When China Sneezes, Asia Catches a Cold: the Effects of China’s Export Decline in the Realm of the Global Economic Crisis

In this discussion report, we dispel the widely held misconception that China’s economy is excessively export-dependent and therefore particularly vulnerable to a drop in export demand. In the past two decades, China’s dramatic exports rise has largely been driven by the fact that many foreign firms have offshored a slice of their value chain – labor-intensive final assembly – to China for export purposes. Many of these assembly plants heavily rely on imported inputs from East Asian economies to produce their export products. Because of this feature, China passes on a large portion of its negative export demand shocks to the East Asian economies by reducing demand for their imported inputs. Using recent trade data, we provide evidence of this business cycle pass-through during the current economic crisis.

The role of trade costs in global production networks : evidence from China's processing trade regime

In a seminal contribution, Yi (2003) has shown that vertically specialized trade should be more sensitive to changes in trade costs than regular trade. Yet empirical evidenceof this remains remarkably scant. This paper uses data from China's processing trade regime to analyze the role of trade costs on trade within global production networks (GPNs). Under this regime, firms are granted duty exemptions on imported inputs as long as they are used solely for export purposes. As a result, the data provide information on trade between three sequential nodes of a global supply chain: the location of input production, the location of processing (in China) and the location of further consumption. This makes it possible to examine the role of both trade costs related to the import of inputs (upstream trade costs) and trade costs related to the export of final goods (downstream trade costs) on intra-GPN trade. The authors show that intra-GPN trade differs from regular trade in that it not only depends on downstream trade costs, but also on upstream trade costs and the interaction of both. Moreover, intra-GPN trade is more sensitive to oil price movements and business cycle movements than regular trade. Finally, the paper analyzes three channels through which intra-GPN trade have amplified the trade collapse during the recent Global Recession.Economic Theory&Research,Free Trade,Trade Policy,Emerging Markets,Currencies and Exchange Rates

Can Education Help Fight Organized Crime in Mexico? An Examination of Education and the Effects on Homicide Across Mexican States

Mexico has been dealing with drug related violence for years, which has taken thousands of lives each year and prevented economic growth. There is existing evidence that shows that higher education levels are associated with lower crime rates, yet there are not many studies on education in developing countries known for organized crime. This paper examines a regression analysis using panel data from all 32 Mexican states across the years of 2010 to 2020 to determine the relationship between crime and education. Additional factors that impact crime will include gross state product, unemployment, tourism, median income, and state demographic characteristics. Previous studies suggest the impact of schooling varies depending on the types of criminal activities. It is expected that as education increases, there will be a reduction in crime due to an improvement in employment opportunities from the increase in human capital, which in turn increases social welfare and promotes social values that discourage criminal activities. The results provide insights for policies in education as a crime prevention strategy in Mexico

Factors Affecting Regional Differences in UK Housing Prices Over Time

This paper investigates factors that contribute to median house prices in cities in the United Kingdom from year to year. Using a panel dataset, this study conducts a fixed-effects regression model to determine the impact of macroeconomic factors and housing market conditions on median house prices. The macroeconomic conditions include employment rates, interest rates, inflation, and credit availability. Housing supply will be proxied by housebuilding rate and land prices. This paper expands upon the existing literature by accounting for both household characteristics and macroeconomic conditions to highlight the importance of the both micro- and macroeconomic factors on the state of the housing market. The results will provide policy guidance on consumer expenditure and the economy

Energy Burden and Owning a Home: Understanding the Effect of Energy Costs on the Owner-Occupied Housing Rate

This paper examines the factors that are associated with owner-occupied housing rates in Southern California cities during 2021. The data is from the United States Census Bureau and the United States Department of Energy. In addition to factors included in previous studies, such as demographic and characteristics about the real estate market as well as the local economy, this study examines the burden of energy costs on owner-occupied housing rates. It is expected that the relationship between energy burden (percent of income spent on energy costs) and the owner-occupied housing rate is negative. The model will factor in demographic, real estate market, general well-being, and economic variables to best explain the variance among entities

Sustainability in the Fashion Industry

This paper examines companies\u27 ratings related to sustainability, particularly for fast fashion brands. The low costs of fast fashion have become an attractive purchase option for consumers, however, in more recent years, social, environmental, and economic concerns have placed sustainability at the center of research studies. It is expected that fast fashion products will continue to influence consumers to purchase from brands that are less sustainable than other brands that may incur higher prices. Factors taken into consideration include three different Fashion Transparency Indexes, Good on You rating, the Company’s yearly sales, and the age of the company. The results will shed light on whether consumers are conscious of, and take into consideration, the ethical, social, economic, or environmental issues when purchasing clothing

Putting a Price On Nature: Does the Increased Protection of Natural Capital Positively Influence GDP?

The philosophy and logistics behind “putting a price on nature” has become an important debate as our global environment undergoes rapid deterioration. With an increased emphasis on natural capital protection, countries question how this will affect their national economy. This paper will examine whether an increased protection of natural capital will positively influence GDP; the study analyzes national GDP in relation to the natural capital protection policies in each country. The wealth and demographics of the country will also be considered, as well as personal consumption, business investments, government spending, and net exporting

Characteristics of Accounting Fraud: Study of Company Profitability

Accounting fraud is a malpractice used to alter financial statement data or account balances. The inaccuracies caused by fraud, when caught, can be detrimental to the company, hurt the reputations of accounting firms, and cause investors to lose faith in the market. External auditors are independent of the company and work to give reasonable assurance that the financial statements are free of errors. Within accounting research, the quality of an audit is often quantified by how many errors will be found within the statements after an opinion is offered. Once errors are found, the company must file a restatement in order to maintain an unqualified audit opinion, which is an auditor\u27s judgment that the financials adhere to GAAP and are fairly presented. This study examines the relationship between audit quality and a set of independent factors, including the size of the external accounting firm, earnings before interest and tax, meeting analyst expectations, and internal control levels. We use financial restatement as a proxy for audit quality, which is measured as the number of restatements a company has made in the past year. Our sample consists of public companies in the United States that had financial restatements in 2017-2019. Financial statement fraud is not usually found by the auditor, it is turned in by an insider or whistleblower. Using this data, the SEC, AICPA, and PCAOB can create more relevant guidelines for auditors in order to catch fraud better

World Trade Flows: 1962-2000

We document a set of bilateral trade data by commodity for 1962-2000, which is available from www.nber.org/data (International Trade Data, NBER-UN world trade data). Users must agree not to resell or distribute the data for 1984-2000. The data are organized by the 4-digit Standard International Trade Classification, revision 2, with country codes similar to the United Nations classification. This dataset updates the Statistics Canada World Trade Database as described in Feenstra, Lipsey, and Bowen (1997), which was available for years 1970-1992. In that database, Statistics Canada had revised the United Nations trade data, mostly derived from the export side, to fit the Canadian trade classification and in some cases to add data not available from the export reports. In contrast, in the new NBER-UN dataset we give primacy to the trade flows reported by the importing country, whenever they are available, assuming that these are more accurate than reports by the exporters. If the importer report is not available for a country-pair, however, then the corresponding exporter report is used instead. Corrections and additions are made to the United Nations data for trade flows to and from the United States, exports from Hong Kong and China, and imports into many other countries.