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Articles 31 - 60 of 153
Full-Text Articles in International Economics
Informal Institutions And Comparative Advantage Of South-Based Mnes: Theory And Evidence, Pao-Li Chang, Yuting Chen
Informal Institutions And Comparative Advantage Of South-Based Mnes: Theory And Evidence, Pao-Li Chang, Yuting Chen
Research Collection School Of Economics
This paper builds a theory based on “informal institutions” to characterize the comparative advantage of South-based MNEs. MNEs headquartered in countries with poorer state institutions are shown to endogenously invest more in firm-specific institutional capital to compensate for the lack of state institutions, and as an optimal response, undertake FDI in countries with weaker institutions. We conduct an extensive test of the theory using worldwide firm-level greenfield FDI flows during 2009–2016, employing (among others) variations in the interaction of prevalence of informal institutions at home and state institutional qualities of host countries, as well as heterogeneity across sectors and firms …
A Ricardian Rationale For The Wto Rules On R&D Subsidies, Yumi Koh, Gea M. Lee
A Ricardian Rationale For The Wto Rules On R&D Subsidies, Yumi Koh, Gea M. Lee
Research Collection School Of Economics
The WTO subsidy rules use two key criteria, specificity and adverse effects, to regulate R&D subsidies. Using the model of Dornbusch et al. (1977), we offer a Ricardian rationale for the regulatory criteria.
The Potential Impacts Of Covid-19 On The Global Value Chains: Gvc Positioning And Linkages, Gerald Foong, Pao-Li Chang
The Potential Impacts Of Covid-19 On The Global Value Chains: Gvc Positioning And Linkages, Gerald Foong, Pao-Li Chang
Research Collection School Of Economics
Apart from the public health crisis entailed by the Coronavirus Disease 2019 (COVID-19) pandemic, it has also propagated a pandemic-induced economic shock globally. One transmission channel is via the inter-country linkages arising from the trade in intermediate inputs, which is a pertinent characteristic of global value chains (GVCs), and resulting in a "supply-chain contagion" as termed by Baldwin and Tomiura (2020). In this paper, we propose measures of bilteral downstreamness and upstreamness, the extent of a country's GVC participation, and the position of a country in GVCs by leveraging upon the gross export decomposition framework as laid out by Borin …
Mandarins Make Markets: Leadership Rotations And Inter-Provincial Trade In China, Junyan Jiang, Yuan Mei
Mandarins Make Markets: Leadership Rotations And Inter-Provincial Trade In China, Junyan Jiang, Yuan Mei
Research Collection School Of Economics
The careers of many public officials span multiple localities, yet the economic effects of their inter-regional movements are not well understood. This paper focuses on the rotation of provincial leaders in China and studies its impact on regional economic integration. Estimation results using the gravity framework indicate that when a provincial leader is appointed as the party secretary of a new province, the trade volume from the new province to the old province increases, but not vice versa. Additional analyses using two novel datasets that capture the intensity of inter-provincial socioeconomic activities in China corroborate this finding. We then construct …
Between Lives And Economy: Optimal Covid-19 Containment Policy In Open Economies, Wen-Tai Hsu, Hsuan-Chih Luke Lin, Yang Han
Between Lives And Economy: Optimal Covid-19 Containment Policy In Open Economies, Wen-Tai Hsu, Hsuan-Chih Luke Lin, Yang Han
Research Collection School Of Economics
This paper studies optimal containment policy for combating a pandemic in an open-economy context. It does so via quantitative analyses using a model that incorporates a standard epidemiological compartmental model in a multi-country, multi-sector Ricardian model of international trade with full-fledged input-output linkages. We devise a novel approach in computing optimal national policies in the long run, and contrast these policies with a baseline in which countries maintain their current policies until vaccine availability. The welfare gains under optimal policies are asymmetric as the gains for the set of countries which should tighten up the containment measures are much larger …
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang
Research Collection School Of Economics
This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity heterogeneity. With all the conflicting effects of import tariffs on welfare considered, the optimal degree of reciprocity in multilateral tariff reduction is shown to be free trade.
