Towards “trade policy analysis 2.0”: From national comparative advantage to firm-level trade data
Lucian Cernat 08 December 2014
The world of international trade has been in constant evolution since the rise of containerisation. This column makes the case for the need to upgrade our toolbox for trade policy analysis. An upgraded "Trade Policy Analysis 2.0" would be based on firm-level statistics and a much more refined product disaggregation, both of which are now becoming widely available.
International trade is present in everyone's life. Be it the fruits we have at breakfast or the electrical devices we use, our daily routine depends on complex trade flows and production processes scattered across multiple countries that hardly get noticed by the final consumer. Trade flows have evolved over time and are becoming increasingly intricate, with countless parts and components crossing multiple borders at different stages of production along global supply chains, before reaching the final consumer.
Frontiers of economic research International trade
trade policy, firm-level data, containers
Firm-level data: Who said that they are too difficult to use for policy?
Filippo di Mauro 11 March 2014
Policies aimed at enhancing firm productivity may greatly benefit from firm-level evidence. Unfortunately, micro-founded data, particularly of cross-country nature, remain largely unavailable. This column presents a new firm-level database built by a research network of the EU system of central banks (CompNet). This data base allows investigating how firm size and labour costs interact at different levels of productivity. This new cross-country data base, and its potential to expand, could be of great policy value.
firm productivity, firm-level data, CompNet
How to get Arab firms exporting
Jamal Ibrahim Haidar 18 February 2012
Recent theoretical and empirical trade research has shifted from analysing aggregate trade flows to studying the behaviour of exporters. This column examines the case of Jordan and finds that multi-product exporters in Jordan look remarkably similar to their US and French counterparts, confirming the predictions of recent theoretical models. It adds that this implies the policy focus should be on raising the number of exporters, not on helping the existing superstars.
Exports are important for economic growth and employment (see, for example, Mayer et al. 2011, Baldwin and Harrigan 2011, Eckel and Neary 2010, and Baldwin and Gu 2009). However, countries do not do trade; it is firms that export and import (Eaton et al 2011, Bernard et al 2011). This basic truth makes it obvious that understanding the firm-level facts is essential to good policymaking in Arab countries. Why exports from some countries grow faster than those from others is one of the most important questions in trade and development economics.
Development International trade
exports, firm-level data, Jordan
International trade in services: A portrait of importers and exporters
Holger Breinlich, Chiara Criscuolo 02 July 2010
Services trade accounts for a large and growing share of international trade - but we know very little about the firms carrying out this trade. Using firm-level data from the UK between 2000 and 2005, this column paints a detailed picture of importers and exporters of services, and discusses some of the resulting implications for economic policy.
Trade in services has been the fastest growing component of international trade since the early 1990s, with average annual growth rates of close to 10% and a total cross-border export value of $2,800 billion in 2006 (WTO 2008). Over the same period, the composition of services trade has shifted dramatically in favour of high-skill intensive categories such as business services, provoking heated debate about the consequences of services offshoring.
UK, trade in services, firm-level data
Institutions matter for growth – but which ones and how much?
Wendy Carlin, Mark Schaffer, Paul Seabright 17 February 2010
How much do institutions matter? This column provides a new insight into measuring their effects, suggesting that a survey of managers’ perceptions of the impact of institutions should be used as an estimate of the effect. It finds that the combined impact of improving public inputs in low-income countries to their level in high-income ones is equivalent to raising output by about 20%.
Most economists today would agree that “institutions matter” for economic growth. This marks a significant shift from twenty years ago and the “Washington Consensus”. Back then, the thinking was that growth required mainly sound policies: macroeconomic stabilisation, trade liberalisation, and privatisation. But since then attempts to quantify the impact of institutions have actually been too successful to be credible.
Development Institutions and economics
growth, institutions, firm-level data