An Empirical Approach
The paper focuses on systemically important jurisdictions in the global trade network, complementing recent IMF work on systemically important financial sectors. Using the IMF’s Direction of Trade Statistics (DOTS) database and network analysis, the paper develops a framework for ranking jurisdictions based on trade size and trade nterconnectedness indicators using data for 2000 and 2010. The results show a near perfect overlap between the top 25 systemically important trade and financial jurisdictions, suggesting that these ought to be the focus of risk-based surveillance on cross-border spillovers and contagion. In addition, a number of extensions to the approach are developed that can provide a better understanding of trade dynamics at the bilateral, regional, and global levels.
Entering and successfully surviving in export markets is a costly process for firms. Key steps for success include learning
about the existence of foreign demand, determining the production costs of exportable goods, building a high-quality
reputation, succeeding in product branding to reduce competitive pressures, constant upgrading of quality standards to
better serve demanding international clients, and remaining competitive with other players in the global marketplace.
Drawing on the findings of recent research (Reis and Varela 2013), this note argues that tourism can help alleviate some
of these costs by providing a relatively inexpensive platform for cost discovery and acting as a low-cost in-house trade fair,
accessible to all domestic producers.
The global crisis of 2008–09 and its ongoing aftershocks have focused attention on the possible risks associated with global interconnectedness. Absent a satisfactory theory and empirics on the relationships among interconnectedness, stability, and policies, however, following through on the calls in the Triennial Surveillance Review for ncorporating interconnectedness into the Fund’s policy and risk analysis is challenging.
This paper characterizes the architecture of cross-border trade and financial interconnectedness and points to how it might inform the Fund’s work.
This note provides an overview of the theoretical and empirical literature in the implications of greater trade and financial integration for the volatility and sychronization of business cycles.
New Opportunities and Strategies for Structural Transformation in developing countries
When the World Institute for Development Economics Research (WIDER) was established in 1984 as the first research and training center of the United Nations University under the visionary leadership of then Secretary General Javier Pérez de Cuéllar, its mandate was set out quite clearly: ―To undertake multidisciplinary research and policy analysis on structural changes affecting the living conditions of the world's poorest people; To provide a forum for professional interaction and the advocacy of policies leading to robust, equitable and environmentally sustainable growth; and To promote capacity strengthening and training for scholars and government officials in the field of economic and social policy making.‖ Since then, WIDER has contributed enormously to the strengthening of the development knowledge.
A Developing Country Perspective
This paper provides evidence of the links between Global Value Chains (GVCs) and labour market outcomes, focusing on developing economies. The literature generally indicates that firms with international linkages—which we use here as a proxy for GVC involvement—tend to employ more workers, pay higher wages, and employ more skilled workers than firms that deal exclusively with the domestic market. Our results are consistent with existing evidence found in developed economies, with internationalised firms tending to hire more workers and pay higher wages in developing economies as well...
A Literature Review
This paper provides a review of the available literature on global value chains (GVCs) and employment markets in developing countries. Due to the difficulty of observing intra-GVC transactions, there is very little direct empirical work on GVCs and labour markets. However, it is possible to extrapolate from the extensive empirical work already undertaken on firm internationalisation and labour markets to draw inferences as to the likely impacts of GVCs. The review therefore focuses on the labour market impacts of three processes that lie at the core of GVC development: importing, exporting, and foreign direct investment (FDI)...
This fifth edition of the Internationalisation Monitor describes recent developments in international trade in goods and services, foreign direct investment, multinational enterprises, and traffic and transport. In addition, four analytical chapters provide an in-depth analysis of enterprise dynamics and the role of (increasing) internationalisation in this respect.
