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Most literatures have studied the role of the Internet in promoting the country's foreign trade. However, when the difference in Internet level between the two countries becomes the focus, will it hinder bilateral trade? This paper attempts to investigate the hinder impact of the Internet gap between the two countries on bilateral export in the framework of gravity model. The goods export data during the period of 2005–2019 from the WTO and the method of Poisson Pseudo-Maximum-Likelihood (PPML) and Ordinary Least Squares (OLS) were used. It is found that the Internet gap between the two countries will hinder bilateral export by increasing the information trade costs. Lower Internet countries are more sensitive to the Internet gap in bilateral export. This paper also analyzes the impact mechanism, which provides the fresh evidence for related study. [ABSTRACT FROM AUTHOR]

It is notoriously difficult to estimate the impact of information frictions on trade. The 1866 transatlantic telegraph connection has been used to estimate these impacts, but I demonstrate this sample violates the assumptions of an arbitrage model in ways that are likely to bias empirical result. I avoid this bias by constructing a novel dataset that meets all relevant assumptions during the 1848 rollout of the telegraph across the U.S., ultimately estimating the magnitude of the distortions on prices, quantities, and efficiency to be roughly half as large as those found in prior literature. [ABSTRACT FROM AUTHOR]

This study explores how income inequality among individuals in each country and trade costs depicting geographic distance between countries impact economic welfare and regime choice under representative democracy, comparing three trading regimes: most favored nation, customs union, and free trade agreement. We examine two cases: one in which trade costs are incurred symmetrically among all countries, and the other in which no trade costs are incurred among the potential member countries, but only between them and nonmembers. In each case, we identify the political feasibility of each regime as well as the impact on the average welfare levels. [ABSTRACT FROM AUTHOR]

While the effects of immigrants on aggregate trade flows have been extensively examined, the role of immigrants in shaping trade in value added (TiVA) remains underexplored. Employing a panel dataset covering 38 Organization for Economic Co-operation and Development (OECD) member host countries and 64 immigrant home countries spanning 2000–2018 and estimating a random intercept and random slope mixed-effects model, we find that immigrants play a significant role in enhancing the value added from their home countries that is embedded in their host countries' exports to the world. We document these effects at the aggregate level and across sectors (i.e., manufacturing, agriculture, and services). There is, however, considerable variation in the influence of immigrants on TiVA across country pairs. Our findings highlight that immigrants significantly enhance trade sophistication by promoting specialization and upward movement in the value chain, yielding economic benefits for their home and host countries. [ABSTRACT FROM AUTHOR]

The finding of Feldstein and Horioka (1980) that domestic saving and domestic investment are highly correlated across countries despite the rapid globalization and liberalization of financial markets in recent decades has been regarded as a Puzzle or Paradox. However, in this paper, we show that countries as a whole may not be able to transfer their capital abroad and that the Feldstein–Horioka Finding of domestic saving and domestic investment being highly correlated across countries may arise even if there are no frictions in financial markets and even if individual investors can freely transfer their capital abroad if there are frictions in goods markets such as transport costs, tariffs, nontariff barriers, the cost of regulatory compliance, etc. In fact, there is evidence that frictions in goods markets are a more serious impediment to countries as a whole being able to transfer their capital abroad than frictions in financial markets, especially in the short run. [ABSTRACT FROM AUTHOR]

We study how internal trade costs affect the Chinese economy. Combining regional and industry data with a multiregional multisector general equilibrium model, we quantify the magnitude of total trade costs and institutional trade costs, and the impact of their changes on aggregate, regional, and sectoral total factor productivity, gross domestic product, and welfare. Using unique data, we estimate the sectoral trade elasticity of internal trade in 16 tradable sectors. We use our calibrated model to perform a variety of counterfactual exercises. We find that the welfare gains are negative for a 5% reduction in total trade costs and for the elimination of institutional trade costs, which can be attributed to inherent inefficiencies in the economy. However, as total trade costs decrease further, the positive welfare effect significantly exceeds the impact of inefficiency. The regional and sectoral effects of changes in trade costs show that the spatial structure of the economy, input‐output linkages, and local factors together determine the heterogeneity of sectoral and regional consequences. Finally, we infer the relative changes in China's internal trade costs from 2012 to 2017, and calculate their economic effects. [ABSTRACT FROM AUTHOR]

