International Production Networks and Economic Growth: The Case of the Western Balkan Countries

The globalization of the world economy has given rise to new trade patterns through the intensification of international production networks (IPNs). This phenomenon has enabled countries to undertake more in-depth specialization in niche parts of the production chain, with important benefits for their economic activity and growth. The Western Balkan countries are no exception. With their recent integration into global markets, an increasingly large share of their trade flows entail intermediate goods that are eventually processed and exported. This article analyzes the impact of different degrees of participation in IPNs on the economic performance of the Western Balkan countries, thereby testing the hypothesis that trade created by international fragmentation of production may generate effects on economic growth beyond the beneficial influence of total or final goods trade. The article focuses on the period 2002–2013. The results, using a set of panel data models, show that the degree of involvement in IPNs significantly affects economic performance, which partly explains the observed differences in the growth rates of the Western Balkan countries. We also find that the positive influence of processing trade on economic growth is greater than the traditional gains of an increase in foreign demand

Fragmentation and parts and components trade in the Western Balkan countries

As a consequence of the increasing globalization and integration of the world’s markets, there has been an intensive process of international fragmentation of the production over the last few decades. This phenomenon whereby previously integrated productive activities are segmented and internationally spread is reflected in the rapid increase in parts and components trade, growing at higher rates than final goods trade. In this process, the Western Balkan countries (WBC) have not been an exception. With their recent integration into the global markets, the WBC have witnessed growth in parts and components trade that has even exceeded the world average. This paper examines the determinants of the trade that stems from the international fragmentation of production in the WBC. Using a panel data set of disaggregated bilateral trade flows, we estimate gravity equations for the period 2000-2009. Our findings support the hypothesis drawn from the theory of fragmentation that trade in parts and components is motivated by labor cost differences and by geographical and proximity reasons. The relevance of additional service link costs, as well as the influence of institutional similarity and infrastructure quality or political-economic agreements is also confirmed by our empirical research

Is the road to regional integration paved with pollution convergence?

This paper evaluates the impact of free trade agreements (FTAs) on carbon dioxide emissions convergence for a cross-section of 182 countries over the period 1980 to 2008, paying particular attention to Mediterranean and European Union countries. In order to overcome the endogeneity problem of the FTA variable, a propensity score matching approach is first used to match country pairs. Next the convergence properties of relative CO2 emissions are examined for the whole panel and for the matched sample using difference-in-difference techniques. The main results indicate that CO2 emissions of the pairs of countries that belong to an FTA tend to converge, and do so at a higher rate for more advanced integration agreements. In particular, we find that emissions converge more rapidly for NAFTA and EU-27 countries than for Euro-Med countries.Pollution haven hypothesis, convergence, CO2 emissions, Euro-med Agreements, difference-in-difference.

The impact of FTAs on MENA trade in agricultural and industrial products

This article analyses the impact of Free Trade Agreements (FTAs) on Middle East and North African Countries (MENA) trade for the period 1994–2010. The analysis distinguishes between industrial and agricultural trade to take into account the different liberalization schedules. An augmented gravity model is estimated using up-to-date panel data techniques to control for all time-invariant bilateral factors that influence bilateral trade as well as for the so-called multilateral resistance factors. We also control for the endogeneity of the agreements and test for self-selection bias due to the presence of zero trade in our sample. The main findings indicate that North–South-FTAs and South–South-FTAs have a differential impact in terms of increasing trade in MENA countries, with the former being more beneficial in terms of exports for MENA countries, but both showing greater global market integration. We also find that FTAs that include agricultural products, in which MENA countries have a clear comparative advantage, have more favourable effects for these countries than those only including industrial products.The authors would like to thank the financial support obtained from the Universitat Jaume I, P1.1B2013-06, PREDOC/2009/55 and E-2012-09

Relationship between logistics infraestructure and trade: Evidence from Spanish regional exports

