Special Issue "International Trade and Its Intersection with Development, Labor, and Public Economics"

A special issue of Economies (ISSN 2227-7099).

Deadline for manuscript submissions: 1 March 2020.

Special Issue Editor

Prof. Dr. Lourenco Paz
E-Mail Website
Guest Editor
Hankamer School of Business, Baylor University, Waco, TX 76798, USA
Interests: International Trade; Development Economics; Labor Economics; Public Finance; International Macro and Finance; Latin America

Special Issue Information

Dear Colleagues,

International trade flows can affect the labor markets and the public finances of open economies. Developing countries may experience even stronger versions of such effects due to their fragile institutions and their financial constraints. For this Special Issue of Economies we welcome submissions on any topic related to international trade and its intersection with development, labor, and public economics. Topics include but are not limited to: Compensation for workers displaced by import competition, export promotion, foreign direct investment, informal economy, labor productivity, poverty, regional trade agreements, returns to human capital and/or skills, safeguards against import competition, tax compliance, tax reforms, trade in services, trade liberalization, unemployment, value added tax, and wage inequality.

Prof. Dr. Lourenco Paz
Guest Editor

Manuscript Submission Information

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Keywords

  • developing countries
  • employment
  • international trade
  • taxation
  • trade liberalization
  • wages

Published Papers (7 papers)