Free‐on‐board (FOB) export prices for identical products from the same origin often differ across destinations, even when accounting for the trade costs and attributes of the destination country. One explanation for this observed price difference is per‐unit trade costs, and the ability of exporters to vary their markups and/or product quality. Using a novel dataset that details trade flows between countries by mode of transport, we estimate the transport mode‐specific effect of a per‐unit trade cost, specifically specific tariffs, on the FOB export prices of agricultural products. We find an elasticity of specific tariffs to export prices of 1.8%. However, the estimates are heterogeneous across modes of transport. The elasticity of specific tariffs to export prices is 2% for air transport, 5% for road transport, and.3% for sea cargo. Since the observed positive export price effect can reflect product quality differences or markups, we account for the quality element and find that for a given product quality, markups increase with increasing specific tariffs. This form of price discrimination is less pronounced for higher‐quality products that are predominantly shipped by air. [ABSTRACT FROM AUTHOR]

Under local protectionism, environmental regulation may harm market integration and create expensive domestic trade cost. After matching data of trade flows from Chinese Customs to A-listed enterprise, the Head–Ries trade cost index is used to measure domestic and international trade costs during 2003–2013. Then, the environmental information disclosure (EID) released in 2008 is introduced as a policy cutoff, and this article adopts the regression discontinuity in time model to explore its effects on trade costs. After a set of robustness tests, the results show that EID leads to significant discontinuities in trade costs, suggesting a 0.077 increase in domestic trade cost but a 0.222 decrease in international trade cost. Domestic market segmentation goes against internal circulation of commodities, and regulated enterprises alternatively enter international markets to seek scale economies. The further mechanism test applies the two-stage least squares model to investigate corporate strategy, and it proves that EID generates an overall decline in corporate productivity. After the exit of low-productivity enterprises, the market structure becomes more concentrated and remaining enterprises gain export competitiveness. However, corporate productivity fails to significantly reduce international trade cost, while the export scale of leading enterprises in high-concentrated market has an absolute advantage. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of geopolitical risk on trade costs across 43 countries from 1995 to 2019. The results show that geopolitical risk enters trade costs regressions positively and significantly. These findings are robust to the consideration of the different sub-periods, the sub-samples ex US and countries with the highest geopolitical risk, more control variables, the alternative estimation method, and the endogeneity issue. Given the importance of trade costs for welfare gains from trade, our results suggest a potential role for policy reforms that aim to reduce the geopolitical risk across the countries. [ABSTRACT FROM AUTHOR]

The issues of the relevance of foreign trade cooperation between Russia and Syria, including the opportunities and risks of the Syrian economy for partners; the current state of bilateral trade between Russia and Syria; Syria as a promising direction for the Russian export business and the need for its development are considered. The authors analyzed the foreign trade potential of the dynamics and structure of foreign trade relations, identified comparative advantages in the world commodity markets, determined the place and role of bilateral foreign trade partnership. Russia is one of the key export markets for Syrian agricultural products, whose price competitiveness is supported by zero preferential duties within the framework of the unified system of preferences of the Eurasian Economic Union. In the course of the study, the authors identified the volume of unrealized export potential of Syria to the EAEU countries and vice versa, including in the structure of goods. It is concluded that it is necessary to develop trade relations on a bilateral basis with the help of instruments aimed at raising awareness of consumer demand and supply of national producers, as well as through “soft power” instruments in the field of education. It seems that Syria’s obtaining observer status in the EAEU will become an incentive to strengthen trust relations and investment attractiveness, which, in turn, will become the basis for joint work on infrastructure cross-border logistics projects in Syria (the Five Seas Strategy) and will reduce costs for increasing mutually beneficial bilateral trade. The study contains theoretical and statistical justification, as well as practical proposals for the development of friendly relations and strategic partnership with the Syrian Arab Republic in the context of the development of integration processes of the Eurasian Economic Union.

A supply chain is only as strong as its weakest link. Firms are constantly managing uncertainties, including unexpected delays in the provision of a critical input that can slow down or halt the production process, possibly making the manufacturer miss a delivery deadline. As most exporters are also importers of intermediate goods, supply chain unreliability related to import processing times at the border could impact downstream export dynamics. The role of unpredictability in border-clearance times for imports in manufacturing firms' entry, exit, and survival in export markets is investigated using the PPML estimator on a rich dataset built on firm-level information for 48 developing countries over 2006–2014. Uncertainty in the time to clear imported inputs impacts neither the entry nor the exit rate, but translates into lower survival rates for new exporters, reducing the number of firms that continue serving the foreign market beyond their first year of entry. This effect grows larger over time, owing to rising reputational costs to input-importing exporters and is mainly driven by South-North trade, possibly reflecting the time-sensitivity of buyers in developed countries. Results also reveal heterogeneous effects across export industries, and the mediating role of sunk costs of entry in foreign markets, which attenuate the negative effect of uncertainty on survival rates as firms delay exiting the export market. [ABSTRACT FROM AUTHOR]

This paper studies the relationships between digitalisation, trade costs, quality upgrading and trade flows, using an extended version of a gravity model. Based on information from various sources of data, we estimate these relationships sequentially for a sample of 18 manufacturing and 14 service sectors in 40 countries over the period 2000–2014. Using input–output tables from World Input–Output Database, we define an original measure of digitalisation at the country‐sector level that reflects the use of digital inputs into a country's production function. Using trade databases from the CEPII and OECD, we estimate a series of gravity models of trade augmented with this measure of digitalisation. Our results show that sectoral digital intensity positively affects sectoral exports. We provide evidence that this result is not ruled out by other possible factors, such as internet adoption or participation in a global value chain. A heterogeneous analysis also reveals that the effect of digital intensity is stronger for manufacturing trade and for trade between emerging economies. We explore two possible mechanisms explaining this positive relationship. First, we find that digital intensity facilitates trade between countries by reducing communication and transport costs. Second, we show that digital intensity improves the quality of exported products. [ABSTRACT FROM AUTHOR]

The agricultural sector's share of gross domestic product (GDP) in growing economies typically declines but, for a century from the early 1850s, Australia's did not. Drawing on recent structural transformation literature, this paper seeks explanations for this unusual phenomenon, which is all the more striking because agriculture's share of employment continued to decline throughout and growth in manufacturing was being stimulated by tariff protection from imports. Several factors contributed, including a huge land frontier that took more than a century for settlers to explore, rapid declines in initially crippling domestic and ocean trade costs for farm products, the absence of a need to do any processing of the two main exports during that period (gold and wool) and innovations by farmers and via a strong public agricultural R&D system that contributed to farm labour productivity nearly doubling over those 10 decades. The ban on iron ore exports from 1938 and low export prices for fuels, minerals and metals during the two world wars and in the intervening decades also contributed. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Technology Economics is the property of Chinese Society of Technology Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

There is an abundant literature on the economic (including trade) effects of Aid for Trade (AfT) flows. However, little attention has been devoted to the effect of AfT flows on demand for technology licensing. The present article aims to fill this void in the literature by investigating the effect of AfT flows on technology licensing in developing countries. The analysis has used an unbalanced panel dataset of 77 countries over the period from 2002 to 2019 and mainly the two-step generalized method of moments estimator. It has been established that AfT flows foster technology licensing in countries that experience lower trade costs. In addition, the analysis has revealed that adverse environmental and external (economic and financial) shocks significantly hamper innovation, including the demand for technology licensing, and that AfT flows promote technology licensing in countries that experience lower magnitudes of such shocks. Finally, AfT flows foster technology licensing in countries that diversify export products. [ABSTRACT FROM AUTHOR]

Deep trade agreements (DTAs) have boomed in recent years and extended their reach well beyond tariff liberalisation. This paper investigates the impact of deep trade agreements on trade costs from a global perspective. The results show that trade costs between partners that sign an agreement with the highest depth decrease by 10.3%. The results are shown to be robust to the consideration of interval data, different measures of the trade agreement depth, different datasets, and alternative estimation strategy. Furthermore, we provide supportive evidence of the spillover effect of DTAs. We find that non‐discriminatory provisions in DTAs significantly lower non‐tariff costs for non‐member countries, especially for agricultural goods. [ABSTRACT FROM AUTHOR]

We extend the small country trade model with firm heterogeneity (Demidova and Rodriguez-Clare, Journal of International Economics, 90, 2013 and 266) to incorporate offshoring (along with final goods trade). We derive the firm-level employment implications of output and input trade and trade costs and test them using Korean firm-level data for the period 2006–2016. A key theoretical result is that the impact of a change in offshoring cost on employment depends crucially on the net substitutability between inputs where net substitutability is the difference between the elasticities of input substitution and output substitution. Empirically, we find that a decrease in the input trade cost reduces employment and the impact is stronger, the greater the net substitutability between inputs. Our 2SLS results with firm-level imports (in place of trade costs) are consistent with our results with trade costs.

While the effects of immigrants on aggregate trade flows have been extensively examined, the role of immigrants in shaping trade in value added (TiVA) remains underexplored. Employing a panel dataset covering 38 Organization for Economic Co-operation and Development (OECD) member host countries and 64 immigrant home countries spanning 2000–2018 and estimating a random intercept and random slope mixed-effects model, we find that immigrants play a significant role in enhancing the value added from their home countries that is embedded in their host countries’ exports to the world. We document these effects at the aggregate level and across sectors (i.e., manufacturing, agriculture, and services). There is, however, considerable variation in the influence of immigrants on TiVA across country pairs. Our findings highlight that immigrants significantly enhance trade sophistication by promoting specialization and upward movement in the value chain, yielding economic benefits for their home and host countries.

This article has examined the effect of the duration of membership in the World Trade Organization (WTO) on the submission of trademarks by countries' residents. The analysis used an unbalanced sample of 124 countries (including developed and developing countries) and, primarily, the binominal regression approach supplemented by the generalized method of moments estimator, which was utilized for the robustness check. Results have shown that the effect of the duration of WTO membership on trademarks works through the channel of trade costs. This effect is positive for less developed economies and negative for relatively advanced economies. These findings reflect the fact that as countries spend more time as WTO members, they experience a higher submission of patents in relation to trademarks, especially if they enjoy an improvement in their real per capita income (and export complex products). Furthermore, countries that receive higher Aid for Trade flows (which help to reduce trade costs) experience yet a higher number of trademark applications, but to a lesser extent than patent filings. [ABSTRACT FROM AUTHOR]

This paper provides a new explanation for the choice of commodity tax principle when introducing network externalities into the intra-industry trade model. First, regardless of the destination or origin principle, when the network externalities are strong (weak), the optimal commodity tax rate in the presence of network externality is positive (negative) and higher (lower) than that without network externality. Second, the interplay between network externalities and trade costs affects the difference in commodity tax rates, influencing the differences in firms' profits, consumer surplus, tax revenues, and social welfare. Third, if the origin principle's commodity tax rate is higher (lower) than the destination principle's, the origin principle's social welfare level is lower (higher) than the destination principle's. [ABSTRACT FROM AUTHOR]

Developing countries are striving to reform their tax revenue structure to reduce its dependence on international trade tax revenue. The present study has investigated the effect of trade costs on this type of tax revenue structure reform (also referred in the present analysis to as 'Tax transition Reform'—TTR) through the trade openness channel in developing countries. The analysis has used a set of 124 countries over the period from 1996 to 2019 and several econometric estimators. It shows that higher overall trade costs (notably non‐tariff costs) undermine the TTR process, notably in countries that enjoy high degrees of openness to international trade. In other words, countries that wish to pursue their TTR process, while concurrently further opening up their economies to international trade, have to reduce their trade costs. [ABSTRACT FROM AUTHOR]

The history of agricultural trade stretches back more than ten millennia, but it became more inter‐continental from the 17th century and much denser in the 19th century following the repeal of Britain's protective Corn Laws in 1846 and major declines in international trade costs. Trade was chaotic in the period bookended by the two world wars, but trade policy anarchy gave way to greater certainty after the General Agreement on Tariffs and Trade (GATT) was signed in 1947. This paper seeks to identify the forces that shaped that history, and to re‐examine the case for continued openness to trade in farm and processed food products. It does so in the wake of uneven economic growth and structural transformation and as agri‐food systems respond to increased market and policy uncertainties this century—and to growing pressures for agricultural production to become more sustainable and for its food outputs to be safer and more nutritious. The paper points to better policy options than trade measures for achieving most national objectives—options that can simultaneously benefit the rest of the world. Areas for further economic research are noted before the paper concludes. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Technology Economics is the property of Chinese Society of Technology Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper studies the direct and indirect trade volume and trade cost effects of uncertainty on international trade and economic welfare using a structural gravity framework for a panel of 97 developed and developing countries from 2000 to 2018. We find that the sign and magnitude of the effect depend on whether uncertainty originates from the importing or exporting country. Moreover, applying a cross‐sectional gravity model, we show that an uncertainty shock directly reduces cross‐border trade flows. The paper illustrates the suitability of the proposed modelling approach by means of two counterfactual scenario analyses in which we calculate the general equilibrium trade and welfare effects of uncertainty induced by the unexpected outcome of the Brexit referendum in 2016 and the outbreak of the COVID‐19 pandemic in 2020. [ABSTRACT FROM AUTHOR]