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang
The Optimal Degree Of Reciprocity In Tariff Reduction, Pao-Li Chang
Research Collection School Of Economics
This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity heterogeneity. In particular, without making parametric assumptions on firm productivity distribution, this paper derives the optimal degree of reciprocal tariff reductions that maximize the world welfare. A reciprocal import subsidy raises the industry productivity, lowering aggregate price; a reciprocal import tariff helps correct the markup distortion, increasing nominal income. With all the conflicting effects of import tariffs on welfare considered, the optimal degree of reciprocity in multilateral tariff reduction is shown to be free trade.
Globalization And Top Income Shares, Lin Ma, Dimitrije Ruzic
Globalization And Top Income Shares, Lin Ma, Dimitrije Ruzic
Research Collection School Of Economics
This paper documents empirically that access to global markets is associated with a higher executive-to-worker pay ratio within the firm. It then uses China's 2001 accession to the World Trade Organization as a trade shock to show that firms that exported to China prior to 2001 subsequently exported more, grew larger, and grew more unequal in terms of executive-to-worker pay. To evaluate analytically and quantitatively the impacts of globalization on top income inequality, this paper builds a model with heterogeneous firms, occupational choice, and executive compensation. In the model, executive compensation grows with the size of the firm, while the …
Efficiency, Quality Of Forecasts And Radner Equilibria, Shurojit Chatterji, Atsushi Kajii
Efficiency, Quality Of Forecasts And Radner Equilibria, Shurojit Chatterji, Atsushi Kajii
Research Collection School Of Economics
We study a simple two period economy with no uncertainty and complete markets where agents trade based on forecasts about the second period spot price. We propose as our solution concept a set of forecasts with the following properties: there exist (heterogenous) forecasts contained in this set that lead to efficient allocations, the set contains only those forecasts that correspond to some efficient equilibrium, and Önally that the forecasts assign positive probability to the actual market clearing spot price. We call such a set of prices an efficient equilibrium with ambiguity, and interpret it as a generalization of Radner equilibrium …
Cross-Border Technology Investments In Recessions, Juliana Yu Sun, Huanhuan Zheng
Cross-Border Technology Investments In Recessions, Juliana Yu Sun, Huanhuan Zheng
Research Collection School Of Economics
Utilizing industry-level foreign direct investment (FDI) from 72 source markets to 122 destination markets between 2003 to 2018, we apply a differences-in-differences approach to evaluate the response of technology FDI to recessions. We find that research and development (R&D) intensive FDI drops when the destination market is in recession and the source market is in a normal state, and recovers to the pre-recession levels when both destination and source markets are in recession. The result is particularly pronounced in deep and long recessions, during the propagation stage of recessions, and in destination markets with stronger intellectual property protection, looser FDI …
Foreign Direct Investment And Industrial Agglomeration: Evidence From China, Wen-Tai Hsu, Yi Lu, Xuan Luo, Lianming Zhu
Foreign Direct Investment And Industrial Agglomeration: Evidence From China, Wen-Tai Hsu, Yi Lu, Xuan Luo, Lianming Zhu
Research Collection School Of Economics
This paper studies the effect of foreign direct investment (FDI) on industrial ag-glomeration. Using the differential effects of FDI deregulation in 2002 in China on different industries, we find that FDI actually affects industrial agglomeration neg-atively. As FDI brings technological spillovers and various agglomeration benefits, other forces must be at work to drive our empirical finding. We propose a simple theory that FDI may discourage industrial agglomeration due to fiercer competition pressure. We find various evidence on this competition mechanism. We also examine an alternative theory based on spatial political competition, but find no evidence sup-porting it. On industrial growth, …
Sustainable Cooperation In International Trade: A Quantitative Analysis, Yuan Mei
Sustainable Cooperation In International Trade: A Quantitative Analysis, Yuan Mei
Research Collection School Of Economics
How does the presence of multilateral institutions affect the sustainability of trade-policy cooperation? Do free-trade agreements make multilateral cooperation less sustainable? Will countries be more likely to deviate from negotiated tariffs when more trade liberalization realizes in the future? These questions have been studied in theory literature using models that feature repeated games, but have yet to be quantitatively analyzed. In this paper, I propose a methodology to quantitatively characterize the equilibrium strategies on tariffs of various nations in a widely used repeated-game framework. I then apply this methodology to address these questions from a quantitative perspective. The numerical results …
Infrastructure Investment And Travel Time, Yumi Koh, Gea M. Lee
Infrastructure Investment And Travel Time, Yumi Koh, Gea M. Lee
Research Collection School Of Economics
We examine additional travel time that arises as reconstruction of non-functioning bridges gets delayed. Our simulations show that the extent to which a budget increase reduces such additional travel time is rather modest. We show that a substantial portion of the unsolved travel time results from budgetary allocations.
Competition, Markups, And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Competition, Markups, And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Research Collection School Of Economics
This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 7.1%. The gains are decomposed into a Ricardian component and two pro-competitive ones. The pro-competitive effects account for 20% of the total gains. Moreover, the total gains from trade are 13 − 31% larger than what would result from the formula provided by ACR (Arkolakis et al., 2012), which nests a …
Singapore In The Global Value Chains, Pao-Li Chang, Tran Bao Phuong Nguyen
Singapore In The Global Value Chains, Pao-Li Chang, Tran Bao Phuong Nguyen
Research Collection School Of Economics
In this chapter, we analyze the participation of Singapore in the global value chains (GVC): how much of its gross exports are GVC-related trade, how downstream it is, and which countries are its key upstream and downstream trade partners. This is done at both the country aggregate and at the sector level. New formulas are proposed in the gross export decomposition framework of Koopman, Wang and Wei (2014) and Borin and Mancini (2017), to characterize a country/industry’s downstreamness in the GVC and the importance of each trade partner in its backward/forward linkages. Singapore is found to start off with a …
Innovation, Growth, And Dynamic Gains From Trade, Wen-Tai Hsu, Raymond G. Riezman, Ping Wang
Innovation, Growth, And Dynamic Gains From Trade, Wen-Tai Hsu, Raymond G. Riezman, Ping Wang
Research Collection School Of Economics
How large are the welfare gains from trade? Would such gains be significantly amplified in the long run when productivity is endogenously enhanced? To address these questions, we focus on the dynamic effect of trade, in particular, how trade affects the incentives for technological advancement. We construct an innovation-based endogenous growth model of North-South trade. There are two types of innovation: one by the North to upgrade the general purpose technology (GPT) and another by all countries to advance entrepreneurial knowledge for developing differentiated products. We find sizable welfare gains from trade, about 5.3% when compared to autarky. The gains …
Financing Singapore’S Smes And The Crowdfunding Industry In Singapore, Swee Liang Tan, Yoke Wang Tok, Thitipat Chansriniyom
Financing Singapore’S Smes And The Crowdfunding Industry In Singapore, Swee Liang Tan, Yoke Wang Tok, Thitipat Chansriniyom
Research Collection School Of Economics
As new digital technologies emerge that make the provision of financial services more efficient, they hold the potential to address barriers that SMEs face in accessing credit. This paper found empirical evidence that crowdfunding improved SMEs’ timeliness to pay debt. Anecdotal evidence from SMEs suggests that getting crowdfunding loans also induced financing from banks. In just four years, Singapore’s crowdfunding volumes have grown rapidly to make it the top crowdfunding hub in Southeast Asia. The rapid development of Singapore’s crowdfunding industry can be attributed to its higher GDP per capita, higher level of financial sector development and greater availability of …
Global Value Chains And The Cptpp, Pao-Li Chang, Tran Bao Phuong Nguyen
Global Value Chains And The Cptpp, Pao-Li Chang, Tran Bao Phuong Nguyen
Research Collection School Of Economics
The CPTPP, or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is an example of a “mega-regional” free trade agreement, whose provisions on the rules of origin and trade facilitation can have potentially large impacts on the CPTPP-wide supply chains. In this paper, we investigate whether the CPTPP members are key upstream and downstream trade partners to each other in the global value chains. We develop formulas of bilateral upstreamness and downstreamness, based on the gross-export decomposition framework of Koopman, Wang and Wei (2014) and Borin and Mancini (2017). We demonstrate how the decomposition of gross exports can be used …
Competition, Markups, And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Competition, Markups, And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Research Collection School Of Economics
This paper provides a quantitative analysis of gains from trade in a model with head-to-head competition using Chinese firm-level data from Economic Censuses in 1995 and 2004. We find a significant reduction in trade cost during this period, and total gains from such improved openness during this period is 7:1%. The gains are decomposed into a Ricardian component and two pro-competitive ones. The procompetitive effects account for 20% of the total gains. Moreover, the total gains from trade are 13 31% larger than what would result from the formula provided by ACR (Arkolakis, Costinot, and Rodríguez-Clare 2012), which nests a …
A Two-Round In-Class Trading Game On The Principle Of Comparative Advantage And The Theory Of Reciprocal Demand, Bei Hong
Research Collection School Of Economics
This paper outlines a classroom trading game that explores equilibrium terms of trade using the principle of comparative advantage and theory of reciprocal demand. Students are divided into eight groups. Each group is assigned a country with hypothetical productivity and each country seeks its trading partner based on comparative advantage. Students simulate the trading of goods between countries with the objective of achieving the best possible terms of trade. The game encourages students to reflect on their learning of the principle of comparative advantage, consider improvements in trade terms through negotiation, and summarize the conditions for mutually beneficial terms of …
Made In Singapore, Pao-Li Chang, Phuong T. B. Nguyen
Made In Singapore, Pao-Li Chang, Phuong T. B. Nguyen
Research Collection School Of Economics
In this paper, we characterize the position of Singapore in global value chains and identify Singapore's key upstream and downstream trade partners. We trace how the position of Singapore in global value chains has changed in the past two decades: whether it has moved upstream or downstream, how involved it is in global value chains, how its trend compares with other major Asian exporting countries (China, Japan, Korea and Taiwan), and which key sectors of Singapore play a major role in these global trade networks.
Geography, Trade And Power-Law Phenomena, Pao-Li Chang, Wen-Tai Hsu
Geography, Trade And Power-Law Phenomena, Pao-Li Chang, Wen-Tai Hsu
Research Collection School Of Economics
This article provides a review on the theories of various power-law phenomena related to geography and trade. In particular, we focus our discussion on the gravity equation of trade flows, the power law in firm size, and the link between the two - highlighting the roles of geography and trade in the theoretical modeling. We also discuss how these two power-law phenomena may be related to other power-law phenomena, such as those in income, firm productivity and city size.
Income Inequality, Productivity, And International Trade, Wen-Tai Hsu, Lin Lu, Pierre Picard
Income Inequality, Productivity, And International Trade, Wen-Tai Hsu, Lin Lu, Pierre Picard
Research Collection School Of Economics
This paper discusses the effect of income inequality on selection and aggregate productivity in a general equilibrium model with non-homothetic preferences. It shows the existence of a negative relationship between the number and quantity of products consumed by an income group and the earnings of other income groups. It also highlights the negative effect of a mean-preserving spread of income on aggregate productivity through the softening of firms’ selection. This effect is however mitigated in the presence of international trade. In a quantitative analysis, it is shown that an excessively large mean-preserving spread of income may harm the rich as …
Cultural Preferences In International Trade: Evidence From The Globalization Of Korean Pop Culture, Pao-Li Chang, Iona Hyojung Lee
Cultural Preferences In International Trade: Evidence From The Globalization Of Korean Pop Culture, Pao-Li Chang, Iona Hyojung Lee
Research Collection School Of Economics
The Korean pop culture (TVdramas and K-pop music) has grown immensely popular across the globe over thepast two decades. This paper analyzes its impacts on international trade. We compilea cross-country panel dataset of South Korea's TV show exports to over 150countries for the period of 1998{2014. These variations in exposure to Koreanpop cultures are used to identify changes in consumer preferences for Koreanmerchandise across time, countries, and products (at the HS 4-digit level).First, we find that more Korean TV show exports significantly increase Koreanexports of goods for women, while the effects are much smaller on men'smerchandise. This strongly supports the …