Geographical factors and transport infrastructure are two of the key determinants that influence international competitiveness. In this sense, the quality of such infrastructure and how widespread it is, the distribution and capacity of logistics facilities in a country, as well as the number of private operators and their degree of specialisation, all play an increasingly important role in the design of business strategies aimed at increasing a country’s share of the international market. Until recently, however, availability and access to logistics services have been considered secondary factors when defining business competitiveness. This paper estimates an augmented gravity model of trade that specifically includes logistics and transport infrastructure indicators as explanatory variables. The model is estimated by using bilateral exports from 19 Spanish regions to 64 destinations (45 countries and 19 Spanish regions) with data for the period 2003–2007. The findings show that logistics is indeed important for the analysis of trade flows in goods and they highlight the importance of logistics measures at the regional level. In particular, the number, size and quality of logistics facilities positively influence export flows

A Two-Methodology Comparison Study of a Spatial Gravity Model in the Context of Interregional Trade Flows

This paper argues that the introduction of spatial interactions to model the determinants of origin-destination (OD) flows can potentially result in excessive contiguity. To explain flows between OD regions, it is not only what happens in the origin and destination that is relevant, but also what happens in their neighbouring regions. However, what happens if there is a high degree of overlap between origin neighbouring areas and destination neighbouring areas? The paper presents an empirical illustration to re-examine the evidence presented in previous research (Alamá-Sabater et a., 2013) and more closely analyses the territorial level, focusing on the case of interregional trade of goods at the NUTS3 level (Spanish provinces). We then use two different methodologies within the framework of a spatial gravity equation for interregional trade modelling. The findings confirm the importance of spatial dependence on trade flows and in particular that logistics decisions within a province affect shipments from contiguous provinces

La relación entre el Comercio Interregional y la conectividad del transporte en España. Un análisis de dependencia espacial

This article analyzes the influence of transport connectivity on trade flows between regions from the perspective of spatial dependence. To do this, we consider two neighborhood criteria in a spatially autoregressive gravity model. The first geographic criteria is first-contiguity , and secondly we incorporate transport connectivity. The results show the importance of logistics platforms to meet the demand for transport infrastructure in the Spanish regions. Since it is not common to have disaggregated database on trade flows within a country, or regional indicators of the degree of development of logistics, this also justifies the need for progress in the achievement of such information for other regions and countries.Este artículo analiza la influencia de la conectividad del transporte sobre los flujos comerciales entre regiones desde una perspectiva de dependencia espacial. Para ello, se consideran dos criterios de vecindad en un modelo de gravedad autorregresivo espacial. En primer lugar, se considera el criterio geográfico de contigüidad de primer orden y, en segundo lugar, se incorpora la conectividad del transporte. Los resultados obtenidos constatan la importancia de las plataformas logísticas para satisfacer la demanda de infraestructura de transporte en las regiones españolas. El artículo también justifica la necesidad de avanzar en la consecución de bases de datos desagregadas sobre flujos de comercio dentro de un país y de indicadores regionales del grado de desarrollo logístico para otros territorios y países

Globalització econòmica i comerç internacional: una revisió a la llum de la crisi

L’últim quart del segle XX ha sigut testimoni d’un procés de globalització econòmica que ha intensificat els intercanvis comercials mundials. Aquesta expansió s’ha vist bruscament interrompuda aquests últims anys com a conseqüència de la crisi econòmica actual. La recuperació dels fluxos internacionals de mercaderies en un marc de liberalització comercial serà un element crucial per apuntalar l’eixida futura de la crisi. Així com la superació dels forts desequilibris macroeconòmics que han estat presents en l’última dècada.El último cuarto del siglo XX ha sido testigo de un proceso de globalización económica que ha intensificado los intercambios comerciales mundiales. Esta expansión se ha visto bruscamente interrumpida estos últimos años como consecuencia de la crisis económica actual. La recuperación de los flujos internacionales de mercancías en un marco de liberalización comercial será un elemento crucial para apuntalar la salida futura de la crisis. Así como la superación de los fuertes desequilibrios macroeconómicos que han estado presentes en la última década.The last quarter of the twentieth century has witnessed a process of economic globalization that has intensified world trade. This expansion has been sharply interrupted in recent years due to the current economic crisis. The recovery of international flows of goods in a context of trade liberalization is a crucial element underpinning the future output of the crisis, as well as overcoming the strong macroeconomic imbalances that have been present in the last decade