The escalation of geopolitical tensions with the prospect of the European Union (EU) enlargement make connectivity a defining feature of European integration, which in turn facilitates trade and foreign direct investment (FDI) in the region. This paper uses a panel data approach for 39 countries over 2000-2020 to verify the connectivity among the economic and institutional factors affecting the FDI flows within Europe versus the European and non-European countries (focusing on China) in terms of three key issues. First, we hypothesize that the ability of countries to connect through FDI and trade on global and regional levels will affect how they might maximize the benefits of European integration. Second, we extend the existing FDI estimated models by adding our received indices to investigate the effects of connectivity on FDI inflows in Europe. Finally, we incorporate institutional factors in the empirical model and use interaction terms between the host country and integration dummy variable to capture how the effect of policy stability influenced FDI inflows across Europe. A relatively high drop in trade costs between the Western Balkans and the EU (-45%) over the period 2000-2020 indicates a high level of integration within Europe. But the decline (-35%) in trade costs between the EU and China over the same time period points to integration with non-EU partners. As a result, trade and FDI connectivity are still more global than regional.

This paper estimates the bilateral trade costs between Bangladesh and its leading trading partners before investigating the factors that influence Bangladesh's import costs, including the contribution of NTMs. To measure implied bilateral trade costs, we first deploy an inverse gravity equation. We then estimate the determinants of import trade costs at the HS 6-digit product level, applying PPML estimation techniques to a gravity model, using a unique new NTM database developed for the current study. Our results show that imports to Bangladesh are related in an expected way to common trade cost proxies and that NTMs negatively impact imports. [ABSTRACT FROM AUTHOR]

Copyright of Internasjonal Politikk is the property of Cappelen Damm Akademisk and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper assesses the effects of the duration of membership in the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO) and structural economic vulnerability on trade costs in developing countries. The analysis is performed on an unbalanced panel dataset of 121 countries over the period 1996–2018 and primarily utilizes the two-step system generalized method of moments estimator. It has established several findings. We obtain that longstanding GATT/WTO members enjoy a larger reduction in trade costs than relatively new GATT/WTO members. Concomitantly, a higher degree of structural economic vulnerability leads to higher trade costs. Moreover, the membership duration exerts a higher trade costs reduction effect in countries that are highly "structurally" vulnerable, including those that face high levels of exposure to shocks and high magnitudes of shocks. Finally, longstanding GATT/WTO members that receive higher amounts of development aid (including total development aid flows, Aid for Trade flows, and NonAfT flows) enjoy a larger trade costs reduction than relatively new GATT/WTO members. [ABSTRACT FROM AUTHOR]

This study aims to examine (1) the impact of digital trade rules on digital services exports, (2) the heterogeneity of this impact in different trade categories, (3) the impact of digital trade rules on the growth of services exports through reducing trade costs, and (4) whether this impact is different in national income levels. In order to test the hypotheses, this study uses panel data from the TAPED database encompassing 143 economies between 2005 and 2019, employing a differences-in-differences model as the analytical framework. Our empirical results yield several key findings. Firstly, digital trade rules have a significant role in promoting the export of digital services. Secondly, the impact of trade rules on different types of trade and national income levels is significantly different. Thirdly, the mechanism analysis results show that trade costs have an intermediary role, and digital trade rules can promote the export of digital services by reducing trade costs. Finally, compared to "high-income countries", the establishment of digital trade rules brings greater benefits to the digital services trade of low- and middle-income countries. Digital trade has brought significant changes to globalization development. Few studies address the role of digital trade rules in regulating the development of digital trade, and some researchers suggest reconstructing the global trade rules to meet the growth of digital trade. Nevertheless, research on how digital trade rules affect digital services exports is still sparse. This study contributes to the literature by revealing the importance of digital trade rules and provides a reference to promote institutional openness in the field of digital trade. [ABSTRACT FROM AUTHOR]

Domestic trade costs are anecdotally high in the Philippines, and yet a systematic and spatially comparable metric of trade costs is unavailable. This paper fills this gap by estimating province border effects, or a province’s tendency to trade with itself rather than with other provinces. Subsequently, the effects of a maritime transport program based on roll-on roll-off (RORO) ships on province border effects are assessed. Using two novel datasets—the starting dates of RORO shipping services by route, and the intraprovince trade of agricultural products—this study finds that province border effects are substantial, with a typical province trading 51 times more with itself than with other provinces. The RORO transport program is associated with an average reduction of 35% of this home province bias. However, the border effect reductions are unevenly distributed, with the largest reductions concentrated in provinces near the biggest demand centers.

