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We will be asking ourselves if the trading blocs created or renewed since the end of the 1980s favor the multilateralization of trade, and so constitute building or stumbling blocks. In a gravity model using panel data, we estimate a set of three regional dummies representative of intra-bloc trade, extra-bloc exports and extra-bloc imports. Taking the resulting three coefficients as a starting point, we propose an original typology of trade creations / diversions and of trading blocs. In applying it to our results, all the groups chosen as well as the Economic and Monetary Union, are shown to be building blocks. No trade diversion is noted, with the exception of an export diversion brought about by North American Free Trade Agreement.

With production activity tending rapidly towards international fragmentation, this study examines the consequences for labour countries of the forms of specialisation brought about by fragmentation processes. It further addresses the risk that fragmented sectors may become excluded from greater developments within the manufacturing industry as a whole. An empirical analysis using panel data reveals that, contrary to expectation, the textile and clothing sector in labour countries does not always reap the positive benefits of this form of international trade integration. Rather, we observe a phenomenon of immiserising specialisation, due to a drop in relative wages within this sector.

COVID-19 is a matter of common European interest since its very first detection on the continent. Yet this pandemic outbreak has largely been handled as an essentially national matter.This article makes a first attempt at unpacking how such fragmented, uncoordinated national responses to COVID19 came into being under the EU legal order. To do so, it systematizes the European response into separate stages. Phase 1 – the emergency – has been characterized by the adoption of national emergency risk management measures that, albeit country specific, were inspired by a common objective of pandemic suppression, i.e. to reduce disease transmission and thereby diminishing pressure on health services, under the by now well-known ‘flatten the curve’ imperative. Phase 2 – the lifting – is about the attempt at relaxing some of the national risk responses in a coordinated fashion to avoid creating negative spillovers or distortions – be they sanitary and/or financial – across the Union.The article argues that contrary to conventional wisdom the resulting uncoordinated EU response to Covid-19 shouldn’t be seen as the inevitable consequence of the EU’s limited competence in public health. Against this backdrop, it strives to define the regulatory policy framework that might be governing the next phases of the European risk management response to this pandemic as they will emerge from a widely undefined yet unescapable dialectic between the Union and its member states. Ultimately, it predicts that by testing the outer limits of the EU public health competence COVID-19 is set to go down in history as a major catalyst in the advancement of EU health emergency action.

We study whether R&D-intensive firms are more resilient to trade shocks. We correct for the endogeneity of R&D using tax-induced changes to R&D cost. While rising imports from China lead to slower sales growth and lower profitability, these effects are significantly smaller for firms with a larger stock of R&D (by about half when moving from the bottom quartile to the top quartile of R&D). As a result, while firms in import-competing industries cut capital expenditures and employment, R&D-intensive firms downsize considerably less. Finally, we provide evidence that these effects are explained by R&D allowing firms to increase product differentiation.

Using inter-state banking deregulation in the U.S. as an exogenous experiment, the authors find that a 1% increase in banking integration between U.S. states caused a 0.164-0.184% increase in the foreign exports/domestic shipments ratio for U.S. state level exports in the years 1992-1996. They can ascribe these effects to the integration by banks with foreign assets: a 1% increase in banking integration through such banks caused the exports/domestic shipments ratio to increase by 0.22-0.41% while the expansion of banks with purely domestic assets appears to have no impact. Given the empirical specification, this increase in openness can be attributed to an increase in capital to cover variable and fixed export costs relative to domestic shipping costs and a higher provision of trade finance services. Serving new destinations (the extensive margin defined at the state-country level) accounts for 22% to 28% of the banking integration effect that the authors observe.

We test the trade finance channel of exports by controlling for the bank credit channel. Using Turkey’s July 2012 adoption of Basel II as a quasi-natural experiment, we examine whether shocks to trade financing costs affect exports. With data for 16,662 Turkish exporters shipping 2,888 different products to 158 countries, we find that the share of letters-of-credit-based exports decreases (increases) when the associated risk weights for counterparty exposure increase (decrease) after the adoption of Basel II. However, growth of firm-product-country-level exports remains unaffected. Trade financing might have a lesser role in exports than previously suggested by the previous literature. © The Author 2017. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved.