A large body of research has established a positive link between immigrants and bilateral trade. However, the temporary movement of people across borders has received less attention. This column uses Swedish data to analyse the impact of temporary cross-border movement on trade. Recently arrived migrants are found to reduce the negative impact of distance on foreign trade, by assisting firms to overcome informal and informational barriers to trade with their origin country. Facilitating movement of people across borders can be a highly useful tool for engaging in and benefitting from specialised and internationalised production networks.
Emilie Anér, Anna Graneli, Magnus Lodefalk, Wednesday, October 14, 2015 - 00:00
Andrew K Rose, Tuesday, September 1, 2015 - 00:00
A nation’s hard power is based on its ability to coerce, while its soft power depends on the attractiveness of its culture, political ideals, and policies. This column shows that a country’s soft power has measureable effects on its exports. Countries that are admired for their positive global influence export more, holding other things constant.
Swarnali Ahmed, Maximiliano Appendino, Michele Ruta, Thursday, August 27, 2015 - 00:00
The export-less depreciation of the yen has opened a debate on the power of exchange rates to boost exports. This column presents new evidence on how the exchange rate elasticity of exports has changed over time and across countries, and how global value chains have affected it. The upshot is that greater integration in global value chains makes exports substantially less responsive to exchange rate depreciations.
Rosario Crinò, Laura Ogliari, Wednesday, July 29, 2015 - 00:00
The production of high-quality goods influences key aspects of countries’ economic performance, including growth and development. This column argues that removing credit market imperfections may help countries transition from the production of low-quality to high-quality goods, especially in industries that are more sensitive to financial frictions.
Takatoshi Ito, Satoshi Koibuchi, Kiyotaka Sato, Junko Shimizu, Monday, June 29, 2015 - 00:00
Japanese firms have been struggling with the yen’s volatility ever since the peg was dropped in 1973. This column, based on a recent survey of Japanese firms, argues that many firms have managed their exchange rate exposure by using operational and financial hedging strategies. It also finds that firms employing currency hedge and invoicing exports in yen are judged by the market to have reduced currency exposures.
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright, Wednesday, June 17, 2015 - 00:00
International trade in services and immigration are among the fastest growing aspects of globalisation. Using UK data, this column explores the links between these phenomena. Immigrants promote exports of final services to their home countries, while also reducing imports for some intermediate services, and bringing productivity gains to the labour market. In designing immigration policies, it is important that the potential impact on exports and offshoring activities are carefully considered.
Simon J Evenett, Johannes Fritz, Tuesday, June 16, 2015 - 00:00
The Global Crisis resulted in many trade barriers and distortions. This column introduces a new eBook that argues that least developed countries were hard hit by these barriers. Drawing on Global Trade Alert data, it argues that these barriers reduced these nations’ exports by 30% during the period 2009 to 2013 – over a quarter of a trillion US dollars in total.
Uri Dadush, Friday, March 13, 2015 - 00:00
Otaviano Canuto, Cornelius Fleischhaker, Philip Schellekens, Sunday, January 11, 2015 - 00:00
Atsuyuki Kato, Tuesday, November 25, 2014 - 00:00
Maria Bas, Vanessa Strauss-Kahn, Monday, July 14, 2014 - 00:00
The rise of trade in intermediate inputs is well documented, but its role in shaping domestic economies is not yet completely understood. This column presents evidence from French firms on the effects of importing intermediate inputs. Firms importing more varieties of intermediate inputs increased their productivity and exported more varieties. Foreign inputs from the most advanced economies have the strongest effect on firm productivity, but imported inputs from all countries help raise the number of export varieties.
Kerem Cosar, Nezih Guner, James R Tybout, Monday, July 7, 2014 - 00:00
Trade liberalisations are often accompanied by labour market reforms, making it difficult to isolate their effects. This column discusses the effects of trade liberalisation, globalisation, and labour-market reforms on the Colombian labour market. Reduced trade frictions increased cross-firm wage inequality and shifted the firm-size distribution rightward, with offsetting effects on overall wage inequality. Average income increased, but the gains were concentrated among employees of large, productive firms with access to export markets. Greater trade openness also increased job turnover.
Filippo di Mauro, Francesco Pappadà, Monday, June 2, 2014 - 00:00
Trade imbalances in the Eurozone require relative price adjustments. This column argues that the traditional ‘elasticity’ approach is lacking when thinking about the adjustment magnitude. Exports adjust when exporting firms sell more (intensive margin) and new firms start exporting (extensive margin). The extensive-margin reaction depends upon the fatness of firm-level productivity distributions. Surplus-country distributions have fatter tails than deficit countries, suggesting that the price adjustment magnitude may be larger than traditional calculations suggest.
Julien Martin, Florian Mayneris, Wednesday, December 4, 2013 - 00:00
While quality upgrading is always viewed positively in both policy and academic circles, little is known about the macro implications for countries of specialising in high-end varieties. This column presents evidence that high-end variety exporters are less sensitive to trade costs. This implies a greater geographic diversification of exports, which compensates for their higher sensitivity to demand shocks and smoothes aggregate volatility. It also increases export growth when business opportunities arise in distant markets.
Balázs Égert, Rafał Kierzenkowski, Wednesday, October 2, 2013 - 00:00
Decreasing world market share in exports threatens France’s recovery. Traditional determinants of exports do not fully explain the downturn. This paper presents a novel explanation for France’s declining exports: the real-estate boom. Strong profitability in the construction industry, led by rising house prices, diverted capital and labour from export-intensive industries. These results suggest a strong warning against policies supporting property ownership as an end in itself.
Holger Görg, Marina-Eliza Spaliara, Friday, September 13, 2013 - 00:00
International trade declined dramatically during the Global Crisis. This column focuses on UK firms that exited from exporting during the Global Crisis. The evidence clearly points to the importance of financial factors. Firms that exited were more heavily indebted, less liquid, and faced higher firm-specific interest rates.
Jerónimo Carballo, Gianmarco I.P. Ottaviano, Christian Volpe Martincus, Wednesday, September 11, 2013 - 00:00
Firm-level data has told us much about exporters, but little about export buyers. This column discusses new research that shows how buyer margins can be a critical channel through which trade policies influence aggregate exports. Reaching a larger number of buyers is an important vehicle of export expansion, both at the country level and at the firm level. As buyer margins are important, they should be incorporated into the assessment of policies such as export promotion and customs facilitation.
Danielken Molina, Marc Muendler, Monday, May 27, 2013 - 00:00
Exporting is essential for economic development. But can firms move from local sales to export sales? How do firms prepare for exporting? This column presents new research showing that worker mobility is an important mechanism by which exporter knowledge spreads through the economy.
Mary Amiti, Oleg Itskhoki, Jozef Konings, Tuesday, February 19, 2013 - 00:00
Why is it that large movements in exchange rates have small effects on international prices? What does this mean for a crisis-stricken Eurozone? Using firm-level data, this column presents new research that investigates this exchange rate ‘disconnect’. Evidence suggests that the prices of the largest firms – with their disproportionately large share of trade – are insulated from exchange rate movements. The international competitiveness effects of a euro devaluation are therefore likely to be modest, given major exporters’ reliance on global supply chains.
Barry Eichengreen, Poonam Gupta, Friday, January 18, 2013 - 00:00
Increasingly, services form a larger and larger share a country’s exports. Do exchange rates matter as much for services and they do for goods exports? This column argues that they do. Distinguishing between traditional services (such as trade and transport, tourism, financial services and insurance) and modern services (such as communications, computers, information services) suggests that the effect of the real exchange rate is especially large for exports of modern services.