Essays on the Impact of Renegotiating Trade Agreements

This thesis explores the impact of the renegotiation of trade agreements when there is a threat that trade barriers could increase. The thesis addresses the following questions: 1. What is the impact on firm exporting decisions of the trade policy uncertainty generated by the renegotiation of trade agreements? 2. What is the role of a customer base in export dynamics, and does an exporter customer base respond to the renegotiation of trade agreements? 3. How do industries restructure in response to changing economic competition driven by trade agreements? 4. What is the impact of exchange rate movements (driven by the renegotiation of a trade agreement) on exporter prices and quantities, and are the effects heterogeneous across firms? 5. How important are firms that trade goods internationally for the UK economy and how could these firms respond to the future renegotiation of trade agreements following Brexit? The second chapter (joint with Meredith Crowley and Lu Han) introduces the concept that the renegotiation of a trade agreement introduces uncertainty into the economic environment. In June 2016 the British electorate unexpectedly voted to leave the European Union, introducing a new era in which the UK and EU began to renegotiate the terms of the UK-EU trading relationship. We exploit this natural experiment to estimate the impact of uncertainty associated with trade agreement re-negotiation on the export participation decision of firms in the UK. Starting from a model of exporting under trade policy uncertainty, we derive testable predictions of firm entry into and exit from a foreign market under an uncertain `renegotiation regime'. Empirically, we develop measures of the trade policy uncertainty facing firms exporting from the UK to the EU after June 2016. Using the universe of UK export transactions at the firm and product level and cross-sectional variation in `threat point' tariffs, we estimate that entry in 2016 would have been 5.0% higher and exit 6.1% lower if firms exporting from the UK to the EU had not faced increased trade policy uncertainty after June 2016. In the third chapter (joint with Davide Rigo) we investigate the role of customer base in export market dynamics. First, we provide evidence that exporters grow in a foreign market by accumulating customer base. Second, we show that customer base can explain up to 30% of the growth in a destination market. Third, we explore potential mechanisms and find no evidence that exporters use customer specific price dynamics to attract new customers or expand existing customer relationships. Fourth, we explore how exporters adjust customer base in response to changes in market access by exploiting the trade policy uncertainty associated with the renegotiation of the UK-EU trade relationship and Sterling depreciation following the Brexit referendum. We show that French exporters in 2016-2017 were less likely to enter into exporting to the UK and incumbent exporters acquired a lower number of new buyers in the UK compared with the other European countries. Overall our results indicate that customer base is an important margin for export market growth and provides another margin that firms may adjust in response to changing market conditions. The fourth chapter shows that the rise in import competition from China following China's accession to the World Trade Organization contributed to the decline in UK manufacturing activity post 2000. A significant proportion of this decline in manufacturing activity is driven by firms switching their industrial activity out of manufacturing production and towards services. In particular, firms switch into business services such as research and development and wholesale and retail. This paper also shows that the speed of the transition across industries is fast, with the majority of the employment and turnover effects occurring in the first few years. This is primarily driven by the largest firms, as the switching effect on the number of firms is substantially smaller. The final chapter explores why the value of UK goods exports increased following depreciation of Sterling after the Brexit referendum. This paper shows that most of the response was initially driven by an increase in prices, although export quantities did also increase. The largest exporters were most responsive to the depreciation, increasing both quantities and prices more than smaller exporters. The paper also provides new facts on the importance of firms engaged in international trade in goods for the UK economy. Only 3% of UK firms are engaged in international trade in goods, yet these firms account for over 30% of employment and over 50% of UK turnover. The top 1% of goods exporters are pivotal in shaping UK export patterns as they account for 70% of exports, 5% of employment, and 12% of turnover

Essays on Labor and Development Economics.

This work comprises four essays in two related areas: labor and development economics. On the labor side, two essays study (i) the effects of sizeable policy reforms over labor informality and (ii) the relation between productivity and wages in a context of substantial informality and high turnover rates. On the development side, two essays provide a comparison between developed and developing countries in the following aspects: (iii) the degree of complementarity of production factors and their capacity to translate R&D investments into economic growth and (iv) the effects of fiscal redistribution over income inequality. Within the context of Latin America - the most income-unequal and labor-informal region in the world - this work intends to augment the understanding of the behavior, dynamics, interactions and contributions of productive factors (labor and innovative capital) and the effects that policies aimed at formalizing labor, innovating capital or redistributing factors retributions may have. The study applies recent measurement techniques and exploits rich novel datasets which combined with reformulated models help us to propose alternative appealing explanations. Lessons learnt from these four essays suggest that (i) job dynamics play a fundamental role in the success (or failure) of policies aimed at promoting labor formality. Against the conventional wisdom, we contend that reductions in hiring rather than increases in separation rates are the main determinants of informality increases following protectionist policies. (ii) Job dynamics also play a differentiating role in the determination of wage-productivity elasticities and income risk (with new hires reacting more than incumbents). (iii) Yet, returns of labor and physical capital are constant across countries and periods regardless the stage of development whereas they exhibit an inverted U shape for technological capital (this is, highest returns observed for mid developed cases). (iv) Comparable private returns of productive factors are mirrored in comparable market income inequality measures observed across some developed and developing regions. However, while in Europe fiscal redistribution helps to achieve better distributed disposable income, in Latin America fiscal redistribution has meager or even countervailing effects.