Does "America First" Help America? The Impact Of Country Image On Exports And Welfare, Pao-Li Chang, Tomoki Fujii, Wei Jin
Does "America First" Help America? The Impact Of Country Image On Exports And Welfare, Pao-Li Chang, Tomoki Fujii, Wei Jin
Research Collection School Of Economics
This paper estimates the effects of bilateral and time-varying preference bias on trade flows and welfare. We use a unique dataset from the BBC World Opinion Poll that surveys (annually during 2005-2017 with some gaps) the populations from a wide array of countries on their views of whether an evaluated country is having a mainly positive or negative influence in the world. We identify the effects on bilateral preference parameters due to shifts in these country image perceptions, and quantify their general equilibrium effects on bilateral exports and welfare (each time for an evaluated exporting country, assuming that the exporting …
Growing Through The Merger And Acquisition, Jianhuan Xu
Growing Through The Merger And Acquisition, Jianhuan Xu
Research Collection School Of Economics
The paper studies with an endogenous growth model how the merger and acquisition (M&A) affects the aggregate growth rate. We model the M&A as a capital reallocation process, which can increase both productivity and growth rates of firms. The model is tractable and greatly consistent with patterns observed in the M&A at the micro level. Matching our model to the data, we find that prohibiting the M&A would lead to the reduction of the aggregate growth rate of US economy by 0.1% and the reduction of the aggregate TFP by 5%.
Tackling Technology Disruption In The Financial Sector: Are The Current Singapore Government Incentives And Labour Force Preparations Adequate?, Swee Liang Tan
Tackling Technology Disruption In The Financial Sector: Are The Current Singapore Government Incentives And Labour Force Preparations Adequate?, Swee Liang Tan
Research Collection School Of Economics
No abstract provided.
Energy Price Shocks And External Balances, Bao Tan Huynh
Energy Price Shocks And External Balances, Bao Tan Huynh
Research Collection School Of Economics
This paper studies the impact of a wide set of energy price shocks on exter- nal balances using a two-country framework comprising multiple sectors and en- dogenous energy production with convex costs. The paper disentangles different demand and supply shocks in the energy market through their distinct impact on external balances. It provides a theoretical confirmation of Kilian et al. (2009) and a theoretical foundation to the determining role of the non-energy trade balance in the transmission of energy price shocks. The presence of durables also highlights the immediate channel through which energy prices impact the non-energy trade balance.
Competition And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Competition And Gains From Trade: A Quantitative Analysis Of China Between 1995 And 2004, Wen-Tai Hsu, Yi Lu, Guiying Laura Wu
Research Collection School Of Economics
This paper provides a quantitative analysis of gains from trade for China over the period of 1995-2004, which was when China's openness drastically improved. We decompose gains from trade in two ways. First, we disentangle pro-competitive effects from a traditional Ricardian effect. Second, we separate the effect due to tariff reductions from that due to reductions in non-tariff trade costs. Our quantitative analysis shows that the pro-competitive effects account for 25.4% of the total welfare gains from trade, whereas the allocative effciency alone accounts for 22.3%. We also find that tariff reductions account for about 31.6% of reductions of overall …
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Research Collection School Of Economics
This paper proposes a framework of endogenous energy production with convex costs to investigate the general equilibrium effects of energy price shocks on the business cycle. This framework explicitly models the consumption of durables and nondurables and implements a high complementarity between energy and the usage of durables and capital. The model predicts energy price elasticities of various consumption variables that fall within reasonable agreement with empirical estimates. Convex costs in energy production produce energy price and energy supply dynamics that tallies well with empirical behavior. Our analysis confirms in a theoretical setting recent observations that not all energy price …