Do unilateral trade preferences help export diversification? An investigation of the impact of European unilateral trade preferences on the extensive and intensive margin of trade.

We analyze the impact of the EU unilateral trade preferences on both the intensive and the extensive margin of trade. Using a tobit and probit estimation we find that the impact of unilateral trade preferences on both margins is strictly linked to the sector under analysis and to the type of preferences a country benefits from. In particular, we find an anti-diversification effect along with a concentration of exports in agricultural products in the case of more stable preferential schemes, as represented by the African Caribbean and Pacific trade preferences. We also confirm that the Generalized System of Preferences (GSP) for least developing countries did not change the beneficiaries' export pattern, while the traditional GSP and the regime to combat drug production tend to promote diversification of exports.Extensive margin, Melitz model, Generalized System of Preference.

Aid for trade : matching potential demand and supply

This paper is designed to help both the beneficiary governments and donors of aid-for-trade identify countries that are under-performing in trade and which are receiving less aid for trade than their global performance might otherwise suggest is necessary. The authors develop ten measures of trade performance and capacity (including trade-related infrastructure, institutions, and incentives) to assess potential demand, and then look at country allocations of aid for trade to see which are receiving below-average amounts in the supply of aid for trade - relative to their potential demand. As they design national development strategies, countries may wish to consider giving greater attention to trade and requesting that donors allocate more aid for trade. As part of the analysis, the paper provides a conceptual framework for selecting indicators of trade performance and its policy determinants that the World Trade Organization and its partners might monitor closely as part of the aid for trade initiative.Economic Theory&Research,Free Trade,Emerging Markets,Trade Policy,Transport Economics Policy&Planning

Firm Heterogeneity, Rules of Origin and Rules of Cumulation

We analyse the impact of relaxing rules of origin (ROOs) in a simple setting with heterogeneous firms that buy intermediate inputs from domestic and foreign sources. In particular, we consider the impact of switching from bilateral to diagonal cumulation when using preferences (instead of paying the MFN tariff) involving the respect of rules of origin. We find that relaxing the restrictiveness of the ROOs leads the least productive exporters to stop exporting. The empirical part confirms these results. We use the most recent techniques developed by Helpman, Melitz and Rubinstein (2007) on highly disaggregated data (HS6 digit) to analyse the effects of the introduction of the Pan-European Cumulation System (PECS). We find that PECS reverses the negative impact of strict ROOs on intermediate trade which turns positive as a consequence of introducing diagonal ROCs.Intermediate goods, Rules of origin, Rules of cumulation, Firm heterogeneity, Gravity.

Gender-Informing Aid for Trade: Entry Points and Initial Lessons Learned from the World Bank

The effects of policy interventions on women are of increasing concern to policy makers in all fields, and trade is no exception. This note reviews recent World Bank projects and studies that "gender inform" trade-related interventions, and it uses the Bank's experience to promote gender-equal opportunities by highlighting entry points at which trade projects, studies, and policies can effectively address gender issues.aid-for-trade, trade, gender, women, gender-inform, world bank, developing countries, trade facilitation, value chain, labor market

Timeliness and contract enforceability in intermediate goods trade

This paper shows that the institutional environment and the ability to export on time are sources of comparative advantage as important as factors of production. In particular, the ability to export on time is crucial to explain comparative advantage in intermediate goods. These findings underscore the importance of investing in infrastructure and fostering trade facilitation to boost a country's participation in production networks. Furthermore, the paper contributes to the so-called"distance puzzle"by showing that the increasing importance of distance over time is in part driven by trade in intermediate goods.Economic Theory&Research,Free Trade,Environmental Economics&Policies,Trade Policy,Transport Economics Policy&Planning

The Roles of Openness and Labor Market Institutions for Employment Dynamics during Economic Crises

Employment effects of the recent global economic crisis have differed significantly across countries. An active public debate currently focuses on external shocks and the role of labor market policies as a driver of those differences. In this note, we analyze the roles of integration into the global economy and different labor market institutions during different phases of past global economic downturns and domestic banking and debt crises. We find that domestic debt and banking crises were much more severe in their impact on employment than were global economic downturns. On average, the reduction in employment growth was more than twice as strong. We also find that openness to trade has both deepened the contractionary effects on employment and allowed for a faster recovery. High severance pay dampened the employment effect in both domestic crises and global economic downturns, whereas very high unemployment benefits were associated with stronger reductions in employment growth.openness, labor, labor market, employment, crisis, integration, debt, banking, unemployment, recovery, severance pay

The Role of Openness and Labour Market Institutions for Employment Dynamics during Economic Crises

Employment effects of the 2008/9 global economic crisis have differed significantly across countries. As a consequence, an active public debate has emerged on the impact of external shocks and the role of public institutions and policies in mitigating them. We contribute to this debate by analyzing the role of integration into the global economy and different labour market institutions during past phases of global economic downturns as well as domestic banking and debt crises. We find that domestic debt and banking crises were much more severe in terms of their impact on employment than global economic downturns. On average, the reduction in employment growth was more than twice as strong. Openness to trade is found to have initially deepened the contractionary effects on employment, but also allowed for a faster recovery. High severance pay dampened the employment effects of both domestic crises and global economic downturns. High unemployment benefits were associated with stronger reductions in employment growth, but the effect seems to be non-linear and driven mainly by countries in the highest 20th percentile of unemployment benefits.labour market / employment / economic recession / economic implication

A Short-Term Effect of a Better Work Programme on Firms’ Performance: Evidence from Vietnam

This paper provides preliminary evidence on the impact of the Better Work programme on firm performance in Vietnam. We construct a panel data using the Vietnam Enterprise Censuses for the years 2009 and 2011. Using firm fixed-effect regressions, we find that the factories enrolled in the Better Work programme tend to be larger, pay higher wages for workers, and employ more capital compared to other factories. However, we do not find that significant effects of the Better Work programme on factories’ sale and profit