Evaluating the Trade and Welfare Effects of Developing RTAs

Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements, calling for a reassessment of their economic merits. We focus on six such agreements currently in force in Sub-Saharan Africa, Asia and Latin America, estimating their impacts on trade flows and welfare. We combine a gravity model with kernel and bootstrap estimation techniques so as to capture the non-monotonic trade effects while imposing minimal structure. Instead of the usual dummy variables for RTAs, we propose a new variable, capturing the number of years of a country's RTA membership, and we adapt the framework proposed by Winters (1997) to relate trade effects to their welfare implications. The results indicate that only AFTA and MERCOSUR have induced positive trade and welfare effects. The remaining RTAs have produced mixed effects for their members.regional trade agreement; kernel regression; bootstrap; welfare

Persistent Uneven Spread of Economic Activities within Developing RIAs

One of the striking features of many developing Regional Integration Areas (RIAs) is the strong asymmetry between countries. In this paper, we consider a three-country two-sector model in a footloose capital framework. Two of these countries are involved in a regional integration process while the third is left out of the union. They are "port-like" economies where only one region is endowed with international infrastructures, so that imports and exports between trading partners necessarily pass through this transit region. The comparative statics of our model show that better domestic transport infrastructure helps to attract a higher share of footloose activity when trade costs within the RIA are lowered, inducing a persistent uneven spread of the mobile sector between the member countries. If the domestic infrastructure levels of these countries are both raised towards a high-quality level, a convergence process is triggered to the disadvantage of the country left outside the RIA.uneven development; regional integration area; convergence

Evaluating the trade effect of developing regional trade agreements : a semi-parametric approach

Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members'trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members'intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members'imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members'imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA's negative impact on its members'intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period.Free Trade,Trade Law,Trade Policy,Economic Theory&Research,Trade and Regional Integration

Evolving Cityscapes: Agglomeration and Specialization with Mobile Labor and Vertical Linkages

In "new economic geography" models, spatial concentration typically arises either because of worker mobility or because of vertical linkages among firms. We examine a setup that combines those two approaches in conjunction with local congestion costs. We find that, as trade costs are lowered, the spatial concentration of total activity ("agglomeration") follows an inverse u-shaped evolution, while the degree of specialization of locations increases. The evolution of spatial configurations accommodated by this model is consistent with changes in sectorial employment patterns within US metropolitan areas over the 1850-1990 period.agglomeration; specialization; congestion cost; input-output linkages

South-South Trade: Geography Matters

Intra-subsaharan African trade appears to be very low, an outcome that is often attributed to the size of the exporting and the importing economies. If that were the explanation, there would be no untapped trade potential. We argue instead that the main determinants of this "missing trade" are geographical and infrastructure-related impediments. Being landlocked and poor translates into high trade costs. In this paper, we try to measure the impact of geographical impediments on South-South trade. We focus on the intra and extra-regional trade of the countries belonging to the West African Economic and Monetary Union. We use an Armington-based model in order to evaluate the impact of geographical and infrastructure-related impediments on bilateral trade flows within this region. We find two main results: paving all inter-state roads would increase trade by a factor of 3, and crossing a transit country reduces intra-bilateral trade flows by 6%, ceteris paribus.South-South trade; landlocked; transport infrastructure; border infrastructure

Chronic disease prevention in college students: assessment of perception and intention to use a health management app

2018 Summer.Includes bibliographical references.The relationship between intention to use a hypothetical health management app and other variables from a conceptual framework of the Health Belief Model (HBM) and the extended Unified Theory of Acceptance and Use of Technology (UTAUT2) was assessed using a convenience sample of college students (N= 176). The self-reported online survey measured perceived susceptibility to chronic diseases, perceived seriousness of chronic diseases, perceived benefits of the app, perceived barriers to the app, cues to action, social influence, facilitating conditions and intention to use the app, on 5-point Likert type scales adapted from previous studies. Multiple linear regression was used to determine relationships between the predictor variables and criterion variable. The results of the data analysis showed that individually there were a low perception of susceptibility to diseases, perception of barriers to the app and perception of social influence, and a high perception of seriousness of diseases, perception of benefits of the app, cues to action, facilitating conditions, and intention to use the app. Perceived susceptibility, perceived benefits, perceived barriers, social influence and facilitating conditions had a significant influence on college students' intention to use the app to manage different aspects of their health. However, perceived seriousness and cues to action were not found to predict college students' intention to use the health management app

Empirical Assessment of the Existence of Taxable Agglomeration Rents

The New Economic Geography literature claims that firms are ready to pay more tax in "big markets" because of agglomeration rents. Tax authorities can thus set higher tax rates in denser economic area, hence an opposite mechanism to the "race to the bottom" process described by the classical tax competition theory. The aim of this paper is to empirically assess the existence of such agglomeration rents. We use Swiss data on municipalities corporate income tax rates and firms location to test the tax gap between these municipalities and the most peripheral one using a theory-based relation. Our estimations indicate that municipalities with higher agglomeration rents (measured as the number of firms plus the "potential of neighboring firms") are setting higher corporate income tax rates, hence confirming the existence of taxable agglomeration rents.agglomeration rents; tax competition; potential of neighboring firms

Urbanization and productivity : evidence from Turkish provinces over the period 1980-2000

Since the early 1980s, Turkey has been going through a rapid urbanization process at a pace beyond the World average. This paper aims at assessing the impact of this rapid urbanization process on the country's sector productivity. The authors built a database combining two-digit manufacturing data and some geographical, infrastructural, and socio-economic data collected at the provincial level by the Turkish State Institute of Statistics. The paper develops a parsimonious econometric relation linking sector productivity to accessibility, localization, and urbanization economies, proxying variables in the tradition of the New Economic Geography literature. The estimation results suggest that both localization and urbanization economies, as well as market accessibility, are productivity-enhancing factors in Turkey, although the causation link between productivity and these agglomeration measures is not clearly established. The sector-by-sector estimation confirms this result, although the localization economies effect is negative for the non-oil mineral sector, and the urbanization economies effect is weak for natural-resource-based sectors such as the wood and metal industry. Although the data cover the period up to 2000 and thus ignore the financial crisis that hit Turkey in 2001, the current structural transformation of the country away from the agricultural sector gives room to use the insights of these results as a preliminary step to understand the new challenges faced by the Turkish manufacturing sector. The results provide a discussion base to revisit the policy agenda on the improvement of the accessibility to markets, the improvement of the business environment to ease the creation and development of new firms, and a well-managed urbanization process to tap in the economic potential of cities.E-Business,Population Policies,Municipal Financial Management,Economic Theory&Research,