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Research

Open AccessArticle
The Effects of the Catch-Up Mechanism on the Structural Transformation of Sub-Saharan Africa
Economies 2019, 7(4), 111; https://doi.org/10.3390/economies7040111 - 08 Nov 2019
Abstract
Structural transformation is one of the processes of productivity growth urgently needed in Sub-Saharan Africa (SSA). This study uses the catch-up mechanism to analyze how international contacts and domestic absorptive capacity constraints are shaping the pattern of structural transformation in SSA. Using a [...] Read more.
Structural transformation is one of the processes of productivity growth urgently needed in Sub-Saharan Africa (SSA). This study uses the catch-up mechanism to analyze how international contacts and domestic absorptive capacity constraints are shaping the pattern of structural transformation in SSA. Using a two-step Generalized Method of Moments on 2000–2015 data for 29 SSA countries, the paper finds that SSA is undergoing a non-classical structural transformation led by the service sector instead of manufacturing. Import penetration, a key variable of international contact, has negative coefficients for both the agricultural and manufacturing shares of gross domestic product (GDP) but is positively associated with both the services shares of employment and GDP. A test of Kaldor’s third law finds that if growth in employment outside manufacturing is in services, it can also increase economy-wide productivity. Hence, it is the international constraints, such as import penetration and foreign direct investment, that are making the structural transformation of SSA non-classical. Services that involve transfer of skills and technology, such as international tourism and information and communications technology services exports, provide opportunities for structural change and productivity growth. Full article
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Open AccessArticle
The Effects of the Chinese Imports on Brazilian Manufacturing Workers
Economies 2019, 7(3), 76; https://doi.org/10.3390/economies7030076 - 02 Aug 2019
Abstract
This study examines the impacts of imports from China and from the Rest of the World (ROW) on the wages of Brazilian manufacturing workers during 2000–2012. In this period, import penetration in Brazil grew by 25 percent, and the Chinese share of it [...] Read more.
This study examines the impacts of imports from China and from the Rest of the World (ROW) on the wages of Brazilian manufacturing workers during 2000–2012. In this period, import penetration in Brazil grew by 25 percent, and the Chinese share of it increased from 3 to 20 percent. Using household survey data that encompass both formal and informal workers, we find that imports from China and from the ROW had different effects on manufacturing skilled and unskilled workers’ wages. Both the skilled and unskilled workers were negatively affected by an increase in the Chinese import penetration of intermediate inputs. For skilled workers, the ROW import penetration effect was negative for labor-intensive industries and positive for the other industries, while the Chinese import penetration had a positive effect on skilled workers’ wages. For the unskilled workers, we find that those in unskilled-labor intensive industries experienced positive impacts from both China and ROW import penetrations, whereas larger import penetrations reduced the wages for unskilled workers in the other industries. Full article
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Open AccessArticle
Economic Reform, Labour Markets and Informal Sector Employment: Evidence from India
Economies 2019, 7(2), 55; https://doi.org/10.3390/economies7020055 - 13 Jun 2019
Abstract
Theory and economic intuition suggest that domestic institutions influence the employment impact of economic reform, but the evidence base is thin. This paper seeks to address this by examining the extent to which differences in regional labour market flexibility shaped the impact of [...] Read more.
Theory and economic intuition suggest that domestic institutions influence the employment impact of economic reform, but the evidence base is thin. This paper seeks to address this by examining the extent to which differences in regional labour market flexibility shaped the impact of unanticipated economic reforms on employment in informal (unregistered) manufacturing enterprises in India (1990–2001). It employs a difference-in-differences strategy and finds that tariff reductions are not associated with significant employment shifts in informal enterprises, a finding that may be attributable to the fact that these enterprises rarely engage in international trade. However, on average and ceteris paribus, delicensing (FDI reform) is associated with statistically significant increases (increases) in informal employment and informal enterprise numbers in inflexible (flexible) labour markets. There is some evidence that the delicensing effect is attributable to increases in product market competition in delicensed industries. However, the channel underlying the result associated with FDI reform is less clear. In light of the persistent primacy of the informal sector in India and other developing economies, these findings have substantial policy relevance. Full article
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Open AccessArticle
Emerging Countries and the Effects of the Trade War between US and China
Economies 2019, 7(2), 45; https://doi.org/10.3390/economies7020045 - 13 May 2019
Abstract
The aim of the paper is to examine the effects of the US–China trade war on both countries and some emerging economies. Two scenarios are examined, one where only US protectionist measures are considered, and another in which Chinese retaliation is taken into [...] Read more.
The aim of the paper is to examine the effects of the US–China trade war on both countries and some emerging economies. Two scenarios are examined, one where only US protectionist measures are considered, and another in which Chinese retaliation is taken into account, using the GTAP (Global Trade Analysis Project) Computable General Equilibrium model. The results showed that, on one hand, the trade war would lead to a reduction in US trade deficit and an increase in domestic production of those sectors affected by higher import tariffs and Chinese producers and consumers would bear the lion’s share of the burden of the trade war. But, on the other hand, both countries and the world as a whole would lose in terms of welfare, due to the significant reduction in allocative efficiency, especially in the US, and the loss of terms of trade in the Chinese case. With the increase in protectionism between the two largest global economies, some important emerging countries, not directly involved in the trade war, would benefit by the shift in demand to sectors where they have comparative advantages. Full article
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Open AccessArticle
Trade Openness and Economic Growth in Turkey: A Rolling Frequency Domain Analysis
Economies 2019, 7(2), 41; https://doi.org/10.3390/economies7020041 - 08 May 2019
Abstract
Taking Turkey’s experience as a case study, this study provides further insights into the evaluation of time-varying Granger-causal relationships in the trade openness and economic performance nexus. We reinvestigated the Granger-causal relationships between trade openness and real economic growth in Turkey for the [...] Read more.
Taking Turkey’s experience as a case study, this study provides further insights into the evaluation of time-varying Granger-causal relationships in the trade openness and economic performance nexus. We reinvestigated the Granger-causal relationships between trade openness and real economic growth in Turkey for the time period 1950–2014. We employed a rolling version of Breitung and Candelon’s frequency domain Granger-causality test, which allowed us to identify the changes in the nature of the causal relationships overtime. Hence, in the face of different results found in the literature overtime, our study provides a more unified evidence on the relationship between trade openness and real economic growth in Turkey. In addition, we found empirical evidence for the possibility of a distinct temporal ordering in a feedback relationship between trade openness and economic growth. We called this situation “sequential feedback”. Full article
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Open AccessArticle
Economic Reforms, Labour Markets and Formal Sector Employment: Evidence from India
Economies 2019, 7(2), 31; https://doi.org/10.3390/economies7020031 - 04 Apr 2019
Abstract
Development economists generally concur that the implications of economic reform for employment are influenced by an economy’s institutional framework. This paper examines the extent to which differences in regional labour market flexibility shaped the impact of unanticipated economic reforms on employment in formal [...] Read more.
Development economists generally concur that the implications of economic reform for employment are influenced by an economy’s institutional framework. This paper examines the extent to which differences in regional labour market flexibility shaped the impact of unanticipated economic reforms on employment in formal manufacturing firms in India in the 1990s, using pooled cross-sectional firm survey data. It employs a difference-in-differences strategy for this analysis and finds that, on average and ceteris paribus in the 1990–1997 period, declines in input tariffs were associated with increased employment in formal firms across all Indian states, while FDI reform was associated with increased (reduced) formal firm employment in states with flexible (inflexible) labour markets. Supporting analysis indicates that these results were underpinned, at least in part, by product market competition within the formal sector. As policy makers in developing economies increasingly emphasise increases in formal employment as a key policy objective, these findings are of general interest. They underline the relevance of market structure and geographical variation in institutional characteristics to a study of the effects of economic reform. Furthermore, this paper highlights the continuing relevance of formal sector analysis, notwithstanding the persistent primacy of informal enterprises in developing economies. Full article
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Open AccessArticle
Impact of Multilateral Trade Liberalization on Resource Revenue
Economies 2018, 6(4), 60; https://doi.org/10.3390/economies6040060 - 16 Nov 2018
Cited by 1
Abstract
This paper investigates the impact of multilateral trade liberalization on resource revenue, using an unbalanced panel dataset comprising 57 countries, including both developed and developing countries, over the period 1995–2015. By means of the two-step system Generalized Methods of Moments (GMM) estimator, the [...] Read more.
This paper investigates the impact of multilateral trade liberalization on resource revenue, using an unbalanced panel dataset comprising 57 countries, including both developed and developing countries, over the period 1995–2015. By means of the two-step system Generalized Methods of Moments (GMM) estimator, the empirical analysis suggests that multilateral trade liberalization exerts a negative effect on resource revenue, probably at the benefit of non-resource revenue. However, this effect over the full sample hides a positive effect of multilateral trade liberalization on resource revenue in poorest countries, and a negative effect of multilateral trade liberalization on resource revenue in non-poorest countries of the sample. Additionally, the negative effect of multilateral trade liberalization on resource revenue over the full sample appears to be dependent on the degree of domestic trade liberalization. In fact, multilateral trade liberalization genuinely induces a reducing effect on resource revenue only if countries liberalize their domestic trade regime beyond a minimum level. Full article
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