South-South Trade Agreements, Location of Production and Inequality in Latin America

This study aims at evaluating the relation between South-South trade agreements, location of production and inequality in Latin Amer- ican RTAs. Following Sanguinetti et al.(2004) and Midelfart-Knarvik et al.(2000), an empirical model will be estimated to check whether industry localization was affected by the agreement. An ending sec- tion will then evaluate the overall impact of trade agreements on ¾ -convergence, i.e. the standard deviation of income levels of countries belonging to the same agreement.

Empirical investigation on labour market interactions in an enlarged Europe

This paper proposes an empirical assessment of economic interactions between the labour markets of the integrating EU over the period of time 1995–2005. Drawing on recently made available industry statistics, we provide a sector level study (13 tradable sectors, including manufacturing and services), analysing the contemporary evolution of domestic and trade partners’ employment levels. Given the intensification of trade relations as a result of ongoing integration process, we build a sector-specific measure of economic interdependency, based on information on labour markets’ performance and weighted by the magnitude of intra-EU trade flows (imports). The estimates of a dynamic empirical model confirm the interactions between employment levels in different Member States. Domestic employment in NMS-5 is rather positively affected by the expansion of labour markets in other EU’s trade partners (domestic employment levels in NMS-5 countries improve in parallel to the increase in foreign tradable sectors’ employment). The opposite holds true for EU-15 domestic labour markets that are rather challenged by the expansion of tradable sectors in their EU trade partners.EU integration, labour markets, trade

Specialize rightly or decline

Is exporting potato chips really the same than exporting microchips for a country economic growth? Is the rate of economic growth independent on the production/export structure? Is moving toward dynamic sectors a key for economic growth? This paper exploits a panel dataset for 188 countries and almost 700 sectors over the 1960-2004 period. Our purpose is to determine if and how sectoral structure influences the rate of economic growth, both from a static and a dynamic perspective. Different theoretical lines of research give suggestion in this direction: both past keynesian contributions and the endogenous growth literature suggest that economic structure can play an effective role in influencing economic growth. Our empirical analysis, shows that there is some evidence of this kind. We test the robustness of our result, checking the sensitivity of our main result to several alternative

Individual Earnings, International Outsourcing and Technological Change.

The aim of this paper is to empirically evaluate the relative effects of international outsourcing of materials and services and of ICT capital deepening on wage inequality between blue and white collars in the Italian manufacturing industry during the period 1985-1999. We merge an administrative data set on workers\' wages and individual characteristics with data on imported inputs from Italian input-output tables and other sector-level variables. Our results confirm that both material and service outsourcing widen the skilled/unskilled wage gap while ICT capital deepening positively affects real wages regardless of the worker\'s status. However, important differences emerge when the overall sample is split between traditional and innovative sectors.International Outsourcing, ICT, Wage Inequality

“Glocal” ties: banking development and SEs’ export entry

In this paper we explore the impact of the banking sector development on the first time export entry of small enterprises (SEs) in the Turkish manufacturing sector. By exploiting variation in the number of branches per capita across NUTS3 regions and variation in financial dependence across sectors, we support a positive and significant role of finance in fostering the access to foreign markets of SEs. This evidence is robust to the use of alternative measures, the control for omitted variables and the correction for endogeneity. We show that the banking sector reduces the incidence of sunk entry costs by providing both credit and destination-specific information. Finally, we provide original evidence on the role of the territorial diffusion of foreign banks’ branches on SEs’ exports. While no direct effect is detected, we disclose a minor and indirect effect of foreign branches working through their influence on the banking sector development at the local level

Imports, Exports and the Firm Product Scope: Evidence From Turkey

By exploiting an original firm-product level dataset for Turkish manufacturing, -way trading on firm product scope and innovation in a multiple treatment setting. Our evidence points at the prominent role of exporting, while no effect is found for importing only. Nonetheless, we corroborate existing evidence on the virtuous nexus between the two international activities and add to the literature by showing that joint firm involvement in exporting and importing fosters product innovation and quality upgrading

For God's sake. The impact of religious proximity on firms' exports

Using a rich firm level data set for Turkish manufacturing, we test whether the sharing of similar religious beliefs with potential contracting parties drives a firm’s first time entry in export markets. We exploit variation in the practice of Islam across Turkish NUTS3 regions and we find that firms located in regions characterised by stronger religiousness are more likely to enter export destinations with a higher share of Muslims among their population. This result is robust to the control for past trade, common language, cultural and migration ties and to several further sensitivity checks. In particular, religious proximity eases export entry for producers of "trust intensive" goods and it plays a role in subsequent foreign market entries. All in all, our evidence hints at an export enhancing effect of religious proximity working more through export sunk costs reduction than through similarity in preferences

Local discoveries and technological relatedness: the role of MNEs, imports and domestic capabilities

We explore the role of intra- and extra-regional product-specific capabilities in the introduction of local discoveries - products new to the firm and to its local market - by Turkish manufacturing firms. We find that product discoveries in a NUTS3 region are favoured by their technological proximity to the product mix of co-located foreign firms. Proximity to co-located domestic firms and local imports does not play any role. The high intensity of local discoveries in novel and exclusive capabilities which foreign affiliates bring into the local economy drives our findings. Finally, we show that the importance of knowledge spilling from foreign affiliates depends on their insidership in the local market, on their product-specific knowledge advantage and on local firms' absorptive capacity

A firm level perspective on migration: the role of extra-EU workers in Italian manufacturing

A production-theory approach to migration is adopted in this paper to address the role of migrant workers from extra-EU countries in Italian manufacturing firms. The adoption of flexible functional forms to model firm-level technology lets us directly derive different measures of elasticity from the coefficients of the estimated production and cost functions. The use of foreign labour is shown to affect the industry composition in favour of low skill intensive sectors and the estimated cross demand elasticities confirm the complementarity between migrant and native workers found in previous studies. However, the two labour inputs prove to be substitutes in terms of the Morishima elasticity of substitution: in general, firms tend to increase the foreign labour intensity of production in response to a decline in migrants’ wage, while the migrant to domestic labour ratio responds to changes in the domestic workers’ wage only for firms in low skill intensive sectors