The implementation of the WTO Trade Facilitation Agreement introduces a significant impact on enhancing trade flows between countries. Five years have passed since Russia ratified this Agreement. The goal of this study is to assess the implementation process of trade facilitation in the Russian Federation and to identify the main challenges and prospects in this area of the Russian foreign trade policy today. The paper firstly discusses various research approaches on the role of trade facilitation measures in the economic development of countries. The authors then conduct a qualitative analysis of the data on the implementation of measures in Russia and provide quantitative estimates for some categories of trade facilitation measures.The literature review demonstrates that trade facilitation leads to lower transaction and trade costs, but it is also associated with certain costs of changing the regulatory framework and infrastructure. In the implementation of the WTO Trade Facilitation Agreement from the perspectives of many categories, Russia has today achieved impressive results in comparison with the world practice. However, firstly, the Russian Federation should pay attention not only to the mandatory measures of the Agreement, but also to those measures, which are advisory and are not included in the Agreement. Those measures substantially contribute to the trade under the modern conditions of trade cooperation and digitalization of economies. Secondly, the authors present recommendations for the development of trade facilitation measures, which today require a special approach and the implementation of which will significantly simplify export-import operations. Finally, Russia needs to conduct continuous comprehensive monitoring of all applied trade facilitation measures in order to achieve their greater effectiveness.

Recent empirical studies find that the magnitudes of reductions in bilateral shipping costs are asymmetric within country pairs. Motivated by these findings, I study the welfare effects of asymmetric reductions in transportation costs in Helpman and Itskhoki's [(2010). Labour market rigidities, trade and unemployment. Review of Economic Studies, 77(3), 1100–1137] model of international trade with heterogeneous firms and frictional labor markets. I show that sufficiently asymmetric reductions in bilateral transportation costs result in welfare losses in the importing country, while a uniform reduction in the bilateral transportation costs of both imports and exports always benefits both countries. This paper raises a cautionary note that the phrase 'welfare gains from trade liberalization' implicitly assumes an 'approximately equal' reduction in transportation costs. [ABSTRACT FROM AUTHOR]

Despite the voluminous literature on the effect of aid-for-trade (AfT) flows on recipient countries' trade performance, little is known about the relationship between AfT flows and other capital flows to developing countries. This paper contributes to the literature by exploring the effect of AfT inflows on investment-oriented remittance inflows, notably through the channel of trade costs. Using an unbalanced panel data set of 106 countries over the period 2002–2019 and the two-step system generalized method of moments, the empirical analysis establishes several outcomes. AfT flows exert a positive effect on investment-oriented remittance flows, where the magnitude of this positive effect is higher in least-developed countries and in remittance-dependent countries than in other countries. AfT flows stimulate investment-oriented remittance flows in countries that face higher trade costs. The analysis shows that AfT flows could be important leverages for stimulating investment-oriented remittance flows and could promote the development of the private sector in beneficiary countries. [ABSTRACT FROM AUTHOR]

The growing impact of the global production of agricultural commodities has created new regulations that aim at a more sustainable trade. Sustainability standards (SS) are essential tools for transnational trade governance because they increase the possibility of recognizing products from sustainable sources. However, there is currently a proliferation of SS in almost every industry. This paper proposes a conceptual framework to establish how standard interactions such as competition, cooperation, and overlap shape the impact of multiplicity on trade costs. We apply the framework to the palm oil industry by using the information on three aspects of SS schemes: the requirements, the institutional design, and the cooperation strategies. Our results indicate that the North–South multiplicity in the palm oil market is characterized by high overlap, but there exists a balanced co‐opetition in the standard market. As the cooperation strategies between the SS schemes are very shallow, there might be potential trade costs associated with the SS multiplicity in the palm oil industry. [EconLit Citations: Q01 Sustainable Development, Q17 Agriculture in International Trade, Q18 Agricultural PolicyFood Policy]. [ABSTRACT FROM AUTHOR]