The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis

This thesis examines the potential impacts of the Economic Partnership Agreements (EPAs) between the EU and the Southern African Development Community (SADC). It provides a quantitative assessment of the prospective implications for welfare, output and trade structures, resource allocation, prices and fiscal revenue. The thesis undertakes country- and sector-specific analyses using the multi-region, multi-sector computable general equilibrium (CGE) GLOBE model. The model is calibrated to the Global Trade Analysis Project (GTAP) Database- version 7 for 2004. Different scenarios are implemented in order to simulate the alternative EU-SADC EPA scenarios in addition to their WTO-compatible alternatives. The thesis aims to contribute novel insights to the ongoing debate on the EU-SADC EPAs. It provides detailed country- and sector-specific impact projections within an internally consistent modelling framework. Furthermore, it contemplates the other WTO-compatible arrangements for SADC-EU trade in the case of not signing final EPAs. The simulation results inform answers for several research questions, as follows. Who gains and who loses from the EU-SADC EPAs? Do the agreements help SADC to effectively integrate into the world economy? What type of structural change might SADC experience under the EU-SADC EPA scenarios? How significant are potential adjustment costs for the SADC members likely to be? Are the WTO-compatible alternatives preferable for SADC members compared to the EU-SADC EPAs scenario? The simulation results suggest that a comprehensive EPA scenario is welfare-improving for many SADC members. The agreements, however, do not serve as a stumbling block towards more integration for SADC members into the world markets. Overall, SADC production structures become more concentrated in export-oriented sectors. These structural changes are accompanied by a high degree of adjustment in factor markets and substantial fiscal losses. A comprehensive EPA scenario is the best option vis-à-vis the WTO-compatible alternatives for SADC non-LDCs, whereas the results for SADC LDCs are mixed

A Corpus-based Register Analysis of Corporate Blogs – Text Types and Linguistic Features

A main theme in sociolinguistics is register variation, a situation and use dependent variation of language. Numerous studies have provided evidence of linguistic variation across situations of use in English. However, very little attention has been paid to the language of corporate blogs (CBs), which is often seen as an emerging genre of computer-mediated communication (CMC). Previous studies on blogs and corporate blogs have provided important information about their linguistic features as well as functions; however, our understanding of the linguistic variation in corporate blogs remains limited in particular ways, because many of these previous studies have focused on individual linguistic features, rather than how features interact and what the possible relations between forms (linguistic features) and functions are. Given these limitations, it would be necessary to have a more systematic perspective on linguistic variation in corporate blogs. In order to study register variation in corporate blogs more systematically, a combined framework rooted in Systemic Functional Linguistics (SFL), and register theories (e.g., Biber, 1988, 1995; Halliday & Hasan, 1989) is adopted. This combination is based on some common grounds they share, which concern the functional view of language, co-occurrence patterns of linguistic features, and the importance of large corpora to linguistic research. Guided by this framework, this thesis aims to: 1) investigate the functional linguistic variations in corporate blogs, and identify the text types that are distinguished linguistically, as well as how the CB text types cut across CB industry-categories, and 2) to identify salient linguistic differences across text types in corporate blogs in the configuration of the three components of the context of situation - field, tenor, and mode of discourse. In order to achieve these goals, a 590,520-word corpus consisting of 1,020 textual posts from 41 top-ranked corporate blogs is created and mapped onto the combined framework which consists of Biber’s multi-dimensional (MD) approach and Halliday’s SFL. Accordingly, two sets of empirical analyses are conducted one after another in this research project. At first, by using a corpus-based MD approach which applies multivariate statistical techniques (including factor analysis and cluster analysis) to the investigation of register variation, CB text types are identified; and then, some linguistic features, including the most common verbs and their process types, personal pronouns, modals, lexical density, and grammatical complexity, are selected from language metafunctions of mode, tenor and field within the SFL framework, and their linguistic differences across different text types are analysed. The results of these analyses not only show that the corporate blog is a hybrid genre, representing a combination of various text types, which serve to achieve different communicative purposes and functional goals, but also exhibit a close relationship between certain text types and particular industries, which means the CB texts categorized into a certain text type are mainly from a particular industry. On this basis, the lexical and grammatical features (i.e., the most common verbs, pronouns, modal verbs, lexical density and grammatical complexity) associated with Halliday’s metafunctions are further explored and compared across six text types. It is found that language features which are related to field, tenor and mode in corporate blogs demonstrate a dynamic nature: centring on an interpersonal function, the online blogs in a business setting are basically used for the purposes of sales, customer relationship management and branding. This research project contributes to the existing field of knowledge in the following ways: Firstly, it develops the methodology used in corpus investigation of language variation, and paves the way for further research into corporate blogs and other forms of electronic communication and, more generally, for researchers engaging in corpus-based investigations of other language varieties. Secondly, it adds greatly to a description of corporate blog as a language variety in its own right, which includes different text types identified in CB discourse, and some linguistic features realized in the context of situation. This highlights the fact that corporate blogs cannot be regarded as a simple discourse; rather, they vary according to text types and context of situation