A strategic framework
In recent years, global value chains have played an increasing role in business strategies, profoundly affecting international trade and development paradigms. Global value chains now represent a major source of socio-upgrading opportunities and a new path for development. Trade, competitiveness and development policies should be reshaped accordingly to seize these opportunities and avoid the risks associated with greater participation in global value chains. This paper provides a framework and analytical tools for measuring and improving a country's performance with respect to participation in global value chains. With a clear operational focus, it provides guidance for countries willing to join, maintain participation, and/or move up global value chains.
This paper evaluates some of the potential effects of EU-US TTIP economic integration on the trade in goods of 43 low-income countries (LIC) listed in Table 1. It first assesses the impact of removing the most-favoured nation (MFN) tariffs that apply to trade between the EU and the US. It then examines the impact of regulatory integration on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) on LIC. These tariff and non-tariff barrier (NTB) assessments reached similar conclusions.
Compendium of studies on Global Value Chains
This report brings together OECD data on the globalisation of value chains, including the rise of outsourcing/offshoring. It first examines how OECD countries are affected by the globalisation of production, on both the macroeconomic and sector-specific levels. The costs and benefits of globalisation are then discussed, with an emphasis on employment and productivity. Finally, this report analyses how globalisation impacts the competitiveness of OECD countries, highlighting the need for an effective innovation strategy. The report discusses not only the moving up the value chain that takes place in OECD countries but also in China, as R&D is increasingly going to emerging countries.
Going for Growth
Structural reforms have gained momentum in the aftermath of the recent recession.
This has been driven in part by market pressures in the context of the euro area crisis and by discussions and co-ordinated efforts in multilateral settings such as the G20.1 There is increasing awareness of the necessity to accompany macroeconomic stabilisation policies with structural reforms. Yet, given the weakness of near-term demand prospects, the limited scope for macro policies to further stimulate demand and the still less than fully functioning financial sector in many countries, there is a risk that the benefits from reform may take more time to materialise than in a normal conjuncture...
Special Topic: Services' Contribution to Manufacturing
The U.S. International Trade Commission’s latest update in this series of reports presents results on the economic effects on the U.S. economy of removing significant U.S. import restraints, including U.S. tariffs and tariff-rate quotas on certain agricultural products, textiles and apparel, and other manufactured products.
The Commission estimates that liberalization of all significant import restraints quantified in this update would increase annual U.S. welfare by $1.1 billion by 2017.
The eighth update also features a special topic chapter on the role of services in manufacturing, which explores trends in U.S. manufacturers’ use of services and the contribution of services to manufacturing output and productivity.
The fate of large firms helps explain economic volatility
Because economies are built of millions of firms and trading relationships, individual companies and export channels should not matter. Yet aggregate shocks do not explain volatility very well. Common shocks (to whole countries or global industries) explain only 45% of the variations. The data show that the picture of trade as millions of links is inaccurate; in fact, flows are extremely concentrated. A widely held view is that trade lowers volatility: exporting to more markets means greater diversification. But more foreign trade exposes economies more to the fortunes of large firms, since they trade disproportionately.
Discussions of international trade often focus on aggregate trade flows, but it is firms that trade, not countries. This column presents evidence from Norwegian export data showing that larger exporters have more customers and greater dispersion in customer size. Moreover, exporters with many customers tend to sell to importers with few suppliers. These stylised facts are captured by a model in which finding a buyer is costly. The model’s prediction that export responses are amplified in destinations with less buyer dispersion is confirmed in the data.
Jobs provide higher earnings and better benefits as countries grow, but they are also a driver of development. Poverty falls as people work their way out of hardship and as jobs empowering women lead to greater investments in children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and less productive ones disappear. Societies flourish as jobs bring together people from different ethnic and social backgrounds and provide alternatives to conflict. Jobs are thus more than a byproduct of economic growth. They are transformational—they are what we earn, what we do, and even who we are. High unemployment and unmet job expectations among youth are the most immediate concerns. But in many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. In these countries, growth is seldom jobless. Most of the poor work long hours but simply cannot make ends meet. And the violation of basic rights is not uncommon.