In this article, trade‐in sustainably produced agricultural products with eco‐labeling are modeled using a modern Ricardian framework. Based on this approach, expressions are derived for the share of products importers purchase from specific exporters for low‐cost unsustainable and high‐cost sustainable production technologies, assuming consumers have non‐homothetic preferences. The consumer and sustainability gains from eco‐labeling are also analyzed, along with a discussion and comparison of the effects of mutual recognition versus harmonization of countries' eco‐labeling regimes. [ABSTRACT FROM AUTHOR]

The present analysis assessed the effect of Aid-for-Trade (AfT) flows on the shadow economy using an unbalanced panel dataset of 106 countries over the period of 2002 to 2015. The empirical results obtained by means of the two-step system generalized method of moments showed that higher AfT flows were associated with a decrease in the size of the shadow economy, with less developed countries experiencing a greater negative effect of AfT flows on the shadow economy than relatively advanced countries among recipient countries of AfT flows. AfT interventions reduced the size of the shadow economy in countries that faced high trade costs as well as in those that experienced a depreciation in the real exchange rate. Finally, AfT interventions reduced the size of the shadow economy in countries that improved economic sophistication. [ABSTRACT FROM AUTHOR]

The escalation of geopolitical tensions with the prospect of the European Union (EU) enlargement make connectivity a defining feature of European integration, which in turn facilitates trade and foreign direct investment (FDI) in the region. This paper uses a panel data approach for 39 countries over 2000-2020 to verify the connectivity among the economic and institutional factors affecting the FDI flows within Europe versus the European and non-European countries (focusing on China) in terms of three key issues. First, we hypothesize that the ability of countries to connect through FDI and trade on global and regional levels will affect how they might maximize the benefits of European integration. Second, we extend the existing FDI estimated models by adding our received indices to investigate the effects of connectivity on FDI inflows in Europe. Finally, we incorporate institutional factors in the empirical model and use interaction terms between the host country and integration dummy variable to capture how the effect of policy stability influenced FDI inflows across Europe. A relatively high drop in trade costs between the Western Balkans and the EU (-45%) over the period 2000-2020 indicates a high level of integration within Europe. But the decline (-35%) in trade costs between the EU and China over the same time period points to integration with non-EU partners. As a result, trade and FDI connectivity are still more global than regional. [ABSTRACT FROM AUTHOR]

We analyze the impact of the COVID‐19 pandemic and associated policy responses on the global economy and food security in 80 low‐ and middle‐income countries. We use a global economy‐wide model with detailed disaggregation of agricultural and food sectors and develop a business‐as‐usual baseline for 2020 and 2021 called "But‐for‐COVID" (BfC). We then shock the model with aggregate income shocks derived from the IMF World Economic Outlook for 2020 and 2021. We impose total‐factor productivity losses in key sectors as well as consumption decreases induced by social distancing. The resulting shocks in prices and incomes from the CGE model simulations are fed into the USDA‐ERS International Food Security Assessment (IFSA) model to derive the impact of the pandemic on food security in these 80 countries. The main effect of the pandemic was to exacerbate the existing declining trend in food security. Food insecurity increases considerably in countries in Asia through income shocks rather than prices effects. We also review trade policies that were put in place to restrict imports and exports of food, and we evaluate their potential for further disruption of markets focusing on the food‐security implications. [ABSTRACT FROM AUTHOR]

This study investigates whether trade costs have a systematic influence on the composition of developing countries' exports, one which is distinct from their effect on the volume of trade. It uses the World Bank's bilateral trade cost dataset and incorporates trade flows for a large set of developing countries. The identification strategy exploits the variation in trade costs across countries and the differences in trade cost sensitivity across industries and employs a cost shifter as an instrument to overcome the potential endogeneity of trade costs. The paper finds that the export composition of developing economies is fashioned by trade costs, with higher trade costs lowering (other things constant) the share of an industry's exports in the country's total exports more for more trade‐cost‐sensitive industries. The policy implication is clear: reducing trade costs encourages a shift in the composition of developing country exports in favor of relatively more trade‐cost‐intensive exports, which tend also to be more technologically advanced. [ABSTRACT FROM AUTHOR]