biases related to endogeneity, omitted variables and sample selection, our results indicate that the common currency has boosted intra-EMU imports by 7%. Under the assumption that the same relationship between the explanatory variables and imports will hold for EMU-CEEC trade, we are able to predict the future impact of the euro. Our findings suggest that except for the least integrated countries, Poland, Latvia and Lithuania, all CEECs can expect increases in the EMU-12 import share.
Ethnic networks, information, and international trade : revisiting the evidence
(2009) Felbermayr, Gabriel; Jung, Benjamin; Toubal, Farid
Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias. Moreover, it is partly related to a preference effect rather than to enforcement and/or the availability of information. Applying a theory-based gravity model to ethnicity data for 1980 and 1990, and focusing on pure network effects, we find that the Chinese network leads to a more modest amount of trade creation of about 15%. Using new data on bilateral stocks of migrants from the World Bank for the year of 2000, we extend the analysis to all potential ethnic networks. We find, i.a., evidence for a Polish, a Turkish, a Mexican, or an Indian network. While confirming the existence of a Chinese network, its trade creating potential is dwarfed by other ethnic networks.
Kyoto and the carbon content of trade
(2010) Felbermayr, Gabriel; Aichele, Rachel
A unilateral tax on CO2 emissions may drive up indirect carbon imports from non-committed countries, leading to carbon leakage. Using a gravity model of carbon trade, we analyze the effect of the Kyoto Protocol on the carbon content of bilateral trade. We construct a novel data set of CO2 emissions embodied in bilateral trade flows. Its panel structure allows dealing with endogenous selection of countries into the Protocol. We find strong statistical evidence for Kyoto commitments to affect carbon trade. On average, the Kyoto protocol led to substantial carbon leakage but its total effect on carbon trade was only minor.
The pro-trade effect of the brain drain : sorting out confounding factors
(2008) Jung, Benjamin; Felbermayr, Gabriel J.
We sort out confounding factors in the empirical link between bilateral migration and trade. Using newly available panel data on developing countries? diaspora to rich OECD nations in a theory-grounded gravity model, we uncover a robust, causal pro-trade effect. Moreover, we do not find evidence in favor of strong differences across education groups.
Trade and welfare effects of a potential free trade agreementbetween Japan and the United States
(2018) Walter, Timo
This paper deals with the trade and welfare effects of a potential bilateral trade agreement between the US and Japan. A possible agreement is currently being discussed between Washington and Tokyo, although, there is also the alternative for the US government joining Trans-Pacific Partnership (TPP). Based on the theoretical model of Caliendo and Parro (2015) I analyse the welfare gains of such a bilateral free trade agreement (FTA) in the style of Aichele et al. (2014). In particular, I simulate three scenarios with different levels of integration: The reduction of tariffs only, the scenario of a shallow FTA, and a deep FTA. In addition, the paper compares the trade and welfare changes of a deep FTA to the welfare effects of TPP. The findings are that Japan has the highest welfare gains with a FTA (0.085%), whilst the United States benefits the most from TPP with a welfare gain of 0.05%.