A Customs Union with Multinational Firms: The Automobile Market in Argentina and Brazil

This paper looks empirically into the behavior of multinational firms in international oligopolistic markets with trade balance constraints. I show how a particular form of non-tariff barrier applied at the firm level can lead to an increase in trade flows in the presence of intra-firm strategic trade. In my application, I estimate a model of demand, supply and trade policy in the automobile sector in Argentina and Brazil during 1996-1999. I measure the economic impact of a trade balance constraint that was in effect during that period and I compute predicted economic outcomes for the full adoption of a customs union, as has been agreed as part of the Mercosur negotiations, separating the sometimes opposing impacts of the removal of non-tariff barriers and the adoption of a common external tariff. Results show that the elimination of non-tariff barriers dominates the leveling of tariffs. Imports from outside of Mercosur increase under the new regime even though tariffs against these goods become more discriminatory, and exports from Brazil to Argentina decrease once the trade balance constraint is removed.

An Empirical Analysis of Mark-ups in the Argentine Manufacturing Sector

In this paper, we estimate mark-ups with plant level production data for Argentina from a structural model of cost-minimizing producers, as proposed by De Loecker and Warzynski (2012). We explore systematic differences across industries and plants. Our main findings are that mark-ups are higher in capital-intensive industries, and for plants that are more productive, larger, and more capital-intensive. Our findings are consistent with theories that predict larger mark-ups for more efficient firms and for higher quality products.Fil: Brambilla, María Irene. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Ciencias Económicas; ArgentinaFil: Tortarolo, Darío. Berkeley University; Estados Unidos. Universidad Nacional de La Plata; Argentin

Market Structure, Outgrower contracs and Farm Output. Evidence from Cotton Reforms in Zambia

This paper investigates the dynamic impacts of cotton marketing reforms on farm output in rural Zambia. Following liberalization and the elimination of the Zambian cotton marketing board, the sector developed an outgrower scheme whereby cotton firms provided credit, access to inputs and output markets, and technical assistance to the farmers. There are two distinctive phases of the reforms: a failure of the outgrower contracts, due to farmers' debt renegation, firm hold up, and lack of coordination among firms and farms, and a subsequent period of success of the scheme, due to enhanced contract enforcement and commitment. We find interesting dynamics in the sector. During the phase of failure, farmers were pushed back into subsistence and cotton yields per hectare declined. With the improvement of the outgrower scheme, farmers devoted larger shares of land to cash crops, and farm output significantly increased.

Farm Productivity and Market Structure. Evidence From Cotton Reforms in Zambia

This paper investigates the impacts of cotton marketing reforms on farm productivity, a key element for poverty alleviation, in rural Zambia. The reforms comprised the elimination of the Zambian cotton marketing board that was in place since 1977. Following liberalization, the sector adopted an outgrower scheme, whereby firms provided extension services to farmers and sold inputs on loans that were repaid at the time of harvest. There are two distinctive phases of the reforms: a failure of the outgrower scheme, and a subsequent period of success of the scheme. Our findings indicate that the reforms led to interesting dynamics in cotton farming. During the phase of failure, farmers were pushed back into subsistence and productivity in cotton declined. With the improvement of the outgrower scheme of later years, farmers devoted larger shares of land to cash crops, and farm productivity significantly increased.cotton marketing reforms, farm productivity

Farm productivity and marketstructure : evidence from cotton reforms in Zambia

This paper investigates the impacts of cotton marketing reforms on farm productivity, a key element for poverty alleviation, in rural Zambia. The reforms comprised the elimination of the Zambian cotton marketing board that was in place since 1977. Following liberalization, the sector adopted an outgrower scheme, whereby firms provided extension services to farmers and sold inputs on loans that were repaid at the time of harvest. There are two distinctive phases of the reforms: a failure of the outgrower scheme, and a subsequent period of success of the scheme. The authors'findings indicate that the reforms led to interesting dynamics in cotton farming. During the phase of failure, farmers were pushed back into subsistence and productivity in cotton declined. With the improvement of the outgrower scheme of later years, farmers devoted larger shares of land to cash crops, and farm productivity significantly increased.Crops&Crop Management Systems,Economic Theory&Research,Livestock&Animal Husbandry,Rural Poverty Reduction,Rural Development Knowledge&Information Systems

Adjusting to Trade Policy: Evidence from U.S. Antidumping Duties on Vietnamese Catfish

In 2003, after claims of dumping, the U.S. imposed heavy tariffs on imports of catfish from Vietnam. As a result, Vietnamese exports of catfish to the U.S. market sharply declined. Using a panel data of Vietnamese households, we explore the responses of catfish producers in the Mekong delta between 2002 and 2004. We study adjustments not only in catfish aquaculture but also in other economic activities. We find that, over this period, the rate of income growth was significantly lower among households relatively more involved in catfish farming in 2002. The source of this slower growth is explained by a relative decline in both catfish income and revenues from other miscellaneous farms activities such as poultry and livestock farming. Households did not adjust labor supply, most likely because of off-farm employment limitations. We also document that households more exposed to the shock reduced the share of investment assigned to catfish, while substituting into agriculture.

Realizing the Gains From Trade: Export Crops, Marketing Costs, and Poverty

This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.

Adjusting to trade-policy changes in export markets : evidence from U.S. antidumping duties on Vietnamese catfish

A large literature studies the effects of trade policy changes on developing-country exports on household incomes, and recent contributions have increasingly addressed the effects of administered protection, such as anti-dumping duties. In 2003 the United States imposed anti-dumping tariffs on imports of catfish from Vietnam ranging from 37 to 64 percent. As a result, Vietnamese exports of catfish to the U.S. market declined sharply, thus providing a unique opportunity to study the effects of U.S. trade policy changes on Vietnamese families. Using data on Vietnamese households, the authors study the responses of catfish producers in the Mekong delta of Vietnam between 2002 and 2004. The evidence suggests that the rate of growth of income of households that depended on catfish sales was significantly affected. In addition, the anti-dumping duties triggered significant exit from catfish farming. Households adjusted by moving out of catfish aquaculture and into wage labor markets and agriculture, but not into other aquaculture activities. Finally, the evidence also suggests that households found it difficult to change their catfish production levels, and that performance in aquaculture affects other household economic activities.Economic Theory&Research,Fisheries&Aquaculture,Emerging Markets,Wildlife Resources,Labor Policies

China's Experience Under the Multifiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)

This paper analyzes China's experience under U.S. apparel and textile quotas. It makes use of a unique new database that tracks U.S. trading partners' performance under the quota regimes established by the global Multifiber Arrangement (1974 to 1995) and subsequent Agreement on Textiles and Clothing (1995 to 2005). We find that China was relatively more constrained under these regimes than other countries and that, as quotas were lifted, China's exports grew disproportionately. When the ATC finally ended in 2005, China's exports surged while those from nearly all other regions fell.